The People of the State of California-v-eBay, Inc
5:12-cv-05874
N.D. Cal.Sep 27, 2013Background
- California sued eBay alleging a handshake no-solicitation/no-hire agreement with Intuit that prevented mutual recruiting/hiring of employees.
- Key alleged facts: 2005–2007 communications among eBay executives (including Whitman) and Intuit’s Scott Cook; eBay repeatedly declined to recruit or hire Intuit employees and notified Intuit before offers in some instances.
- Plaintiffs allege the agreement persisted at least until DOJ publicized investigations of similar tech-company agreements in 2009.
- California seeks only injunctive relief under the Sherman Act and parallel state claims (Cartwright Act and UCL).
- eBay moved to dismiss under Rule 12(b)(6), arguing the complaints fail to allege an actionable conspiracy, lack competitive harm, and that California lacks standing for injunctive relief; the court heard the motions and issued this order.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Standing for antitrust injunctive relief under Section 16/Clayton Act | California says continued enforcement of the agreement after DOJ investigations shows threatened future injury warranting injunctive relief | eBay argues public DOJ announcements do not create a concrete threatened injury specific to California or to eBay’s conduct | Court: California lacks standing for injunctive relief; public DOJ announcements alone do not allege a threatened, forward-looking antitrust injury |
| Whether the complaint adequately pleads an unlawful agreement under Sherman Act | California relies on alleged communications, executive awareness, and repeated non-hiring as proof of an agreement | eBay contends plaintiffs fail to allege an actionable conspiracy and competitive harm | Court did not find sufficient standing to reach merits; Sherman Act claim dismissed with leave to amend |
| State-law claims (Cartwright Act and UCL) dependent on federal claim | California asserts parallel state claims ancillary to Sherman Act theory | eBay argues state claims fail if Sherman Act claim fails | Court: Cartwright Act and UCL claims rise and fall with Sherman claim; dismissed with leave to amend |
| Whether allegations of DOJ investigations suffice to convert past conduct into prospective threat | California argues DOJ publicity put eBay on notice but eBay nevertheless continued the agreement, showing ongoing threat | eBay argues DOJ publicity was general and not a legal determination concerning eBay’s specific conduct | Court: General DOJ announcements are insufficient to show threatened illegal conduct by eBay; not enough to establish equitable standing |
Key Cases Cited
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (pleading must be plausible to survive 12(b)(6))
- Ashcroft v. Iqbal, 556 U.S. 662 (courts accept well-pleaded facts and assess plausibility)
- Shroyer v. New Cingular Wireless Servs., Inc., 606 F.3d 658 (12(b)(6) standards in Ninth Circuit)
- Navarro v. Block, 250 F.3d 729 (pleading requirement summary at district stage)
- Rohnert Park v. Harris, 601 F.2d 1040 (standing elements for antitrust injunctive relief)
- County of Tuolumne v. Sonora Cmty. Hosp., 236 F.3d 1148 (state claims dependent on federal antitrust showing)
- Nova Designs, Inc. v. Scuba Retailers Ass'n, 202 F.3d 1088 (antitrust injury principles)
- Hawaii v. Standard Oil Co., 405 U.S. 251 (state treated as a private person under Section 16 for injunctive relief)