Friedman v. Apple, Inc. et al

Filing 29

Transcript of Proceedings held on 07-15-11, before Judge Ronald M. Whyte. Court Reporter/Transcriber Lee-Anne Shortridge, Telephone number 408-287-4580. Per General Order No. 59 and Judicial Conference policy, this transcript may be viewed only at the Clerks Office public terminal or may be purchased through the Court Reporter/Transcriber until the deadline for the Release of Transcript Restriction.After that date it may be obtained through PACER. Any Notice of Intent to Request Redaction, if required, is due no later than 5 business days from date of this filing. Release of Transcript Restriction set for 11/9/2011. (las, ) (Filed on 8/11/2011)

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UNITED STATES DISTRICT COURT

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NORTHERN DISTRICT OF CALIFORNIA

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SAN JOSE DIVISION

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IN RE: APPLE AND AT&T
IPAD UNLIMITED DATA PLAN
LITIGATION,

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ALL CONSOLIDATED ACTIONS

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C-10-02553 RMW
SAN JOSE, CALIFORNIA
JULY 15, 2011
PAGES 1-12

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TRANSCRIPT OF PROCEEDINGS
BEFORE THE HONORABLE RONALD M. WHYTE
UNITED STATES DISTRICT JUDGE

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A P P E A R A N C E S:

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FOR THE PLAINTIFF:

LIEFF, CABRASER, HEIMANN
& BERNSTEIN
BY: MICHAEL W. SOBOL AND
ALLISON ELGART
275 BATTERY STREET, 29TH FLOOR
SAN FRANCISCO, CALIFORNIA 94111

FOR DEFENDANT
AT&T:

MAYER BROWN, LLP
BY: ARCHIS A. PARASHARAMI
1999 K STREET, N.W.
WASHINGTON, D.C. 20006

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APPEARANCES CONTINUED ON NEXT PAGE

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OFFICIAL COURT REPORTER: LEE-ANNE SHORTRIDGE, CSR, CRR
CERTIFICATE NUMBER 9595
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APPEARANCES (CONTINUED)

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FOR DEFENDANT
AT&T:

CROWELL & MORING
BY: KATHLEEN TAYLOR SOOY
1001 PENNSYLVANIA AVENUE, N.W.
WASHINGTON, D.C. 20004

FOR DEFENDANT
APPLE:

MORRISON & FOERSTER
BY: STUART PLUNKETT
425 MARKET STREET
SAN FRANCISCO, CALIFORNIA

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94105

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SAN JOSE, CALIFORNIA

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P R O C E E D I N G S

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JULY 15, 2011

(WHEREUPON, COURT CONVENED AND THE
FOLLOWING PROCEEDINGS WERE HELD:)

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THE CLERK:

LAST MATTER ON THE CALENDAR,

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C-10-02553, IN RE: APPLE AND AT&T IPAD UNLIMITED

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DATA PLAN LITIGATION, ON FOR A MOTION TO COMPEL

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ARBITRATION AND TO STAY CLAIMS.

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THE COURT:

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MS. ELGART:

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THE CLERK:

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THANK YOU FOR YOUR PATIENCE.

MS. ELGART:

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YOUR APPEARANCES.
GOOD MORNING, YOUR HONOR.

ALLISON ELGART FOR THE PLAINTIFFS.

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GOOD MORNING, YOUR HONOR.

MR. SOBOL:

GOOD MORNING, YOUR HONOR.

MICHAEL SOBOL FOR THE PLAINTIFFS.

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MR. PARASHARAMI:

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HONOR.

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GOOD MORNING, YOUR

MOBILITY.

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ARCHIS PARASHARAMI FOR THE DEFENDANT AT&T

MR. PLUNKETT:

STUART PLUNKETT FOR

DEFENDANT APPLE.
MS. SOOY:

GOOD MORNING, YOUR HONOR.

KATHLEEN SOOY FROM CROWELL & MORING FOR AT&T.
THE COURT:

IT SEEMS TO ME GIVEN THE --

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THAT THIS IS A CONTENTION THAT THE ARBITRATION

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CLAUSE IS VALID AND THE CLAIMS NEED TO BE
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ARBITRATED, EXCEPT FOR HANNA'S CLAIM, AND I DON'T

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SEE A BASIS FOR ARBITRATING HANNA'S CLAIM.

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THE ARGUMENT THAT THE ARBITRATION

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AGREEMENT HE SIGNED WAS BROAD ENOUGH TO COVER THE

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PRODUCT HERE I JUST THINK IS -- TO SAY THAT IT GOES

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BEYOND IPADS IS -- IT JUST STRIKES ME AS

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UNREASONABLE.

