Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-3_13-cv-03826/USCOURTS-cand-3_13-cv-03826-85/pdf.json

Nature of Suit Code: 190
Nature of Suit: Other Contract Actions
Cause of Action: 28:1332 Diversity-Other Contract

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United States District Court

For the Northern District of California

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

DOUGLAS O'CONNOR, et al.,

Plaintiffs,

v.

UBER TECHNOLOGIES, INC., et al.,

Defendants.

Case No. 13-cv-03826-EMC 

ORDER GRANTING IN PART AND 

DENYING IN PART DEFENDANT’S 

MOTION FOR SANCTIONS

Docket No. 811

Uber moves for sanctions against Class Counsel based on an e-mail solicitation to Class 

Members that Uber argues reflected an improper use of information covered by the protective 

order in this case and included misleading statements in violation of the California Rules of 

Professional Conduct. The Court GRANTS IN PART and DENIES IN PART the motion. As a 

sanction and as an exercise of the Court‘s discretionary power under Rule 23(d), the Court will 

direct corrective notice to the Class. The parties are ordered to meet-and-confer and submit notice 

proposals to the Court by September 5, 2017.

I. INTRODUCTION AND FACTUAL BACKGROUND

A. The Stipulated Protective Order

In February 2016, after a class had been certified in this case, see Docket Nos. 342, 395,

the parties stipulated to a two-tier protective order signed by Magistrate Judge Ryu. See Docket 

Nos. 467, 478 (―Protective Order‖). Uber subsequently produced the class list to Class Counsel 

under a ―Highly Confidential – Attorneys‘ Eyes Only‖ designation, defined under the Protective 

Order as:

[A]ny documents or information . . . which, in good faith, [the] 

designating Party . . . believes could place it at a competitive 

disadvantage if disclosed to anyone other than the receiving Party‘s 

counsel of record in this litigation because such documents or 

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information contain commercially sensitive information, proprietary 

information, or trade secrets, the disclosure of which is likely to 

cause irreparable harm or significant injury to the competitive 

position of the designating Party.

Docket No. 478 ¶ 3. The Protective Order restricted the use of such information:

Highly Confidential—Attorneys‘ Eyes Only Information shall be 

disclosed only to the receiving Party‘s counsel of record in this 

litigation for purposes that are specifically and directly related to the 

reasonable conduct of this litigation, and to no other persons. Such 

information shall be held in the highest confidence by each person to 

whom it is disclosed, shall be used only for purposes that are 

specifically related to the conduct of this litigation, and shall not be 

used for any business purpose.

Id. ¶ 9 (emphasis added). The Order also states:

All information and/or documents produced in this action that are 

Confidential or Highly Confidential—Attorneys Eyes‘ Only shall be 

used only for purposes of this litigation and not for any other 

purpose.

Id. ¶ 13 (emphasis added). Class Counsel did not object to or challenge the language of the order 

or the designation of the class list as Highly Confidential. The class list was thus transmitted 

under the Protective Order to facilitate issuance of notice that the Court had certified a class. See 

Docket No. 460. 

Since that time, Uber has appealed several of the Court‘s orders, including the Court‘s 

orders denying Uber‘s motion to compel arbitration, see Docket No. 404, limiting its 

communications with Class Members, see Docket No. 437, and certifying a class pursuant to 

Federal Rule of Civil Procedure 23(f), see Docket No. 395. On April 11, 2016, the Ninth Circuit 

granted Uber‘s petition for permission to appeal the class certification order. See Docket No. 512. 

Subsequently, and after thorough review and extensive consideration, the Court also denied 

preliminary approval of a prospective class action settlement. See Docket No. 748. All 

outstanding matters, with the exception of this motion, have been stayed pending resolution of the 

appeals at the Ninth Circuit.

///

///

///

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B. Class Counsel‘s E-mail to Class Members

On June 20, 2017,1 Class Counsel used the class list to send an email with the subject line:

―IMPORTANT NOTICE FOR UBER DRIVERS REGARDING YOUR RIGHTS IN A CLASS 

ACTION LAWSUIT.‖ See Ring-Dowell Decl. ¶ 3, Ex. A (―Solicitation Email‖).

