Unites States of America v. Apple, Inc. et al

Filing 137

NOTICE OF APPEAL from 136 Memorandum & Opinion. Document filed by Bob Kohn. Form C and Form D are due within 14 days to the Court of Appeals, Second Circuit. (Attachments: # 1 Exhibit Order Denying Bob Kohn's Motion to Intervene)(Brower, Steven)

Case 1:12-cv-02826-DLC Document 136

Filed 10/02/12 Page 1 of 10

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
----------------------------------------X
UNITED STATES OF AMERICA,
Plaintiff,
12 Civ. 2826 (DLC)
-v-

MEMORANDUM
OPINION & ORDER

APPLE, INC., et al.,
Defendants.

----------------------------------------x
Appearances:
For plaintiff the United States:
Mark W. Ryan
Lawrence E. Buterman
Stephen T. Fairchild
United States Department of Justice
Antitrust Division
450 Fifth Street, N.W., Suite 4000
Washington, DC 20530
For defendant HarperCollins Publishers L.L.C.:
Shepard Goldfein
Clifford H. Aronson
Paul M. Eckles
C. Scott Lent
Skadden, Arps, Slate, Meagher & Flom LLP
Four Times Square
New York, NY 10036-6522
For defendants Hachette Book Group, Inc. and Hachette Digital,
Inc. :
Walter B. Stuart
Samuel J. Rubin
Freshfields Bruckhaus Deringer US LLP
601 Lexington Avenue
New York, NY 10022

1

Case 1:12-cv-02826-DLC Document 136

Filed 10/02/12 Page 2 of 10

Richard S. Snyder
Freshfields Bruckhaus Deringer US LLP
701 Pennsylvania Avenue, Suite 600
Washington, D.C. 20004
For defendants Simon & Schuster, Inc. and Simon & Schuster
Digital Sales, Inc.
James W. Quinn
Yehudah L. Buchweitz
Weill Gotshal, & Manges LLP
767 Fifth Avenue
New York, NY 10153-0119
Helene D. Jaffe
Proskauer Rose LLP
Eleven Times Square
New York, NY 10036-8299
Martha E. Gifford
Law Office of Martha E. Gifford
137 Montague Street #220
Brooklyn, NY 11201
For amicus curiae Bob Kohn:
Bob Kohn
140 E. 28th St.
New York, NY 10016
Steven Brower
Buchalter Nemer
18400 Von Karman Ave., Suite 800
Irvine, CA 92612-0514

DENISE COTE, District Judge:
On September 7, 2012, Bob Kohn ("Kohn") moved to intervene
in this action for the sole purpose of filing an appeal. 1

Kohn

seeks to appeal from the final judgment of September 6 ("Final

Kohn was granted permission to submit an amicus brief in this
litigation by Order of August 28, 2012.

1

2

Case 1:12-cv-02826-DLC Document 136

Filed 10/02/12 Page 3 of 10

Judgmentll) as to plaintiff the United States of America ("the
Government ll ) and defendants Hachette Book Group, Inc.

("Hachette

ll

)

,

HarperCollins Publishers L.L.C.

and Simon & Schuster, Inc.

("HarperCollins ll )

("Simon & Schuster ll )

(collectively,

"Settling Defendants ll ), and the Opinion and Order of September 5
granting entry of the Final Judgment.

United States v. Apple,

Inc., No. 12 Civ. 2826 (DLC) , 2012 WL 3865135 (S.D.N.Y. Sept. 5,
2012).

The Final Judgment approved the settlement by three of

six defendants of antitrust claims brought by the Government
arising out of a pattern of agency agreements executed in
January 2010 for the sale of e-books.

For the following

reasons, the motion to intervene is denied.
Kohn describes himself as a "consumer of digital goods,
author of a treatise on copyright, and founder and CEO of
technology companies directly involved in the digital
distribution of music and e-books.1I

Kohn argues that he is "as

well-situated as any consumer ll to demonstrate that the Final
Judgment is not in the public interest.
The Government and Settling Defendants have each opposed
Kohn's motion to intervene.

The motion was fully submitted on

September 21.
Rule 24 of the Federal Rules of Civil Procedure provides in
relevant part that "[o]n timely motion, the court may permit
anyone to intervene who .

has a claim or defense that shares
3

Case 1:12-cv-02826-DLC Document 136

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with the main action a common question of law or fact."
Ci v. P. 24 (b) (1) (B)

.2

Fed. R.

