1. BREACH OF CONTRACT 2. BREACH OF THE IMPLIED 3 ...

[Pages:33]Case 3:17-cv-05393 Document 1 Filed 09/18/17 Page 1 of 33

REED SMITH LLP

A limited liability partnership formed in the State of Delaware

1 John Bovich (SBN 150688) Email: jbovich@

2 Ashley L. Shively (SBN 264912) Email: ashively@

3 REED SMITH LLP 101 Second Street, Suite 1800

4 San Francisco, CA 94105-3659 Telephone: +1 415 543 8700

5 Facsimile: +1 415 391 8269

6 Randall D. Haimovici (SBN 213635) Email: rhaimovici@

7 Angela B. Johnson (SBN 287421) Email: angelaj@

8 Ariel F. Ruiz (SBN 305488) Email: ariel.ruiz@

9 Uber Technologies, Inc. 1455 Market Street, Floor 4

10 San Francisco, CA 94103-1355 Telephone: +1 415 533-7652

11 Attorneys for Plaintiff

12 Uber Technologies, Inc.

13 UNITED STATES DISTRICT COURT

14 NORTHERN DISTRICT OF CALIFORNIA - SAN FRANCISCO DIVISION

15

16 UBER TECHNOLOGIES, INC.,

17

Plaintiff,

18

vs.

19 FETCH MEDIA, LTD.,

20

Defendants.

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Case No.:

REDACTED VERSION OF DOCUMENTS SOUGHT TO BE SEALED

UBER TECHNOLOGIES, INC. COMPLAINT FOR:

1. BREACH OF CONTRACT 2. BREACH OF THE IMPLIED

COVENANT OF GOOD FAITH AND FAIR DEALING 3. INTENTIONAL BREACH OF FIDUCIARY DUTY 4. CONSTRUCTIVE FRAUD 5. FRAUD 6. NEGLIGENT MISREPRESENTATION 7. PROFESSIONAL NEGLIGENCE 8. NEGLIGENCE 9. UNFAIR COMPETITION, CAL. BUS. & PROF. CODE ?? 17200, ET SEQ. 10. UNJUST ENRICHMENT

JURY TRIAL DEMANDED

Case No.

COMPLAINT

Case 3:17-cv-05393 Document 1 Filed 09/18/17 Page 2 of 33

REED SMITH LLP

A limited liability partnership formed in the State of Delaware

1

Plaintiff Uber Technologies, Inc. ("Uber"), by and through its attorneys, and for its

2 Complaint against Defendant Fetch Media, LTD. ("Fetch" or "Defendant"), hereby alleges as

3 follows:

4

NATURE OF THE ACTION

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1. Uber brings this action to redress the injuries Fetch caused in failing to fulfill its

6 duties and obligations as Uber's mobile advertising agency. Uber put its trust and confidence in

7 Fetch to purchase and place digital advertisements on Uber's behalf. Uber paid a premium price and

8 agreed to a high-volume mobile advertising campaign where spending reached millions of dollars

9 per week because Fetch represented it had the expertise to meet Uber's growth objectives.

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2. Instead, Fetch squandered tens of millions of dollars to purchase nonexistent,

11 nonviewable and/or fraudulent advertising. Fetch knew about the problems in the mobile inventory it

12 purchased on Uber's behalf, and concealed those facts from Uber.

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3. Fetch nurtured this environment of obfuscation and fraud for its own personal benefit,

14 and the personal gain of its parent company Dentsu Inc. ("Dentsu"). Fetch misrepresented its media

15 purchasing decisions as directly attributable to Uber's growth goals to incentivize Uber to increase

16 its mobile advertising budget to millions of dollars per week. As a result, Fetch received substantial,

17 unearned compensation from Uber and allowed networks and publishers to take credit for Uber App

18 installs that would have happened regardless of advertising.

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4. Fetch's actions, and those of Fetch's partners, negatively affected the user experience

20 of millions of smartphone users by subjecting them to unwanted popup advertisements and auto-

21 redirects.

22

THE PARTIES

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5. Uber is a Delaware company with its principal place of business in San Francisco,

24 California.

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6. Defendant Fetch is a U.K. mobile advertising agency with offices in London,

26 Manchester, Hong Kong, Berlin, New York, and San Francisco.

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Case No.

? 1 ?

COMPLAINT

Case 3:17-cv-05393 Document 1 Filed 09/18/17 Page 3 of 33

REED SMITH LLP

A limited liability partnership formed in the State of Delaware

1

JURISDICTION AND VENUE

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7. This Court has diversity jurisdiction over the subject matter of this action pursuant to

3 28 U.S.C. ? 1332, because there is complete diversity between the parties and the amount in

4 controversy exceeds $75,000, exclusive of interest and costs.

