Case 4:19-cv-02690-HSG Document 179 Filed 08/20/21 Page 1 of 9
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`UNITED STATES DISTRICT COURT
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`NORTHERN DISTRICT OF CALIFORNIA
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`MATIAS MALIG, AS TRUSTEE FOR
`THE MALIG FAMILY TRUST,
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`Case No. 19-cv-02690-HSG
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`Plaintiff,
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`v.
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`ORDER DENYING MOTION FOR
`JUDGMENT ON THE PLEADINGS
`AND DENYING ADMINISTRATIVE
`MOTIONS TO SEAL
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`LYFT, INC., et al.,
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`Re: Dkt. No. 152, 169, 172
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`Defendants.
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`Pending before the Court is Defendants’ motion for judgment on the pleadings. See Dkt.
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`No. 152 (“Mot.”); Dkt. No. 159 (“Opp.”); Dkt. No. 170 (“Reply”).1 Also pending are the parties’
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`associated administrative motions to file under seal. Dkt. Nos. 169, 172. The Court DENIES the
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`motion for judgment on the pleadings and DENIES the motions to seal.
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`I.
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`BACKGROUND
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`On April 16, 2021, Plaintiff Rick Keiner filed the operative consolidated complaint against
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`Defendant Lyft Inc. (“Lyft”), Logan Green, Co-Founder, Chief Executive Officer, and Director on
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`Lyft’s board of directors (the “Board”), John Zimmer, Co-Founder, President and Vice Chairman
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`of the Board, Brian Roberts, Chief Financial Officer, Prashant (Sean) Aggarwal, Chairman of the
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`Board, Board Members Ben Horowitz, Valerie Jarrett, David Lawee, Hiroshi Mikitani, Ann
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`Miura-Ko, and Mary Agnes (Maggie) Wilderotter (“Individual Defendants,” and collectively with
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`Lyft, “Defendants”).2 See Dkt. No. 74 (“CCAC”).
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`1 The Court finds this matter appropriate for disposition without oral argument and the matter is
`deemed submitted. See Civil L.R. 7-1(b).
`2 On October 14, 2020, the parties stipulated to the voluntary dismissal of Former Board Member
`Jonathan Christodoro, “who resigned from the Board prior to signing Lyft’s registration
`statement.” Dkt. No. 103.
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`Case 4:19-cv-02690-HSG Document 179 Filed 08/20/21 Page 2 of 9
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`Lyft is a rideshare company that “sought to revolutionize transportation by launching its
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`peer-to-peer marketplace for on-demand ridesharing.” CCAC at ¶ 4. Lyft registered its issuance
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`of common stock “under the Securities Act of 1933, as amended, pursuant to Lyft’s registration
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`statement on Form S-1 (File No. 333-229996) declared effective on March 28, 2019.” Id. at ¶ 3.
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`Lyft offered 32.5 million shares to the public through an initial public offering (“IPO”) at a price
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`of $72.00 per share, generating total proceeds of $2.34 billion. Id. at ¶ 5. According to Plaintiff,
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`Lyft made representations in the IPO Registration Statement and Prospectus filed in connection
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`with the IPO that “were materially misleading, omitted information necessary in order to make the
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`statements not misleading, and omitted material facts required to be stated therein.” Id. ¶ 6.
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`On May 14, 2020, Defendants moved to dismiss Plaintiff’s consolidated amended class
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`action complaint. Dkt. No. 78. On September 8, 2020, the Court granted in part and denied in
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`part Defendants’ motion. Dkt. No. 96. Following the hearing on Plaintiff’s motion for class
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`certification, Defendants moved for judgment on the pleadings as to a subset of Plaintiff’s sexual
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`assault allegations. Dkt. No. 152.
