Siddharth Hariharan, et al v. Adobe Systems, Inc., et al

Filing 1

FILED ON 11/07/2013 PETITION FOR PERMISSION TO APPEAL PURSUANT TO RULE 23(f). SERVED ON 11/07/2013. [8856405] (HC)

Case No. __________
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT

IN RE HIGH-TECH EMPLOYEE ANTITRUST LITIGATION

Petition for permission to appeal from the United States District Court
Northern District of California
The Honorable Lucy H. Koh, Presiding
Case No. 5:11-2509-LHK
DEFENDANT-PETITIONERS’ EXCERPTS OF RECORD
VOLUME I OF VIII
ROBERT A. VAN NEST, #84065
DANIEL PURCELL, #191424
EUGENE M. PAIGE, #202849
JUSTINA SESSIONS, #270914
KEKER & VAN NEST LLP
633 Battery Street
San Francisco, CA 94111-1809
Telephone: [phone]
Facsimile: 415 397 7188
Attorneys for Defendant and Petitioner
Google Inc.

789556

EXCERPTS OF RECORD
N.D.CAL.
DOCKET #

DOCUMENT

PAGE

Volume I of VIII
(District Court Orders—Public Versions)
1.

531

Oct. 24, 2013 Order Granting Plaintiffs’
Supplemental Motion for Class Certification
(public redacted version)

0001

2.

382

April 15, 2013 Order Granting in Part and Denying in
Part Plaintiffs’ Motion for Class Certification
(public redacted version)

0087

Volume II of VIII
(Expert Reports – Public Versions)
3.

518-2 518-4

Expert Report of Professor Kevin M. Murphy
(public redacted version)

0140

4.

424-2

Supplemental Expert Report of Edward E. Leamer,
Ph.D.
(public redacted version)

0340

Volume III of VIII
(Expert Reports – Public Versions)
5.

440

Supplemental Expert Report of Professor Kevin M.
Murphy
(public redacted version)

0402

6.

442

Expert Report of Kathryn M. Shaw, Ph.D.
(public redacted version)

0570

Volume IV of VIII
(Depositions and Declarations – Public Versions)
7.

308-1,
445-2

Deposition of Edward Leamer

0676

8.

538-8 538-11

Declaration of Danny McKell in Support of
Defendants’ Opposition to Plaintiffs’ Motion for
Class Certification
(public redacted version)

0691

1
789556

N.D.CAL.
DOCKET #
9.

516-6

10.

DOCUMENT

PAGE

Declaration of Frank Wagner in Support of
Defendants’ Opposition to Plaintiffs’ Motion for
Class Certification
(public redacted version)

0713

District Court Docket Report

0725

Volume V of VIII
(District Court Orders FILED UNDER SEAL)
11.

Oct. 24, 2013 Order Granting Plaintiffs’ Motion for
Class Certification
(under seal version)

0804

12. 383

April 15, 2013 Order Granting in Part and Denying in
Part Plaintiffs’ Motion for Class Certification
(under seal version)

0890

Volume VI of VIII
(Expert Reports FILED UNDER SEAL)
13.

Expert Report of Professor Kevin M. Murphy
(under seal version)

0944

14.

Supplemental Expert Report of Edward E. Leamer,
Ph.D.
(under seal version)

1144

Volume VII of VIII
(Expert Reports FILED UNDER SEAL)
15.

Supplemental Expert Report of Professor Kevin M.
Murphy
(under seal version)

1180

16.

Expert Report of Kathryn M. Shaw, Ph.D.
(under seal version)

1348

17.

Expert Witness Report of Kevin F. Hallock, Figure 7

1454

2

N.D.CAL.
DOCKET #

DOCUMENT

PAGE

Volume VIII of VIII
(Depositions and Declarations
FILED UNDER SEAL)
18.

Deposition of Michael Devine

1455

19.

Declaration of Danny McKell in Support of
Defendants’ Opposition to Plaintiffs’ Motion for
Class Certification
(under seal version)

1458

20.

Declaration of Frank Wagner in Support of
Defendants’ Opposition to Plaintiffs’ Motion for
Class Certification
(under seal version)

1480

21.

Exhibit 24 to Declaration of Lin W. Kahn in Support 1492
of Defendants’ Opposition to Plaintiffs’ Supplemental
Motion for Class Certification

3

1

Case5 11 cv 02509 LHK

Filed1024 13

Document531

Page1

of

86

1
2
3
4
5
6
7
8

UNITED STATES DISTRICT COURT

9

NORTHERN DISTRICT OF CALIFORNIA
SAN JOSE DIVISION

10
11

California

RE HIGH TECH EMPLOYEE
ANTITRUST LITIGATION
IN

Case

No 11 CV02509 LHK

12

Court

of
District

13

ORDER GRANTING PLAINTIFFS
SUPPLEMENTAL MOTION FOR

14

CLASS CERTIFICATION

District

15
States

DOCUMENT RELATES TO

16

THIS

17

ALL ACTIONS

Northern

United

the
For

18
19

Plaintiffs

Devine Mark Fichtner Siddharth Hariharan

Michael

20

Daniel Stover

21

situated

22

Apple Inc

23

Ltd

24

conspired to suppress and actually

25

by

26

Act 15

Apple

Lucasfilm

not

to

and Pixar collectively

solicit

1 and

5 2013 the

Certification with leave

and on behalf

of

Section

to

4

Intel

Corp

Intel

Defendants

did suppress

amend

See

class of all those similarly

Plaintiffs

Intuit

in

Apr 5

Act 15

Inc

Intuit Lucasfilm

1

U SC

to artificially

of the

Sherman

ECF No 382

Motion

No

11 CV 02509 LHK

ORDER GRANTING PLAINTIFFS SUPPLEMENTAL

levels

Antitrust

for Class

Currently

1
Case

low

15

part and denied in part Plaintiffs

Class Cert Order

Adobe

allege that Defendants

employee compensation

of the Clayton Antitrust

Court granted

a

former employersAdobe Systems Inc

each other s employees in violation of Section

US C
April

their

Google

Google Inc

On

27
28

claims against

allege antitrust

agreeing

Plaintiffs individually

collectively

Brandon Marshall and

MOTION FOR CLASS CERTIFICATION

before

Case5 11 cv 02509 LHK

Motion

1

the Court is Plaintiffs Supplemental

2

Cert

3

to

4

Reply

5

Plaintiffs Supplemental

6

Having considered

7

case

8

Plaintiffs proposed class of technical

9

I

Suppl Class Cert

Pls Suppl Mot

the parties

See

Pls Suppl Mot

an opposition

filed

and

Plaintiffs

Reply ECFNo 455

for Class Certification

86

of

on August

Opp n

a reply

filed

See

law and

submissions arguments the relevant

Defs

see

The Court held

8 2013

Class

Pls
on

a hearing

ECF No 495

the record in this

Motion for Class Certification and CERTIFIES

Plaintiffs Supplemental

employees

Class

Technical

BACKGROUND

A

10

Factual Background

1

11

California

Motion

Defendants

Opp n ECF No 439
Suppl

Class Cert

GRANTS

the Court

Suppl

Page2

Class Certification

for

Mot ECF No 418

Class Cert

Supp Suppl Mot

Filed1024 13

Document531

12

The

Parties

Defendants are leading

high tech companies each with a principal place of business

the

in

Court

of

San Francisco

14

products

15

2011

16

District

13

search provider

17

went public in

18

largest semiconductor

19

Adobe

20

nearly

21

programs Opp n

22

Lucasfilm

is

23

producing

box

24

Pixar is a leading

25

acquired

Apple

Valley area of California

Silicon

Defs

and software

Opp n

to

Pls

Mot

108

billion

is

a market leader

in

consumer computer

Opp n at 5 ECF No 209

Class Cert

In

District

Apple s

revenues exceeded

total

Id

Google

the world s leading

is

internet

States

Dr Edward E

Report of

Northern

United

the
For

2004

specializes

3

chip maker

5

In

Id

2011

a film production

Intuit

27

Devine worked

28

Consolidated

16

38

2011

In

the Star

for

are software engineers

Adobe

CAC

See

id

13

Intel

In

54

No

earned

19

In

Rep

17

animation expertise and for

Jones franchise

2006 Walt

Id

18

Disney Productions

Id

who were

former employees of Defendants

from October of 2006 to July of

16 ECF No 65

Decl Ann

B Shaver

11 CV 02509 LHK

ORDER GRANTING PLAINTIFFS SUPPLEMENTAL

billion

Leamer

2
Case

the world s

is

2009 Adobe

3.8 billion

films and the Indiana

in the State of Washington

Amended Complaint

2011 Id

Google

in financial planning and tax preparation

computer animation film studio Id

Plaintiffs

15 ECF No 190

earned approximately

for its computer

Wars

7.4 billion

Intel

revenues exceeded

company known

office hits including

Rep

billion in

software

specializes

the company s

Pixar for approximately

Named

Id

media and marketing

billion in revenues

26

Leamer

and reached revenues of nearly

in digital

at

Leamer

MOTION FOR CLASS CERTIFICATION

2008

in

See

Supp Pls

Case5 11 cv 02509 LHK

Decl Ex 6 1 ECF No

1

Mot

2

Arizona from July of 1993 through November

3

of

4

from January of 2007 through August of

5

worked

6

Shaver

7

2006 through December

for Class Cert

2011

for

Shaver

CAC 17

See

Adobe

Decl Ex

in

9

9

Ex

See

of

2009

See

for

from

worked

CAC 18

Page3

CAC 20

Shaver

May of

for Intel

in

May

2008 through

for Lucasfilm in California

1

Decl Ex 8

Shaver

2006 through December
Intuit

86

of

worked

Fichtner

again

Hariharan

Finally Stover worked for

Market

of

2006

in California

from

Decl Ex 10

Marshall

CAC 19

See

November

1

at least

of

High Tech Employees

assert that in a properly

Plaintiffs

1

2008

291

2006 and

of

7

California from July of

2

8

Decl

Shaver

1

Filed1024 13

Document531

and lawfully competitive labor market each

functioning

10
11

California

Defendant would compete for employees by soliciting current employees from one or more of the
other Defendants

12

calling

13

telephonically

14

applied

includes

CAC 41

See

communicating

This method of recruiting to which Defendants refer as

manner
including

directly in any

cold

orally in writing

Court

of
District

for

or electronically

with another

employee who has

company s

not otherwise

a job Id

District

15

Plaintiffs

allege that cold calling is a

key competitive

tool that companies

use to

recruit

States

16

employees

17

recruiting employees from competitors a

18

has expended

19

a

particularly high tech employees with advanced

skills

and abilities

45

Id

Through

Northern

United

the
For

cost

20

on

Plaintiffs

by removing an

able to take advantage

employee

on

whom

the rival

further contend that the use of cold calling

21

increases

22

Most

23

with opportunities

24

increased

25

that the compensation

26

calls

27

calling have a broader

28

technical

directly

is

of the efforts its rival

in soliciting interviewing and training skilled labor while simultaneously inflicting

the rival

total

company

compensation

all

of

secure higher

compensation

wages

either

Id

among Defendants commonly

calling provides

by switching

to a rival

with the recipient s current employer Id

allege the effects of cold calling

common

employees Id

46

company

or

by

No

who

receive

and the effects of eliminating

impact on Defendants salaried employees especially

50

11 CV 02509 LHK

ORDER GRANTING PLAINTIFFS SUPPLEMENTAL

negotiating

Plaintiffs further allege

3
Case

48 50
of a cold call

the recipient

effects of cold calling are not limited to those individuals

Rather Plaintiffs

44

Defendants employees See id

allege that the practice of cold

Plaintiffs

to

and mobility for

may depend

MOTION FOR CLASS CERTIFICATION

cold

their

the

Case5 11 cv 02509 LHK

3

1

Filed1024 13

Document531

Defendants

Page4

of

Alleged Conspiracy

Between approximately 2005 and 2009 Defendants Adobe Apple Google

2
3

Lucasfilm

4

among Defendants

5

interconnected

6

soliciting each other s

7

company under

the control

8

Apple and or

company

9

55 57

and Pixar allegedly engaged

web

a

for skilled labor

of express

in an

overarching conspiracy

55

Id

see also

12

id

The conspiracy

agreements among Defendants

bilateral

employees Id

55.1

of Steve Jobs

Plaintiffs

CoFounder

that shared at least

one

with Apple s Board of Directors

limits to other Defendants

12

bilateral

13

88 100 105

These agreements were not limited by geography job function

14

time period

Nor were they

15

Defendants

agreement applied

Class Cert

to all employees of

Class Cert

a given

employees off

each Defendant s

putting

Mot

Id

CEOto CEO emails and

11

Pls Mot

from actively

FormerChairman and FormerCEO of

director

Do Not Call lists thereby

of an

allege that each agreement involved a

other

including

competition

consisted

abstain

to

Defendants memorialized these nearly identical agreements in

documents

Intel Intuit

to eliminate

10

California

86

at

1 ECFNo

pair of Defendants

See

187 Each

CAC

63 76 81

Court

of
District

related to any specific

business

product group or
between

or other collaboration

District

Id

States

16

Plaintiffs

17

overarching conspiracy

18

of accomplishing

19

through eliminating

20

senior executives

21

generally

22

55 108

Defendants entered

allege that

into the express

agreements and entered

into the

Northern

United

the
For

27
28

actively

Procedural

DOJ investigated
1

The

to reduce

competition for skilled labor
concealed each

bilateral

Id

participation

and with the intent

employee compensation and

55

Plaintiffs

mobility

also allege that Defendants

agreement and that Defendants

employees

Department

Defendants

of Justice

Investigation

the Antitrust Division

employment and

parties refer to these agreements as

agreements

of the United

recruitment

States

practices

Do Not Cold Call agreements

and anti competitive
anti solicitation agreements

anti poaching agreements

refers to these agreements as

agreements

Department

Id

No

anti solicitation
In this

Order

11 CV 02509 LHK

ORDER GRANTING PLAINTIFFS SUPPLEMENTAL

of Justice

3 111

4
Case

Id

Background

From 2009 through 2010

26

objective

the conspiracy s

1

24
25

of the other Defendants

were not informed of nor did they agree to the terms of any of the agreements

B

23

with knowledge

MOTION FOR CLASS CERTIFICATION

the Court

Case5 11 cv 02509 LHK

1

Following

2

United

3

ECF No 79 1 Ex

its

v

States

DDC June

4

investigation

the

DOJ

3 2011

States

DOJ

v

Lucasfilm

Lucasfilm

J

DOJ

proposed

final

judgments in each case See

6

proposed

final

judgments Defendants

7

agreed

be

8

any other person

9

otherwise competing for employees of the other

4 CAC

11

judgments on March

12

CAC

115 The

refrain

Adobe

from

ing

and June

DOJ

B

The

DOJ

J DOJ Lucasfilm

J

3 2011

DOJ

See

stipulated

law

but they

recruiting

or

J

J at 5 DOJ Lucasfilm

entered

Adobe

also filed

1

at

any agreement with

soliciting cold calling

Columbia

J

Adobe

2636850

or violation of

person DOJ Adobe

See

In these stipulated

enter into maintaining or enforcing

to

District Court for the District of

17 2011

Defendants

No 10 2220 2011 WL

did not admit any wrongdoing

attempting

any way

or in

10

California

from

enjoined

Inc

86

of

DD C Mar 7 2011

2

at

ECF No 79 1 Ex

5

to

Page5

complaints in federal court against

filed

Inc No 10 1629

Adobe Systems

A United

Filed1024 13

Document531

proposed

the stipulated

at

final

J at 12 DOJ Lucasfilm J at 1

115.2

Court

of
District

2

13

The

Instant Action

a

14

Removal Case

and Preliminary Motions

Consolidation

District

The

15

five cases underlying this consolidated

action

were

initially

filed

in

California Superior

States

v

16

Court Hariharan

17

2011 ECF No

18

filed

19

Clara Super

20

204187

21

No 11 CV 205090

No 11 CV574066

Adobe Sys Inc Case

Northern

United

the
For

22
23

28 2011 ECF No 43 2
Ct

Santa Clara Super

Ct

filed

removed
July

19 2011

see

Ct

removed

filed

see

ECF No

ECF No 41

Devine

Fichtner

July 14

these five state

District of California

May 23 2011

Adobe Sys Inc Case

v

Hariharan

1 Marshall v
v

Adobe Sys

May 4

filed

Santa Clara Super

No 11 CV 204053

Adobe Sys Inc Case

30 2011 ECF No 43 3

June

Santa Clara Super

Court for the Northern

v

Devine

28 2011 ECF No 43 1

June

filed

No 11 CV204052

Adobe Sys Inc Case

Defendants subsequently

24
25

June

1 Marshall v

Alameda Super Ct

v

Stover

Ct

Santa

No 11 CV

Adobe Sys Inc Case

2011 ECF No 43 4.3
court actions

v

States

Inc

Case

Inc

Case

No 11 3538

Case

No 11 3539

District

No 11 2509

Adobe Sys

Adobe Sys

Inc

to the United

removed

removed

July

19

26
2

27

3

28

Under

the provisions

of Section

5 a of

the Clayton

Act 15

US C

judgment has no prima facie effect in any subsequent private lawsuit

While

the

name

of each Superior Court case

also

named Apple Google

Case

No

Intel Intuit

listed only

Lucasfilm

Adobe

16 a
brought

the proposed final
against

as the defendant

Pixar and Does

1 200

the complaints

as defendants

5
11 CV 02509 LHK

ORDER GRANTING PLAINTIFFS SUPPLEMENTAL

Defendants

MOTION FOR CLASS CERTIFICATION

Case5 11 cv 02509 LHK

ECF No 41

1

2011

2

see

3

ECF No 41 On

4

from Magistrate Judge Spero

see

ECF No 41

On

5

July

Fichtner

v

and Stover

June

v

Adobe Sys Inc Case

Adobe Sys

1 2011 the

19 2011

Filed1024 13

Document531

Inc

Case

Defendants collectively

ECF No 41

v

6

actions

7

involve

8

there

9

they were heard before

different judges

Defendants believe

10

Armstrong

Motion to

on

11

California

86

removed

removed

July

July

19 2011

19 2011

Adobe Systems Inc was

a motion

filed

Motion to Relate

of

see

reassigned

ECF No 24

Judge Armstrong See

to

No 11 3540

No 11 3541

case Hariharan

lead

Page6

Plaintiff

12

ECF No 56

13

relate the five underlying

to

b ecause

58

See

substantially

In the

same

the

Defendants stated that

events and allegations

parties

would be an unduly burdensome duplication

granted

the

moved

Hariharan

Siddharth

Relate

Judge Armstrong

to

granted

July

transfer

the

of labor

and because

and expense

27 2011

they are

appears likely that

or conflicting

related

Id

ECF No 52 On

See

the related actions

Motion

it

at

results

3

2 2011

August

4 2011

See

if

Judge

San Jose Division

to the

on August

to Transfer

the cases

See

ECF No

Court

of

5 2011 the

14

On

15

judge See

16

District

the individual

17

conduct of proceedings

18

consolidated

19

the Consolidated

August

five related underlying actions

were

reassigned

to the undersigned

District

ECF No 60 On

6 2011 the

September

parties filed

a joint

stipulation to consolidate

States

cases

avoid duplication

to

to

and unnecessary costs and

promote the

efficient

Northern

United

the
For

20

ECF No

63

at

Defendants

21

and

22

see

23

part and denied in part

24

Dismiss on April

on September

Complaint

a Joint

filed

Motion to Dismiss

with leave of the Court Lucasfilm

ECF No 83

Following a hearing

Defendants

18 2012

see

b

25

On

26
27

expert

28

certification

October

filed

motion

of the

Plaintiffs

its

to

Joint

Motion

this joint

12 2011
13 2011

the

CAC on

separate

on January

see

See

ECF No 64

October

to

the Court

Plaintiffs

13 2011

see

No

ECF No 79

Dismiss on October

ECF No 108

17 2011

the Court granted

to Dismiss and denied Lucasfilm s Motion

Initial

Motion

to

for Class Certification

their

Motion

motion See Class Cert

for Class Certification along with

Mot

sought certification of an

All

Leamer

Rep

Employee

class which included

11 CV 02509 LHK

ORDER GRANTING PLAINTIFFS SUPPLEMENTAL

an

In their class

6
Case

filed

CAC

See

Motion

26 2012

stipulation

ECF No 119

1 2012 Plaintiffs filed

report in support

Pursuant

on September

the five underlying actions

Amended

2

MOTION FOR CLASS CERTIFICATION

in

Case5 11 cv 02509 LHK

1

every salaried employee throughout

2

and

3

employees See id

4

salaried technical

5

Cert

2009

Class Cert

Mot

1

Plaintiffs

estimated

Plaintiffs

and research

creative

November

12 2012

Opp n

by

9

Certification and in Opposition to the

see

Plaintiffs see

as well as

ECF No 210

filed

a Motion to

Certification

8

then

Plaintiffs

for Defendants

between

2005

more than 100,000

sought certification of a more limited class of
employees

Class

Technical

in

11

Administrative

12

to Class Certification

13

The Court held

14

Opposition to Plaintiffs Motion

their

Strike

filed

Motion to

Reply ECF No 247 On

Mot

10

California

86

of

that this class included

and development

Defendants

7

Supp

who worked

States

In the alternative

5

at

the United

Page7

Class

1

at

On

6

at

Mot

Filed1024 13

Document531

the expert

their

report

declarations

submitted

Consolidated Reply in Support of Class

on December

Strike

and

for Class

10 2012 Pls

9 2013 Defendants

Consol Reply

ECF No 282

of

Motion

for Leave

to

Supplement

ECF No 263

see

January

to

the

which

Record

Plaintiffs

in Support of

filed

a Joint

filed

Defendants Opposition

an opposition see

ECF No 270

Court

of
District

a hearing

on

Plaintiffs

Motion

for Class Certification

on January

17 2013

See

District

On

15

April

5 2013 the

Court granted

part and denied in part Plaintiffs

in

Motion

for Class

States

amend

Apr 5

Class Cert Order Specifically

16

Certification with leave

17

to certify

18

Cabraser

19

appointed as Class Counsel the law firms that had served on the Executive

20

Montague

21

have vigorously

to

See

the Court declined

Northern

United

the
For

the class but it did confirm as final

Heimann

P A and

Grant

prosecuted

The Court

22

Bernstein

part Plaintiffs request

24

49 52

25

Supplement

first

28

PA

Eisenhofer

this

action

the Joseph

to strike

Id

at

Saveri

47

and will continue

Defendants

Motion
expert

prior interim appointment

to

Law

the

Record

satisfied

in Support of

in part and denying

to

the requirements of Rule

Counsel and

Committee Berger

Strike

and granted

that these firms

in part and denied in

report and certain employee

in part Plaintiffs

23 a

Co Lead

of Lieff

do so Id

Defendants Opposition

noted that Defendants did not dispute

Firm as

The Court recognized

Finally the Court denied Defendants Joint Administrative

In granting

27

and

further denied Defendants

23

26

LLP

the Court s

Motion

for

declarations

Leave

to Class Certification

Motion

No

Id

at

52

the Court

Plaintiffs assertion that both of the proposed classes

numerosity commonality typicality and adequacy

11 CV 02509 LHK

ORDER GRANTING PLAINTIFFS SUPPLEMENTAL

MOTION FOR CLASS CERTIFICATION

at

to

for Class Certification

7
Case

Id

of

Case5 11 cv 02509 LHK

Id

9

citing Class Cert

1

representation

2

17

3

proposed classes satisfied Rule

4

doing

5

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individual

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concern that Plaintiffs

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100,000 members of the All Employee Class were affected

19

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be important

21

that Defendants

22

criticized the reliability admissibility

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Plaintiffs initial

25

certifying Plaintiffs

the impact of the alleged

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documents

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whether Plaintiffs All Employee Class was overly broad and noted that

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afforded

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until after the

11 CV 02509 LHK

ORDER GRANTING PLAINTIFFS SUPPLEMENTAL

at

had failed to produce

8
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bases of Plaintiffs theories of harm and actively

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MOTION FOR CLASS CERTIFICATION

52

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hearing

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proposed classes satisfied the Rule 23 requirements

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to enforce

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to

to strike

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filed

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file

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decisions

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Court

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United

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For

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18

July

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and Defendants

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Plaintiffs

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and class claims alleged

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and

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227
304
308 n5
Cal 2005 striking witness declaration because it was an attempt to introduce new
evidence in connection with their reply papers The Court DENIES Defendants request to

FRD

ND

supplement

the record as to the deposition
cite

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excerpts

were properly

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regarding
request

cite

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motion

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as to the deposition

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salary ranges because
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on

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testimony of

submitted to the Court by Plaintiffs

further argument

request

complete the record

28

a letter informing the Court that

Pls Reply Supp

Defendants
27

filed

of Plaintiffs proposed Technical

CoLead

Plaintiffs

PART

behalf

Defendants

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Class Counsel

and Lucasfilm Ltd reached an agreement

Pixar

in

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to

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his rebuttal

report

9

No 11 CV02509 LHK
ORDER GRANTING PLAINTIFFS SUPPLEMENTAL

as the

be provided

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MOTION FOR CLASS CERTIFICATION

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and Defendant

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that Plaintiffs

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purposes against

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on

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agree that these proposed settlements

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class whether for

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591 619 1997 Hanlon

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against

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and several

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ECF No 489

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a Motion for

filed

pending before this

is

of a class for litigation

certification

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do not have any impact on

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Plaintiffs

Impact of the Proposed

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preserve

noting that the settlements

Plaintiffs

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under the

liability

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right to litigate

Pixar

only seek

parties agree that the settlements

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California

now

Adobe Apple Google

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joint

ECF No 501

of Class Settlement

to the settlements Plaintiffs

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and Defendants Pixar Lucasfilm and

86

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contributed

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in at

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11 CV 02509 LHK

ORDER GRANTING PLAINTIFFS SUPPLEMENTAL

by one

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Case

case

2005 through December 2009

c

and

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2005 through December 2009

December 2009

Plaintiffs

employees whose work

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from March

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from June 2007 through

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creative

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Defendants conspiracy and

certify

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through

for any Defendant

agreement with another

at the very crux of

Plaintiffs

of the following

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Cir 1999

class of salaried technical

comprising those technical

core business

guarded and who appear

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26

9th

PROPOSED CLASS DEFINITION

18

25

F3d 1011 1019 23

MOTION FOR CLASS CERTIFICATION

Case5 11 cv 02509 LHK

2009

through December

1

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3

6
7
8
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10
11

California

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and senior executives

of

86

January 2005 through December

employees

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corporate

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2009
of the

of all Defendants

5

Id

at iii

The proposed Technical Class consists

4
5

g Pixar from

or

from the Class are

boards of directors

2

Filed10 24 13

Document531

ECF No 190

Report

Animators

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11 Web

Graphic Artists

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Leamer

people Class Cert

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Designers

12

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at

and Component

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and Development

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by

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that this proposed class includes

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155

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Appendix

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Developers

or User Experience

Interface

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including

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Designers

of job titles identified in

employers See
more than 50,000

5

Court

of
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13

LEGAL STANDARD

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Class actions

14

by Rule 23

are governed

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District

15

does not

set

forth a

mere

To

standard

pleading

obtain

class certification

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bear the burden

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showing

16

of

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subsection

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met each

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at least

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18

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compliance

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22
23
24
25
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numerous that

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court

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Employee Class

Court denied
Plaintiffs

28

certification

have

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consisting

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class is so

parties are typical of the

parties will fairly and adequately

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satisfy

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to certify

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to maintain a class action

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at

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classes without prejudice

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11 CV 02509 LHK

ORDER GRANTING PLAINTIFFS SUPPLEMENTAL

protect

the requirements of

11
Case

2011

of law or fact

are questions

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demonstrate

S Ct 2541 2551

more than 100,000 employees Class Cert

of both the All

in their Supplemental

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of

1180 1186 amended by

a class only if

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representative

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131

of the representative

numerosity commonality typicality and adequacy
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27

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MOTION FOR CLASS CERTIFICATION

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substantial

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9th Cir 2012

of

86

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10

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11

act

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declaratory

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a

14

to class

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under Rule

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at least one of the three subsections

or inconsistent

certified

relief

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have held that the Rule implies

courts

LCS Fin Servs Corp 274

S Ct 1426 1432 2013

Behrend 133

prejudice

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four prerequisites

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666

must be

as to whether the class

5

California

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2011

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relief

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class

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certified

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b3

a court finds that

if

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District

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Fed

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methods for

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fairly

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with the merits of the

19

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20

at

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whether the party seeking certification has met the prerequisites

22

F3d

23

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24

class

25

opt

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predominate

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28

court s

class certification

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S Ct 1184 1194

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1194 95

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court must conduct a

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rigorous analysis applies to both Rule

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11 CV 02509 LHK

ORDER GRANTING PLAINTIFFS SUPPLEMENTAL

MOTION FOR CLASS CERTIFICATION

Case5 11 cv 02509 LHK

1

extent

2

prerequisites

3

party has

4

253

5

IV

extent

but only to the

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86

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1195

at

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23

court concludes that the

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Zinser

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at

DISCUSSION
The Supreme Court has long recognized

6

laws As

enforcement

8

US 251 262

9

envisaged by Congress This system depends

of antitrust

every violation

1972

10

strong

competition depends

11

Co v

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12

charter of

13

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14

allocation

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conductive

economic

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in

aimed

1958
at

laws

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serve

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to

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strong

with

valuable

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Oil

Co 405

the free enterprise system

its

and vigor and

health

legislation See also

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free and unfettered

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Hawaii v Standard

stated in

of the antitrust

turn on compliance

US 1 4

liberty

that class actions

Supreme Court

7

California

Page13

that they are relevant to determining whether the Rule

for class certification

met

Filed10 24 13

Document531

N Pac Ry

to be a comprehensive

competition as the rule of trade

Court

of
District

rests

on

the premise that the unrestrained

of our

economic

interaction

while

resources

at

the

of competitive forces

will yield the best

same time providing an environment

District

sic to the preservation

of our democratic

and social institutions

political

States

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16

open

to

the door of justice

to individuals

harmed by

antitrust

violations

while at

Northern

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the
For

same time

17

the

18

attorneys general

19

Brunswick

20

Congressional debates

21

sponsors saw treble damages both as a means of

22

wrong suffered and

23

v

24

treble damage and injunctive

25

well the high purpose of enforcing

26

Sonotone

27

to the limited resources

28

deterring

penalizing

in antitrust

Corp

Hazeltine

v

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actions

Bowl

concerning

442

Congress chose to allow individuals

and to recover

OMat Inc

429

treble

means

damages

damages

giv ing

of enforcing

US 100 13031

1969

1977

provisions

the injured

the

to serve as private

for their injuries

US 477 486 n10

the Clayton Act s

as an important

Research Inc 395

Corp

violators

antitrust

law

citing the initial

as evidence that the

party ample

damages

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The purpose

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Radio

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for the

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parties

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the antitrust

US 330 344
available

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1979

laws
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private suits

Supreme Court noted

of Justice for enforcing

the antitrust

violations

11 CV 02509 LHK

ORDER GRANTING PLAINTIFFS SUPPLEMENTAL

in Reiter

v

provide a significant supplement

13
Case

See

MOTION FOR CLASS CERTIFICATION

laws and

Case5 11 cv 02509 LHK

Filed10 24 13

Document531

an

Page14

1

Plaintiffs

2

employee compensation

3

agreements restrained trade and were thus per se unlawful under Section

4

Antitrust

5

form of

6

States or with foreign

7

Co 51 F3d 1421 1431

8

private parties to sue antitrust

9

trust

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now

12

damages

nations

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at

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declared

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to suppress

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of the

Sherman

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commerce among the

also Rebel Oil

4

that Section

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of the Clayton Act allows

damages

DOJ

ultimately put an end to Defendants

to compensate

bring this case as private attorneys general

for themselves

1

of trade or

explaining

violators for

was unable

U SC

According

be illegal see

to

contend that although the

the government

15

86

overarching conspiracy

CAC 55

in restraint

Cir 1995

9th

into

low levels

or otherwise or conspiracy

Plaintiffs

agreements

to artificially

2 Class Cert Mot

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California

allege that Defendants entered

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of the conspiracy

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up where

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13
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assert that their

Plaintiffs

proposed Technical

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15

numerosity commonality typicality and adequacy

16

Fed

17

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of representation

Class Cert

Mot

at

4 6 see

States

Northern

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the
For

R Civ P 23a

18

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at

Defendants do not contest

510 15

Nevertheless

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23 a

1

19

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20

members

21

potential

22

Chems Antitrust

23

the specific

24

parties agree that the Technical

25

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26

impracticable

27
28

at

is

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impracticable

class

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requirement

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finds joinder

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numerosity requirement

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23 a

1980

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examine
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be

R Civ P 23a1

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s commonality

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11 CV 02509 LHK

ORDER GRANTING PLAINTIFFS SUPPLEMENTAL

of

See Class Cert

14
Case

number

In re Rubber

of this proposed class to

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the Court must

approximately 60,000 employees

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the numerosity requirement is satisfied

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the class is so

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satisfied

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members nor is there a
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that Plaintiffs have satisfied

MOTION FOR CLASS CERTIFICATION

to the

class

Case5 11 cv 02509 LHK

1
2

the class

3

depend

S Ct at 2250 51

Dukes 131

members have
upon

4

resolve

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6

common

7

apt to drive

8

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do

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DRAM

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86

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marks and citation omitted

Id

Filed10 24 13

Document531

267

have consistently

that

common

FRD 583

the

of law and

questions

ND Cal 2010

593

ND Cal July 28 2011

Antitrust Litig

held that

quoting In re

No 02 1486 2006 WL

1530166

at

3

District

15

ND Cal June

5 2006

Antitrust liability alone constitutes

a

common

question

will

that

States

16

resolve

17

131

18

not on the conduct of individual

19

FRD

20

Defendants

21

issues

Apr 5

22

common

issues

23

the existence

24

liability the Court finds that the proposed class meets the commonality

25

23

Northern

United

the
For

an issue that

S Ct at 2551

310

at

citing

alleged

is

central to the validity of each class

because proof of an alleged

class

cases Indeed
antitrust

and

of at least one

members

fact

at

13

will focus

TFT LCD

on overwhelmingly

Tr

question

at

18 2 8

in

one stroke Dukes

on defendants

Flat

found that

Moreover Defendants do

See Jan 17

common

In re

the Court has already

violation will turn

Class Cert Order
of law

conspiracy

member s claim

Panel Antitrust
the adjudication

common
not

conduct and

legal

dispute

and

Litig 267

of

factual

that there are

some

Because Plaintiffs have demonstrated

capable of generating

a common answer

antitrust

requirement of Rule

a2

26

Third

27

Under

28

reasonably

the

the Court finds that Plaintiffs

permissive standards

co extensive

of Rule

have

23

satisfied

a3

with those of absent class

Rule

23

representative

a3

s typicality requirement

claims are

membersthey need

not

be

typical

No

11 CV 02509 LHK

ORDER GRANTING PLAINTIFFS SUPPLEMENTAL

they are

substantially

15
Case

if

MOTION FOR CLASS CERTIFICATION

Case5 11 cv 02509 LHK

F3d

Filed10 24 13

Document531

v

1

identical

2

2003

3

the action

4

members have been

5

F2d 497

6

typicality requirement is to assure that the interests of the

7

interests

8

In antitrust

9

alleging

Hanlon 150

The
is

based on conduct which

cases

See

v

Ellis

antitrust

2010

11

F Supp

12

individual

13

compensation

14

Tr

15

Act a

16

align with the interests

8742757

same

the

Hanon

v

case

F3d 970

v

Cir

9th

The purpose

all

976

of the

align with the

984 85

and

other class

Corp

Dataproducts

representative

by plaintiffs
Pecover

21 2010

In this

657

957

plaintiffs and whether

named

Corp

86

or similar injurywhether

marks and citation omitted

by defendants

ND Cal Dec

employers allege

conduct

will be established

ED NY 1998

2d 231 241

of

Costco Wholesale

violations

11

at

named

not unique to the

internal quotation

typicality usually

10

California

is

same

the

of

F3d 938

Inc 327

Boeing

members have

other

same course

the

Cir 1992

9th

same

by

injured

of the class

WL

accord Staton

of typicality is whether

test

508

the

1020

at

Page16

Cir 2011

9th

members

class

No 08 2820

Elec Arts Inc

quoting In re Playmobil Antitrust Litig 35

class

all

injuries arising

membersregardless

of their

from common conduct suppression of

Court

of
District

Aug

8

due

to

Defendants anti solicitation

Tr

at

19 11 14 ECF No

494

agreements

We re

alleging

See

8 2013

Aug

Class Cert Hr g

a single violation of the

Sherman

District

single conspiracy

Accordingly

the Court finds that the

named

Plaintiffs interests

States

Northern

United

the
For

17

of the class and the typicality requirement of Rule

Finally the Court finds that

18

adequacy

of

19

plaintiffs

and

2 whether

20

a

their

named

counsel

and

plaintiffs

F3d

21

the

22

Class members share an

class Hanlon 150

any

have

at

interest

23

under Rule

class representative

a4

turns

conflicts of interest

counsel will

their

1020 As

23 a

satisfy Rule

Plaintiffs

stated

on two

s adequacy

prosecute

previously

the action

the

named

6

satisfied

is

requirement

1 whether

inquiries

with other class

proving that Defendants

in

4

23 a 3

Legal

named

members and

vigorously on behalf

of

Plaintiffs and Technical

conduct violated

the antitrust

laws and

23
6

24

At

the August

concern regarding

25

27

is

persuaded that Hariharan

have an active

active

Panel

antitrust

T he people

2115 23

claims against

combination

28

the Supplemental

whether Hariharan

Motion

for Class Certification

a former employee

of Lucasfilm

could

the Court expressed
the typicality

satisfy

requirement given that Lucasfilm recently reached a settlement agreement with Plaintiffs
Court

26

8 hearing on

claim against

who worked

the other

conspiracy

Antitrust Litig

still satisfies

the remaining

members

FR D 594

during the period of the conspiracy s

members

for the settled companies
of the conspiracy

are liable for

267

the typicality requirement because

one

A

another s
conspirator

of the conspiracy

because

is

See

all

of the

No

jointly liable for everything

11 CV 02509 LHK

MOTION FOR CLASS CERTIFICATION

to
at

of the

TFT LCD

existence

ORDER GRANTING PLAINTIFFS SUPPLEMENTAL

8 Tr

still have

members

see also In re

16
Case

Aug

during the class period

conduct

The

he continues

done

Flat

Case5 11 cv 02509 LHK

1

suppressed

2

interest

3

9

4

satisfies

compensation

their

with class

members

5 6 id Ex 10

5

56

the adequacy

23 a also

7

672

A class definition

8

administratively

9

Boeing

California

12

Matthew

to objective

Bender

3d

13

Here

sufficient

for

a

14

to the

job

16

creative

17

economist

and expert

18

proposed

Technical

19

light

if

the description

conflicts of

56 id Ex 8

319

23 a

in Rule

56 id Ex
Class

is

W Moore Moore s

FRD at

so that

it

is

member O Connor v
omitted

internal citation

determine that class members are included

criteria 5 James

a

274

enough

definite

an individual

CD Cal 1998

have held that

courts

eg Herrera

See

of the class is

court to ascertain whether

or excluded

Federal Practice

addition

In

from

the class

23.21

3

ed

Plaintiffs proposed

15

District

86

the Court finds that the Plaintiffs proposed Technical

FRD 311

184

Court

of

is

feasible

N Am Inc

reference

56 id Ex 7

6

of

do not have any

implicitly requires that the class be ascertainable

the court must be able to

by

Thus

Ex

Decl

Shaver

Plaintiffs

to the four requirements explicitly provided

In addition

Rule

11

addition the named

In

Page17

requirement

6

10

Filed10 24 13

Document531

Leamer Report as

Technical

discussed

above

Class consists of the job
See Leamer

Rep App

titles

B

identified in

Dr Leamer

Appendix

selected

B

these

District

titles

own employment

based on Defendants

compensation data which breaks jobs into

States

Northern

United

the
For

of

technical

and

Defendants

in compensation

Rep

21

to include

22

period of time

23

Court finds that the class definition

24

24144 ECF No 417

to

who

2009

Having undertaken

a

25

certification

26

Plaintiffs proposed Technical

27

adequacy

28

ascertainable

In addition within

filled

Thus

No

the

in

in the Technical

F Hallock

of Kevin

Class

companies

Class in

Hallock

Plaintiffs

within

except Intuit 2007 to 2009 for Intuit

a

seek

fixed

Thus

the

analysis to determine whether the party seeking

23

Class satisfies

Mazza 666

the numerosity

satisfied

F3d at 588

the Court finds that

commonality typicality and

Plaintiffs proposed Technical

the requirements set forth

by Rule

23 a

17
Case

a labor

ascertainable

rigorous

have

the titles included

the proposed Technical

In addition the Court finds that

Plaintiffs

F Hallock

Kevin

for inclusion

these job titles at Defendants

for all Defendants

is

reviewed

workers See Report

has met the prerequisites of Rule

requirements

and design

the titles selected

job families for technical

20

2005

structure

Class and confirmed

only employees

job families Id

and development

research

11 CV 02509 LHK

ORDER GRANTING PLAINTIFFS SUPPLEMENTAL

MOTION FOR CLASS CERTIFICATION

Class is

Case5 11 cv 02509 LHK

1

Further because the named

Defendants conduct

3

any conflicts

4

Mark Fichtner Siddharth Hariharan

of interest the Court

5

B

6

Plaintiffs

23

23

Rule

b3

b3

Rule

8

does not

9

damages can be proven on
below

11

California

any individual

23

Rule

in proving that

interest

and do not have

Brandon Marshall and Daniel Stover

Devine

Michael

to appoint

as class representatives

Predominance

b3

s predominance

basis

a classwide

Class satisfies

the requirements of

Defendants argue that Plaintiffs proposed class

requirement because neither

Opp n

at

11

common

the Court finds that questions

Suppl Opp n

at

impact nor

antitrust

34

For the reasons

to the class are likely to predominate

over

questions

The predominance

12

86

of

compensation

their

Plaintiffs request

Defendants disagree Specifically

satisfy

discussed

GRANTS

now

also contend that their proposed Technical

7

10

laws and suppressed

the antitrust

Page18

and Class members share an

Plaintiffs

2

violated

Filed10 24 13

Document531

analysis focuses

on

that qualify each class

the legal or factual questions

Court

of

member s case

14

cohesive to warrant adjudication

15

Fed

16

District

13

or fact

17

members

as a genuine controversy

to determine

whether proposed classes are sufficiently

Amchen Prods 521

by representation

US

at

623

see also

District

R Civ P 23b3

holding that

to

certify

a class

the court

must

find that

of law

questions

States

common

to class

members predominate over any

questions

affecting

only individual

Northern

United

the
For

18

added

emphasis

Considering whether questions

common

to class

with the elements of the underlying causes of action

19

begins

20

Halliburton

21

which are subject

22

LCD

Flat

23

Co 131 S Ct 2179 2184
to

common

Panel Antitrust

In this

case

24

US C

25

Class Cert

26
27

estimated

In re

1 and

Section

Mot

at

measure

New

1

4

of

A court

FRD

at

must

allege a violation of Section

establish an antitrust

2 an

damages

to

Erica

analyze

members predominate

P John

these elements to

individualized

proof

Act 15
claim

1

of the

U SC

plaintiffs

Sherman

New

Motors 522 F3d 6 19 n18

Motor
1st

No

15

See

CAC

Vehicles

119 135

typically must prove

Canadian Export

and

1a
3 an

Antitrust Litigation

Cir 2008

11 CV 02509 LHK

ORDER GRANTING PLAINTIFFS SUPPLEMENTAL

TFT

Act 15

18
Case

v

determine

In re

Antitrust

injury they suffered as a result of that violation

In re

Fund Inc

31113

of the Clayton Antitrust

To

laws

2011

proof and which are subject

Litig 267

Plaintiffs

violation of antitrust

28

of law or fact

MOTION FOR CLASS CERTIFICATION

Case5 11 cv 02509 LHK

1

Before the Court discusses

2

these elements

3

are not altogether

4

the standard

5

class action

6

Supreme Court

7

In

9

86

of

predominate with regard to each of

questions

a

the Court notes that the legal standards

clear Specifically

must apply

court

wage

alleging

authority

Walmart

the Court notes that there is

suppression

on

must

v Dukes

the

from

resulting

Supreme Court

certification

11

2551 The Supreme

12

in a

13

claim Id The Supreme

14
15

relied

16

120

17

Id

in

could not demonstrate commonality

rigorous

common

no binding

issues

rejected certification

a Title VII case

predominate
7

entail

some

a party

holding that

with the

a

in

putative

somewhat

more than one

seeking class

S Ct at

rule Dukes 131

court must engage

district

with the merits of the

overlap

discussing

Further recent

of a class of

Court further noted that prior to certifying a class a

analysis that will

authority

inquiry

that the law in this area remains

demonstrate his compliance

affirmatively

to the predominance

violations

antitrust

class certification suggests

Walmart employees

million female

with respect

in determining whether

10

California

common

whether

Page19

unsettled

8

Filed10 24 13

Document531

underlying

plaintiff s

Court

of
District

Court held that the class could not be

23 a

under Rule

Id

at

because the

certified

2554 57 The Dukes

plaintiffs

plaintiffs

had

District

on

evidence that

statistical

women

were paid less anecdotal

evidence of discrimination

from

States

women

and

a sociologist

who

opined that there was a culture of sex stereotyping

Walmart

at

Northern

United

the
For

2549 The Supreme

at

Court found that this evidence was insufficient to establish commonality

18
7

19

In their initial opposition
class actions

antitrust

20

outside

to Plaintiffs class certification

alleging

wage

21
22
23

aff d

NDNY

25
26

Roebuck
3d 802

F

issues

v

3d Cir 2004 Reed

257

v

impact

of antitrust

Corp

Sun Chemical
Advocate

Health

210

Care

In re

the comprehensive

the comprehensive

In addition intervening

the cases cited

Northern

issues See Weisfeld

Albany Med Ctr No 06 765 2008 WL 2945993
Comp of Managerial Prof l Technical Emps Antitrust Litig
WL 26115698 DN J May 27 2003 However these cases are inapposite

