LUCY H. KOH, United States District Judge.
Plaintiffs Greg Garrison ("Garrison"), Deborah Van Vorst ("Van Vorst"), and Sastry Hari ("Hari") (collectively, "Plaintiffs") bring this putative class action against Defendant Oracle Corporation ("Oracle") for alleged violations of federal and California antitrust laws. ECF No. 105 (Second Amended Complaint, or "SAC").
Oracle is a Delaware corporation with its principal place of business in Redwood Shores, California. SAC ¶ 22. The world's second-largest software producer by revenue, Oracle specializes in developing and marketing computer hardware systems and enterprise software products, including its own brands of database management systems. Id. ¶ 23.
Plaintiffs are former employees of Oracle. Id. ¶¶ 16, 18, 20. Garrison worked for Oracle as a senior account manager from
Plaintiffs seek to represent the following classes:
Id. ¶ 64.
Here, Plaintiffs allege that Oracle conspired with Google, Inc. ("Google"), Intuit Inc. ("Intuit"), Adobe Systems, Inc. ("Adobe"), International Business Machines Corp. ("IBM") and "various other technology companies," as well as with non-technology based companies and recruiting companies, to fix and suppress employee compensation. SAC ¶¶ 2-3. As the factual and procedural history of In re High-Tech Employee Antitrust Litigation ("High-Tech"), as well as the U.S. Department of Justice's ("DOJ") investigations and complaints, are relevant to this action, the Court briefly summarizes the background of that litigation below. See SAC ¶¶ 48, 50-53 (discussing DOJ investigation).
From 2009 to 2010, DOJ's Antitrust Division investigated the employment and recruitment practices of various Silicon Valley technology companies, including Adobe, Apple Inc. ("Apple"), Intel Corp. ("Intel"), Intuit, and Google. See High-Tech, 856 F.Supp.2d 1103, 1109 (N.D.Cal. 2012). DOJ filed its complaint against Adobe, Apple, Google, Intel, Intuit, and Pixar on September 24, 2010. Id. On December 21, 2010, DOJ filed another complaint against Lucasfilm Ltd. ("Lucasfilm"). See No. 11-2509, ECF No. 93-4. The defendants in these two lawsuits stipulated to proposed final judgments in which they agreed that DOJ's complaints had stated claims under federal antitrust law and agreed to be "enjoined from attempting to enter into, maintaining or enforcing any agreement with any other person or in any way refrain from...soliciting, cold calling, recruiting, or otherwise competing for employees of the other person." High-Tech, 856 F.Supp.2d at 1109-10 (quoting Adobe Proposed Final Judgment at 5). The U.S. District Court for the District of Columbia entered the stipulated proposed final judgments on March 17, 2011, and June 2, 2011, respectively. Id. at 1110.
Private plaintiffs filed five separate state court actions between May and July 2011. Following removal, transfer to San Jose to the undersigned judge, and consolidation as In re High-Tech Employee Antitrust Litigation, the High-Tech plaintiffs filed a consolidated amended complaint on September 13, 2011. Id. at 1112-13. In their complaint, the High-Tech plaintiffs alleged antitrust claims against their employers, claiming that the defendants had conspired "to fix and suppress employee compensation and to restrict employee mobility." Id. at 1108. More specifically, the High-Tech
On May 17, 2013, the High-Tech plaintiffs publicly filed a number of documents in support of their supplemental motion for class certification. No. 11-2509, ECF Nos. 418, 428. One of those documents was an internal Google memo describing Google's hiring protocols and practices as of "1.7.2008." No. 11-2509, ECF No. 428-10 at GOOG-HIGH-TECH-00059839. At one point, the Google memo refers to certain companies on the "`Restricted Hiring' list," including Microsoft, Novell, Sun Microsystems, and, as relevant here, Oracle. Id. Although DOJ began investigating Oracle with the High-Tech defendants in 2009, DOJ concluded its investigation into Oracle without filing a lawsuit on October 29, 2014. SAC ¶ 53.
Plaintiffs allege a conspiracy among Oracle, other technology companies, the technology departments of non-technology-based companies, and recruiting companies "to fix and suppress employee compensation, and impose unlawful restrictions on employee mobility." SAC ¶¶ 2-4, 9. As part of this conspiracy, Oracle allegedly entered into a series of anti-solicitation "Secret Agreements." Id. ¶ 2. Other than the senior executives who "actively managed and enforced" the Secret Agreements, Oracle employees "were not apprised of any of these Secret Agreements and did not consent to this restriction on their mobility of employment." Id. ¶¶ 34, 57.
Plaintiffs allege three types of Secret Agreements. First, Oracle allegedly established a "no hire" list, on which Oracle placed companies that entered into a reciprocal agreement with Oracle not to solicit each other's employees. Id. ¶¶ 26-27. Plaintiffs do not further define the terms of the "no hire" agreements, so it is unclear whether the "no hire" agreements alleged here include all of the activities alleged in High-Tech: (1) not to cold call each other's employees, (2) to notify the other company whenever making an offer to an employee of the other company, and (3) not to engage in "bidding wars." See High-Tech, 856 F.Supp.2d at 1111.
Second, Plaintiffs allege that Oracle formed "gentlemen's agreements" when the CEOs of "certain companies" would agree orally not to solicit one another's employees. SAC ¶ 6. According to Plaintiffs, "gentlemen's agreements" were often not added to the "no hire" list. Id. ¶ 31. Third, Plaintiffs allege a "Restricted Hiring Agreement" between Oracle and Google. Id. ¶ 5.The Restricted Hiring Agreement between Oracle and Google was the sole Secret Agreement alleged in Garrison's original complaint. See Garrison v. Oracle Corp., No. 14-CV-04592-LHK 2015 WL 1849517, at *2 (N.D.Cal. Apr. 22, 2015).
Now, the SAC specifically identifies the following Secret Agreements:
Altogether, Plaintiffs identify around 15 companies with which Oracle allegedly entered
Plaintiffs additionally allege that Oracle ensured that its employees and other companies adhered to the "no hire" list. For example, internally, Oracle disseminated the "no hire" list to "key human resource and recruiting personnel" in June 2007. Id. ¶ 31; see also id. ¶ 41 (June 8, 2007 email from Oracle's Director of Recruiting to the "recruiting team," stating, "While we have no written policy concerning non-solicitation of our partners' employees; our policy is and continues to be that
According to Plaintiffs, the effect of the Secret Agreements was to depress the salaries of "all employees of participating companies." Id. ¶ 60. In a restricted hiring market, Oracle and the other companies with Secret Agreements faced decreased pressure to match or better a rival's employment offer to an employee. Id. Thus, the Secret Agreements "fix[ed] the compensation of the employees of participating companies at artificially low levels." Id. ¶ 61. Moreover, depressing the wages of "top tier employees" also allegedly suppressed the wages of all employees underneath the top tier employees. Id. ¶ 60.
The SAC adds a new section titled "Statute of Limitations," which alleges that Plaintiffs' claims were timely filed for two reasons: (1) Oracle's conspiracy was a continuing violation of the antitrust laws until at least 2013; and (2) Oracle fraudulently concealed the conspiracy from Plaintiffs until 2013. Plaintiffs' specific allegations as to each theory follow.
Plaintiffs allege that "Oracle's conspiracy was a continuing violation through which Oracle repeatedly invaded Plaintiffs' and Plaintiff Class' interests by adhering to, enforcing, and reaffirming the anticompetitive" Secret Agreements. SAC ¶ 73. First, Plaintiffs allege that "Oracle continued to enter into new Secret Agreements with companies...well into 2012." Id. ¶ 49. Second, Plaintiffs allege that, during their collective employment with Oracle from 2009 to 2013, neither Plaintiff Van Vorst nor Plaintiff Hari was solicited by any technology company with which Oracle had a Secret Agreement. Id. ¶¶ 18, 20, 77, 80. Third, all Plaintiffs were unable to find employment in the technology industry after leaving Oracle, allegedly due to the Secret Agreements. Id. ¶¶ 74-81. Plaintiff Van Vorst specifically alleges that, during the end of her employment with Oracle, she applied to "technology companies, including those with which Oracle had entered a Secret Agreement," and was not hired by said companies. Id. ¶ 78.
Plaintiffs allege that Oracle fraudulently concealed the conspiracy in two ways, which prevented Plaintiffs from filing their claims on time. First, Plaintiffs allege that Oracle affirmatively aimed "to
Second, Plaintiffs allege that Oracle misled Plaintiffs into believing their compensation was competitive. Plaintiff Garrison alleges that "an Oracle human resource employee" falsely informed Garrison that "Oracle's commission structure was competitive with other technology companies." Id. ¶ 90. Plaintiff Hari alleges that he was "directed by a senior executive to inform his team of subordinates that their compensation levels at Oracle were highly competitive and that they should be very pleased with the level of compensation Oracle offered." Id. According to Plaintiff Hari, the statement was false because Oracle was actively suppressing compensation levels by way of the Secret Agreements. Id. Further, Plaintiffs allege that "Class members repeatedly asked Oracle about how compensation was determined," but Oracle responded misleadingly that compensation was "competitive." Id. ¶ 97. According to Plaintiffs, in these conversations about compensation Oracle "never once admitted that it had any agreements with any other company not to solicit one another's employees." Id. ¶ 103.
In addition to these alleged misrepresentations, Plaintiffs claim that Oracle's public filings with the Securities and Exchange Commission ("SEC") have been misleading. Id. ¶¶ 92-94. For example, Oracle's 2008 filing stated "We may be unable to hire enough qualified employees or we may lose key employees.... In the software industry, there is substantial and continuous competition for highly skilled business, product development, technical and other personnel.... We may also experience increased compensation costs that are not offset by either improved productivity or higher prices." Id. ¶ 93 (emphases omitted). Plaintiffs aver that Oracle made substantially identical statements in Oracle's 10-K SEC filings from 2010 to 2013. Id. ¶ 94. Plaintiffs also highlight Oracle's employee handbook, which from 2008 to 2014 stated, "Oracle commits rigorously to observing applicable antitrust or competition laws of all countries or organizations." Id. ¶¶ 85-87.