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`II. REQUESTS FOR JUDICIAL NOTICE
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`A. Legal Standard
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`In Khoja v. Orexigen Therapeutics, the Ninth Circuit clarified the judicial notice rule and
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`incorporation by reference doctrine. See 899 F.3d 988 (9th Cir. 2018). Under Federal Rule of
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`Evidence 201, a court may take judicial notice of a fact “not subject to reasonable dispute because
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`it … can be accurately and readily determined from sources whose accuracy cannot reasonably be
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`questioned.” Fed. R. Evid. 201(b)(2). Accordingly, a court may take “judicial notice of matters of
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`public record,” but “cannot take judicial notice of disputed facts contained in such public records.”
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`Khoja, 899 F.3d at 999 (citation and quotations omitted). The Ninth Circuit has clarified that if a
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`court takes judicial notice of a document, it must specify what facts it judicially noticed from the
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`document. Id. at 999. Further, “[j]ust because the document itself is susceptible to judicial notice
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`does not mean that every assertion of fact within that document is judicially noticeable for its
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`truth.” Id. As an example, the Ninth Circuit held that for a transcript of a conference call, the
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`court may take judicial notice of the fact that there was a conference call on the specified date, but
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`Case 4:19-cv-02690-HSG Document 179 Filed 08/20/21 Page 3 of 9
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`may not take judicial notice of a fact mentioned in the transcript, because the substance “is subject
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`to varying interpretations, and there is a reasonable dispute as to what the [document] establishes.”
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`Id. at 999–1000.
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`Separately, the incorporation by reference doctrine is a judicially-created doctrine that
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`allows a court to consider certain documents as though they were part of the complaint itself. Id.
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`at 1002. This is to prevent plaintiffs from cherry-picking certain portions of documents that
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`support their claims, while omitting portions that weaken their claims. Id. Incorporation by
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`reference is appropriate “if the plaintiff refers extensively to the document or the document forms
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`the basis of plaintiff’s claim.” Khoja, 899 F.3d at 1002. However, “the mere mention of the
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`existence of a document is insufficient to incorporate the contents” of a document. Id. at 1002.
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`And while a court “may assume [an incorporated document’s] contents are true for purposes of a
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`motion to dismiss … it is improper to assume the truth of an incorporated document if such
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`assumptions only serve to dispute facts stated in a well-pleaded complaint.” Id.
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`B. Analysis
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`Defendants request that the Court take judicial notice of or consider incorporated by
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`reference the following three documents:
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`• Lyft’s Form S-1 Registration Statement (Ex. 1);
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`• an April 9, 2019 San Francisco Chronicle news article titled “Uber, Lyft safety in
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`spotlight after student’s slaying” (Ex. 2); and
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`• a January 5, 2017 Business Insider article titled “Lyft tripled its rides in 2016” (Ex.
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`3).
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`Dkt. No. 153 (“RJN”); Dkt. No. 152-1 (“Smith Decl.”), Exs. 1–3. Plaintiff generally argues that
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`Defendants’ requests are improper, but raises a specific objection only as to Exhibit 3. Opp. at 6.
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`The Court previously found Exhibit 1 incorporated by reference because it formed the
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`basis of Plaintiff’s claim. For the same reason, the Court GRANTS the motion as to Exhibit 1 and
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`will again consider Lyft’s Form S-1 Registration Statement for the purpose of determining what
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`was disclosed to the market. Defendants argue that Plaintiff’s complaint also relies on Exhibit 2
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`because “Plaintiff’s losses under that claim allegedly resulted from the public’s reaction to” the
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`Case 4:19-cv-02690-HSG Document 179 Filed 08/20/21 Page 4 of 9
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`San Francisco Chronicle news article. RJN at 2–3. The Court agrees. Because “the plaintiff
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`refers extensively to the document [and] the document forms the basis of the plaintiff’s claim,” the
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`Court GRANTS the motion as to Exhibit 2, finding this document incorporated by reference.
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`Khoja, 899 F.3d at 1002 (quoting United States v. Ritchie, 342 F.3d 903, 907 (9th Cir. 2003)). As
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`to Exhibit 3, the Court agrees with Plaintiff that Defendants offer it for the truth of its contents.
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`Defendants argue that the Business Insider article is “relevant to the amount of sexual assaults that
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`occurred on the platform as compared to overall rides.” RJN at 4. The Court thus DENIES the
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`motion as to Exhibit 3.
