Case 5:20-cv-00363-BLF Document 71 Filed 09/11/20 Page 1 of 34
`
`
`
`
`
`SONAL N. MEHTA (SBN 222086)
` Sonal.Mehta@wilmerhale.com
`WILMER CUTLER PICKERING
` HALE AND DORR LLP
`2600 El Camino Real, Suite 400
`Palo Alto, California 94306
`Telephone: (650) 858-6000
`Facsimile: (650) 858-6100
`
`DAVID Z. GRINGER (pro hac vice)
`David.Gringer@wilmerhale.com
`ARI HOLTZBLATT (pro hac vice)
` Ari.Holtzblatt@wilmerhale.com
`MOLLY M. JENNINGS (pro hac vice)
` Molly.Jennings@wilmerhale.com
`WILMER CUTLER PICKERING
` HALE AND DORR LLP
`1875 Pennsylvania Avenue, NW
`Washington, DC 20006
`Telephone: (202) 663-6000
`Facsimile: (202) 663-6363
`Attorneys for Defendant
`FACEBOOK, INC.
`
`
`
`UNITED STATES DISTRICT COURT
`NORTHERN DISTRICT OF CALIFORNIA
`SAN JOSE DIVISION
`
`REVEAL CHAT HOLDCO, LLC, a Delaware
`limited liability company, USA TECHNOLOGY
`AND MANAGEMENT SERVICES, INC. (d/b/a
`Lenddo USA), a Delaware corporation, and
`BEEHIVE BIOMETRIC, INC., a dissolved
`Delaware corporation,
`
`Plaintiffs,
`
`v.
`FACEBOOK, INC., a Delaware corporation,
`Defendant.
`
`
`
`
`Case No. 5:20-cv-00363-BLF
`
`DEFENDANT FACEBOOK, INC.’S
`NOTICE OF MOTION AND
`MOTION TO DISMISS;
`MEMORANDUM OF POINTS AND
`AUTHORITIES IN SUPPORT OF
`THEREOF
`
`Hearing Date: December 3, 2020
`Time: 9:00am
`Judge: Hon. Beth Labson Freeman
`
`
`
`
`
`
`
`
`No. 5:20-cv-00363-BLF NOTICE OF MOTION & MOTION TO DISMISS; MEMO. ISO MOTION
`
`1 2 3 4 5 6 7 8 9
`
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`26
`27
`28
`
`

`

`Case 5:20-cv-00363-BLF Document 71 Filed 09/11/20 Page 2 of 34
`
`
`
`TABLE OF CONTENTS
`
`Page
`TABLE OF AUTHORITIES .......................................................................................................... ii 
`INTRODUCTION .......................................................................................................................... 1 
`BACKGROUND ............................................................................................................................ 3 
`ARGUMENT .................................................................................................................................. 4 
`I. 
`Plaintiffs’ Claims Remain Time-Barred ................................................................................ 4 
`
`A.  Plaintiffs’ Claims Accrued No Later Than April 2015 ................................................. 4 
`
`B. The Doctrine Of Fraudulent Concealment Does Not Apply ........................................ 5 
`1.
`The Fraudulent Concealment Doctrine Does Not Apply ..................................... 5
` 
`
`2.
`Plaintiffs Have Not Adequately Pled Fraudulent Concealment .......................... 6
`
`II. 
`Plaintiffs Have Not Plausibly Alleged Antitrust Injury ....................................................... 11 
`
`A.  Plaintiffs Did Not Suffer Antitrust Injury In The “Social Data” Market .................... 12
`
`
`1.
`Plaintiffs Did Not Suffer Antitrust Injury As Competitors In Social Data ........ 13
`
`
`2.
` Plaintiffs Did Not Suffer Antitrust Injury As Customers In Social Data .......... 16
`B. 
`
`Plaintiffs Did Not Suffer Antitrust Injury In The “Social Advertising” Market ........ 18 
`III.  The FAC Does Not State A Section 2 Claim ....................................................................... 19 
`
`A.   Plaintiffs Have Not Plausibly Alleged Exclusionary Conduct ................................... 19
`
`
`1.
`Facebook’s Purported “Scheme” Was Not Plausibly Exclusionary .................. 19
`
`
`2.
`Facebook Did Not Have A Duty To Deal With Plaintiffs ................................. 20
`
`B. 
`Facebook Does Not Have Monopoly Power .............................................................. 23 
`CONCLUSION ............................................................................................................................ 25 
`
`
`
`
`
`
`
`i
`No. 5:20-cv-00363-BLF NOTICE OF MOTION & MOTION TO DISMISS; MEMO. ISO MOTION
`
`1 2 3 4 5 6 7 8 9
`
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`26
`27
`28
`
`