In light of the relationship between the instant case and High-Tech, the Court briefly summarizes the relevant procedural history in High-Tech before turning to the instant case.
The High-Tech defendants removed the first state court action on May 23, 2011.
In the interim, three of the High-Tech defendants — Intuit, Lucasfilm, and Pixar — reached an early settlement with the plaintiffs. On September 21, 2013, the High-Tech plaintiffs filed a motion for preliminary approval of a proposed class action settlement as to defendants Intuit, Lucasfilm, and Pixar. No. 11-2509, ECF No. 501. On October 30, 2013, the Court granted preliminary approval. No. 11-2509, ECF No. 540. The Court granted final approval as to that settlement on May 16, 2014. No. 11-2509, ECF No. 915. The Court entered a final judgment with regards to Lucasfilm, Pixar, and Intuit on June 9, 2014. No. 11-2509, ECF No. 936. At the request of Intuit, the Court entered an amended final judgment on June 20, 2014. No. 11-2509, ECF No. 947.
The remaining High-Tech defendants — Adobe, Apple, Google, and Intel — filed individual motions for summary judgment, and joint motions for summary judgment and to strike certain expert testimony on January 9, 2014. No. 11-2509, ECF Nos. 554 (Intel), 556 and 557 (joint motions), 560 (Adobe), 561 (Apple), 564 (Google). The Court denied the High-Tech defendants' individual motions for summary judgment on March 28, 2014. No. 11-2509, ECF No. 771. On April 4, 2014, the Court granted in part and denied in part the High-Tech defendants' motion to strike, and denied the defendants' joint motion for summary judgment. No. 11-2509, ECF No. 788.
On May 22, 2014, the High-Tech plaintiffs filed a motion for preliminary approval of class action settlement as to the remaining defendants. No. 11-2509, ECF No. 920. On August 8, 2014, the Court denied the High-Tech plaintiffs' motion for preliminary approval and concluded that the proposed settlement did not fall "within the range of reasonableness." No. 11-2509, ECF No. 974 at 30. On September 4, 2014, the High-Tech defendants filed a petition for a writ of mandamus with the Ninth Circuit. No. 14-72745 (9th Cir.), ECF No. 1. On September 22, 2014, the Ninth Circuit found that the petition "raises issues that warrant a response," and ordered briefing. No. 14-72745 (9th Cir.), ECF No. 2. On January 13, 2015, the High-Tech defendants filed correspondence with the Ninth Circuit referring to a new proposed settlement agreement. No. 14-72745 (9th Cir.), ECF No. 21. On January 30, 2015, the defendants filed an unopposed motion to dismiss the petition, which the Ninth Circuit granted on February 2, 2015. No. 14-72745 (9th Cir.), ECF Nos. 23, 24.
Plaintiff Garrison filed the class action complaint on October 14, 2014. ECF No. 1. On October 22, 2014, the Court related this action to High-Tech. ECF No. 6. After initially answering the complaint on November 10, 2014, ECF No. 9, Oracle filed an amended answer on December 1, 2014, ECF No. 12.
On January 5, 2015, Oracle filed a motion for judgment on the pleadings, ECF No. 17, which the Court granted on April 22, 2015, ECF No. 72. The Court found that Garrison's claims were time barred under the applicable statutes of limitations, and that Garrison had failed to adequately plead a "continuing violation" or "fraudulent concealment" theory to toll the statutes of limitations. See Garrison, 2015 WL 1849517, at *9. The dismissal was without prejudice, as the Court determined that Garrison might be able to allege sufficient facts to support his continuing violation or fraudulent concealment theories. Id.
On May 22, 2015, Garrison filed an amended complaint. ECF Nos. 98 (conditionally sealed); 102 (unredacted). After the Court approved a stipulation for Garrison to file a second amended complaint, ECF No. 104, Garrison, along with additional plaintiffs Van Vorst and Hari, filed the SAC on June 5, 2015, ECF No. 105. The SAC asserts causes of action under the following statutes: (1) Section 1 of the Sherman Act, 15 U.S.C. § 1; (2) California's Cartwright Act (the "Cartwright Act"), Cal. Bus. & Prof. Code § 16720 et seq.; (3) California's Unfair Competition Law ("UCL"), Cal. Bus. & Prof. Code § 17200 et seq.; and (4) California's Business & Professions Code § 16600 et seq. ("Section 16600"). SAC ¶¶ 111-142. Plaintiffs seek damages, pre- and post-judgment interest, attorneys' fees and expenses, and a permanent injunction. Id. at 29.
Oracle filed the instant motion to dismiss on June 25, 2015. ECF No. 110 ("Mot."). Oracle renews the argument that Plaintiffs' claims are untimely, and also moves to dismiss for failure to state a claim on the merits. See id. Oracle also filed a request for judicial notice. ECF No. 111. On July 15, 2015, the Court granted a stipulation to strike one paragraph of the SAC. ECF No. 113. On July 22, 2015, Plaintiffs opposed the motion to dismiss, ECF No. 114 ("Opp."), and filed a request for judicial notice, ECF No. 114-1. Oracle replied on August 13, 2015. ECF No. 125 ("Reply"). On December 4, 2015, Plaintiffs filed an ex parte motion to supplement the record and to stay proceedings pending Plaintiffs' anticipated motion to compel compliance with a subpoena. ECF No. 138. Plaintiffs also filed a motion to seal materials associated with the motion to supplement the record. ECF No. 137. Although
On December 17, 2015, the Court ordered the parties to file supplemental briefing. ECF No. 144. The Court noted that the parties, in the original briefing, did not dispute that Plaintiffs' claims accrued under the default accrual rules by 2009, at the latest, and thus that Plaintiffs' claims were untimely absent an exception to the default accrual rules or a tolling doctrine. Id. The Court asked the parties to address whether Plaintiff Hari's employment at Oracle impacts the statutes of limitations analysis. Id. On January 5, 2016, the parties filed simultaneous briefs in response to the Court's order. ECF Nos. 148 (Oracle's supplemental brief); 149 (Plaintiffs' supplemental brief). Plaintiffs filed an administrative motion to file Plaintiffs' supplemental brief and associated documents under seal. ECF No. 150. On January 15, 2016, the parties filed simultaneous reply briefs. ECF Nos. 153 (Oracle's reply); 155 (Plaintiffs' reply).
Rule 8(a)(2) of the Federal Rules of Civil Procedure requires a complaint to include "a short and plain statement of the claim showing that the pleader is entitled to relief." A complaint that fails to meet this standard may be dismissed pursuant to Rule 12(b)(6). Rule 8(a) requires a plaintiff to plead "enough facts to state a claim to relief that is plausible on its face." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007). "A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009). "The plausibility standard is not akin to a probability requirement, but it asks for more than a sheer possibility that a defendant has acted unlawfully." Id.
For purposes of ruling on a Rule 12(b)(6) motion, the Court "accept[s] factual allegations in the complaint as true and construe[s] the pleadings in the light most favorable to the nonmoving party." Manzarek v. St. Paul Fire & Marine Ins. Co., 519 F.3d 1025, 1031 (9th Cir.2008). The Court, however, need not accept as true allegations contradicted by judicially noticeable facts, see Shwarz v. United States, 234 F.3d 428, 435 (9th Cir.2000), and it "may look beyond the plaintiff's complaint to matters of public record" without converting the Rule 12(b)(6) motion into a motion for summary judgment, Shaw v. Hahn, 56 F.3d 1128, 1129 n. 1 (9th Cir. 1995). Nor must the Court "assume the truth of legal conclusions merely because they are cast in the form of factual allegations." Fayer v. Vaughn, 649 F.3d 1061, 1064 (9th Cir.2011) (per curiam). Mere "conclusory allegations of law and unwarranted inferences are insufficient to defeat a motion to dismiss." Adams v. Johnson, 355 F.3d 1179, 1183 (9th Cir.2004).
Claims sounding in fraud or mistake are subject to the heightened pleading requirements of Federal Rule of Civil Procedure 9(b), which require that a plaintiff alleging fraud "must state with particularity the circumstances constituting fraud." Fed. R. Civ. P. 9(b); see also Kearns v. Ford Motor Co., 567 F.3d 1120, 1124 (9th Cir.2009). To satisfy the heightened standard under Rule 9(b), the allegations must be "specific enough to give defendants notice of the particular misconduct which is alleged to constitute the fraud charged so that they can defend
If the court concludes that the complaint should be dismissed, it must then decide whether to grant leave to amend. Under Rule 15(a) of the Federal Rules of Civil Procedure, leave to amend "shall be freely given when justice so requires," bearing in mind "the underlying purpose of Rule 15 ... [is] to facilitate decision on the merits, rather than on the pleadings or technicalities." Lopez v. Smith, 203 F.3d 1122, 1127 (9th Cir.2000) (en banc) (citation omitted). Nonetheless, a district court may deny leave to amend a complaint due to "undue delay, bad faith or dilatory motive on the part of the movant, repeated failure to cure deficiencies by amendments previously allowed, undue prejudice to the opposing party by virtue of allowance of the amendment, [and] futility of amendment." See Leadsinger, Inc. v. BMG Music Publ'g, 512 F.3d 522, 532 (9th Cir.2008).
Oracle moves to dismiss Plaintiffs' complaint on four grounds: (1) all of Plaintiffs' claims are barred by the applicable statute of limitations; (2) Plaintiffs fail to state a Sherman Act claim because Plaintiffs fail to adequately allege an agreement between Oracle and Google or a conspiracy among Oracle and other companies; (3) Plaintiffs are ineligible for restitution or disgorgement under the UCL; and (4) Plaintiffs, as former Oracle employees, lack standing to seek injunctive and declaratory relief. Mot. at 7-25. As the Court concludes below that Plaintiffs' claims are time barred, the Court need not reach the remainder of Oracle's arguments.
As a preliminary matter, the Court addresses the parties' requests for judicial notice and Plaintiffs' ex parte motion to supplement the record and to stay the ruling. The Court then turns to the statutes of limitations applicable to Plaintiffs' claims. Next, the Court considers Plaintiffs' arguments that an exception to the default accrual rules or a tolling doctrine renders Plaintiffs' claims timely.
