Uber, the company that allows consumers to procure rides using a cell phone app, has invoked the First Amendment in an attempt to overturn court orders regulating its communications with drivers. My tentative view is that Uber’s First Amendment interests are minimal and should not defeat the court orders. Uber may have a better claim that the district court’s rulings contravene the Federal Arbitration Act, which places arbitration on equal footing with judicial proceedings, because the court is discouraging arbitration in favor of litigation. However, the Ninth Circuit should rule against Uber on its First Amendment claim. Uber’s case is distinguishable from cases involving restrictions on communications between lawyers and their own prospective clients. The case is also distinguishable from regulations compelling commercial disclosures to consumers on controversial topics.
Plaintiffs in three class actions have alleged that Uber has deprived drivers of gratuities and expense reimbursements. They also claim Uber violated consumer reporting laws by obtaining credit reports on its drivers. The major issue in this class action, if the Ninth Circuit allows the litigation to proceed, will be whether Uber drivers are employees entitled to certain benefits or are simply independent contractors using Uber’s technology to connect to passengers. But in its latest appeal to the Ninth Circuit, Uber claims that Judge Chen, in the Northern District of California, violated Uber’s right to free speech when issuing orders making it easier for drivers to join a class action against Uber. Judge Chen issued an injunction that, among other things, forced Uber to send drivers an easy-to-use hyperlink that allows drivers to opt out of the mandatory arbitration clause in Uber’s contracts. Uber is also required to explain the current lawsuit and provide an easy way to opt out of its arbitration clause to any prospective driver who signs up for the Uber app, even though these drivers may never become part of a class action against Uber.
Uber’s First Amendment claim is situated within a vexing debate about how much protection to afford commercial speech. As a threshold matter, corporations, as organizations of individuals, can assert some constitutional rights. First Amendment protections attach to organizations engaged in political speech, worthy of the highest First Amendment protections. The question then becomes what level of protection to give speech that is not political but purely commercial, related to or proposing a commercial transaction in the economic marketplace.
Courts are currently struggling to determine the level of constitutional scrutiny commercial speech should receive. Uber relies on a Supreme Court case, Gulf Oil v. Bernard, that is distinguishable because it involves a restraint on lawyers attempting to contact their own prospective clients to inform them of their rights. The Court in Gulf Oil deemed unconstitutional a district court’s orders banning plaintiffs’ counsel from trying to undermine a settlement, reached between Gulf Oil and its employees, by contacting prospective class members and urging them to join a separate antidiscrimination lawsuit. The Supreme Court did not decide what standards are mandated by the First Amendment when assessing the broad discretion that district courts have in controlling communications during litigation. However, the Court noted that injunctions banning communications in litigation involve “serious restraints on expression.”
Gulf Oil is distinguishable from Uber’s case because it involved plaintiffs’ lawyers contacting their own potential clients to inform them about a pending lawsuit. The Court held that the First Amendment protected the right to receive information about litigation that could impact employees’ interests. In the instant case, Judge Chen’s order, although potentially an abuse of discretion under the rules of class action litigation because of its broad sweep, applies to Uber’s communication with potential adversaries in litigation. Judge Chen is trying to avoid having Uber confuse drivers about their legal rights by sending them opaque arbitration agreements while a class action lawsuit is pending. This is a far cry from violating Gulf Oil’s rationale that parties in litigation deserve to be informed of their legal rights.
That said, Judge Chen did not make lengthy factual findings concerning the necessity of his ruling. Uber is being forced to send notices about the lawsuit and revised arbitration clauses to new drivers, who aren’t involved in the current lawsuit and thus have less reason to be confused about their rights. Gulf Oil requires district courts to make factual findings that their orders do not unduly burden speech. Thus, the application of Gulf Oil, and Uber’s First Amendment claim, turns upon whether forcing Uber to send contractual agreements to millions of drivers and potential drivers, alerting these drivers to the class actions lawsuits, involves a First Amendment interest.
Deciding that question is hard because a reasonable argument can be made that commercial speech deserves little First Amendment protection, or deserves protection only when consumers’ interests in receiving information are at stake. This argument relies on the idea that commercial speech does not implicate the speakers’ autonomy interests in expression (because the expression is largely economic) or serve First Amendment purposes like facilitating democratic self-governance or the search for truth. On the other hand, a reasonable argument can be made that there isn’t a principled reason for distinguishing commercial speech from other types of speech. On this account, giving commercial speech less protection is based on a moral judgment about the worthiness of the speech, and this type of viewpoint discrimination is the worst type of First Amendment evil.
I disagree with scholars and judges who believe that commercial speech shouldn’t be defined as speech for the purposes of First Amendment protection. But I also disagree that commercial speech should receive the rigorous constitutional scrutiny afforded to communication that facilitates public discourse or reflects of an individual’s autonomy interests in self-expression. The intermediate scrutiny often applied to commercial speech, which permits speech regulations if the government can demonstrate that its speech restrictions are sufficiently tailored to alleviate an important harm, makes sense.
Take, for example, a fairly recent District of Columbia Circuit case invalidating a regulation compelling businesses to disclose on their websites that the gold they use is not mined in a conflict-free area. The D.C. Circuit held this regulation unconstitutional because there was no evidence that this forced disclosure would ameliorate the humanitarian crisis in the Democratic Republic of Congo, and the compelled disclosure forced companies to use a controversial term (“conflict free”) to skew public debate.
Although I cannot fully address the issue now (stay tuned!), applying this type of intermediate constitutional scrutiny seems sensible, especially for compelled speech targeting the general public. Judge Chen’s rulings, however, involve the administration of arbitration agreements of no import to general public debate. Judge Chen’s purpose was to allow Uber drivers to have more information about Uber’s class action lawsuit. While potentially unfair to Uber and potentially an improper assault on arbitration clauses generally, Judge Chen’s orders do not seem to violate the First Amendment.