City of S.F. v. Uber Techs., Inc.
City of S.F. v. Uber Techs., Inc.
Opinion of the Court
*70Appellants Uber Technologies, Inc., Raiser-CA, LLC, and Rasier, LLC (collectively, Uber) challenge an order directing them to comply with administrative subpoenas issued by the City Attorney of San Francisco (the City Attorney) for reports and data submitted to the California Public *277Utility Commission (CPUC).
We find that it was within the City Attorney's investigative powers to issue the administrative subpoenas. We further find that section 1759 of the Public Utilities Code
FACTS AND PROCEDURAL HISTORY
Uber operates "transportation networking companies" (TNC) in numerous locations, including San Francisco. TNCs "facilitate prearranged transportation services, using smart-phone applications to network riders looking for rides with independent third party transportation providers (Drivers) looking to provide rides at their convenience with their personal vehicles." Tens of thousands of drivers use the Uber smart phone application to arrange rides in San Francisco.
As a TNC, Uber is regulated by the CPUC. All TNCs are required to submit reports and data to the CPUC on an annual basis (the CPUC Annual Reports). This requirement includes reports and data submitted via CPUC
*71spreadsheet templates concerning: (1) accessible vehicles; (2) service by zip code; (3) problems with drivers; (4) hours logged by drivers; (5) miles logged by drivers; and (6) drivers' completion of driver training courses. TNCs are also required to file an annual accessibility plan which must include information regarding access needs, timelines for responding to such needs, and a "plan for ensuring that drivers' review of customers will not be used in a manner that results in discrimination." Finally, TNCs must submit a narrative report addressing their plans for provisions of services to disabled communities.
The Investigation and Administrative Subpoenas
The City and County of San Francisco (the City) is a municipal corporation existing under its charter and the laws of the State of California. It is empowered by the California Constitution to control its own municipal affairs. (See Cal. Const., art. XI, §§ 3 - 6.) Article XI of the California Constitution recognizes the City's authority to enforce laws of general application via its police power. (See Cal. Const., art. XI, § 7.) The City's charter states the City Attorney must "[r]epresent the City and County in legal proceedings with respect to which it has an interest" (§ 6.102(1).) and empowers the City Attorney to commence legal proceedings whenever a cause of action "in favor of the City ... is within [its] knowledge." (S.F. Charter, § 6.102(3).) The San Francisco Administrative Code empowers the City Attorney to employ subpoenas when the City Attorney investigates any potential violations of municipal law (S.F. Admin. Code, § 2A.230) or California law (S.F. Admin. Code, § 2A.231). (See Dibb v. County of San Diego (1994)
After receiving numerous complaints from the San Francisco Municipal Transportation Agency (SFMTA) regarding illegal parking, traffic congestion, and safety hazards caused by TNC vehicles, the City Attorney opened an investigation into possible violations of state and municipal law by TNCs, including Uber. The City Attorney also based its investigation upon a San Francisco police department study showing that TNCs accounted for nearly 65% of all moving violations for driving in transit lanes and bicycle lanes, obstructing bicycle lanes and traffic lanes, failure to yield to pedestrians, and illegal U-turns in business districts; media reports that Uber and Lyft, Inc. (Lyft, another TNC) incentivize drivers to drive hundreds of miles before starting driving shifts in San Francisco; and survey data showing that TNC drivers make far less than the San Francisco minimum wage.
*72On June 5, 2017, the City Attorney issued the administrative subpoenas to Uber pursuant to San Francisco Administrative Code.
Uber states in its opening brief that request number seven, which asks for "[d]ocuments evidencing the actual number of miles driven and actual hours logged by San Francisco [d]rivers from 2013 to the present," is also at issue. However, Uber's arguments only address request number eight without any explanation of how those arguments relate to request number seven. Further, at the October 5 trial court hearing, counsel for Uber stated that she "thought seven was CPUC," and counsel for the City stated that "it bears mentioning that Uber provides [the information requested in number seven] to the CPUC." Finally, the Notice of Appeal states that Uber is appealing the trial court's October 25, 2017 order; that order states that Uber only disputes producing documents in response to request number eight and that the "parties shall further meet and confer regarding the documents and/or declaration to be produced by Uber in response to Item 7." Thus, our analysis only addresses request number eight.
