Xiaoning et al v. Yahoo! Inc, et al

Filing 11

CASE MANAGEMENT STATEMENT MOTION FOR AN EARLY CASE MANAGEMENT CONFERENCE AND ORDER; PROPOSED ORDER filed by Yahoo! Inc.. (Petrocelli, Daniel) (Filed on 6/21/2007)

Xiaoning et al v. Yahoo! Inc, et al

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DANIEL M. PETROCELLI ( s.^. #9^^02)
dpetrocelli a,omm.com

MATTHEW T. KLINE ( s.^. #211640) mkl^r^e ^,om^n.com

O'MELVENY & MYERS LLP 1999 Avenue Of The Stars Los Angeles , California 90067-6035 Main Number : [phone] Facsimile : [phone] Attorneys for Defendant YAHOO!, INC. and Specially Appearing Defendant YAHOO! HOLDINGS (HONG KONG), LTD. UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF CALIFORNIA OAKLAND DIVISION WANG XIAONING, YU LING, SHI TAO, and ADDITIONAL PRESENTLY UNNAMED AND TO BE IDENTIFIED INDIVIDUALS, Plaintiff, v. YAHOO!, TNC., a Delaware Corporation, YAHOO! HOLDINGS (HONG KONG}, LTD., a Foreign Subsidiary of Yahoo!, ALIBABA.COM, INC. a Delaware Corporation, AND OTHER PRESENTLY UNNAMED AND TO BE IDENTIFIED INDIVIDUAL EMPLOYEES OF SAID CORPORATIONS, Defendant. TO PLAINTIFFS; DEFENDANT ALIBABA.COM, INC.; AND THEIR COUNSEL OF RECORD: PLEASE TAKE NOTICE THAT ON Monday, July 2, 2007, at a time to be determined by the Court or on Thursday , July 26, 2007, at 2:00 p.m.-depending on whether the Court grants defendant Yahoo!, Inc .' s ("Yahoo!'s") motion to shorten time being filed concurrently Case No. C07-02151 CW DEFENDANT YAHOO!, ING'S MOTION FOR AN EARLY CASE MANAGEMENT CONFERENCE AND ORDER; PROPOSED ORDER Date: July 2 or 26, 2007* Time: TBD Location : Courtroom 2 Judge: Hon. Claudia Wílken

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* Defendant Yahoo!, Inc. ís filing concurrently herewith a motion to shorten time for the hearing on this motion from July 26, 2007 to July 2, 2007. Defendant Alíbaba.com, Inc. joins this case management motion and the motion to shorten time.
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herewith-ín Courtroom 2, 4th Floor, United States Courthouse, 1301 Clay Street, Oakland, California, defendant Yahoo!, Inc. ("Yahoo!") wí11 and hereby does move for an early Case Management Order, pursuant to Civil Local Rule 16-2(d). This Case Management Order, which proposes bifurcating certain issues and soliciting statements of interest from the political branches to address others, is sought consistent with the procedures contemplated in Sosa v. AlvarezMachain, 542 U.S. 629, 728 n.23 (2004); other Alien Tort Statute cases that similarly pose foreign policy concerns, see, e.g., Doe v. Qi, 349 F. Supp. 2d 1258 (N.D. Cal. 2004); and the Standing Order for All Judges of the N.D. Cal., Contents of Joint Case Mgmt. Statement (effective Mar. 1, 2007), which encourage parties to propose case management procedures that "facilitate the just, speedy, and inexpensive disposition" of matters by "narrowing," "bifurcat[ing]," and "streamlin[ing]" procedures. This motion, which Alíbaba.com, Inc. joins, ís based on this Notice of Motion and Motion, the pleadings on file in this matter, the following Memorandum of Points and Authorities, the Exhibits filed with this Motion, and any further argument the Court might allow. Dated: June 21, 2007 DANIEL M. PETROCELLI MATTHEW T. KLINE O'MELVENY & MYERS LLP

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By:

^ Daniel M. Petrocellí Attorneys for Defendant YAHOO!, INC.