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8. This Court has personal jurisdiction over Fetch because it is bound by a valid forum

6 selection clause. Uber and Fetch are parties to a Services Agreement, pursuant to which the parties

7 agreed that the laws of the State of California would govern the Agreement and Amendments

8 thereto, and "consent[ed] to the exclusive jurisdiction and venue in San Francisco, California." Ex. B

9 at ? 11.16.

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9. In addition, the Court has personal jurisdiction over Fetch because Uber's claims

11 arise out of Fetch's forum-related activities, and, on information and belief, Fetch has purposely

12 availed itself of the benefits and protections of the State of California by doing and transacting

13 business in this forum.

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10. Venue is proper in this District because Fetch has consented to venue in this District

15 and, pursuant to 28 U.S.C. ? 1391, because a substantial part of the events or omissions giving rise

16 to the claims occurred in the City and County of San Francisco. For purposes of intra-district

17 assignment under Civil Local Rules 3-2(c) and 3-5(b), assignment of this action in the San Francisco

18 Division is proper.

19

FACTUAL ALLEGATIONS

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11. Uber is a San Francisco-based technology company. It has developed a smartphone

21 application (the "Uber App") that enables users of the application ("riders") to request ridesharing

22 services from independent, third-party transportation providers ("drivers").

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12. Uber gains new riders and drivers in a number of ways, including through "organic"

24 downloads and installations of the Uber App--where a mobile phone user navigates directly to her

25 mobile software provider's app store or marketplace and downloads the Uber App because of the

26 user's prior knowledge of Uber's overall brand and reputation in the marketplace.

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13. Uber also relies on mobile advertising to gain new riders and drivers. "Mobile

28 advertising" refers to advertisements that appear on either mobile-optimized websites or in mobile

Case No.

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COMPLAINT

Case 3:17-cv-05393 Document 1 Filed 09/18/17 Page 4 of 33

REED SMITH LLP

A limited liability partnership formed in the State of Delaware

1 smartphone applications such as games. When a potential rider or driver clicks on a mobile

2 advertisement, she is directed to the app store or marketplace where she has the opportunity to

3 download and install the Uber App.

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15 Figure 1 ? Examples of Mobile Advertisements

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14. "Placements" are the actual spaces on a mobile-optimized website or mobile

17 smartphone application (called "mobile inventory") where mobile advertising can appear.

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15. "Publishers" are companies that sell mobile inventory. A publisher can be the actual

19 owner of particular mobile websites or mobile smartphone applications that sell placements, such as

20 the New York Times mobile website or app, or a publisher can have mobile inventory from dozens

21 or even hundreds of different websites and/or mobile smartphone applications.

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16. "Networks" are companies that, often acting at the direction of an advertising agency,

23 buy mobile inventory from different sources, including directly from publishers, from other

24 networks that own and operate inventory from multiple publishers, from exchanges that offer mobile

25 inventory for sale or auction, or through a combination of these methods.

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17. "Mobile advertising agencies" are companies that specialize in digital advertisements

27 that appear on mobile smartphones. Mobile advertising agencies assist their clients (i.e., the

28 advertiser) to develop a mobile advertising strategy, buy mobile inventory on behalf of their clients,

Case No.

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COMPLAINT

Case 3:17-cv-05393 Document 1 Filed 09/18/17 Page 5 of 33

REED SMITH LLP

A limited liability partnership formed in the State of Delaware

1 increase engagement with their clients' brands, acquire new users for their clients, and related

2 services.

3

18. "Insertion Orders" or "IOs" are forms used by mobile advertising agencies to

4 purchase, on behalf of a client, mobile inventory from networks and/or publishers. IOs typically

5 include limitations on the types of mobile inventory on which a client's advertisements may appear

6 (e.g., many clients elect not to advertise on sites with adult content), placement and size

7 requirements for advertisements, payment arrangements, and other requirements. IOs are intended to

8 ensure appropriate and legitimate mobile inventory is purchased. Mobile advertising agencies are

9 responsible for ensuring that the terms of IOs are followed by the networks and publishers engaged

10 on behalf of a client.

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19. Defendant Fetch is a mobile advertising agency that offers the following services to

12 its clients:

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25 Figure 2 ? Fetch's Public Representations of Expertise1

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28 1 last viewed September 9, 2017.

Case No.

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COMPLAINT

Case 3:17-cv-05393 Document 1 Filed 09/18/17 Page 6 of 33

REED SMITH LLP

A limited liability partnership formed in the State of Delaware

1

20. Uber engaged Fetch to act as its mobile advertising agency between late 2014 and

2 early 2017 (the "Fetch Campaign") based on Fetch's representations of its expertise as a mobile

3 advertising agency and provider of mobile advertising services.

