Case 3:19-cv-06361-RS Document 217 Filed 07/26/22 Page 1 of 8
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`UNITED STATES DISTRICT COURT
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`NORTHERN DISTRICT OF CALIFORNIA
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`BOSTON RETIREMENT SYSTEM, et al.,
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`Plaintiffs,
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`v.
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`UBER TECHNOLOGIES, INC., et al.,
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`Defendants.
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`Case No. 19-cv-06361-RS
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`ORDER GRANTING MOTION FOR
`CLASS CERTIFICATION
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`I. Introduction
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`In this putative securities class action arising from the initial public offering (“IPO”) for
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`Defendant Uber Technologies, Inc. (“Uber”), Plaintiff Boston Retirement System (“BRS”) and
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`four individual plaintiffs bring a motion for class certification and seek appointment as class
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`representatives. Defendants oppose the motion, arguing that BRS and the other named plaintiffs
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`do not satisfy the typicality and adequacy requirements of Federal Rules of Civil Procedure
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`23(a)(3) and 23(a)(4), and that the predominance and superiority requirements of Rule 23(b)(3) are
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`not met. For all the foregoing reasons, the motion for class certification is granted. Defendants’
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`affirmative defense of actual knowledge does not defeat certification, because the actual
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`knowledge asserted concerns pieces of information disseminated in news stories, rather than the
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`full scope of the issues Uber faced that Plaintiff avers were not disclosed until after the IPO.
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`Further, the proposed class representatives and counsel have demonstrated that they will
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`adequately serve the class.
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`Case 3:19-cv-06361-RS Document 217 Filed 07/26/22 Page 2 of 8
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`II. Factual and Procedural Background
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`Uber is a transportation company which provides on demand rides and food delivery. The
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`company was founded in San Francisco in 2009 and has since expanded globally. On May 10,
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`2019, Uber conducted its IPO, in which it sold 180,000,000 shares of common stock to the public.
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`The IPO was priced at $45 per share and generated nearly $8 billion in proceeds for Uber. The
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`IPO was conducted pursuant to several documents filed by defendants with the U.S. Securities and
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`Exchange Commission, including an April 11, 2019 Registration Statement on Form S-1, which,
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`after amendment, was declared effective by the SEC on May 5, 2019. See ECF No. 86-1 (“RS”).
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`BRS purchased Uber’s common stock in the IPO, and from an underwriter of the IPO,
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`pursuant to the offering documents, including the RS. At the time BRS purchased this stock, only
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`Uber shares offered in the IPO were available in the market. Uber’s share price subsequently
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`declined from $45 to an all-time low of $25.99 on November 14, 2019. This action was brought,
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`alleging violations of Sections 11, 12(a)(2), and 15 of the Securities Act, 15 U.S.C. §§ 77k,
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`77I(a)(2), and 77o. In January 2020, BRS was appointed lead plaintiff. The named defendants are
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`Uber, several of its past and present executives, and the underwriters of its IPO.
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`On August 7, 2020, Defendants’ motion to dismiss was denied, as Plaintiff had adequately
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`stated claims that Defendants omitted material facts concerning the legality (or lack thereof) of
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`Uber’s business model, its passenger safety record, and its financial condition. On May 14, 2021,
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`Plaintiff filed a Second Amended Class Action Complaint (“SAC”), adding four new proposed
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`class representatives. Defendants moved to dismiss the claims of these new plaintiffs, and the
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`motion was denied on October 1, 2021. The order denying the motion to dismiss claims brought
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`by the new plaintiffs noted, however, “[t]he addition of named plaintiffs in the Second Amended
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`Complaint does not automatically morph them into additional court-designated Lead Plaintiffs”
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`and that the Court would “consider any concerns about the involvement of too many law firms,
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`and the related concern of overgeneration of fees, at the class certification stage.” Order Denying
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`Motion to Dismiss, p.7.
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`On October 29, 2021, BRS filed this motion for class certification. BRS seeks certification
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`ORDER GRANTING MOTION FOR CLASS CERTIFICATION
`CASE NO. 19-cv-06361-RS
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`Case 3:19-cv-06361-RS Document 217 Filed 07/26/22 Page 3 of 8
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`of the following proposed class:
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`All persons and entities that purchased or otherwise acquired Uber’s publicly traded common
`stock pursuant and/or traceable to the Offering Documents for Uber’s IPO, and who were
`damaged thereby. Excluded from the Class are: (i) Defendants and the Individual Defendants’
`immediate family members; (ii) the officers, directors, affiliates, and subsidiaries of Uber and
`the Underwriter Defendants, at all relevant times, (iii) Uber’s affiliates and employee
`retirement and/or benefit plan(s) and their participants or beneficiaries to the extent they
`purchased or acquired Uber common stock pursuant or traceable to the Offering Documents
`through any such plan(s); (iv) any entity in which Defendants have or had a controlling
`interest; and (v) the legal representatives, heirs, successors, or assigns of any such excluded
`person or entity.
