Irving Firemen’ Srelief & Retirement Fund v. Uber Technologies , Inc.; Travis Kalanick

FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
I RVING FIREMEN’ S RELIEF &
RETIREMENT FUND,
Plaintiff-Appellant,
v.
UBER TECHNOLOGIES , I NC.; TRAVIS
KALANICK ,
Defendants-Appellees,
M ORGAN STANLEY I NVESTMENT
M ANAGEMENT I NC.; NEW RIDERS LP,
Intervenors.
No. 19-16667
D.C. No.
4:17-cv-05558-
HSG
OPINION
Appeal from the United States District Court
for the Northern District of California
Haywood S. Gilliam, Jr., District Judge, Presiding
Argued and Submitted December 7, 2020
Pasadena, California
Filed May 19, 2021

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2 IRVING FIREMEN’S RELIEF & RET. FUND V. UBER TECH.
Before: Paul J. Kelly, Jr.,* Ronald M. Gould, and
Ryan D. Nelson, Circuit Judges.
Opinion by Judge Gould
SUMMARY**
Securities Fraud
The panel affirmed the district court’s dismissal for
failure to state a claim in a putative class action brought by
Irving Firemen’s Relief & Retirement Fund (“Irving”)
against Uber Technologies, Inc. and Travis Kalanick,
cofounder and former CEO of Uber, alleging a claim of
securities fraud under California Corporations Code sections
25400(d) and 25500.
The district court assumed that the heightened pleading
standards of Fed. R. Civ. P. 9(b) and the Private Securities
Litigation Reform Act applied to this case.
The panel held that Rule 9(b)’s particularity requirement
applied to state law causes of action relating to fraud when
asserted in federal court. To establish a securities fraud
violation under the federal Securities Exchange Act, a
plaintiff has the burden to prove that the defendant’s act or
omission caused plaintiff’s loss.
* The Honorable Paul J. Kelly, Jr., United States Circuit Judge for
the U.S. Court of Appeals for the Tenth Circuit, sitting by designation.
** This summary constitutes no part of the opinion of the court. It
has been prepared by court staff for the convenience of the reader.

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IRVING FIREMEN’S RELIEF & RET. FUND V. UBER TECH. 3
The panel affirmed the district court’s holding that Irving
did not adequately allege loss causation.
Specifically, the panel rejected Irving’s contention that
the district court erred by applying the federal standard for
loss causation rather than the “less-rigid” state law standard.
The panel held that California law, as cited by the parties,
provided only limited guidance on how its causation element
should be applied in this case. The panel held further that the
district court did not err in looking to federal cases
interpreting loss causation for claims brought under section
10(b) of the Securities Exchange Act.
Looking to the federal loss causation regime as
persuasive authority, the panel held that Irving did not
adequately allege loss causation. Typically, to establish loss
causation, a plaintiff must show that the defendants’ alleged
misstatements artificially inflated the price of stock and that,
once the market learned of the deception, the value of the
stock declined. The panel held that this “fraud-on-the-
market-theory” conflicted with Irving’s assertion that mere
inflation was enough. Even assuming without deciding that
Uber and Kalanick made actionable misstatements, and
news articles and government investigations revealed the
truth to the market, the panel held that the claims still failed
because Irving did not adequately and with particularity
allege that those revelations caused the resulting drop in
Uber’s valuation.
Because Irving did not plausibly allege that Uber and
Kalanick’s alleged misstatements caused its damages, the
panel did not reach the other elements of Irving’s claim or
the other arguments advanced by the parties.

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4 IRVING FIREMEN’S RELIEF & RET. FUND V. UBER TECH.
COUNSEL
Joseph D. Daley (argued) and Luke O. Brooks, Robbins
Geller Rudman & Dowd LLP, San Diego, California; Dennis
J. Herman, Robbins Geller Rudman & Dowd LLP, San
Francisco, California; for Plaintiff-Appellant.
A. Matthew Ashley (argued), Andra Greene, and Michael D.
Harbour, Irell & Manella LLP, Newport Beach, California,
for Defendant-Appellee Uber Technologies, Inc.
Sarah M. Harris (argued), Joseph G. Petrosinelli, Eden
Schiffmann, Harrison L. Marino, and Kimberly Broecker,
Williams & Connolly LLP, Washington, D.C.; Walter F.
Brown and James N. Kramer, Orrick Herrington & Sutcliffe
LLP, San Francisco, California; for Defendant-Appellee
Travis Kalanick.
OPINION
GOULD, Circuit Judge:
This case concerns allegations of securities fraud against
Uber Technologies, Inc. (“Uber” or the “Company”), a
technology startup known for its ridesharing application, and
Travis Kalanick (“Kalanick”), cofounder and former CEO of
Uber. After Uber’s founding in 2009, its valuation soared,
with some investors assigning a valuation as high as
$68 billion by mid-2016. Between June 2014 and May
2016, Kalanick and Uber completed four preferred stock
offerings, raising more than $10 billion in additional capital
through limited partnerships and other entities. Irving
Firemen’s Relief & Retirement Fund (“Irving”), a retirement
fund for firefighters based in Irving, Texas, acquired Uber
securities through one of these offerings on February 16,

