Tech Giants’ Anti-Poaching Settlement Rejected In California Federal Case

“Not in my house!”  That is essentially what U.S. District Judge Lucy Koh recently said in rejecting a proposed settlement agreement in a federal case pending in California between several Silicon Valley tech giants and a class of tech employees who claimed that the companies conspired to suppress their wages.  As we here at Abnormal Use previously reported in April, the companies (including Apple, Intel, and Google) and the tech workers agreed to settle their dispute for approximately $325 million.  According to Judge Koh, that settlement amount ”falls below the range of reasonableness.” Once the plaintiffs’  lawyers take their slice of the pie, the settlement would have provided the class members just over $3,500.  In reaching the conclusion that such an amount was unreasonable, Judge Koh noted that other class members settled the same claims last year against Pixar and Lucasfilm Ltd. more money per plaintiff, despite the fact these current plaintiffs had newly discovered evidence that made their claims even stronger.  The order also notes that to reach the same level as the previously settling class members, the current class members would need to receive $380 million. Check out the order’s conclusion:

This Court has lived with this case for nearly three years, and during that time, the Court has reviewed a significant number of documents in adjudicating not only the substantive motions, but also the voluminous sealing requests. Having done so, the Court cannot conclude that the instant settlement falls within the range of reasonableness. As this Court stated in its summary judgment order, there is ample evidence of an overarching conspiracy between the seven Defendants, including the similarities in the various agreements, the small number of intertwining high-level executives who entered into and enforced the agreements, Defendants’ knowledge about the other agreements, the sharing and benchmarking of confidential compensation information among Defendants and even between firms that did not have bilateral anti-solicitation agreements, along with Defendants’ expansion and attempted expansion of the anti-solicitation agreements. Moreover, as discussed above and in this Court’s class certification order, the evidence of Defendants’ rigid wage structures and internal equity concerns, along with statements from Defendants’ own executives, are likely to prove compelling in establishing the impact of the anti-solicitation agreements: a Class-wide depression of wages.

In light of this evidence, the Court is troubled by the fact that the instant settlement with Remaining Defendants is proportionally lower than the settlements with the Settled Defendants. This concern is magnified by the fact that the case evolved in Plaintiffs’ favor since those settlements. At the time those settlements were reached, Defendants still could have defeated class certification before this Court, Defendants still could have successfully sought appellate review and reversal of any class certification, Defendants still could have prevailed on summary judgment, or Defendants still could have succeeded in their attempt to exclude Plaintiffs’ principal expert. In contrast, the instant settlement was reached a mere month before trial was set to commence and after these opportunities for Defendants had evaporated. While the unpredictable nature of trial would have undoubtedly posed challenges for Plaintiffs, the exposure for Defendants was even more substantial, both in terms of the potential of more than $9 billion in damages and in terms of other collateral consequences, including the spotlight that would have been placed on the evidence discussed in this Order and other evidence and testimony that would have been brought to light. The procedural history and proximity to trial should have increased, not decreased, Plaintiffs’ leverage from the time the settlements with the Settled Defendants were reached a year ago.

The Court acknowledges that Class counsel have been zealous advocates for the Class and have funded this litigation themselves against extraordinarily well-resourced adversaries. Moreover, there very well may be weaknesses and challenges in Plaintiffs’ case that counsel cannot reveal to this Court. Nonetheless, the Court concludes that the Remaining Defendants should, at a minimum, pay their fair share as compared to the Settled Defendants, who resolved their case with Plaintiffs at a stage of the litigation where Defendants had much more leverage over Plaintiffs.

(Quotations and citations omitted).

This ruling is not at all surprising.  As we noted in our initial coverage, given the number of employees involved the settlement amounts to peanuts compared what the alleged conspiracy likely cost the workers.  We’re going to go out on a limb and guess that the class members and the defendants reach new deal for exactly $380 million. The order in question is In re High-Tech Employee Antitrust Litigation, No.: 11-CV-02509-LHK (N.D. Cal. Aug. 8, 2014).

Former Oppressive Dictator Sues Video Game Creator For Portraying Him As An Oppressive Dictator

Noriega

We recently blogged about troubled actress Lindsay Lohan’s lawsuit against a video game creator who allegedly misappropriated her likeness and used it for profit.  Apparently, she is not the only public figure who has been recently targeted by a video game company.  Reportedly, former Panamanian dictator, Manuel Noriega, has filed suit in California state court against video game creator Activision Blizzard for using his likeness in Call of Duty: Black Ops II.  Noriega is apparently the subject of various fictional missions within the video game that include historical footage and “real-life characters in Cold War scenarios, including Oliver North.”

