ORDER GRANTING DEFENDANT’S MOTION TO DISMISS WITH PREJUDICE
Re: Dkt. Nos. 110, 137, 138
Plаintiffs Greg Garrison (“Garrison”), Deborah Van Vorst (“Van Vorst”), and Sastry Hari (“Hari”) (collectively, “Plaintiffs”) bring this putative class action against Defendant Oracle Corporation (“Oracle”) for alleged violations of federal and California antitrust laws. ECF No. 105 (Second Amended Complaint, or “SAC”).
I. BACKGROUND
A. Factual Background
1. The Parties
Oracle is a Delaware corporation with- its principal place of business in Redwood Shores, California. SAC ¶ 22. The world’s second-largest software producer by revenue, Oracle specializes in developing and marketing computer hardware systems and enterprise software products, including its own brands of database management systems. Id. ¶ 23.
Plaintiffs are former employees of Oracle. Id. ¶¶ 16, 18, 20. Garrison worked for Oracle as a senior account manager from
Plaintiffs seek to represent the following classes:
All natural persons who were employed by Oracle on a salaried basis in the technical, creative, and/or research and development fields in the United States from May 10, 2007 to the present. Excluded from the Class are: retail employees, corporate officers, members of the boards of directors, and senior executives of Oracle.
All natural persons who were employed by Oracle on a salaried basis in a manager level or above position, for product, sales, or general and administrative roles in the United States at any time from May 10, 2007 to the present. Excluded from the Class are: retail employees[,] corporate officers, members of the boards of directors, and senior executives of Oracle.
Id. ¶ 64.
2. In re High-Tech Employee Antitrust Litigation
Here, Plaintiffs allege that Oracle conspired with Google, Inc. (“Google”), Intuit Inc. (“Intuit”), Adobe Systems, Inc. (“Adobe”), International Business Machines Corp. (“IBM”) and “various other technology companies,” as well as with non-technology based companies and recruiting companies, to fix and suppress employee compensation. SAC ¶¶ 2-3. As the factual and procedural history of In re High-Tech Employee Antitrust Litigation (“High-Tech”), as well as the U.S. Department of Justice’s (“DOJ”) investigations and complaints, are relevant to this action, the Court briefly summarizes the background of that litigation below. See SAC ¶¶ 48, 50-53 (discussing DOJ investigation).
From 2009 to 2010, DOJ’s Antitrust Division investigated the employment and recruitment practices of various Silicon Valley technology companies, including Adobe, Apple Inc. (“Apple”), Intel Corp. (“Intel”), Intuit, and Google. See High-Tech,
Private plaintiffs filed five separate state court actions between May and July 2011. Following removal, transfer to San Jose to the undersigned judge, and consolidation as In re High-Tech Employee Antitrust Litigation, the High-Tech plaintiffs filed a consolidated amended complaint on September 13, 2011. Id. at 1112-13. In their complaint, the High-Tech plaintiffs alleged antitrust claims against their employers, claiming that the defendants had conspired “to fix and suppress employee compensation and to restrict employee mobility.” Id. at 1108. More specifically, the High-Tech
On May 17, 2013, the High-Tech plaintiffs publicly filed a number of documents in support of their supplemental motion for class certification. No. 11-2509, ECF Nos. 418, 428. One of those documents was an internal Google memo describing Google’s hiring protocols and practices as of “1.7.2008.” No. 11-2509, ECF No. 428-10 at GOOG-HIGH-TECH-00059839. At one point, the Google memo refers to certain companies on the “ ’Restricted Hiring’ list,” including Microsoft, Novell, Sun Mi-crosystems, and, as relevant here, Oracle. Id. Although DOJ began investigating Oracle with the High-Tech defendants in 2009, DOJ concluded its investigation into Oracle without filing a lawsuit on October 29, 2014. SAC ¶ 53.
3. Alleged Conspiracy in the Instant Lawsuit
Plaintiffs allege a conspiracy among Oracle, other technology companies, the technology departments of non-technology-based companies, and recruiting companies “to fix and suppress employee compensation, and impose unlawful restrictions on employee mobility.” SAC ¶¶ 2-4, 9. As part of this conspiracy, Oracle allegedly entered into a series of anti-solicitation “Secret Agreements.” Id. ¶ 2. Other than the senior executives who “actively managed and enforced” the Secret Agreements, Oracle employees “were not apprised of any of these Secret Agreements and did not consent to this restriction on their mobility of employment.” Id. ¶¶ 34, 57.
Plaintiffs allege three types of Secret Agreements. First, Oracle allegedly established a “no hire” list, on which Oracle placed companies that entered into a reciprocal agreement with Oracle not to solicit each other’s employees. Id. ¶¶ 26-27. Plaintiffs do not further define the terms of the “no hire” agreements, so it is unclear whether the “no hire” agreements alleged here include all of the activities alleged in High-Tech: (1) not to cold call each other’s employees, (2) to notify the other company whenever making an offer to an employee of the other company, and (3) not to engage in “bidding' wars.” See High-Tech,
Second, Plaintiffs allege that Oracle formed “gentlemen’s agreements” when the CEOs of “certain companies” would agree orally not to solicit one another’s employees. SAC ¶ 6. According to Plaintiffs, “gentlemen’s agreements” were often not added to the “no hire” list. Id. ¶ 31. Third, Plaintiffs allege a “Restricted Hiring Agreement” between Oracle and Google. Id. ¶ 5.The Restricted Hiring Agreement between Oracle and Google was the sole Secret Agreement alleged in Garrison’s original complaint. See Garrison v. Oracle Corp., No. 14-CV-04592-LHK
Now, the SAC specifically identifies the following Secret Agreements:
• In an email dated March 30, 2006, Oracle’s Director of Recruiting stated that Oracle had a “gentleman’s agreement with IBM whereby both companies would not solicit each other’sconsultants.” SAC ¶ 30; see also id. ¶ 44 (January 16, 2008 email from Oracle’s Director of Recruiting, who told an Oracle recruiter to stop soliciting employees from IBM). The SAC does not allege the date that Oracle entered into the agreement with IBM.
• In May 2007, Oracle and Google entered into a Restricted Hiring Agreement: “Not to pursue manager level and above candidates for Product, Sales, or [General and Administrative] roles — even if they have applied to [any of the other companies who are parties to the Restricted Hiring Agreement].” Id. ¶ 32 (second alteration in original). A Google employee confirmed the Restricted Hiring Agreement in an October 9, 2007 email: “I would like to make sure there is no confusion around our Restricted Hiring Rule: We are not to pursue any PSG&A [Product, Sales, General, and Administrative] candidate at the manager level or above from Microsoft, Novell, Oracle,' or Sun.” Id. ¶ 33 (alteration in original) (emphases omitted).
• In a June 4, 2007 email, Oracle’s Director of Recruiting memorialized an agreement with Deloitte: “Please get a note out to our team that no emails of this kind and no solicitation voice-mails should be left for Deloitte candidates or to any other candidates who we have no-hire agreements with.” Id. ¶ 40.
• In an email dated November 30, 2007, a YP at Oracle contacted Oracle’s HR department and stated “pis confirm that we can put Micros on a no hire list.” Id. ¶ 42. The SAC does not specify whether Micros was added to the “no hire” list.
• By March 19, 2009, Oracle and Adobe came to an agreement “not to directly or indirectly solicit employees from any company on the ‘no hire’ list.” Id. ¶ 47. Plaintiffs allege that Adobe was not added to the “no hire” list but had a “gentleman’s agreement” with Oracle. Id. ¶ 28.
• On December 29, 2009, Oracle added CoreTech, Inc. (“CоreTech”) to the “no hire” list. Id. ¶ 49. Plaintiffs allege that CoreTeeh’s inclusion on the “no hire” list was scheduled to end on September 4, 2012. Id.
• At unspecified dates, Oracle added Texas Instruments, Honeywell, No-vell, and Novartis to the “no hire” list. M ¶ 27.