28 2008

because they lack

since

of

Ill

July

No 02 2924 2003
theories

motion Defendants pointed to a series
agreement in which district courts

horizontal

the basis that individual

over classwide

FRD 136 DN J 2002
by 84 F App x
268 FRD 573 ND
2009 Fleischman v

the instant case

24

on

circuit denied class certification

this

and damages would predominate

by

suppression

authority

case

Co 722 F3d 796
Cir 2012

record

Amgen

such as

that predates

This

is

the Seventh

7th Cir 2013 and Messner

These two Seventh

present

in

the instant

record strongly supports

by Defendants were decided

District of Illinois

7th

documentary
documentary

Circuit cases

case Moreover

has refined the predominance
particularly true with respect
Circuit s decisions

v

Northshore

suggest

in

the Plaintiffs experts

in Butler

Univ

that the

Reed

inquiry
to

v

Reed a
Sears

HealthSystem

669

court construed

requirement too stringently The Court further notes that other district courts
wage suppression antitrust classes including one since the latest Supreme Court
Merenda v VHS of Mich Inc No 06 15601 2013
5106520
Mich

the predominance

27

have

certified

cases

28

See

eg

Sept 13 2013 Johnson
Ariz July 14 2009

WL

v

Ariz

Hosp

Healthcare

Ass n

ED

No 07 1292 2009 WL

19
Case

No

11 CV 02509 LHK

ORDER GRANTING PLAINTIFFS SUPPLEMENTAL

MOTION FOR CLASS CERTIFICATION

5031334

D

Case5 11 cv 02509 LHK

demonstrated no general

1

because

2

managers

3

required

4

proceeding

5

it

not just

common

657

questions

Dukes

F3d

988 The

of a class

7

consider

8

Circuit further concluded

that

9

analysis requires

courts

but

at

district

there is

years after

decided

it

Dukes

12

plaintiffs

who

13

plaintiffs

need not prove materiality

14

class certification stage

15

that

16

California

that questions

17

merits in favor of the class

18

to adjudicate

the

19

controversy

fairly

20

inquiry into the merits

21

at

22

were not required to demonstrate that

23

element Id

24

certification

were alleging

corporate

a

battle

direction

common

of store

that commonality

finding

a

Costco vacated

answer

in a classwide

commonality held

of the experts

on

court s

district

Id

class certification issues

to determine

of the evidence

persuasiveness

Two

when

v

a

86

of

2551

at

court discussing

Ellis

and no

to generate

Id

in Ellis

Page20

Supreme Court

the

the capacity

the underlying merits in addressing

also the

11

Accordingly

the Ninth Circuit

6

10

of discrimination

the certification of the class

reversed

Applying

policy

Id at 2554

discretion

Filed10 24 13

Document531

district

courts

983 The

must

Ninth

that

at

certification

class certification

rigorous

not only admissibility of the experts statements

presented Id

at

982

Supreme Court

the

Amgen

securities fraud in

In

but

affirmed

the certification of a class of

Amgen the

Supreme Court held

that

Court

of
District

one of the elements of plaintiffs securities fraud claim at the

rather the Supreme Court found that

needed only demonstrate

plaintiffs

District

common

would predominate

questions

S Ct at

133

1191

Rule

23

b3

showing

requires a

States

common

to

the class predominate

not that those questions

will be

answered on

the

Northern

United

the
For

25

the certification

at

case rather

2013

1196

Rule

28

court in

after

at

23

to prove that each

reversed

is

metho

to select the

Id Therefore

1194

no

common

elemen t

d

23

b3

certification ruling is not

best suited to adjudication

while class certification

license to engage

of

questions

may

her claim

Supreme Court

damages and

certified a class of

in

liability

more than two

more

that plaintiffs

respect

to

classwide

v

No

class under Rule

Comcast

23

b3 The

subscribers

11 CV 02509 LHK

ORDER GRANTING PLAINTIFFS SUPPLEMENTAL

to each

proof

Behrend 133

20
Case

some

holistic

Comcast Corp

million

require

seeking class

plaintiff

is susceptible

inquiry is

of the

in free ranging merits inquiries

would predominate with

does not require a

original Rather the

Amgen the

a Rule

Importantly the Supreme Court specified

b3 however

certification of a

Comcast had

the office of

Rule 23 grants courts

stage Id

One month

27

it

and efficiently

alterations and emphasis in

26

Id As such

MOTION FOR CLASS CERTIFICATION

S Ct 1426
district

who

sought

Case5 11 cv 02509 LHK

1

damages

2

four theories of antitrust

3

proven using

4

notwithstanding the fact that plaintiffs expert

5

isolate the

6

Court reversed

7

principles due to the disconnect

8

1433 The

9

certification

for violations

10
11

California

with

Rule

13

23

14

of the

damages

Id However

resulting from the

one

its liability

case

model

Dukes

District

b3

required

a

claim Id

rigorous

at

and

a

model

but

analysis and that Rule

that did not

at

b3
23 b3 may

require

at

consistent

effect of the

applied

pursuant

the Court stated

Specifically

Id

the class

damages case must be

of the principles

23

class

damages

the theory of

some

to Rule

be

impact Id The Supreme

need not be exact

plaintiff s

damages

anticompetitive

the Court suggested that

pursuant

a

to the alleged

Court

of

a

of those theories could

of class certification

application

damages

supporting

particularly with respect

also applied

one

antitrust

the theory of impact

of

Comcast had proposed

court certified

theory of

86

of

in

Plaintiffs

damages using

calculated

credited

c alculations

Id Importantly

the district

straightforward

between

as at trial any

1431

at

Page21

court found that only

but the district

evidence

Court stated that

23 a in

laws Id

antitrust

the certification under a

stage

violation

12

common

of federal

impact

Filed10 24 13

Document531

to

that Rule

inquiry into the merits

143233

District

The Ninth Circuit

15

in line with the

Supreme Court s admonition

that

Comcast

created

no

States

16

new law

17

There

18

alleged

19

Ninth Circuit

20

not defeat certification of a Rule

21

calculated

22

Comcast does

read Comcast narrowly in Levya

v

Medline

Industries

F3d 510

716

Northern

United

the
For

the Ninth Circuit reversed

violations

law

the fact that

23

calculations

b3

not

pose a barrier

to

24

Cir 2013

25

individual

26

found that

27

damages

a

51314 Thus

lost due to

Circuit in Butler

alleging

by each

class

liability

so long as

at

Comcast

inquiries does

damages

v

Sears Roebuck

defects

in washing

Co 727 F3d 796
machines held

789 The

Seventh

hearings

to

ORDER GRANTING PLAINTIFFS SUPPLEMENTAL

MOTION FOR CLASS CERTIFICATION

Circuit

determine the

Circuit distinguished

11 CV 02509 LHK

7th

that

The Seventh

21

No

will be

Id

28

Case

under

defendant s unlawful practices

could be followed by individual

member Id

after

require individualized

with respect to damages do not defeat class certification

a determination of

sustained

would

class certification

post Comcast consumer action

questions

Circuit held that even

class Id at

based on the wages each employee

Echoing Levya the Seventh

23

laws The Ninth

damages

Cir 2013

court s denial of class certification in a case concerning

a district

of California labor

9th

Comcast

Case5 11 cv 02509 LHK

1

on

2

defendants that are not challenged on a class wide basis

the basis that

there is

The Seventh

3

Univ

no

Filed10 24 13

Document531

damages could be

possibility in this case that

approvingly cited

Circuit in Butler

F3d 802

669

Page22

Id

its

at

attributed

previous

decision

Cir 2012 where

5

reversed

6

inquiry does not require the total absence

7

predominate

8

noted that for the purposes of predominance the inquiry focused on whether

9

predominate

a denial of class certification

over any individual

the Seventh

Id

at

those questions

11

certification

12

even rigorous application

13

Id

14

cases

15

both Messner

16

determined simply by counting

17

or

Seventh

815 Moreover

the Seventh

on

meritsand

the

of the class certification standard

against

stated

common

had

questions

Circuit in Messner

common

common

could show

plaintiffs

Circuit

Circuit held that the predominance

Circuit further cautioned

dress rehearsal for the trial

the Seventh

questions but rather that

of individual

questions

Id at 819 The

10

California

Messner

questions not whether

over individual

into a

In

Messner v

in

Northshore

7th

to acts of the

800

4

HealthSystem

86

of

turning

questions

answers

to

class

cases

that in antitrust

lead to certification

will frequently

Court

of
District

at

811 815

see also

Amchem

consumer or

alleging

521

US

at

625

Predominance

securities fraud or violations

is

a test readily

laws

of the antitrust

met

in

certain

Importantly in

District

and Butler the Seventh

Circuit rejected the proposition

that

predominance

is

States

noses

that is determining whether there are

more common

issues

Northern

United

the
For

18

more

issues regardless of relative importance

individual

too

requires a qualitative assessment

predominance

F3d

19

Messner 669

20

The Seventh

21
22

post Comcast

23

Litigation

24

class finding

25

common

26

Amgen the

27

Id

28

class certified

at

F3d

Butler

6th Cir 2013

838

counting

cited and

There

in the

at

801

Id see

Rather

also

damages purposes

consumer class

in addition

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in accord with the Sixth Circuit s

Products Liability

the certification of a

considered the merits in determining that

individual

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for

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test

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court had adequately

liability

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Corp Front Loading Washer

would predominate over

defendant s

859 The

in

in In re Whirlpool

that the district

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Circuit decision

decision

722

There

no mathematical

not bean

F3d

predominance

at

814

is

it

Butler 727

questions The Sixth Circuit found that like

action

would be classwide

Comcast on

the basis that

to liability purposes

or

non existent

Comcast concerned

Id Accordingly

22
Case

No

11 CV 02509 LHK

ORDER GRANTING PLAINTIFFS SUPPLEMENTAL

MOTION FOR CLASS CERTIFICATION

the Sixth

a

Case5 11 cv 02509 LHK

1

Circuit concluded

2

satisfy Rule

3

law or

4

individual

23

that

common

fact

to

members

DC

Id

6

and Seventh

7

scrutinize

8

classwide basis

9

Cir 2013

The

10

there exists

no

11

further stated

12

show and

before granting certification

Circuits and concluded

Circuit held that

means

i

t

is

over any questions

on

include

that to

that questions

of

that affect only

Fuel Surcharge

indisputably

Id

at

injury in

DC

to

fact Id

at

can be proven on a

F3d 244

25253

where

DC

Circuit

the evidence

i

found that

DC

247

The

court to scrutinize

Circuit therefore

the Sixth

closely

of fact cannot predominate

the role of the district

253 The

courts

725

Antitrust Litig

c ommon questions

of proving classwide

now

by

the qualitative assessment required

reports that demonstrate that impact

See In re Rail Freight

that

must find

that such an assessment requires district

factual evidence and expert

reliable

courts

86

of

Corp

and Comcast

district

of the class predominate

Circuit has further elaborated

DC

Amgen

Page23

860

at

The

glean from

must

plaintiffs

members

5

California

we

the principles

b3 named

Filed10 24 13

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t

is

now

clear

Court

of

13

that Rule

23

not only authorizes

14

show predominance

15

district

16

District

plaintiffs expert

the rule

a hard look at the soundness

it

commands

Id

at

255

of statistical

Accordingly

the

models

DC

that

purport

to

Circuit vacated the

District

court s certification of the class because

there were

methodological problems with the

States

reports that the district

court

had

not considered

Id at

252.8

Northern

United

the
For

17
18
8

19

The

First

and Third Circuits

20
21

F

issues

22

8 In

at

Court s

through

conclusion

if

the fact of antitrust

common proof

24

133

S Ct

in

Amgen

1191

at

emphasis

and In re Hydrogen Peroxide

25

In re

Circuit held that

27

that

Rule

same
23 3

311

b

elemen t
in

original

of

a

district

methodology
Court authority

Id

a district

F3d

This appears

to

at

does not require a

her claim

Nevertheless

that

it

20

intends

impact cannot be

Hydrogen
Supreme

plaintiff

seeking class

is susceptible to classwide proof
some of the theories in In re New Motors

Amgen

Specifically

conflicts in expert

to use

common

evidence

No

the

opinions that go to
is

insufficient

F

for

552
3d at 32123 Similarly the First
court should have engaged in a searching
inquiry into the validity of a
of impact In re New Motors 522 F3d at 27 Accordingly
the First
Antitrust Litig

court should have addressed criticisms of the plaintiffs expert s

In light of the fact that these theories appear to be consistent with

the Court applies

them

in

the instant action

23
Case

courts

see also In re

conflict with the

Antitrust Litigation are consonant with

Hydrogen Peroxide

novel and complex theory
Circuit found that

28

at

and that a party s indication

certification

district

based in part on

violation and the fact of antitrust

New Motors 522

Third Circuit held that a rigorous analysis required resolving
certification

26

In re

F3d

to prove that each

certification

cases vacated

for reconsideration

F

not predominate

established

b3 and remanded

Supreme Court authority See In re New Motors
Hydrogen Peroxide Antitrust Litig 552
3d 305 307 3d Cir 2008 For
and Third Circuits relied on a theory that
in antitrust class actions common

Peroxide Antitrust Litig 552

23

23

re

the First

do

preDukes Amgen and Comcast

been superseded by intervening

theories that have

522
3d
example

in

of classes under Rule

certification

11 CV 02509 LHK

ORDER GRANTING PLAINTIFFS SUPPLEMENTAL

MOTION FOR CLASS CERTIFICATION

Supreme

Case5 11 cv 02509 LHK

1

Certain principles

2

whether the Technical

3

circuit

4

question

5

questions

6

evidence and

7

action

8

Comcast

9

cannot require

regarding

S Ct

Amgen 133
common

Id Second

Corp

1191

at

First

common

whether

questions

In essence

Plaintiffs

to

prove elements of

11

evidence that forms the basis of the methodology

12

predominate

13

evidence

14

also In re Rail Freight

15

inquiry is not a mechanical

16

California

Amgen 133

individual

17

contemplates a qualitative assessment which includes

18

models

19

are not required

20

classwide proof

Amgen 133

S Ct

21

will predominate

with respect

to their case as a

1194 Third

Ellis

657

F3d

at

this

and the

the critical

over individual

common

whether

rigorous analysis

a

with the merits but the inquiry

case at the class certification stage

substantive

10

at

predominate

must conduct

may overlap

their

determining

prove the elements of the underlying cause of

this question this Court

S Ct at 1432 This analysis

in

Amgen Comcast

this Court must determine

to

86

and most importantly

authority

could be used

methodology

in answering

133

S Ct

is

of

must apply

emerge from Walmart

certified

Supreme Court

that this Court must answer

Page24

that this Court

the legal standard

Class should be

court cases applying this

Filed10 24 13

Document531

Court must determine not only the admissibility of expert

that demonstrates

982 Rather this Court must

common

whether

also determine

questions

whether that expert

Court

of
District

is

persuasive

which may require

the Court to resolve

Fuel Surcharge Antitrust Litig 725

Id

methodological disputes

F3d

at

255 Fourth

see

the predominance

District

inquiry of

bean counting

to

determine whether there are more

States

questions

common

than

questions Butler 727

Northern

United

the
For

Id

With

22

show

questions

24

801

Instead the inquiry

a hard look at the soundness

F3d

at

255

that each element of the underlying cause of action

these principles

23

at

Fuel Surcharge Antitrust Litig 725

In re Rail Freight

to

F3d

in

at

1196 Rather they need

of statistical

Fifth Plaintiffs

susceptible

is

only show that

to

common

questions

whole Id

mind this Court now

turns to the elements and finds

elementsantitrust

that

common

impact and damages

predominate overall

1

25
26

Plaintiffs

and with regard to

all

three

violation

antitrust

Antitrust Violation

allege that Defendants engaged

in an

overarching conspiracy

to

eliminate

27

competition among one another for skilled labor with the intent and effect of suppressing the

28

compensation

and mobility of Defendants

employees

CAC

1 2 55

Accordingly

24
Case

No

11 CV 02509 LHK

ORDER GRANTING PLAINTIFFS SUPPLEMENTAL

MOTION FOR CLASS CERTIFICATION

Plaintiffs

Case5 11 cv 02509 LHK

p roving

1

contend that

2

every Class Member

3

forth copious

4

transcripts and email exchanges

5

and senior managers

6

express

trial

Defendants

Class Cert

common

all

on common

9

antitrust

legal

violation

10

motion

11

that Plaintiffs

12

turn

As

at

and

support

In support

of their allegations

this Court s

April

have demonstrated that

common

on overwhelmingly

Defendants

Tr

issues See Jan 17

factual

in

of

common

issue for

have

Plaintiffs

work documents

internal

CEOs as

86

of

deposition

well as other directors

that Defendants

alleged

17 1 4

at

antitrust

Do

Court

Defendants Counsel

officers

entered

into

Not

violations

you

will turn

contest

the

for purposes of this

5 Class Certification Order this Court agrees and

adjudication

of

Defendants

alleged

finds

violation will

antitrust

issues Apr 5 Class Cert Order

legal and factual

set

employees

for one another s

that adjudication

Page25

will be the overriding

Plaintiffs allegations

prong of the analysis

stated

2

Defendants

between

of which

Defendants concede

8

Mot

conspiracy

evidence in the form of Defendants

agreements not to compete

7

California

at

Filed10 24 13

Document531

13

at

Court

of

To

13

prevail

on

1 there

14

must show that

15

entities

16

District

a cause of action

reason analysis and

17

Corp

for violation of Section

was an agreement conspiracy

1

of the

Sherman Act a

or combination

between

two

plaintiff

or

more

District

2 the

agreement was an unreasonable

of trade under either a per se or rule of

restraint

States

3 the

Northern

United

the
For

F3d 781

9th Cir 2001

18
19

92

all

784

20

9th

affected

Cir 1996

here present

Plaintiffs

of that evidence is

restraint

common

to

Class as a

Plaintiffs evidence indicates that the roots of

mid1980s

21

to the

22

sold Lucasfilm s

CoFounder

23
24

Decl

25

because

27

explained

28

9

The

Lucas

computer division a

of Lisa Cisneros

believed

it s
I

George

tech

not

Cisneros

a normal

alwaysthe

we had

third factor whether the alleged

and development

Apple who
Lucas

violations

situation

affected

No

Id
down

interstate

at

CEO

Steve Jobs

Pixar

16 59 ECF No 418 2

each other for employees

at

52

for

As George Lucas

everybody was

commerce

is

that

we

not disputed

11 CV 02509 LHK

ORDER GRANTING PLAINTIFFS SUPPLEMENTAL

and

reach back

to

company to

25
Case

1059 1062

then renamed the division

Depo

or the rule that I put

restraint

antitrust

v GTE

whole

should not compete against

industrial competitive

rule

S Cal 252 F3d

Defendants conspiracy appear

research

Decl Ex NN

that companies

of

Inc

former Lucasfilm Chairman of the Board and

FormerChairman FormerCEO of

George Lucas

26

shortly after

Univ

evidence of Defendants

substantial

the Technical

v

Tanaka

see also

Am Ad Mgmt

commerce9

interstate

MOTION FOR CLASS CERTIFICATION

Case5 11 cv 02509 LHK

Filed10 24 13

Document531

1

cannot get into a bidding

2

of

3

independent Pixar would reciprocate

4

agreed

5

to an employee

6

initiative

7

counter offer by the employee s current employer

8

3 McAdams

9

No

10

war with

thing Id at 44 Edward

1 not to cold

168

Depo

any

at

this

non compete

company even

offer

from the other via cold

CoFounder

Steve Jobs

for a job

Am Ans to

that the newly

The companies

on
in

own

response to a

Decl

Shaver

Am Compl

would

thus

an offer

his or her

Pixar

Consol

that they

for that sort

when making

each other

applied

understanding

not

actively

Ex

59 ECF
solicit

calling

FormerChairman FormerCEO of

employee force proceeded

adamant about

13

to include

14

such beginning no
employment

16

employee applied

independently

17

Vice President

Advanced Technology

18

offer to an Apple

19

Resources

20

formalized the two companies understanding

21

between

22

phone

23

with Apple that

24

Apple employee

25

team to follow the same procedure

his

George Lucas

whether Lucasfilm or

Ltd s

Lucasfilm

12

protecting

the margins

final and would not be improved

15

California

2 to notify

86

of

rule with Lucasfilm

that employee

if

would be

14546 Def

don t have

Pixar President agreed with

Lucasfilm and Pixar had a general

candidates

11

3 that

Catmull

we

because

each other s employees

call

of the other

and

other companies

Page26

to

Apple who

expand

was

very

the Pixar Lucasfilm agreement

Court

of
District

Apple and

its

later

Cisneros Decl

labor competitors

than

2004

Ex RR

Catmull

Depo

at

195 As

Pixar sought Steve Jobs permission before making offers of

District

Apple employees

to

regardless of whether Pixar solicited

the

employee or

the

States

Decl Ex 62

See Shaver

showing email from Rob Cook

Pixar

Northern

United

the
For

26
27
28

of

employee On

April

and Administration and

Pixar and Lucasfilm

call with Danielle

is

See

to Steve Jobs in

30 2007

Lambert and that

similar to our Lucasfilm

including

outside

on

66

the

Lori

same terms

recruiters if

emphasis

we

use

them

Intuit

assisted Steve Jobs

Board

of Directors

CoFounder

No

Co Lead

as the

gentlemen s

follow a gentleman s

we

won t

agreement

Danielle

agreement

directly solicit

any

will ask her Recruiting

Director

On
of

February

Apple

18 2005

and advisor

FormerChairman FormerCEO of Apple

Bill Campbell

to

Google

in entering into an

11 CV 02509 LHK

ORDER GRANTING PLAINTIFFS SUPPLEMENTAL

Human

Human Resources

26
Case

of

added

These agreements extended to other Defendants

Chairman of

is

of

President

make an

informing recruiting team about her

now we ll

agreement That

permission to

Pixar Vice

Apple Head

McAdams

effective

requesting

McAdams

Lambert

Danielle

id Ex

Lori

2004

MOTION FOR CLASS CERTIFICATION

Case5 11 cv 02509 LHK

1

agreement with Eric Schmidt

2

former

3

Jobs that Eric Schmidt

4

Apple

5

p lease

CEO at

Google

Danielle

add Google to your

you hear

6

so

7

sure to honor our side of the

8

Recruiting

9

Apple which had

if

27

Google s senior executives

12

Google

hands off

list

We

deal Id Ex 23

was

including

us

please

Later that year

Do

be sure to

and

of Directors

anyone from

ordered her

from one

Not Cold Call list
to

compete

for

me know

of

Google

staff

to

another

Please be

Google

companies

employees See

Management Group

former Google

let

Arnnon Geshuri

Schmidt Larry Page

Eric

and Shona Brown

Human Resources

recently agreed not to recruit

to Google s Executive

presented

CoFounder

of

agreements with Google not

special

11

California

Lambert Apple Head

Director was asked to create a formal

draft

Board

email from Bill Campbell to Steve Jobs informing Steve

of any recruiting they are doing against

10

The

of the

86

of

got directly involved and firmly stopped all efforts to recruit

day

That same

Page27

Google Executive Chairman Member

id Ex 17

See

Filed10 24 13

Document531

a committee

including

id Ex

consisting

CoFounder

of

Sergey Brin

Senior Vice President Business

Court

of

id Ex 28

Operations See

14

stating

15

concerns with sharing

16

District

13

Schmidt responded that he preferred that

17

paper

18

to

this looks

very

Eric Schmidt

good

When

approved

id email from

the list See

Shona Brown asked

Eric Schmidt

Eric Schmidt

whether he had any

District

information regarding

Do

the

Not Call list with Google s competitors

Eric

States

it

be shared

verbally

since I don t want

to create

a

Northern

United

the
For

do

trail

orally

i

Two

19

we

over which

can be sued later

Id Ex 41

months

entering

after

into

an agreement with Google Steve Jobs

Chairman Former CEO of Apple persuaded Adobe

21

Apple

22

Adobe was

23

thought

24

way

25

by

26

they are free to approach

27

understanding

28

NOT

On May 26 2005

Open

recruiting

Steve Jobs complained

Apple employees

to discuss

to

would be good

It

to Bruce Chizen

Id Ex 18

send Apple recruiters

solicit

after

I

from

either

CEO that

is

would propose we keep

OK

not

a

Sr

Director

I ll tell

or

VP Am

No

company

If

you

I d

that

rather agree

are in agreement I will let

11 CV 02509 LHK

ORDER GRANTING PLAINTIFFS SUPPLEMENTAL

it

I

27
Case

I

our recruiters that

correctly Id Bruce Chizen immediately gave in

any employee

Former

Steve Jobs was not satisfied and replied

Adobe s employees

who

former Adobe

Bruce Chizen responded by saying

agree Id

any Adobe employee

your position

to actively

to

CoFounder

to enter into a nearly identical agreement with

agreed not to recruit any senior level employees

threatening

makes sense

agree Id

20

we

Shona Brown responded

MOTION FOR CLASS CERTIFICATION

Case5 11 cv 02509 LHK

1

my folks know

2

President

3

agreement that

4

in original

5

Adobe employees not

6
7

Id

we

announced

In addition

cold

to

to Google s

no poaching policy with

8

Member

9

an unofficial no poaching policy

of the

Google Board

10
11

California

Member

to Paul Otellini in which

12

Intel

of the

has been

Board

Google

with

and former
wrote

Eric Schmidt

the

Do

Not

Adobe Vice

Bruce and Steve Jobs have an

Id Ex

versa

19 emphasis

that are off limits list which

instructed

Id Ex 11

51 email from Paul

of Directors to Intel

of Directors

on

listed

eg id Ex

See

86

agreement with Apple Google also entered

anti solicitation

Intel

of

Theresa Townsley

team

c ompanies

its

Apple employees

call

Page28

Apple employees and vice

placed Apple on

then

day

next

to her recruiting

ANY

are not to solicit

Adobe

The

emphasis in original

Human Resources

Filed10 24 13

Document531

recruiter

dated April

checked

CEO of

16 2007

this

policy

in

have

I

No

was created

4 2007 email

a June

as to our recruiting policy

Call List since the policy

and

Intel

stating

a

Google Executive Chairman

Eric Schmidt

CEO confirmed
I

Otellini

into

with Intel

one in staffing

Court

of

networks

directly calls

14

Hopefully there are no exceptions

15

know immediately

16

District

13

Director

17

reflected

company

or emails into the

and

to this policy

looking for talent

or its subsidiaries

if

you become aware

of this please let

me

District

Id Ex 56

Chairman of

Bill Campbell

Board

Intuit

of Directors

Co Lead

States

Apple and

of

advisor

Google was

to

Google

also involved in the

Intel

agreement

as

Northern

United

the
For

18

in

an email exchange

Google Advisor

to

Google should

from 2006

the Office of

CEO and

19

that

20

whether the

21

the email to Patricia

22

former President

23

later in an email entitled

24

Otellini and another

25

prohibits us from recruiting Google s

26

clarify

27

would not

28

Google

We

Intel

employee first approached

of

Murray

Human

Intel

Bill Campbell

making an
Google

Resources with a note

global

signed

See

Are either
senior

We

later

of

stating

Intel

of

regardless of

of Leadership

not

fwd

Intel

Strategy

DOJ

No

eric and

alleged

Let

that

me

myself

I

that the

other evidence suggests

11 CV 02509 LHK

ORDER GRANTING PLAINTIFFS SUPPLEMENTAL

days

Google

Paul Otellini replied

between

and

recruiter asked Paul

28
Case

Two

Id

of any agreement with

recruit

2007

Management

Paul Otellini then forwarded

note that while the

than September

employee

Google an

Id Ex 52
no

of Product

Do

FYI

you aware

talent

Plaintiffs

an

and Director

have a handshake

Id

agreed with Jonathan Rosenberg

id Ex 37

gentleman agreement with

known

agreement began no

offer to

Senior Vice President

senior executive

have nothing

which

former Senior Vice President

call Paul Otellini before

like this broadly

Intel

in

MOTION FOR CLASS CERTIFICATION

that the

Case5 11 cv 02509 LHK

1
2

agreement began

showing

Intel

2005

in

agreed with Pixar that

4

Defendants

as other

Not Call list as

early as

Page29

agreements

bilateral

2005

86

of

In October of

id Ex 28

See

2008

also

Intel

forward

Decl Ex 70

5

Bill

6

advisor

7

9

also insisted

non solicit

Campbell
June

Campbell Chairman of

Google

to

requested

Executive

11

2007

12

include

13

ECF No

14

was broadened

was added

Intuit

not

cover

be added fully to the

Google

ed

Do

only 18

Not

call see

also

Decl

id

of

Intuit

Ex 30

employees

and

Bill

31 email dated
Google

CEO Thus by June
DNC

please update the

Dean Harvey

Shaver

agreement

Id Ex

Call list

Apple

of

Director and Eric Schmidt

Recruiting

Id Ex 26

Director

non compete

of the Board of Directors and former

fully to the list

100 do

Intuit

enter into a

Intuit

initially

Arnnon Geshuri

Chairman Member

10

Google and

policy

CoLead

Board of Directors

Intuit

that

that Intuit

6 2007 between

pursue any Pixar employees going

will not proactively

it

Google s

Although

8

California

Do

on Google s

3

same time

the

Filed10 24 13

Document531

Harvey

list

12
now

to

Decl Ex 25 at 13

Court

of
District

248

stating that

2007

in June

Do

Google s

to include

Not Cold Call policy

for Intuit

began in April 2006 and

employees

all Intuit

District

Ultimately by the time that the

15

DOJ

began

investigation

the

in

summer

of

2009

Apple s

States

Do

own

Hands Off

17

Jobs

CoFounder

18

enter into a similar agreement with

19

employees

20

Colligan

21

Apple by which

22

employees Decl

23

threatened

24

not agree

25

patents

26

agree that neither company will hire the other s employees regardless of the individual s desires

27

not only

28

people

Not

List

Decl Ex 22

16

Call

included

every Defendant

See Shaver

Steve

Northern

United

the
For

moved

FormerChairman and Former CEO of Apple

to

neither

of

retaliate

two companies

and

CEO of Palm to

company would

Edward
against

Palm

wrong

who

elect

it

Colligan

is

if

propose

Colligan

Palm

resisted

Palm could

nevertheless

likely illegal

August

hire the other s

Colligan

to such an arrangement

Edward

On

the

between

former President

Palm following

Palm Inc

a period in which

22 2007

Decl

including

6 ECF No
Mr

Id

293

at

Palm

alleging

Colligan

the right to

Palm and

high tech

Steve Jobs also

Jobs also suggested that

stated

your proposal

further

I

can t

No

11 CV 02509 LHK

ORDER GRANTING PLAINTIFFS SUPPLEMENTAL

Palm

MOTION FOR CLASS CERTIFICATION

did

many

that

deny

do so simply because they now

29
Case

if

infringement of Apple s

refused writing to Steve Jobs

Edward

several

Steve Jobs called Edward

an arrangement between

employees

face lawsuits

Id Ex A

to pursue their livelihood

also tried unsuccessfully to

we
is

Case5 11 cv 02509 LHK

1

work

2

Colligan

3

intimidated

4

based on

5

Page30

of

86

wouldn t want you to do that to current Palm employees

responded

for

6

Apple and

Filed10 24 13

Document531

by your
Palm s

sure

is

If

you

you choose

assets but

patent

realize the

when

money
final

threat

We

say

advice

is

stating

litigation

We

want to be clear that

route

is

the

are not

can respond with our claims

answer

end up paying

at our patent

we

Id Edward

Id Steve Jobs

I m

to stop this

of our respective

the financial resources

a look

we

must do whatever we can

will both just

to take

I

the litigation

don t think

asymmetry in

you

My

I

to Apple

not satisfactory

companies

8

Steve Jobs threats

held firm against

This

7

I

a lot of lawyers a lot of

portfolio before

you make a

on an anti solicitation agreement here

decision

9

B

10
11

California

Id Ex
regarding

12

Edward

Colligan

his proposal

Id

did not agree and did not communicate

with Steve Jobs further

8

Defendants generally structured

their

agreements with each other to apply to

all

employees

Court

of

regardless of job

14

recruit

15

subsidiaries

16

District

13

from either

17

employees id Ex 66

18

Harvey

19

However

Defendants Apple and

20

from each

other rather

21

Decl Ex 17

in original

type department

anyone from

or

Apple id Ex

geography See Shaver

56 Google would

network

not call

Google would

not

or email into Intel or its

District

looking for talent

id Ex 19

Apple and Adobe agreed

any employee

not to solicit

States

Northern

United

the
For

22

company id Ex 60

Decl Ex 25

Plaintiffs

DOJ

at

Pixar agreed not to

Do

13 Google s
Intel

than to avoid

Not Cold

the

24

reached

25

to the detriment

26

informationand access

27

Dep t of Just

28

of Just

investigating

anti solicitation

Defendants

facially anticompetitive

of the affected

to

employees

Compl Against

eliminated

who were

Lucasfilm

al

DOJ

DOJ

Adobe

Lucasfilm

Shaver

the

a

Order at

Compl

Compl

esp technical away

Decl Ex 55

concluded

significant

form

No

112

by

important

see also

2 14 ECF No 93 1 Dep t

2 15 22 ECF No 93 4

11 CV 02509 LHK

ORDER GRANTING PLAINTIFFS SUPPLEMENTAL

revealed

of competition

of competitively

3 4 CAC

emphasis

that Defendants

30
Case

also

employees

all Intuit

for years until

DOJ

likely deprived

MTD

d

went on

each other s

employee see

hire top talent

efforts

conspiracy

alleged

better job opportunities

et

to

conspiracy

agreements that

Compl Against Adobe

NOT

solicit

include

Call policy

agreed simply

all

not to

any Apple

directly solicit

maintain that Defendants alleged

23

After

Lucasfilm and Pixar agreed

MOTION FOR CLASS CERTIFICATION

The

Case5 11 cv 02509 LHK

1
2

DOJ

3

effort and

4

Adobe

5

Defendants entered

6

antitrust

7

government

8

compensation

Lucasfilm

Compl 17 CAC
were

into agreements that

only obtained

injunctive

relief

by

for employees injured

alleged

Class

12

alleged

violation will turn

antitrust

Accordingly

on

of trade that were

collaboration

the Defendants

the allegedly

by

collusive

common

the Court finds that

issues

questions

concluded that

per se unlawful under the

112 However

did not obtain

the

any

activities

suggests

Plaintiffs

legal and factual

It

DOJ

the labor setting

3 CAC

Compl

Lucasfilm

from

in

112 The DOJ

restraints

35 DOJ

laws DOJ Adobe Compl

This substantial evidence presented

11

California

price setting mechanisms that apply

disrupted the normal

Compl 16 DOJ

10

86

of

than reasonably necessary for the formation or implementation of any collaborative

