A U.S. appeals court on Thursday ruled in favor of Uber Technologies in a closely watched lawsuit over whether passengers gave up their right to sue the ride-sharing company when they registered for its service.
The 2nd U.S. Circuit Court of Appeals in Manhattan vacated a lower court order that denied motions by Uber and former Chief Executive Officer Travis Kalanick to compel arbitration.
It also said Spencer Meyer, the passenger named in the proposed class action, had agreed as a matter of law to arbitrate his own claims with Uber.
Lawyers for Uber, Kalanick, and Meyer did not immediately respond to requests for comment.
The decision may give a boost to Internet companies hoping to force customers to submit to arbitration, included in a long list of terms and conditions they may not see.
Meyer said Uber failed to provide sufficient notice, saying he had not seen a hyperlink to a document that mentions arbitration when he registered with his smartphone.
But in Thursday’s decision, Circuit Judge Denny Chin said Uber disclosed the provision clearly, and that Meyer was not excused for not following the hyperlink.
“While it may be the case that many users will not bother reading the additional terms, that is the choice the user makes …” Chin wrote.
The appeals court returned the case to U.S. District Judge Jed Rakoff in Manhattan to decide whether Uber, by having litigated the case in his court, waived its right to arbitrate.