Unites States of America v. Apple, Inc. et al
OPPOSITION BRIEF Plaintiffs' Opposition to Defendants' Motion in Limine to Exclude Certain Anticipated Testimony Regarding the "Appropriateness" of Communications. Document filed by Unites States of America.(Fairchild, Stephen)
UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF NEW YORK
APPLE, INC., et al.,
UNITED STATES OF AMERICA,
Civil Action No. 12-cv-2826 (DLC)
THE STATE OF TEXAS;
THE STATE OF CONNECTICUT; et al.,
PENGUIN GROUP (USA) INC. et al.,
Civil Action No. 12-cv-03394 (DLC)
PLAINTIFFS’ OPPOSITION TO DEFENDANTS’ MOTION
IN LIMINE TO EXCLUDE CERTAIN ANTICIPATED TESTIMONY REGARDING
THE “APPROPRIATENESS” OF COMMUNICATIONS
Defendants’ conduct in this case, which includes Penguin communicating with its
competitors regarding e-book prices and future plans, and Apple acting as facilitator and gobetween in order to allow Publisher Defendants to raise consumer e-book prices industry-wide,
was inappropriate under any definition of the word. Indeed, several witnesses, including Apple’s
chief legal counsel responsible for drafting the Apple Agency Agreements and Apple’s manager
of the iBookstore, gave deposition testimony indicating they knew the conduct they (or their
employers) were engaging in was improper.1 In an effort to prevent the Court from considering
these admissions, however, Defendants2 seek a broad order excluding all “testimony regarding
whether certain conduct is ‘appropriate’ or ‘inappropriate.’” MIL at 1.
At trial, Plaintiffs intend to prove that Apple and Penguin engaged in a price-fixing
conspiracy aimed at raising e-book prices and ending retail e-book price competition. Plaintiffs
do not intend, and have never indicated that they intend, to try this case by proving that
Defendants’ conduct was “inappropriate.” But to suggest, as Defendants do, that there is no
For example, Robert McDonald, Apple’s manager of the U.S. iBookstore (and an individual that Apple
intends to have testify at trial), testified during his deposition that if a publisher asked “am I getting the
same offer as these other guys,” he “would not answer that question” because “[t]hat would reveal the
nature, the specifics of my conversation with this publisher to that publisher.” McDonald Dep. 137:23138:8. Nonetheless, Apple has admitted that it “told each publisher that it was offering the same basic
terms to every other publisher, and that it would open the iBookstore only if it could reach agreements
with several of the publishers.” Apple MOL at 31. Similarly, Apple’s Associate General Counsel and
drafter of the Apple Agency Agreements, Kevin Saul (whom Apple also intends to have testify at trial),
testified during his deposition that if a publisher had informed him that it was interested in an agency
model in order to fix Amazon’s pricing, that would have been something that he likely would have
viewed as improper and could have caused him not to proceed with the e-books deals. Saul Dep. 99:9100:25, 103:17-105:13. Although Mr. Saul’s own notes make clear that HarperCollins told Apple that it
was interested in an agency model in order “to fix Amazon pricing,” PX-0036, at APLEBOOK01601745, Apple went ahead and entered into agency agreements with HarperCollins and the other
Though the motion is authored by Penguin, Plaintiffs understand from the meet and confer process that
Apple has joined in the motion. Apple’s participation in the motion is also confirmed by the fact that the
motion seeks to preclude not just the Plaintiff States, but also the United States, from introducing the
evidence in question.
possible way that Defendants’ knowledge of their wrongdoing can be relevant to the factfinder,
strains credulity. Defendants’ knowledge of their wrongdoing, for example, sheds light on
whether they knowingly conspired to violate the antitrust laws. And, even though Plaintiffs
believe Defendants’ actions constitute per se violations of Section 1 of the Sherman Act, within
the context of a rule of reason analysis, “knowledge of intent may help the court to interpret facts
and to predict consequences.” Board of Trade of City of Chicago v. United States, 246 U.S. 231,
238 (1918). Furthermore, the willfulness of Defendants’ conduct is an important factor for the
Court to consider in fashioning the injunctive relief Plaintiffs seek and in determining penalties
for several state law claims.
To the extent Defendants believe Plaintiffs’ cross-examination questions call for
inadmissible lay opinion or seek testimony that is inadmissible on relevancy grounds,
Defendants can lodge objections at trial. To exclude—before trial—unspecified swaths of
evidence where the words “appropriate,” “inappropriate,” and their synonyms are used would not
promote efficiency and would unnecessarily cause confusion.
I. DEFENDANTS’ MOTION IS HOPELESSLY VAGUE AND PROVIDES NO
GUIDANCE AS TO THE SPECIFIC EVIDENCE THEY SEEK TO EXCLUDE
When a “motion in limine lacks the necessary specificity with respect to the evidence to
be excluded” the Court should “reserve judgment on the motion until trial when admission of
particular pieces of evidence is in an appropriate factual context.” Nat’l Union Fire Ins. Co. v.
