In the ongoing legal battle with Apple, one that has even been taken up by the U.S. Department of Justice, the first major motion of the proceedings was handed down today and ultimately denied. Apple filed a motion to dismiss that class-action suit brought by Seattle-based law firm Hagens Berman, but that motion was denied by Judge Denise Cote.
Apple’s motion was essentially filed on the grounds that the plaintiffs didn’t have evidence of their misconduct when they allegedly conspired with five of the Big Six publishers to set ebook prices artificially high. The lawsuit claims that this was done with the specific intent of forcing Amazon’s hand and causing the online retailer to raise the prices of its ebooks.
This ruling is in regard only to the civil suit filed on behalf of consumers. The DoJ has its own investigations and proceedings underway, as do several state governments. Three of the publishers named in the case have already signed deals with those states.
According to Judge Cote’s decision, Apple’s motion was denied under the Sherman Act; this ruling specifically addresses the alleged collusion that stemmed from Apple and the publishers working together to set the prices on ebooks. Due to the fact that parties involved in secret collaborations rarely put everything in writing, then inferences are allowed based on the actions and outcomes.
“We look forward to uncovering additional evidence in the discovery phase of this litigation,” said Berman in a press release about the motion today. “We litigated this case because we strongly believe that consumers were harmed by Apple and the publishers’ tactics and we will not settle without an effective plan to repay consumers for their losses.”
The purpose of the class-action suit is to recover some of the estimated $250 million that consumers overpaid following the supposed secret dealings between Apple and the publishers.
“Fortunately for the publishers, Apple was also terrified of Amazon’s pricing and the popularity of its Kindle device,” said Berman. “Rather than compete on merit, price and convenience, we intend to prove that the cabal simply tried to game the system.”
Judge Rules in Favor of E-book Consumers in Civil Price-fixing Case
Federal judge rejects Apple and publishers’ attempt to dismiss case
New York – Today a United States District Court judge flatly denied court petitions by several of the nation’s largest book publishers and Apple (NASDAQ: AAPL) to dismiss a nationwide class-action lawsuit that accuses the companies of conspiring to illegally fix the prices of e-books.
The 56-page ruling, issued by Judge Denise Cote of the United States District Court for the Southern District of New York, is the first substantive ruling in the litigation. It denies the companies’ motion to dismiss the case, allowing the civil litigation to move forward.
The case was originally filed on Aug. 9, 2011, and seeks to represent purchasers of e-books who the complaint says were forced to pay tens of millions of dollars more for their favorite titles because of a price-fixing scheme organized by the e-book publishers and Apple.
“We thought that Judge Cote’s ruling was spot on, especially when she noted that we’ve gone above and beyond in illustrating the legitimacy of our case,” said Steve Berman, lead counsel representing consumers in the nationwide class action and managing partner of Hagens Berman, a consumer-rights law firm. “We are eager to push forward with the case.”
In April, the U.S. Justice Department filed a lawsuit in U.S. District Court in New York making very similar allegations to the civil case and citing much of the same evidence. It describes Apple and the publishers actively conspiring to wrestle control of the e-book market from Amazon while artificially driving up prices for consumers.
Unlike the criminal actions filed by the DOJ and the states, Hagens Berman’s case was filed without discovery. “We look forward to uncovering additional evidence in the discovery phase of this litigation,” said Berman. “We litigated this case because we strongly believe that consumers were harmed by Apple and the publishers’ tactics and we will not settle without an effective plan to repay consumers for their losses.”
According to the class-action suit, the publishers believed that Amazon’s wildly popular Kindle e-reader device and the company’s discounted pricing for e-books would increase the adoption of e-books and permanently set consumer expectations for lower prices, even for other e-reader devices.
“Fortunately for the publishers, Apple was also terrified of Amazon’s pricing and the popularity of its Kindle device,” said Berman. “Rather than compete on merit, price and convenience, we intend to prove that the cabal simply tried to game the system.”
The case seeks to compensate e-book purchasers for losses incurred as a result of the alleged price-fixing scheme.
You can learn more about this case by visiting www.hbsslaw.com/ebooks. The ruling is available here.
About Hagens Berman
Seattle-based Hagens Berman Sobol Shapiro LLP represents consumers, whistleblowers, investors, workers and others in complex and class-action litigation. The firm has offices in ten cities and has been named to the National Law Journal’s Plaintiffs’ Hot List five times. Founded in 1993, HBSS continues to successfully fight for consumer rights in large, complex litigation against large corporations. More about the law firm and its successes can be found at www.hbsslaw.com. Visit the firm’s class-action law blog at www.classactionlawtoday.com.
Contact: Mark Firmani, Firmani + Associates Inc., 206.443.9357 or mark@firmani.com.
