Case 3:21-cv-00817-SI Document 62 Filed 07/07/22 Page 1 of 18
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`IN THE UNITED STATES DISTRICT COURT
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`FOR THE DISTRICT OF OREGON
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`IN RE: INTEL CORP. CPU MARKETING,
`SALES PRACTICES AND PRODUCTS
`LIABILITY LITIGATION
`______________________________________
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`This Document Relates to All Actions.
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`Case No. 3:18-md-2828-SI
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`OPINION AND ORDER
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`Christopher A. Seeger, SEEGER WEISS LLP, 55 Challenger Road, Ridgefield Park, NJ 07660;
`Rosemary M. Rivas, GIBBS LAW GROUP LLP, 505 14th Street, Suite 1110, Oakland, CA 94612;
`Steve D. Larson and Jennifer S. Wagner, STOLL STOLL BERNE LOKTING & SHLACHTER PC, 209
`SW Oak Street, Suite 500, Portland, OR 97204; Gayle M. Blatt, CASEY GERRY SCHENK
`FRANCAVILLA BLATT & PENFIELD LLP, 110 Laurel Street, San Diego, CA 92101; Stuart A.
`Davidson, ROBBINS GELLER RUDMAN & DOWD LLP, 120 East Palmetto Park Road, Suite 500,
`Boca Raton, FL 33432; Melissa R. Emert, STULL, STULL, & BRODY, 6 East 45th Street, New
`York City, NY 10017; Richard M. Hagstrom, HELLMUTH & JOHNSON PLLC, 8050 West 78th
`Street, Edina, MN 55439; Jennifer L. Joost, KESSLER TOPAZ MELTZER & CHECK LLP, One
`Sansome Street, Suite 1850, San Francisco, CA 94104; Adam J. Levitt, DICELLO LEVITT
`GUTZLER, Ten North Dearborn Street, 11th Floor, Chicago, IL 60602; and Charles E. Schaffer,
`LEVIN SEDRAN & BERMAN LLP, 510 Walnut Street, Suite 500, Philadelphia, PA 19106. Of
`Attorneys for Plaintiffs.
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`Daniel F. Katz, David S. Kurtzer-Ellenbogen, David Krinsky, and Samuel Bryant Davidoff,
`WILLIAMS & CONNOLLY LLP, 725 Twelfth Street NW, Washington, D.C. 20005; and Steven T.
`Lovett and Rachel C. Lee, STOEL RIVES LLP, 760 SW Ninth Avenue, Suite 3000, Portland, OR
`97205. Of Attorneys for Defendant.
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`John D. Ostrander and William A. Drew, ELLIOTT, OSTRANDER & PRESTON, P.C., 707 SW
`Washington Street, Suite 1500, Portland, OR 97205; Emilio W. Cividanes, Matthew D. Field,
`and Elizabeth C. Rinehart, VENABLE LLP, 600 Massachusetts Avenue NW, Washington, DC
`20001. Of Attorneys for Amici the Cybersecurity Coalition, the Cyber Threat Alliance, the
`Information Technology Industry Council, and BSA | The Software Alliance.
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`PAGE 1 – OPINION AND ORDER
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`Case 3:21-cv-00817-SI Document 62 Filed 07/07/22 Page 2 of 18
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`Michael H. Simon, District Judge.
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`In this multidistrict proceeding, Plaintiffs bring a putative nationwide class action against
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`Defendant Intel Corporation (Intel) relating to certain security vulnerabilities in Intel’s
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`microprocessors. Plaintiffs contend that Intel knew for decades about two alleged design defects
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`in its microprocessors that created security vulnerabilities and that Intel failed to disclose or
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`mitigate these vulnerabilities. Plaintiffs also allege that the way these security vulnerabilities
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`could be exploited became publicly known beginning on January 3, 2018, and that new ways
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`continue to be discovered and publicized. These forms of exploit have become generally known
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`as “Spectre,” “Meltdown,” “Foreshadow,” “ZombieLoad,” “SwapGS,” “RIDL,” “LazyFP,”
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`“CacheOut,” and “Vector Register Sampling,” among others. Plaintiffs contend that until Intel
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`fixes the alleged defects at the hardware level, additional ways to exploit these security
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`vulnerabilities likely will still be discovered.
