As expected, Judge Denise Cote granted preliminary approval to a deal that would settle money damages arising from Apple’s e-book price-fixing case. “The Court concludes that there is probable cause to find that the proposed Settlement Agreement is within the range of those that may be approved as fair and reasonable,” wrote Judge Denise Cote, in giving the deal a green light to proceed.
The order comes after the judge had expressed concern with some of the settlement details, including a request to delay notice to consumers, and questions about the amount of damages consumers might ultimately receive. Earlier this week, the parties informed the court that they would not be modifying their proposal, and urged approval. Preliminary approval is generally a low bar to clear, and a rejection would have been a stunning turn of events.
In terms of the class notice question, however, the judge ordered the parties to proceed immediately, and set a swift schedule for final approval that could have the deal fully approved by Thanksgiving. The judge ordered notice to be sent to consumers by September 15, with consumers who wish to opt out required to do so by October 31. Motions for final approval are then due by November 14, 2014. And a final fairness hearing is set for November 21, in New York. Notably, Cote approved the previous publisher settlements from the bench after their final fairness hearings.
Under terms of the settlement, Apple will pay $400 million to consumers if the liability finding survives the appeal process; $50 million if the liability question is remanded or vacated; and nothing if the finding is reversed. In dismissing her own concerns over the damages that Apple could pay if her decision is remanded, Cote noted that the plaintiffs believe that her liability finding will be upheld on appeal. In addition, Cote was persuaded by assurances from counsel that the agreement applies only to the liability finding—thus, if the decision is remanded for “administrative or non-substantive grounds that do not, or could not, affect the Liability Finding” the $400 million payout would still apply.
Apple's appeal is currently pending before the Second Circuit.
Still, despite the swift notice schedule, it could be many months before Apple pays. The settlement agreement affords both sides the ability to appeal the case all the way to the Supreme Court.
