EFiled: Aug 18 2017 10:43AM EDT

Transaction ID 61004168
Case No. 2017-0575-SG
IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE

BENCHMARK CAPITAL PARTNERS )

VII, L.P., a Delaware limited partnership, )
)
Plaintiff, )
)
v. )
) C.A. No. 2017-0575-SG
TRAVIS KALANICK, )
)
Defendant, )
)
and )
)
UBER TECHNOLOGIES, INC., a )
Delaware corporation, )
)
Nominal Defendant. )
)

DEFENDANT TRAVIS KALANICKS OPENING BRIEF IN SUPPORT OF

HIS MOTION TO DISMISS OR STAY IN FAVOR OF ARBITRATION

POTTER ANDERSON & CORROON LLP

OF COUNSEL: Donald J. Wolfe, Jr. (No. 285)

Kevin R. Shannon (No. 3137)
Joseph G. Petrosinelli T. Brad Davey (No. 5094)
Kenneth J. Brown J. Matthew Belger (No. 5707)
WILLIAMS & CONNOLLY LLP Jacob R. Kirkham (No. 5768)
725 Twelfth Street, N.W. 1313 N. Market Street
Washington, D.C. 20005 Hercules Plaza, 6th Floor
(202) 434-5000 Wilmington, DE 19899-0951
(302) 984-6000

Dated: August 17, 2017 Attorneys for Defendant Travis Kalanick

 TABLE OF CONTENTS

Page
TABLE OF AUTHORITIES .................................................................................... ii

INTRODUCTION ..................................................................................................... 1

BACKGROUND ....................................................................................................... 2
ARGUMENT ............................................................................................................. 5

I. IF BENCHMARK CONTESTS ARBITRATION, THEN THE

ARBITRATOR, NOT THE COURT, SHOULD DECIDE
WHETHER THE CLAIMS MUST BE ARBITRATED ................................ 5
II. THE ARBITRATION CLAUSE IN THE VOTING AGREEMENT
MANDATES ARBITRATION OF ALL OF BENCHMARKS
CLAIMS .......................................................................................................... 8

A. Benchmarks Counts Two, Three, And Four Plainly Require

Arbitration Under The Voting Agreement .......................................... 10
B. Benchmarks Section 225 Claim Likewise Falls Within The
Voting Agreements Arbitration Clause ............................................. 12
CONCLUSION ........................................................................................................ 17
 TABLE OF AUTHORITIES
CASES

Page(s)
Buckeye Check Cashing, Inc. v. Cardegna,
546 U.S. 440 (2006) ............................................................................................ 11
Carter v. Pearlman,
1998 WL 326605 (Del. Ch.) ............................................................................... 16
Chandler v. Ciccoricco,
2003 WL 21040185 (Del. Ch.) ..................................................................... 16-17

CompuCredit Corp. v. Greenwood,

565 U.S. 95 (2012) .......................................................................................... 8, 16
Elf Atochem N.Am., Inc. v. Jaffari,
727 A.2d 286 (Del. 1999) ...........................................................................5, 8, 16
Gilmer v. Interstate/Johnson Lane Corp.,
500 U.S. 20 (1991) .............................................................................................. 12

Glazer v. Alliance Beverage Distributing Co., LLC,

2017 WL 822174 (Del. Ch.) ................................................................................. 9

Halpern Med. Servs., LLC v. Geary,

2012 WL 691623 (Del. Ch.) ................................................................................. 9
James & Jackson, LLC v. Willie Gary, LLC,
906 A.2d 76 (Del. 2006) ....................................................................................... 5

Karish v. SI Intl., Inc.,

2002 WL 1402303 (Del. Ch.) ............................................................... 7, 9, 11-12

Li v. Standard Fiber, LLC,

2013 WL 1286202 (Del. Ch.) ........................................................................... 5, 9
Mastrobuono v. Shearson Lehman Hutton, Inc.,
514 U.S. 52 (1995) ............................................................................................ 8-9