The body of the e-mail reads:

READ HERE AND CLICK THIS LINK IF YOU WANT US TO 

CONTINUE TO PURSUE CLAIMS FOR YOU AGAINST UBER 

(individually if necessary) FOR EXPENSE REIMBURSEMENT 

AND TIPS THAT WERE NOT PAID TO YOU

Dear Uber driver:

You are getting this email because you are a member of a certified 

class action we brought against Uber for violating California wage 

laws, by not reimbursing drivers for their expenses (including 

expenses for leasing or owning their vehicles, maintaining the 

vehicles, gas, insurance, etc.) and also for representing to passengers 

that tips are included in the fare (but not distributing any portion of 

the fare to drivers as tips). We have asserted that Uber is 

responsible for these payments because it has misclassified drivers 

as independent contractors. The federal judge in our case has agreed 

that these are valid claims that can go to trial.

We started this case in 2013, and the case was certified as a class 

action in 2015 on behalf of most Uber drivers in California. (This is 

the original case that was filed against Uber for misclassifying 

drivers. It is called O’Connor v. Uber Technologies, Inc., C.A. No. 

13-3826 (N.D. Cal.)) However, Uber has been fighting hard to try 

to ―decertify‖ the class (by enforcing an arbitration agreement it has 

required all drivers to accept). If Uber is successful, that would 

mean that only drivers who sign up to bring these claims 

individually would be able to recover any money, if we are 

successful in this case. 

We are sending you this email to find out if you would like us to 

continue to pursue these claims for you, individually if necessary, in 

the event that the court enforces Uber‘s arbitration clause or 

decertifies the class. IF YOU WOULD LIKE TO STAY A PART 

OF OUR CASE, AND HAVE US PURSUE THESE CLAIMS FOR 

YOU INDIVIDUALLY IF NEEDED, PLEASE CLICK THIS 

LINK AND FILL OUT THE FORM:

 

1

 Uber submitted evidence that at least one Class Member received a ―follow-up‖ dated May 22, 

2017, suggesting the original e-mail was sent even before June 20. See Lipshutz Decl., Ex. A 

(Docket No. 813-2). Another ―follow-up‖ was sent on August 24, 2017, just hours before the 

hearing on this motion. See Docket No. 817-2. At the Court‘s order, Class Counsel explained 

that her firm had sent the original e-mail and follow-up reminders ―in large batches‖ over the 

course of several months, but stopped after the hearing on this motion. See Liss-Riordan Decl. ¶¶ 

4, 7 (Docket No. 824). 

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YES, PLEASE CONTINUE TO PURSUE MY CLAIM 

INDIVIDUALLY IF NECESSARY

Our representation of you is on a contingency basis, meaning you 

would not be charged anything out of pocket for us to continue to 

represent you, if we need to pursue a claim for you individually. 

Instead, we would be paid by contingency (meaning our firm will 

keep one-third of whatever we recover for you, and the other twothirds will go to you). If we try to reach you for more information 

but cannot reach you, or if we determine that you do not have a 

viable claim, we would not be able to pursue your claim. 

You can find out more information about the case, and keep updated 

on developments, by visiting the website, www.uberlawsuit.com. 

You can read more about our firm at www.llrlaw.com. For other 

questions, feel free to contact us at uberlawsuit@llrlaw.com.

Sincerely,

Class Counsel, O’Connor v. Uber Technologies, Inc.

Shannon Liss-Riordan

Lichten & Liss-Riordan, P.C.

[Address Omitted]

Docket No. 811-3. At the hearing on this motion, Class Counsel acknowledged that the e-mail 

had been sent to the entire Class, approximately 240,000 individuals.

The hyperlinks in the e-mail, if followed, took users to a web form that collected basic 

background information about each driver and his or her work history with Uber. The form stated 

at the top:

Yes, I want Lichten & Liss-Riordan, P.C. to continue to represent 

me individually in my claims against Uber for expense 

reimbursement and unremitted tips, if necessary, in the event the 

class action lawsuit is decertified or Uber‘s arbitration agreement is 

enforced.

Docket No. 811-3. At the bottom, it read:

I want Lichten & Liss-Riordan, P.C. to continue representing me 

individually in my claims against Uber for expense reimbursement 

and unremitted tips, if it becomes necessary because Uber‘s 

arbitration clause is enforced or the class is decertified. I understand 

that the firm will represent me on a complete contingency fee basis, 

so I will not be charged anything out of pocket and the firm would 

be entitled to one-third of what it recovers for me. I understand that 

my claims may not be pursued if the firm attempts to reach me for 

more information but I do not respond, or if the firm determines that 

I do not have a viable claim. If my contact information changes, I 

will notify the firm by emailing uberlawsuit@llr.com.

