Faced with a class action brought by over 64,000 combined employees, Adobe, Apple, Google, Intel, Intuit, Lucasfilm and Pixar asked U.S. District Judge Lucy Koh to grant a summary judgment effectively throwing out the lawsuit. On Friday, Judge Koh denied that request, allowing California’s most high-profile wage-fixing suit to move forward.

Not only is a potentially costly verdict at stake for the Silicon Valley heavyweights. Their reputation — and the economy it helped create — also are on the line.

Election year politics, meanwhile, offer politicians an opportunity to cast the controversy in terms that could sharpen familiar debates or muddy long-established battle lines.

The road to trial has been a lengthy one. Four years ago, a U.S. Department of Justice investigation against Adobe, Apple, Google, Intel, Intuit and Pixar culminated in a settlement designed to ensure the six companies refrained from anticompetitive practices. In a press release announcing the settlement, a Deputy Assistant Attorney General laid out the Department of Justice rationale:

“The agreements challenged here restrained competition for affected employees without any procompetitive justification and distorted the competitive process. The proposed settlement resolves the department’s antitrust concerns with regard to these no solicitation agreements.”

Civil suit

But a civil suit followed in 2011, brought by five software engineers who claimed antitrust laws had been violated.

In January 2014, the 9th Circuit Court of Appeals allowed the suit to proceed as a class action, setting May 27 as the start date for legal proceedings. Koh’s rejection of the defendants’ request for summary judgment removes the last barrier to trial on that date.

As the big tech firms’ court date approaches, their out-sized economic role in California and the nation at large is coming under renewed scrutiny. Leaked court documents, including sensitive internal corporate emails, have hit the Internet.

Lurid details  include the late Steve Jobs, at the time Apple’s CEO, threatening Google with “war” over its recruitment practices. He also dispensed smiley-face messages when assured by Google CEO Eric Schmidt that the latter would fire an offending recruiter “within the hour.”

Collusion

For some, however, the bigger picture merits the greater anger. Rather than merely colluding to raise one another’s profits, critics say, Silicon Valley’s most powerful corporations worked together to suppress workers’ wages.

That line of attack against big tech creates unexpected space for a complicated twist on California’s typical political struggles. Ideological positions on Silicon Valley and its main players had become relatively settled: Apple was criticized for its overseas manufacturing practices, Google for its private bus system.

Silicon Valley “bros” were seen as privileged, self-entitled and hostile to broad-based social obligations. Facebook COO Sheryl Sandberg, meanwhile, became something of a latter-day feminist icon. Getting more girls interested in tech, and more women hired into top-level tech positions, acquired such importance that even the White House saw fit to weigh in.

The Silicon Valley suit has already begun to disrupt those patterns of judgment. One advocacy-based journalist laments “the political predicament that low-paid fast food workers share with well-paid hi-tech workers: the loss of power over their lives and their futures to the growing mass of concentrated power in Silicon Valley.”

GOP candidates

Surprisingly for some, anti-corporate political pressure typically associated with the political left continues to gain force on the right. In California, that spells trouble for GOP gubernatorial candidate Neel Kashkari, the architect of the Troubled Asset Relief Program who currently lags Tea Party favorite Assemblyman Tim Donnelly, R-Twin Peaks.

On the one hand, Donnelly isn’t running as an anti-corporate Republican. On the other, anticompetitive business practices are key to the charges Tea Party voters — like members of the progressive Occupy movement — routinely level against “crony capitalist” firms, especially big corporations.

In a potent sign of just how scrambled the politics of big technology has become, one founder of Occupy Wall Street, Justine Tunney, now actually works for Google.

With divides among California Democrats increasing, and Republicans looking for the kind of policy reboot that could swing disaffected voters, the legal fate of Google, Apple and their co-defendants could provide substantial grist for the election-year mill.

By Wayne Lusvardi

You read the headline right.  California Lt. Governor Gavin Newsom is threatening those who “threaten” to “boycott” any entity of government in California that wants to use eminent domain to seize “underwater” mortgages.  Huh?

Newsom is threatening to call in the U.S. Department of Justice against any banks, Wall Street investment firms, bond rating agencies or others who may consider “boycotting” any county or joint powers authority that wants to use eminent domain to acquire mortgages that exceed the market value of homes.

According to Reuters, Newsom sent a letter to U.S. Attorney General Eric Holder seeking the investigation and prosecution of any attempts by Wall Street investors or government agencies to “boycott” local California governments seeking to use eminent domain to seize mortgages.

The Lt. Governor’s website had a summary of the letter as follows:

09-10-2012 

Lt. Gov. Gavin Newsom Calls Upon Attorney General Eric Holder to Review Threats of Retaliatory Actions by Mortgage Industry.

September 10, 2012

Today Lt. Gov. Gavin Newsom called on Attorney General Eric Holder and members of the Antitrust Division of the Attorney General’s Office to review the actions of some members of the mortgage industry, as well as federal agencies, who have coercively urged local governments to reject consideration of any proposal that would exercise the powers constitutionally granted local governments to use eminent domain to help stem the mortgage crisis.

“Communities have been ravaged by the housing crisis and now members financial sector, who has had long enough to fix the problem, are threatening to redline communities in California that are looking for unique solutions that may save thousands of families their homes. I am asking the Attorney General to investigate and protect homeowners and their communities that simply want to find their way out of this mortgage crisis.”

The full letter can be viewed by clicking here.

On its face, this letter seems premature. No court has thus far even validated that seizing mortgages is a legitimate use of the “public purpose” provision of the eminent domain law.  Nor has a court upheld the use of eminent domain by local governments to “cherry pick” only performing loans out of a lender’s loan portfolio and leave those loans that are in arrears or in default to the lender.  Neither has there been any legal ruling on the legitimacy of homeowners “applying” for eminent domain, as recently proposed in San Bernardino County.

And it is totally unclear how any actions that banks, Wall Street investment firms or bond rating agencies take in reaction to any use of eminent domain to seize mortgages is an “antitrust” violation.

“The Washington, DC special interest groups needs to back off,” said Newsom. “We owe it to homeowners everywhere to see if the solutions being discussed in San Bernardino will work.”

Vocal opponents of the proposal include the Association of Mortgage Investors, a lobbying group in Washington, D.C., and the Inland Valley Association of Realtors.

California is now becoming a “bully” state.  Voters should take note before the November elections.