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AND JUST THINKING ABOUT IT MYSELF,
THERE'S NO WAY I WOULD HAVE THOUGHT THAT BY

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AGREEING TO THAT ARBITRATION AGREEMENT, I WAS

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AGREEING THAT YOU COULD ARBITRATE A DISPUTE THAT

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DIDN'T DEAL WITH THE IPAD.

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I MEAN, WITH -- I'M SORRY -- THAT YOU

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COULD ARBITRATE DEALING WITH THE IPADS BECAUSE THE

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ARBITRATION CLAUSE WAS WITH RESPECT TO THE -- AS I

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RECALL, IT WAS THE IPHONES.

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SO THAT'S WHERE I AM.

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MR. PARASHARAMI:

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THANKS, YOUR HONOR.

ARCHIS PARASHARAMI FOR AT&T.
SO WE AGREE WITH VIRTUALLY ALL OF YOUR
TENTATIVE RULING.

I THINK CONCEPCION IS CLEAR.

AND I'M GOING TO TRY TO MAKE THINGS A
LITTLE BIT EASIER FOR THE COURT TODAY.
WHILE WE RESPECTFULLY DISAGREE ON HANNA,
WE THINK IT MAKES SENSE TO NARROW THE ISSUES BEFORE
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THE COURT.
SO WITHOUT CONCEDING THE POINT, WE'D BE

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PREPARED TO WITHDRAW THE PORTION OF OUR ARBITRATION

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MOTION WITH RESPECT TO HANNA IF THE COURT'S WILLING

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TO ALLOW US TO DO SO, AND MY COLLEAGUE, MS. SOOY,

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HAS INFORMED THE PLAINTIFFS OF THAT PRIOR TO THE

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HEARING TODAY.

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THE COURT:

WHAT'S THE DIFFERENCE BETWEEN

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WITHDRAWING IT AND HAVING IT DENIED?

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MR. PARASHARAMI:

I SUPPOSE MAYBE IT

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MAKES IT MORE EASY FOR YOUR HONOR TO ENTER AN ORDER

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FOCUSSED ON CONCEPCION AND THE ARBITRATION

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AGREEMENTS WITH RESPECT TO THE IPAD.

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I MEAN, IF YOUR HONOR DOESN'T THINK IT'S
APPROPRIATE, I SUPPOSE YOU COULD DENY IT.

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THE COURT:

OKAY.

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MR. PARASHARAMI:

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MS. ELGART:

THANK YOU, YOUR HONOR.

YOUR HONOR, JUST AS TO THAT

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LAST POINT ABOUT HANNA, IF -- WE BELIEVE THE COURT

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SHOULD ENTER AN ORDER AS TO HANNA DENYING THE

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MOTION TO COMPEL ARBITRATION WITH PREJUDICE IN

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ORDER TO PROTECT THE ABSENT CLASS MEMBERS.

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THE -- HANNA REPRESENTS A SUBSET OF THE

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CLASS OF SIMILARLY SITUATED CLASS MEMBERS, SO WE

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WOULD ARGUE THAT THAT MOTION SHOULD NOT BE ABLE TO
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BE RENEWED AS TO THOSE PEOPLE WHEN WE TRY TO

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CERTIFY OUR CLASS LATER ON.

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SHOULD BE ENTERED.

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SO WE THINK THE ORDER

AND AS TO CONCEPCION, YOUR HONOR, WE

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BELIEVE THAT THIS CASE IS DIFFERENT FROM

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CONCEPCION.

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CONCEPCION MADE VERY CLEAR THAT THE

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F.A.A. SAVINGS CLAUSE REMAINED IN TACT AND THAT

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SECTION II APPLIES FOR GENERALLY APPLICABLE

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CONTRACT DEFENSES, AND WE SUBMIT THAT WE HAVE A

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GENERALLY APPLICABLE CONTRACT DEFENSE HERE.

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OUR ARGUMENT HAS TO DO WITH THE
ARBITRATION PROVISION IN ITS ENTIRETY.
SO WHILE CONCEPCION PREEMPTED THE

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DISCOVER BANK RULE, IT DID NOT PREEMPT ALL

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GENERALLY APPLICABLE CONTRACT DEFENSES.

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AND HERE CALIFORNIA CONTRACT CODE, CIVIL
CODE 1668 -THE COURT:

WHICH DISCOVER BANK WAS

DECIDED ON.
MS. ELGART:

DISCOVER BANK WAS DECIDED ON

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THAT IN PART, BUT DISCOVER BANK RELIED ON THE FACT

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THAT THERE WAS A CLASS ACTION WAIVER CLAUSE.

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WE'RE NOT RELYING ON JUST THE CLASS
ACTION WAIVER CLAUSE HERE.
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WE'RE LOOKING AT THE ENTIRE ARBITRATION

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PROVISION, AND WE THINK THAT THE ENTIRE PROVISION

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ITSELF SERVED TO EXEMPT AT&T FROM LIABILITY FOR

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THEIR FALSE ADVERTISING.