The Trial Court's Order Requiring Uber to Comply with the Administrative Subpoenas
The City Attorney filed a petition for an order requiring Uber to comply with the *279administrative subpoenas (the petition) as Uber refused substantial compliance. At the October 5, 2017 hearing on the petition, Uber took the position that it was refusing to comply with request number eight on the basis that the CPUC had primary jurisdiction. In response to the trial court's request for authority supporting this position, Uber responded that it was "obviously not the law" that primary jurisdiction can stop a subpoena but, *73rather, "this is a collateral attack on something that the [C]PUC has asserted its jurisdiction over." The trial court rejected the primary jurisdiction argument on the basis that it was premature and ordered Uber to produce the CPUC reports. On October 20, 2017, in a letter addressing the draft proposed order from the hearing, Uber informed the City that it would appeal the trial court's ruling and would not produce the CPUC reports until after the appeal was heard.
The trial court entered its order on October 25, 2017. As to request number eight, the trial court held that Uber's primary jurisdiction arguments were premature given that it was a "pre-litigation motion to enforce administrative subpoenas, not a summary judgment motion at the close of discovery. The City need not prove the merits of its case or demonstrate triable issues of fact before it can enforce its subpoenas or conduct an investigation. The City has broad investigatory powers, which include the power to obtain information from third parties. That power is a prerequisite to the adequate enforcement of the law." The trial court ordered Uber to produce its "annual reports to the [CPUC] from 2013 through 2017," and set a further hearing to address any remaining disputes concerning Uber's compliance with requests one through seven. Uber and the City entered into a stipulated protective order to protect confidential information produced in response to the administrative subpoenas in September 2017 that the trial court signed in November 2017.
Uber timely filed an appeal on November 14, 2017.
DISCUSSION
A. Standard of Review
An order compelling compliance with an administrative subpoena is an appealable final judgment. ( Dana Point Safe Harbor Collective v. Superior Court (2010)
B. The Administrative Subpoenas Were Properly Issued Pursuant to the City's Investigative Power
The City Attorney has a broad right to investigate, including the use of subpoenas, when it suspects an entity operating within its jurisdiction is *74violating the law. (See California Restaurant Assn. v. Henning (1985)
In United States v. Morton Salt Co. (1950)
As explained by the Henning court, "[j]udicial deference to administrative discretion and expertise is considerable. The general policy of noninterference is evidenced by the manner in which courts evaluate claims that an administrative subpoena infringes upon interests protected by the Fourth Amendment. Such direct attacks are seldom successful." ( Henning , supra , 173 Cal.App 3d. at p. 1075,
1. Request Number Eight Relates to Inquiries the City Attorney is Authorized to Make
The City's investigation began because of a concern that Uber was violating the law in several areas relating to "unsafe driving and illegal parking by Uber drivers, the congestion and volume of Uber vehicles, and inequality of access and treatment of passengers .... [and] the distance driven by Uber drivers prior to commencing a shift, after media reports that Uber incentivizes drivers to drive as much as 200 miles or more before driving for an additional 12 to 16 hours, crowding the City's streets with unfamiliar and *75extremely fatigued drivers. The City is also investigating allegations that Uber's compensation structure results in underpayment of drivers."
The City Attorney also suspected Uber was in violation of state nuisance law. Civil Code section 3479 defines a nuisance as "[a]nything which is ... an obstruction to the free use of property, so as to interfere with the comfortable enjoyment of life or property, or unlawfully obstructs the free passage or use, in the customary manner, or any ... public park, square, street, or highway." A public nuisance is "one which affects ... any considerable number of persons, although the extent of the annoyance or damage inflicted upon individuals may be unequal." ( Civ. Code § 3480.) Code of Civil Procedure section 731 gives "the city attorney of any town or city in which the nuisance exists" the authority to file a civil action to abate that nuisance pursuant to Civil Code sections 3479 - 3480. (See County of Santa Clara v. Atlantic Richfield Co. (2006)
The City Attorney also sought to investigate whether Uber was failing to provide adequate accommodations for disabled riders and was, therefore, in violation of the Unruh Civil Rights Acts and other state laws protecting individuals with disabilities. ( Civ. Code, § 51, subd. (b) [the Unruh Civil Rights Act gives Californians the *281right to free and equal treatment regardless of disability, among other factors]; see also Civ. Code § 54 [guaranteeing equal access to individuals with disabilities, including the full and free use of the streets and highways].)
Finally, the City Attorney was concerned about reports that Uber was underpaying its drivers and thereby violating San Francisco's independent minimum compensation ordinance. (S.F. Admin. Code, ch. 12V). Chapter 12V requires companies to pay minimum wage to all independent contractors who work more than twenty hours in San Francisco in any given month, and is enforceable by action of "the City Attorney ... or any entity acting on behalf of the public as provided for under applicable state law ...." (S.F. Admin. Code, ch. 12V(5)(h).)
We find that, as explicitly stated in the administrative subpoenas, "[t]he subpoenaed items are relevant to an investigation of possible violations of law, including California Civil Code § 51 et seq. [the Unruh Civil Rights Act] and California Civil Code § 54 et seq. [California disability rights law], California Civil Code §§ 3479 and 3480 [public nuisance laws], and San Francisco Administrative Code § 12V [minimum wage law] ...." Uber unconvincingly argues that "in light of the CPUC's asserted jurisdiction over *76the TNC industry, the City's subpoena is necessarily outside any inquiry the City is authorized to make." However, we cannot reach the question of a "[h]ypothetical conflict" between the CPUC's jurisdiction and the City's jurisdiction because that conflict may never arise. ( Younger v. Jensen (1980)
2. Request Number Eight Seeks Reasonably Relevant Information and Is not Too Indefinite .
The CPUC reports requested are "reasonably relevant" to the City's investigation of possible violations of state and municipal laws by Uber. ( Henning , supra , 173 Cal.App.3d at p. 1075,
Uber contends that the City has failed to establish the first two required elements of the Henning test, but does not dispute compliance with the third element. In any event, request number eight is "not too indefinite" under the third prong of the Henning test because it is limited in both scope and time. ( Henning , supra , 173 Cal.App.3d at p. 1075,
*282C. Uber's Preemption Arguments Fails
Uber contends that the City Attorney's investigation, including the issuance of the administrative subpoenas, and "any action the City might take pursuant to that investigation," is preempted under Public Utilities Code section 1759. We are not persuaded.
1. Uber is Regulated by the CPUC as a TNC
Uber is regulated as a TNC by the CPUC. The CPUC is a constitutionally established regulatory agency vested with jurisdiction to regulate *77private persons and entities providing certain services to the public, including the kinds of services provided by Uber. ( Cal. Const., art. XII, §§ 3, 5.) It has broad authority to "fix rates, establish rules, examine records, issue subpoenas, administer oaths, take testimony, punish for contempt, and prescribe a uniform system of accounts for all public utilities subject to its jurisdiction." ( Cal. Const., art. XII, § 6.) The Public Utilities Act (§ 201 et seq.) vests the CPUC with broad authority to "supervise and regulate every public utility in the State." (§ 701.) " ' "The commission's authority has been liberally construed" [Citation], and includes not only administrative but also legislative and judicial powers.' [Citation]." ( Goncharov v. Uber Technologies, Inc. (2018)
The California Legislature has acted to isolate the CPUC's administrative authority from interference by the courts in section 1759, subdivision (a) : "No court of this state, except the Supreme Court and the court of appeal ... shall have jurisdiction to review, reverse, correct, or annul any order or decision of the commission or to suspend or delay the execution or operation thereof, or to enjoin, restrain, or interfere with the commission in the performance of its official duties ...." ( Pub. Util. Code § 1759, subd. (a).) This limitation on the court's jurisdiction carves out exclusive jurisdiction for the CPUC's adjudicatory and rulemaking jurisdiction. (See Goncharov , supra , 19 Cal.App.5th at p. 1169,
Uber makes several preemption arguments based on crystal ball predictions of what the City might do in the future based on its current investigation. For example, Uber contends the City might seek an injunction based on its investigation, and as a result "other cities and counties would seek the same powers, thereby exposing TNCs to a patchwork of local regulation across California." Uber also argues that "[t]he fact that the City can cite TNC drivers for traffic violations does not mean it can ... regulate the TNC industry in areas already being regulated by the CPUC." (italics added.)