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`Plaintiffs allege that Intel’s processors have two general design defects. First, the design
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`of the processors heightens the risk of unauthorized access to protected memory secrets. This is
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`called “Unauthorized Access.” Second, the design does not completely delete, or undo, the
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`memory’s recent retrieval of those secrets, also increasing the risk of unauthorized access. This is
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`called “Incomplete Undo.” Plaintiffs contend that these two general design defects create
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`security vulnerabilities that could expose confidential data and that many of the resulting exploits
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`of these vulnerabilities are unique to Intel microprocessors. Plaintiffs also allege that Intel cannot
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`fix these defects “after-the-fact” with software alone and that the software patches that have been
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`created and distributed by Intel after January 3, 2018 to mitigate these defects substantially
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`diminish the speed of Intel’s processors.
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`Intel already has moved three times to dismiss this lawsuit. The Court granted the first
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`motion and gave Plaintiffs leave to amend. See In re Intel Corp. CPU Mktg., Sales Pracs. &
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`PAGE 2 – OPINION AND ORDER
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`Case 3:21-cv-00817-SI Document 62 Filed 07/07/22 Page 3 of 18
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`Prod. Liab. Litig. (Intel I), 2020 WL 1495304 (D. Or. Mar. 27, 2020). Plaintiffs then filed an
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`Amended Consolidated Class Action Allegation Complaint. That pleading asserted the following
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`nationwide putative class claims: (1) fraud by concealment or omission; (2) breach of
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`California’s Consumers Legal Remedies Act (CLRA), Cal. Civ. Code §§ 1750, et seq.;
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`(3) breach of California’s Unfair Competition Law (UCL), Cal. Bus. & Prof. Code §§ 17200, et
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`seq.; (4) breach of California’s False Advertising Law (FAL), Cal. Bus. & Prof. Code §§ 17500,
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`et seq.; and (5) unjust enrichment, or quasi-contract. Plaintiffs also asserted separate putative
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`state subclass claims for each state except California, Kentucky, and Massachusetts, plus the
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`District of Columbia, under each jurisdiction’s deceptive or unfair trade practices act or
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`consumer protection law. Plaintiffs sought both money damages and injunctive relief.
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`The Court granted Intel’s second motion to dismiss. See In re Intel Corp. CPU Mktg.,
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`Sales Pracs. & Prod. Liab. Litig. (Intel II), 2021 WL 1198299 (D. Or. Mar. 29, 2021). The Court
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`gave Plaintiffs leave to amend their nationwide claim under California’s UCL alleging unfair
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`conduct, their nationwide claim for unjust enrichment, and their state subclass claims. The Court
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`dismissed all other claims with prejudice.
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`Plaintiffs then filed a Second Amended Consolidated Class Action Allegation Complaint
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`(Second Amended Complaint). This pleading realleges the two nationwide claims for which the
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`Court granted leave to replead. The first is a claim alleging breach of California’s UCL by
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`engaging in unfair conduct. The second is a claim alleging unjust enrichment. The Second
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`Amended Complaint also alleges the same state subclass claims under each jurisdiction’s
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`deceptive or unfair trade practices act or consumer protection law. Intel again moved to dismiss.
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`The Court granted in part Intel’s motion to dismiss the Second Amended Complaint. See
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`In re Intel Corp. CPU Mktg., Sales Pracs. & Prod. Liab. Litig. (Intel III), --- F. Supp. 3d ---,
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`PAGE 3 – OPINION AND ORDER
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`2022 WL 225304 (D. Or. Jan. 26, 2022). The Court dismissed with prejudice all claims except
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`those brought by seven Named Plaintiffs who asserted claims based on Intel’s alleged conduct on
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`or after September 1, 2017. The Court also dismissed the claims of even those seven Named
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`Plaintiffs other than: (a) their nationwide claim under California’s UCL alleging unfair conduct;
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`(b) their nationwide claim alleging unjust enrichment; (c) their state subclass claims alleging
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`unfair conduct; and (d) their state subclass claims alleging unconscionable conduct. In other
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`words, the Court granted in part and denied in part Intel’s motion to dismiss, allowing only
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`certain claims asserted by the seven Named Plaintiffs who purchased devices containing Intel
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`processors after September 1, 2017.