• At an unspecified date, Oracle and recruiting company Riviera Partners agreed that Riviera Partners would “not perform job placement services for Oracle employees.” Id. ¶ 55. This agreement was in place at least in 2014, when Riviera Partners told a former Senior Director at Oracle that Riviera Partners could not place the former Oracle employee due to Riviera Partners’s agreement with Oracle. Id.
• At an unspecified date, Oracle added Intuit to the “no hire” list. Id. ¶ 27. In an undated email, an Intuit recruiting employee expressed concern about hiring a consultant, asking “can we make an offer to him after he signs on as a consultant and not be in violation of non-solicitation clauses from Oracle (where he is employed)?” Id. ¶ 29 (emphases omitted).
• Hewlett-Packard and Xerox were “part of the conspiracy at some time from 2007 through 2015.” Id. ¶ 75. Plaintiffs do not allege when Oracle entered into an agreement with either Hewlett-Packard or Xerox, or the content of any such agreements.
Altogether, Plaintiffs identify around 15 companies with which Oracle allegedly en
Plaintiffs additionally allege that Oracle ensured that its employees and other companies adhered to the “no hire” list. For example, internally, Oracle disseminated the “no hire” list to “key human resource and recruiting personnel” in June 2007. Id. ¶ 31; see also id. ¶ 41 (June 8, 2007 email from Oracle’s Director of Recruiting to the “recruiting team,” stating, “While we have no written policy concerning non-solicitation of our partners’ employees; our policy is and continues to be that we do not directly solicit from our partners.... Our partners have the same arrangement with Oracle”). Externally, Oracle could allegedly fine other companies for violating a Secret Agreement. Id. ¶¶ 35-36. Additionally, Oracle allegedly threatened companies with baseless lawsuits “as a means to punish them for breaching the Secret Agreement.” Id. ¶¶ 37-39.
According to Plaintiffs, the effect of the Secret Agreements was to depress the salaries of “all employees of participating companies.” Id. ¶ 60. In a restricted hiring market, Oracle and the other companies with Secret Agreements faced decreased pressure to match or better a rival’s employment offer to an employee. Id. Thus, the Secret Agreements “fix[ed] the compensation of the employees of participating companies at artificially low levels.” Id. ¶ 61. Moreover, depressing the wages of “top tier employees” also allegedly suppressed the wages of all employees underneath the top tier employees. Id. ¶ 60.
4. Statute of Limitations Allegations
The SAC adds a new section titled “Statute of Limitations,” which alleges that Plaintiffs’ claims were timely filed for two reasons: (1) Oracle’s conspiracy was a continuing violation of the antitrust laws until at least 2013; and (2) Oracle fraudulently concealed the conspiracy from Plaintiffs until 2013. Plaintiffs’ specific allegations as to each theory follow.
a. Continuing Violation
Plaintiffs allege that “Oracle’s conspiracy was a continuing violation through which Oracle repeatedly invaded Plaintiffs’ and Plaintiff Class’ interests by adhering to, enforcing, and reaffirming the anticom-petitive” Secret Agreements. SAC ¶ 73. First, Plaintiffs allege that “Oracle continued to enter into new Secret Agreements with companies.. .well into 2012.” Id. ¶49. Second, Plaintiffs allege that, during their collective employment with Oracle from 2009 to 2013, neither Plaintiff Van Vorst nor' Plaintiff Hari was solicited by any technology company with which Oracle had a Secret Agreement. Id. ¶¶ 18, 20, 77, 80. Third, all Plaintiffs were unable to find employment in the technology industry after leaving Oracle, allegedly due to the Secret Agreements. Id. ¶¶ 74-81. Plaintiff Van Vorst specifically alleges that, during the end of her employment with Oracle, she applied to “technology companies, including those with which Oracle had entered a Secret Agreement,” and was not hired by said companies. Id. ¶ 78.
b. Fraudulent Concealment
Plaintiffs allege that Oracle fraudulently concealed the conspiracy in two ways, which prevented Plaintiffs from filing their claims on time. First, Plaintiffs allege that Oracle affirmatively aimed “to
Second, Plaintiffs allege that Oracle misled Plaintiffs into believing their compensation was competitive. Plaintiff Garrison alleges that “an Oracle human resource employee” falsely informed Garrison that “Oracle’s commission structure was competitive with other technology companies.” Id. ¶ 90. Plaintiff Hari alleges that he was “directed by a senior executive to inform his team of subordinates that their compensation levels at Oracle were highly competitive and that they should be very pleased with the level of compensation Oracle offered.” Id. Accоrding to Plaintiff Hari, the statement was false because Oracle was actively suppressing compensation levels by way of the Secret Agreements. Id. Further, Plaintiffs allege that “Class members repeatedly asked Oracle about how compensation was determined,” but Oracle responded misleadingly that compensation was “competitive.” Id. ¶ 97. According to Plaintiffs, in these conversations about compensation Oracle “never once admitted that it had any agreements with any other company not to solicit one another’s employees.” Id. ¶ 103.
In addition to these alleged misrepresentations, Plaintiffs claim that Oracle’s public filings with the Securities and Exchange Commission (“SEC”) have been misleading. Id. ¶¶ 92-94. For example, Oracle’s 2008 filing stated “We may be unable to hire enough qualified employees or we may lose key employees.... In the software industry, there is substantial and continuous competition for highly skilled business, product development, technical and other personnel .... We may also experience increased compensation costs that are not offset by either improved productivity or higher prices.” Id. ¶ 93 (emphases omitted). Plaintiffs aver that Oracle made substantially identical statements in Oracle’s 10-K SEC filings from 2010 to 2013. Id. ¶ 94. Plaintiffs also highlight Oracle’s employee handbook, which from 2008 to 2014 stated, “Oracle commits rigorously to observing applicable antitrust or competition laws of all countries or organizations.” Id. ¶¶ 85-87.
B. Procedural History
In light of the relationship between the instant case and High-Tech, the Court briefly summarizes the relevant procedural history in High-Tech before turning to the instant case.
1. High-Tech
The High-Tech defendants removed the first state court action on May 23, 2011.
In the interim, three of the High-Tech defendants — Intuit, Lueasfilm, and Pix-ar — reached an early settlement with the plaintiffs. On September 21, 2013, the High-Tech plaintiffs filed a motion for preliminary approval of a proposed class action settlement as to defendants Intuit, Lucasfilm, and Pixar. No. 11-2509, ECF No. 501. On October 30, 2013, the Court granted preliminary approval. No. 11-2509, ECF No. 540. The Court granted final approval as to that settlement on May 16, 2014. No. 11-2509, ECF No. 915. The Court entered a final judgment with regards to Lucasfilm, Pixar, and Intuit on June 9, 2014. No. 11-2509, ECF No. 936. At the request of Intuit, the Court entered an amended final judgment on June 20, 2014. No. 11-2509, ECF No. 947.
The remaining High-Tech defendants— Adobe, Apple, Google, and Intel — filed individual motions for sumpiary judgment, and joint motions for summary judgment and to strike certain expert testimony on January 9, 2014. No. 11-2509, ECF Nos. 554 (Intel), 556 and 557 (joint motions), 560 (Adobe), 561 (Apple), 564 (Google). The Court denied the High-Tech defendants’ individual motions for summary judgment on March 28, 2014. No. 11-2509, ECF No. 771. On April 4, 2014, the Court granted in part and denied in part the High-Tech defendants’ motion to strike, and denied the defendants’ joint motion for summary judgment. No. 11-2509, ECF No. 788.
