Uber seeks dismissal of suit by attorney who represented the company

A former lawyer for Uber Technologies Inc. is accusing the company of knowingly flouting local regulations when it launched in Argentina, making him the target of criminal investigations despite not being involved in the operation.

Michael R. Rattagan alleges the ridesharing service made him the "sacrificial lamb" of its Buenos Aires rollout by using him and his law firm as a "front" for its efforts.

"While taxi drivers, labor unions, and politicians sought a public face to direct their ire, Mr. Rattagan was smeared in the local media for his supposed role in Uber's conduct," wrote Stephen J. Rosenfeld, representing the plaintiff.

"His name became inseparable from Uber's claimed illegal operations and aggravated tax evasion," Rosenfeld added.

Uber has denied the allegations. It not only argued Rattagan should instead be suing local officials because it maintains Argentine courts have held Uber's operations in the country were handled appropriately but also that he lied in court documents.

U.S. District Judge Edward M. Chen of San Francisco will consider dismissing the lawsuit and sanctioning the plaintiff on Thursday.

Uber retained Rattagan in 2013 to help create an Argentine subsidiary, Uber International Entities, for its future operations in Buenos Aires. The business attorney represented foreign shareholders in Argentina. According to the lawsuit, the ridesharing company incorporates disruptive launches in new jurisdictions into its business model then negotiates a truce into legally compliant operations after it establishes its presence.

"As has been a pattern in Uber's entry into new markets, Uber took the approach that it is better to ask for forgiveness than for permission," argued the McDonald Hopkins LLC attorney in court documents.

Local officials and unions have accused Uber of failing to register to do business in Buenos Aires, to comply with transportation laws and to pay local taxes.

Because public records revealed Rattagan represented the subsidiary, local officials targeted him and his law firm for Uber's purportedly illegal activities. He was personally charged with aggravated tax evasion, which could lead to a nine-year prison sentence.

The criminal case against Rattagan is pending. In the meantime, the attorney is forbidden from leaving Argentina.

Rattagan alleges breach of fiduciary duty, fraud and negligence, among other claims. Rattagan v. Uber Technologies, Inc., 19-CV01988 (N.D. Cal., filed May 8, 2019).

Clara J. Shin, an attorney for the ridesharing company, argued the lawsuit should not only be dismissed but also that Rattagan should be sanctioned for lying about his association with Uber. The plaintiff represented the Uber subsidiary, which was dropped from the original lawsuit because the Northern District does not have jurisdiction over claims by foreign plaintiffs against foreign defendants.

"Any relationship relevant to Rattagan's work in Argentina existed between him and Uber International Entities, not Uber Technologies," Shin wrote.

Rosenfeld responded in court documents that Uber paying for Rattagan's criminal defense is evidence of an attorney-client relationship.

Disregarding the "improper forum shopping," Uber maintains Rattagan's injuries were a result of third-parties' responses, including those by government authorities, media and unions, to lawful conduct by the company.

An Argentine appellate court ruled Uber did not violate "lucrative use of public space without authorization" in 2019. The ruling reversed a determination from a federal tax agency that it owed $358 million in unpaid taxes and social security.

Buenos Airies claims the ruling does not make Uber's violations legal, which the ridesharing company disputes.

Uber did not immediately respond to requests for comment.