Judge Rules on Motions in ABA Suit Against Chains

Jim Milliot |

Dec 18, 2000

News
Judge Rules on Motions in ABA Suit Against Chains Jim Milliot -- 12/18/00 The legal skirmishing between the American Booksellers Association and Barnes & Noble and the Borders Group is beginning to heat up as the April 9 trial date in the association's antitrust lawsuit against the two chains draws closer. In a decision handed down December 1, Judge William Orrick of the U.S. District Court for the Northern District of California granted a motion filed by the chains that the ABA lacks standing in federal court to assert its state law claims for monetary relief on behalf of all its California members. However, the judge denied Borders and B&N's motion to sever the claims of the eight California bookstores named in the complaint and the ABA. In March 1998, on behalf of 27 of its members, the ABA filed suit against the two companies, charging them with receiving secret discounts and other favorable terms from publishers that are not available to independents (News, Mar. 23, 1998). By granting the chains' first motion, Judge Orrick found that if the ABA wants to sue B&N and Borders for monetary relief for all its California members (besides the eight stores named as plaintiffs), it must file those claims in a state court, not a federal court. David DeBruin of Jenner & Block, who is heading up the ABA's legal team, said he expects that the ABA will file state claims. In denying the chains' motion to conduct different trials for the eight California booksellers and the other plaintiffs, Judge Orrick ruled that such a maneuver would create "needless duplication of efforts." The judge said he was inclined to trifurcate the trial before a single jury. Judge Orrick suggested that one way to try the case without unduly burdening the jury with the claims of all 27 plaintiffs in a single trial was to try the claims of the eight California booksellers first; after reaching a verdict, the jury could immediately hear the claims of nine of the remaining booksellers. After reaching a decision on those claims, the jury could then hear the claims of the remaining plaintiffs. Judge Orrick also used the December 1 opinion to "encourage the parties to begin thinking about how to streamline the presentation of evidence at trial," implying that it will not be necessary for either side to call numerous witnesses to drive home the same point about a particular aspect of the case. A ruling is also expected soon in a motion filed by Borders to delay the start of the trial. The special master who is assisting Judge Orrick with the case has recommended that the motion be denied, and a final decision is anticipated before the end of the year. The ABA has never disclosed how much money it is seeking from the chains, but Borders's third-quarter SEC filing sheds some light on the subject. According to the document, the ABA is asking for damages of between $2.8 million and $3.3 million with respect to alleged violations of the Robinson-Patman Act, and between $5.5 million and $6.4 million with respect to claims under the California Unfair Trade Practices Act and the California Unfair Competition Law. The figures do not include interest and come before trebling the damages. Only the stores named in the suit would receive damages in the event the ABA wins, but an ABA victory would also bring injunctive relief that would help level the playing field between the chains and independent booksellers.

News

Judge Rules on Motions in ABA Suit Against Chains
Jim Milliot -- 12/18/00

The legal skirmishing between the American Booksellers Association and Barnes & Noble and the Borders Group is beginning to heat up as the April 9 trial date in the association's antitrust lawsuit against the two chains draws closer.

In a decision handed down December 1, Judge William Orrick of the U.S. District Court for the Northern District of California granted a motion filed by the chains that the ABA lacks standing in federal court to assert its state law claims for monetary relief on behalf of all its California members. However, the judge denied Borders and B&N's motion to sever the claims of the eight California bookstores named in the complaint and the ABA. In March 1998, on behalf of 27 of its members, the ABA filed suit against the two companies, charging them with receiving secret discounts and other favorable terms from publishers that are not available to independents (News, Mar. 23, 1998).

By granting the chains' first motion, Judge Orrick found that if the ABA wants to sue B&N and Borders for monetary relief for all its California members (besides the eight stores named as plaintiffs), it must file those claims in a state court, not a federal court. David DeBruin of Jenner & Block, who is heading up the ABA's legal team, said he expects that the ABA will file state claims.

In denying the chains' motion to conduct different trials for the eight California booksellers and the other plaintiffs, Judge Orrick ruled that such a maneuver would create "needless duplication of efforts." The judge said he was inclined to trifurcate the trial before a single jury. Judge Orrick suggested that one way to try the case without unduly burdening the jury with the claims of all 27 plaintiffs in a single trial was to try the claims of the eight California booksellers first; after reaching a verdict, the jury could immediately hear the claims of nine of the remaining booksellers. After reaching a decision on those claims, the jury could then hear the claims of the remaining plaintiffs.

Judge Orrick also used the December 1 opinion to "encourage the parties to begin thinking about how to streamline the presentation of evidence at trial," implying that it will not be necessary for either side to call numerous witnesses to drive home the same point about a particular aspect of the case.

A ruling is also expected soon in a motion filed by Borders to delay the start of the trial. The special master who is assisting Judge Orrick with the case has recommended that the motion be denied, and a final decision is anticipated before the end of the year.

The ABA has never disclosed how much money it is seeking from the chains, but Borders's third-quarter SEC filing sheds some light on the subject. According to the document, the ABA is asking for damages of between $2.8 million and $3.3 million with respect to alleged violations of the Robinson-Patman Act, and between $5.5 million and $6.4 million with respect to claims under the California Unfair Trade Practices Act and the California Unfair Competition Law. The figures do not include interest and come before trebling the damages. Only the stores named in the suit would receive damages in the event the ABA wins, but an ABA victory would also bring injunctive relief that would help level the playing field between the chains and independent booksellers.

A version of this article appeared in the 12/18/2000 issue of Publishers Weekly under the headline: