Yahoo Finance Uber Spends Millions On Nevada Ballot Initiative That May Slow Sexual Assault Suits
Uber has poured millions of dollars into a Nevada ballot initiative that would impose a stringent cap on attorneys’ share of civil lawsuit payouts — potentially limiting the ride-hailing giant’s exposure to sexual assault claims and other litigation from customers and drivers.
The measure, pushed by a new political action committee called Nevadans for Fair Recovery, would set a firm 20% ceiling on lawyers’ contingency fees in all civil cases in the state. Plaintiffs are likely to hire attorneys on contingency when they can’t afford to pay an hourly rate out of pocket; an attorney then takes a cut of any judgment or settlement if a case succeeds.
Backers of the proposal assert that it’s aimed at sketchy “billboard” lawyers who drive up litigation costs with dubious, slip-and-fall-type claims. But lowering the fees in civil lawsuits could make plaintiffs attorneys less likely to take certain cases — possibly freezing legitimate plaintiffs out of the justice system and saving the likes of Uber from civil liabilities.
The ride-hailing company is the measure’s lead sponsor and has dumped at least $4 million into the effort so far, according to state campaign finance filings. Local news site The Nevada Independent listed it among the biggest political contributions toward a ballot initiative this year. Backers hope to get the proposal on the state’s ballot in November.
A company like Uber could hire the most expensive lawyers on earth to defend itself, but they want to hamstring the ability of ordinary people ... to get counsel.Attorney Deepak Gupta
Uber did not respond to questions from HuffPost about why capping attorneys’ contingency fees in Nevada was important to the San Francisco-based tech company and its drivers. A spokesperson for Nevadans for Fair Recovery reached out to HuffPost to insist that the initiative would benefit, not hurt, civil plaintiffs.
“The measure protects plaintiffs by ensuring they receive more money when they win in court or settle a case,” the spokesperson said in an email. “Importantly, the measure does not limit the ability of plaintiffs to sue, or limit the amount defendants must pay when they are found liable.”
But Deepak Gupta, a Washington, D.C.-based plaintiffs attorney and lecturer at Harvard Law School who’s fighting the proposal, said that it “would amount to the most extreme limitation on access to legal counsel in the country.”
He said that the norm for contingency fees in Nevada is currently between 33% and 40%, and slashing it to 20% would make complex cases less worthwhile for attorneys to pursue. The ballot initiative language includes no exception for class action lawsuits, in which individual plaintiffs ban together in larger numbers.
“A company like Uber could hire the most expensive lawyers on earth to defend itself, but they want to hamstring the ability of ordinary people who are suing companies like Uber to be able to get counsel,” Gupta said.
He suspects that Uber will take the contingency fee cap to other states if it succeeds in Nevada. He acknowledged that he doesn’t know why the company is trying to pass it in the Silver State in particular.
“Perhaps they chose Nevada because it’s a smaller state, and it’s cheaper and easier to get things onto the ballot,” he said. “They have to start somewhere.”
He noted that since Uber no longer funnels drivers or customers into mandatory arbitration for sexual assault and harassment allegations, it must now face those claims in court. The company dropped its arbitration policy in 2018 amid the #MeToo movement, and Congress later banned the mandatory use of arbitration in sexual assault and harassment cases.
Gupta and other lawyers have filed a lawsuit in federal court in Nevada seeking to keep the initiative off the ballot. The complaint was brought on behalf of an attorney trade organization called the Nevada Justice Association, as well as a group called Uber Sexual Assault Survivors for Legal Accountability, whose members are suing Uber.
Dozens of lawsuits have claimed that Uber failed to protect riders from sexual assault and harassment, including by having weaker background checks for drivers than taxi companies — allegations that Uber has denied. More than 100 claims, including some originating in Nevada, have been consolidated into a federal multidistrict class action lawsuit.
The complaint seeking to block the ballot measure alleges that Uber is hiding its real intent with the proposal.
“As more and more sexual-assault survivors’ claims get consolidated into a nationwide case,” it states, “Uber wants to stop survivors from hiring lawyers.”
Reuters legal columnist Alison Frankel recently wrote that the challenge to the ballot initiative is all but certain to end up before the Nevada Supreme Court: “A 20% fee cap in all civil litigation, even in one state, is a big deal.”
Uber’s proposal has drawn the backing of the Nevada Trucking Association, a state trade group. CEO Paul Enos said in an interview that many of the group’s 500 trucking companies are weighed down by litigation costs. He hopes the proposal can deter law firms that advertise for trucking accident lawsuits.
Enos said that he likes going the ballot initiative route because he doesn’t believe his group could succeed with legislation in the statehouse.
“The trial lawyers are very good. They have a tremendous amount of money,” he said.
Politically speaking, the trucking group has hitched its cargo to Uber on the ballot initiative. Enos said that his group has not put a dime into the effort yet, though it may further down the road.
“I wish I had Uber money to spend,” he said. “The only reason we’re here is Uber has had a lot of the sustained issues we’ve had. ... We’re happy they’re doing it, and we’re very supportive of the effort.”
It’s part of this larger strategy they [Uber] have to create a legal environment in which there is very little ability to challenge them.Veena Dubal, a law professor at the University of California, Irvine
When Nevadans for Fair Recovery announced the ballot initiative, it pointed to the backing of the trucking group as well as the Retail Association of Nevada. But a spokesperson for the retail group said that the statement of support attributed to it was “released without permission.”
“The Retail Association of Nevada will not be participating in this effort,” the group clarified. (The original press release was included in the complaint aimed at blocking the ballot measure.)
The political action committee’s announcement also attributed a statement of support to a Nevada Uber driver named Emilee Rogers. Reached by phone, Rogers said that she’s been driving for Uber for three years, and that she wasn’t aware of the ballot effort until Uber reached out and asked if she would publicly support it. Last fall, a TV news station in Las Vegas aired an Uber-friendly segment that featured Rogers discussing how her Uber earnings covered her Christmas gifts.
Rogers said in an interview that she can understand both sides of the debate.
“If you don’t think you’re going to make enough money, why would you put your time into that?” she said of plaintiffs attorneys. “At the same time, this is people’s lives, so it doesn’t make sense to me for someone to be in an accident, lose everything and then have the lawyer take over half.”
To Gupta and other Uber opponents, the Nevada ballot measure has shades of the Proposition 22 fight in 2020. Uber, Lyft and other app-based ride and delivery services collectively spent $200 million on that effort to keep their drivers classified as independent contractors in California, essentially carving them out of a broader labor law covering gig work. Both companies successfully mobilized drivers and riders through their apps to vote in favor of the measure.
Veena Dubal, a law professor at the University of California, Irvine, and a vocal Uber critic, said that many Nevada voters might not understand the contingency fee system and how it works. Making the ballot initiative about the stereotypical “ambulance chaser” is a smart play on the company’s part, she said, and she finds it alarming that it might succeed.
“It’s part of this larger strategy they have to create a legal environment in which there is very little ability to challenge them,” Dubal said. “It is really insidious and antidemocratic, and undermines the ability of people who are hurt, injured, harassed or underpaid to get their day in court.”
Need help? Visit RAINN’s National Sexual Assault Online Hotline or the National Sexual Violence Resource Center’s website.