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WE THINK AT&T HAD TO HAVE KNOWN WHEN THEY

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OFFERED THE IPADS UP FOR SALE WITH UNLIMITED DATA

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PLANS THAT THEY WERE GOING TO REMOVE THAT OPTION,

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AND BY PUTTING AN ARBITRATION PROVISION INTO THEIR

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DATA SERVICE PLAN, WE THINK THEY SERVED THAT --

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THAT SERVES AS THEIR OBJECT -- THE OBJECT OF

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PUTTING THAT IN THERE WAS TO EXEMPT THEM FROM

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LIABILITY FOR THEIR FRAUD AND UNLAWFUL CONDUCT.

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AND WE THINK DISCOVERY HERE WOULD

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DEMONSTRATE THAT THE PURPOSE BEHIND AND THE

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MOTIVATION BEHIND PUTTING THAT ARBITRATION

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PROVISION INTO THEIR SERVICE AGREEMENT WAS TO

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EXEMPT THEM FROM LIABILITY, NOT TO MAKE THINGS

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EASIER FOR CONSUMERS BY GOING TO ARBITRATION, BUT

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TO ACTUALLY SERVE TO FRUSTRATE CONSUMERS' EFFORTS

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TO PARTICIPATE IN THE CIVIL JUSTICE SYSTEM.

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WE THINK THE CASE HERE REQUIRES A

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PARTICULARIZED EVIDENTIARY ANALYSIS OF THE IMPACT

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OF THE ARBITRATION CLAUSE ON THE CONSUMERS AND THE

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FACT THAT WE WOULD ARGUE THAT CONSUMERS ARE NOT

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LIKELY TO GO TO ARBITRATION BASED ON THIS CLAUSE
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AND, THEREFORE, AT&T IS -- WOULD BE EXEMPTED FROM

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ANY LIABILITY FOR THEIR CONDUCT.

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THE COURT:

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ANYTHING FURTHER?

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MR. PARASHARAMI:

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THANK YOU.

I MEAN, I'LL JUST BE

EXTRAORDINARILY BRIEF, YOUR HONOR.

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OKAY.

THOSE WERE THE ARGUMENTS THAT THE SUPREME
COURT HEARD IN CONCEPCION AND REJECTED.

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THE ARGUMENT BASICALLY DEPENDS ON THE

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NOTION THAT CLASS ACTIONS ARE NECESSARY, BUT THE

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SUPREME COURT REJECTED THAT CLEARLY.

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THE COURT:

OKAY.

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MR. PARASHARAMI:

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THE COURT:

THANK YOU, YOUR HONOR.

ALL RIGHT.

I'M GOING TO

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STICK WITH THE TENTATIVE ON THIS.

I THINK THE

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MOTION SHOULD BE DENIED AS TO HANNA AND GRANTED AS

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TO THE OTHER PLAINTIFFS.

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OKAY.

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MS. SOOY:

THANK YOU.
YOUR HONOR, WE ARE ALSO

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SCHEDULED TO BE BEFORE YOU JUST MOMENTS FROM NOW ON

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OUR CMC.

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COULD WE TAKE UP ANY ISSUES THAT THE

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COURT WANTS TO ADDRESS ON THAT?

WE -- I MEAN, OUR

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POSITION FOR AT&T IS THAT THERE REALLY ISN'T

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ANYTHING FURTHER WE NEED TO DEAL WITH TODAY.

THE
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COURT WILL ISSUE THIS RULING.

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YOU ALSO HAVE A TENTATIVE PENDING ON THE
MOTION TO DISMISS THAT WAS ARGUED BACK IN MARCH.

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AND SO WE THINK THOSE RULINGS NEED TO

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COME OUT BEFORE WE DETERMINE WHETHER THERE ARE ANY

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NEXT STEPS HERE BECAUSE YOUR TENTATIVE ON THE

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MOTION TO DISMISS DISMISSED ALL CLAIMS -- I THINK

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THAT'S RIGHT -- AS TO PLAINTIFF HANNA.

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AND SO UNLESS THE COURT DECIDES TO GIVE
LEAVE TO AMEND, I THINK WE'RE BACK AT AN END POINT.

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OUR POSITION THAT WE ASSERTED IN THAT

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BRIEFING IS THAT THERE SHOULD NOT BE ANY LEAVE TO

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AMEND.

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I'M SURE MR. SOBOL WILL TAKE A DIFFERENT
VIEW OF THAT.
MR. SOBOL:

DOES YOUR HONOR WANT TO HOLD

THE STATUS CONFERENCE NOW?

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THE COURT:

MIGHT AS WELL.

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MR. SOBOL:

OKAY.

THERE ARE A COUPLE OF

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HOUSEKEEPING MATTERS WE SHOULD ADDRESS AS PART OF

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OUR CMC THIS MORNING.

