Amicus Curiae Brief — Lyft, Inc., Petitioner v. California

Nos. 23-1130 & 23-1132

IN THE

Supreme Court of the United States

————

UBER TECHNOLOGIES, INC., ET AL.,

Petitioners,

v.

PEOPLE OF THE STATE OF CALIFORNIA, ET AL.,

Respondents.

————

LYFT, INC.,

Petitioner,

v.

PEOPLE OF THE STATE OF CALIFORNIA, ET AL.,

Respondents.

————

On Petitions for Writs of Certiorari to the

California Court of Appeal

————

BRIEF OF AMICUS CURIAE

PROFESSOR GEORGE A. BERMANN

IN SUPPORT OF PETITIONERS

————

ELLIOT FRIEDMAN

Counsel of Record

THOMAS W. WALSH

SCOTT A. EISMAN

CHRISTIAN VANDERGEEST

FRESHFIELDS BRUCKHAUS

DERINGER US LLP

3 World Trade Center

175 Greenwich St.

New York, NY 10007

(212) 277-4000

elliot.friedman@freshfields.com

May 20, 2024

Counsel for Amicus Curiae

WILSON-EPES PRINTING CO., INC. – (202) 789-0096 – WASHINGTON, D.C. 20002

i

TABLE OF CONTENTS

INTEREST OF AMICUS CURIAE ............................. 1

SUMMARY OF ARGUMENT ..................................... 2

ARGUMENT ............................................................... 6

I. This Court has Consistently Barred States from

Undermining the Federal Arbitration Act. ........... 6

II. The Court of Appeal’s Decision Violates the FAA

and the Federal Policy Protecting Arbitration

Agreements and Requires this Court’s Review. ... 9

A. The Decision Below Expressly Allows Public

Officials to Bring Suit in Court on Behalf of

Parties Whose Claims Are Subject to

Arbitration. ....................................................... 9

B. Allowing a State Official to Sue as a

Representative of Individuals Who Agreed to

Assert their Claims Exclusively in Arbitration

Runs Afoul of the FAA. ................................... 10

1. The California Court of Appeal’s Decision

Conflicts with the Decisions of Federal

Courts of Appeals. ..................................... 11

2. Waffle House Does Not Support the

Decision of the Court of Appeal. ............... 14

3. Upholding the FAA Will Not Prevent State

Officials from Using Their Powers to

Protect their Citizens. ............................... 16

III.Decisions of other State Courts have Likewise

Undermined Arbitration Agreements in Cases

Brought by State Officials, Increasing the

Prejudice to the FAA. ........................................... 17

CONCLUSION .......................................................... 19

ii

TABLE OF AUTHORITIES

Cases ............................................................... Page(s)

Arthur Andersen LLP v. Carlisle,

556 U.S. 624 (2009) .............................................. 13

AT&T Mobility LLC v. Concepcion,

563 U.S. 333 (2011) .................................. 3, 7, 8, 20

Buckeye Check Cashing, Inc. v. Cardegna,

546 U.S. 440 (2006) ................................................ 7

EEOC v. Waffle House, Inc.,

534 U.S. 279 (2002) .................................... 5, 15, 16

Epic Sys. Corp. v. Lewis,

584 U.S. 497 (2018) ............................................ 3, 6

GE Energy Power Conversion Fr. SAS, Corp.