McLaughlin v. McCann,
942 A.2d 616 (Del. Ch. 2008) .......................................................................... 6-8

ii
Orix LF, LP v. Inscap Asset Mgmt., LLC,
2010 WL 1463404 (Del. Ch.) .............................................................7, 10, 12, 14

Parfi Holding AB v. Mirror Image Internet, Inc.,

817 A.2d 149 (Del. 2002) ..................................................................................... 9

Prima Paint Corp. v. Flood & Conklin Mfg. Co.,

388 U.S. 395 (1967) ............................................................................................ 11

Redeemer Comm. Of Highland Crusader Fund v. Highland Capital

Mgmt., L.P., 2017 WL 713633 (Del. Ch.) ........................................................ 6, 8

Rohe v. Reliance Training Network, Inc.,

2000 WL 1038190 (Del. Ch.) ............................................................................. 16

SBC Interactive, Inc. v. Corporate Media Partners,

714 A.2d 758 (Del. 1998) ..................................................................................... 9

State v. Corr. Officers Assn,

2016 WL 6819733 (Del. Ch.) ............................................................................... 6
State v. Philip Morris USA, Inc.,
2006 WL 3690892 (Del. Ch.) ............................................................................... 7

Wilcox & Fetzer, Ltd. v. Corbett & Wilcox,

2006 WL 2473665 (Del. Ch.) ....................................................................... 13-14

STATUTES
10 DEL. C. 5702(c) .................................................................................................. 8

OTHER AUTHORITIES
Court of Chancery Rule 12(b)(1) .....................................................................2, 5, 17

AAA Commercial Rule R-7(a) .................................................................................. 6

AAA Comercial Rule R-47(a) ................................................................................. 12

iii
 INTRODUCTION
All of the claims asserted in this matter are subject to mandatory arbitration.

Benchmark Capital Partners VII, L.P. (Benchmark) filed this lawsuit based

on allegationsmany made on information and beliefthat have been cribbed

from media reports and even the fabricated claims made in litigation by a company

currently suing Uber Technologies, Inc. (Uber). The gravamen of Benchmarks

allegations is that Ubers co-founder and long-time CEO, Travis Kalanickwho

tirelessly stewarded Uber from the germ of an idea through its earliest days as a

startup, through more than seven years of consistent, phenomenal growth, into a

company now valued at more than $70 billion, which has increased the value of

Benchmarks $12 million investment to more than $7 billionimproperly obtained

control over three new seats on Ubers board through the June 1, 2016 Amended

and Restated Voting Agreement (Voting Agreement). Compl. 2. As set forth in

Mr. Kalanicks opposition to Benchmarks motion to expedite, these allegations are

predicated on assertions ranging from distortions to demonstrable falsehoods. And

as Benchmark is well aware, they were filed in the wrong forum, as they uniformly

are subject to the Voting Agreements mandatory arbitration provision.

Subject to two minor carveouts that are not applicable here, the arbitration

clause in the Voting Agreement encompasses [a]ny unresolved controversy or

claim arising out of or relating to this Agreement. Ex. 1 hereto (Voting Agreement)
 5.18. The parties have delegated the question of arbitrability to the arbitrator, but

regardless of who makes this decision, each of Benchmarks claims easily falls

within the scope of the broad arbitration provision. Consequently, this case should

be dismissed pursuant to Court of Chancery Rule 12(b)(1) or, in the alternative,

stayed in favor of arbitration.

BACKGROUND
Travis Kalanick cofounded Uber with a friend in 2010. From those humble

beginnings, the company has grown at a phenomenal rate to become a world-leading

technology company, valued at $70 billion, and the undisputed leader of the ride-

sharing industry. Naturally, given this strong record of growth, investors have

flocked to the company. Benchmark was one of the first, and it has reaped massive

rewardsjust six years after making its $12 million investment, its stake in the

company is now worth more than $7 billion.

