Malden Transportation, Inc. v. Uber Technologies, Inc.

United States District Court

District of Massachusetts

)

Malden Transportation, Inc. et )

al., )

)

Plaintiffs, )

) Civil Action No.

v. ) 16-12538-NMG

)

Uber Technologies, Inc., )

)

Defendant. )

)

)

Anoush Cab, Inc. et al., )

)

Plaintiffs, )

)

v. ) Civil Action No.

) 17-10142-NMG

Uber Technologies, Inc., )

)

Defendant. )

)

)

Dot Ave Cab, Inc. et al., )

)

Plaintiffs, )

)

v. ) Civil Action No.

) 17-10180-NMG

Uber Technologies, Inc., )

)

Defendant. )

)

Max Luc Taxi, Inc. et al., )

)

Plaintiffs, )

)

v. )

) Civil Action No.

Uber Technologies, Inc., ) 17-10316-NMG

)

Defendant. )

-1-

)

Gill & Gill, Inc. et al., )

)

Plaintiffs, )

)

v. ) Civil Action No.

) 16-12651-NMG

Uber Technologies, Inc. et al, )

)

Defendant. )

)

Sycoone Taxi, Inc. et al., )

)

Plaintiffs, )

)

v. ) Civil Action No.

) 17-10586-NMG

Uber Technologies, Inc., )

)

Defendant. )

)

Taxi Maintenance, Inc. et al., )

)

Plaintiffs, )

)

v. ) Civil Action No.

) 17-10598-NMG

Uber Technologies, Inc., Travis )

Kalanick, and Garrett Camp, )

)

Defendants.

MEMORANDUM & ORDER

GORTON, J.

This case involves seven consolidated actions by various

taxi medallion holders in the Greater Boston area (“plaintiffs”)

who allege that Uber Technologies, Inc. (“Uber” or “defendant”)

and two of its founders, Travis Kalanick and Garrett Camp (the

“individual defendants”) competed unlawfully in the on-demand,

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ride-hail ground transportation market in and around Boston,

Massachusetts. Plaintiffs in all seven actions allege that Uber

competed unfairly in violation of the common law and the

Massachusetts Consumer Protection Act. Certain plaintiffs also

allege that Uber violated state and federal antitrust law,

interfered with advantageous business relationships, engaged in

a civil conspiracy and aided and abetted unfair competition.

Before the Court are 1) a motion to dismiss of individual

defendants Travis Kalanick and Garrett Camp (Docket No. 70) and

2) defendants’ consolidated motion to dismiss plaintiffs’

complaints (Docket No. 72).

I. Background

The City of Boston has traditionally regulated taxis under

a set of municipal rules, ordinances and regulations

collectively known as “Taxi Rules”. The Police Commissioner for

the City of Boston (“the Commissioner”) is authorized by statute

to regulate all vehicles that fall under those rules. Boston

Police Department Rule 403 (“Rule 403”) requires that

[i]n the City of Boston, no person, firm, or corporation

driving or having charge of a taxicab or other private

vehicle shall offer the vehicle for hire for the purpose of

transporting, soliciting and/or picking up a passenger or

passengers unless said person is licensed as a hackney

driver and said vehicle is licensed as a hackney carriage

by the Police Commissioner.

City of Boston Code 16-15.05: Vehicle for Hire Ordinance

(Appendix I to Rule 403).

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Rule 403 applies to all vehicles “used or designed to be

used for the conveyance of persons for hire from place to place”

within the city of Boston.1 The Taxi Rules impose certain

regulations on taxi cabs, such as requiring possession of a taxi

medallion, maintaining a properly equipped taxicab and belonging

to an approved dispatch service or radio association.

Uber entered the Boston market for private transportation

services in 2011 and launched its UberX service in 2013. The

company provides a digital tool for requesting private vehicles-

for-hire by users who download Uber's free “smart phone

application” (“the Uber app”). Users who open the Uber app on

their mobile phones are shown a map of their location or

designated pick-up point and the available Uber-affiliated

vehicles in that vicinity.

In August, 2016, Massachusetts enacted the Transportation

Network Companies Act (“the TNC Act”). See M.G.L. c. 159A ½.

The statute defines a TNC as an “entity that uses a digital

network to connect riders to drivers to pre-arrange and provide

transportation.” M.G.L. c. 159A ½ § 1. The law preempts

municipalities from regulating TNCs through local Taxi Rules.

M.G.L. c. 159A ½ § 10 (“[N]o municipality or other local or

1 Plaintiffs note that Taxi Rules vary among municipalities but

do not identify any specific differences.

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state entity, . . . may subject a [TNC]” to requirements besides

the Massachusetts Department of Public Utilities and the

Massachusetts Port Authority.).

In the “Taxi Maintenance” action plaintiffs assert claims

against Travis Kalanick, Uber’s co-founder and former CEO, and

Garrett Camp, an Uber co-founder and a current director. The

complaint names both individuals as defendants.

The present litigation involves seven different groups of

plaintiffs that represent over 700 holders of taxi medallions in

the Greater Boston area. The various complaints were filed in

this district between December, 2016, and April, 2017. The

Court consolidated the cases pursuant to Fed. R. Civ. P.

42(a)(2) on October 5, 2017. On November 13, 2017, this Court

entered an order explaining in detail how the cases were to

proceed consistent with judicial economy and due process for all

parties.

Before the Court are two omnibus motions to dismiss filed

by defendants: one with respect to Uber and the other with

respect to the individual defendants.

II. Analysis

A. The Motion to Dismiss of Defendants Travis Kalanick and

Garrett Camp

Only the Taxi Maintenance plaintiffs pursue a claim against

the individual defendants. Accordingly, defendants’ motion to

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dismiss is directed only at the Taxi Maintenance Corrected

Amended Complaint.

Personal Jurisdiction

On a motion to dismiss for want of personal jurisdiction,

plaintiff bears the burden of showing that the Court has

authority to exercise jurisdiction over defendants. See Mass.