v. Outokumpu Stainless USA, LLC,

140 S. Ct. 1637 (2020) .......................................... 13

Gen. Tel. Co. of the Nw. v. EEOC,

446 U.S. 318 (1980) .............................................. 15

Gilmer v. Interstate/Johnson Lane Corp.,

500 U.S. 20 (1991) ................................................ 17

Hays & Co. v. Merrill Lynch, Pierce,

Fenner & Smith, Inc.,

885 F.2d 1149 (3d Cir. 1989) ............................... 12

Jock v. Sterling Jewelers Inc.,

942 F.3d 617 (2d Cir. 2019) ................................. 12

iii

Joulé, Inc. v. Simmons,

944 N.E.2d 143 (Mass. 2011) ............................... 18

Kindred Nursing Ctrs. Ltd. P’ship v. Clark,

581 U.S. 246 (2017) ................................................ 8

Lamps Plus, Inc. v. Varela,

587 U.S. 176 (2019) ............................................ 3, 8

Mandviwala v. Five Star Quality Care, Inc.,

723 F. App’x 415 (9th Cir. 2018).......................... 13

Marmet Health Care Center, Inc. v. Brown,

565 U.S. 530 (2012) ................................................ 8

Mitsubishi Motors Corp. v. Soler

Chrysler-Plymouth, Inc.,

473 U.S. 614 (1985) .............................................. 17

Moses H. Cone Mem’l Hosp. v. Mercury

Constr. Corp.,

460 U.S. 1 (1983) .................................................... 7

NC Fin. Sols. of Utah v. Commonwealth

ex rel. Herring,

854 S.E.2d 642 (Va. 2021) .................................... 17

Olde Discount Corp. v. Tupman,

1 F.3d 202 (3d Cir. 1993) ............................. 4, 5, 12

People ex rel. Cuomo v. Coventry First LLC,

915 N.E.2d 616 (N.Y. 2009) ................................. 18

Perry v. Thomas,

482 U.S. 483 (1987) ............................................ 3, 7

iv

Preston v. Ferrer,

552 U.S. 346 (2008) .......................................... 8, 14

Pritzker v. Merrill Lynch, Pierce, Fenner

& Smith, Inc.,

7 F.3d 1110 (3d Cir. 1993) ................................... 13

Rent-A-Ctr. v. Iowa Civil Rights Comm’n,

843 N.W.2d 727 (Iowa 2014)................................ 19

Rent-A-Ctr., W., Inc. v. Jackson,

561 U.S. 63 (2010) .............................................. 3, 7

Rogers v. Lyft, Inc.,

452 F. Supp. 3d 904 (N.D. Cal. 2020) .................. 10

Shearson/Am. Exp., Inc. v. McMahon,

482 U.S. 220 (1987) .............................................. 17

Southland Corp. v. Keating,

465 U.S. 1 (1984) ............................................ 3, 5, 7

State ex rel. Hatch v. Cross Country Bank, Inc.,

703 N.W.2d 562 (Minn. Ct. App. 2005) ............... 19

United States v. Bankers Ins. Co.,

245 F.3d 315 (4th Cir. 2001) ...................... 4, 11, 12

Viking River Cruises, Inc. v. Moriana,

595 U.S. 639 (2022) ................................ 3, 8, 15, 16

Statutes

9 U.S.C. § 2 .................................................................. 6

Cal. Bus. & Prof. Code § 17203 ................. 9, 10, 14, 15

v

Other Authorities

Hearing Before a Subcomm. of the

Senate Comm. on the Judiciary, 67th

Cong. 6 (1923)......................................................... 6

Christopher R. Drahozal, Federal Arbitration Act Preemption, 79 Ind. L.J.

393 (2004) ............................................................... 6

Restatement (Third) U.S. Law of Int’l

Comm. Arb. (Am. Law Inst. 2024)................. 13, 14

1

INTEREST OF AMICUS CURIAE1

Amicus curiae George A. Bermann is the Jean

Monnet Professor of European Union Law, Walter

Gellhorn Professor of Law, and director of the Center

for International Commercial and Investment Arbitration at Columbia Law School. He has been a faculty

member at Columbia Law School since 1975, and

teaches and writes extensively on international arbitration, transnational litigation, European Union law,

administrative law, and comparative law. He is an affiliated faculty member of both the MIDS Master’s

Program in International Dispute Settlement in Geneva and the International Dispute Resolution LLM

Program at the School of Law of Sciences Po in Paris.

For more than four decades, Professor Bermann

has been an active arbitrator in commercial and investment disputes. He is the Chief Reporter of the

American Law Institute’s Restatement of the U.S. Law

of International Commercial and Investor-State Arbitration (Am. Law. Inst. 2024), a project that began in

2007. He is also the co-author of the UNCITRAL

Guide to the New York Convention on the Recognition

and Enforcement of Foreign Arbitral Awards; chair of

the Global Advisory Board of the New York International Arbitration Center; co-editor-in-chief of the

American Review of International Arbitration; and

founding member of the International Chamber of

1 Pursuant to Rule 37.2, all parties were notified of amicus cu-

riae’s intent to submit this brief at least 10 days before it was

due. Pursuant to Rule 37.6, counsel for amicus authored this

brief. No counsel for a party in this case authored this brief in

whole or in part. Only amicus and his counsel contributed monetarily to the preparation and submission of this brief.

2

Commerce International Court of Arbitration’s Governing Body.

Professor Bermann is interested in this case because it raises important questions concerning the relationship between federal and state law in the field

of commercial arbitration. While there is a role for

state law in this field, the decisions of this Court have

established that States may not enact or implement

legislation that compromises the substantial federal

interest in the enforcement of agreements to arbitrate. There is considerable case law, including from

this Court, on the preemptive effect of the Federal Arbitration Act (“FAA”) on state law. That case law has

been unfailingly sensitive to the importance of the

FAA and its priority over state policies that make arbitration agreements and arbitral awards harder to

enforce. The decision below directly undermines the

FAA and the federal policy in favor of enforcing arbitration agreements and requires this Court’s review.