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`Now before the Court is Intel’s motion for reconsideration of Intel III or, in the
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`alternative, motion for certification for interlocutory appeal under 28 U.S.C. § 1292(b). For the
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`reasons discussed below, the Court grants Intel’s motion for reconsideration and now dismisses
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`this lawsuit in its entirety.
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`A. Motion for Reconsideration
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`STANDARDS
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`Rule 54(b) of the Federal Rules of Civil Procedure provides that any order “may be
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`revised at any time before the entry of a judgment adjudicating all the claims and all the parties’
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`rights and liabilities.” Fed. R. Civ. P. 54(b). The rule, however, does not address the standards
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`that a district court should apply when reconsidering interlocutory orders, and the Ninth Circuit
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`has not established a standard of review. “Rule 54(b) is not a mechanism to get a ‘do over’ to try
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`different arguments or present additional evidence when the first attempt failed. Thus, while the
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`limits governing reconsideration of final judgments under Rule 59(e) do not strictly apply, courts
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`frequently invoke them as common-sense guideposts when parties seek reconsideration of an
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`PAGE 4 – OPINION AND ORDER
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`interlocutory ruling under Rule 54(b).” Stephen S. Gensler & Lumen N. Mulligan, 2 Fed. R. of
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`Civ. P., Rules and Commentary, Rule 54 (2022).
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`When reconsidering an interlocutory order, district courts in the Ninth Circuit have
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`stated:
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`Motions to reconsider under Rule 54(b), while generally
`disfavored, may be granted if: (1) there are material differences in
`fact or law from that presented to the court and, at the time of the
`court’s decision, the party moving for reconsideration could not
`have known the factual or legal differences through reasonable
`diligence; (2) there are new material facts that happened after the
`Court’s decision; (3) there has been a change in law that was
`decided or enacted after the court’s decision; or (4) the movant
`makes a convincing showing that the court failed to consider
`material facts that were presented to the court before the court’s
`decision.
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`In re Galena Biopharma, Inc. Derivative Litig., 2014 WL 5494890 (D. Or. Oct. 30, 2014)
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`(quoting Lyden v. Nike, Inc., 2014 WL 4631206, at *1 (D. Or. Sept. 15, 2014)); see also
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`Stockamp & Assocs. v. Accretive Health, 2005 WL 425456, at *6-7 (D. Or. Feb. 18, 2005)
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`(discussing the four factors as established in the local rules of the Central District of California
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`and applied by other district courts within the Ninth Circuit); cf. U.S. Tobacco Coop. Inc. v. Big
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`S. Wholesale of Virginia, LLC, 899 F.3d 236, 257 (4th Cir. 2018) (noting that courts have more
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`discretion in evaluating reconsideration under Rule 54(b) and concluding that “a court may
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`revise an interlocutory order under the same circumstances in which it may depart from the law
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`of the case: (1) a subsequent trial producing substantially different evidence; (2) a change in
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`applicable law; or (3) clear error causing manifest injustice” (quotation marks omitted)).
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`However, “[w]hile a motion for reconsideration allows a party to bring a material oversight to
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`the court’s attention, it is not appropriate for a party to request reconsideration merely to force
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`the court to think about an issue again in the hope that it will come out the other way the second
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`PAGE 5 – OPINION AND ORDER
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`time.” Brown v. S. Nevada Adult Mental Health Servs., 2014 WL 2807688, at *2 (D. Nev.
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`June 20, 2014) (cleaned up).