Sch. of Law at Andover, Inc. v. ABA, 142 F.3d 26, 33–34 (1st

Cir. 1998). The Court must take facts alleged by plaintiff as

true and construe disputed facts favorably toward plaintiff. See

Ticketmaster–New York, Inc. v. Alioto, 26 F.3d 201, 203 (1st

Cir. 1994).

In a diversity suit, this Court acts as “the functional

equivalent of a state court sitting in the forum state.” See

Astro–Med, Inc. v. Nihon Kohden America, Inc., 591 F.3d 1, 8

(1st Cir. 2009). As such, this Court must determine whether (1)

jurisdiction is permitted by the Massachusetts long-arm statute

and (2) the exercise of jurisdiction coheres with the Due

Process Clause of the United States Constitution. Id.

The Massachusetts long-arm statute, M.G.L. c. 223A, § 3,

extends jurisdiction to the limits of the United States

Constitution. See Tatro v. Manor Care, Inc., 416 Mass. 763, 771

(1994). Accordingly, this Court need not further consider the

statute's applicability and may proceed to the due process

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question. See Daynard v. Ness, Motley, Loadholt, Richardson &

Poole, P.A., 290 F.3d 42, 52 (1st Cir. 2002).

Due process demands a showing of general or specific

personal jurisdiction by plaintiff. See Negron–Torres v. Verizon

Commc’n, Inc., 478 F.3d 19, 24 (1st Cir. 2007). Plaintiffs must

demonstrate that defendants have made sufficient contacts with

the forum state to justify the exercise of that jurisdiction.

Id.

1. General Jurisdiction

This Court may assert general jurisdiction over a defendant

who maintains continuous and systematic activity in the forum

state. See United Elec., Radio and Mach. Workers of Am. v. 163

Pleasant St., 960 F.2d 1080, 1088 (1st Cir. 1992). General

jurisdiction is only appropriate where the defendant’s activity

renders him “essentially at home in the forum state”. Goodyear

Dunlop Tires Operations, S.A. v. Brown, 564 U.S. 915, 919

(2011).

The Taxi Maintenance complaint states, in conclusory

fashion, that the individual defendants are subject to general

personal jurisdiction within the Commonwealth of Massachusetts

by “regularly engaging in persistent courses of conduct in the

Commonwealth of Massachusetts” through the Uber ride-hailing

service. Plaintiffs fail, however, to allege specific facts

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demonstrating that the individual defendants, as opposed to the

corporate defendant with which they are associated, should be

considered “at home” in Massachusetts. See id. The plaintiffs’

threadbare statement is insufficient to establish this Court’s

general jurisdiction.

2. Specific Jurisdiction

The Due Process Clause of the Fourteenth Amendment requires

that a defendant have “minimum contacts” with the forum state

such that the “maintenance of the suit does not offend

traditional notions of fair play and substantial justice.” Int’l

Shoe Co. v. Washington, 326 U.S. 310, 316 (1945). The plaintiff

must allege that (1) the claim underlying the litigation arises

directly out of, or relates to the defendant’s forum-state

activities, (2) the defendant’s in-state contacts represent a

purposeful availment of the privilege of conducting activities

in the forum state and (3) the exercise of jurisdiction is

reasonable. Sawtelle v. Farrell, 70 F.3d 1381, 1389 (1st Cir.

1995) (citing United Electrical Workers v. 163 Pleasant St.

Corp., 960 F.2d 1080, 1089 (1st Cir. 1992)).

“The relatedness requirement focuses on the nexus between

the defendant’s contacts and the plaintiff’s cause of action.”

Nowak v. Tak How Investments, Ltd., 94 F.3d 708, 714 (1st Cir.

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1996) (citing Ticketmaster-New York, Inc. v. Alioto, 26 F.3d

201, 206 (1st Cir. 1994)) (internal quotation omitted).

Personal jurisdiction over an employee does not follow from the

fact jurisdiction over the employer exists. Keeton v. Hustler

Magazine, Inc., 465 U.S. 770, 781 n. 13 (1984). Instead, there

must be “an independent basis for jurisdiction based on an

individual’s actions.” Rissman Hendricks & Oliverio, LLP v. MIV

Therapeutics Inc., 901 F. Supp. 2d 255, 263 (D. Mass. 2012)

(citations omitted).

Plaintiffs fail to allege facts that demonstrate a nexus

between the individual defendants’ contacts and the plaintiff’s

cause of action.

No specific facts with regard to Camp are alleged beyond

the claim that he founded (and is a director of) Uber and that

he resides in California. Plaintiffs attempt to attribute the

acts of Uber to Camp through principles of agency law. They

fail to allege, however, a single fact indicating that Camp made

decisions about Uber’s operations in Massachusetts or even

traveled to the Commonwealth. Accordingly, plaintiffs have

failed to allege that this Court has specific personal

jurisdiction over Garrett Camp. Cf. Galletly v. Coventry

Healthcare, Inc., 956 F. Supp. 2d 310, 314 (D. Mass. 2013)

(finding that court lacked jurisdiction over individual

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defendant because plaintiff’s allegations “[did] not suggest

that [defendant] played any specific role” in the underlying

cause of action).

The handful of statements that plaintiffs attribute to

Kalanick do not create a nexus to their cause of action.

Plaintiffs provide a smattering of irrelevant comments made by

Kalanick, such as that he is a fan of Ayn Rand’s novel

“Fountainhead” (sic). They do not, however, point to a single

decision Kalanick made about Uber’s operations in Massachusetts.

They do not allege that Kalanick traveled to the Commonwealth

regularly, or even at all. Plaintiffs have failed to allege

that this Court has specific personal jurisdiction over Travis

Kalanick. Cf. Interface Grp.-Massachusetts, LLC v. Rosen, 256 F.

Supp. 2d 103, 107 (D. Mass. 2003) (determining that Court lacked

specific personal jurisdiction because there was “too tenuous a

nexus” between the defendant’s specific Massachusetts contacts

and the injuries suffered by the plaintiff).

Because plaintiffs have failed to establish the relatedness

requirement of specific personal jurisdiction, the Court

declines to address the foreseeability and reasonableness

requirements.

