Case 1:20-cv-03590-JEB Document 66 Filed 05/06/21 Page 1 of 11
`
`IN THE UNITED STATES DISTRICT COURT
`FOR THE DISTRICT OF COLUMBIA
`
`
`FEDERAL TRADE COMMISSION,
`
`Plaintiff,
`
`v.
`
`FACEBOOK, INC.,
`
`Defendant.
`
`
`
`
`
`
`Case No. 1:20-cv-03590-JEB
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`FACEBOOK, INC.’S MEMORANDUM IN OPPOSITION
`
`
`After waiting almost a decade to bring claims and after waiting for four months after
`
`TO PLAINTIFF’S MOTION TO COMPEL A RULE 26(f) CONFERENCEP0F1
`
`filing its complaint, the FTC now demands that this Court ignore the Local Rules and commence
`
`discovery before the Court has ruled on Facebook’s pending motion to dismiss. The State
`
`Plaintiffs make the same demand. But neither the FTC nor the States have the authority to
`
`proceed here, their claims lack plausible legal and factual support, and their complaints should be
`
`dismissed entirely as set forth in Facebook’s pending motions to dismiss. See Facebook Mem. in
`
`Support of Mot. To Dismiss, FTC v. Facebook, Inc., No. 1:20-cv-03590-JEB, ECF No. 56-1;
`
`Facebook Mem. in Support of Mot. To Dismiss, New York v. Facebook, Inc., No. 1:20-cv-
`
`03589-JEB, ECF. No. 114-1.
`
`The Court’s Local Rules establish a sensible cadence for the conduct of these cases –
`
`should the Court determine that there are cases to conduct. Under those Rules, there is no Rule
`
`
`1 Because both the Federal Trade Commission, Plaintiff in FTC v. Facebook, Inc., No.
`1:20-cv-03590-JEB, and the State Plaintiffs in New York v. Facebook, Inc., No. 1:20-cv-03589-
`JEB, have filed motions requesting identical relief and making nearly identical arguments,
`Facebook has submitted this opposition brief in each action.
`
`

`

`Case 1:20-cv-03590-JEB Document 66 Filed 05/06/21 Page 2 of 11
`
`26(f) conference commencing discovery until after Facebook has filed an answer, and no answer
`
`can be filed until after the Court has decided the pending motions to dismiss. Plaintiffs’
`
`suggestion that the Local Rules do not apply or need not be followed is incorrect and
`
`unsupported by any authority. See infra Point I.
`
`Plaintiffs’ claimed reasons for departure from the orderly sequencing dictated by the
`
`Local Rules are similarly strained. There is no emergency here requiring expedited
`
`commencement of discovery. Plaintiffs’ basis for rushing is the speculative concern that related
`
`class actions against Facebook have an initial schedule calling for trial in two years. Plaintiffs
`
`say that discovery must start now to avoid the possibility that the class cases will be tried ahead
`
`of the cases here. See FTC Mem. in Support of Mot. To Compel at 4-5, No. 1:20-cv-03590-JEB,
`
`ECF No. 63-1 (“FTC Br.”); States Mem. in Support of Mot. To Compel at 3, No. 1:20-cv-03589-
`
`JEB, ECF No. 125-1 (“States Br.”). But the Klein case trails Plaintiffs’ cases – the operative
`
`Klein class complaints were just filed, and motions to dismiss will not even be fully briefed until
`
`July. Discovery there has not started (contrary to what Plaintiffs claim). The plethora of
`
`differing parties and theories in Klein, the complexities of class treatment, and the substantial
`
`caseload of the Northern District of California make it all but certain that the initial schedule will
`
`be changed – as frequently occurs. The notion that Klein will be tried at all is chimerical: such
`
`cases are very rarely tried and are frequently dismissed or fail class certification. See, e.g.,
`
`Reveal Chat Holdco LLC v. Facebook, Inc., 2021 WL 1615349 (N.D. Cal. Apr. 26, 2021)
`
`(recently dismissing with prejudice antitrust class action against Facebook).
`
`If Plaintiffs are correct that their cases should be tried before any private case, and if a
`
`competing trial ever actually materializes, they can move to stay it (as the government frequently
`
`does in private civil actions). Their claimed worry – years before any such trial, based on a
`
`-2-
`
`