Id.

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C. Uber‘s Reaction

Uber caught wind of the missive when a Class Member forwarded a copy to Uber‘s 

counsel. Ring-Dowell Decl. ¶ 3. Uber then sent a letter to Plaintiffs‘ Counsel stating it was 

―concerned that [counsel] may have violated the stipulated protective order . . . and California 

Rule of Professional Conduct 1-400, as well as the privacy rights of Uber‘s driver-partners.‖ 

Ring-Dowell Decl. ¶ 13, Ex. K (Docket No. 811-12). The letter also argued that Class Counsel 

had misused the class list, identifying what Uber called ―misrepresentations‖ in the solicitation email, and demanding that Plaintiffs‘ counsel (1) identify every person to whom the letter was sent; 

(2) identify any arbitrations, administrative proceedings, or lawsuits that had been initiated as a 

result of the solicitation; (3) state whether Plaintiffs‘ counsel had relied on the class list to send the 

solicitation; and (4) to state the justification for doing so. 

The same day, Plaintiffs‘ counsel responded to Uber‘s counsel by e-mail, stating:

As you know, we represent a certified class of Uber drivers. We are 

taking, and will continue to take, every action necessary to protect 

their rights to pursue the claims we have pursued on their behalf. 

We are doing so in accordance with our ethical duty to protect their 

interests. I understand your client is not happy about this because it 

hopes it can avoid the claims of most class members if you succeed 

in your upcoming appeal, but your challenge to our right to do so is

baseless. We are not going to reveal to you our privileged 

communications with our clients.

Ring-Dowell Decl. ¶ 14, Ex. L (Docket No. 811-13).

II. DISCUSSION

A. Legal Standard

1. Rule 37

Federal Rule of Civil Procedure 37(b)(2)(A) provides that when any party ―fails to obey an 

order . . . including an order under Rule 26(f),‖ ―the court where the action is pending may issue 

further just orders.‖ Fed. R. Civ. P. 37(b)(2)(A). The rule ―grants courts the authority to impose 

sanctions where a party has violated a discovery order, including a protective order issued 

pursuant to Rule 26(f).‖ Life Tech. Corp. v. Biosearch Tech., Inc., No. C-12-00852 WHA (JCS), 

2012 WL 1600393, at *8 (N.D. Cal. May 7, 2012). The violation need not be willful, unless the 

sanction is dismissal. Lew v. Kona Hosp., 754 F.2d 1420, 1426-27 (9th Cir. 1985). Whether to 

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impose sanctions is ―left to the sound discretion of the trial judge.‖ Von Brimer v. Whirlpool 

Corp., 536 F.2d 838, 844 (9th Cir. 1976); see also Bollow v. Fed. Reserve Bank of San Francisco, 

650 F.2d 1093, 1102 (9th Cir. 1981). 

2. Rule 16

Federal Rule of Civil Procedure 16 provides that ―[o]n motion or on its own, the court may 

issue any just orders, including those authorized by Rule 37(b)(2)(A)(ii)-(vii), if a party or its 

attorney: . . . (C) fails to obey a scheduling or other pretrial order.‖ Fed. R. Civ. P. 16(f)(1)(C). 

The rule further provides that ―[i]nstead of or in addition to any other sanction, the court must 

order the party, its attorney, or both to pay the reasonable expenses—including attorney‘s fees—

incurred because of any noncompliance with this rule, unless the noncompliance was substantially 

justified or other circumstances make an award of expenses unjust.‖ Fed. R. Civ. P. 16(f)(2). 

Sanctions under this rule, too, are committed to the district court‘s discretion. Ayers v. City of 

Richmond, 895 F.2d 1267, 1269-70 (9th Cir. 1990). 

3. Court‘s Inherent Authority To Enter Sanctions

The Court also has the ―inherent authority to impose sanctions for bad faith, which 

includes a broad range of willful improper conduct.‖ Fink v. Gomez, 239 F.3d 989, 992 (9th Cir. 

