At a July 24 teleconference, Judge Denise Cote expressed concerns with a proposed deal to settle damage claims in Apple’s e-book price-fixing case. But in a letter filed yesterday with the court, the parties indicated that they would not be modifying the agreement for which they are now seeking preliminary approval.
“The parties discussed the Court’s comments after the July 24 hearing,” wrote Steve Berman, attorney for the consumer class, “but did not reach agreement to include interest or modify the settlement agreement in other respects. The Class and Plaintiff States (“Plaintiffs”) believe that the settlement is fair, reasonable, and adequate without modification.” In separate letters, attorneys for the states, and Apple attorneys also agreed that the settlement was fair and reasonable, and pressed for preliminary approval.
At the July 24 teleconference, Judge Cote reportedly raised concerns that there was no accommodation for interest, even though it could be years before the case winds its way through the full appeal process. In addition, she expressed concern with the amount of damages that would be paid if Apple’s case was remanded over a minor issue. According to the settlement document, if Judge Denise Cote’s 2013 liability finding against Apple is upheld, Apple will refund a hefty $400 million to consumers. But if the decision is vacated and remanded to Cote for further proceedings, Apple will refund just $50 million.
Rejecting the proposed settlement at this stage would be a stunning turn of events. Preliminary approval is generally a relatively low bar to clear. As noted in a plaintiff brief, agreements that appear to be the result of “serious, informed, non-collusive negotiations” with “no obvious deficiencies” and that does not grant “preferential treatment” to class segments should be granted preliminary approval. The final approval process would obviously be more involved, although the parties have asked to delay that process until after the matter has been settled on appeal.
In a previous order, Judge Cote also suggested that there may be details to iron out regarding the parties’ request to delay notice to consumers, although it is highly unlikely that would turn out to be a fatal flaw.
