Case 3:17-md-02773-JSC Document 468 Filed 05/18/18 Page 1 of 5
`
`
`
`Steve W. Berman
`HAGENS BERMAN SOBOL SHAPIRO LLP
`1918 Eighth Avenue, Suite 3300
`Seattle, WA 98101
`Telephone: (206) 623-7292
`Facsimile: (206) 623-0594
`steve@hbsslaw.com
`
`Kalpana Srinivasan (237460)
`SUSMAN GODFREY L.L.P.
`1901 Avenue of the Stars, Suite 950
`Los Angeles, CA 90067
`Telephone: (310) 789-3100
`Facsimile: (310) 789-3150
`ksrinivasan@susmangodfrey.com
`
`Joseph Cotchett (36324)
`COTCHETT, PITRE & MCCARTHY, LLP
`840 Malcolm Road, Suite 200
`Burlingame, CA 94010
`Telephone: (650) 697-6000
`Facsimile: (650) 697-0577
`jcotchett@cpmlegal.com
`
`Plaintiffs’ Counsel
`
`[Additional Counsel on Signature Page]
`
`
`
`UNITED STATES DISTRICT COURT
`
`NORTHERN DISTRICT OF CALIFORNIA
`
`SAN JOSE DIVISION
`
`
`
`IN RE QUALCOMM ANTITRUST
`LITIGATION
`
`
`
`
`
`
`
`No. 17-md-02773-LHK-NMC
`
`
`PLAINTIFFS’ SEPARATE
`STATEMENT IN SUPPORT OF
`MOTION TO COMPEL PRODUCTION
`OF QUALCOMM TRANSACTIONAL
`DATA
`
`
`Magistrate Judge:
`Hon. Nathaniel M. Cousins
`
`
`
`
`
`010669-11 1034013 V1
`
`
`
`
`
`
`
`

`

`Case 3:17-md-02773-JSC Document 468 Filed 05/18/18 Page 2 of 5
`
`
`
`Plaintiffs submit this separate statement1 in support of their motion to compel
`Qualcomm’s production of regularly maintained chipset transactional data accessible in
`Qualcomm’s databases regarding Qualcomm’s chipset margins, chipset costs, chipset product
`tiers, and chipset cellular technology features. The parties met and conferred on these issues on
`May 16, 2018 but did not reach agreement. Production of this transactional data is justified
`because Plaintiffs specifically requested such data; the data is relevant to numerous important
`issues in this litigation; Qualcomm has not articulated the burden of producing such data; and
`Plaintiffs have limited their request to transactional data that remains available in accessible
`online databases.
`
`Plaintiffs specifically requested that Qualcomm produce regularly maintained
`transactional data on Qualcomm’s chipset margins; chipset manufacturing costs; chipset product
`tiers and classifications, and chipset technology feature (i.e. CDMA vs. WCDMA).2
`Qualcomm’s primary production of chipset transactional data, however, contained only a few
`basic fields on Qualcomm’s revenues, costs, and end customers, for sales of particular types of
`chipsets but did not specifically breakout the types of data requested by Plaintiffs.
`
`Plaintiffs subsequently identified Qualcomm documents indicating Qualcomm tracks
`significant amounts of additional data fields regarding margins, costs, tiers and technology
`features.3 Plaintiffs then isolated over 1,000 fields used by Qualcomm’s chipset division from a
`list provided by Qualcomm that relate to chipset margins, costs, tiers, and technology features.4
`Plaintiffs requested on May 2nd that Qualcomm produce the underlying data for these fields. To
`minimize Qualcomm’s burden and focus on data that is actually kept, Plaintiffs alternatively
`offered Qualcomm to first produce a sample of all regularly kept transactional data to determine
`what data fields are maintained in the ordinary course of business. As of the date of filing this
`motion, Qualcomm has substantively responded to neither offer.
`
`Courts routinely order the compelled production of transactional data in antitrust
`litigation, including from third parties, because of its obvious relevance.5 Indeed, numerous third
`parties in this litigation have pulled significant datasets from dynamic databases in response to
`Plaintiffs’ subpoenas. Each of the types of data that Plaintiffs are requesting to be produced by
`Qualcomm, the sole Defendant in this litigation, are clearly relevant. Qualcomm’s margin and
`cost data is relevant to measuring market power, corroborating documentary evidence on
`Qualcomm’s pricing and discount/penalty practices (for example, determining whether any
`prices were predatory), and modeling chipset prices as a function of costs. This information will
`also be relevant to evaluating economies of scale in chipset production (which could be relevant
`
`1 The reasons for Plaintiffs submitting this as a separate statement are set forth in the accompanying separate
`statement in support of Plaintiffs’ Motion to Compel Production of Qualcomm Financial Planning and Analysis
`Materials, at 1 n.1, concurrently filed herewith.
`2 See, e.g., Plaintiffs’ First Set of Requests for Production of Document (RPD) No. 4 (requesting “Product
`number or SKU used to uniquely identify a particular product, including a description of the product, model number,
`and product line or product family under which it is classified; . . . the Cellular Communication Standard(s) with
`which the Baseband Processor or Baseband Processor Product were compatible; . . . product margin); RPD No. 5
`(“[A]ll documents and electronic data sufficient to identify each cost that you incurred in connection with
`manufacturing . . . Baseband Processors.”).
`3 See April 19, 2018 letter from Rio Pierce to Yonatan Even.
`4 See May 2, 2018 letter from Rio Pierce to Yonatan Even, Exhibit A.
`5 See, e.g., In re Rail Freight Fuel Surcharge Antitrust Litig., No. 07-489, 2009 WL 3443563, at *4 (D.D.C.
`Oct. 23, 2009) (compelling production of transaction-level data by defendants to evaluate product market
`boundaries); In re Namenda Direct Purchaser Antitrust Litig., No. 15-civ-7488, 2017 WL 4700367, at *2-*3
`(S.D.N.Y. Oct. 19, 2017) (dismissing arguments of third party subpoena target on burden as “unpersuasive” because
`“[w]hile the money and time that will be spent on the production is not trifling, it is small in comparison with the
`potential damages in this case”).
`
`010669-11 1034013 V1
`
`
`
`-1-
`
`