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`B. Certification for Interlocutory Appeal
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`“Under 28 U.S.C. § 1292(b) parties may take an interlocutory appeal when ‘exceptional
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`circumstances justify a departure from the basic policy of postponing appellate review until after
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`the entry of a final judgment.’” ICTSI Oregon, Inc. v. Int’l Longshore & Warehouse Union, 22
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`F.4th 1125, 1130 (9th Cir. 2022) (quoting Coopers & Lybrand v. Livesay, 437 U.S. 463, 475
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`(1978)). A district court may certify an order for interlocutory appeal when the district court
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`finds “that such order involves a controlling question of law as to which there is substantial
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`ground for difference of opinion and that an immediate appeal from the order may materially
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`advance the ultimate termination of the litigation.” 28 U.S.C. § 1292(b); see also ICTSI, 22 F.4th
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`at 1130.
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`“A controlling question of law must be one of law—not fact—and its resolution must
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`‘materially affect the outcome of litigation in the district court.’” Id. (quoting In re Cement
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`Antitrust Litig., 673 F.2d 1020, 1026 (9th Cir. 1982)). A court may find substantial ground for
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`difference of opinion when “novel legal issues are presented, on which fair-minded jurists might
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`reach contradictory conclusions.” Reese v. BP Expl. (Alaska) Inc., 643 F.3d 681, 688 (9th
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`Cir. 2011). “For example, this prong is satisfied if ‘the circuits are in dispute on the question and
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`the court of appeals of the circuit has not spoken on the point, if complicated questions arise
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`under foreign law, or if novel and difficult questions of first impression are presented.’”
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`ICTSI, 22 F.4th at 1130 (quoting Couch v. Telescope Inc., 611 F.3d 629, 633 (9th Cir. 2010)).
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`The district court need not, however, “await development of contradictory precedent before
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`concluding that the question presents a substantial ground for difference of opinion.” Id.
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`at 1130-31 (cleaned up). “Finally, the ‘materially advance’ prong is satisfied when the resolution
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`PAGE 6 – OPINION AND ORDER
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`of the question ‘may appreciably shorten the time, effort, or expense of conducting’ the district
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`court proceedings.” Id. (quoting In re Cement, 673 F.2d at 1027).
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`BACKGROUND1
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`Throughout this case, the parties have mainly focused on Plaintiffs’ allegations involving
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`Intel’s alleged conduct since 2006, relating to the alleged two design defects, Unauthorized
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`Access and Incomplete Undo. In their written response to Intel’s Third Motion to Dismiss,
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`however, Plaintiffs relied extensively on Intel’s alleged conduct after the first of the exploits of
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`Intel’s alleged security vulnerabilities, identified as Spectre and Meltdown, became known to
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`Intel around June and July 2017, respectively. At oral argument on Intel’s third motion to
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`dismiss, Plaintiffs continued to focus on their allegations of Intel’s alleged conduct since 2006
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`and only briefly addressed their allegations of Intel’s conduct after mid-2017 when Spectre and
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`Meltdown were disclosed to Intel.
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`For example, at oral argument counsel for Plaintiffs cited paragraph 539 of the Second
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`Amended Complaint, which alleged that Intel “delayed” the embargo period, and Plaintiffs’
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`counsel also referenced Plaintiffs’ contention that Intel “rushed not only items out, product out,
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`they created new product with the defective CPU and launched that during that period.” Tr.
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`at 104:9-18. Plaintiffs’ counsel also stated that in the Second Amended Complaint, Plaintiffs
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`added new allegations that supported their unjust enrichment claim, including that Intel
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`“continued to sell CPUs after learning in 2017 about the defects and the exploits; we allege that
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`it told the public that the issue was fixed, but it wasn't fixed; and that Intel told the public that the
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`defects and exploits were industrywide. So those are additional facts that we allege.” Tr.
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`1 This section discusses the procedural background relevant to the pending motion and
`alternative motion. The more general background of this case, including the technology and
`alleged defects and misconduct, are described in the Court’s previous opinions.