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IRVING FIREMEN’S RELIEF & RET. FUND V. UBER TECH. 5
2016. Throughout 2017, several alleged corporate scandals
surfaced, and by early 2018, investors estimated a nearly
30% decline in Uber’s valuation.
Irving filed a putative class action against Uber and
Kalanick alleging one claim of securities fraud under
California Corporations Code sections 25400(d) and 25500.
The district court dismissed the operative complaint for
failure to state a claim. We have jurisdiction pursuant to
28 U.S.C. § 1291, and we affirm. We hold that Irving did
not state a claim because it did not adequately allege that
Uber and Kalanick’s alleged fraudulent misstatements and
omissions caused its alleged losses.
I
At the time Irving filed the Second Amended Complaint
(“SAC”)—the operative complaint in this appeal—in 2018,
Uber had raised more than $11.5 billion in financing through
a series of private equity and debt offerings to investors. In
2009, Uber was valued at $4 million and sold its first
$200,000 in securities. The next year, it raised $1.3 million.
And in the year after that, Uber’s value increased to
$350 million after it raised $48 million through its Series A
and B funding rounds. In 2013, after raising an additional
$363 million through its Series C funding round, Uber was
worth more than $3.5 billion. By June 2014, Uber was
valued at more than $18 billion.
Between no later than June 20141 and May 24, 2016,
Uber offered and sold Series D, E, F, and G securities
(“Offerings”), the offerings at issue in this appeal. These
1 The SAC provides no announcing date starting the Series D
offering but alleges that the offering ended on June 6, 2014.

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6 IRVING FIREMEN’S RELIEF & RET. FUND V. UBER TECH.
private offerings were sold through limited partnerships and
other entities formed to sell and hold securities issued in the
Offerings. Irving acquired its interests in Uber securities by
becoming a limited partner of New Riders LP (“New
Riders”), a Delaware limited partnership, on February 16,
2016; New Riders then in turn invested in Uber’s Series G
Preferred Stock. The Offerings netted more than $10 billion.
By mid-2016, investors valued Uber at as much as
$68 billion, higher than any other private technology startup
at the time.
Throughout 2017, a series of alleged corporate scandals
surfaced. We set forth a brief overview of these scandals in
chronological order. In February 2017, former Uber
engineer Susan Fowler posted a blog describing her
experiences of alleged sexual harassment while working for
Uber. That same month, Google affiliate Waymo sued Uber
for theft of its trade secrets related to self-driving car
technology. The next month, The New York Times reported
on “Greyball,” a secret Uber program under which Uber had
collected data through the Uber app and other sources to
identify and circumvent officials in jurisdictions that
prohibited or restricted Uber’s operations.
On April 12, 2017, a news article exposed a secret Uber
program dubbed “Hell,” which was in use between 2014 and
2016. In cities where Uber competed with Lyft—another
ridesharing service—Uber collected information on Lyft
drivers through spoofed2 accounts. This information
allowed Uber to track Lyft’s prices and the number of drivers
at each location in real time and identify which drivers were
2 Uber allegedly created fake Lyft rider accounts and used
commonly available software to fool Lyft’s system into thinking those
riders were in particular locations.

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IRVING FIREMEN’S RELIEF & RET. FUND V. UBER TECH. 7
driving for both Uber and Lyft. On April 25, 2017, Reuters
reported that a South Korean court had determined that Uber
had violated South Korea’s national transport law.
Sometime in the third quarter of 2017, the U.S. Department
of Justice began a criminal probe into Uber’s foreign
practices. In September 2019, Bloomberg reported
“widespread” Asia bribery allegations against Uber. And on
November 22, 2017, reports surfaced of a data breach that
occurred in October 2016 and affected 57 million riders and
drivers.
As an apparent result of these cascading scandals, from
fall 2016 to February 28, 2018, several funds holding stakes
in Uber wrote down the value of their Uber holdings, which
were not yet being publicly traded. For instance, BlackRock,
a mutual fund investor, wrote down its investment by 33.3%.
Similarly, Fidelity devalued its investment by 28%; Hartford
Funds by 28%; and T. Rowe Price by 29.3%. In April 2017,
media outlets reported that Uber had lost $10 billion in value
since the beginning of 2017. Kalanick resigned as Uber’s
CEO in June 2017. In August 2017, investors such as
Vanguard Group, Principal Funds, Hartford Funds, and T.
Rowe Price marked down their Uber investments by as much
as 15%, or $10.2 billion. In September 2017, news reports
indicated that SoftBank valued the Company at $50 billion,
representing at least $18 billion in lost value. In October
2017, BlackRock marked down its Uber investment by 16%.
On November 27, 2017, a consortium of investors led by
SoftBank made an $8 billion offer to purchase a stake in
Uber from its existing shareholders. The amount of this
offer implied a $48 billion overall valuation of Uber, which
was a 30% reduction from its apparent estimated peak in
mid-2016. Around the same time as the SoftBank tender
offer, Uber reported a 40% increase in its quarterly losses.
The SoftBank sale was completed in January 2018.