`

`Case 1:20-cv-03590-JEB Document 66 Filed 05/06/21 Page 3 of 11
`
`preliminary schedule – is simply not a valid reason for this Court to leapfrog the Local Rules to
`
`rush into discovery in cases where the Court has not even decided whether any of Plaintiffs’
`
`claims can be litigated. It is likewise not a valid reason to jam Facebook with an unfairly rushed
`
`schedule. See infra Point II.
`
`Plaintiffs chose to site their actions in this District: they should therefore expect to
`
`comply with its Local Rules. Like their complaints, the instant motions lack legal or factual
`
`substance. They should be denied.
`
`BACKGROUND
`
`On December 9, 2020, the FTC, and a group of 48 states and territories (collectively, the
`
`“State Attorneys General” or “States”), each filed a complaint against Facebook alleging that it
`
`violated antitrust laws. The FTC alleges that Facebook’s acquisitions of Instagram (2012) and
`
`WhatsApp (2014), as well as former policies governing application developers’ access to some
`
`Facebook data, unlawfully maintained a monopoly of a purported market for “personal social
`
`networking” in violation of Section 2 of the Sherman Act. Compl., FTC v. Facebook, Inc., No.
`
`1:20-cv-03590-JEB, ECF No. 3. The State Attorneys General claim that the two acquisitions –
`
`which the FTC reviewed and cleared, and does not directly challenge – violated Section 7 of the
`
`Clayton Act. The States also echo the FTC’s Section 2 claim. Compl., New York v. Facebook,
`
`Inc., No. 1:20-cv-03589-JEB, ECF No. 4.
`
`On June 18, 2019, the FTC notified Facebook that it was conducting an investigation of
`
`Facebook’s compliance with federal antitrust law. Over approximately the next 18 months, it
`
`issued broad discovery requests that together included more than 200 specifications or
`
`sub-specifications that sought information about, in substance, nearly every aspect of Facebook’s
`
`business over the course of 12 years. In response to the FTC’s requests, Facebook produced
`
`-3-
`
`

`

`Case 1:20-cv-03590-JEB Document 66 Filed 05/06/21 Page 4 of 11
`
`more than 3 million documents totaling more than 12 million pages, and provided hundreds of
`
`pages of detailed narrative responses and internal data sets. On top of this, 18 of Facebook’s
`
`most senior executives appeared for Investigative Hearings that spanned 24 days and more than
`
`150 hours. The State Attorneys General conducted a parallel and similarly extensive
`
`investigation, including additional depositions and separate narrative responses.
`
`Although they filed their cases separately, Plaintiffs soon moved to consolidate them for
`
`all purposes, including discovery and trial. See States Mem. in Support of Mot. To Consolidate
`
`at 1, 3, No. 1:20-cv-03589-JEB, ECF No. 45-1; States Reply Mem. in Support of Mot. To
`
`Consolidate at 7, No. 1:20-cv-03589-JEB, ECF No. 96 (requesting consolidation “through trial”).
`
`Facebook opposed premature consolidation as unsupported by the Federal and Local Rules. See
`
`Facebook Mem. in Response to Pls.’ Mot. To Consolidate at 1, No. 1:20-cv-03589-JEB, ECF
`
`No. 80. The Court ruled on January 13, 2021, that the motion would be “held in abeyance.”
`
`Min. Orders, Nos. 1:20-cv-03589-JEB & 1:20-cv-03590-JEB (Jan. 13, 2021).
`
`Facebook filed motions to dismiss both complaints on March 10, 2021, Plaintiffs filed
`
`their opposition briefs on April 7, and Facebook replied on April 21. The motions are now fully
`
`briefed. If granted, Facebook’s motions to dismiss would dispose of both cases in their entirety.
`
`If not granted in full, the motions could also result in the elimination of some claims (e.g., one or
`
`both Section 7 acquisition claims) or theories (e.g., refusal to deal with rivals) that would
`
`significantly narrow the scope of appropriate discovery.
`
`In a conference with counsel for Facebook on January 8, 2021, counsel for Plaintiffs
`
`stated that they expected to proceed immediately with discovery and asked for dates for a Rule
`
`26(f) discovery conference. When counsel for Facebook informed them that the Local Rules do
`
`not provide for such a conference before the filing of an answer, Plaintiffs’ counsel stated that
`
`-4-
`
`

