Case No. 3:17-cv-00359-WHA REPLY TO OPPOSITION TO MOTION TO REMAND 

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Basil P. Fthenakis, Esq. (88399) 

CRITERION LAW 

2225 E. Bayshore Road, Suite 200 

Palo Alto, California 94303 

Tel. (650) 352-8400 

Fax. (650) 352-8408 

Of counsel: 

David S. Godkin (Admitted pro hac vice) 

James E. Kruzer (Admitted pro hac vice) 

BIRNBAUM & GODKIN, LLP 

280 Summer Street 

Boston, MA 02210 

(617) 307-6100 

godkin@birnbaumgodkin.com 

kruzer@birnbaumgodkin.com 

Attorneys for Plaintiff, 

SIX4THREE, LLC, a Delaware 

limited liability company 

UNITED STATES DISTRICT COURT 

NORTHERN DISTRICT OF CALIFORNIA 

SIX4THREE, LLC, a Delaware limited 

liability company, 

 Plaintiff, 

v. 

FACEBOOK, INC., a Delaware corporation 

and DOES 1 through 50, inclusive 

 Defendants. 

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Case No. 3:17-cv-00359-WHA 

REPLY TO DEFENDANT’S OPPOSITION 

TO PLAINTIFF’S NOTICE OF MOTION 

TO REMAND FOR LACK OF FEDERAL 

JURISDICTION AND AWARD OF FEES 

AND COSTS 

 

Date: February 16, 2017 

Time: 8:00AM 

Ctrm: 8 

Judge: Honorable William H. Alsup 

Case 3:17-cv-00359-WHA Document 22-4 Filed 02/09/17 Page 1 of 18
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TABLE OF CONTENTS 

Page 

I. ARGUMENT ............................................................................................................................ 1 

 A. Plaintiff’s Claim Under the “Unlawful” Prong of Cal. Bus & Prof. Code § 17200 

 and Its Discovery Responses Have Not Focused on Sherman Act Conduct ..................... 1 

 B. To the Extent Monopolistic Conduct is Implicated by Plaintiff’s Second Amended 

 Complaint, Facebook’s Removal Petition Was Filed Too Late ......................................... 8 

 C. There is No Exclusive Federal Jurisdiction Because Numerous State and Common Law 

 Claims are Asserted ........................................................................................................... 9 

 D. It Remains Premature to Determine the Full Nature of Potential Antitrust Claims as 

 Discovery in Superior Court is Ongoing, but Ample Evidence of Cartwright Act 

 Violations Has Been Found in Facebook’s Files. ............................................................ 10 

II. CONCLUSION ..................................................................................................................... 15 

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TABLE OF AUTHORITIES 

Cases 

Asahi Kasei Pharma Corp. v. CoTherix, Inc., 204 Cal. App. 4th 1 (2012) ....................... 15 

California v. Pinnacle Sec. CA LP, 746 F. Supp. 2d 1129 (N.D. Cal. 2010) .................. 6,8 

Corwin v. Los Angeles Newspaper Serv. Bureau, Inc., 4 Cal. 3d 842 (1971). ................. 15 

Dimidowich v. Bell & Howell, 803 F.2d 1473 (9th Cir. 1986) .......................................... 14 

Hendricks v. Dynegy Power Marketing, 160 F. Supp. 2d 1155 (S.D. Cal. 2001) ...... 6, 7, 8 

In re Nat’l Football Leagues Sunday Ticket Antitrust Litig., 2016 U.S. Dist. LEXIS 

41639 (C.D. Cal. Mar. 28, 2016) ................................................................................ 3, 4, 9 

In re Sony Grand WEGA KDF-E A10/A20 Series Rear Projection HDTV Litig., 758 

F. Supp. 2d 1077 (S.D.Cal. 2010) ....................................................................................... 9 

Kasky v. Nike, Inc., 27 Cal. 4th 939 (2002) ...................................................................... 10 

Khoury v. Maly’s of California, Inc., 14 Cal. App. 4th 612 (1993) ..................................... 9

Lippitt v. Raymond James Fin. Servs., 340 F.3d 1033 (9th Cir. 2003) ........................ 6, 7, 8 

Kolling v. Dow Jones & Co., 137 Cal. App. 3d 709 (1982). ............................................ 15

Moss v. Infinity Ins. Co., 2015 U.S. Dist. LEXIS 158059 (N.D. Cal. Nov. 20, 2015) ..... 10 

National Credit Reporting Ass’n v. Experian Info. Solutions, Inc., 2004 U.S. Dist. 

LEXIS 17303 (N.D. Cal. July 21, 2004) ................................................................. 3, 4, 8, 9 

Nevada v. Bank of Am. Corp., 672 F.3d 661 (9th Cir. Nev. 2012) ...................................... 1 

People v. Dollar Rent-A-Car Systems, Inc., 211 Cal. App. 3d 119 (1989) ...................... 10 

Spanos v. Bancorp, 2015 U.S. Dist. LEXIS 14785 (C.D. Cal. Feb. 6, 2015) ..................... 2 

Other Authorities 

28 U.S.C. § 1446 ................................................................................................................. 8 

28 U.S.C. § 1447 ............................................................................................................... 15 

Cal. Bus. & Prof. Code § 17200 ................................................................................ 1-9, 15 

Cal. Bus. & Prof. Code § 17500 ................................................................................... 9, 10 

Cal. Bus. & Prof. Code § 16720 ............................................................................. 4, 14, 15 

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I. ARGUMENT 

a. Plaintiff’s Claim Under the “Unlawful” Prong of Cal. Bus & Prof. Code § 17200 

and its Discovery Responses Have Not Focused on Sherman Act Conduct. 