Although a district court generally may not consider any material beyond the pleadings in ruling on a Rule 12(b)(6) motion, the Court may take judicial notice of documents referenced in the complaint, as well as matters in the public record, without converting a motion to dismiss into one for summary judgment. See Lee v. City of L.A., 250 F.3d 668, 688-89 (9th Cir.2001), overruled on other grounds by Galbraith v. Cty. of Santa Clara, 307 F.3d 1119, 1125-26 (9th Cir.2002). In addition, the Court may take judicial notice of matters that are either "generally known within the trial court's territorial jurisdiction" or
Oracle requests that the Court take judicial notice of documents incorporated by reference into the SAC, including emails quoted or relied upon in SAC ¶¶ 29, 33, 36, 40, 45, 47, 49, 98-100; Oracle documents quoted or relied upon in SAC ¶¶ 84-110; and deposition testimony relied upon in SAC ¶ 54. Oracle also requests judicial notice of matters of public record (complaints and final judgments in federal district courts), and a newspaper article. Plaintiffs request the Court take judicial notice of certain matters of public record (an official government document in a DOJ file, and complaints and final judgments in federal district courts). These documents are appropriate for judicial notice. See Coto Settlement v. Eisenberg, 593 F.3d 1031, 1038 (9th Cir.2010) (materials incorporated by reference into the complaint); Von Saher v. Norton Simon Museum of Art at Pasadena, 592 F.3d 954, 960 (9th Cir.2010) (the fact that information was published in news articles); Lee, 250 F.3d at 689-90 (matters of public record). Accordingly, the Court GRANTS the parties' unopposed requests for judicial notice. See ECF Nos. 111, 114-1.
On Friday evening, December 4, 2015 — almost four months after the completion of briefing in the instant motion — Plaintiffs filed an ex parte motion to supplement the record and to stay the Court's ruling on the instant motion pending an anticipated motion to compel documents from the defendants and the counsel for the plaintiffs in the High-Tech litigation. ECF No. 138 (noting the motion to compel is "set to be filed next week"). Plaintiffs seek to supplement the record with numerous documents allegedly discovered after the completion of the briefing on the instant motion, which Plaintiffs claim demonstrate Oracle's alleged antitrust violations and fraudulent concealment. Plaintiffs filed a corresponding motion to file the documents under seal. ECF No. 137. Although Oracle was not served with Plaintiffs' filings, and did not have access to the documents that Plaintiffs filed conditionally under seal, Oracle filed an opposition on December 7, 2015. ECF No. 139. As of the date of this order, Plaintiffs have not filed the anticipated motion to compel documents from the parties involved in the High-Tech litigation.
Civil Local Rule 7-10 provides that a party may file an ex parte motion "only if a statute, Federal Rule, local rule or Standing Order authorizes the filing of an ex parte motion," unless otherwise ordered by the Court. Civ. L.R. 7-10. The Rule also provides that the ex parte motion "must include a citation to the statute, rule or order which permits the use of an ex parte motion to obtain the relief sought." Id. Plaintiffs' ex parte motion does not cite to any authority permitting the filing of an ex parte motion. Nor does Plaintiffs' motion provide any reason for filing ex parte. Accordingly, the Court STRIKES Plaintiffs' motion. See Civ. L.R. 7-10; cf. Bertuccio v. San Benito Cty., No. 13-CV-01339-LHK, 2013 WL 2147421, at *3 (N.D.Cal. May 15, 2013) ("None of Plaintiffs' motions identified any authorization for her ex parte communications. This alone would justify denial...."). The Court DENIES as moot Plaintiffs' corresponding motion to file under seal.
Second, on a motion to dismiss, the Court does not look beyond the pleadings to evidence presented by the parties, and Plaintiffs do not assert that the proffered documents are proper subjects of judicial notice. See Manzarek, 519 F.3d at 1030-31 (noting that on a motion to dismiss, the district court may "generally consider only allegations contained in the pleadings, exhibits attached to the complaint, and matters properly subject to judicial notice"). There is therefore no basis for the Court to consider the proffered documents.
Third, the majority of "newly discovered" documents proffered by Plaintiffs were, according to a declaration by Oracle, produced by June 2015, a month before Plaintiffs filed their opposition to the instant motion. See ECF Nos. 140, 141. Plaintiffs offer no reason for their multiple-month delay in seeking to supplement the record or to stay the case to conduct further discovery. See generally ECF No. 138. It appears that Plaintiffs' motion was not triggered by new discovery in this case, but by the Court's November 23, 2015 dismissal of virtually identical allegations brought by the same Plaintiffs' counsel against Microsoft. See Ryan v. Microsoft ("Ryan II"), No. 14-CV-04634-LHK, 147 F.Supp.3d 868, 891-93, 2015 WL 7429495, at *18-19 (N.D.Cal. Nov. 23, 2015). Additionally, Plaintiffs offer no authority that discovery from a third party, sought after briefing on a motion to dismiss was completed, justifies a stay of that motion. Nor have Plaintiffs filed the anticipated motion to compel that forms the basis of Plaintiffs' motion to stay, although Plaintiffs have had over two months to do so. Accordingly, Plaintiffs have not shown good cause to supplement the record or to stay the instant ruling.
Plaintiffs do not dispute that Plaintiffs' claims under the Sherman Act, Cartwright Act, UCL, and Section 16600 are all subject to a four-year statute of limitations. See Garrison, 2015 WL 1849517, at *6 (applying-four year statute of limitations) (citing 15 U.S.C. § 15b (Sherman Act); Cal. Bus. & Prof. Code § 16750.1 (Cartwright Act); Cal. Bus. & Prof. Code § 17208 (UCL); Cal. Civ. Proc. Code § 343 (catch-all limitations statute applicable to Section 16600)); see also Ryan v. Microsoft
The parties agree that all of Plaintiff Garrison's and Plaintiff Van Vorst's claims accrued under the default accrual rules by 2009, at the latest. See, e.g., ECF No. 148, at 1 (Oracle claiming that the "statute of limitations began to run no later than 2009 and expired in 2013"); ECF No. 150, at 3 (Plaintiffs stating that Garrison's and Van Vorst's claims accrued when Garrison and Van Vorst were injured by Oracle's alleged misconduct between 2007-2009). Accordingly, an exception to the default accrual rules or a tolling doctrine must apply in order for Garrison's and Van Vorst's claims to be timely.
The parties dispute when Plaintiff Hari's claims accrued under the default accrual rules, and thus whether an exception to the default accrual rules or a tolling doctrine is necessary to render Hari's claims timely. In order to determine the accrual of Hari's claims under the default accrual rules, the Court must first review the history of the parties' dispute over the accrual of Hari's claims.
In briefing Oracle's motion for judgment on the pleadings, the parties did not dispute that, for Garrison's federal Sherman Act claim and three California state law claims, under the default accrual rules, "the applicable statutes of limitations began to run in May 2007 (i.e., when Plaintiff alleges Oracle and Google entered into the Agreement)." Garrison v. Oracle Corp., No. 14-CV-04592-LHK, 2015 WL 1849517, at *6 (N.D.Cal. Apr. 22, 2015). Accordingly, the parties agreed that an exception to the default accrual rules or a tolling doctrine was necessary for all of Garrison's claims to be timely. Id.
In the SAC, Plaintiffs allege new Secret Agreements, in addition to the alleged 2007 agreement between Oracle and Google. The SAC also adds Hari as a named plaintiff. ECF No. 105. Highlighting the new Secret Agreements, Oracle argues in the instant motion to dismiss that, according to the default accrual rules, Plaintiffs' Sherman Act and state law claims accrued by 2009, which is the latest date that Plaintiffs allege that Oracle entered a specific Secret Agreement. Mot. at 7; Reply at 2. Thus, according to Oracle, the statutes of limitations for all of Plaintiffs' claims expired in 2013 absent an exception to the default accrual rules or a tolling doctrine. Reply at 2.
In Plaintiffs' opposition to the instant motion to dismiss, Plaintiffs do not dispute Oracle's contention that Plaintiffs' Sherman Act and state law claims accrued in 2009, at the latest. See generally Opp. Nor do Plaintiffs analyze when Plaintiffs' claims accrued according to the default accrual rules. Rather, Plaintiffs assert that an exception to the default accrual rules or a tolling doctrine applies and thus renders Plaintiffs' claims timely. See id.
Neither party separately addressed Hari's claims in the briefing on the instant motion to dismiss. Thus, the Court requested supplemental briefing on whether Hari's employment at Oracle, which began in 2012, impacts the statute of limitations analysis. ECF No. 144. In the order requesting supplemental briefing, the Court summarized its understanding of the parties' positions on the accrual of Plaintiffs'
In the requested supplemental briefing, the parties do not contest the Court's understanding of the parties' positions. See generally ECF Nos. 148, 150, 153, 155. However, Plaintiffs now argue that Hari's claims are timely under the default accrual rules, without any exceptions to the default accrual rules or tolling. According to Plaintiffs, Hari's claims did not accrue until 2012, when Hari was hired by Oracle and injured through the receipt of an artificially depressed salary from Oracle. ECF Nos. 150, 155. Specifically, Plaintiffs state that Hari began working for Oracle in 2012 when Oracle acquired the company for whom Hari worked. See ECF No. 150, at 2. As in Plaintiffs' original briefing, Plaintiffs' two supplemental briefs fail to address the state law default accrual rules. Instead, Plaintiffs' supplemental briefs focus entirely on the federal default accrual rule for Hari's Sherman Act claim, and cite only federal case law. See ECF No. 150, at 2-3; ECF No. 155. Similarly, Oracle's two supplemental briefs focus on the accrual of Hari's Sherman Act claim. See generally ECF Nos. 148, 153. Oracle argues that Hari's Sherman Act claim accrued by 2009, when Oracle allegedly committed the anticompetitive conduct that depressed the labor market in which Hari participated. Oracle asserts that Hari's state law claims accrued at the same time as Hari's Sherman Act claim. See ECF No. 148, at 4 n.2.