2001) (quotation and citation omitted). A finding of bad faith is usually required before a court 

can enter sanctions pursuant to its inherent authority. Lahiri v. Universal Music and Video 

Distribution Corp., 606 F.3d 1216, 1219 (9th Cir. 2010). Bad faith can be inferred from a variety 

of circumstances, including but not limited to: an act that is both reckless and knowing, see, e.g., 

B.K..B. v. Maui Police Dep’t, 276 F.3d 1091, 1107-08 (9th Cir. 2002); an act that is reckless and 

undertaken with an improper purpose, see Fink, 239 F.3d at 993-94; and actions delaying or 

disrupting the litigation, see Primus Automotive Financial Servs., Inc. v. Batarse, 115 F.3d 644, 

648-49 (9th Cir. 1997). However, ―a  ̳willful‘ violation of a court order does not require proof of 

mental intent such as bad faith or an improper motive, but rather, it is enough that a party acted 

deliberately.‖ Evon v. Law Offices of Sidney Mickell, 688 F.3d 1015, 1035 (9th Cir. 2012). 

Accordingly, the Court may enter sanctions pursuant to its inherent authority if it finds a willful 

violation of a Court order even without finding bad faith. This inherent power ―must be exercised 

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with restraint and discretion,‖ but a court is not ―forbidden to sanction bad-faith conduct by means 

of the inherent power simply because that conduct could also be sanctioned under the statute or the 

Rules.‖ Chambers v. NASCO, Inc., 501 U.S. 32, 44, 50 (1991).

4. Professional Ethics

Lawyers who practice before this Court are required to comply with California‘s Rules of 

Professional Conduct. See Local C.R. 11-1(c)(3). ―Failure by counsel or a party to comply with 

any duly promulgated local rule . . . may be a ground for imposition of any authorized sanction.‖ 

Local C.R. 1-4. Moreover, ―[t]he district court has the duty and responsibility of supervising the 

conduct of attorneys who appear before it.‖ Erickson v. Newmar Corp., 87 F.3d 298, 300 (9th Cir. 

1996); see also Gas-A-Tron of Ariz. v. Union Oil Co., 534 F.2d 1322 (9th Cir. 1976) (―It is the 

duty of the district court to examine the charge [of unethical conduct], since it is that court which 

is authorized to supervise the conduct of the members of its bar.‖) (quotation and citation omitted). 

To discharge this duty, courts have ―an arsenal of sanctions they can impose for unethical 

behavior,‖ including ―monetary sanctions, contempt, and the disqualification of counsel.‖ 

Erickson, 87 F.3d at 303.

5. Court‘s Authority to Supervise Conduct of Class Action

Separate and apart from the various sources of sanctions authority, the Court must 

safeguard the interests of absent class members. See Allen v. Bedolla, 787 F.3d 1218, (9th Cir. 

2015) (―[T]he district court has a fiduciary duty to look after the interests of . . . absent class 

members.‖). To that end, Federal Rule of Civil Procedure 23(d) provides:

In conducting an action under this rule, the court may issue orders 

that . . . (B) require—to protect class members and fairly conduct the 

action—giving appropriate notice to some or all class members of: 

(i) any step in the action; (ii) the proposed extent of the judgment; or 

(iii) the members‘ opportunity to signify whether they consider the 

representation fair and adequate, to intervene and present claims or 

defenses, or to otherwise come into the action. 

Fed. R. Civ. P. 23(d)(1)(B)(i)-(iii). This has been described as a ―nonexhaustive list.‖ See 

Newberg on Class Actions, § 8:26; see also Fed. Prac. & Proc. § 1793 (enumerated factors are 

―not intended . . . to represent an exhaustive list of possible occasions on which orders requiring 

that notice be given to the class might be utilized‖). The purpose of Rule 23(d) is to permit 

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discretionary notice ―when needed for the protection of class members or for the fair conduct of 

the action.‖ Manual for Complex Litigation § 21.31 (4th ed.). See, e.g., In re McKesson HBOC, 

Inc. Securities Litig., 126 F.Supp.2d 1239 (N.D. Cal. 2000) (trial court exercised discretion under 

Rule 23(d) to order law firm that sent improper and misleading solicitation to putative class 

members urging them to opt out of putative class and enter separate retention agreement to pay 

costs of issuing corrective notice).