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I. INTRODUCTION

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Pursuant to Standing Order of this Court and Civí1 Local Rule 16-2(d), Yahoo! seeks an

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early Case Management Conference and the adoption of a tailored Case Management Order to

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facilitate a reasoned approach to this litigation, promote efficiency, and narrow and focus the

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issues, while at the same time respecting the seriousness of plaintiffs' claims and defendants'

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defenses. See Standing Order for All Judges of the N.D. Cal., Contents of Joint Case Mgmt. Statement 15, 16, 20 (effective Mar. 1, 2007). Plaintiffs seek to hold Yahoo! and the other

defendants liable under the Alien Tort Statute for alleged acts of torture and violations of human rights committed by officials of the People's Republic of China. The complaint acknowledges that none of the defendants committed the alleged abuses; the allegation ís that defendants aided and abetted the Chinese government by providing ít with information about plaintiffs, in response to law enforcement requests. The Supreme Court has cautioned that cases of this sort raise foreign policy concerns and must be handled with "great caution" and ín consultation with the political branches of governrr^ent. Sosa v. Alvarez-Machain, 542 U.S. 629, 728 n.23 (2004). Cases seeking to hold corporations liable for the acts of foreign government officials pose particular concern, because they expand the number of ATS suits that may be brought and provide more direct financial incentives to bring such suíts.^ Because this case challenges several decades of U.S. foreign policy toward China, seeks to adjudge the actions of the Chinese government, and seeks to impose new rules for responding to law enforcement requests for information, we believe the Court should secure a Statement of Interest from the United States before proceeding. The proposed Case Management Order reflects the time it wí11 take to solicit the views of the United States, while at the same time setting a schedule to address other issues in the interim. Yahoo! proposes that this case be managed in phases, with a hold on discovery unless and until the Court determines the case may proceed. The proposed Order initially divides the case 1 See, e.g., Sosa, 524 U.S. at 732-33 nn.20 & 21; Brief of the United States as Amícus Curiae, The Presbyterian Church of Sudan v. Talisman, United States Court of Appeal for the Second Círcuít, Case No. 07-0016, at 19-22 (filed May 15, 2007) ("U.S. Amicus Br.") (attached as Ex. A).

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into two phases: · Phase I: The Court immediately resolves whether plaintiffs have named the correct corporate parties, whether the Court has jurisdiction over the Yahoo! Hong Kong defendant, and whether plaíntíffs can prosecute this case, ín light of the unique circumstances that they cannot give testimony or communicate with their counsel; · Phase II: After the Court obtains a Statement of Interest by the appropriate branches of governrr^ent, and after jurisdiction and party issues are resolved, the Court can address the varied legal issues presented by plaíntíffs' claims asserted under federal, international, and California law. As described below, Yahoo! proposes a briefing schedule for Phases I and II. Yahoo! requests this motion be heard on shortened time, on July 2, 2007, so that these case management issues may be considered and the case streamlined before a great deal of work ís done ín the coming month. Also, a hearing on this date would make passible the attendance of Yahoo!'s lead counsel, who thereafter wí11 be on along-scheduled vacation until July 23. Defendant Alíbaba.com, Inc. joins in these motions. II. PLAINTIFFS' ALLEGATIONS Plaintiffs Wang Xíaoning and Shi Tao are Chinese citizens. See Amended Complaint for Tort Damages ^¶ 10, 12 (filed May 29, 2007) ("Am. Compl."}. Both men are currently serving prison terms in China. See id. Wang's wife, Yu Líng, ís also named as a plaintiff ín this suit; she alleges she was harmed by her husband's mistreatment at the hands of the Chinese authorities. See id. ¶ 11. The named defendants are Yahoo!, Inc.; Yahoo Holdings (Hong Kong) Ltd. ("YHKL"); and Alíbaba.com, Inc. The essence of the complaint ís that plaíntíffs published prodemocracy and other literature using Yahoo! China group lists or email accounts, and that the Chinese government requested information from YHKL to identify, charge, and try plaíntíffs for violations of Chinese law. The complaint alleges that Chinese officials tortured and violated plaíntíffs' human rights and seeks to hold defendants liable for the acts of the Chinese government. See id. ^¶ 30-43.