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8 IRVING FIREMEN’S RELIEF & RET. FUND V. UBER TECH.
Kalanick sold nearly a third of his 10% stake in Uber
pursuant to that transaction. After the tender offer, Fidelity
Investments marked down its Uber investment by 21%. In
December 2017, Vanguard Group also marked down its
Uber investment by another 15.3%. By early 2018, investors
estimated a nearly 30% decline in Uber’s valuation.
Irving filed this putative class action lawsuit against
Uber and Kalanick soon after. It asserted one violation of
securities fraud under California Corporations Code sections
25400(d) and 25500. The SAC alleges that Uber and
Kalanick made false and misleading statements and
omissions about Uber and its operations to induce the
purchase of billions of dollars of Uber securities. These
statements and omissions were allegedly disseminated
“through information in the offering memoranda . . . [and]
by making numerous public statements.” Uber and Kalanick
allegedly misled investors by concealing material risks to
their business, including illegal business practices, which
allegedly allowed them to market and sell Uber securities at
inflated prices. The SAC asserts that when these business
practices came to light, Uber’s valuation declined, reducing
the value of Irving’s—and other class members’—securities
and their actual and anticipated investment returns by
billions of dollars.
The SAC divides Uber’s alleged misrepresentations into
six categories, five of which correspond directly to each of
the 2017 corporate scandals: (1) government regulation and
“Greyball,” (2) data security, (3) competition and the “Hell”
program, (4) self-driving cars and trade secrets litigation,
and (5) corporate culture and sexual harassment allegations.
The sixth category concerns misrepresentations about the
general risks to Uber’s business from negative publicity and
other events that threatened to curtail its rapid growth.

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IRVING FIREMEN’S RELIEF & RET. FUND V. UBER TECH. 9
The district court dismissed the SAC without granting
leave to amend. The district court assumed that the
heightened pleading standards of Federal Rule of Civil
Procedure 9(b) and the Private Securities Litigation Reform
Act (“PSLRA”)3 applied to the case. The district court
applied cases interpreting section 10(b) of the Securities
Exchange Act of 1934 (“Securities Exchange Act”),
15 U.S.C. § 78j(b), noting that the parties had relied on such
cases. The district court then concluded that Irving did not
adequately allege false or misleading representations or loss
causation. This appeal followed.
II
We review de novo a district court’s dismissal pursuant
to Rule 12(b)(6). In re Quality Sys. Inc. Sec. Litig., 865 F.3d
1130, 1140 (9th Cir. 2017). We accept well-pleaded
allegations as true and construe them in the light most
favorable to the plaintiff. In re Gilead Scis. Sec. Litig.,
3 Although the district court found that neither party contested the
application of the PSLRA pleading standard, Irving contends that it
raised this issue in a motion before the district court in a footnote.
Regardless of whether Irving properly preserved the issue, however, we
may address it because the applicability of federal pleading standards to
state law claims is a purely legal question. See Self-Realization
Fellowship Church v. Ananda Church of Self-Realization, 59 F.3d 902,
912 (9th Cir. 1995). The district court made no mention of the PSLRA
in its loss causation analysis and concluded that Irving’s “broad brush
pleading is insufficient under Rule 9(b).” We conclude that the district
court applied only the heightened pleading standards of Rule 9(b) in its
loss causation analysis. Oregon Pub. Emps. Ret. Fund v. Apollo Grp.
Inc., 774 F.3d 598, 605 (9th Cir. 2014). Because we hold that Irving
fails to state a claim under the pleading requirements of Rule 8(a) and
Rule 9(b), we need not and do not address whether the heightened
pleading standards of the PSLRA apply to a claim of violation of
California Corporations Code sections 25400 and 25500 when asserted
in federal court.