SUMMARY OF ARGUMENT

This Court has repeatedly rejected attempts by

state legislatures and state courts to undermine the

effectiveness of agreements to arbitrate. The decision

of the California Court of Appeal here allows the California Attorney General and other public officials to

sidestep and effectively nullify arbitration agreements between ride-sharing companies and their drivers. The decision does so by allowing public officials to

pursue representative claims or relief on behalf of the

drivers, and against Lyft and Uber, in state court proceedings—even though the drivers agreed to resolve

their disputes with Lyft and Uber exclusively through

arbitration. This decision violates the FAA and the

federal policy protecting arbitration agreements and

calls for this Court’s review.

3

I. Congress enacted the FAA in 1925 to protect

agreements to arbitrate. Frequently since then, however, States have sought to undermine arbitration

agreements by creating new private causes of action

and making their courts the sole arbiters of those

claims—thereby denying effect to freely entered

agreements to arbitrate those claims between private

parties. In all such cases, this Court has affirmed the

right to arbitrate and has rejected state laws that seek

to constrain that right. According to this Court, the

FAA embodies a substantive federal policy favoring

arbitration that States must respect. For States to declare state-law claims nonarbitrable is to create “‘an

obstacle to the accomplishment and execution of the

full purposes and objectives’ of the FAA”—a result

that flouts the Constitution’s Supremacy Clause.

Lamps Plus, Inc. v. Varela, 587 U.S. 176, 183 (2019)

(quoting AT&T Mobility LLC v. Concepcion, 563 U.S.

333, 352 (2011)).

This Court has reiterated its disapproval of these

state-law measures, first stated in Southland Corp. v.

Keating, 465 U.S. 1, 15–16 (1984), in numerous cases.

See, e.g., Rent-A-Ctr., W., Inc. v. Jackson, 561 U.S. 63,

75 n.4 (2010); Perry v. Thomas, 482 U.S. 483, 491

(1987). This trend has not abated with time. In 2022,

this Court reversed a decision of the California Court

of Appeal that invalidated certain employee arbitration agreements. See Viking River Cruises, Inc. v. Moriana, 596 U.S. 639 (2022). Just a few years earlier,

this Court warned that courts “must be alert to new

devices and formulas” that undercut the federal policy

in favor of arbitration. Epic Sys. Corp. v. Lewis, 584

U.S. 497, 509 (2018).

II. The Court should reinforce that admonition in

this case. Here, the attack on agreements to arbitrate

4

takes a form that this Court has not previously considered. The California law at issue authorizes a state

official to bring claims that belong to individuals, as

those individuals’ “representative,” seeking the payment of restitution to those individuals. In the suit below, state officials brought these claims against Lyft

and Uber, alleging that the defendants misclassified

ride-share and delivery drivers as contractors rather

than employees. Each driver had previously agreed to

submit these and other claims arising from their relationship with Lyft or Uber to arbitration. There is no

dispute that if the drivers had brought on their own

behalf the precise claims that the state officials

brought, the drivers would have to arbitrate those

claims. Even so, the California Court of Appeal ruled

that there is “no basis” for compelling arbitration of

these claims because the public officials “are not parties to the arbitration agreements.” Pet. App. 20a–

21a.2

III. The California Court of Appeal’s ruling is at

odds with this Court’s precedent and the preemptive

nature of the FAA. Federal Courts of Appeals in cases

like this one have rejected the reasoning that the California Court of Appeal applied. In United States v.

Bankers Insurance Co., the Fourth Circuit rebuffed an

attempt by the U.S. Attorney General to avoid arbitration by bringing suit on behalf of federal agencies

bound by an arbitration agreement. 245 F.3d 315 (4th

Cir. 2001). And in Olde Discount Corp. v. Tupman, the

Third Circuit ruled that the Delaware Deputy Attorney General could not sue to rescind a contract on behalf of a party bound by an arbitration clause, because

2 Citations to “Pet. App.” refer to the Petition Appendix in No.

23-1132.

5

allowing a state official to use a “substitute” proceeding to pursue claims that the parties had agreed to arbitrate would “render [the parties’] right to arbitration

meaningless,” and “must fall before the conflicting

right to an arbitral forum granted by the FAA.” 1 F.3d

202, 209 (3d Cir. 1993).

There is likewise no doubt that the California

Court of Appeal’s decision refusing to compel arbitration runs afoul of the FAA. If, as this Court has held,

States may not proscribe arbitration when an individual’s claim is governed by a valid arbitration agreement, Southland, 465 U.S. at 15–16, state officials

likewise cannot pursue representative claims and relief in court on the individual’s behalf. To allow public

officials to sidestep the arbitration agreements here

would undermine Congress’s purpose in enacting the

FAA: to enforce agreements to arbitrate claims between private parties.