On May 22, 2014, the High-Tech plaintiffs filed a motion for preliminary approval of class action settlement as to the remaining defendants. No. 11-2509, ECF No. 920. On August 8, 2014, the Court denied the High-Tech plaintiffs’ motion for preliminary approval and concluded that the proposed settlement did not fall “within the range of reasonableness.” No. 11-2509, ECF No. 974 at 30. On September 4, 2014, the High-Tech defendants filed a petition for a writ of mandamus with the Ninth Circuit. No. 14-72745 (9th Cir.), ECF No. 1. On September 22, 2014, the Ninth Circuit found that the petition “raises issues that warrant a response,” and ordered briefing. No. 14-72745 (9th Cir.), ECF No. 2. On January 13, 2015, the High-Tech defendants filed correspondence with the Ninth Circuit referring to a new proposed settlement agreement. No. 14-72745 (9th Cir.), ECF No. 21. On January 30, 2015, the defendants filed an unopposed motion to dismiss the petition, which the Ninth Circuit granted on February 2, 2015. No. 14-72745 (9th Cir.), ECF Nos. 23, 24.
2. Instant Lawsuit
Plaintiff Garrison filed the class action complaint on October 14, 2014. ECF No. 1. On October 22, 2014, the Court related this action to High-Tech. ECF No. 6. After initially answering the complaint on November 10, 2014, ECF No. 9, Oracle filed an amended answer on December 1, 2014, ECF No. 12.
On January 5, 2015, Oracle filed a motion for judgment on the pleadings, ECF No. 17, which the Court granted on April 22, 2015, ECF No. 72. The Court found that Garrison’s claims were time barred under the applicable statutes of limitations, and that Garrison had failed to adequately plead a “continuing violation” or “fraudulent concealment” theory to toll the statutes of limitations. See Garrison,
On May 22, 2015, Garrison filed an amended complaint. ECF Nos. 98 (conditionally sealed); 102 (unredacted). After the Court approved a stipulation for Garrison to file a second amended complaint, ECF No. 104, Garrison, along with additional plaintiffs Van Vorst and Hari, filed the SAC on June 5, 2015, ECF No. 105. The SAC asserts causes of action under the following statutes: (1) Section 1 of the Sherman Act, 15 U.S.C. § 1; (2) California’s Cartwright Act (the “Cartwright Act”), Cal. Bus. & Prof. Code § 16720 et seq.-, (3) California’s Unfair Competition Law (“UCL”), Cal. Bus. & Prof. Code § 17200 et seq.\ and (4) California’s Business & Professions Code § 16600 et seq. (“Section 16600”). SAC ¶¶ 111-142. Plaintiffs seek damages, pre- and post-judgment interest, attorneys’ fees and expenses, and a permanent injunction. Id. at 29.
Oracle filed the instant motion to dismiss on June 25, 2015. ECF No. 110 (“Mot.”). Oracle renews the argument that Plaintiffs’ claims are untimely, and also moves to dismiss for failure to state a claim on the merits. See id. Oracle also filed a request for judicial notice. ECF No. 111. On July 15, 2015, the Court granted a stipulation to strike one paragraph of the SAC. ECF No. 113. On July 22, 2015, Plaintiffs opposed the motion to dismiss, ECF No. 114 (“Opp.”), and filed a request for judicial notice, ECF No. 114-1. Oracle replied on August 13, 2015. ECF No. 125 (“Reply”). On December 4, 2015, Plaintiffs filed an ex parte motion to supplement the recоrd and to stay proceedings pending Plaintiffs’ anticipated motion to compel compliance with a subpoena. ECF No. 138. Plaintiffs also filed a motion to seal materials associated with the motion to supplement the record. ECF No. 137. Although
On December 17, 2015, the Court ordered the parties to file supplemental briefing. ECF No. 144. The Court noted that the parties, in the original briefing, did not dispute that Plaintiffs’ claims accrued under the default accrual rules by 2009, at the latest, and thus that Plaintiffs’ claims were untimely absent an exception to the default accrual rules or a tolling doctrine. Id. The Court asked the parties to address whether Plaintiff Hari’s employment at Oracle impacts the statutes of limitations analysis. Id. On January 5, 2016, the parties filed simultaneous briefs in response to the Court’s order. ECF Nos. 148 (Oracle’s supplemental brief); 149 (Plaintiffs’ supplemental brief). Plaintiffs filed an administrative motion to file Plaintiffs’ supplemental brief and associated documents under seal. ECF No. 150. On January 15, 2016, the parties filed simultaneous reply briefs. ECF Nos. 153 (Oracle’s reply); 155 (Plaintiffs’ reply).
II. LEGAL STANDARD
A. Rule 12(b)(6)
Rule 8(a)(2) of the Federal Rules of Civil Procedure requires a complaint to include “a short and plain statement of the claim showing that the pleader is entitled to relief.” A complaint that fails to meet this standard may be dismissed pursuant to Rule 12(b)(6). Rule 8(a) requires a plaintiff to plead “enough facts to state a claim to relief that is plausible on its face.” Bell Atl. Corp. v. Twombly,
For purposes of ruling on a Rule 12(b)(6) motion, the Court “accept[s] factual allegations in the complaint as true and eonstrue[s] the pleadings in the light most favorable to the nonmoving party.” Manzarek v. St. Paul Fire & Marine Ins. Co.,
B. Rule 9(b)
Claims sounding in fraud or mistake are subject to the heightened pleading requirements of Federal Rule of Civil Procedure 9(b), which require that a plaintiff alleging fraud “must state with particularity the circumstances constituting fraud.” Fed. R. Civ. P. 9(b); see also Kearns v. Ford Motor Co.,
C. Leave to Amend
If the court concludes that the complaint should be dismissed, it must then decide whether to grant leave to amend. Under Rule 15(a) of the Federal Rules of Civil Procedure, leave to amend “shall be freely given when justice so requires,” bearing in mind “the underlying purpose of Rule 15... [is] to facilitate decision on the merits, rather than on the pleadings or technicalities.” Lopez v. Smith,
III. DISCUSSION
Oracle moves to dismiss Plaintiffs’ complaint on four grounds: (1) all of Plaintiffs’ claims are barred by the applicable statute of limitations; (2) Plaintiffs fail to state a Sherman Act claim because Plaintiffs fail to adequately allege an agreement between Oracle and Google or a conspiracy among Oracle and other companies; (3) Plaintiffs are ineligible for restitution or disgorgement under the UCL; and (4) Plaintiffs, as former Oracle employees, lack standing to seek injunctive and declaratory relief. Mot. at 7-25. As the Court concludes below that Plaintiffs’ claims are time barred, the Court need not reach the remainder of Oracle’s arguments.
As a preliminary matter, the Court addresses the parties’ requests for judicial notice and Plaintiffs’ ex parte motion to supplement the record and to stay the ruling. The Court then turns to the statutes of limitations applicable to Plaintiffs’ claims. Next, the Court considers Plaintiffs’ arguments that an exception to the default accrual rules or a tolling doctrine renders Plaintiffs’ claims timely.
A. Motions for Judicial Notice, to Supplement the Record, and to Stay the Ruling
1. Judicial Notice
Although a district court generally may not consider any material beyond the pleadings in ruling on a Rule 12(b)(6) motion, the Court may take judicial notice of documents referenced in the complaint, as well as matters in the public record, without converting a motion to dismiss into one for summary judgment. See Lee v. City of L.A.,
Oracle requests that the Court take judicial notice of documents incorporated by reference into the SAC, including emails quoted or relied upon in SAC ¶¶ 29, 33, 36, 40, 45, 47, 49, 98-100; Oracle documents quoted or relied upon in SAC ¶¶ 84-110; and deposition testimony relied upon in SAC ¶ 54. Oracle also requests judicial notice of matters of public record (complaints and final judgments in federal district courts), and a newspaper article. Plaintiffs request the Court take judicial notice of certain matters of public record (an official government document in a DOJ file, and complaints and final judgments in federal district courts). These documents are appropriate for judicial notice. See Coto Settlement v. Eisenberg,
2. Plaintiffs’ Ex Parte Motion to Supplement the Record and to Stay the Ruling
On Friday evening, December 4, 2015 — almost four months after the completion of briefing in the instant motion— Plaintiffs filed an ex parte motion to supplement the record and to stay the Court’s ruling on the instant motion pending an anticipated motion to compel documents from the defendants and the counsel for the plaintiffs in the High-Tech litigation. ECF No. 138 (noting the motion to compel is “set to be filed next week”). Plaintiffs seek to supplement the record with numerous documents allegedly discovered after the completion of the briefing on the instant motion, which Plaintiffs claim demonstrate Oracle’s alleged antitrust violations and fraudulent concealment. Plaintiffs filed a corresponding motion to file the documents under seal. ECF No. 137. Although Oracle was not served with Plaintiffs’ filings, and did not have access to the documents that Plaintiffs filed conditionally under seal, Oracle filed an opposition on December 7, 2015. ECF No. 139. As of the date of this order, Plaintiffs have not filed the anticipated motion to compel documents from the parties involved in the High-Tech litigation.