`

`Case 5:20-cv-00363-BLF Document 71 Filed 09/11/20 Page 3 of 34
`
`
`
`TABLE OF AUTHORITIES
`
`CASES
`
`Page(s)
`
`American Professional Testing Service, Inc. v. Harcourt Brace Jovanovich Legal
`& Professional Publications, Inc.,
`108 F.3d 1147 (9th Cir. 1997) .................................................................................................17
`
`Aspen Skiing Co. v. Aspen Highlands Skiing Corp.,
`472 U.S. 585 (1985) .....................................................................................................20, 21, 22
`
`Associated General Contractors of California v. California State Council of Carpenters,
`459 U.S. 519 (1983) .................................................................................................................18
`
`Bell Atlantic Corp. v. Twombly,
`550 U.S. 544 (2007) ...........................................................................................................19, 22
`
`Bourns, Inc. v. Raychem Corp.,
`331 F.3d 704 (9th Cir. 2003) .............................................................................................15, 18
`
`Brantley v. NBC Universal, Inc.,
`675 F.3d 1192 (9th Cir. 2012) .................................................................................................17
`
`Cascade Health Solutions v. PeaceHealth,
`515 F.3d 883 (9th Cir. 2008) ...................................................................................................19
`
`Christy Sports, LLC v. Deer Valley Resort Co.,
`555 F.3d 1188 (10th Cir. 2009) .........................................................................................21, 22
`
`Conmar Corp. v. Mitsui & Co. (U.S.A.), Inc.,
`858 F.2d 499 (9th Cir. 1988) ...............................................................................................7, 11
`
`DeHoog v. Anheuser-Busch InBev SA/NV,
`899 F.3d 758 (9th Cir. 2018) ...................................................................................................12
`
`Dimidowich v. Bell & Howell,
`803 F.2d 1473 (9th Cir. 1986) .................................................................................................20
`
`Distance Learning Co. v. Maynard,
`2020 WL 2995529 (N.D. Cal. June 4, 2020) ...........................................................................24
`
`Facebook, Inc. v. Power Ventures, Inc.,
`2010 WL 3291750 (N.D. Cal. July 20, 2010) ..........................................................................22
`
`Feitelson v. Google Inc.,
`80 F. Supp. 3d 1019 (N.D. Cal. 2015) .....................................................................4, 13, 15, 16
`
`Foremost Pro Color, Inc. v. Eastman Kodak Co.,
`703 F.2d 534 (9th Cir. 1983) ...................................................................................................23
`
`ii
`No. 5:20-cv-00363-BLF NOTICE OF MOTION & MOTION TO DISMISS; MEMO. ISO MOTION
`
`1 2 3 4 5 6 7 8 9
`
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`26
`27
`28
`
`

