In a partial victory for Barnes & Noble and Borders Group, Judge William Orrick of the U.S. District Court for the Northern District of California has denied the American Booksellers Association and its 27 bookstore co-plaintiffs the ability to claim monetary damages should they win their antitrust lawsuit against the two chains. The judge, however, also denied the chains' bid to dismiss the case. The trial is still set to begin April 9 and will be heard by Judge Orrick rather than by a jury.
B&N chairman Len Riggio and Borders Group president and CEO Greg Josefowicz echoed each other, saying, "We are pleased with the court's ruling, and we will continue to defend our position in this case."
The legal skirmishing began in March 1998, when the ABA, on behalf of 27 of its members, filed suit against the two chains, charging them with receiving secret discounts and other favorable terms from publishers that are not available to independent booksellers.
Although the court denied the ABA a monetary remedy, the association continues to seek an injunction to force a change in business relationships among the chains, independent booksellers and publishers. In a statement, the ABA wrote, "While we are disappointed... this suit was never about monetary damages. Rather, from the beginning, it has been a fight to ensure that all book retailers play by the same rules on a level playing field." Regarding the contended issue of special discounts for the chains, the judge's opinion noted, "Defendants do not dispute that they receive discounts that were not available to plaintiff." Whether these discounts were substantial enough to warrant a court order forcing the chains to alter their business practices will be the main focus of the trial. The ABA does have the option to appeal the denial of monetary remedy, although no decision had been made at press time.
The ABA never disclosed how much money it is seeking from the chains, but according to a Borders SEC filing last year, it appears the ABA was 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 $9.5 million in relation to claims under the California Unfair Trade Practices Act and the California Unfair Competition Law.
Despite Orrick's ruling, California state law still allows the eight California independents who are litigants to pursue monetary claims in the form of "disgorgement," which differs from "damages," in that it represents a payback of any "ill-gotten gains" from activity deemed illegal, rather than financial harm that may have been suffered.