Civil Local Rule 7-10 provides that a party may file an ex parte motion “only if a statute, Federal Rule, local rule or Standing Order authorizes the filing of an ex parte motion,” unless otherwise ordered by the Court. Civ. L.R. 7-10. The Rule also provides that the ex parte motion “must include a citation to the statute, rule or order which permits the use of an ex parte motion to obtain the relief sought.” Id. Plaintiffs’ ex parte motion does not cite to any authority permitting the filing of an ex parte motion. Nor does Plaintiffs’ motion provide any reason for filing ex parte. Accordingly, the Court STRIKES Plaintiffs’ motion. See Civ. L.R. 7-10; cf. Bertuccio v. San Benito Cty., No. 13-CV-01339-LHK,
Second, on a motion to dismiss, the Court does not look beyond the pleadings to evidence presented by the parties, and Plaintiffs do not assert that the proffered documents are proper 'subjects of judicial notice. See Manzarek,
Third, the majority of “newly discovered” documents proffered by Plaintiffs were, according to a declaration by Oracle, produced by June 2015, a month before Plaintiffs filed their opposition to the instant motion. See ECF Nos. 140, 141. Plaintiffs offer no reason for their multiple-month delay in seeking to supplement the record or to stay the case to conduct further discovery. See generally ECF No. 138. It appears that Plaintiffs’ motion was not triggered by new discovery in this case, but by the Court’s November 23, 2015 dismissal of virtually identical allegations brought by the same Plaintiffs’ counsel against Microsoft. See Ryan v. Microsoft (“Ryan II”), No. 14-CV-04634-LHK,
B. Four-Year Statute of Limitations
Plaintiffs do not dispute that Plaintiffs’ claims under the Sherman Act, Cartwright Act, UCL, and Section 16600 are all subject to a four-year statute of limitations. See Garrison,
C. Accrual of Plaintiffs’ Claims under the Default Accrual Rules
The parties agree that all of Plaintiff Garrison’s and Plaintiff Van Vorst’s claims accrued under the default accrual rules by 2009, at the latest. See, e.g., ECF No. 148, at 1 (Oracle claiming that the “statute of limitations began to run no later than 2009 and expired in 2013”); ECF No. 150, at 3 (Plaintiffs stating that Garrison’s and Van Vorst’s claims accrued when Garrison and Van Vorst were injured by Oracle’s alleged misconduct between 2007-2009). Accordingly, an exception to the default accrual rules or a tolling doctrine must apply in order for Garrison’s and Van Vorst’s claims to be timely.
The parties dispute when Plaintiff Hari’s claims accrued under the default accrual rules, and thus whether an exception to the default accrual rules or a tolling doctrine is necessary to render Hari’s claims timely. In order to determine the accrual of Hari’s claims under the default accrual rules, the Court must first review the history of the parties’ dispute over the accrual of Hari’s claims.
In briefing Oracle’s motion for judgment on the pleadings, the parties did not dispute that, for Garrison’s federal Sherman Act claim and three California state law claims, under the default accrual rules, “the applicable statutes of limitations began to run in May 2007 (i.e., when Plaintiff alleges Oracle and Google entered into the Agreement).” Garrison v. Oracle Corp., No. 14-CV-04592-LHK,
In the SAC, Plaintiffs allege new Secret Agreements, in addition to the alleged 2007 agreement between Oracle and Google. The SAC also adds Hari as a named plaintiff. ECF No. 105. Highlighting the new Secret Agreements, Oracle argues in the instant motion to dismiss that, according to the default accrual rules, Plaintiffs’ Sherman Act and state law claims accrued by 2009, which is the latest date that Plaintiffs allege that Oracle entered a specific Secret Agreement. Mot. at 7; Reply at 2. Thus, according to Oracle, the statutes of limitations for all of Plaintiffs’ claims expired in 2013 absent an exception to the default accrual rules or a tolling doctrine. Reply at 2.
In Plaintiffs’ opposition to the instant motion to dismiss, Plaintiffs do not dispute Oracle’s contention that Plaintiffs’ Sherman Act and state law claims accrued in 2009, at the latest. See generally Opp. Nor do Plaintiffs analyze when Plaintiffs’ claims accrued according to the default accrual rules. Rather, Plaintiffs assert that an exception to the default accrual rules or a tolling doctrine applies and thus renders Plaintiffs’ claims timely. See id.
Neither party separately addressed Hari’s claims in the briefing on the instant motion to dismiss. Thus, the Court requested supplemental briefing on whether Hari’s employment at Oracle, which began in 2012, impacts the statute of limitations analysis. ECF No. 144. In the order requesting supplemental briefing, the Court summarized its understanding of the parties’ positions on the accrual of Plaintiffs’
In the requested supplemental briefing, the parties do not contest the Court’s understanding of the parties’ positions. See generally ECF Nos. 148, 150, 153, 155. However, Plaintiffs now argue that Hari’s claims are timely under the default accrual rules, without any exceptions to the default accrual rules or tolling. According to Plaintiffs, Hari’s claims did not accrue until 2012, when Hari was hired by Oracle and injured through the receipt of an artificially depressed salary from Oracle. ECF Nos. 150, 155. Specifically, Plaintiffs state that Hari began working for Oracle in 2012 when Oracle acquired the company for whom Hari worked. See ECF No. 150, at 2. As in Plaintiffs’ original briefing, Plaintiffs’ two supplemental briefs fail to address the state law default accrual rules. Instead, Plaintiffs’ supplemental briefs focus entirely on the federal default accrual rule for Hari’s Sherman Act claim, and cite only federal case law. See ECF No. 150, at 2-3; ECF No. 155. Similarly, Oracle’s two supplemental briefs focus on the accrual of Hari’s Sherman Act claim. See generally ECF Nos. 148, 153. Oracle argues that Hari’s Sherman Act claim accrued by 2009, when Oracle allegedly committed the anti-competitive conduct that depressed the labor market in which Hari participated. Oracle asserts that Hari’s state law claims accrued at .the same time as Hari’s Sherman Act claim. See ECF No. 148, at 4 n.2.
Accordingly, in four rounds of briefing— the opposition to the motion for judgment on the pleadings, the opposition to the instant motion to dismiss, and the two supplemental briefs — -Plaintiffs assume that Plaintiffs’ state law claims accrue at the same time as Plaintiffs’ Sherman Act claims. Plaintiffs have never distinguished the accrual of Plaintiffs’ state law claims from the accrual of Plaintiffs’ Sherman Act claim under the default accrual rules. By contrast, Oracle has repeatedly asserted that Plaintiffs’ Sherman Act and state law claims accrue at the same time. In the supplemental briefing, both parties focus on the federal default accrual rule for Sherman Act claims to determine the accrual of Hari’s state law and Sherman Act claims.
