In a brief filed last week, attorneys for the class plaintiffs argued that Apple should be assessed damages between $231 million and $280 million for its role in an e-book price-fixing conspiracy. With trebling, the damage award can be tripled, potentially putting the final award range between $693 million and a high end award of around $840 million. If the plaintiff's number is granted, it would put the total damages in this e-book conspiracy at over $1 billion, as the five settling publishers have already paid $166 million.
The claim comes as the Summary Judgment phase of the class action case against Apple over e-book price-fixing kicked off—but with Apple’s liability already established after its federal antitrust trial last June, the current action will basically come down to expert witnesses seeking to establish a number to compensate for damages.
The $280 million damage figure, based on a model developed by Stanford economist Roger Noll, has been revised down from Noll’s initial estimate, which put total damages at nearly $308 million ($924 million with trebling). Apple, meanwhile, is seeking to bar Noll’s testimony entirely, arguing that his damages estimate “assumes away important individual variances” and “results in a finding of harm where none exists.”
In Noll’s original report, he found that the average added margin due to “the effect of collusion” was about 19.9%. That was revised down to around 18.1%.
Apple is appealing Judge Cote’s July 10 decision in the case, and has sought to block certification of the class, asserting that recent Supreme Court decisions, including a landmark ruling in Wal-Mart Stores, Inc. v. Dukes et al., precludes the kind of “trial-by-formula” pressed by the plaintiff states and the consumer class.
In his brief supporting Summary Judgment, class counsel Steve Berman argued that the DoJ’s June trial “conclusively establishes that Apple and its confederates ‘deliberate[ly] interfere[d] with market forces,’” which “eliminated price competition at the retail level” producing “an industry-wide shift” in e-book prices.
“Because the Court found that e-book consumers suffered antitrust impact, they are entitled to summary judgment on this issue,” Berman concluded.
As to what the damages number should be, Berman referenced the disputes over Apple’s expert witnesses as well Apple's objections to Noll’s estimate. He argued that Apple’s experts have failed to impeach Noll’s testimony, and thus his estimate should stand. In addition, he cited the findings of Apple’s own witnesses to establish a baseline. There is no “genuine dispute,” Berman stated, that the overcharges were, “at a minimum, 14.9% of e-book sales,” according to Apple’s own expert witnesses, and Noll’s 18.1% estimate.
“Class Plaintiffs respectfully request that the Court enter summary judgment and enter an order granting Class and State Plaintiffs $280,254,374 in damages,” Berman concluded. “Plaintiffs will request this amount to be trebled, after which the parties will proceed to a distribution phase to divide damages among the States and Class members as specified.”
Opposition briefs are next, due February 21, and must be 30 pages or less; Reply briefs must be filed no later than March 7, and are limited to 15 pages or less.Failing a finding for Summary Judgment, the schedule keeps the case on track for a May damages trial.
