Rattagan v. Uber Technologies, Inc.
S272113
| Cal. | Aug 22, 2024Background
- Michael Rattagan, an Argentinian attorney, assisted Uber and its Dutch subsidiaries in launching Uber in Argentina, serving as their registered local representative.
- Rattagan claims Uber and its subsidiaries concealed plans to launch Uber’s ridesharing platform in Buenos Aires, exposing him to criminal and regulatory risks as Uber’s legal representative.
- After Uber’s launch, Rattagan faced public backlash, government raids, and criminal charges, resulting in business and reputational harm.
- He sued Uber in federal court, alleging fraudulent concealment and related torts; the case was dismissed on the grounds that such claims were barred by the economic loss rule.
- On appeal, the Ninth Circuit certified to the California Supreme Court the question whether California law allows a tort claim for fraudulent concealment related to the performance of a contract.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Can a plaintiff assert a tort claim for fraudulent concealment in performance of a contract? | Fraudulent concealment should be actionable, even if connected to a contract, when independent of contractual duties and causes special harm. | Such tort claims are barred by the economic loss rule unless there is physical injury or property damage, or an affirmative misrepresentation. | Yes, if the elements are independent of contractual duties and the tortious conduct exposes the plaintiff to risks beyond anticipated contractual harms. |
| Does the economic loss rule bar all fraud/tort claims in contract performance? | The economic loss rule should not bar claims for intentional torts like fraud, including concealment, in a contractual setting. | The rule forecloses all tort claims for purely economic losses except in cases of affirmative misrepresentation causing personal damage. | The economic loss rule does not bar fraud (including concealment) if the claim arises from independent tort duties and not from contract. |
| Is fraudulent concealment during contract performance actionable under California law? | Fraudulent concealment, even absent affirmative misrepresentation, is actionable when independent and harmful beyond contract expectations. | Only actionable if involving affirmative misrepresentation or causing non-economic loss. | Yes, as long as all elements are independently established and the harm exceeds what was reasonably contemplated in the contract. |
| Does public policy favor tort remedies for contractual fraud/concealment? | Allowing tort remedies for concealment deters fraud and promotes honest business practices. | Allowing such torts undermines contractual predictability and risk allocation. | Public policy supports tort remedies for independently actionable fraud and concealment even during contractual performance. |
Key Cases Cited
- Robinson Helicopter Co. v. Dana Corp., 34 Cal.4th 979 (Cal. 2004) (economic loss rule does not bar independent fraud claims during contract performance)
- Seely v. White Motor Co., 63 Cal.2d 9 (Cal. 1965) (origin and limits of the economic loss rule in product liability context)
- Tameny v. Atlantic Richfield Co., 27 Cal.3d 167 (Cal. 1980) (independent tort principle: tort liability even during contractual relationships for violating independent duties)
- Applied Equipment Corp. v. Litton Saudi Arabia Ltd., 7 Cal.4th 503 (Cal. 1994) (contract and tort remedies require violation of independent duties)
- Freeman & Mills, Inc. v. Belcher Oil Co., 11 Cal.4th 85 (Cal. 1995) (tort recovery for breach of contract requires independent duty)
- Lazar v. Superior Court, 12 Cal.4th 631 (Cal. 1996) (elements of fraud include concealment; fraud remedies extend beyond contract)
- Erlich v. Menezes, 21 Cal.4th 543 (Cal. 1999) (exceptions to economic loss rule involve independent tortious conduct)