Under California law, the general accrual rule is the “last element rule,” where a claim accrues “ ‘when [it] is complete with all of its elements’ — those elements being wrongdoing, harm, and causation.” Pooshs v. Philip Morris USA, Inc.,
Plaintiffs contend that; under the default accrual rule for a Sherman Act claim, Hari’s claims accrued at the time Hari experienced injury from Oracle’s anticom-petitive conduct. ECF No. 150, at 2-3. According to Plaintiffs, Hari was not injured until 2012, when Oracle paid Hari an artificially depressed salary. Id. Oracle counters that Hari’s claims accrued at the time of the anticompetitive conduct, and thus Hari’s claims accrued in 2009, at the latest, when Oracle entered into the last alleged Secret Agreement. ECF No. 148, at 2-5. Oracle also argues that Hari was injured in 2009, at the latest, because Hari was in the allegedly affected labor market working at another technology company that was acquired by Oracle in 2012, and thus received a depressed salary prior to Hari’s employment with Oracle. Id.; ECF No. 150, at 4 (referring to Hari’s Linkedln account to confirm Hari’s previous employment). Finally, Oracle claims that Plaintiffs “have consistently alleged that they suffered an injury and their claims accrued at the time of Oracle’s allegedly anticompeti-tive conduct.” ECF No. 148, at 4.
The Court agrees with Oracle that Hari’s Sherman Act claim accrued by 2009 under the default accrual rule. The Court finds the Ninth Circuit’s recent decision in Samsung Elecs. Co. v. Panasonic Corp.,
Samsung was not in the SD market at the time of Panasonic’s initial anti-competitive agreement, and thus “the harm to Samsung challenged in this suit was speculative at the time of the initial wrong.” Id. at 1204-05. However, the Ninth Circuit did not find that Samsung’s claim accrued, under the default accrual rules, when Samsung began to pay royalties in 2006. See id. at 1202-05. Rather, the Ninth Circuit held that the continuing violation and speculative damages exceptions to the default accrual rules were necessary to render Samsung’s claims timely. Id. at 1203-05 (noting that the 2006 agreement was a continuing violation, and that the speculative damages exception applies when damages are not clear at the “time of the initial act”). Under the Ninth Circuit’s reasoning, Samsung’s claim accrued — absent an exception to the default accrual rules — at the time of Panasonic’s anticom-petitive conduct in 2003. See id. at 1203-04. Therefore, in the Ninth Circuit, Sherman Act claims accrue under the default accrual rules at the time of the alleged anticom-petitive conduct. See id.; see also Pace Indus., Inc. v. Three Phoenix Co.,
The Court acknowledges that some courts, including this Court, have stated that Sherman Act claims accrue “at the time of injury.” See Animation Workers I,
In the instant case, Oracle’s alleged anticompetitive conduct is entering into the Secret Agreements. See SAC ¶¶ 2-6, 113-116, 120-121, 124. Plaintiffs allege that Oracle first entered into a Secret Agreеment in 2006. Id. ¶ 30. This Secret Agreement, and others later formed by Oracle, allegedly depressed compensation in the labor market for technology and management employees. SAC ¶¶ 9, 60-61. If each subsequent Secret Agreement entered into by Oracle constituted a new antitrust violation, then Hari’s Sherman Act claim could have accrued as late as 2009, the last year in which Plaintiffs allege that a specific new Secret Agreement was entered into by Oracle. See generally SAC. Accordingly, the statute of limitations for Hari’s Sherman Act claim began to run, under the default accrual rules, by 2009. See Samsung,
In hopes of avoiding the time bar, Plaintiffs offer the following five arguments: (1) Plaintiffs are entitled to statutory tolling under 15 U.S.C. § 16(i); (2) Oracle committed a “continuing violation”; (3) Oracle fraudulently concealed Oracle’s anticom-petitive conduct; (4) the California “discovery rule” applies to the UCL claim; and (5) the California “continuous accrual” rule applies to the California claims.
Plaintiffs contend that the statutes of limitations are tolled by four past DOJ proceedings: (1) the DOJ investigation into Oracle, from 2009 until October 2014; (2) and (3) the DOJ’s lawsuits against Adobe and Lucasfilm, which Plaintiffs treat collectively, from September 24, 2010 to June 3, 2012; and (4) the DOJ’s lawsuit against eBay, from November 16, 2012 to September 2, 2014.
Whenever any civil or criminal proceeding is instituted by the United States to prevent, restrain, or punish violations of any of the antitrust laws, but not including an action under section 15a of this title, the running of the statute of limitations in respect to every private or State right of action arising under said laws and based in whole or in part on any matter complained of in said proceeding shall be suspended during the pendency thereof and for one year thereafter: Provided, hoiuever, That whenever the running of the statute of limitations in respect оf a cause of action arising under section 15 or 15c of this title is suspended hereunder, any action to enforce such cause of action shall be forever barred unless commenced either within the period of suspension or within four years after the cause of action accrued.
15 U.S.C. § 16(i).
In other words, to receive tolling under § 16(i) a private plaintiff must show that the plaintiffs antitrust suit is “based in whole or in part on any matter eom-plained of’ in a government antitrust proceeding. Id.; see also Charley’s Tour & Transp., Inc. v. Interisland Resorts, Ltd.,
A private plaintiff “is not required to allege that the same means were used to achieve the same objectives of the same conspiracies by the same defendants.” Leh,
Plaintiffs first contend that the DOJ investigation into Oracle tolls the statutes of limitations. According to Plaintiffs, DOJ opened an investigation into Oracle in 2009 when DOJ began investigating other technology companies for unlawful recruiting practices. Opp. at 3. DOJ informed Oracle that DOJ would not pursue a case against Oracle on October 29, 2014, more than two weeks after Plaintiffs filed the instant action. ECF No. 114-1 Ex. A.
At the outset, the Court notes that Plaintiffs spend only a single sentence arguing that the DOJ investigation into Oracle tolls the statutes of limitations. Opp. at 7-8. Plaintiffs rely solely on Dungan v. Morgan Drive-Away, Inc.,
Instead, courts have used the date on which the government filed a complaint as the date on which statutory tolling began. See Leh,
Plaintiffs additionally seek tolling under § 16(i) for the pendency of three government-filed lawsuits: United States v. Adobe Sys., Inc., No. 10-CV-1629 (D.D.C.), United States v. Lucasfilm, Inc., No. 10-CV-2220 (D.D.C.), and United States v. eBay, Inc., No. 12-CV-5869 (N.D.Cal.). To receive statutory tolling for the pendency of these lawsuits, Plaintiffs must show that these lawsuits are “based in whole or in part on the same matter” as the instant
The Court first notes that there is no overlap between the parties in the government-filed lawsuits and the instant lawsuit. The Adobe defendants were Adobe, Apple, Google, Intel, Intuit, and Pixar. ECF No. 111-11. The sole defendant in Lucasfilm was Lucasfilm. ECF No. 114-1 Ex. B. The sole defendant in eBay was eBay. Id. Ex. E. Oracle was not a defendant in any of the three government-filed lawsuits.
Moreover, not one of the complaints in the three government-filed lawsuits mentions Oracle. The Adobe complaint alleges five substantially similar agreements, each between two companies: (1) Apple and Google, (2) Apple and Adobe, (8) Apple and Pixar, (4) Google and Intel, and (5) Google and Intuit. ECF No. 111-11. The two companies in each agreement agreed not to “cold call” each other’s employees. Id. The Adobe complaint does not mention any other technology company. Oracle was not a party to any of these agreements, and none of the alleged agreements restricted any of the named companies from hiring employees from Oracle, Id.
Similarly, the Lucasfilm complaint alleged an agreement between Lucasfilm and Pixar “not to cold call, not to make counteroffers under certain circumstances, and to provide notification when making employment offers to each other’s employees.” ECF No. 114-1 Ex. B. The Lucasfilm complaint does not mention any other technology companies.
Likewise, the eBay complaint alleges that eBay and Intuit “agreed not to recruit each other’s employees” and “eBay agreed not to hire Intuit employees, even those that approached eBay for a job.” Id. Ex. E. The complaint further alleges direct communications between eBay CEO Meg Whitman and Founder and Chairman of the Executive Committee at Inuit Scott Cook. See id. The eBay complaint does not mention any other technology companies.