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`PAGE 7 – OPINION AND ORDER
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`at 68:14-18 (ECF 224 at 68); see also Tr. at 75:10-13 (“I think we’ve alleged the defect if not,
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`you know, going back to 2006, definitely during that time period, Your Honor, of 2017 going
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`forward, so Your Honor has a choice on that.”). Plaintiffs, however, continued to emphasize that
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`their primary theory of the case is that Intel “should be held responsible for [its 2006] design
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`decision” and that the Court “misunderstood” Plaintiffs’ counsel if the Court believed that
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`Plaintiffs now contended that the case was “really about” conduct in 2017 and later. Tr. at 43:4-
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`23.
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`In resolving Intel’s Third Motion to Dismiss, the Court rejected Plaintiffs’ contentions
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`relating to conduct before 2017. The Court found, however, that Plaintiffs’ new allegations
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`relating to Intel’s conduct after Spectre and Meltdown were revealed to Intel in mid-2017 were
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`sufficient, at least at this stage of the lawsuit and under the standards a court must apply in
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`resolving a motion to dismiss, to state nationwide claims for unfair conduct under the UCL and
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`for unjust enrichment, as well as certain claims under the laws of other states. The Court found
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`that Plaintiffs sufficiently alleged that: (1) Intel manipulated the embargo periods for multiple
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`security exploits and caused delay, including delaying public disclosure of Spectre and
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`Meltdown by extending the “embargo” through the end of the 2017 winter holidays buying
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`season and for other alleged exploits by extending an embargo for 21 months; (2) at least since
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`mid-2017, Intel knew that its chips had unique design flaws that rendered them vulnerable to side
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`channel security exploits like Spectre and Meltdown in ways that other manufacturers’ chips
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`were not similarly vulnerable; (3) at least since mid-2017, Intel knew that it would need to
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`implement software patches that would affect the performance of its chips; (4) after mid-2017,
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`Intel continued to sell chips at premium prices and market its chips as fast, safe, and secure
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`during the time that it knew of these problems and that the public did not; (5) after public
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`PAGE 8 – OPINION AND ORDER
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`disclosure of Spectre and Meltdown in early 2018, Intel made statements that it would put
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`security first and fix the problem, but merely offered software patches and has yet to fix the
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`problem at the hardware level by correcting the alleged fundamental developmental defects;
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`(6) after public disclosure in early 2018, Intel made statements that the problems broadly
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`affected the industry, when Intel knew that many of the security exploits were unique to Intel
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`chips; and (7) after public disclosure in early 2018, Intel attempted to ban users from publishing
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`test results showing the significant negative effects from the mitigation patches.
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`The Court concluded that Plaintiffs’ allegations relating to post-September 2017 conduct
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`involved conduct that did not wholly overlap with Plaintiffs’ fraud claim and thus the unfair
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`prong claim was not barred as duplicative of the fraud claim. The Court next considered whether
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`the Second Amended Complaint failed to allege facts showing that Intel’s conduct was unfair
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`under the applicable balancing test. In concluding that Plaintiffs sufficiently stated a claim, the
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`Court primarily relied on Plaintiffs’ allegations that Intel manipulated and delayed the embargo
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`periods, particularly the 2017 embargo to get through the 2017 winter holidays selling season;
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`that Intel downplayed the negative effects of the mitigation patches; and that Intel suppressed
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`users’ testing and disclosure of the effects of the mitigation. The Court allowed claims beyond
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`January 2018, when Spectre and Meltdown were publicly disclosed, because the Court found
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`that Plaintiffs sufficiently alleged that Intel made misrepresentations or half-truths or failed to
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`disclose material information and thus the market was not operating based on full disclosure that
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`would allow consumers to make informed decisions.
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`The Court issued its decision on January 26, 2022. On February 23, 2022, Intel moved
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`for reconsideration or, in the alternative, for certification of interlocutory appeal. Amici filed a
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`PAGE 9 – OPINION AND ORDER
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`brief in support of Intel’s motion. Plaintiffs responded, and Intel replied. The Court heard oral
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`argument on June 30, 2022.