broader

9

Page31

were not ancillary to any legitimate

also determined that the agreements

were

Filed10 24 13

Document531

that adjudication

that are

common

will predominate

Defendants

of

the Technical

to

with respect

to

the

violation

antitrust

Court

of
District

2

13

Antitrust Impact

Having found

14

that

common

will predominate

questions

with respect

the first

to

element

District

15

antitrust

16

referred to as antitrust

17

laws

18

antitrust

the Court

violation

now

turns to the second

element impact

impactalso

Antitrust

States

injury
is

the

fact of

damage

that results from a violation of the antitrust

Northern

United

the
For

19

In re

DRAM

violation

Plaintiffs

Antitrust Litig

and

the

2006

WL

1530166

at

damages sought by plaintiffs

marshal substantial

modeling economic

evidence

including

7
In re

It

is

New Motors 522

documentary

20

using

21

predominate

22

Court finds that the documentary

23

business

24

could be used to demonstrate the impact of Defendants actions

25

Accordingly

26

link between

the causal

F3d

at

19

evidence and expert

common

the

n18
reports

standard

27
28

statistical

over individual

practices

and

questions

the market

in determining the impact

evidence and expert
in which

of the antitrust

reports paint a picture

Defendants operate

that suggests

on Technical

the Court finds that Plaintiffs proposed methodology

Specifically

have received

theory and data to demonstrate that

cold

the record suggests

calls

but

for

that all technical

the anti solicitation

satisfies

employees

agreementsmay

questions

violations

No

that

common

proof

Class members
the predominance

not just those

who would

have been impacted by the

11 CV 02509 LHK

ORDER GRANTING PLAINTIFFS SUPPLEMENTAL

The

of Defendants

31
Case

will

MOTION FOR CLASS CERTIFICATION

Case5 11 cv 02509 LHK

1

agreements

2

has the effect of spreading information

3

employees of another

4

employees within a firmand

5

across

6

Leamer

the labor market

Further

relationship

9

equity

to

tool that Defendants

a recruitment

71 76

Rep

86

viewed

Such informationcould then spread

beyond leading

to widespread

increases

to information

access

contend that Defendants had

in

all

other

10

firms Id Because

11

cold

12

have also affected

13

in individual

14

Each Defendant s

15

Defendants

of

groups Suppl

a

Mot

at

15 22

desire to maintain equity

placed on the salaries of individual
other employees

favorably

to other

employee compensation

Id

company wide

compensation structures

In addition Defendants

the idea that similarly situated employees should be compensated

calls

of

employees into job groups levels and families that were evaluated

which organized

8

Page32

about salaries and benefits from recruiters of one firm to

due to increased

Plaintiffs

7

California

note that cold calling

Plaintiffs

Filed10 24 13

Document531

between

employees

who were

part of the

employees

who would
same

the

and paid in

valued internal

similarlywithin

upward

pressure

have received

that

would

the calls

As such

salary structure

their

variances

Court

of
District

employees

salaries

would

other employees

affect

who were

in a similar position

by

compensation structure could then have been influenced

the other

District

structures as Defendants

saw each

other as competitors for the

same

labor

pool

States

16

Finally

Plaintiffs

point

to

the fact that Defendants

were motivated

to retain their

Northern

United

the
For

17

employees This

18

incentives

19
20

Plaintiffs

contend would have motivated each Defendant

to employees to respond to and to prevent

105 Yet

21

Ultimately the Court

on

22

prevail

23

sufficiently

24

impact The Court

25

data and expert

26

likely to predominate

27

evidence

these theories

benefitted

is

Rather the

at

this

question

reliable theory to demonstrate that

finds that based

statistical

is

phase with determining whether

narrower whether

common

the extensive

Plaintiffs theory of

initiate

Plaintiffs

first

evidence

a

economic theory

demonstrates that

discusses

common impact and

common

the substantial

then proceeds

to

11 CV 02509 LHK

ORDER GRANTING PLAINTIFFS SUPPLEMENTAL

will

have presented

32

No

such

Plaintiffs

28

Case

Rep

evidence can be used to demonstrate

documentary

issues The Court

Leamer

Class

modeling Plaintiffs methodology

over individual

which supports

on

Defendants did not need to

the entire Technical

not tasked

provide financial

poaching by other Defendants

because of the antisolicitation agreements

measures which would have

to

MOTION FOR CLASS CERTIFICATION

issues

are

documentary

discuss

the

Case5 11 cv 02509 LHK

Filed10 24 13

Document531

The Court concludes by rejecting

1

expert

2

Page33

86

of

flaws that would

undermine Plaintiffs entire methodology

reports

Defendants

attempt

to identify

3

a

4
5

Documentary Evidence
Motion

In Plaintiffs Supplemental

documents

for Class Certification

common evidence

6

pages of

7

and undermine

8

evidence suggests that for the purpose of ultimately proving impact

9

predominate

all

many of

the representations

over individual

The Court begins by

10

and

as a recruitment

12

whole

13

importance

14

Defendants viewed

Defendants wage suppression depressing

The Court then

made by Defendants

previously

the documentary

discussing

15

California

Plaintiffs theories of classwide

common

Plaintiffs

common

issues

harm

will

ones

11

tool

which support

submitted thousands of

Plaintiffs

Defendants

the evidence of

on

of cold calling

the effect of the preclusion

discusses

evidence on the importance
the Technical

compensation

rigid

of cold calling

Class as a

structure

and

Court

of
District

The Court

of internal equity

turns to the documentary

finally

may have

each other as labor competitors which

evidence that

resulted in individual

District

employees wages

other Defendants

States

i

16

Cold Calling and Recruitment

Northern

United

the
For

17

Plaintiffs

produce significant evidence that cold calling was an important part of

18

Defendants

19

cold calling had adverse

recruitment

and contend that the elimination

practices

effects

on

a

20

through

Class members

Technical

all

of such recruitment

The Importance

of

Cold Calling as a Recruitment

Practice to Defendants

21
Plaintiffs documents

support

the allegation

that throughout

the class period Defendants

22
viewed recruitment

particularly of

passive

candidates

who

that is employees

were not actively

23
looking for a

new

jobas

crucial

and development

to their growth

Donna Morris AdobeAdobe

24
Senior Vice President Global

Human

Resources

described

recruiting talent

as

critical

to

25
company growth Harvey

Decl Ex 1

Morris

Depo

at

56 17 19

26
important to

27
intellectual

Adobe

A So our

property based

critical

most

company

critical

Adobe

asset is

Q Why

people So

also believed

is

recruiting talent

really we re

that an important

way

28
33
Case

No

11 CV 02509 LHK

ORDER GRANTING PLAINTIFFS SUPPLEMENTAL

MOTION FOR CLASS CERTIFICATION

an

to

source

Case5 11 cv 02509 LHK

1

top talent was to focus on

may be

2

entrenched

3

14

4

looking for

5

their

6

rapid

7

Google employed

8

agencies

9

increasingly

10

3

at

passive

Adobe

willing to listen

And

so recruiting

included

as

hiring

many

id Ex 25

as

at

800

a

is

it

defined

as

Adobe

that

big big aspect

is

Id

a

larger role in recruiting as

is

who

tend to be

Decl Ex

presented Shaver

might not necessarily be

company where

57 13 17

at

86

To

they can leverage

Google s

support

2009

thousand employees per year from 2006 to

several

Google

of

top performers

often the very best candidates

recruiters while also working

78

Page34

the right opportunity

if

They might not even know

growth which

See

which

talent

As explained by Donna Morris

capabilities

also determined

we move

with external recruiting

p assive

that

will play an

sourcing

company

key method

Decl Ex

Harvey Suppl

calling as a

forward as a

14 Google 2006 Sourcing Diagnostic
The

11

California

but

Filed10 24 13

Document531

employees

12

potential

13

and research

viewed

also indicates that Defendants

record

Intel

estimated

cold

to attract

that historically competitive sourcing including

cold

calling

Court

of
District

14

accounted

Complete Guide

to

for

Sourcing

that

Cold

Decl Ex 27

Harvey

of hires

percent

Calling

candidates

is

and stated in

one of the most

its

and

efficient

District

ways

Decl Ex 54

15

effective

16

were the largest source of hires

17

yield Harvey Suppl Decl

18

Google s Chief Culture Officer

stated

19

expected unless they re on our

don t call

to

Shaver

recruit

Similarly Google found that although

referrals

States

and

agencies

passively sourced candidates

offer ed the highest

Northern

United

the
For

20

Consequently

c old

that

in response to concerns over slow

calling into companies

list Shaver Decl

employees for positions

22

solicitation agreement with

23

engineering hiring

24

drain competitors

within the Technical

rate

Cisneros Decl

to accomplish

this

Relatedly

27

hiring

when

plan was

a Senior Apple

finding

hiring

documenting

Executive

that

Ex 1753 Thus

rate of

stated

a
in

recruit is to be

about

their

ability

it

Google

Id see
large

2007

needed to

also

hiring

dramatically

stated

it

would

gap

challenge

former Apple Director

in

need to

Ex

14

the

EE

of Executive

11 CV 02509 LHK

ORDER GRANTING PLAINTIFFS SUPPLEMENTAL

the

for engineering positions

34

No

recruit

increase

Harvey Suppl Decl

that his biggest

high quality people Mark Bentley

that

28

Case

to

For example shortly prior to Google s anti

Apple Google determined

Google 2006 Sourcing Diagnostic

26

Class

to

hiring

Ex 42

Further Defendants appear to have been particularly concerned

21

25

Ex 14

MOTION FOR CLASS CERTIFICATION

Case5 11 cv 02509 LHK

Human

1

Recruiting

2

need to do more targeted

and Interim

Google

3
4

decline

6

Shaver

7

leaving

8

for the highest

tracked

the decline

Decl Ex
Google

45 documenting

portion

of overall

a

to

Bottom

at

Ex 7

Google s offer

that

candidates

top technical

see also

who

employees

of technical

we

as well as the

candidates

1 showing

line is that

reported

and that Facebook accounted

startup organization

departures

b

Enforcement

AntiSolicitation Agreements

of the

by Defendants

10
While Defendants

11
12

Ex 173

how during 2010

9

California

rate of its top technical

among senior and

company went

for another

86

of

candidates Harvey Suppl Decl

passive

especially

rates

Page35

Director responded by stating

employees See Cisneros Decl

loss of its technical

5

Resources

recruiting of

also closely

Filed10 24 13

Document531

dispute

that this absence

agreements had any effect on job opportunities

due

of cold calling

to their anti solicitation

or flow of information to the class

memberssee

Court

of
District

13
14

Opp n

17

at

Defendants own documents

created

during the alleged

conspiracy

tell

a

different

story

District

First Plaintiffs

15

that but for Defendants anti solicitation

offer evidence indicating

States

16

agreements

Defendants would have been cold calling one another s

employees For example

in

Northern

United

the
For

17
18
19
20
21
22
23
24
25
26
27

November

of

2005 Howard Look

to find candidates

but

Adobe personnel recognized

former Pixar Vice President

that

struggling

recruiting

Adobe

knew

but

CEO and

talent Shaver
Director

of

of course cannot recruit

CEO Steve

advisor

to

and above

30 Thus

by

because

that

Apple
to

was what

I

objected

Z

stated

Shaver

that Pixar was

Bruce

of Intuit

to

Chizen

poach

and calling

to

everybody that was a

Cisneros Decl

agreements

Defendants

Ex EE

CoLead

midlevel

Campbell

Depo

at

employees were deprived of

and opportunities

11 CV 02509 LHK

ORDER GRANTING PLAINTIFFS SUPPLEMENTAL

each other s

at his deposition anti solicitation agreements

35

No

former

Board of Directors

28

Case

Ex 64

Decl

look into for the purpose of

u nfortunately

Chairman

explained

A through

virtue of these anti solicitation

job information

so

Software

Jobs have a gentleman s agreement not

Google

prevented a competitor from going

engineer

do

Decl Ex 13 As Bill Campbell

Apple and

out of

Apple would be a great target

that they could not

Apple

of

MOTION FOR CLASS CERTIFICATION

Case5 11 cv 02509 LHK

Second

1

the evidence indicates that Defendants

2

anti solicitation agreements

3

Arnnon Geshuri

4

Member

5

President

6

following the

7

the

8

agreement with Pixar in a document

9

emailing or enticing

Google

Board

of the

Do

of Directors

Not

Call policy

or its subsidiaries

11

Corporate Vice President

Plaintiffs

regarding

looking

any way

in

employee applies

12

and former

CEO and

We

which states

O

by

CEO of

the

Google Senior Vice

Google

ur

Decl Ex 35

cannot

recruiters are strictly

including

recruit

Pixar for approval to

If

former

its

up

calling

for Intel

Pat Geslinger

Intel

or emailed into

memorialized

Intel

come to work

current Pixar employees to

will contact

an email from

In

Google Executive Chairman

Laszlo Bock

talent Shaver

without being recruited

to Intel

enforced these

and no one has called networked

Intel

for

86

of

harmful effects

their

Director to Eric Schmidt

Recruiting

10

California

which further demonstrates

Page36

and aggressively

actively

Operations Arnnon Geshuri confirmed

of People

company

Filed10 24 13

Document531

a

Pixar

Intel

Senior

Id Ex 53

hire

Defendants agreements were

also offer evidence supporting their assertion that

Court

of

particularly concerned

14

Steve Jobs

15

CEOs of co Defendants

to thwart the recruitment

16

District

13

recruiter from Google s

engineering team contacted

17

forwarded

18

Directors and former

19

would

20

recruiter and

21

was

22

from Bill Campbell

23

advisor

to

24

pissed

that

25

to Eric

26

recruiting in our iPod

with preventing

CoFounder

the recruitment

of

one

another s

employees

technical

FormerChairman and FormerCEO of Apple

repeatedly

contacted

the

District

of Apple s

employees For instance when

a

States

an Apple employee

in

2007

Steve Jobs

Northern

United

the
For

Eric Schmidt

to

CEO and

this

I

would be very

future

Chairman

occurrences

of Intuit

to Sergey Brin

prevent

I

am

ing

Decl Ex 24

If

Id see

Co Founder

Google

told that Googles

group

hour

if

your recruiting department

public

example

out of the

Id The aim of

this public

spectacle

a

Decl Ex 1869

Co Lead

of

stating

guy Shaver

Director

future occurrences

you

of Google s

Decl Ex 25

put a stop to

recruitment

Apple employees were deprived of learning

Apple

Steve just called

sic new cell phone software

this is indeed true can

of the Board of

also Cisneros

Board of Directors

are still recruiting his browser

Schmidt

pleased

Google responded by making

terminat ing the recruiter within the

Google
we

Google Executive Chairman Member

stated

Id Ex 24

hopefully prevent

By
Shaver

message

stop doing

to

27
28

the

of

No

and

is

email from Steve Jobs

group

is

relentlessly

it
Apple employees

about potential

see

job opportunities

11 CV 02509 LHK

ORDER GRANTING PLAINTIFFS SUPPLEMENTAL

and

me again

36
Case

email

MOTION FOR CLASS CERTIFICATION

Case5 11 cv 02509 LHK

Google from more than 800 Google

1

at

2

See Harvey

3

engineers

4

guys

5

Decl Ex 25
Steve Jobs

after

Cisneros Decl

personally

7

applied

8

CEO of

members

9

regarding

and

Intel

am

their

of the Technical

Member

10

57

11

know

12

Chairman Member

13

Id

14

Eric Schmidt

15

Otellini

16

California

that he d

also Cisneros Dec

17

bother you again on

18

Page37

of

86

well as Google s external recruiting agencies

declined

strongly

to hire

some former Apple

Google

prefer that

not hire these

Ex 653

of the

Google s successful

Paul

known

be

it

as

Google even

In fact

and enforced

monitored

to

let

recruiters

offer further evidence supporting

Plaintiffs

6

78

at

Filed10 24 13

Document531

anti solicitation

agreements

especially

Google Board

of Directors received

of Intel s

an internal complaint

Decl Ex

employees Shaver

technical

We

Paul Otellini

key players

I

losing

so

Paul Otellini s answer

people

was

Google

CEOs

as the agreements

26 2007

For example on September

Class

recruiting efforts

many

assertion that Defendants

their

to

but thought

are countering

Google Executive

to forward the email to Eric Schmidt

of the Board of Directors and former

CEO

you should

Eric can you pls help

here

Court

of
District

Eric Schmidt

and forwarded

obliged

on Google s

the email to his recruiting

Id Ex 35

activities

The next day

team who prepared

Eric Schmidt

replied

a report for

to Paul

District

If

we

a

find that

recruiter

called into Intel

we

the recruiter

will terminate

Ex 50

see

States

l

Ex 651 May 4 2006 email from

Paul Otellini to Eric Schmidt

Sorry to

Northern

United

the
For

19

topic but

this

my guys

Additionally an email forwarded

to

felt

21

Apple

22

response Edward Catmull emphasized to

23

Technology

24

Edward Catmull informed Steve Jobs

25

Apple employee to work

26

424

27

another

28

whether Jobs would

to

check

with Steve Jobs

Several

offer

t he key

to stay

Rob Cook

away from

that employee

still planned

object

to leave

if

the

via email that

as a test automation

months later
and

is

continuing

assistant

indicated

Shaver

Pixar Vice President

engineers Id

but

w

e

of

Decl Ex 68

an application

declined

No

from an

Cisneros Decl

Catmull emailed Steve Jobs asking

Pixar communicated with the employee and Steve Jobs gave

11 CV 02509 LHK

ORDER GRANTING PLAINTIFFS SUPPLEMENTAL

Ex

Pixar again informing Pixar that he had

Apple Id Edward

In

with this position

37
Case

that Pixar

Advanced

Consistent

Pixar had received

engineer

contacted

to recruit our

FormerChairman and FormerCEO of

before extending a job offer to even an administrative

that

by Google

Edward Catmull Pixar President

CoFounder

20

compelled

are very troubled

MOTION FOR CLASS CERTIFICATION

Case5 11 cv 02509 LHK

Filed10 24 13

Document531

1

permission

Id Thus

2

agreements

enforced by Defendants

3

Page38

86

of

members

Plaintiffs evidence supports

their

top officers

4

c

The

stifled

In addition

showing

to

recruitment

of Technical

efforts

Class

Effect of the Absence of Cold Calling on the
Class as a

Technical

5

claim that these anti solicitation

that Defendants valued cold calling

Whole
and

that the absence

of cold

6
calling

hampered

recruitment

of

members

of the Technical

Class the documentary

evidence also

7
suggests

that the lack

of cold

calls

had a profound

and

common

on

effect

all

members

of the

8
Technical

Class

9
Plaintiffs

allege that the elimination

of cold calling deprived

employees of information

all

10
regarding

pay packages

that the employees could

more

have used to obtain

employment

lucrative

11
over

or to gain leverage
California

Court

of

Mot

pay increases Class Cert

employers in negotiating

existing

at

16

The

earning

potential

who knows

employee

of a valuable

her market worth

is illustrated

by an

13
email exchange

District

their

12

at

Adobe

Out

of concern that one

employeea

star

performerdue

to his

14

District

technical

and collaborative

skills intelligence

abilities might leave Adobe because

he could

15
States

easily get a great job elsewhere if he

desired Adobe considered how

him

best to retain

Cisneros

16
Northern

Decl Ex1250
United

the

already

For

In so

doing Adobe expressed concern about

the fact that this

employee had

17
interviewed with

other companies

and communicated with

friends

who worked

there

18
Id Thus Adobe noted

that the

employee was aware

of his value in the

market

as well as the fact

19
that the employee s

friends

were

from college

20
Id

In response

Adobe decided

to give

the

employee an immediate pay raise Id

21
Similarly as explained

by Alex

Lintner

Intuit

Head

of Global Business

whenever

Division

22
somebody s

being targeted

by an

outside

company and we want

to retain

them we

have a

23
conversation

around

how we

can retain them so they don t take the offer from the outside

24

company

Hallock

Rep

199

In the

example

of one

employee that

Intuit

wanted

to retain Intuit

25
which was an
26
but

in light

of the employee s

skills

and

contributions

to the

company

Intuit

27
to

make an investment

Id

28
38
Case

No

11 CV 02509 LHK

ORDER GRANTING PLAINTIFFS SUPPLEMENTAL

MOTION FOR CLASS CERTIFICATION

was

willing

Case5 11 cv 02509 LHK

While Defendants claim

1

key

2

individuals

3

by cold

4

Google employee in response

5

were recruited

6

getting counter

7

they received

8

as a tool to recruit

9

stating that

10

to retain

may

to Google s

it

go elsewhere

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offers were

s

impossible

by

in the hopes

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staying

Alan Eustace

Google

at

Google

competition for workers

12

makes sense to make changes

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comp

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best

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allegation

broader

them

my loyalty

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to particular

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some

this

imposed

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who

individuals

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where

also to the competitors

those competitors talk

This employee

is

86

effects

counteroffers

exGooglers but

Decl Ex 59

like

their

of

made only

keep something like

to

of improving

Shaver

it

to

and

offers talk not just to Googlers

their

have had

decision

Page39

generally

Plaintiffs evidence supports

talent

11

California

that counter

and subsequent counteroffers

calls

Filed10 24 13

Document531

too using

it

expressed frustration

being punished

Id

Senior Vice President commented on concerns regarding

and Google s approach

in

by

to counteroffers

compensation even

if

it

introduces

noting

that

it

discontinuities

sometimes

your current

in

Court

of
District

to save your best

people Id

people and send

Because

recruiting

a

a

message

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really good

company

people could

that we ll fight for our

many many

inspire

others

District

15

to follow Alan

Eustace concluded

you

can t afford

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a

rich target for other

companies

States

16

Id According

17

off s but to have

18

get a better

him the

to

long term

right approach

is

not to deal with these situations

as

one

Northern

United

the
For

19

a systematic

approach

to compensation

very

for anyone

difficult

informationspread by cold

21

that affected

22

the anti solicitation

23

impact of

24

Plaintiffs theory that Defendants

25

put

26

Plaintiffs theory that if the anti solicitation

27

to take actions

all

this

members

calls

not merely

of the Technical

agreements eliminated

elimination

affected

structural incentives

on an

Class

a key

individual

Thus

to retain

Plaintiffs evidence suggests

tool of recruitment cold calling

the entire Technical

elimination

basis but with a structural response

Class

The documentary

of cold calling allowed

evidence supports

Defendants not to have to

employees This common evidence

provides

support

for

agreements did not exist Defendants would have had

not only to retain the particular employees

who may

have received

the cold calls

39

No

not only that

but also that the

28

Case

to

evidence suggests that Defendants would have responded to the

20

place

it

offer Id emphasis added

This documentary

in

makes

that

11 CV 02509 LHK

ORDER GRANTING PLAINTIFFS SUPPLEMENTAL

MOTION FOR CLASS CERTIFICATION

Case5 11 cv 02509 LHK

Filed10 24 13

Document531

1

but also that Defendants would have had to take broader

2

Technical

4

As

5

maintained

6

within those structures

This additional

7

that the anti solicitation

agreements downward

8

have applied

9

affected

the

Class employees salaries

10

forth

set

below

Plaintiffs documentary

formal compensation

similar downward

and ranges by which they evaluated

13

At Adobe every

14

across

First Plaintiffs evidence supports

12

made significant

their

Adobe s

efforts

maintain internal equity

to

evidence further supports

on

pressure

Defendants

individual

Plaintiffs theory

employees

salary structure

jobs into

and on

a job title

salary structure

which

and every job

included

title

a salary

all

all

Technical

Defendants

pay bands zones grades

and paid employees in groups in relationship

was assigned

would

salaries

claim that during the class period

compensation structures and divided

job position

salary range within

evidence further shows that Defendants

documentary

pressure

used formal administrative

Court

and

structures

11

District

would have

Compensation Structure and Internal Equity

ii

of

that

86

of

Class as a whole

3

California

action

Page40

groups

to other

had a corresponding

minimum middle and

District

15

maximum See

16

G

17

would

18

shows that

19

categorizing

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levels assigned

21

to

Cisneros Decl

Ex C

ArriadaKeiper

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at

16 20

159

18990 259 id Ex

States

Northern

United

the
For

Vijungco

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29

Adobe expected

Id Ex F

fit

and compensating

its

workforce

to all salaried employees

at

57

Apple had

23

comprised centrally established

24

Google

25

within grades

26

Depo

at

also had

See

74 76

eg

many

job structure

a

system which

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and

testifying that Google s

ranges Throughout

Decl

min mid and max

company

6 10

had

Google

Ex

B

many job

see also Cisneros Decl

Google

generally

No

the

id Ex X

Wagner

same structure

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Ex S

Depo

as the

at

titles

Brown
at

49 50

salary

pay bands with minima

11 CV 02509 LHK

ORDER GRANTING PLAINTIFFS SUPPLEMENTAL

Depo

Every salary range

40
Case

wide job

amounts See ids

Decl Exs 15 16

salary ranges utilized by

the class period

data

included

Burmeister

job families many grades within job families and

salary ranges

salaries

sets of base salary ranges applicable

Burmeister

Harvey Suppl

discussing

employees

Similarly Apple s compensation

Id Ex M

14 15 52 53 Brown Decl Ex 16

28

Depo

Streeter

for each year in the Class Period

22

27

that the distribution of its existing

MOTION FOR CLASS CERTIFICATION

Case5 11 cv 02509 LHK

Document531

maximaand

medians Hallock

means

Filed10 24 13

Rep

1

and

2

Depo

3

had generally

4

Google Senior Vice President Business Operations

5

you could understand

6

S Brown

74 76 id Ex X

at

same

the

Depo

8

id Ex BB

9

call

them

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to a grade level

11

Ex CC

12

similar to a job

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applied

14

at

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Depo

Wagner

structure

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Intel

McKell

RD

or

was

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based on

specific

at

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73

66

86

of

see Cisenors Decl

Ex S

testifying that Google s

Brown

salary ranges

ranges As explained by Shona Brown former

level

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compensation

and nontech

tech

salary

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at

49 50

at

as the

9495 id Ex Y

at

Likewise

7

California

either

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if

you

on a

discussed

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a specific

role

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Google

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23

at

structure with job grades and job classifications

e break jobs into one of three

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a

more

lot

categoriesjob

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Id Ex Y

families

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we

employees

assigned

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Murray Depo

grade

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at

45

Intel

and experience

skills

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that everyone at Intel

explaining

standardized

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assigned a

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at

classification

company

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see also

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Court

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District

59

to multiple

Intel

jobs and

most

jobs spanned

Id Ex BB

salary grades

multiple

and compensation

further

at

McKell

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Intel like

District

States

Id

16

at

62 63

Northern

United

the
For

The

17

other Defendants

had

18

titlesas

19

percentiles and categorized

20

Lucasfilm s compensation

21

Cisneros Decl

22

similar job titles or job classifications

23

families and

24

each position

indicated

by documents

similarly set salary structures

Ex LL

groups see

id Ex

tracking

scheme

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included

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id Ex VV

SS McAdams

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job

246

titles

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26

used specific guidelines

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ranges for setting and adjusting salaries

to ensure that employees

Hallock

matched

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at

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78 136

at

to

85 89

job families see

137 138

and established

No

and tools For instance to

assist

Adobe had an

salary ranges for

managers

online

salary ranges

in staying

within

Defendants

the prescribed

salary planning tool as well as

with guidelines based on market salary data

11 CV 02509 LHK

ORDER GRANTING PLAINTIFFS SUPPLEMENTAL

had

Pixar used job

41
Case

who

29

were paid within the prescribed

matrixes which provided managers

Rep

as well as set salary ranges for employees

id Ex NN
Sheehy

that were

had job families and job

high information job codes and

formal bands

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salary

low mid and

jobs into

25

28

salary

Intuit

MOTION FOR CLASS CERTIFICATION

See

Case5 11 cv 02509 LHK

Ex C

1

Cisneros Decl

2

populated with employee

3

sic You

4

range

5

guidelines

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allocated

have the

information

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Apple

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in

how

in terms of

9

manager

on

so the employees

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might want

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kind of the

about spending

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team

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tool also has the ability to provide

managers

employees

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levels See

52 53 id Ex O

id Ex

Mansfield

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13

understood what the boundaries

employee

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33

advisor

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Baja

I

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Apple Senior Vice President Ipod Division and

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recruiting tool called

employee records and performance

preset

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11

California

86

ssentially the salary planning tool is

current compensation

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a Human Resources

also created

internal system for tracking

Fadell

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kind of look

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Page42

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82 3

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is

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ArriadaKeiper

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Document531

managers

to grade

14243 145 46 id Ex N

at

As explained by Tony

Jobs

to Steve

this is the level here are the salary ranges

required

former

Fadell

would say

and through that tool

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this is

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were then

Court

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District

14

Intel

also used

a

software

were Id Ex N

Fadell

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53

at

tool to provide guidance to managers

about an employee s

pay

District

15

range which would also take into account market reference

16

Decl Ex 9 As explained

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the tool

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outside

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at

ranges and merit

Suppl

See Harvey

States

by Randall Goodwin

Intel

if

Development Manager

Technology

Northern

United

the
For

52

recommended something and we
its

guidelines

accord Hallock

20

Intuit

we would

Rep

write

some

Depo

Cisneros Decl

22

Talent Development former Vice President

23

Acquisition Director

24

acknowledged

25

usually

use s

McNeal

make

decision

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27

the target salary range for jobs at Google

Wagner

Depo

at

76 99

57 58

make a proposed change

s

Google

Q And

if

to managers

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Michael

throughout

McNeal

of Talent Strategy Vice

provided

that Intuit

26

28

at

of Talent Acquisition and

example

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to

Cisneros Decl

justification

guidelines

21

for

wanted

No

Depo

Goodwin

Manager

about compensation

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company

99
testified

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the target salary

locate

id Ex

would be

11 CV 02509 LHK

ORDER GRANTING PLAINTIFFS SUPPLEMENTAL

of

of Talent

the variables that

Id

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an internal company website

to

company

Vice President

President

of Executive

guidance about

Director

Intuit

the

42
Case

was

that

77

similarly gave compensation

Ex GG

we

thought

MOTION FOR CLASS CERTIFICATION

X
for a

Case5 11 cv 02509 LHK

1
2

that

for that job family

Third

3

and

their

5

below

6

annual review and

7

salary ranges

8

explained

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Page43

of

some place

86

and pull up what

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grade

that

Plaintiffs evidence indicates

4

that Defendants

expected compensation

Adobe s

to be set within

employees were

competitive Id

salary ranges

deviations

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10

would

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also result

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programs were designed

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McKell

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id Ex HH

approval

Intuit recruiters could

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to

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employees

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72 73 90 92

range

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Similarly Intel regularly ran reports showing the salary range distribution of

id Ex BB

part of the

with managers wherein Adobe s officers

in conversations

minimum for

have a

special approval

them Id Ex C

red flag

11

California

could you go online or go to

certain job within a certain grade

was

Filed10 24 13

Document531

At Apple going

outside

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District

Fadell

guidelines

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53

at

also required extra approval

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we

if

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to

go

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outside

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J

of that then

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have to pull in a

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of people to then approve anything outside

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range

Google s compensation

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monitored

People

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Ops

Northern

United

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For

id Ex

5 Brown

Resources

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21

Analysis

pool

allocated

compensation

23

maintaining internal

24

similarly both
in

25

As
looked

27

that s

28

need to

at

and Lori

finally

at

McAdams

for ensuring

Ex VV

shows

Pixar Stephanie Sheehy

Pixar Vice

President

of

Pixar Manager of

Human

that salaries for each job group

Sheehy

Depo

Resources

remained within

77 78

at

not only that Defendants

maintained

formal

idea that employees doing the

same work would

generally

No

be paid

hiring and promotions

by Debbie

Streeter

Adobe Vice President

as a data point because

if

more than somebody who s an
that before

you bring them

Total

Rewards Adobe

existing

in Id Ex F

employee that
Streeter

s

Depo

a high performer you
at

175

Similarly when

11 CV 02509 LHK

ORDER GRANTING PLAINTIFFS SUPPLEMENTAL

always

you are going to go hire somebody externally

43
Case

and

but that the details of these structures were driven by concerns about

equity the

internal equity

know

24 And

Cisneros Decl

structures

explained

making

at

Plaintiffs evidence

22

26

Depo

MOTION FOR CLASS CERTIFICATION

Case5 11 cv 02509 LHK

1

considering

2

considered

3

whether

Concerns

extend a counteroffer Adobe advised

to

Id Ex

Burmeister Apple Senior Director
Burmeister defined

6

individual s

7

organization

8

determining starting salaries

9

explained by Patrick Burke

inheres

in

11

join

the biggest

86

internal equity should

ALWAYS

be

program

an employee s compensation

some

all of

not

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Id Ex M

former Apple Technical

comparing

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determining factor on what

at

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based on the

fair

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or across

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61 64 id Ex 1856

on

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we gave

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Steven

equity which

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testified

relative to the other employees in your

contribution

a new employee at Apple

emphasis

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of

as the notion of whether

10

12

of

about internal equity also permeated Apple s compensation

5

California

Page44

216.5

4

was

Filed10 24 13

Document531

the team they

Burke

hiring

would

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279

at

added

Court

of

Likewise Google considered

13
14

salary algorithm

15

a reasonable range

16

District

overall

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increases

internal equity

in part for the purpose of

to

be an important goal

e nsur ing

internal equity by

Google

managing

utilized a

salaries within

District

Id Ex 1613

Furthermore because Google

strive

d

to achieve

fairness in

States

high performers with low

salary distribution

would

salaries

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Northern

United

the
For

18

Similarly Intel used internal equity

19

employees that corresponded

20

210 211 id Ex 398.8 To

21

Equity Report

22

the words of

23

screams egalitarianism

24

treating

to

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we

play

26

compensation

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regarding

28

compensated and

how

committee

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this

positions

for approval

employee s

factored

heavily

lip

service

new

hires

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used a tool that generates

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of Compensation

everyone the same within broad

new

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new employees

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determine wage rates for

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to

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assist

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25

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than high performers with high salaries

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id Exs 710 729 2084

MOTION FOR CLASS CERTIFICATION

its

information

company were

11 CV 02509 LHK

ORDER GRANTING PLAINTIFFS SUPPLEMENTAL

In

2035.4

and out of cycle compensation adjustments presented
were

at

of our culture

44
Case

current

Case5 11 cv 02509 LHK

1
2

request

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positions

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it

Acquisition

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with the manager requesting

Chris Galy explained

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hire See

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hire one person and lose

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salary in order to preserve

bringing

in

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new

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person

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comp

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testified

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at

86

had were

testified

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Chris Galy also

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Lucasfilm Director

always one of the considerations in determining pay for

7

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Chris Galy

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pay increase

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10

for

11
12

41 42

at

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Condiotti

Page45

would have

5

California

MM

2092 2094 2096 id Ex

Filed10 24 13

Document531

See

Pixar similarly expressed concerns with maintaining internal equity

Depo

Batali

If

67

at

someone

eg id Ex QQ

being paid more than someone

feels like they re

I

know who

Court

of
District

13

has more value

14

salaries of similar employees

it

raises a bit of a

to

flag id Ex UU

Zissimos

ensure they were not

out of

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at

71

discussing

comparing

whack

District

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15

Defendants formalized pay structures and compensation design

to

Plaintiffs

States

16

evidence indicates that Defendants concerns with internal equity could lead to classwide

17

in compensation

18

between

19

existing

20

and emails before

21

reviewed

changes

Northern

United

the
For

new

23

align

25
26

10

and

a

quity

ing

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result of the anti solicitation

existing

after

A

dynamic

s

individual

employee more

appropriately

sic high performing
out

and

best reflected

was

to ensure its workforce

djustment

ago where we went
team we recognized

is

the anti solicitation agreements

Chris Galy stated in his deposition

have an

agreements

employees Defendants considered

precise

employee salaries

O E

24

and

hires

employees This

22

ut

levels as

hired

in

in Defendants

compensation

own

internal documents

within

range and implemented

28

Call

for the explicit purpose of

and

based on

how

that

manager would come in and say I believe that I
had one of these about a month ago couple months

a

somebody and
we were

as

we

at

risk of potentially having

were looking

at

some

of the folks
this

on

know not in the market range so we did an action for
We gave
a
increase Cisneros Decl Ex FF Galy Depo at 195 Defendants contest this anecdote by
contending that the employee in question received a salary increase for purposes unrelated to
internal equity

record

Yet the portions of Chris Galy s deposition

The Court

relies

on

the materials

No

11 CV 02509 LHK

ORDER GRANTING PLAINTIFFS SUPPLEMENTAL

salary

that the Defendants cite are not in the

that the parties placed in the record

45
Case

the

person feel like

they were you

27

for

Lucasfilm regularly and proactively

in their salary range

I just

that the person is

increasing

compensation increases

Where

fact

In the face of inequities

MOTION FOR CLASS CERTIFICATION

Case5 11 cv 02509 LHK

1
2

employee aligns with

At

3
4

Depo

Maupin

at

Intel a

Filed10 24 13

Document531

internal peer group based

their

on

the

same

Page46

set

of

86

Id Ex OO

of criteria

id Ex 730

194

human resources document

from

2002 prior to

the anti solicitation agreements

recognized

5

and

Id Ex 392

6

In response

planned to

Intel

1

7

2

and

8

An

Id

9

human

Intel

resources

document confirms that

11

California

Decl Ex

Harvey Suppl

10

10

at

7 emphasis

added
At Adobe

12

five

months before Bruce Chizen

former Adobe

CEO entered

into an

Court

of

14

eliminate

Human

CoFounder

agreement with Steve Jobs

15

District

13

cold

calling between

the

former Chairman and FormerCEO of

Apple

to

companies Donna Morris Adobe Senior Vice President Global

District

Resources

Division expressed concern

about internal equity due to

States

16

Decl Ex 17

Harvey

Northern

United

the
For

17
Adobe

18
19

respond

to

personnel

the problem

stated that because

of the

they

may

not be able to

immediately

Id

20
The

21

effects of internal equity may have

example

been even more concentrated

22

Class

23

positions

24

range of salaries

and

25

Id Pixar had

Tools Software Engineer leveling

26

framework

27

adjusting

Intuit for

28

versus

a

all

other

s

Cisneros Decl

compensation

Ex 2739.70

even for employees of similar salaries

for evaluating

salaries

differentiated between

See

the expected contribution

id Ex

1309.1

Pixar decided to

After

Technical

technical

matrix that
of

it

used

their software

Pixar determined

make

for engineers

that

within the Technical

and other technical

employees had a

employees

to

give

engineers

some

Pixar a consistent

and

of its

Id From Pixar
46

Case

No

11 CV 02509 LHK

ORDER GRANTING PLAINTIFFS SUPPLEMENTAL

to justify

MOTION FOR CLASS CERTIFICATION

s

Case5 11 cv 02509 LHK

1

perspective

the

2

members who

are performing at the highest

3

a

4

seeing

clear message

to these

much more

sum

5

In

6

structures

7

the Technical

8

that of her peers

9

the impact of

11

California

these factors

salary proposals

that

we

Page47

to compensate
is

value them at

Plaintiffs evidence supports

the

is

levels This

of

86

We

pre emptive strike

a

as

least

much

team

the lowest paid

as

some new

want

hires

who

their

premium Defendants placed on

finds persuasive

Defendants compensation
on

are

theory that Defendants formal compensation

internal equity

a market for

created

Class of employees in which any individual s compensation was intertwined

The Court

send

to

companies Id

competitive offers from other

combined with

10

new

goal of the

Filed10 24 13

Document531

Plaintiffs contention

structures

that

common

questions

with

about

focus on internal equity and the effects of

their

Class as a whole are likely

questions

the Technical

12

Impact

iii

of

to

predominate

over any individual

Labor Market Competition

Court

of

Thus far

13

the Court has discussed

Plaintiffs documentary

evidence of the

effects

of cold

and Defendants internal equity concerns on wage

14

calling

15

suppression across the Technical

16

District

suggests

17

Class members employed by other Defendant firms because the Defendants viewed

18

competitors for the same employees This competition often meant that Defendants benchmarked

19

compensation

Defendants

compensation

structures

District

Class

Now

the Court turns to documentary

evidence that

States

that

wage suppression within an

individual

Defendant firm may have affected

Technical

Northern

United

the
For

Adobe

20

based on each other or based on

for

example viewed

21

14

23

Google Apple and

24

benchmarked

25

Decl Ex 15

26
27

Adobe

direct

further considered

its

Intuit

as

itself

Ex 2800

considered Apple

not actually benchmark

other

against

cf Cisneros Decl

external

to be

winning

sources

among its top
the talent

competitors

war

Shaver

horses

companies

See Shaver

including

showing that

Google

compensation against

and

Intel

to

these latter

in

be

Decl Ex 15

In

Google Apple and

2010 Adobe
reference

considered

peers

companies

47

No

Decl

Ex

11 CV 02509 LHK

ORDER GRANTING PLAINTIFFS SUPPLEMENTAL

2008 Adobe
Intel

Intuit

Shaver

to

be

a

though Adobe did

28

Case

for talent

horse race from a benefits standpoint which included

in a

among the

compensation

peer and

Google and Apple

about whether Adobe was

and expressed concerned

22

common

each other as

MOTION FOR CLASS CERTIFICATION

Case5 11 cv 02509 LHK

1

Similarly throughout

2

compensation

3

designated

4

to

a

as

on an

6

President

7

that

8

beat Google

company

Google

analysis of

as

biggest

for

Apple

among other companies

Intuit

based on meeting

a

key

to

its

and Dave

of

its

In

it

company

2007

a

based in part

Bock Google Senior Vice

Google Equity Compensation Manager wrote

Rolefson

labor market competitors are

to

talent Id

Google

identified

The Walt Disney Company which now owns

Intel as well as

companies

USbased stand alone

10

Pixar and Lucasfilm as

11

California

equity

high tech

Id Ex 173

peer companies Laszlo

86

each of which

such as being a

criteria

competitor

labor market

compared

of People Operations

o ur

9

peer

Adobe and

Intel

Page48

Google analyzed and compared

the class period

company and

high growth

5

Apple

Filed10 24 13

Document531

public

companies

12

talent

have revenue market capitalization and performance that are generally

peer

that in

the Apple

a phrase Apple

defined

as

view compete with

compensation committee s

Apple

comparable

for

to

Court

of
District

13

Apple

14

Ex 1855

Cisneros Decl

Intel

also

benchmarked compensation

against

tech companies

other

considered

generally

District

Intel which

15

comparable

16

communications and

17

to Intel in

to

Intel

defined

b lend

as a

of

semi software networking

States

diversified computer

Cisneros Decl

companies

Ex 2030.115

According

Northern

United

the
For

2007

At Lucasfilm

18
19

Directors

20

Defendants

21

these comparable

a

2007

meeting corroborates

The update

extremely diverse

Recruiting

many

states that

Defendants in this case including

23

its

difficult

and

positions

to

fill

Apple and Google

included

Human

Resources

of the dynamics

1 passive

needs for each division

22

most

companies

talent

3

its

Update

that appear to have

was

difficult

Bay Area

Pixar Google and

Silicon

to

Id

prepared for a Board of
been at play for

find

2 Lucasfilm

competition included

Valley generally and

included members of the Technical

had

other

4 some

of

Class including

Id Ex 690.1922

24
25

Further there

26

common

27

compensation

external

is

evidence that Defendants also benchmarked

sources most commonly

structure

Radford

or

their

Croner Adobe

compensation data to

for

example pegged

as a

28

See

id Ex C

ArriadaKeiper

Depo

at

16

see also

48
Case

No

its

11 CV 02509 LHK

ORDER GRANTING PLAINTIFFS SUPPLEMENTAL

MOTION FOR CLASS CERTIFICATION

id Ex

M

Case5 11 cv 02509 LHK

1

Depo

Burmeister

how

discussing

a

3

against

4

market targets that Adobe used as benchmarks

5

high tech those

7

determining salary

Depo

Chizen

that were

98

at

or

that Pixar compared itself

for setting salary ranges

tended

the position

At times Defendants would make adjustments to

to

be software

Id Ex A

existed

salaries in order to

their

and use that as part of the process

for determining its

own

id Ex CC at 23

pay delivery

Id Ex BB at 90

10
11

Plaintiffs documentary

evidence further suggests

own pay practices

12

competitiveness

13

company

14

Shaver

15

Resources

16

California

the particular

would

Intel

id Ex BB at 89
focal process

86

of

CEO explained that

similar to wherever

geographically

showing

1309.1

former Adobe

Bruce Chizen

For example

stay competitive

8
9

survey

the Radford

Page49

Apple used external market data such as Radford as

ranges id Ex

2

6

reference when

52 55

at

Filed10 24 13

Document531

Human Resources among others

17

stating

18

close more or

19

President

20

We

21

their

22

could safely share

23

that

when determining

the

anti solicitation agreements

of their

Defendants matched

job

title

compensation

within the

Court

of
District

to

similar titles across

Ex

Suppl Decl

multiple

companies

122 email from

Lori

and shared compensation

McAdams

information See

PixarVice President

of

Human

District

and Administration

to Sharon

Coker

former Lucasfilm Director

and Senior Director

of

States

asking about others

budget for

salary increase

FY

07 and

Northern

United

the
For

o urs

but

is

it

less Cisneros Decl Ex

of People Operations

called tech companies

this

are

merit budgets

this

24

The

25

competition against

26

we may manage

week

621

o ur

stating

to check

Adobe

on average

closer to

email from Laszlo Bock
budget

is

Google Senior Vice

comparable to other tech companies

merit budgets to

Apple

data only because

Are you doing anything

compare

to our

3.9

other Defendants

Defendants

Intel

they were not in fact competing

of

in this

Software

to

case
Lori

and Administration Ed Catmull

27

Resources

28

Senior Vice President

for employees due to the

of Strategic

is

reflected

McAdams

Pixar President

in

a 2006 email from Howard Look

Pixar Vice

and

Ali

President

Rowghani

of

Planning

11 CV 02509 LHK

ORDER GRANTING PLAINTIFFS SUPPLEMENTAL

Human

Pixar CFO and

49

No

told us

Defendants would have experienced due to market competition including

pressure

former Pixar Vice President

Case

They

MOTION FOR CLASS CERTIFICATION

Case5 11 cv 02509 LHK

new

This

1

the bay area tech

cost

11

California

12

Court

of
District

13
14

District

15

but for

a

We

engineers

have

recounted

if

you Brin

CoLead

make any new

threatened

Director

on out there

new

offers or contact

2005

team Steve

we may

advisor

people

at

Apple

Chairman

we

Former

as Brin

stating

war Id Ex 1871

Google

until

that

CoFounder

CoFounder

means

to

to Defendants

hearing

after

Jobs

as well as Bill Campbell

Apple and

of

in

Google

Sergey Brin

Management Team

Id Similarly in 2005 when

discuss

For example

agreements

hire a single one of these people that

Google s Executive

not

going for us beyond

lots

there s a lot going

trying to recruit employees from Apple s Safari

Board of Directors

sic

best to

higher

about competition for employees contributed

felt

Chairman Former CEO of Apple

to

much

Ex 1306

enter into anti solicitation

to

Google was

email

the

there is risk that

The concern Defendants
decisions

recruiting has

and do our

should also acknowledge

apps engineer

software

why

more

Cisneros Decl

7

10

we

and with
lose

9

but

86

to other tech companies

be fiscally prudent

to

of

been feeling about

and helps partially explain

two people

lost

Page50

what we ve

corroborates

obviously want

for experienced

of backfilling

base salary

5

8

we ve

budget

stay within our

4

6

why

We

3

up

market heating

been so hard and

2

from Radford

market data

Filed10 24 13

Document531

In

an

of Intuit

Sergey Brin advised

lets

have had a chance to

whether to enter into an anti solicitation

considering

States

16
Northern

United

the
For

17
18
19
20
21

agreement with

top talent

Jobs

Steve

24
25

will

do

it

in

wooing

it s

did not enter into

open season

a

way

in

other than senior

Steve he

will

go

which they will be

Harvey Decl

to stifle rising costs

Board and

don t

after

enticed

27

wars

60

rapidly

From

the perspective

CEO Lucasfilm c ouldnot
that

sort

of

stating in an email that Pixar

of

seriously

managers he
some
to

will deliberately

of our top

come

Apple

Mac

talent

extraordinary

stating

poach

No

Adobe

I tell

just to

and he

like

packages

and Steve

George Lucas

thing

a

war with

bidding

Cisneros Decl

and Lucasfilm

messes up the pay structure

other companies

Ex NN

have agreed that

Pixar President

by

every

offering

at

we

44

because

see also Shaver

we

Decl

want to avoid bidding

time a studio

high salaries

to

tries

grow

11 CV 02509 LHK

ORDER GRANTING PLAINTIFFS SUPPLEMENTAL

way

former Lucasfilm Chairman of the

50
Case

if

perceived the anti solicitation agreements as a

get into

As expressed by Edward Catmull
it

agreement with

about the loss of

Ex 14

have the margins for

Ex

CEO expressed concerns

an anti solicitation

In addition Defendants appear to have

26

28

Adobe

former Adobe

Bruce Chizen

prove a point Knowing

22
23

if

Apple

MOTION FOR CLASS CERTIFICATION

to

grow

at the rate

Case5 11 cv 02509 LHK

1
2

a company desire

Ex RR

3

Depo

Catmull

That s

s people

So

it

do

I

5

Norther

6

and a couple smaller places

7

61

8

Whitman

9

Board of Directors and former

Notably

Ex 872

11

of the valley

As

CEO of eBay

Eric Schmidt

because

The evidence

12

have conscientiously

Steve Jobs entered

shortly after

former

10

California

w

up

very high

to the

in

Lucasfilm Dreamworks
Shaver

Google s

salaries across

board

the

Google

said

Meg

Google

of the

Cisneros Decl

hiring practices

Ms Whitman

Ex

Decl

Google Executive Chairman Member

indicates that Defendants

therefore

up here

other

each

it

Decl

in response

into an anti solicitation agreement with

to talk about

driving

ILM

Pixar

told Google s senior executives

you are

makes

It

it Writing

avoided raiding

called Eric Schmidt

CEO

see also Cisneros

does

It

86

of

e have avoided wars

up here

of the companies

all

about

feel strongly

head of Disney Studios Edward Catmull explained
California because

Id Ex 61

and leave

4

n

Page51

messes up the pay structure

it

got And

we ve

the reality

just

will hear about

179

at

Filed10 24 13

Document531

is

the talk

Id

sought to enter into anti solicitation

Court

of

agreements in an effort

14

that they were

15

otherwise would have to

16

District

13

the anti solicitation

17

affected

18

The

19

be

to

stifle

competition for labor and rising wages

increased

successful Defendants did not need to increase

compensation

as

To

much

the extent

as they

District

and retain employees

attract

This

common

evidence further suggests

that

States

agreements reached beyond individual

members

of the Technical

Class and

Northern

United

the
For

the compensation

extensive

documentary

To show

22

Plaintiffs

23

Hallock

24

11

common

D

and a

Ph

B A in Mathematics

D

econometric
forecasting
12

Kevin

Joseph

Statistical

own

reports from their

Chauncey J Medberry

the

their

Statistics

at

Defendant firms

theory that they will

basis

Evidence
classwide impact

E Leamer PhD
experts Kevin

Professor

of

11

F

M Murphy PhD

13

Management
Angeles

of CaliforniaLos

the University

and Kevin

Professor

of

Dr Leamer

1966 and a Masters in Mathematics
1970 He has published on the topics
methodology and statistical analysis international economics and macro economic
including
on the subject of inferences that may appropriately be drawn from non
in