`

`Case 5:20-cv-00363-BLF Document 71 Filed 09/11/20 Page 4 of 34
`
`
`
`Federal Trade Commission v. Qualcomm Inc.,
`969 F.3d 974 (9th Cir. 2020) ........................................................................................... passim
`
`Garrison v. Oracle Corp.,
`159 F. Supp. 3d 1044 (N.D. Cal. 2015) ...............................................................................7, 11
`
`GO Computer, Inc. v. Microsoft Corp.,
`508 F.3d 170 (4th Cir. 2017) ...................................................................................................10
`
`Hexcel Corp. v. Ineos Polymers, Inc.,
`681 F.3d 1055 (9th Cir. 2012) .........................................................................................5, 6, 10
`
`Hicks v. PGA Tour, Inc.,
`897 F.3d 1109 (9th Cir. 2018) .............................................................................................4, 20
`
`Hunt-Wesson Foods, Inc. v. Ragu Foods, Inc.,
`627 F.2d 919 (9th Cir. 1980) .............................................................................................24, 25
`
`Image Technical Services, Inc. v. Eastman Kodak Co.,
`125 F.3d 1195 (9th Cir. 1997) .................................................................................................24
`
`In re Animation Workers Antitrust Litigation,
`123 F. Supp. 3d 1175 (N.D. Cal. 2015) ...............................................................................8, 10
`
`In re Ciprofloxacin Hydrochloride Antitrust Litigation,
`261 F. Supp. 2d 188 (E.D.N.Y. 2003) .......................................................................................6
`
`In re Dual-Deck Video Cassette Recorder Antitrust Litigation,
`11 F.3d 1460 (9th Cir. 1993) ...................................................................................................14
`
`In re Glumetza Antitrust Litigation,
`__ F. Supp. 3d __, 2020 WL 1066934 (N.D. Cal. Mar. 5, 2020) ..............................................8
`
`In re Lithium Ion Batteries Antitrust Litigation,
`2014 WL 4955377 (N.D. Cal. Oct. 2, 2014) ............................................................................14
`
`In re National Football League’s Sunday Ticket Antitrust Litigation,
`933 F.3d 1136 (9th Cir. 2019) .................................................................................................23
`
`In re Webkinz Antitrust Litigation,
`695 F. Supp. 2d 987 (N.D. Cal. 2010) .....................................................................................16
`
`Liveuniverse, Inc. v. Myspace, Inc.,
`2007 WL 6865852 (C.D. Cal. June 4, 2007), aff’d 304 F. App’x 554 (9th Cir.
`2008) ........................................................................................................................................21
`
`Lucas Automotive Engineering Inc. v. Bridgestone/Firestone, Inc.,
`140 F.3d 1228 (9th Cir. 1998) .................................................................................................17
`
`MetroNet Services Corp. v. Qwest Corp.,
`383 F.3d 1124 (9th Cir. 2004) ...........................................................................................20, 21
`iii
`No. 5:20-cv-00363-BLF NOTICE OF MOTION & MOTION TO DISMISS; MEMO. ISO MOTION
`
`1 2 3 4 5 6 7 8 9
`
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`26
`27
`28
`
`

`

`Case 5:20-cv-00363-BLF Document 71 Filed 09/11/20 Page 5 of 34
`
`
`
`Moviecolor Ltd. v. Eastman Kodak Co.,
`288 F.2d 80 (2d Cir. 1961).........................................................................................................6
`
`Novation Ventures, LLC v. J.G. Wentworth Company, LLC,
`156 F. Supp. 3d 1094 (C.D. Cal. 2015) ...................................................................................17
`
`Novell, Inc. v. Microsoft Corp.,
`731 F.3d 1064 (10th Cir. 2013) ...............................................................................................22
`
`NYNEX Corp. v. Discon, Inc.,
`525 U.S. 128 (1998) .................................................................................................................16
`
`Ohio v. American Express Co.,
`138 S. Ct. 2274 (2018) .............................................................................................................20
`
`Pace Industries, Inc. v. Three Phoenix Co.,
`813 F.2d 234 (9th Cir. 1987) .....................................................................................................4
`
`Pacific Bell Telephone Co. v. Linkline Communications, Inc.,
`555 U.S. 438 (2009) .................................................................................................................20
`
`Paladin Associates, Inc. v. Montana Power Co.,
`328 F.3d 1145 (9th Cir. 2003) ...........................................................................................13, 16
`
`Peralta v. California Franchise Tax Board,
`124 F. Supp. 3d 993 (N.D. Cal. 2015) .......................................................................................9
`
`Pincay v. Andrews,
`238 F.3d 1106 (9th Cir. 2001) ...................................................................................................6
`
`Pocahontas Supreme Coal Co. v. Bethlehem Steel Corp.,
`828 F.2d 211 (4th Cir. 1987) ...................................................................................................11
`
`Rebel Oil Co. v. Atlantic Richfield Co.,
`51 F.3d 1421 (9th Cir. 1995) .......................................................................................12, 23, 25
`
`Reyn’s Pasta Bella, LLC v. Visa USA, Inc.,
`442 F.3d 741 (9th Cir. 2006) .....................................................................................................8
`
`Rheumatology Diagnostics Laboratory, Inc. v. Aetna, Inc.,
`2013 WL 3242245 (N.D. Cal. June 25, 2013) .........................................................................25
`
`Rutledge v. Boston Woven Hose & Rubber Co.,
`576 F.2d 248 (9th Cir. 1978) .....................................................................................................7
`
`Ryan v. Microsoft Corp.,
`147 F. Supp. 3d 868 (N.D. Cal. 2015) ...............................................................................10, 11
`
`Sambreel Holdings LLC v. Facebook, Inc.,
`906 F. Supp. 2d 1070 (S.D. Cal. 2012) ....................................................................................22
`
`iv
`No. 5:20-cv-00363-BLF NOTICE OF MOTION & MOTION TO DISMISS; MEMO. ISO MOTION
`
`1 2 3 4 5 6 7 8 9
`
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`26
`27
`28
`
`

