"The Apple iPod iTunes Anti-Trust Litigation"

Filing 155

Brief re 154 Order Direct Purchaser Plaintiffs' Response to the Court's Order Regarding Consolidation filed byMelanie Tucker. (Related document(s) 154 ) (Sweeney, Bonny) (Filed on 5/2/2008)

"The Apple iPod iTunes Anti-Trust Litigation"

Doc. 155

1 COUGHLIN STOIA GELLER RUDMAN & ROBBINS LLP 2 BONNY E. SWEENEY (176174) 655 West Broadway, Suite 1900 3 San Diego, CA 92101 Telephone: [phone] (fax) [e-mail] 5 THE KATRIEL LAW FIRM 6 ROY A. KATRIEL (pro hac vice) 1101 30th Street, N.W., Suite 500 7 Washington, DC 20007 Telephone: [phone] (fax) [e-mail] 9 Co-Lead Counsel for Plaintiffs 10 [Additional counsel appear on signature page.] 11 UNITED STATES DISTRICT COURT 12 NORTHERN DISTRICT OF CALIFORNIA 13 SAN JOSE DIVISION 14 THE APPLE IPOD ITUNES ANTI-TRUST ) Lead Case No. C-05-00037-JW(RS) 15 LITIGATION ) ) CLASS ACTION 16 ) ) DIRECT PURCHASER PLAINTIFFS' This Document Relates To: 17 ) RESPONSE TO THE COURT'S ORDER ) REGARDING CONSOLIDATION ALL ACTIONS. 18 ) JUDGE: Hon. James Ware 19 DATE: May 12, 2008 TIME: 10:00 a.m. 20 CTRM: 8-4th Floor 21 22 23 24 25 26 27 28

Dockets.Justia.com

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Plaintiffs Melanie Tucker, Somtai Troy Charoensak, and Mariana Rosen (collectively,

2 "Direct Purchaser Plaintiffs"), as plaintiffs and proposed class representatives in The Apple iPod 3 iTunes Anti-Trust Litig., No. C-05-00037-JW (N. D. Cal.) ("Apple Anti-Trust"), hereby respectfully 4 respond to the Court's April 22, 2008, Order Directing All Parties to Submit Briefing re: 5 Consolidation of the Present Action with C 05-00037 ("Order"). Direct Purchaser Plaintiffs agree 6 that consolidation of Apple Anti-Trust with Somers v. Apple, Inc., No. C-07-06507-JW (N. D. Cal.) 7 ("Somers"), is proper for purposes of pretrial discovery and scheduling, but oppose consolidation for 8 purposes of pleading, class certification, summary judgment and (at least at this early stage) trial. 9 I. 10 Complete Consolidation Is Not Warranted Under Rule 42(a) Rule 42(a) authorizes consolidation of "actions . . . involv[ing] a common question of law or

11 fact." Fed. R. Civ. P. 42(a); see also Paxonet Commc'ns, Inc. v. Transwitch Corp., 303 F. Supp. 2d 12 1027, 1028 (N.D. Cal. 2003); Enterprise Bank v. Saettele, 21 F.3d 233, 235 (8th Cir. 1994). A 13 district court "has broad discretion under this rule to consolidate cases pending in the same district." 14 Investors Research Co v. U.S. District Court, 877 F.2d 777 (9th Cir. 1989). However, the court 15 "must examine `the special underlying facts' with `close attention' before ordering a consolidation." 16 In re Repetitive Stress Injury Litig., 11 F.3d 368, 373 (2d Cir. 1993) (citation omitted). This 17 involves weighing "the interest in judicial convenience against the potential for delay, confusion, and 18 prejudice caused by consolidation." Southwest Marine, Inc. v. Triple A Mach. Shop, Inc., 720 F. 19 Supp. 805, 807 (N.D. Cal. 1989). 20 Here, the two actions previously consolidated as Apple Anti-Trust were brought on behalf of

21 a class of direct purchasers: individuals and companies that purchased iPod portable digital music 22 players and iTunes online digital music directly from Apple. By contrast, Somers seeks to represent 23 a class of indirect purchasers, consumers who purchased iPod portable digital music players 24 downstream. While there is no question the related actions share some "common questions of law or 25 fact" as to Apple's alleged anticompetitive practices, there remain potential conflicts of law and fact 26 between the classes of direct and indirect purchaser plaintiffs such that complete consolidation 27 would cause delay, confusion and prejudice. 28 PLAINTIFFS' BRIEF IN RESPONSE TO COURT'S ORDER REGARDING CONSOLIDATION - C-05-00037-JW(RS) -1-

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For example, indirect purchasers uniquely face the "pass-on" defense. Illinois Brick Co. v.