As significant investors came to Uber over the years, they often bargained for

a board seat, and each time this occurred the companys Voting Agreement 1 was

amended and restated. The Voting Agreement takes the companys board seats, as

established in its Bylaws and Certificate of Incorporation, and allocates the right to

1
Unless otherwise specified, the term Voting Agreement refers to the June 1, 2016
Uber Technologies, Inc. Amended and Restated Voting Agreement, which is
currently in effect.

2
fill them to various stakeholders. See, e.g., Voting Agreement 1.1(a) (assigning

director seat to person designated by Benchmark and specifying that it shall

initially be Bill Gurley or Matt Cohler). All the signatories are then bound to vote

for the people thus chosen. See id. 1.1. The Voting Agreement also contains a

broad arbitration provision that, subject to two minor carveouts that are not

implicated here, encompasses [a]ny unresolved controversy or claim arising out of

or relating to this Agreement. Id. 5.18.

In June 2016, the Saudi Arabian governments Public Investment Fund

(PIF) made a massive, $3.5 billion investment in the company. Per the normal

course of events, the Voting Agreement was amended to give PIF the right to

designate a member of Ubers board. See id. 1.1(e)(ii). Mr. Kalanick, however,

insisted as a condition of this amendment that the Voting Agreement be further

amended to give him the right to appoint three additional members to newly-created

seats on the board. Although all of Ubers principal investors, including Benchmark,

agreed to this change, Benchmarks complaint now seeks to strip Mr. Kalanick of

his right under the Voting Agreement to appoint these additional board members.

Given the prominent role that the Voting Agreement plays in this dispute, it

permeates every part of Benchmarks complaint. In the introduction, Benchmark

claims that, in order to control the three new board seats, Mr. Kalanick induced it to

execute [the] amended voting agreement. Compl. 4. In its factual narrative,

3
Benchmark similarly claims it was approached on May 23, 2016 to consider certain

amendments to the Prior Voting Agreement and other documents adding board

seats. Id. 22. It claims these amendments together gave Mr. Kalanick the ability

to appoint hand-picked directors to those seats, id. 24; that Mr. Kalanick did not

inform Benchmark of various issues prior to Benchmarks execution of the Voting

Agreement, id. 25; and that on June 1, 2016, Benchmark and the other

shareholders ultimately granted Mr. Kalanick the ability to appoint directors to the

new seats by executing the Voting Agreement, id. 27.

The arbitrability determination, as the parties agreed by contract, is for an

arbitrator to make. But regardless of the decision maker, as set forth fully below,

each of Benchmarks four claims arise out of and relate to the Voting

Agreement, making them subject to the broad arbitration provision therein. For

these reasons, Benchmarks complaint should be dismissed or stayed in favor of

arbitration. This result not only is compelled by the contract to which Benchmark

agreed, but it furthers the interests of Uber, the entity Benchmark purports to be

serving.

4
 ARGUMENT
Delaware courts lack subject matter jurisdiction to adjudicate disputes that the

parties have contractually agreed to arbitrate. Elf Atochem N. Am., Inc. v. Jaffari,

727 A.2d 286, 295 (Del. 1999). [A] Rule 12(b)(1) motion will be granted if the

parties contracted to arbitrate the claims asserted in the complaint. Li v. Standard

Fiber, LLC, 2013 WL 1286202, at *4 (Del. Ch.).

I. IF BENCHMARK CONTESTS ARBITRATION, THEN THE

ARBITRATOR, NOT THE COURT, SHOULD DECIDE WHETHER
THE CLAIMS MUST BE ARBITRATED.
Benchmark apparently contests the arbitrability of at least some of its claims.

Thus, the Court must first resolve the threshold issue of who decides the question of

arbitrability. By agreeing to a broad clause that incorporates the rules of the

American Arbitration Association (AAA), the parties agreed that the arbitrator

should decide this question.