Noriega, who is currently serving out a prison sentence in Panama for “drug trafficking, money laundering, and killing political opponents,” alleges in his lawsuit that, among other things, the defendant “damaged his reputation” by portraying him “as a kidnapper, murderer, and enemy of the state.”  For these alleged wrongs, Noriega seeks damages, to include a share of the profits from sales of the video game. He also demanded a jury trial!

Now, quite frankly, this is a deposition that we would like to see (assuming that the case makes it to the discovery phase and that Noriega, currently a prisoner in Panama, testifies in any way, shape, or form). We’re amused that in his Complaint, in the “Parties” section, Noriega mentions that he is “an individual residing in Gamboa, Panama,” without referencing that he is, in fact, in prison. If he is deposed, we would ask that defense counsel please question him about the punk rock and heavy metal music that was played during Operation Nifty Package back in the day. But that’s just us. Oh, and here is the complaint if you would like to read it.

An unrelated confession: The Activision game our editor played was Pitfall! for the Atari 2600.

The Range Feud 2: The Dueling Dukes

The Range Feud 2

Famed actor John Wayne was born Marion Robert Morrison, but he was perhaps best known for his nickname, “The Duke.”  The Duke personified the American Wild West.  He shot and strung up bad guys, fought his way out of tight spots, and generally exhibited a level of awesome manliness that inspired generations of American men.  The Duke also enjoyed his whiskey, and his family recently launched a “Duke” brand whiskey, “inspired by bottles from John Wayne’s personal whiskey collection, preserved for over 50 years and only recently discovered.”  Sounds great, right?  Well, not to everyone.

Reportedly,  Duke University recently filed objections in the trademark office to prevent the whiskey from using the “Duke” name, alleging that doing so will ”’cause confusion and dilution’ that hurts the school’s recruiting and reputation.”  The Duke’s family, which has filed a lawsuit of its own in California, denounces Duke University’s arguments as “ludicrous,” and argues that “[Duke University] ‘has never been in the business of producing, marketing, distributing or selling alcohol,’ [but the school] ‘seems to think it owns the word ‘Duke’ for all purposes and applications.”

It will be interesting to see how this one turns out, as both sides have some interesting arguments.  While the outcome is not clear, one thing is. Duke University should count its lucky stars that it is dealing with the family and not the Duke himself, because the Duke didn’t believe in lawsuits:  “Out here a man settles his own problems.”

Lindsay Lohan Alleges That Grand Theft Video Game Steals More Than Autos

Lacey Jonas

Apparently, if believe the news, pro se Plaintiff Jonathan Lee Riches isn’t the only person to have fallen victim to “Batman and identity robbin.”  Troubled actress Lindsay Lohan recently filed suit against the makers of the Grand Theft Auto V video game alleging that they improperly used her likeness in a “a look-alike side mission.” The character in question is named Lacey Jonas and begs the main character for a ride so that she can avoid the flock of paparazzi chasing her. This is not Lohan’s first legal action involving an alleged theft of her likeness.  In 2010, Lohan sued E-Trade in connection with a baby’s reference to “that milkaholic Lindsay” during an E-Trade ad aired during the Super Bowl.  In 2011, Lohan sued Pitbull for a reference in one of his songs to having it “locked up like Lindsay Lohan.” It will be interesting to see how this one turns out.  We at Abnormal Use are thankful to Lindsay for the material.  Keep it coming!

(Hat tip: FindLaw).

Synthetic Marijuana Gets Tangible Victory in California

Last week, an Oakland County, California jury ruled in favor of the defendants in a wrongful death case involving synthetic marijuana. The Estate of John Anthony Sdao filed suit against Yassmine Wholesalers, the distributor of the substance, and a local gas station after Sdao, 20, committed suicide after smoking K2, a brand of synthetic marijuana. The sale of synthetic marijuana was legal at the time of the event, but it has now been banned by California law. The plaintiff presented evidence at trial of numerous other suicides which allegedly occurred as a result of using the substance. Apparently, the jury didn’t buy it under the facts of this case.

We here at Abnormal Use have not seen the verdict form nor are we aware of the full scope of evidence presented at trial. Lee Ann Rutila, who represented Yassmine, had this to say about the result:

We were pleased with the result, and I guess we’re not surprised. . . . They were basically unable to say that the suicide really wouldn’t have happened otherwise. It could have happened with or without the K2. They couldn’t put that as being the contributing factor.

Dean Kallas, who represented the gas station that was accused of selling the product to Sdao, added:

It always appeared that the suicide was unrelated to the product, and that’s been our defense all along, and that’s why I believe the jury came to the conclusions they came to.

The plaintiff apparently plans to appeal the verdict. However, the reports are not clear as to the grounds of any such appeal.

The case of synthetic marijuana is an interesting one. In the shadow of Four Loko, it is difficult to gauge how a jury may handle a product which, while legal at the time of the injury, has been banned by the time of trial. In this case, the personal accountability of the decedent apparently also played a role in the jury’s decision. Proving that it was the product, and not the decedent’s own tendencies, that caused the suicide is a difficult burden to bear.

Despite the result in this trial, we expect to see more of these synthetic marijuana cases in the future. We will be sure to keep you posted.

GM Recall Devalues All GM Vehicles, California Class Action Alleges

When it rains, it pours for GM.  Of course, if you’re a reader of a products liability blog, then you’re certainly already familiar with the myriad difficulties facing GM in various courts across the country these days. A recent class action suit filed in California alleges that GM’s actions in handling the alleged ignition switch defect have resulted in a devaluation of all GM cars, which will cost GM customers when it comes time to resell their vehicles.  Surely you saw this one coming, right? The named plaintiff in the suit is Anna Andrews, and the firm that filed the suit on her behalf is Hagens Berman Sobol Shapiro, LLP.

The lawsuit purports to seek at least $10 billion, which is apparently over twice GM’s net earnings for 2013.  It will be interesting to see how this suit plays out.  We at Abnormal Use see this as a slippery slope in that it could lead to a class action suit by owners of a product any time a brand receives negative publicity, finds itself subject to a recall, or otherwise makes headlines relating to a defect. Only time will tell.

(Hat Tip: Law360).

Tech Giants Agree to Settle (No) Poaching Lawsuit

On the eve of what could have been very embarrassing litigation for Apple, Google, Intel, and Adobe, the four tech giants agreed to settle a federal lawsuit in California alleging that they conspired to keep wages lows for certain employees.  The settlement is worth approximately $325 million. That would seem like a pretty massive settlement for these companies unless you consider the fact that Google and Apple alone have a combined market cap of nearly $1 trillion.

The Plaintiffs in the lawsuit alleged the four tech companies agreed to not poach each others’ employees, which in effect formed an anti-competitive cabal that kept engineers’ wages down.  A class-action antitrust lawsuit was filed to compensate the engineers that worked for the tech giants from approximately 2005 through 2006.  There were more than 60,000 workers in the class.  Class members claimed that the no poaching agreement resulted in $3 billion of lost wages.  That’s a far cry from the $324 million settlement agreement. Although some of the companies admitted the no-poaching agreement, they disputed the fact that it was done to keep price wages down.  Right. So, these multi-billion companies claim ignorance of basic economic principles?  I know some of these tech guys pride themselves on not having college degrees, but maybe they should take a few online college courses?  Economics 101 would be a start.

Some of the alleged actions of the executives laid out in the Reuters article are just comical:

  • After a Google recruiter solicited an Apple employee, then-Google CEO Eric Schmidt told Apple co-founder Steve Jobs that the recruiter would be fired.  Jobs then forwarded the email to an Apple HR executive with a smiley face.
  • A Google human resources director sent an email asking Schmidt about sharing its no-cold call agreements with competitors.  Schmidt replied that the agreement should be spread “verbally, since I don’t want to create a paper trail over which we can be sued later?

If you are going to go the route of avoiding a paper trail, wouldn’t you pick up the phone to tell someone that?  Maybe its just me.

Lucasfilm, Intuit, and Pixar were also defendants in the original lawsuit, but those companies settled before the class was formed. Those companies got off relatively cheap, paying approximately $20 million to settle the claims against them.

We often say that in class action lawsuits there’s really no winner other than the lawyers.  However, I think it’s safe to say that the tech companies won here.  $325 million is nothing to sneeze at, but it really works out to about $5,500 per employee (before deducting fees and costs).  While that’s certainly better than the $10 gift cards that are the spoils of many class action settlements, it’s not a lot of money in comparison to what these employees may have lost.