`

`Case 1:20-cv-03590-JEB Document 66 Filed 05/06/21 Page 5 of 11
`
`because of the “importance” of these cases they planned to seek a variance from the Local Rules.
`
`But Plaintiffs did not proceed with their threatened motion at that time.
`
`However, on April 14, 2021, as Facebook prepared to submit its reply briefs in support of
`
`its motions to dismiss both cases, Plaintiffs reprised their demand for immediate commencement
`
`of discovery. This time, Plaintiffs based the demand on a purported need to stay ahead of the
`
`private Klein antitrust class actions against Facebook in the Northern District of California. The
`
`instant motions followed.
`
`DISCUSSION
`
`I.
`
`THIS DISTRICT’S LOCAL RULES PROVIDE FOR NO RULE 26 CONFERENCE
`UNTIL AFTER AN ANSWER IS FILED
`
`Plaintiffs cannot (and do not) claim that the relief sought in their motions comports with
`
`the Local Rules. Those Rules dictate that no Rule 26(f) conference can be required before the
`
`Court has ruled on motions to dismiss and Defendant has answered. Federal Rule 26(f)(1)
`
`provides that parties should confer “as soon as practicable — and in any event at least 21 days
`
`before a scheduling conference is to be held or a scheduling order is due under Rule 16(b).” Fed.
`
`R. Civ. P. 26(f)(1). Rule 16(b), in turn, states that, “[e]xcept in categories of actions exempted
`
`by local rule,” a judge “must issue [a] scheduling order as soon as practicable.” Fed. R. Civ. P.
`
`16(b)(2) (emphasis added). Here Local Rule 16.3(b) expressly provides just such an exemption:
`
`in this Court, “[t]he requirements of . . . Fed. R. Civ. P. 16(b) and 26(f)[] shall not apply in cases
`
`in which no answer has yet been filed.” LCvR 16.3(b) (emphasis added). As a result, under the
`
`Local Rules of this District, no Rule 26(f) conference is required until after Facebook has filed
`
`an answer.
`
`This rule embodies the “eminently logical” principle that “discovery is generally
`
`considered inappropriate while a motion that would be thoroughly dispositive of the claims in the
`
`-5-
`
`