Although a court can decide whether a given claim is arbitrable, the parties

can commit that decision to the arbitrator if they do so clearly and unmistakably.

James & Jackson, LLC v. Willie Gary, LLC, 906 A.2d 76, 79 (Del. 2006) (internal

quotation marks omitted). One way the parties can do so is by agreeing to an

arbitration clause that generally provides for arbitration of all disputes and also

incorporates a set of arbitration rules that empower arbitrators to decide

arbitrability. Id. at 80. Taking the second requirement first, the Voting Agreement

5
specifically requires the use of the AAA rules in any arbitration. See Voting

Agreement 5.18 (any arbitration shall be conducted in accordance with the AAA

rules then in effect). Under those rules, [t]he arbitrator shall have the power to

rule on his or her own jurisdiction, including questions about the scope of the

arbitration clause. AAA Commercial Rule R-7(a). The second Willie Gary

requirement accordingly is met. See McLaughlin v. McCann, 942 A.2d 616, 625

(Del. Ch. 2008) (courts apply a heavy presumption that the parties agreed by

referencing the AAA Rules that the arbitrator, and not a court, would resolve

disputes about substantive arbitrability).

The first prong of Willie Gary is met if an arbitration clause provides for

arbitration of a wide array of potential claims, unless the clauses carveouts and

exceptions to committing disputes to arbitration are so obviously broad and

substantial as to overcome that presumption. McLaughlin, 942 A.2d at 62526; see

also Redeemer Comm. of Highland Crusader Fund v. Highland Capital Mgmt., L.P.,

2017 WL 713633, at *5 (Del. Ch.) ([C]arving out some obligations from an

otherwise broad arbitration provision, alone, will not result in a failure of the first

prong of Willie Gary.); State v. Corr. Officers Assn, 2016 WL 6819733, at *6 (Del.

Ch.) (Delaware courts have repeatedly rejected the Departments argument that, if

an arbitration provision contains any exceptions, then the parties did not intend to

6
empower the arbitrator to determine substantive arbitrability for all other contractual

claims.).

Here, the arbitration clause in the Voting Agreement is extremely broad. It

requires arbitration of [a]ny unresolved controversy or claim arising out of or

relating to this Agreement. Voting Agreement 5.18 (emphases added).

Delaware courts have found the use of both arising out of and relating to

language in an arbitration provision to be a broad mandate. Orix LF, LP v. Inscap

Asset Mgmt., LLC, 2010 WL 1463404, at *7 (Del. Ch.); see also, e.g., State v. Philip

Morris USA, Inc., 2006 WL 3690892, at *4 (Del. Ch.) (clause requiring arbitration

of claims arising out of or relating to agreement was a broad arbitration

clause), affd, 925 A.2d 504 (Del. 2007); Karish v. SI Intl, Inc., 2002 WL 1402303,

at *3-4 (Del. Ch.) (The arbitration clause of the LLC Agreement uses the broadly

written phrase arising out of or relating to.).

Because the clause is broad, the first Willie Gary prong is met unless the

exceptions to it are so obviously broad and substantial as to rebut the presumption

that the arbitrator decides arbitrability. McLaughlin, 942 A.2d at 625. The broad

arbitration clause here admits only two narrow exceptions, both of which are

irrelevant to this dispute. First, if another part of the agreement otherwise

provide[s], then arbitration is not required. Voting Agreement 5.18. But no

provision in the Voting Agreement otherwise provide[s]. Second, claims for a

7
provisional remedy or equitable relief relating to a partys intellectual property

rights may be pursued in court. Id. But this exception applies only to intellectual

property claims, and thus it too has no bearing here. These two irrelevant exceptions

do not remotely constitute such a substantial exception to general arbitrability as to

indicate that the parties meant to eschew the AAA rules on substantive arbitrability.

Redeemer Comm., 2017 WL 713633, at *7.