B. Analysis

1. Class Counsel Violated the Protective Order

The Protective Order is explicit: designated material may only be used ―for purposes that 

are specifically related to the conduct of this litigation.‖ Docket No. 478 ¶ 9 (emphasis added); id.

¶ 13 (designated material ―shall be used only for purposes of this litigation and not for any other 

purpose‖) (emphasis added).

On its face, Class Counsel‘s e-mail did not comply with this limitation. Had Class Counsel 

simply advised Class Members about the pending appeal and its potential impact on this case and 

on their rights, Class Counsel would have been well within the scope of the Protective Order. 

Such comments would pertain to ―this litigation.‖ But Class Counsel went one step beyond: it 

attempted to solicit Class Members as clients in separate arbitration proceedings that would be 

initiated outside of this litigation – an eventuality predicated on the class being decertified and the 

arbitration clause enforced as to those unnamed class members bound by an arbitration clause. To 

be sure, such individual arbitration proceedings might be related to this case inasmuch as they may

involve identical or similar legal claims as asserted in this suit, but the individual arbitrations 

themselves would not be a part of ―this litigation.‖ The Court would not have jurisdiction or 

continued supervision over the arbitration of unnamed class members‘ claims.

Class Counsel did not cite any legal authority to the contrary. Instead, Class Counsel 

asserted without authority that, upon certification of the Class and the expiration of the exclusion 

period, the Protective Order‘s restrictions somehow disappeared and thus Counsel was not bound

by the Protective Order. The fact that Class Counsel had an attorney-client relationship with Class 

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Members as a result of certification,

2

however, did not dissolve the Protective Order. The 

Protective Order contained no such term limiting its duration and Counsel has cited no case 

authority for the proposition that such a result automatically obtains. Counsel‘s assertion makes 

little sense; under its analysis, Counsel would not be prohibited by the Protective Order from, e.g., 

sharing Uber‘s trade secrets with 240,000 members of the class simply because the class was 

certified. In any event, if Counsel had any doubt about the matter, it should have sought leave of 

the Court or a stipulation from Defendant to clarify the otherwise unambiguous scope of the 

Protective Order rather than taking unilateral action.

Accordingly, the Court finds that Class Counsel violated the Protective Order by using the 

protected class list to solicit retainer agreements for individual arbitration proceedings outside of 

this litigation (in the event the class is decertified).

2. Class Counsel‘s E-mail Was Misleading

Uber also argues that Class Counsel‘s e-mail was misleading in violation of California 

Rule of Professional Conduct 1-400, which states in relevant part:

―A communication or a solicitation (as defined herein) shall not:

(1) Contain any untrue statement; or

(2) Contain any matter, or present or arrange any matter in a manner 

or format which is false, deceptive, or which tends to confuse, 

deceive, or mislead the public; or

(3) Omit to state any fact necessary to make the statements made, in 

the light of circumstances under which they are made, not 

misleading to the public; or ....

Rule 1-400(C)(1)-(3).3

 

2

 See, e.g., Harris v. Vector Mktg. Corp., 716 F.Supp.2d 835, 847 (N.D. Cal. 2010) (―[O]nce a 

class has been certified, the rules governing communications [with class members] apply as 

though each class member is a client of the class counsel.‖) (citing Manual for Complex 

Litigation, Fourth, § 21.33 (―Once a class has been certified, the rules governing communications 

apply as though each class member is a client of the class counsel.‖); see also Restatement (Third) 

of Law Governing Lawyers § 99 cmt. l (2000) (―[A]ccording to the majority of decisions, once the 

proceeding has been certified as a class action, the members of the class are considered clients of 

the lawyer for the class ...‖). Prior to certification, putative class counsel has only a fiduciary duty 

to the class. See, e.g., Fed. R. Civ. P. 23(g)(2), advisory committee‘s note (2003) (―Whether or 

not formally designated interim counsel, an attorney who acts on behalf of the class before 

certification must act in the best interests of the class as a whole.‖). 

3

 Uber also argued that the e-mail was an improper ―solicitation‖ under Rule 1-400. The e-mail, 

however, was not ―delivered in person or by telephone‖ or ―directed by any means to a person 

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Uber points to several statements in the e-mail that were arguably misleading, but the 

Court‘s primary concern are those statements that may have induced a wrongful reliance on the 

part of Class Members who read the e-mail and subsequently clicked through to enter into the 

retention agreement with Lichten & Liss-Riordan, P.C.