Economics

experimental data

28

is

a classwide

two experts Edward

of

Defendants presented

E

across

therefore supports

on

violations

including

predominate for the purpose of assessing

issues

further retained the services

PhD 12

present

Expert Reports and

Edward
Leamer Ph
Economics and Professor of
earned a

27

that

whole

Class as a

Plaintiffs

of the antitrust

b

21

26

evidence

able to prove the impact

20

25

of the Technical

F Hallock Ph

R Rich

at

D

from

Princeton

the University

is

80 Professor

the

Donald

Professor

of

University

of Michigan

C Opatrny
Economics

in

in

74 Chair
Professor

of the Department
of

Human

of

Resources

51

No 11 CV02509 LHK
ORDER GRANTING PLAINTIFFS SUPPLEMENTAL
Case

MOTION FOR CLASS CERTIFICATION

of

Economics
Studies and

Case5 11 cv 02509 LHK

Shaw Ph

D

14

Filed10 24 13

Document531

Dr Leamer s

and

1

and Kathryn

2

The Court begins by

3

which support

4

criticisms of

5

rely The Court finds that methodological deficiencies

6

criticisms unpersuasive

7

Leamer and

8

individual

to attack

the methodologies

describing

common

Plaintiffs theories of

Dr Leamer Dr Hallock

The Court

Dr Hallock

Dr

and the materials on which

therefore

86

and conclusions

Leamer and

Dr Hallock

Court then turns to Defendants

Dr Leamer

Defendants

and

Dr

Hallock

reports render the

expert

finds that the methodologies

commonquestions

demonstrate that

Dr

of

harm The

in

of

Hallock s analyses

and analyses

impact of

Page52

and theories of

are likely to predominate

Dr

over

questions

9

Dr Leamer s

i

Opinions Based on Economic

Documentary Evidence Data and

10

Dr Leamer s

In

report which was presented

expert

first

Theory
Analyses

Statistical

in support

Motion

of Plaintiff s

for

11
Class Certification
California

Dr Leamer

asked

Plaintiffs

to evaluate

whether classwide evidence was

12

Court

of

capable of showing that the anti solicitation

1 members
District

agreements

reduced the compensation

artificially

of

13
and All Employee classes generally and

of the Technical

2

all

members

or most

of

14

District

10 a

Rep

each class See Leamer

15
States

there

was

a reliable classwide

In addition Plaintiffs

or formulaic

method capable

asked

Dr Leamer

of quantifying

assess whether

to

amount

the

of

16
Northern

suppressed compensation suffered by each class
United

the

answered
For

member Leamer Rep

17
these questions

10 b Dr

Leamer

the affirmative

in

18
19
20
Director

21

of the Cornell

Economics from
22
23

compensation
13

structure

in the Booth School

Murphy
24

Princeton

in

1981

received

and a

a

Compensation Studies

the University

at

University

in

1995 He

is

is

the

George

J Stigler

of Business and the Department
bachelor s

PhD in

at

Cornell

of Massachusetts at
a leading

University

Amherst

in

labor economist

degree in economics

economics

Distinguished

25

and an expert

in

in

Service Professor

of

Economics

Economics at the University of Chicago
from the University of CaliforniaLos Angeles
of

from the University

of Chicago

in

1986

published on labor markets and the determinants of wages and compensation
has addressed the market determinants of wage by

economics

Dr Hallock
and a PhD

1991

and design

M Murphy PhD

Kevin

for

Institute

B A in Economics

earned a

skill

Dr Murphy has
His work

in

labor

level as well as the

determination of relative wages across industries and occupations
14

26

Kathryn

Shaw Ph

27
28

D

is

the Ernst

Dr Shaw

School of Business

C Arbuckle
Economics
Stanford Graduate
an AB degree from Occidental College and PhD
Professor

of

go within companies and use
from management practices

researchers

performance

gains

the

in

Economics from Harvard University Dr Shaw has published on the
She also co pioneered the field of insider econometrics a research
in which

at

received

insider knowledge

topic of personnel
field

and

in personnel

No

11 CV 02509 LHK

ORDER GRANTING PLAINTIFFS SUPPLEMENTAL

economics

data to identify the

52
Case

economics

MOTION FOR CLASS CERTIFICATION

Case5 11 cv 02509 LHK

Dr Leamer s

1

analysis proceeded

2

studies and theory documentary

3

anti solicitation agreements

4

class

5

words

6

least

7

the absence

8

studies and theory documentary

9

suppression of compensation

members from

Dr Leamer

and

how

that

work

Class Cert

Mot

16

at

classwide evidence was capable of showing that

economic

at

preventing

other

In

the very

Defendants were paying some members of the class less than they would have been paid in

Second Dr Leamer

of the anti solicitation agreements

evidence

affected

all

and

analyses

statistical

or nearly all class

followed a roadmap widely accepted

10

Leamer s approach

11

California

explained

employee compensation generally by

the true value of their

discovering

86

of

were capable of showing that the

analyses

statistical

suppress

to

Page53

two steps First Dr Leamer

in

evidence

tend ed

illustrated

Filed10 24 13

Document531

of general

12

capable of showing widespread harm to the class

See

are capable

members

Plaintiffs

to conclude that

eg

of

WL

that this

noted that

Dr

that use evidence

common

Johnson 2009

economic

showing

class actions

in antitrust

price effects plus evidence of a price structure

how

illustrated

evidence

5031334

is

8 11

at

Court

of

13

predominance

finding

conduct was alleged

where

14

evidence was presented

15

Linerboard Antitrust Litig 305

16

District

structure

that bill rates

to suppress

bill

rates for nurses

generally

and

were correlated with nurse pay rates see also In re

District

F3d

145 153 55 3d Cir 2002

endorsing regression plus pricing

States

study to show classwide

impact

Northern

United

the
For

17

In

Dr Leamer s

supplemental

expert

18

supplemental

19

raised

20

impact

21

additional

22

Defendant that would have transmitted

23

the Technical

by

motion

for class certification

Leamer focused

analyses

his supplemental

confirmed

his

Dr Leamer

first

Leamer

methodology

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a somewhat

to

respond to questions

could show classwide

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rigid pay structure

concluded that classwide evidence was capable of showing that the anti

27

According

28

such as

Dr Leamer this

first

market price discovery

step

Dr

of Technical

was supported by

Class members generally

principles

Leamer noted that when

of information

evaluating

economics

the functioning

53

No

throughout

Suppressed Compensation Generally

solicitation agreements suppressed compensation

Case

at each

13

26

to

of

on

Dr

of the

the effects of the agreements broadly including

a

25

initial

report

original finding

Class Leamer Suppl Rep

24

asked

Plaintiffs

Dr Leamer s

the Court related to whether

Dr

report which was prepared in support

11 CV 02509 LHK

ORDER GRANTING PLAINTIFFS SUPPLEMENTAL

MOTION FOR CLASS CERTIFICATION

of labor

Case5 11 cv 02509 LHK

1

markets economists

2

are powerful

3

the

4

reality

5

can slow the process

6

price discovery

7

when

change high

conditions

by which

by which

that market forces

demand

at

approximately

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71

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costs and limited informationflow

transaction

participants

Dr Leamer

72 73

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Market

in a market search for this equilibrium

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74

11

who

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14

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16

these passive

17

of information for employees about outside

Id

are not actively

Defendants and other high tech companies

looking

are looking for

time

number

for high tech jobs limit the

in searching

new employment

who

costsincluding

opined that the high transaction

10

California

supply and

86

occur

prices reach market equilibrium

transaction

the process

presume s

that virtually all transactions

market price which equilibrates

labor market

is

enough

rapidly

of

Id

71

8
9

enough and work

Page54

model which

often use a market equilibrium

pricethe

same

Filed10 24 13

Document531

for

new

new employment

jobs

active

opportunities

candidates because

money and

of existing

workers seeking

value potential

passive

personal

employees

candidates more than

currently

satisfied

employees

1

Court

of
District

to

be perceived

more

as

qualified

and track records

diligent

2 often

and reliable

that save the hiring

company search and

on the job

have training

3 are

training costs and

District

assets that

if

hired

away from

harm competitors

rivals can

Id

62 Thus

recruiting

States

candidates

by

cold

calling is both

an

important

tool for employers

and a key channel

Northern

United

the
For

Dr Leamer

18

hypothesized

that by

19

employees Defendants anti solicitation

20

compensation

21

to discover

22

fewer opportunities

23

that could

24

71 76

to

agreements impaired information

their

salaries

have been used to negotiate

In addition

Mot

at

3

Defendants

the competitive value of their services

increase

Dr Leamer

25

Defendants could avoid taking

26

and other forms of profit sharing

27

57 62 75

cold calling and other competition over

restricting

and job offers Class Cert

and obtain

opportunities Id

inhibition

flow about

of

employees

meant employees were

by moving between

firms

and deprived

afforded

of information

higher wages and benefits within a firm See Leamer

opined that by limiting the information available

to

80

affirmative steps such as offering

to

their

retain employees with valuable

firm
specific

11 CV 02509 LHK

ORDER GRANTING PLAINTIFFS SUPPLEMENTAL

employees

skills

54

No

Rep

employees financial rewards

28

Case

ability

MOTION FOR CLASS CERTIFICATION

Id

77

Case5 11 cv 02509 LHK

1

Dr

of this hypothesis

In support

Leamer

2

economists

3

imperfection

4

Information and the Change in the Paradigm

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6

people

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could have a profound

alter

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37 38

behavior

their

effect

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on

81 88

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work

40

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of Nobel Prize winning

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markets function

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Joseph Stiglitz

Rev 460

2002

461

convey information leads

fact that actions

why

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information

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the documentary

evidence common

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to the class as

agreements and compensation

10

See Leamer

11

California

of

of the equilibrium

Economics 92

in

Page55

even a small amount of information

that

the nature

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further support

on

see also id

have such profound

Dr Leamer

8

cited to the

such as Joseph Stiglitz for the proposition

Leamer Reply
to

Filed10 24 13

Document531

For example he cited to Defendants internal documents

that but for the anti solicitation agreements

12

cold calling each other s employees and that Defendants recognized

13

forms of employee

14

could then have broader effects

a

whole as

reduction

indicating

Defendants would have been competing

for labor

and

calling and other

that cold

Court

of
District

had the potential

solicitation

to

drive

up

employees which

the cost of specific

Id

District

15

Finally

Dr Leamer

with standard

bolstered his findings

econometric

analysis utilizing

States

Dr Leamer

evidence and methods

16

solely classwide

17

who

18

theory of price discovery at

19

analyses

20

undercompensation

21

conspiracy

22

showed

23

Defendant

performed

an

analysis to

show

that employees

Northern

United

the
For

changed

firms received

15

higher

internal compensation

by comparing

concluded

that the anti solicitation agreements artificially

Leamer

Rep

who

stayed reflecting the economic

also performed

data to

illustrate

compensation during the conspiracy

Dr Leamer

free but for world

than those

89 93 Dr Leamer

work Id

Defendants

utilizing

compensation

14546

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class

regression

members

with compensation

in

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at

each

20 24

b

24

that the multiple

multiple

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25
15

26

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is

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tool designed to express

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27

used to

isolate

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28

Antitrust Litig

276

of an alleged

may

affect

conspiracy

price like costs and

FRD 364

371

the relationship

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on price

demand

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taking

one variable such
analysis can be

into consideration

In re Aftermarket
internal quotation

Auto

other factors

Lighting

marks and

omitted
55
Case

No

11 CV 02509 LHK

ORDER GRANTING PLAINTIFFS SUPPLEMENTAL

Prods

citation

MOTION FOR CLASS CERTIFICATION

Case5 11 cv 02509 LHK

Dr Leamer

Second

1

statistical

3

effects

4

studies and theories of loyalty

5

data to explain

6

agreements would have been

7

significant chance

8

internal equity

were

capable

of

showing

that this compensation

In both his initial report and his supplemental

how

of

86

and

fairness

the adverse effects

felt

of receiving

relied

on economic
evidence and

internal equity as well as documentary

on compensation due

to

a cold call and employees

who

Defendants anti solicitation
a

received

are linked

Suppl Expert Decl

Rebuttal

and

suppression had widespread

Dr Leamer

by employees who would have

Leamer

considerations

report

evidence

call or had a

cold

to these groups due to

Rep

Leamer Suppl Reply

27 28

9

Based on economic studies and theories involving

10
11

Leamer contended

12

markets rely on committed

13

interests

14

small change

15

termination This would create enormous uncertainty

16

California

Page56

opined that economic studies and theory documentary

2

analyses

Filed10 24 13

Document531

and

17

into secure

18

financial

19

Companies thus

20

the place

that labor markets

long term

do

not behave

relationships

loyalty

fairness

and

internal equity

Dr

commodity markets Rather labor

like

on

built

trust understanding

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Court

of
District

Leamer

Rep

external

to

Dr Leamer

102 As

explained

would

or internal conditions

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workers

were commodities every

lead to recontracting

separation or

District

and disruption

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for employer

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employee Id Thus

both employers and employees seek ways to turn the market transaction

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United

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For

long term

attempt

work

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21

can

the mission of the organization

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of

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create

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commitment

emotional or

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buyin from

the firm s mission

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103

foundation of employee loyalty is a feeling of fairness that can translate into a sharing

a firm s rewards with more

produce

104

Id

22

of

23

Firms seek to promote a feeling of fairness

among employees

24

employees commitment and contentment

which also leads to higher levels of productivity

25

Leamer Suppl

26

a firm to

27

another

Rep

anticipate

16 Dr

equality

Leamer

than a market might otherwise

explained

rather than to react to outside

that

to

to

maintain or to increase

maintain loyalty

opportunities since

firm at a much higher level of compensation

coworkers

left

if

it is

a worker

usually

better for

were to

move to

behind might feel they have

28
56
Case

No

11 CV 02509 LHK

ORDER GRANTING PLAINTIFFS SUPPLEMENTAL

MOTION FOR CLASS CERTIFICATION

Case5 11 cv 02509 LHK

1

not been

2

productivity

compensated That can have an adverse

fairly

and increasing interest

Dr Leamer

3

a

by management

stimulate

5

the cold

6

outside

7

competitive threat

8

move

9

employees Leamer Suppl Rep

response

call As

in

Dr Leamer

to

this

similar individuals

that threat

by an

increase

15

by an

beyond

and management
in compensation

Even though

11

improvements can minimize

12

employee discovers

13

as well as just the threat of

14

Dr Leamer

15

that are tied to informationprovided

16

by

17

bursts of cold

18

equity

individual

19

Reply

Rep

until

the disruption

to

they actually

employee

may

to

Rep

attractive

similar

a rise in

offer

outside

loyalty that might occur

was undercompensated Leamer

received

make a preemptive

mandate

not

an

receive

who

also of the implicit

wise

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an

of

newly threatened

for these

concerns that would spread the impact throughout

for these similar individuals

aware

may feel

105

offer or a cold call could

the specific

the market

compensation

the she

outside

may make management

10

California

Rep

when management becomes aware

explained

86

of

on worker loyalty reducing

effect

conveyed

that could extend

for one individual

opportunity

Page57

employment elsewhere Leamer

opined that the information

4

against

Filed10 24 13

Document531

preemptive

when an

c oldc alling

105 Thus

Court

of
District

opined that

c oldc alling
puts

upward

a broad preemptive response

is

pressure

on compensation

106

Id

completely analogous to salary increases

District

by employment

services

the compensation

regarding

offered

States

the

market

Rep

Leamer Suppl

15

Essentially

Dr Leamer

opined that the

response to

Northern

United

the
For

calls

and

even

more

the response to the threat of cold calls

the Technical

would

Class

raise internal

Leamer Suppl

27

20

In further support

21

Defendants compensation data

22

each employed

23

high level management

24

for individual

variation

25

compensation

levels with the goals

26

same employment category

27

different

28

maintaining employee productivity

of his opinion

company wide

Leamer

relied

on documentary

evidence showed

This documentary

compensation structures that included

established

Id

Dr

Leamer

grades and

ranges of salaries for grades and titles which

12122
of

Defendants also established

1 providing

2 providing

hierarchically ordered

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evidence

specific

relative compensation

and contentment

3 retaining

See id

that Defendants

titles

left little

No

scope

levels for employees in

employees and

122

11 CV 02509 LHK

ORDER GRANTING PLAINTIFFS SUPPLEMENTAL

that

for all employees in the

57
Case

and

and regularly updated

similar compensation

employment categories

including

MOTION FOR CLASS CERTIFICATION

4

Case5 11 cv 02509 LHK

Dr Leamer

1

Filed10 24 13

Document531

economic

looked to standard

Page58

labor theory and statistical

of

86

analyses

as additional

2

evidence that the anti solicitation agreements would broadly affect members of the Technical

3

Class

4

data and to apportion

5

Reply

He

explained that his

Rep

6

report

Dr Leamer

and compensation data

7

salary structures

8

Factors

9

Analyses assessed

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See Leamer

Defendants

10

which

11

California

factors between

factors in the individual

internal and external

forces Leamer Suppl

29

In his first expert

12

explained by

13

title

14

titles

was

approximately 90 percent

total

common

these

common

task is to identify the

statistical

compensation

common

to which

time

over

in

any

individual

Common
Factors

and the formulaic way

structures

128

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Dr Leamer s

Dr Leamer s Common

Specifically

firmwide compensation

varied

based on Defendants

regression analyses

the Court referred as

11 14

Figs

of the variation

factors

conducted

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to

in

Dr Leamer

employee s compensation can be

company gender

such as age number of months in the

location

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of
District

and

employer

explain

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a large fraction

also

id Figs 11 14
firm
wide

of the

Defendants do not dispute

variation

in

compensation

the

fact that job

Murphy

Expert Report

District

15

Murphy Rep

16

variability in class

17

variables

18

Defendant

19

fact that the coefficients

92 ECF No 230 Dr

Leamer concludes

that

the

fact that nearly all

States

member compensation

at

any point

time can be explained by

in

common

Northern

United

the
For

20

means

there

a systematic

firms Leamer Rep

compensation

of class

21

factors such

22

experienced broadly

in

structure

130

to

Dr Leamer

opined that these

to

move

together

employees consistent with important

25

practices

26

base salaries and

27

the ten major job titles at

28

to these five charts

134 Dr Leamer

as

wage

structures

over time and in response

opined that the evidence showed

24

total

each of the

would be expected

to

No

the

common

to be

elements of equity

specifically relied

compensation

the

across

Defendants compensation

five charts

that depicted

for ten major job titles at Apple

Google between

Dr Leamer s

on

in

a persistent salary structure

between

changes in the

2006 and 2009 and

2005 and 2009 See

id Figs 15 17

The Court

Movement

Charts Apr 5

Class Cert Order

Compensation

58
Case

and

Id

Dr Leamer

Id

rigid

at

over time suggested that

did not vary substantially

his regressions

members tended

employee compensation

that the effects of the anti solicitation agreements

Second

23

was

11 CV 02509 LHK

ORDER GRANTING PLAINTIFFS SUPPLEMENTAL

MOTION FOR CLASS CERTIFICATION

referred

Case5 11 cv 02509 LHK

36 Dr

Leamer contended

Filed10 24 13

Document531

1

at

2

different positions

3

did account executives

4

that the anti solicitation

5

broader effects because of a desire on Defendants

6

Third

8

some

9

Leamer

11

offered further evidence that compensation

e

i

over time

together

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Rep

13334

if

software

engineers

Based on this evidence

for

a raise so

received

Dr Leamer

agreements that focused on subsets of workers would nonetheless

general

Rep

Dr

Leamer used

part to maintain the overall

a regression

model

impact on the Class and to quantify

Figs

20 24

Regression analysis

1 age sex and

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model

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and

12

solicitation agreements

13

revenue

total

14

estimate

the average or net

Fig 22 and

show

the total

to which

company

years at the

to

opined

have

Id

salary structure

2 the

the anti solicitation agreements had

that

amount

of that impact

the Court previously

a range of variables

incorporated

15

California

move

to

86

of

134

7

10

tended

that these charts

Page59

by

the Class

See

Conduct

as the

account for factors including

to

on compensation caused by

effects

effects caused

designed

referred

on

the anti

to each Defendant

factors specific

eg firm

Court

of
District

number

new

of

hires

etc

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id Figs 20 23 Dr Leamer

under compensation

at

used the model

each firmduring the conspiracy

to

period

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id

District

24

Reply

at

33

States

16

In the Court s

April

5 Class Certification Order

the Court stated

that

a ccepting

Northern

United

the
For

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17

arguendo

18

employee works and what an employee does play a

19

salary

20

establish that this fact

21

for employees with different

22

impact

23

different jobs

to

that the

Apr 5

Class Cert Order

at

e

i

36 However

they show that factors such as where

that

titles

would move
title

would

any impact would

also found that

large role in determining the employee s

the Court found that

Dr

together

Dr Leamer

did not

result

ripple across

through time such that a detrimental

in an impact

Leamer s Compensation Movement

whether compensation of members of the All Employee Class

26

Texas

27

Compensation

28

Technical

at

an

Movement

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eg

a

office in California moved together

Chart included

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to other employees in entirely

the entire salary structure

25

and an engineer

only twenty job

titles

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Charts shed

custodian

at

an

No

primarily

Intel

companies

11 CV 02509 LHK

MOTION FOR CLASS CERTIFICATION

on

office in

job titles from the

out of the thousands of job titles at the seven

ORDER GRANTING PLAINTIFFS SUPPLEMENTAL

little light

over time because the

59
Case

an

implied that Defendants salary structures were so rigid that compensation

an employee with one job

The Court

24

Analyses are accurate

Factors

Case5 11 cv 02509 LHK

Id

36 38

1

included

in the classes

2

reflected

on

3

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evidence regarding

5

that the allegedly

parallel

6

wage structure

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7

the chart were

36 38

at

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movement

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showing

9

in the absence

that Defendants

total

Dr Leamer s

11

of

12

Court rejected Defendants contentions

13

discusses

14

damages

15

California

Apr 5

Regression analysis

Class Cert Order

at

38

The Court

Dr Leamer

Conduct Regression

had

non rigid

Id

at

was capable

analysis

less than they

showing

39 42

of

would have been
damages

classwide

Regression was capable

impact on class

a general

to the contrary

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admitted

283 23 25

at

further found that the Conduct

that the anti solicitation agreements

of all Class members

also consistent with

of anti solicitation agreements and thus capable of

10

showing

was

on compensation was

expenditures

positions

did not provide particularly compelling

reflected in the charts

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86

that the twenty

each company were linked because

1 Leamer

Finally the Court found that

8

at

of

movement

of the compensation

also found that these charts

whether salaries

Page60

The Court expressed concern

not representative

The Court

Filed10 24 13

Document531

In this

members Id The

Order

the Court

Court

of
District

Conduct

Regression primarily for the analysis s

However

the Court also notes

as

it

utility in

demonstrating classwide

order that the Conduct

did in its previous

District

is

also capable of demonstrating a general

classwide impact

States

16

In response to the Court s

concerns that the extant

could not show a

analyses

statistical

Northern

United

the
For

wage

17

rigid

18

expert

19

somewhat

20

a

21

analysis

22

compensation

23

Suppl

rigid

Dr Leamer

structure

new

report These

rigid

wage
on

wage

structure

a

structure

that

compared

4 emphasis omitted

how

25

stating that this correlation

26

Leamer conducted

27

presented

28

Leamer had

closely

at

least

Dr Leamer

different variables

the correlation

22

move together Id

Leamer Suppl
a

Leamer performed

equivalent

Rep

statistical

4

not

Class Leamer

co movement

the twenty

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threshold

analysis to measure

see also Suppl Reply at 4

of the

just

No

all titles

which included

that

charts

for which

94

Dr

Dr Leamer
Dr

of Class Period

11 CV 02509 LHK

ORDER GRANTING PLAINTIFFS SUPPLEMENTAL

such

a correlation

60
Case

a

of the average

of the firm s Technical

analysis for all job titles

six observations

Dr

looked to the correlation

analysis is the quantitative

his initial report

his supplemental

movement over time

the

of each title with the average compensation

statistically

in

not only within job titles but also that Defendants maintained

across job titles To demonstrate this

24

analyses

statistical

focused on demonstrating that Defendants maintained

analyses

job titlebyjobtitle basis

Rep

in

submitted additional

MOTION FOR CLASS CERTIFICATION

Case5 11 cv 02509 LHK

1
2

of compensation

3

The former

4

14 30 He

employee years Id

Filed10 24 13

Document531

of

86

Id

levels and correlations

6

employee job

7

time with the compensation of the overall

8

32

9

was

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to

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increase

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of compensation

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vast majority

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employee years

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set

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11

factors

12

supported an inference

13

Dr Leamer s

14

demonstrated that not only was there a rigid salary structure within

15

analysis

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Dr

with the fact that

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of

of employee

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across

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titles

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4 Figs 2 3

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firm

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compensation

total

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that firm See

at

of each job title within any given

compensation

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at

emphasis in original

of Technical

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in the compensation

in the overall

23

correlation

on year byyear movements

focuses

latter

10

California

Page61

Accordingly

Court

of
District

supplemental

analysis bolstered his finding

of

a

rigid

because

salary structure

job

which his

titles

it

initial

District

showed

but also that there was a rigid salary structure across job

titles

States

Dr Leamer

16

next presented

a multiple

model

regression

for each

company designed

to

Northern

United

the
For

17

detect

18

structure as opposed

19

of a

20

Technical

21

the degree to which

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number

of internal forces

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acting

on

external market forces

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at

compensation

on

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a particular

increases

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24 29

id

compensation One

company

for the group are shared broadly

23

degree

24

same company

25

and job growth in the San Jose Sunnyvale Santa Clara Metropolitan

26

the possibility of alternative

27

16

28

To

to

which

gains

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account for

divides

measured

in

later

26 Dr Leamer s

id

titles

the employee

the effect of the previous

one year are

explanations

year s

model

also included

for compensation

positive

relationship

was average
this

at

variable

No

the

Class at the

variables for the firm s revenue

Statistical

increases Id

the correlation

Area

to

allow for

2728
Dr Leamer

also

of each decile to the

See Leamer Suppl

Rep

Figs

9 10

11 CV 02509 LHK

ORDER GRANTING PLAINTIFFS SUPPLEMENTAL

reflects

same time Id

the

61
Case

the effect

compensation showing

with insufficient data to run the titlebytitle analysis

same

a rigid compensation

shared with other members of the Technical

groups into deciles and measures

these groups exhibit the

variable

See id The effect of

25

variable

i

The model measured

22

The next

e

member compensation

class

MOTION FOR CLASS CERTIFICATION

mean

Case5 11 cv 02509 LHK

Dr Leamer

1

within each

3

49

4

or groups that

5

Figs

2 that

11 12

gains

Dr

The

for

on a

24 34 42

Fig 1

Intel

indicated that the

vast

regressions

1 that

show

some

bytitle

the regression

estimated

company Id

2

Filed10 24 13

Document531

see

8.18

7

Defendants employees would have been impacted by

8

Moreover

9

basis for job titles with adequate

example Figs 6 8
majority

an internal sharing

that this is consistent with his previous

results

17

43

Id

of employees fall within titles

opinion that

non compete

the

data

same time and

all

See id

or almost all

agreements

Id

opined that the fact that gains were shared over time strongly indicated that

force rather than only external market forces drove the structure of class

Dr Leamer

Id

10

member compensation

11

California

86

in different job titles in a subsequent year

6

Dr Leamer

of

for the titles or groups are shared broadly at the

gains

are shared with others

Leamer contended

title

Page62

between

compensation

12

between

firms This finding

13

somewhat

14

structure

also demonstrated there is

a

of job titles within

a much

firm than there is between

his conclusion

further reinforced

stronger

correlation

compensation of job

that each Defendant

titles

maintained

a

Court

of
District

pay

rigid

Defendants

and undermined

structure

play no role in setting compensation

contention

that internal forces

and pay

65 68

Id

District

15

Dr Leamer

16

positively correlate

17

that the

18

data

19

conclusions about

20

17

recognized

do

that his analyses

include

outliersjob

titles

that

do

not

States

to the average or

do

not

show

sharing

over time Id

12 He

noted however

Northern

United

the
For

21

number

total

18

initially

their

employees Such conclusions were

Rep

this latter

that an

title and then divided
these up into deciles
Leamer attempted to break the firms up into 10 equal
years some groups ended up being larger than others

Dr

28

89

hypothesis

gains

for

some

of particular employees are highly individualized

of

an

are shared with others

rest in

Rep

8

internal sharing

rather than only external

becomes unsupportable when used to
year there is not a sensible
demand for computers would affect some

argue that this contention

Plaintiffs

Leamer Suppl

the existence

Leamer Suppl Rep 43 n8
Defendants expert Dr Murphy
that the level of compensation of Defendants

result is particularly significant

alternative

employees in one year and the
concerns

market

the

next

in

without

a subsequent

resort to internal forces

Furthermore the sharing
force driving

the structure

of gains
of class

such as fairness

over time strongly indicates

member compensation

forces
62

Case

No

by

over the lifetime of the

Although

reason that an external force such as increased

27

also supported

broadly determined by competition in a vast labor market for similar employees and

is

why

undermine his basic

by splitting the Technical Class titles into deciles Dr
groups he ranked titles on the basis of average inflation

the ten

that adjustments for unique circumstances

explain

outliers did not

were more populous than others

argue that

contended

Murphy
26

titles

few

the outliers involved titles with incomplete

regressions

equal based on employee

because some

employees

25

compensation

in most cases

the presence of a

Defendants paid

based on employee years

Plaintiffs

24

how

Dr Leamer also estimated
Leamer explains that to form

sized groups

23

was small and

12 50 64 Thus

See id

adjusted

22

of outliers

11 CV 02509 LHK

ORDER GRANTING PLAINTIFFS SUPPLEMENTAL

MOTION FOR CLASS CERTIFICATION

Case5 11 cv 02509 LHK

Filed10 24 13

Document531

1

economic theory and

2

that

3

been harmed by the anti solicitation agreements

he had

4

any evidence

not seen

Ultimately

Dr Leamer

that

economic theory and

6

solicitation agreements artificially

7

Technical

statistical

8

64

Importantly

of

86

Dr Leamer

also contended

Class would not have

of the titles within the Technical

Id

common

proof

in the

methodologies were capable

Rep

Leamer

any

concluded that

5

Class

See id

record

the evidentiary

Page63

suppressed compensation of

form

of

documents data

of demonstrating that the anti

all

or nearly all

members

of the

149

Dr Hallock s

ii

Opinions Based on Defendants

Testimony

Contemporaneous Documents and Data

9

of Class Certification

In further support

present

Plaintiffs

a second

expert

report

from

Dr

10
Kevin

F Hallock

labor economist

a leading

and an expert

in compensation

structure

and design

11
See Hallock
California

1 3 Dr Hallock

Rep

whether Defendants used formal administrative

investigated

12

Court

of

pay systems and whether
compensation

District

agreements at issue would have suppressed the

the anti solicitation

13
of all or nearly all

members

of the Technical

Class

In forming his opinions

Dr

14

District

Hallock

reviewed

only

commonevidence

Defendants testimony contemporaneous

documents

15
States

and data

Suppl Class Cert

Mot

at

2

16
Northern

Dr Hallock
United

the

found that Defendants

all

used formalized compensation systems that

17
organized employees into pay ranges grades or families under umbrella systems Hallock

For

Rep

18

45

In finding

that all Defendants

utilized formalized pay

systemsDr Hallock

relied

on

19
evidence that

among other

things

1 Defendants

sorted

their

employees into job families

andor

20

2 Defendants

grades

utilized salary ranges with a

minimum midpoint and maximum

set based

21
on

external

employment market data and

3 Defendants

used internal tools to

assist

managers

22
with setting other employees compensation

levels See id

45 109

23

An

important

feature of these formal systems is that job titles

levels and grades are valued

24
relative to all other

employee categories

in the

company Employees who

receive

compensation

25
outside

ranges are identified and corrected

of their guideline

to bring

them

in line with the

26
company

structure

27
ratios

between

See

eg

a person and

id

114 140 160 166 181

someone

else

who

is

According

similarly situated

to

diverge

Dr Hallock

from each other

28
63
Case

No

11 CV 02509 LHK

ORDER GRANTING PLAINTIFFS SUPPLEMENTAL

if

MOTION FOR CLASS CERTIFICATION

the

the

Case5 11 cv 02509 LHK

1
2
3

Filed10 24 13

Document531

86

of

person will experience reactions of unfairness and inequity thus making internal equity
important not only in setting up the original structure of a compensation

managing it Id

110

Dr Hallock

4

internal quotation

employees in systematic

6

decisions

7

compensation

8

employees

9

solicitation

were made

and structured

company

ways

used

their

compensation system

Dr Hallock

found that nearly

wide on an annual basis and

When

relationships

Defendants made

such as to make counteroffers

11

situated and similarly performing employees were

also found that Defendants adhered to principles

a

fashion

that preserves

retain certain

Dr

into account

whereby

similarly

11181

See id

Given Defendants formalized pay structures and compensation

existing

of a competitor s

light

of internal equity

paid similarly

their

compensation

all

take the exceptions

to

pay

to

cycle adjustments to

bonuses in

Defendants were careful to adjust the system

Hallock

in

out of

or pay retention

10

12

system but also when

marks omitted

also found that Defendants

5

California

Page64

design

as well as issues

of

Court

of

equity

14

Hallock

16

call or if the

17

were disrupted Id

18

lowered

19

noted that Defendants employed certain

20

top employees Id

21

employees and therefore lowered

22

that the entire

Dr

agreements would have a widespread and systematic

15

District

13

and fairness present in the Defendant firms

Hallock

opined that the anti solicitation

impact on compensation

237

Id

First

Dr

District

a direct

opined that

impact on pay could occur

if

an employee

did not receive

a cold

States

upward wage

on any

pressures

of the employees

in

related groups or job families

Northern

United

the
For

at

For example

Defendants for nearly

239

elite

employees and

the top of the

25

Croner See id

26

and other behavior of

27

structure

28

absence of such agreements

To

the extent

firmsDr

lower and

their

hence

their

data to external

found that

own

that cold

that

employees

No

nearly all other

these

wages

as there is

sources most commonly
at other firms through

the market

data they

opined

workers Id

use for

Radford

or

anti competitive

their

own

pay levels will be lower than they would be in the

Id

11 CV 02509 LHK

ORDER GRANTING PLAINTIFFS SUPPLEMENTAL

Dr Hallock

range Hallock

64
Case

pay could be

calling often targeted

data could influence

that pay is lowered

Hallock

one way

in terms of the salary

as well thus impacting

evidence that Defendants benchmark

that

agreements suppressed salaries of these top

box

also opined that external market

240

hypothesized

has to do with extraordinary

Since the anti solicitation

24

will be

Dr Hallock

workers

all

box may be lowered

Dr Hallock

23

238

MOTION FOR CLASS CERTIFICATION

Case5 11 cv 02509 LHK

1

Finally in support

Filed10 24 13

of Plaintiffs Technical

Page65

Class definition

Document531

Dr Hallock

of

86

examined

2

Defendants pay

3

concluded that the same mechanisms that would have transmitted

4

Defendants

5

anti solicitation agreements suppressed the pay of certain members of the Technical

6

nearly all other

firms apply with even

c

8

The

to

Defendants argue that this Court should not

individualized

who was

inquiries regarding

Defendants contend that

11

wide

12

different managers

13

As such

14

of all other employees in the Technical

variation

in

their

who

According

were directed

the Technical

if

Class

See Suppl

Mot

the

the

at

3

Contentions

Class because

over

common

compensation was

to Defendants

or

all

questions

and practices were highly individualized

differentiate

to

246 Thus

employees Id

impacted will predominate

compensation policies

compensation

pay suppression throughout

and Defendants

certify

Class and

the Technical

to

have also been impacted

Court s Conclusions

10

California

design as they pertain

greater force to technical

members would be expected

7

9

and compensation

structures

set

with

by hundreds

of

pay and reward high achieving employees

Court

of
District

Defendants argue that pay raises to one employee would not necessarily affect the salary
Class

District

15

In furtherance

of their contention

that individualized

issues

predominate

Defendants

States

16

contend that the individual

17

discussed

18

internal files

Northern

United

the
For

19

pieces

of evidence offered

below Defendants cannot
and

rebut the voluminous

First the Court finds as

it

did previously

20

internal equity

21

solicitation agreements suppressed compensation

22

While Defendants

23

relied

24

Leamer s hypothesis

25

192 25 193 6 194 10 196 10 197 7 19

hypotheses offer theories subject

Dr Murphy did

Dr Murphy

not

See

dispute

initial

27

other goals such as procedural

28

loyalty motivator

report because

see

that

to

Dr

broadly

principles

it

Murphy

evidence from Defendants

See

Apr 5

Ex

Similarly although

upon which

economics

No

13 Murphy Depo

21

Dr Leamer

at

Dr

188 6 14

Dr Murphy criticized Dr Leamer s
of maintaining internal equity

contributions

the Court does not find that this undermines

11 CV 02509 LHK

ORDER GRANTING PLAINTIFFS SUPPLEMENTAL

at

undergirding

65
Case

anti

Class Cert Order

literature

of information

297

how Defendants

equity or the value of rewards for individual

81

as

evidence

proof for

did not compare the importance

Rep

However

Leamer s market price discovery and

criticized the economic

the basic

are unpersuasive

documentary

common

eg Harvey Decl ECF No

26

expert

Plaintiffs

reports that rely on this documentary

the expert

expert

by

MOTION FOR CLASS CERTIFICATION

to

as a

Dr Leamer s

Case5 11 cv 02509 LHK

1

hypothesis

2

particularly true in light

3

Filed10 24 13

Document531

played some role

86

of

employment compensation

internal equity

that internal equity

Second

4

of the extensive

affecting

in

the Court finds that Plaintiffs documentary

method

impact Indeed

support

6

evidence

7

the actual

8

new

9

evidence significantly bolsters Plaintiffs showing that

for Plaintiffs

is

likely to

of proving

be among

the most persuasive

dynamics at play within

evidence as

common

11

valued internal equity

12

indicates

13

internal equity

14

Defendants utilized software

15

employee to

16

consideration

17

compensation

18

evidence provides

point

is

substantial

further

trial the Court predicts that this

at

jury as

it

see Suppl Opp n

at

13

method

their

and confirms many

illustrates

Defendants firms While Defendants

mostly old and off

10

a

to

This

evidence showing that Defendants valued

documentary

5

California

Page66

characterize

of

Plaintiffs

the Court finds that this

of proving impact

will turn

on

make adjustments as necessary

evidence

For example rather than a few documents
compensation

in their

practices

that all Defendants valued internal equity

showing

some Defendants

that

evidence

Plaintiffs documentary

now

Further the evidence

now

suggests

that

Court

of
District

was such an

important

aspect

of

Defendants compensation

tools to generate

internal equity

reports

2 Defendants

advised managers

and

1

practices that

to

compare each

District

his or her peers

that internal equity

was

a prime

States

when

setting and adjusting

salaries

and

Northern

United

the
For

19

structure

Despite

this

when

documentary

and

evidence

discretion

21

Defendants

22

documents

23

that although

24

and long term high performer differentiation

25

Indeed

refer

as

indicate

Intel

pay for

c ompensation

notes that

27

to distinguish

28

increases

at

lack

over internal equity

For example in a 2004

differentiation is desired

is

Human
by

valued

performanceto

presentation

Decl Ex 10

v ulnerability c hallenges
merit increases

Intel

identifies

are significantly

term threat to retention of key players

2

1

m

anagers

No

states

short

at

13

little

to

no

actual

pay

11 CV 02509 LHK

ORDER GRANTING PLAINTIFFS SUPPLEMENTAL

in ability

reduced from system generated

66
Case

Intel

Meritocracy philosophy

Harvey Suppl

questionable

which

However Defendants

Resources

Intel s

broad

exercised

of differentiation has existed

focal actual

long

salaries and that Defendants

performance

otherwise

Id at 19 As key

26

adjusting

their

and groups and to

titles

Defendants contend that managers

20

setting

monitored

actively

within and beyond job

identify discrepancies

to

3 Defendants

MOTION FOR CLASS CERTIFICATION

Case5 11 cv 02509 LHK

1

differentiation for

2

3

Page67

n o explicit strategy

of

86

differentiate Id

24 emphasis added

3

and

Further the documentary

such differentiation

5

a

6

position the lower the merit increase

7

that

8

strong

9

employee whose

from Google shows

chart

tries

it

to

manage

performers

with

not inconsistent

is

who

that for a given

Dr Leamer s

See

eg

high

the higher

1609.9

documents

10

than an employee whose salary exceeds

11

performance

12

performance based pay and concerns

Ex

the target even

a larger percentage

receive

noting

very

to

show

that

an

pay increase

though both employees receive

1855.107 This demonstrates

exists

pre adjustment

the

Google

at

For example

Google s documents

Specifically

would

the target salary

review See Cisneros

performance

range and thus give minimal increases

are paid relatively

below

Ex

Cisneros

salaries in the

salary is

for

theories of internal equity

of performance

level

to

pay

evidence indicates that even where

4

California

Filed10 24 13

Document531

the coexistence

the

same

of

of internal equity

Court

of

To

14

principally

15

compensation

16

District

13

declarations

17

and accordingly

18

re Wells

pay

contend that they valued

on

for

performance over

from top management

declarations

in their

internal equity Defendants rely

human resources

recruitment

District

However

and benefits departments

the Court has already

recognized

that these

States

were drafted

for

the specific

purpose of opposing Plaintiffs class

motion

certification

Northern

United

the
For

19

the Court finds that these documents

are of

F Supp

Fargo Home Mortg Overtime Pay Litig 527

scrutinizing carefully declarations

20

Indeed many of

21

obtained

22

example

23

Mason

24

salary bands

25

in his deposition

26

diametrically

27

company

28

numbers of

from Defendants
in

a

made

the claims

declaration

Stubblefield

Intuit

or ranges

after

after

from Defendants

created

either for existing

on

opposite

position when

Each

we

levels

job that

have

of

he stated that

fits

with the discovery

stated

new hires

within a band

Jobs

on

bands

are

fit

business

Intuit

Stubblefield

motion Mason

t here

get used in different job families based

that

into levels

needs

No

took the

Intuit inside the

And

different

Stubblefield

11 CV 02509 LHK

ORDER GRANTING PLAINTIFFS SUPPLEMENTAL

10 Yet

Decl

67
Case

motion

does not use

Stubblefield

at

Plaintiffs

motion For

the initial class certification

Human Resources

the class certification

driven

litigation

Plaintiffs initial class certification

employees or

Cf In

value

ND Cal 2007

2d 1053 1061

are inconsistent

for the purposes of opposing

Vice President

the hearing

on

probative

employees that appeared

in those declarations

the hearing

a diminished

MOTION FOR CLASS CERTIFICATION

Depo

Case5 11 cv 02509 LHK

1

87 8 8824

2

internal documents

3

CEOtoCEO emails presentations

4

Defendants human

5

concerns

6

is litigation

of these demonstrated

In light

Defendants created

resources

compensation

regarding

86

more persuaded by

and recruitment

agreements

from

and interoffice communications

the

such as

the heads

of

about internal equity

class certification and testimony that

driven

8

Defendants maintained

9

maintain a

subjective

evaluations

11

Hallock s

top of the

12

that

b ased

Dr Shaw s

report to rebut Plaintiffs contentions

formalized compensation

pay for performance

10

California

of

before and during the anti solicitation

Defendants created to oppose

than the declarations

Page68

the Court is

inconsistencies

departments

Defendants further rely on

7

Filed10 24 13

Document531

box

theory

on Defendants

by

philosophy implemented

employees Shaw

of

is

opines that Defendants

managers

individual

16 Dr Shaw

Rep

based on

further contends that

Dr

41 42 54 62 66 Dr Shaw

See id

unsupportable

compensation

Dr Shaw

structures

that

systemspay practices

opines

and pay philosophy she

Court

of
District

13
14

would not expect

that a suppression

Class members Id

Technical

at

of

wages

to

some employees would

affect all or nearly all

27

District

The Court

15

finds

Dr Shaw s

criticisms of Plaintiffs theories and of

Dr Hallock s

report

States

Dr

Shaw s

16

unpersuasive

17

record

18

class certification even

19

Defendants own

20

Shaw App

21

emphasizes managers broad discretion

22

investigate

23

Dr Shaw

24

difference

25

9814 15 Dr Shaw

26

are

27

Rep

28

to the extensive

report is conclusory

and

contrary to the

overwhelming evidence

in the

Northern

United

the
For

For example

C

Dr Shaw
though

internal

relies

many

heavily

on

the declarations

Defendants created

of the claims in those declarations

documents See id

at

20 21 n25

in

whether Defendants supervised

setting compensation

and controlled

their

19

to

mere guidelines

30 However

for

managers and

documentary

Dr Shaw s

evidence discussed

managers use

No

made any

significant

is

emphasis on managerial

above which

to job codes

highly individualized

suggests

discretion

that the exercise

11 CV 02509 LHK

ORDER GRANTING PLAINTIFFS SUPPLEMENTAL

and

of discretion

68
Case

Dr Shaw

did not systematically

based firms pay ranges assigned

that the pay of workers

the Court finds that

n35

23

Ex O Shaw Depo 74 1 7516 93 1622

employee pay See Shaver Suppl Decl
also asserts that in technology

n32 and

Further although

Dr Shaw

admits that she did not assess whether managerial discretion

with

are inconsistent

n26 21 n30

1 2 3 4 7 8 10 11 18 24 Shaw App D

to oppose

MOTION FOR CLASS CERTIFICATION

See Shaw

is

contrary

of

any

Case5 11 cv 02509 LHK

was

1

discretion

2

compensation

3

Depo

4

to pull in a bunch

5

Keiper

Depo

6

had

minimum for

7

nature

8

show

9

Suppl Reply

a

in

24 Adobe admonished

at

reason

a

19

97

are contrary

of class

Rep

Dr Shaw s

from Defendants

to deviate

g Cisneros Decl Ex N

Fadell

would have

range id Ex C

of that

Arriada

from salary ranges that Adobe

deviated

contentions

regarding

member employee years pay was within

the individualized

Dr Leamer
which

by

analysis provided

to the statistical

86

range Apple managers

salary

managers who

of

range

the prescribed

Leamer

31 67
principal contentions

11

analyses

12

and Defendants expert

13

is

14

impact

15

California

IVB2aii see e

Moreover

Page69

authorization

of people to then approve anything outside

Defendants

10

to obtain

from a prescribed

stating that to deviate

of compensation

that

had

that managers

See supra section

structure

53

at

and

limited

Filed10 24 13

Document531

considered

however

are challenges

Before the Court turns to an analysis of the competing

Dr Murphy

to

Dr

Leamer s

methodologies

the Court notes that the importance

statistical

of

Dr Leamer

of these statistical

models

Court

of
District

diminished in

light

of the extensive

In other contexts courts

documentary

evidence that supports

have long noted that

statistical

Plaintiffs theory

and anecdotal

of

evidence must be

District

in

tandem

See Coral Const

Co v

King

Cnty 941

F2d

910 919

9th Cir 1991

States

T he combination

16
Northern

United

the
For

of convincing

17

not identify a case

18

have presented

19

experimental data needs

20

persuasive

21

the documents

at

statistical

evidence

is

potent

the class certification stage with the level of documentary

The Court agrees with

in the instant case

to

be

from

conclusions

to

and

anecdotal

sensitive

to

Dr Leamer

in which

the context

that

the data

This Court could

evidence

Plaintiffs

interpretation of

non

were generated and

the numerical data require the information in the numerical data and

be aligned

Leamer Suppl

Rebuttal

Rep

11

After all class certification

22
23
19

24
25
26
27

for failure

to

strike

Dr

to provide

Leamer s

reliable

U

report in support

of Plaintiffs initial motion

for class

relevant and admissible testimony under Daubert

Dow Pharmaceutical 509
S 579 1993
Evidence Defs Mot to Strike Rep of Dr Edward
Merrell

and Rule 702

of the Federal

v

Rules of

E

Leamer
Mot to Strike ECF No 210
The Court rejected Defendants motion in its April 5 Class Certification Order See Apr 5 Class
Cert Order at 49 50
While the Court has concerns about the probativeness
of some of Dr
Leamer s
flawed