Because the parties agreed to a broad arbitration clause that incorporates the

AAA rules, any arbitrability questions must be raised before the arbitrator.

II. THE ARBITRATION CLAUSE IN THE VOTING AGREEMENT

MANDATES ARBITRATION OF ALL OF BENCHMARKS CLAIMS.
Even if this Court reaches the arbitrability question, all of Benchmarks claims

are arbitrable. The Federal Arbitration Act, which governs this issue,2 embodies a

strong public policy in favor of arbitration. E.g., CompuCredit Corp. v. Greenwood,

565 U.S. 95, 98 (2012). Delaware law and policy are in accord. Elf Atochem, 727

A.2d at 295 (noting Delawares strong public policy in favor of arbitration). Under

both the FAA and Delaware law, any doubts about the scope of an arbitration clause

should be resolved in favor of arbitration. Id.; see also, e.g., Mastrobuono v.

2
Under 10 Del. C. 5702(c), all arbitration agreements that do not specifically
reference the Delaware Uniform Arbitration Act, as the one relevant here does not,
are analyzed in this Court in conformity with the Federal Arbitration Act and
such general principles of law and equity as are not inconsistent with that Act.

8
Shearson Lehman Hutton, Inc., 514 U.S. 52, 62 (1995) (ambiguities as to the scope

of the arbitration clause itself must be resolved in favor of arbitration. (internal

quotation marks omitted)).

The Court employs a two-part test in assessing whether an arbitration clause

covers a particular claim. First, it asks whether the arbitration clause is broad or

narrow. Parfi Holding AB v. Mirror Image Internet, Inc., 817 A.2d 149, 155 (Del.

2002). A strong presumption exists in favor of arbitration, and, accordingly,

contractual arbitration clauses are generally interpreted broadly by the courts. See

Glazer v. Alliance Beverage Distributing Co., 2017 WL 822174, at *1 (Del. Ch.);

Halpern Med. Servs., LLC v. Geary, 2012 WL 691623, at *2 (Del. Ch.); see also Li,

2013 WL 1286202, at *4 (Del. Ch.) ([C]ontractual arbitration clauses are generally

interpreted broadly. (internal quotation marks omitted)). Second, if the clause is

broad, then the Court will defer to arbitration so long as the claim merely

touch[es] on contract rights or contract performance. Parfi Holding, 817 A.2d at

155. Under the parties agreement, that standard is satisfied as long as Benchmarks

claims arise out of or relate to the Voting Agreement. See Karish, 2002 WL

1402303, at *4 (In determining arbitrability, the courts are confined to ascertaining

whether the dispute is one that, on its face, falls within the arbitration clause of the

contract. (quoting SBC Interactive, Inc. v. Corporate Media Partners, 714 A.2d

758, 761 (Del. 1998))).

9
 As set forth above, the arbitration clause here is extremely broad. See Voting

Agreement 5.18; Orix LF, 2010 WL 1463404, at *7 (Delaware courts have found

the use of both arising out of and relating to language in an arbitration provision

to be a broad mandate.); supra at 7 (citing additional cases). And as the below

analysis demonstrates, there is no question that all of Benchmarks claims fall within

the scope of that clause.

A. Benchmarks Counts Two, Three, and Four Plainly Require

Arbitration Under The Voting Agreement.
The arbitrability of Claims Two, Three, and Four is beyond serious dispute.

The second claim seeks to determine the validity of Mr. Kalanicks right to

hold or continue to hold the office of director. Compl. 71. In other words, it asks

the Court to determine whether Mr. Kalanick validly exercised his right under the

Voting Agreement to appoint himself to one of the three new board seats that

Agreement affords him. See Id. 72; Voting Agreement 1.1(e). This claim

unquestionably relates to the Voting Agreement, the terms and validity of which

determine whether Mr. Kalanick may occupy a seat on the board.