In particular, Class Counsel‘s e-mail strongly suggested to the average lay person that 

Class Members had to retain Lichten & Liss-Riordan, P.C., and no other firm, to preserve their 

rights, should the Ninth Circuit reverse this Court‘s orders regarding arbitration and class 

certification. It is true, as Class Counsel states, that the e-mail does not make that representation 

explicitly. In context, however, at the very least, the e-mail ―tends to confuse, deceive, or mislead 

the public.‖ Rule 1-400(C)(2). The e-mail begins in all capital letters that state: ―READ HERE 

AND CLICK THIS LINK IF YOU WANT US TO CONTINUE TO PURSUE CLAIMS FOR 

YOU AGAINST UBER (individually if necessary) FOR EXPENSE REIMBURSEMENT AND 

TIPS THAT WERE NOT PAID TO YOU.‖ See Docket No. 811-3. The body of the e-mail states 

―If Uber is successful, that would mean that only drivers who sign up to bring these claims 

individually would be able to recover any money, if we are successful in this case.‖ Id. (emphasis 

added). The e-mail then states, again in capital letters, ―IF YOU WOULD LIKE TO STAY A 

PART OF OUR CASE, AND HAVE US PURSUE THESE CLAIMS FOR YOU 

INDIVIDUALLY IF NEEDED, PLEASE CLICK THIS LINK AND FILL OUT THE FORM.‖ 

Id.

A reasonable lay person, reviewing the e-mail as a whole, could be misled into believing 

that ―only drivers who sign up‖ with Class Counsel would recover any money. There was no 

statement in the e-mail that Class Members were free to choose any counsel, or no counsel at all, 

to pursue arbitration. Additionally, contrary to what Class Counsel‘s e-mail suggested, Class 

 

known to the sender to be represented by counsel in a matter which is a subject of the 

communication,‖ and therefore does not constitute a prohibited solicitation. Rule 1-400 ¶ (B)(2). 

See also Parris v. Sup. Ct., 109 Cal.App.4th 285, 298 n.6 (2003) (―Because neither the proposed 

notice to class members nor the web site prepared by plaintiffs‘ counsel is to be  ̳delivered in 

person or by telephone,‘ it is not prohibited by rule 1-400.‖); Best Buy Stores, L.P. v. Sup. Ct., 137 

Cal.App.4th 772, 776 (2006) (communication not covered by Rule 1-400 where ―[t]here [was] no 

indication that [the attorney] intends to contact the identified Best Buy customers [in putative class 

action] in person or by telephone‖). 

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Members were not obligated to ―sign up now‖ to ―stay a part of our case.‖ There was no urgency. 

Class Members continue to be a part of the Class until otherwise ordered by the Court. By 

delivering a message that suggested otherwise, Class Counsel‘s e-mail was arranged in ―a manner 

or format . . . which tends to confuse, deceive, or mislead.‖ Rule 1-400(C)(2). The misleading 

nature of the message about the need to ―sign up‖ is amplified by saying the federal judge had

agreed that these were ―valid claims.‖ Although the email refers to ―valid claims‖ that can go to 

trial, a lay person may be misled into believing that the term ―valid claim‖ means something more 

than a claim that has survived summary judgment. Counsel could have simply omitted the word 

―valid‖ to convey its point.

Accordingly, the Court finds that Class Counsel‘s e-mail violated Rule 1-400(C).

3. Sanctions

In light of these findings, the Court is compelled to consider the appropriate sanctions.4 

Uber presses the Court for sanctions (1) disqualifying Class Counsel from representing any 

individual in other proceedings who received an e-mail through improper use of the class list; (2) 

directing Class Counsel to dismiss, without prejudice, any actions already filed on behalf of such 

individuals; (3) ordering Class Counsel to send a notice to recipients of the e-mail notifying them 

of the disqualification and reasons therefor; (4) producing to Uber all solicitations sent based on 

information in the class list; and (5) prohibiting Class Counsel from using the class list in any way 

prohibited by the Protective Order. 

a. Disqualification Is Not Warranted At This Time

―[D]isqualification motions involve a conflict between the clients‘ right to counsel of their 

choice and the need to maintain ethical standards of professional responsibility.‖ People ex rel. 