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`DISCUSSION
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`Intel argues that reconsideration is appropriate because the grounds on which the Court
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`allowed Plaintiffs’ claims to proceed—Plaintiffs’ allegations relating to Intel’s conduct from
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`September 2017 onward—were not the focus of the parties throughout this litigation. Although
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`Plaintiffs’ written response to Intel’s third motion to dismiss relied heavily on this post-
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`September 2017 alleged conduct, Plaintiffs’ primary theory of the case has always remained
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`grounded in the entire period from 2006 forward and focused on the two general alleged defects.
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`Intel previously did not address in its briefing any potential liability or theories based on Intel’s
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`alleged conduct after the disclosure to Intel of Spectre and Meltdown in mid-2017. Intel
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`contends that if it is allowed to present argument and evidence2 on the 2017 and later conduct on
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`which the Court based its most recent opinion, the Court’s holding would be seen to be clearly
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`erroneous or manifestly unjust.
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`Intel argues that Plaintiffs’ “new” theory of liability for post-2017 conduct fails because:
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`(1) Plaintiffs’ allegations that Intel manipulated and delayed the embargo periods are speculative
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`and unsupported, as are Plaintiffs’ allegations that the “typical” embargo period is 90 days or
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`that 90 days is a reasonable embargo period for the security vulnerabilities and exploits here;
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`(2) Plaintiffs’ UCL claim based on unfair conduct overlaps with Plaintiffs’ dismissed UCL claim
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`based on fraud; (3) Plaintiffs’ UCL claim based on unfair conduct is foreclosed under Bardin v.
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`DaimlerChrysler Corp., 39 Cal. Rptr. 3d 634 (Ct. App. 2006); (4) Plaintiffs’ UCL claim fails as
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`2 With its motion for reconsideration, Intel submitted more than 300 pages of exhibits for
`which it asks the Court to take judicial notice. The Court addresses this evidence below in
`Section A.
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`PAGE 10 – OPINION AND ORDER
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`a matter of law under the balancing test applied by the Court in evaluating UCL claims; and
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`(5) even if Plaintiffs’ UCL claim survives all these arguments, the Court should dismiss all
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`claims after the public disclosure of Spectre and Meltdown on January 3, 2018. Because the
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`Court finds Intel’s first two arguments persuasive and dispositive of its motion, the Court does
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`not reach Intel’s remaining arguments.3
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`In its alternative motion, Intel requests certification under 28 U.S.C. § 1292(b) on the
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`questions of whether Bardin forecloses Plaintiffs’ UCL claim based on unfair conduct and
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`whether the alleged manipulation and delay of the embargo period beyond the supposedly
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`“typical” 90-day period states a claim for unfair conduct under the UCL. Because the Court
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`grants Intel’s motion for reconsideration, the Court declines to reach Intel’s alternative request
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`for § 1292(b) certification.
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`A. New Evidence Submitted by Intel
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`Intel submits articles referenced by Plaintiffs in their Second Amended Complaint,
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`arguing that those documents are incorporated-by-reference. “[A] defendant may seek to
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`incorporate a document into the complaint ‘if the plaintiff refers extensively to the document or
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`the document forms the basis of the plaintiff's claim.’” Khoja v. Orexigen Therapeutics, Inc., 899
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`F.3d 988, 1002 (9th Cir. 2018) (quoting United States v. Ritchie, 342 F.3d 903, 907 (9th Cir.
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`3 Plaintiffs respond that the Court should not even entertain Intel’s motion to reconsider
`because Plaintiffs have always alleged post-2017 conduct and Intel already had the opportunity
`to brief these issues but chose not to do so. Plaintiffs assert that reconsideration is not an
`appropriate mechanism to raise arguments that a party could have raised in its original motion.