`

`Case 3:17-md-02773-JSC Document 468 Filed 05/18/18 Page 3 of 5
`
`
`
`to determining exclusionary effects on rivals) and to evaluating Qualcomm's claims about how it
`invests in R&D and how it tries to recover those costs.
`
`Plaintiffs’ experts also seek chipset data organized by specific tier of chipset (e.g.
`premium, mid-range, low-tier) and technology of chipset (e.g. CDMA, WCDMA, and/or LTE)
`so that revenues, costs, and margins can be measured distinctly for each type of chipset cellular
`functionality or tier. This is relevant for calculating market sizes and shares, measuring market
`power, corroborating documentary evidence on Qualcomm’s pricing and discount/penalty
`practices, modeling chipset prices, and potentially determining any chipset damages, all for tier-
`specific and technology-specific chipset groups. This information will also be relevant to
`evaluating Qualcomm’s alleged defenses and efficiencies. For example, Qualcomm has claimed
`in various submissions to regulators that it can only earn a single monopoly profit in any chipset
`sales, but the ability to specifically measure CDMA chipset sales is relevant to evaluating this
`claim because Plaintiffs are not alleging monopoly power in WCDMA chipsets.
`
`Courts in this District recognize that “[t]he Federal Rules of Civil Procedure clearly
`contemplate the production of information from dynamic databases . . . [because] Rule 34(a)(1)
`(A) allows a party to request ‘any designated documents or electronically stored information . . .
`stored in any medium from which information can be obtained.’”6 For example, in Apple v.
`Samsung, Judge Grewal recognized that “[c]ourts regularly require parties to produce reports
`from dynamic databases, holding that the ‘technical burden . . . of creating a new dataset for the
`instant litigation does not excuse production.’”7 In that case, Judge Grewal was “dubious” of
`Apple’s “generalized claims of burden in complying with discovery obligations” such as the
`assertion that Apple “would engage ‘multiple financial groups’ in what is ‘likely to be several
`months of coordinated effort’” in response to Samsung’s motion to compel data production.8
`Judge Grewal rejected Samsung’s motion to compel because Samsung had already submitted the
`expert reports that would use the data.9 But here the situation is the reverse – Plaintiffs are
`seeking this material precisely for use in expert reports that have not yet been submitted. And
`Qualcomm has not yet even made the minimal assertions of burden that Apple provided.
`
`Rule 26(b)(2)(b) carefully distinguishes between “discovery of electronically stored
`information from sources that the party identifies as not reasonably accessible because of undue
`burden or cost.” Qualcomm, as of yet, has not provided any information on the burden that it
`would take to produce such information even though Plaintiffs made their request over two
`weeks ago. Therefore, as a compromise position, Plaintiffs request that the Court order
`Qualcomm to produce all data from 2006-2017 from the data fields identified in Plaintiffs’ May
`2nd letter that remains in active databases that are accessible to Qualcomm. This request is
`proportional considering the numerous relevant factual issues related to this data, the billions of
`dollars potentially at stake in this litigation, and Qualcomm’s failure to explain the burden it
`would face from producing such data. Plaintiffs remain available to further meet and confer
`regarding tailoring Qualcomm’s data production if Qualcomm provides sufficient specific
`information on the burden that it would face from this compelled production.
`
`
`
`6 In re eBay Seller Antitrust Litig., No. C 07-1882 JF (RS), 2009 WL 3613511, at *2-3* (N.D. Cal. Oct. 28,
`2009) (ellipses in added and in original; internal citation omitted).
`7 See Apple Inc. v. Samsung Elecs. Co. Ltd., No. 12-CV-0630-LHK (PSG), 2013 WL 4426512, at *3 (N.D. Cal.
`Aug. 14, 2013) (ellipsis in original; internal citation omitted).
`8 Id. (Internal citation omitted.)
`9 Id.
`
`010669-11 1034013 V1
`
`
`
`-2-
`
`

