18th Annual Workplace Class Action Report - 2022 Edition

Annual Workplace Class Action Litigation Report: 2022 Edition 587 representative. Accordingly, the Court denied Defendant’s motion on this ground. Likewise, the Court found that Defendant’s argument that Rochester should be disqualified because Rochester engaged in criminal conduct regarding the distribution of Suboxone and had formally admitted its conduct in a deferred prosecution agreement (“DPA”) with the United States Attorney for the Southern District of New York also did not render it an inadequate class representative. As such, the Court denied Defendant’s motion in its entirety. Klein, et al. v. Facebook, 2021 U.S. Dist. LEXIS 135218 (N.D. Cal. July 20, 2021). Plaintiffs filed a class action alleging various violations of the Sherman Act. Defendant moved to disqualify the law firm of Keller Lenkner LLC, which had been appointed to Plaintiffs’ Executive Committee for the consumer class. The Court granted the motion. Defendant’s motion was based primarily on Keller Lenkner’s employment of Albert Pak, who previously worked at Kellogg, Hansen, Todd, Figel & Frederick ("Kellogg Hansen") and represented Defendant in antitrust investigations brought by the Federal Trade Commission ("FTC") and a group of state Attorneys General ("the Facebook government investigations"). Id . at *3. The antitrust investigations led to the filing of two related cases against Defendant, which Pak participated in as a fourth-year associate. The parties acknowledged that California Rules of Professional Conduct prohibit representation of materially adverse parties. The parties’ dispute centered upon California Rule of Professional Conduct 1.10(a)(2), which provides an exception to the prohibition on representation when: (i) the prohibited lawyer did not substantially participate in the same or a substantially related matter; (ii) the prohibited lawyer was timely screened from any participation in the matter and was apportioned no part of the fee therefrom; and (iii) written notice was promptly given to any affected former client to enable the former client to ascertain compliance with the provisions of the rule, which shall include a description of the screening procedures employed, and an agreement by the firm to respond promptly to any written inquiries or objections by the former client about the screening procedures. Id . at *18-19. Plaintiffs argued that the exemption applied, which Defendant refuted. The Court agreed with Defendant that the exemption did not apply here. The Court explained that Pak’s participation weighed heavily in favor of a finding of substantial participation; including Pak having been exposed to Defendant’s confidential information likely to be material in the current matter. The Court also noted that Pak’s level of responsibility, and personal contact with and advice provided to Defendant, weighed in favor of a finding of substantial participation. The Court thus concluded that Pak substantially participated in the government investigations. The Court determined that the Rule 1.10(a)(2) exception did not apply under the substantial participation standard. Moreover, even assuming that Pak did not substantially participate in the government investigations, Keller Lenkner did not timely screen Pak from this case. Id . at *24. Finally, the Court noted that Keller Lenkner did not provide prompt notice to Defendant. Accordingly, Keller Lenkner violated the California Rules of Professional Conduct. The Court concluded given Pak’s involvement in the government litigations and his knowledge of Defendant’s confidential information, disqualification was appropriate here. For these reasons, the Court granted Defendant’s motion. (xxxvii) Experts In Class Actions Conrad, et al. v. Jimmy John ’ s Franchise, LLC, 2021 U.S. Dist. LEXIS 33933 (S.D. Ill. Feb. 16, 2021) . Plaintiffs, a group of current and former food service employees, filed a class action alleging that, through a “no- poach provision” in Defendant’s franchise agreement, Defendant suppressed wages and restricted worker mobility in violation of § 1 of the Sherman Act. The specific provision at issue required Defendant’s franchisees not to hire any employees who were employed by Defendant or its affiliates in the preceding twelve months. In support of their motion for class certification, Plaintiffs relied on the expert report of Dr. Singer, who concluded that Defendant’s no-poach provision was linked to anticompetitive effects experienced by the class as a whole. Id. at *2. Conversely, Defendant relied on two reports from its own experts – Dr. Ordover and Dr. McCrary – to rebut Dr. Singer’s findings. Defendant’s experts generally determined that Dr. Singer’s economic model suffered from several conceptual flaws, and that Defendant’s no-poach provision was not causally linked to any anticompetitive market effects. The parties filed motions to exclude each other’s expert reports, and the Court granted Defendant’s motion while denying Plaintiffs’ motion. In deciding on these motions, the Court noted that none of the experts’ credentials were in serious doubt, as Dr. Singer and Dr. McCrary were accomplished economics professors and Dr. Ordover was an internationally recognized antitrust expert. Id. at *50. With respect to Dr. Singer’s expert report, Defendant argued that Dr. Singer utilized flawed data by relying on Defendant’s weekly sales report (“WSRs”), which certain franchisees found to be inaccurate. The Court disagreed. It found that Defendant’s franchisee testimony was not sufficient to show that the data was “so