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`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
`MOTION FOR ADMINISTRATIVE
`RELIEF TO CONSIDER WHETHER
`CASES SHOULD BE RELATED
`PURSUANT TO CIVIL L.R. 3-12
`
`Judge: Hon. Beth Labson Freeman
`
`
`
`
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`No. 5:20-cv-00363-BLF
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`FACEBOOK’S MOTION FOR ADMINISTRATIVE
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`RELIEF TO CONSIDER WHETHER CASES SHOULD BE RELATED
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`Case 5:20-cv-00363-BLF Document 87 Filed 12/16/20 Page 2 of 8
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`Pursuant to Civil Local Rule 3-12, defendant Facebook, Inc. respectfully moves the Court
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`to consider whether to relate Sherman v. Facebook, Inc., No. 3:20-cv-08721-LB (“Sherman”),
`Kupcho v. Facebook, Inc., No. 4:20-cv-08815-JSW (“Kupcho”), and Dames v. Facebook, Inc.,
`No. 3:20-cv-08817-TSH (“Dames”) to Reveal Chat Holdco, LLC v. Facebook, Inc., No. 5:20-cv-
`00363-BLF (“Reveal Chat”). The Reveal Chat plaintiffs agree that the cases should be related.
`The Sherman and Dames plaintiffs do not agree that the cases should be related. The Kupcho
`plaintiffs did not respond to Facebook’s inquiry regarding their position. A declaration from
`David Z. Gringer accompanies this motion.
`
`Under Civil Local Rule 3-12(a), actions are related “when: (1) The actions concern
`substantially the same parties, property, transaction or event; and (2) It appears likely that there
`will be an unduly burdensome duplication of labor and expense or conflicting results if the cases
`are conducted before different Judges.” These putative antitrust class actions, like the recently
`filed Klein case, all follow the highly-publicized antitrust lawsuits filed by the FTC and the
`Attorneys General of 46 states, D.C., and Guam (collectively “the States”) against Facebook.
`These putative antitrust class actions all proceed under a “monopoly broth” theory of
`anticompetitive conduct, much like the one alleged in the Reveal Chat case. While the cases
`vary slightly in the “ingredients” they challenge (and with respect to the putative classes
`themselves), all focus on Facebook’s acquisitions of Instagram and WhatsApp, its purported use
`of Onavo for “surveillance,” and its regulation of developer usage of Facebook APIs. As the
`Court knows, these theories are also at the heart of the Reveal Chat case, which has been pending
`in this Court for nearly a year. It is telling that both Facebook and the Reveal Chat plaintiffs
`recognize that Sherman, Kupcho, and Dames are related to Reveal Chat. Similarly, both the
`FTC and the States acknowledge that their recently-filed lawsuits, which are predicated on some
`of the same conduct, are related to each of these private cases. Dispersing these largely identical
`actions across the dockets of multiple judges on this Court would result in a significant
`duplication of efforts and ultimately poses a risk of inconsistent judgments and other orders as
`the litigation advances. These challenges and burdens can be easily avoided by relating the
`
`No. 5:20-cv-00363-BLF
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`FACEBOOK’S MOTION FOR ADMINISTRATIVE
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`Case 5:20-cv-00363-BLF Document 87 Filed 12/16/20 Page 3 of 8
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`cases.
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`In light of the substantial factual and legal overlap, the threat of duplicative discovery,
`and the real threat of inconsistent judgments, the cases easily exceed the relevant standard for
`relation.
`
`First, the cases all “concern substantially the same parties, property, transaction or
`event.” Civil L.R. 3-12(a)(2)(1). Facebook is the defendant in all the cases. With respect to
`legal theories, the cases all allege that Facebook unlawfully monopolized or attempted to
`monopolize markets in violation of Section 2 of the Sherman Act, 15 U.S.C. § 2. And the
`plaintiffs in all cases, like the plaintiffs in Reveal Chat (and Klein), all allege the following as
`part of their unlawful monopolization theories:
` Facebook acquired Instagram (compare Reveal Chat Am. Compl. ¶¶ 287-299, with
`Sherman Compl. ¶¶ 105-108, Kupcho Compl. ¶¶ 171-179, and Dames Compl. ¶¶ 59-63;
`see also ECF No. 85-2 (“Klein Compl.”) ¶¶ 170-177), and WhatsApp (compare Reveal
`Chat Am. Compl. ¶¶ 323-332, with Sherman Compl. ¶¶ 110-111, Kupcho Compl. ¶¶ 186-
`188, and Dames Compl. ¶¶ 65-68; see also Klein Compl. ¶¶ 184-186), allegedly to
`eliminate potential competition;
` Facebook allegedly imposed conditions on or restricted access to its Platform for third-
`party developers, including through withdrawal of access to APIs (compare Reveal Chat
`Am. Compl. ¶¶ 247-261, with Sherman Compl. ¶¶ 112, 114, Kupcho Compl. ¶¶ 165-167,
`169, and Dames Compl. ¶¶ 74-81; see also Klein Compl. ¶¶ 164-166, 168); and
` Facebook allegedly acquired and used Onavo to collect user data and employed that data
`to identify and target competitive threats (compare Reveal Chat Am. Compl. ¶¶ 266-286,
`with Sherman Compl. ¶¶ 112-114, Kupcho Compl. ¶¶ 149-154, and Dames Compl. ¶¶
`55-56; see also Klein Compl. ¶¶ 148-153).
