(The opinions expressed here are those of the author, a

columnist for Reuters.)

By Alison Frankel

April 9 (Reuters) - An association of Uber ( UBER ) riders has

filed a lawsuit in Nevada state court to enjoin an Uber ( UBER )-backed

ballot initiative that would limit lawyers' contingency fees in

all civil suits to 20% of their clients' recovery, by far the

most restrictive cap in the country.

The group challenging the proposal, Uber Sexual Assault

Survivors for Legal Accountability, contends that Uber ( UBER ) is

pushing the ballot initiative to make it harder for sexual

assault victims to find lawyers willing to take their cases.

But those are not the only prospective plaintiffs who would be

affected by the "draconian" fee cap, according to the April 8

lawsuit. Patent holders, nursing home residents, shareholders

alleged securities fraud, employees with workers' compensation

claims, civil rights plaintiffs and even first responders and

law enforcement officers who are injured on the job would all

have less access to the courts, according to the complaint, if

their contingency fees are limited to 20%.

Moreover, the lawsuit asserted, if the Nevada initiative

succeeds, Uber ( UBER ) will follow the same playbook in other states.

Uber ( UBER ), which is named as a defendant in the new

lawsuit, did not respond to my email query. The company is

facing consolidated litigation in federal court in San Francisco

by hundreds of alleged sexual assault victims who blame Uber ( UBER ) for

failing to screen drivers and otherwise assure their safety. The

company has denied wrongdoing and said that reports of sexual

assault are on the decline after its adoption of safety

measures.

Uber ( UBER ) has previously backed ballot proposals in California and

Massachusetts. In 2022, Massachusetts's highest court blocked an

initiative that would have limited ride share companies'

liability for accidents caused by their drivers. But in 2023

California voters approved an Uber ( UBER )-backed ballot measure to

allow ride share companies to treat drivers as independent

contractors rather than employees.

The Nevada fee cap challenge also names Uber's ( UBER ) Nevada

lobbyists as defendants. Partners from the lobbying shop, the

Griffin Company, are listed as agents of the political action

committee that filed the ballot initiative with Nevada

government officials. The Griffin firm, which issued a March 18

press release announcing the Uber ( UBER )-backed ballot initiative, did

not respond to my phone and email messages or to a query sent

via the firm website.

Deepak Gupta of Gupta Wessler, who represents the Uber ( UBER ) riders'

group challenging the fee cap proposal, said the Nevada

initiative is the company's latest "cynical" tactic to evade

accountability.

"If passed, it would be the most extreme barrier to legal

representation in the nation," Gupta said in an email statement.

"We're hopeful that the Nevada courts will not tolerate this

effort to mislead the voters and wreck the state's civil justice

system."

The new complaint makes a compelling case that the fee limit

is bad public policy, citing declarations from law professors

who analyze contingency fees and from more than 30 Nevada

lawyers, from both plaintiffs' and defense firms, who said the

cap would wreak havoc on the state's civil justice system.

A policy expert from the American Association for Justice, a

trial lawyers group, said in a declaration accompanying the new

lawsuit that only two states - Oklahoma and Michigan - currently

impose sweeping fee caps, and their restrictions are not nearly

as extreme. (Oklahoma caps fees at 50% and Michigan at 33%.)

Several states limit fees in medical malpractice litigation but

the lowest cap for those cases, according to the AAJ lawyer's

declaration, is New York's 30%.

Ballot initiative challengers in Nevada cannot block proposals

with pure policy arguments, though. They must show that ballot

initiative petitions are legally deficient. (Under the Nevada

process, petitioners seeking to get their initiatives on

statewide ballots must obtain signatures from about 100,000

voters. If the Uber ( UBER )-backed fee cap proposal survives legal

challenges, Uber ( UBER ) and other supporters will try to collect

signatures to put the proposal before voters in 2026.)

Nevada precedent requires that ballot petitions present only a

single subject so that voters are not tricked into supporting an

unpopular cause attached to a more popular initiative. State law

also requires petitioners to provide voters with a brief

description of the effects of their initiatives.

The new lawsuit contends that Uber's ( UBER ) fee cap initiative

violates both requirements by failing to disclose the "vast

range" of practice areas that will be affected by the cap.

To back that claim, Gupta Wessler brought in pollsters to ask

Nevadans about the initiative and a political science expert who

opined that poll results show "how Uber ( UBER ) and other corporations

have misleadingly led the public to believe that lawsuits on

behalf of people who have been injured or had their rights

violated are a drain on society."

In a more technical - and perhaps ultimately more effective -

argument, the new complaint also asserts that the fee cap

petition is misleading because it fails to warn Nevadans that a

reduction in the number of contingency fee lawsuits will cost

taxpayers millions in extra Medicaid costs.

Here's why. Nevada's Medicaid system reaps millions of dollars

a year in reimbursements from plaintiffs who have successfully

sued defendants over their injuries. If those injury victims

can't find lawyers to prosecute their cases, the new complaint

argued, the Medicaid system won't receive reimbursements - which

means that Nevada taxpayers will be on the hook for the full

cost of their care.

A similar argument about Medicaid reimbursement helped

challengers win a 2004 Nevada Supreme Court ruling that a ballot

proposal to cap damages in medical malpractice cases was

misleading.

I'm sure the challenge to Uber's ( UBER ) ballot initiative will also

end up at the Nevada Supreme Court. I'm equally sure, based on

the dozens of declarations that challengers' lawyers from Gupta

Wessler, Nossaman, and Reese Ring Velto pulled together in a

matter of weeks, that plaintiffs' lawyers will match whatever

resources Uber ( UBER ) and the initiative's other supporters throw into

the case.

A 20% fee cap in all civil litigation, even in one state, is a

big deal. Keep your eyes on this litigation.

Read more:

Uber ( UBER ) loses bid to change name of US cases over 'sexual

assault' claims

Californians pass proposition to let Uber ( UBER ) treat drivers as

contractors: projection

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Uber ( UBER ), Lyft