L.E. Myers Co. Grp., 937 F. Supp. 276, 287 (S.D.N.Y. 1996); see also Wechsler v. Hunt Health
Sys., Ltd., No. 94 Civ. 8294(PKL), 2003 WL 21998980, at *3 (S.D.N.Y. Aug. 22, 2003); Baxter
Diagnostics, Inc. v. Novatek Med., Inc., No. 94 Civ. 5520(AJP), 1998 WL 665138, at *3
(S.D.N.Y. Sept. 25, 1998) (denying motions in limine to exclude “all ‘evidence of Baxter’s
financial condition’” and “evidence on its punitive damages claim” because they “lack[ed] ‘the
necessary specificity’” (citation omitted)). In National Union Fire Insurance, the court rejected
a party’s attempt pre-trial to exclude “the testimony of various witnesses interpreting the purpose
and/or meaning of certain policy provisions” because the party failed to specify “which evidence
should be excluded or which parties intend to offer such evidence.” 937 F. Supp. at 287.
Similarly, in Viada v. Osaka Health Spa, Inc., motions in limine seeking to preclude plaintiffs
from offering “writings and testimony” that defendants alleged were the product of material
stolen from a defendant were denied as vague because the motions did “not specify the writings
or potential testimony that the movants believe should be excluded from the trial.” No. 04 Civ.
2744 VMKNF, 2005 WL 3435111, at *1 (S.D.N.Y. Dec. 12, 2005). The Magistrate Judge in
Viada noted that defendants’ lack of specificity meant that “the Court is unable to determine . . .
whether the writings and testimony sought to be excluded from the trial would be inadmissible
under any of the provisions of the Federal Rules of Evidence.” Id. As the court in Wechsler
made clear, “[a] district court is well within its discretion to deny a motion in limine that fails to
identify the evidence with particularity or to present arguments with specificity.” 2003 WL
21998980, at *3 (quotation omitted).
Here, the vague nature of Defendants’ motion mandates its denial. Defendants do not
specify in any way the witnesses or testimony that they seek to exclude. Instead, Defendants
present limited examples of questions from depositions they found objectionable, and from that
seek a broad order with fuzzy parameters for purposes of trial. See Sperberg v. Goodyear Tire &
Rubber Co., 519 F.2d 708, 712 (6th Cir. 1975) (“Orders in limine which exclude broad
categories of evidence should rarely be employed.”). More troubling, despite fashioning the
motion as one seeking to “exclude testimony regarding whether certain conduct is ‘appropriate’
or ‘inappropriate,’” MIL at 1, the examples contained in Defendants’ Exhibit A show that
Defendants are seeking to exclude a broader and undefined set of testimony that uses other
words such as “improper,” “uncomfortable,” and “off limits.” MIL at Exhibit A. Thus, there is
no clear test for determining whether testimony would fit into the category Defendants seek to
exclude. As a result, rather than promoting any efficiency, granting Defendants’ motion in
limine risks turning certain questioning in the upcoming trial into a version of the board game,
Accordingly, and given that Plaintiffs have no intention of making the inappropriate
nature of Defendants’ conduct a major part of the upcoming trial, Plaintiffs respectfully submit
that the more prudent course of action is to deal with any objections relating to these issues on a
case-by-case basis at trial.4
II. THE EVIDENCE IN QUESTION MAY PROVE RELEVANT AND THUS IS NOT
AN APPROPRIATE SUBJECT FOR A MOTION IN LIMINE
Even assuming Defendants’ motion had precisely defined the contours of the evidence
they seek to exclude, a motion in limine under these circumstances would nonetheless be, to use
Defendants’ forbidden word, “inappropriate.”
“The purpose of a motion in limine is to allow the trial court to rule in advance of trial on
the admissibility and relevance of certain forecasted evidence.” United States v. Chan, 184 F.
Supp. 2d 337, 340 (S.D.N.Y. 2002) (citing Luce v. United States, 469 U.S. 38, 41 n.4 (1984)).
Taboo is a word-guessing board game published by Hasbro in which the goal is for a player to have
his/her partner(s) guess the word on his/her card without using the word itself or five additional words
listed on the card.
To the extent Defendants’ motion seeks to exclude the particular deposition excerpts referenced in
Defendants’ motion, Plaintiffs note that, pursuant to the Court’s instruction, all parties have provided the
Court with their objections to all submitted deposition excerpts. Thus, there simply is no need for such a
motion in limine.