Facebook’s Opposition rests on a plainly false assertion: “The bottom line is that 

unilateral monopoly is the focus of the operative complaint.” See Defendant’s Opposition to 

Motion to Remand (“Opposition”), at 1-2. The gravamen of Plaintiff’s Second Amended 

Complaint (“SAC”) is not grounded in antitrust at all. Rather than focusing on monopoly 

position, market power and other federal antitrust questions, the SAC alleges common law and 

state law claims related to deceptive, unfair, fraudulent, tortious and collusive conduct 

surrounding Facebook’s decision to deliberately misrepresent its intentions with its operating 

system. The SAC focuses almost entirely on the pattern of clear and unambiguous promises by 

Facebook over many years to demonstrate the reasonability of Plaintiff’s reliance in investing 

time and capital in building an application on Facebook’s operating system. Indeed, over half 

of the paragraphs in the SAC focus on these repeated, clear and unambiguous promises made 

by Facebook and its partners to establish the reasonableness of Plaintiff’s reliance. See ECF 

No. 1-2, ¶¶ 1-53, ¶¶ 67-72. The SAC focuses on this to ground the elements of its alleged 

causes of action, including intentional interference with contract, intentional interference with 

prospective business relations, negligent misrepresentation, and Section 17200 violations of 

unfair, deceptive or unlawful conduct. 

In addition, Plaintiff never characterizes Facebook’s anti-competitive conduct as 

unilateral and makes clear that the conduct in question is not unilateral. The SAC specifically 

references a Wall Street Journal investigative report that demonstrates that Facebook and 

Tinder reached an “unspecified compromise” to give Tinder an unfair competitive advantage 

that Facebook refused to offer to Plaintiff, violating promises that Facebook would maintain a 

fair operating system. See ECF No. 1-2, ¶¶ 103-104. 

Notably, the SAC does not invoke the concepts of federal antitrust law described by 

terms like “monopoly power,” “market power” or “unilateral”. The SAC refers to Facebook as 

a “monopolist” only once and further notes that Facebook “monopolized for itself” the image 

search market: “In sum, Facebook acts as a platform when it wants to exploit Developer 

creativity and resources, and a monopolist when it wants to secure areas of the ecosystem for 

itself once developer creativity and resources have been invested.” See ECF No. 1-2, ¶¶ 107, 

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116. This reference to Facebook as a “monopolist” and as “monopolizing for itself” is not 

sufficient to make any reasonable determination as to whether Facebook’s conduct was 

unilateral or in concert with other partners with which it executed binding agreements to extract 

large advertising payments in exchange for their continued access to data that had been shut off 

to all other companies, thereby giving these partners an insurmountable competitive advantage 

in various software markets. 

Instead, Facebook quotes the Superior Court’s June 28, 2016 Ruling on Demurrer 

permitting Plaintiff to proceed under its Section 17200 claim: “Plaintiff has specifically alleged 

that it was a victim to a Facebook practice/scheme to lure in developers, generate additional 

advertising revenue by enhancing the user’s experience, and then monopolize for itself the 

market for image search capabilities.” See Opposition, at 9. Remarkably, Facebook contends 

that this phrase used by the Superior Court – “monopolize for itself” – is somehow dispositive 

that Plaintiff is unequivocally alleging unilateral monopoly conduct when the gravamen of the 

SAC and its discovery responses contradict this baseless conclusion. The phrase “monopolize 

for itself” is not remotely sufficient to determine whether Facebook’s conduct created a 

monopoly or an oligopoly in any specific market for software applications (e.g. photo sharing 

applications) or whether Facebook acted on its own or in concert with others to create a 

monopoly or oligopoly.1 

As such, Facebook’s reliance on National Credit Reporting Ass’n v. Experian Info Sols. 

Inc., No. C04-01661 WHA, 2004 WL 1888769 (N.D. Cal. July 21, 2004) and In re Nat’l 

Football Leagues Sunday Ticket Antitrust Litig., 2016 U.S. Dist. LEXIS 41639 (C.D. Cal. Mar. 

28, 2016) is entirely misplaced. National Credit and National Football Leagues apply only if 

the SAC in fact “alleges unilateral monopolistic conduct by Facebook” and “the only law 

identified by [Plaintiff] that prohibits the alleged conduct is Section 2 of the Sherman Act”. See

Opposition, at 11. In National Credit and National Football Leagues, the plaintiffs repeatedly 

alleged federal antitrust violations in their complaints, acknowledged that these violations were 

the sole basis for their “unlawful” claims under Section 17200, and did not rely upon any other 

actionable state or common law claims that did not require resolution of the Sherman Act 

 

1

 To be clear, the following four scenarios are possible for each software market affected by Facebook’s anticompetitive conduct: (1) Facebook acted unilaterally to monopolize the market; (2) Facebook acted unilaterally to 

oligopolize the market; (3) Facebook acted in concert with other large companies to monopolize the market; or (4) 

Facebook acted in concert with other large companies to oligopolize the market. Facebook’s interpretation of 

“monopolize for itself” somehow concludes that only scenario (1) is a possibility here, notwithstanding that 

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violation. In National Credit, the plaintiff alleged a single cause of action that was hollow in 

the absence of a determination of unilateral abuse of market power as virtually every paragraph 

of its complaint borrowed the language of federal antitrust law.2

The National Football Leagues complaint is replete with allegations that DirecTV is a 

monopoly that uses its market power to impose supra-competitive prices on consumers. See

Godkin Reply Decl., Exhibit 2, ¶¶ 7-9, 27-28, 35-42, 57-60, 72, 77. The language used to 

describe the allegations is borrowed heavily from federal antitrust law and the allegations could 

not have been made without reference to federal antitrust law.3 Moreover, the conduct at issue 

centered on unilateral price fixing, for which there is no actionable basis in California antitrust 

law. The National Football Leagues court denied remand because the plaintiffs did not have an 

adequate state law basis for their allegations, since price fixing is not prohibited by state law, 

and necessarily had to reach a federal question to prevail on the merits of any of their claims: 

“If the Court were to disregard the allegations regarding Defendants’ alleged ‘monopoly 

position’ and ‘supra-competitive prices’, no alternative and independent unconscionability 

theory would remain.” See National Football Leagues, 2016 U.S. Dist. LEXIS 41639, at 11. 