2 Illinois, 431 U.S. 720, 730-31 (1977); see also Campos v. Ticketmaster Corp., 140 F.3d 1166, 1171 3 (8th Cir. 1998) (applying direct purchaser rule to monopoly claims by indirect purchasers). This 4 typically requires proof by indirect purchasers that supracompetitive prices paid by direct purchaser 5 plaintiffs were passed-on in whole or in part to indirect purchasers. See Sports Racing Servs. v. 6 Sport Car Club of Am., 131 F.3d 874, 890 (10th Cir. 1997) (noting conflict in recovery between 7 indirect and direct plaintiffs). Thus, the burdens and interests of indirect and direct purchasers 8 remain distinct, eliminating any possible benefit a consolidated complaint may provide to the parties 9 or the Court. 10 Accordingly, separate complaints for direct and indirect purchaser claims are the norm in

11 consolidated federal antirust actions. See, e.g., In re Static Random Access Memory (SRAM) 12 Antitrust Litig., MDL No. 1819, 2008 WL 426522, at *1 (N.D. Cal. Feb. 14, 2008) (separate 13 consolidated amended complaints filed for direct and indirect purchasers); In re Flash Memory 14 Antitrust Litig., No. C 07-0086 SBA, 2008 WL 62278, at *1 (N.D. Cal. Jan. 4, 2008) (same); In re 15 Graphics Processing Units Antitrust Litig., _____ F. Supp. 2d _____, No. C 06-7417 WHA, 2007 16 WL 3342602, at *2 (N.D. Cal. Nov. 7, 2007) (same); see also In re Hydrogen Peroxide Antitrust 17 Litig., MDL No. 1682, 2006 WL 999955 (E.D. Pa. Apr. 11, 2006) (all antitrust actions were 18 consolidated into multidistrict litigation, but then divided into two actions, one for direct purchasers 19 and one for indirect purchasers). 20 Additionally, as a practical matter, Direct Purchaser Plaintiffs previously defeated motions to

21 dismiss in Tucker v. Apple Computer, Inc., 493 F. Supp. 2d 1090 (N. D. Cal. 2006), and in Slattery v. 22 Apple Computer, Inc., No. C 05-00037 JW, 2005 WL 2204981 (N. D. Cal. Sept. 9, 2005).1 Direct 23 Purchaser Plaintiffs would be prejudiced if forced to face the motion to dismiss stage again through 24 the filing of an amended complaint consolidating direct and indirect purchaser claims. 25 26
1 Plaintiff Slattery withdrew his 27 Troy Charoensak and Mariana Rosen. claims and was replaced as a class representative by Somtai 28

PLAINTIFFS' BRIEF IN RESPONSE TO COURT'S ORDER REGARDING CONSOLIDATION - C-05-00037-JW(RS)

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For similar reasons, Direct Purchaser Plaintiffs also contend consolidation is improper at the

2 class certification stage. Issues of injury and damages for direct and indirect purchasers remain 3 unique and require separate briefing. Direct and indirect purchaser classes may also confront unique 4 defenses. 5 Furthermore, Direct Purchaser Plaintiffs do not want to further delay class certification.

6 Direct Purchaser Plaintiffs are set to file their class certification brief in May 2008, whereas the 7 Somers action has a current class certification date of November 3, 2008. There is no reason to 8 delay Direct Purchaser class certification. Nor is there any benefit to the Court in doing so; to the 9 contrary, it is more likely that class certification issues decided in Apple Anti-Trust would actually 10 aid the Court in deciding issues in the Somers action. 11 Similarly, while the issue may be premature at this stage, Direct Purchaser Plaintiffs at this "Although,

12 point also believe a consolidated trial would be improper and unwarranted.

13 consolidation may enhance judicial efficiency, `considerations of convenience and economy must 14 yield to a paramount concern for a fair and impartial trial.'" Repetitive Stress Injury Litig., 11 F.3d 15 at 373. Where major conflicts exist, the court should avoid consolidation of the actions. See Fed. R. 16 Civ. P. 42(b); see also Manual Complex Litigation (Fourth) §11.631 (2004) ("MCL 4th "). Indeed, 17 presentation of direct and indirect purchasers' injury and damages before one jury may create the 18 suggestion that Direct Purchaser Plaintiffs suffered no actual harm because they were able to pass-on 19 any illegal overcharge to indirect purchasers. See Illinois Brick, 431 U.S. at 735. 20 Still, to avoid prejudice the Court may consolidate only common issues for trial and sever