`

`Case 1:20-cv-03590-JEB Document 66 Filed 05/06/21 Page 6 of 11
`
`Complaint is pending.” Chavous v. Dist. of Columbia Fin. Resp. & Mgmt. Assistance Auth., 201
`
`F.R.D. 1, 2 (D.D.C. 2001) (internal quotation marks omitted). Whether to permit discovery at
`
`all, or what discovery should be provided as “relevant to [a] party’s claim or defense,” Fed. R.
`
`Civ. P. 26(b)(1), is sensibly deferred until after resolution of motions to dismiss and, if the
`
`motions are not granted, after the defendant answers.
`
`Courts within this District uniformly reject attempts to deviate from Local Rule 16.3(b),
`
`which embodies this reasoned and efficient approach. See, e.g., Min. Order, Plackett v. Wash.
`
`Deluxe Bus, Inc., No. 1:19-cv-00794-CJN (D.D.C. Sept. 27, 2019) (denying similar motion);
`
`Min. Order, Klayman v. Fox, No. 1:18-cv-01579-RDM (D.D.C. Oct. 9, 2018) (same); Min.
`
`Order, Stanton v. Yount, No. 1:17-cv-01480-CKK (D.D.C. Oct. 19, 2017) (same); see also Sai v.
`
`Dep’t of Homeland Sec., 99 F. Supp. 3d 50, 56, 58 (D.D.C. 2015) (denying, among other
`
`discovery motions, a motion “to compel Defendants to participate in a Rule 26(f) conference”
`
`because the “resolution” of certain “threshold motions” would “likely define the scope of
`
`discovery”); Citizens for Resp. & Ethics in Wash. v. Exec. Office of the President, 2008 WL
`
`2932173, at *5 (D.D.C. July 29, 2008) (denying a motion to compel a Rule 26(f) conference,
`
`finding “no reason to diverge from the schedule set forth in the Federal Rules of Civil
`
`Procedure”). At least one court in this District has rejected even a joint attempt to initiate
`
`discovery planning while a motion to dismiss was pending. See Min. Order, Comm. to Defend
`
`the President v. FEC, No. 1:18-cv-00888-RDM (D.D.C. July 23, 2018) (explaining a “Joint
`
`Proposed Scheduling Order and Discovery Plan” was “premature” until after the Court ruled on
`
`“Defendant’s motion to dismiss”).
`
`Plaintiffs cite no authority for deviation from the Local Rules and no case from this
`
`District granting the relief they seek. Facebook is aware of no such case. Tellingly, Plaintiffs
`
`-6-
`
`

`

`Case 1:20-cv-03590-JEB Document 66 Filed 05/06/21 Page 7 of 11
`
`instead rely (see FTC Br. 3 & n.2) on decisions from courts in other districts with no local rule
`
`equivalent to this District’s Local Rule 16.3(b). Those cases are obviously irrelevant.
`
`Plaintiffs implausibly suggest that they seek only a Rule 26(f) conference and not to
`
`actually begin discovery. But the sole purpose of the Rule 26(f) conference is to begin the
`
`discovery process. Plaintiffs argue that there is no reason to wait because Facebook’s motions to
`
`dismiss “cannot narrow the issues” where the FTC brought a “single claim” and the States
`
`challenge a “single course of conduct.” FTC Br. 7; see also States Br. 3. This too is irrelevant as
`
`well as wrong. The Local Rule defers discovery until after the Court has determined whether
`
`there is a facially sufficient claim, not only in circumstances where “narrow[ing]” may occur.
`
`And, here, narrowing may occur: there are multiple claims (Sherman Act Section 2, Clayton Act
`
`Section 7) and multiple theories with multiple elements (relevant market, market power, several
`
`different allegations of exclusionary conduct), rulings on which would certainly focus and may
`
`limit the scope of any discovery in the event the Court does not dismiss the cases in full (as it
`
`should).
`
`II.
`
`PLAINTIFFS’ CLAIMED REASON FOR IGNORING THE LOCAL RULES IS
`GROUNDLESS
`
`Plaintiffs have not provided a credible reason to even consider deviating from the Local
`
`Rules. Plaintiffs base their argument on the spectral possibility that the Klein case might be tried
`
`two years from now in the Northern District of California, before the cases in this Court can be
`
`tried. See Klein v. Facebook, Inc., No. 5:20-cv-08570-LHK (N.D. Cal. 2020). But the claimed
`
`“urgent” need to coordinate with the Klein class actions is pretextual.
`
`First, Klein is not ahead of but behind the cases pending in this Court. The plaintiffs in
`
`Klein only recently (on April 22) filed operative consolidated complaints. See Consol.
`
`Consumer Class Action Compl., Klein v. Facebook, Inc., No. 5:20-cv-08570-LHK, ECF No. 87
`
`-7-
`
`