28

moved

Defendants

certification

statistical

Certification

by

evidence

as to warrant

or

In their Opposition to the Supplemental

any new Daubert
Dr Hallock See Suppl Opp n

Defendants do not

Dr Leamer

the Court does not find this evidence is so methodologically

exclusion

raise

challenges

Motion

for Class

to the expert opinions

69
Case

No

11 CV 02509 LHK

ORDER GRANTING PLAINTIFFS SUPPLEMENTAL

MOTION FOR CLASS CERTIFICATION

set

forth

Case5 11 cv 02509 LHK

1

requires a holistic qualitative assessment

2

analysis is not

bean counting

The Court now

3
4

unpersuasive

5

correlation

6

Dr Leamer s

7

statistical

8

render dubious

9

id

at

and multiple

12

11

do not

12

light

13

discussed

Defendants

F3d

show

contentions

that

Dr

Leamer s conclusion

finds that several

Dr Leamer s

1 averaging

because

suggest

that

Dr Leamer s

of the extensive

statistical

documentary

13 14

are

in

his

issues

individualized

2

3 Dr Leamer s

Defendants argue that these flaws

a

rigid

are contrary

wage structure

own

to their

Defendants remaining

the Court finds that

analyses

methodologies

problem and

Defendants arguments

Moreover

and methodologies

masks

that Defendants maintained

of

the class certification

should not have relied on averages

Suppl Opp n

causation

noted

86

of

801

at

Dr Leamer

regression analyses

Page70

Circuit has

regression analysis is faulty due to an endogeneity

The Court

documents

as the Seventh

Butler 727

Defendants contend that

evidence cannot

10

California

turns to

Filed10 24 13

Document531

should be rejected wholesale

See

internal

contentions

particularly in

Dr Leamer s

conclusions

Thus

and accepts

evidence that supports

Dr Leamer s

methodology

as

Court

of
District

below

the Court rejects

Defendants primary

14

Defendants

contentions

Dr Leamer s

criticisms of

supplemental

report turn

on

his use of

District

15

averaging in his correlation

16

take issue with

17

analyzes

18

compensation

and multiple

regression

See Suppl Opp n at

analyses

12

Defendants

States

Dr Leamer s

use of averages in his job titlebyjob title correlation

analysis

which

Northern

United

the
For

19

movement over time

the

of the average compensation

of the firm s Technical

b y averaging

the compensation

of all employees

who

Dr Leamer

necessarily

wipes out the very thing he

21

significant variation

in individual

employees compensation

22

Defendants

23

whether

24

over time and whether

their

25

Defendants also object

to

26

models designed

27

member compensation

28

Specifically

all

correlation

of averages

employees with the same job

to detect

compensation

Dr

title

moved

the

or fall into the

5

at

According

No

e

i

Leamer s multiple

a

company
wage
forces

specific

structure

See id

regression analysis

multiple

acting

at

on

Id

at

masks

MOTION FOR CLASS CERTIFICATION

6

regression

class

5 6 11 13

11 CV 02509 LHK

ORDER GRANTING PLAINTIFFS SUPPLEMENTAL

to

regardless of

directions

70
Case

same

be measuring the

same conclusion

or in opposite

his

in

to merely external market

Dr

to

Suppl Opp n

in lockstep

the effects of internal forces

Defendants claim that

supposed

title

identical or vastly different compensation

Leamer s use of averages

as opposed

is

would reach

received

Defendants contend that

hold the same job

decile

Leamer s

4

Class Leamer Suppl Rep

20

Dr

of each title with the average

individual

Case5 11 cv 02509 LHK

1
2

Id

by using average job

variation

at

title

However

86

of

compensation

data rather than individual

that in the context

5

Plaintiffs theory that there is a

6

supplemental

7

signal of the internal

8

32 Dr Murphy admits that

9

reasons

10

do

11

averaged

the averaging

and multiple

of the correlation

report that

given by

Dr Leamer s

the Court finds that

4

data

Leamer

data is

Decl Ex N

Shaver

so that you are

are trying to

aggregate

left

Dr

structure

detect

an

are consistent with

Leamer

notes in his rebuttal

level data tends to

in the individual

Plaintiffs

averaging

regression analyses

wage

rigid

the inherent noise

pay structure

Dr
is

somewhat

averaging of the data appears to yield results

Leamer Suppl

appropriate

Murphy

with a more systematic

drown

out the

Rebuttal

Rep

tool for the

statistical

Depo 553 18 20

same

The reason you

part and the idiosyncratic

parts get

out

With

12

compensation

Page71

13

3

California

Filed10 24 13

Document531

to both correlation

respect

and multiple

regression

Dr Leamer

analyses

averaged

the

Court

of

14

averaging

15

necessary to determine whether there was a wage structure across job

16

District

compensation

9711 22 106 5 13.20

17

analysis for the purposes of

18

Analysis shows that approximately 90 percent

19

common factors

20

individual

21

Analysis

of employees within each job title

may

have masked some of the individual

variations

18 29

Rep

Leamer Suppl

13

each job

within

While

title

it

this kind of

was

District

See

titles

Aug

8

Tr at

States

Northern

United

the
For

The Court

showing

primarily

compensation

is

therefore not persuaded that

is

by job

a

wage

title

structure

job

titles

of each employee s

Rep

Leamer

by

primarily determined

which was run on an employee

across

should disregard the correlation

it

128

job title

byemployee basis

Common

compensation

Aug
as

The

8 Tr

at

shown by

explained by

105 10 24
the

Because

Common

averaging

without

is

Factors

see

Factors

Leamer

22
20

23

Dr Leamer
because

explains

individual

24

in his supplemental

data is likely to

level which can

make it

be dominated by forces

difficult

to

detect

individuals

26

in a title can average out the individual

wide

more transparent
In addition
on the compensation structures

effects

perspective

Defendants used

27

to

maintain

their

many

that operate

title

the firms Averaging
effects

averages

at the individual

the firmwide effects including

of the anti cold calling agreements broadly across

25

work with

report that he chose to

the spread
across

thus making the firm

a titlelevel analysis provides
the documentary

a clearer

evidence shows

employees and maintain internal equity

among their employees

28
Leamer Suppl

Rep

19
71

Case

No

11 CV 02509 LHK

ORDER GRANTING PLAINTIFFS SUPPLEMENTAL

MOTION FOR CLASS CERTIFICATION

Rep

Case5 11 cv 02509 LHK

Filed10 24 13

Document531

1

128 Fig

11 and

2

job

move

3

that there is a

4

resulted in

5

conclusions

6

evidence that suggests that Defendants maintained

7

of

86

equity

titles

9

together the Court believes

wage

structure

an impact
in

and multiple

the correlation

the

to all or nearly all

contention

particularly unconvincing

regression

that

Dr Leamer s

that averaging

budget and compared

11

compensation

within the company

12

Depo 44 12 20

13

bonus

to

it

to

further notes that

across

a formal wage

Google Senior Vice

Dr Leamer s

matched

is

job title

companies See

multiple

analyses

often aggregated their entire

the budgets of other firms or

President

and valued internal

structure

rendered unpersuasive

similar titles across

Dr Leamer s

are consistent with the documentary

analyses

that Defendants themselves

considering

compensation

that compensation

analysis bolsters Plaintiffs theory

employees The Court

and correlation

10

show

analyses

under which an impact on some employees would have

in place

Common Factors

Defendants

8

California

Page72

of People Operations

eg

Bock

testifying that Google s

Court

of
District

amounts were

14

by

calculated

people because

All those

a set of people in like jobs

taking

they re

in like jobs will have

you

calculate the

same

the

The

District

15

on

will be based

the

on

rather than

their

States

16

see also Shaver

Decl Ex

122

email from Lori

McAdams

Pixar Vice

President

of

Northern

United

the
For

17

Human

18

Director

19

07 and

Resources

of

and Administration

Human Resources among

stating

Ours

but

is

Coker former Lucasfilm

Sharon

it

21

Adobe uses aggregated and average

22

then uses in developing

its

Defendants further

own

criticize

Dr

24

basis Defendants contend that

25

levels and changes

in individual

26

examines variation

at the individual

27

compensation

28

these results show that

is

Streeter

Leamer

for job titles

supplemental

ignores

data that

employees compensation
employee level and

wrong

who

Depo

at

and

and Senior

budget for

Are you doing

46 47

discussing

classifications

start

expert

shows

report

substantial

No

finds substantial

to infer that an increase

title

another

variation

which

it

similar

in the

divergence in

Defendants argue that

in compensation

for

some employees

11 CV 02509 LHK

ORDER GRANTING PLAINTIFFS SUPPLEMENTAL

how

Dr Leamer Dr Murphy

In contrast to

with the same job

on

72
Case

FY

structure

Dr Leamer s

over time for individuals

it

F

data from Radford

compensation

on average

closer to

less Cisneros Decl Ex

anything close more or

Director

others asking about others salary increase

we may manage

20

23

to

MOTION FOR CLASS CERTIFICATION

Case5 11 cv 02509 LHK

1

would

2

results reflect

3

Filed10 24 13

Document531

86

of

B

result in an impact

managerial

However

4

to all or nearly all

discretion

that Defendants

5

that the Defendants maintained

6

as discussed

7

for

8

Cisneros Decl

9

employee compensated

above

Opp n

Ex 1609

at

10

differentiated

is

pay

is

with

not inconsistent

not inconsistent

Dr

App

Leamer s finding

Indeed

such as based on a

with theories of internal equity

of Google s

that a high performance

target salary having

higher percentage than an individual

11

Google s target salary For example Google notes that

12

Rep Exs 2 3

Rebuttal

the notion that differentiation

Google Chart showing

at

Murphy

citing

that the

compensation structures that restrained that differentiation

the evidence supports

performance philosophy

employees Rather Defendants contend

10

California

Page73

range and thus give minimal increases

to very strong

eg

rating will result

his her salary increased

with the same rating but compensated

it

See

tries

to

manage

performers

who

pay

in an

by a

at a level higher than

salaries in the

are paid relatively

Court

of

high Id

14

performance

15

District

13

Google

see also Cisneros

Decl Ex 1855.107

based compensation

is

showing

that managerial

not necessarily inconsistent

and

discretion

with principles

of internal equity

at

District

States

Second Defendants contend

16

that

Dr Leamer s

multiple

regression analysis is unpersuasive

Northern

United

the
For

17

because

18

it

arises

suffers

from an endogeneity problem Suppl Opp n

when some

of the

common

same unmeasured

Murphy Suppl Rep

43

19

dependent

20

San Jose Sunnyvale Santa Clara Metropolitan

21

variables affect

22

internal

variables

both average job

title

23

13

24

improperly concludes that the

25

compensation

26

fundamental

27

unsound

Defendants argue that by

while the

ignoring

Dr

Leamer s

the dependent

the independent

not

variable

among his

variables

Suppl Opp n

Dr Leamer

Id Defendants contend

model uninformative and

title

that this is a

his inferences

Id

28
73
Case

No

11 CV 02509 LHK

ORDER GRANTING PLAINTIFFS SUPPLEMENTAL

external

variable and Leamer s

meaningfully explains average job

external variable does

error that renders

Dr Leamer s

and

Area variable and unnamed omitted

endogeneity

internal variable

problem

endogeneity

factors drive both the independent

Statistical

variable

this

13 An

Defendants argue that

compensation

firm
wide average compensation

at

MOTION FOR CLASS CERTIFICATION

from

it

at

Case5 11 cv 02509 LHK

The Court

1

not persuaded by

is

Filed10 24 13

Document531

concern With

this

respect

show

2

Defendants have not provided quantitative

3

skews

4

Defendants offer the endogeneity theory without any support

5

law

6

variables that Defendants

7

Defendants have not

8

change

9

Murphy

10

12

with respect

A similar lack

contend cause

identif

ied a

Suppl Reply

the results

has

to the internal

this

9 see

not presented any analysis

for the positive

endogeneity

in the form of data

problem

showing

sharing

or

in

that omitted

Dr

Dr Leamer s

underlying Plaintiffs theory

of classwide

respect

variable

analysis or case

to the

Specifically

show n how

Leamer Suppl

also

Finally Defendants argue that

causation

San Jose variable

San Jose employment

the

that

86

of

firm
wide average compensation variable Rather

single omitted variable

at

to the

Defendants argument with

of specificity plagues

effects are responsible

11

California

the results

analysis to

Page74

Rebuttal

note

as Plaintiffs

adding one would

Rep

non sharing

unknown

61 noting

external

that

Dr

or internal

Leamer s results

analyses

cannot address the question

impact which Defendants

of

characterize

as

Court

of

13

whether compensation

14

would cause

a

15

contend that

Plaintiffs

16

District

wage

for class

depression

17

agreements would have been

18

simultaneous

19

evidence

20

individual

21

compensation

increase

members was

so rigidly interlinked that

all Suppl Opp n

for substantially

at

14

a wage

increase

for

some

That is Defendants

District

have not demonstrated that the antisolicitation agreements caused

any

States

in

wages However

clarify

that

that a

5

Plaintiffs

Plaintiffs never argued that the impact

of the

Northern

United

the
For

by

raise

across

shielding

raises

As

22

5

lockstep
the

firm Suppl

raise to

Reply

at

8

one employee

they also avoided having to

make across the board

the documentary

evidence above demonstrates

increases

Defendants would have had to make structural

25

explaining

that a group of Pixar employees base salary needed

26

competing

with technology

or reactive

that they

agreements

changes See

were

eg Cisneros Decl Ex VV

companies

in the

getting better offers

of Patricia

Murray

Intel

Bay Area and
elsewhere

at

to

106

Sheehy

be increased

Depo

because Pixar was

its recruiting team was hearing

Leamer Suppl

Senior Vice President

Rebuttal

and Director

No

11 CV 02509 LHK

ORDER GRANTING PLAINTIFFS SUPPLEMENTAL

Rep

of Leadership

74
Case

to

there is compelling evidence that in the

preemptive

citing deposition

preemptive

Id

24

28

a

employees from waves of recruiting Defendants not only avoided

their

absence of the anti solicitation

candidates

required

Rather as shown by the documentary

23

27

would have

MOTION FOR CLASS CERTIFICATION

23

from

Case5 11 cv 02509 LHK

1

Strategy

and former President

2

question

regarding

3

preemptively prevent

4

globe

5

Dr Leamer s

6

causal

7

Leamer Suppl

8

with Plaintiffs expert

9

Human Resources

Page75

of

86

Murray explained

a

a classwide basis

whether

would be

that

methodology

12

and

13

the Court finds that

14

documentary

of

in

attrition

was high

in the

many

a

we assessed The

facts

Rep

13

theories

and

correlation

case

analyses

Defendants arguments

by

are contradicted

and complementary

to

draw

information
evidence along

on

are capable of demonstrating causation

any analysis

Defendants have not presented

Dr

criticisms of

that undermines

the documentary

the

in

Court finds persuasive

the compelling documentary

Defendants

find persuasive

somewhere

which are routinely used

analyze correlations

In the instant

or job ranges to

particular job category

supported by compelling frameworks

the Court does not

11

many

if

in response to

for particular job categories

that economists

when

in which

raised compensation

Intel

a fact considered

Rebuttal

sum

In

of

attrition

statement

conclusions

10

California

Filed10 24 13

Document531

Leamer s

Dr Leamer s

evidence

analysis

Accordingly

Court

of
District

Dr Leamer s

evidence

is

methodology

in conjunction with and bolstered

sufficient to meet the predominance

by

with respect

standard

the extensive

to

impact

District

d

15

Conclusion

on Impact

States

16

Plaintiffs documentary

evidence

along with the expert

reports

and

statistical

analyses

that

Northern

United

the
For

on

common

members

17

rely

18

individual

19

that Defendants

20

premium on

21

Defendants limited the proportion

22

increases Further the evidence suggests that the Defendants benchmarked

23

structures

24

support

Plaintiffs theory that the top companies

25

ceiling

based on which

26

This extensive

27

was

linked

Case

No

this

evidence

issues

in

proving

antitrust

internal equity

concerns

issues between

structures

of each

that

will predominate

supports

between

would be

The documentary evidence and

the expert

merit

reports also

set

Class s compensation

Plaintiffs theory that each technical

a

was set

employee s compensation

those of her peers within and across Defendants firms

28
75
11 CV 02509 LHK

ORDER GRANTING PLAINTIFFS SUPPLEMENTAL

to

compensation

and top employees at these companies

of the Technical

a

various

dedicated

their

over

Plaintiffs theory

basis that placed

communications

Defendants budget

or nearly all employees

evidence supports

on a company wide

and that collusive

data and to each other

all

class

impact The documentary evidence

had formal compensation

to external

to

establish that

MOTION FOR CLASS CERTIFICATION

Case5 11 cv 02509 LHK

1

have also presented

Plaintiffs

Filed10 24 13

Document531

documentary

and expert

Page76

86

of

evidence about labor market

2

dynamics that would have affected

compensation

on a classwide basis For example Defendants

3

would have had

steps through

bonuses

4

poaching by other Defendants

5

and poaching of employees by increasing compensation

6

from outside

7

equity

8

preemptive

9

classwide effect and would have impacted

take preemptive

to

rigid compensation

many of

California

illustrates

12

the disruption

13

solicitation agreements

these theories

all

including

how

of internal equity and

the evidence suggests

of the anti solicitation

the significance

these dynamics

would have had

of the Technical

non party

Google and

between

of the threat

would have

internal

that any such

agreements

members

or nearly all

which concerns interactions

11

in response to the spread of information

of the structural concerns regarding

structures

or reactive steps in the absence

One example

10

threats of

off

Further Defendants would have had to react to any cold calling

and within Defendants firms Because

and the existing

and raises to ward

Class

Facebook

imposed by

cold

calling

in the absence of the anti

Court

of
District

14

March

In

of

prompted Defendants to offer employees incentives to minimize attrition

2008 Arnnon

Google

Geshuri

non party

Director discovered that

Recruiting

District

15

Facebook had been

16

Geshuri s

first

17

non party

Facebook

18

our

19

we

calling into Google s

cold

SRE team

Site Reliability Engineering

States

response was

to

suggest

Sheryl Sandberg

contacting

Chief Operating

Officer

for

Northern

United

the
For

SRE team

and

cold

will not

in an effort to

to consider

call

20

look ing

21

to consider

additional

22

possible

SRE

23

aggressive

campaign

24

would be

unrelenting

25

In

into each

26
27
28

President

internally and

in

August
of

of

to

establishing

other

review ing

individual

Id

ask her

emphasis

after

added

Intuit

Board

email the Google Vice

President

sourcing

Not Call agreement

Ex 614

SRE group

losing one of

their

stating

w

to keep attrition

folksno

No

low

as

holds barred

want

as

an

We

Id

many

Co Lead

employees

executive

Director

to

Facebook

Google s Vice

management group and
of

Apple

and advisor

expressed concern about Facebook s

to

Bill

Campbell

Google

poaching and

11 CV 02509 LHK

ORDER GRANTING PLAINTIFFS SUPPLEMENTAL

that

may

e

start

76
Case

at

also suggested

Finally an alternative suggestion was to

after

directed

effort

that specifies

Arnnon Geshuri

or team incentives

company and go

of Directors

Do

rate for the

incentives

Communications emailed Google s

Chairman of

stop to the targeted

a mutual

the attrition

and a force of nature

2008

a

Cisneros Decl

retention

to call into their

put

MOTION FOR CLASS CERTIFICATION

stated

In this

that

Case5 11 cv 02509 LHK

1

she had

2

gone

offered

employee

the

Filed10 24 13

Document531

and

different roles

discussed

his future at

she could without making promises about pay or

as far as

team

her

Id

3

problems across

4

Sheryl Sandberg

or

Facebook

5

a truce Id Facebook

Page77

title

but that she had

would cause

Who

significant

refused

Facebook continued

6
7

October

9

months

new

Facebook s

8

Founder Mark

from Google

Facebook s

studying

DOJ made public

the

Zuckerberg

Google s employees

to poach

employees were recruited

2010 Google began
after

Bill Campbell s

2010

In

Leamer

of

for

Rep

We

example

109

have to get

of

Accordingly

A month

Google announced

Defendants

its

in

later

Id

strategy

solicitation

investigation

its

should contact

to get a cease fire

10

Bang

11

provided

12

email Laszlo Bock

13

rationale

for the Big

14

retention

because

15

because start ups don t have the cash flow to match and big companies

16

California

Google

that

response was to ask

86

of

internal equity

17

and two
Big

10 and

Ex 48

which involved an increase

an immediate

to the base salary of all of its salaried employees

cash bonus

1,000 to

of

Google Senior Vice

all

President

employees Shaver

Ex 46

Decl

of People Operations

by

In an internal

explained that the

Court

of
District

1 being

Bang included

higher salaries generate

responsive

higher fixed

to rising attrition

3 being

costs and

2 supporting

higher

very strategic

District

a too

are

worried about

States

and scalability to do

this

b don t

and

Northern

United

the
For

The

18
19

Google s

20

new

21

Recruiting

22

increased

Big

Bang

which

hires

Apple s compensation

internal equity

Manager and former Research

We

will go back

for your

23

then created

and review

issues

structure

internal equity

good

talent

employees Great
26

its

forcing

Apple

to

pay more

as follows

new

proposal

review

to stay ahead and be competitive
close

by

again and come up with a

This

25

employees a

Having

10

Ex 1376

these

talent does
increase

we
new

come

comp

is

due

must be aggressive
data points

at

a cost

to

the market

issue with current

changing

employees

with our offers

in

will help justify adjusting

to deal with the aggressive

offers out in the

Cisneros Decl

28

Apple s subsequent reaction to Google s actions demonstrates the weakness

Google s reaction to Facebook s solicitation of

In order
order to
current

Google gave

Just as a data point

27

its

market

employees and
of

Defendants

77
Case

No

Decl

with current employees David Alvarez

Manager responded

This will most likely create an internal

24

Shaver

impacted the other Defendants as well For example

salaries within Google

disrupted

have the margins to do this

11 CV 02509 LHK

ORDER GRANTING PLAINTIFFS SUPPLEMENTAL

MOTION FOR CLASS CERTIFICATION

for

Apple

Case5 11 cv 02509 LHK

1

contention

2

who would

3

impacted differently depending on

4

reactions of the Defendants

5

widespread

that the impact

that

c alculations

damages

model supporting a

11

with respect to the alleged

12

citing

circumstances

individual

86

to individual

employees

ABA

These contemporaneous

to genuine competition for labor suggest

whether

to disputing

10

California

their

would have been

that their response to

instead

structural rather than individual

can show impact on a classwide basis the parties

Plaintiffs

whether Plaintiffs can show damages on a classwide

dispute

of

Damages

In addition

9

agreements was localized

of the anti solicitation

of their employees

solicitation

3

8

Page78

have been solicited but for the agreements or that class members would have been

6
7

Filed10 24 13

Document531

need not be exact

anticompetitive

of Antitrust

consistent with its liability

effect of the

Law Proving

The Supreme Court has held
as at trial any

the class certification stage

at

damages case must be

plaintiff s

Section

but

basis

violation

Damages

Antitrust

Comcast

case

133

particularly

S Ct at 1433

Legal and Economic

57

Issues

Court

of

62 2d ed

2010

14

unless

damages sought

15

District

13

F3d

the

words

In other

a

damages

cannot be

suit

to proceed as a class action

certified

are the result of the class wide injury that the suit

alleges Butler 727

District

at

799

emphasis in original

States

Here

16

rely

Plaintiffs

on

expert

their

Dr Leamer

to demonstrate that they can use reliable

Northern

United

the
For

17

methods to compute damages by applying classwide methods and analyses

18

22

19

approach

could be used to create a model for quantifying

20

members

resulting from Defendants

21

percentages by which Defendants undercompensated

22

the conspiracy

23

solicitation agreements

24

agreements were

25

136 Dr

135 48 Dr Leamer

Rep

Leamer

citing

years

in

by

contrasting

model

sex and

26

including

27
28

revenue

number

of

years at the

new

Technical

Dr Leamer

before

2 the

3 the

effects caused

hires

etc

and

by

4 the

to

Technical

This model generated

the effect

when

of the anti

the anti solicitation

designed

to

on compensation caused by

factors specific

effects caused

to

by

No

each Defendant

the industry See

11 CV 02509 LHK

ORDER GRANTING PLAINTIFFS SUPPLEMENTAL

Id

account for factors

78
Case

Class

the anti solicitation agreements

effects

at

Class employees in each of

estimated

after

a range of variables

company

cost

during the periods

and

Mot

evidence and a regression

14148

Id

their

compensation

incorporated

anti solicitation agreements

total

Specifically

common

the estimated

challenged conduct

with compensation

effect

Leamer s

1 age

Id Fig 24

concluded that

See Class Cert

MOTION FOR CLASS CERTIFICATION

the

eg

firm

id Fig

Case5 11 cv 02509 LHK

Filed10 24 13

Document531

1

23 Dr Leamer

2

the Technical

3

Defendant firmduring the period

4

Fig

5

solicitation agreements over time and for variations

6

146

7

in a straightforward

8

calculate

24

Reply

33 Dr

at

11

model

12

damages

Dr

the average or net

estimate

in which

the anti solicitation

fashion

Regression

Class Cert Order at

See id

the effect of the anti

in

148

see

employees Id

also

the Court considered

but ultimately found the

sufficient to satisfy Plaintiffs burden for the purpose of Rule

Apr 5

each

at

employee compensation could be used

Class See id

5 Class Certification Order

Leamer s Conduct

had some impact on

agreements were in effect

different kinds of

of

86

conjunction with Defendants compensation data to

in

for employees in the Technical

April

among

of

under compensation

variations

for

model

that this econometric

formulaic

In the Court s

criticisms of

to

that the anti solicitation agreements

Leamer s model accounted

contended

damages

10

show

to

Class generally and

Dr Leamer

9

California

used the model

Page79

23

4

id Figs 3

Defendants

Conduct Regression

b3 on

the issue of

43 44

Court

of

13

First the Court rejected

14

analysis an

sensitivity

15

District

variables

Defendants

exploration

of

how

criticism that

sensitive

Dr

Leamer

failed to conduct a

a model s conclusions

are to a choice of

District

Leamer

Depo

at

351 4 6

Dr

Defendants argued that

Leamer should have performed

States

16

disaggregated

using only data from that Defendant s

for each Defendant

analyses

employees

Northern

United

the
For

17
18

However

99

in light

including

of the limited compensation

the relatively short length

of the data period

to

aggregation may provide

20

statistical

21

Court also was not persuaded by

22

42 Defendant

23

agreements

24

many

25

spreading those effects across a wider range of variables See

26

see

period

Apr 5

v

analysis and yield

Corp

Costco Wholesale

Dr Murphy s

more

competing

523

disaggregated

more meaningful

ND Cal 2012
model which

Rep App 9A

could also

Rep

because the Court found that

Dr Murphy s

No

The

included

use of that

minimize artificially the effects of the anti solicitation agreements by

Apr 5

Class Cert Order

at

39 40

101

the Court rejected

Defendants

Class Cert Order at

40 Mot

to

criticisms of

Strike

at

13

Dr

Leamer s choice of a benchmark

Defendants argued that

79
Case

Rep

the Court found that

reliable and

FRD 492

285

Reply

variables only 28 of which related to the effect of the anti solicitation

Murphy

Leamer Reply
Second

27
28

specific

variables

citing

Ellis

robust

Dr Leamer Leamer

2001 2011

19

results

a more

data available

11 CV 02509 LHK

ORDER GRANTING PLAINTIFFS SUPPLEMENTAL

MOTION FOR CLASS CERTIFICATION

if

the

Case5 11 cv 02509 LHK

Filed10 24 13

Document531

Page80

86

of

1

benchmark period was changed

2

period during which the anti solicitation agreements were in effect

3

this period then the

4

However

5

limited in this

6

data

7

Furthermore the Court expressed concern that in altering the benchmark periods Defendants

8

reduced the

9

result in less accurate

was

model showed

way Apr

not comparable

amount

total

5 Class Cert Order
from

to data

Id

results

at

12

compensation

13

Murphy

14

the Conduct

15

Class and overcompensation

16
17

reflecting changes

18

companies See Leamer Reply

19

altered the results of

20

should be disregarded

a

persuaded by Defendants contention

to

failed to include

employees over

under compensation

non conduct

the

See id

benchmark period should be

the

show that

Defendants did not

regarding

the

pre conduct

should be excluded

periods which could then

argument that the Conduct Regression was flawed

the Court rejected Defendants

Dr Leamer

only the two years following

rather than

why

the

40 41

at

because

40

to

the conduct period and therefore

of data available

11

California

over compensation

net

the Court noted that Defendants failed to explain

Third

10

from the two years preceding and the two years following

variable to

time Mot

for changes

control

to Strike

at

13

in the value of

equity

Defendants argued that when

Dr

Court

of
District

an equity variable specifically a variable that tracks

introduced

much

Regression yielded

smaller

under compensation

changes

in

the

S

P 500

AllSalaried Employee

for the

District

for the Technical

Class

See

Murphy Rep

138

The Court was

not

States

because the equity variable Defendants selected a variable

Northern

United

the
For

21

In addition

in

the

Dr

S

500 tracked

P

Rep

Leamer s

or that

the

Regression was flawed

23

employees within the same firm

24

Murphy

25

See

26

observations

27

certain

28

commonly

because

89 Thus

issues

Dr

used

common

to

estimate

factors

accepted

a regression

clustering

is

Dr

Leamer s

that the

Mot

See

method

contain
a

the standard

Strike

to

at

16 Murphy Rep

No

Conduct

to

Dr

errors

take into account the fact that

groups

particular

errors

of observations

company

that are affected

or present

For the reasons

set

in a single

forth

below

11 CV 02509 LHK

ORDER GRANTING PLAINTIFFS SUPPLEMENTAL

for

126

should have clustered the standard

80
Case

results

flawed

above Defendants argued

Dr Leamer

such as those affecting

referred to as

this variable significantly

failed to account for the fact that compensation

correlated

A generally

126

discussed

Leamer

opined that given this correlation

Murphy Rep

price of hundreds of unrelated

the fact that including

Conduct Regression

is

in the stock

analysis did not persuade the Court that

to the sensitivity

22

variations

MOTION FOR CLASS CERTIFICATION

by

year
the

is

Case5 11 cv 02509 LHK

1

Court did not find that

2

to reject

the Conduct

4

when

5

the

6

See Cook

7

testified

8

Murphy

Depo

9

was only one way

percent

v

Rockwell

12

Another approach

83

13

the standard

14

to provide

at

would be

The Court noted

82 83 Thus

See id

was unpersuasive

D Colo 2006
significant to

Dr

Murphy

be

reliable

the standard

errors

Rep

employees See Leamer Reply

to include

Dr

significant at

statistically

Dr Leamer adjusting

between

that

a sufficient basis

errors the fact that

the regression

statistically

Further as explained by

86

42

2d 1071 1105

of controlling for correlations

variable revenue

15

California

across

F Supp

of

errors provided

should have clustered the standard

need not necessarily be

results

Page81

Conduct Regression s results were not

the

Corp 580

Int’l

firms See id

11

Class Cert Order at

level did not persuade the Court that

366 14 20

76 78 82 83

10

clustered

confidence

at

Apr 5

Dr Leamer

that

that a model s

the errors were

95

Leamer s failure to cluster the standard

Regression

Even assuming

3

Dr

Filed10 24 13

Document531

variables

Leamer had

the Court concluded

to

explain

the commonalities

included one such

already

Dr Leamer s

that

to cluster

failure

Court

of
District

errors did not provide a sufficient basis to conclude that the Conduct

a reliable methodology

Apr 5

for the purposes of class certification

Regression failed
Class Cert Order

District

42

States

16

now

Defendants

arguments not raised in

raise additional

their

to contend

opposition

initial

Northern

United

the
For

Dr Leamer s

cannot be used

17

that

18

predominate

19

single conduct variable

for all Defendants

20

most

analyses

recent

methodology

with respect

correlation

to

damages

show

show

to

Specifically

that

common

renewing

was inappropriate

their

21

that total compensation

questions

are likely to

argument that the use of a

Defendants argue that

and changes

in total

Dr

Leamer s

compensation

at

21
22

21

Defendants also contend that because the Court

additional

23
24

variables

were needed Suppl Opp n

this is an issue of even

the correlation

Opp n
26

28

and

Dr

greater importance

at

whether

23 24
to

means
of

Suppl Opp n

citing

23

Murphy Suppl Rep

add any variables but

Rep

is

not

66

Given

of proving and calculating

harm

more

at

now

that

Dr

Leamer

rejected

to

Defendants argue that

that compensation

Defendants maintain that

w

68 69 Dr Leamer contends
he need s to add at
acceptance

damages

that he

Dr Leamer s

upon

No

11 CV 02509 LHK

ORDER GRANTING PLAINTIFFS SUPPLEMENTAL

addition

this basis

81
Case

time

Regression as a

Dr Leamer s

model on

for

Suppl

considered

the present

of the Conduct

the Class was not contingent

variables to his analysis the Court does not reject

within a

ithout accounting

impact or

aware of any

that the Court s

whether

to address

did not add variables to his

now

Leamer opines

Leamer s model cannot reliably determine or measure

Leamer Suppl Reply
27

encouraged Leamer

23

Conduct Regression analysis Dr Leamer s model should be
firm is highly correlated

25

at

MOTION FOR CLASS CERTIFICATION

Case5 11 cv 02509 LHK

Filed10 24 13

Document531

1

Defendants diverged and sometimes moved in opposite

2

Leamer

3

single conduct variable

4

Certification

5

understandable

6

practices

7

Defendants

8

regarding

9

a more coherent

Rep

Tables 1 and

Order

Leamer s

because

decision

Apr 5

data and calculating

As

at

in his

39 40 Dr Leamer s

a single conduct variable

a

11

model

efficient

Id The Court

a

5 Class

compensation

approach

of aggregating

rather than using the limited data

each Defendant to calculate separate conduct variables

more

citing

Conduct Regression was

Defendants

data regarding

24

the use of

set forth in the April

to use a single variable

Class Cert Order

at

of these divergences

light

inappropriate

compensation

the available

is limited

is

86

of

Suppl Opp n

directions

Defendants assert that in

for all Defendants

Dr

10

California

2

Page82

is

Dr Leamer

allowed

Dr Leamer s

not persuaded that

use of

determining damages

single conduct variable

12

prevents

Conduct Regression from

to produce

the

Finally Defendants argue that

Dr Leamer s

serving

Conduct Regression

as a reliable

is

method

of

overly sensitive to

Court

of

Opp n

24

variable

14

Leamer Suppl

16

of alternative

17

aggregation The

18

variable

The Court disagrees

in his reply report and rebuttal

15

District

13

choice

at

supplemental

expert

Dr Leamer

specifically addresses

concern

85 97

Rep

report See Leamer Reply

this

District

Rep

Rebuttal

66

discussing

the lack

of sensitivity of

his

findings

to

inclusion

States

external control

variables

such as firm stock prices and to a different level of

Northern

United

the
For

19

choice that

Because

20

Shaw s

21

Dr Leamer s

22

calculating

Court

it

not persuaded that the Conduct

cannot be used

Dr Leamer s

model

e

i

robust

is statistically

subsequent analysis

classwide

4

23

is

damages

to

is

supported by the economic

insensitive

to alternative

the Court finds that

25

individual

26

assessment

27

how

this

28

F3d

at

case should

20

Under

it

F3d

proceed to

including

literature

variables and

control

Dr Leamer s

model

is

is

No

Dr
by

buttressed

capable of

common

issues

are likely to predominate

at

801

trial

the predominance

involves

a

This qualitative assessment includes

would

actually

inquiry a

district

be litigated

court

must

See In re

formulate

some

New

some

analysis into

Motors 522
predication

11 CV 02509 LHK

ORDER GRANTING PLAINTIFFS SUPPLEMENTAL

over

qualitative

82
Case

to

Regarding Predominance

issues Importantly this Court s analysis of predominance
See Butler 727

so sensitive

15

at

This Court s rigorous analysis shows that

24

is

satisfy Plaintiffs burden at class certification

Suppl Reply

Conclusion

Regression model

MOTION FOR CLASS CERTIFICATION

as

Case5 11 cv 02509 LHK

how

1

to

2

predominate

specific

in

4

exclusively

5

The Court

6

judgment and

7

and

8

contest

9

effect

their

will play out in order to determine

issues

case

a given

As such

3

is

common

market

the

11

standard

12

labor

13

entails

14

Med

at

issues

shown using

Class for the reasons discussed

be

a central

clear both

disputed

through

motions

their

above

summary

issue at

for class certification that Defendants

dismiss

to

will seek to

no anti competitive

that their agreements had

demonstrate that the

to

under the rule of reason were reasonable and lawful under that
had any adverse effect on compensation