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`Motion for Class Certification, p. 2-3. BRS and four of the named plaintiffs added to the Second
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`Amended Complaint—David Messinger, Salvatore Toronto, and Irving S. and Judith Braun—seek
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`appointment as Class Representatives.1 Defendants oppose the motion.
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`III. Legal Standard
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`Class actions are governed by Rule 23 of the Federal Rules of Civil Procedure, which
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`represents more than a mere pleading standard. To obtain class certification, plaintiffs bear the
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`burden of showing they have met each of the four requirements of Rule 23(a) and at least one
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`subsection of Rule 23(b). Zinser v. Accufix Research Inst., Inc., 253 F.3d 1180, 1186, amended
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`by 273 F.3d 1266 (9th Cir. 2001). “A party seeking class certification must affirmatively
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`demonstrate . . . compliance with the Rule[.]” Wal–Mart Stores, Inc. v. Dukes, 564 U.S. 338, 350
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`(2011).
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`Rule 23(a) provides that a court may certify a class only if: “(1) the class is so numerous
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`that joinder of all members is impracticable; (2) there are questions of law or fact common to the
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`class; (3) the claims or defenses of the representative parties are typical of the claims or defenses
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`of the class; and (4) the representative parties will fairly and adequately protect the interests of the
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`class.” These requirements are commonly referred to as numerosity, commonality, typicality, and
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`adequacy of representation. Mazza v. Am. Honda Motor Co., Inc., 666 F.3d 581, 588 (9th Cir.
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`1 Joseph Cianci was named as a new plaintiff in the SAC, but does not seek appointment as Class
`Representative.
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`ORDER GRANTING MOTION FOR CLASS CERTIFICATION
`CASE NO. 19-cv-06361-RS
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`Case 3:19-cv-06361-RS Document 217 Filed 07/26/22 Page 4 of 8
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`2012). If all four Rule 23(a) prerequisites are satisfied, a court must also find that plaintiffs
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`“satisfy through evidentiary proof” at least one of the three subsections of Rule 23(b). Comcast
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`Corp. v. Behrend, 569 U.S. 27, 33 (2013). Rule 23(b)(3) requires that “the questions of law or fact
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`common to class members predominate over any questions affecting only individual members,
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`and that a class action is superior to other available methods for fairly and efficiently adjudicating
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`the controversy.” Fed. R. Civ. P. 23(b)(3).
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`IV. Discussion2
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`Defendants challenge whether Plaintiff has met the adequacy and typicality requirements
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`of Rule 23(a) and the predominance and superiority requirements of Rule 23(b)(3). As the
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`discussion of predominance and superiority helps resolve the concerns about adequacy and
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`typicality, the Rule 23(b)(3) requirements are discussed first. Since Defendants have not
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`challenged numerosity or commonality under Rule 23(a), those requirements are not addressed.
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`2 Defendants’ motion to file a sur-reply is denied, as the issues addressed in the sur-reply are not
`necessary to decide the motion for class certification. The administrative motions to file materials
`under seal, see Dkt. Nos. 189, 205, are denied in part and granted in part. The motion at Dkt. No.
`189 is a motion from Defendants to consider whether another party’s material should be sealed.
`Plaintiff filed a statement in support of the motion, outlining limited pieces of information that
`should be sealed. The motion to file under seal is granted as to those limited pieces of information.
`Nonparty Zevenbergen Capital Investments LLC (“ZCI”) filed a statement in support of the
`motion seeking to seal all materials it had designated as confidential, maintaining that those
`materials are trade secrets. These designations, however, seem to cover a wide variety of
`materials, and lead to numerous redactions in Defendants’ opposition—including for sentences
`which simply state what information ZCI was or was not aware of concerning Uber. The motion is
`therefore denied without prejudice as to ZCI’s designations. ZCI may provide a more limited list
`of designations, bearing in mind the limitations outlined in Civil Local Rule 79-5. Next, the
`motion at Dkt. No. 205 is a motion from Plaintiff to consider whether Defendants’ or ZCI’s
`materials should be sealed. Defendants filed a statement seeking the redaction of only a small
`number of lines of deposition transcript. The motion is therefore granted as to this information.
`ZCI did not file a response, and normally a nonresponse is deemed a statement that it does not
`object to the unsealing of any information at issue in the administrative motion. See Civil Local
`Rule 79-5(f)(3). It is noted, however, that information that ZCI seeks to maintain under seal in the
`other administrative motion appears to overlap with information in this administrative motion.