The third claim takes aim at the Voting Agreement as a whole, alleging that

Mr. Kalanick fraudulently induced Benchmarks consent to changes in it (as well

as the Certificate of Incorporation, which is discussed fully below). Compl. 76.

On its face, this claim arises out of and relates to the Voting Agreement.

Moreover, it is hornbook law that claims alleging the fraudulent inducement of a

10
contract containing an arbitration clause are arbitrable unless the claim is that the

arbitration clause itself was fraudulently procuredan allegation Benchmark does

not make. See, e.g., Karish, 2002 WL 1402303, at *4; Buckeye Check Cashing, Inc.

v. Cardegna, 546 U.S. 440, 44546 (2006) (citing Prima Paint Corp. v. Flood &

Conklin Mfg. Co., 388 U.S. 395, 40304 (1967)). Nor could it. Not only is the

arbitration provision in the June 2016 Voting Agreement identical to the arbitration

provision in the previous iterations of that contract, compare Compl. Ex. C 5.18

with Ex. 1 5.18, but the same clause appears in the proposed amended agreement

that Benchmark itself recently has attempted unsuccessfully to force Mr. Kalanick

to sign, see Compl. Ex. D 5.18.

Finally, Benchmarks fourth claim seeks a declaration that Mr. Kalanick is

bound by certain statements from his June 20, 2017 resignation letter regarding the

Voting Agreement. Benchmark claims this letter modified the Voting Agreements

allocation to Mr. Kalanick of the right to appoint two additional board members

beside himself. Compl. 85; Voting Agreement 1.1(e). It claims that [t]o date,

however, Kalanick has refused to sign a further amendment to the Voting Agreement

to implement his binding commitment. Compl. 84. Obviously, this claim that

Mr. Kalanick must modify his right to appoint members under the Voting Agreement

relates to the agreement that grants him those rights in the first place.

11
 In short, Claims Two, Three, and Four indisputably should be dismissed or

stayed in favor of the mandatory arbitration to which Benchmark agreed.3

B. Benchmarks Section 225 Claim Likewise Falls Within The Voting

Agreements Arbitration Clause.
Benchmarks first claim, brought under Section 225 of the DGCL, nominally

takes aim at the amendment to the Certificate of Incorporation, rather than the

companion Voting Agreement. See Compl. 65. Setting aside its lack of

substantive significance, this distinction is legally irrelevant. As a matter of law,

such interdependent, contemporaneously-executed agreements are both subject to an

arbitration clause contained in one of them. See Orix LF, LP, 2010 WL 1463404, at

*7 (arbitration clause in one contract applied to other contract executed on the same

day); Karish, 2002 WL 1402303, at *4 (applying arbitration clause in one

agreement where two contemporaneous agreements are at issue: Where two

agreements are executed on the same day and are coordinated to the degree outlined

3
This conclusion applies squarely to all of the relief Benchmark seeks, including
injunctive relief, which the arbitrator is authorized to award if appropriate. See AAA
Commercial Rule R-47(a) (The arbitrator may grant any remedy or relief that the
arbitrator deems just and equitable and within the scope of the agreement of the
parties.); see also Gilmer v. Interstate/Johnson Lane Corp., 500 U.S. 20, 32
(1991) (arbitrators do have the power to fashion equitable relief). The arbitration
clause itself confirms that, except for requests for provisional or equitable relief in
intellectual property disputeswhich is not implicated here[a]ny unresolved
controversy or claim arising out of or relating to the Voting Agreement is to be
resolved in arbitration. Voting Agreement 5.18 (emphasis added).

12
above, in essence, they form one contract and must be examined as such. (internal

quotation marks omitted)); see also Compl. 27 (Benchmark acknowledging it

executed the consent to the Certificate and the Voting Agreement on or about the

same day in June 2016).

Substantively, Benchmarks nominal focus in its first claim on the Certificate

is beside the point; the Certificate needed to be amended to add the new board seats,

but it was the Voting Agreement that was amended the same day to give Mr.