Dept. of Corporations v. SpeeDee Oil Change Systems, Inc., 20 Cal.4th 1135, 1145 (1999). 

Accordingly, a motion to disqualify should be carefully examined ―to ensure that literalism does 

not deny the parties substantial justice.‖ Id. at 1144. The relevant considerations will vary 

depending on the circumstances, but they ―involve such considerations as a client‘s right to chosen 

 

4

 Uber has not requested monetary sanctions, so the Court does not address that issue. 

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counsel, an attorney‘s interest in representing a client, the financial burden on a client to replace 

disqualified counsel, and the possibility that tactical abuse underlies the disqualification motion.‖ 

Id. at 1145. Further, ―[t]hese concerns are magnified when, as here, disqualification is sought not 

just for a single case but for many and, indeed, an entire class of litigation.‖ In re Complex 

Asbestos Litig., 232 Cal.App.3d 572, 586 (1991). 

First, Uber expressly disavowed any request to disqualify Class Counsel from continuing 

to represent Plaintiffs or the Class in this litigation, so the sole question is whether the Court 

should disqualify Class Counsel from representing recipients of the e-mail in separate arbitration 

proceedings. The Court has serious questions about its authority to do so. The California Court of 

Appeals considered a similar situation in In re Complex Asbestos Litigation. There, the Court of 

Appeals affirmed the trial court‘s disqualification of a law firm in the case before it based on a 

conflict of interest. However, the trial court declined to disqualify the law firm from representing 

its clients in eleven other related asbestos cases that were not before it. The Court of Appeals 

affirmed, reasoning that the trial court‘s ―inherent power to control the conduct of persons in any 

manner connected with a judicial proceeding before it . . . . [d]oes not mean that a superior court 

has any inherent or statutory power to control the conduct of persons in judicial proceedings 

pending before a different superior court.‖ 232 Cal.App.3d at 600 (emphasis added). The Court 

explained that ―[t]his is a matter of fundamental comity between the courts, which should not be 

cast aside because it may be expedient under . . . novel circumstances . . . .‖ Id. Accordingly, the 

Court reasoned that ―whether the [firm] should be disqualified in any cases pending in other 

superior courts is a question we leave for those courts to decide in the sound exercise of their 

discretion in light of our opinion.‖ Id. at 601. The Court is reluctant to disqualify Class Counsel 

from appearing before other tribunals outside of this litigation.

Even if the Court found such authority existed, disqualification would not appear to be an 

appropriate sanction here. The Court recognizes that each Class Member‘s right to choose their 

own counsel would be implicated by disqualification. Some Class Members who received the 

solicitation may want to be represented by Class Counsel, particularly in light of Counsel‘s years 

of experience preparing these legal claims and litigating against Uber. Moreover, this is not a 

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situation where, despite the client‘s desires, disqualification may be required due to a conflict of 

interest; Uber has not cited any conflict here. Further, Class Members who have pursued 

arbitration claims or signed up to pursue them might be left without legal assistance were 

disqualification ordered. The Court is also mindful of the possibility of Uber‘s desire to obtain a 

tactical advantage. Whether it is Uber‘s motive or not, Uber clearly stands to gain if Class 

Counsel is categorically disqualified from representing Class Members in separate arbitration 

proceedings if Uber is successful in decertifying the Class and compelling arbitration. Finally, 

although the Court concludes that Class Counsel‘s e-mail was sent willfully, it is unable to 

conclude that Class Counsel did so in bad faith given the fact that Counsel did have an attorneyclient relationship with class members once the class was certified, a relationship that is entitled to 

some respect. Accordingly, disqualification would not appear to be merited in these 

circumstances even if the Court were to find it had the power to do so.

5

Because the Court concludes that disqualification sought by Uber is not warranted here, 

the Court denies Uber‘s request for sanctions directing Class Counsel to dismiss actions it has 

already filed and to produce all solicitations based on information in the class list.

b. Corrective Notice

Although the Court will not disqualify Class Counsel at this time, the Court cannot allow 

the violation to go uncorrected. The sanction most appropriate to these circumstances is that 

 

5

 Uber has cited two cases to support disqualification, but counsel‘s conduct in both cases is 

meaningfully distinguishable. In Burda v. Fidelity Nat’l Mgmt. Servs., LLC, No. SACV 11-

