In an important victory for firm client American Arbitration Association (AAA), Hughes Hubbard helped secure denial of Uber’s motion for a preliminary injunction seeking to suspend AAA’s $10 million invoice to the ride-hailing giant for administrative costs associated with 7,771 arbitration cases.
Uber commenced its lawsuit in New York Supreme Court’s Commercial Division against AAA after law firm Consovoy McCarthy brought more than 31,000 demands for arbitration on behalf of Uber Eats customers alleging “reverse discrimination” arising from Uber’s efforts to show support for Black-owned restaurants following the police killing of George Floyd in May 2020. AAA is the world’s largest private mediation and alternative dispute resolution service.
While acknowledging this background, Justice Robert Reed of the Commercial Division emphasized that Uber’s suit against AAA “does not in any way involve an analysis of the merits of the ‘reverse discrimination’ claims” asserted by the Consovoy law firm. Rather, in its suit against AAA, Uber sought a declaration barring AAA from billing Uber for the costs associated with the arbitrations on the grounds that those costs were unreasonable and not justified by AAA’s actual costs and expenses.