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`IN THE UNITED STATES DISTRICT COURT
`FOR THE DISTRICT OF COLUMBIA
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`FEDERAL TRADE COMMISSION,
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`Plaintiff,
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`v.
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`Civil Action No. 1:20-cv-03590 (JEB)
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`FACEBOOK, INC.
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`Defendant.
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`MEMORANDUM IN SUPPORT OF
`MOTION TO COMPEL A RULE 26(f) CONFERENCE
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`Case 1:20-cv-03590-JEB Document 63-1 Filed 04/22/21 Page 2 of 11
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`Table of Contents
`I. THE COURT HAS BROAD DISCRETION TO ORDER A RULE 26 CONFERENCE
`PRIOR TO DEFENDANT’S ANSWER .................................................................................. 2
`II. THE COURT SHOULD EXERCISE ITS DISCRETION TO ORDER A PROMPT RULE 26
`CONFERENCE ........................................................................................................................ 4
`A. A Prompt Rule 26 Conference Will Prevent Needless Delay and Facilitate Cooperation
`with the State Plaintiffs, the Klein Plaintiffs, and Third Parties ................................................. 4
`B. Delaying the Rule 26 Conference Until After Facebook’s Answer Will Not Increase
`Efficiency .................................................................................................................................... 6
`C. A Rule 26 Conference No Later Than May 20, 2021 is Practicable and Will Advance the
`Public Interest ............................................................................................................................. 8
`CONCLUSION ............................................................................................................................... 8
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`Case 1:20-cv-03590-JEB Document 63-1 Filed 04/22/21 Page 3 of 11
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`Plaintiff, the Federal Trade Commission (“FTC”), respectfully asks the Court to order
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`Defendant (“Facebook”) to confer, pursuant to Fed. R. Civ. P. 26(f) and Local Rule 16.3(c), with
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`Plaintiff and with the plaintiffs in the related case before this Court, State of New York, et al. v.
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`Facebook, Inc., No. 1:20-cv-03589 (the “State Plaintiffs”). The FTC has repeatedly asked
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`Facebook for such a conference (hereinafter, a “Rule 26 conference”), and Facebook has
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`repeatedly refused, which has prevented the parties from using time efficiently while the Court
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`considers Defendant’s motion to dismiss. The FTC is not asking for discovery to begin at the
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`time of the requested conference: instead, the FTC simply seeks to confer with Defendant and
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`submit a report to the Court that includes a proposal regarding an appropriate start date for
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`discovery, as well as all other relevant case management issues. Cf. Local Rule 16.3(d).
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`Accordingly, as reflected in the attached Proposed Order, the FTC respectfully requests that the
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`Court order the parties to confer no later than May 20, 2021, and to submit to the Court no later
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`than June 3, 2021, a case management Report and Proposed Order that contains the parties’
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`proposals regarding a start date for discovery and other matters appropriate under the Local
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`Rules.
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`While the FTC recognizes that Local Rule 16.3(b) provides that parties in this District are
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`not required to conduct a Rule 26 conference until a defendant files an answer, the Local Rule
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`preserves the Court’s discretion to order a pre-answer conference. This case presents compelling
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`reasons for the Court to exercise its discretion in spite of the general practice in this District:
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`specifically, a prompt Rule 26 conference will vindicate an important public interest in resolving
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`government antitrust litigations promptly and in advance of related private cases, create
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`efficiencies for all parties and many non-parties, and preserve scarce judicial resources. Here,
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`the Court should exercise its discretion to order a Rule 26 conference because it will allow the
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`1
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`Case 1:20-cv-03590-JEB Document 63-1 Filed 04/22/21 Page 4 of 11
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`FTC, the State Plaintiffs, and Facebook to cooperate efficiently with a related class action
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`involving common issues of fact that is currently underway in the Northern District of
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`California. See ECF No. 4 (related case notice for Klein v. Facebook, Inc.). Fact discovery in
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`that case, Klein v. Facebook, Inc., will close in September of 2022 and trial will begin in March
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`2023. See Ex. A (Order, Klein v. Facebook, Inc., 20-cv-08570-LHK, ECF No. 82 (N.D. Cal.
