Intel 2014 Annual Report Download - page 109

INTEL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
All of the federal and state class actions other than the California class actions were transferred by the Multidistrict Litigation
Panel to the U.S. District Court in Delaware for all pre-trial proceedings and discovery (MDL proceedings). The Delaware district
court appointed a Special Master to address issues in the MDL proceedings, as assigned by the court. In January 2010, the
plaintiffs in the Delaware action filed a motion for sanctions for our alleged failure to preserve evidence. This motion largely copies
a motion previously filed by AMD in the AMD litigation, which has settled. The plaintiffs in the MDL proceedings also moved for
certification of a class of members who purchased certain personal computers containing products sold by us. In July 2010, the
Special Master issued a Report and Recommendation (Report) denying the motion to certify a class. The MDL plaintiffs filed
objections to the Special Master’s Report, and a hearing on those objections was held before the district court in July 2013. In
July 2014, the district court affirmed the Special Master’s ruling and issued an order denying the MDL plaintiffs’ motion for class
certification. In August 2014, plaintiffs filed a petition for interlocutory appeal of the district court’s decision with the U.S. Court of
Appeals for the Third Circuit, which the Third Circuit denied on October 29, 2014. On December 29, 2014, Intel filed a motion for
summary judgment on the claims of the remaining individual plaintiffs. The court is likely to rule on this motion in late 2015.
All California class actions have been consolidated in the Superior Court of California in Santa Clara County. The plaintiffs in the
California actions moved for class certification, which we are in the process of opposing. At our request, the court in the California
actions agreed to delay ruling on this motion until after the Delaware district court ruled on the similar motion in the MDL
proceedings. The plaintiffs asked the court for leave to retain a new expert and to amend their previous motion for class
certification. The court granted plaintiffs’ request on February 6, 2015 and set the hearing on plaintiffs’ new motion for class
certification for May 29, 2015. Given the procedural posture and the nature of these cases, we are unable to make a reasonable
estimate of the potential loss or range of losses, if any, arising from these matters.
In re High Tech Employee Antitrust Litigation
Between May and July 2011, former employees of Intel, Adobe Systems Incorporated, Apple Inc., Google Inc., Intuit Inc.,
Lucasfilm Ltd., and Pixar filed antitrust class-action lawsuits in the California Superior Courts alleging that these companies had
entered into a conspiracy to suppress the compensation of their employees. The lawsuits were removed to the United States
District Court for the Northern District of California and in September 2011 the plaintiffs filed a consolidated amended complaint,
captioned In re High Tech Employee Antitrust Litigation. The plaintiffs’ allegations reference the 2009 and 2010 investigation by
the Department of Justice (DOJ) into employment practices in the technology industry, as well as the DOJ’s complaints and
subsequent stipulated final judgments with the seven companies named as defendants in the lawsuits. The plaintiffs allege that
the defendants entered into certain unlawful agreements not to cold call employees of particular other defendants and that there
was an overarching conspiracy among the defendants. Plaintiffs assert one such agreement specific to Intel, namely that Intel
and Google entered into an agreement starting in 2005, not to cold call each other’s employees. Plaintiffs assert claims under
Section 1 of the Sherman Antitrust Act and Section 4 of the Clayton Antitrust Act and seek a declaration that the defendants’
alleged actions violated the antitrust laws, damages trebled as provided for by law under the Sherman Act or Clayton Act,
restitution and disgorgement, and attorneys’ fees and costs.
In October 2013, the district court certified a class consisting of approximately 65,000 current or former employees of the seven
defendants and set the matter for trial in late May 2014. The so-called “technical class” consists of a group of current and former
technical, creative, and R&D employees at each of the defendants. In January 2014, Intel filed a motion for summary judgment,
which the court denied in March 2014.
In April 2014, Intel, Adobe, Apple, and Google reached an agreement with plaintiffs to settle this lawsuit, but in August 2014, the
district court denied preliminary approval of the settlement. In September 2014, defendants filed a petition for writ of mandamus
asking the U.S. Court of Appeals for the Ninth Circuit to reverse the district court’s decision. The Ninth Circuit ordered briefing and
scheduled a March 2015 hearing date on the writ petition. Defendants have withdrawn the petition for writ of mandamus in light of
the settlement agreement discussed below.
In January 2015, Intel, Adobe, Apple, and Google reached a second agreement with plaintiffs to settle this lawsuit, which is
subject to court approval. The court has scheduled a hearing on plaintiffs’ motion for preliminary approval for March 2015. We
continue to dispute the plaintiffs’ claims, but have agreed to settle this lawsuit to avoid the uncertainties, expenses, and diversion
of resources from continued litigation. Our operating expenses for 2014 reflect accruals for this proceeding and we believe
reasonably possible losses in excess of the accrued amount are not material to our financial statements.
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