"The Apple iPod iTunes Anti-Trust Litigation"

Filing 629

Brief re 627 Order on Motion for Summary Judgment, Order on Administrative Motion to File Under Seal, Order on Motion for Leave to File [Supplemental Brief In Support of Plaintiffs' Renewed Motion For Class Certification and Response to Court's May 19, 2011 Order] filed bySomtai Troy Charoensak, Mariana Rosen, Melanie Tucker. (Related document(s) 627 ) (Sweeney, Bonny) (Filed on 6/6/2011)

1 ROBBINS GELLER RUDMAN
& DOWD LLP
2 JOHN J. STOIA, JR. (141757)
BONNY E. SWEENEY (176174)
3 THOMAS R. MERRICK (177987)
ALEXANDRA S. BERNAY (211068)
4 CARMEN A. MEDICI (248417)
655 West Broadway, Suite 1900
5 San Diego, CA 92101
Telephone: [phone]
6 619/231-7423 (fax)
[e-mail]
7 [e-mail]
[e-mail]
8 [e-mail]
[e-mail]
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THE KATRIEL LAW FIRM
10 ROY A. KATRIEL (pro hac vice)
1101 30th Street, N.W., Suite 500
11 Washington, DC 20007
Telephone: [phone]
12 202/330-5593 (fax)
[e-mail]
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Co-Lead Counsel for Plaintiffs
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[Additional counsel appear on signature page.]
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UNITED STATES DISTRICT COURT
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NORTHERN DISTRICT OF CALIFORNIA
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SAN FRANCISCO DIVISION
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THE APPLE IPOD ITUNES ANTI-TRUST ) Lead Case No. C-05-00037-JW(HRL)
19 LITIGATION
)
) CLASS ACTION
20
)
) SUPPLEMENTAL BRIEF IN SUPPORT OF
This Document Relates To:
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) PLAINTIFFS’ RENEWED MOTION FOR
) CLASS CERTIFICATION AND RESPONSE
ALL ACTIONS.
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) TO COURT’S MAY 19, 2011 ORDER
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JUDGE:
DATE:
TIME:
CTRM:

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Chief Judge James Ware
June 27, 2011
9:00 a.m.
5 – 17th Floor

1 I.

INTRODUCTION

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In the Court’s May 19, 2011 Order, the Court requested further briefing regarding two issues

3 related to Plaintiffs’ class certification motion.1 The Court asked the parties to file simultaneous
4 supplemental briefs addressing “how the class should be defined and the length of the class period in
5 light of the Court’s ruling on Defendant’s Motion for Summary Judgment.” Id. at 15. The Court
6 made clear in its ruling that “[b]ecause . . . there is a genuine issue of fact as to whether Plaintiffs can
7 state a claim under the Sherman Act for iTunes 7.0, the Court’s earlier findings that Plaintiffs’
8 proposed class satisfies the requirements of Rule 23(a) and 23(b)(3) still stand.”2
9

In accordance with the Court’s May 19, 2011 and December 22, 2008 Orders, Plaintiffs

10 propose the following class definition:
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All persons or entities, including resellers, in the United States (excluding
federal, state and local governmental entities, Apple, its directors, officers and
members of their families) who purchased an iPod directly from Apple between
September 12, 2006 and March 31, 2009 (“Class Period”).

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A.

Class Definition

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As Plaintiffs explained in their Reply Memorandum in Support of Plaintiffs’ Renewed
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Motion for Class Certification (“Reply Mem.”), the class properly includes all direct purchasers of
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iPods, including resellers.3 Dkt. No. 566. As the Court has previously stated: “[T]he Court

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Dkt. No. 627 (Order Granting in Part and Denying in
21 Judgment; Denying as Premature Plaintiffs’ Motion for ClassPart Defendant’s Motion for Summary
Certification (“May 19, 2011 Order”)).