Because the conspiracies alleged in the Adobe, Lucasfilm, and eBay complaints do not involve Oracle, Plaintiffs’ allegations of misconduct by Oracle in the instаnt lawsuit are not “intertwined with and fundamentally the same as those alleged in the government aetionfs].” Charley’s Tour,
Plaintiffs rely heavily on the similarity between the kinds of alleged anti-competitive behavior, namely the existence of anti-solicitation agreements in both the
E. Continuing Violation
Under the “continuing violation” theory, “each overt act that is part of the [antitrust] violation and that injures the plaintiff.. .starts the statutory period running again, regardless of the plaintiffs knowledge of the alleged illegality at much earlier times.” Klehr v. A.O. Smith Corp.,
The Court previously determined that Plaintiff Garrison’s original complaint failed to allege a continuing violation because “the bald assertion that ’[Oracle’s] conspiracy was a continuing violation through which [Oracle] repeatedly invaded Plaintiff and Plaintiff Class’ interests by adhering to, enforcing, and reaffirming the anticompetitive agreements described herein’ is insufficient to show a continuing violation.” Garrison,
Plaintiffs assert that the SAC fixes the deficiencies in the original complaint by alleging: (1) Oracle entered new Secret Agreements and added companies to the
A review of the allegations in the SAC again fails to reveal any specific conduct by Oracle during the limitations period. Although Plaintiffs allege that Oracle continued to enter into new Secret Agreements and add companies to the “no hire” list “well into 2012,” Plaintiffs fail to identify a single new agreement after 2009. See generally SAC. Although the Court accepts “factual allegations in the complaint as true,” Manzarek,
Similarly, all of Plaintiffs’ allegations about Oracle’s enforcement of the Secret Agreements are undated or predate 2009. See SAC ¶¶26, 31, 41, 43 (discussing Oracle’s dissemination of the “no hire” list and adherence to the Secret Agreements in 2007 and 2008); id. ¶¶ 35-39 (discussing Oracle’s enforcement of the Secret Agreements in 2007 and 2008). Plaintiffs do allege that the 2009 “no hire” CoreTech agreement, for example, was not set to terminate until 2012. Id. ¶ 49. However, Plaintiffs need to do more than merely allege a continuing violation — they must also allege an overt act:
A continuing violation is one in which the plaintiffs interests are repeatedly invaded and a cause of action arises each time the plaintiff is injured. However, even when a plaintiff alleges a continuing violation, an overt act by the defendant is required to restart the statute of limitations and the statute runs from the last overt act.
Pace,
In opposition, Plaintiffs rely on Samsung,
Lastly, the Court turns to Plaintiffs’ allegations that they were not solicited by other companies while working at Oracle and were unable to find meaningful employment after leaving Oracle. SAC ¶¶ 74-82. Plaintiffs argue that they “are entitled to the inference at the pleading stage that this was because of those agreements.” Opp. at 11. Plaintiffs additionally point to the experience of one former Oracle employee, who was told by the recruiting company Riviera Partners that it could not place the former employee because Riviera Partners had an agreement with Oracle not to perform job placement services for Oracle employees. Id. ¶ 55. Oracle counters that the failure of other companies to solicit, hire, or place Plaintiffs cannot be an overt act by Oracle. Mot. at 10; Reply at 8 n.9.
The Court agrees with Oracle that Plaintiffs have not alleged any overt acts by Oracle after 2009, as required by Ninth Circuit law. See Pace,
Because Plaintiffs do not allege an overt act by Oracle during the limitations period, the Court finds that Plaintiffs have failed to plead a continuing violation — namely, that Oracle engaged in a “new and independent act that is not merely a reaffirmation of a previous act,” which “inflict[ed] new and accumulating injury” on Plaintiffs.
The purpose of fraudulent concealment is to prevent a defendant from “concealing a fraud .. .until such a time as the party committing the fraud could plead the statute of limitations to protect it.” In re Animation Workers Antitrust Litig. (“Animation Workers II”), No. 14-CV-04062-LHK,
Moreover, allegations of fraudulent concealment must be pled with particularity. Conmar,
In granting Oracle’s motion for judgment on the pleadings, the Court rejected Plaintiff Garrison’s argument that Oracle had an affirmative duty to disclose Oracle’s participation in the alleged conspiracy. The Court then identified two deficiencies in Garrison’s allegations of affirmative acts. First, thе Court found that Garrison failed “to allege sufficient facts showing the ‘who, what, where, when, and how’ of Oracle’s alleged fraudulent concealment.” See Garrison,
Plaintiffs now concede that Oracle did not have a duty to disclose its allegedly illegal behavior. See Opp. at 13-15. Thus, Plaintiffs acknowledge that they must plead “affirmative acts to mislead” by Oracle. Plaintiffs contend that they have alleged four categories of “affirmative acts” sufficient to demonstrate fraudulent concealment: (1) “efforts by Oracle to limit access to and circulation of documents reflecting its secret agreements”; (2) “at
1. Rule 9(b)
Having reviewed the SAC, the Court finds that the allegations for two categories of “affirmative acts” fail to meet the heightened pleading standard of Rule 9(b). First, Plaintiffs fail to sufficiently allege affirmative acts of conceаlment during the DOJ proceedings. Second, Plaintiffs fail to sufficiently allege misleading conversations between Oracle personnel and Plaintiffs. After addressing these two categories, the Court will then address Plaintiffs’ remaining two categories of overt acts: efforts by Oracle to maintain secrecy and the public statements by Oracle about compensation, a. DOJ Proceedings
Plaintiffs argue that Oracle’s conduct during the DOJ investigation was an affirmative act of fraudulent concealment because “Oracle refused to produce any documents without first securing agreements that the document production would not be publicly filed or disclosed, including requiring that any documents that were publicly filed or disclosed would be heavily redacted so as not to publicly reveal the substance of the Secret Agreements and the specific companies involved.” SAC ¶ 104.
Plaintiffs do not cite, and the Court is not aware of, any case holding that agreements with DOJ to redact the public versions of documents properly produced during a government investigation are acts of fraudulent concealment.- Furthermore, Plaintiffs do not provide the “who, what, where, when, and how” for any of the alleged document production or related agreements. See Swartz,
b. Misleading Conversations with Plaintiffs
Similarly, the Court finds insufficient under Rule 9(b) Plaintiffs’ allegations that Oracle’s misleading statements on compensation to Plaintiffs and class members constitute affirmative acts of fraudulent concealment. For instance, Plaintiff Garrison alleges that “an Oracle human resource employee” falsely informed Garrison that “Oracle’s commission structure was competitive with other technology companies.” SAC ¶ 90. Plaintiff Hari alleges that he was “directed by a senior exec
The Court previously admonished Plaintiffs that, to plead fraudulent concealment in accordance with Rule 9(b), Plaintiffs must allege “an account of the time, place, and specific content of the false representations as well as the identities of the parties to the misrepresentations.” Garrison,
2. Allegations of Oracle’s Efforts at Secrecy
Plaintiffs allege that Oracle’s efforts to maintain the secrecy of the Secret Agreements constitute affirmative acts of fraudulent concealment. Specifically, Plaintiffs allege that Oracle aimed “to avoid dissemination of the [S]ecret [A]greements and restrict the knowledge to the smallest possible group within Oracle.” SAC ¶ 101. Plaintiffs additionally allege that knowledge of the Secret Agreements was “confined to only the most senior executives and the most senior employees from [Oracle’s] human resources and recruiting departments.” Id. ¶ 109. Oracle counters that Plaintiffs’ factual allegations reveal “that Oracle’s hiring policies and agreements, as well as its ‘no-hire’ list, were disseminated broadly to Oracle’s human resources and other employees, and were anything but secret.” Mot. at 13. Oracle also argues that Plaintiffs’ secrecy allegations amount to passive concealment, at most. Id. at 13-14.
