Boston Retirement System v. Uber Technologies, Inc.

Background

This proposed class action alleges violations of the Securities Act of 1933 related to Uber’s May 2019 initial public offering. Boston Retirement System was appointed lead plaintiff under the Private Securities Litigation Reform Act. The court had previously denied defendants’ motion to dismiss the amended complaint.

The case involved related state and federal proceedings. After a state-court case was dismissed without prejudice, some of those plaintiffs filed a separate federal class action. This court later consolidated that federal action with Boston Retirement System’s action. The court then allowed plaintiffs to file a second amended complaint, which added four proposed class representatives: David Messinger, Ellie Marie Toronto ESA, Joseph Cianci, and Irving S. and Judith Braun.

The second amended complaint did not change the substantive allegations. It added the new plaintiffs as named plaintiffs and proposed class representatives. Defendants moved to dismiss only the new plaintiffs’ claims, not the underlying claims themselves.

Issue and legal standard

The Securities Act contains a one-year statute of limitations, meaning claims generally must be filed within one year after the plaintiff discovers the facts constituting the alleged violation. The court considered whether the new plaintiffs’ claims could relate back to the original complaint under Federal Rule of Civil Procedure 15(c)(1)(B). Relation back allows an amended pleading to be treated as filed on the date of the original pleading when it concerns the same conduct, transaction, or occurrence.

The court applied Ninth Circuit requirements for adding a new plaintiff through relation back: the original complaint must have given defendants adequate notice of the new plaintiff’s claims, the addition must not unfairly prejudice defendants, and the original and new plaintiffs must have sufficiently similar interests.

Defendants relied on China Agritech v. Resh, in which the Supreme Court held that a person may not file a new class action after the relevant limitations period has expired following denial of class certification. Defendants argued that this rule also barred adding new plaintiffs to this existing class action.

Court’s reasoning

The court held that the new plaintiffs satisfied the requirements for relation back. The second amended complaint alleged the same claims and conduct as the original complaint, so defendants had adequate notice. The court also found an identity of interests because the original and new plaintiffs asserted the same claims against defendants.

The court rejected defendants’ claim of unfair prejudice. It distinguished adding plaintiffs to an existing action from consolidating separate cases. Defendants could still raise limitations defenses in the separate federal action, and they did not show that adding the new plaintiffs to this case unfairly prejudiced them.

The court also held that China Agritech did not apply. That decision concerned filing a new class action after the denial of class certification, whereas this motion concerned adding plaintiffs to an already timely filed class action. The court relied on appellate decisions concluding that China Agritech does not prohibit adding or substituting a new class representative within the same ongoing class action when ordinary Rule 15 requirements are met.

The court further explained that adding the new plaintiffs did not automatically make them court-designated lead plaintiffs or class representatives. Whether they would serve as class representatives, and any concerns about multiple law firms or excessive fees, would be addressed during class certification.

Disposition

The court denied defendants’ motion to dismiss the new plaintiffs’ claims. The court vacated the scheduled hearing because it found the motion suitable for decision without oral argument. The ruling did not decide whether the new plaintiffs would ultimately represent the class.