updated 10:00 pm EDT, Tue April 15, 2014
Judge ignores Apple argument that states have suffered no harm
For observers in Apple's battle against the US Department of Justice over alleged e-book "price fixing," it will come as no shock whatsoever that Judge Denise Cote has ruled against the company on a connected legal matter -- but the fact that she actually cited a reasoning based in law this time may surprise some. The US District Court judge has refuted Apple's filing for a dismissal in the lawsuits brought by 33 states and territories based on the DOJ case ruling.
The attorneys general of the states in question are suing for additional damages based on Apple's conviction in the first DOJ lawsuit that it led a conspiracy among publishers to break Amazon's abusive monopoly on e-book prices by daring to enter the market using a publisher-friendly pricing model rather than predatory undercutting of e-book prices as Amazon was doing. Judge Cote had pre-announced prior to the trial beginning that Apple was likely to be guilty of the charges, and accordingly found so --despite contradictory testimony from Google and Amazon executives.
The trial for the states' case is scheduled to start on July 14, and Apple had complained to the court that the states had no standing to seek damages -- saying that the states themselves had not alleged that they suffered any injury. In fact, e-book prices have fallen overall since Apple and others entered the market by introducing competition, which meant that Amazon was forced to give up its "wholesale" model and predatory pricing actions anyway.
Judge Cote dismissed the complaint, saying that Apple had not challenged the states' standing in its pursuance of the lawsuit originally, or when it obtained an injunction in September following the ruling which called for the appointment of an external compliance monitor. In something of a tradition for the judge, she again failed to directly address Apple's actual contention, however. Although Apple is appealing Judge Cote's verdict with the Second Court of Appeals, the class-action lawsuits filed by the states and consumer groups can proceed based on the original case.
"Apple has cited no authority to support the distinction it is advocating here between the standing to seek an end to an antitrust violation and the standing to seek damages for that violation," she wrote in her decision. The states are seeking $280 million in damages, but a finding of willful price-fixing (which seems a foregone conclusion with Judge Cote in charge) could triple the damages to as high as $840 million.