IV. The decision below is not an isolated error.

Other state appellate courts have issued similar decisions, often mistakenly relying on this Court’s decision in EEOC v. Waffle House, Inc., 534 U.S. 279

(2002)—a case involving interpretation of the Americans with Disabilities Act, where federal preemption

was not applicable. The California Court of Appeal’s

decision conflicts with this Court’s precedent and has

deepened the split between state appellate courts, on

the one hand, and the decisions of the Third and

Fourth Circuits, on the other. This Court should grant

certiorari to resolve that split and bring state law into

harmony with the policies and prescriptions of the

FAA.

6

ARGUMENT

I.

This Court has Consistently Barred States

from Undermining the Federal Arbitration

Act.

When Congress enacted the Federal Arbitration

Act in 1925, a fundamental purpose was ensuring that

agreements to arbitrate commercial disputes arising

out of interstate or international transactions would

be fully respected by state courts and legislatures. See

Epic Sys. Corp. v. Lewis, 584 U.S. 497, 505 (2018). Before the FAA, agreements to arbitrate disputes were

largely denied enforcement on the ground that they

tended to “oust” courts of their jurisdiction. See generally Christopher R. Drahozal, Federal Arbitration Act

Preemption, 79 Ind. L.J. 393 (2004). Congress’s primary purpose in enacting the FAA was to override

that case law,3 and that has been the touchstone of

this Court’s interpretation of the FAA ever since.

This Court has repeatedly rejected attempts by

state legislatures and state courts to undermine the

effectiveness of agreements to arbitrate. For decades,

this Court has stressed that FAA § 2—which, generally, makes arbitration agreements “valid, irrevocable, and enforceable,” 9 U.S.C. § 2—represents “a liberal federal policy favoring arbitration agreements,

notwithstanding any state substantive or procedural

3 Senator Walsh, explaining the purpose of the FAA at the 1923

Senate Hearings on the Act, reported that the Act “sought to

overcome the rule of equity, that equity will not specifically enforce an[y] arbitration agreement.” Sales and Contracts to Sell in

Interstate and Foreign Commerce, and Federal Commercial Arbitration: Hearing Before a Subcomm. of the Senate Comm. on

the Judiciary, 67th Cong. 6 (1923).

7

policies to the contrary.” AT&T Mobility LLC v. Concepcion, 563 U.S. 333, 346 (2011) (citing Moses H.

Cone Mem’l Hosp. v. Mercury Constr. Corp., 460 U.S.

1, 24 (1983)). This Court has thus consistently had “a

healthy regard” for this federal policy in answering

“questions of arbitrability.” Moses H. Cone Mem’l

Hosp., 460 U.S. at 24.

In the leading case of Southland Corp. v. Keating,

for instance, this Court observed that “Congress intended to foreclose state legislative attempts to undercut the enforceability of arbitration agreements.” 465

U.S. at 15–16. Southland established a standard to

which this Court has since consistently adhered: the

FAA preempts not only state-law measures that directly conflict with the FAA, but also those that single

out or discriminate against arbitration or that otherwise “stand as an obstacle to the accomplishment of

the FAA’s objectives.” Concepcion, 563 U.S. at 343.

Thus, this Court has repeatedly rejected attempts by

state legislatures and courts to undermine agreements to arbitrate. See Buckeye Check Cashing, Inc. v.

Cardegna, 546 U.S. 440, 446 (2006) (state courts may

not rely on public policy to avoid arbitration agreements); Rent-A-Ctr., W., Inc. v. Jackson, 561 U.S. 63,

67 (2010) (FAA was designed to “place[] arbitration

agreements on an equal footing with other contracts”

(citing Buckeye, 546 U.S. at 443)); Perry v. Thomas,

482 U.S. 483, 491 (1987) (states cannot force statecourt litigation of claims subject to arbitration);

Lamps Plus, Inc. v. Varela, 587 U.S. 176, 183 (2019)

(“[S]tate law is preempted to the extent it ‘stands as

an obstacle to the accomplishment and execution of

the full purposes and objectives’ of the FAA.” (quoting

Concepcion, 563 U.S. at 352)).

8

The Court has looked no more favorably on decisions by state courts restricting access to arbitration

by consenting parties. In Kindred Nursing Centers

Ltd. Partnership v. Clark, for instance, this Court rejected a Kentucky rule that disfavored arbitration

agreements by invalidating such agreements signed

on another person’s behalf under a power of attorney.

581 U.S. 246, 248 (2017). And in Concepcion, this

Court rejected a California common-law doctrine that

invalidated as unconscionable class arbitration waivers. 563 U.S. at 352. The Court has also struck down

state statutes giving state administrative bodies the

exclusive authority to adjudicate claims between private parties. For example, in Preston v. Ferrer, this

Court held that a state cannot force parties that have

agreed to arbitrate claims to litigate those claims instead before an administrative tribunal. 552 U.S. 346,

349–50 (2008).

