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Apple Commences On Rocky Road In Appellate Challenge Of Antitrust Monitor

Posted  February 5, 2014

By Allison F. Sheedy

Apple is finding this week that its appellate challenge to a court-appointed antitrust monitor is going to be a tough sell in the U.S. Court of Appeals for the Second Circuit.

Apple is asking the Second Circuit to stay the monitorship while it appeals both Judge Denise Cote’s decision in United States v. Apple, Inc. that Apple conspired to raise e-book prices and her subsequent decision to impose an external monitor on Apple to ensure its antitrust compliance.  The Court has already granted Apple a temporary administrative stay of the monitor until a three-judge panel can rule on Apple’s motion for a full stay pending appeal.

At oral argument yesterday, the three-judge panel—comprised of Judges Guido Calabresi, Gerard Lynch, and Pierre Leval—was noticeably skeptical of the thriving company’s claims of irreparable financial harm stemming from the conduct of the monitor.

In particular, Judge Lynch seemed to comment on Apple’s possible hubris, opining that the company would not be in its current predicament if management had “spent some of their valuable time keeping the company from violating the antitrust laws.”

Judging by the judges’ comment, the appellate panel also seemed to be unmoved by several of Apple’s other arguments, including Apple’s claims that the trial court’s order violates the separation of powers between the judiciary and the executive.  However, the panel appeared sympathetic to the argument that Judge Cote should have been more precise in setting limits on the powers of the external monitor, lawyer Michael Bromwich.

It would not be surprising if the appellate court is skeptical of any suggestion that no meaningful remedy can be imposed.  At the same time, not only is the imposition of a monitor in a litigated antitrust case unprecedented, but the reports of the monitor’s conduct suggest, at least for purposes of appearances, that there should be clear directions and limits to his oversight.

It would be a prudent course for the appellate court, most likely through its directions to Judge Cote, to set forth the metes and bounds of the monitor’s mandate.  And it appears from the judges’ comments at oral argument that this is a course the court is considering, and may well steer.

Edited by Gary J. Malone

Tagged in: Antitrust Enforcement, Antitrust Litigation,