The City has not, however, instigated litigation seeking an injunction or damages, nor are any proposed regulations at issue. Rather, the City has issued the administrative subpoenas as part of an investigation of possible violations of the law. Thus, as the trial court correctly pointed out during oral argument, Uber is "way too early" with its contention that the administrative subpoenas are "a collateral attack on something that the [C]PUC has asserted jurisdiction over." As stated in the trial court order: "This is a pre-litigation motion to enforce administrative subpoenas, not a summary judgment motion at the close of discovery. The City need not prove the merits of its case or demonstrate triable issues of fact before it can enforce its subpoenas or conduct its investigation."
We agree with the trial court's determination that Uber's preemption arguments are premature. Uber does not cite any cases where enforcement of an administrative subpoena was preempted under section 1759. Rather, the cases cited by Uber involve proceedings far beyond the investigative stage. For example, Uber relies on Goncharov,
3. The Trial Court Has Jurisdiction to Enforce the Administrative Subpoenas Under Section 1759
Uber argues that under section 1759 and San Diego Gas & Electric Co. v. Superior Court (1996)
In Covalt , the California Supreme Court established the test to determine whether an action is barred by section 1759. ( Id. at pp. 923, 926, 925,
Trial court jurisdiction "is precluded only if all three prongs of the Covalt test are answered affirmatively." ( PegaStaff v. Pacific Gas & Electric Co. (2015)
Uber argues that enforcing the administrative subpoenas would interfere with the CPUC's ongoing rulemaking process regarding whether the CPUC
*80will make reports submitted to it by TNCs available to the public. Specifically, the CPUC is considering whether it should establish a website portal for the TNC data and whether the CPUC should directly share TNC trip data with interested California government entities.
*285( Id. at p. 1174,
Unlike the judicial determination in Goncharov that "would strike at the heart" of CPUC ongoing rulemaking, the trial court did not need to make any determinations relating to the CPUC rulemaking process in order to determine whether Uber was required to respond to request number eight in the administrative subpoenas. ( Id. at p. 1171,
In addition, Uber makes the overarching argument that "the City may not interfere in any way with the CPUC's oversight of TNCs." For instance, Uber contends that the City should not be permitted to investigate possible safety or nuisance violations by Uber drivers because the CPUC "controls TNC operations on City streets," and "is fully engaged on this issue, requiring extensive reporting to ensure that TNC drivers operate safely." However, Uber fails to demonstrate how the order requiring it to produce the CPUC reports hinders or interferes with the CPUC's general oversight of TNCs. Instead, Uber makes the argument that "[b]ecause any lawsuit or injunction the City might pursue would interfere with the CPUC's ongoing rulemaking, no court has jurisdiction to do anything that would matter." (italics added.) In other words, Uber contends that any hypothetical lawsuit or injunction based on the City's investigation would fail under the third prong of the Covalt test because it would "hinder or interfere with" the CPUC's regulatory authority. ( Covalt , supra , 13 Cal.4th at pp. 923, 926, 925,
For example, the City Attorney could bring an action based on its investigation that would aid or complement, as opposed to interfere with, the CPUC's oversight of TNCs. (See Hartwell Corp. v. Superior Court (2002)
As is evident, we do not and cannot know at this juncture what the City Attorney will choose to pursue, let alone whether or not any legal action it undertakes will hinder, aid, or have no impact upon the CPUC in its regulation of TNCs. Thus, we hold that Uber's preemption arguments fail because they are premature and because the trial court had jurisdiction to enforce the administrative subpoenas under section 1759 and the Covalt test.
D. The Doctrine of Primary Jurisdiction Does Not Apply to Stay Enforcement of the Administrative Subpoenas
Uber contends that "appropriate legal tests confirm the common sense conclusion that the CPUC, not the City Attorney, has primary jurisdiction over Uber,"
The California Supreme Court has explained that the primary jurisdiction doctrine " 'applies where a claim is originally cognizable in the courts, and comes into play whenever enforcement of the claim requires the resolution of issues which, under a regulatory scheme, have been placed within the special competence of an administrative body; in such a case the judicial process is suspended pending referral of such issues to the administrative body for its views.' [Citation.]" ( Farmers Ins. Exchange v. Superior Court (1992)
*83[the primary jurisdiction doctrine may be invoked whenever a court concludes there is a "paramount need for specialized agency fact-finding expertise"].)
Uber does not cite to any cases supporting their argument that the primary jurisdiction doctrine could apply to stay the enforcement of a valid administrative subpoena pending some resolution or examination *287by the CPUC. Further, there is no need for "specialized fact-finding expertise" by the CPUC in order for the trial court to enforce the administrative subpoenas. ( Kliger , supra , 52 Cal.3d at p. 88,
E. Uber's Confidentiality Concerns Are Addressed by the Protective Order
Uber urges us to reverse the trial court's order on the basis that the administrative subpoenas should have been rejected because they "invade[ ] the privacy rights of third parties and the right of Uber's TNC subsidiary to protect the confidentiality of its trade secrets." However, Uber and the City entered into a stipulated protective order that, at their request, was signed by the trial court in November 2017. The City and Uber "stipulate that the [protective order] is appropriate to protect Confidential Information and Highly Confidential Information .... produced in response to the Administrative Subpoenas."
It is Uber's burden to demonstrate that the protective order is inadequate to protect its privacy interests, a burden that Uber fails to meet.
Uber expresses concern that "[i]f the City receives the private and confidential information it demands, the interests of third parties and Uber's TNC subsidiary will potentially be compromised by requests for that data under the Public Records Act." This concern is squarely and thoroughly addressed in the protective order, which provides, in relevant part, that: (1) the City Attorney must notify Uber in writing within three business days "following the receipt of any subpoena or Public Records Request relating to Confidential Information or Highly Confidential Information"; (2) in responding to a public records request, the City Attorney is required to assert that documents designated as " 'Confidential' " or " 'Highly Confidential' " "constitute investigatory materials exempt from production under one or more provisions of the Public Records Act ...."; and (3) the City is required to provide a copy of its public records response and keep Uber informed of the status of *288the public records request "such that [Uber] may reasonably take or respond to legal action to protect its confidentiality rights."
Uber also seeks to assert the privacy rights of its drivers by stating that "[t]he CPUC reports contain personal information - for example, rider complaints with rider identifying information along with the names of Drivers who they alleged drove while impaired." Again, this concern has already been addressed and Uber fails to demonstrate in what manner the protective order is inadequate. The protective order provides that Uber "shall mark all Documents and portions of Documents that Uber contends contain Confidential Information or Highly Confidential Information ... as appropriate." Under its terms, "Confidential Information" and "Highly Confidential Information" may only be disclosed to attorneys and certain staff in the City Attorney's Office, and other specified individuals necessary to assist with the litigation or investigation. The protective order provides that for certain categories of people, "Confidential Information and/or Highly Confidential Information" may only be disclosed after the City Attorney received a signed confidentiality statement. Thus, Uber is able to protect the privacy interests of its drivers by designating the portions of the reports containing personal information as confidential.