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10 IRVING FIREMEN’S RELIEF & RET. FUND V. UBER TECH.
536 F.3d 1049, 1055 (9th Cir. 2008). A plaintiff must plead
“enough facts to state a claim to relief that is plausible on its
face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007).
A claim is facially plausible when it contains “factual
content that allows the court to draw the reasonable
inference that the defendant is liable for the misconduct
alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009).
Federal Rule of Civil Procedure 9(b) provides: “In
alleging fraud or mistake, a party must state with
particularity the circumstances constituting fraud or mistake.
Malice, intent, knowledge, and other conditions of a
person’s mind may be alleged generally.” This is not a mere
technical requirement. Instead, it reflects hundreds of years
of development of the common law, which was adopted in
our federal rules of civil procedure. 5A Charles Alan
Wright, Arthur R. Miller & Edward H. Cooper, Federal
Practice and Procedure § 1296 (4th ed.). Because
allegations of fraud inescapably carry a degree of moral
turpitude, Rule 9(b) imparts a heightened note of
seriousness, requiring a greater degree of pre-discovery
investigation by the plaintiff, followed by the plaintiff’s
required particular allegations, thereby protecting a
defendant’s reputation from frivolous and unfounded
allegations and permitting a particularized basis for a
defendant to respond to the particularized allegations. Id. at
n.4, 5, 11 (citing Am. C.L. Union v. Holder, 673 F.3d 245,
253 (4th Cir. 2011); Durham v. Bus. Mgmt. Assocs.,
847 F.2d 1505, 1511 (11th Cir. 1988); U.S. ex rel. Grubbs v.
Kanneganti, 565 F.3d 180, 185 (5th Cir. 2009)).
It is established law that Rule 9(b)’s particularity
requirement applies to state law causes of action relating to
fraud when asserted in federal court. Vess v. Ciba-Geigy
Corp. USA, 317 F.3d 1097, 1103 (9th Cir. 2003).
Furthermore, “Rule 9(b) applies to all elements of a

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IRVING FIREMEN’S RELIEF & RET. FUND V. UBER TECH. 11
securities fraud action, including loss causation.” Oregon
Pub. Emps. Ret. Fund v. Apollo Grp. Inc., 774 F.3d 598, 605
(9th Cir. 2014). To satisfy Rule 9(b), the allegations must
contain “sufficient detail” to (1) give the defendant “ample
notice of [the plaintiff’s] loss causation theory” and
(2) provide the court “some assurance that the theory has a
basis in fact.” In re Gilead Scis. Sec. Litig., 536 F.3d at 1056
(quoting Berson v. Applied Signal Tech., Inc., 527 F.3d 982,
989–90 (9th Cir. 2008)). The second requirement in
particular serves “to deter the filing of complaints as a
pretext for the discovery of unknown wrongs, to protect
defendants from the harm that comes from being subject to
fraud charges, and to prohibit plaintiffs from unilaterally
imposing upon the court, the parties and society enormous
social and economic costs absent some factual basis.”
United States ex rel. Anita Silingo v. WellPoint, Inc.,
904 F.3d 667, 677 (9th Cir. 2018) (cleaned up).
III
To establish a securities fraud violation under the
Securities Exchange Act, “the plaintiff shall have the burden
of proving that the act or omission of the defendant . . .
caused the loss for which the plaintiff seeks to recover
damages.” 15 U.S.C. § 78u-4(b)(4). On appeal, Irving
describes its loss causation theory as follows: Uber and
Kalanick’s false or misleading statements and omissions
concealed existing risks to Uber’s business and growth
which, if known at the time, would have negatively impacted
the valuation of the securities sold in Uber’s Offerings, and
thus caused those shares to be overvalued—or inflated—
when they were purchased by Irving and the class. If an
accurate rendition describing Uber’s business had been
known, class members would have reduced their valuation
of Uber’s preferred stock to reflect expected: (1) reduced
cash flows, (2) higher risks, and (3) IPO timing delays—and

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12 IRVING FIREMEN’S RELIEF & RET. FUND V. UBER TECH.
consequently would have paid far less than they did. When
the true state of Uber’s business was revealed, Uber’s actual
value at the time of the Offerings was revealed to have been
significantly less than investors had believed.
The SAC asserts that, “[v]aluation experts and market
observers” attributed Uber’s reduction in value to
“revelations of truth regarding the true state of Uber’s
business.” Dr. Aswath Damodaran, finance professor at
New York University’s Stern School of Business, concluded
that Uber’s value declined because of “Uber’s
Extracurricular Activities.” Dr. Damodaran attributed this
to an increase in Uber’s expected risk, which the SAC asserts
resulted in a decreased valuation, to emerging “news
stories.”
Uber contends, however, that Irving did not satisfy the
element of loss causation. We agree, and we affirm the
district court’s holding that Irving did not adequately allege
loss causation.
A
Irving contends that the district court erred by applying
the federal standard for loss causation rather than the “less-
rigid state law standard.” Under Irving’s interpretation, it
need only show that the proposed class members purchased
securities that were overvalued—or inflated—at the time of
the offerings. By Irving’s account, class members’ damages
arose at the moment they purchased overinflated securities,
and no subsequent corrective disclosures or public price
declines were needed. We disagree.
Although Irving brings claims under state law,
California Corporations Code sections 25400 and 25500 are
derived from substantially identical language in the