Here, the Superior Court could entirely disregard considerations of Facebook’s market power, 

which is not even mentioned in the SAC, and Plaintiff’s one reference to Facebook being a 

“monopolist,” and still find numerous violations of state and common law related to 

Facebook’s campaign of promising from 2007 to 2014 that it would maintain a fair operating 

system in order to induce investment by startups and then engaging in schemes with large 

companies beginning at least by 2012 to reap the benefits of the startups’ investments upon 

shutting off their access to the operating system in 2015. In sharp contrast to National Credit

and National Football Leagues, a big leap is required to conclude that the Sherman Act is the 

exclusive means through which Facebook’s alleged conduct can be regulated, particularly 

when discovery is ongoing regarding the nature of that conduct and has already provided clear 

evidence of entirely independent state and common law violations. 

 

Plaintiff’s discovery to date has uncovered specific evidence that scenario (4) occurred in a number of software 

markets affected by Facebook’s anti-competitive behavior. 

2

 The National Credit complaint asserts, among other things, that “defendants possess virtually 100% of the 

market for the provision of consumer credit reports,” “each of the defendants has and exercises monopolistic 

market power over buyers of consumer credit reports,” and defendants’ conduct increases “above competitive 

levels, the prices of credit reports,” thereby violating “state and federal antitrust laws” See Declaration of David S. 

Godkin In Support of Plaintiff’s Reply to Opposition (“Godkin Reply Decl.”), Exhibit 1, ¶¶ 15, 56. 3

 Terms like “monopoly power,” “monopoly position,” and “market power” blanket the National Football 

Leagues complaint. See Godkin Reply Decl., Exhibit 2, ¶¶ 7, 9, 11, 27, 28, 35, 36, 38, 39, 41, 58, 59, 60, 67,78. 

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Further, at no time since filing the SAC has Plaintiff affirmatively stated that it seeks to 

pursue federal antitrust claims as predicate violations of Section 17200. Plaintiff answered 

Facebook’s interrogatory by first stating that its “analysis, investigation and discovery are 

ongoing and it does not intend to limit evidence at trial to matters stated herein.” See ECF No. 

1-3 at 3, 5. Plaintiff then provided a comprehensive list of all potential laws Facebook’s 

conduct may have violated in order to ensure it would not be precluded from alleging any of 

the listed violations upon completing discovery. Plaintiff is entirely within its rights to preserve 

its ability to allege any of the listed violations in its interrogatory response after reviewing 

relevant documents of key Facebook executives it has moved to compel in Superior Court. That 

Plaintiff might allege a federal antitrust violation under the “unlawful” prong of Section 17200 

is not sufficient to provide exclusive federal jurisdiction, particularly when Plaintiff has also 

asserted that it might allege entirely independent state and common law violations, particularly 

violations of the Cartwright Act.4 Plaintiff has consistently stated that it reserves its rights 

regarding the predicate violations it will rely upon until it reviews the discovery that is central 

to the conduct at issue. 

Because it would not be prudent to determine the predicate violations before completing 

discovery, Facebook is left putting words in Plaintiff’s mouth. Facebook repeatedly attempts to 

recharacterize Plaintiff’s silence or inaction as affirmative intent. For instance, Facebook states 

that Plaintiff “made clear that it was sticking with that approach and would not be withdrawing 

its federal claims”. See Opposition, at 2. The act to which Facebook refers in which Plaintiff 

“made clear” its intent was Plaintiff’s decision not to respond to an email from Facebook 

requiring that Plaintiff confirm or disavow any federal causes of action. Importantly, Plaintiff 

has no obligation to confirm or disavow any causes of action and its silence in response to an 

email from Facebook attempting to bait Plaintiff further cannot be construed as an affirmative 

intent to pursue any specific causes of action. 

Facebook mischaracterizes Plaintiff’s interrogatory response in other ways. It claims 

that Plaintiff’s interrogatory response “makes clear that [the Sherman Act] is not an alternative 

theory or among a list of predicate violations of law set forth in the disjunctive.” See

Opposition, at 1. Further, Plaintiff has “unequivocally stated that its Section 17200 theory turns 

on allegations that Facebook violated federal antitrust law.” See Opposition, at 1-2. Plaintiff 

 

4

 Plaintiff’s interrogatory response explicitly states: “Facebook’s conduct further repeatedly violates the 

Cartwright Act” and “include numerous per se violations resulting from tying agreements with a host of third 

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disputes that its interrogatory response expressed specific intent regarding the use of 

conjunctive adjectives simply because words like “also” and “further” were used. Defendant 

asked for “ALL laws”; Plaintiff provided a list of “ALL laws”. It would be a curious result if 

this case could be removed to federal court simply because Defendant is permitted to impute 

intent regarding the conjunctive when Plaintiff took itself to be providing a list of predicate 

violations in the disjunctive. Plaintiff further disputes that it has made an “unequivocal” 

statement that the Superior Court must decide on federal antitrust law before finding an 

“unlawful” violation under Section 17200. Finally, Facebook states that Plaintiff “continues to 

decline to disavow reliance on Section 2 of the Sherman Act,” again attempting to impute 

affirmative intent from the decision not to respond to a baiting email. See Opposition, at 8. 

