Dismissal of shareholder lawsuit against Alphabet over no-poach policy affirmed

A 6th District Court of Appeal panel affirmed the dismissal of a suit against Alphabet Inc.-owned Google for losses stemming from legal action against the technology giant by the U.S. Department of Justice for anticompetitive practices.

The appellate court agreed with Santa Clara County Superior Court Judge Peter H. Kirwin's decision that the plaintiffs were barred from stating a claim by the applicable three-year statute of limitations.

"The first question the appellate court judge asked was, 'Why'd you wait so long,'" said lead defense attorney Boris Feldman of Wilson Sonsini Goodrich & Rosati PC.

Kirwin properly granted summary judgment because the causes of action alleged in the complaint all concern "harm flowing from the no cold call agreements made by defendants," wrote Justice Adrienne M. Grover, who authored the opinion.

This conduct predated the Department of Justice's antitrust action, filed in 2010, which should have provided ample time to file a complaint within the statute of limitations, she added.

The alleged anticompetitive violations were also widely reported by various media outlets a year prior to the government taking legal action, according to Feldman.

Plaintiffs filed the complaint in 2014, "more than three years after the events giving rise to their claims, so they cannot -- and do not -- argue defendants' conduct occurred within the limitations period."

They instead contended that the time on the statute of limitations should have been tolled because pertinent facts necessary to file a viable complaint were not known to them until much later.

Plaintiffs' lawyers argued they did not have enough information to put Google directors on notice of their claims until 2012, when emails produced in discovery in employee class action suits relating to the no poach agreements first became publicly available.

Brian J. Robbins of Robbins Arroyo LLP and Joseph W. Cotchett of Cotchett, Pitre & McCarthy LLP argued for the plaintiffs. Neither could be reached for comment. The Police Retirement System of St. Louis et al. v. Page et al., 2018 DJDAR 3381.

Feldman said the government's press release announcing their settlement with various technology companies for anticompetitive behavior had sufficient information to plead viable claims. This information would have caused a reasonable shareholder to suspect officers and directors at Google were involved in the alleged violations, according to Grover.

"Plaintiffs conflate the concept of proving a claim with that of being aware of a claim," she added.

Grover was joined by Acting Presiding Justice Franklin D. Elia and Justice Eugene M. Premo.

Employees from Google and the other technology companies named in the DOJ's suit brought class action complaints in 2011, alleging that the cold calling restrictions were illegal and led to lost wages.

Google and three other companies named in the class actions settled for $415 million in 2015. High-Tech Employee Antitrust Litigation, 11-CV02509 (N.D. Cal., filed May 23, 2011).

"We're gratified to put this litigation, over events that occurred between 2005 to 2009, behind us," Feldman said.