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3. Piercing the corporate veil

As an alternative, plaintiffs contend that they have

established specific personal jurisdiction over the individual

defendants on the basis of an alter ego theory. That theory is

inapposite. Under Massachusetts law, courts consider a

multitude of factors when deciding whether to pierce a corporate

veil:

(1) common ownership; (2) pervasive control; (3) confused

intermingling of business assets; (4) thin capitalization;

(5) nonobservance of corporate formalities; (6) absence of

corporate records; (7) no payment of dividends; (8)

insolvency at the time of the litigated transaction; (9)

siphoning away of corporation's funds by dominant

shareholder; (10) nonfunctioning of officers and directors;

(11) use of the corporation for transactions of the

dominant shareholders; and (12) use of the corporation in

promoting fraud.

Attorney Gen. v. M.C.K., Inc., 432 Mass. 546, 555 n. 19 (2000)

(citing Pepsi-Cola Metro. Bottling Co. v. Checkers, Inc., 754

F.2d 10, 14-16 (1st Cir. 1985)).

The complaint does not allege facts in support of a single

factor relevant to piercing the corporate veil. Accordingly,

plaintiffs have not justified the application of such a theory.

See Newman v. European Aeronautic Defence & Space Co. Eads N.V.,

700 F. Supp. 2d 156, 168 (D. Mass. 2010).

Plaintiffs have failed to establish that this Court has

personal jurisdiction over either of the individual defendants.

Therefore, the motions to dismiss of defendants Travis Kalanick

and Garrett Camp will be allowed.

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B. The Consolidated Motion to Dismiss of Defendants Uber,

Travis Kalanick and Garrett Camp

Defendants contend that plaintiffs fail to state a claim

upon which relief can be granted. In summary, Uber avers that

it has not been shown: 1) to compete “unfairly” because it was

never subject to the Taxi Rules, 2) to present a dangerous

probability of monopolizing a market, 3) to interfere with

advantageous business relationships or with the market-at-large,

or 4) to have been part of a conspiracy or to have aided and

abetted the violation of any legal canon. The Court will

address these contentions seriatim.

To survive a motion to dismiss, a complaint must contain

sufficient factual matter, accepted as true, to “state a claim

to relief that is plausible on its face.” Bell Atl. Corp. v.

Twombly, 550 U.S. 544, 570 (2007). In considering the merits of

a motion to dismiss, the Court may look only to the facts

alleged in the pleadings, documents attached as exhibits or

incorporated by reference in the complaint and matters of which

judicial notice can be taken. Nollet v. Justices of Trial Court

of Mass., 83 F.Supp.2d 204, 208 (D. Mass. 2000), aff’d, 248 F.3d

1127 (1st Cir. 2000). Furthermore, the Court must accept all

factual allegations in the complaint as true and draw all

reasonable inferences in the plaintiff's favor. Langadinos v.

Am. Airlines, Inc., 199 F.3d 68, 69 (1st Cir. 2000). If the

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facts in the complaint are sufficient to state a cause of

action, a motion to dismiss the complaint must be denied. See

Nollet, 83 F.Supp.2d at 208.

Although a court must accept as true all of the factual

allegations contained in a complaint, that doctrine is not

applicable to legal conclusions. Ashcroft v. Iqbal, 556 U.S. 662

(2009). Threadbare recitals of the legal elements which are

supported by mere conclusory statements do not suffice to state

a cause of action. Id. Accordingly, a complaint does not state a

claim for relief where the well-pled facts fail to warrant an

inference of any more than the mere possibility of misconduct.

Id. at 1950.

1. Unfair competition under the common law and the

Massachusetts Consumer Protection Act, M.G.L. c. 93A

§ 11

All seven groups of plaintiffs bring claims of unfair

competition under the common law and Massachusetts statutory

law.2

Plaintiffs theory, in its simplest form, is that the taxi

industry in Greater Boston area is a heavily regulated business.

Taxi cabs must, for instance, obtain a license, known as a “taxi

medallion”, to operate lawfully. Uber, the plaintiffs insist,

2 The plaintiffs do not distinguish between the legal standard

for their common law and statutory claims.

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did not comply with the Taxi Rules, did not incur the

concomitant costs, and thereby gained an unfair advantage and

caused economic injury to taxi medallion holders and duly

licensed fleet owners.

Uber responds that it is not and has never been subject to

the Taxi Rules. Uber submits that the rules have never been

enforced against it and furthermore that the Commonwealth of

Massachusetts has recently enacted a statute that preempts

municipalities from regulating Uber (referring to M.G.L. c. 159A

½, § 10). According to defendants, the TNC Act thus reaffirms

that the Taxi Rules do not apply (and never have applied) to

Uber.

Chapter 93A makes it unlawful for a party to engage in an

“unfair method of competition” or an “unfair or deceptive act or

practice.” M.G.L. c. 93A, § 11. Proponents of such claims must

prove they have suffered a tangible loss as a result of the

unfair or deceptive conduct. Arthur D. Little, Inc. v. Dooyang

Corp., 147 F.3d 47, 56 (1st Cir. 1998).

To determine whether a particular practice is unfair,

courts examine

Whether the practice . . . is within at least the penumbra

of some common-law, statutory or other established concept

of unfairness; (2) whether it is immoral, unethical,

oppressive, or unscrupulous; [and] (3) whether it causes

substantial injury to consumers . . . .

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Mass. Eye & Ear Infirmary v. QLT Phototherapeutics, Inc., 552

F.3d 47, 69 (1st Cir. 2009).

The lodestar of Chapter 93A claims is whether the

defendant's actions “would raise an eyebrow of someone inured to

the rough and tumble of the world of commerce.” Levings v.

Forbes & Wallace, Inc., 8 Mass. App. Ct. 498, 504 (1979) (Kass,

J.).

Although claims under Chapter 93A are uniformly included

with allegations of statutory and common law violations,

“[v]iolation of a statutory regime is not a necessary basis” for

them to proceed. Morris v. BAC Home Loans Servicing, L.P., 775

F.Supp.2d 255, 259 (D. Mass. 2011); see also Mass. Eye & Ear

Infirmary, 552 F.3d at 66 (“To prove [a Chapter 93A] claim, it

is neither necessary nor sufficient that a particular act or

practice violate common or statutory law.”); cf. Madan v. Royal

Indem. Co., 26 Mass. App. Ct. 756, 763 (1989) (explaining that a

plaintiff must show unfair or deceptive acts over and above a

breach of contract to demonstrate a violation of Chapter 93A).