21 non-common issues, such as causation and damages, for separate resolution. MCL 4th §11.631. 22 Perhaps as the parties move closer to trial in the respective actions, some benefit from limited 23 consolidation on certain common issues may become apparent. But for now, in order to avoid 24 confusion with the jury and prejudice to both direct and indirect purchaser classes, the unique factual 25 and legal issues raised in the separate actions should not be consolidated for trial. 26 27 28 PLAINTIFFS' BRIEF IN RESPONSE TO COURT'S ORDER REGARDING CONSOLIDATION - C-05-00037-JW(RS) -3-

1 II. 2

Consolidation Is Warranted Under Rule 42(a) For Purposes of Scheduling and Pretrial Discovery On the other hand, Direct Purchaser Plaintiffs agree that consolidation is appropriate for

3 scheduling and pretrial discovery. Doing so would advance the ultimate purpose of consolidation 4 under Rule 42 ­ avoiding unnecessary duplication in discovery or procedure without prejudicing the 5 parties. In re Prudential Sec. Inc. Ltd. P'ships Litig., 158 F.R.D 562, 571 (S.D.N.Y. 1994) (purpose 6 of consolidation is to streamline and economize pretrial proceedings as to avoid duplication and 7 effort). As discussed above, the focus of both actions will be the common conduct of Apple giving 8 rise to the antitrust tying and monopoly claims. Much of the discovery already served in Apple Anti9 Trust would be equally applicable to the Somers action. Continued coordination of pretrial 10 discovery should save time and expense for all parties. 11 III. 12 Direct Purchaser Plaintiffs therefore respectfully request that any consolidation of Apple 13 Anti-Trust and Somers be limited at this time to pretrial discovery and scheduling. The Apple Anti14 Trust action should otherwise continue separately with respect to class certification, summary 15 judgment, and (for now) trial. 16 DATED: May 2, 2008 17 18 19 20 21 22 23 24 25 26 27 28 THE KATRIEL LAW FIRM ROY A. KATRIEL 1101 30th Street, N.W., Suite 500 Washington, DC 20007 Telephone: [phone] (fax) Co-Lead Counsel for Plaintiffs PLAINTIFFS' BRIEF IN RESPONSE TO COURT'S ORDER REGARDING CONSOLIDATION - C-05-00037-JW(RS) -4s/ BONNY E. SWEENEY BONNY E. SWEENEY 655 West Broadway, Suite 1900 San Diego, CA 92101 Telephone: [phone] (fax) COUGHLIN STOIA GELLER RUDMAN & ROBBINS LLP BONNY E. SWEENEY Respectfully submitted, Conclusion

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 PLAINTIFFS' BRIEF IN RESPONSE TO COURT'S ORDER REGARDING CONSOLIDATION - C-05-00037-JW(RS) -5S:\CasesSD\Apple Tying\BRF00051006.doc

BONNETT, FAIRBOURN, FRIEDMAN & BALINT, P.C. ANDREW S. FRIEDMAN FRANCIS J. BALINT, JR. ELAINE A. RYAN TODD D. CARPENTER 2901 N. Central Avenue, Suite 1000 Phoenix, AZ 85012 Telephone: [phone] (fax) BRAUN LAW GROUP, P.C. MICHAEL D. BRAUN 12304 Santa Monica Blvd., Suite 109 Los Angeles, CA 90025 Telephone: [phone] (fax) MURRAY, FRANK & SAILER LLP BRIAN P. MURRAY JACQUELINE SAILER 275 Madison Avenue, Suite 801 New York, NY 10016 Telephone: [phone] (fax) GLANCY BINKOW & GOLDBERG LLP MICHAEL GOLDBERG 1801 Avenue of the Stars, Suite 311 Los Angeles, CA 90067 Telephone: [phone] (fax) Additional Counsel for Plaintiffs

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CERTIFICATE OF SERVICE I hereby certify that on May 2, 2008, I electronically filed the foregoing with the Clerk of the

3 Court using the CM/ECF system which will send notification of such filing to the e-mail addresses 4 denoted on the attached Electronic Mail Notice List, and I hereby certify that I have mailed the 5 foregoing document or paper via the United States Postal Service to the non-CM/ECF participants 6 indicated on the attached Manual Notice List. 7 I certify under penalty of perjury under the laws of the United States of America that the

8 foregoing is true and correct. Executed on May 2, 2008. 9 10 11 12 13 14 E-mail:[e-mail] 15 16 17 18 19 20 21 22 23 24 25 26 27 28 COUGHLIN STOIA GELLER RUDMAN & ROBBINS LLP 655 West Broadway, Suite 1900 San Diego, CA 92101-3301 Telephone: [phone] (fax) s/ BONNY E. SWEENEY BONNY E. SWEENEY

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