John Paczkowski

Recent Posts by John Paczkowski

Apple’s Chances on an E-Book Ruling Appeal Are Lousy, Say Legal Scholars

Apple seized the moment and brilliantly played its hand. Taking advantage of the Publisher Defendants’ fear of and frustration over Amazon’s pricing … [Apple] provided the Publisher Defendants with the vision, the format, the timetable, and the coordination that they needed to raise e-book prices. … The evidence is overwhelming that Apple knew of the unlawful aims of the conspiracy and joined that conspiracy with the specific intent to help it succeed.

U.S. District Judge Denise Cote

Apple has vowed to appeal a federal judge’s ruling Wednesday that it colluded with five publishers to raise the retail price of e-books and break Amazon’s choke hold on the nascent market. And the company thinks its chances are pretty good.

But legal scholars aren’t so sure. Those who’ve read U.S. District Judge Denise Cote’s decision say its extensive factual findings and careful application of law will make it difficult to fight.

“Apple will appeal once the damages trial is complete,” Stanford law school professor Mark Lemley told AllThingsD. “But I wouldn’t be very confident of their chances.”

According to Pam Samuelson, the Richard M. Sherman Distinguished Professor of Law and Information at the University of California, Berkeley, Apple’s task on appeal is a daunting one.

“Apple may have a tough time getting this ruling reversed because the judge made findings of fact about the antitrust violation that appellate courts typically defer to,” Samuelson told AllThingsD. “Most reversals happen as to interpretations of the law.”

Samuelson’s point: Apple argued that the facts show no conspiracy in restraint of trade. But Cote found that the company’s actions were a per se violation of antitrust law. In other words, they were inherently illegal, so there was no need to prove that they had any anticompetitive effect on the e-books market. And Cote’s opinion relies so heavily on facts that it leaves very little room for an appellate court reversal.

Philip Weiser, dean of the University of Colorado law school and a former DOJ official, agreed, saying Cote’s ruling won’t be easily overturned. “This is a decisive defeat for Apple’s theory of the case,” Weiser said. “It will have a significant hurdle on appeal given the judge’s careful findings.”

To effectively argue against Cote’s ruling, Apple has to somehow convince the U.S. Court of Appeals for the Second Circuit that Cote made a mistake of law in writing it up. And at this point, the chances of that seem slim indeed.

“As a general matter, per se rulings are uncommon, but nakedly anticompetitive agreements among competitors are still firmly in that category,” Weiser said. “Apple’s challenge is thus to find a way to distinguish the facts of this case from that category, and the judge firmly rejected its arguments on that score.”

Now, that doesn’t mean Cote’s ruling is utterly bulletproof or that Apple won’t come at it with every weapon in its arsenal. Indeed, some observers have suggested the company may push the case all the way to the Supreme Court. But again, legal scholars are dubious.

“The Supreme Court? It’s possible, but unlikely,” said Stanford’s Lemley. “The case seems heavily dependent on the facts, not on a new question of law.”

Apple did not respond to a request for comment.


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