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IRVING FIREMEN’S RELIEF & RET. FUND V. UBER TECH. 13
Securities Exchange Act. See Kamen v. Lindly, 94 Cal. App.
4th 197, 202–03 (Ct. App. 2001). In particular, “sections
25400 and 25500 are modeled on subsection (a) and
subsection (e) of section 9 of the Securities Exchange Act
. . . (15 U.S.C. § 78i(a) & (e)).” Id. But the district court did
not err in looking to federal cases interpreting loss causation
for claims brought under section 10(b) of the Securities
Exchange Act. The loss causation requirement applies to all
claims arising under the Securities Exchange Act. See
Nuveen Mun. High Income Opportunity Fund v. City of
Alameda, 730 F.3d 1111, 1119 (9th Cir. 2013) (“In any
private action arising under this chapter, the plaintiff shall
have the burden of proving that the act or omission of the
defendant alleged to violate this chapter caused the loss for
which the plaintiff seeks to recover damages.” (emphasis
added in Nuveen) (quoting 15 U.S.C. § 78u-4(b)(4)). Loss
causation, then, is required for section 10(b) claims—the
cases on which the district court relied—as well as section 9
claims—the section on which sections 25400 and 25500
were modeled. See Kamen, 94 Cal. App. 4th at 202–03
(citing 15 U.S.C. § 78u-4(b)(4)). Thus, federal law is
“unusually strong persuasive precedent” in construing
sections 25400 and 25500. Id. at 203. Indeed, “[i]n the
absence of California cases that address the issue at bench,
[California courts] look to federal cases.” Id.
California law, as cited by the parties, provides only
limited guidance on how its causation element should be
applied in this case. Section 25400(d) “makes it unlawful
. . . for sellers or buyers of stock to make false or misleading
statements of material facts for the purpose of inducing a
purchase or sale.” Overstock.com, Inc. v. Goldman Sachs &
Co., 231 Cal. App. 4th 513, 530 (Ct. App. 2014), as modified
(Nov. 25, 2014) (citation omitted); see also Cal. Corp. Code
§ 25400. Section 25500 creates a private remedy for
violations of section 25400. Cal. Amplifier, Inc. v. RLI Ins.

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14 IRVING FIREMEN’S RELIEF & RET. FUND V. UBER TECH.
Co., 94 Cal. App. 4th 102, 109 (Ct. App. 2001). Section
25500 requires a plaintiff to allege that it purchased or sold
a security “at a price which was affected” by the violation.
Cal. Corp. Code § 25500. And this “requires the violator’s
acts to cause the resultant damages.” Bowden v. Robinson,
67 Cal. App. 3d 705, 714 (Ct. App. 1977).
Irving’s cited case law in our view does not support its
argument that mere inflation is enough to show loss
causation under California law. Quoting Mirkin v.
Wasserman, 858 P.2d 568, 580 (Cal. 1993), Irving contends
that, under California law “[a]ll that is required is that the
plaintiff establish that the price which he paid . . . was
affected by the defendant’s conduct or statements.” The
sentence that Irving relies upon, taken from the Mirkin
decision, is not even a holding of that court. Instead, the
California court there merely contrasted the plaintiffs’ claim
of common law deceit, which was before it, with a
hypothetical claim under sections 25400 and 25500, claims
that were not before it, and which hypothetical claims
“conspicuously avoid[s] the requirement of actual reliance.”
Id. (cleaned up). Moreover, Mirkin noted the fraud-on-the-
market doctrine applies equally to Rule 10b-54 and
California securities law. Id. at 583. And as explained
below, the fraud-on-the-market theory requires a revelation
to “cause[] the fraud-induced inflation in the stock’s price to
be reduced or eliminated.” In re BofI Holding, Inc. Sec.
Litig., 977 F.3d 781, 789 (9th Cir. 2020).
Irving also points to Diamond Multimedia Systems, Inc.
v. Superior Court, 968 P.2d 539, 543 (Cal. 1999), for
crediting allegations that “[a]t the time of [plaintiffs’]
4 Rule 10b-5 was promulgated pursuant to section 10(b) of the
Securities Exchange Act. See 17 C.F.R. § 240.10b-5.