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AND PICKING UP WHERE AT&T COUNSEL JUST

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LEFT OFF, WE DO THINK, NOW THAT WE HAVE A RULING ON

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THE ARBITRATION MOTION, THERE ARE A COUPLE OF

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THINGS THAT NEED TO BE SCHEDULED IN THE CASE.
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ONE OF THEM IS WE DID ASK FOR LEAVE TO

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AMEND, AND RATHER THAN GOING BACK AND REVISITING

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THE TENTATIVE RULING THAT WAS PUT IN PLACE ON THE

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MOTION TO DISMISS THAT WAS ARGUED ON MARCH 25TH, WE

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WOULD REQUEST THAT WE BE ABLE TO SUBMIT A REVISED,

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AMENDED PLEADING AND MOVE FROM THERE.

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THE OTHER MATTER THAT WE WOULD WANT TO

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DO, TO ADDRESS THIS MORNING, IS TO SET A DATE FOR

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CLASS CERTIFICATION.

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AT&T TOOK THE POSITION IN THE, IN OUR

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JOINT FILING FOR THE CONFERENCE THIS MORNING THAT

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IT WAS PREMATURE GIVEN THAT WE DON'T HAVE A RULING

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YET ON THE ARBITRATION.

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NOW WE HAVE A RULING ON THE ARBITRATION.

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PLAINTIFFS WOULD REQUEST A DATE TO FILE

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THEIR CLASS CERTIFICATION BRIEF IN JANUARY OF 2012.
AND NOW THAT -- NOW THAT -- WHEN WE --

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WHEN WE FIRST ADDRESSED THE ARBITRATION ISSUE

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EARLIER ON IN THE CASE, YOUR HONOR PUT A PARTIAL

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STAY ON DISCOVERY DIRECTED TO LIMITING WHERE WE

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COULD DIRECT DISCOVERY SO AS NOT TO BURDEN THE

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PARTIES GIVEN THAT THE ARBITRATION ISSUE WAS LIVE.

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NOW THAT WE'RE PAST THAT WITH RESPECT TO

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APPLE, WHICH DOESN'T HAVE AN ARBITRATION ISSUE, AND

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WITH RESPECT TO THE NONSUBSCRIBER CLASS, PUTATIVE
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NONSUBSCRIBER CLASS REPRESENTED BY MR. HANNA, WE

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SHOULD OPEN UP DISCOVERY FOR ALL PURPOSES AT THIS

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POINT NOW THAT WE'RE PAST THE ARBITRATION ISSUE.

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AND THE LAST THING I'D LIKE TO REPORT TO

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THE COURT, I SUPPOSE IT IS SOMEWHAT GOOD NEWS --

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AND WITH THE CONSENT OF APPLE'S COUNSEL -- WE HAVE

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BEEN ENGAGED IN SERIOUS MEDIATION IN FRONT OF

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RETIRED JUDGE WEINSTEIN.

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WE'RE VERY CLOSE ON BEING ABLE TO RESOLVE

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OUR ISSUES AND WE HOPE THAT THE NEXT TIME WE SHOW

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UP, WE'LL BE ABLE TO REPORT THE CASE SETTLED WITH

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RESPECT TO APPLE.

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THE COURT:

OKAY.

LET'S TAKE ABOUT A

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FIVE MINUTES RECESS AND THEN I'LL COME BACK AND

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DISCUSS THIS WITH YOU FURTHER.

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MR. SOBOL:

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(WHEREUPON, A RECESS WAS TAKEN.)

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(WHEREUPON, THE CMC WAS HELD OFF THE

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OKAY.

THANK YOU, YOUR HONOR.

RECORD.)
(WHEREUPON, THE PROCEEDINGS IN THIS
MATTER WERE CONCLUDED.)

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CERTIFICATE OF REPORTER

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I, THE UNDERSIGNED OFFICIAL COURT
REPORTER OF THE UNITED STATES DISTRICT COURT FOR

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THE NORTHERN DISTRICT OF CALIFORNIA, 280 SOUTH

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FIRST STREET, SAN JOSE, CALIFORNIA, DO HEREBY

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CERTIFY:

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THAT THE FOREGOING TRANSCRIPT,

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CERTIFICATE INCLUSIVE, CONSTITUTES A TRUE, FULL AND

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CORRECT TRANSCRIPT OF MY SHORTHAND NOTES TAKEN AS

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SUCH OFFICIAL COURT REPORTER OF THE PROCEEDINGS

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HEREINBEFORE ENTITLED AND REDUCED BY COMPUTER-AIDED

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TRANSCRIPTION TO THE BEST OF MY ABILITY.

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/S/
_____________________________
LEE-ANNE SHORTRIDGE, CSR, CRR
CERTIFICATE NUMBER 9595

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