`Although that is often correct as a general proposition, in this lawsuit Plaintiffs have consistently
`focused on the two alleged defects and Intel’s conduct since 2006. It was not until the Court’s
`most recent decision that Intel had a reason to focus on Plaintiffs’ allegations of Intel’s post-2017
`conduct and brief those specific issues in the manner now addressed in Intel’s motion for
`reconsideration. The Court rejects Plaintiffs’ argument that the Court should decline to address
`the pending motion on the merits.
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`PAGE 11 – OPINION AND ORDER
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`2003)). The Court finds that Plaintiffs did not sufficiently incorporate by reference Intel’s
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`Exhibits 5 and 6, which were referenced only once in the Second Amended Complaint and do
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`not form the basis of any of Plaintiffs’ claims. Thus, the Court does not take judicial notice of
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`those two exhibits. The Court, however, does take judicial notice of the other documents that
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`Intel submits were incorporated by reference in the Second Amended Complaint.
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`The Court also notes that for these incorporated exhibits, although incorporation
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`“generally permits courts to accept the truth of matters asserted in incorporated documents . . . it
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`is improper to do so only to resolve factual disputes against the plaintiff’s well-pled allegations
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`in the complaint.” Id. at 1014. The Ninth Circuit has emphasized that “[t]he incorporation-by-
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`reference doctrine does not override the fundamental rule that courts must interpret the
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`allegations and factual disputes in favor of the plaintiff at the pleading stage.” Id.
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`Intel also separately submits materials from governmental and other official websites
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`relating to embargo and security procedures. Although a court may take judicial notice of certain
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`matters of public record, “a court cannot take judicial notice of disputed facts contained in such
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`public records.” Id. at 999. Intel asserts that it is offering those documents only for the fact that
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`embargo procedures exist, but Intel then argues the content of those embargo procedures and
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`quotes the discussions within the documents when challenging Plaintiffs’ allegations on the
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`reasonableness of Plaintiffs’ assertions about Intel’s supposed manipulation and embargo delays.
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`Whether 90 days is a reasonable, or typical, period for the embargo here, whether Intel could
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`have made some type of disclosure sooner, or whether Intel could have influenced the embargo
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`timeframes are all factual disputes inappropriate for judicial notice. Thus, the Court declines to
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`take judicial notice of the content of these documents, other than the largely irrelevant fact of
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`their existence.
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`PAGE 12 – OPINION AND ORDER
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`The remaining documents offered by Intel are official court transcripts, which are already
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`in the docket in this case. The Court declines to take judicial notice of the versions filed by Intel
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`and instead references the versions in the Court docket whenever such reference is required.
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`B. Embargo Manipulation
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`In reaching its conclusions in Intel III allowing Plaintiffs’ post-September 2017 claims to
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`proceed, the Court relied on Plaintiffs’ allegations that Intel manipulated the embargos and
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`delayed the embargo periods beyond a reasonable timeframe and that 90 days was a reasonable
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`timeframe for the embargos in this case. See, e.g., Intel III, 2022 WL 225304, at *10, 12-13, 15,
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`16. Plaintiffs’ Second Amended Complaint alleges statements made by researchers reviewing the
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`primary embargo at issue, who noted the “tremendous delay” in disclosure. Plaintiffs also allege
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`comments by researchers stating that in the context of software security vulnerabilities embargo
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`durations are typically 90 days. Plaintiffs further allege that Intel was informed about Spectre
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`and Meltdown in June and July 2017, respectively, but the public was not informed until
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`January 3, 2018. Thus, Plaintiffs allege that Intel manipulated the embargo periods, including
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`past the 2017 winter holidays shopping season, for improper reasons.
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`Plaintiffs also allege that Intel continued to manipulate other embargo periods for future
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`security exploits that affected only Intel chips, including some that were allegedly embargoed
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`for 21 months. The Court found to be plausible Plaintiffs’ allegations that Intel delayed embargo
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`periods beyond a reasonable time. Instrumental to this finding were Plaintiffs’ allegations citing
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`researchers who had reviewed the specific embargos and noted their long delay. The Court,
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`however, was not intending to declare or establish any specific default embargo period, let alone
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`one that would apply under all circumstances.