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IRVING FIREMEN’S RELIEF & RET. FUND V. UBER TECH. 15
purchases the fair market value of the shares was
substantially less than the price paid by class members.” But
this, too, was dicta. There, the California Supreme Court
expressly disclaimed any binding comment on the merits of
the underlying lawsuit, see id. at 546, focusing exclusively
on the discrete legal issue of whether a “civil remedy [under
section 25500] is available to out-of-state purchasers,” id.
at 541. Even so, the complaint did not rely exclusively on
price inflation at the time of the purchase, instead alleging a
drop in stock prices following a revelation. Id. at 542. These
cases do not establish that the state loss causation regime is
less rigid than the federal loss causation regime or that mere
inflation is enough under California law. See also In re
Nuveen Funds, No. C 08-4575 SI, 2011 WL 1842819, at *5,
*26 (N.D. Cal. May 16, 2011), aff’d sub nom. 730 F.3d 1111
(9th Cir. 2013) (equating loss causation under sections
25400 and 25500 with loss causation under Rule 10b-5).
Because the parties have not pointed to California law
directly addressing this issue, we turn to the federal standard
for loss causation. We nonetheless emphasize that, although
federal precedent is unusually persuasive, California law still
governs claims brought pursuant to sections 25400 and
25500. See Smith v. Lenches, 263 F.3d 972, 977–78 (9th Cir.
2001) (expressing that California law governs the
determination whether California securities laws were
violated).
B
Irving next contends that the district court misapplied
federal law when it rejected Irving’s loss causation theory.
Looking to the federal loss causation regime as persuasive
authority, we conclude that Irving did not adequately allege
loss causation.

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16 IRVING FIREMEN’S RELIEF & RET. FUND V. UBER TECH.
1
In the loss causation analysis, “the ultimate issue is
whether the defendant’s misstatement, as opposed to some
other fact, foreseeably caused the plaintiff’s loss.” Lloyd v.
CVB Fin. Corp., 811 F.3d 1200, 1210 (9th Cir. 2016). A
plaintiff must show that the defendant’s misrepresentation
was a “substantial cause” of his or her financial loss. Loos
v. Immersion Corp., 762 F.3d 880, 887 (9th Cir. 2014)
(citation omitted), as amended (Sept. 11, 2014). To survive
a motion to dismiss, a plaintiff “need only allege that the
decline in the defendant’s stock price was proximately
caused by a revelation of fraudulent activity rather than by
changing market conditions, changing investor expectations,
or other unrelated factors.” Id.
Typically, to establish loss causation, a plaintiff must
show that the defendants’ alleged misstatements artificially
inflated the price of stock and that, once the market learned
of the deception, the value of the stock declined. Nuveen,
730 F.3d at 1119–20 (citing McCabe v. Ernst & Young, LLP,
494 F.3d 418, 425–26 (3d Cir. 2007)). Courts refer to this
theory as “fraud-on-the-market.” Id. at 1120. In this
scenario, “the plaintiff must show that after purchasing her
shares and before selling, the following occurred: (1) ‘the
truth became known,’ and (2) the revelation caused the
fraud-induced inflation in the stock’s price to be reduced or
eliminated.” In re BofI Holding, Inc. Sec. Litig., 977 F.3d at
789 (quoting Dura Pharm., Inc. v. Broudo, 544 U.S. 336,
347 (2005)). This theory notably conflicts with Irving’s
assertion that mere inflation is enough.
We stress the second element, which requires a showing
that the revelation of the truth “caused the company’s stock
price to decline and the inflation attributable to the
misstatements to dissipate.” Id. at 791. This analysis

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IRVING FIREMEN’S RELIEF & RET. FUND V. UBER TECH. 17
involves a temporal component. Id. at 790. “[A] disclosure
followed by an immediate drop in stock price is more likely
to have caused the decline.” Id. For example, we have held
that investors adequately alleged loss causation when they
claimed that a company engaged in improper accounting
practices because the “stock [price] fell precipitously after
[the company] began to reveal figures showing the
company’s true financial condition.” In re Daou Sys., Inc.,
411 F.3d 1006, 1026 (9th Cir. 2005). However, we have
rejected “a bright-line rule requiring an immediate market
reaction because the market is subject to distortions that
prevent the ideal of a free and open public market from
occurring.” In re Gilead Scis. Sec. Litig., 536 F.3d at 1057–
58 (cleaned up).
2
Even assuming without deciding (1) that Uber and
Kalanick made actionable misstatements and (2) that the
news articles, the Waymo lawsuit, and the government
investigations cited by Irving revealed the truth to the
market, still the claims fail because Irving did not adequately
and with particularity allege that these revelations caused the
resulting drop in Uber’s valuation.
Irving’s loss causation theory lumps together more than
60 alleged misstatements, which Irving associates with at
least eight purported corporate scandals that took place
throughout the course of a year, and Irving concludes that
the disclosure of these scandals resulted in a year-long
decline in Uber’s valuation. But Irving’s allegations fail to
link Uber’s reduced valuation to any particular scandal or
misstatement. The news articles and expert assessments
provided in the SAC attribute Uber’s reduced valuation to
corporate scandals generally, referring for example to a
“string of blows dealt to [Uber’s] brand this year.” These