Accordingly, in four rounds of briefing — the opposition to the motion for judgment on the pleadings, the opposition to the instant motion to dismiss, and the two supplemental briefs — Plaintiffs assume that Plaintiffs' state law claims accrue at the same time as Plaintiffs' Sherman Act claims. Plaintiffs have never distinguished the accrual of Plaintiffs' state law claims from the accrual of Plaintiffs' Sherman Act claim under the default accrual rules. By contrast, Oracle has repeatedly asserted that Plaintiffs' Sherman Act and state law claims accrue at the same time. In the supplemental briefing, both parties focus on the federal default accrual rule for Sherman Act claims to determine the accrual of Hari's state law and Sherman Act claims.
Under California law, the general accrual rule is the "last element rule," where a claim accrues "`when [it] is complete with all of its elements' — those elements being wrongdoing, harm, and causation." Pooshs v. Philip Morris USA, Inc., 51 Cal.4th 788, 797, 123 Cal.Rptr.3d 578, 250 P.3d 181 (2011) (quoting Norgart v. Upjohn Co., 21 Cal.4th 383, 397, 87 Cal.Rptr.2d 453, 981 P.2d 79 (1999)). The California Supreme Court has held that federal interpretations of the Sherman Act are instructive in interpreting California's Cartwright Act. Aryeh v. Canon Bus. Solutions, Inc., 55 Cal.4th 1185, 1195, 151 Cal.Rptr.3d 827, 292 P.3d 871 (2013). Given the Aryeh court's guidance and the parties' exclusive focus on the default accrual rule for Hari's Sherman Act claim, the Court addresses Hari's Sherman Act claim to resolve when Hari's Sherman Act and California law claims accrued under the default accrual rules. See In re Animation Workers Antitrust Litig. ("Animation Workers I"), 87 F.Supp.3d 1195, 1208 n. 10
Plaintiffs contend that, under the default accrual rule for a Sherman Act claim, Hari's claims accrued at the time Hari experienced injury from Oracle's anticompetitive conduct. ECF No. 150, at 2-3. According to Plaintiffs, Hari was not injured until 2012, when Oracle paid Hari an artificially depressed salary. Id. Oracle counters that Hari's claims accrued at the time of the anticompetitive conduct, and thus Hari's claims accrued in 2009, at the latest, when Oracle entered into the last alleged Secret Agreement. ECF No. 148, at 2-5. Oracle also argues that Hari was injured in 2009, at the latest, because Hari was in the allegedly affected labor market working at another technology company that was acquired by Oracle in 2012, and thus received a depressed salary prior to Hari's employment with Oracle. Id.; ECF No. 150, at 4 (referring to Hari's LinkedIn account to confirm Hari's previous employment). Finally, Oracle claims that Plaintiffs "have consistently alleged that they suffered an injury and their claims accrued at the time of Oracle's allegedly anticompetitive conduct." ECF No. 148, at 4.
The Court agrees with Oracle that Hari's Sherman Act claim accrued by 2009 under the default accrual rule. The Court finds the Ninth Circuit's recent decision in Samsung Elecs. Co. v. Panasonic Corp., 747 F.3d 1199, 1202-03 (9th Cir.2014), cert. denied, ___ U.S. ___, 135 S.Ct. 1157, 190 L.Ed.2d 912 (2015), to be instructive. In Samsung, Panasonic Corporation, Panasonic Corporation of North America, and SD-3C, LLC (collectively, "Panasonic") allegedly entered into anticompetitive agreements in 2003 and 2006 to charge a royalty for certain manufacturers producing SD cards. Id. at 1201. When Samsung Electronics Company ("Samsung") began to manufacture SD cards in 2006, Samsung paid the requested royalty to Panasonic. Id. at 1202. Samsung filed suit in 2010 and alleged that Panasonic's agreements violated the Sherman Act. Id.
Samsung was not in the SD market at the time of Panasonic's initial anticompetitive agreement, and thus "the harm to Samsung challenged in this suit was speculative at the time of the initial wrong." Id. at 1204-05. However, the Ninth Circuit did not find that Samsung's claim accrued, under the default accrual rules, when Samsung began to pay royalties in 2006. See id. at 1202-05. Rather, the Ninth Circuit held that the continuing violation and speculative damages exceptions to the default accrual rules were necessary to render Samsung's claims timely. Id. at 1203-05 (noting that the 2006 agreement was a continuing violation, and that the speculative damages exception applies when damages are not clear at the "time of the initial act"). Under the Ninth Circuit's reasoning, Samsung's claim accrued — absent an exception to the default accrual rules — at the time of Panasonic's anticompetitive conduct in 2003. See id. at 1203-04. Therefore, in the Ninth Circuit, Sherman Act claims accrue under the default accrual rules at the time of the alleged anticompetitive conduct. See id.; see also Pace Indus., Inc. v. Three Phoenix Co., 813 F.2d 234, 237 (9th Cir.1987) ("A cause of action in antitrust accrues each time a plaintiff is injured by an act of the defendant and the statute of limitations runs from the commission of the act." (emphasis added) (citing
The Court acknowledges that some courts, including this Court, have stated that Sherman Act claims accrue "at the time of injury." See Animation Workers I, 87 F.Supp.3d at 1216; see also Detrick v. Panalpina, Inc., 108 F.3d 529, 538 (4th Cir.1997) (noting that "under the antitrust accrual rule, the statute of limitations is triggered by the date of the injury alone"). However, these courts were determining whether to apply a discovery rule of accrual to the plaintiff's claims. See Animation Workers I, 87 F.Supp.3d at 1208 (rejecting argument that accrual began "at the time that Plaintiffs discovered, or reasonably should have discovered[,] their injuries"); Detrick, 108 F.3d at 538 (discussing the "injury discovery" rule applied by the Ninth Circuit in RICO actions). In neither case did the timeliness of the plaintiff's claims turn on whether accrual began at the time of injury or the time of the alleged anticompetitive conduct, and thus the courts were not presented with the arguments made by the parties in the instant case. Additionally, this Court is bound by the Ninth Circuit's decision that, absent an exception, a Sherman Act claim accrues at the time of the anticompetitive conduct. See Samsung, 747 F.3d at 1202-05.
In the instant case, Oracle's alleged anticompetitive conduct is entering into the Secret Agreements. See SAC ¶¶ 2-6, 113-116, 120-121, 124. Plaintiffs allege that Oracle first entered into a Secret Agreement in 2006. Id. ¶ 30. This Secret Agreement, and others later formed by Oracle, allegedly depressed compensation in the labor market for technology and management employees. SAC ¶¶ 9, 60-61. If each subsequent Secret Agreement entered into by Oracle constituted a new antitrust violation, then Hari's Sherman Act claim could have accrued as late as 2009, the last year in which Plaintiffs allege that a specific new Secret Agreement was entered into by Oracle. See generally SAC. Accordingly, the statute of limitations for Hari's Sherman Act claim began to run, under the default accrual rules, by 2009. See Samsung, 747 F.3d at 1202-05. As noted above, the Court finds that — in light of Plaintiffs' assumption that Hari's California law claims and Sherman Act claims accrue at the same time — Hari's California law claims also accrued by 2009. The statutes of limitations expired four years later, in 2013, a year before the complaint was filed on October 14, 2014. Thus, as with Garrison's and Van Vorst's claims, Hari's claims are untimely unless an exception to the default accrual rules or a tolling doctrine applies.
In hopes of avoiding the time bar, Plaintiffs offer the following five arguments: (1) Plaintiffs are entitled to statutory tolling under 15 U.S.C. § 16(i); (2) Oracle committed a "continuing violation"; (3) Oracle fraudulently concealed Oracle's anticompetitive conduct; (4) the California "discovery rule" applies to the UCL claim; and (5) the California "continuous accrual" rule applies to the California claims.
Plaintiffs contend that the statutes of limitations are tolled by four past DOJ proceedings: (1) the DOJ investigation into Oracle, from 2009 until October 2014; (2) and (3) the DOJ's lawsuits against Adobe and Lucasfilm, which Plaintiffs treat collectively, from September 24, 2010 to June 3, 2012; and (4) the DOJ's lawsuit against eBay, from November 16, 2012 to September 2, 2014.
15 U.S.C. § 16(i).
In other words, to receive tolling under § 16(i) a private plaintiff must show that the plaintiff's antitrust suit is "based in whole or in part on any matter complained of" in a government antitrust proceeding. Id.; see also Charley's Tour & Transp., Inc. v. Interisland Resorts, Ltd., 618 F.Supp. 84, 86 (D.Haw.1985) (noting "[t]he plaintiff bears the burden of showing that the two suits are based in whole or in part" on the same matter) (citing Akron Presform Mold Co. v. McNeil Corp., 496 F.2d 230, 233 (6th Cir.1974)). To determine whether a private suit is "based in whole or in part on any matter complained of" in prior government action, the Court is "limited to a comparison of the two complaints on their face." Chipanno v. Champion Int'l Corp., 702 F.2d 827, 832 (9th Cir.1983) (quoting Leh v. Gen. Petroleum Corp., 382 U.S. 54, 59, 86 S.Ct. 203, 15 L.Ed.2d 134 (1965)).
A private plaintiff "is not required to allege that the same means were used to achieve the same objectives of the same conspiracies by the same defendants." Leh, 382 U.S. at 59, 86 S.Ct. 203. However, there must be a "real relation" between the government and private causes of action. Id. "The real relation test is met where the conspiratorial acts of the defendants are intertwined with and fundamentally the same" as those alleged in the government's filed lawsuits. See Charley's Tour, 618 F.Supp. at 86. Factors that courts have considered to assess a "real relation" include the "substantial identity of parties," Leh, 382 U.S. at 63, 86 S.Ct. 203, whether Plaintiffs have alleged "a conspiracy that included the objectives, means, time span, and geographic scope of
Plaintiffs first contend that the DOJ investigation into Oracle tolls the statutes of limitations. According to Plaintiffs, DOJ opened an investigation into Oracle in 2009 when DOJ began investigating other technology companies for unlawful recruiting practices. Opp. at 3. DOJ informed Oracle that DOJ would not pursue a case against Oracle on October 29, 2014, more than two weeks after Plaintiffs filed the instant action. ECF No. 114-1 Ex. A.