and could not have conceivably

market Opp n

or individual

violation can be

that antitrust

Defendants have stated that they intend

Specifically

agreements should be evaluated

quite

by contending

violation

10

California

made

to the motion

the issue of antitrust

dispute

86

of

omitted

violation is likely to

trial Defendants have

opposition

no

marks

Page83

common

whether

the entire Technical

to

further finds that antitrust

initial

on

internal quotation

this Court notes that there is

evidence that

at

Filed10 24 13

Document531

5 n1

The Supreme Court has

in any relevant

that the rule of reason analysis

stated

Court

of
District

costs and

significant

Soc y 457

is

US 332 343

often

extensive

and complex

See Arizona

v

Maricopa Cnty

1982

District

15

Given the considerable compelling

common

proof

have submitted regarding

Plaintiffs

States

16

Defendants

17

vigorously

litigate

18

question

likely to

19

be understated See

20

611

21

of the claim

22

is

23

present

24

209

alleged

antitrust

violation

as

well as the parties

actions

that they will

indicating

Northern

United

the
For

is

be

held

27

Kay Kane

28

is

to

issue

and

quoting Thomas

FRD 159

26

Plaintiffs

Access

Memory

liability

issues

certification even

such as conspiracy

Inc

question

that is thought

to

where

v

Newport Adhesives

on Class Actions

1781

predominate

Charles

No

FR D

issues

18.25

4th

Inc

ed 2002

have almost invariably been

Alan Wright Arthur Miller

3d ed 2005

603

are

Composites

whether a conspiracy

over other issues in the

case

Mary
existed

cf Cordes

11 CV 02509 LHK

ORDER GRANTING PLAINTIFFS SUPPLEMENTAL

should not

of the conspiracy

83
Case

this

proof on each element

significant individual

or monopolization

issues 7AA

and Procedure

common

trial

Litig 264

have held that the existence

repeatedly

Thomas Rodmakers

over individual

Federal Practice

SRAM Antitrust

need not show that there will be

warrants

violation

antitrust

At the very least this aspect of the

CD Cal 2002 see 6 Newberg

167

predominate

a common

Random

In price fixing cases courts

the predominant

Defendants engaged in an

central to this litigation

In re Static

ND Cal 2009

Common

25

of whether

the question

MOTION FOR CLASS CERTIFICATION

Case5 11 cv 02509 LHK

Filed10 24 13

Document531

1

Co Fin Servs v A G Edwards

2

court concludes that the issue of injuryinfact presents

3

necessarily

4

therefore

5

in favor of a finding

Sons Inc 502

follow that they predominate

unwarranted
that

As

6

In addition

7

central element of antitrust

8

that

9

extensive

common

to concluding

questions

that

violation

documentary

ones and that class action

classwide proof of

the district

it

does not

treatment

is

violation weighs

antitrust

will predominate

questions

over individual

valued internal equity This suggests

11

on

12

reports

13

evidence

14

that Plaintiffs

15

following a rigorous analysis the Court finds that

16

predominance

17

with respect

questions

to the

analysis also finds

a rigorous

with respect

impact The

to

a formal wage

evidence suggests that Defendants maintained

10

California

if

questions however

Court having conducted

will predominate

questions

Even

predominate

common
the

86

of

2d Cir 2007

individual

common

the voluminous

a result

common

over

F3d 91 108

Page84

had

and

structure

damages

members compensation

class

concludes that

Plaintiffs

that the anti solicitation agreements

a structural impact

Furthermore the Court having taken a hard look

have presented

a methodology

that supports

at

a finding

the experts

that the

Court

of
District

common
have

the class will be utilized in demonstrating impact

to

forth a methodology

set

damages on

for calculating

Finally the Court finds

a classwide

Thus

basis

District

Plaintiffs

have

Rule

satisfied

23

b3

s

States

requirement with respect to

all

three

elements antitrust

violation

impact and

Northern

United

the
For

18

C

19

Rule

Rule

23

23

b3

b3

Superiority

also tests whether

20

fairly

21

the Court

22

superior

23

individually

24

any litigation

25

desirabilityof concentrating

26

difficulties

27

a

class action

controversy

is

Fed

superior

to

other available

R Civ P 23b3

methods for

must

consider

method

four

the

non exclusive

of adjudicating

plaintiffs

claims

the controversy already

the litigation

likely to be encountered

in

1 the

the

whether a class action

interest of each class

or defense of separate

controlling the prosecution

concerning

factors in evaluating

commenced

actions

by

or against

of the claims in the particular

management

2 the

of a class action

the class

forum and

of

3 the

4 the

Zinser 253

11 CV 02509 LHK

ORDER GRANTING PLAINTIFFS SUPPLEMENTAL

a

and nature

extent

84

No

is

b3

member in

28

Case

23

Under Rule

92

and efficiently adjudicating

MOTION FOR CLASS CERTIFICATION

F3d

at

1190

Case5 11 cv 02509 LHK

1

Plaintiffs

2

claims

3

Mot

4

questions

5

23

6

mandatory trebling

7

Panel

8
9

at

an

in

23

b3

c lass treatment

that

state

case

antitrust

common

where

TFT LCD

citing In re

267

FR D

are likely to be too small to justify

claims the opportunity

10

Plaintiffs

267

predominate

FRD

Class Cert

If common

314

at

the superiority prerequisite

that Class members individual

314 15

individual

noting that in

after

TFT LCD

In re

cases individual

would

of Rule

damages even

litigation

antitrust

litigation but a class action

Flat

damages

offer those with small

redress

for meaningful

c lass treatment

further contend that

11

than hundreds or thousands of individual

12

proof

13

their

14

same evidence whether

15

California

action

large to warrant

at

86

of

definition superior to thousands of individual

Antitrust Litig

in an antitrust

are insufficiently

Page85

of liability and impact

issues

satisfied Plaintiffs contend

Antitrust Litig

by

is

Panel

Flat

are found to predominate

is

Filed10 24 13

Document531

will also be

same

more manageable

and

efficient

23 24

actions

the

litigating

Either defendants colluded or they did

not

issues

with nearly identical

either their conspiracy

artificially

suppressed

Court

of
District

compensation

structure

it

or

it

did not

involves

Any

a single

trial

here will focus on these questions

employee or

the Class as a

whole

and

the

Class Cert

Mot

at

District

States

16

however

Defendants

t he numerous and

argue that

substantial

issues each

separate

Northern

United

the
For

17

class

member would

18

that

class action

19

Zinser 253

20

Certification

21

the groups of people

22

such an approach

23

would be

24

67 68

25

the Court does not

F3d

have to

treatment

at

1192

is

litigate

to

superior method of adjudication

not the

During

establish his or her right to recover

Defendants proposed instead

impacted

Aug

8 Tr

would not conserve

at

31 32

affected

bellwether

In response

because
the

Given that Plaintiffs case

find that conducting

Opp n

Plaintiffs Supplemental

holding multiple

resources

the opinion that this conduct

The Court agrees

on

the hearing

in

pay

rises

at

25

trials

to

accommodate

Plaintiffs

and

falls

of the entire

with

their

trials which

company

common

28
85
11 CV 02509 LHK

ORDER GRANTING PLAINTIFFS SUPPLEMENTAL

MOTION FOR CLASS CERTIFICATION

Id

at

evidence

will effectively

27

No

argued that

every single case the proof of impact

26

Case

citing

Motion for Class

counsel for

structure

numerous bellwether

individually means

be

trials

Case5 11 cv 02509 LHK

1

with

2

would merely

representing

Plaintiffs

Thus

3

multiply

subclasses

the

number

of

a

this case

5

conspiracy

6

favor of finding

7

See Zinser 253

8

weigh in favor of finding

class treatment

9

Court finds that

have

V

as

and the desirabilityof concentrating

F3d

1190 92 The

at

Plaintiffs

the litigation

superior to

is

of

Defendants

satisfied

overarching

alleged

weigh

heavily

in

of the controversy

adjudication

other methods

to

weigh in favor of having

in one proceeding

Court also finds that questions

superior

In fact this

and evidence

methods of

other

22

management

Class members interests

addition the nature

In

that class treatment

issues

86

of

manageability

regarding

of adjudication

Thus

the

the superiority requirement

CONCLUSION
For the reasons set forth above

11
12
13

Rule

14

Technical

IT IS

16

Dated October

23 a of

requirements for Rule

15

California

class action

Page86

will ease case

same

of trials with the

4

10

employees

the Court finds that the Technical

litigated

Filed10 24 13

Document531

the Court finds that Plaintiffs

the Federal

have

Rules of Civil Procedure

satisfied

all

of the

as well as the requirements of

Court

of
District

23

b3

Accordingly

the Court

Class and appoints

named

GRANTS

Plaintiffs

Plaintiffs

Motion for Class Certification

as to the

as Class Representatives

District

SO ORDERED

States

24

2013

Northern

LUCY
United

the
For

H KOH

United

17

States

Judge

District

18
19
20
21
22

22

Defendants further suggest

Act because

23

entitled

In

it

would

making

Court held that Rule

24

relief

and

not

who

plaintiffs

25
26
27
28

this

23

argument Defendants

b2

damages was

which provides

not an appropriate

sought backpay

Supreme Court held
would not be

that certifying the Technical

under Title

that the putative

able to litigate

members Dukes 131

Class would violate

Defendants from asserting statutory defenses

prevent

rely

on

vehicle

class could

not

that

it

Dukes

of

at

be

25

citing

certified

may have

the Rules Enabling

which they are

in which

of a class seeking

for certifying

VII Opp n

Title VII defenses

a section

for the certification

to

in

a

the

Supreme

injunctive

class of discrimination

Dukes 131
part because

had against

S Ct

at

2561

The

the defendant

individual

class

S Ct at 2561

As a result class certification would have expanded
plaintiffs substantive
rights under Title VII This Dukes holding applied
to a class under Rule
23
which provides for only injunctive relief and not for damages thus this holding is
inapplicable
to the instant case
Further Defendants here have not identified any statutory defenses

b2

would have against particular class membersnor have Defendants contended
would expand Plaintiffs rights under the antitrust laws

that Defendants
certification

86
Case

No

11 CV 02509 LHK

ORDER GRANTING PLAINTIFFS SUPPLEMENTAL

MOTION FOR CLASS CERTIFICATION

that

2

Case5 11 cv 02509 LHK

Filed0405 13

Document382

Page1

of

53

1
2
3
4
5
6
7
8

UNITED STATES DISTRICT COURT

9

NORTHERN DISTRICT OF CALIFORNIA

10
11

California

SAN JOSE DIVISION

RE HIGH TECH EMPLOYEE
ANTITRUST LITIGATION
IN

Case

No 11 CV 02509 LHK

12

Court

District

13

ORDER GRANTING

14

of

DENYING IN PART MOTION FOR
CLASS CERTIFICATION

IN

PART

District

15
States

16

THIS

17

ALL ACTIONS

Northern

United

the

For

DOCUMENT RELATES TO

18
19

Plaintiffs

Devine Mark Fichtner

Michael

20

Daniel Stover

21

situated

22

Apple Inc

23

Ltd

24

with a principal place of business

25

challenge

26

compensation

27
28

Plaintiffs individually

collectively

claims against

allege antitrust

Apple

Lucasfilm

and

their

to

in the

Before the Court

Mot ECF No 187

is

employee

Plaintiffs

and on behalf

Corp

Defendants

San Francisco

overarching conspiracy

restrict

Intel

Brandon Marshall and

Hariharan

of

Intel
all

Silicon

a

class of all those similarly

of

Intuit

whom

Inc

are

No

Valley area of California

among Defendants

to fix

and

suppress

Plaintiffs

employee

mobility

Motion for Class Certification

Defendants oppose

this motion

and

move

to

See

Pls Mot

IN

Class Cert

strike the expert

11 CV 02509 LHK

ORDER GRANTING IN PART DENYING

Intuit Lucasfilm

high tech companies

1
Case

Adobe

Adobe Systems Inc

former employers

Google

Google Inc

and Pixar collectively

an alleged

Siddarth

PART MOTION FOR CLASS CERTIFICATION

report of

Dr

Case5 11 cv 02509 LHK

E Leamer

1

Edward

2

Class Certification

3

Mot

4

move

5

opposition

6

upon which

7

Oppn

8

supplement

9

Mot

10

of

Dr

ECF No

oppose

Plaintiffs

Having considered

12

GRANTS

13

amend The

part Plaintiffs request

15

Finally the Court

16

Record

17

I

the

in

The Court

held

Defendants seek to

Finally

Oppn
on

a hearing

to

Defs

See

class certification

Defs

of

part Plaintiffs

Motion

for

in

for Class Cert

Joint

Class Cert ECF No

these motions

on January

submissions arguments and the relevant

the parties

in

Supp

to

38 40

at

similarly

Plaintiffs

employee declarations

Supp Mot

in

Motion for

Defendants submitted

as well as certain

Pls Consolidated Reply

Rec

270.1

DENIES

in part and

M Murphy which

of their opposition

of their

Strike ECF No 210

to

Reply ECF No 247

to Strike

to Supplement

Mot

53

of

Oppn ECF No 209 Defs

for Class Cert

for Class Certification

the record in support

for Leave

Pls Mot

Dr Kevin

See

relies

to

Page2

submitted in support

Plaintiffs

E Leamer

Edward

Motion

Murphy

Defs Mot

to

Oppn

report of

Plaintiffs

to

14

California

Dr

strike the expert

to

11

Defs

See

Rep

to Strike

Rep which

Leamer

Filed0405 13

Document382

law

Admin

263

17 2013

the Court

Class Certification with leave

to

Court

of

District

Court

DENIES

Defendants

to strike

Motion

Defendants

Strike

to

GRANTS

and

in part and

report and certain employee

expert

DENIES

in

declarations

District

DENIES Defendants

Motion for Leave

Joint Administrative

to Supplement

the

States

in Support of

Defendants Opposition

to Class Certification

Northern

United

the

For

BACKGROUND

A

18

Factual Background

Plaintiffs

19
20

worked

21

Decl Ann

for

are software

Adobe

in

B Shaver

engineers

the State of Washington

In

Supp Pls Mot

22

Consolidated

23

Arizona from

May of

24

Hariharan

25

Shaver

26

Decl Ex

2008 through

from October of 2006 through July of

for Class Cert

Shaver

16 ECF No 65

May of 2011

1 CAC

2006 through December

of

18

2006

Mr Marshall

See Shaver

worked

Decl

Ex

9

for

2008

See

Decl Ex 6 1 ECF No
Mr Fichtner

Decl Ex 7

See Shaver

for Lucasfilm in California from January of

8

Mr Devine

were employed formerly by Defendants

CAC

Amended Complaint

worked

who

worked

1 CAC

for Intel

in

1 CAC 17 Mr

2007 through August

Adobe

188

of

2008

See

in California from July of

19

Finally

Mr

Stover

27
1

28

The Court

will address

Defendants

No

307

in

Case

No

Renewed

Administrative

Motion

to File Under

11 CV 02509 LHK

a

separate

order

2

ORDER GRANTING IN PART DENYING

IN

PART MOTION FOR CLASS CERTIFICATION

Seal

ECF

Case5 11 cv 02509 LHK

1

worked

2

Decl Ex 10

for Intuit

in

California from

1

of

2006 through December

5

competition amongst

6

compensation

them

53

2009

of

See Shaver

compete

9

labor

This method of recruiting to which Defendants refer as

for employees

eliminate

to

of suppressing

market each Defendant would

CAC

soliciting current employees from the other Defendants

any manner
including

10

directly in

11

another

12

allege that the use of cold calling

13

mobility

cold calling includes

orally in writing telephonically

who

companys employee

has not otherwise applied

the

1 2 55

CAC

employees

and lawfully competitive

functioning

by

overarching conspiracy

for skilled labor with the intent and effect

and mobility of Defendants

In a properly

in an

8

California

of

Alleged Conspiracy

allege that Defendants engaged

Plaintiffs

7

November

Page3

1 CAC 20

3
4

Filed0405 13

Document382

for

among Defendants commonly

a

communicating

or electronically

opening

job

increases

total

41

Id

with

Plaintiffs

compensation and

Court

of

14

District

for all of Defendants

Here each

employees

pair of Defendants

CAC

allegedly

48 50

entered

into an express

bilateral

agreement not

to

District

15

compete

16

developed to prevent

17

Mot

18

other

19

Defendants

Mot

20

Defendants

CAC

21

product group or time period

22

Defendants

for each others

employees

CAC

55.2

Plaintiffs

maintain that the agreements

were

States

a

war for talent

bidding

that

would

up wages

drive

across

the

Defendants

Northern

United

the

For

at

2

Defendants memorialized these nearly identical agreements

documents

23
most

25

Intuit

26

conspiracy

27

2

important

bilateral

each firms employees off limitsto other

agreements applied

63 76 81 88 100 105
Id They

to all employees of a given

They were not

also were

by geography job function

limited

not related to

any

pair of

specific

collaboration

among

Plaintiffs these anti solicitation

to

Bill

Mot

Campbell

at

2

Valley Apple

all

of

whom

agreements

CEO Steve

Jobs Google

served on Apples

Allegedly these three individuals

centered

Board

around three of the

CEO Eric

of Directors

Schmidt and

throughout

as well as senior executives

the

from each

Do Not Cold Call agreements anti solicitation
and anti competitive
agreements
For the purpose
agreements as the anti solicitation
agreements
3

parties refer to these agreements as

agreements

Order

The

figures in Silicon

Chairman

The

1

at

Do Not Call lists putting

CEOto CEO emails and

Id

According

24

28

including

in

anti poaching agreements

the Court refers to these

No 11 CV02509 LHK
ORDER GRANTING IN PART DENYING
Case

IN

PART MOTION FOR CLASS CERTIFICATION

of this

Case5 11 cv 02509 LHK

Filed0405 13

Document382

Page4

53

of

1

Defendant

2

policing

3

Defendants

4

employees generally were not informed of nor did they agree to the terms of any of the

5

agreements

6

actively

participated

violations

CAC

agreements

of the bilateral

senior executives

negotiating executing

in

55 108

concealed each

actively

also allege that

Plaintiffs

agreement and Defendants

bilateral

Id
contend that Defendants anti solicitation

Plaintiffs

agreements eliminated

7

employees and suppressed employees compensation and mobility thereby

8

harm

11

California

12

2

inflicting

class wide

of Justice

DOJ

DOJ Investigation

From 2009 through 2010
an

conducted

111

competition for

CAC 110

9
10

with and

monitoring compliance

After

documents

of the Department

employment and

into Defendants

investigation

receiving

the Antitrust Division

recruitment

by Defendants and

produced

witnesses

interviewing

3

CAC

practices

the

DOJ

Court

of

13
14

District

concluded that Defendants reached

facially anticompetitive

significant form of competition to the detriment

agreements that

employees

of the affected

eliminated

who

a

were likely

District

15

deprived of competitively

16

112

see also

and

important information

States

ECF No 93 Ex

A

2 14

at

Dept

access

to better job opportunities

of Justice

Compl

Against

Adobe

CAC

al

et

Northern

United

the

For

17

ECF No 93 Ex

D

2 15 22

at

18

determined that the agreements

19

than reasonably necessary

20
21
22
23

entered

25
26
27
28

See

Lucasfilm

its

stipulated

3 2011

proposed

A

at

2011

final

17 CAC

Compl
naked

investigation

ECF No 79 1 Ex

DDC June

Lucasfilm The

DOJ

collaboration

were broader

2

WL

DOJ

DOJ

judgments

in

filed

Adobe

2636850

Lucasfilm

at

complaints

J

United

DOJ

1

each case Id

Defendants did not admit any wrongdoing

Compl
in

States

Lucasfilm

3 CAC

law

112

court against

Lucasfilm

J

In these stipulated

or violation of

Inc

The DOJ

but they agreed

to

No

11 CV 02509 LHK

ORDER GRANTING IN PART DENYING

IN

PART MOTION FOR CLASS CERTIFICATION

Defendants

No 10 02220
also filed

proposed

4
Case

Adobe

per se unlawful under the

federal

v

DOJ

concluded that Defendants

of trade that were

restraints

35 DOJ
the

112 The DOJ

also

effort and

for the formation or implementation of any collaborative

laws DOJ Adobe Compl
Following

24

Compl Against

were not ancillary to any legitimate

into agreements that were

antitrust

of Justice

price setting mechanisms that apply in the labor setting

disrupted the normal

Compl 16 DOJ

Dept

final

be

judgments

enjoined

from

Case5 11 cv 02509 LHK

1

attempting to enter into maintaining or enforcing

2

way

3

employees of the other

4

Against Lucasfilm

5

judgments on March

6

J at 1 CAC

refrain

7

from

ing

soliciting cold

4 CAC

at

17 2011

and June

9

case as private attorneys general

was unable

themselves and for the

B

12

The

District Court entered

2 2011 respectively

DOJ

contend that although the

Plaintiffs

11

or otherwise competing

recruiting

for

DOJ

proposed

the stipulated

Adobe

J

Final

final

J at 12 DOJ Lucasfilm

115.3

the government

10

53

of

J at 5 ECF No 79 1 Ex B DOJ Proposed

DC

115 The

Page5

any agreement with any other person or in any

calling

person DOJ Adobe

8

California

Filed0405 13

Document382

to compensate

at

of the conspiracy

the victims

up where

to pick

Class Mot

ultimately put an end to these illegal

the

DOJ

left

off

to

Plaintiffs

agreements

now

bring this

seek damages for

1

Background

Procedural

original complaints in the five actions

underlying this consolidated

were

action

filed

in

Court

of

13
14

District

court

California state

May 4 2011

Hariharan

v

Marshall

v

Adobe Sys Inc Case

Adobe Sys

Inc

No

11574066

No 11 CV 204052

Case

Alameda Super

Ct filed

Ct

Santa Clara Super

filed

District

v

15

June

28 2011

Devine

16

June

28 2011

Fichtner

17

June

30 2011

Stover

Adobe Sys

Inc

Case

No 11 CV204053

States

v

Adobe Sys Inc Case

Santa Clara Super

No 11 CV204187

Ct

filed

Ct filed

Santa Clara Super

Northern

United

the

For

18
19
20

14 2011 4

23
24
25
26

Adobe Sys Inc Case

Defendants subsequently

District Court for the Northern

2509

19 2011

July

2011
see

3

July

see

removed

19 2011
see

see

the five state

1 Marshall v

ECF No 41

ECF No 41

ECF No 41

No 11 CV25090

v

Fichtner

and Stover

v

v

Devine

Santa Clara Super

court actions

District of California Hariharan

May 23 2011 ECF No

removed

removed

21
22

v

v

Inc

Adobe Sys

Inc

Adobe Sys Inc Case

Adobe Sys

to the United

Adobe Sys Inc Case

Adobe Sys

Case

Case

Inc

filed

July

States

Case

No 11

No 11 3538

No 11 3539

No 11 3540

No 11 3541

Ct

removed

removed

removed

July

July

19

19 2011

ECF No 41

Under

the provisions

Judgment has no prima

of Section

5 a of

facie effect in

the Clayton

any subsequent

Act 15

U SC

private lawsuit

16
that

a

the proposed Final

may

be brought against

Defendants

27

4

While

the

the Superior

28

name

of each Superior Court case

listed only

Adobe Systems Inc

as the

Court complaints also named as Defendants Apple Google Intel Intuit Lucasfilm

Pixar and Does

1 200
5

Case

No

Defendant

11 CV 02509 LHK

ORDER GRANTING IN PART DENYING

IN

PART MOTION FOR CLASS CERTIFICATION

Case5 11 cv 02509 LHK

On

1

June

1 2011 the

2

Magistrate

3

to relate

4

2011 ECF No 52 On

5

underlying actions

6

August

lead

2 2011 Plaintiff

August

July

Inc

53

Intuit

granted

moved

from

reassigned

19 2011

Hariharan

Siddharth

of

was

which Judge Armstrong

ECF No 56

San Jose Division

Page6

Adobe Systems

ECF No 24 On

ECF No 41

the five underlying actions

to

on July 27

transfer

which Judge Armstrong

a motion

filed

the five

on

granted

4 2011 ECF No 58
On

7

August

8

Court consolidated

9

filed

5 2011 the

Defendants

underlying actions

the five underlying actions

the Consolidated

10

Amended

leave

Court Lucasfilm

12

83 On

13

Dismiss and denied Lucasfilms

of the

April

18 2012

were reassigned

on September

Complaint

filed

its

separate

the Court granted

motion

the undersigned

The

judge

and

Plaintiffs

13 2011 ECF No 65
13 2011 ECF No 79 and with

dismiss

to

to

12 2011 ECF No 64

on September

motion to dismiss on October

a joint

filed

11

California

v

case Hariharan

Judge Spero to Judge Armstrong

to the

Filed0405 13

Document382

on October

in part and denied in part

17 2011 ECF No

Defendants

Joint

Motion to

Court

of

On

14

District

October

ECF No 119

Motion to Dismiss

1 2012 Plaintiffs

Motion

filed

their

their

opposition

for Class Certification

ECF No 187 On

District

12 2012

15

November

16

ECF No 209

17

Plaintiffs

18

the

19

a

20

Opposition to Class Certification

ECF No 263

21

270 The

Plaintiffs

22

Plaintiffs

23

ECF No 339

Defendants

filed

to Plaintiffs

Motion for Class Certification

States

as well

as

a Motion to

report submitted

Strike the expert

by

Plaintiffs

ECF No 210

Northern

United

the

For

then

Motion to

their

Motion for Leave

to Supplement

17 2013

case law relevant

filed

two

Named
or

of

and Defendants

in Support of Defendants

Motion for Class Certification on January
to

Plaintiffs

their

similar notices see

filed

Motion

for Class Certification

see

ECFNos 343 368

Class Definition
Plaintiffs

seek

to

certify

AllEmployee Class

a nationwide

defined

class of similarly situated individuals

the

as follows

All natural persons employed on a salaried basis in the United States by one or more

a Apple

of the following

28

from

May 2005

through

from March 2005 through December 2009

December 2009

c

Google from March 2005 through

6
Case

No

11 CV 02509 LHK

ORDER GRANTING IN PART DENYING

IN

b Adobe

PART MOTION FOR CLASS CERTIFICATION

to

filed

ECF No

new

a notice

9 2013 Defendants

an opposition

then

filed

January

the Record

which

to

on

25

27

10 2012 ECF No 247 On

Court held a hearing

C
Class

Consolidated Reply in Support of Class Certification and in Opposition

on December

Strike

Joint Administrative

24

26

filed

Case5 11 cv 02509 LHK

d

December 2009
1

December 2009

3
4
5
6
7

designed

their

their

1

at

members Mot

5

at

contend that the

Plaintiffs

According

agreements to

Alternatively

is

e Intuit

from

2009

Excluded

of the boards of

more than 100,000

broad because Defendants

ANY employee

of employees to accomplish

and Defendants enforced

their

goals

Mot

24

at

the Court to certify the following class of salaried technical

and development employees

and research

creative

members

AllEmployee Class includes

competition for

move

Plaintiffs

officers

to Plaintiffs the Class Definition

restrict

53

of all Defendants

agreements across a wide variety

8
9

Mot

corporate

of

from January 2005 through

from January 2005 through December

employees

retail

and senior executives

directors

Notice of

g Pixar

or

from the Class are

f Lucasfilm

2009

Page7

December 2009

from March 2005 through

Intel

June 2007 through December

2

Filed0405 13

Document382

the

Technical

Class5

as follows

defined

10

who work

All natural persons

11

development
or

California

12

14

the

15

corporate

States

December 2009
from March

Intel

2009

Class

officers

members

research

and

by one

States

b

2005 through December 2009

c

Google from March 2005

e

2005 through December 2009

December 2009

g Pixar from

or

and or

a salaried basis in the United

from March

d

Employee

Technical

creative

through

2009

through December

District

a Apple

from June 2007 through

Intuit

District

May 2005

through December

13

employed on

fields that are

of the following

Adobe from

Court

of

more

in the technical

f

Lucasfilm from January 2005

January 2005 through December 2009

Excluded

from the Class are

of the boards of directors

retail

employees

and senior executives

of all

Defendants

16
Northern

Notice of
United

the

Mot

50,000 people
For

1

at

believe

Plaintiffs

that their alternative

Technical

more than

Class includes

17

Mot

at

5

18
also

Plaintiffs

move the

Court to appoint

them

as Class representatives

and

to confirm as

19
final

prior interim appointment

the Courts

of Lieff Cabraser

Heimann

Bernstein

LLP

and the

20
Joseph Saveri

Law

Firm as

CoLead

Counsel See

ECF No 147

Finally

Plaintiffs

move the

21
22

5

This proposed alternative class consists of those members of the Class with the following

job

1 Software Engineers 2 Hardware Engineers and Component Designers 3 Application
4 Programmers 5 Product Developers 6 User Interface or User Experience
Designers
7 Quality Analysts 8 Research and Development 9 Animators Digital Artists
titles

23
24

Developers

Creative

25

Directors

Developers

12

and Technical Editors

IT Professionals

Employees classified

as technical

B ECF No

13

10

Systems Engineers and Administrators and

professionals

11 Web
14
Dr Edward

Graphic Designers and Graphic Artists

by

Rep

their

employers

See Report of

26

Leamer Appx

27

1 Non technical Employees marketing accounting finance
operations etc 2 Senior Executives
3 Non US employees 4 Network Administrators 5
Systems SupportMaintenance
Personnel
6
Maintenance
Employees or 7
the following types of

190

Leamer

The Technical

Employee Class does

employees

Facilities

28

Manufacturing

Technicians

Id
7

Case

No

11 CV 02509 LHK

ORDER GRANTING IN PART DENYING

IN

PART MOTION FOR CLASS CERTIFICATION

not include

Case5 11 cv 02509 LHK

1

Court

2

Berger

3

II

as Class Counsel the law firms that have

appoint

to

PA and

Montague

Grant

Eisenhofer

PA

Class actions

does not

6

of

7

requirement of Rule

8

273

showing

9

mere

forth a

set

of

53

served on the Executive

Mot

at

Committee

2

23 b

Zinser

Cir 2001

9th

class certification

v

A party

Inst Inc 253

Research

Accufix

seeking class
Stores Inc

F3d

bear the burden

one

at least

1180 1186 amended

must affirmatively

certification

v Dukes

plaintiffs

23 a and

of the four requirements of Rule

Rule Wal Mart

with the

compliance

met each

obtain

Rule 23

Rules of Civil Procedure

of the Federal

To

standard

pleading

that they have

F3d 1266

by Rule 23

are governed

5

US

564

131

demonstrate

S Ct 2541 2551

2011

11

23 a provides

Rule

a

that

district

may certify

2 there

numerous that

13

common

claims or defenses

of the class and

15

the interests

class

16

requirements of numerosity commonality typicality and adequacy

17

maintain a class action

18

see

19

ascertainable

20

LCS Fin Servs Corp 274

of all

to the class

3 the

is

impracticable

1 the

a class only if

12

joinder

members

court

14

California

Page8

LEGAL STANDARDS

4

10

Filed0405 13

Document382

class is so

of law

are questions

and

fact

Court

of

District

claims or defenses

4 the

parties are typical of the

of the representative

representative

parties will fairly and adequately

protect

District

of the

Fed

R Civ P 23a

That is the class

must at a minimum

satisfy the

States

of representation

in order to

Northern

United

the

For

Fed

21

R Civ P 23a

Further while Rule

FR D 666

four prerequisites

evidentiary

23

569

24

actions

25

substantial

prejudice

26

under Rule

23

27

apply generally to the class so that

28

appropriate

2013

at

least

WL

respecting

this

certified

under Rule

actions

the party opposing

the class as a

final

666

F3d 581 588

as to whether

the class must

requirement as well

See

satisfied the court

Rule

23

of Rule

23 b

No

23 b

a

showing

R Civ P 23b1

the class has acted

injunctive

whole Fed

relief

Comcast Corp

IN

Herrera

v

Behrend

that there is a risk of

A class may be

or refused

to act

or corresponding

R Civ P 23b2

v

types of class

certified

on grounds

declaratory

Finally a class

11 CV 02509 LHK

ORDER GRANTING IN PART DENYING

eg

be

satisfy through

sets forth three general

b1 upon

Fed

must

8
Case

9th Cir 2012

ND Cal 2011

23 a are

2013

4

from separate

if

672

Co Inc

23 a is silent

of the three subsections

1222646

A class may be

b2

one

of Rule

22

US

proof

Motor

have held that the rule implies

courts

If all

v Am Honda

Mazza

PART MOTION FOR CLASS CERTIFICATION

that

relief

is

may be

Case5 11 cv 02509 LHK

23

b3

1

certified

2

members predominate over any

3

action

4

controversy

under Rule

the court finds that

if

questions

Fed

questions

and

fairly

Page9

law

of

or fact

of

53

common

membersand

only individual

affecting

methods for

superior to other available

is

Filed0405 13

Document382

adjudicating

efficiently

to class

that a class

the

R Civ P 23 b3

5

A

6

with the merits of the

plaintiffs

7

and Trust Funds 568

US

8

also

9

analysis to determine whether the party seeking certification has met the prerequisites

courts

class certification

F3d

Mazza 666

at

analysis

underlying

133

588

claim Amgen

S Ct 1184 1194

11

Comcast

12

license to engage

13

at

14

are relevant to determining whether the Rule

15

California

23

Id

Corp

569

2013

Before certifying a class the

10

quoting Zinser 253

must be rigorous and may

F3d

US

at

1186

2013

in free ranging

WL

v

Inc

Connecticut

quoting

trial

4

some

merits inquiries at the certification

Plans

S Ct at 2551

court must conduct a

Nevertheless

overlap

Retirement

Dukes 131

This analysis applies to Rule

1222646

entail

23 a and

see

rigorous

of Rule

23 b

Rule

Rule 23 grants courts

no

stage Amgen Inc 133

S Ct

Court

of

District

1194 95

Merits questions

may be

considered to the

23

extent

prerequisites

but only to the

extent

that they

for class certification are satisfied

District

at

1195

States

16

If

a court concludes that the

moving

party has

met

its

burden of proof then the court has

Northern

United

the

For

17

broad discretion

18

III

at

1186

DISCUSSION

19

The Supreme Court has long recognized

20

enforcement

21

Standard Oil

22

antitrust

23

compensation

24

F3d

Zinser 253

to certify the class

of antitrust

laws

See Reiter

Co 405 US 251

v

Plaintiffs

Corp

Sonotone

1972 Here Plaintiffs

262

laws by entering into an overarching

to artificially

that class actions

low levels See

illegal

Mot

at

serve

442

a

valuable

US 330 344

role in the

1979

allege that Defendants

conspiracy

in order to suppress

violated

numerosity commonality typicality and adequacy

26

P 23 a

27

Jan

17

Case

No

Defendants do not contest

1

2013 Class Cert Hrg

Tr

at

of representation

have

that Plaintiffs

satisfied

Mot

at

46 see

these requirements

510 15

28
9
11 CV 02509 LHK

ORDER GRANTING IN PART DENYING

IN

the

employee

assert that both of their proposed classes satisfy the elements of Rule

25

Hawaii v

PART MOTION FOR CLASS CERTIFICATION

23a
Fed

See

R Civ

Tr

of

Case5 11 cv 02509 LHK

1

also contend that their proposed classes

Plaintiffs

2

Defendants disagree Specifically

3

Rule

4

proved on a class wide basis

5

superiority requirement is not satisfied

6

Page10

of

53

23

the requirements of Rule

satisfy

b3

disputes

23

7
8

b3

predominance

s

Defendants argue that Plaintiffs proposed classes do not satisfy

requirement because neither

Oppn

11

at

antitrust

In addition Defendants

Oppn

25

at

requirements of Rule

A

10

23

b3

shall have

Plaintiffs

impact nor damages can be

leave

exclusively

have

Plaintiffs

amend

to

23

contend that Rule

This Order focuses

For the reasons stated herein the Court does not find that

9

on

b3

s

these

the

fulfilled

IV

See Part

Predominance

The predominance

11

California

Filed04 05 13

Document382

commonality

12

591 624 1997

13

Comcast

23

of Rule

criterion

b3

23 a

requirement set forth by Rule

See

Courts have a duty to look closely

far

is

at

more demanding than

v

Amchem Prods Inc

satisfying the

Windsor 521

whether this requirement

is

US
See

satisfied

Court

of

14

District

Corp

US

569

The predominance

2013

WL

4

1222646
on

analysis focuses

that qualify each class

the legal or factual questions

District

15

members case

16

sufficiently

17

623 As

18

Trust

19

not that those questions

20

emphasis in original

21

Although

as a genuine controversy

in order to determine

whether proposed classes are

States

cohesive

to

Amchen Prods Inc 521

by representation

warrant adjudication

Northern

United

the

For

Justice Ginsburg

Funds

Rule

23

recently emphasized

b3

requires a

will be

there

is

in

showing

answered on

no mathematical

Amgen Inc

v

that questions

the merits in favor of the

or mechanical

F3d 802

test

22

Messner v Northshore

23

generally

24

basis are such a significant aspect of the case that they present

25

the dispute

26

F3d 1011 1022

27

make

28

present

Univ HealthSystem

669

met where common questions which can be

on

a representative

9th

a prima facie

rather than

Cir 1998

on an

amended

individual

the

member to member

then

class

133

a

predominance

members on

clear justification

Hanlon

v

No

IN

b3

a class

is

wide

for handling

marks and citation omitted

If to

of a proposed class will need to

it is

an individual

question

11 CV 02509 LHK

ORDER GRANTING IN PART DENYING

23

Chrysler Corp 150

10
Case

S Ct at 1191

Cir 2012 Rule

for all

basis

members

the class predominate

for evaluating

7th

resolved

internal quotation

showing on a given question

evidence that varies from

814

to

at

Retirement Plans and

Connecticut

common

US

PART MOTION FOR CLASS CERTIFICATION

If

the

same

Case5 11 cv 02509 LHK

Filed04 05 13

Document382

Page11

1

evidence will suffice for each member to make a prima facie showing then

2

question Messner 669

3

53

becomes a common

Cir 2005

4
begins

6

Halliburton

7

F3d

at

815

of law or fact

common

Co 131 S Ct 2179 2184

TFT LCD

8

re

9

other grounds

10

In this

Panel

Flat

in

to class

case

Fee

US C

12

Mot

13

antitrust

14

of

15

Motors 522 F3d 6 19 n18

To

1

4

Section

267

FRD 291

1

Act 15

of the Clayton Antitrust

claim

establish an antitrust

of the

P John

In

on

abrogated

15

See

Antitrust

Act 15

119135

Compl

1 a violation

typically must prove

plaintiffs

proof

9th Cir 2012

Sherman

U SC

v

Fund Inc

individualized

to

n7

755

8th

members predominate

ND Cal 2010

311 13

566

these elements in order to

analyze

F3d 741

686

Antitrust Litig

allege a violation of Section

Plaintiffs

11

1 and

must

Erica

proof and which are subject

Antitrust Litig

ATM

In re

common

to

A court

2011

it

Co 400 F3d 562

Monsanto

with the elements of the underlying causes of action

determine which are subject

at

v

quoting Blades

Considering whether questions

5

California

of

of

Court

of

District

2 an injury they suffered

laws

damages

In re

New

Motor

as

a

result

Canadian Export

Vehicles

and

of that violation

3 an estimated

Antitrust Litigation

In re

measure

New

District

1st

Cir 2008

The Court

each in turn

will address

States

1

16

Antitrust Violation

Northern

United

the

For

17

Regarding the

18

the

Court

19

antitrust

20

this

violation

Plaintiffs

predominate

issues

prong of the analysis

assert that Defendants

unlawful under Section

23

1

of the

Every contract combination

commerce among the

24

or

25

Rebel Oil

26

Section

27
28

common

1

element of Plaintiffs Section

See

Tr

at

antitrust

17 1 4

Mr Mittelstaedt

claim the parties agree as does

Court

Do

you contest

Not

for Defendants

4

Co Inc v

Atlantic

Sherman

in

several

conspiracy

Antitrust

for purposes of

2 Mot

CAC

Act

States or with foreign

nations

is

Co 51 F3d 1421 1431

Richfield

parties to sue antitrust

1 claim

of Plaintiffs Section

anti solicitation agreements

and agreements restrained trade and are per se

at

1 see

the form of trust or otherwise or conspiracy

of the Clayton Act allows private

In support

Plaintiffs

which were memorialized in

declared

9th

to be

Cir 1995

violators for

No

IN

US C

1

of trade

illegal see
explaining

also

that

damages

have set forth evidence of Defendants

CEOto CEO emails and

11 CV 02509 LHK

ORDER GRANTING IN PART DENYING

15

in restraint

11
Case

the

motion

21
22

that

first

PART MOTION FOR CLASS CERTIFICATION

other

Case5 11 cv 02509 LHK

Do

1

documents such

2

Defendants

3

explicit anti solicitation agreements with

as

Do

5

Rep

6

agreement with

7

See

8

Decl

9

employees See Leamer

21 22

eg

Apple

Google

workers

11

employee

12

function

not to

9 n26

Rep at

Pixar

make counteroffers

its

agreements with

See Leamer

not to compete

and to notify each other before

to all

Intel

pursue each

proactively

These agreements applied

Hands Off

and Intuit

Harvey

Consolidated Reply

and Lucasfilm agreed

into

to its anti solicitation

In addition

Supp Pls

in

on

entered

Intel Intuit and Lucasfilm

including

and Pixar agreed not to

Intel

Decl Ex 60

Shaver

Pixar and Google and included

M Harvey

Decl Dean

53

of

CEO of Apple Apple

into anti solicitation

also entered

Decl Ex 56

ECF No 93 Ex 25

Adobe

this case

in

Page12

each firms employees offlimits to other

Decl Exs 17 19 55 66

see also Shaver

Shaver

others

putting

lists

Call List every Defendant

10

California

Not Call

These documents show that while Steve Jobs was

4

Not

Filed04 05 13

Document382

for each

extending

employees

others

an offer to an

regardless of job

product group or geography

Court

of

Plaintiffs

14

Defendants employees

15

District

13

the agreements

allege that Defendants

concealed each

senior executives

bilateral

agreement and

were not informed of nor did they agree to the terms of any of

generally

District

For example

when

discussing

Googles

protocol

for

Do

Not Cold Call and

States

16

Sensitive

companies Google

CEO Eric

Schmidt stated

I

want to create a paper

dont

trail

over

Northern

United

the

For

17

which we can be sued later Not

18

likewise

stated

19

broadly

known

20

with employees from

21

want anything

22

we

23

Decl

Shaver

in

Adobe Ann

writing

at

alleged

26

United

27

DOJ

misconduct

States

v

to

Similarly when

Decl Ex 21

CEO Paul

and myself
Apples

discussing

I

Inc

et

stipulated

but see Shaver

anti solicitation

Decl

Ex

No

Any

66

in

a

al No 10 1629

these agreements to

1

Sherman Act 15

Final

DDC Sept 24 2010
be

a

U SC

naked

restraint

on

1

11 CV 02509 LHK

ORDER GRANTING IN PART DENYING

IN

early

into

Judgment See Shaver

12
Case

would not

following an investigation

finding

of the

Otellini

like this

policy

Everson of Apple reiterated that they did not

mirrorthe DOJs findings

Adobe Systems

per se unlawful per Section

eric

Intel

Pixar should be told of our gentlemans agreement

which Defendants

Impact Statement

between

recruit

Reeves and Brenda

Harvey

Plaintiffs allegations

25

no

Decl Ex 52

bring in for interviews

24

28

e have a handshake

this Shaver

Ex 41

process

W

sure about

PART MOTION FOR CLASS CERTIFICATION

candidate

on

in the

Defendants

Decl Ex 71

ECF No
trade that

2

w ere

Case5 11 cv 02509 LHK

1

Defendants contend that

2

the agreements should

3

standard

4

labor

5

question

be

6

of antitrust

liability is

The Court need
Health

8

conspiracy

9

whether

a common

ND

581

we

can prove a conspiracy

10

For purposes of evaluating

11

California

in original

Defendants

alleged

12

issues Defendants concede

13

23

antitrust

W

2009
on

consider

with

predominance

time See

hether

plaintiffs

See

Tr

eg

Reed

v

relevant

it is

18 2 8

at

Advocate

rather the question

yes

is

common

have

satisfied

legal

and

is

emphasis

sufficient that the adjudication

Plaintiffs

that the

can prove that a

proof and the answer

on overwhelmingly

Court finds that

this

any

one

individual

class certification

common

violation will turn

and

an

issue rather than

Ill

in

under that

during oral argument Defendants conceded

the issue of liability at this

existed is not an issue that

plaintiffs

demonstrate that

had any adverse effect on compensation

Nevertheless

not resolve

FRD 573

Care 268

7

53

of

under the rule of reason were reasonable and lawful

evaluated

5 n1

at

Page13

proceeds Defendants will seek to

this action

if

and could not have conceivably

market Oppn

Filed04 05 13

Document382

of

factual

this element of Rule

Court

of

b3

Tr

See

17 1 4

2

14

District

at

Antitrust Impact

District

15

The second element

of Plaintiffs Section

1

claim

antitrust

is

impact

Antitrust

impact

States

16
17

antitrust

18

2006

19

violation and the

injury
is

also referred to as antitrust

the

fact of

damage

that results from

a

violation of the

Northern

United

the

For

20

laws

WL

In re

1530166

The

7

ND Cal June

damages sought by

question

presented

by

5 2006

plaintiffs

It is

In re

had an impact on any employees Defendants concede

22

impacted

23

impacted

24

that

25

alternatively

26

would have

27

member In

Tr

at

144 11 12

The primary

Defendants

Technical

to

And

I

New

is

whether

that

re Methionine

link between

Motors 522

F3d

the antitrust

at

we

n18

nobody was

common

can show through

proof

suppressed wages across the entire All Employee Class or

by mini trials examining
Antitrust Litig

204

is

actually

an individual

the particular circumstances

FR D 161

165

11 CV 02509 LHK

ORDER GRANTING IN PART DENYING

IN

PART MOTION FOR CLASS CERTIFICATION

question

that

of each class

ND Cal 2001

13

No

19

are not saying that

28

Case

No 02 1486

some employees may have been

Plaintiffs

Class or whether proof of injury

be resolved

Antitrust Litig

Defendants anti solicitation agreements

admit at the start

issue presented

conspiracy

alleged

the causal

this case is not whether

21

See

DRAM

Dynamic Random Access Memory

Case5 11 cv 02509 LHK

1

In analyzing whether Plaintiffs

2

will be able to demonstrate

3

establish antitrust

4

persuasive

5

requirement

6

satisfied

have

satisfied

impact in

of the nature

light

The Court then

23

b3

7

analyzes

Whether

23

8

b3

common

Plaintiffs

and

conspiracy

alleged

impact must be

of class

if

proof

must

so how

satisfy this

to

Plaintiffs

have

wide impact

Must Show Common Impact

to Satisfy

Rule

Predominance Requirement

contend that should the Court determine that

first

common

evidence to determine whether

the parties

Plaintiffs

s

whether

considers

first

for proving

53

of

burden of showing that

Defendants

of

Page14

predominance requirement for the question

s

a
Plaintiffs

their

class wide injury the Court

Plaintiffs proposed methodology

Rule

Filed04 05 13

Document382

common

of Defendants

proof

9
conspiracy will be the predominant

antitrust

issue at trial the Court

may

on

grant class certification

10
that basis alone

See

Mot

at

11
legal issues
California

of whether

7

Specifically

the Defendants

Plaintiffs

contend that because

into the agreements

entered

their

and

the major factual

scope

duration and

their

12

Court

their

of

on compensation

effect

other price fixing

Mot

cartel

6 see

at

14

District

common

are overwhelmingly

th is case

is

no

different than any

13
also Reply at

6

Prices

do

not need to be identical in

District

by

order to be impacted

common

a

conspiracy

courts

where

routinely certify class actions

as

here

15
States

any individual

negotiations of which

there is little

evidence

were commonly

impacted by

16
Northern

Defendants misconduct
United

the

As
For

The Court

declines

to

make such

a determination at this juncture

17
the Third Circuit stated

in In re

Hydrogen Peroxide

in

Antitrust Litig

cases

antitrust

18
impact often

important for the purpose of evaluating

is critically

Rule

19
requirement because

is

it

an element of the claim that

may

call

23

b3

s predominance

for individual as opposed

to

five circuit

and

20

common proof

552

21
least

two

district

courts

F3d

305 311 3d Cir 2008 Notably

within

this district

at

least

have held that for cases involving

courts

at

violations

antitrust

22

common

issues

do

not predominate

unless

the issue of impact is also susceptible

to class wide

23
proof

See In re

New Motors 522

24
Litig 552

25
26

2003

F3d 311312

Messner 669

California

27

Cal Sept
28

v

Infineon

5 2008

F3d

F3d

3d Cir 2008
at

816

7th

Technologies

In re Graphics

at

20

1st

Bell Atl

Cir 2008

Corp v

Infineon

Hydrogen Peroxide

Co 400 F3d at 566

No 06 4333

2008

Processing Units Antitrust Litig 253

WL

No

FRD

11 CV 02509 LHK

ORDER GRANTING IN PART DENYING

IN

8th

PART MOTION FOR CLASS CERTIFICATION

at

5th

Cir

Cir 2005

4155665

14
Case

Antitrust

ATT Corp 339 F3d 294 302

Cir 2012 Monsanto

AG

In re

500

at

5

ND

Case5 11 cv 02509 LHK

1

Moreover

WL

as the Ninth Circuit noted recently

2

2013

781715

3

balance between

4

omitted Therefore

5

policy

5

6

Vinole

9th

Cir 2013

a

district

to

common ones

that predominate

9

on an

F3d 935

946

9th

may

inquiry

is

the

marks and citation

internal quotation

in relying

F3d

News

internal uniform

inquiry Id

quoting

Cir 2009
for individualized

call

inquiries

proving impact on a class wide basis

over

b

10
11

Burden

The Court next

of Proof in

how

addresses

must demonstrate a method for

the Court finds that Plaintiffs

Demonstrating Antitrust Impact

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be

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15

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at

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No

11 CV 02509 LHK

ORDER GRANTING IN PART DENYING

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at

to

affect the class as

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PART MOTION FOR CLASS CERTIFICATION