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18 IRVING FIREMEN’S RELIEF & RET. FUND V. UBER TECH.
general allegations, which lump together the effects of
various alleged scandals, do not contain sufficient detail to
provide Uber and Kalanick with ample notice of Irving’s
loss causation theory or provide us with assurance that its
theory is plausibly based in fact as required by Rule 9(b).
See In re Gilead Scis. Sec. Litig., 536 F.3d at 1056; see also
Wellpoint, 904 F.3d at 677 (explaining that, to satisfy Rule
9(b), plaintiffs must “differentiate their allegations” and
cannot “lump” together dissimilar defendants); Fener v.
Operating Engineers Const. Indus. & Miscellaneous
Pension Fund (LOCAL 66), 579 F.3d 401, 410 (5th Cir.
2009) (rejecting at the summary judgment stage, expert
report showing only that a “stock reacted to the entire bundle
of negative information” (emphasis omitted)).
Irving provided a chart purporting to show how various
funds responded to revelations between October 2016 and
February 2018. At best, however, this chart does not support
Irving’s theory; at worst, the chart undermines it. As the
district court pointed out:
This chart . . . shows that every fund
maintained or increased its valuation after the
alleged revelations of “Susan Fowler Blog
post,” “Waymo sues Uber,” and “News of
Greyball Program breaks.” . . . And the
majority of funds maintained or increased
their valuation after the alleged revelations of
“News of Hell Program breaks,” and “CEO
Travis Kalanick Resigns.” . . . [E]ven if the
Court were to find that these fund valuations
do not definitively contradict the claim that
certain “revelations” materially depressed
Uber’s valuation, their inclusion in the
operative complaint at a minimum magnifies
Plaintiff’s general failure to tie particular

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IRVING FIREMEN’S RELIEF & RET. FUND V. UBER TECH. 19
misrepresentations to a decline in Uber’s
value. Plaintiff continues to plead that an
amalgam of misrepresentations decreased
Uber’s value over time, and yet Plaintiff’s
pleaded facts demonstrate that at least several
of those had little or no effect.
Irving does not dispute the district court’s description of the
chart, but instead provides three arguments arrayed against
the district court’s conclusion.
First, Irving contends that the district court
impermissibly required an immediate market-price reaction
to disclosed information. Irving is correct that we have not
adopted a “bright-line rule requiring an immediate market
reaction.” In re Gilead Scis. Sec. Litig., 536 F.3d at 1057.
Nor do we require an immediate drop in valuation here.
Rather, our concern is with the lack of consistency among
the valuation reactions that the chart reveals. If the
purported revelations—“as opposed to some other fact”—
really caused the drops, the funds would have been expected
to price the stock consistently downward in response to each
revelation, rather than subsequently decreasing,
maintaining, or even increasing their valuations. See Lloyd,
811 F.3d at 1210. These disparate reactions of multiple
funds to the serial revelations of scandals indicate that the
funds, in making their decisions on reevaluation of their
holdings of Uber stock shares, were not responding to the
specific revelations Irving cites.5
5 Furthermore, Irving draws no favorable comparisons to cases in
which we have held that loss causation was adequately alleged despite a
delayed market reaction. Unlike in those cases, Irving did not provide a
plausible explanation for a delay in the devaluation of some funds’
holdings of Uber stock. See In re Gilead Scis. Sec. Litig., 536 F.3d at

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20 IRVING FIREMEN’S RELIEF & RET. FUND V. UBER TECH.
Irving contends that, instead of focusing on the
immediate result of the early 2017 revelations, the district
court should have considered the “overall 30% devaluation
saturating that entire year, which was uniformly attributed
by market observers to the concealed misconduct lying at the
heart of this case.” At this stage of the proceedings, we do
not dispute Irving’s allegation that Uber’s apparent valuation
decreased over the course of the year. But the issue before
us more precisely centers on Irving’s failure to plead with
particularity and distinguish among the various
misstatements and revelations that allegedly caused that
decrease. Irving’s allegations of a general decline in
valuation in response to multiple alleged scandals do nothing
to alleviate this problem. For we think that the general
considerations potentially impacting a stock’s valuation will
turn on a large range of uncertainties that could impact future
earnings and investor valuations, including “changed
economic circumstances, changed investor expectations,
new industry-specific or firm-specific facts, conditions, or
other events.” See Dura Pharms., Inc., 544 U.S. at 343.
The value of stocks turns not only on the net value of
assets of a company, but also on its earnings. We hesitate to
try to summarize the diverse factors that can affect the price
at which a willing buyer and seller will get together on a
1053–54, 1057–58 (concluding that although the public misunderstood
the significance of an FDA warning letter, prices dropped immediately
when lower sales resulting from the warning were later revealed); see
also No. 84 Employer-Teamster Joint Council Pension Tr. Fund v. Am.
W. Holding Corp., 320 F.3d 920, 935 (9th Cir. 2003) (concluding that
loss causation was plausibly alleged “although [the plaintiff’s]
disclosures of the settlement agreement had no immediate effect on the
market price, [because] its stock price dropped 31% on September 3,
1998 when the full economic effects of the settlement agreement and the
ongoing maintenance problems were finally disclosed to the market”).