At the outset, the Court notes that Plaintiffs spend only a single sentence arguing that the DOJ investigation into Oracle tolls the statutes of limitations. Opp. at 7-8. Plaintiffs rely solely on Dungan v. Morgan Drive-Away, Inc., 570 F.2d 867, 871 (9th Cir.1978), in which the Ninth Circuit noted that "[t]he initiation of an investigation or a decision to prosecute more comfortably fits the statutory language than does empanelling the grand jury." However, the Ninth Circuit proceeded to say that to begin tolling upon the initiation of an investigation or upon a decision to prosecute "would introduce great uncertainty in fixing the time at which the suspension period commences" and "would frustrate the statute-of-repose purpose of section 16(i)." Id. The Ninth Circuit therefore declined to select the initiation of a government investigation as the trigger for the start of § 16(i) tolling. Id.
Instead, courts have used the date on which the government filed a complaint as the date on which statutory tolling began. See Leh, 382 U.S. at 59-63, 86 S.Ct. 203 (giving tolling effect from the time that the government filed a complaint); Minn. Mining & Mfg. Co. v. N.J. Wood Finishing Co., 381 U.S. 311, 313, 85 S.Ct. 1473, 14 L.Ed.2d 405 (1965) (giving tolling effect from the date Federal Trade Commission filed a proceeding); Chipanno, 702 F.2d at 832-33 (giving tolling effect from the date government filed a complaint); In re Scrap Metal Antitrust Litig., No. 1:02 CV 0844, 2006 WL 2850453, at *22 (N.D.Ohio Sept. 30, 2006) (noting "more than a government investigation is needed to activate § 16(i)"); see also Areeda and Hovenkamp, Antitrust Law: An Analysis of Antitrust Principles and Their Application, § 321 (2014) (stating that § 16(i) "is not triggered by...government proceedings falling short of the filing of a complaint"). This view is consistent with the instruction of the U.S. Supreme Court and the Ninth Circuit that the private and government proceedings are to be compared by examining "the two complaints on their face." Chipanno, 702 F.2d at 832 (emphasis added) (quoting Leh, 382 U.S. at 59, 86 S.Ct. 203). In 2014, DOJ "closed its investigation of [Oracle] relating to potential agreements among certain firms regarding employee recruiting," without filing a complaint. ECF No. 114-1 Ex. A. Because DOJ never filed a complaint against Oracle, Plaintiffs are not entitled to § 16(i) tolling based on the DOJ's investigation of Oracle.
Plaintiffs additionally seek tolling under § 16(i) for the pendency of three government-filed lawsuits: United States v. Adobe Sys., Inc., No. 10-CV-1629 (D.D.C.), United States v. Lucasfilm, Inc., No. 10-CV-2220 (D.D.C.), and United States v. eBay, Inc., No. 12-CV-5869 (N.D.Cal.). To receive statutory tolling for the pendency of these lawsuits, Plaintiffs must show that these lawsuits are "based in whole or in part on the same matter" as the instant
The Court first notes that there is no overlap between the parties in the government-filed lawsuits and the instant lawsuit. The Adobe defendants were Adobe, Apple, Google, Intel, Intuit, and Pixar. ECF No. 111-11. The sole defendant in Lucasfilm was Lucasfilm. ECF No. 114-1 Ex. B. The sole defendant in eBay was eBay. Id. Ex. E. Oracle was not a defendant in any of the three government-filed lawsuits.
Moreover, not one of the complaints in the three government-filed lawsuits mentions Oracle. The Adobe complaint alleges five substantially similar agreements, each between two companies: (1) Apple and Google, (2) Apple and Adobe, (3) Apple and Pixar, (4) Google and Intel, and (5) Google and Intuit. ECF No. 111-11. The two companies in each agreement agreed not to "cold call" each other's employees. Id. The Adobe complaint does not mention any other technology company. Oracle was not a party to any of these agreements, and none of the alleged agreements restricted any of the named companies from hiring employees from Oracle. Id.
Similarly, the Lucasfilm complaint alleged an agreement between Lucasfilm and Pixar "not to cold call, not to make counteroffers under certain circumstances, and to provide notification when making employment offers to each other's employees." ECF No. 114-1 Ex. B. The Lucasfilm complaint does not mention any other technology companies.
Likewise, the eBay complaint alleges that eBay and Intuit "agreed not to recruit each other's employees" and "eBay agreed not to hire Intuit employees, even those that approached eBay for a job." Id. Ex. E. The complaint further alleges direct communications between eBay CEO Meg Whitman and Founder and Chairman of the Executive Committee at Inuit Scott Cook. See id. The eBay complaint does not mention any other technology companies.
Because the conspiracies alleged in the Adobe, Lucasfilm, and eBay complaints do not involve Oracle, Plaintiffs' allegations of misconduct by Oracle in the instant lawsuit are not "intertwined with and fundamentally the same as those alleged in the government action[s]." Charley's Tour, 618 F.Supp. at 86. As noted, the government-filed lawsuits and the instant lawsuit lack "substantial identity of the parties." Leh, 382 U.S. at 63, 86 S.Ct. 203. Additionally, Plaintiffs have not shown that "evidence adduced in the trial of the government suit would be of practical assistance to plaintiffs," as there is no need for Plaintiffs to prove the existence of any of the agreements in Adobe, Lucasfilm, or eBay. Chipanno, 702 F.2d at 832; see also In re Coordinated Pretrial Proceedings in Petroleum Prods. Antitrust Litig., 782 F.Supp. 481, 486 (C.D.Cal.1991) (finding no factual overlap from the government lawsuit when the government lawsuit was based on anticompetitive conduct in different geographic area than that alleged in the private lawsuit).
Plaintiffs rely heavily on the similarity between the kinds of alleged anticompetitive behavior, namely the existence of anti-solicitation agreements in both the
Under the "continuing violation" theory, "each overt act that is part of the [antitrust] violation and that injures the plaintiff... starts the statutory period running again, regardless of the plaintiff's knowledge of the alleged illegality at much earlier times." Klehr v. A.O. Smith Corp., 521 U.S. 179, 189, 117 S.Ct. 1984, 138 L.Ed.2d 373 (1997) (internal quotation marks omitted); see also Pace, 813 F.2d at 237 ("A continuing violation is one in which the plaintiff's interests are repeatedly invaded and a cause of action arises each time the plaintiff is injured."). In the Ninth Circuit, an overt act restarts the statute of limitations in an antitrust action if it: (1) is "a new and independent act that is not merely a reaffirmation of a previous act"; and (2) "inflict[s] new and accumulating injury on the plaintiff." Samsung, 747 F.3d at 1202 (internal quotation marks omitted).
The Court previously determined that Plaintiff Garrison's original complaint failed to allege a continuing violation because "the bald assertion that `[Oracle's] conspiracy was a continuing violation through which [Oracle] repeatedly invaded Plaintiff and Plaintiff Class' interests by adhering to, enforcing, and reaffirming the anticompetitive agreements described herein' is insufficient to show a continuing violation." Garrison, 2015 WL 1849517, at *7. The Court noted, "the complaint is largely bereft of any dates or details with regards to Oracle's specific conduct" and "there are no allegations of any new or independent actions taken by Oracle after October 14, 2010 — i.e., within four years of the filing date of this complaint — that caused Plaintiff any new or accumulating injury." Id. The Court further explained, "Plaintiff has simply failed to allege any facts indicating when the supposed continuing violations took place, let alone that they took place on or after October 14, 2010." Id. The Court cautioned Plaintiffs that "failure to cure the deficiencies identified" would result in a dismissal with prejudice. Id. at *9.
Plaintiffs assert that the SAC fixes the deficiencies in the original complaint by alleging: (1) Oracle entered new Secret Agreements and added companies to the
A review of the allegations in the SAC again fails to reveal any specific conduct by Oracle during the limitations period. Although Plaintiffs allege that Oracle continued to enter into new Secret Agreements and add companies to the "no hire" list "well into 2012," Plaintiffs fail to identify a single new agreement after 2009. See generally SAC. Although the Court accepts "factual allegations in the complaint as true," Manzarek, 519 F.3d at 1031, the Court need not accept as true "allegations that are merely conclusory," In re Gilead Scis Sec. Litig., 536 F.3d 1049, 1055 (9th Cir.2008). The Court's order granting Oracle's motion for judgment on the pleadings found that "the complaint is largely bereft of any dates or details with regards to Oracle's specific conduct," and explicitly warned Plaintiffs that they must allege details regarding "any new or independent actions taken by Oracle after October 14, 2010" in order to plead a continuing violation. See Garrison, 2015 WL 1849517, at *7. Nonetheless, Plaintiffs' SAC — which is the third complaint filed in this case — does not identify any information as to an agreement entered into by Oracle after 2009, including the companies involved or the dates of formation. Plaintiffs' conclusory allegations are insufficient to allege that Oracle formed a new Secret Agreement after 2009. See In re Gilead Scis., 536 F.3d at 1055 (noting courts do not need to accept allegations that are "merely conclusory").
Similarly, all of Plaintiffs' allegations about Oracle's enforcement of the Secret Agreements are undated or pre-date 2009. See SAC ¶¶ 26, 31, 41, 43 (discussing Oracle's dissemination of the "no hire" list and adherence to the Secret Agreements in 2007 and 2008); id. ¶¶ 35-39 (discussing Oracle's enforcement of the Secret Agreements in 2007 and 2008). Plaintiffs do allege that the 2009 "no hire" CoreTech agreement, for example, was not set to terminate until 2012. Id. ¶ 49. However, Plaintiffs need to do more than merely allege a continuing violation — they must also allege an overt act:
Pace, 813 F.2d at 237 (emphasis added) (citations omitted); see also Samsung, 747 F.3d at 1202-03 (explaining that an overt act must be "a new and independent act that is not merely a reaffirmation of a previous act"). Merely carrying out during the limitations period a final, binding decision
In opposition, Plaintiffs rely on Samsung, 747 F.3d 1199, Columbia Steel Casting Co. v. Portland Gen. Elec. Co., 111 F.3d 1427, 1444-45 (9th Cir.1996), and Hennegan v. Pacifico Creative Serv., Inc., 787 F.2d 1299, 1300-01 (9th Cir.1986). Opp. at 10. From these cases, Plaintiffs argue that each act by Oracle to enforce, renew, or expand the Secret Agreements was an overt act that restarted the limitations period. Id. at 10-11. However, Plaintiffs' argument misses the fact that Plaintiffs have simply failed to allege any acts of enforcement, renewal, or expansion after 2009.
