updated 07:37 pm EST, Thu December 5, 2013
Judge agrees to no ex parte meetings, reiterates procedures
In response to complaints from Apple about the court-ordered monitor the company is saddled with as a result of its e-book case, Judge Denise Cote in an order filed on December 2 agreed to change one policy associated with the monitor, and reminded Apple of the procedure for objecting to specific actions or other problems with the monitor. Apple has charged that the monitor is unqualified, overpaid, extortionist, disruptive, exceeding his authority and that the judge had provided for off-the-record, secret meetings with him.
In the order, Judge Cote denied that any "ex parte" meetings have taken place thus far, and agreed not to hold any. As originally provided, the meetings would have been private, with no record or transcription of what was said, and unreported to Apple.
As Judge Cote can continue to make rulings regarding the enforcement of her orders from the original trial (the result of which is being appealed), and is also handling the still-active damages case related to the e-book trial brought by various state attorneys general and consumer groups, Apple objected that such meetings would improperly influence her -- particularly given that Apple would have no opportunity to respond or rebuff the monitor's claims.
The order clarifies that Apple should take complaints about the monitor up first with the Department of Justice. If the company cannot get an agreement to resolve the complaint from the DOJ, it can then consult with the appropriate state attorney general. If no resolution is arrived at, then and only then can Apple complain to Judge Cote.
The DOJ successfully sued Apple earlier this year, alleging that the company joined an existing "horizontal" price-fixing conspiracy among publishers against Amazon's abusive-monopoly behavior and price model. Apple argued (and will argue in its appeal) that it did not participate in any conspiracy, and that its proposed "agency" model for e-book pricing in fact levelled the playing field, allowing more publishers and more e-book sellers to enter the market.
In its objections, Apple pointed out that the court-appointed monitor, Michael Bromwich, required a second lawyer with actual experience in antitrust issues to assist him. Bromwich demanded an $1,100 per hour rate, as well as a 15 percent "administrative fee" to his consulting firm and $1,025 per hour for the antitrust lawyer assistant. Though the hourly rate is typical for top-flight lawyers, both the "administrative fee" and his need for an assistant is unusual.
Apple claimed that Bromwich went well outside his remit, demanding interviews with engineers and board members that had no connection to the e-book business, such as product designer Sir Jonathan Ive and former US Vice President Al Gore, on his own schedule and terms. Bromwich also demanded access to confidential Apple documents that had no direct bearing on the e-book business, and Apple subsequently also objected to a portion of Cote's November 21 order in which she gave herself the right to publicly file materials the monitor obtains from Apple "in the interests of justice."
The iPhone maker is clearly setting the stage for getting Bromwich replaced, as he appears to be fundamentally unqualified for the job of antitrust compliance monitor. Judge Cote has not revealed the reasons why she appointed him in the first place, and will likely have to justify the choice or allow a new monitor to be chosen when the ruling is reviewed on appeal. Apple has maintained that Bromwich is also overstepping his bounds, noting that according to Cote's ruling, Bromwich has no duties whatsoever until Apple revises its antitrust compliance policies and submits them for review -- which is scheduled to happen in mid-January.
Appointing a monitor in a case where the guilty party has no history of similar behavior is in itself unusual, and was seen by many as a vindictive move by the judge, who had pre-announced her likely findings before the trial even began. Apple is likely to ask the appeals court to stay the monitor entirely until the appeal is concluded. Apple's briefs in the appeal are due in February, and will likely challenge Judge Cote's decisions on every point of her rulings, as she has been thus far very hesitant to explain or justify specific judgements and actions.