Judge Lucy Koh Questions Tech Class Settlement

Major technology companies recently agreed to settle a class-action lawsuit in which 64,000 employees accused them of conspiring not to recruit each other's workers, suppressing compensation. The case alleged an inner circle of Silicon Valley executives communicated during a period when the interoperability of companies' products was often discussed. Embarrassing emails between company executives surfacing during E-discovery played a role in the settlement, with four tech companies agreeing to pay plaintiffs $324.5 million. Plaintiffs had planned to ask for about $3 billion in damages at trial, which could have been trebled under antitrust law. Last week, Judge Koh told plaintiffs during a hearing that they had leverage going into trial against the defendants, given the strength of emails showing former CEOs, such as Apple's Steve Jobs and Google's Eric Schmidt, were planning to enforce their no-poaching agreement. Reportedly, Judge Koh had concerns about whether the amount is really fair to the class and deferred a decision about whether to approve the deal. Though Plaintiffs' attorney said the workers faced serious risks on appeal all the way up, Judge Koh was skeptical the Supreme Court would get involved by further restricting class actions. She has previously approved separate settlements totaling $20 million reached by Disney's Lucasfilm and Pixar units, and Intuit. Apple, Google, Intel and Adobe are paying a higher premium to settle this case than Disney and Intuit did, as calculated by the number of employees from each company in the class. Avoiding executives appearing on the witness stand made a settlement attractive. The civil case followed a 2010 Justice Department case on the same matter. Trial was set to begin last month in California. See story here-- http://reut.rs/1q5cB3Y

Tech Firms Settle Recruiting Suit on Eve of Trial

Major technology companies agreed yesterday to settle a class-action lawsuit in which 64,000 employees accused them of conspiring not to recruit each other's workers, suppressing compensation. Terms of the settlement involving Apple, Google, Intel, and Adobe weren't immediately released, but the case reportedly settled for about $325 million. During pretrial proceedings, emails from top executives including Steve Jobs, Sergey Brin and Eric Schmidt surfaced, showing the executives conferred on hiring plans, sometimes through intermediaries. Defendants filed motions seeking to exclude evidence that made Jobs appear as a bully, which was apparently validated in Brin's deposition. Avoiding executives appearing on the witness stand made a settlement attractive. Intel stated it was settling to avoid the risks of litigation, but denied violating any laws or obligations. Adobe elected to settle this matter in order to avoid the uncertainties, cost and distraction of litigation. Apple and Google declined comment. Employees of the companies had been seeking $3 billion in damages. Under antitrust rules, that could have been tripled to $9 billion. The settlement follows settlements reached last year with Lucasfilm, Pixar and Intuit for a combined $20 million. The civil case followed a 2010 Justice Department case on the same matter. Trial was set to begin May 27th before U.S. District Judge Lucy Koh in San Jose, Calif. The case alleged an inner circle of Silicon Valley executives communicated during a period when the interoperability of companies' products was often discussed. Emails between the executives embarrassed executives and their companies. E-discovery played a role in the deal, as Schmidt had emailed about only conferring on agreements not to recruit from other companies verbally, so as not to create a paper trail which could later be sued upon. See story here-- http://on.wsj.com/1mEOu7N

EU Enforcing Settlement Agreement against Microsoft

Microsoft was fined over $700 million by the European Commission for failing to offer a choice of browsers in its computer operating system used by some fifteen million people in the EU. This agreement was the result of Microsoft's legal fight over competitive practices with the European Union that was settled in 2009, making a dozen internet browsers available for use in Windows. Apparently, Microsoft dropped the ability for choice during a recent service pack update. "Legally binding commitments reached in antitrust decisions play a very important role in our enforcement policy because they allow for rapid solutions to competition problems," said Joaquín Almunia, Commission Vice President in charge of competition policy. "Of course, such decisions require strict compliance. A failure to comply is a very serious infringement that must be sanctioned accordingly." Microsoft retained outside counsel last year to conduct the investigation and offered to extend the compliance period while cooperating with the EU. The fine comes when Microsoft Internet Explorer's influence is waning globally as competitors like Google Chrome and Mozilla Firefox have become increasingly popular. The European Commission has also been formally investigating Google. VP Almunia reportedly offered Google a settlement last year after finding that it might have abused its dominance in internet search and advertising by giving its own products an advantage over those of others, even while maintaining that it offered neutral results. Google and the EU have been negotiating since then, and a final agreement may not come until later this year, suggesting that the strategy of seeking quick results in antitrust technology cases through settlements instead of lengthy legal battles could be coming undone. See news items here http://usat.ly/15xeZDf and http://nyti.ms/XSAoEP