Ninth Circuit Seals Uber’s Victory Against Securities Suit
An Irell & Manella LLP team scored a major victory for Uber Technologies, convincing the U.S. Court of Appeals for the Ninth Circuit to affirm a district judge’s July 2019 dismissal with prejudice at the pleading stage of a securities fraud class action against our client. The plaintiff contended Uber made false or misleading statements about numerous alleged high-profile scandals, negatively impacting investors. In a precedent-setting opinion, the Ninth Circuit agreed with the firm’s argument that the plaintiff had failed to plead loss causation because it did not specifically tie any alleged misstatement to a drop in Uber’s stock price.
The Ninth Circuit’s opinion is the first to address the causation pleading requirement for claims under California’s market manipulation statute asserted in federal court. This is a highly positive outcome for Uber because the suit sought billions of dollars in damages under a state statute that is notorious for its low evidentiary hurdles for plaintiffs suing under it.
At the outset of the case and over the plaintiff’s vigorous opposition, Irell obtained a stay of discovery pending resolution of Uber’s motion to dismiss. While such discovery stays are automatic under federal securities law, they are rarely granted in cases brought under California state law. The team subsequently secured the complete dismissal of the plaintiff’s complaint, followed by a second complete dismissal of the amended complaint with prejudice.
The plaintiff appealed, and Matt Ashley argued Uber’s case to the Ninth Circuit in December 2020. The team also included Michael Harbour and Andra Greene.