Lastly, the Court turns to Plaintiffs' allegations that they were not solicited by other companies while working at Oracle and were unable to find meaningful employment after leaving Oracle. SAC ¶¶ 74-82. Plaintiffs argue that they "are entitled to the inference at the pleading stage that this was because of those agreements." Opp. at 11. Plaintiffs additionally point to the experience of one former Oracle employee, who was told by the recruiting company Riviera Partners that it could not place the former employee because Riviera Partners had an agreement with Oracle not to perform job placement services for Oracle employees. Id. ¶ 55. Oracle counters that the failure of other companies to solicit, hire, or place Plaintiffs cannot be an overt act by Oracle. Mot. at 10; Reply at 8 n.9.
The Court agrees with Oracle that Plaintiffs have not alleged any overt acts by Oracle after 2009, as required by Ninth Circuit law. See Pace, 813 F.2d at 237 (holding that "even when a plaintiff alleges a continuing violation, an overt act by the defendant is required to restart the statute of limitations" (emphasis added)). Plaintiffs contend that any overt act by co-conspirators should be imputed to Oracle, and cite two cases holding that co-conspirators may be held jointly and severally liable for damages caused by violations of the antitrust laws. Opp. at 11 (citing Beltz Travel Serv., Inc. v. Int'l Air Transp. Ass'n, 620 F.2d 1360, 1367 (9th Cir.1980); In re K-Dur Antitrust Litig., 338 F.Supp.2d 517, 538 (D.N.J.2004)). However, these cases do not address the continuing violation theory nor what constitutes an "overt act," and Plaintiffs offer no substantive argument to apply these cases to the continuing violation context. As Plaintiffs have provided no basis for the Court to conclude that Oracle committed an overt act, the Court concludes that Oracle has not committed a continuing violation based on the acts of other companies.
Because Plaintiffs do not allege an overt act by Oracle during the limitations period, the Court finds that Plaintiffs have failed to plead a continuing violation — namely, that Oracle engaged in a "new and independent act that is not merely a reaffirmation of a previous act," which "inflict[ed] new and accumulating injury" on Plaintiffs.
The purpose of fraudulent concealment is to prevent a defendant from "concealing a fraud ...until such a time as the party committing the fraud could plead the statute of limitations to protect it." In re Animation Workers Antitrust Litig. ("Animation Workers II"), No. 14-CV-04062-LHK, 123 F.Supp.3d 1175, 1194, 2015 WL 4974343, at *13 (N.D.Cal. Aug. 20, 2015) (quoting Bailey v. Glover, 88 U.S. (21 Wall.) 342, 349, 22 L.Ed. 636 (1874)). Thus, "[a] statute of limitations may be tolled if the defendant fraudulently concealed the existence of a cause of action in such a way that the plaintiff, acting as a reasonable person, did not know of its existence." Hexcel Corp. v. Ineos Polymers, Inc., 681 F.3d 1055, 1060 (9th Cir. 2012). The plaintiff bears the burden of pleading and proving fraudulent concealment. Conmar v. Mitsui & Co. (U.S.A.), Inc., 858 F.2d 499, 502 (9th Cir.1988). To plead fraudulent concealment, the plaintiff must allege that: (1) the defendant took affirmative acts to mislead the plaintiff; (2) the plaintiff did not have "actual or constructive knowledge of the facts giving rise to [his] claim" as a result of the defendant's affirmative acts; and (3) the plaintiff acted diligently in trying to uncover the facts giving rise to his claim. Hexcel, 681 F.3d at 1060.
Moreover, allegations of fraudulent concealment must be pled with particularity. Conmar, 858 F.2d at 502. Although "it is generally inappropriate to resolve the fact-intensive allegations of fraudulent concealment at the motion to dismiss stage," In re Rubber Chemicals Antitrust Litig., 504 F.Supp.2d 777, 789 (N.D.Cal.2007), Plaintiffs nevertheless must allege specific factual allegations of fraudulent concealment to survive a motion to dismiss, In re Transpacific Passenger Air Transp. Antitrust Litig., No. C 07-5634 CRB, 2011 WL 1753738, at *20-21 (N.D.Cal. May 9, 2011). "Conclusory statements are not enough." Conmar, 858 F.2d at 502.
In granting Oracle's motion for judgment on the pleadings, the Court rejected Plaintiff Garrison's argument that Oracle had an affirmative duty to disclose Oracle's participation in the alleged conspiracy. The Court then identified two deficiencies in Garrison's allegations of affirmative acts. First, the Court found that Garrison failed "to allege sufficient facts showing the `who, what, where, when, and how' of Oracle's alleged fraudulent concealment." See Garrison, 2015 WL 1849517, at *8. Specifically, the Court explained that Garrison's allegation about Oracle's "pretextual, incomplete, or materially false and misleading explanations for hiring, recruiting, and compensation decisions made under the conspiracy" was "conclusory," "devoid of factual content" and did "not satisfy Rule 12(b)(6)'s pleading standard, much less Rule 9(b)'s heightened pleading standard." Id. Second, the Court found that Garrison alleged only passive concealment, not "affirmative acts" of concealment. Id. Because the Court found that Plaintiffs failed to allege affirmative acts, the Court did not have to reach whether Garrison had "actual or constructive knowledge" or "acted diligently."
Plaintiffs now concede that Oracle did not have a duty to disclose its allegedly illegal behavior. See Opp. at 13-15. Thus, Plaintiffs acknowledge that they must plead "affirmative acts to mislead" by Oracle. Plaintiffs contend that they have alleged four categories of "affirmative acts" sufficient to demonstrate fraudulent concealment: (1) "efforts by Oracle to limit access to and circulation of documents reflecting its secret agreements"; (2) "attempts
Having reviewed the SAC, the Court finds that the allegations for two categories of "affirmative acts" fail to meet the heightened pleading standard of Rule 9(b). First, Plaintiffs fail to sufficiently allege affirmative acts of concealment during the DOJ proceedings. Second, Plaintiffs fail to sufficiently allege misleading conversations between Oracle personnel and Plaintiffs. After addressing these two categories, the Court will then address Plaintiffs' remaining two categories of overt acts: efforts by Oracle to maintain secrecy and the public statements by Oracle about compensation.
Plaintiffs argue that Oracle's conduct during the DOJ investigation was an affirmative act of fraudulent concealment because "Oracle refused to produce any documents without first securing agreements that the document production would not be publicly filed or disclosed, including requiring that any documents that were publicly filed or disclosed would be heavily redacted so as not to publicly reveal the substance of the Secret Agreements and the specific companies involved." SAC ¶ 104.
Plaintiffs do not cite, and the Court is not aware of, any case holding that agreements with DOJ to redact the public versions of documents properly produced during a government investigation are acts of fraudulent concealment. Furthermore, Plaintiffs do not provide the "who, what, where, when, and how" for any of the alleged document production or related agreements. See Swartz, 476 F.3d at 764. Plaintiffs point to no specific document or set of documents that was improperly withheld or redacted. Instead, Plaintiffs make only the conclusory allegation that Oracle took these actions "between 2009 and 2013, all with the intent of preventing the disclosure of its Secret Agreements." Id. Plaintiffs also fail to "set forth what is false or misleading" about the redactions. GlenFed, 42 F.3d at 1548. Here, Plaintiffs fail to allege any facts that could lead this Court to conclude that Oracle redacted documents during the DOJ investigation in a fraudulent or misleading way, let alone facts that could pass muster under Rule 9(b). See Garrison, 2015 WL 1849517, at *8 ("This conclusory allegation devoid of factual content does not satisfy Rule 12(b)(6)'s pleading standard, much less Rule 9(b)'s heightened pleading standard.").
Similarly, the Court finds insufficient under Rule 9(b) Plaintiffs' allegations that Oracle's misleading statements on compensation to Plaintiffs and class members constitute affirmative acts of fraudulent concealment. For instance, Plaintiff Garrison alleges that "an Oracle human resource employee" falsely informed Garrison that "Oracle's commission structure was competitive with other technology companies." SAC ¶ 90. Plaintiff Hari alleges that he was "directed by a senior executive
The Court previously admonished Plaintiffs that, to plead fraudulent concealment in accordance with Rule 9(b), Plaintiffs must allege "an account of the time, place, and specific content of the false representations as well as the identities of the parties to the misrepresentations." Garrison, 2015 WL 1849517, at *8 (quoting- Swartz, 476 F.3d at 764). However, the SAC still fails to allege the "who, what, where, when, and how" of Oracle's allegedly misleading conversations with Plaintiffs and class members. For example, the SAC does not specify the identity of the parties who allegedly made false representations to Plaintiffs, beyond broad descriptors like "an Oracle human resource employee," a "senior executive," and "Oracle." SAC ¶¶ 90, 97. Plaintiffs additionally do not specify the time, date, or place of the allegedly misleading conversations. See Neubronner v. Milken, 6 F.3d 666, 672 (9th Cir.1993). ("The complaint must specify such facts as the times, dates, places, benefits received, and other details of the alleged fraudulent activity."). Without more specific information as to who spoke to Plaintiffs when, Plaintiffs have not given Oracle sufficient notice of what conversations Plaintiffs allege were fraudulent. As such, Oracle is hindered in its ability to adequately defend against the accusation through the testimony of the Oracle employees involved. See Swartz, 476 F.3d at 764 ("To comply with Rule 9(b), allegations of fraud must be specific enough to give defendants notice of the particular misconduct which is alleged to constitute the fraud charged so that they can defend against the charge."); see also Das v. WMC Mortg. Corp., 831 F.Supp.2d 1147, 1166 (N.D.Cal.2011) ("Plaintiffs, for instance, did not plead with the requisite particularity the name of the AmNet employee who concealed material facts....As such, Plaintiffs have failed to sufficiently allege the circumstances constituting the alleged fraudulent concealment."). As this Court stated in its previous order, such conclusory allegations are insufficient to pass muster under Rule 9(b). See Garrison, 2015 WL 1849517, at *8.
