Intel 2013 Annual Report Download - page 107

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At least 82 separate class-action lawsuits have been filed in the U.S. District Courts for the Northern District of
California, Southern District of California, District of Idaho, District of Nebraska, District of New Mexico, District of
Maine, and District of Delaware, as well as in various California, Kansas, and Tennessee state courts. These
actions generally repeat the allegations made in a now-settled lawsuit filed against us by AMD in June 2005 in the
U.S. District Court for the District of Delaware (AMD litigation). Like the AMD litigation, these class-action lawsuits
allege that we engaged in various actions in violation of the Sherman Act and other laws by, among other things:
providing discounts and rebates to our manufacturer and distributor customers conditioned on exclusive or near-
exclusive dealing that allegedly unfairly interfered with AMD's ability to sell its microprocessors; interfering with
certain AMD product launches; and interfering with AMD's participation in certain industry standards-setting groups.
The class actions allege various consumer injuries, including that consumers in various states have been injured by
paying higher prices for computers containing our microprocessors. We dispute these class-action claims and
intend to defend the lawsuits vigorously.
All of the federal class actions and the Kansas and Tennessee state court class actions have been 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 PCs 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 in March 2011. In September 2012, the
court ruled that an evidentiary hearing would be necessary to enable the court to rule on the objections to the
Special Master's Report, to resolve the motion to certify the class, and to resolve a separate motion to exclude
certain testimony and evidence from the MDL plaintiffs' expert. The hearing occurred in July 2013, and we are
awaiting the court's decision on the class certification issues.
All California class actions have been consolidated in the Superior Court of California in Santa Clara County. The
plaintiffs in the California actions have moved for class certification, which we are in the process of opposing. At our
request, the court in the California actions has agreed to delay ruling on this motion until after the Delaware district
court rules on the similar motion in the MDL proceedings. Given the procedural posture and the nature of these
cases, including the fact that the Delaware district court has not determined whether the matters before it may
proceed as a class action, 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 California
Superior Court lawsuits were removed to the United States District Court for the Northern District of California and
were consolidated. The plaintiffs’ allegations referenced 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 no later than
September 2007, not to cold call each other’s employees.
In September 2011, the plaintiffs filed a consolidated amended complaint, captioned In re High Tech Employee
Antitrust Litigation, which asserts the same state law claims as the state court complaints, and also asserts claims
under Section 1 of the Sherman Antitrust Act and Section 4 of the Clayton Antitrust Act. Plaintiffs’ consolidated
amended complaint seeks 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 April 2012, the court granted the defendants’ motion to dismiss plaintiffs’ state law claims but
denied defendants’ motion to dismiss the Sherman Act and Clayton Act claims.
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INTEL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)