Nitsch v. Dreamworks Animation SKG Inc. et al

Filing 272

Questions for Hearing on Motion for Class Certification. Signed by Judge Lucy H. Koh on May 2, 2016. (lhklc1, COURT STAFF) (Filed on 5/2/2016)

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UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF CALIFORNIA
SAN JOSE DIVISION

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ROBERT A. NITSCH, et al.,

United States District Court
Northern District of California

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Plaintiffs,

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Case No. 14-CV-04062-LHK
QUESTIONS FOR HEARING ON
MOTION FOR CLASS
CERTIFICATION

v.
DREAMWORKS ANIMATION SKG INC.,
et al.,
Defendants.

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Plaintiffs’ Motion for Class Certification is set for hearing on Friday, May 6, 2016 at 1:30
p.m. At the hearing, each side will have 15 minutes to answer the following questions:
Questions for Plaintiffs


Many of the cases that find that common questions predominate despite a statute of
limitations defense involved a defense that was applicable only to a small portion of the
class. Here, the entire class has to overcome the statute of limitations using fraudulent
concealment. Does this distinction alter the balance in favor of the individual questions?



The Defendants have identified specific e-mails sent to specific class members referencing
aspects of the alleged conspiracy, which could be evidence of constructive or actual
knowledge by individual class members. In response, Plaintiffs’ Reply says that if any
individualized inquiries exist as to constructive knowledge or actual knowledge, those can
be “resolved at a later time.” When and how do Plaintiffs propose the Court resolve those
issues later? Would doing so require individual damages proceedings for each class
member against whom an individualized challenge is raised? How would that be
manageable with approximately 9,000 member class?



What is Plaintiffs’ proposal for identifying the putative class members who released claims
against particular defendants as part of the High Tech settlement, or who are subject to
releases or arbitration agreements? Once these individuals are identified, what is Plaintiffs’
specific proposal to deal with these issues?

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Case No. 14-CV-04062-LHK
QUESTIONS FOR HEARING ON MOTION FOR CLASS CERTIFICATION

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

Regardless of whether the complaint discusses events from the 1980s as background, how
does a complaint specifically identifying a class beginning in 2004 put the Defendants on
notice of claims from plaintiffs from 2001-2003? How should the Court proceed if the
Court finds that activity prior to 2004 may not be included in the claims?



The only members of the proposed class for 2001-2002 are Pixar and Lucasfilm
employees, since the class definition doesn’t contemplate another Defendant entering the
alleged conspiracy until 2003. Why wouldn’t the High Tech settlement largely or entirely
eliminate the 2001–2002 claims against Pixar and Lucasfilm? See SAC ¶ 196.



Plaintiffs’ proposed class definition references Appendix C to the Ashenfelter Report. Dr.
Ashenfelter revised Appendix C and reattached an Amended Appendix C to his Reply
Report. Should the class definition be altered to reference Appendix C to the Ashenfelter
Reply Report? If so, should the Court deny the motion to certify the class referencing
Appendix C to the Ashenfelter Report without prejudice and require the parties to brief
class certification as to the new proposed class referencing the Amended Appendix C to
the Ashenfelter Reply Report?



Setting aside Plaintiffs’ argument that DreamWorks improperly included independent
contractors in the data initially provided to Dr. Ashenfelter, why did Dr. Ashenfelter’s
selection of job titles include titles like “Actor” at all? How is an “Actor” an animation or
visual effects employee?

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United States District Court
Northern District of California

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o If Dr. Ashenfelter’s selection criteria for job titles allowed the inclusion of “Actor,”
which Dr. Ashenfelter has subsequently removed from his analyses, how can the
Court be confident that the remainder of the job titles selected by Dr. Ashenfelter
are appropriate for inclusion in the class?

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Questions for Defendants


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The Court has already denied Defendants’ motion to dismiss Plaintiffs’ claims from 2004
onwards as to Pixar and Lucasfilm on the basis that Plaintiffs have alleged fraudulent
concealment. Why should the Court treat 2001-2003 differently?

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o Assuming fraudulent concealment is treated the same for 2001-2003, why wouldn’t
the new 2001-2003 plaintiffs in the proposed class relate back to the original
complaint?

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o What prejudice are Defendants asserting that would prevent relation back?

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

How should the Court proceed if the Court finds that activity prior to 2004 may not be
included in the claims?

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

Is Defendants’ argument about the reliability of the selection of job titles an
ascertainability or Daubert issue?



In his reply report, Dr. Ashenfelter concedes that the Defendants do not have unusually
rigid pay structures, but argues that the pay structures nevertheless are sufficiently rigid.
Why is an unusual degree of rigidity necessary to show antitrust damages on a class-wide
basis? What case law supports that argument? Isn’t it sufficient for Plaintiffs to show that
the Defendants had sufficiently rigid pay structures for the alleged antitrust behavior to
have suppressed wages overall?



Dr. Keeley criticizes Dr. Ashenfelter’s model for excluding 2010 from the benchmark
period. However, Plaintiffs include 2010 in the class period for damages. If Plaintiffs wish
to prove that the conspiracy existed and led to class-wide damages in 2010, then doesn’t

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Case No. 14-CV-04062-LHK
QUESTIONS FOR HEARING ON MOTION FOR CLASS CERTIFICATION

that make 2010 an inappropriate year to include in Plaintiffs’ benchmark analysis?
Similarly, if Plaintiffs are correct that effects of the conspiracy extended into 2010, then
wouldn’t we expect compensation in 2010 to be lower such that including 2010 in the
benchmark period would tend to mask the effect of the conspiracy in the preceding years?

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

Defendants argue in opposition to class certification that Plaintiffs have no explanation for
why the effect of the conspiracy would fluctuate from year to year. However, the Plaintiffs
allege that the conspiracy in part involved improper collaboration by the Defendants
regarding how much to change compensation from year to year. Given that the alleged
conspiracy involved compensation changes between years, why would the amount of
under-compensation necessarily have been constant or increasing from year-to-year?



Assuming that a class member who has a release or arbitration agreement with one
defendant can still litigate claims against the remaining defendants, isn’t the arbitration or
release issue essentially about allocating damages payments among the defendants if
liability is found?

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United States District Court
Northern District of California

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o Would those arbitration or release issues have any bearing on the adjudication of
whether each Defendant was liable for participation in the alleged conspiracy, or on
the total damages calculation?
o Similarly, would the High Tech releases have an effect other than changing the
proportion of the judgment each Defendant must pay if liability is proven?

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IT IS SO ORDERED.

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Dated: May 2, 2016
______________________________________
LUCY H. KOH
United States District Judge

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Case No. 14-CV-04062-LHK
QUESTIONS FOR HEARING ON MOTION FOR CLASS CERTIFICATION