Uber sues the city over collective bargaining rules, in a weird way

Everyone knew it was coming: today Uber filed a lawsuit against the City of Seattle to stop the collective bargaining process for its drivers from moving forward. But they’ve chosen a strange legal maneuver to do it.

Caveat emptor: I’m not a lawyer, and we’re about to wade into the deep end in legal process. My lawyer friends are welcome to chime in here and let me know where I got it right and where I’m just plain wrong.

Last spring, the U.S. Chamber of Commerce did Uber’s dirty work for it, filing a lawsuit on its behalf that was eventually thrown out by the judge because the law hadn’t gone into effect so the company couldn’t actually show that it had been harmed. Now the law has officially taken effect and the City has issued its first round of rule-making, so the game is on.

But today Uber didn’t go back to the same U.S. District Court that the Chamber sued in last year.  Instead, they filed in King County Superior Court, and they filed a very different kind of case.

Instead of claiming that the ordinance itself is illegal (they are silent on that point), they are challenging the rulemaking that the Department of Finance and Administrative Services (FAS) has pursued, as required by the ordinance, to flesh out the details of the collective-bargaining process.

The case they are trying to make is that FAS’s rulemaking has been “arbitrary and capricious.” This is a specific reference to the Washington state Administrative Procedures Act, which states:

In a proceeding involving review of a rule, the court shall declare the rule invalid only if it finds that: The rule violates constitutional provisions; the rule exceeds the statutory authority of the agency; the rule was adopted without compliance with statutory rule-making procedures; or the rule is arbitrary and capricious.

Taken literally, the APA just applies to state agencies, but there is case law that says this is a reasonable standard to apply to other agencies in local jurisdictions as well.

Uber’s filing is therefore littered with the phrase “arbitrary and capricious” in order to try to meet this standard of judicial review. They argue that there are four main ways that FAS screwed up:

  1. They are doing their rulemaking piecemeal, instead of all at once. If they can make the case that the rules really need to be considered and reviewed as an indivisible whole, they may have something here.
  2. Their rules “disregard the facts and circumstances of the industry and lack a rational basis,” their way of saying “they disagree with our talking points on how our industry works.”
  3. FAS did not allow for enough time between when they published the draft rules and when they held a public hearing. FAS published its draft on November 23rd, and held the public hearing on December 6th. Uber complains that it’s only eight business days, and the Thanksgiving holidays are in the middle of that period. All true. But it turns out that Seattle Municipal Code actually sets the standard for the minimum amount of time between publishing draft rules and the public hearing: not less than 10 days. FAS’s hearing was 13 days after the rules were published. It doesn’t say they must be business days, and it doesn’t say anything about holidays (but even if you took out the Thanksgiving holidays, it’s still 11). So this is probably B.S.
  4. FAS conducted flawed surveys of Uber’s drivers. Uber’s argument on this point is pretty whiny, and it’s not clear that a judge will give it much weight.

Of course, what this all rolls up to is that Uber didn’t like FAS’s decision to not let all drivers be “qualified drivers” with the right to vote on whether to be represented; FAS said in order to qualify a driver must average 4 trips a week for a three-month period in the last year. Uber wants all drivers to qualify because it knows that full-time Uber drivers and occasional Uber drivers have very different issues and if they are all represented it will dilute and fragment the drivers’ ability to organize and collectively bargain.

So here’s the weird thing about Uber’s lawsuit: they filed for a “writ of certiorari” in King County Superior Court. A writ of certiorari is a special kind of action that a court takes in order to formally review (and possibly overturn) the ruling of a lower court. Any court that has discretion on which cases it decides to hear will issue a writ of certiorari when it takes up a case; for instance, all of the U.S. Supreme Court’s cases begin that way. So Uber is effectively appealing the FAS rulemaking to the King County Superior Court — even though FAS isn’t a court, and isn’t even in the judicial branch.

Uber’s filing refers to a case as precedent, in which a Snohomish County Superior Court issued a writ of certiorari for a case involving local agency rulemaking. What they carefully omit, however, is that the case they mention went through a review with the Hearing Examiner first, then was appealed to the County Council in its official capacity as a quasi-judicial body that hears appeals of Hearing Examiner rulings as part of the standard judicial appeal process dictated in their laws. So the Snohomish County Superior Court issued its writ to the County Council– not to the rulemaking agency. The Seattle City Council plays the same role for the city’s Office of the Hearing Examiner, mostly for land use decisions. So there is precedent for a Superior Court issuing writs of certiorari, but not directly to a local executive branch agency.  The State Constitution (article IV, section 6) defines the jurisdiction of Superior Courts as having appeal jurisdiction over inferior courts in the county “as may be prescribed by law,” and as a catch-all “in all cases and of all proceedings in which jurisdiction shall not have been by law vested exclusively in some other court.”

That brings us to a key question then: what judicial body hears appeals of FAS’s rulemaking on the city’s Uber collective bargaining ordinance? Actually, the ordinance itself is pretty clear on this (SMC 6.310.735.M.2):

Judicial review. After receipt of the decision of the Hearing Examiner, an aggrieved party may pursue all available judicial remedies.

It sure looks like the first level of review is the Office of the Hearing Examiner. That suggests that Uber’s lawsuit will get thrown out for lack of jurisdiction at the Superior Court level, and the company will get pointed in the direction of the Hearing Examiner to file its appeal there.

I could be wrong about this. If I’m right, Uber either did some stupid-ass lawyering, or they went forum-shopping because they didn’t want to deal with the Hearing Examiner. We’ll know pretty quickly: the city will write their reply brief arguing that the court doesn’t have jurisdiction, and the judge will rule.

Here’s one more nagging question. Uber’s lawsuit, as they filed it today, doesn’t attack the ordinance itself, but the rulemaking process as executed by FAS. By doing so, did Uber just acknowledge the legality of the ordinance? If so, they might have just given up their ability to challenge its legality — or some aspects of it — at a later date. That wouldn’t preclude Lyft or some other company affected by the ordinance from challenging it, and perhaps that’s part of their legal strategy: to divide and conquer by attacking different parts. Plus, if they are successful with their lawsuit, or even partially successful, they will have delayed implementation further while continuing to execute on their business plan. Still, Uber’s legal strategy remains far from clear — and far from successful.