Intel Anti-Trust Litigation



We are writing to advise you about recent developments in the anti-trust litigation filed by the New York State Attorney General’s Office, on behalf of all New York State public entities, against Intel Corporation with regard to the sale of “x86 CPU” microprocessors. This anti-trust litigation involves allegations by the New York State Attorney General that Intel Corp. has been engaged in unlawful conduct that has resulted in Intel Corp. charging inflated prices for products that contain the “x86 CPU” microprocessor.

On June 10, 2010, our office participated in a conference call with the New York State Attorney General’s Office regarding this matter. The Attorney General’s Office had placed all public entities on notice of the lawsuit in early December 2009.

In correspondence from the Attorney General’s office dated May 25, 2010, all public entities were informed that they have until June 25, 2010 to advise the Attorney General’s Office whether they wish to “opt out” and retain separate counsel in the anti-trust suit. The May 25, 2010 correspondence indicated that if a public entity does not advise the Attorney General’s Office of its desire not to be represented by it in this action, then the Attorney General’s Office will continue to assume that it represents the public entity’s interests in this matter.

The conference call was designed to answer any questions that public entities might have about their participation, or non-participation, in the suit as well as any obligations they may have related to the ongoing litigation.

During the conference call, the Attorney General’s Office stated that their Office imposed the June 25, 2010 “opt out” deadline, not the Court. If an entity requires additional time to make its decision, the Attorney General’s Office should be notified and the entity will be given the time it requires. Furthermore, if an entity does not “opt out” of the suit now but later wishes to exercise this option, the Attorney General’s Office advised that the entity will be permitted to do so.

By remaining part of the suit beyond the June 25, 2010 “opt out” deadline, the only legal right which the entity is surrendering is its right to commence an independent action against Intel Corp. Otherwise, the entity’s legal rights with regard to the subject matter of this lawsuit remain intact.

The Attorney General’s Office and Intel Corp. are currently in the process of resolving discovery disputes relating to the production of various records. The Attorney General’s Office intends to resist any discovery request that seeks documents from every public entity in the state. To this end, the Attorney General’s Office is confident that the Court will limit discovery to a small sampling of public entities within the state. For those entities that will have to provide discovery material, the requirement of producing documents is not expected to be onerous. Moreover, just because an entity chooses to “opt out” of the suit, it may not necessarily be relieved of any discovery obligations. Thus, “opting out” will not immunize the entity from discovery.

The Attorney General’s Office reiterated that public entities should continue to implement and abide by the litigation hold letter previously sent out by the Attorney General (copy enclosed). Until the matter is resolved, public entities should continue to preserve documents relevant to purchase of computers for the period 2001 until present.

Finally, in the event of a settlement of the lawsuit, public entities who choose not to “opt out” will not have an opportunity to review and approve the terms of any settlement agreement, as they would in a typical class action lawsuit. In addition, it is possible that any settlement will not result in funds being distributed to any public entities directly. Rather, it is possible that the parties will agree to have the funds paid to a central fund used for a public purpose. However, the Attorney General’s Office feels it is too early to speculate on potential settlement as the parties have not discussed the possibility at this stage of the litigation.

We will continue to monitor this litigation and further advise if there are any new developments of which you should be aware.


© Lamb & Barnosky, LLP, 2010

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