As noted above, the TNC Act authorizes the operations of

Uber and preempts municipalities from regulating TNCs. Indeed,

plaintiffs concede that, after enactment of the statute in

August, 2016, Uber can not, as a matter of law, violate the Taxi

Rules. Accordingly, the activity in dispute in this action is

limited to that which took place prior to August 5, 2016.

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i. Competing as an unlicensed participant in a licensed

market can constitute an unfair trade practice

Determining the boundaries of actionable conduct under

Chapter 93A is a question of law. Incase Inc. v. Timex Corp.,

488 F.3d 46, 56 (1st Cir. 2007) (citation omitted). Whether a

particular set of acts is unfair or deceptive is a question of

fact. Id.

Taking the plaintiffs’ plausibly alleged facts as true and

construing disputed acts in their favor, plaintiffs have stated

a claim that Uber engaged in an unfair method of competition by

operating its services outside of the purview of Massachusetts

and local law. Massachusetts courts have consistently allowed

“a licensed carrier of passengers [to] restrain competition by

an unlicensed carrier.” A. B. & C. Motor Transp. Co. v. Dep’t of

Pub. Utilities, 327 Mass. 550, 551 (1951) (collecting cases).

This Court has already allowed claims similar to plaintiffs’ to

survive a motion to dismiss against this same defendant. See

Boston Cab Dispatch, Inc. v. Uber Techs., Inc., 2014 WL 1338148,

at *6-7 (D. Mass. Mar. 27, 2014) (holding that plaintiffs stated

a claim for unfair competition pursuant to Chapter 93A and the

common law where defendant allegedly operated service without

incurring expense of local and state regulation).

Whether Uber’s conduct in this particular instance was

sufficiently egregious will require “an individualized, fact-

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specific inquiry”. Woods v. Wells Fargo Bank, N.A., 733 F.3d

349, 358 (1st Cir. 2013) (citing Arthur D. Little, 147 F.3d at

55) (internal quotation omitted). At this stage, however,

plaintiffs have plausibly stated a claim that Uber’s conduct

amounted to more than a statutory violation or tort. See Juarez

v. Select Portfolio Servicing, Inc., 708 F.3d 269, 281 (1st Cir.

2013).

ii. The Regulatory Framework

Uber vigorously rejoins that it “is not, and was not,

subject to Taxi Rules.” Accordingly, it submits, it cannot be

said to compete unfairly for failure to follow inapplicable

rules. The Court disagrees.

The Massachusetts legislature authorized the Commissioner

to regulate the taxi business in Boston. Town Taxi Inc. v.

Police Com’r of Boston, 377 Mass. 576, 578 (1979). The

Commonwealth has issued regulations regarding vehicle

registration requirements. Those regulations define a “Taxicab”

as

any vehicle which carries passengers for hire, and which is

licensed by a municipality pursuant to M.G.L. c. 40, § 22

as a taxicab.

540 Code Mass. Regs. 2.05(3) (Dec. 7, 2012).

A “Livery Vehicle” is defined as

any limousine or other vehicle which is designed to carry

fifteen or fewer passengers, including the driver, and

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carries passengers for hire, business courtesy, employee

shuttle, customer shuttle, charter or other pre-arranged

transportation, and which vehicle is not required to obtain

a taxicab license pursuant to M.G.L. c. 40, §22.

Id. 3

In turn, the City of Boston defines a “Taxi” as

[a] vehicle used, or designed to be used, for the

conveyance of persons for hire, from place to place, and

licensed by the Hackney Carriage Division of the Boston

Police Department.

Traffic Rules and Regulations, City of Boston (November 1,

2012).

It defines a “Livery Vehicle” as

A vehicle used, or designated to be used, for the

conveyance of less than sixteen (16) persons for hire, from

place to place, except a bus, streetcar, taxi or commercial

vehicle.

Id.

Finally, in January, 2016, the Massachusetts Department of

Transportation revised 540 Code Mass. Regs. § 2.05 to include a

“Personal Transportation Network Vehicle” which is defined as

a private passenger motor vehicle that is used by a

Transportation Network Company Driver to provide

Transportation Services for a Transportation Network

Company.

540 Code Mass. Regs. 2.05(3) (Jan. 16, 2015).

The regulations impose state-level requirements and

standards for entities and their drivers.

3 The definitions of “taxicab” and “livery vehicle” were not

changed by the January, 2015, revision.

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The Commissioner has imposed additional requirements on

taxis operating in Boston, over and above the state regulations.

The primary ordinance at issue is the City of Boston’s Vehicle

for Hire Ordinance (“Rule 403”), which requires that

[i]n the City of Boston, no person, firm, or corporation

driving or having charge of a taxicab or other private

vehicle shall offer the vehicle for hire for the purpose of

transporting, soliciting and/or picking up a passenger or

passengers unless said person is licensed as a hackney

driver and said vehicle is licensed as a hackney carriage

by the Police Commissioner.

City of Boston Code 16-15.05: Vehicle for Hire Ordinance

(Appendix I to Rule 403).

Uber relies heavily on the fact that Rule 403 was not

enforced against it between 2013 and 2016. Nor was the Rule

enforced against livery vehicles, Uber contends, even though it

seems to apply to livery vehicles as well. The statutory and

regulatory framework does, however, distinguish between Uber and

livery vehicles. State regulations explicitly state that livery

vehicles are “not required to obtain a taxicab license” pursuant

to state regulation. 540 Code Mass. Regs. 2.05(3) (Dec. 7,

2012). Uber can point to no such regulation or ordinance with

respect to TNCs during the complained of period.

iii. Analogous caselaw does not preclude plaintiffs’ claim

Neither Massachusetts courts nor the United States Circuit

Court of Appeals for the First Circuit (“First Circuit”) has

determined whether Uber’s conduct was permissible under the Taxi

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Rules during the relevant period. Accordingly, Uber maintains,

this Court should not interpret Rule 403 pursuant to the

doctrine propounded in Dial A Car, Inc. v. Transportation, Inc.,

82 F.3d 484, 489 (D.C. Cir. 1996), which it contends is “the

leading case” on the issue at hand and dispositive.