`

`Case 3:17-md-02773-JSC Document 468 Filed 05/18/18 Page 4 of 5
`
`
`
`DATED: May 18, 2018
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`HAGENS BERMAN SOBOL SHAPIRO LLP
`
`
`
`s/ Jeff D. Friedman
`By
` JEFF D. FRIEDMAN
`
`
`
`
`
`
`Rio Pierce (298297)
`HAGENS BERMAN SOBOL SHAPIRO LLP
`715 Hearst Avenue, Suite 202
`Berkeley, CA 94710
`Telephone: (510) 725-3000
`Facsimile: (510) 725-3001
`jefff@hbsslaw.com
`riop@hbsslaw.com
`
`Steve W. Berman
`1918 Eighth Avenue, Suite 3300
`Seattle, WA 98101
`Telephone: (206) 623-7292
`Facsimile: (206) 623-0594
`steve@hbsslaw.com
`
`Plaintiffs’ Steering Committee
`
`Kalpana Srinivasan (237460)
`Marc M. Seltzer (54534)
`Steven G. Sklaver (237612)
`Amanda Bonn (270891)
`Oleg Elkhunovich (269238)
`SUSMAN GODFREY L.L.P.
`1901 Avenue of the Stars, Suite 950
`Los Angeles, CA 90067-6029
`Telephone: (310) 789-3100
`Facsimile: (310) 789-3150
`ksrinivasan@susmangodfrey.com
`mseltzer@susmangodfrey.com
`ssklaver@susmangodfrey.com
`abonn@susmangodfrey.com
`oelkhunovich@susmangodfrey.com
`cale@susmangodfrey.com
`
`Joseph Grinstein
`jgrinstein@susmangodfrey.com
`SUSMAN GODFREY L.L.P.
`1000 Louisiana, Suite 5100
`Houston, TX 77002-5096
`Telephone: (713) 651-9366
`Facsimile: (713) 65-6666
`jgrinstein@susmangodfrey.com
`
`Joseph W. Cotchett (36324)
`Mark F. Ram (294050)
`Brian Danitz (247403)
`
`010669-11 1034013 V1
`
`
`
`-3-
`
`

`

`Case 3:17-md-02773-JSC Document 468 Filed 05/18/18 Page 5 of 5
`
`Tamara Prevost (313422)
`COTCHETT, PITRE & MCCARTHY, LLP
`840 Malcolm Road, Suite 200
`Burlingame, CA 94010
`Telephone: (650) 697-6000
`Facsimile: (650) 697-0577
`jcotchett@cpmlegal.com
`mram@cpmlegal.com
`bdanitz@cpmlegal.com
`tprevost@cpmlegal.com
`
`Plaintiffs’ Co-Lead Counsel
`
`
`
`
`
`
`
`010669-11 1034013 V1
`
`
`
`-4-
`
`