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Id. at 14 (citing Dkt. No. 196 (Order Granting Plaintiffs’ Motion for Class Certification as to
Count’s Two, Three, Four, Five, Six and Seven Only and Appointing Class Counsel Sua Sponte
23 Order Reconsidering Defendant’s Motion to Dismiss Count One and Requiring Further Briefing
24 (“December 22, 2008 Order”) at 4-13)).
3
Plaintiffs
that
can properly
25 represent all classbelieve they have demonstratedIf the the named class representatives a reseller can
members, including resellers.
Court finds, however, that only
represent the
26 Penney Co.,resellers in the proposed class, a reseller can intervene in the action. Wambheim v. J.C.
No. C-75-2486-WTS, 1977 U.S. Dist. LEXIS 13852 (N.D. Cal. Sept. 22,
1977) (granting motion to intervene to represent subclass of workers). Plaintiffs Melanie Tucker and
27 Mariana Rosen purchased iPods after September 12, 2006 and plainly have standing.
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1 considered Defendant’s contentions that resellers should be excluded from the class definition” and
2 “included resellers in the certified class.”4
3

As Plaintiffs detailed in their Reply Mem., resellers have always been included in the direct

4 purchaser class definition.5 Although Apple argued in opposition that Plaintiffs somehow waived
5 the right to include resellers in the class definition, Apple’s argument was unsupported and contrary
6 to the clear record in this case. Reply Mem. at 10. Plaintiffs’ expert, Professor Roger G. Noll,
7 addressed in detail both kinds of direct purchasers in his January 18, 2011 declaration.6 Plaintiffs
8 have also diligently sought discovery as to resellers throughout the litigation.7 Even Apple’s expert
9 acknowledged the class includes resellers.8 Moreover, because Plaintiffs allege damages based on
10 an overcharge theory, everyone, including resellers, who purchased an iPod from Apple was
11 damaged by Apple’s anticompetitive conduct.9 See Reply Mem. at 12.
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Dkt. No. 198 (Order Vacating Case Management Conference; Clarifying and Correcting
Class Certification Order; Setting Briefing Schedule (“January 15, 2009 Order”) at 2).

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See also Dkt. No. 532 (Plaintiffs’ Notice of Motion and Renewed Motion for Class
Certification and Appointment of Lead Class Counsel); Dkt. No. 534 (Declaration of Bonny E.
20 Sweeney in Support of Plaintiffs’ Notice of Motion and Renewed Motion for Class Certification and
21 Appointment of Lead Class Counsel).
6
See, e.g., Dkt. No. 535 (Declaration of Roger G. Noll (“Noll Decl.”) at 14-17) (discussing
22 data issues with regard to resellers); id. at 69-70 (addressing damages methodology for resellers).
23 7
Dkt. No. 568 (Declaration of Alexandra S. Bernay in Support of Reply Memorandum in

24 Support of Plaintiffs’ Renewed Motion for Class Certification (“Bernay Decl.”)), ¶¶8, 17-28.
8
of
25 CarmenDkt. No. 530 at 2-3 (Expert Report of Dr. Michelle M. Burtis); Dkt. No. 569 (Declarationfor
A. Medici in Support of Reply Memorandum in Support of Plaintiffs’ Renewed Motion
26 Class Certification (“Medici Decl.”), Ex. 1 at 46:18-25 (Burtis Depo.)).
9
See also Noll Decl.; Dkt. No. 567 (Reply Declaration of Roger G. Noll); Bernay
27 Decl.; Medici Decl.
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1

Apple’s other arguments regarding resellers were also not well taken. Reply Mem. at 11.

2 Apple wrongly argued that resellers were not “similarly situated” to retail purchasers because
3 resellers do not pay retail prices.10 However, Apple’s own internal documents show that the
4 wholesale price resellers pay is based on retail prices. Id. at 22 (resellers’ wholesale price is “set at
5 varying discounts from Apple’s retail price”). Therefore, if the retail price was impacted by Apple’s
6 monopoly maintenance scheme, the resellers also automatically paid more for their wholesale price.
7 See also Noll Reply Decl. at 27.
8

Apple’s claim that resellers could actually have benefited from higher retail prices has also