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Plaintíffs seek to hold defendants liable under three federal statutes (the Alien Tort Statute, 28 U.S.C. § 1350 ("ATS"); the Torture Víctím Protection Act, 28 U.S.C. § 1350 ("TVPA"); and the Electronic Communications Privacy Act, 18 U.S.C. §§ 2701, 2702, 2511 ("ECPA")), a variety of international law sources , and on a number of California statutory and common law theories ( including battery, assault, false imprisonment , intentional infliction of emotional distress , negligence, and unfair business practices ). See Am. Compl. at 17:5-28:5. Plaintíffs seek to hold defendants liable on aiding and abetting and other theories of vicarious liability. See, e.g., id. at ¶¶ 2, 60, 90. Plaintiffs seek, í^ter alia, compensatory and punitive damages, as well as declaratory and injunctive relief. See id. at 29:22-30:8. III. THE COURT SHOULD SEEK THE VIEWS OF THE POLITICAL BRANCHES GIVEN THE SERIOUS POLICY QUESTIONS PRESENTED BY THIS CASE. As this Court and United States Supreme Court both have observed, ATS cases of this sort are "unusual" and must be approached with "great caution." Doe v. Qi, 349 F. Supp . 2d 1258, 1273 (N.D. Cal. 2004); Sosa v. Alvarez-Machain, 542 U.S. 629, 728 (2004). Caution ís essential because such cases seek to compel the courts to pass judgment on the acts of governrr^ent off^cíals of foreign sovereign nations, thereby raising foreign policy and justiciability concerns. See Sosa, 524 U.S . at 727. Consequently , there is a "high bar" to asserting such claims, and courts are charged with the duty of "vigilant doorkeeping" to make sure ATS claims fall within the "narrow class" of claims allowed. Id. at 728; Qi, 349 F. Supp. 2d at 1291. Such doorkeeping, of necessity , must take into account the "policy of case-specific deference to the political branches" and includes seeking the political braches and other governments ' views before allowing such a case to proceed. Sosa, 524 U.S. at 733 n. 21; Qi, 349 F. Supp. 2d at 1291, 1296-1303. This particular ATS case has unique potential to affecting " impact foreign relations." Qi, 349 F. Supp. 2d at 1266. It challenges several decades of U.S. foreign policy toward China, in that one of its stated aims is to curtail American investment ín China.2 Moreover, the gist of
2 Compare World Organization for Human Rights USA, "Major lawsuit filed by Human Rights USA against Yahoo! highlights the ínternet company's complicity ín human rights abuses in China, (Apr. 18, 2007), http:llhumanrí^;htsusa.bhgspot.com/search/labellhuman%20^íghts (Websíte of Plaintíffs' Lead Counsel: "jTJhis lawsuit ought to convince other U. S. companies to C07-02151 CW
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plaintiffs ' claim is that when Chinese law enforcement officials requested information from defendants , defendants should have refused the request on the ground the information provided could potentially be used to violate plaintiffs ' human rights . Forcing Internet companies, or any

company, into this quasi -judicial role of evaluating the merits of law enforcement requests, not only puts companies into an impossible position (requiring them either to break the law and refuse the request or risk liability in a case of this sort), but would impermissibly delay and