`

`Case 5:20-cv-00363-BLF Document 71 Filed 09/11/20 Page 6 of 34
`
`
`
`Samsung Electronics Co. v. Panasonic Corp.,
`747 F.3d 1199 (9th Cir. 2014) ...................................................................................................5
`
`Santa Maria v. Pacific Bell,
`202 F.3d 1170 (9th Cir. 2000) ...................................................................................................7
`
`Sidibe v. Sutter Health,
`4 F. Supp. 3d 1160 (N.D. Cal. 2013) .......................................................................................25
`
`Simon & Simon, PC v. Align Technology, Inc.,
`2020 WL 1975139 (D. Del. Apr. 24, 2020) .............................................................................23
`
`Soap Opera Now, Inc. v. Network Publishing Corp.,
`737 F. Supp. 1338 (S.D.N.Y. 1990) .........................................................................................15
`
`Somers v. Apple, Inc.,
`729 F.3d 953 (9th Cir. 2013) .......................................................................................12, 13, 18
`
`Stackla, Inc. v. Facebook Inc.,
`2019 WL 4738288 (N.D. Cal. Sept. 27, 2019) ........................................................................22
`
`United States v. Aluminum Co. of America,
`148 F.2d 416 (2d Cir. 1945).....................................................................................................23
`
`United States v. E.I. du Pont de Nemours & Co.,
`351 U.S. 377 (1956) ...........................................................................................................23, 25
`
`United States v. Syufy Enterprises,
`903 F.2d 659 (9th Cir. 1990) .......................................................................................17, 19, 25
`
`Verizon Communications Inc. v. Law Offices of Curtis V. Trinko, LLP,
`540 U.S. 398 (2004) .....................................................................................................18, 20, 21
`
`Vess v. Ciba-Geigy Corp. USA,
`317 F.3d 1097 (9th Cir. 2003) .................................................................................................10
`
`Volk v. D.A. Davidson & Co.,
`816 F.2d 1406 (9th Cir. 1986) .................................................................................................11
`
`Von Saher v. Norton Simon Museum of Art at Pasadena,
`592 F.3d 954 (9th Cir. 2010) ...................................................................................................10
`
`Western Center for Journalism v. Cederquist,
`235 F.3d 1153 (9th Cir. 2000) ...................................................................................................6
`
`Zenith Radio Corp. v. Hazeltine Research, Inc.,
`401 U.S. 321 (1971) ...................................................................................................................4
`
`v
`No. 5:20-cv-00363-BLF NOTICE OF MOTION & MOTION TO DISMISS; MEMO. ISO MOTION
`
`1 2 3 4 5 6 7 8 9
`
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`26
`27
`28
`
`

