The Northern District of California court overseeing the securities litigation declined the rideshare company’s request for judgment on the pleadings as to a component of the plaintiff’s claim that Lyft misrepresented the sexual assault allegations it faced during the initial public offering (IPO) process. The court’s nine-page opinion concluded that Lyft presented no basis for the court to reconsider its prior ruling partly granting, partly denying the defendants’ motion to dismiss.
The class action accuses Lyft and several of its officers of making false and misleading representations in its registration statement and prospectus filed in connection with its March 2019 IPO, which generated $2.34 billion for the company. In particular, the shareholders take issue with statements about topics including the degree to which Lyft was insulated from driver sexual assault liability, safety and labor issues, and the company’s actual market share.
In September 2020, the court permitted some claims to go forward, finding that certain allegations concerning passenger sexual assault were sufficiently plead. The court explained that factual disputes existed as to whether the official filings adequately disclosed ongoing sexual assault litigation.
In last week’s opinion, Judge Haywood S. Gilliam, Jr. first considered whether to take judicial notice of a Lyft Securities and Exchange Commission filing and two news articles the defendants proffered. The court agreed as to one article and the financial report after finding that they were sufficiently related to the plaintiff’s claims. Judge Gilliam denied the request as to the second news article because the court felt that it was offered for the truth of the matter discussed.
Additionally, the order addressed and denied the parties’ motions to seal portions of the record as non-compliant with a local rule requiring that requests be “narrowly tailored to seek sealing only of sealable material.”
Turning to the substance of the motion for judgment on the pleadings, the court examined whether the plaintiff’s counsel revised its omission theory in its class certification filings and during the accompanying hearing. The plaintiff countered that he made no such modifications to allegations the court previously found well-pleaded.
The court agreed. Judge Gilliam explained that issues Lyft raised in its motion for judgment on the pleadings had already been addressed by the plaintiff in his opposition to the motion to dismiss. The court also noted that “the resolution of disputed factual questions regarding materiality is not appropriate at this stage of the litigation.”