Most recently, in 2022, this Court reversed another decision of the California Court of Appeal that

authorized representatives of private parties to bring

claims in court that were subject to agreements to arbitrate. Viking River Cruises, Inc. v. Moriana concerned a California statute that authorized employees

to bring claims on behalf of other employees against

their employer in court. 596 U.S. 639, 644 (2022). The

California Court of Appeal interpreted that law as allowing such suits even when the employee and employer had agreed to arbitrate the claims. Id. at 648.

In reversing the California Court of Appeal’s judgment, this Court recognized that it has enforced agreements to arbitrate claims brought by a representative

on behalf of an absent principal who signed an arbitration agreement, id. at 658 (citing Marmet Health

Care Ctr., Inc. v. Brown, 565 U.S. 530 (2012))—the

very situation present here. In reaching its decision,

9

the Court also rejected the argument that the claims

at issue belonged to the State, holding that “regardless of whether a[n] . . . action is in some sense also a

dispute between an employer and the State, nothing

. . . categorically exempts claims belonging to sovereigns from the scope of [the FAA].” Id. at 652 n.4.

II. The Court of Appeal’s Decision Violates the

FAA and the Federal Policy Protecting Arbitration Agreements and Requires this

Court’s Review.

A. The Decision Below Expressly Allows

Public Officials to Bring Suit in Court on

Behalf of Parties Whose Claims Are Subject to Arbitration.

In this case, California state officials sued Lyft

and Uber on behalf of ride-share and delivery drivers,

alleging that the defendants misclassified those drivers as contractors rather than employees. Pet. App.

2a. The California statute authorizing these claims

provides that the drivers themselves may bring the

claims or that state officials may “pursue representative claims [and] relief on behalf of” individuals.4 Cal.

Bus. & Prof. Code § 17203. As a remedy for the drivers’

claims, the state officials demand that Lyft and Uber

pay restitution to the drivers. See Pet. App. 2a.

There is no dispute that the drivers had agreed to

arbitrate these claims. Pet. App. 6a n.9 (“We will assume for purposes of this opinion that the arbitration

agreements bind drivers who entered them.”). Indeed,

4 The state officials also bring other claims, including some that

are not “representative” claims under the relevant statutes, such

as claims for injunctive relief and civil penalties. Pet. App. 2a. As

the California Court of Appeal recognized, Lyft and Uber do not

seek to compel arbitration of non-representative claims. Id.

10

in cases where the drivers have brought these exact

claims on their own behalf in court, courts compelled

arbitration. See, e.g., Rogers v. Lyft, Inc., 452 F. Supp.

3d 904, 918, 921 (N.D. Cal. 2020), aff’d, 2022 WL

474166 (9th Cir. Feb. 16, 2022). When Lyft and Uber

sought to compel arbitration of the “representative”

claims brought on behalf of the drivers in this case,

however, the trial court refused, Pet. App. 30a, and

the California Court of Appeal affirmed, Pet. App. 1a.

The Court of Appeal reasoned that the public officials

“are not parties to the arbitration agreements” and

are instead “nonparties to the agreements who are suing in their law enforcement capacities.” Pet. App.

20a. As a result, even though the state officials bring

claims belonging to the drivers, as “representative[s]”

of the drivers, seeking the payment of relief to the

drivers, see Cal. Bus. & Prof. Code § 17203, the California Court of Appeal ruled that “there is no basis for

binding [the officials] to arbitration agreements Uber

and Lyft entered with [the] drivers.” Pet. App. 8a.

B. Allowing a State Official to Sue as a Representative of Individuals Who Agreed to

Assert their Claims Exclusively in Arbitration Runs Afoul of the FAA.

The California Court of Appeal erred. The state

officials here assert “representative claims” for restitution, Cal. Bus. & Prof. Code § 17203, on behalf of

drivers who, because of their arbitration agreements

with Lyft and Uber, are obliged to pursue the claims

in an arbitral forum. This case cannot be distinguished from the Court’s numerous prior cases rejecting state attempts to undermine arbitration agreements. As in several of those cases, the decision below

effectively declares certain claims under state law to

be nonarbitrable and consequently allows the claims

11

to proceed in court notwithstanding agreements to

submit the claims exclusively to arbitration. Although

some state courts have found similar measures to be

compatible with the FAA, the Federal Courts of Appeals that have considered this issue have consistently held to the contrary. This Court should do so too.

1. The California Court of Appeal’s Decision Conflicts with the Decisions

of Federal Courts of Appeals.

Federal courts have consistently found similar

suits by public officials to be incompatible with the

FAA. The California Court of Appeal’s decision allows

public officials to essentially sidestep the drivers’

agreement to arbitrate their disputes. The notion that

a public official may bring claims in court on behalf of

a party that agreed to arbitrate those claims was

squarely rejected by the Fourth Circuit in United

States v. Bankers Insurance Co., 245 F.3d 315 (4th Cir.