9 been thoroughly rebutted. Reply Mem. at 11. As Plaintiffs explained, under settled federal antitrust
10 law, a “pass-on” or “otherwise benefited” defense is barred. See Hanover Shoe, Inc. v. United Shoe
11 Mach. Corp., 392 U.S. 481, 489, 88 S. Ct. 2224 (1968) (disallowing “pass on” defense; “[a]s long as
12 the seller continues to charge the illegal price, he takes from the buyer more than the law allows”).
13 Apple’s other arguments regarding resellers related to typicality and supposed conflicts suffered
14 from similar flaws. See Reply Mem. at 12-14. Apple points to nothing that would cause the Court
15 to disturb its earlier ruling that resellers are naturally included in the class. January 15, 2009 Order
16 at 2.
In sum, nothing substantive has changed with regard to the class definition. The Court’s

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18 Order finding that a genuine issue of material fact exists as to Plaintiffs’ antitrust claims related to
19 iTunes 7.0 does not change the composition of the direct purchaser class.
20

B.

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As Apple’s internal documents reveal, iTunes 7.0 was released to the public on September

Class Period

22 12, 2006.11 This date, in line with the Court’s May 19, 2011 Order, properly serves as the starting
23 date for the Class Period. “The relevant time, often referred to as the ‘class period,’ is, for example,
24 the period during which members of the proposed class incurred the claimed injury.” Manual for
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Dkt. No. 529 at 21-23 (Apple’s Opposition to Renewed Motion for Class Certification).

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Dkt. No. 539 (Declaration
in
Plaintiffs’ Memorandum in
27 Opposition to Apple’s Motion for of Bonny E. SweeneyEx.Support oflisting release dates)).
Summary Judgment,
36 (chart
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1 Complex Litigation (Fourth) §21.222. Therefore, the Class Period for the proposed class should run
2 from the iTunes 7.0 release date, September 12, 2006 through March 31, 2009.
3 DATED: June 6, 2011

Respectfully submitted,

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ROBBINS GELLER RUDMAN
& DOWD LLP
JOHN J. STOIA, JR.
BONNY E. SWEENEY
THOMAS R. MERRICK
ALEXANDRA S. BERNAY
CARMEN A. MEDICI

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s/ Bonny E. Sweeney
BONNY E. SWEENEY

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655 West Broadway, Suite 1900
San Diego, CA 92101
Telephone: [phone]
619/231-7423 (fax)

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THE KATRIEL LAW FIRM
ROY A. KATRIEL
1101 30th Street, N.W., Suite 500
Washington, DC 20007
Telephone: [phone]
202/330-5593 (fax)

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Co-Lead Counsel for Plaintiffs
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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]
602/274-1199 (fax)

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BRAUN LAW GROUP, P.C.
MICHAEL D. BRAUN
10680 West Pico Blvd., Suite 280
Los Angeles, CA 90064
Telephone: [phone]
310/836-6010 (fax)

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MURRAY, FRANK & SAILER LLP
BRIAN P. MURRAY
JACQUELINE SAILER
275 Madison Avenue, Suite 801
New York, NY 10016
Telephone: [phone]
212/682-1892 (fax)

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GLANCY BINKOW & GOLDBERG LLP
MICHAEL GOLDBERG
1801 Avenue of the Stars, Suite 311
Los Angeles, CA 90067
Telephone: [phone]
310/201-9160 (fax)

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Additional Counsel for Plaintiffs

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CERTIFICATE OF SERVICE
I hereby certify that on June 6, 2011, I authorized the electronic filing of the foregoing with

3 the Clerk of the Court using the CM/ECF system which will send notification of such filing to the
4 e-mail addresses denoted on the attached Electronic Mail Notice List, and I hereby certify that I
5 caused to be mailed the foregoing document or paper via the United States Postal Service to the non6 CM/ECF participants 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 June 6, 2011.
9

s/ Bonny E. Sweeney
BONNY E. SWEENEY

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ROBBINS GELLER RUDMAN
& DOWD LLP
655 West Broadway, Suite 1900
San Diego, CA 92101-3301
Telephone: [phone]
619/231-7423 (fax)

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E-mail:

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