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hamper legitimate law enforcement efforts. The U.S. government, foreign governments, law enforcement agencies, and the ínternatíonal business community no doubt would have serious and justifiable concerns about the creation of such a rule. It ís well settled that the views of the appropriate branches of government should be sought ín ATS cases , where, as here , plaintiffs' case potentially violates the "act of state" doctrine , poses nonjusticíable "political questions ," or should be dismissed under the doctrine of "ínternatíonal comity."4 The Case Management Order, as described below, affords the Court time to solicit and consider these views and the parties the opportunity to brief them. think twice before doí^g business with the Chinese government ...."), with U.S. Dept of State, Bureau of East Asian and Pacific Affairs, Background Note: China (January, 2007), http://www.state. ov/r/pa/ei/b^n/18902.htm ("U.S. China policy has been remarkably consistent. For seven consecutive administrations , U. S. policy has been to encourage China's opening and integration into the global system . As a result, China has moved from being a relatively isolated and poor country to one that ís a key participant ín ínternatíonal institutions .... The State Department ' s annual China human rights and religious freedom reports have noted China's welldocumented abuses of human rights ..... At the same time, China 's economic growth and reform since 1978 has improved dramatically the lives of hundreds of míllío^s of Chínese, increased social mobility, and expanded the scope of personal freedom.") (emphases added). ^ See "Some people think the Internet is a bad thing ," (June 6, 2007), http://www.^^^ínternetl.co. uklamn^st^/rrepressíb1e01J (video webcast at 1:02:05 to 1:02:33) (Plaintiffs' Lead Counsel: i "The bottom line for Yahoo and the other Internet companies that we're concerned about ís that they must be held accountable for their complicity ín these abuses, they must ask themselves, before any new requests for information are responded to, whether it would result i^ the arbitrary arrest and torture of i^ternet users who have committed no real crimes , and they must not allow themselves to become complicit í^ major human rights abuses .") ( emphasis added). a See, e.g., Sosa, 524 U.S. at 733 n. 21; Sarei v. Rio Tito, _ F.^d _, 2007 WL 1079901, at *714 (9th Cír. Apr. 12, 2007); Qi, 349 F. Supp. 2d at 1291, 1296-1303; see also Banco National de Cuba v. Sabbatino , 376 U.S. 398 (1964); Vieth v. Jubelirer, S14 U.S. 267, 277-78 (2004); American Ins. Ass's v. Garamendi, 539 U.S, 396, 414 (2003); Societe Nationale I^dustrielle Aerospatiele v. United States Dist. Court for the Dist. of Iowa, 482 U.S. 522, 544 n.27 (1987).
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IV.

THIS COMPLICATED LEGAL ISSUES IN THIS CASE SHOULD BE RESOLVED IN A LOGICAL, SEQUENTIAL FASHION. This case should be divided into two initial Phases. In Phase I, whích would commence

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immediately, the parties and Court would address three threshold issues: (1) whether this Court has personal jurisdiction over YHKL; (2) whether plaíntíffs have any basis for bringing suit against the named Alíbaba defendant; and (3) the complicated issue of how Wang and Shí intend to prove their case, given the fact of their incarceration and presumed inability to give testimony or communicate with the parties or the Court. In Phase II, and with the anticipated benefit of the political branches' views regarding this case, the parties and Court would address merits issues, such as whether (1) this case ís justiciable or violates the "act of state" doctrine; (2) plaíntíffs have stated a claim under the ATS, TVPA, ECPA, and other sources of law on whích they rely; and (3) whether plaíntíffs' California state law claims are subject to a special motion to strike under the so-called "Anti-SLAPP" statute. A. (1) Phase I: Threshold , Procedural Issues. Personal Jurisdiction. Before the parties' and judicial resources are unnecessarily

expended, the Court should determine whether ít has personal jurisdiction over YHKL. YHKL ís a foreign company that has never purposefully availed itself of California, and its contacts with California are minimal. The fact that YHKL ís a wholly owned subsidiary of Yahoo!, a California company, does not confer personal jurisdiction over YHKL. See, e.g., Doe I v. Unocal 248 F.^d 915, 925-26 (9th Cír. 2001). YHKL ís an independent Hong Kong business, focused on serving a Hong Kong clientele. It employs over 100 employees ín Hong Kong, is well capitalized, and observes corporate formalities. It is not an alter ego or mere agent. Plaintiffs' complaint lacks any allegations to the contrary. Whether YHKL belongs in this case should be addressed at the outset, ín Phase I. (2) Alíbaba. Plaintiffs conclusoríly plead that the information concerning them

allegedly disclosed to the Chinese governrr^ent was provided by "Defendants Yahoo! Inc., its agents, wholly-owned subsidiaries Yahoo! HK and Yahoo! China, and its strategic partner

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Alibaba.com, Inc." Am. Compl. ^ 2 (emphasis added). Alibaba.com, Inc. does not, and never