`ZCI’s revised statement of materials to be sealed should therefore address both Dkt. No. 189 and
`No. 205. ZCI’s revised submission should be filed within fourteen days of this Order. After ZCI’s
`revised submission and an order on the propriety of sealing, Plaintiff and Defendants will be
`directed to file new versions of the materials reflecting the approved redactions on the public
`docket.
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`ORDER GRANTING MOTION FOR CLASS CERTIFICATION
`CASE NO. 19-cv-06361-RS
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`Case 3:19-cv-06361-RS Document 217 Filed 07/26/22 Page 5 of 8
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`A. Predominance and Superiority
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`Defendants argue that issues concerning each plaintiff’s actual knowledge of allegedly
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`omitted information preclude Plaintiff from satisfying the predominance and superiority
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`requirements of Rule 23(b)(3). Actual knowledge is a defense to claims under Sections 11 and 12.
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`See 15 U.S.C. § 77k(a) (stating that a plaintiff does not establish liability if “it is proved that at the
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`time of such acquisition he knew of such untruth or omission”); id. at 77I(a)(2) (requiring that “the
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`purchaser not know[] of such untruth or omission”). Predominance concerns in connection with
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`affirmative defenses may be considered at class certification for affirmative defenses the defendant
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`“has actually advanced and for which it has presented evidence.” True Health Chiropractic, Inc. v.
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`McKesson Corp., 896 F.3d 923, 931 (9th Cir. 2018). As another district court has noted, “in some
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`circumstances individualized issues regarding knowledge can be sufficient to defeat class
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`certification in Section 11 and 12(a)(2) cases.” Vignola v. Fat Brands, Inc., No.
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`CV187469PSGPLAX, 2020 WL 1934976, at *5 (C.D. Cal. Mar. 13, 2020) (citing cases).
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`Issues of actual knowledge do not defeat class certification here. Defendants have
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`presented evidence in the form of deposition testimony from various employees of BRS’s
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`investment manager, ZCI, showing that some employees had knowledge of pieces of information
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`related to the alleged omissions. Separate and apart from issues of whether knowledge of
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`individual ZCI employees may be imputed to BRS, rather than only ZCI’s knowledge, the
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`awareness of snippets of information do not defeat predominance. In a securities class action
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`against fellow rideshare operator Lyft, another court in this district rejected the contention that
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`some knowledge about the problems Lyft faced concerning sexual assaults defeated
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`predominance. As stated in the order granting class certification in that case, “the declarations
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`concerning the sexual assault issue reflect a general awareness that Lyft was subject to some
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`allegations of sexual assault, rather than any knowledge about the alleged magnitude of the
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`problem.” In re Lyft Inc. Sec. Litig., No. 19-CV-02690-HSG, 2021 WL 3711470, at *6 (N.D. Cal.
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`Aug. 20, 2021). Similarly here, each of the pieces of knowledge identified by Defendants go to the
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`awareness of a general issue, not the magnitude of the problems alleged in the SAC.
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`Defendants also argue that individual issues of actual knowledge give rise to
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`ORDER GRANTING MOTION FOR CLASS CERTIFICATION
`CASE NO. 19-cv-06361-RS
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`Case 3:19-cv-06361-RS Document 217 Filed 07/26/22 Page 6 of 8
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`individualized issues of causation which will predominate over common issues and create
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`conflicts within the class, and that Comcast v. Behrend, 569 U.S. 27 (2013) prohibits class-wide
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`treatment of the causation issues in this case. Given that Defendants have failed to establish that
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`actual knowledge will preclude class certification, these issues similarly do not preclude
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`certification. The absence of loss causation, also referred to as negative causation, is an affirmative
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`defense for which Defendants have the burden. Hildes v. Arthur Andersen LLP, 734 F.3d 854, 860
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`(9th Cir. 2013). Defendants have not established that individualized issues with negative causation
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`will predominate over common questions, and “[t]he causes of the [Uber] stock declines are
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`factual questions suitable for resolution on a class-wide basis.” In re Facebook, Inc., IPO Sec. &
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`Derivative Litig., 312 F.R.D. 332, 350 (S.D.N.Y. 2015).
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`Further, Comcast does not prevent certification. “The Ninth Circuit reads Comcast to
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`demand only that plaintiffs be able to show that their damages stemmed from the defendant’s
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`actions that created the legal liability.” Hatamian v. Advanced Micro Devices, Inc., No. 14-CV-
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`00226 YGR, 2016 WL 1042502, at *8 (N.D. Cal. Mar. 16, 2016) (internal quotation marks and
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`citation omitted). Defendant points to no securities class action in which the concerns from
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`Comcast prevented certification; indeed, many courts have held that “Comcast is simply
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`inapposite to Section 11 actions, where damages reflect liability by statutory formula.” New Jersey
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`Carpenters Health Fund v. Royal Bank of Scotland Grp., PLC, No. 08-CV-5310 (DAB), 2016 WL
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`7409840 (S.D.N.Y. Nov. 4, 2016) (internal quotation marks and citation omitted). In short,
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`Plaintiff has established predominance and superiority.