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`Apr. 2, 2021)). A prompt Rule 26 conference will advance the important public interest in
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`concluding government antitrust litigation in advance of the related Klein class action, and will
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`do so without imposing any burden on Defendant or on the Court.
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`I. THE COURT HAS BROAD DISCRETION TO ORDER A RULE 26
`CONFERENCE PRIOR TO DEFENDANT’S ANSWER
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`This Court has “‘broad discretion to manage the conduct of discovery,’ with the ultimate
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`goal of ensuring the ‘just, speedy, and inexpensive determination of every action and
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`proceeding.’” Sai v. Dep’t of Homeland Sec., 99 F. Supp. 3d 50, 58 (D.D.C. 2015) (quoting
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`Chavous v. Dist. of Columbia Fin. Responsibility and Mgmt. Assistance Auth., 201 F.R.D. 1, 2
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`(D.D.C. 2001); Fed. R. Civ. P. 1). The Court’s broad discretion unquestionably encompasses the
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`power to control the timing of Rule 26 conferences, which must occur “as soon as practicable.”
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`Fed. R. Civ. P. 26(f)(1) (instructing that “parties must confer as soon as practicable.”). Indeed,
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`the Advisory Committee Comments to the Federal Rules expressly state that a court’s discretion
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`to order a conference extends even to proceedings entirely exempted from Rule 26(f)’s
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`conference requirement, which this case is not.1 See 2000 Advisory Comm. Comments to Rule
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`26 (“[C]ourt may order that the conference . . . occur in a case otherwise exempted . . . .”).
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`1 Rule 26 conferences are required in all civil cases except for the specified categories of
`proceedings that are exempted from Rule 26(f) “because the nature of the action [does] not
`involve discovery or because of the nature of the parties.” Wright & Miller, 8A Fed. Prac. &
`Proc. Civ. § 2053 (3d ed.); see also 1993 Advisory Comm. Comments to Rule 26 (Rule 26(f)
`exempts “cases in which there will be no discovery . . . cases in which discovery is rarely needed
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`Case 1:20-cv-03590-JEB Document 63-1 Filed 04/22/21 Page 5 of 11
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`The Court’s broad discretion is unaffected by Facebook’s pending motion to dismiss,
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`notwithstanding the common practice in this District to postpone Rule 26 conferences until after
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`a defendant’s answer is filed. While Local Rule 16.3(b) notes a Rule 26 conference is not
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`required prior to an answer, the Local Rules also recognize that Rule 26 conferences may
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`proceed while a dispositive motion is pending, and instruct the parties in such situations to
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`consider and recommend to the Court whether or not discovery should proceed prior to
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`resolution of the dispositive motion. See Local Rule 16.3(c)(1) (explaining that at the Rule 26
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`conference “parties must confer to discuss . . . [w]hether the case is likely to be disposed of by
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`dispositive motion; and whether, if a dispositive motion has already been filed, the parties should
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`recommend to the Court that discovery or other matters should await a decision on the motion”).
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`Courts in this District recognize that the timing of a Rule 26 conference is not dictated by a
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`motion to dismiss, but instead depends entirely on the needs of the case: for Rule 26 conferences
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`“[n]o categorical rule is appropriate; rather each case should be considered based on its unique
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`facts and context.” Sai, 99 F. Supp. 3d at 58. In this case, as discussed below, a prompt Rule 26
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`conference will increase efficiency, and should occur in advance of Facebook’s Answer, as is
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`commonplace around the country. E.g., Glazer’s Wholesale Drug Co., Inc. v. Klein Foods, Inc.,
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`3:08-cv-774-L, 2008 WL 2930482, at *1 (N.D. Tex. July 23, 2008) (“[H]ad the Federal Rules
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`contemplated that a motion to dismiss under Fed. R. Civ. P. 12(b)(6) would stay discovery, the
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`Rules would contain a provision to that effect.” (quoting Gray v. First Winthrop Corp., 133
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`F.R.D. 39, 40 (N.D. Cal. 1990))).2 Indeed, Facebook is currently engaged in discovery in the
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`. . . or in which a meeting of the parties might be impracticable.”). No exemption is appropriate
`for this matter: discovery in this case will be needed, and a meeting of the parties is clearly
`practicable.
`2 See also Escareno v. Lundbeck, LLC, 3:14-cv-257-B, 2014 WL 1976867, at *2-3 (N.D. Tex.
`May 15, 2014); Pena v. Taylor Farms, 2:13-cv-1282-KJM-AC, 2013 WL 3933934, at *1, *6
`3
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`Case 1:20-cv-03590-JEB Document 63-1 Filed 04/22/21 Page 6 of 11
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`related Klein v. Facebook class action case in the Northern District of California, despite the fact
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`that its motion to dismiss in that matter will not be fully briefed until July of this year. See Ex.
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`A.
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`II.
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`THE COURT SHOULD EXERCISE ITS DISCRETION TO ORDER A
`PROMPT RULE 26 CONFERENCE
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`A Rule 26 conference will allow the parties to discuss, and hopefully come to agreement
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`on, important threshold issues including but not limited to: preparation for electronic discovery;
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`an appropriate schedule for discovery and trial; and a proposed protective order. See generally
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`Local Rule 16.3(c). The accompanying firm deadline for submitting to the Court a Report and
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`Proposed Order will make the parties’ discussions far more efficient than any ad hoc discussions
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`in which Facebook might agree to participate. In addition, a conference will facilitate necessary
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`cooperation with the State Plaintiffs and class plaintiffs in the related Klein v. Facebook
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`litigation, increasing judicial efficiency and preventing unnecessary delays in both this Court and
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`the Northern District of California. Conducting the conference promptly will be far more
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`efficient than delaying to await Facebook’s Answer, as Facebook’s Answer will not provide new
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`information relevant to the issues the parties must discuss.
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`A. A Prompt Rule 26 Conference Will Prevent Needless Delay and Facilitate
`Cooperation with the State Plaintiffs, the Klein Class Action, and Third Parties
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`The FTC seeks to vindicate an important public interest by putting an end to ongoing
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`monopolization that impacts millions of Americans’ daily lives. The same is true for the State
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`Plaintiffs which bring this case on behalf of residents in 48 states and territories across the
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`country. Courts have recognized that public policy favors resolving such cases promptly, and in
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`advance of related private litigations. For example, in United States v. Dentsply Int’l, Inc., 190
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`(E.D. Cal. July 29, 2013); Bowens v. Columbus Metro. Library Bd. of Trs., 2-10-cv-00219, 2010
`WL 3719245, at *2 (S.D. Ohio Sept. 16, 2010); Turner Broad. Sys., Inc. v. Tracinda Corp., 175
`F.R.D. 554, 556 (D. Nev. 1997).
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`4
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`Case 1:20-cv-03590-JEB Document 63-1 Filed 04/22/21 Page 7 of 11
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`F.R.D. 140 (D. Del. 1999), the court denied the defendant’s motion to consolidate the
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`government case with private antitrust cases arising from the same set of facts. The court held
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`that, despite the potential for clear efficiencies, the risk that consolidation might delay the
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`government suit was unacceptable in light of “congressional recognition of the primacy of
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`antitrust enforcement actions brought by the United States, and that such actions are of special
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`urgency and serve a different purpose than private damages suits because they seek to enjoin
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`ongoing anticompetitive conduct.” Id. at 145 (citing H.R. Rep. No. 90-1130, at 8, reprinted in
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`1968 U.S.C.C.A.N. at 1905). Among other reasons that government suits should be resolved
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`before private litigation, the government’s proof of liability can serve as “prima facie evidence of
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`a violation for injured competitors or customers bringing a subsequent private suit.” Id. (citing
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`15 U.S.C. § 16(a) (1994)).
