Key Points

  • The First District, Division Five, affirmed the denial of Uber's motion to compel arbitration of a putative class action alleging its upfront prices are deceptively advertised.
  • The riders' request to enjoin the allegedly deceptive pricing is a public injunction under McGill and Khan v. Coinbase, so the terms' waiver of non-individual relief is unenforceable as to it, and the accompanying restitution and disgorgement demands do not change that.
  • The severance clause's use of 'claim' is ambiguous as to whether whole causes of action or only the public-injunction request must proceed in court.
  • Construing the ambiguity against Uber under Civil Code section 1654 is not preempted by the FAA, because unlike in Lamps Plus the rule here withholds arbitration absent consent rather than imposing class arbitration.
  • The panel disavowed as overly broad dicta its statement in Vaughn v. Tesla that Lamps Plus mandates a different rule than the one applied in Sandquist.

A California appeals court ruled Wednesday that two Uber riders accusing the company of charging more than its advertised "upfront" fares may litigate their entire proposed class action in court. The court held that an ambiguous clause in Uber's terms of use must be read against the company and that federal arbitration law does not block that result.

A three-justice panel of the First District Court of Appeal, Division Five, unanimously affirmed a San Francisco Superior Court order denying Uber's motion to compel arbitration. Acting Presiding Justice Simons wrote the published opinion, joined by Justices Burns and Chou.

The decision holds that California's rule construing contract ambiguities against their drafter, known as contra proferentem and codified in Civil Code section 1654, survives preemption by the Federal Arbitration Act when it keeps a dispute out of arbitration the parties never clearly agreed to. The U.S. Supreme Court held in Lamps Plus Inc. v. Varela in 2019 that the same rule could not be used to impose classwide arbitration. The panel read that decision as turning on consent and wrote that here "application of the contra proferentem rule ensures arbitration is unavailable absent consent, and, for this reason, application of the contra proferentem rule is not preempted by the FAA."

Plaintiffs Dove A. Bogguess and Douglas John Marrone sued in December 2024 under California's unfair competition law and false advertising law. Their complaint alleges that Uber advertises the displayed price as "the price [the consumer will] pay at the end of the ride" but treats it as an estimate, and that Uber "can—and frequently does—charge the consumer more than the price it advertised."

The riders asked the court to bar Uber from "advertising prices that are lower than the prices consumers will actually pay." They also sought restitution or disgorgement for California riders charged more than the advertised fare.

Uber's January 2023 terms require riders to arbitrate disputes individually and waive "any non-individual relief." Under the California Supreme Court's 2017 decision in McGill v. Citibank, a contract cannot waive in every forum a consumer's right to seek a public injunction, an order aimed primarily at stopping unlawful acts that threaten future injury to the general public. Uber's terms provide that if the waiver fails, "any class, collective, coordinated, consolidated, and/or representative claims subject to the unenforceable or unlawful portion(s) shall proceed in a court of competent jurisdiction."

Uber argued that the riders sought a private injunction that would affect "only a small subset of existing Uber users." The panel disagreed, following the Court of Appeal's 2025 decision in Khan v. Coinbase Inc., which held that a challenge to a hidden fee on a cryptocurrency platform sought public relief because anyone could open an account. It also rejected the U.S. Chamber of Commerce's argument, as amicus for Uber, that no price exists until a rider requests a specific trip. "Uber cannot evade consumer protection laws just because its allegedly deceptive scheme is complicated," Simons wrote.

The panel held that the riders' demand for money did not strip the injunction of its public character, and it declined to follow the Ninth Circuit's 2021 decision in Hodges v. Comcast Cable Communications LLC where it conflicts with Khan. It also rejected Uber's argument that enforcement would require ride-by-ride inquiries.

Uber argued in the alternative that the riders' individual requests for relief should be arbitrated first. That dispute turned on the word "claim." The trial court, relying on a 2019 Ninth Circuit decision, Blair v. Rent-A-Center Inc., and a 2023 California appellate decision, Jack v. Ring LLC, read "claim" to mean an entire cause of action, keeping both statutory counts in court.

The panel agreed with Uber that Blair and Jack wrongly treated the word as clear, writing that it "has no single legal meaning." But it found the riders' reading reasonable too, because Blair had addressed the exact same issue in the same consumer protection context before Uber adopted its 2023 terms. "Uber was on constructive notice," Simons wrote, that for splitting decisionmaking between a court and an arbitrator, the term "was, at best, a problematic word to use to accomplish that end."

With the contract ambiguous, the panel turned to section 1654. Uber argued that, under Lamps Plus, ambiguities about the scope of an arbitration agreement must be resolved in favor of arbitration. The panel wrote that "Lamps Plus did not suggest that the presumption in favor of arbitration required preemption of the contra proferentem rule where its application does not disfavor arbitration but instead reinforces the requirement of consent."

The panel relied on California Supreme Court decisions applying the rule to arbitration agreements, including Fuentes v. Empire Nissan this year, and noted that federal circuit decisions declining to apply it all predated Lamps Plus. It also disavowed as "overly broad dicta" a statement in its own 2023 decision in Vaughn v. Tesla Inc. that Lamps Plus mandates a different rule than contra proferentem.

Uber also argued that the riders had never claimed the agreement was unconscionable. The panel answered that Uber did not deny the terms were a contract of adhesion, a standardized form whose signer lacks the bargaining power to change it, and that the rule applies "with peculiar force in the case of a contract of adhesion." It concluded that "the parties did not agree to piecemeal resolution of the causes of action in the complaint."

Uber was represented by Joseph E. Barakat of Gibson, Dunn & Crutcher. The riders were represented by Mara Leventhal of Leventhal Stanley & Taylor. Josephine K. Petrick filed the Chamber of Commerce's amicus brief.

The ruling returns the case to San Francisco Superior Court, where Judge Jeffrey S. Ross denied Uber's motion to compel arbitration; the appeals court stayed his proceedings in October 2025 pending the appeal. The panel awarded the riders their costs on appeal.