Finally, if Uber believes the current protective order to be inadequate, its remedy is set forth within the order itself; the protective order "may be amended by application to the Court and upon a showing of good cause."
Thus, we reject Uber's contention that the trial court's order should be reversed on the basis that the administrative subpoenas invade the privacy and confidentiality interests of Uber or third parties.
*85DISPOSITION
The order is affirmed in its entirety. The City is entitled to recover its costs on appeal.
WE CONCUR:
Siggins, P.J.
Wiseman, J.
Raiser-CA, LLC is wholly owned by Raiser, LLC, which is wholly owned by Uber Technologies, Inc. The City Attorney issued two identical subpoenas to: (1) Uber Technologies, Inc.; and (2) Raiser-CA, LLC and Rasier, LLC.
Unless otherwise indicated, all further undesignated statutory references are to the Public Utilities Code.
The City issued an identical subpoena to Lyft on the same day. We deny the City's request for judicial notice of the subpoena issued to Lyft and the transcript of proceedings before the San Francisco Superior Court in City v. Lyft (San Francisco County Superior Court Case No. CPF-17-515768). "[The] rulings of other courts in purportedly similar matters are not relevant or helpful in our de novo review .... [Citation]." (Johnson & Johnson v. Superior Court (2011)
Uber requests that we take judicial notice of various CPUC documents. (Evid. Code § 452, subd. (c) ; see Wise v. Pacific Gas & Electric Co. (1999)
In the Scoping Memo for Phase III, the Commissioner defines the issues in the ongoing rulemaking cited by Uber: "TNC data: (a) Should the Commission establish a website portal for TNC data; and (b) Should the Commission share TNC trip data with interested California government entities?" The questions listed regarding these issues are: "(1) What is the public and/or research value of a website, database, or other publicly accessible means to host data about transportation for hire that is under the Commission's jurisdiction?; (2) What has been the effectiveness of third-party hosted websites that provide data about Commission programs?; (3) What concerns, if any, are there about the ability of a Commission-sponsored website to protect customer privacy and market sensitive data? (4) What characteristics or design specifications are needed to ensure that a Commission-sponsored website would be flexible enough to adjust to future legislative action including, but not limited to: new background check standards that are germane to the Commission's jurisdiction over TNC's? (5) Should the Commission share TNC trip data with interested California governmental entities? (6) What factors should the Commission take into account in determining if TNC trip data should be shared with interested California governmental entities? (7) What steps should the Commission consider implementing to protect the market sensitivity of trip data?"
The City contends that that "Uber's 'preemption' and 'primary jurisdiction' arguments are basically interchangeable." However, these are distinct legal doctrines.
"Confidential Information" is defined in the protective order as "any information that Uber clearly designates as such as provided in this Order and that constitutes (i) confidential trade secrets as defined in California Civil Code § 3426.1(d), proprietary business information, commercially sensitive information that, if released, could cause competitive harm to Uber, or (ii) non-public personal, client, rider, driver, or customer information concerning individuals or other entities (including, but not limited to, name, Social Security numbers, home telephone numbers and addresses, tax returns, and medical, investment, credit and banking information.)" "Highly Confidential Information" is defined as "Confidential Information that Uber clearly designates as such as provided in this Order and that constitutes extremely sensitive 'Confidential Information' the disclosure of which would create a substantial risk of serious harm that could not be avoided by less restrictive means."
Because we find that the protective order protects Uber's privacy interest, we do not reach the issue of whether its assertions of trade secret privilege are valid.
Retired Associate Judge of the Court of Appeal, Fifth Appellate District, assigned by the Chief Justice pursuant to article VI, section 6 of the California Constitution.
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