Rattagan v. Uber Techs., Inc., 324 Cal. Rptr. 3d 433 (Cal. S. Ct. 2024)

In this nonemployment case, attorney Michael R. Rattagan (self-described as “one of the top and most renowned business lawyers in Buenos Aires”) had agreed to act as Uber’s registered legal representative in Argentina before Uber launched in Buenos Aires in April 2016.  Following the launch, “public reaction was immediate and hostile, sparking violent demonstrations in the streets of Buenos Aires” and resulting in protestors surrounding and blocking the exits of Rattagan’s office for hours.  Rattagan then asked Uber to designate someone else as its legal representative in Argentina.  Subsequently, Rattagan was formally charged with unauthorized use of public space with a commercial aim and aggravated tax evasion, was subjected to interrogation, mugshots and fingerprinting, and was temporarily banned from traveling abroad.

In this lawsuit, Rattagan sued Uber for fraudulent concealment, among other claims, based on his allegations that Uber intentionally concealed Uber’s launch plans from him even though Uber knew that local government authorities would consider the launch to constitute a “legally non-compliant and tax evasive transportation business.”  The district court dismissed the fraudulent concealment claim based upon the “economic loss rule”, which generally prohibits the recovery of tort damages by a party to a contract.  On appeal, the Ninth Circuit certified a question of state law to the California Supreme Court, and in this opinion, the Supreme Court concluded that an independent fraudulent concealment tort may arise during an ongoing contractual relationship if the elements of the claim can be established independently of the parties’ contractual rights and obligations and the tortious conduct exposes the plaintiff to a risk of harm beyond the reasonable contemplation of the parties when they entered into the contract.