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`Defendants’ briefing otherwise discusses matters outside of the pleadings, such as
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`Plaintiff’s discovery responses. See Mot. at 7 & n.1. Defendants contend that they attach such
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`documents “for the purpose of giving the Court sufficient context to understand why Defendants
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`are raising this issue at this juncture.” See id. In opposing the motion, Plaintiff also references
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`evidence obtained through discovery, as well as emails between counsel. See, e.g., Opp. at 16, 19
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`n.14. Notwithstanding these tactics, the parties appear to understand that the Court is limited to
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`the pleadings and matters properly incorporated by reference or subject to judicial notice. The
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`parties’ extensive references to extraneous matters underscore the essential purposelessness of
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`another pleadings motion seven months after the Court ruled that Plaintiffs’ surviving claims
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`implicate disputed factual issues.
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`III. ADMINISTRATIVE MOTIONS TO SEAL
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`A. Legal Standard
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`Courts generally apply a “compelling reasons” standard when considering motions to seal
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`documents. Pintos v. Pac. Creditors Ass’n, 605 F.3d 665, 678 (9th Cir. 2010) (quoting Kamakana
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`v. City & Cty. of Honolulu, 447 F.3d 1172, 1178 (9th Cir. 2006)). “This standard derives from the
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`common law right ‘to inspect and copy public records and documents, including judicial records
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`and documents.’ ” Id. (quoting Kamakana, 447 F.3d at 1178). “[A] strong presumption in favor
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`of access is the starting point.” Kamakana, 447 F.3d at 1178 (quotations omitted). To overcome
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`this strong presumption, the party seeking to seal a judicial record attached to a dispositive motion
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`must “articulate compelling reasons supported by specific factual findings that outweigh the
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`general history of access and the public policies favoring disclosure, such as the public interest in
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`understanding the judicial process” and “significant public events.” Id. at 1178–79 (quotations
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`omitted).
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`Records attached to nondispositive motions must meet the lower “good cause” standard
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`of Rule 26(c) of the Federal Rules of Civil Procedure, as such records “are often unrelated, or only
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`tangentially related, to the underlying cause of action.” Id. at 1179–80 (quotation omitted). This
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`requires a “particularized showing” that “specific prejudice or harm will result” if the information
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`is disclosed. Phillips ex rel. Estates of Byrd v. Gen. Motors Corp., 307 F.3d 1206, 1210–11 (9th
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`Cir. 2002); see also Fed. R. Civ. P. 26(c). “Broad allegations of harm, unsubstantiated by specific
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`examples of articulated reasoning” will not suffice. Beckman Indus., Inc. v. Int’l Ins. Co., 966
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`F.2d 470, 476 (9th Cir. 1992) (quotation omitted).
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`B. Analysis
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`Because the motion for judgment on the pleadings is more than tangentially related to the
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`underlying action, the Court applies the “compelling reasons” standard in evaluating the motions
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`to seal. Plaintiff moves to seal the portions of opposition and Declaration of Jeffrey C. Block
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`Declaration, Dkt. No. 159-1, that reference the parties’ joint letter brief and a related exhibit filed
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`at docket number 157. Dkt. No. 172. Defendants also seek to seal portions of their reply
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`referencing the joint letter brief. Dkt. No. 169.
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`Defendants’ justifications in its supporting declaration and in its own motion largely
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`overlap. Defendants note that the Court previously sealed the joint letter brief and Exhibit E to the
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`joint letter brief. Dkt. No. 164 (“Smith Decl.”) ¶ 7; Dkt. No. 169 at 2. That the Court granted the
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`motion to seal the underlying documents in the context of a discovery dispute is not dispositive
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`here. The Court is also unpersuaded by Defendants’ argument that granting the request “would
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`permit the Lyft Defendants to maintain the confidentiality of the information that Lyft Defendants
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`have designated as CONFIDENTIAL or HIGHLY CONFIDENTIAL.” See Smith Decl. ¶ 5. A
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`designation of confidentiality is not sufficient to establish that a document is sealable. See Civ. L.