00247-JVS (MLGx), 2013 WL 11042668 (C.D. Cal. Mar. 25, 2013), class counsel used contact 

information from a confidential class list after class certification had been denied to solicit 

individual representation agreements. Although, the violation of the protective order was 

comparable to the violation here, in Burda, it was the court‘s second time finding a violation of the 

protective order. Further, counsel in Burda had no legitimate reason to use the class list after class 

certification had been denied. In contrast, here, Class Counsel has not previously been sanctioned 

by the court for violating the protective order, and the class has been certified. In Clarke v. First 

Transit, Inc., CV 07-06476 GAF (MANx), 2012 WL 12877865 (C.D. Cal. Nov. 2, 2012), the 

court concluded class counsel had violated a protective order by sending solicitations to putative 

class members offering to represent them in a separate action that they later filed. Although the 

violation of the protective order was comparable, the overall circumstances were not. Counsel 

there had been competing with other law firms pursuing parallel litigation in federal and state 

court for a leadership position. Id. at *2-3. It sent its solicitation on the eve of class certification 

as a means of interfering with a competing proceeding and strong-arming other law firms into 

accepting unfavorable fee sharing terms. Id. Class Counsel‘s conduct here is far from the 

egregious, bad-faith gamesmanship and misconduct in Clarke.

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which most directly addresses the harm the violation caused – wrongful reliance by Class 

Members who received and read the e-mail, and who were misled into believing they were 

required to retain Class Counsel – and Class Counsel only – to preserve their rights. Accordingly, 

the Court directs Class Counsel to issue corrective notice to the Class approved by the Court.

As discussed above, the Court‘s authority to direct issuance of corrective notice stems not 

only from its broad sanctioning authority (including under Rule 37, Rule 16, and its inherent duty 

and responsibility to supervise the professional conduct of attorneys practicing before it), but also 

from its duties under Federal Rule of Civil Procedure 23(d). Rule 23 authorizes the court to ―issue 

orders that . . . require—to protect class members and fairly conduct the action—giving 

appropriate notice to some or all class members‖ at its discretion. Fed. R. Civ. P. 23(d)(1)(B).

See, e.g., Bauman v. U.S. Dist. Ct., 557 F.2d 650 (9th Cir. 1977) (district court did not abuse 

discretion in issuing notice pursuant to Rule 23(d) ―as an aid‖ to determine whether class 

certification requirements were met).

A corrective notice is warranted to protect class members. See In re McKesson HBOC, 

Inc. Securities Litig., 126 F.Supp.2d at 1246-47 (entering sanction of corrective notice under Rule 

23 where putative class members were misled by improper solicitation e-mail sent by firm who 

lost leadership bid and sought to provoke opt-outs). Class Members should know that they are not 

obligated to take any action at this time to preserve their rights or to remain members of the Class. 

And they should know that they are not obligated to retain Lichten & Liss-Riordan, P.C. if they 

should decide to pursue arbitration on an individual basis in the event the class is decertified and 

the arbitration clause is held to be valid and enforceable. They should also be informed that, if the 

Ninth Circuit ultimately reverses class certification or enforces Uber‘s arbitration clause, the Court 

will direct further notice to them to inform them of their rights and options at that time. Counsel 

should keep these goals in mind in drafting their proposals.6

 

6

 Uber‘s final request is that Class Counsel be ordered not to use the class list in a manner 

inconsistent with the Protective Order. However, the Protective Order already constrains Class 

Counsel‘s use of the list. A second, separate order would be redundant.

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III. CONCLUSION

For the reasons stated, the Court finds that Class Counsel violated the Protective Order and 

that the e-mail sent to Class Members was misleading in violation of California Rule of 

Professional Conduct 1-400(C). Pursuant to Rule 37, Rule 16, and its inherent authority to 

sanction attorneys for violations of the Rules of Professional Conduct, and pursuant to the Court‘s 

authority under Rule 23(d), the Court concludes that a corrective notice is necessary to protect 

Class Members‘ rights. The parties are ordered to meet-and-confer and to submit proposed 

corrective notices to the Court by September 5, 2017. Class Counsel shall file under seal the list 

of arbitrations arising from its solicitation by September 5, 2017. See Docket No. 822.

This order disposes of Docket No. 811. 

IT IS SO ORDERED.

Dated: August 31, 2017

______________________________________

EDWARD M. CHEN

United States District Judge

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