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`In Klein, Facebook recognized that the FTC’s and the State Plaintiffs’ lawsuits should
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`proceed more quickly than the related private actions in the Northern District of California. See
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`Ex. B (Joint Case Management Statement, Klein v. Facebook, 20-cv-08570-LHK, ECF No. 78
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`(N.D. Cal. filed Mar. 31, 2021)) at 24 (citing need to prevent the Klein plaintiffs from “moving
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`ahead of the government cases, which would both be inefficient and inconsistent with
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`congressional intent.”), 25 (“ensuring the government cases go first will . . . promote judicial
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`economy.”). The FTC agrees with Facebook that public policy has long favored resolving
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`government antitrust enforcement actions prior to resolving related private suits seeking
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`damages. See, e.g., Dentsply, 190 F.R.D. at 145. Therefore, now that the Klein court has
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`rejected Facebook’s efforts to delay discovery in the Northern District of California, this strong
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`public policy demands that the FTC and the State Plaintiffs’ suits move forward as expeditiously
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`5
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`Case 1:20-cv-03590-JEB Document 63-1 Filed 04/22/21 Page 8 of 11
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`as possible to ensure that they are resolved prior to the Klein plaintiffs’ trial date of March 27,
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`2023. See Ex. A.
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`A prompt Rule 26 conference, in advance of Facebook’s Answer, is a necessary first step
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`to proceeding with the “special urgency” this case requires. Dentsply, 190 F.R.D. at 145
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`(acknowledging congressional recognition of the “special urgency” of antitrust enforcement
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`actions brought by the United States). It will allow the FTC and Facebook to begin to coordinate
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`discovery with the State Plaintiffs and proceed in advance of the Klein plaintiffs, while achieving
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`some cooperation with them, as Facebook itself has acknowledged will be necessary. See Ex. B
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`at 14 (Facebook recognizing “the need to coordinate with the government cases”). Moreover, a
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`prompt Rule 26 conference is particularly beneficial in an antitrust case of this magnitude
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`because third parties are likely to express an interest in matters such as avoiding duplicative
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`discovery and ensuring confidentiality protections are afforded to competitively sensitive
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`commercial information. Cf. United States, et al. v. Google, Inc., No. 1:20-cv-3010, ECF Nos.
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`47, 50, 51, 52, 53 (statements filed by various non-parties regarding a proposed protective order).
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`Starting discussions promptly will allow the parties and third parties sufficient time to resolve as
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`many such issues as possible without involving the Court, which will both promote judicial
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`efficiency and minimize delay.
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`B. Delaying the Rule 26 Conference Until After Facebook’s Answer Will Not
`Increase Efficiency
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`In some civil cases, a defendant’s answer may impact the matters to be discussed in a
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`Rule 26 conference because the defendant’s admissions can reveal matters that are undisputed,
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`and its denials can illuminate the need for further inquiry into disputed issues. This is unlikely to
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`be the case here. The FTC conducted an 18-month investigation before filing its Complaint,
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`during which lawyers and economists retained by Facebook provided the FTC with hundreds of
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`Case 1:20-cv-03590-JEB Document 63-1 Filed 04/22/21 Page 9 of 11
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`pages of written advocacy, and many hours of oral advocacy, addressing the anticompetitive
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`conduct described in the FTC’s Complaint. As a result, unlike most private litigants, the FTC is
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`familiar with the basic contours of most, if not all, of Facebook’s likely responses to the
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`allegations in the Complaint, and which areas are disputed. The same is true for the State
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`Plaintiffs, which coordinated their investigation closely with the FTC. Facebook’s Answer is
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`therefore unlikely to provide the FTC or the State Plaintiffs with new information, and
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`postponing the Rule 26 conference until after the Answer would accomplish nothing but delay.
