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Gravity Payments Lawsuit: What Dan Price’s Brother Alleged and How the Case Ended

Lucas Price served Dan Price with a lawsuit before the $70,000 salary announcement. The trial court ruled for Dan on all claims, and an appeals court affirmed in 2018.
From TheFinanceBase Team3 min to read
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Dan Price’s brother and Gravity Payments business partner, Lucas Price, sued over what he alleged was excessive executive compensation and harm to his interests as a minority shareholder. The lawsuit was served in March 2015, before Dan Price announced in April that he would raise the company’s minimum salary to $70,000 and reduce his own pay to that level. A judge ruled for Dan on all claims after a 2016 trial, and the Washington Court of Appeals affirmed that judgment in 2018.

What was the lawsuit about?

Lucas Price challenged his brother’s compensation and alleged that Dan’s actions harmed his position as a minority shareholder in Gravity Payments. Those were Lucas’s claims, not findings of wrongdoing. The case turned on whether the compensation decisions and related conduct supported the claims Lucas brought.

Dan Price was Gravity Payments’ CEO, while Lucas was both his brother and a business partner. That made the dispute more than a disagreement about executive pay: it also concerned the rights and interests Lucas said he held as a minority owner.

Did the $70,000 salary announcement trigger the suit?

No. Contemporary GeekWire reporting said Lucas served Dan with the lawsuit in March 2015. Dan announced the $70,000 minimum-salary plan in April 2015, after service of the suit. The chronology does not support saying that the announcement caused Lucas to file.

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Date Development
March 2015 Lucas Price served Dan Price with the lawsuit, according to contemporary GeekWire coverage.
April 2015 Dan Price announced plans to set Gravity Payments’ minimum salary at $70,000 and reduce his own compensation to that level.
April 1, 2016 Lawyers argued Dan Price’s motion for partial summary judgment in King County Superior Court.
April 7, 2016 The court granted the motion in part and denied it in part, according to the update to the hearing report.
July 8, 2016 Judge Theresa B. Doyle ruled for Dan Price on all claims at the conclusion of the trial.
August 30, 2016 GeekWire reported a separate award of $1.3 million in legal fees to Dan Price.
2018 The Washington Court of Appeals affirmed the judgment.

What did the compensation figures show?

GeekWire’s 2016 account of court records reported that Dan Price received $1.1 million in compensation in 2014, the last full year before his pay was reduced to $70,000. The same report said he received more than $2 million in 2012. It also reported that Gravity Payments had 2014 pre-tax net income of $3.5 million on sales exceeding $16.1 million.

Those figures provide context for the compensation dispute; they do not, by themselves, establish that the compensation was improper. The appellate opinion later discussed the compensation evidence and the Towers Watson report considered at trial.

How did the courts decide the case?

Trial ruling

Judge Theresa B. Doyle ruled for Dan Price on all claims at the end of the July 2016 trial. The partial-summary-judgment ruling in April was an earlier procedural decision, not the final outcome on the claims.

Appeal

In 2018, the Washington Court of Appeals affirmed the judgment. The appellate opinion said the record supported the trial court’s relevant findings, including its treatment of the compensation evidence and the Towers Watson report. It reproduced the trial court’s finding that “the court finds that Daniel’s compensation decisions in 2013 and 2014 were a reasonable business judgment made in good faith.” That sentence is the trial court’s finding as quoted in the appellate opinion, not a statement attributed to either brother.

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What was the $1.3 million award?

The $1.3 million figure was a reported award of legal fees to Dan Price, covered separately by GeekWire on August 30, 2016. It was distinct from the trial court’s ruling on the merits of Lucas Price’s claims; it should not be confused with the judgment that the appellate court affirmed.

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