WILMINGTON, Del. (Legal Newsline) - New York Attorney General Eric Schneiderman says he should no longer proceed with his antitrust lawsuit against Intel Corp. in federal court.
Schneiderman apparently came to this realization not long after U.S. District Judge Leonard Stark granted a trio of motions filed by Intel that significantly limited any potential recovery. Schneiderman inherited the lawsuit from former AG and current Gov. Andrew Cuomo.
"(G)iven the combination of the conservative methodology employed by New York's expert to calculate damages and Your Honor's recent decision on statute of limitations, New York is no longer able to proceed before Your Honor with its claim for damages under its state's laws," a letter sent from Schneiderman's office to Stark on Thursday says.
"New York's claims for equitable relief were not dismissed and New York retains damages claims under federal law, but those are much smaller in amount."
Stark granted two motions to dismiss and one motion for summary judgment. The lawsuit alleges the company threatened and punished companies it viewed as working too closely with its competitors.
The summary judgment opinion bars Sherman Act damages claims for microprocessor purchases that came before Nov. 4, 2005, and Donnelly Act and Executive Law damages and penalties claims for purchases before Nov. 4, 2006, because of expired statutes of limitations.
Stark also dismissed Donnelly Act damages claims brought on behalf of consumers and New York's claims on behalf of non-state public entities.
Schneiderman proposed that New York dismiss its federal law claims, divesting the court of jurisdiction. He added that the court should dismiss state law claims without prejudice so that it may re-file and pursue them in a state court.
"Undoubtedly, Intel will argue that New York's proposal requires them 'to start over' and as such it is inconvenient," the letter says. "However, those arguments are without merit.
"To be sure, once in state court, Intel would be obliged to try the case that was brought. But that is true in any event; Intel would have to try this case even if it remained in federal court."
Schneiderman added that where the case is tried should make little difference to Intel because its counsel and witnesses do not reside in Delaware.
Intel said a response to Stark the next day, but it was filed under seal. Friday, Stark cancelled the Feb. 14 trial, vacated all dates in the scheduling order and stayed the case. He also scheduled a meeting for Friday where Schneiderman will file a motion to dismiss and Intel will file a brief requesting the court exercise supplemental jurisdiction in the event all federal claims are dismissed.
Cuomo filed the lawsuit in November 2009. He said the company cut off payments it was making to computer makers, funded those maker's competitors and ended joint development ventures
Cuomo says Intel paid rebates -- which he said were basically payoffs -- to obtain exclusive agreements with computer makers. Those payments were large enough to be the difference between loss and profit for some computer makers, he said.
Intel paid $2 billion to Dell in 2006, threatened HP with the derailment of a server technology and paid IBM $130 million not to launch an AMD-based server product, Cuomo says.
It also threatened to stop funding for an IBM/Intel joint project if IBM marketed AMD-based server products, he alleges.
From Legal Newsline: Reach John O'Brien by e-mail at email@example.com.