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IRVING FIREMEN’S RELIEF & RET. FUND V. UBER TECH. 21
completed sale of securities. But these factors rather
obviously must include not only any current scandals or
problems for management, but also the prospect of future
earnings for a company with anticipated growth of earnings,
and such things as what is an appropriate multiple of
earnings that the market will pay for this type of stock,
whether buyers are willing to pay a premium for companies
within certain sectors of the economy that are considered hot
at any given time, what political or natural events predictably
may occur, the general mood of the stock market, whether
irrational exuberance for or undue pessimism about the
market exists at any particular time, whether investors think
the general market or a particular stock is in a pendulum
swing one way or the other, and whether a company is
valued as a growth stock or as a value stock. See generally
Benjamin Graham, The Intelligent Investor: The Definitive
Book on Value Investing (rev. ed. 2003) (thoughtfully
discussing many market conditions that may affect price);
see also Dura Pharms., Inc., 544 U.S. at 343.
Second, Irving contends that a different analysis should
apply because Uber’s Offerings’ shares were privately
traded rather than publicly listed securities. But the private
nature of the transactions does not excuse Irving from
pleading loss causation.
When a case concerns shares of a privately held
company, “a comparison of market stock price to establish
loss causation has less relevance because market forces will
less directly affect the sales prices of shares of a privately
held company.” Nuveen, 730 F.3d at 1120 (citation
omitted). Even in a privately traded securities case,
however, “fundamentally the same loss causation analysis
occurs.” Id. at 1123 (cleaned up). A plaintiff is not relieved
of the burden of showing “the necessary link between the
claimed misrepresentations and the economic loss [she]

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22 IRVING FIREMEN’S RELIEF & RET. FUND V. UBER TECH.
suffered.” Id. at 1116. Indeed, the Seventh Circuit has
concluded that showing loss causation for privately traded
securities requires plaintiffs to “carry the greater burden of
proving the causal links that an efficient secondary market
establishes automatically.” Eckstein v. Balcor Film Inv’rs,
8 F.3d 1121, 1130 (7th Cir. 1993) (emphasis added).
Irving acknowledges that Uber’s valuation, even if
privately traded, was monitored by major investors. Irving
provided the valuations of these investors as “Market
Evidence of Declining Value Due to Revelations of the True
State of Uber’s Business,” concluding that “in the absence
of [a] daily trading market, investor valuations provide
reliable indicators of security’s worth.” Under Irving’s
theory, then, these revelations should have had an impact
reflected in the next round of publicly reported portfolio
valuations issued by each mutual fund. Yet Irving’s own
chart demonstrates that this did not happen.
Finally, Irving contends that it was not required to plead
a “revelation-of-the-fraud theory.” We have expressed that
“loss causation is a ‘context-dependent’ inquiry” and that a
tort may cause a loss in an “infinite variety” of ways. Lloyd,
811 F.3d at 1210 (citations omitted). However, “[w]hen
plaintiffs plead a causation theory based on market
revelation of the fraud, this court naturally evaluates whether
plaintiffs have pleaded or proved the facts relevant to their
theory.” Mineworkers’ Pension Scheme v. First Solar Inc.,
881 F.3d 750, 754 (9th Cir. 2018).
Irving acknowledges that the SAC pleads a “revelation-
of-the-fraud theory” but contends that it should be allowed
to plead in the alternative. But Irving identifies its
alternative theory as “the truism” that, under California law,
losses may arise the moment investors purchase inflated

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IRVING FIREMEN’S RELIEF & RET. FUND V. UBER TECH. 23
securities. We have already rejected that contention. See
supra Section III.B.
IV
Irving did not plausibly allege that Uber and Kalanick’s
alleged misstatements caused its damages. Accordingly, we
do not reach the other elements of Irving’s claim or the other
arguments advanced by the parties.
AFFIRMED.

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