`

`Case 5:20-cv-00363-BLF Document 71 Filed 09/11/20 Page 7 of 34
`
`
`
`DOCKETED CASES
`
`Six4Three, LLC v. Facebook, Inc.,
`Case No. CIV 533328 (San Mateo Super. Ct.) ......................................................................8, 9
`
`STATUTES AND RULES
`
`Fed. R. Civ. P. 9(b) ........................................................................................................................10
`
`Fed. R. Civ. P. 12(b)(6)................................................................................................................1, 4
`
`15 U.S.C. § 15b ................................................................................................................................5
`
`OTHER AUTHORITIES
`
`HERBERT HOVENKAMP & PHILLIP E. AREEDA, ANTITRUST LAW, Wolters Kluwer
`(4th ed., last updated May 2020) ...............................................................................................8
`
`
`
`
`
`
`vi
`No. 5:20-cv-00363-BLF NOTICE OF MOTION & MOTION TO DISMISS; MEMO. ISO MOTION
`
`1 2 3 4 5 6 7 8 9
`
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`26
`27
`28
`
`

`

`Case 5:20-cv-00363-BLF Document 71 Filed 09/11/20 Page 8 of 34
`
`
`
`NOTICE OF MOTION AND MOTION TO DISMISS
`
`PLEASE TAKE NOTICE THAT, on December 3, 2020 at 9:00am or as soon thereafter
`as the matter may be heard, in Courtroom 3 of the U.S. District Court for the Northern District of
`California, San Jose Division, at 280 South 1st Street, San Jose, California, this Motion to
`Dismiss filed by defendant Facebook, Inc. will be heard. Pursuant to Federal Rule of Civil
`Procedure 12(b)(6), Facebook moves to dismiss the First Amended Complaint in the above-
`captioned action on the grounds that plaintiffs’ claims are time-barred, no plaintiff has suffered
`antitrust injury, and plaintiffs have otherwise failed to state claims upon which relief can be
`granted. Facebook’s Motion to Dismiss is based on this Notice of Motion, the Memorandum of
`Points and Authorites, and the Declaration of David Z. Gringer and attached exhibits.
`STATEMENT OF REQUESTED RELIEF
`Pursuant to Federal Rule of Civil Procedure 12(b)(6), Facebook requests that the Court
`
`dismiss plaintiffs’ First Amended Complaint with prejudice.
`MEMORANDUM OF POINTS AND AUTHORITIES
`INTRODUCTION
`More than six years ago, in April 2014, Facebook announced that it was changing the
`policy that allowed the plaintiffs’ apps to access certain user data using Application
`Programming Interfaces, or “APIs.” More than five years ago, in April 2015, Facebook
`implemented that change. At the time, the plaintiffs say “they” asked for an exception to the API
`policy from “Facebook,” which was denied. They then did nothing until January 2020. The
`plaintiffs now assert antitrust claims, seeking to transform what is—at most—a run-of-the-mill
`business dispute into a federal offense. Their claims are both too little and too late to survive a
`motion to dismiss.
`
`This Court dismissed plaintiffs’ original complaint, holding that each of their claims was
`time-barred and that the complaint failed to state a claim. Despite its length, plaintiffs’
`complaint was light on meaningful details clearly within the plaintiffs’ possession, including
`their business plans, their status as ongoing entities, and their response to the challenged conduct.
`Plaintiffs have now returned to this Court with an even lengthier 123-page, 509-paragraph
`
`1
`No. 5:20-cv-00363-BLF NOTICE OF MOTION & MOTION TO DISMISS; MEMO. ISO MOTION
`
`1 2 3 4 5 6 7 8 9
`
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`26
`27
`28
`
`

