San Francisco judge allows suit against Uber to proceed

A San Francisco County judge has allowed an entrepreneur to move forward with a $1 billion claim Uber Technologies Inc. founder Travis Kalanick stole his idea for a ride sharing service.

Kevin Halpern created his own cellular phone-based app in 2002 to connect passengers and drivers. He alleged he had multiple meetings and other communications between 2006 and 2008 with Kalanick and Uber investor Bill Trenchard while seeking financing for his own startup; Trenchard is also a defendant.

Halpern contends Uber is an "exact replica" of his idea. Halpern et al. v. Uber Technologies Inc. et al., CGC15545 (S.F. Super. Ct., filed May 14, 2015).

Superior Court Judge Mary E. Wiss' order Friday denying Uber's motion for summary judgment concerned a dispute over the delayed discovery rule. In their motion to dismiss the case, Uber's attorneys focused on the two years that passed between when Halpern first heard of Uber in 2010 and when he discovered Kalanick's involvement in the company in 2012.

"Defendants contend that Mr. Halpern's initial 'suspicion' in 2010 commenced the statute of limitations period as a matter of law," Wiss wrote. "Defendants are incorrect."

"The court's ruling was right on the mark," said Halpern's attorney, Alan A. Greenberg, a partner with Greenberg Gross LLP in Costa Mesa. "It enables Mr. Halpern to have his day in court despite the endless efforts of Uber, Travis Kalanick, and the other defendants to sweep this important case under the rug."

Joshua H. Lerner, who represents Uber as lead counsel for Durie Tangri LLP in San Francisco, did not return a call seeking comment Monday.

Wiss agreed that under a precedent set by the state Supreme Court in Fox v. Ethicon Endo-Surgery Inc. (2005) 35 Cal.4th 797, 808, a "plaintiff who suspects that an injury has been wrongfully caused must conduct a reasonable investigation of all potential causes of that injury."

But, she added, "Defendants did not present any evidence demonstrating that Mr. Halpern failed to conduct a 'reasonable investigation.'"

Kalanick stepped down as CEO in 2017 under pressure from investors after reports of sexual harassment and discrimination within the company, but retains a seat on the board of directors. In interviews, Kalanick has credited the idea for Uber to co-founder Garrett Camp.

Halpern claimed Kalanick's involvement in the company was far less well known in the period following Uber's 2009 founding than it is today. He claims the first time he heard of Uber was from a "business acquaintance" in 2010 who told him of a man named Ryan Graves who was representing the new company.

Graves is several years younger than Kalanick and at the time was based in the Midwest with no apparent ties to Silicon Valley.

The4-year-old case has had a complex history without ever leaving its original venue. There was a delay when Halpern parted ways with his first attorney and filed an amended complaint in 2016.

In 2017, Wiss granted Uber's motion to bifurcate the case, with one proceeding focused solely on the statute of limitations issues. Greenberg Gross LLP joined Halpern's team shortly before the March 20 hearing, when the sides argued the statute of limitation issue.

The ruling comes at a potentially inopportune time for Uber. A group representing its drivers, as well as those of competitors Lyft Inc. and Juno, are planning a morning rush hour strike Wednesday, two days before Uber is scheduled to go public.