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did, maintain any information about Yahoo ! China users and so could not possibly have participated ín any way ín the disclosures upon which plaintiffs' claims are based. Moreover, the complaint makes clear that it was not untí12005 -well after the alleged wrongful disclosures were made in 2002 and 2004-that any Alíbaba entity even had a connection with the operation of Yahoo! China. Id. ^ 18. Alíbaba.com, Inc. should be dismissed from this case immediately. This threshold issue should be lítígated ín Phase I before Alíbaba.com, Inc. is forced to expend resources litigating the many other issues raised by this case. (3) Plaintiffs' Proffer. A key threshold issue to be discussed at the first Case

Management Conference and, if need be, lítígated , is how plaintiffs wí11 be able to prove their case and defendants defend it. Wang and Shí are currently serving lengthy prison terms in China. See Am. Comp1. ¶¶ 10, 12, 39, 42, 60, 63. According to the complaint, Wang and Shí are allowed very little contact with the outside world. Indeed , the complaint alleges that Wang's access to visitors ís "strictly limited" and that "[p ] rison officials scrutinize all written correspondence to and from Wang, severely limiting his ability to communicate with anyone outside the prison, including his wife." Id. ^ 43. Similarly, Shi is said to be housed at a high-security prison, at which his written communications are monitored , and ít ís alleged "[h]e has very little contact with people outside the prison." Id. ^ 62. There is no reason to believe that Wang or Shi will be allowed any contact with foreign attorneys (their named counsel in this case or defendants' lawyers ), especially for purposes of prosecuting this case . Plaintiffs ' counsel wí11 not be able to take their deposition; and neither wí11 defendants ' counsel . According to the U.S. Department of State, "ít does not appear possible to take the deposition of a witness located ín China.... China does not recognize the right of persons to take depositions , and any effort to do so could result in the detention and/or arrest of U. S. citizen participants."5 The majority of plaintiffs' causes of action, íf not all of them, depend on admissible proof that defendants caused plaintiffs to suffer abuse at the hands of the Chinese government. U.S. Dept of State, China Judicial Assistance , http:// travel.state .^;avJlawl info/judicial/iudícíal _^^ 4.htm1( boldíng ín original) (last accessed on June 11, 2007). s

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Although we have raised the issue, plaíntiffs have not explained to date how they will provide such proof. Any attempt by Yu or other parties to testify as to what Wang and Shi told them, or mere reliance on generalized reports about abuses ín China, is inadmissible hearsay that does not fall within any recognized exception to the rule. See Qi, 349 F. Supp. at 1310 n.39. Under these circumstances, we believe ít is prudent and reasonable to require plaíntiffs' to make a factual proffer identifying the witnesses and other proof available of their claims. (4) A Phase I Briefing Schedule. Defendants propose the following Phase I briefing schedule: opening briefs addressing these three issues should be due July 27, 2007; oppositions should be due August 27, 2007; and replies should be due September 14, 2007. B. Phase II: Disposítive Motions Informed by Governments' Views

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We request that the Court solicit the views of the U.S. government regarding this case. The Court should also ask the U.S. government to solicit the views of other nations regarding the foreign policy and law enforcement issues this case raises. The Court should request responses from the government by the beginning of September, íf possible. With these statements in hand, the parties wí11 be able to brief a number of legal issues this case poses: (1) Is this Case Justiciable? Given the foreign policy and impact this case could have on law enforcement, this Court will need to determine íf the case violates the "act of state" doctrine, poses nonjusticiable "political questions," or should be dismissed under the doctrine of "international comity." See supra n. 4. Waiting for the government's views on these issues is essential to the analysis. See id. (2) Can Claims Be Stated Under the ATS? Thís statute ís the source of great controversy. ATS issues to be litigated, include: · whether aiding and abetting theory of liability exists under the ATS;^