Plaintiff has no obligation to “disavow” its reliance on Section 2 of the Sherman Act. Plaintiff’s 

position has remained consistent: Plaintiff reserves its rights to allege any number of state, 

common or federal causes of action and will do so after it is able to access and review the 

documents of key Facebook executives that it moved to compel Facebook to produce months 

ago. 

Facebook has gone to great lengths to recast Plaintiff’s silence and inaction as clear, 

unequivocal and affirmative intent to make a Sherman Act bed.5 But Plaintiff’s SAC and 

discovery responses make clear how far Facebook is stretching. For example, Plaintiff 

responded on December 13, 2016 to other interrogatories requesting that it state the complete 

factual basis for the causes of action alleged in its complaint. Interrogatory No. 9 sought the 

complete factual basis to support the Section 17200 claim, Interrogatory No. 10 for negligent 

misrepresentation, Interrogatory No. 11 for intentional interference with contract, and 

Interrogatory No. 12 for intentional interference with prospective business relations. Plaintiff’s 

response to these interrogatories borrows nothing from federal antitrust law, but instead focus 

on Facebook’s failure to provide notice to Plaintiff of its decision to close Graph API once 

 

parties.” See ECF No. 1-3 at 6. 5

 Facebook further makes much of the definition of “contention” in attempting to use Plaintiff’s interrogatory 

response regarding “ALL laws” to recharacterize Plaintiff’s causes of action as necessarily relying on federal 

antitrust law. See Opposition, at 7. Facebook conveniently ignores that Plaintiff began its response to the 

interrogatory by explicitly stating that its discovery was ongoing and it was not intending to limit its discussion of 

matters at trial to the responses therein, and that Plaintiff reserved the right to update its responses in the future. 

Plaintiff does not dispute the meaning of “contention”. Plaintiff simply asserts that its intent in responding to the 

interrogatory was to contend that any one of the listed predicate violations may be asserted, not that Plaintiff 

intended to assert all of the predicate violations, particularly since Plaintiff has not obtained discovery necessary 

to determine if the elements of all of the predicate violations are established. Plaintiff has never affirmatively 

stated it intends to assert all of the predicate violations, though it reserves its rights to do so. 

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Facebook made the decision.6 Such notice, had it been provided, would have put Plaintiff on 

notice to cease making further investments in building applications on Facebook’s operating 

system. Plaintiff states as the factual basis for its Section 17200 claim the following: 

Facebook did not notify [Plaintiff] of the shutting down of Graph API...until 

January 20, 2015. Between April 30, 2014 and January 20, 2015, [Plaintiff] 

received numerous emails from Facebook, none of which ever mentioned 

that 643’s App would be shut down on April 30, 2015. In fact, many of the 

emails sent by Facebook provided updates...to ensure that [Plaintiff] could 

continue to use Facebook Platform.... That Facebook continued to entice 

[Plaintiff] to invest in Facebook Platform while deliberately withholding 

updates to [Plaintiff] of perhaps the most significant change to Facebook 

Platform since it was launched in 2007, is direct evidence in support of 

[Plaintiff’s] claim that Facebook violated Business and Professions Code 

17200 et seq. See ECF No. 20-2 at 21-23. 

It stretches the imagination to suggest, particularly prior to completing necessary discovery, 

that the kind of conduct described in this interrogatory response as the basis for the Section 

17200 claim necessarily implicates Section 2 of the Sherman Act. 

For this reason, Facebook’s attempt to distinguish Lippitt, Hendricks and Pinnacle falls 

short.7

 Facebook argues that the dispositive question for the Lippitt court was the fact that the 

plaintiff in Lippitt “disclaimed that his complaint sought to enforce any federal statute or 

regulation, and instead only relied on false advertising as the basis for his Section 17200 claim. 

Here, not only has [Plaintiff] not disclaimed a significant federal question, it has expressly 

alleged a violation of Section 2 of the Sherman Act, as well as violations of several other 

federal antitrust provisions.” See Opposition at 11-12 (referencing Lippitt, 340 F.3d at 1040). 

The Lippitt court’s language that Facebook references is as follows: “Lippitt contends that his 

complaint has been misinterpreted by Defendants and by the district court.... What the 

complaint seeks, according to Lippitt, is not a ban on the instrument itself, but rather a ban on 

false advertising.... While the complaint is the exact opposite of a model of clarity, it can be 

 

6

 Facebook’s Opposition references an October 31, 2016 response to Interrogatory No. 9 that borrows the 

language of the Superior Court Order on Demurrer in using the phrase “monopolize for itself”. See Opposition, at 

5. Facebook attempts again to rely on this phrase to argue that Plaintiff has alleged unilateral monopoly behavior 

under the Sherman Act all along. It should be noted that Facebook takes this quotation and Plaintiff’s reference to 

the Antitrust Subcommittee of the U.S. House of Representatives from Plaintiff’s response entirely out of context. 

Plaintiff states prior to the quoted section: “This type of conduct and the harm it caused 643 is by no means 

isolated.” See ECF No. 20-2 at 19-20. The reference to “monopolize for itself” was not even referring to the 

conduct alleged in the SAC. It was referring to examples of other conduct. Surely this is not sufficient to establish 

Facebook’s argument that Plaintiff’s sole basis for the Section 17200 claim is Section 2 of the Sherman Act. 

