In an exchange of letters, attorneys for Apple and the U.S. Department of Justice traded fire over an issue that will be central to Apple’s upcoming appeal hearing: whether Judge Denise Cote improperly weighed the evidence presented to her when she presided over the government's e-book price fixing case against Apple.
In a letter filed just before Thanksgiving, Apple attorneys cite a recent ruling in an appeal case before the Sixth Circuit, Hyland v. HomeServices of America. In finding against collusion in the Hyland case, Apple notes, the court held that the evidence was not “direct, unambiguous evidence of a conspiracy,” because evidence in such antitrust cases must be "explicit" and "require no inferences to establish the proposition or conclusion being asserted." Apple attorneys argue that ruling “directly supports Apple’s arguments for reversal,” because, "all of the evidence supposedly supporting a conspiracy involving Apple is circumstantial and ambiguous.”
In a brief reply, however, attorneys for the DoJ quickly shot down Apple’s argument. The Hyland case simply applied "a standard principle," DoJ attorneys write, but "Apple does not explain how a conclusion about the Hyland evidence sheds light on what inferences are proper from the evidence in [its] case, in which the district court found compelling direct and circumstantial evidence of Apple’s participation in the alleged conspiracy.”
A central argument in its appeal filing, Apple attorneys claim that Judge Denise Cote relied on too many inferences from too much circumstantial evidence, and improperly inferred a conspiracy from evidence that was all, at best, "highly ambiguous." But in her decision, Cote held that the evidence provided “every necessary component” of a conspiracy, finding that “with Apple’s active encouragement and assistance, the Publisher Defendants agreed to work together to eliminate retail price competition and raise e-book prices, and again with Apple’s knowing and active participation, brought their scheme to fruition.”
Apple’s appeal is set for December 15—and there is as much as $400 million in consumer refunds riding on the outcome. Under a settlement agreement approved by Judge Cote last month, Apple will pay $400 million to consumers if her liability finding survives the appeal process; it will pay $50 million if the liability question is vacated or remanded for further proceedings. If the liability finding is reversed on appeal, Apple will pay nothing.