`

`Case 1:20-cv-03590-JEB Document 66 Filed 05/06/21 Page 8 of 11
`
`(N.D. Cal. Apr. 22, 2021); Consol. Advertiser Class Action Compl., Klein v. Facebook, Inc., No.
`
`5:20-cv-08570-LHK, ECF No. 86 (N.D. Cal. Apr. 22, 2021). Facebook will move to dismiss the
`
`class complaints in that case, which are similar to other cases that have previously been
`
`dismissed in that court. See generally Reveal Chat, 2021 WL 1615349; Reveal Chat Holdco,
`
`LLC v. Facebook, Inc., 471 F. Supp. 3d 981 (N.D. Cal. 2020); Facebook, Inc. v. Power Ventures,
`
`Inc., 2010 WL 3291750 (N.D. Cal. July 20, 2010). The motions to dismiss the Klein complaints
`
`will not be fully briefed until July 1, 2021. Nor has discovery begun in Klein, as the FTC (at 3-
`
`4) and the States (at 3) claim. The Court in Klein ordered Facebook only to turn over documents
`
`already produced to the FTC and the House of Representatives. See FTC Mot. To Compel Ex.
`
`A at 1, No. 1:20-cv-03590-JEB, ECF No. 63-2. Otherwise, discovery has not opened: counsel
`
`in Klein have not scheduled, much less conducted, a Rule 26(f) conference necessary to begin
`
`discovery. Any discovery in Klein will undoubtedly focus first on class certification, which
`
`involves complex questions of law and fact that are likely to occupy a significant period of time
`
`at the early stages of the case.
`
`Second, the Klein trial date (March 27, 2023) is not set in stone. See FTC Br. 4. While
`
`the Klein court issued an initial schedule with a trial date, as is that judge’s practice, the dates in
`
`that schedule – including the trial date – may well slip as the case proceeds. Compare, e.g., Case
`
`Management Order, In re High-Tech Emp. Antitrust Litig., No. 5:11-cv-02509-LHK, ECF No.
`
`88 (N.D. Cal. Oct. 26, 2011) (initially setting trial for June 10, 2013), with Case Management
`
`Order, In re High-Tech Emp. Antitrust Litig., No. 5:11-cv-02509-LHK, ECF No. 986 (N.D. Cal.
`
`Sept. 8, 2014) (rescheduling trial for nearly two years later, April 9, 2015); also compare Case
`
`Management Order, Rider v. Moving Solutions, Inc., No. 5:17-cv-04015-LHK, ECF No. 35
`
`(N.D. Cal. Mar. 7, 2018) (initially setting trial for July 1, 2019), with Case Management Order,
`
`-8-
`
`

`

`Case 1:20-cv-03590-JEB Document 66 Filed 05/06/21 Page 9 of 11
`
`No. 5:17-cv-04015-LHK, ECF No. 141 (N.D. Cal. Oct. 9, 2019) (rescheduling trial for nearly
`
`two years later, April 12, 2021).
`
`Third, it is far too early to tell if Klein will ever go to trial, much less go to trial only two
`
`years after the filing of an operative complaint. Plaintiffs cite no antitrust class action similar to
`
`Klein that has ever gone to trial in the Northern District of California, and trials of sprawling
`
`multi-class actions are exceedingly rare. Facebook expects Klein to be dismissed, if not on a
`
`Rule 12(b)(6) motion, then at class certification or on summary judgment under Rule 56. But if
`
`Klein turns out, against all odds, to be an outlier and actually reaches trial in that court, it may
`
`well take far longer than two years to get there.
`
`Fourth, there is no emergency requiring action now. According to Plaintiffs, the problem
`
`arises – if at all – only if Klein proceeds to trial two years from now and the cases here are not
`
`yet ready for trial. As noted above, there is little chance of that happening. But even if it does,
`
`the FTC and the State Attorneys General can assert the primacy of their cases at that time
`
`(assuming the Klein complaints have not been dismissed); they can move to stay the trial of the
`
`private actions or otherwise ask the two courts to address the sequencing of the trials as may be
`
`appropriate.
`
`Finally, Plaintiffs also claim this case should be exempted from the Local Rules because,
`
`after years of acquiescence or inaction, they now claim that Facebook is an “ongoing” monopoly
`
`that must be addressed urgently. FTC Br. 4; States Br. 3. But they have sought no preliminary
`
`injunction to address any such claimed urgency, their cases are entirely (and improperly)
`
`historical, and they do not even try to point to anything that Facebook is doing now that would
`
`violate Section 2 or any other antitrust law. See Verizon Commc’ns Inc. v. Law Offices of Curtis
`
`-9-
`
`

