Judges hearing two separate cases brought by Apple against (respectively) Judge Denise Cote's appointment of an unqualified personal friend as an antitrust monitor, and an appeal of the whole of Cote's ruling against the company in the Department of Justice e-book "price fixing" lawsuit appeared to find
sympathetic ears in the Second US Court of Appeals in New York on Tuesday. At least one judge said the court's monitor was grossly overpaid, while another panel appeared to agree with Apple's arguments with Judge Cote's ruling.
The panel of three judges listening to Apple's arguments over Michael Bromwich, the lawyer friend of Cote who has no previous antitrust experience (and thus requires a $1,100 per hour antitrust lawyer assistant to aid him) who was appointed to serve has a monitor to ensure that Apple did not engage in any further "antitrust" activities with regards to e-books, has been
repeatedly excoriated by both Apple and
independent observers on how he is doing the job.
Apple, of course, argues that as it wasn't guilty of actual antitrust activities in the first place, and had no previous background of offenses, did not require a monitor and has sought to have Bromwich ousted on that principle alone. Where legal analysts and Apple -- and at least one of the three Appeals Court judges --
appear to agree is that Bromwich has abused his position, overreached or attempted to break the law himself in the course of his duties, is overpaid for the position and is not acting within the limitations of the order set forth by Judge Cote.
Apple has already scored
minor victories against Bromwich and Cote, with the Appeals court ordering that the judge's original order be watered down considerably and altered to prohibit the original
proposed secret, off-the-record meetings with Cote late last year. The court also ordered a change from Bromwich's original $1,250 per hour fee (plus 15 percent "administrative fee"), though the current rate Apple is forced to pay him is presently unrevealed (but believe to still be more than $1,000 per hour).
In addition to the payment issue, Apple has repeatedly informed the court that Bromwich is attempting a "witch hunt" that involves "investigating" areas of the company that have nothing to do with its e-book business; demanding to speak to company executives who are not involved in the e-book business; demanding to interview executives and board members without their lawyers present, in direct violation of the law; meeting privately with the Department of Justice without Apple's lawyers present; and making other demands outside the scope of his function as an e-book antitrust monitor.
As the
Wall Street Journal wrote in a recent editorial, the problem "is that Mr. Bromwich has been stumbling all around Cupertino to conduct a roving, unfettered inquisition into Apple's business … He even probes units such as Siri voice recognition, the maps group and hardware engineering. None of this is relevant to antitrust."
One judge, Dennis Jacobs, expressed alarm at the evidence that Bromwich wanted to interview Apple officials without a lawyer present, telling the DOJ's counsel "I think you could see how that could generate substantial anxiety in the company." The DOJ attorney said in its defense that Bromwich had failed in the attempt, and had not met with any executives or board members without an attorney present. She did argue, however, that Bromwich was expected to report his findings to the DOJ without informing Apple.
The same judge also said that the public would be "flabbergasted" at the amount of money Judge Cote initially demanded Apple pay her friend for his services. For the first two weeks Bromwich was "on the job" -- which he began earlier than specified in Judge Cote's order -- he expected to be paid $138,432.40. Judge Jacobs ordered that updated records on Bromwich's current compensation be filed later this week. Sources have claimed that Bromwich has, over the course of 10 visits to the iPhone maker, cost the company some $2.65 million.
The separate panel hearing Apple's appeal of the Cote ruling entirely, which comprises two of the same judges from the Bromwich matter, had previously expressed strong sympathy with Apple's arguments regarding both the errors in law in Judge Cote's ruling and the entire conclusion she reached, which has been strenuously objected to by others
outside the case for
ignoring the limitations of antitrust law, and as an example of
"judicial overreach." It last heard arguments from Apple on its appeal in December, and a ruling is expected soon.
During the original trial, numerous experts and attorneys filed
amicus curei ("friend of the court") briefs to try and persuade Judge Cote that the entire DOJ case was wrong-headed from the start. Cote, who has a
history of pre-judging such trials and then reshaping the legal justifications to fit the foregone conclusion, even received one such defense in the form of a
five-page comic from RoyaltyShare and Emusic co-founder Bob Kohn.
Comic rebuttal to DOJ's case from Bob Kohn
Should Apple win a reversal of the original judgement -- or if the decision is handed back to Judge Cote for further review -- Apple could
get out of paying the $450 million settlement deal it struck with 33 state attorneys general and several consumer groups, which was
contingent on a guilty finding by the appeals court. The publishers involved in the case, who settled separately of Apple with the DOJ, have repeatedly denied that Apple was a "ringleader" of any conspiracy to raise e-book prices, and have testified in Apple's defense that the entire matter came as a reaction to Amazon's illegal "predatory pricing" of e-books at a loss, which inhibited competitors entering the field and attempted to build a monopoly.
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