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read in the way Lippitt asserts. Because Lippitt has disclaimed a broader reach, we need not 

consider whether a state court action that seeks to ban the sale of a given investment instrument 

altogether would necessarily be subject to federal jurisdiction.” Lippitt, 340 F.3d at 1040. Here, 

Plaintiff certainly contends that its SAC is being misinterpreted by Facebook. Plaintiff further 

contends that the SAC “can be read in the way [Plaintiff] asserts”. Plaintiff contends that the 

conduct described in the SAC entails a scheme whereby Facebook falsely advertises its 

“revolutionary” new operating system from 2007 to 2014. Finally, the plaintiff in Lippitt

“disclaimed” the defendant’s interpretation of his complaint in a reply brief in that matter. 

Plaintiff here is doing the same. And, perhaps most importantly, the Lippitt court’s decision did 

not in fact turn on whether plaintiff proactively took measures to explicitly disavow specific 

federal causes of action and waive its right to raise them in the future. The Lippitt court hinged 

its decision entirely on the fact that the “state court need not inquire into NYSE regulations, or 

even refer to federal law, in the case before us.” Lippitt, 340 F.3d at 1045. Here, the Superior 

Court can avoid reference to federal law and Plaintiff can prevail on each of its causes of 

action, including the “unlawful” claim under Section 17200. 

Facebook’s attempt to distinguish Hendricks similarly falls short. Facebook argues that 

Plaintiff has alleged state and federal law violations whereas the plaintiff in Hendricks only 

alleged state law violations. As Plaintiff has stated repeatedly, it disputes that it has made any 

affirmative statement regarding the arguments it intends to raise at trial and should be taken to 

have contended that it has reserved its rights to pursue any number of common, state and 

federal law violations. Even so, the court’s decision in Hendricks did not turn on the mere 

presence of federal antitrust issues. The decision specifically turned on whether the plaintiff in 

Hendricks could establish the “unlawful” prong of Section 17200 without determining a federal 

question. Hendricks, 160 F. Supp. 2d at 1156. In this important respect, Hendricks is precisely 

on point. Hendricks, along with Pinnacle, further supports Plaintiff’s position that just because 

Plaintiff “might” pursue violations of federal law, a conclusion Plaintiff has repeatedly stated it 

will not reach until it completes discovery, this fact in no way requires the Superior Court to 

reach a federal question. Id. at 1163. Facebook attempts to distinguish Pinnacle along the same 

lines by attempting to recharacterize the dispositive question on whether any state or federal 

law is implicated or alleged on the face of a plaintiff’s complaint. However, in none of these 

 7 See California v. Pinnacle Sec. CA LP, 746 F. Supp.2d 1129 (N.D. Cal. 2010); Hendricks v. Dynegy Power 

Marketing, 160 F. Supp. 2d 1155 (S.D. Cal. 2001); Lippitt v. Raymond James Fin. Servs., 340 F.3d 1033 (9th Cir. 

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cases is that the dispositive question. The fundamental question in Lippitt, Hendricks, Pinnacle, 

National Credit, and National Football League is whether it is possible for the Superior Court 

to disregard federal law without hollowing out any of Plaintiff’s causes of action. Here, it is 

abundantly clear that questions of federal antitrust law could be disregarded entirely without 

hollowing out any of Plaintiff’s claims. 

b. To the Extent Monopolistic Conduct is Implicated by Plaintiff’s Second 

Amended Complaint, Facebook’s Removal Petition Was Filed Too Late. 

Facebook’s Opposition suffers from a fatal flaw in relying repeatedly on statements and 

actions by Plaintiff that are many months old. In relying upon these statements and actions, 

Facebook clearly fails to meet the deadline for removal under 28 U.S.C. § 1446(b)(3). 

Facebook repeatedly attempts to characterize the SAC, filed almost one year ago on February 

26, 2016, as describing unilateral monopoly conduct under the exclusive jurisdiction of the 

Sherman Act. See Opposition, at 3-4. To the extent the SAC is really about unilateral 

monopolistic behavior, an assertion that Plaintiff emphatically rejects, then Plaintiff’s 

interrogatory response provided no new information and Facebook is more than 10 months late 

in filing its removal petition. Further, Facebook relies on Plaintiff’s interrogatory response of 

October 31, 2016 noting that Facebook sought to “monopolize the market for itself”. See

Opposition, at 5. Again, this quotation is taken out of context, but regardless, if it has the 

meaning Facebook purports it to have, then Plaintiff’s Third Supplemental Interrogatory 

Response provides no new information and Facebook’s removal petition is almost two months 

late. In order to avoid remand, Facebook must assert that the merits of Plaintiff’s causes of 

action necessarily hinge on Section 2 of the Sherman Act and that Plaintiff is now taking 

“belated efforts” to recharacterize its claims under state law. See Opposition, at 13. However, 

by citing to the SAC and Plaintiff’s earlier discovery responses, Facebook necessarily concedes 

that it had ample basis to remove this case long ago, but missed the deadline. 

c. There is No Exclusive Federal Jurisdiction Because Numerous State and 

Common Law Claims are Asserted. 

Facebook’s Opposition depends entirely on its argument that the only cognizable 

predicate for Plaintiff’s “unlawful” claim under Section 17200 is Section 2 of the Sherman Act. 

This is not true. Facebook conveniently ignores entirely that in its interrogatory response 

Plaintiff reserves its right to assert that Facebook’s conduct violates the “unlawful” prong of 

 

2003).

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Section 17200 “by reason of its tortious conduct, including but not limited to constructive 

fraud, negligent misrepresentation of material fact, intentional interference with contract and 

intentional interference with prospective business relations.” See ECF No. 1-3 at 6. Plaintiff 

need not reach any federal question in order to establish the elements of such violations based 

on the conduct it has described – conduct that need not rely on questions under which federal 

law asserts exclusive jurisdiction, such as unilateral supra-competitive pricing, as in National 

Credit and National Football Leagues. 

