Uber’s California Ballot Battle Over Legal Fees Sparks a High-Stakes Political War with Trial Lawyers

Uber is discovering in California that few issues unite plaintiffs’ attorneys more effectively than a perceived threat to their fees. What began as an effort to curb what the company describes as the influence of “billboard lawyers” has instead galvanised consumer attorneys into a well-funded political force.

The confrontation started when Uber backed a proposed ballot measure aimed at limiting legal fees in car-crash lawsuits. In response, consumer attorneys launched their own proposal seeking to lower the legal threshold for holding Uber liable for driver misconduct. Both sides have since raised more than $70 million and collected more than a million signatures in support of their respective ballot initiatives while campaigning against the other.

Through competing advertising campaigns, including Super Bowl commercials, both Uber and the plaintiffs’ bar claim to be acting in the interests of consumers. Yet the dispute appears to be driven largely by the significant financial stakes involved.

“It would probably be an extinction event,” Torrance-based trial attorney Robert Simon said of the potential impact on personal injury law firms if voters approve Uber’s measure in November. Geoffrey Wells, a veteran plaintiffs’ lawyer in Los Angeles, agreed, saying: “Lawyers won’t take those cases.”

Uber’s proposal targets contingency fees, under which lawyers are paid only if their clients succeed. It is common for attorneys to receive one-third of a settlement, with fees often rising to 40 per cent or more if a case proceeds to trial.

The Uber-backed campaign argues that the initiative is designed to curb self-serving practices and ensure that accident victims receive the bulk of any compensation awarded. Nathan Click, a spokesperson for the campaign, said the objective is to ensure that “accident victims — not billboard attorneys — actually take home the majority of their awards”.

‘Code Red’

The dispute escalated in October when leaders of the Consumer Attorneys of California (CAOC) learned that Uber had filed a proposed ballot measure requiring plaintiffs to receive 75 per cent of legal recoveries from car-crash cases, while limiting payouts to attorneys and medical providers.

Within hours, trial lawyers across California had begun organising. Simon described the response as a “code red”, with hundreds of attorneys joining a virtual meeting over the first weekend after the proposal was announced.

CAOC members and legislative advisers quickly developed three alternative ballot proposals. One would have directly countered Uber’s initiative but required significantly more signatures because it involved amending California’s constitution rather than ordinary state law. According to several individuals involved in the effort, the costs of gathering the necessary signatures ultimately made the proposal impractical.

Instead, the plaintiffs’ lawyers united behind a measure that would require rideshare companies to conduct more rigorous background checks on drivers, including fingerprinting, and impose a higher liability standard when drivers assault passengers. Under the proposal, Uber would be classified as a “common carrier”, placing it under a heightened duty of care similar to that imposed on taxi operators, rail companies and airlines.

If enacted, the measure could strengthen the position of plaintiffs pursuing more than 3,800 lawsuits in state and federal courts relating to alleged sexual assaults by Uber drivers. Juries have ruled in favour of plaintiffs in two trials this year, including one case in which a woman who alleged that she had been raped by an Uber driver was awarded $8.5 million. Uber has consistently argued that it should not be held liable for criminal acts committed by drivers using its platform and secured a defence verdict in a state court case last year.

An Uber spokesperson described the proposal as retaliatory and maintained that the company already employs rigorous background checks and safety standards.

To build support for their campaign, plaintiffs’ lawyers have organised fundraising events, hosted town hall meetings and gathered signatures at legal conferences. More than a dozen major consumer law firms have each contributed at least half a million dollars to the campaign.

The funds raised have been used for advertising, campaign consultants and professional signature-gathering operations. Because Uber’s proposal would also affect the recovery of damages for medical expenses, doctors have separately begun raising funds to oppose the measure.

“I’ve never seen us more united, quicker, with the ability to raise more money in a short period of time than this one,” Wells said, reflecting on the campaign’s rapid mobilisation.

Full Steam Ahead

In securities filings, Uber identifies car-crash litigation as an operational risk that exposes the company to significant liability claims, although it does not disclose the number of cases involved. An Uber spokesperson said the company’s insurance coverage makes it an attractive target for litigation.

At the centre of the dispute is a provision requiring consumers to retain at least 75 per cent of the “total amount recovered”. Lawyers opposing the measure argue that medical expenses and liens linked to litigation would have to be paid from the remaining 25 per cent alongside legal fees.

CAOC contends that this could leave little or no compensation for lawyers handling catastrophic injury claims. For example, a case resulting in a $1 million recovery but involving $400,000 in medical expenses and hospital liens could exceed the proposed cap on fees.

Uber rejects that interpretation, arguing that medical liens would instead be deducted from the victim’s 75 per cent share rather than from the amount allocated to attorneys.

Uber is the sole contributor to its fundraising effort, which has reached nearly $78 million. The company previously demonstrated its political influence in California through its successful support of Proposition 22 in 2020, which classified rideshare drivers as independent contractors rather than employees.

At the same time, Uber is pursuing litigation against personal injury law firms in Florida, California, New York and Philadelphia, alleging that they collaborated with medical providers to submit fraudulent or exaggerated claims arising from motor vehicle accidents.

An analysis by Berkeley Law’s Civil Justice Research Initiative concluded that voters are likely to misunderstand Uber’s proposal and warned that it could reduce access to legal representation while increasing healthcare costs. The report argued that the initiative’s language may lead voters to believe victims would receive greater compensation when, in practice, fewer attorneys might be willing to accept car-crash cases on a contingency basis.

No independent analysis has yet been conducted on the CAOC-backed proposal.

Although both campaigns are advancing aggressively, there remains a possibility that neither initiative will appear on the November ballot. Under California’s ballot process, both Uber and its opponents retain the option of withdrawing their proposals before a late-June deadline.

 

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