A team of Orrick attorneys successfully defended client Travis Kalanick, founder and former CEO of Uber Technologies, Inc., in a securities class action filed in the Northern District of California. Plaintiffs, represented by Robbins Geller, filed an action in September 2017 on behalf of series D-G institutional investors, alleging that Uber and Mr. Kalanick violated California state securities laws by making years of materially misleading statements concerning alleged regulatory violations and government investigations, data security breaches, autonomous driving technology and alleged sexual harassment and gender discrimination. When the various scandals and investigations were eventually revealed throughout the tumultuous 2017 time period, the complaint alleged, Kalanick was forced from the company and Uber’s value declined.
Orrick moved to dismiss on the grounds that Mr. Kalanick never sold or offered to sell his shares (a requirement under California law), and did not make materially misleading statements. Because the Reform Act’s mandatory discovery stay does not apply to state law securities claims, Plaintiffs sought immediately to compel discovery from Uber and Mr. Kalanick, which would have given them a significant advantage in amending their complaint. Defendants therefore moved to stay discovery, and the Court granted that motion, staying all discovery pending resolution of the motion to dismiss.
On August 31, 2018, the Court granted Mr. Kalanick’s and Uber’s motion to dismiss with leave to amend, ruling that the Complaint failed to allege Kalanick and Uber had made any materially misleading statements. Plaintiffs thereafter filed a second amended complaint, which Kalanick and Uber again moved to dismiss, arguing that the new pleading merely repackaged the original complaint’s deficient allegations. The district court agreed, and on July 31, 2019, United States District Judge Haywood Gilliam dismissed the case with prejudice.