The Dial a Car doctrine is a prudential principle that a

federal court should not interpret an ambiguous local regulation

until the local regulator has addressed the issue. See id. In

Dial a Car, a licensed, on-call taxi service alleged that two

defendant taxi companies were illegally providing unlicensed

taxi services within the District of Columbia. Id. at 484. The

plaintiff brought a Lanham Act claim alleging that defendants

misled customers by holding themselves out as an authorized

business. Id. at 488. The Circuit Court of Appeals for the

District of Columbia affirmed dismissal of plaintiff’s claim,

explaining that it saw “no reason to reach out and apply federal

law to this quintessentially local dispute.” Id. at 488-89.

Accordingly, the court held that

there must be a clear and unambiguous statement from the

Taxicab Commission regarding [defendants’] status before a

Lanham Act claim can be entertained.

Id. at 489.

The reasoning in the Dial a Car decision is not controlling

with respect to the issue before this Court if for no other

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reason than that the First Circuit has neither adopted nor cited

the case.

Furthermore, the Dial a Car court’s justification for

abstention, grounded in principles of federalism, does not apply

to the unfair competition claims of these plaintiffs. The D.C.

Circuit Court took particular issue with the fact that the claim

in that case was brought under the Lanham Act in an effort to

transform a federal statute “into a handy device to reach and

decide all sorts of local law questions.” Id. at 491. In the

present case, by contrast, plaintiffs rely on state regulations,

statutes and common law that is designed to hold a business to a

“standard of lawfulness.” See J.E. Pierce Apothecary, Inc. v.

Harvard Pilgrim Health Care, Inc., 365 F. Supp. 2d 119, 145 (D.

Mass. 2005) (emphasis in original). Under the regulations of

the Attorney General of Massachusetts, an act or practice

violates Chapter 93A, § 2 if it “fails to comply with existing

statutes, rules, regulations or laws” meant for the protection

of the public’s health, safety or welfare. 940 Code Mass. Regs.

3.16(3). Uber does not dispute that the Taxi Rules are designed

for the public’s health, safety or welfare and there is

no reason to assume that [section 3.16(3)] ought not apply

to claims brought pursuant to section 11 [of Chapter 93A].

J.E. Pierce Apothecary, 365 F. Supp. 2d at 145.

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Even if the Dial a Car doctrine applied to this case,

Uber’s application of it is inapposite. The D.C. Circuit Court

acknowledged that a regulation might “be so clear on its face

that no good faith doubt concerning its interpretation would be

possible.” Dial A Car, 82 F.3d at 489 n. 3. In such a case, the

Court explained, no explicit statement from the municipal

regulator would be necessary. Because the Court found that the

regulatory scheme in the Dial a Car case was, “at the very

least, ambiguous with regard to the legality” of the defendants’

conduct, the regulation was found insufficiently clear for

Lanham Act purposes. Id.

In sharp distinction, the regulatory scheme in this case is

“so clear on its face that no good faith doubt concerning its

interpretation” is possible. Under the rubric of Rule 403, Uber

is a

corporation . . . having charge of a . . . private vehicle

[that] offer[s] the vehicle for hire for the purpose of

transporting . . . a passenger or passengers.

Those vehicles were not, at the operative time, licensed as

hackney carriages by the Police Commissioner. A response from

Uber that it did not “hav[e] charge” of the vehicles is

underwhelming. If this Court were to find that Uber did not

have control over its drivers, then its business model would

consist of aiding and abetting the “private vehicle[s]” of those

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drivers, none of which was licensed as a hackney carriage by the

Police Commissioner. Under either reading, there is “no good

faith doubt” that Uber was (during the subject interlude and if

the facts alleged are proved) engaged in unlawful behavior. See

id. at 489 n. 3.

For all of these reasons, the Dial a Car doctrine does not

compel this Court to dismiss plaintiffs’ unfair competition

claims.

iv. Uber is not exempt from Chapter 93A liability

Chapter 93A exempts from liability

transactions or actions otherwise permitted under laws as

administered by any regulatory board or officer acting

under statutory authority of the Commonwealth.

M.G.L. c. 93A, § 3.

Uber contends that it was exempt from Chapter 93A because

the Commonwealth authorized its conduct. It has failed,

however, to satisfy the rigorous requirements for application of

that statutory safe haven.

“Defendants have the burden of proving the exemption” and

that burden is a “heavy one”. See Fleming v. National Union Fire

Ins. Co., 445 Mass. 381, 389 (2005). A defendant must show that

the Commonwealth’s regulatory scheme “affirmatively permits the

practice which is alleged to be unfair or deceptive.” Id. at 390

(quotation omitted).

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Uber relies on three arguments. First, it repeats its

contention that Rule 403 never applied to it or to its drivers.

That argument fails for the reasons articulated above.

Second, it emphasizes that Rule 403 was not enforced

against it. Drawing all inferences in favor of the plaintiffs,

as the Court must do at this stage, they have plausibly alleged

that Rule 403 or its equivalent in other municipalities was, at

least occasionally, enforced against Uber drivers. Even if that

were not the case, regulatory forbearance is insufficient to

prompt exemption under § 3. A defendant must show that the

regulatory scheme “affirmatively permits the practice which is

alleged to be unfair or deceptive.” Id. (emphasis added).

Failure to enforce a regulation is insufficient.

Finally, Uber submits that the TNC Act codified the fact

that the Taxi Rules did not apply to it. The Court disagrees.

Massachusetts courts interpret statutes with a presumption

against retroactivity. See generally Fed. Nat. Mortg. Ass’n v.

Nunez, 460 Mass. 511 (2011). Accordingly, a statute only

applies retroactively if it is “unequivocally clear . . . from

the words, context or objects” of the statute that the

legislature intended it to be retroactive in operation. Smith v.

Massachusetts Bay Transp. Auth., 462 Mass. 370, 377 (2012). No

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such “unequivocally clear” intention is evident from the TNC

Act.