In this circuit, “affirmative acts” must consist of more than mere pas
In reviewing the SAC, the Court agrees with Oracle that Oracle’s alleged efforts at secrecy do not plead fraudulent concealment. Plaintiffs’ spеcific factual allegations contradict Plaintiffs’ general allegations about Oracle’s efforts at secrecy. In the SAC, Plaintiffs excerpt over a dozen emails from Oracle employees discussing the “no hire” list or alleged Secret Agreements. These emails reveal that Oracle employees spoke openly about the “no hire” list and the gentleman’s agreements, both within Oracle and with other companies. Id. ¶¶ 30-31, 36, 40-47, 98-100; see also id. ¶ 26 (noting HR webpage lists “works for company on the Do Not Hire List” as a reason for rejecting a candidate). For instance, as “representative” of Oracle’s “corporate policy” of secrecy, Plaintiffs highlight a January 17, 2008 email by Oracle’s Director of Recruiting ordering an Oracle recruiter, “DO NOT email any employees of our partners or employees on our no-hire list.” Id. ¶¶ 98, 202. In another email, the Director of Recruiting writes “to her recruiting team” that “our policy is and continues to be that we do not directly solicit from our partners. What this means is that we do not send email solicitations; we do not solicit by phone.” Id. ¶ 41 (emphases in original).
Moreover, the emails in the SAC reveal that, rather than restrict knowledge of the Secret Agreements to a limited number of employees, Oracle shared the “no hire” list with numerous people: at least the “HR department,” “key human resource and recruiting personnel,” the “recruiting team,” and Oracle’s Director of Consulting. SAC ¶¶ 31, 41, 100; ECF No. 111-5. Of the dozen emails in the SAC, only one email was marked do not forward. Id. ¶ 100.
By comparison, in Animation Workers II, the Court found that the plaintiffs had alleged affirmative acts to keep the conspiracy secret. The Animation Workers II plaintiffs alleged that the defendants took efforts to avoid sending emails related to the non-solicitation agreements, to avoid writing down the details of. the non-solicitation agreements, and to eliminate any paper trail relating to the agreements by using a code name for the agreements. Animation Workers II,
Similarly, in Lithium Ion a district court found fraudulent concealment when defendants took affirmative steps to destroy evidence of the conspirators’ secret meetings, avoided memorializing conversations, and used secret codes to refer to cocon-spirators and topics. See In re Lithium Ion Batteries Antitrust Litig., No. 13-MD-2420,
Here, by contrast, Plaintiffs fail to allege affirmative acts of concealment. Unlike the Animation Workers II and Lithium Ion plaintiffs, Plaintiffs put forth no specific factual allegations that Oracle took steps to keep employees from discussing the Secret Agreements, that Oracle attempted to eliminate a paper trail for the Secret Agreements, that Oracle avoided memorializing the Secret Agreements in writing, that Oracle used code names, or that Oracle employees avoided discussing the “nо hire” list orally or in writing.
Additionally, Plaintiffs have not alleged that Oracle instructed supervisors or Human Resources personnel to respond to inquiries about compensation with a misleading, fraudulent, or pretextual response. At best, Plaintiffs allege only that Oracle’s senior executives and members of the human resources and recruiting departments did not disclose the Secret Agreements to Plaintiffs. That is insufficient to allege “affirmative acts” of concealment. Animation Workers I,
3. Reliance on Misleading Statements
The Court turns to Plaintiffs’ remaining allegations, that Oracle made misleading public statements in Oracle’s employee handbook and its SEC filings.
The Court recently found that similar allegations were insufficient to establish fraudulent concealment. See Ryan II,
Similarly, in Animation Workers II, the plaintiffs made ample allegations of affirmative acts of fraudulent concealment that rendered reliance upon the defendants’ allegedly misleading public filings with the SEC reasonable.
The Animation Workers II plaintiffs additionally alleged that they had discussed their compensation with specific, named individuals, and provided the dates, method of communication, and content of these conversations. Id. The Animation Workers II plaintiffs alleged that in these specifically identified conversations, the individuals with whom they spoke did not mention the collusive salary agreements. Id. The Animation Workers II plaintiffs also alleged that the defendants took efforts to avoid sending emails related to the non-solicitation agreements, to avoid writing down the details of the non-solicitation agreements, and to eliminate any paper trail relating to the agreements by using a code name for the agreements. Id. at 1186-87,
In the instant case, on the other hand, Plaintiffs have not alleged circumstances that would render their reliance on Oracle’s allegedly misleading public statements reasonable. Plaintiffs’ allegations of allegedly misleading conversations with Oracle employees and of efforts by Oracle to conceal the conspiracy during the DOJ investigatiоn do not satisfy Rule 9(b), and Plaintiffs’ allegations of efforts to keep the conspiracy secret by avoiding disseminating information about the Secret Agreements is contradicted by the numerous emails quoted by Plaintiffs in which Oracle freely discussed the “no hire” list and gentleman’s agreements. Unlike the plaintiffs in Animation Workers II and Lithium Ion, Plaintiffs here have not alleged that Oracle used a code name to refer to the alleged anti-solicitation agreements or that Oracle instructed employees not to discuss the anti-solicitation agreements by email. Plaintiffs provided just a single example of an Oracle email that was labeled do not forward. Additionally, Plaintiffs have not alleged that Oracle instructed supervisors or Human Resources personnel to respond to inquiries about compensation with a misleading, fraudulent, or pretextual response.
Thus, Plaintiffs are left solely with the allegation that Oracle falsely represented in public filings that it abides by antitrust laws and engages in a competitive market. However, absent any evidence of pretextual justifications for compensation or of steps taken by Oracle to conceal the agreements, the public filings are inadequate, on their own, to satisfy Plaintiffs’ burden to show that Oracle took affirmative acts to fraudulently conceal the alleged conspiracy. See Hexcel,
G. Discovery Rule
Plaintiffs contend that the discovery rule applies to delay the accrual of their UCL claim. Opp. at 9. The UCL prohibits “any unlawful, unfair or fraudulent business act or practice.” Cal. Bus. & Prof. Code § 17200. Plaintiffs allege that Oracle violated the UCL by entering into “illegal Secret Agreements to suppress wages of their respective workforce by restricting the ability of its managerial employees from attaining employment with the other technology companies.” SAC ¶ 129. Plaintiffs further allege that these acts “were unfair, unlawful, and or unconscionable, both in their own right and because they violated the Sherman Act and the Cartwright Act.” Id. ¶ 130.
In California, the discovery rule postpones accrual of a claim until the plaintiff discovers, or has reason to discover, the cause of action. Clemens v. DaimlerChrysler Corp.,
Applying Aryeh, this Court has already concluded that the discovery rule does not apply to UCL claims similar to the UCL claim alleged here. See Animation Workers I,
In the instant case, the conduct alleged as the basis for Plaintiffs’ UCL claim consists of Oracle’s attempts to suppress the wages of Oracle employees by entering into non-solicitation Secret Agreements with other companies. SAC ¶ 129. These allegations are equivalent to the allegations in Animation Workers I that the Animation Workers I defendants took “efforts to limit competition for and suppress compensation of their employees” and “agreed to restrict competition for class members’ services through anti-solicitation agreements and agreements to set and fix the compensation of class members.” No. 14-4062, Consolidated Amended Class Action Compl., ECF No. 63 ¶ 143. Like the allegations in Animation Workers I, Plaintiffs’ UCL claim allegations are purely of anticompetitive behavior.
Although elsewhere in the SAC Plaintiffs allege that Oracle engaged in fraudulent concealment, Plaintiffs’ UCL claim does not mention fraudulent concealment or any alleged act of fraudulent concealment by Oracle as a basis for the alleged UCL violation. See SAC ¶¶ 126-133 (Plaintiffs’ UCL claim). Indeed, Plaintiffs do not specify any fraudulent conduct by Oracle that violates the UCL. Moreover, the Court concludes above that the SAC does not sufficiently allege fraudulent concealment. See supra. Thus, the SAC does not include allegations of fraud sufficient to support application of the discovery rule to Plaintiffs’ UCL claim. Bеcause Plaintiffs’ UCL claim is based solely on Oracle’s
H. Continuous Accrual
The Court turns to Plaintiffs’ argument that the Court should apply the California “continuous accrual” rule to Plaintiffs’ state law claims. Under “continuous accrual,” “a series of wrongs or injuries may be viewed as each triggering its own limitations period, such that a suit for relief may be partially time-barred as to older events but timely as to those within the applicable limitations period.”