The Fitbit Class Action Litigation

After recalling several models of its Fitbit Force bracelets, Fitbit now faces a class action in California.  Plaintiffs allege that Fitbit did not alert consumers of possible skin irritation.  Fitbit reported in January that it was aware of 9,900 instances of skin issues with the Fitbit, approximately 1.7 percent of users. Previously, the company issued public statements regarding the issue and offered full refunds, but that has not appeased the purportedly injured.  According to the suit, Jim Spivey, the named plaintiff, lost money or property and time and opportunity as a result of Fitbit’s alleged false advertising.  Further, the suit alleges that the defendant continues to hold money which rightfully belongs to the class for reimbursement or compensation for physical and emotional injuries.  Allegedly, the product’s wristband can increase the risk of experiencing an adverse cardiovascular event, which apparently includes increased risk of skin irritation, rash, burns, blistering, cracking, peeling, bleeding, oozing, boils and other physical injuries. Fitbit responded in The Wall Street Journal stating, “Based on our initial review of the lawsuit, the complaint asks for a recall of Force and a refund to consumers. Fitbit took initiative long before this complaint was filed, publicly offered refunds, and worked closely with the CPSC on its voluntary recall program. We strongly disagree with the statements about the product and the company.”

Interesting, Mr. Spivey, who bought his Fitbit in January, has not developed any skin irritation, so there’s that.

California Man Asks Court For $1.5 Million After Receiving Only One Napkin With McDonald’s Burger

It’s not just about the hot coffee, you know. In what seemed like a normal culinary transaction, Webster Lucas ordered a Quarter Pounder Deluxe from his local McDonalds in Pacoima, California. The Quarter Pounder Deluxe (or “Royale with Cheese Deluxe,” for our readers on the metric system) comes with the following according to the McDonalds website: “100% beef layered with melty American cheese, ripe tomato, leaf lettuce, crinkle-cut pickles, crunch red onion, mayo and mustard, on a toasted bakery-style bun.” According to Mr. Lucas, it should also come with more than one napkin. It is plausible that one would need more than one napkin in the process of consuming this beast of a burger. These ingredients, while delicious (in fact, just typing the description of this burger caused my mouth to water), are quite messy. Knowing the messy character of the delicious burger, Mr. Lucas opened his McDonalds bag hoping to find a sufficient number of napkins. It is unclear how many napkins Mr. Lucas expected to find, but what we do know is that the bag contained only one napkin.

As TMZ reports, Mr. Lucas immediately confronted the manager who, according to Mr. Lucas, was unwilling to provide additional napkins. Mr. Lucas then explained to the manager: “I should have went to eat at the Jack-in-the-Box because I didn’t come here to argue over napkins.” Things apparently escalated from there, and according to Mr. Lucas, the manager also made a racist comment during the exchange. When McDonalds corporate offered free burgers (and presumably extra napkins) in an attempt to remedy the napkin debacle, Mr. Lucas was “insulted.” Not only was he insulted, but Mr. Lucas now suffers from “undue mental anguish” from the experience.

It is unclear how many napkins Mr. Lucas needed, or how much those extra napkins would have cost McDonalds, but Mr. Lucas is able to assign a dollar figure to his suffering. Mr. Lucas has sued McDonalds for $1.5 million.

Sprint Allegedly Overbills Feds For Spying Services

There has been a lot of press in the past year about the various government programs in place for the United States to snoop on its own citizens.  Well, apparently, all that snooping is far from free, and the federal government is none too happy with one of its bills.  Federal officials filed a lawsuit earlier this week alleging that Sprint Communications overbilled the FBI, U.S. Bureau of Alcohol, Tobacco and Firearms, and other government to the tune of $21 million for wiretap services. Communication companies ordered by courts to intercept customers’ communications are allowed to recoup the cost of installing and maintaining the wiretaps.  However, the federal government and communications battled for years over who covers the cost to upgrade their equipment and facilities to ensure they can comply with court orders seeking wiretaps of their customers.  In 2006, the Federal Communications Commission settled the dispute in favor of the government, ruling that companies can’t bill for modifying their equipment and facilities to more efficiently intercept communications. Shocking! The lawsuit filed in federal court in San Francisco alleges that Sprint fraudulently billed for such expenses relating to equipment and facilities, which it knew was not billable. The tab from 2007 to 2010 amounted to $21 mil.  Of course, like any good Plaintiffs, the government doesn’t just want its $21 million back from the over-billing.  The feds are seeking treble damages, which would amount to approximately $63 million.  Sprint has denied any wrongdoing. This whole thing just seems silly.  Maybe Sprint should just suggest that the federal government join up with Russia for a wiretapping Framily Plan.  That might save Uncle Sam a little money.  Because “You don’t have to be family, to be Framily.”