Plaintiffs allege that Oracle's efforts to maintain the secrecy of the Secret Agreements constitute affirmative acts of fraudulent concealment. Specifically, Plaintiffs allege that Oracle aimed "to avoid dissemination of the [S]ecret [A]greements and restrict the knowledge to the smallest possible group within Oracle." SAC ¶ 101. Plaintiffs additionally allege that knowledge of the Secret Agreements was "confined to only the most senior executives and the most senior employees from [Oracle's] human resources and recruiting departments." Id. ¶ 109. Oracle counters that Plaintiffs' factual allegations reveal "that Oracle's hiring policies and agreements, as well as its `no-hire' list, were disseminated broadly to Oracle's human resources and other employees, and were anything but secret." Mot. at 13. Oracle also argues that Plaintiffs' secrecy allegations amount to passive concealment, at most. Id. at 13-14.
In this circuit, "affirmative acts" must consist of more than mere passive
In reviewing the SAC, the Court agrees with Oracle that Oracle's alleged efforts at secrecy do not plead fraudulent concealment. Plaintiffs' specific factual allegations contradict Plaintiffs' general allegations about Oracle's efforts at secrecy. In the SAC, Plaintiffs excerpt over a dozen emails from Oracle employees discussing the "no hire" list or alleged Secret Agreements. These emails reveal that Oracle employees spoke openly about the "no hire" list and the gentleman's agreements, both within Oracle and with other companies. Id. ¶¶ 30-31, 36, 40-47, 98-100; see also id. ¶ 26 (noting HR webpage lists "works for company on the Do Not Hire List" as a reason for rejecting a candidate). For instance, as "representative" of Oracle's "corporate policy" of secrecy, Plaintiffs highlight a January 17, 2008 email by Oracle's Director of Recruiting ordering an Oracle recruiter, "DO NOT email any employees of our partners or employees on our no-hire list." Id. ¶¶ 98, 202. In another email, the Director of Recruiting writes "to her recruiting team" that "our policy is and continues to be that
Moreover, the emails in the SAC reveal that, rather than restrict knowledge of the Secret Agreements to a limited number of employees, Oracle shared the "no hire" list with numerous people: at least the "HR department," "key human resource and recruiting personnel," the "recruiting team," and Oracle's Director of Consulting. SAC ¶¶ 31, 41, 100; ECF No. 111-5. Of the dozen emails in the SAC, only one email was marked do not forward. Id. ¶ 100.
By comparison, in Animation Workers II, the Court found that the plaintiffs had alleged affirmative acts to keep the conspiracy secret. The Animation Workers II plaintiffs alleged that the defendants took efforts to avoid sending emails related to the non-solicitation agreements, to avoid writing down the details of the non-solicitation agreements, and to eliminate any paper trail relating to the agreements by using a code name for the agreements. Animation Workers II, 123 F.Supp.3d at 1200-02, 2015 WL 4974343, at *19. These allegations of secrecy in Animation Workers II detailed the specific conduct taken by the defendants to disguise the conspiracy. For example, the complaint in Animation Workers II alleged that one of the defendants, Lucasfilm, "made affirmative efforts to eliminate a paper trail regarding its code-named `DNR' agreements. In an October 2009 `Recruiting Staff Meeting Summary,' Lucasfilm staff emphasized in bolded, all-caps lettering that all discussions of `DNR' needed to be conducted over the phone: `DNR questions CALL Steve. If you see an email forward to Steve and one of our lawyers.'" Animation Workers II, Second Consolidated Amended Class Action Compl., ECF No. 121 ¶ 138.
Similarly, in Lithium Ion a district court found fraudulent concealment when defendants took affirmative steps to destroy evidence of the conspirators' secret meetings, avoided memorializing conversations, and used secret codes to refer to coconspirators and topics. See In re Lithium Ion Batteries Antitrust Litig., No. 13-MD-2420, 2014 WL 309192, at *16 (N.D.Cal. Jan. 21, 2014). The Lithium Ion plaintiffs supported their allegations by quoting specific examples of the defendants' affirmative acts to keep the conspiracy secret, such as an email in which the representative of one of the defendants "asked that the recipients of his email...`destroy this e-mail immediately.'" No. 13-2420, Second Consolidated Amended Compl., ECF No. 415 ¶ 219.
Here, by contrast, Plaintiffs fail to allege affirmative acts of concealment. Unlike the Animation Workers II and Lithium Ion plaintiffs, Plaintiffs put forth no specific factual allegations that Oracle took steps to keep employees from discussing the Secret Agreements, that Oracle attempted to eliminate a paper trail for the Secret Agreements, that Oracle avoided memorializing the Secret Agreements in writing, that Oracle used code names, or that Oracle employees avoided discussing the "no hire" list orally or in writing.
Additionally, Plaintiffs have not alleged that Oracle instructed supervisors or Human Resources personnel to respond to inquiries about compensation with a misleading, fraudulent, or pretextual response. At best, Plaintiffs allege only that Oracle's senior executives and members of the human resources and recruiting departments did not disclose the Secret Agreements to Plaintiffs. That is insufficient to allege "affirmative acts" of concealment. Animation Workers I, 87 F.Supp.3d at 1216 ("That Defendants did not affirmatively disclose the details of their allegedly unlawful conspiracy to Plaintiffs is neither surprising nor sufficient to constitute `affirmative
The Court turns to Plaintiffs' remaining allegations, that Oracle made misleading public statements in Oracle's employee handbook and its SEC filings.
The Court recently found that similar allegations were insufficient to establish fraudulent concealment. See Ryan II, 147 F.Supp.3d at 891-93, 2015 WL 7429495, at *18-19. The Court is not aware of, and Plaintiffs do not cite, any case finding that a defendant's statements in routine public filings that the defendant obeys antitrust laws and participates in a competitive market alone suffice to show fraudulent concealment, absent other evidence that the defendant attempted to conceal its alleged antitrust behavior. Id. Rather, in the Ninth Circuit an affirmative act of denial of wrongdoing constitutes an affirmative act of fraudulent concealment only "if the circumstances make the plaintiff's reliance on the denial reasonable." Conmar, 858 F.2d at 505.
Similarly, in Animation Workers II, the plaintiffs made ample allegations of affirmative acts of fraudulent concealment that rendered reliance upon the defendants' allegedly misleading public filings with the SEC reasonable. 123 F.Supp.3d at 1189-90, 2015 WL 4974343, at *10. These included allegations that the Animation Workers II defendants' Human Resources departments were exchanging voluminous information about salary ranges and bonuses and colluding to fix compensation. Id. at 1184-86, 2015 WL 4974343, at *6-7. For example, the Animation Workers II plaintiffs alleged that the defendants held meetings at which they "set the parameters of a compensation survey" that "provides wage and salary ranges for the studios' technical or artistic positions, broken down by position and experience level." Id. at 1184, 2015 WL 4974343, at *6. The Animation Workers II plaintiffs further alleged that after participating in these meetings fixing compensation, Pixar circulated annual "talking points" memos instructing managers on how to explain compensation. Id. at 1188, 2015 WL 4974343, at *9. These "talking points" memos allegedly did not mention Pixar's agreements colluding with Pixar's competitors to fix salary ranges, and the 2007 "talking points" memo specifically instructed managers to explain that "one of the main reasons" compensation increases were low was in order to "fund additional benefit programs." Id. The plaintiffs alleged that Pixar's president similarly sent a company-wide email justifying the modest compensation increases
The Animation Workers II plaintiffs additionally alleged that they had discussed their compensation with specific, named individuals, and provided the dates, method of communication, and content of these conversations. Id. The Animation Workers II plaintiffs alleged that in these specifically identified conversations, the individuals with whom they spoke did not mention the collusive salary agreements. Id. The Animation Workers II plaintiffs also alleged that the defendants took efforts to avoid sending emails related to the non-solicitation agreements, to avoid writing down the details of the non-solicitation agreements, and to eliminate any paper trail relating to the agreements by using a code name for the agreements. Id. at 1186-87, 2015 WL 4974343, at *8. Further, the Animation Workers II plaintiffs alleged that the defendants made affirmative misrepresentations in their public statements and filings during the DOJ investigations and made unjustified or misleading sealing motions in order to improperly seal documents that did not satisfy the requirements for sealing. Id. at 1189-91, 2015 WL 4974343, at *10-11. On top of all of these allegations, the plaintiffs alleged that the defendants falsely stated in their public filings that they engaged in competitive hiring. Id. at 1189-90, 2015 WL 4974343, at *10. This Court found that the plaintiffs' allegations in combination were adequate to render reliance upon the allegedly misleading SEC filings reasonable. Id.; see also In re TFT-LCD (Flat Panel) Antitrust Litig., 586 F.Supp.2d 1109, 1119 (N.D.Cal.2008) (defendants provided "numerous specific pretextual reasons for inflated prices" and also kept conspiracy secret).
In the instant case, on the other hand, Plaintiffs have not alleged circumstances that would render their reliance on Oracle's allegedly misleading public statements reasonable. Plaintiffs' allegations of allegedly misleading conversations with Oracle employees and of efforts by Oracle to conceal the conspiracy during the DOJ investigation do not satisfy Rule 9(b), and Plaintiffs' allegations of efforts to keep the conspiracy secret by avoiding disseminating information about the Secret Agreements is contradicted by the numerous emails quoted by Plaintiffs in which Oracle freely discussed the "no hire" list and gentleman's agreements. Unlike the plaintiffs in Animation Workers II and Lithium Ion, Plaintiffs here have not alleged that Oracle used a code name to refer to the alleged anti-solicitation agreements or that Oracle instructed employees not to discuss the anti-solicitation agreements by email. Plaintiffs provided just a single example of an Oracle email that was labeled do not forward. Additionally, Plaintiffs have not alleged that Oracle instructed supervisors or Human Resources personnel to respond to inquiries about compensation with a misleading, fraudulent, or pretextual response.
