Judge finds “reasonable basis” for fraud in Uber's outsourced investigation of plaintiffs and lawyers who sued CEO Kalanick over surge pricing anti-trust issues
When a young labor lawyer named Andrew Schmidt first filed suit against Uber in December of last year, he couldn't have predicted it would make him a target. Tweets: @sarahcuda . Thanks: @cauchon Tweets: Sarah Lacy / @sarahcuda : “Acc. to a sworn deposition from an Ergo employee, this was the fourth time Uber hired the company for research” http://www.theverge.com/... Thanks: @cauchon
Context & Ripple Effects
This ruling lands mid-arc in the surge-pricing antitrust case: two months earlier a U.S. judge decided Kalanick must face the passengers' price-fixing lawsuit rather than wave it off, and by late April Uber's hoped-for exit was a settlement still awaiting district-court approval. The new finding means the judge now sees 'reasonable basis' for fraud in how Uber handled the people behind that suit.
The mechanics matter as much as the verdict: deposition testimony from an Ergo employee shows this was the fourth time Uber had hired the research firm, meaning the scrutiny of lawyer Andrew Schmidt and his co-plaintiffs was a repeat playbook, not a one-off defensive move.
First-order effects
- Schmidt and the other plaintiffs are directly affected: the judge's finding gives their fraud allegations standing inside an antitrust case Uber was simultaneously trying to settle, raising the cost of the settlement path Uber was counting on.
Second-order effects
- Uber's reliance on outside investigators like Ergo becomes discoverable ammunition for every future litigant against the company — the same deposition trail later surfaces around the firm's internal probes, including the harassment investigation that ended with 20+ firings and the Holder report feeding board-level pressure.
Third-order effects
- If the pattern holds, Uber's counter-investigation habit stops being a legal tactic and becomes a governance liability: investor patience frays to the point where Benchmark publicly warns it is preparing litigation against Kalanick, citing damning findings from the Holder probe — the same CEO whose conduct drew this suit.
The trend: Uber's aggressive investigation of its own critics — plaintiffs, whistleblowers, employees — keeps converting discrete lawsuits into evidence for a broader governance reckoning that ends with investors moving against Kalanick himself.