“Evidence should be excluded on a motion in limine only when the evidence is clearly
inadmissible on all potential grounds.” Wechsler v. Hunt Health Sys., Ltd., 381 F. Supp. 2d 135,
140 (S.D.N.Y. 2003) (quoting Baxter Diagnostics, 1998 WL 665138, at *3). In considering a
motion in limine, courts may reserve judgment until trial, so that the motion is placed in the
appropriate factual context. See Nat’l Union Fire Ins. Co., 937 F. Supp. at 287 (citing
Hawthorne Partners v. AT&T Tech., Inc., 831 F. Supp. 1398, 1400 (N.D. Ill. 1993) (stating that a
motion in limine to exclude evidence should be granted only “when evidence is clearly
inadmissible on all potential grounds . . . [and] [u]nless evidence meets this high standard,
evidentiary rulings should be deferred until trial”)).
Defendants provide the Court with a false choice, arguing that the evidence they seek to
exclude is either (1) inadmissible lay opinion testimony or (2) inadmissible testimony based on
relevancy. Neither is true.
First, witnesses have not been asked to provide opinions of their conduct based on “social
acceptability” or expert legal opinion. MIL at 3-4. Indeed, Plaintiffs clarified throughout that
they were not seeking legal opinions when asking about the “appropriateness” of conduct.5
Rather, to the extent witnesses were asked questions that elicited opinions regarding their
conduct, the witnesses were instructed to testify based on what they perceived was appropriate in
light of their business experience and any training they had been provided. As such, Defendants’
reliance on United States v. Tomasetta, No. 10 Cr. 1205(PAC), 2012 WL 1080293, at *4
(S.D.N.Y. Mar. 30, 2012), where the court prohibited third-party analysts from testifying before
a jury about how the company “should have” followed laws, is misplaced. See MIL at 4. In
See, e.g., Moerer Dep., 50:17-19 (“I’m asking the witness in his experience as a businessman, would
that be an inappropriate conversation to have.”).
other words, the testimony in question here meets the personal knowledge requirement of Fed. R.
Evid. 602, and is permissible lay opinion testimony consistent with Fed. R. Evid. 701.
Second, the testimony at issue, which, inter alia, goes to show Defendants’ knowledge
and intent, is relevant for numerous purposes. For example, while not necessarily part of the per
se case against Apple and Penguin, Defendants’ intent is relevant when assessing liability under
the rule of reason. As the Supreme Court stated in Chicago Board of Trade:
The history of the restraint, the evil believed to exist, the reason for adopting the
particular remedy, the purpose or end sought to be attained, are all relevant facts.
This is not because a good intention will save an otherwise objectionable
regulation or the reverse; but because knowledge of intent may help the court to
interpret facts and to predict consequences.
246 U.S. at 238.
Similarly, with respect to many of the asserted state law claims, the subjective good faith
of Defendants is a factor in determining whether a penalty should be assessed. For example,
Connecticut alleges that the defendants’ actions, in addition to violating the Connecticut
Antitrust Act, also violate the Connecticut Unfair Trade Practices Act, Conn. Gen. Stat. § 42110a et seq., which provides civil penalties for “willful” violations, defined as those where the
defendant “knew or should have known that his conduct was a violation.” See Conn. Gen. Stat.
§ 42-110o(b). Virginia law also allows that a civil penalty be assessed for each “willful or
flagrant” violation of the Virginia Antitrust Act. Va. Code Ann. § 59.1-9.11.6
Whether Defendants’ officers believed they were acting appropriately or not also is
relevant to the Court’s determination as to the size of a civil penalty to be assessed. Cf. United
States v. J. B. Williams Co., 498 F.2d 414, 438-39 (2d Cir. 1974) (finding, in the context of
assessing civil penalties under 15 U.S.C. § 45(l) for violation of a “cease and desist” order under
See also Illinois Antitrust Act, 740 Ill. Comp. Stat. 10/3 (Defendants acted “for the purpose or with the
effect of fixing, controlling, or maintaining the price . . . .”).
15 U.S.C. § 45(b), that “the size of the penalty should be based on a number of factors including
the good or bad faith of the defendants, the injury to the public, and the defendants’ ability to
pay” (citations omitted) (emphasis added)). For example, assuming the Court finds that Apple
and Penguin violated Texas antitrust law, the Court is statutorily required to assess a civil penalty
against those companies. However, the Court is allowed to award a civil penalty in any amount
up to $1 million. Tex. Bus. & Com. Code Ann. § 15.20(a). Whether Apple or Penguin
witnesses believed their actions to be “inappropriate” is one factor relevant to the Court’s
determination as to where in this broad spectrum the civil penalty should be placed.
For the foregoing reasons, Plaintiffs respectfully request that Defendants’ motion in
limine be denied.
Dated: May 3, 2013
Mark W. Ryan
Lawrence E. Buterman
Laura B. Collins
Adam C. Speegle
United States Department of Justice
450 Fifth Street, NW, Suite 4000
Washington, DC 20530
On Behalf of the United States of America
Assistant Attorneys General
Office of the Attorney General of Texas
P.O. Box 12548
Austin, TX 78711
W. Joseph Nielsen
Gary M. Becker
Assistant Attorneys General
Office of the Attorney General of
55 Elm Street
Hartford, CT 06106
On Behalf of the Plaintiff States