`

`Case 5:20-cv-00363-BLF Document 71 Filed 09/11/20 Page 9 of 34
`
`
`
`Amended Complaint (“FAC”). The FAC reveals why plaintiffs initially said so little about
`themselves: plaintiffs were not putative competitors of Facebook’s, nor were they—or
`competition more generally—inhibited by any of Facebook’s actions. Instead, plaintiffs were
`(and in one case are) “app” developers that hoped to operate on Facebook Platform, using
`Facebook’s data to offer niche products.
`
`The FAC should be dismissed for at least three reasons. First, plaintiffs waited too long
`to sue and plaintiffs’ attempt to toll the statute of limitations by alleging fraudulent concealment
`remains unavailing. The FAC concedes that plaintiffs were aware of the challenged acts and of
`their injuries at the time the acts and injuries occurred. Plaintiffs were likewise aware of
`Facebook’s market position and purported dominance. That is unsurprising because, as this
`Court emphasized, all of this was public knowledge at the time it occurred. ECF No. 61 (“MTD
`Order”) at 10. Thus, nothing relevant was concealed from plaintiffs—let alone fraudulently so.
`That is dispositive. Plaintiffs’ reference to statements made to the general public expressing
`Facebook’s reasons for the changes at issue—most of which plaintiffs do not allege to have
`heard or read—are plainly insufficient under controlling Ninth Circuit authority. And asking
`Facebook for “exceptions” to its API policy and then doing nothing else but reading a blog post
`is not “due diligence” under any sense of the term.
`
`Second, plaintiffs’ attempt to address the Court’s concern regarding whether they are
`customers or competitors of Facebook’s is unsuccessful, since plaintiffs now claim to be both, at
`the same time, in the same market. That is illogical on its face. The allegations make clear that
`plaintiffs were customers of Facebook’s and had no plans or ability to compete with Facebook.
`The challenged conduct plainly did not impact competition in the relevant markets, and thus
`plaintiffs have still not adequately alleged antitrust injury and cannot do so.
`
`Third, plaintiffs’ unlawful monopolization and attempted monopolization claims fail
`across every dimension. Even accepting plaintiffs’ fanciful relevant markets as true, Facebook is
`not plausibly alleged to have monopoly power—or anything close. And plaintiffs took no steps
`to modify their previously deficient refusal-to-deal theory, which cannot meet the stringent
`standard for such claims. The FAC also highlights the implausibility of plaintiffs’ claims,
`
`2
`No. 5:20-cv-00363-BLF NOTICE OF MOTION & MOTION TO DISMISS; MEMO. ISO MOTION
`
`1 2 3 4 5 6 7 8 9
`
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`26
`27
`28
`
`

`

`Case 5:20-cv-00363-BLF Document 71 Filed 09/11/20 Page 10 of 34
`
`
`
`whereby, according to plaintiffs, Facebook designed a scheme to strengthen its largest
`competitors while killing off smaller firms that only “planned” to compete in the future.
`
`At the hearing on Facebook’s initial motion to dismiss, plaintiffs were challenged
`repeatedly to come forward with facts that would support their conclusory allegations. It is now
`abundantly clear that plaintiffs not only did not do so, but that they cannot do so because their
`theories suffer not from mere pleading defects, but fundamental factual and legal flaws that
`cannot be cured. The FAC should therefore be dismissed with prejudice.
`BACKGROUND
`Facebook was founded in a college dorm room by Mark Zuckerberg in 2004. FAC ¶ 75.
`
`Since then, and in the face of vigorous competition, it has succeeded in providing a platform for
`connectivity and sharing among its over two billion users worldwide. Id. ¶¶ 67, 75-84. In
`addition to “core” Facebook, it operates a portfolio of products that includes the photo-sharing
`app Instagram, which it acquired in 2012, and the messaging product WhatsApp, which it
`acquired in 2014. Id. ¶ 67. In April 2014, Facebook publicly announced that it would no longer
`make generally available certain APIs that allowed third-party app developers to access user data
`that users had consented to share. Id. ¶ 242. Facebook implemented this change in April of
`2015. Id. ¶ 245. Plaintiffs allege that between the 2014 annoucement and the 2015
`implementation, Facebook entered into data sharing agreements with certain competitors
`allowing those companies to retain API access. Id. ¶ 247.
`Five years later, plaintiffs filed this lawsuit alleging various antitrust violations. This
`Court dismissed plaintiffs’ original complaint, holding, as relevant to this motion, that all claims
`were time-barred, plaintiffs had failed to establish an antitrust injury, and had not adequately
`alleged a cognizable refusal to deal. MTD Order at 9-11, 16-17, 23. The FAC accuses Facebook
`of both monopolizing and attempting to monopolize “social data” and “social advertising”
`markets. FAC ¶¶ 492-509. Plaintiffs’ other claims in the original complaint, along with former
`plaintiff Cir.cl, Inc., have been dropped, the latter without explanation.
`The FAC has three principal differences from the original. First, it alleges that Facebook
`assumed various duties to disclose information to plaintiffs about API availability and
`
`3
`No. 5:20-cv-00363-BLF NOTICE OF MOTION & MOTION TO DISMISS; MEMO. ISO MOTION
`
`1 2 3 4 5 6 7 8 9
`
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`26
`27
`28
`
`

`

`Case 5:20-cv-00363-BLF Document 71 Filed 09/11/20 Page 11 of 34
`
`
`
`Facebook’s reasons for modifying its API policies. Id. ¶¶ 450-453, 460. Second, plaintiffs claim
`to have exercised diligence to discover their antitrust claims by requesting exemptions from
`Facebook’s new API policy. Id. ¶ 476. Finally, the FAC alleges plaintiffs are simultaneously
`Facebook’s customers, potential competitors, and actual competitors in the “social data” market.
`Id. ¶ 9.
`
`ARGUMENT
`On a Rule 12(b)(6) motion to dismiss a private antitrust complaint, “it is one thing to be
`
`cautious before dismissing an antitrust complaint in advance of discovery, but quite another to
`forget that proceeding to antitrust discovery can be expensive. As such, a district court must
`retain the power to insist upon some specificity in pleading before allowing a potentially massive
`factual controversy to proceed.” Feitelson v. Google Inc., 80 F. Supp. 3d 1019, 1025-1026 (N.D.
`Cal. 2015) (Freeman, J.) (quotations and citations omitted). Thus, to “survive a motion to
`dismiss, a complaint must contain sufficient factual matter, accepted as true, to ‘state a claim for
`relief that is plausible on its face.’” Hicks v. PGA Tour, Inc., 897 F.3d 1109, 1117 (9th Cir.
`2018). “Applying this standard is a ‘context-specific task’ that requires drawing on ‘judicial
`experience and common sense.’” Id. Applying this standard, this Court should dismiss both of
`plaintiffs’ claims. First, each claim is time-barred because the challenged conduct occurred over
`four years ago. Second, plaintiffs have not adequately alleged antitrust injury. Third, both of
`plaintiffs’ claims are premised on theories that are either implausible, noncognizable, or both.
`PLAINTIFFS’ CLAIMS REMAIN TIME-BARRED
`I.
`A.
`Plaintiffs’ Claims Accrued No Later Than April 2015
`It is black-letter law that “a[n] [antitrust] cause of action accrues … when a defendant
`commits an act that injures a plaintiff’s business.” Zenith Radio Corp. v. Hazeltine Research,
`Inc., 401 U.S. 321, 338 (1971); see also Pace Indus., Inc. v. Three Phoenix Co., 813 F.2d 234,
`237 (9th Cir. 1987). Under this “injury rule,” the statute of limitations for an antitrust claim
`begins to run the moment the plaintiff was injured, regardless of whether the plaintiff realizes at
`the moment of injury that it has an antitrust claim; there is no requirement that a “plaintiff []
`actually discover its antitrust claims before the statute of limitations begins to run.” Hexcel
`
`4
`No. 5:20-cv-00363-BLF NOTICE OF MOTION & MOTION TO DISMISS; MEMO. ISO MOTION
`
`1 2 3 4 5 6 7 8 9
`
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`26
`27
`28
`
`