Kalanick the right to choose who would occupy them. And, obviously, the remedy

Benchmark seekseliminating the additional board seatswould also eliminate

Mr. Kalanicks right under the Voting Agreement to fill them. See Wilcox & Fetzer,

Ltd. v. Corbett & Wilcox, 2006 WL 2473665, at *4 (Del. Ch.) (arbitration clause

applied to claim where ruling in [plaintiffs] favor effectively would impose a

limitation on defendants rights under the contract containing the clause).

Benchmarks own factual allegations make clear that the amendments to the

Certificate and the Voting Agreement are substantively inseparablethey plainly

relate to one another. Benchmark claims it was approached on May 23, 2016, to

support a package of governance changes comprising amendments to the Prior

Voting Agreement, Ubers Certificate of Incorporation, and other documents.

Compl. 22. The goal of these changes, Benchmark alleges, was to allow Mr.

Kalanick to obtain[] three additional Board seats. Id. 25. Similarly, in the very

13
introduction of its Complaint, Benchmark asserts that these amendments included

provisions to grant [Mr. Kalanick] the absolute right to designate directors to

occupy three newly created Board seats. Id. 4 (emphasis added). Mr. Kalanick

has not held a majority of Ubers common stock in the relevant period, see id. 18,

so the Certificate amendment alone did not grant him the absolute right to do

anything; it was the Voting Agreement amendment that did so. The Complaint also

makes clear that Mr. Kalanicks right to control these seats (which is conferred by

the Voting Agreement) rather than their mere existence (a product of the Certificate)

is Benchmarks true target. See Compl. 2 (claiming Mr. Kalanick fraudulently

obtained control of three newly created seats on Ubers Board (emphasis added)).

Because the parties agreed to arbitrate all disputes relating to the Voting

Agreement, and because the contemporaneously-executed Voting Agreement and

Certificate are deeply intertwined with respect to the issues before the Court,

Benchmarks first claim is subject to the arbitration provision in the Voting

Agreement. See Orix LF, LP, 2010 WL 1463404, at *7; Wilcox & Fetzer, 2006 WL

2473665, at *4. This is no surprise to Benchmark. When Benchmark threatened

Mr. Kalanick with legal action in recent weeks, it stated that its claims would take

the form of an arbitration demand (what changed in the interim is a matter known

only to Benchmark).

14
 Benchmark attempts to avoid this conclusion with the odd allegation that

Kalanick and his allies controlled the companys common stock in June 2016,

such that the mere addition of the board seats harmed Benchmark. Compl. 65.

That suggestion ignores that allocation of the companys board seats is controlled

by the Voting Agreement, not the Certificate. If the Voting Agreement had allowed

Benchmark (rather than Mr. Kalanick) to fill the three additional seats, Benchmark

assuredly would not be claiming harm from their addition. Similarly, if the Voting

Agreement were set aside and if Mr. Kalanick effectively controlled the companys

common shares, as Benchmark alleges, then the added seats would have been

irrelevant because Mr. Kalanick already would have controlled the board based upon

the pre-existing six common directors and two preferred directors. Simply put,

Benchmarks allegations make no sense without reference to the rights granted to

the various shareholders under the Voting Agreement. To give just one example of

the primacy of the Voting Agreement, one seat that the Certificate of Incorporation

designates a common seat is allocated by the Voting Agreement to the PIF, a

preferred stockholder. Voting Agreement 1.1(e)(ii)(A). Clearly, it is the Voting

Agreements allocation of the three seats to Mr. Kalanick, not the Certificates

creation of the seats, that gives rise to Benchmarks claims.

Nor does the fact that this claim arises under Section 225though in

substance it is a fraud claim crammed uncomfortably into the form of Section 225

15
somehow exempt it from the parties arbitration agreement. If a Section 225 claim

poses a real threat of conflict with the right to arbitrate, then the Court should refer

the matter to arbitration. Carter v. Pearlman, 1998 WL 326605, at *1 (Del. Ch.)

(dicta); see also Rohe v. Reliance Training Network, Inc., 2000 WL 1038190, at *8

n.16 (Del. Ch.) (in Section 225 claim, dispute amounting to a dispute regarding

the relevant contracts is a matter for the arbitrator) (dicta). Indeed, arbitration

provisions routinely are enforced in the context of statutory rights and procedures

that on their face permit access to the courts. See, e.g., Elf Atochem, 727 A.2d at

29596 (party cannot avoid arbitration agreement [b]y resorting to the alleged

special jurisdiction of the Court of Chancery over claim to remove LLC manager);

CompuCredit Corp., 565 U.S. at 100 (use of terms action, class action, and

court in provisions of Credit Repair Organization Act did not prevent enforcement

of arbitration agreement). It is utterly commonplace for statutes that create civil

causes of action to describe the details of those causes of action, including the relief

available, in the context of a court suit, but it is not the law that those formulations

prevent arbitration. CompuCredit Corp., 565 U.S. at 10001.

Finally, in its recent letter to the Court, Benchmark suggested that it plans to

argue that this claim arises out of breaches of fiduciary duties that do not arise from

or relate to the voting agreement. Dkt. 20 (August 15, 2017 Ltr.) at 2 (citing

Chandler v. Ciccoricco, 2003 WL 21040185, at *15 n.65 (Del. Ch.)). Chandler is

16
inapposite; in that case, the arbitration agreement was signed in connection with a

purchase agreement in 2000, but the conduct at issue occurred two years later and

concerned an entirely separate issue of shares. Id. *5 & *15 n.65. Here, in contrast,

the wrong that Benchmark allegesthat Mr. Kalanick deceived them into increasing

his control over the boardis obviously and inextricably related to the document

that creates that control, i.e., the Voting Agreement.

CONCLUSION
For all of the foregoing reasons, Benchmarks claims should be dismissed

pursuant to Court of Chancery Rule 12(b)(1) or, in the alternative, stayed in favor of

arbitration.

POTTER ANDERSON & CORROON LLP

OF COUNSEL:
By: /s/ Donald J. Wolfe, Jr.
Joseph G. Petrosinelli Donald J. Wolfe, Jr. (No. 285)
Kenneth J. Brown Kevin R. Shannon (No. 3137)
WILLIAMS & CONNOLLY LLP T. Brad Davey (No. 5094)
725 Twelfth Street, N.W. J. Matthew Belger (No. 5707)
Washington, D.C. 20005 Jacob R. Kirkham (No. 5768)
(202) 434-5000 1313 N. Market Street
Hercules Plaza, 6th Floor
Wilmington, DE 19899-0951
(302) 984-6000
Dated: August 17, 2017 Attorneys for Defendant Travis Kalanick
5368101
WORDS: 3,969

17
 CERTIFICATE OF SERVICE

I hereby certify that on August 17, 2017, a copy of the foregoing

document was served electronically upon the following counsel of record via File &

ServeXpress:

Stephen P. Lamb, Esquire Raymond J. DiCamillo, Esquire

Daniel A. Mason, Esquire Rudolf Koch, Esquire
Paul, Weiss, Rifkind, Wharton Kevin M. Gallagher, Esquire
& Garrison LLP Matthew D. Perri, Esquire
500 Delaware Avenue, Suite 200 Sara C. Hunter, Esquire
P.O. Box 32 Richards, Layton & Finger, P.A.
Wilmington, DE 19899 920 North King Street
Wilmington, DE 19801
Kevin G. Abrams, Esquire
Michael A. Barlow, Esquire
April M. Ferraro, Esquire
Abrams & Bayliss LLP
20 Montchanin Road, Suite 200
Wilmington, DE 19807

/s/ T. Brad Davey

T. Brad Davey (No. 5094)