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`R. 79-5(d)(1)(A).
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`Defendants also contend that the references at issue describe commercially sensitive and
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`proprietary information and that disclosure would cause competitive harm to Lyft. Smith Decl. ¶
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`6; Dkt. No. 169 at 2. Specifically, they note that disclosure of the requested material, which
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`details statistical information regarding alleged sexual assaults reported by Lyft users during the
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`relevant time period, “may unnecessarily alarm Lyft users by implying that their reports and
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`sensitive personal information may be subject to discovery.” See id. Defendants further contend
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`that the disclosure may “chill Lyft’s ability to gather important information to improve its service”
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`and could lead users to “choose not to utilize Lyft’s platform” if “users do not feel they have the
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`opportunity to confidentially report information.” Dkt. No. 169 at 2.
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`The Court reiterates that it will not consider the parties’ references to the parties’ joint
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`letter brief or associated exhibits in its analysis. But in resolving the motions to seal, the Court
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`finds that neither party has complied with Civil Local Rule 79-5(b), which requires that the
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`“request must be narrowly tailored to seek sealing only of sealable material.” The proposed
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`redactions describe statistical information at a general level without any specific disclosure of Lyft
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`users’ reports or personal information. Even assuming that the specific statistics could be sealable
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`(which the Court does not here decide), the parties’ proposed redactions remain overbroad.
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`Accordingly, the Court DENIES the motions to seal.
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`IV. MOTION FOR JUDGMENT ON THE PLEADINGS
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`A. Legal Standard
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`Under Federal Rule of Civil Procedure (“Rule”) 12(c) a party may move for judgment on
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`the pleadings “[a]fter the pleadings are closed—but early enough not to delay trial.” “Judgment
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`on the pleadings is proper when, taking all allegations in the pleading as true, the moving party is
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`entitled to judgment as a matter of law.” Stanley v. Trustees of Cal. State Univ., 433 F.3d 1129,
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`1133 (9th Cir. 2006). “Rule 12(c) is functionally identical to Rule 12(b)(6) and . . . the same
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`standard of review applies to motions brought under either rule.” Cafasso, U.S. ex rel. v. Gen.
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`Dynamics C4 Sys., Inc., 637 F.3d 1047, 1054 n.4 (9th Cir. 2011) (quotation omitted). The Court
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`will “accept factual allegations in the complaint as true and construe the pleadings in the light
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`most favorable to the nonmoving party.” Manzarek v. St. Paul Fire & Marine Ins. Co., 519 F.3d
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`1025, 1031 (9th Cir. 2008). The Court generally may not consider materials beyond the pleadings
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`without converting the motion for judgment on the pleadings to a motion for summary judgment
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`under Rule 12(d) and Rule 56. Hal Roach Studios, Inc. v. Richard Feiner & Co., 896 F.2d 1542,
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`1550 (9th Cir. 1989). Whether to grant a motion under Rule 12(d) is left to the discretion of the
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`Court. See Data Disc, Inc. v. Sys. Tech. Assocs., Inc., 557 F.2d 1280, 1289 (9th Cir. 1977); Adobe
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`Sys. Inc. v. Blue Source Grp., Inc., 125 F. Supp. 3d 945, 968 (N.D. Cal. 2015).
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`B.
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`Analysis
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`Defendants contend that they are entitled to judgment on the pleadings on Plaintiff’s
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`“sexual assault claim” as it relates to the magnitude and trend of sexual assault allegations. See
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`Mot. at 8. According to Defendants, Plaintiff’s counsel revised Plaintiff’s omission theory for the
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`first time “in his class certification papers” and during the hearing on Plaintiff’s motion for class
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`certification. Mot. at 6; Reply at 13. Plaintiff contends that neither his theory nor the pleadings
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`that the Court has already found adequate have changed. Opp. at 5. The Court agrees.