Uber’s conduct is not exempted from liability under Chapter

93A, section 3.

v. Other litigation involving Uber does not compel

dismissal

Uber cites a number of cases in which taxi companies have

brought actions involving unfair competition and regulation of

TNCs. The Court agrees with defendant that, since the TNC Act

was enacted, Uber has not been required to comply with local

taxi ordinances. Accord Boston Taxi Owners Ass’n, Inc. v. City

of Boston, 223 F. Supp. 3d 119, 122 (D. Mass. 2016). On the

other hand, no case that Uber cites justifies dismissal of

plaintiffs’ unfair competition claims given the relevant law,

alleged facts and regulatory framework.

Some of the cases Uber cites are simply beside the point.

For instance, plaintiffs do not challenge the legality of the

Taxi Rules or the TNC Act. Contra, e.g., Boston Taxi Owners

Ass’n, Inc. v. Baker, 2017 WL 354010 (D. Mass. Jan. 24, 2017),

appeal dismissed, 2017 WL 3758297 (1st Cir. Mar. 27, 2017);

Illinois Transportation Trade Ass’n v. City of Chicago, 839 F.3d

594, 599 (7th Cir. 2016), cert. denied sub nom. Illinois Transp.

Trade Ass’n v. City of Chicago, Ill., 137 S. Ct. 1829 (2017)

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(dismissing equal protection and takings challenges to the City

of Chicago’s TNC ordinance).

Other cases upon which Uber relies depend on different

operative law. The California Public Utilities Code, for

example, forbids courts, except the California Supreme Court and

Court of Appeal, from hindering or interfering with the

California Public Utilities Commission’s exercise of regulatory

authority. See A White & Yellow Cab, Inc. v. Uber Techs., Inc.,

2017 WL 4642346, at *3-4 (N.D. Cal. Oct. 17, 2017) (dismissing

plaintiff’s unfair competition and unfair practices claims

because a ruling in plaintiff’s favor would “hinder or interfere

with a broad and continuing CPUC program”) (citing California

Public Utilities Code § 1759(a)) (additional citation omitted).

Massachusetts state law has a more expansive understanding

of unfair competition than do other states. Cf. Checker Cab

Philadelphia, Inc. v. Uber Techs., Inc., 689 F. App’x 707, 709

(3d Cir. 2017) (explaining that, under Pennsylvania law, unfair

competition is limited to an entity passing off its product as

another, dishonest statements, tortious interference with

contract or intellectual property theft) (citations omitted);

Greenwich Taxi, Inc. v. Uber Techs., Inc., 123 F. Supp. 3d 327,

340 (D. Conn. 2015) (stating that, under Connecticut law, unfair

competition is guided by the Federal Trade Commission’s

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“cigarette rule”). Chapter 93A, by contrast, renders violations

of public safety regulations actionable. See 940 Code Mass.

Regs. 3.16(3).

Finally, Uber cites a handful of cases where courts have

relied on Dial a Car to find that plaintiffs could not state a

claim for unfair competition based on regulatory violations.

Those cases, too, are of no consequence. For instance, in Manzo

v. Uber Techs., Inc., 2014 WL 3495401, at *4 (N.D. Ill. July 14,

2014), the court maintained that the ordinance at issue was

ambiguous. Id. (explaining that whether a smartphone equipped

with Uber constituted a “taximeter” as that term was defined by

the city ordinance was ambiguous). This Court has explained why

the regulatory framework at issue here is unambiguous.

Uber fails to distinguish cases where courts have allowed

unfair competition claims based on Uber’s non-compliance with

local regulation. See, e.g., The Yellow Cab Co. v. Uber Techs.,

Inc., 2015 WL 4987653, at *5-6 (D. Md. Aug. 19, 2015) (finding

that plaintiffs demonstrated a possibility of success on their

common law unfair competition claim because the “expansive

scope” of Maryland’s unfair competition law does not impose a

fraud or deceit requirement). Most importantly, Uber fails to

distinguish the similar claims with which it has already been

confronted in this Court.

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Although the facts and legal arguments vary somewhat, this

Court held that plaintiffs had sufficiently stated a claim that

Uber unfairly competes with plaintiffs, in violation of

Chapter 93A, [] by operating its service without incurring

the expense of compliance with Massachusetts law and Boston

ordinances.

Boston Cab Dispatch, Inc. v. Uber Techs., Inc., 2014 WL 1338148,

at *6-7 (D. Mass. Mar. 27, 2014).

The Court also found that plaintiffs had stated a common

law unfair competition claim based upon the same conduct. Id. at

*7. Defendant does not distinguish Boston Cab from the present

action. Indeed, it does not cite that case anywhere nor explain

why this Court should rule differently than it did before.4 The

Court finds no reason to do so. Plaintiffs have state a claim

for unfair competition.

Accordingly, defendant’s motion to dismiss will, with

respect to the statutory and common law unfair competition

claims, be denied.

2. Attempt to monopolize under the Sherman Antitrust Act,

15 U.S.C. § 2 and the Massachusetts Antitrust Act,

M.G.L. c. 93 § 5

The Malden, Dot Ave, Max Luc and Taxi Maintenance

plaintiffs all bring actions for attempt to monopolize in

4 In its proposed reply memorandum Uber proffers an unconvincing

distinction. It contrasts the magistrate judge’s analysis of

the plaintiffs’ Lanham Act claim with the unfair competition

claim before this Court but it fails to distinguish the unfair

competition claim in the earlier case with the unfair

competition claim here.

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violation of the Sherman Antitrust Act and the Massachusetts

Antitrust Act, M.G.L. c. 93 § 5.5

Plaintiffs argue that Uber has attempted to drive taxi

companies out of business through the use of its allegedly

predatorily priced UberX service. Defendants respond that

plaintiffs have not met the high burden of alleging a predatory

pricing claim.

Section 2 of the Sherman Act makes it illegal to

monopolize, or attempt to monopolize, or combine or

conspire with any other person or persons, to monopolize

any part of the trade or commerce among the several States,

or with foreign nations.