^ See, e.g., Sarei v. Río Tito, _ F.^d _, 2007 WL 1079901, at *5 (9th Cír. Apr. 12, 2007) (concluding that such a claim was not frivolous, but stopping short of recognizing such a claim); U.S. Amicus Br. at 12-27 (arguing against aiding and abetting liability); Curtis A. Bradley et al., Sosa, Customary International Law and the Continuing Relevance of Erie, 120 HARV. L. REV. 870, 924-29 (2007) (discussing debate; concluding, that in light of Sosa, only Congress and the President through legislation, and not the courts, can impose such liability).
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assuming such a theory exists, whether corporate defendants may be held liable, given that international - law norms are applicable only to states;

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assuming corporations may be held liable, whether these defendants may be liable, given there ís no allegation they intended for plaintiffs to suffer any harm;8

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whether plaintiffs' torture claims under the ATS are preempted by the TVPA;9 whether plaintiffs ' remaining ATS claims , based on norms against arbitrary arrest and forced labor, are of sufficiently " definite content and acceptance " to be actionable under the ATS;^o

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whether the international-law sources on which plaintiffs rely support ATS claíms;^^ and whether plaintiffs ' factual allegations are specific enough even to state a claim, particularly as to plaintiff Shí, for whom no specific allegations are made and ít ís merely assumed he was tortured because he is incarcerated at a notoriously abusive prison, see, e.g., Am. Comp1. ¶¶ 57, 64.

Litigating all these issues will take time and ís costly , and their resolution is best informed after giving the government an opportunity to express its views. YHKL and Alíbaba.com, Inc., moreover , should not be forced to brief these issues íf they do not belong in this case. ^3) Can Claims Be Stated Under the TVPA? Plaintiffs' TVPA claims raise similar questions and equally call out for the government ' s views. The questions include: · whether the TVPA applies only to individuals , not corporatíons;^^

7 See, e. g., RESTATEMENT (THIRD) OF THE FOREIGN RELATIONS LAW OF THE UNITED STATES, Part I, ch. 1, introductory note ( 1987) (noting that international law generally applies to states).

^ See, e.g., Rome Statute of the Int'1 Criminal Court, art. 25(3), U.N. Doc. A/CONF.183/9 (1998) (recognizing intent requirement); Presbyterian Church of Sudan v. Talisman Energy, 453 F. Supp. 2d 633, 668 (S.D.N.Y. 2006} ( same). 9 See E^ahoro v. Abubakar, 408 F.^d 877, 886 (7th Cír. 2005) (concluding the TVPA preempts torture claims under the ATS). ^o Sosa, 542 U.S. at 732. ^^ See id. at 734 (noting that the International Covenant on Civil and Political Rights and the Universal Declaration of Human Rights, on which plaintiffs rely here, have "little utility" ín establishing norms enforceable under the ATS).

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whether defendants can be held líable when they did not engage ín the acts of
torture; ^ ^

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whether even if the TVPA could be construed to impose some form of aiding and abetting liability, it would not impose such líabilíty on individuals who were not themselves acting under the color of law;^^

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and whether plaintíffs have alleged sufficient facts to make out their claíms.

(4) Wí11 the Remaining Claims Survive ? Plaintiffs' claíms under Calífornía common law, the California Unfair Competition Law ("UCL" ), and ECPA raise similarly complex questions . For example, the Court wí11 need to decide whether these sources of law can be applied extraterritoríally . ^s The Court wí11 also need to decide whether plaintiffs' claíms suffer from other defects, including whether some are time-barred.^^ Finally, plaintiffs' California state law claíms are subject to a special motion to strike. Invoking Calífornía law, plaintíffs seek to hold Yahoo! líable for communications allegedly made by its agent, YHKL, to the Chinese government. See, e. g., Am. Compl. ¶^ 40, 54 , 60. Such communicative acts with government officials cannot give rise to claims for civil líabilíty. See CAL. C v. Co^^E § 47(b); Beroiz v. Wahl, 100 Cal . Rprt. 2d 905 , 909-12 ( Cal. Ct. App. 2000). Calífornía law provides Yahoo! immediate means to assert this defense, pursuant to C^,L. C v.