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these principles

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Filed04 05 13

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mind the

shown

3

set forth

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regard to the All Employee Class or the Technical

below

requirement

met

the Court concludes that Plaintiffs

5

c

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to Prove

for proving class wide

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impact For

time

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addressing class wide impact

8
9

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10
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California

is

53

of

Court proceeds to determine whether

2

that the predominance

Page17

Leamer
is

the methodology

that

common

submit an expert

Plaintiffs

asked

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issues

report of

Dr Leamer

of each class generally

2

and

and evidence upon which the parties rely

predominate

for

the purpose of assessing

E Leamer PhD

Edward

to evaluate

artificially

7

whether evidence

agreements

capable of showing that the anti solicitation

1 members

12

showing

of

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considers

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members

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class

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common

to

in

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each class

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asked

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formulaic method capable of quantifying

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to assess whether there is

amount

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reliable class wide or

of suppressed compensation

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the

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studied

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documents

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18

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19
20

effects

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concluded that

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applied

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21

the compensation

analysis proceeds in

22

studies and theory documentary

23

anti solicitation agreements

tend ed

to

b as

a result of Defendants

of all or nearly all Class members

two steps

evidence

and

the facts

to

evidence and methods are capable of showing that

agreements had an adverse effect on compensation and

solicitation agreements

labor economics

internal

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analyses

statistical

suppress

Dr Leamer

anti

was suppressed

opines that economic

are capable

showing

of

employee compensation generally by

that the

preventing

24
7

25

Dr Leamer

is

the

Chauncey

Professor

26

of Statistics

degree

Mathematics

PhD
27
28

in

at

J Medberry

the University

from

Princeton

Professor

University

degree in Economics at the University

the fields of econometric

macro economic

methodology

forecasting

of

of California at
in

1966

of Michigan

and

statistical

on

the subject

including

Management
Los Angeles

Professor

of

Dr Leamer

and a Masters in Mathematics

in

1970 He

analysis

in international

of inferences

that

may

appropriately

11 CV 02509 LHK

ORDER GRANTING IN PART DENYING

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and a

economics and

17

No

BA

has published extensively

drawn from non experimental data
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Economics and

earned a

PART MOTION FOR CLASS CERTIFICATION

be

in

in

Case5 11 cv 02509 LHK

Filed04 05 13

Document382

Page18

work Mot

16

of

1

Class members from discovering the true value of

2

Leamer opines

3

were paying some members of the Class less than they would have been paid

4

Dr

anti solicitation agreements

5

According

Dr Leamer

to

economics such

7

markets function

8

forces

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approximately the same

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informationflow can slow the process

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market conditions

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market price which equilibrates

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notes that when

economists often use a market equilibrium

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showing that

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their

that class wide evidence is capable of

6

California

53

a market

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of

13

price Leamer

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14

District

71 73

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Leamer Reply

hypothesizes that by

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restricting

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15

employees Defendants anti solicitation

16

compensation

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and

18

movement between

19

information that could have been used

20

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to

22

financial

agreements impaired information

flow about

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and job offers

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at

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of inhibiting

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discover

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United

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23

obtain

the competitive value of their services

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firms
and

71 76

thus fewer

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to

rewards in order

opportunities

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to increase

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fewer opportunities

salariesand deprived

opines that by limiting the information

affirmative steps such as offering

to retain employees

for

higher wages and benefits within a firm See

negotiate

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employees Defendants could avoid

employees were afforded

with valuable firm
specific

available

their employees

skills

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Rep

77 80

24

Second

Dr

Leamer opines

economic

that

25

statistical

26

virtually all Class members In order to explain

27

Defendants anti solicitation

analyses

are capable

of

showing

studies and theory

documentary

that this suppression of compensation

how

the adverse effects

agreements would have been

felt

not only

11 CV 02509 LHK

ORDER GRANTING IN PART DENYING

IN

all

or

to

by employees who would

18

No

affected

and

on compensation due

28

Case

evidence

PART MOTION FOR CLASS CERTIFICATION

of

Case5 11 cv 02509 LHK

1

have been recruited

2

loyalty

by all employees corporation wide

but

and

fairness

internal

3

Dr Leamer

4

can translate into a sharing

5

otherwise

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increases

7

implies

or reductions

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when

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higher wages for a

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for the improved

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across

outside

few

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Equitable

broad categories

53

on

relies

theories of

opportunities

opportunities

put pressure

compensation

at

that

12

would have been widespread and extended

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Class and Technical

14

maintain worker loyalty by adhering to principles

15

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eg

structure

calling for

rewarding

component

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of

everyone

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structure

that the overall

common

firm

structure

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evidence can demonstrate that the

to

artificial

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firm wage structure

rigid See

11

a market might

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in

of fairness that

practices spread

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one point

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theory

is

wage

of

loyalty is a feeling

workers Id

of

10

California

of

more equality than

firms tend to maintain the overall

outside

Leamer

foundation of employee

a firms rewards with

of

Leamer

Dr

Page19

equity

contends that

produce

Filed04 05 13

Document382

101

explaining

suppression of employee compensation

or nearly all

members of

the

AllEmployee

Court

of

District

Class based

in

part on

economic theory

implicating

of internal equity

firm incentives

to

through a rigid salary

District

States

Dr Leamer

16

further explains

to

that

maintain loyalty

it

is

usually better for a firm to

Northern

United

the

For

17

anticipate

18

firm at a much higher level of compensation coworkers

19

fairly

20

reducing productivity

21

avoid

22

improvements

23

rather than to react to outside

compensated

this

reduction

economics

25

and

and

Rep

105

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since

if

left

a worker were

Dr

packages

Leamer opines that by

considerations

put competitive pressure

move

can have an adverse effect on worker

in loyalty in the face of competition

compensation

to

to

another

behind might feel they have not been

and increasing interest in employment elsewhere

in their

Essentially

24

Leamer

opportunities

firms may

loyalty

Id Therefore

to

make preemptive

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virtue of the interplay between

of internal equity

cold

calls

would have

information

transmitted

information to

on

26

See Reply at

27

16

28

the anti solicitation

see also

Leamer

Rep

104

agreements

Dr Leamer

further hypothesizes that

firms are able to be

more

relaxed

by

virtue of entering into

in maintaining competitive

19
Case

No

11 CV 02509 LHK

ORDER GRANTING IN PART DENYING

IN

PART MOTION FOR CLASS CERTIFICATION

Case5 11 cv 02509 LHK

1

compensation

2

the risk of employees

3

competition for passive

4

packages

Defendants

Filed04 05 13

Document382

1

because such agreements

becoming aware

of

own

their

expert Kevin

6

for the purpose of determining class wide

7

contend that

8

inadmissible

9

702

Leamers

testimony on the

11

DENIES

Defendants

12

While

impact See

Dow

Merrell

latter

Motion

ECF No

Id

ground

to

8

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230

common

over

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11 25

at

Defendants have

For the reasons stated in Part

ones

Defendants

but also

US 579

Inc 509

1

Dr Leamers

attack

Murphy

see Oppn

Pharmaceuticals

Mot

Rules of Evidence see

of the Federal

10

California

v

under Daubert

reduce

otherwise eliminate

inquiries predominate

not only unpersuasive

is

3

M Murphy PhD

analysis and conclusions and argue that individualized

evidence

2

106

5

Dr Leamers

53

of

competition directly

suppress

pay practices elsewhere and

employees Leamer Rep

through

Page20

1993

moved

and Rule

strike

to

VIB infra the

Dr

Court

to Strike

Dr Murphy criticizes

the economic

literature

Dr Leamer

upon which

relies

he does

Court

of

not dispute

14

See

15

19610 197 7 19

16

District

13

not discuss the strength of the incentive

17

goals such as procedural equity or the value of rewards for individual

18

motivator

19

may

eg

the basic principles

Harvey

economics

of information

Decl ECF No 93 Ex 13

Murphy

undergirding

Dep

Dr

Leamers

hypothesis

188 6 14 192 25 193 6 194 10

at

District

Dr Murphy criticizes Dr Leamers

Similarly although

report because

it

does

States

maintain internal equity as against

to

other compensation

Northern

United

the

For

see

Murphy

Rep

81

this does not negate

have played some role in affecting

20

Therefore

the Court finds that

Dr Leamers

common

hypotheses offer theories subject

22

agreements suppressed compensation

broadly

23

theory

23

is

not sufficient to satisfy Rule

a

as

loyalty

hypothesis that internal equity

employment compensation

21

to

Dr Leamers

contributions

market

proof for

how

However

b3

s

and internal equity

price discovery

Defendants

as observed

requirements

In re

anti solicitation

by

the In re

GPU

253

GPU

FR D

Court

at

496

24
8

25

Dr Murphy

is

the

George

J Stigler

Distinguished Service

School of Business and the Department

26

Murphy
in

27
28

1981

received

a

bachelors

and a doctorate

on

in labor economics

the determination

Professor

of

the University

of

from

the University

of California

degree in economics

from

the University

in

by

skill

and occupations

20
Case

No

11 CV 02509 LHK

ORDER GRANTING IN PART DENYING

IN

the

Booth

Professor

1986

Los Angeles

Dr Murphy

wages and compensation His

has addressed the market determinants of wage
industries

Chicago

of Chicago

labor markets and the determinants of

of relative wages across

Economics in

Economics at

degree in economics

has published extensively

work

of

PART MOTION FOR CLASS CERTIFICATION

level

as well as

Case5 11 cv 02509 LHK

1

Plaintiff

2

exists to prove impact

3

proceeds to consider

must provide

properly

on

Dr

a class

5

In support

1 the

analyzed

reliable evidence

wide basis Id

emphasis

and

Leamers documentary

d

4

Filed04 05 13

Document382

added

statistical

Plaintiffs

7

Defendants enforcement

8

procedures regarding

9

Defendants

10

documentary

11

interrogatory

responses

12

human resources

13

Google and

of the anti solicitation agreements

in preserving

interest

from

the

Accordingly

and

2

policies

documents

1 deposition

2 declarations

evidence related

3 Defendants

In opposition Defendants

Plaintiffs

of proof

the Court

compensation

and compensation including

internal equity

named

common method

evidence

cold calling and increased

recruitment retention

53

forth documentary

evidence addressing these subjects including

recruitment

of

Antitrust Impact

set

to

link between

and

impact

6

California

that a

Documentary Evidence Showing

of proving class wide

Page21

submit

that

their

show

own

transcripts and

from top management

recruitment compensation and benefits departments

and

and

3 documents

in their

from

Court

of

14

District

Intel

regarding

Having reviewed

compensation and benefits

the parties

common

materials the Court finds that Plaintiffs

evidence

District

Dr Leamers

15

supports

16

able to prove antitrust

theories regarding

price discovery

and

internal equity

and

is

likely to be

States

injury to at least a portion

of Plaintiffs proposed Classes

Northern

United

the

For

17

i

Much

18

of the

common

19

whether members of the

20

All Employee Class

evidence set forth by

AllEmployee Class were

Plaintiffs

would apply

to the question

agreements

21

First Plaintiffs

22

show

23

lawsuit as

24

set forth contemporaneous

that Defendants viewed

winning

a significant

the talent

competition for

problem Adobe

war

Shaver

Decl

impacted by Defendants

of

documents from Defendants

workersincluding

for

anti solicitation

against

example was concerned

internal files which

other Defendants in this

about whether

it

was

Ex 14

25
26
27

Shaver

Decl Ex 15

28
21
Case

No

11 CV 02509 LHK

ORDER GRANTING IN PART DENYING

IN

PART MOTION FOR CLASS CERTIFICATION

see

Case5 11 cv 02509 LHK

1
2

Recruiting

3

as crucial

5

34 Google email

How to

Wars

Second

4

Ex

Decl

also Shaver

Filed04 05 13

Document382

with

sharing

a 2007 Forbes

of

article

53

The

entitled

Talent

Beat Google to Tech

the evidence indicates that Defendants

viewed recruitment

including

cold calling

growth

to

growth and development

staff

Page22

their

For instance in order to support

Googles

rapid

6

See

Decl Ex 25

7
8

on our

dont

10

Human

Resources

11

Decl

12

asset is people

78

Officer emphasized that

9

California

Harvey

at

call list

at

So

c old calling
Shaver

Adobe

Q Why

Ex 1

is

In response to concerns over slow hiring Googles

into companies

Decl Ex 42

described

an

recruit is to be expected unless

Donna Morris

recruiting talent as

recruiting talent important to

really were

to

the Senior Vice President

critical

A

Adobe

property based

intellectual

Chief Culture

to

theyre

of Global

company growth Harvey

So our

critical

most

critical

company

Court

of

13
14

District

District

15
States

16

Id

Intel

estimated

that historically

Northern

United

the

For

17

competitive sourcing including

18

Harvey Decl

Ex 27

cold calling and research

and stated in

accounted

for

its

19
20

Third

21

would

22

target to look

23

the evidence indicates

one anothers

solicit

into

u nfortunately

employees Adobe personnel recognized

Chizen

CEO of Adobe

24

agreement not to poach each others

25

PayPal were

26

emailed Google

27

candidates

28

eBay PayPal and

lifted

but knew

for the purpose of recruiting

Bruce

from Googles

do

stating

from these two companies

the potential

not call

CEO Steve

Decl Ex 13

list Googles

any

roles within

No

Jobs have a gentlemans

Relatedly as soon as eBay and

Director

of Staffing

Google

IN

Operations

hundred leads and

Given the history with

recruiting activity directly to

you

11 CV 02509 LHK

ORDER GRANTING IN PART DENYING

a great

not do so because

22
Case

companies

Apple would be

staffing is ready to pursue several

for various

escalation of

that

that they could

and Apple

talent Shaver

CEO Eric Schmidt

hightech

that but for anti solicitation agreements

PART MOTION FOR CLASS CERTIFICATION

are there any

Case5 11 cv 02509 LHK

1

directions

2

contacting

3

good point So

4

Fourth

or sensitivities

talent

that

as

not

to

Plaintiffs

you would

like the staffing

Decl Ex 33

Shaver

Filed04 05 13

Document382

Google

response

In

team

CEO Eric

have offered evidence indicating

could lead to higher wages for employees

6

President Ed Catmull

e very time a studio

7

structure

8

leave

to

grow

at

to

believed

seriously

budget Id

that increased

As expressed by

grow rapidly it

Yes

Pixars

messes up the pay

the rate they desire people will hear about

it

and

Decl Ex 61

Shaver

Fifth Plaintiffs have

10

transmit

11

California

high salaries

tries

and

begin sourcing

Schmidt stated

that Defendants

competition for workers

9

53

an avalanche can you please propose and manage to a

create

offering

of

we

to follow as

5

By

Page23

which

12

response to Googles

13

set

forth evidence

showing

that

cold

and

could

solicitation

who

elsewhere

salary information that spread well

Dr Leamers

supports

beyond any single

calling

price discovery theory

decision

to

make counteroffers

As
to

individual

noted by one Google

some

employee in

who were

individuals

a job offer

received

recruited

to

go

Court

of

14

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District

15
States

16
Northern

United

the

For

Id

17
18

Plaintiffs

have also

set

forth evidence indicating

19

internal equity

20

employees and counter offers to retain existing

that Defendants

as one factor in determining compensation

generally

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employees

In

did consider

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making offers Adobe

new

for

example

21
22
23

Similarly

24
25

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Decl Ex 20

In response

26
27

Id

Intel

even had a computerized

program

that

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28
23
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ORDER GRANTING IN PART DENYING

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Case5 11 cv 02509 LHK

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3
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8
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eg Shaver Decl Ex 17

10

or

11

Board at Intuit to Apple

12

all efforts

13

Eric Schmidt

14

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15

Adobe

and Apple

16

California

geography

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Shaver

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17

solicit

18

President

19

well

follow a gentlemens agreement

20

is

we

21

them

CEO Steve

anyone from

to recruit

up wages

also indicates that to avoid bidding wars that could drive

Jobs

all

employees

a 2005 email from
Google

stating that

Apple

regardless of job type department

Shaver

Decl

Bill

Campbell Chairman of

CEO Eric

Ex 56

Schmidt

the

firmly stopped

a 2007 email from Google

CEO

Court

of

District

CEO Paul

to Intel

was

created

Otellini

Shaver

stating that

Decl Ex 19

Intel

has been on the

a 2005 email between

Do

Not

Call list since

CEO of

Bruce Chizen then

District

CEO Steve

Jobs agreeing

not to solicit

any employee

from either

company

States

60

a

2007 email showing

that Lucasfilm and Pixar has

an agreement

not to

Northern

United

the

For

employees

each others

of

Human

wont

Resources

directly solicit

see also

Harvey

at

Shaver

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Pixar to Pixars

recruiting

with Apple that

any Apple employee

Decl Ex 25

at

a 2007 email from Lori McAdams Vice

is

team

stating that

effective

similar to our Lucasfilm

recruiters

now

agreement That

including

outside

recruiters

from communicating

if

we

use

13

22
23

These anti solicitation

24

another

25

employee had

26

companys

Google

agreements prohibited

employee
whether

not otherwise applied

for

recruiters are strictly following

orally in writing telephonically

a

job

the

opening

Do

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27

called networked or emailed into the company or

28

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We

cannot recruit

including

eg

Call policy

its

calling

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Shaver

regarding

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up

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or electronically

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talent

in

No

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any way

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ORDER GRANTING IN PART DENYING

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PART MOTION FOR CLASS CERTIFICATION

current

Case5 11 cv 02509 LHK

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Pixar employees

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beyond

3

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5

would be

6

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Pixar and Lucasfilm

2 to notify

employees

each other when

employee applied

that

if

work

to

for a job

final and would not be improved

were

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in

8

from employees of the other Defendants

9

example

2007 Apple

personnel

on

upon

whether Lucasfilm or Pixar

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Filed04 05 13

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his or her

A senior

11

California

for a position

Apple through a job posting

stated

12
13

terminate but

called

the

employee

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by

refused

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consider

the persons

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human resources manager

mutual agreement guidelines and asked that he contact

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me

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initiative

who

from an Adobe employee

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discussed

agreements reached

employee of

offer to an

to a counter

the employees

if

53

Decl Ex 60

which Defendants

even

Defendants

own

in response

Shaver

of

example agreed

making an

10

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for

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applied

from Apple

Adobe employee explained our

should his employment with Adobe

Court

of

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Indeed

this time I

am unable

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personal

continue

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efforts

by

exploring

with

him

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own

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chief executives

Ex 21

including

District

CEO Steve

15

but not limited to Apple

16

Intuit

17

agreements indicate that the agreements

18

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19

2007 Apple

20

would be very

21

Google responded by making

CEO Eric

Jobs Google

Schmidt

Ed Catmull

Pixar President

States

Chairman

Bill

Campbell and

CEO Paul

Intel

Otellini

to

monitor and enforce

these

Northern

United

the

For

22
23

Eric Schmidt

24

Clara

25

actively

26

recruiter

27
28

a recruiter from Googles

CEO Steve
if

recruit

a

hour

Decl Ex 35
from

have had broad effects on Defendants employees

message

the

Intel

example

public

Id Also

after

in

learning

Eric Schmidt

If

we

to

Google

CEO Eric

that

Intel

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Google was

confirmed

Otellini wrote

recruiting Intel

exceptionally

Finally based on the evidence

it

anti solicitation agreements would lead

No

seriously

Shaver

IN

the

Decl Ex 50

appears that Defendants recognized that eliminating

to

CEO

do es not

will terminate

greater competition for employees

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and require enhanced

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ORDER GRANTING IN PART DENYING

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to

to

I

Decl Ex 24

Shaver

out of the recruiter and decided

2007

in

Schmidt and stated

this

find that a recruiter called into Intel

take these relationships

an Apple employee

engineering team contacted

your recruiting department would stop doing

asking for help

Shaver

We

pleased

jobs forwarded

within the

the recruiter

may

PART MOTION FOR CLASS CERTIFICATION

Case5 11 cv 02509 LHK

1

incentives

2

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3

Intelligence

4

the extent

5

Apple dialup

6

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Filed04 05 13

Document382

Dr Leamer

of

53

975

for retaining

Adobe and Apple ended

Group

reported

the

volume on

in retaining

and

recruiting

that the high tech sector

Adobe

8

employees For example

Page27

2007 someone from

retaining

top

talent

Adobes

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Adobe resources

top talent

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what changes

88

citing

investigation

antitrust

the anti solicitation

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be more competitive

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remains economically healthy

attracting

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in

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or

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ADOBE004964

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email

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13
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15
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16

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17

mechanisms behind

contend that

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United

the

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18

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agreements

effect

on compensation

Collectively the Court finds that these documents

how

19

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21

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may

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26

attracting

27

presentation

entitled

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was

to focus

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have affected

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supports

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eg

Shaver

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AllEmployee Class

of Plaintiffs evidence indicates that the anti solicitation

only a subset of Plaintiffs proposed Classes which

talent See

or nearly all of the All

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talent

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it

stating

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defined

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may

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that

Adobe power
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top performers

to

who

point

source

top talent

tend to be entrenched

27
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ORDER GRANTING IN PART DENYING

the

PART MOTION FOR CLASS CERTIFICATION

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Case5 11 cv 02509 LHK

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willing to listen if the right opportunity

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Mac

Harvey

if

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packages

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just

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9
10
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California

Defendants

12

Apple and

13

rather than to avoid

Intel

NOT

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Court

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anti solicitation

all

efforts

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Shaver

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that Defendants

Ex 55

may

have been more concerned

about

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15

enforcing

16

than other categories

17

appears to have actively

monitored

18

about Googles

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19

Ex

20

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the anti solicitation

agreements for some categories

of

employees such

as engineers

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of

as administrative

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assistants

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United

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For

software

25 showing that

am told

in

that Googles

2006
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group

22

recruiter from Googles

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forwarded

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department would stop doing

25

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26

employee that

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the

at

and enforced the anti solicitation agreements when

Apple

cell

you

CEO Steve
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please

engineering team

message

to

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this

for a project

group

software

put a stop to

tried

to

I

it

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CEO Eric

Cook

would be okay

to

pleased

if

Vice President

make an

assistant position

28
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of Software

offer to an Apple

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ORDER GRANTING IN PART DENYING

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Decl Ex 24

27

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employee in 2007 Steve Jobs

would be very

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he learned

relentlessly recruiting in our iPod

it Shaver

when Rob

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and wrote

Pixar asked Steve Jobs whether

applied

Jobs emailed Google

PART MOTION FOR CLASS CERTIFICATION

if

Steve

talent like Chris Cox and he will

extraordinary

that Defendants

indicates

see also

agreement with Apple specifically

some

after

53

of

had concerns about the loss of

managers he

other than senior

Page28

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Document382

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Case5 11 cv 02509 LHK

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Shaver

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employees without necessarily making changes

5

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further refers to using a

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53

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for evaluating

14

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Rep

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to these engineers

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Page29

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are seeing

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Plaintiffs

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District

Class was intended

address

to

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16

by focusing on

cohesiveness

the job titles of people working

in

software technical

and creative

Northern

United

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Tr

22 11 21

17

positions

18

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19

such an expansive impact as to affect

20

proposed Class is not

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Nonetheless

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data

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driven Tr

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Plaintiffs believe

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at

140

was broader than that

that the anti solicitation

or nearly all of the Technical

agreements had

Class and contend that

this

58

Defendants

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22

that

Evidence

in Opposition

to Proving

Impact

Defendants have submitted evidence to demonstrate

why

they believe

that individual

issues

23
predominate

over

common

ones for the purpose of assessing

antitrust

impact

24
Defendants

first

contend that individualized

because

in order to identify

likely to receive

a cold call but for

issues predominate

25

who was

injured the Court will have

to

1 who

determine

26
27
28

9

Of course the

compelled

fact that Pixar Vice President

to get approval

weigh in favor of finding

Rob Cook

from Steve Jobs before

was

and Pixar President

Ed Catmull

even hiring an administrative

that these agreements had

a much broader impact

29

No 11 CV02509 LHK
ORDER GRANTING IN PART DENYING
Case

IN

PART MOTION FOR CLASS CERTIFICATION

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Case5 11 cv 02509 LHK

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enough

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4

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5

depositions

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current employer

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raise as a result of an offer

8

or after

9

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some

to get

it

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moved

end

made to

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higher

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call far

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boss See

11

aware

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companies and websites

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claims

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a

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A Brown

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depositions

Stover Fichtner and Marshall Further Defendants note
of competitive salary levels from multiple

ever negotiated

Plaintiff

employee from

Brown Decl ECF No 215 Exs 3

Oppn

53

of

would have taken

received

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10

California

Page30

Defendants highlight that based on the named Plaintiffs

based on a cold call or

period

would have

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does not appear that

the class

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salary information

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Filed04 05 13

Document382

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named

of

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sources including

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Supp Defs
Hariharan

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friends

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Defendants also assert that Plaintiffs different

Court

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show

wide

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would have

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employees

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to assess to determine

and circumstances

qualifications

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impact

District

15

In addition Defendants argue that

b eyond

trying to

show

that someones

salary

was

States

16

reduced by a missed cold call

would

17

evidence that a raise for one employee would produce raises for all

18

Specifically

19

concerned

20

automatically

Plaintiffs

face the impossible task

of showing

with

common

Northern

United

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For

21
22
23
24
25

Defendants argue that there

with

drive

snippets which

distort

See Oppn

at

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26

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Mason

concrete

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across

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job categories

showing as consisting

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objective

at

of

equal

so

1

mere documentary

its

internal

managers

Brown

that

Decl Ex 19

of Intuit

27

that they have submitted to the Court

28

the purpose of attracting

and retaining

shows

that they considered

that Defendants

top talent

internal equity the evidence

were willing to make exceptions

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Intel

powerpoint

30

No

14

would

placed on

instructed

Intuit

since talents and markets are not

Defendants also assert that to the extent

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at

evidence that each Defendant was

one employees compensation

Plaintiffs evidentiary

the limited importance

18

internal equity is not

no

increase

raises for all employees

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equity

an

internal equity that

is

employees Id

11 CV 02509 LHK

ORDER GRANTING IN PART DENYING

IN

PART MOTION FOR CLASS CERTIFICATION

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presentation

Case5 11 cv 02509 LHK

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shows

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2

competitiveness and internal equity

3

internal equity

4

this does not

that Intels

5

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mean we

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talent

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7

reality their compensation

8

compensation

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different managers

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1720

at

who

policies

Leamer

According

were directed

12

necessarily affect

13

Wagner

14

company

15

16

16

its

17

scope

reward high achieving

to

Intel

may

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might have to push

pay more for critical

skills

match Brown Decl Ex 27

somewhat

200 1 17

at

53

position market

we

rigid

wage

Defendants contend that in

and practices were highly individualized

compensation

with wide variation

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set

by hundreds

in

of

to

Oppn
managers

s that

skilled employees to

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also

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10

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structures see Brown

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employees such that pay raises

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Court

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Google

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Google

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believes

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its

top

a

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disproportionate

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Ex

District

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of Steven

3

Burmeister of Apple

Apples

general

philosophy has been to compensate

States

employees based on

their

individual

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in their job

Northern

United

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responsibilities

18

declaring

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salary increase

determinations

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21

employees

22

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23

the divisions

24

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25

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26

outside

27

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salary

declarations

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of Lucasfilm

if

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in

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34

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one employee receives

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must

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come out

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manager

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11 CV 02509 LHK
PART MOTION FOR CLASS CERTIFICATION

of

is

division

Apple may go

budgets

IN

eg

the salaries of all other employees of that

salary range for a particular job

ORDER GRANTING IN PART DENYING

in one

increase

31

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for

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28

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19

are not reviewed

affect the salaries of everyone else

salary budget to increase

of Steve Burmeister of Apple

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Stubblefield

her overall

Case5 11 cv 02509 LHK

1

Further Defendants note that

2

handle counteroffers

3

Lucasfilm gave managers

4

Adobe and

5

Pixar

6

Lucasfilm

7

Stubblefield

8
9

had

Intuit

23 Ex 17

discretion

Decl

37 Ex 14
of Intuit

of

set

to vary individual

Decl Ex 23

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12

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13

raise for one

employee would produce

14

Defendants

salary structures

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manager would handle compensation decisions

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Decl

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of Intel

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and other factors

McAdams

Lori

of Michelle

28 29 Ex 19

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varying compensation ranges for certain jobs such

11

California

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11 Ex 22

of Intel

each manager was directed to

18

had broad discretion

78

Brown Decl

10

at

how

53

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based on performance

Donna Morris of Adobe

of

Defendants also contend that they

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in

Page32

by other employees While Pixar

solicited

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varied

make counteroffers

to

guidelines

specific

policies

their

who were

employees

to

Filed04 05 13

Document382

10

of Intuit

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compensation even up
of Lori

McAdams

100

to

or

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9 Ex 17 Decl

of Pixar

13 30 Ex 19

Frank Wagner of Google

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Defendants argue that determining whether a

Court

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practices

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require examining

as well as assessing

how an

each

individual

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In light

argue that

States

16

there is

no common evidence

to

help

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make the

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for

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Northern

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17

in the accounting

18

receptionists

19

department

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21

salary increase

22

inhouse

counsel

or

14

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20

engineers

Plaintiffs heavy

reliance

on Googles

Big

Id

23

to

show class wide impact
Oppn

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at

20

recognizes

there is

no evidence

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that

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24

questions

25

evidence Defendants have presented

26

Defendants own employees

27

for Class Certification

28

1061

of the issues

raised

ND Cal 2007

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to rebut Plaintiffs contentions

declarations

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unusual and

by Defendants may

about whether any particular employee was injured

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followed Googles

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which were drafted specifically to oppose

Fargo Mortg Overtime Pay Litig 527

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ORDER GRANTING IN PART DENYING

of

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PART MOTION FOR CLASS CERTIFICATION