15 U.S.C. § 2.

To state a monopolization claim under § 2, a plaintiff must

adequately allege that defendant (1) has monopoly power in the

relevant market and (2) has engaged in illicit “exclusionary

practices” with “the design or effect of protecting or enhancing

its monopoly position.” Sterling Merch., Inc. v. Nestle, S.A.,

656 F.3d 112, 125 (1st Cir. 2011) (quoting Coastal Fuels of

P.R., Inc. v. Caribbean Petroleum Corp., 79 F.3d 182, 195 (1st

Cir. 1996) (internal citation omitted)).

One kind of exclusionary practice is the practice of

“predatory pricing”. In this scheme, a company reduces the

5 Neither party contends that the legal standard varies for the

state law claim.

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price of its product to below cost, hoping to drive competitors

out of business and then raise prices once it has achieved a

monopoly position. See Matsushita Elec. Industrial Co. v. Zenith

Radio Corp., 475 U.S. 574, 584-585, n. 8 (1986). To succeed on

a predatory pricing claim a plaintiff must demonstrate that

the prices complained of are below an appropriate measure

of its rival’s costs . . . [and that the competitor had] a

dangerous probability of recouping its investment in below-

cost prices.

Brooke Grp. Ltd. v. Brown & Williamson Tobacco Corp., 509 U.S.

209, 222, 224 (U.S. 1993).

Because an economically unsound approach by a competitor

could actually benefit consumers, plaintiffs must explain with

particularity “just what the arrangements were and why they

plausibly constituted antitrust violations.” See Am. Steel

Erectors v. Local Union No. 7, Int'l Ass’n of Bridge,

Structural, Ornamental & Reinforcing Iron Workers, 815 F.3d 43,

71 (1st Cir. 2016) (quoting Stop & Shop Supermarket Co. v. Blue

Cross & Blue Shield of R.I., 373 F.3d 57, 65 (1st Cir. 2004)).

Plaintiffs fail to allege facts supporting a predatory

pricing claim.

Plaintiffs do not allege that Uber’s services were priced

below Uber’s costs. Accordingly, they have failed to “explain

in detail” why Uber’s conduct constituted an antitrust

violation. See id. No complaint alleges any facts with respect

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to Uber’s costs. Instead, the Malden complaint repeatedly

states that Uber employs a “below-cost pricing scheme”. Such

“threadbare recitals of a cause of action’s elements, supported

by mere conclusory statements, do not suffice” survive the

motion to dismiss stage. Iqbal, 556 U.S. at 678 (citing Twombly,

550 U.S. at 555).

Plaintiffs repeatedly allege that UberX was priced below

the cost of a taxi. But to state a claim for antitrust injury

from a rival’s low prices, a plaintiff must allege that “the

prices complained of are below an appropriate measure of its

rival’s costs.” See Brooke Group, 509 U.S. at 222 (emphasis

added).

Plaintiffs attempt to bolster their predatory pricing

claims by noting that Uber has lost “billions of dollars”. That

allegation lacks the particularity required from an antitrust

plaintiff. If Uber’s “unconventional approach is economically

unsound,” then it may just be “a boon to consumers.” Am. Steel

Erectors, 815 F.3d at 71 (quoting Brooke Group, 509 U.S. at

224). Without specific factual allegations as to Uber’s costs,

plaintiffs’ invocation of Uber’s annual deficits is unavailing.

Because plaintiffs have failed adequately to allege a claim

for predatory pricing, the defendants’ motion to dismiss will,

with respect to plaintiffs’ antitrust claims, be allowed.

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3. Aiding and abetting and civil conspiracy to engage in

unfair competition in violation of the common law and

the Massachusetts Consumer Protection Act, M.G.L. c.

93A

The Anoush and Taxi Maintenance plaintiffs each allege a

different theory of civil conspiracy to engage in unfair

competition in violation of the common law and Massachusetts

statutory law. The Anoush plaintiffs allege that Uber conspired

with its independent contractor, third-party drivers. The Taxi

maintenance plaintiffs allege that the individual defendants,

Uber and Uber’s employees entered into a common conspiracy.

Both conspiracy claims include allegations that Uber had a

common plan, design and agreement to operate in violation of the

Taxi Rules.

Under Massachusetts law, a defendant may be liable for

aiding and abetting a tort where

(1) a third-party committed the relevant tort; (2) the

defendant knew the third-party was committing the tort; and

(3) the defendant actively participated in or substantially

assisted in the commission of the tort.

Doe v. Brandeis Univ., 177 F. Supp. 3d 561, 616 (D. Mass. 2016)

(citing Go–Best Assets Ltd. v. Citizens Bank of Mass., 463 Mass.

50, 64 (2012); Restatement (Second) of Torts § 876(b) (1977)).

Massachusetts courts recognize a tort of civil conspiracy

that is a form of vicarious liability for the tortious conduct

of others. Snyder v. Collura, 812 F.3d 46, 52 (1st Cir.), cert.

denied, 136 S. Ct. 2517 (2016) (citing Taylor v. Am. Chemistry

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Council, 576 F.3d 16, 34 (1st Cir. 2009)). To state a claim for

civil conspiracy, a plaintiff must allege that the conspiring

parties agreed to or assisted in committing the underlying tort.

Taylor, 576 F.3d at 35 (citations omitted).

First, the Court notes that (as it has already found) it

lacks personal jurisdiction over the individual defendants.

With respect to the Taxi Maintenance plaintiffs’ contention that

Uber conspired with its employees, the claim is legally

untenable. No civil conspiracy can exist under plaintiffs’

theory because “an entity cannot conspire with itself.” Platten

v. HG Bermuda Exempted Ltd., 437 F.3d 118, 131 (1st Cir. 2006).

The Anoush plaintiffs’ theory represents a more belt-and-

suspenders approach to pleading. In Count I of their complaint

they allege that Uber controls and manages its drivers, such

that Uber is directly liable for violating Chapter 93A. Their

claims of civil conspiracy and aiding and abetting, (Counts III

and IV), however, resort to Plan B. They allege that if Uber

did not violate the Taxi Rules, they facilitated the violation

of those rules by assisting Uber drivers in an unlawful

business.