Further, Plaintiff may pursue the “unlawful” prong of Section 17200 via Section 17500 

false advertising prohibition. Facebook’s reliance on Khoury v. Maly’s of California, Inc., 14 

Cal. App. 4th 612 (1993) is inapposite. In Khoury, the appellant “[failed] to describe with any 

reasonable particularity the facts supporting violation...nor [did] the facts explain the manner 

of misleading appellant’s customers” Khoury, 14 Cal. App. 4th at 619. Here, Plaintiff devotes 

much of its SAC to detailing specific false representations at specific dates and times while 

demonstrating that it relied on those false representations and that such reliance was 

reasonable. See ECF No. 1-2, ¶¶ 1-53, ¶¶ 67-72. In its Section 17200 count, Plaintiff 

specifically incorporates these repeated false statements and misrepresentations. Id., ¶ 110. A 

Section 17500 claim “need be alleged only with ‘reasonable particularity’” and “must allege 

actual reliance”. See In re Sony Grand WEGA KDF-E A10/A20 Series Rear Projection HDTV 

Litig., 758 F.Supp.2d 1077, 1093 (S.D.Cal. 2010) (quoting Khoury, 14 Cal. App. 4th at 619). 

The SAC meets both of these requirements. 

Further, Facebook’s narrow construal of advertising and its limitation to the offering of 

selling real property is belied by the language of Section 17500 and the case law surrounding it. 

The Section 17500 language is explicitly not limited to “real or personal property” but applies 

to “services, professional or otherwise, or anything of any nature whatsoever...in any other 

manner or means whatever...concerning any circumstance or matter or fact connected with the 

proposed performance or disposition thereof, which is untrue or misleading.” See Cal. Bus. & 

Prof. Code ¶ 17500 et seq. The case law strongly supports the view that when a company 

makes representations of fact about its own business operations for the purpose of promoting 

sales of its products, these messages are commercial speech for purposes of applying state laws 

barring false and misleading commercial messages. See, e.g., Kasky v. Nike, Inc., 27 Cal. 4th 

939 (2002). For seven years, Facebook made false statements with the intention of increasing 

adoption of its operating system to generate substantial revenues for it and its partners. Clearly 

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commercial statements intentionally designed to mislead companies and consumers to 

participate in Facebook’s operating system and purchase advertisements in the operating 

system, which Plaintiff and many other businesses in fact did, fall squarely under the purview 

of Section 17500 as its prohibition “extends to the use of false or misleading oral statements” 

and to recover under Section 17500 “it is necessary to show only that members of the public 

are likely to be deceived.” See People v. Dollar Rent-A-Car Systems, Inc., 211 Cal. App. 3d 

119, 129 (1989); see also Moss v. Infinity Ins. Co., 2015 U.S. Dist. LEXIS 158059; Kasky, 27 

Cal. 4th at 951 (“Thus, to state a claim under either the UCL or the false advertising law, based 

on false advertising or promotional practices, it is necessary only to show that members of the 

public are likely to be deceived”) (quotations omitted). 

d. It is Premature to Determine the Full Nature of Potential Antitrust Claims as 

Discovery in Superior Court is Ongoing, but Ample Evidence of Potential 

Cartwright Act Violations Has Been Found in Facebook’s Files. 

Facebook filed its removal petition on the eve of its deadline to serve its motions for 

summary judgment and mere days before the Superior Court’s ruling on Plaintiff’s discovery 

motions to obtain information from key Facebook executives, including Chief Executive 

Zuckerberg, regarding the decision to close Graph API that shut down Plaintiff’s business and 

many others. Plaintiff’s discovery to date provides evidence suggesting that the decision to shut 

down Graph API was made: (1) for anticompetitive reasons; (2) in concert with other large 

companies; (3) prior to October 2012 (even though Facebook waited to announce the decision 

until April 2014); (4) by Mr. Zuckerberg; and (5) with the active participation of at least six 

other individuals who reported directly to Mr. Zuckerberg. See Godkin Reply Decl. Exhibit 3, 

at 1-4. Plaintiff has yet to receive information regarding this decision that shut down its 

business. Rather, Facebook has produced documents only from low-level employees that 

Facebook unilaterally selected as custodians and who clearly had no involvement in the 

decision that shut down Plaintiff’s business. 

Nonetheless, Plaintiff has found in the files of these low-level employees clear evidence 

that beginning at least by 2012 and likely earlier, Facebook engaged in a scheme to trade 

access to data in its operating system on advantageous terms in order to extract large payments 

from collusive partners who sought to stifle competition in the various software markets in 

which they operated. Plaintiff has found direct evidence of agreements in which large 

companies agreed to spend substantial sums of money on advertising with Facebook in 

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exchange for Facebook providing an uneven playing field granting these companies a strong 

competitive advantage for their software applications by accessing data that Facebook shut off 

to over 40,000 other companies on April 30, 2015, a decision which is at the heart of Plaintiff’s 

SAC.8 These agreements were entered into in violation of Facebook’s repeated promises over a 

period of many years that this data would be accessible on a level playing field to all 

companies, promises upon which Facebook built its globally dominant advertising business and 

upon which Plaintiff relied in building its own business. 