`

`Case 1:20-cv-03590-JEB Document 66 Filed 05/06/21 Page 10 of 11
`
`V. Trinko, LLP, 540 U.S. 398, 407 (2004) (unlawful exclusionary conduct to acquire or maintain
`
`2
`a monopoly may violate Section 2; mere possession of a monopoly does not).P1F
`
`P
`
`The parties agree on one point, however. If claims are ever determined to be adequately
`
`pleaded, in this Court and in California, then there will be a need for careful and rational
`
`coordination to avoid confusion, duplication of effort, and unwarranted burdens on the parties
`
`and the Courts. But that time has not yet arrived and – Facebook respectfully submits – should
`
`never arrive because its motions to dismiss should be granted. If it ever does arrive, Facebook
`
`will work cooperatively and in good faith to achieve necessary and appropriate coordination.
`
`For purposes of the instant motions before the Court to expedite discovery, however, this
`
`District’s “eminently logical” rules should be followed. Chavous, 201 F.R.D. at 2 (internal
`
`quotation marks omitted).
`
`CONCLUSION
`
`Facebook respectfully requests that the Court deny Plaintiff’s Motion To Compel a Rule
`
`26(f) Conference.
`
`
`
`
`
`
`2 The authority the FTC cites does not support the relief Plaintiffs seek, because in those
`cases there was ongoing conduct that warranted expedition. In United States v. Dentsply
`International, Inc., 190 F.R.D. 140 (D. Del. 1999), the court explained that governmental action
`there was “of special urgency” not as a general proposition but instead because the government
`sought “to enjoin ongoing anticompetitive conduct” (there, ongoing exclusive-dealing
`agreements). Id. at 145. In United States v. Microsoft Corp., 253 F.3d 34 (D.C. Cir. 2001) (en
`banc) (per curiam), the district court ordered expedition of a government case where there was a
`past history of enforcement (a consent decree agreed to three years earlier), the government
`alleged ongoing violations of the antitrust laws, and the government sought a preliminary
`injunction, see id. at 47 – none of which is present here. Here, as in all of their many prior
`citations of Microsoft, Plaintiffs misconstrue both the holdings of Microsoft and its applicability
`to these cases.
`
`-10-
`
`

`

`Case 1:20-cv-03590-JEB Document 66 Filed 05/06/21 Page 11 of 11
`
`May 6, 2021
`
`
`
`
`
`
`
`
`
`Respectfully submitted,
`
`
`
`U/s/ Mark C. Hansen
`Mark C. Hansen (D.C. Bar No. 425930)
`Kevin B. Huff (D.C. Bar No. 462043)
`Alex A. Parkinson (D.C. Bar No. 166695)
`KELLOGG, HANSEN, TODD,
` FIGEL & FREDERICK, P.L.L.C.
`1615 M Street, N.W., Suite 400
`Washington, D.C. 20036
`Tel: (202) 326-7900
`mhansen@kellogghansen.com
`
`Counsel for Defendant Facebook, Inc.
`
`-11-
`
`