Legal Newsline

Thursday, October 17, 2019

Google shareholders waited too long to sue company

By Robert Davis | Apr 24, 2018

SAN JOSE, Calif. (Legal Newsline) – The 6th Appellate District Court of California has affirmed summary judgment awarded by the Superior Court of Santa Clara County in favor of officers and directors of Google LLC in a suit filed by shareholders.

Judge Adrienne M. Grover gave the opinion of the court on April 16 with judges Eugene M. Premo and Franklin D. Elia concurring. The court upheld the summary judgment granted by the trial court on the grounds the shareholders' action was barred by a three-year statute of limitations.

According to the opinion, The Department of Justice (DOJ) filed a civil antitrust lawsuit against Google and other companies in 2010 alleging the "no cold-call" policies many companies shared "illegally diminished competition for high-tech employees."

Google and several other companies entered into a stipulated judgment "in which they admitted no liability but agreed to be bound by an injunction prohibiting the no cold call arrangements," the opinion states.

Plaintiff the Police Retirement System of St. Louis and other shareholders of Google LLC, filed their lawsuit in February 2014 alleging the company suffered financial losses after entering into the agreement. They also alleged the agreement "harmed the company’s reputation and stifled innovation." 

Both parties agreed to adjudicate the case under Delaware law because Google was incorporated in the state. The “internal affairs doctrine” also generally requires application of the law of the state of incorporation in cases involving companies and their shareholders.

The court argued the summary judgment was properly granted because the agreement contained a three-year statute of limitations. The opinion also noted the plaintiffs did not argue Google's conduct occurred within the statute of limitations, only that they learned of the conduct much later. 

Delaware allows for a limitations period to be tolled during a time that a reasonable plaintiff could discover the underlying facts of the case, the opinion states. Google posted a statement of its agreement with the DOJ online, and thereby could not have concealed the facts from their shareholders, the court stated.

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Organizations in this Story

California 6th District Court of Appeal Google, Inc. U.S. Department of Justice