What We Learned from the Apple eBook Lawsuit
Maxwell is a member of The Motley Fool Blog Network -- entries represent the personal opinion of the blogger and are not formally edited.
The twelve DOJ Attorneys of Record for the United States in US v. Apple (NASDAQ: AAPL), requested that their case be assigned to Southern District of New York Judge Denise Cote because she already has before her a prior federal civil case brought by Hagens Berman, a relatively small Seattle based law firm. Hagens also has smaller offices in nine other cities, including San Francisco where the case was initially filed and New York to where it was transferred.
Another reason for the request may be that Judge Cote served eight years as a federal prosecutor, not so unusual for a federal judge. On the other side, she did spend another six at Kay Sholer, a venerable New York defense firm. Given what is said about her as a judge in The Robing Room, a site for commenting on judges, someone among the defendants ought to hire Kay Sholer to represent them, if just as added local counsel.
In addition to asserting that Judge Cote's appointment is the second worst mistake Bill Clinton ever made (presumably, his worst was that he "did not have sex… with that woman", The Robing Room Raters gave Cote a rating of 4 on a scale of 10. Even this coatless rating was more gracious than warranted because a government attorney gave her 10s across the board, and a non-litigant apiarist who misunderstood that her ruling favorable to the Honey Bees was solely on technical, procedural grounds and not on the civil rights of his Beloved Bees, both ratings motivated more by personal agendas than merit, no doubt.
Those who down rated her agreed that Judge Cote was very unpleasant, foul tempered, closed minded, sarcastic, discourteous, disrespectful, and inept. Others asserted that she was a legal contortionist reaching for outcomes favorable to her pet party, even to the extent of ignoring applicable black-letter law. Instead, they also asserted, she relied on unbriefed decisions from obscure jurisdictions with no connection or relevance to the matter at hand. Generally, she was accused of prejudging the cases before her, and masking her prejudices with bubbly demeanor, and refusing to listen to facts or argument that did not fit her preconceived notions. They claimed that she does not let the facts or the law get in the way of her personal prejudices, and very smartly grounds her rulings on discretionary issues that will be most difficult to appeal. Given all that, she is also accused of being a stickler for technicalities over merit, fairness, and logic. She is accused of being small-minded, her courtroom conjuring an inner circle of Hell. Most importantly to Apple and the other defendants, she was characterized as being blatantly enamored of governmental entities.
On the positive side for Apple and the Publishers, Judge Cote was reported also to be blatantly enamored of big-name firms. Each of the defendants is being represented by a powerhouse big name law firm—Apple by O'Melveny & Myers, Hachette Book Group, Inc. by Freshfields Bruckhaus Deringer, HarperCollins Publishers LLC by Skadden, Arps, Slate, Meagher & Flom, Verlagsgruppe Georg von Holtzbrinck GmbH & Holtzbrinck Publishers, LLC d/b/a Macmillan by Sidley Austin, The Penguin Group, A Division of Pearson PLC & Penguin Group (USA), by Akin Gump Strauss Hauer & Feld, and Simon & Schuster, by Proskauer Rose.
Better that they petition, however, to have Judge Cote removed for bias by a different judge, or her to recuse herself, denial of either a basis for mandamus to the appellate court, which is immediate, as waiting would constitute a waiver.
Apple and the Publishers can ill afford remaining before Judge Cote. However, they may not be able to shed her, merely delay her by these tactics.
Three defendants, CBS's Simon & Schuster, Lagardère SCA’s Hachette Book Group and News Corp’s HarperCollins have already made the mistake of settling with the Department of Justice. Meanwhile, Apple is going to the airways to protest its innocence, for most a mistake, but for Apple possibly not.
Apple spokesperson Natalie Kerris responded in the Court of Public Opinion to the Department of Justice complaint by denying that Apple conspired with the book publisher defendants to fix eBook prices to undermine dominance of that market by Amazon (NASDAQ: AMZN). She added that Apple's eBook store was introduced in 2010 to foster "innovation and competition, breaking Amazon’s monopolistic grip on the publishing industry.” Kerris added that Apple's entry into the eBook market has given readers books that are "more interactive and engaging." As for setting prices, she said it had always been Apple's policy to allow developers to set prices on the App Store and to let publishers set prices on the iBookstore.
After the removal of Judge Cote is resolved, Apple should file a motion to dismiss on the grounds that Natalie has asserted, but in the usual legal patois, of course, that O'Melveny & Myers know so well. So clearly, even from the Department of Justice and Hagens complaints, Apple was making the eBooks market more competitive rather than less. Amazon did and still does have a stranglehold on the eBook market. At some point eBooks may replace print books altogether. Every brick-and-mortar book store and every library may be turned into a store for purchasing Amazon's Kindle, or Barnes & Noble's (NYSE: BKS) Nook or Apple's iBook, or others to come, and downloading via wifi whatever books one wants to purchase, or rent, or check out.
There are still many of the current generation who prefer the smell and feel of paper. There may always be those. Just like print media, the eBook is ever improving. Until recently, the eBook could not provide cover art, but now it can. It also provides immediate dictionary and other reference aids, making the experience more convenient than a printed book. Travelers can take their entire library with them wherever they go without the bulk and strain of printed books. The innovators need rein to innovate. There is and there may always be a place for the printed page. Let the competition go where it will without interference in the Courts. Most especially, Judge Cote should not decide the bounds.
StockCroc1 has no positions in the stocks mentioned above. The Motley Fool has no positions in the stocks mentioned above. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. If you have questions about this post or the Fool’s blog network, click here for information.