Wang v. Ehang Holdings Limited

Background

Gary Wang brought four claims against EHang Holdings Limited, Guangzhou EHang Intelligent Technology Co., LTD., Huazhi Hu, Derrick Yifang Xiong, Shang-wen Hsiao, and Richard Jian Liu. The defendants moved to dismiss Wang’s breach-of-contract, unpaid-wages, and unfair-competition claim under California’s Unfair Competition Law.

Personal jurisdiction

The defendants argued that the court lacked personal jurisdiction over them. The court held that they had waived this defense because they should have raised it in their prior motion to dismiss but did not.

Breach of contract and unpaid wages

The court held that Wang adequately pleaded that EHang Intelligent Technology, the company identified in his contract, was the same company as Guangzhou EHang Intelligent Technology Co., Ltd. Because the defendants’ only challenge to the unpaid-wages claim was that Wang had not adequately alleged employment by EHang Intelligent Technology, the court denied the motion to dismiss both claims against that entity.

The court also held that Wang adequately pleaded both claims against EHang Holdings under an agency theory at this stage of the case. Wang alleged that executives of EHang Holdings, who were also executives of EHang Intelligent Technology, told him that the shares promised in his employment agreement were restricted stock units in EHang Holdings. The court therefore denied the motion to dismiss the breach-of-contract and unpaid-wages claims against EHang Holdings.

Unfair-competition claim

The court granted the motion to dismiss Wang’s unfair-competition claim. The court relied on a recent Ninth Circuit decision requiring a plaintiff seeking equitable restitution for past harm under California’s Unfair Competition Law to establish that the plaintiff lacks an adequate remedy at law. Wang acknowledged that he had not made that showing, but requested permission to amend. The court granted the motion to dismiss this claim with leave to amend.

Disposition

The court denied the motion to dismiss the breach-of-contract and unpaid-wages claims and granted the motion to dismiss the unfair-competition claim with leave to amend. Wang was ordered to file an amended complaint and a redlined version by February 4, 2021. Judge Beth Labson Freeman signed the order.