In Silicon Valley Hiring Case, a New Player at the Table

San Francisco: It's not often that a judge decides to blow up a settlement worth hundreds of millions of dollars because it is too low, but San Francisco attorney Daniel Girard convinced one Silicon Valley jurist to do exactly that.

Girard represents a former Adobe engineer who objected to a proposed $324.5 million deal, aimed at resolving an antitrust class action that alleged Apple, Google, Intel and Adobe conspired to refrain from soliciting each other's employees to avert a salary war.

Late last week, U.S. District Judge Lucy Koh in San Jose, California said the proposed settlement amount was not enough. Koh's ruling mirrored the arguments Girard made against the deal and may indicate that she will eventually approve an amount that is not vastly higher than the one she rejected.

Girard usually represents consumers and shareholders far from the tech world, but now he has some leverage in one of the most closely watched cases in Silicon Valley. Asked if he will participate in any negotiations, Girard said "we would certainly expect to be included."

In an exchange with Girard in June, Koh had asked him how much "short of the mark" the $324.5 million settlement was, and his response: "I don't think we're talking about multiples of this number."

In her ruling, Koh said the latest deal "would need to total at least $380 million" to match a related deal involving Disney last year.

The companies in the case have not said whether they plan to return to the table. The next hearing is not until September 10, at which point they will likely either tell Koh they want to continue negotiating or set a trial date.

Representatives for Apple, Intel and Adobe declined to comment on Monday, while Google did not immediately respond to inquiries. Joseph Saveri, an attorney for the class of tech workers, said his team "will continue to work hard moving forward in the case."

NOT LOOKING FOR A FAST BUCK

Girard is no stranger to many of the attorneys in the case: he was once a partner at Lieff Cabraser Heimann & Bernstein, one of the elite plaintiff firms which reached the $324.5 million deal. Girard has a 19-lawyer firm, Girard Gibbs, and has worked alongside Lieff Cabraser in other class action cases.

Girard, who was referred the case by another lawyer, said it's "a genuine concern" to litigate against former colleagues. But at the hearing in June, he made clear that his objection to the settlement was not the often-raised concern that plaintiffs' lawyers are settling low to make a fast buck on attorneys fees. Those fees could be up to 25 per cent of the settlement, according to court filings, which would have been about $81 million.

Girard told Koh he did not believe attorneys for the tech workers had colluded with the companies or "sold out the case." Rather, Girard said the plaintiffs had simply overstated the risks of going forward given the strength of their evidence.

In her ruling, Koh praised the plaintiff lawyers as "zealous advocates." Like Girard, the judge focused on the "substantial and compelling evidence" plaintiff lawyers had been able to uncover.

The case was based largely on emails in which Apple co-founder Steve Jobs, former Google Chief Executive Officer Eric Schmidt and some of their rivals hatched plans to avoid poaching each other's prized engineers. In one, referring to an attempt by Google to hire three former Apple engineers for a Paris project, Jobs wrote that he would "strongly prefer that you not hire these guys." Google scrapped the idea.

The four companies agreed to settle with the workers in April shortly before trial. The plaintiffs had planned to ask for about $3 billion in damages at trial, which could have tripled to $9 billion under antitrust law.

In June, Girard told Koh that if the plaintiffs had gone to trial and gotten a $3 billion verdict, his client Michael Devine would get about $144,000. Under the much smaller deal Koh rejected, however, Devine would have received $3,600.

Copyright: Thomson Reuters 2014