`Recognizing these similarities, both the FTC and the States listed Reveal Chat, Sherman, and
`Kupcho as related to cases they respectively filed on December 9, 2020 in the United States
`District Court for the District of Columbia challenging Facebook’s acquisitions of WhatsApp
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`No. 5:20-cv-00363-BLF
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`Case 5:20-cv-00363-BLF Document 87 Filed 12/16/20 Page 4 of 8
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`and Instagram and its platform policies. The FTC stated that Reveal Chat, Sherman, and Kupcho
`“involve[] common issues of fact” and “grow[] out of the same event or transaction” as the
`FTC’s case. ECF Nos. 5, 10, 28, FTC v. Facebook, Inc., No. 1:20-cv-03590-CRC (D.D.C.). The
`States similarly told the court that Reveal Chat and Sherman “involve[] common issues of fact,”
`and that Kupcho both “involves common issues of fact” and “grows out of the same event or
`transaction.” ECF Nos. 6, 9, 14, State of N.Y. v. Facebook, Inc., No. 1:20-cv-03589-JEB
`(D.D.C.).1 Indeed, the timing of the complaints makes it clear that these lawsuits were filed
`either in anticipation of or in the wake of the FTC’s and the States’ lawsuits.
`
`To be sure, the plaintiffs in the various cases do differ somewhat. However, “Rule 3-
`12(a)(1) allows for relation of actions even where plaintiff classes differ, including classes of
`consumers as opposed to content creators.” Pepper v. Apple Inc., 2019 WL 4783951, at *1
`(N.D. Cal. Aug. 22, 2019). In Pepper, Judge Gonzalez Rogers correctly held that the fact that
`the plaintiffs in certain of the related cases were “app developers” while others were
`“consumers” did not defeat relation because the “bases of plaintiffs’ complaints[] center around
`the same technology and economic structure[].” Id. So it is here. The plaintiffs all challenge
`Facebook’s supposed dominance over social networking (however denominated), the
`competitive structure in that market, and the impact of similar or identical conduct on
`competition in that industry.
`
`Nor is relation defeated by the fact that the Sherman, Kupcho, and Dames complaints,
`like the complaint in Klein, allege as one component of their monopoly broth theory that
`Facebook deceived users about its data privacy practices, while that theory is currently absent
`from the Reveal Chat complaint. Compare Klein Compl. ¶¶ 91-125, with Sherman Compl. ¶¶
`
`
`1 The FTC and the States also listed Klein as a related case. The FTC indicated that Klein both
`“involves common issues of fact” and “grows out of the same event or transaction.” ECF No. 4,
`FTC v. Facebook, Inc., No. 1:20-cv-03590-CRC (D.D.C.). The States also indicated that Klein
`“involves common issues of fact.” ECF No. 5, State of N.Y. v. Facebook, Inc., No. 1:20-cv-
`03589-JEB (D.D.C.).
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`No. 5:20-cv-00363-BLF
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`Case 5:20-cv-00363-BLF Document 87 Filed 12/16/20 Page 5 of 8
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`92-100, Kupcho Compl. ¶¶ 93-101, and Dames Compl. ¶¶ 83-93. Relation does not require
`identical theories of liability. See, e.g., Pepper, 2019 WL 4783951, at *2. Were it otherwise,
`parties who wished to defeat relation could do so easily through creative pleading or strategic
`timing of amendments.