2001). There, the U.S. Attorney General sued on behalf of federal agencies, bringing claims that the agencies had agreed to arbitrate. The Fourth Circuit rejected this attempt to avoid an arbitration agreement,

noting that “when a third party sues on a contract, any

arbitration provision . . . remains in force,” and it

would be unjust to allow the Attorney General to bring

a claim arising out of the contract “while . . . avoid[ing]

the terms of an arbitration provision contained

therein.” Id. at 323.

To the same effect is the Third Circuit’s decision

in Olde Discount Corp. v. Tupman, 1 F.3d 202 (3d Cir.

1993). There, the Delaware Deputy Attorney General

sued for rescission of securities transactions between

a securities broker and one of its customers. The broker and its customer had agreed to arbitrate any dispute arising from the securities transaction, and the

12

broker resisted the state action, as Lyft and Uber have

done here. The Third Circuit honored the parties’

agreement, observing that “[State] proceedings, to the

extent they concern claims and liabilities between the

[contractual parties], are nothing other than a substitute for the arbitration.” Id. at 209. The court concluded that the fact that the Delaware Deputy Attorney General was not a party to the arbitration agreement “does not alter [the] result,” because allowing a

state official to use such a “substitute” proceeding to

pursue claims that the parties had agreed to arbitrate

would “render [the parties’] right to arbitration meaningless,” and “must fall before the conflicting right to

an arbitral forum granted by the FAA.” Id. The situation here is indistinguishable from those in Olde Discount and Bankers Insurance: here, too, a public official seeks to circumvent the parties’ arbitration agreement.

Bankers Insurance and Olde Discount echo decisions by other Courts of Appeals requiring arbitration

of claims covered by an arbitration agreement, even

when such claims are brought by a third party. See

Jock v. Sterling Jewelers Inc., 942 F.3d 617, 625 (2d

Cir. 2019) (enforcing arbitration agreements signed

by absent class members when class representative

brought action on their behalf), cert. denied, 141 S. Ct.

255 (2020); Hays & Co. v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 885 F.2d 1149, 1153 (3d Cir. 1989)

(debtor’s claims brought by court-appointed bankruptcy trustee are subject to the debtor’s arbitration

agreement); Pritzker v. Merrill Lynch, Pierce, Fenner

& Smith, Inc., 7 F.3d 1110, 1122 (3d Cir. 1993)

(“[A]rbitration agreements may be upheld against

non-parties where the interests of such parties are directly related to, if not congruent with, those of a signatory.”); see also Mandviwala v. Five Star Quality

13

Care, Inc., 723 F. App’x 415, 417 (9th Cir. 2018) (forcing arbitration of claims brought in state court because they “could be pursued individually” by a plaintiff).

These cases signal that there is nothing unusual

about extending arbitration agreements to nonparties. This Court very recently held, for example, that

the FAA “authorize[s] the enforcement of a[n] [arbitration agreement] by a nonsignatory.” GE Energy

Power Conversion Fr. SAS, Corp. v. Outokumpu

Stainless USA, LLC, 590 U.S. 432, 436–37 (2020); see

also Arthur Andersen LLP v. Carlisle, 556 U.S. 624,

631 (2009) (nonsignatory to a contract may be bound

by it). The Restatement of the U.S. Law of International Commercial and Investment Arbitration takes

the same view:

[N]onsignatories may be bound by or entitled to invoke an arbitration agreement to

the extent that they may be deemed to

have assented to the arbitration agreement under ordinary principles of contract

law, as well as other legal doctrines that

operate legally to bind parties. In addition

to principles of contract law, a range of

theories and doctrines exist under which a

nonsignatory may be bound by or entitled

to invoke an arbitration agreement, including doctrines under equity and that

apply to related corporate entities.

Restatement (Third) U.S. Law of Int’l Comm. Arb.

§ 2.3 cmt. a (Am. Law Inst. 2024). Here, state officials

brought claims belonging to individuals, and so they

must be bound by the arbitration agreements to which

the individuals agreed.

14

Finally, the state officials’ attempt to bring these

claims in a state forum also contravenes the teachings

of another of this Court’s precedents, Preston v. Ferrer, 552 U.S. 346 (2008). Under the decision below, a

public official might, by “pursu[ing] representative

claims or relief,” Cal. Bus. & Prof. Code § 17203, and

obtaining a final judgment or settlement with the

company, eliminate a driver’s access to arbitration by

creating claim preclusion applicable to the driver’s individual claims.5 In fact, if the officials were to settle

a restitution claim against a business, they could in

one fell swoop preclude claims held by the very individuals who the state officials purport to represent—

potentially divesting thousands of potential claimants

of their rights of action. This situation mirrors the one

in Preston, where this Court struck down a California

law that forced disputes subject to an arbitration

agreement into a state administrative body for resolution. 552 U.S. at 349. There is no meaningful difference between redirecting a claim to the California Labor Commissioner, as in Preston, and allowing a Californian public official to preclusively litigate an individual’s claim to judgment in a state court, as here. In

both situations, a state law impermissibly diverts

claims subject to arbitration into a state forum, with

potentially preclusive effects.

