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GMSR co-managing partner Cindy Tobisman appeared yesterday before the California Supreme Court to argue for the petitioner, Michael Rattagan, in a case against Uber Technologies, Inc.  The Ninth Circuit Court of Appeals had asked the Court to decide whether, under California law, claims for fraudulent concealment are exempt from the economic loss rule.

In the underlying case, Rattagan alleged that Uber fraudulently concealed information from him when he represented its subsidiaries during a problem-filled launch in Buenos Aires, Argentina, and that the concealed information led to him being arrested and vilified in the media.  The district court held that Rattagan’s fraudulent concealment claims were foreclosed by the economic loss rule—a doctrine that prevents a party to a contract from recovering economic damages under tort liability theories—and thus, dismissed his complaint.  The Ninth Circuit Court of Appeals recognized that there is no controlling California precedent addressing whether fraudulent concealment claims are exempt from the economic loss rule, and the answer would be dispositive in the case, so it certified the question to the California Supreme Court.

Law360 wrote about the oral argument, providing some highlights:  “There’s nothing about [the doctrine] that we would want to shield people who commit fraud just because there’s a contract in the mix,” Tobisman said.  “And in fact it would create some kind of perverse incentives for people to draw somebody into a contractual relationship because then they could have their way with them.”

The high court’s decision is expected within the next 90 days.

Click here to learn more:  Clough, Atty’s Argentine Uber Debut Fight Lands At Calif. High Court, Law360 (June 4, 2024), https://www.law360.com/articles/1844320/atty-s-argentine-uber-debut-fight-lands-at-calif-high-court (subscription required).

Cindy Tobisman