According to a joint letter submitted on Tuesday, shareholders prosecuting the class action against Lyft Inc. and the company have reached a settlement in principle. The parties notified the court as it was preparing to issue a written decision on whether to permit the plaintiffs to file a second amended complaint.
The May 2019 case concerns purported securities law violations and related causes of action stemming from alleged misleading statements and omissions made in Lyft’s official initial public offering filings. In particular, the plaintiffs said that Lyft knew about but failed to disclose the risks it was facing from a number of outstanding issues.
The shareholders pointed to the potential for severe reputational damage and legal liability due to sexual assaults committed by drivers, Lyft’s actual national market share, bikeshare program safety and maintenance issues, that it was the days away from closing its first quarter with a massive loss, and labor unrest.
In September 2020, Judge Haywood S. Gilliam, Jr. issued a mixed ruling in response to Lyft’s motion to dismiss, addressing whether the statements amounted to actionable falsities under federal securities law. The court permitted the plaintiffs’ contention concerning sexual assault liability and bikeshare program issues to proceed. In August 2021, the court granted the plaintiffs’ motion for class certification and denied Lyft’s motion for judgment on the pleadings.
With this week’s letter submission, the parties disclosed that they have agreed to settle the case on a class-wide basis. It stated that they are “working diligently to execute a term sheet and draft the stipulation of settlement, notice, and preliminary approval papers.”
Block & Leviton LLP is lead counsel for the plaintiff and class and Latham & Watkins represents Lyft.