Accordingly, California courts have held that disputes regarding monthly billing and payments qualify for continuous accrual, with each month triggering a new limitations period. See, e.g., id. at 1200-01,
In the instant case, Plaintiffs contend that Oracle had a “continuing obligation not to collude with competitors to restrict free competition for engineers and managers that was susceptible to being breached each time a Secret Agreement was entered into or renewed or reaffirmed.” Opp. at 13. The Court first observes that the SAC fails to allege this continuing duty. See generally SAC. Additionally, Oracle’s duty “not to collude with competitors” bears little relation to the monthly payments or monthly bills that California courts have found to be periodic, recurring obligations warranting continuous accrual. See Metz,
More importantly, even if Oracle breached a continuing duty each time that Oracle “entered into or renewed or reaffirmed” a Secret Agreement, Plaintiffs have failed to allege that Oracle took any of these actions during the limitations period. Although Plaintiffs allege that Oracle continued to enter into new Secret Agreements and add companies to the “no hire” list “well into 2012,” Plaintiffs fail to identify a single new agreement after 2009. See generally SAC. As discussed above, in the section on the continuing violation theory, although the Court accepts “factual allegations in the complaint as true,” Manzarek,
I. Leave to Amend
As Plaintiffs have failed to allege any applicable exception to the default accrual rules or tolling doctrine, the Court concludes that Plaintiffs’ claims are time barred. Under Rule 15(a) of the Federal Rules of Civil Procedure, leave to amend “shall be freely given when justice so requires,” bearing in mind “the underlying purpose of Rule 15 to facilitate decisions on the merits, rather than on the pleadings or technicalities.” Lopez,
In the instant case, the Court’s April 22, 2015 order dismissed Plaintiffs’ claims as untimely and noted that “the complaint is largely bereft of any dates or details with regards to Oracle’s specific conduct.” See Garrison,
IY. CONCLUSION
For the foregoing reasons, the Court GRANTS Oracle’s motion to dismiss with prejudice.
IT IS SO ORDERED.
Notes
. Unless otherwise indicated, all ECF references are from the docket of No. 14-04592 in the Northern District of California.
. The Court notes that Plaintiffs also apparently failed to comply with the Court’s local rules when filing the motion to seal. When seeking to file under seal a document designated as confidential by the opposing party or a non-party, Civil Local Rule 79-5(e) requires
. The Court notes that Plaintiffs do not argue that the speculative damages exception, discussed by the Ninth Circuit in Samsung, applies to Plaintiffs' claims. In the instant case, after Plaintiffs have twice amended the complaint and had multiple opportunities to brief the issue, ''[t]he Court is not inclined to manufacture arguments on Plaintiff[s’] behalf.” Kiland v. Boston Scientific Corp., No. C 10-4105 SBA,
. In Plaintiffs’ brief, they argue that the eBay litigation tolls their claims until September 2, 2014. However, the DOJ proceeding against eBay ended on September 2, 2014. Section 16(i) provides that the statute of limitations is "suspended during the pendency thereof and for one year thereafter.” (emphasis added). Oracle suggests that Plaintiffs seek to toll the statutes of limitations until September 2, 2015. See Reply at 5.
. Plaintiffs expressly disclaim that Oracle's hiring of Hari in 2012 constitutes a continuing violation. See ECF No. 155, at 3. The Court agrees that Oracle's hiring of Hari is not an "overt act” sufficient to trigger the continuing violation theory. Even if Oracle hired Hari at an artificially depressed salary, the salary was based on alleged anticompeti-tive actions taken by Oracle prior to the limitations period. See In re Multidistrict Vehicle Air Pollution,
. The Court reiterates that this result is the same even if the Court were to consider the documents submitted by Plaintiffs in their procedurally improper ex parte motion to supplement the record. See ECF No. 138. None of the proffered documents reveal specific Secret Agreements, or actions by Oracle
. Oracle denies that the "no hire” list is unlawful, and argues that the identified non-solicitation agreements are either unilateral policies by Oracle not to hire from its business partners or are narrowly tailored and ancillary to legitimate business interests. Mot. at 4, 20-22. Oracle further argues that the "no hire” list reflects the tracking of permissible non-solicitation agreements that DOJ requires of the Adobe and eBay defendants. Id. at 3-4.
. Plaintiffs also allege that an Adobe employee sent an email about a "no hire” agreement to an Oracle employee from the Adobe employee's private email account. SAC ¶ 47. However, Plaintiffs do not argue that the Adobe employee's act should constitute fraudulent concealment by Oracle. Additionally, Plaintiffs fail to allege that the use of a private email account was unusual at Adobe. See Animation Workers II,
.In Plaintiffs’ procedurally improper ex parte motion to supplement the record, and in Plaintiffs’ supplemental briefing on the accrual of Hari’s claims, Plaintiffs argue that the Court should find fraudulent concealment based on the actions of Google. See ECF No. 138 Ex. B; ECF No. 149, at 6-7. Plaintiffs appear to argue that, even in the absence of sufficient allegations that Oracle itself fraudulently concealed the Secret Agreements, the Court may find fraudulent concealment based entirely on actions of concealment taken by Google. As noted above, the Court struck Plaintiffs’ ex parte motion. However, even if the Court were to consider, and accept, Plaintiffs' argument, the Court would find that Plaintiffs' ex parte motion does not sufficiently allege fraudulent concealment by Google that may be imputed to Oracle. The documents attached to Plaintiffs' ex parte motion reveal Google employees openly discussing a restricted hiring policy. See ECF No. 138 Ex. B. The documents do not reveal that Google took steps to keep employees from discussing the restricted hiring policy, that Google sought to destroy evidence of the restricted hiring policy, or that Google avoided discussing the restricted hiring policy in writing. There are also no allegations about fraudulent concealment by Google in the SAC. Accordingly, the Court's conclusion that Plaintiffs have not sufficiently pled fraudulent concealment would not be altered were the Court to consider the documents from Plaintiffs' ex parte motion.
. Plaintiffs also allege that Oracle continues to mislead the public about the Secret Agreements because an Oracle spokeswoman stated on October 14, 2014 that "Oracle was deliberately excluded from all prior litigation filed in this matter because all the parties investigating the issue concluded there was absolutely no evidence that Oracle was involved.” Id. ¶ 108. Regardless of whether this statement misleads the public, the statement was made after Plaintiffs filed the instant action and thus could not have fraudulently concealed Plaintiffs' claims.
. Other courts have found that misleading statements constitute affirmative acts of fraudulent concealment only if Plaintiffs allege actual reliance upon the allegedly misleading statements. See Block v. Toyota Motor Corp.,
. Plaintiffs argue that the documents submitted with Plaintiffs' procedurally improper ex parte motion reveal Oracle exchanged compensation information with competitors. First, Plaintiffs include an email from an Adobe employee asking Oracle and other technology companies to participate in a survey regarding the equity options given to employees. See ECF No. 138 Ex. B. However, the email itself indicates that Oracle had not responded to the request for information. See id. Second, Plaintiffs point to a document listing compensation information for Director and Vice President positions at four companies that Oracle received from a "confidential source.” Id. Given that the proposed class excludes corporate officers and senior Oracle executives, it appears that this compensation information is not relevant to Plaintiffs' allegations. See SAC ¶ 64 (providing class definition). Moreover, Garrison, Van Vorst, and Hari were not corporate officers or senior executives, and thus this compensation information would not ap
. The continuous accrual rule is similar to the continuing violation theory. “However, unlike the continuing violation doctrine, which renders an entire course of conduct actionable, the theory of continuous accrual supports recovery only for damages arising from those breaches falling within the limitations period.” See Aryeh,