DOVER, DE – Delaware's Supreme Court has upheld a judge's dismissal of a shareholder lawsuit against ride-hailing company Uber and its former CEO.
The court on Monday affirmed the judge's April ruling that the suit must be dismissed because the shareholder had failed to demand that Uber's board of directors take action itself before he filed his complaint.
The lawsuit challenged the Uber board's approval in 2016 of former CEO Travis Kalanick's plan to pay $680 million for a startup company created by former Google engineer Anthony Levandowski to develop self-driving cars.
Levandowski was indicted in August by a federal grand jury in California on charges of stealing self-driving car technology from Google spinoff Waymo before joining forces with Uber. His lawyers have maintained his innocence.
In the midst of a trial last year in a lawsuit filed by Waymo, Uber agreed to settle the case for $245 million.
Kalanick, who was ousted as CEO in 2017, announced last month that he was resigning from the board of Uber, which he co-founded a decade ago. Kalanick's departure came after he sold more than $2.5 billion worth of shares in the company, more than 90% of his holdings.
In the Delaware lawsuit, Lenza McElrath III, an Uber shareholder and former employee, alleged that Uber's board ignored the alleged theft of Google’s intellectual property and failed to conduct due diligence that would have revealed problems with the deal.
While noting that Uber directors approved "a flawed transaction," a three-judge panel of the Supreme Court nevertheless said it was not deciding the merits of the claims. Instead, the justices agreed with a Chancery Court judge that the plaintiff failed to comply with Delaware corporation law in filing the lawsuit.