2. Waffle House Does Not Support the

Decision of the Court of Appeal.

The situation here must not be confused with

EEOC v. Waffle House, Inc., 534 U.S. 279 (2002)—a

5 The California Court of Appeal admitted this possibility in its

decision, noting that “there could be some future preclusive effect” on claims by individuals but ruling it “need not resolve this

point” because the California public officials are not signatories

to the relevant arbitration agreements. Pet. App. 18a.

15

mistake made by the California Court of Appeal, Pet.

App. 8a–11a. In Waffle House, the EEOC brought a

court action against an employer for violations of the

Americans with Disabilities Act (“ADA”), seeking

backpay, reinstatement, and damages. This Court

ruled that the EEOC’s suit was compatible with the

FAA, despite an arbitration agreement between the

employer and its employee, because the EEOC was

not asserting the same claim that the employee was

required by contract to bring in an arbitral forum. Id.

at 297–98. This Court stated that the EEOC’s claim

was not “merely derivative” of a claim by the employee, id. at 297, because once a charge is filed with

the EEOC, the EEOC is “in command of the process”

and has “exclusive jurisdiction”: the employee may not

bring her own suit without the EEOC’s permission, id.

at 291–92. Here, by contrast, the public officials are

acting as “representative[s]” asserting claims that the

drivers could independently assert, Cal. Bus. & Prof.

Code § 17203, albeit in arbitration. While this Court

ruled in Waffle House that the EEOC was “not merely

a proxy” for the employee, id. at 288 (citing Gen. Tel.

Co. of the Nw. v. EEOC, 446 U.S. 318, 326 (1980)), in

this case, the public officials here are indeed proxies

for the drivers. This case is far more like Viking River,

where this Court affirmed that “representative actions in which a single agent litigates on behalf of a

single principal are part of the basic architecture of

much of substantive law,” and that “regardless of

whether a[n] . . . action is in some sense also a dispute

between an employer and the State, nothing . . . categorically exempts claims belonging to sovereigns from

the scope of [the FAA].” 595 U.S. at 652 n.4, 657.

More importantly, the EEOC brought its claim in

Waffle House under the ADA, a federal statute. In this

respect, this case is fundamentally different. Here, the

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officials are bringing an action under a state, not a

federal, statute. Congress is free to modify the FAA’s

scope or establish exceptions, but state legislatures do

not have that privilege. Waffle House harmonized two

federal statutes. Here, California is preempted from

curtailing the reach of the FAA.

3. Upholding the FAA Will Not Prevent

State Officials from Using Their

Powers to Protect their Citizens.

Protecting drivers’ access to arbitration would not

“fundamentally undermine” the “important public

policies underlying” California labor law, as the California Court of Appeal suggested. Pet. App. 26a. The

Court of Appeal acknowledged that Lyft and Uber

have never alleged that the arbitration agreements

here affect the officials’ demands for non-individualized remedies (such as injunctive relief and civil penalties), see Pet. App. 4a, and so requiring the individual actions to proceed in arbitration leaves the officials’ authority to pursue non-individualized remedies

fully intact.

Moreover, employment claims “continue to serve

both [their] remedial and deterrent function” when

claimants pursue those claims in an arbitral forum.

Gilmer v. Interstate/Johnson Lane Corp., 500 U.S. 20,

27–28 (1991) (arbitration of Age Discrimination in

Employment Act claims was consistent with “further[ing] [the] important social policies” of that Act

and the arbitration dispute resolution mechanism

“can further broader social purposes” (citing

Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth,

Inc., 473 U.S. 614, 637 (1985))); Shearson/Am. Exp.,

Inc. v. McMahon, 482 U.S. 220, 238, 242 (1987) (Securities Exchange Act and civil RICO claims are arbitrable). Enforcing the arbitration agreements at issue

17

here would thus fully accord with California’s stated

employee-protection aim. Because the drivers would

be entitled to the same relief (if any) in arbitration as

they would have in court, and because the state officials’ non-individualized claims may be brought in

court, enforcement of the driver’s arbitration agreements does not undermine California law.

III. Decisions of other State Courts have Likewise Undermined Arbitration Agreements

in Cases Brought by State Officials, Increasing the Prejudice to the FAA.

