Demartini v. Microsoft Corporation
- Jacquelyn Corley
- 3:22-cv-08991
- U.S. District Court · Northern District of California
- 7
In Demartini v. Microsoft, Judge Corley denied plaintiffs’ requested injunction because a related appeal had removed the court’s jurisdiction.
The ruling affected the recreational video game players who sought restrictions on Microsoft’s post-merger conduct and Microsoft Corporation. The court did not impose the requested restrictions and also denied Microsoft’s administrative motion to supplement the record as moot.
What happened
In Dante Demartini, et al. v. Microsoft Corporation, recreational video game players sought orders restricting Microsoft’s post-merger actions involving Activision Blizzard. The merger had closed, and plaintiffs’ appeal of an earlier denial of an injunction was still pending in the Ninth Circuit.
Plaintiffs argued that later events, including layoffs in Microsoft’s video game division, justified a new temporary restraining order and preliminary injunction. They asked the court to keep Activision as an independent subsidiary and restrict Microsoft from terminating employees, interfering with game development, or taking other actions that could harm Activision’s ability to compete independently.
Judge Jacqueline Scott Corley ruled that the pending appeal removed the district court’s jurisdiction to impose the requested restrictions because they would change, rather than preserve, the case’s status while the appeal was pending. The court denied plaintiffs’ motion and denied Microsoft’s administrative motion to supplement the record as moot.
The detailed version
- Demartini v. Microsoft Corporation · No. 3:22-cv-08991
- Jacquelyn Corley
- Apr. 8, 2024
Background
Plaintiffs, recreational video game players, brought an antitrust action seeking to stop Microsoft’s proposed acquisition of Activision Blizzard, Inc. The merger closed on October 13, 2023. Earlier in the case, the court dismissed plaintiffs’ original complaint with leave to amend, later dismissed their amended horizontal-merger claim, and held that their vertical-merger claim was sufficiently pleaded. The court also denied plaintiffs’ earlier motion for a preliminary injunction, concluding in part that plaintiffs had not shown a likelihood of irreparable injury.
Plaintiffs appealed the denial of that preliminary injunction to the Ninth Circuit. The appeal remained pending when plaintiffs filed the motion addressed in this order. The district court had previously denied plaintiffs’ request for a hold-separate order while the appeal was pending and later vacated the scheduled bench trial because of the pending appeal.
Current Motion
Plaintiffs sought a temporary restraining order and preliminary injunction requiring Microsoft to maintain Activision as an independent subsidiary. They asked the court to prohibit Microsoft from terminating additional Activision employees, interfering with the development of new games, or taking other actions that could further harm Activision’s ability to compete as an independent company. Plaintiffs argued that the factual basis for this motion differed from their earlier hold-separate request because the new motion relied on post-merger events, including layoffs in Microsoft’s gaming division.
Jurisdictional Analysis
The court explained that filing a notice of appeal generally transfers jurisdiction over the matters being appealed from the district court to the appellate court. A district court may act during an appeal to preserve the status quo, but that action may not materially alter the case’s status on appeal. This exception does not allow the district court to decide the merits again.
The court concluded that plaintiffs had not shown that this exception applied. The pending appeal challenged the denial of an injunction against the Microsoft-Activision merger, including the earlier finding that plaintiffs were not likely to suffer irreparable harm without an injunction. Granting the new request would require the court to reach the opposite conclusion on that issue. The requested restrictions also would impose significant limits on Microsoft’s conduct when no injunction was currently in place. The court therefore found that the requested relief would change, rather than preserve, the status quo.
Disposition
The court held that it was divested of jurisdiction to order a preliminary injunction while the earlier denial of a similar injunction remained on appeal. It DENIED plaintiffs’ motion for a temporary restraining order and preliminary injunction. It also DENIED Microsoft’s administrative motion to supplement the record as moot. The order disposed of Docket Nos. 350 and 379.
Read the full 7-page opinion on CourtListener, the free public archive maintained by the Free Law Project.