Uber and Gibson Dunn Put the Brakes on Monopoly Claims
Defunct ride-hailing company Sidecar will have the opportunity to amend its antitrust claims against Uber by Feb. 4.
January 21, 2020 at 05:09 PM
3 minute read
Uber Technologies and its Gibson, Dunn & Crutcher counsel shrugged off claims from shuttered ride-hailing startup Sidecar that Uber surged into new markets and deployed anti-competitive tactics to create a monopoly.
On Tuesday, U.S. District Chief Magistrate Judge Joseph Spero of the Northern District of California granted Uber's motion to dismiss Sidecar's amended complaint, which alleged Uber acted as a monopolist to drive Sidecar and other companies out of business.
For instance, Sidecar contends that Uber has "turned its guns" on Lyft, to the point that the ride-hailing competitor does not attempt to compete on pricing anymore. Yet, Spero said he was bound by the Ninth Circuit's ruling in Rebel Oil v. Atlantic Richfield, which held such arguments insufficient to support a claim under the Sherman Act.
"Even if the court accepts Sidecar's allegations that Uber can raise prices above competitive levels by disciplining Lyft, this court is not free to depart from the Ninth Circuit's holding that, without action by Congress, such oligopoly power must 'slip past' the Sherman Act's prohibitions," Spero wrote.
Spero said that not all of Uber's arguments presented grounds for dismissal, including Uber's assertion that it was exempt from monopolization claims because it entered the nonlimousine ride-hailing segment one year after Sidecar and Lyft. Still, Sidecar did not allege "a cognizable market power or a dangerous probability" of Uber obtaining such power, Spero wrote.
However, Sidecar will have the chance to amend its Sherman Act claims by Feb. 4, because Spero ruled that it is "conceivable that Sidecar could allege that Uber can unilaterally raise market prices by restricting its output."
As for the defunct company's claims under California's Unfair Practices Act, the judge tossed those with prejudice.
Uber said it is pleased that the court recognized the deficiencies in the complaint brought by SC Innovations, which succeeded Sidecar after the company shut down operations. "Uber operates in an intensely competitive environment and the case is nothing more than an attempt to monetize the remnants of a failed business," an Uber representative said.
McKool Smith and Zelle now represent Sidecar in the case after Gibson Dunn sought to remove its original Quinn Emanuel Urquhart & Sullivan counsel over claims the law firm argued for Uber in more than 20 suits. Spero disqualified the Quinn Emanuel team in May, ruling that the firm repped a substantially similar case for Uber involving a taxi car company.
Kirk Dillman of McKool Smith Hennigan's Los Angeles office said SC Innovations plans to amend its complaint according to the court's order, so that it can hold Uber accountable for its anti-competitive conduct.
Gibson Dunn did not immediately respond to requests for comment Tuesday afternoon.
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