See, e.g., Mujica v. Occidental Petroleum Corp., 381 F. Supp. 2d 1164, 1175-76 (C.D. Cal. 2005) (TVPA does not apply to corporations). ^^ C f 28 U.S.C. § 1350, Note. See In re South African Apartheid Litíg., 346 F. Supp. 2d 538, 555 (S.D.N.Y. 2004 ) ("Since a prerequisite to TVPA líabilíty ís that the individual be acting under color of law, this Court finds that creating alder and abettor líabilíty for private actors not acting under color of law would be inconsistent with the statute and precluded by Central Bank."). ^s See, e.g., United States v. Toscanino, 500 F.2d 267, 279 (2nd Cír. 1974) (refusing to apply ECPA extraterrítoríally); Norwest Mortgage, Inc. v. Superior Court, 72 Cal. App. 4th 214, 223 (1999) (refusing to apply UCL extraterrítoríally); Argo v. Club Med, Inc., 22 F.^d 1464 (9th Cír. 1994) (Californian's claim against foreign employer for injury suffered in France governed by French law); Amicus Br. at 5-12 (arguing the ATS does not apply extraterrítoríally). ^^ To take just one example , Yu's intentional infliction of emotional distress claim fails because she was not the target of any of the conduct alleged-her husband allegedly was. See, e.g., Christensen v. Superior Court, 54 Ca1.3d 868, 905-06 (1991). ^^

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PROC. § 425.16, the so-called "Anti-SLAPP" statute. See Less v. Ciba-Geigy Corp. USA, 317 F.^d 1097, 1109 (9th Cir. 2003) (affirming granting of SLAPP motion). The Anti-SLAPP statute provides that a SLAPP motion should be filed within 60 days of service of the operative complaint and the hearing on a SLAPP motion should be held "not more than 30 days after the service of the motion." CAL. Cw. PROC. § 425.16(f). If the Court agrees to the phased approach Yahoo! proposes, and if plaintiffs consent to the hearing on the SLAPP motion occurring more than 30 days after the motion ís filed, then Yahoo! could file its SLAPP motion and the Court could hear it pursuant to the Phase II briefing schedule below. See Greka Integrated, Inc. v. Lowrey, 35 Cal. Rptr. 3d 684, 689 (Cal. Ct. App. 2005). If not, Yahoo! wí11 need to file this motion sooner, and it wí11 need to be heard sooner. (5) A Phase II Briefing Schedule. These issues are complex and no doubt disputed.

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They require extensive brief ng, but may not need to be briefed at all after Phase I. To allow time for Phase I and to solicit and receive Statement of Interest letters, opening briefs on Phase II issues should be due October 8, oppositions due October 29, and replies due November 7. V. STAYING DISCOVERY Only if plaintiffs' case survives Phases I and II, should merits discovery begin. A serious issue and impediment ín this case ís whether defendants may produce docurr^ents or interview witnesses related to the requests for information made by the Chinese government without violating Chinese law and subjecting defendants, their employees, and counsel to criminal sanctions. A Hong Kong Privacy Commissioner has already ruled ín a parallel case that he would not compel the production of such written materials, because producing such materials could violate Chinese "State Secret Laws" and expose defendants to "serious penal consequences."17 Similarly, China counsel have advised us that merely interviewing witnesses about these events could subject the witnesses and our lawyers to prosecution.

Office of the Privacy Commissioner for Personal Data, Hong Kong, Report Published under Section 48 (2) of the Personal Data (Privacy) Ordinance (Cap. 486), Report No.: Rß7-3619, at ¶^ 7.17-7.18 ( issued Mar. 14, 2007); see also id. ^^ 7.3-7.20 (attached as Exhibit C),