`
` Second, given the substantial factual and legal overlap between the cases, it is “likely
`that there will be an unduly burdensome duplication of labor and expense … if the cases are
`conducted before different Judges.” Civil L.R. 3-12(a)(2). Because all of these cases involve the
`same activity and substantially the same legal theories, any discovery, motion practice, trials, and
`potential remedies will substantially overlap. At the center of all of these cases will be an
`examination of the relevant markets in which Facebook operated, Facebook’s conduct in the
`relevant markets, including the competitive effects of the challenged acquisitions, the viability of
`app developers as emergent competitors to Facebook, how, if at all, Facebook used data from
`Onavo, and Facebook’s API practices. Substantial efficiencies will be available in discovery
`into each of these theories if these cases are related. Likewise, it would be inefficient and unduly
`burdensome to “hav[e] … different judges govern discovery disputes.” Financial Fusion, Inc. v.
`Ablaise Ltd., 2006 WL 3734292, at *3 (N.D. Cal. Dec. 18, 2006). Moreover, given the time and
`effort that the Court has already expended in assessing similar legal claims premised on a shared
`factual predicate, relating Reveal Chat, Sherman, Kupcho, and Dames would conserve judicial
`resources. Discovery in Reveal Chat has not yet begun, meaning that it is not far ahead of
`Sherman, Kupcho, or Dames. Id. at *4 (noting lack of delay as factor in favor of relation).
`Third, absent relation, there is a serious risk “of conflicting results.” See Civil L.R. 3-
`
`12(a). Facebook anticipates raising similar defenses to the Sherman, Kupcho, and Dames
`allegations as it has raised in Reveal Chat, including that the claims are untimely and that the
`plaintiffs have failed to plausibly allege exclusionary conduct. If the cases are not related and
`related to Reveal Chat, there is the real prospect, for example, that different courts could reach
`different conclusions about whether fraudulent concealment theories can ever be resolved on
`motions to dismiss, whether Facebook owed any duty to any of the plaintiffs to disclose its plan
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`No. 5:20-cv-00363-BLF
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`FACEBOOK’S MOTION FOR ADMINISTRATIVE
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`Case 5:20-cv-00363-BLF Document 87 Filed 12/16/20 Page 6 of 8
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`for the API withdrawal, or findings regarding whether Facebook’s intent was sufficient to
`support a fraudulent concealment claim. And while Sherman, Kupcho, and Dames allege the
`existence of different relevant markets with different market participants than Reveal Chat, the
`allegations all focus on the same product: the Facebook platform. Reveal Chat Am. Compl. ¶¶
`130-142, Sherman Compl. ¶¶ 23-24, Kupcho Compl. ¶¶ 38-52, Dames Compl. ¶¶ 22-25; see also
`Klein Compl. ¶¶ 37-51. Treating the same product as part of different alleged relevant markets
`increases the prospect for inconsistent judgments as to Facebook’s purported monopoly power
`and the markets in which Facebook is alleged to participate. If decisions on these pivotal issues
`are inconsistent, not only would it lead to disarray among the various private and government
`cases, but also potentially disrupt the operations of the dynamic markets in which Facebook
`competes today.
`
`Because of the substantial overlap between these cases, and because the Court
`is already familiar with many of the legal and factual issues implicated in the cases, Facebook
`respectfully requests that the Court enter an order relating Reveal Chat, Sherman, Kupcho, and
`Dames.
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`No. 5:20-cv-00363-BLF
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`Case 5:20-cv-00363-BLF Document 87 Filed 12/16/20 Page 7 of 8
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`Dated: December 16, 2020
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`
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`
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`Respectfully submitted,
`
`By: /s/ Sonal N. Mehta
`SONAL N. MEHTA (SBN 222086)
`sonal.mehta@wilmerhale.com
`WILMER CUTLER PICKERING HALE
`AND DORR LLP
` 2600 El Camino Real, Suite 400
`Palo Alto, CA 94306
`Telephone: (650) 858-6000
`
`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
`
`No. 5:20-cv-00363-BLF
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`Case 5:20-cv-00363-BLF Document 87 Filed 12/16/20 Page 8 of 8
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`CERTIFICATE OF SERVICE
`I hereby certify that on this 16th day of December 2020, I electronically transmitted the
`foregoing document to the Clerk’s Office using the CM/ECF System. And I hereby certify that I
`have served the foregoing document on counsel for the plaintiffs in the action in which relation is
`sought pursuant to agreement between the parties.
`
`/s/ Sonal N. Mehta
`Sonal N. Mehta
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`No. 5:20-cv-00363-BLF
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