Thus, Plaintiffs are left solely with the allegation that Oracle falsely represented in public filings that it abides by antitrust laws and engages in a competitive market. However, absent any evidence of pretextual justifications for compensation or of steps taken by Oracle to conceal the agreements, the public filings are inadequate, on their own, to satisfy Plaintiffs' burden to show that Oracle took affirmative acts to fraudulently conceal the alleged conspiracy. See Hexcel, 681 F.3d at 1060 ("[The plaintiff] carries the burden of pleading and proving fraudulent concealment; it must plead facts showing that [the defendant] affirmatively misled it, and that [the plaintiff] had neither actual nor constructive knowledge of the facts giving rise to its claim despite its diligence in trying to uncover those facts." (emphasis omitted) (alterations in original)); see also Retail Wholesale & Dep't Store Union Local 338 Ret. Fund v. Hewlett-Packard Co., 52 F.Supp.3d 961, 970 (N.D.Cal.2014) (noting, in securities regulation context, that "a code of ethics is inherently aspirational; it simply cannot be that every time a violation of that code occurs, a company is liable under federal law for having chosen to adopt the code at all"). Accordingly, Plaintiffs have failed to plead fraudulent concealment.
Plaintiffs contend that the discovery rule applies to delay the accrual of their UCL claim. Opp. at 9. The UCL prohibits "any unlawful, unfair or fraudulent business act or practice." Cal. Bus. & Prof. Code § 17200. Plaintiffs allege that Oracle violated the UCL by entering into "illegal Secret Agreements to suppress wages of their respective workforce by restricting the ability of its managerial employees from attaining employment with the other technology companies." SAC ¶ 129. Plaintiffs further allege that these acts "were unfair, unlawful, and or unconscionable, both in their own right and because they violated the Sherman Act and the Cartwright Act." Id. ¶ 130.
In California, the discovery rule postpones accrual of a claim until the plaintiff discovers, or has reason to discover, the cause of action. Clemens v. DaimlerChrysler Corp., 534 F.3d 1017, 1024 (9th Cir.2008). Thus, according to Plaintiffs, their UCL claim did not accrue until Plaintiffs "discovered" the claim on May 17, 2013, when Plaintiffs gained access to documents from the High-Tech litigation that allegedly indicated that Oracle was party to Secret Agreements. Opp. at 9. Plaintiffs acknowledge that this Court determined in Animation Workers I and Ryan I that the discovery rule does not apply to UCL claims that arise purely out of anticompetitive conduct, like Plaintiffs' claim here. Id. at 9 & n.2. The Court dismissed as time barred the complaints in both Animation I and Ryan I, yet Plaintiffs rely on the same arguments that the Court rejected in both of those cases. See Opp. at 9-10; see also Ryan II, 147 F.Supp.3d at 893-96, 2015 WL 7429495, at *20-21 (rejecting application of discovery rule to UCL claim). The Court remains unpersuaded.
Applying Aryeh, this Court has already concluded that the discovery rule does not apply to UCL claims similar to the UCL claim alleged here. See Animation Workers I, 87 F.Supp.3d at 1210-11. In Animation Workers I, the plaintiffs based their UCL claim on the defendants' "efforts to limit competition for and suppress compensation of their employees" and the defendants' agreement "to restrict competition for class members' services through anti-solicitation agreements and agreements to set and fix the compensation of class members." See No. 14-4062, Consolidated Amended Class Action Compl., ECF No. 63 ¶ 143. The Court concluded that these allegations were allegations purely of anticompetitive conduct and not allegations of fraud. Animation Workers I, 87 F.Supp.3d at 1210-11. Therefore, the Court held that the discovery rule did not apply to the Animation Workers I plaintiffs' UCL claim. Id.; see also Ryan II, 147 F.Supp.3d at 893-96, 2015 WL 7429495, at *20-21 (declining to apply the discovery rule to similar allegations of anticompetitive conduct).
In the instant case, the conduct alleged as the basis for Plaintiffs' UCL claim consists of Oracle's attempts to suppress the wages of Oracle employees by entering into non-solicitation Secret Agreements with other companies. SAC ¶ 129. These allegations are equivalent to the allegations in Animation Workers I that the Animation Workers I defendants took "efforts to limit competition for and suppress compensation of their employees" and "agreed to restrict competition for class members' services through anti-solicitation agreements and agreements to set and fix the compensation of class members." No. 14-4062, Consolidated Amended Class Action Compl., ECF No. 63 ¶ 143. Like the allegations in Animation Workers I, Plaintiffs' UCL claim allegations are purely of anticompetitive behavior.
Although elsewhere in the SAC Plaintiffs allege that Oracle engaged in fraudulent concealment, Plaintiffs' UCL claim does not mention fraudulent concealment or any alleged act of fraudulent concealment by Oracle as a basis for the alleged UCL violation. See SAC ¶¶ 126-133 (Plaintiffs' UCL claim). Indeed, Plaintiffs do not specify any fraudulent conduct by Oracle that violates the UCL. Moreover, the Court concludes above that the SAC does not sufficiently allege fraudulent concealment. See supra. Thus, the SAC does not include allegations of fraud sufficient to support application of the discovery rule to Plaintiffs' UCL claim. Because Plaintiffs' UCL claim is based solely on Oracle's
The Court turns to Plaintiffs' argument that the Court should apply the California "continuous accrual" rule to Plaintiffs' state law claims. Under "continuous accrual," "a series of wrongs or injuries may be viewed as each triggering its own limitations period, such that a suit for relief may be partially time-barred as to older events but timely as to those within the applicable limitations period."
Accordingly, California courts have held that disputes regarding monthly billing and payments qualify for continuous accrual, with each month triggering a new limitations period. See, e.g., id. at 1200-01, 151 Cal.Rptr.3d 827, 292 P.3d 871 (allegations of unlawful charges in monthly bills were recurring obligations); Tsemetzin v. Coast Fed'l Sav. & Loan Ass'n, 57 Cal.App.4th 1334, 1344, 67 Cal.Rptr.2d 726 (1997) (monthly rent payments owed were a recurring obligation); Armstrong Petroleum Corp. v. Tri-Valley Oil & Gas Co., 116 Cal.App.4th 1375, 1388-89, 11 Cal.Rptr.3d 412 (2004) (monthly payments on a gas and oil lease created a recurring obligation). However, if the alleged recurring injuries during the limitations period "arose out of a single transaction" that occurred before the limitations period, the continuous accrual rule does not apply. State ex rel. Metz v. CCC Info. Servs., Inc., 149 Cal.App.4th 402, 418, 57 Cal.Rptr.3d 156 (2007). Thus, allegedly fraudulent statements and admissions following an inaccurate valuation in an insurance claim did not trigger new limitations periods under the continuous accrual rule because all of the false statements arose out of the same insurance valuation, which occurred before the limitations period. Id.
In the instant case, Plaintiffs contend that Oracle had a "continuing obligation not to collude with competitors to restrict free competition for engineers and managers that was susceptible to being breached each time a Secret Agreement was entered into or renewed or reaffirmed." Opp. at 13. The Court first observes that the SAC fails to allege this continuing duty. See generally SAC. Additionally, Oracle's duty "not to collude with competitors" bears little relation to the monthly payments or monthly bills that California courts have found to be periodic, recurring obligations warranting continuous accrual. See Metz, 149 Cal.App.4th at 418, 57 Cal.Rptr.3d 156 (holding that continuous accrual
More importantly, even if Oracle breached a continuing duty each time that Oracle "entered into or renewed or reaffirmed" a Secret Agreement, Plaintiffs have failed to allege that Oracle took any of these actions during the limitations period. Although Plaintiffs allege that Oracle continued to enter into new Secret Agreements and add companies to the "no hire" list "well into 2012," Plaintiffs fail to identify a single new agreement after 2009. See generally SAC. As discussed above, in the section on the continuing violation theory, although the Court accepts "factual allegations in the complaint as true," Manzarek, 519 F.3d at 1031, the Court need not accept as true "allegations that are merely conclusory." In re Gilead Scis., 536 F.3d at 1055. Here, Plaintiffs offer no facts about what companies formed post-2009 Secret Agreements with Oracle, much less when those Secret Agreements took place. Similarly, all of Plaintiffs' allegations about Oracle's "reaffirmation" or enforcement of the Secret Agreements are undated or pre-date 2009. This includes Plaintiffs' allegations that Oracle disseminated the "no hire" list and abided by the Secret Agreements internally, see SAC ¶¶ 26, 31, 41, 43 (listing dates in 2007 and 2008), and that Oracle threatened other companies with fines or lawsuits to ensure adherence to the Secret Agreements, id. ¶¶ 36-39 (listing dates in 2007 and 2008). Thus, Plaintiffs have failed to identify any "separate, recurring invasions" of Plaintiffs' rights after 2009, and the continuous accrual rule does not apply. See Aryeh, 55 Cal.4th at 1198, 151 Cal.Rptr.3d 827, 292 P.3d 871.
As Plaintiffs have failed to allege any applicable exception to the default accrual rules or tolling doctrine, the Court concludes that Plaintiffs' claims are time barred. Under Rule 15(a) of the Federal Rules of Civil Procedure, leave to amend "shall be freely given when justice so requires," bearing in mind "the underlying purpose of Rule 15 to facilitate decisions on the merits, rather than on the pleadings or technicalities." Lopez, 203 F.3d at 1127 (alterations omitted). The Court may deny leave to amend due to "undue delay, bad faith or dilatory motive on the part of the movant, repeated failure to cure deficiencies by amendments previously allowed, undue prejudice to the opposing party by virtue of allowance of the amendment, [and] futility of amendment." See Leadsinger, 512 F.3d at 532.
In the instant case, the Court's April 22, 2015 order dismissed Plaintiffs' claims as untimely and noted that "the complaint is largely bereft of any dates or details with regards to Oracle's specific conduct." See Garrison, 2015 WL 1849517, at *9. The Court's April 22, 2015 order stated that "failure to cure the deficiencies identified in this Order will result in a dismissal with prejudice." Id. Plaintiffs then filed a first amended complaint on May 28, 2015, ECF No. 102, and the SAC on June 5, 2015, ECF No. 105. The SAC has failed to cure the timeliness deficiencies — even after Plaintiffs had months of discovery, received all of the documents that Oracle
For the foregoing reasons, the Court GRANTS Oracle's motion to dismiss with prejudice.