Plaintiffs have pled facts sufficient to establish that

Uber gave substantial assistance to its drivers to violate the

Taxi Rules. Both Uber and the plaintiffs agree that Uber

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classifies its drivers as “independent third-party drivers”.

Both parties agree that Uber connects the drivers to passengers

through its smart phone application and that Uber collects the

fares for its drivers. The parties disagree on the issue of

whether Uber’s drivers were subject to the Taxi Rules.

This Court finds that the text of Rule 403 clearly applies

to Uber drivers. If Uber denies that it “controls” the drivers

(such that it is not subject to direct liability), it cannot

dispute that its drivers drove

other private vehicle[s] [that were] offer[ed] for hire for

the purpose of transporting . . . passengers [and that

those vehicles were not] licensed as a hackney carriage by

the Police Commissioner.

Finally, plaintiffs have pled facts sufficient to indicate,

if proved, that Uber had knowledge that its drivers were

committing torts. See also Boston Cab Dispatch, Inc. v. Uber

Techs., Inc., 2015 WL 314131, at *6-7 (D. Mass. Mar. 27, 2014)

(denying defendant’s motion to dismiss where plaintiffs alleged

that Uber competed unfairly in violation of the common law and

M.G.L. c. 93A, § 11).

Uber claims that it does not control its drivers but rather

that the drivers are independent contractors. The courts in

which it has proffered such claims have not necessarily seen it

that way. See, e.g., O'Connor v. Uber Techs., Inc., 82 F. Supp.

3d 1133, 1135 (N.D. Cal. 2015) (denying Uber’s motion for

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summary judgment that Uber drivers are independent contractors

as a matter of law); Mumin v. Uber Techs., Inc., 239 F. Supp. 3d

507, 532 (E.D.N.Y. 2017) (holding that plaintiff stated a

plausible overtime claim under New York labor law under theory

that Uber misclassified its drivers as independent contractors);

Razak v. Uber Techs., Inc., 2016 WL 5874822, at *5 (E.D. Pa.

Oct. 7, 2016) (holding that Uber driver stated a plausible claim

under state and federal labor law that they were employees of

Uber). Based on the litigated position of Uber, then,

plaintiffs have stated a plausible claim.

Defendants’ motion to dismiss the conspiracy and aiding and

abetting claims will, with respect to the claim of the Taxi

Maintenance plaintiffs, be allowed but, with respect to the

claim of the Anoush plaintiffs, be denied.

4. Interference with advantageous business relationships

The Taxi Maintenance plaintiffs bring a count of

interference with advantageous business relationships. They

allege that Uber interfered with identifiable business

relationships through improper means with improper motives.

Uber responds that the complaint alleges that it interfered with

the “market-at-large”, which is insufficiently precise to state

a claim.

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According to Massachusetts law, a claim for tortious

interference with advantageous business relationships requires

four elements: (1) the plaintiff was involved in a business

relationship or anticipated involvement in one, (2) the

defendant knew about the relationship, (3) the defendant

intentionally interfered with the relationship for an improper

purpose or by an improper means and (4) the plaintiff suffered

damages as a result. Pembroke Country Club, Inc. v. Regency Sav.

Bank, F.S.B., 62 Mass. App. Ct. 34 (2004) (citing United Truck

Leasing Corp. v. Geltman, 406 Mass. 811, 812, 815–17 (1990)).

To demonstrate an anticipated business relationship, a plaintiff

must show that it “had a probable future business relationship

anticipating a reasonable expectancy of financial benefit.”

Brown v. Armstrong, 957 F. Supp. 1293, 1305 (D. Mass. 1997),

aff’d, 129 F.3d 1252 (1st Cir. 1997) (citation omitted). A

plaintiff cannot rely on speculative future relationships but

must allege that a specific business relationship existed

between itself and the potential customer. See Sherman v. Clear

Channel Outdoor, Inc., 889 F. Supp. 2d 168, 177 (D. Mass. 2012).

Plaintiffs claim that they had a prospective business

relationship with every person seeking ride-hailing services in

the City of Boston. They explain that, before Uber began

operating in Boston, “every individual seeking for-hire services

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in Boston was a de facto customer” of the regulated taxi

companies. That evanescent, hypothetical relationship lacks the

specificity required to survive a motion to dismiss.

A plaintiff “may not speculate about future business

relationships when alleging this tort.” Singh v. Blue Cross/Blue

Shield of Massachusetts, Inc., 308 F.3d 25, 48 (1st Cir. 2002).

Instead, they must allege “a specific business relationship that

was interfered with by [defendant].” See id. The “mere

possibility that [their] proposal would be accepted by [the

customers] is not sufficient.” Sherman, 889 F. Supp. 2d at 177.

Because plaintiffs have failed to allege that they were

involved in a specific anticipated business relationship,

defendants’ motion to dismiss for failure to state a claim upon

which relief can be granted will be allowed. Cf. Moving &

Storage, Inc. v. Panayotov, 2014 WL 949830, at *3 (D. Mass. Mar.

12, 2014) (allowing motion to dismiss because the class of

alleged customers included “any individual who may need moving

services in the future”).

ORDER

For the foregoing reasons, the motion to dismiss of

defendants Travis Kalanick and Garrett Camp (Docket No. 70), is

ALLOWED and the consolidated motion to dismiss of defendants

Uber, Travis Kalanick and Garrett Camp (Docket No. 72) is, with

respect to the claims of antitrust violation and interference

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with advantageous business relationships and the Taxi

Maintenance claim of civil conspiracy, ALLOWED, but is otherwise

DENIED.

The following claims of the named plaintiffs remain

pending:

1) the claims of all plaintiffs for unfair competition under

the common law and M.G.L. c. 93A § 11.

2) the claims of the Anoush plaintiffs for:

a) aiding and abetting unfair competition in

violation of the common law and M.G.L. c.

93A, and

b) civil conspiracy to commit unfair

competition in violation of the common law

and M.G.L. c. 93A.

So ordered.

/s/ Nathaniel M. Gorton____

Nathaniel M. Gorton

United States District Judge

Dated December 29, 2017

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