4

21. Fetch assumed all the duties and responsibilities expected of a prudent mobile

5 advertising agency.

6

22. Uber relied on Fetch's expertise to recommend and engage networks and publishers

7 best suited to encourage new riders to download and use the Uber App. Through Fetch, Uber

8 purchased mobile inventory from networks, and, ultimately, publishers. The relationship between

9 Uber and Fetch, and as between Fetch and the various networks and publishers they supervised is

10 illustrated by the diagram below:

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25 Figure 3 - Fetch's Role in Supervising Networks and Publishers on Uber's Behalf

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23. The diagram above shows that Fetch, in its capacity as Uber's mobile advertising

27 agency, engaged networks to purchase mobile inventory to place Uber advertisements. Networks, in

28 turn, acquired mobile inventory from publishers. Fetch's role was to select networks and supervise

Case No.

- 5 -

COMPLAINT

Case 3:17-cv-05393 Document 1 Filed 09/18/17 Page 7 of 33

REED SMITH LLP

A limited liability partnership formed in the State of Delaware

1 their conduct in order to purchase legitimate mobile inventory and ultimately acquire new riders for

2 Uber.

3

A. Uber Contracts With Fetch For Mobile Advertising Services

4

24. In connection with the Fetch Campaign, Uber and Fetch entered into a Services

5 Agreement dated January 29, 2015 and an amendment dated December 22, 2015 (collectively "the

6 Agreement"), true and correct copies of which are attached hereto as Exhibits A and B.

7

25. Under the Agreement, Fetch promised to perform and deliver services

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and to provide

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26. As contemplated in the Agreement, Uber (and its affiliates) and Fetch also entered

11 into a number of Statements of Work. As relevant here:

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a. Effective January 29, 2015, Uber and Fetch entered into a Statement of Work for

13 expenditures in 2015 (the "2015 SOW"). A true and correct copy of the 2015 SOW is attached as

14 Exhibit C.

15

b. Effective December 26, 2015, Uber and Fetch entered into a Statement of Work for

16 expenditures in 2016 (the "2016 SOW"). A true and correct copy of the 2016 SOW is attached as

17 Exhibit D.

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c. On April 18, 2016, Uber and Fetch entered into an Addendum to the 2016 SOW. A

19 true and correct copy of the Addendum to the 2016 SOW is attached as Exhibit E.

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d. Effective January 1, 2017, Uber and Fetch entered into a Statement of Work for

21 expenditures in 2017 (the "2017 SOW"). A true and correct copy of the 2017 SOW is attached as

22 Exhibit F.

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27.

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Case No.

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COMPLAINT

Case 3:17-cv-05393 Document 1 Filed 09/18/17 Page 8 of 33

REED SMITH LLP

A limited liability partnership formed in the State of Delaware

1

28. Uber entered into each of the above-referenced SOWs based on Fetch's continued

2 representations that it had the resources available to acquire human viewable, quality mobile

3 inventory at scale, and provide the relevant insight, support, and services required to meet Uber's

4 goal of acquiring new riders in both existing and new markets.

5

B. Fetch Buys Media On Uber's Behalf And Manages Uber's Mobile Advertising

6

Strategy

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29. During the Fetch Campaign, Fetch purchased mobile inventory on behalf of Uber and

8 its affiliates in a number of jurisdictions.

9

30. For mobile advertising conducted in the United States, Mexico, France, the

10 Philippines, Romania, and Singapore, Fetch purchased mobile inventory from Networks on an

11 "agent-principal" basis--Fetch purchased mobile inventory on Uber's behalf as Uber's

12 representative in each transaction with networks and publishers.

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31. For mobile advertising conducted in jurisdictions other than those referenced in the

14 prior paragraph, Fetch purchased mobile inventory on a "principal transaction" basis--Fetch

15 purchased mobile inventory from networks and publishers on its own behalf and then resold that

16 mobile inventory to Uber.

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32. Regardless of whether Fetch purchased mobile inventory on an agent-principal or

18 principal transaction basis, Fetch was responsible for the day-to-day oversight of networks and the

19 vetting of publishers for quality and fraud prevention, concordant with the

20 agreed-to in the Agreement and the duties of a reasonably prudent mobile advertising agency.

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33. Regardless of whether Fetch made mobile inventory purchases on an agent-principal

22 or principal transaction basis,

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34. Fetch's compensation under the Agreement was tied to

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Case No.

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COMPLAINT

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