On October 30, 2012, Facebook Vice President of Engineering, Michael Vernal, sent a 

note to certain employees stating that after discussing with Mr. Zuckerberg, Facebook has 

decided to “limit the ability for competitive networks to use our platform without a formal deal 

in place” and that Facebook is going to “require that all platform partners agree to data 

reciprocity.” Mr. Vernal then describes a whitelisting system Facebook will implement, and did 

in fact implement, to determine data access based on this “reciprocity principle.” See Godkin 

Reply Decl., Exhibit 5 at FB-00423235-FB-00423236. The reciprocity principle is 

subsequently defined and discussed among Facebook employees on numerous occasions as 

shutting down access “in one-go to all apps that don’t spend...at least $250k a year to maintain 

access to the data.” See Godkin Reply Decl., Exhibit 6 at FB-00061251. Facebook then 

embarks on a campaign to reach out to large companies and extract significant payments from 

them with the threat that they will otherwise turn off the company’s data access. However, if a 

company were to agree to provide significant payments to Facebook, then Facebook would 

offer it an enormous advantage relative to its competitors. Facebook employees routinely 

discuss this fact in their email exchanges: “Removing access to all_friends lists seems more 

like an indirect way to drive NEKO adoption.” See Godkin Reply Decl., Exhibit 7 at FB00061439. In other words, Facebook’s decision to close access to data in its operating system 

(“removing access to all_friends_lists”), which shut down Plaintiff’s business, was designed to 

generate increased revenues on Facebook’s advertising platform (“drive NEKO adoption”) by 

offering an unfair competitive advantage to companies from which Facebook could extract 

large payments. 

 

8

 Email from a Facebook employee on August 21, 2013: “Simon managed to pull a list of 40k+ apps that request 

and make use of the friends_permissions.” See Godkin Reply Decl., Exhibit 4 at FB-00061367. This means at 

least 40,000 software applications, and likely many more, were impacted by Facebook’s decision to turn an 

operating system around which it previously promised to maintain a level playing field into a pay-to-play scheme 

for its advertising business. 

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Facebook’s files are replete with examples where it negotiates multiple contracts with 

each partner in executing this deceptive campaign to tie access to data that it previously 

promised would be available on fair and neutral terms to the amount of advertising revenue it 

could extract from the partner. For instance, in August 2013, the Royal Bank of Canada 

expressed concern to Facebook around its continued access to Graph API data. A Facebook 

employee then asks internally whether Royal Bank of Canada has an agreement requiring a 

certain advertising spend each year. Another employee responds: “I believe it will be one of the 

biggest NEKO campaigns ever run in Canada.” See Godkin Reply Decl., Exhibit 8 at FB00427404 - FB-00427406. Facebook employees then confirm the existence of a contract for a 

large advertising expenditure, and then ask their legal department to release an Extended API 

Agreement to Royal Bank of Canada, which gives it access to the Graph API data Facebook 

shut off to other companies like Plaintiff. After this is complete, a Facebook employee then 

responds to Royal Bank of Canada assuring them their access to data will not be impacted. Id. 

Similarly, in April 2013, a Facebook employee asks when negotiating a whitelist with Amazon: 

“are [we] granting them these permissions only if they give in on our asks or are we going to let 

them utilize these GET permissions regardless of any concessions to our asks?” (“GET 

permissions” allowed companies to read Facebook’s data and were used by Plaintiff 

extensively.) Another Facebook employee responds: “Given we’re deprecating the majority of 

these permissions, we’ll need to either have a disappointing conversation with Amazon or a 

strategic conversation in the context of the broader deal discussions.” See Godkin Reply Decl., 

Exhibit 9 at FB-00427604 - FB-00427604. In other words, one Facebook employee tells 

another not to promise Amazon that it will continue to have access to this data after Facebook 

shuts it down until Facebook can extract monetary consideration from Amazon, thereby 

holding Amazon hostage as its app would not function without access to the data. 

 There are numerous other examples where Facebook invokes this “reciprocity 

principle” to whitelist certain companies to the great detriment of others based on Facebook’s 

ability to extract payments or other valuable consideration from them. For instance, in an email 

on April 30, 2015, a Facebook employee confirms that an application developed by 

Chrysler/Fiat had been whitelisted to continue to receive data that was shut off to everyone 

else. See Godkin Reply Decl., Exhibit 10 at FB-00031050, FB-00043519. The agreement 

defines “Private Extended APIs” as “a set of APIs and services provided by FB to Developer 

that enables Developer to retrieve data or functionality relating to Facebook that is not 

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generally available under Platform.” See Godkin Reply Decl., Exhibit 11 at FB-00043886 

(emphasis added). 

 On March 30, 2015, Nissan was granted a whitelist extension to access friends 

permissions until at least June 30, 2015. See Godkin Reply Decl., Exhibit 12 at FB-00042856. 

That same day, Lyft received “Special API access” via the whitelisting process to access 

friends permissions. See Godkin Reply Decl., Exhibit 13 at FB-00042899. On April 15, 2015, 

Facebook discusses a whitelist agreement with GoDaddy in exchange for access to GoDaddy’s 

Places of Interest (POI) data. See Godkin Reply Decl., Exhibit 14 at FB-00042373. On March 

18, 2015, AirBnB is whitelisted. See Godkin Reply Decl., Exhibit 15 at FB-00043830. On 

February 18, 2015, Facebook and Netflix discuss their whitelist agreement to give Netflix 

access to “all friends, not just connected friends,” which is one of the access points that 

Facebook removed that caused Plaintiff’s app to cease functioning. See Godkin Reply Decl., 

Exhibit 16 at FB-00045735. In each of these cases, Facebook seems to base its decision to 

grant or deny these companies an unfair competitive advantage based on its ability to extract 

payment or other valuable consideration. 

 As reported in the Wall Street Journal, Facebook went to great lengths to provide an 

unfair competitive advantage to Tinder to access Graph API data after it was closed to most 

other developers. See Godkin Reply Decl., Exhibit 17 at FB-00047134 - FB-00047134; Exhibit 

18 at FB-00047035 - FB-00047035. Facebook did this in substantial part because Tinder was 

the owner of the United States trademark in “Moments”, which was the name Facebook hoped 

to give and in fact gave to its new photo sharing application, which it launched less than two 

months after shutting off Plaintiff’s access to the photo sharing market on Facebook Platform. 