`

`Case 5:20-cv-00363-BLF Document 71 Filed 09/11/20 Page 12 of 34
`
`
`
`Corp. v. Ineos Polymers, Inc., 681 F.3d 1055, 1060 (9th Cir. 2012). The rule is simple: once the
`injury occurs, the limitations period begins.
`There is no question (and no dispute) that plaintiffs’ injury occurred no later than April
`2015. The FAC challenges a purported “scheme” that Facebook allegedly executed from
`“September 2012 through April 2015.” FAC ¶ 6. The last act in that “scheme” was Facebook’s
`restriction of developer access to certain APIs on which the plaintiffs allegedly depended, id. ¶
`13—more than four years and eight months before plaintiffs filed their original complaint on
`January 16, 2020, see ECF No. 1. Plaintiffs continue to allege that they were injured by
`Facebook’s conduct “immediately.” FAC ¶ 181; see also id. ¶¶ 260, 307, 331-332.
`Because the statute of limitations under the Sherman Act is four years, see 15 U.S.C.
`§ 15b, plaintiffs’ claims are untimely unless a tolling doctrine applies. And, to the extent
`plaintiffs are seeking injunctive relief, this Court has already held that “the doctrine of laches
`applies to the instant case,” MTD Order at 7, and already noted that “the four-year statute of
`limitations in 15 U.S.C. § 15b furnishes a guideline for computation of the laches period,” id.
`(quoting Samsung Elecs. Co. v. Panasonic Corp., 747 F.3d 1199, 1205 (9th Cir. 2014)). All of
`plaintiffs’ claims are therefore barred unless some doctrine tolls the Sherman Act statute of
`limitations. None does.
`B.
`The Doctrine Of Fraudulent Concealment Does Not Apply
`In both their original complaint and the FAC, plaintiffs seek to rely on the doctrine of
`fraudulent concealment to toll the applicable limitations period. This Court already held that the
`original complaint did not adequately plead the necessary predicates for fraudulent concealment.
`See MTD Order at 8-11. Because the FAC does not fix the deficiencies of the original
`complaint, the FAC should be dismissed with prejudice.
`
`1.
`The fraudulent concealment doctrine does not apply
`To begin, the doctrine does not apply because plaintiffs have not alleged that Facebook’s
`purported concealment prevented them from learning of the challenged acts and their injury. To
`the contrary: plaintiffs allege that they knew of Facebook’s changes to the APIs (and their
`resulting injury) no later than April 30, 2015. See FAC ¶¶ 24, 43-44, 60, 245. By that point, “at
`
`5
`No. 5:20-cv-00363-BLF NOTICE OF MOTION & MOTION TO DISMISS; MEMO. ISO MOTION
`
`1 2 3 4 5 6 7 8 9
`
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`26
`27
`28
`
`

`

`Case 5:20-cv-00363-BLF Document 71 Filed 09/11/20 Page 13 of 34
`
`
`
`the very least, plaintiffs had constructive knowledge of the facts that give rise to their claims.”
`MTD Order at 10. And that they knew of their injury, and had at least constructive knowledge of
`their claims, by April 2015, means that the “doctrine of fraudulent concealment does not apply.”
`Hexcel, 681 F.3d at 1060; see also Pincay v. Andrews, 238 F.3d 1106, 1110 (9th Cir. 2001)
`(“[Plaintiffs] had constructive notice of their injuries prior to 1985 as a matter of law. Thus, they
`cannot prevail on their fraudulent concealment claim.”). “[C]ourts have found that ‘[a]ny fact
`that should excite [a plaintiff’s] suspicion is the same as actual knowledge of his entire claim.’”
`In re Ciprofloxacin Hydrochloride Antitrust Litig., 261 F. Supp. 2d 188, 225 (E.D.N.Y. 2003).
`Plaintiffs do not dispute this Court’s holding that they had notice of their injuries no later
`than 2015 as a matter of law. In fact, they now concede as much when they newly allege (e.g.,
`FAC ¶ 476) that they pursued an investigation of their claims; a “plaintiff is deemed to have had
`constructive knowledge if it had enough information to warrant an investigation,” Hexcel, 681
`F.3d at 1060. As before, plaintiffs suggest that their delay was because they were unaware that
`Facebook’s changes to the APIs were motivated by anticompetitive intent. See, e.g., FAC ¶¶
`447-448. But that they were allegedly unaware of Facebook’s intent does not change the
`fraudulent-concealment analysis above. So lo