Case 3:19-cv-02546-CRB Document 163 Filed 11/13/20 Page 1 of 19

 
 
 
 
 
November 13, 2020

Hon. Charles R. Breyer

450 Golden Gate Avenue
San Francisco Courthouse, Courtroom 6
San Francisco, CA 94102

Re: In Re Free File Litig., No. 3:19-cv-02546-CRB

Judge Breyer:

Undersigned counsel represents tens of thousands of individual TurboTax

customers who are pursuing consumer fraud and antitrust claims against Intuit in
individual arbitration (the “Arbitration Claimants”). Counsel awoke this morning to see
that the parties to this action have filed a motion for preliminary approval of a class
settlement that would significantly affect the rights of the Arbitration Claimants. Most
significantly, the motion seeks an ex parte injunction against the Arbitration Claimants,
who are not currently parties to this action.

As this Court is likely aware, the parties’ motion implicates significant and
complex legal issues: Intuit has already taken an appeal in which it prevailed on its
arguments that the claims in this case must be resolved in arbitration, see Dohrmann v.
Intuit Inc., 823 Fed. Appx. 482 (9th Cir. Aug. 11, 2020); some of the Arbitration
Claimants filed a motion to compel arbitration with this Court in Jolly v. Intuit Inc., No.
3:20-cv-04728-CRB (N.D. Cal. Sept. 10, 2020); and this Court ruled that whether the
Arbitration Claimants could proceed in arbitration should be decided by the state court
in Intuit Inc. v. 9,933 Individuals, No. 20STCV22761 (L.A. Super Ct.). The state court in
9,933 Individuals ruled against Intuit, decisively rejecting the company’s arguments that
it could avoid arbitrating with the Arbitration Claimants. See Attachment A.

The parties’ motion should also be considered in light of several factual

developments that are not placed before the Court by the parties’ motion. For example,
Intuit has submitted a declaration in the state court action showing that the Arbitration
Claimants are not similarly situated in the value of their claims with other members of
the class. Intuit has also made statements in state court explaining that it would not
have entered into the proposed settlement here unless it included the Arbitration
Claimants (with the more valuable claims), even though the settlement imposes a one-
size-fits all resolution for these differently-situated plaintiffs. When Counsel for the
Arbitration Claimants sought to represent the distinct interests of their clients in the
mediation leading to the proposed settlement, the parties here excluded Counsel from
settlement discussions regarding their clients’ claims. And last month Arbitration
Claimants filed with the state court a motion for a preliminary injunction, seeking a
declaration of their rights to be excluded from a class-action settlement under Intuit’s
arbitration agreement. A tentative decision on Arbitration Claimants’ motion is expected

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on or before next Friday, November 20, when the parties will argue the motion before
the state court.

The Arbitration Claimants have a self-evident interest—and indeed, a Due

Process right—in having an opportunity to be heard before they are subjected to an
injunction. Hansberry v. Lee, 311 U.S. 32, 40–41 (1940). The legal issues implicated
by the proposed settlement are important, complex, and novel. And this Court should
have the opportunity to consider important facts that were not included in the settlement
approval motion.

For all of these reasons, the Arbitration Claimants respectfully request that they
be granted leave to file a brief responding to the motion for preliminary approval. Given
the importance and complexity of the issues as well as the upcoming holidays, counsel
requests that Arbitration Claimants be permitted to file a response brief 28 days after
the later of (a) the motion filed today or (b) any additional brief that Intuit may file in
support of the settlement. Counsel for the Arbitration Claimants emailed counsel for the
parties at 6:31am PT this morning to seek their agreement to this schedule but has not
yet received a response.

Sincerely,

Warren Postman

2
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