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`In responding to Intel’s motion for reconsideration, Plaintiffs clarified that their “claims
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`are not based on Intel’s participation in a coordinated disclosure process or the fact that it should
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`PAGE 13 – OPINION AND ORDER
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`Case 3:21-cv-00817-SI Document 62 Filed 07/07/22 Page 14 of 18
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`have disclosed the Intel CPU Exploits sooner.” ECF 253 at 10 (emphasis added); see also id.
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`at 12 (stating that Plaintiffs’ claims “are not based on the existence, or even the duration of,
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`embargo periods”) (emphasis added). Instead, Plaintiffs contend that their “claims are based on
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`actions that Intel took independent of, and unrelated to, the coordinated disclosure process.” Id.
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`at 10. Plaintiffs explain that their claims are based on Intel’s use of the “asymmetry of
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`information between itself and purchasers of equipment powered by Intel’s processors” during
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`the embargo periods by continuing to sell product at premium prices throughout the embargo
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`periods. Plaintiffs also state that their claims are based on Intel’s conduct in making
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`misrepresentations and half-truths after the January 2018 disclosure.4 Id. at 12.
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`Plaintiffs describe the Court’s Intel III opinion as being based on the alleged misconduct
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`by Intel as now characterized by Plaintiffs. The Court, however, relied—apparently
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`mistakenly—on Plaintiffs’ allegations of Intel’s alleged manipulation and delay of the embargo
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`periods beyond a reasonable time to increase Intel’s profits, such as delaying notification until
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`4 At oral argument, counsel for Plaintiffs stated that in their response brief they
`“intended” to state that their claims are not “solely based” on their allegations that Intel
`improperly delayed the embargo periods, as found by the Court. In their brief, however,
`Plaintiffs expressly disavowed any reliance on those allegations and that argument. They instead
`focused only on the asymmetry of information during the embargo periods, which the Court
`discusses in this Opinion and Order and does not find supports Plaintiffs’ remaining claims. At
`the hearing, Plaintiffs’ counsel directed the Court’s attention to page 20 of Plaintiffs’ brief
`(ECF 253 at 28), which references Plaintiffs’ allegations of a research paper describing the
`incentives to delay disclosure to take advantage of information asymmetry. Plaintiffs’ counsel
`argues that this discussion demonstrates that Plaintiffs did not abandon the argument relied on by
`the Court in Intel III. This discussion, however, supports the Court’s conclusion that Plaintiffs
`shifted focus in response to the pending motion for reconsideration from improper “embargo
`manipulation” to “information asymmetry.” The Court declines to allow Plaintiffs to change
`their position at oral argument from what they conceded in their written submission. Intel’s reply
`brief reasonably relied on Plaintiffs’ express disclaimer of the theory that Intel acted improperly
`in lengthening any embargo period, and Intel responded to Plaintiffs’ arguments in opposition to
`reconsideration based on that understanding of Plaintiffs’ concession. See, e.g., ECF 254 at 6, 7,
`11, 18. Accordingly, the Court analyzes only the theory as expressly briefed by Plaintiffs.
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`PAGE 14 – OPINION AND ORDER
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`Case 3:21-cv-00817-SI Document 62 Filed 07/07/22 Page 15 of 18
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`January 3, 2018, shortly after the 2017 winter holidays buying season, to maximize sales. See,
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`e.g., Intel III, 2022 WL 225304, at *10, 12-13, 15, 16. Now that Plaintiffs have clarified that
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`their claims are not based on any alleged unreasonable delay of an embargo period, Plaintiffs are
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`simply alleging that Intel sold product during a normal and reasonable embargo with
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`“asymmetrical information.” But that describes the situation during every embargoed security
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`vulnerability—the manufacturer will always know more about any security vulnerability than
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`consumers during an information embargo. That is insufficient to state a claim for unfair conduct
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`under the UCL. Intel’s alleged manipulation of