^^

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Before this Court grapples with such extraordinary issues, which directly raise foreign policy concerns, it should first determine whether this case is justiciable , whether plaintiffs can prosecute ít, and whether the case should be dismissed for a variety of reasons . This can likely be accomplished by November. Thereafter, the Court wí11 be able to determine whether this case should be allowed to proceed. If the Court answers this question ín the negative, the case wí11 be dismissed, foreign policy and justiciability concerns wí11 have been respected, and plaintiffs wí11 be entitled to appeal . If the Court answers the question in the affirmative , the parties can set a schedule to address discovery and move the case toward summary judgment and trial, íf need be. VI. MEET AND CONFER-PLAINTIFFS ' POSITION We have explored these and other difficult threshold issues with plaintiffs' counsel. Plaintiffs ' counsel have indicated they would like this case to proceed on the more traditional track. Plaintiffs also object that this motion ís contrary to the Court's June 19, 2007 scheduling order and ís premature , given the parties have not gone through the regular ADR process.18 To respond briefly, the stipulation and accompanying declaration that gave rise to the Court's June 19 order explicitly mentioned that Yahoo! would file this motion "promptly."19 As for ADR, Yahoo is Proposed Order accompanying this motion provides: the phased approach and briefing schedule set forth in Yahoo!' s Motion shall be followed. By no later than August 17, 2007, the parties shall " meet and discuss " 18 Plaintiffs ' precise position, which they asked us to reproduce ín this motion, ís: Plaintiffs have indicated that they object to both the Defendants ' Motion seeking a special case management conference , and to the Defendants' request for an early (July 2) date for a hearing on that Motion , on the grounds that, first, these requests are at variance with the new timetable ordered by the Court, and more specíf^cally with the justification given by the Defendants for requesting changes ín that timetable , and second, because it ís premature to raise the matters the Defendants seek to address before the Court before the regular ADR and case management process takes place. Email from M. Sklar to M. Kline (June 20, 2007). ^9 See Joint Stíp. Request For Order Enlarging Tíme To Respond To Compl. & Extending Initial Deadlines ¶ 3 (Bled June 18, 2007 ) (defendants " reserve[íng] their right to seek further enlargement of time and propose a modified case management plan consistent with the Standing Order for All Judges of the Northern District of California, Contents of Joint Case Management Statement (effective Mar. 1, 2007)"); Decl. Of Daniel Petrocellí ^ 9 (filed June 18, 2007) ("Defendants anticipate promptly filing a motion to address case management issues.").

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Case 4:07-cv-02151-CW

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VII.

"early settlement" and "ADR. " Otherwise, all deadlines set forth in this Court's June 19, 2007 order are hereby superseded by this Order. (Emphasis added.) CONCLUSION For the foregoing reasons, Yahooi's motion should be granted. Dated: June 21, 2007 DANIEL M. PETROCELLI MATTHEW T. KLINE O'MELVENY & MYERS LLP

By: Daniel M. Petrocellí Attorneys for Defendant YAHOO!, INC.

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v.

UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF CALIFORNIA OAKLAND DIVISION WANG XIAONING, YU LING, SHI TAO, and ADDITIONAL PRESENTLY UNNAMED AND TO BE IDENTIFIED INDIVIDUALS, Plaintíff, Case No. C07-02151 CW [PROPOSED ] OØER REGARDING DEFENDANT YAHOO!, ING'S MOTION FOR AN EARLY CASE MANAGEMENT CONFERENCE AND ORDER Judge: Hon. Claudia Wílken

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28 II CC1:765044

YAHOO!, INC., a Delaware Corporation, YAHOO! HOLDINGS (HONG KONG), LTD., a Foreign Subsidiary of Yahoo!, ALIBABA.COM, INC. a Delaware Corporation, AND OTHER PRESENTLY UNNAMED AND TO BE IDENTIFIED INDIVIDUAL EMPLOYEES OF SAID

coØOØ^^o^^s,

Defendant.

Having considered Defendant Yahoo!, Inc.'s Motion For An Early Case Management Conference and Order ("Yahoo!'s Motion"), the papers filed in response thereto, all other argument, and the entire record in this case, ít is hereby ORDERED that the motion is: GRANTED ,and the phased approach and briefing schedule set forth ín Yahoo!'s

Motion shall be followed. By no later than August 17, 2007, the parties shall "meet and discuss" "early settlement" and "ADR." Otherwise, all deadlines set forth ín this Court's June 19, 2007 order are hereby superseded by this Order. DENIED SIGNED on the day of , 2007.

The Honorable Claudia Wílken Judge, United States District Court for the Northern District of California
C07-02151 CW [PROPOSED] ORDER RE: YAHOO!'S MOT. FOR AN EARLY CASE MANAGEMENT