Uber judge taps brakes on drivers’ lawsuit outcome

U.S. Magistrate Edward Chen, who as a lawyer helped persuade a judge in 1983 to overturn a Japanese-American manês conviction for defying World War II internment, was nominated by President Obama on Friday to the U.S. District Court in San Francisco, where no Asian-American has ever been a federal judge. less U.S. Magistrate Edward Chen, who as a lawyer helped persuade a judge in 1983 to overturn a Japanese-American manês conviction for defying World War II internment, was nominated by President Obama on Friday to ... more Photo: U.S. Federal Court Photo: U.S. Federal Court Image 1 of / 1 Caption Close Uber judge taps brakes on drivers’ lawsuit outcome 1 / 1 Back to Gallery

Uber has won a ruling that may put off the outcome of a bid by California drivers to be treated as employees in a lawsuit that has grown dramatically in both size and potential liability.

U.S. District Judge Edward Chen said this week in San Francisco that he won’t issue a final judgment affecting most drivers in the class action following a June trial if an earlier decision to add more than 100,000 of them to the suit hasn’t been resolved on appeal. Chen also rejected a request by the drivers’ lawyer to consider deciding the case without a jury trial.

In his Dec. 9 ruling, the judge had allowed all drivers covered by the case to seek expense reimbursement, including as much as 57½ cents for every mile driven. Chen had previously allowed the drivers to seek tips in the case.

A victory for the drivers seeking the pay and benefits of employees rather than independent contractors threatens to upend the San Francisco ride-hailing company’s business model and cut into its more than $60 billion valuation. Experts have said the stakes in the lawsuit grew by hundreds of millions of dollars as a result of the Dec. 9 ruling.

Chen concluded then that the company’s contract with its drivers improperly required them to resolve disputes through arbitration, preventing them from suing. Uber then sought to put the case on hold when it asked an appeals court to review the contract’s arbitration provision.

MBA BY THE BAY: See how an MBA could change your life with SFGATE's interactive directory of Bay Area programs.

In this week’s order, Chen said there’s a public interest in not delaying trial in the lead case in the nation on the status of Uber drivers. He also said “a serious legal question has been raised by Uber” that justifies waiting for the company’s appeal on the arbitration issue to play out before the final outcome of the case is decided. The order wouldn’t delay a final judgment after trial with regard to the earlier, smaller groups of drivers.

Jessica Santillo, a spokeswoman for Uber, said the company will ask the U.S. Court of Appeals in San Francisco to halt all proceedings in the case until the judge’s Dec. 9 order is reviewed on appeal.

Shannon Liss-Riordan, the lawyer for the drivers, said she’s pleased the June 20 trial date remains intact.

“Uber had attempted to avoid this trial altogether while its appeal proceeds,” she said in an e-mail. “Judge Chen agreed with our argument that the trial must go forward in any event, with or without Uber’s appeal and so there is no reason for the trial be delayed. ”

Joel Rosenblatt and Pamela MacLean are Bloomberg writers. E-mail: jrosenblatt@bloomberg.net, pmaclean2@bloomberg.net