California Crane School, Inc. v. Google LLC

Background

California Crane School, Inc. (CCS) filed a class action against Google LLC, Alphabet Inc., XXVI Holdings Inc., Google CEO Sundar Pichai, former Google CEO Eric Schmidt, Apple Inc., and Apple CEO Tim Cook. CCS alleged that Google and Apple unlawfully agreed to divide online search and search-advertising markets, violating federal and state antitrust laws.

In March 2024, the court granted in part Google’s motion to compel arbitration, denying it only as to CCS’s claim for public injunctive relief. The court granted Google’s motion to dismiss that remaining claim and granted Apple’s motion to dismiss all claims against the Apple defendants. CCS then moved to set aside that judgment.

Legal standard

Federal Rule of Civil Procedure 60(b)(2) allows a court to relieve a party from a final judgment based on newly discovered evidence. The moving party bears the burden of showing a basis for relief under Rule 60(b) or Rule 59(e). The court described this as requiring extraordinary or highly unusual circumstances. Evidence is not newly discovered if it was already in the party’s possession before judgment or could have been found through reasonable diligence.

CCS’s arguments

CCS relied on an amendment to an Information Services Amendment and a Joint Cooperation Agreement between Apple and Google. CCS argued that the documents showed an illegal horizontal agreement—that is, an agreement between potential competitors—to restrict Apple’s participation in search, share revenue, and coordinate through annual chief-executive compliance meetings. CCS also argued that the amendment made Google the default search engine on Apple devices in violation of Section 2 of the Sherman Act and cured deficiencies in its related state-law claims.

Defendants’ response

The defendants argued that the documents confirmed only the previously known vertical relationship in which Google paid to be the default search engine on Apple devices. They argued that the documents did not show that Apple intended to enter the search or search-advertising markets and then decided not to do so because of an agreement with Google. They also argued that the documents were not newly discovered because they had been posted on the United States Department of Justice’s website on November 17, 2023, before the relevant hearing and judgment.

Court’s analysis and ruling

The court agreed with the defendants and denied CCS’s motion to set aside judgment. The court held that the evidence was publicly available by November 2023, well before the February 8, 2024 hearing, and that CCS could have found it through reasonable diligence. For that reason alone, the court denied relief under Rule 60 based on newly discovered evidence.

The court also ruled that considering the documents would not change the outcome. The court was already aware of the vertical relationship involving Google’s payments for default-search status on Apple devices. The documents did not provide the necessary factual support for an allegation that Apple intended to enter the search or search-advertising markets but abandoned that plan after forming an unlawful agreement with Google. The court further noted that CCS’s claims did not concern paid advertisements on Apple’s Siri and Spotlight services and that CCS was pursuing conspiracy claims rather than direct monopolization claims in this case.

The court therefore denied CCS’s motion to set aside the judgment.