United States of America v. Apple, Inc.

Filing 16

FORM C, on behalf of Appellant Bob Kohn, FILED. Service date 10/16/2012 by CM/ECF.[746983] [12-4017]

UNITED STATES COURT OF APPEALS FOR THE SECOND CIRCUIT
CIVIL APPEAL PRE-ARGUMENT STATEMENT (FORM C)
ADDENDUM “A”
(1)

Description of the Nature of the Action
On April 11, 2012, the United States (the “Government”) brought a civil antitrust
action against defendants Apple, Inc., and several book publishers arising out of alleged
conduct that resulted in a change in the business model under which the defendant book
publishers sell their copyrighted e-books to e-retailers of e-books.
Previously, book publishers sold e-books to e-retailers on a “retail” basis,
charging a wholesale price and allowing each e-retailer to charge consumers whatever
retail price it determines for the re-sale of the e-books. After the change, book publishers
began selling e-books directly to consumers using an “agency” model. Under this model,
the e-retailers become agents of the book publishers, selling e-books at prices established
by the book publishers and retaining an agency commission with respect to each sale.
The Government has not contended, and the District Court has not ruled, that the agency
model constitutes a violation of Federal antitrust laws. The Complaint alleges that, in
connection with the change from the retail to the agency model, the book publishers had
an “opportunity” to discuss pricing models with each other at certain meetings and during
certain telephone calls. The Complaint also alleges that defendant Apple, Inc., who
initially recommended the agency model to the book publishers, engaged in conduct that
facilitated the book publisher’s change to the agency model. The Complaint alleges that
the Defendants’ conduct constituted a violation of Federal antitrust laws.
On the day the Government filed its Complaint, it had announced a proposed
Final Judgment, which set forth the settlement of the antitrust claims in the action with
respect to several defendants. Entry of the proposed Final Judgment was subject to a
determination by a District Court that such judgment is “in the public interest” pursuant
to 15 U.S.C. 16 (the “Tunney Act”), provisions with which the Government was required
to first comply, including a 60-day period during which it was obligated to solicit and
consider comments on the proposed Final Judgment submitted by members of the public.

The Government received 868 comments during such period, more than 90 percent of
which opposed entry of the Final Judgment.
(2)

The Result Below
On August 3, 2012, the Government filed a motion for entry of the proposed Final
Judgment. By Order dated September 5, 2012, the District Court held that the proposed
Final Judgment was in the public interest and entered the Final Judgment the next day.
On September 7, 2012, Appellant Bob Kohn—for whom the District Court had
previously granted leave to participate as amicus curiae (by Order dated August 28,
2012)—filed a motion for leave to intervene for the sole purpose of appealing of the entry
of Final Judgment.
By Order dated October 2, 2012, the District Court denied Mr. Kohn’s motion to
intervene. That same day, Kohn filed a Notice of Appeal to appeal such Order, seeking
reversal of such denial and, at the same time, appellate review of the District Court’s
entry of such Final Judgment.

(3)

Attachments
a.
b.

(4)

Copy of the Notice of Appeal (dated October 2, 2012)
Current Copy of the Lower Court Docket Sheet

Other Attachments: Copies of All Relevant Opinions/Orders Forming the Basis for
This Appeal
a.

Opinion & Order Denying Motion for Leave to Intervene (October 2, 2012)

b.

Opinion & Order Granting the United States’ Motion for Entry of Final
Judgment (September 5, 2012)

c.

Final Judgment (September 6, 2012)

d.

Opinion & Order Granting Motion to Participate as Amicus Curiae
(August 28, 2012)