Case5 11 cv 02509 LHK

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appeared

2

documents

3

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4

of

5

equity

is

more persuaded by

powerpoint

presentations

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the anti solicitation

53

of

contemporaneous

agreements

compensation and recruitment

regarding

and interoffice communications

departments

resources

Page33

such as

CEO

from the heads

about internal

concerns that corresponded to compensation decisions

Thus

7

finding

8

prove

9

compelling

that

the Court finds that Plaintiffs documentary

common

issues predominate

impact Nevertheless

antitrust

may

not be sufficient to

over individual

e

12

show

documentary

examples though

and

support

were

or empirical

by

affected

the

analysis

Evidence

Statistical

offers econometric

in favor of

ones for the purpose of being able to

that all or nearly all Class members

Econometric and

Dr Leamer

Finally

evidence weighs heavily

the Court has concerns that Plaintiffs

anti solicitation agreements without additional

11

California

The Court

by Defendants before and during

created

Defendants human

6

10

driven

litigation

Filed04 05 13

Document382

statistical

which he asserts bolsters

evidence

Court

of

his conclusion

14

District

13

show

proposed Classes were impacted by Defendants anti solicitation agreements

that class wide evidence can

that all or nearly all

members

of Plaintiffs

District

Dr Leamers

15

statistical

evidence consists primarily of three different categories

of

States

16

evidence

The

17

regression analyses

18

Leamer

first

category

evidence upon which

of statistical

Dr Leamer

consists of

relies

Northern

United

the

For

19

Rep

which

firmwide compensation

time

over

Leamer

21

maintained

22

Leamer opines

rigid

structures

Rep

wage

that

the Court refers as

Dr Leamers

11 14 Dr Leamers Common

Figures

20

23

to

it

and the formulaic

128 Dr

structures

may be

factors such

25

broadly experienced by

26

way

Leamer contends

based on principles

of

move

to

Analyses

Factors

See

Analyses assess Defendants

in which

total

compensation

was

varied

that this is evidence that Defendants

of

internal

from the existence

inferred

compensation of Class members tended

24

Factors

Common

equity

of these rigid

together

See id

wage

130 Dr

structures that

over time and in response to

common

Id

27
28

that

Second

Dr

the effects

all

Leamer

consistent with important

the

or nearly all

anti solicitation

members

offers evidence to

elements of equity

in

of the

show

a

Agreements

would be expected

AllEmployee Class and

persistent salary structure

the Defendants

compensation

No

11 CV 02509 LHK

ORDER GRANTING IN PART DENYING

IN

across

practices

33
Case

Technical

PART MOTION FOR CLASS CERTIFICATION

to

be

Class

employees

Leamer

Case5 11 cv 02509 LHK

Dr Leamer

1

Rep

2

salaries and total

3

top 10 positions at Google between

4

these five charts

5

these charts

6

together

134

134

7

as

9

all

e

i

Dr Leamer

evidence

this

engineers

id Figures 15 17

Finally

Dr Leamer

11

show

12

generally and

13

proposed Class i

14

the Class period

15

Plaintiffs this

model

16

and defendant

bydefendant

17

allows the effectiveness

18

workers Id

supplies

that the anti solicitation agreements had

2 quantify

amount

the total

refers to

contends that

See id

a raise so did account executives

t he non compete

opines that

agreements which

have effects that would spread across

model the

salary structure

Conduct Regression

some impact on

of the impact

the

tended to move

for different positions

received

a regression

The Court

Charts Dr Leamer

focus on subsets of workers would nonetheless

to

2006 and 2009 and

Apple between

Compensation Movement

software

if

53

of

which purport to track changes in the base

at

2005 and 2009 See

Page34

or almost all employees at the firm in order to maintain the overall

10

California

positions

offer further evidence that compensation

Based on

might tend

five charts

10

the top

for

Dr Leamers

over time

8

on

specifically relies

compensation

Filed04 05 13

Document382

the Class

e impacted

i

Id

1

to

the Class

damage experienced by each

or

Court

of

District

e

the total

or net reduction

Rep

See Leamer

Figures

in

Defendants

20 24

expenditures

on compensation during

Conduct Regression

10

According

to

District

estimates

undercompensation

for

Defendants employees on a year byyear

States

Mot

basis

at

23

Rep

Leamer

citing

145 Fig

22

The model

Northern

United

the

For

19

of the agreements to vary over time

Leamer

citing

Defendants argue that

20

several

respects

21

1622

see also

As

22

to

and

fails

Oppn

the

at

Dr Leamers

and econometric

statistical

evidence

for Plaintiffs theory

support

is

See

deficient

Mot

to

in

Strike

at

20 21

Common Factors

persuaded that these analyses

24

solicitation agreements

25

Conduct Regression

26

plausible

of

different kinds of

146

Rep

to provide persuasive

23

method

and among

Analyses and Compensation

support

Dr Leamers

would have spread

contention

to all or almost all

Movement

that the detrimental

effects

is

not

that the effects of the anti

employees With

the Court is not persuaded that the Conduct

showing

Charts the Court

Regression

respect

by

to the

itself provides

of the anti solicitation agreements

a

were

27
10

28

Dr Leamer

Technical

prepared separate regression analyses

Class

The Court

refers to both regressions

for the

AllSalaried Employee Class and
Conduct Regression

collectively as the

34
Case

No

11 CV 02509 LHK

ORDER GRANTING IN PART DENYING

IN

PART MOTION FOR CLASS CERTIFICATION

the

Case5 11 cv 02509 LHK

Filed04 05 13

Document382

or nearly all Class members Nevertheless

1

experienced by

2

Conduct Regression provides

3

agreements resulted in Defendants expending less

4

otherwise i

5

by which Defendants

6

to the

e

all

1 showing

money on

Court addresses

7

Common

i

Dr Leamer

sets forth

i

each of these evidentiary

Common

10
According

move

a measure

models

Dr Leamer approximately

to

11

California

12

Court

of

13

company gender

Dr Leamer

location

title

Analyses which he uses

contends that the

90

percent

factors

compensation

District

at

any

point

in time can be explained

15
of Class members tended to

the compensation

States

16
Northern

United

the

For

common

the Class as a

Id

whole

Defendants contend that

Dr

regressionstheir

ability

to

20
employee works and

factors

in any individual

age number
128

employees

months in

of

see also

are significant

id Figures 11 14

because

if

may

it

the

Class members
be inferred

over time and in response

together

Common Factors

Leamers

19
fit of these

common

to

by common variables

move

that compensation

that

to

would have

affected

130

18

the

show

to

to one Class members compensation

factors such that a detriment

17

such as

Common Factor Analyses

14

District

of the variation

employer Leamer Rep

and

damages

of class wide

turn

in

over time and in response

by common

can be explained

compensation

amount

the

Factors Analyses

Factors

together

than they would have

2 quantifying

9
of Class members tended to

53

that the anti solicitation

compensation

e providing

were reduced

expenditures

of

the Court is persuaded that the

Conduct Regression shows impact generally and

the

Class The

8

method of

a reasonable

Page35

his job title

Oppn

at

explain is

20

Analyses prove nothing because

almost entirely attributable

In critiquing

Dr

Leamers

where

to

the

model Dr Murphy

21
contends that

the regressions

22
what an employee

does and

simply reflect

whom

that

in

these labor markets like all competitive

23
indicative

24

Common

of

a

rigid

Factors

wage

much

she works for explain

Id

structure

Analyses cannot as

citing

Murphy

Dr Leamer

Rep

of her

89 92

claims establish

titles

are correlated

with each other over

are not

Defendants argue that the

that compensation

25
employees with different job

compensation and

ones

time such

that

of different

it

may

be

26
inferred

27

that an impact

members Oppn

at

21

to one Class member

quoting

Leamer

would have

Dep 206 421

necessarily rippled

out to other Class

The Court agrees

28
35
Case

No

11 CV 02509 LHK

ORDER GRANTING IN PART DENYING

IN

PART MOTION FOR CLASS CERTIFICATION

Case5 11 cv 02509 LHK

1

Accepting

arguendo

that the

2

factors such as where

3

determining the employees

4

from this fact that Defendants

5

with entirely different

6

impact

7

in entirely different jobs

8

Indeed during

his deposition

9

show

salaries of

that the

time

10
11

California

over

11 12 13

salary

12

correlated

13

Compensation

14

53

of

11

Analyses are accurate

e

i

that

were so

move

necessarily

would

title

they

show

may be

that

through time such that a detrimental

to

other employees

the entire salary structure

Common

Analyses did not

Factors

the regression analyses

two employees with two

A Thats

inferred

for employees

different job titles are correlated

salaries of

with each other over time correct

it

that compensation

ripple across

Q But

235 21 236 2

you whether

tell

together

admitted that the

two employees with two
at

rigid

how

explain

fails to

necessarily result in an impact

any impact would

Dr Leamer

Dep

dont

However Dr Leamer

salary structures

would

titles

See Leamer

and

Common Factors

Page36

an employee works and what an employee does play a large role in

an employee with one job

to

Filed04 05 13

Document382

And

correct

with each other

reflected

different job titles are

why we

thats

in Figures

did the

Court

of

14

District

Charts

Movement

Accordingly

the Court agrees with Defendants

that the

Common

Factors

Analyses do not

District

Plaintiffs theory that all or nearly all Class members compensation

15

support

16

have been impacted by the anti solicitation

would

necessarily

States

agreements

Northern

United

the

For

17
18
In addition

19

Movement

20
to

21

move

that

24
25
26

11

an

opines that an increase

Movement

predict

conclusion

the

the accuracy of the

named

that the

at

rigid linked wage structure
Because

Factors

Movement Charts

in the

to

Strike

Motion to

22.12

at

Analyses noting

No

at 20 21
In
Dr Leamers

Strike identify flaws in
in addition

of the

theory of a

Dr

Leamers

to the admissibility

11 CV 02509 LHK
IN

light

issue

that affect the persuasiveness

ORDER GRANTING IN PART DENYING

The Court

that they fail to

36
Case

do

Charts is misplaced

some years See Oppn

this

Defendants contend

flaws and that the charts

Analyses would not support

the Court need not resolve

Defendants arguments

Compensation

Factors

20 22 Mot
Movement

Common

Plaintiffs salaries in

Common

one Class member would

Charts suffer from several

See Oppn

Leamers conclusion

in salary to

in salary for the rest of the Class

increase

Compensation

Defendants contest

accurately

12

28

He

to

the Compensation

provides

evidence showing that compensation for different positions tended

agrees that Plaintiffs reliance on the Compensation

Courts

27

additional

translated

Dr Leamers
Dr

as

Analyses Dr Leamer

Common Factors

over time

together

not support

to the

Charts

necessarily have

22
23

Compensation Movement Charts

ii

PART MOTION FOR CLASS CERTIFICATION

of

Case5 11 cv 02509 LHK

1

First as noted

by Defendants

2

compensation

3

companies

4

seven Defendants

5

exclusively

6

on whether compensation

7

an

9

Mot

selected

a small fraction

at

an

for

11

discussing

more

in

in

the Technical

eg

disparate titles

his deposition

positions

movement

that

Dr Leamer

12

stating that he

was aware

13

he had decided

14

clear that the

15

of all Class members

16

positions

at

17

positions

moved

18

compensation

19

light

20

Compensation

21

Class members

for

a

custodian

an

at

shed

these charts

little light

office in Texas

Intel

and

over time

some

Leamer

for the charts

Apple

all

appear to be almost

titles

Thus

Class

two

titles at

id

job titles see

Dep

at

results but that

consistent

262 3 10

275 13 18

at

not

of the positions

Charts would not show the same

anomalous

there might be

20 job

which were spread across

admitted that

Movement

were selected

of compensation

Charts only examine the

the Classes

Furthermore these job

in the Compensation

20

as the

21

included

53

of

of the total Class approximately

office in California moved together

Intel

for inclusion

movement

titles

would be included

that

titles

to Strike at

Moreover during

10

California

for

Page37

Movement

the Compensation

out of the thousands of job

engineer

8

movement

Filed04 05 13

Document382

Dr Leamer

in the heat of the

moment

Court

of

District

to

20

assume

that

positions

would be

the anomalies

reflected

on

13

resolved

the chart are representative

Consequently

of the compensation

it

is

not

movement

District

Indeed

Dr

Murphy

expanded

Dr Leamers

analysis to include

the top

25

States

each of the seven Defendants and found that in any given year compensation

for these

Northern

United

the

For

for others

to provide a broader

Even

Movement Charts

moved

putting

compensation

for

rose and by different percentages

of Plaintiffs failure

22

eg

in different directions

together

some

See Murphy

sampling the Court

are particularly probative

positions

is

fell

while

Rep Ex 18A 18B

In

not persuaded that the

of whether

salaries for all or nearly all

over time

by

aside the small sample size provided

23

the Court is not be persuaded that the Compensation

24

compelling evidence regarding

Movement

the Compensation

Movement

Charts provide

Charts

particularly

Dr Leamer

whether salaries at each company were linked

25

Dr Leamers
26

28

Defendants

arguments

here
13

27

conclusions based on these charts the Court will consider

During

his deposition

of other job titles that

Leamer

stated

that

it

Dr Leamer

may

not

be

was asked whether

consistently

the fact that

smooth

over

did not but only because he did not know

of the thousands of omitted

positions

was not

consistently

there are significant

time affected

his opinion

for sure that the

smooth Leamer

37
Case

No

11 CV 02509 LHK

ORDER GRANTING IN PART DENYING

IN

movement

Dep

PART MOTION FOR CLASS CERTIFICATION

at

3 17

numbers

Dr
of any

Case5 11 cv 02509 LHK

1

admitted that the allegedly

2
3

rigid

wage structure

inferences

4

may

that

movement

parallel

Leamer

Dep

at

reflected

283 23 25

above

Movement

6

for all or nearly all employees in either the All

9

Finally

Dr Leamer

had some impact on

e

i

11

compensation

12

a range

13

company

14

Effects

15

number

16

California

on

e impacted

of the impact

average or net under compensation

17

were in effect

the Class

14

Plaintiffs argument

that compensation

the Technical

Class were linked

Conduct Regression

i

10

Charts

Employee Class or

uses a regression model

the Class

non

also consistent with a

This admission seriously undermines any

Charts provide sufficient evidence supporting

iii

8

is

53

of

the Court does not find that the Compensation

5

7

Page38

in the charts

be drawn from the Compensation Movement

of the issues discussed

In light

Filed04 05 13

Document382

to

show

the Class generally and to quantify

the total or net reduction

during the Class period

that the anti solicitation

in

Rep

See Leamer

Defendants

Figures

of variables designed to account for factors including

agreements

on

expenditures

20 24

amount

the total

This model incorporates

1 age sex and

years at the

Court

of

District

2 the

effects

3 the

and

on compensation caused by

effects caused

by

the anti solicitation agreements

factors specific

eg

to each Defendant

Conduct

the

firm revenue

total

District

of

new

hires

etc

See

id Figs 20 23 Dr

Leamer uses

the

model

to estimate

the

States

at each firm during the period in

which

the

DNCC

Agreements

Northern

United

the

For

18

See id Fig 22 and

The Court

is

24

Reply

33

at

persuaded that the Conduct Regression

generally

19

that while the antisolicitation agreements were

20

compensation

21

amount by which Defendants were under compensating

were less than they should have

is

capable

of

effect

Defendants

total

been and

2 providing

an estimate

in

their

employees

1 showing

expenditures on

of the net

class wide

damages

22
23
24
25

14

The Court

that salaries

between

26

28

between

by

also concerned

moved

together

2007 and 2008

sample period the
directions

27

is

total

See Leamer

in

the fact

that the

Compensation Movement Charts

every year Significantly

one of the three year long periods

with respect

to the Apple

shown on

the chart or

compensation for almost half of the positions

Rep

Fig 15 showing

2007 and 2008 while

total

total

compensation

moved

compensation for approximately six positions

11 CV 02509 LHK

ORDER GRANTING IN PART DENYING

IN

percent

of the

in different

38

No

show

positions

33

went down
rose Murphy

for four positions

Rep Appx 8B same

Case

did not

PART MOTION FOR CLASS CERTIFICATION

Case5 11 cv 02509 LHK

1

Defendants argue that the Conduct Regression

9 Oppn

22 24 As will be

2

Strike

3

arguments The Court

at

4
5
6

at

addresses

Dr Leamer

because

of variables

8

sensitive

9

Leamer

is

an

Dep

exploration

at

first

purported

10

decision

11

to Strike at

12

analyses

13

argue that when

14

different results

15

no undercompensation

16

Adobe

17

Page39

in a

number

of

53

Mot

of respects

the Court is not persuaded

to

by Defendants

each of the flaws identified by the Defendants in turn

351 4 6

sensitivity

how

of

See

flawed

and should not be admitted

Mot

is

Strike

to

the Court will

identified

at

11 A

a models conclusions

sensitive

Defendants contend that the Conduct

in at least three respects which

The

below

flawed

failed to conduct a sensitivity analysis

analysis

sensitivity

forth

set

is

contend that the Conduct Regression

First Defendants

7

California

Filed04 05 13

Document382

now

are to a choice

Regression

is

address

by Defendants has

do with

to

Dr Leamers
Mot

undercompensation

to perform the regression using aggregate data from all of

12

Defendants contend that

Dr

Defendants employees

Leamer should have performed

disaggregated

using only data from that Defendants employees

for each Defendant

See id Defendants

Court

of

District

Dr

Murphy

See id

disaggregated the Conduct Regression

1213 Murphy Rep

at

117

he

received

dramatically

showed

that Lucasfilm and Pixar

finding

District

but instead

overcompensation

throughout

the

period Google

States

and

Intel

showed overcompensation

in

some years and

Apple showed

much smaller

Northern

United

the

For

As

18

an

initial

Defendant

matter

19

for each

20

Defendants using aggregate

21

included 42 additional

22

Leamer Supp

23

use of so

many additional

24

model

Leamer Reply

25

introduced

26

solicitation agreements

27

also

in

Dr Murphy

Rather

data

from

Defendant

all

Murphys
See

Dr Leamer generated
However

Defendants

variables

See Murphy

Rep ECF No 247

Defendant specific

Rep

not appear to have created

like

specific

Leamer Reply

of Reply

Dr

Dr Murphy does

single

unlike

out of the

model 28

Murphy Rep Appx

9A

of

them

The use

minimize artificially the effects of the anti solicitation

116

100 As

42 Defendant

model

Decl

specific

IN

E

Edward

testified the

the

variables

related to the effect of the anti

of so

many

of these variables

may

agreements by spreading those effects

11 CV 02509 LHK

ORDER GRANTING IN PART DENYING

of

overwhelm ing

39

No

for all

Dr Leamer

28

Case

models

Dr Leamer Dr Murphy

Rep

variables runs the risk of

100 Moreover
disaggregated

a

truly disaggregated

PART MOTION FOR CLASS CERTIFICATION

Case5 11 cv 02509 LHK

1

across

2

is

3

Moreover

Dr Murphys

analysis is often appropriate

5

may

6

Cir 2002

7

robust

8

Wholesale

9

Dr Leamer

10

any

render

findings

amended

In such a

more

stated

12

Moreover

as

this

Rep

size

53

of these issues the Court

Dr Leamers

may distort

v

aggregate

F3d 1141 1148

California 291

allow for a

v

Costco

results

statistical

appeal dismissed Jan

the relatively short length

to be a circumstance

9th

more

Defendants compensation

by

analysis and

the statistical

numbers may

more meaningful

particularly

light

of

that the use of aggregate data in regression

data regarding

99

In

credible than

ND Cal 2012

523

would appear

Dr Leamer

the use of

Page40

101

probative Paige

reliable and

that the available

limited Leamer Reply

2001 2011 Thus

case

FRD 492

285

11

California

more

a small sample

where

not statistically

analysis and yield

Corp

are

results

the Ninth Circuit has recognized

4

Rep

Leamer Reply

a wider range of variables See

not persuaded that

Filed04 05 13

Document382

Ellis

16 2013 Here

practices

was

of the data period

aggregation may be appropriate

where

Dr

testified the use of aggregate data allowed

Leamer

produce a

to

Court

of

13

more coherent

14

District

more

Finally even

model

efficient

if

Dr Murphy

Dep

Leamer

had developed

at

364 8 365 7
models given

truly disaggregated

that the use of

District

may

15

aggregate data

16

at

17

that completely disaggregating

18

11 annual

19

scope of

20

that

yield

more reliable and more meaningful

statistical

results Ellis 285

FRD

States

523

is

it

not clear that these models

would be

reliable

See Leamer Reply

Rep

101

stating

Northern

United

the

For

observations

for each

Dr Leamers

Dr Leamers

the

model

would reduce

Defendant and

with so few

The second

22

benchmark period

23

changed

24

solicitation agreements were

25

period then the model shows that there was net

26

compensation

27

to limit the

28

conduct data should be excluded because

to Strike

13

at

from the two years preceding

benchmark period

is

in this

to estimate

No

an error in his methodology

is

Defendants argue that

Dr

if

the

Leamers

choice

of a

benchmark period

Conduct

Period to

is

over compensation

not persuaded

way

only the two years following

Defendants

fail

rather than

to explain

IN

this

under

why

it

makes sense

For example Defendants have not shown that the

it

is

not comparable

to

pre

data from the conduct period

11 CV 02509 LHK

ORDER GRANTING IN PART DENYING

of the

the Court is not persuaded

40
Case

a model

and the two years following the period in which the anti

in effect

See id The Court

Thus

by Defendants

identified

sensitivity

of observations to at most

would be impossible

constitutes

21

Mot

number

time
series experiments

failure to disaggregate

alleged

it

the

PART MOTION FOR CLASS CERTIFICATION

Case5 11 cv 02509 LHK

1

Filed04 05 13

Document382

53

of

Furthermore the Court observes that in altering the benchmark periods Defendants have

2

reduced the

3

previously

4

by

5

conduct that occurred over five years using only

6

that

7

in the data is

8

decision

9

Court that

total

amount

the

of data available

may

less data

eliminating

period

Leamers

is

12

over

13

variable specifically a variable that tracks

14

yielded

15

overcompensation

a variable

time Mot

control for changes

to

to Strike

13

at

are sensitive

results

benchmark

96

periods

stating that

the effect

years and

of his understanding

discussed

it

is

of the

startling

that the information

Dr Leamers

to

does not persuade the

flawed

Defendants also contend that the Conduct

to include

as

Rep

to estimate

non conspiracy

in light

periods

Regression

11

See Leamer Reply

Dr Leamers

the fact that

Conduct

two

As

periods

Dr Murphy is attempting

data

pre and post conduct

to use both

non conduct

the

results

conduct such an exercise

limited Thus

Dr

regarding

in less accurate

result

preconduct

Dr Murphy would

10

California

Page41

Regression

is

in the value of

flawed because

equity

compensation

Dr Murphy

Defendants contend that when

Dr Leamer
to

introduced

failed

employees
an equity

Court

of

District

much

changes in the

under compensation

smaller

for the

SP 500

the Conduct

Regression

AllSalaried Employee Class and

District

for the Technical

Class

See

Murphy Rep

138

This argument fails

States

As

16

an

initial

matter

Dr Leamers

a

failure to include

variable for changes

in

the value of

Northern

United

the

For

S

500 s

17

the

P

18

478

19

its

20

value of

21

reflecting changes

22

or

23

See Leamer Reply

24

results of

25

disregarded

26

Leamer used each Defendants

27

variable the model

US

at

stock price does not

400

Normally

make the Conduct

failure to include

admissibility Defendants have

Dr Leamers
in

results

the

S

P

compensation Rather

Dr

it

Rep

Leamers

500 does

the equity

not track or

variations

89 Thus

variables

will affect

the fact

reflect

still

Regression

variations

net

in

Defendants

that including

this

variable

is

flawed Moreover

significantly

Dr Leamers

the Court notes that

should be

when

under compensation See Leamer Reply Fig 10 and

11 CV 02509 LHK

ORDER GRANTING IN PART DENYING

companies

IN

Dr

an ostensibly more relevant

41

No

prices

altered the

results

28

Case

stock

in the stock price of hundreds of unrelated

average stock prices as a variable

predicted

the probative

Defendants selected a variable

variable

analysis does not persuade the Court that

or that the Conduct

the analysis probativeness not

not persuaded the Court that this failure affects

Significantly

tracks

Regression inadmissible See Bazemore

PART MOTION FOR CLASS CERTIFICATION

11

Case5 11 cv 02509 LHK

1

In addition

to the sensitivity

issues

Dr Leamer

Regression

3

employees within the same firm is correlated

4

Murphy

5

See

6

observations

7

certain

8

commonly

9

standard

errors reveals

10

values

are greater than

flawed

contends that given

Murphy Rep

11

because

used

common

estimate

to

clustering

Conduct

that the

method

a

Leamers

at

Dr

126

errors

take into account the fact that

to

of observations

particular

company

by

that are affected

or present

errors Dr Murphy
are not statistically

results

16 Murphy Rep

should have clustered the standard

groups

contain

the standard

Strike

for

in a single

year

states that clustering

significant because

is

the

their

p

5 Id Ex 22A

finds that

12

sufficient basis to reject

13

have clustered the standard

14

Regressions

15

Court that the regression

16

California

Dr

that

to

Dr Leamer

accepted

a regression

Mot

See

such as those affecting

referred to as

53

of

failed to account for the fact that compensation

correlation

A generally

126

factors

The Court

this

Page42

above Defendants argue

discussed

2

is

Filed04 05 13

Document382

value

17

neither

18

epidemiological

19

Moreover

20

significant result

21

adjusting

22

See Leamer Reply

23

explain

24

variable revenue

25

the standard

26

not provide

the

Dr Leamers

failure

errors does not provide a

to cluster the standard

Conduct Regression

Assuming arguendo

Dr

that

Leamer should

Court

of

District

errors the fact that when

are not statistically

results

the errors are clustered

significant at the

95

percent

the

Conduct

does not persuade the

level

District

is

although this

inadmissible

might affect the models

failure

probative

States

v

See Cook

Rockwell

Int’l

Corp

580

F Supp

2d 1071 1105

D Colo 2006

holding

that

Northern

United

the

For

the Tenth Circuit

nor

any other court has adopted a rule barring admission of any

study that was not

Dr Murphy

testified

to be reliable

the standard

that a models

Murphy

errors is only one

Rep

See id

errors does

plausible

way

significant at the

at

366 14 20

confidence

Finally as explained

of controlling for correlations

Another

approach

83 Dr

firms See id

82 83 Thus

95 percent

would be

Leamer has

the Court concludes that

to

between

include

already

Dr

by

employees

included

Leamers

for the purposes of class certification

Dr Leamer

variables to

one such

failure

not provide a sufficient basis to conclude that the Conduct

methodology

level

results need not necessarily be statistically

Dep

76 78 82 83

the commonalities across

a

statistically

to cluster

Regression does

15

27
15

28

The Court does however

variables besides

note that

Dr Leamers

revenue should have been included

report is slightly
to control

ambiguous as

for correlations

to

whether any

across

employees

42
Case

No

11 CV 02509 LHK

ORDER GRANTING IN PART DENYING

IN

PART MOTION FOR CLASS CERTIFICATION

Case5 11 cv 02509 LHK

1

summary the

In

2

Compensation

3

that there

4

necessarily have

5

persuaded that

6

generalized

was

a rigid

harm

10
11

California

to prove

is

structure

to provide adequate

support

to all or nearly all

Conduct

Page43

Regression provides

53

of

Analyses and

Factors

for or confirmation of his theory

some of

such that an impact to

an impact

Leamers

employees would

Defendants

employees The Court is however
a

methodology

plausible

for

showing

class wide damages

Damages
to disputing

whether

parties dispute

fail

to the Class as well as estimating

In addition

8
9

wage

3

7

charts

resulted in

Dr

Dr Leamers Common

Court finds that

Movement

Filed04 05 13

Document382

whether

Plaintiffs

can show impact on a class wide basis the

Plaintiffs

can show damages on a class wide basis and whether the

damages using common evidence

a

precludes

finding

that the predominance

inability

requirement

met
Plaintiffs

12

Dr Leamer

contend that

can calculate damages to the Class in the aggregate and

Court

of

13
14

District

Mot

that this is sufficient for the purposes of class certification

48

CD

see In re Cardizem

Antitrust Litig

200

FR D 297

23

at

citing

Leamer

E D Mich

324

2001

Rep

135

collecting

District

15

cases

to support

this

proposition

Moreover

Plaintiffs

contend that the Ninth Circuit has held that

States

16

damage

the need for individualized

alone cannot defeat certification

calculations

v

Yokoyama

Northern

United

the

For

17
18
19

Midland Nat

Leamer has admitted
25

Recently

22
23
24
25

show

stage to

damages

as at trial any

liability

Comcast

case

569

model

27
28

See Leamer Reply

Rep
why

find

is

to find

another

improve

2013

84
the

a
to

WL

them

on

plaintiffs

a class

No

Oppn

at

at the class certification

wide basis
but

at

the alleged

anticompetitive

5

majority

op

variable

the class certification

consistent with its

effect of the violation

Because the Comcast

the standard

employeryear averages

not track the

To

Conduct Regression and

the extent

obviate

Justice Scalia

the need for clustering

11 CV 02509 LHK
IN

enough

better

and to

there are other variables that

in his next report

ORDER GRANTING IN PART DENYING

errors the

well

43
Case

Dr

basis

individual

damages case must be

that rather than clustering

indicating

appropriate explanatory

to include

on

need not be exact

plaintiffs

1222646

model does

the accuracy of the

encouraged

c alculations

that

supporting

US

route

26

damages on an

the burden

are capable of measurement

particularly with respect

Corp

Defendants argue that

23 2324 7 398 21 399 11

Supreme Court addressed

the

that

at

9th Cir 2010

cannot estimate

that his regressions

for the majority stated

writing

stage

Co 594 F3d 1087 1094

Dep

Leamer

citing

20
21

Ins

Life

PART MOTION FOR CLASS CERTIFICATION

may

Dr Leamer

is

Case5 11 cv 02509 LHK

1

plaintiffs

2

failed to satisfy

3

for the dissent

4

certifying a class action

5

Breyer

6

to certification

7

basis

8

certification

9

methodology

Rule

for proving

23

b3

predominance

under Federal

damages

that

recognition

Indeed

23

Dr

b3

model

11

conduct

terms of a percentage of

12

agreements were

13

Regression cannot estimate

14

Conduct Regression does provide

15

Defendants employees on

16

California

to create a

The model allows

17

of

18

for

in

common

the estimated

for each

effect

in

that

wage

new

23

and Breyer

b3
to

Id 9

of

Ginsburg and

require as a prerequisite

do

calculations

on

a class wide

not preclude

class

Id

when

during the periods

Rep

Leamer

writing

ground on the standard

to Class members of Defendants

suppression

had

plaintiffs

evidence and a regression approach

cost

Defendant

impact

injury be measurable

damages

well nigh universal

is

10

breaks no

a class wide

of

53

of

Justices Ginsburg

should not be read

the decision

that individual

Leamer concludes
for quantifying

requirement

opinion

attributable to

Page44

not tied to their theory

Rule of Civil Procedure

In particular

under Rule

Here

damages was

emphasized that the majority

JJ dissenting

Id

s

Filed04 05 13

Document382

14148

can be used

challenged

anti solicitation

While the Conduct

Court

of

District

damages on an
a

individual

method

basis see Leamer

of estimating

Dep at 23 23 24 7 the
undercompensation

the aggregate

to

District

a

year byyear and defendant

bydefendant

Id

basis

145 Fig 22

States

the effectiveness

of the agreements to vary over time and

among different

kinds

Northern

United

the

For

workers Id
members

19

of the alternative

Plaintiffs

method

20

their

21

Conduct Regression

22

providing an estimate

23

have

theory of

satisfied

their

25

also demonstrates a

Technical

of calculating

Class

Id

damages

the Court finds that Plaintiffs

of

damages

burden

Having undertaken

to each proposed

for the purpose of Rule

Conclusion

model

discussed

Class

23

in

regard

a plausible

Therefore

consistent with

to

method

antitrust

claim antitrust

28

capacity

of Plaintiffs evidence and proposed methodology

damages

burden for predominance

on

the Court finds that Plaintiffs

the first and third elements of Plaintiffs Section

and damage However

the Court has concerns about the

to prove impact

to

the All

44

No

for

the Court finds that Plaintiffs

the issue of

analysis of Plaintiffs evidence

27

Case

Dr Leamers

Regarding Predominance

a rigorous

violation

above

b3 on

have

their

class wide damages

by Dr Leamer is

have established

26

satisfied

that estimates

147 Fig 24

as set forth

In addition for the reasons

liability

4

24

Dr Leamer

146

11 CV 02509 LHK

ORDER GRANTING IN PART DENYING

IN

PART MOTION FOR CLASS CERTIFICATION

Employee

1

Case5 11 cv 02509 LHK

1

Class or the Technical

2

to

show

3

to

some employees would have

4

concerned

5

of people

6

Kohen

7

true

8

if

9

that Defendants maintained

who

v

injured

class definition

may be

However

11

hearing

12

evidence will be able to

13

over individual

so broad that

it

too

the Court believes

motion

this

who

persons

it

is

broad and

Cir 2009

7th

it

persons

show

may be

demonstrate

to

is

also

large

by the

who

numbers
See

stating that while

is

it

conduct

defendants

could not have been

that has occurred

able to offer further proof to demonstrate

class wide impact

wages

the class should not be certified

that with the benefit of the discovery

Plaintiffs

The Court

unlawful conduct

allegedly

have not been injured

within

53

so broadly as to include

defined

672 677

sweeps

of

that a suppression of

structures

or nearly all Class members

all

conduct

is

the defendants

on

compensation

Co 571 F3d

Inv Management

Pacific

by

rigid

Page45

about whether the evidence will be able

were not necessarily harmed by Defendants

that a class will often include

the

such

affected

most concerned

is

proposed classes

that Plaintiffs

10

California

The Court

Class

Filed04 05 13

Document382

why common

since

the

how common

issues predominate

Court

of

14

B

15

District

Rule

ones See

Part

IV supra

Superiority

District

23

b3

a

also tests whether

class action

is

superior

States

16

the fair

and

17

23

18

a

19

individually

20

any litigation

21

desirabilityof concentrating

22

difficulties

23

of the

R Civ P 23b3

Fed

Northern

United

the

For

other available

methods for

92

adjudication

efficient

controversy

to

b3

superior

24
25
26

the Court must consider

method

in

concerning

an

common

28

of Rule

state

antitrust

b3

is

Flat

the

management

c lass treatment

case where

TFT LCD

questions

23

that

common

Panel

is

by

issues

Plaintiffs

2 the

actions

by

or against

of a class action

the class

forum and

No

of liability

267

and impact predominate

FR D

in an antitrust

at

action

314

IN

3 the

F3d

at

Mot

for the proposition

1190

at

23

that

the superiority prerequisite

contend that Class members individual

11 CV 02509 LHK

ORDER GRANTING IN PART DENYING

of

4 the

Zinser 253

45
Case

in

and nature

extent

is

definition superior to thousands of individual

Antitrust Litig

are found to predominate

satisfied

commenced

member

interest of each class

of the claims in the particular

the litigation

in

1 the

or defense of separate

the controversy already

whether a class action

factors in evaluating

the plaintiffs claims

likely to be encountered

citing In re

27

non exclusive

controlling the prosecution

Plaintiffs

claims

of adjudicating

four

Under Rule

PART MOTION FOR CLASS CERTIFICATION

damages even

if

Case5 11 cv 02509 LHK

1

after

mandatory trebling

2

noting that in

3

but a class action

4

are insufficiently

would

than hundreds or thousands of individual

6

proof

7

their

8

same evidence whether

9
10
11

structure

it

or

did not

it

involves

class action

F3d

to

litigate

treatment

the

1192

12

253

13

determine

violate

15

addition Defendants argue that

16

defense against

at

53

Id

litigation

According

will also be

the

litigating

not

trial

same

redress
and

the Class as a

substantial

at

the

23 24

issues each Class

individually means that

superior method of adjudication

Oppn

have presented

Plaintiffs

and

whole Mot

separate

efficient

suppressed

artificially

here will focus on these questions

numerous and

litigation

with nearly identical

issues

either their conspiracy

employee or

to Defendants

314 315

at

more manageable

establish his or her right to recover

to

not the

is

Any

a single

Defendants contend that

14

California

actions

Either defendants colluded or they did

member would have

individual

of

are likely to be too small to justify

c lass treatment

5

compensation

Page46

offer those with small claims the opportunity for meaningful

further contend that

Plaintiffs

large to warrant

damages

cases individual

antitrust

Filed04 05 13

Document382

no

at

25

viable

citing Zinser

means

to

Court

of

District

antitrust

impact or damages class wide Lumping

the Rules Enabling

Act

Id

citing

28

US C

all

2072

employees claims

b

and

together

Dukes 131 S Ct

at

would

2561

In

District

would

it

violate

their

due process

every available

right to assert

States

each Class member

Oppn

at

25

citing Lindsey

v Normet

US 56 66

405

Northern

United

the

For

17

1972

As a

18

The Court

19

members interests weigh

20

nature

21

litigation

22

methods of

23

of

finds that for both the All

Defendants
in

of Plaintiffs claims

result class treatment

in

alleged

favor of having

Employee Class and
this

case

overarching conspiracy

litigated

The Court

is

of the controversy

also inclined

24

finding

class treatment

25

finding

that Plaintiffs

26

the Court declines

superior

to

have failed

to rule

now on

to

other methods

to

satisfy Rule

F3d

regarding

of adjudication

23

Class Class

as a class action

that class treatment

See Zinser 253

find that questions

the Technical

In addition the

b3

at

is

superior

to other

manageability weigh in favor of

However

s predominance

in light

of the Courts

requirement at

Plaintiffs ability to satisfy the superiority requirement

28
46

No

11 CV 02509 LHK

ORDER GRANTING IN PART DENYING

IN

the

1190 92

27

Case

Id

and the desirabilityof concentrating

one forum weigh heavily in favor of finding

adjudication

would be unmanageable

PART MOTION FOR CLASS CERTIFICATION

this

time

Case5 11 cv 02509 LHK

1

Filed04 05 13

Document382

Page47

of

53

LEAVE TO AMEND

IV

For the reasons stated herein the Court does not find that

2
predominance

requirement of Rule

23

b3

Plaintiffs

for the purpose of the All

have

satisfied

the

Employee Class or

the

3
Technical

Class

Nevertheless

the Court is keenly

aware

that Defendants

did not produce

4
amounts of

significant

discovery

make key

or

witnesses

available

for depositions

until

after

the

5
hearing

on

Section

VI

Plaintiffs

6

Motion

A Defendants

for Class Certification

See

Tr

at

80 125

Moreover

as discussed

Opposition to Class Certification relied heavily on declarations

in

from

7
Defendants

current

employees some

of

whom

were

and whose documents

not timely disclosed

8
were not produced

Since the Class Certification hearing

to Plaintiffs

have conducted

Plaintiffs

9
approximately

of Defendants

depositions

fifty

high ranking employees

Defendants

including

10

CEOs and

Human

heads of

Resources

See

ECFNos 320 327 3336 360 365 379

In addition

11
during this time Defendants have provided
California

Court

also

of

Plaintiffs

with over ten thousand documents

Id see

12

ECF No 371

The Court

believes

that

some

of the recently

produced

may

discovery

affect

13
Plaintiffs ability

to

the predominance

satisfy

requirement for one or both of

their

proposed

14

District

District

Classes

Therefore

while the Court

DENIES

Plaintiffs

Motion

for Class Certification

the Court

15
States

leave

amend

affords

Plaintiffs

to

V

CLASS COUNSEL

16
Northern

United

the

17

In addition
For

whether Plaintiffs proposed Classes should be

to deciding

certified

pursuant

to

18
Rule

23

Plaintiffs Motion

for Class Certification requests

whether named

that the Court determine

19
should be appointed as Class representatives and whether the Court should appoint

Plaintiffs

20
Interim

21

CoLead

Committee

Counsel as

CoLead

as Class Counsel

Class Counsel and interim members of the Executive

See Notice of

Mot

at

22

CONFIRMS

The Court hereby

as final

2 ECF No 187

the appointment

of Lieff Cabraser

Heimann

23
Bernstein

24

LLP

and the Joseph Saveri

In addition the Court

GRANTS

Law Firm as

CoLead

Plaintiffs request

to

Counsel See

appoint

ECF No 147

as Class Counsel

the

25
firms that have served on the Executive

Committee Berger

P A and

Montague

26
Eisenhofer

27

PA

The Court

Notice

of

declines

Mot

at

2

to appoint

Plaintiffs

as Class representatives

at

this

time

28
47
Case

No

Grant

11 CV 02509 LHK

ORDER GRANTING IN PART DENYING

IN

PART MOTION FOR CLASS CERTIFICATION

law

Case5 11 cv 02509 LHK

1

VI

Filed04 05 13

Document382

Page48

53

of

SUPPLEMENTAL MOTIONS AND EVIDENTIARY OBJECTIONS

A

Defendants

Discovery

Obligations

2

Dr Murphys

that the Court exclude

request

Plaintiffs

deny Defendants

report and

expert

3
Opposition because

employee declarations

for five of the eleven

that Defendants submitted in

4
opposition

to

witnesses

files

Defendants either refused

class certification

to

produce documents

from the

5
or did not disclose the witnesses

fashion

or did so in an untimely

identities

6
impairing Plaintiffs

whether evidence exists that

to explore

ability

may contradict

the witnesses

7
declarations

Reply at

39

8
The

disputed

witness

declarations

include

1 Steven

from

the declarations

Burmeister

9

Apple

2 Mason

Decl Ex 16

Brown

3 Danny

Decl Ex 19

Intuit Brown

Stubblefield

10
McKell

4 Michelle

Decl Ex 17

Intel Brown

Maupin

Lucasfilm Brown

Decl Ex 22

and

11

5 Rosemary
California

Adobe Brown Decl Ex 24

Arriada Keiper

12

Court

under Federal

appropriate

of

Rule of Civil Procedure

The Ninth

Circuit gives

District

under Rule

sanctions

37 c

15

1

Bollow

v

Northern

the

c1

Reserve

Bank

of

v

Inc

Deckers 259

SF 650 F2d

latitude to the district

courts discretion

v SAP AG 264 FRD 541

F3d 1101 1106

1093 1102

ND Cal

544

Cir 2001

9th

9th Cir 1981

issue

to

see also

amended

The

17
whether

decision
For

Fed

USA

Oracle

quoting Yeti by Molly Ltd

16

wide

particularly

2009

States

United

is

13
14

District

37

argue that exclusion

Plaintiffs

to

a

penalize

party for dilatory conduct during discovery

proceedings

is

18
committed

to

the sound

discretion

of the trial

court

In determining the appropriateness

19
discovery sanctions a court should consider

the following factors

20
expeditious

resolution

of litigation

2

the courts

1T

need to manage

he publics

docket

its

of

interest

3

in

the risk of

21
prejudice

to

the

4

defendants

the public

policy favoring

disposition

of cases

on

their

merits

22
and

5

sanctions Wendt

the availability of less drastic

v

Inc 125

Host Intl

F3d 806

814

9th

23
Cir 1997

Wanderer

citing

v

910

Johnston

F2d 652

656

9th

Cir1990

24
Plaintiffs

contend that

Ms Arraida

Keipers

declaration

should be excluded because she

25
did not appear in

Adobes

initial

Rule

26 a disclosures

and appeared

in its supplemental

26
disclosures only after

Plaintiffs

moved

for class certification

Reply

at

40

Furthermore

Ms

27
ArraidaKeipers

documents

have not been produced

Id

Plaintiffs

neither

deposed

28
48
Case

No

11 CV 02509 LHK

ORDER GRANTING IN PART DENYING

IN

PART MOTION FOR CLASS CERTIFICATION

Ms

Arraida

Case5 11 cv 02509 LHK

1

Keiper nor received

2

Defendants have not shown that

3

disclosures

4

is

5

prejudice

6

Plaintiffs request

7

her documents

to

Ms

Morriss

Defendants

9

Intuit and

failure

Ms Arraida

is

ArriadaKeipers

concerned

timely disclose

to

Defendants

failure

of

11

especially

Ms

ArraidaKeiper

12

drastic sanctions and given

13

either

14

still have

15

do so within 7 days

16

either

17

have leave

policy

Mr

After

favoring

Keipers

Thus

Keipers testimony

Thus

declaration

26 a

Rule

in their

Ms Arraida

any

significant

the Court

GRANTS

declaration

caused

to

the documents

of Steven

by

Plaintiffs

Stubblefield the Vice President

on

of cases

that the Court is granting

leave

Resources

at

Burmeister the Senior Director

in

Wendt

merits the availability of less

their

to

virtue of

Human

of

the five factor test articulated

considering

disposition

53

of

there does not appear to be

about the prejudice

to provide

Compensation at Apple Inc
the public

contend

Page49

Motion for Class Certification

Plaintiffs

to identify

failure

as Defendants

Ms

strike

to

10

California

their

Defendants in excluding

Similarly the Court

8

prior to filing

harmless error Furthermore to the extent

constituted

redundant of

Filed04 05 13

Document382

amend

the Court declines

to exclude

Court

of

District

Mr Stubblefields
not provided

Mr

or

However

Burmeisters declaration

with

Plaintiffs

Mr Burmeisters

to the extent

documents Defendants

that Defendants

are

ORDERED

to

District

of this

Order Likewise

if

have not yet had the opportunity

Plaintiffs

to

depose

States

Mr Burmeister or Mr

on

Stubblefield

the substance

of their declarations

shall

Plaintiffs

Northern

United

the

For

18

do so

to

The Court does

19

Declaration

20

Ex 22

21

Corporation

Maupin

of Michelle

or the Declaration

of

Brown Decl

22

B

23

Defendants

Motions

Ex 17

to Strike

move to

strike

for Class Certification for failing

25

Phamrs Inc

26

Strike

at

27

basis

ECF No 247

1

US 579

Plaintiffs

the Senior

Compensation and

Plaintiffs request

the expert

to

1993

38 40

the

of Compensation

meet

report of

the standards

to

strike either the

at Lucasfilm

Benefits

Dr

Leamer

required

in

support

by Daubert

v

Merrell

Rules of Evidence

sought

report of

exclude the expert

The Court DENIES both motions

to strike

IN

PART MOTION FOR CLASS CERTIFICATION

Motion

Dow

See

Dr Murphy on

11 CV 02509 LHK

ORDER GRANTING IN PART DENYING

Intel

DENIED

of Plaintiffs

49

No

at

FRE 702

28

Case

is

and Rule 702 of the Federal

to

Brown Decl

Specialist

to strike these declarations

Pursuant to Daubert and

have likewise

at

Manager

Danny McKelly

24

509

have set forth good cause

not find that Plaintiffs

Mot
the

to

same

Case5 11 cv 02509 LHK

When

1
2

considering

by

gatekeeper

testimony offered pursuant

expert

making

Filed04 05 13

Document382

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v Cal State Univ Hayward 299 F3d 1053

reliable

Elsayed Mukhtar

4

Kumho

5

testimony

6

will help the trier of fact to understand the evidence or to determine

7

testimony

is

8

principles

and

9

facts of the

Co v

is

Carmichael 526

1

if

admissible

the experts

and

4

11

California

examination contrary evidence

Cook

F3d

12

558 564

3

data

Daubert 509

technical

testimony

1063

US

9th

a fact in

the principles

evidence

admissible

knowledge

2

the

of reliable

and methods
by

be attacked

is to

is

Expert

issue

the testimony is the product

a

Cir 2002 see

597

at

or other specialized

has reliably applied

Shaky but

to the

cross

v

and attention to the burden of proof not exclusion Primiano

9th Cir 2010

move to

Defendants

1999

scientific

the expert

R Evid 702

case Fed

10

598

US 137 150

based on sufficient facts or

methods

the trial court acts as

determination of whether the experts

a preliminary

3

Tire

702

to Rule

53

of

citing

Dr Leamers

strike

Daubert 509

US

594

at

596

testimony for three reasons

First Defendants

Court

of

Dr

criticize

14

market facts

15

F3d 1073 1080 n4

16

District

13

Leamer

Corp

17

the district

18

testimony Id

19

Primiano 598

20

strike

21

Common

22

4 9 16 and 18

23

statistical

24

methodologically flawed

See

know

for failing to

Mot

Strike

to

at

4

the

citing

messy facts

of

the case and

Champagne Metals

ignor ing

the basic

v KenMax Metals Inc

458

District

10th Cir

2006

As

the Federal

Circuit stated

in i4i

Ltd

P’ship

v

Microsoft

States

598

F3d 831

Fed Cir 2010

US

562

cert granted

Northern

United

the

For

25

Dr

attacked

role under Daubert

courts

856l

at

F3d

Leamers

Daubert 509

citing

report because

his

judge

the district

US

Conduct

at

594

While

evidence

cross

A2d

564

Primiano 598

27

the Court in understanding

28

Accordingly

the Court

596 Second

of

some

is

No

Dr Leamers

Motion

at

expert

IN

not

Mot
of

to

his

to Strike

at

Dr Leamers

be

proof

report to be helpful

issue in this antitrust

to Strike

11 CV 02509 LHK

ORDER GRANTING IN PART DENYING

move

of the type to

50
Case

is

finder

fact

Defendants

and attention to the burden of

the evidence and determining the facts

Defendants

a

not

Charts are unreliable

Rather this evidence

In addition the Court finds

DENIES

it

the Court does not find this evidence is so

as to warrant exclusion

26

2010

Regression is methodologically flawed and

examination contrary evidence

at

a gatekeeper

the Court has concerns about the probativeness

see supra Part III

F3d

is

S Ct 647

of facts underlying an experts

the correctness

Analyses and Compensation Movement

Factors

by

Under Daubert

564

at

to evaluate

131

PART MOTION FOR CLASS CERTIFICATION

case

to

Case5 11 cv 02509 LHK

1

contend that

Plaintiffs

Dr Murphys

Murphy

3

did not

4

at

5

two employee declarations

6

Chris Galy The fact that these two declarations

7

does not necessarily

8

In re Wells

9

scrutinizing declarations

Plaintiffs

Dr Murphys

the fact that

criticize

Rep at

See Murphy

make all

11

relationships

12

is

13

Accordingly

14

inadmissible

glaring reliability

n35

20

are

is

citing

from

in their declarations

FSupp 2d

527

Litigation

Reply

and Decl

of Jeff Vijungco

who work

individuals

agreements

and based simply on

untested

Decl

Dr

because

compensation

affect market

hypothesis

of the informationcontained

Fargo Home Mortg Overtime Pay

of

53

of

for his claim that the anti solicitation

meaningfully reduce the supply of information or

10

California

support

or empirical

Page51

report should be rejected as unscientific

2

10

has no theoretical

Filed04 05 13

Document382

for Defendants

closely

from Defendants employees rather than excluding them entirely in

concerns caused by

Rather than excluding

also the type of evidence to be

arising from ongoing

possible pressure

Dr

Murphys
by

attacked

report

on

light

employment

this basis the Court finds that this

evidence

contrary

Cf

untrustworthy

1060 1061

at

of

Primiano 598

F3d

at

564

Court

of

District

the Court

pursuant

DENIES

Plaintiffs request

to Daubert

and Rule

to strike

Dr Murphys

expert

report as

702

District

15

C

16

Plaintiffs

17

Defendants employees

18

26

Additional Evidentiary

Plaintiffs

Objections

to

Dr Murphys

Report

States

Dr

also seek to exclude

Murphys

report because

he

relies

on

interviews

with

Northern

United

the

For

that have

a2 B

19

ii of the Federal

20

that contains

21

Civil Procedure

22

Rule

23

motion

24

26

a2b

the facts or data considered

37 c 1

e

the party is not allowed

contend that at

Dr

by

must

ii states that an expert

the witness

if a party

that

provides

at a hearing or at a trial unless

Plaintiffs

in violation of Rule

Rules of Evidence

Rule of Procedure

Federal

26 a or

never been adequately disclosed

in

fails

forming

Murphys

was

justified

on December

25

admitted that he

26

handpicked declarants

27

from

28

123 5 120 23 12320 312 5 15 284 5 20 294 15 25 295 22 296 23

gathered

Dr Murphys

at

No

Rule of

on

38

citing

Murphy Dep

at

IN

by

a

harmless

2 2012 Dr Murphy

he conducted

with Defendants

and

9616 97 5 9821 101 3 119 14
In fact the declarations

11 CV 02509 LHK

ORDER GRANTING IN PART DENYING

Federal

report

as required

or is

51
Case

written

information that was omitted from the declarations

which included

report Reply

in interviews

a

to supply evidence

substantially

deposition

and relied on information

his opinions

to provide information

to use that information

the failure

provide

PART MOTION FOR CLASS CERTIFICATION

Case5 11 cv 02509 LHK

1

were not given to

2

unable to

3

Dr Murphy until

Defendants dispute

4

report relied on notes from the interviews

5

this issue at the Class Certification hearing

6

notes

7

may

8

request

so

he

didnt

taken

have

to strike

D

9

Tr

Dr

own

to

Murphys

on

report

to

drafting

When

the expert

specifically asked about

Mr Murphy didnt

that

Mr Hinman

Court takes

take

any

at his

word

Plaintiffs

DENIED

Supplement

12

Defendants seek to supplement

13

misleading information that they contend

Plaintiffs

to Civil Local

pursuant

Motion

a Joint Administrative

filed

14

California

Record

was

nor did he rely on any notes that anybody else

this basis is

11

the

on

Murphy

38

the report

drafting

53

Joint Administrative Motion for Leave to Supplement the Record

9 2013 Defendants

January

rely

at

of

and Dr

contributed

Mr Hinman stated

128 17 129 2 The

at

Defendants

On

10

have any of his

when

Reply

who

or anyone

Page52

his report

filed

of the interviews

Dr Murphy

that

he

right before

to the omitted details

testify

Filed04 05 13

Document382

Rules

7 11 and 73d

the record in order to

address

and

See

for Leave

to

ECF No 263

correct incomplete

and

Court

of

District

filed

their

Reply on December

Plaintiffs

10 2012

submitted in

first

See

their

Reply

Id

at

2

ECF No 247

District

15

73 d1

Pursuant to Civil Local Rule

if new

evidence has been submitted

in

the reply

States

may

16

the opposing

17

Evidence which may

18

may

19

rule as

20

Rules page limits Accordingly

21

Supplement

22

VII

party

file

within 7 days

after

the reply

filed and serve an Objection to Reply

is

Northern

United

the

For

not include

it

was

further argument

filed

the

5 pages

not exceed

close

Record

the

one month

to

is

on

of text stating its objections

motion

after

Defendants

filed

new

which

their

reply

Joint Administrative

and exceeded

Motion

this

the Civil Local

for Leave

to

DENIED

CONCLUSION

23

For the reasons set forth above

24

Motion

25

Strike

26

report and certain employee

27

Administrative

28

the Court

GRANTS

amend The

in

part and

DENIES

DENIES

to Class Certification

for Class Certification with leave

and

GRANTS

in part and

Motion

DENIES

declarations

for Leave

to

to

in

Court

part Plaintiffs request

Finally the Court

No

in

part Plaintiffs

Defendants

Motion

to strike Defendants

DENIES Defendants

to

expert

Joint

Supplement the Record in Support of Defendants Opposition

52
Case

evidence

motion failed to comply with

Defendants

Plaintiffs

to the

11 CV 02509 LHK

ORDER GRANTING IN PART DENYING

IN

PART MOTION FOR CLASS CERTIFICATION

Case5 11 cv 02509 LHK

1

IT IS

Document382

Filed04 05 13

Page53

of

SO ORDERED

2
3

Dated

April

4 2013
LUCY

H KOH

United

4

States

District Judge

5
6
7
8
9
10
11

California

12

Court

of

13
14

District

District

15
States

16
Northern

United

the

For

17
18
19
20
21
22
23
24
25
26
27
28
53
Case

No

11 CV 02509 LHK

ORDER GRANTING IN PART DENYING

IN

PART MOTION FOR CLASS CERTIFICATION

53