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`Defendants correctly note that Plaintiff alleges that Lyft’s registration statement made no
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`reference to sexual assault, but as the complaint indicates, that is not Plaintiff’s entire theory. See,
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`e.g., CCAC at ¶ 13 (“Lyft failed to disclose these pervasive sexual assault and safety issues in the
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`Registration Statement.”); id. at ¶ 131 (alleging Lyft “fail[ed] to reveal that sexual assault
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`allegations against Lyft drivers were increasing and could have a negative effect on its business”);
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`id. at ¶ 133 (“[T]he fact that Lyft was facing an increasing number of serious assault allegations
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`was a material trend existing at the time of the IPO.”). A review of the parties’ briefing on
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`Defendants’ motion to dismiss also shows that Plaintiff raises no new theory. See, e.g., Dkt. No.
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`84 at 14 n.29 (citing CCAC at ¶ 131) (“Plaintiff alleges that Lyft failed to disclose its pervasive
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`sexual assault problem in its Registration Statement.”); id. at 10 (citing CCAC at ¶ 111) (noting
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`the complaint “alleges that much of the omitted information was not publicly available such that
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`the magnitude of the problem was concealed”) (emphasis in original); id. at 11 (citing CCAC at ¶
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`129) (“Plaintiff further alleges facts that give rise to an inference that far more sexual assaults
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`were taking place in the lead up to the IPO . . . .”).
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`Contrary to Defendants’ characterization, the Court did not merely “note[]” Plaintiff’s
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`related allegations about the magnitude and trend of sexual assaults. See Mot. at 5. In opposing
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`the motion to dismiss, Plaintiff addressed the arguments Defendants now raise again. For
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`example, as to Plaintiff’s allegations under Item 303, Defendants argued that Plaintiff had not
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`alleged “an omission of a known adverse trend or uncertainty that was reasonably expected at the
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`time of the IPO to have a material adverse financial impact.” Dkt. No. 78 at 22. Plaintiff
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`responded that the “pervasive sexual assault problem . . . constituted a ‘known trend[] or
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`uncertaint[y]’ that Defendants had an affirmative duty to disclose.” Dkt. No. 84 at 18 (alterations
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`in original). And the Court found the allegations about the alleged increase in sexual assault
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`allegations sufficient under Item 303. In re Lyft Inc. Sec. Litig., 484 F. Supp. 3d 758, 769 & n.4
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`(N.D. Cal. 2020) (citing CCAC at ¶¶ 92, 131, 133). Yet Defendants again argue that Plaintiff “has
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`not established any fact or trend warranting disclosure in Lyft’s Registration Statement.” Mot. at
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`11.
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`Defendants have presented no basis for the Court to reconsider its prior ruling. The Court
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`reiterates that the resolution of disputed factual questions regarding materiality is not appropriate
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`at this stage of the litigation. Accordingly, the Court DENIES Defendants’ motion for judgment
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`on the pleadings.
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`Case 4:19-cv-02690-HSG Document 179 Filed 08/20/21 Page 9 of 9
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`V.
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`CONCLUSION
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`The Court DENIES Defendants’ motion for judgment on the pleadings, Dkt. No.152 and
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`DENIES the administrative motions to seal, Dkt. Nos. 169, 172. The Court DIRECTS the parties
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`to file public versions of all documents for which the proposed sealing has been denied within
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`seven days of this order. The parties may also file a new motion to seal that comports with the
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`requirements discussed above within seven days of this order. Additionally, any proposed order
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`or responsive declaration must include in the table for each item sought to be sealed: (1) the
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`docket numbers of the public and provisionally sealed versions of documents sought to be filed
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`under seal; (2) the name of the document; (3) the specific portion(s) of the document sought to be
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`filed under seal; and (4) the filer’s reasons for seeking sealing of the material, along with citations
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`to the relevant declarations and any supporting legal authority. The reasons provided must be
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`specific and tailored to the portion(s) of the document sought to be sealed.
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`IT IS SO ORDERED.
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`Dated:
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`______________________________________
`HAYWOOD S. GILLIAM, JR.
`United States District Judge
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