This quid pro quo arrangement with Tinder is evident from a lengthy negotiation over email 

where a Facebook employee attempts to trade the ability to use “Moments” as the name of 

Facebook’s photo application for Tinder’s continued access to data that was shut off to Plaintiff 

and over 40,000 other companies. See Godkin Reply Decl., Exhibit 19 at FB-00044220-FB00044227. The Facebook employee explicitly asks for use of Tinder’s trademark in “Moments” 

for Facebook’s new photo sharing app (an app directly competitive with Plaintiff’s app), in 

consideration of the fact that Facebook has “developed two new APIs that effectively allow 

Tinder to maintain parity of the product in the new API world.” Id. at FB-00044224. By 

“parity,” the Facebook employee clearly means that Tinder’s app will continue to work as 

intended, while other apps, like Plaintiff’s app, will be forced to shut down. 

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 Tinder, along with a number of other companies that rely upon photo or friend 

information from Facebook and executed whitelist agreements under Facebook’s “reciprocity 

principle,” are competitors of Plaintiff. It is entirely plausible that Facebook and each of these 

entities constitute a trust under the Cartwright Act as they engaged in “a combination of capital, 

skill, or acts by two or more persons to achieve an anticompetitive end.” The anticompetitive 

ends encompass restrictions in trade or commerce, the reduced production of a commodity and 

contracts to preclude free competition, and the combination of interests in connection with a 

sale of advertising. For instance, the number and kinds of software applications from which 

consumers could choose decreased precipitously once Facebook shut down access to its data. 

Consumers were forced to choose from a much smaller pool of applications – those developed 

exclusively by Facebook or companies from which Facebook could extract large advertising 

payments. 

 Dimidowich v. Bell & Howell makes abundantly clear that “a claim for conspiracy to 

monopolize is cognizable under the Cartwright Act because it alleges the requisite combination 

of actors.” Dimidowich v. Bell & Howell, 803 F.2d 1473, 1475 (9th Cir. 1986). Further, “[s]ince 

it is often difficult to show direct evidence of a combination or conspiracy, concerted action 

may be inferred from circumstantial evidence of the antitrust defendant's conduct and course of 

dealings. However, to survive a motion for summary judgment, a plaintiff must present 

evidence that tends to exclude the possibility that the alleged conspirators acted 

independently.” Dimidowich, 803 F.2d at 1475. Plaintiff’s SAC and its discovery motions 

continually refer to concerted action and circumstantial evidence suggesting Facebook 

conspired with other companies. Plaintiff’s review of Facebook’s files confirms this suspicion 

and reveals abundant evidence specifically describing the negotiation of multiple, tied contracts 

(at least one contract 

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to extract advertising payments and another to provide special data access).9 Facebook’s files 

further confirm that significant engineering effort and capital was deployed in executing these 

contracts. As such, Facebook and its partners are separate entities undertaking acts in concert 

which caused proximate harm to Plaintiff, other companies, and the public by actually 

depriving the marketplace of competition. See Asahi Kasei Pharma Corp. v. CoTherix, Inc., 

204 Cal. App. 4th 1, 8 (2012) (“To maintain an action for a combination in restraint of trade 

under the Cartwright Act, ‘the following elements must be established: (1) the formation and 

operation of the conspiracy; (2) illegal acts done pursuant thereto; and (3) damage proximately 

caused by such acts.” (quoting Kolling v. Dow Jones & Co., 137 Cal.App.3d 709, 718 (1982)). 

For these reasons, Facebook’s argument that Plaintiff “has neither the facts nor even a plausible 

story to assert a Cartwright Act claim in good faith” is simply not true. See Opposition, at 16. 

Plaintiff has found ample evidence and awaits completion of discovery before deciding 

whether to name additional defendants and assert predicate violations of its Section 17200 

claim. 

II. CONCLUSION 

 For all of the foregoing reasons, Plaintiff respectfully requests that the Court remand 

this matter back to the Superior Court. Additionally, as set forth above, Facebook did not have 

an objectively reasonable basis for removal. Therefore, Plaintiff respectfully requests an award 

of its costs and fees in accordance with 28 U.S.C. § 1447(c). 

Dated: February 9, 2017 CRITERION LAW 

 BIRNBAUM & GODKIN, LLP 

 By: /s/ David S. Godkin 

 Basil P. Fthenakis, Esq. 

David S. Godkin (pro hac vice) 

James E. Kruzer (pro hac vice) 

 Attorneys for Plaintiff Six4Three, LLC 

 

9

 As Facebook notes in its Opposition, a tying agreement is “an agreement by a party to sell one product but only 

on the condition that the buyer also purchases a different (or tied) product, or at least agrees that he will not 

purchase that product from any other supplier... They deny competitors free access to the market for the tied 

product, not because the party imposing the tying requirements has a better product or a lower price but because 

of his power or leverage in another market. At the same time buyers are forced to forego their free choice between 

competing products.” See Corwin v. Los Angeles Newspaper Serv. Bureau, Inc., 4 Cal. 3d 842, 856 (1971). In this 

instance, Facebook agreed to offer its data, providing an enormous competitive advantage, “only on the condition 

that the buyer also purchases a different product,” in this case advertising expenditures that may be entirely 

unrelated to the data access. Such “buyers are forced to forego their free choice between competing products” 

because Facebook will cause their software applications to shut down if they do not comply. Buyers who could 

not meet the arbitrary minimum requirements set by Facebook were shut out of the market, as was the case with 

Plaintiff since it could not afford to spend $250,000 per year on unrelated advertising expenses with Facebook. 

Plaintiff’s annual advertising budget was far lower than this arbitrary minimum. 

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