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`There is also no reason to postpone discussions until the Court resolves Facebook’s
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`motion to dismiss. The motion to dismiss cannot narrow the issues in dispute, because the FTC’s
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`Complaint entails a single claim that Facebook has unlawfully monopolized U.S. personal social
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`networking services. See ECF 51 (Revised Partially Redacted Compl.) ¶¶ 169-174. Likewise,
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`the State Plaintiffs’ Complaint challenges a single course of conduct, and the scope of required
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`discovery is unaffected by the fact that it invokes both Section 2 of the Sherman Act and Section
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`7 of the Clayton Act. The FTC believes the Court should, and will, deny Facebook’s motion to
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`dismiss, but even if the motion to dismiss is granted, the preliminary discussions requested by
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`the FTC will not have imposed avoidable costs on Facebook, third parties, or the Court. Many of
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`the third parties whose interests may be implicated by the FTC’s case will also be impacted by
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`the State Plaintiffs’ case and the Klein case. These third parties and Facebook will need to
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`engage with the State Plaintiffs and the Klein plaintiffs on issues including a protective order and
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`an electronic discovery protocol, and will be unable to avoid these minimal costs even in the
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`unlikely event that this Court grants Facebook’s motions to dismiss the FTC’s or one of the State
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`Plaintiffs’ claims. A Rule 26 conference that facilitates the FTC’s and the State Plaintiffs’
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`discussions with third parties and Facebook will only increase efficiency. And the Court will not
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`Case 1:20-cv-03590-JEB Document 63-1 Filed 04/22/21 Page 10 of 11
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`be burdened by the Rule 26 conference or the resulting Report and Proposed Order: the Court
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`can address the parties’ proposals for a discovery start date and other matters at whatever time
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`the Court finds most efficient, whether that is prior to or following its ruling on Facebook’s
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`motion to dismiss.
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`C. A Rule 26 Conference No Later Than May 20, 2021 is Practicable and Will
`Advance the Public Interest
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`As noted above, the Federal Rules instruct the parties to “confer as soon as practicable.”
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`Fed. R. Civ. P. 26(f)(1). Here, May 20, 2021 (or earlier) is a practicable and appropriate date for
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`a Rule 26 conference that provides time for full briefing on the instant motion, and for the Court
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`to consider the parties’ arguments before ordering the conference to occur.
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`The FTC has already worked diligently with the State Plaintiffs in an effort to develop a
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`realistic scheduling proposal that would conclude trial prior to the March 27, 2023 Klein trial
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`date. But Facebook’s refusal to participate in a prompt Rule 26 conference prevents additional
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`progress on a scheduling order and on the other gating items required by Local Rule 16.3(c),
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`undermining the strong public interest in promptly resolving the FTC’s suit. Such unnecessary
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`delay is inconsistent with how courts in this District have managed previous government
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`monopolization cases: in United States, et al. v. Microsoft Corp., No. 98-1232 (D.D.C.), the
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`government filed its complaint on May 18, 1998, and began trial five months later on October 19,
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`1998.3
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`CONCLUSION
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`For the reasons explained above, as reflected in the attached Proposed Order, the FTC
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`respectfully requests that the Court order the parties to confer no later than May 20, 2021, and to
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`3 See Complaint: U.S. v. Microsoft Corp., DEP’T OF JUSTICE,
`https://www.justice.gov/atr/complaint-us-v-microsoft-corp; Openlaw: The Microsoft Case, THE
`BERKMAN CTR. FOR INTERNET & SOC’Y, https://cyber.harvard.edu/msdoj/trial.html (compiling
`trial transcripts).
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`Case 1:20-cv-03590-JEB Document 63-1 Filed 04/22/21 Page 11 of 11
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`submit to the Court no later than June 3, 2021 a case management Report and Proposed Order
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`that contains the parties’ proposals regarding a start date for discovery and other matters
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`Respectfully submitted,
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`By: /s/ Daniel Matheson
`Daniel Matheson (D.C. Bar 502490)
`Patricia Galvan
`Krisha Cerilli (D.C. Bar 983281)
`Robert Zuver (D.C. Bar 987216)
`Maria Dimoscato (D.C. Bar 489743)
`Eric Cochran (D.C. Bar 981148)
`Henry Hauser (D.C. Bar 1614882)
`Mitchell London (D.C. Bar 1029408)
`Owen Masters (D.C. Bar 242139)
`Michael Mikawa
`Noel Miller (D.C. Bar 1026068)
`David Owyang
`Mark Silvia
`Michael Smith (D.C. Bar 996738)
`Rebecca Weinstein
`Sylvia Zhang
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`Federal Trade Commission
`Bureau of Competition
`400 Seventh Street, S.W.
`Washington, D.C. 20024
`Telephone: (202) 326-2075
`Email: dmatheson@ftc.gov
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`Attorneys for Plaintiff
`Federal Trade Commission
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`appropriate under the Local Rules.
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`Dated: April 22, 2021
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