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`B. Adequacy
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`To determine whether named plaintiffs will adequately represent a class, courts must
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`resolve two questions: “(1) do the named plaintiffs and their counsel have any conflicts of interest
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`with other class members and (2) will the named plaintiffs and their counsel prosecute the action
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`vigorously on behalf of the class?” Ellis v. Costco Wholesale Corp., 657 F.3d 970, 985 (9th Cir.
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`2011) (internal quotation marks and citation omitted). Defendants only invoke the latter concern.3
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`3 To the extent that Defendants are concerned with conflicts within the class concerning causation,
`that concern is addressed in the discussion of predominance and superiority.
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`ORDER GRANTING MOTION FOR CLASS CERTIFICATION
`CASE NO. 19-cv-06361-RS
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`Case 3:19-cv-06361-RS Document 217 Filed 07/26/22 Page 7 of 8
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`Defendants argue that the proposed class representatives are not adequate because they are not
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`controlling this litigation, arguing that “Lead Plaintiff BRS has shown an inability (or
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`unwillingness) to control its lawyers or legal costs” and citing to the proposed participation of ten
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`law firms on the plaintiff side in this case. Opposition to Motion for Class Certification, p.35.
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`Defendants similarly argue that the proposed individual class representatives “have abdicated
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`responsibility for running this case to counsel[.]” Id. at 37.
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`Defendants assert a higher bar to establishing adequacy than is required in this circuit.
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`“While it is true that plaintiffs must offer affirmative evidence demonstrating that they satisfy the
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`requirements of Rule 23(a), the evidentiary burden upon plaintiffs is low; a class representative
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`will be deemed inadequate only if startlingly unfamiliar with the case[.]” In re Silver Wheaton
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`Corp. Sec. Litig., No. 215CV05146CASJEMX, 2017 WL 2039171, at *8 (C.D. Cal. May 11,
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`2017) (internal quotation marks and citations omitted). Here, the proposed class representatives
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`more than surpass this standard, and “satisfy the requirement that plaintiffs present some
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`affirmative evidence that they are familiar with this case, the claims within it, and the role of a
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`class representative.” Id.
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`As for the number of proposed class representatives, the PSLRA does not dictate that there
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`may only be one class representative. “[T]he PSLRA does not in any way prohibit the addition of
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`named plaintiffs to aid the lead plaintiff in representing a class. Rather, the proposed class and
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`Class Representatives are to be reviewed according to the standards of Rule 23, without any
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`deference to the earlier determinations made in the appointment of Lead Plaintiffs.” In re Twitter
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`Inc. Sec. Litig., 326 F.R.D. 619, 627 (N.D. Cal. 2018) (internal quotation marks and citation
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`omitted). As for the concern about the involvement of numerous law firms, only one firm—
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`Labaton Sucharow—seeks to serve as Lead Counsel. Labaton Sucharow has demonstrated
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`experience in litigating securities class actions and has an incentive to avoid duplication of efforts
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`amongst the firms it will draw on for support; indeed, any payments to other firms will be from
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`attorney’s fees due to Labaton Sucharow, should it be awarded any fees. In short, Plaintiff has
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`established that the proposed class representatives and Lead Counsel are adequate.
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`ORDER GRANTING MOTION FOR CLASS CERTIFICATION
`CASE NO. 19-cv-06361-RS
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`C. Typicality
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`Defendants argue that the proposed class representatives are not typical because they are
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`subject to unique actual knowledge defenses, and that this is a basis to deny certification even if
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`the Court rejects the similar arguments concerning predominance and superiority. This argument
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`is rejected for the same reasons as the predominance and superiority requirements. It is very
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`probable that given the high profile nature of Uber and its IPO, some members of the class became
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`aware of information disseminated in the news media concerning the omissions Plaintiff has
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`averred. Plaintiff’s theory of this case, however, is that the pre-IPO information available in the
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`news did not reach the full scope of the alleged omissions. Thus, the actual knowledge defenses as
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`to the proposed class representatives are not so unique to these plaintiffs that they defeat typicality.
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`Typicality is therefore satisfied.
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`V. Conclusion
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`For all the foregoing reasons, the motion for class certification is granted. BRS, David
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`Messinger, Salvatore Toronto, and Irving S. and Judith Braun are appointed as class
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`representatives, and Labaton Sucharow is appointed as class counsel.
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`IT IS SO ORDERED.
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`Dated: July 26, 2022
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`______________________________________
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`RICHARD SEEBORG
`Chief United States District Judge
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`ORDER GRANTING MOTION FOR CLASS CERTIFICATION
`CASE NO. 19-cv-06361-RS
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