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Yellow Group LLC v. Uber Technologies Inc.

United States District Court, N.D. Illinois, Eastern Division

July 10, 2014

Yellow Group LLC, et al., Plaintiffs,
v.
Uber Technologies Inc., Defendant.

OPINION AND ORDER

SARA L. ELLIS, District Judge.

Approximately thirty Plaintiffs, comprising of taxi medallion owners, taxi affiliations, and livery service providers, sued Uber Technologies Inc. ("Uber"), alleging that Uber competes unfairly by misrepresenting certain features of its service, misleading customers as to an association between Uber and Plaintiffs, and encouraging taxi drivers to breach their agreements with Plaintiffs. Uber filed a motion to dismiss the Second Amended Complaint for failure to state a claim and lack of standing. Uber's motion to dismiss [89] is granted in part and denied in part. The Court dismisses Taxi Affiliation Plaintiffs' claim in Counts I and IV premised on alleged misrepresentations of insurance coverage because this claim does not allege an actual misrepresentation of the insurance coverage of uberX drivers and passengers. The Court also dismisses Plaintiff Your Private Limousine's claims in Counts II, III, and V, as these counts fail to state a claim on behalf of Your Private Limousine. Finally, the Court dismisses without prejudice all claims brought by the Medallion Owner Plaintiffs, as they do not have standing to bring Counts I and IV and do not state a valid cause of action in Counts II, III, V, and VI.

BACKGROUND[1]

Plaintiffs identify themselves in three groups: (1) the Taxi Affiliation Plaintiffs, (2) the Medallion Owner Plaintiffs, and (3) Your Private Limousine. The Taxi Affiliation Plaintiffs are comprised of Flash Cab, Yellow Cab, and related entities; they operate taxi dispatch services in the Chicago area and own intellectual property related to their taxi brands.[2] The Medallion Owner Plaintiffs own City of Chicago taxi medallions, some of which are leased to cab drivers who operate within one of the Taxi Affiliation Plaintiffs' affiliations.[3] Your Private Limousine is a livery service operating in the Chicago area.

Defendant Uber provides a mobile phone based application that connects customers with taxi, livery, and non-chauffer drivers. Uber customers can request a ride via three types of vehicles: a medallion-bearing taxi, a livery vehicle, or an uberX vehicle.[4] Taxi, livery, and non-commercially licensed drivers that subscribe to Uber use the application to pick up rides in their vicinity. Customers pay for the rides automatically and electronically via credit card information stored within their Uber application. Some Uber drivers are associated with Flash Cab, Yellow Cab, or Your Private Limousine. As a result, when a customer orders a taxi via Uber, the driver who accepts the fare may arrive in a vehicle bearing Flash Cab or Yellow Cab trademarks. Likewise, when a customer uses Uber to request a limousine, the driver who provides the customer's ride may be affiliated with Your Private Limousine.

Previously, the Court granted in part and denied in part Uber's motion to dismiss the First Amended Complaint. Plaintiffs filed a Second Amended Complaint, which Uber has moved to dismiss in its entirety.

LEGAL STANDARD

A motion to dismiss under Rule 12(b)(1) challenges the Court's subject matter jurisdiction. Fed.R.Civ.P. 12(b)(1). The party asserting jurisdiction has the burden of proof. United Phosphorus, Ltd. v. Angus Chem. Co., 322 F.3d 942, 946 (7th Cir. 2003), overruled on other grounds by Minn-Chem, Inc. v. Agrium, Inc., 683 F.3d 845 (7th Cir. 2012). The standard of review for a Rule 12(b)(1) motion to dismiss depends upon the purpose of the motion. Apex Digital, Inc. v. Sears, Roebuck & Co., 572 F.3d 440, 443-44 (7th Cir. 2009). If a defendant challenges the sufficiency of the allegations regarding subject matter jurisdiction (a facial challenge), the Court must accept all well-pleaded factual allegations as true and draw all reasonable inferences in the plaintiff's favor. See id.; United Phosphorus, 322 F.3d at 946. If, however, the defendant denies or controverts the truth of the jurisdictional allegations (a factual challenge), the Court may look beyond the pleadings and view any competent proof submitted by the parties to determine if the plaintiff has established jurisdiction by a preponderance of the evidence. See Apex Digital, 572 F.3d at 443-44; Meridian Sec. Ins. Co. v. Sadowski, 441 F.3d 536, 543 (7th Cir. 2006).

A motion to dismiss under Rule 12(b)(6) challenges the sufficiency of the complaint, not its merits. Fed.R.Civ.P. 12(b)(6); Gibson v. City of Chicago, 910 F.2d 1510, 1520 (7th Cir. 1990). In considering a Rule 12(b)(6) motion to dismiss, the Court accepts as true all well-pleaded facts in the plaintiff's complaint and draws all reasonable inferences from those facts in the plaintiff's favor. AnchorBank, FSB v. Hofer, 649 F.3d 610, 614 (7th Cir. 2011). To survive a Rule 12(b)(6) motion, the complaint must not only provide the defendant with fair notice of a claim's basis but must also be facially plausible. Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009); see also Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007). "A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Iqbal, 556 U.S. at 678.

ANALYSIS

I. Statutory Claims (Counts I-IV)

In Counts I through IV, Plaintiffs bring two claims under the Lanham Act and two claims under the Lanham Act's parallel Illinois statutes. As the parties acknowledge, and as the Court has previously held, the analysis is the same under the Lanham Act and the relevant Illinois statutes. Doc. 66 at 7; Dynamic Fluid Control (PTY) Ltd. v. Int'l Valve Mfg., LLC, 790 F.Supp.2d 732, 740 (N.D. Ill. 2011). Therefore, the Court will analyze the federal and state statutory counts together.

A. Misrepresentation of Rates, Licensure, and Insurance (Counts I and IV)

In Count I, Plaintiffs sue Uber pursuant to 15 U.S.C. § 1125(a)(1)(B) for deceptively representing on its website that Uber taxis charged "standard taxi rates, " when in fact riders were charged the meter fare plus a 20% "gratuity" that was split between the driver and Uber. Plaintiffs also point to a statement in an Uber blog post in which Uber stated that all uberX vehicles were "licensed by the city of Chicago, and driven by a licensed chauffeur." Doc. 77 ¶ 40. Plaintiffs further allege in Count I that Uber misrepresented the scope of the insurance coverage for uberX drivers and passengers. Uber allegedly stated that "there will be a $2, 000, 000 insurance policy applicable to ridesharing trips, " id. ¶ 43, and later claimed that uberX drivers and passengers would be subject to $1 million in coverage. Plaintiffs contend that this misrepresents reality because Uber does ...


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