Unfortunately, appellate courts in several other

States, like the California Court of Appeal, have issued decisions permitting state agencies to sidestep

agreements to arbitrate. Those States have likewise

empowered public officials to bring state actions to

prosecute claims as a representative of an individual

bound by an arbitration agreement.

One recent such case is NC Financial Solutions of

Utah v. Commonwealth ex rel. Herring, 854 S.E.2d

642 (Va. 2021), where the Virginia Attorney General

sued a lender under the Virginia Consumer Protection

Act, seeking restitution for consumers who had agreed

to arbitrate disputes with the lender. In that case, the

Supreme Court of Virginia ruled that the Attorney

General “is not precluded from seeking ‘victim-specific’ relief, including restitution for individual consumers,” because Virginia “is not bound by the arbitration agreements at issue.” Id. at 461.

In another such case, People ex rel. Cuomo v. Coventry First LLC, the New York Attorney General sued

a buyer of life insurance policies, alleging that the defendant engaged in bid-rigging that harmed insurance

policy owners. 915 N.E.2d 616, 617–18 (N.Y. 2009).

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The Attorney General sought recission of the insurance policy purchase agreements, which contained arbitration agreements, and restitution on behalf of the

policy sellers. The New York Court of Appeals rejected

the defendant’s attempt to compel arbitration of the

recission and restitution claims brought on behalf of

the sellers. The Court of Appeals held that “the arbitration agreement . . . does not bar the Attorney General from pursuing victim-specific judicial relief in his

enforcement action,” because the Attorney General

was not a party to the arbitration agreement. Id. at

619–20.

The Massachusetts Supreme Judicial Court

reached a similar decision in Joulé, Inc. v. Simmons,

944 N.E.2d 143 (Mass. 2011). There, an employee filed

a claim with a state agency alleging discrimination.

Id. at 145. The employer sought to compel arbitration

of the claim under an employment agreement’s arbitration provision, but the Massachusetts court held

that the state agency’s “authority to conduct an investigation and adjudication of [the employee’s] claim of

discrimination was not affected by the [employee’s]

agreement to arbitrate.” Id. at 147. The court further

noted that “there is no legal bar to having an arbitration and the [state administrative] proceeding continue concurrently, on parallel tracks,” id. at 152, and

that the employee was free to testify or otherwise participate in the state administrative proceeding, id. at

98.

So too did courts in Iowa and Minnesota. In RentA-Center v. Iowa Civil Rights Commission, the Supreme Court of Iowa ruled that the Iowa Civil Rights

Commission could bring a claim against an employer

and seek “relief specific to” an individual despite an

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agreement between the individual and employer to arbitrate such claims. 843 N.W.2d 727, 741 (Iowa 2014).

And in State ex rel. Hatch v. Cross Country Bank, Inc.,

the Minnesota Attorney General sued credit card companies under various state-law causes of action, alleging unfair or deceptive practices and seeking restitution on behalf of consumers who had signed arbitration agreements with the defendants. 703 N.W.2d 562,

566 (Minn. Ct. App. 2005). The defendants sought to

compel arbitration of the restitution claims, but the

Court of Appeals of Minnesota disagreed, finding that

“a party that has not agreed to arbitrate a dispute cannot be required to arbitrate,” id. at 569, and “[t]he

FAA only applies when there is an agreement to arbitrate,” id. at 571.

Unless this Court intervenes, there will doubtless

be many more future examples of state legislatures

and courts seeking to undermine the FAA in this manner. This Court should make clear that, just as States

may not shield state-law claims from arbitration, they

also may not empower public officials to bring damages actions in court as a representative of parties

who have agreed to resolve their disputes exclusively

through arbitration.

CONCLUSION

The California Court of Appeal’s decision should

not be allowed to stand. This Court’s consistent case

law under the FAA requires States to place arbitration agreements on the same footing as other contractual provisions and refrain from adopting measures

that conflict with the FAA, discriminate against arbitration, or otherwise “stand as an obstacle to the accomplishment of the FAA’s objectives.” Concepcion,

563 U.S. at 343. If, as this Court has held, parties may

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not avoid their obligation to honor their arbitration

agreement, public officials should not be allowed to do

so on their behalf. Accordingly, this Court should

grant the Petition and invalidate the decision of the

California Court of Appeal, which harms the FAA and

contravenes this Court’s jurisprudence.

Respectfully submitted,

ELLIOT FRIEDMAN

Counsel of Record

THOMAS W. WALSH

SCOTT A. EISMAN

CHRISTIAN VANDERGEEST

FRESHFIELDS BRUCKHAUS

DERINGER US LLP

3 World Trade Center

175 Greenwich St.

New York, NY 10007

(212) 277-4000

elliot.friedman@freshfields.com

Counsel for Amicus Curiae

May 2024