Eyebrows rise as Uber-cab case bounces

An Uber app is seen on an iPhone in Beverly Hills, California, Dec. 19, 2013. (Lucy Nicholson/Reuters file)

The ghosts of the Las Vegas cab racket past must have had a good chuckle. The state’s current corporate taxi service licensees surely smiled as well.

Call it a fortuitous turn of events at the Washoe County Courthouse. Suspect it was a piece of long-distance legal legerdemain, if you wish.

But you have to be impressed with the preliminary injunction the Nevada Transportation Authority (and representatives of the cab industry) recently won over ride-sharing company Uber. Not because the state had the facts on its side as it presented its case in Judge Scott Freeman’s courtroom but because it managed to succeed in what at least one state Supreme Court justice seems to suspect was an attempt at forum shopping. Simply stated, forum shopping takes place when a litigant chooses a courtroom he believes the odds of prevailing are in his favor.

One fact isn’t in dispute: The authority first sought a temporary restraining order against Uber before Clark County District Judge Douglas Herndon, who denied the motion. The state on Oct. 27 filed its related litigation in Washoe County and followed the next day in Clark County. Two counties, two lawsuits. A TRO and preliminary injunction, already denied in Clark County, was granted in Washoe, where Judge Freeman also took jurisdictional possession of the case.

Before Freeman, the state prevailed in its argument despite the endorsement of Uber by Nevada Department of Business and Industry Director Bruce Breslow, whose duties include regulation of the state’s cab and limo service licensees. Breslow admitted he had used Uber on trips in cities outside Nevada, where the Internet-based service isn’t so controversial. Freeman expressed concern about the safety of Uber’s service.

“I’m not going to risk the safety of the public,” Freeman said.

Uber argues that it’s a technology-based platform, not a transportation company, and isn’t subject to Nevada rules and regulations. I wonder if it’s beginning to suspect there are unwritten rules at play in Nevada, too.

Uber’s legal standing aside, some legal observers are scratching their heads over the state’s success in bouncing the forum from Clark to Washoe. Did it intend to file its complaint in Clark County, but shifted to Washoe after Herndon’s denial of the temporary restraining order?

A three-justice state Supreme Court panel recently visited the issue and came away with a split. In a Nov. 24 opinion, Justices James Hardesty and Michael Douglas concluded that Uber’s argument to dismiss or stay the proceedings wasn’t compelling enough to for the high court to intervene. In short, the two justices concluded Judge Freeman “did not exceed his jurisdiction and was not required by law to dismiss or stay the proceedings.”

The justices determined, “Although NTA’s failure to follow the relevant procedural rules demonstrates an inept effort to commence its case,” the justices said it failed to impugn the neutrality of the court.

But Justice Michael Cherry offered quite another view in his dissent. He called for a meeting of the entire court to revisit the matter and said the case “raises an important issue of statewide concern regarding litigant practices and the appropriate forum to hear disputes when essentially the matter is filed in multiple district courts. He said the transit authority’s two requests for relief “gives an appearance of improper forum shopping. By denying this petition, the majority may very well encourage such behavior in future matters in our district courts, which I cannot condone.”

That qualifies as strong rhetoric coming from a veteran member of the court.

Perhaps Cherry appreciates how such things are apt to look to the outside world in 2014, where people are likely to look askance at the protectionist laws involving the transportation industry, and the ghosts of Nevada’s cab racket are supposed to be a part of our colorful past.

John L. Smith’s column appears Sunday, Tuesday, Wednesday, Friday and Saturday. E-mail him at jsmith@reviewjournal.com or call 703-383-0295.