The words \" claim or defense r manifestly

refer to the kinds of claims or defenses that can be raised in
courts of law as part of an actual or impending lawsuit."
Diamond v. Charlesr 476 U.S. 54

76 (1986)

r

(OrConnor r J.

r

concurring) .
A district court has broad discretion in deciding whether
to grant permissive intervention.

See Restor-A-Dent Dental Lab.

v. Certified Alloy Prod. r 725 F.2d 871 r 876-77

(2d Cir. 1984)

In exercising its discretion r a district court must consider
whether granting the request "will unduly delay or prejudice the
adjudication of the original parties r rights."
24(b) (3).

Fed. R. Civ. P.

Additional relevant factors

include the nature and extent of the intervenors r
interests r the degree to which those interests are
adequately represented by other parties r and whether
parties seeking intervention will significantly contribute
to [the] full development of the underlying factual issues
in the suit and to the just and equitable adjudication of
the legal questions presented.
H.L. Hayden Co. of N'Y'r

Inc. v. Siemens Med. Sys.r Inc' r 797

F.2d 85 r 89 (2d Cir. 1986)

(citation omitted) .

Kohn fails to demonstrate that he should be permitted to
intervene.

Kohnrs expressed interest in the action is as a

"consumer of e-books and e-book systems" who fears that the

Kohn does not claim that he is entitled to intervention as a
matter of right pursuant to Rule 24(a)
2

4

Case 1:12-cv-02826-DLC Document 136

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Final Judgment may result in consumers paying less "efficient"
prices for e-books or that it may stifle competition in what
Kohn terms the e-books systems market.

According to Kohn, he

and other consumers believe that even though they paid higher
prices for some e-books as a result of the defendants'
activities, they have nonetheless benefitted because they paid
"more efficient prices" and because the defendants' activities
increased competition in what he considers the relevant market.
As he puts it, higher prices are in this instance "good for
consumers."

Kohn represents that he is prepared to file an

answer to the complaint in order to raise defenses that the
defendants have not or may not interpose in this action.

He

acknowledges that he has not formally sought to represent a
class of consumers in this litigation, but argues that if he had
chosen to file the motion to intervene as a motion to certify a
class action on behalf of consumers, then he may very well have
satisfied the Rule 23 requirements.
As the description of Kohn's argument underscores, Kohn
does not suggest that his individual rights will be impaired in
any way if he is not permitted to intervene.
U.S. at 76-77.

See Diamond, 476

Kohn's legal theories are not "claims or

defenses" that share a common question of law or fact with the
claims and defenses of the parties, as envisioned by Rule 24(b)
One consolidated putative class action and two parens patriae
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Case 1:12-cv-02826-DLC Document 136

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actions have already been filed to represent the interests of
consumers in this antitrust litigation.

While Kohn wishes to

assist the defendants in this litigation and proffers arguments
in their defense, the lawyers representing the putative class
and the many States that have filed the parens patriae actions
have brought claims against the defendants.

Kohn has not argued

that he -- and the "millions" of other consumers on whose behalf
he contends he speaks -- should be treated as defendants.

Nor

does anyone suggest that consumers are in violation of the
antitrust laws.
The six defendants in this litigation are fully capable of
framing their own defenses.

There remain three defendants who

have not settled with the Government and who vigorously dispute
its theory of the case and its claims.

All three opposed entry

of the Final Judgment, including the Court's public interest
determination.

Apple, 2012 WL 3865135, at *8.

Kohn does not

explain why these parties, each of whom is represented by
sophisticated counsel, is not capable of making each of the
legal and factual arguments against the settlement that they
believe defendants should make.
Approval of this motion to intervene would also prejudice
the adjudication of the rights of the parties to the Final
Judgment.

See Fed. R. Civ. P. 24(b) (3).

The parties to that

judgment have settled, and they are entitled to litigation
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Case 1:12-cv-02826-DLC Document 136

peace.

Filed 10/02/12 Page 7 of 10

In addition, the Court of Appeals should not be burdened

by an appeal filed by a member of the public who does not
qualify as an intervenor under the federal rules.
Moreover, Kohn's analysis of the factual and legal issues
in this case has already been considered, and he may have a
further opportunity to present his views and to have them
considered anew, albeit not as an intervenor.

Kohn was a full

participant in the Tunney Act public comment process and was
granted permission to make an amicus curiae submission. 3
2012 WL 3865135, at *4.

Apple,

Through these two avenues, he was given

a full opportunity to express his personal views on the
Government's theory of the case and the state of competition in
the e-books market.

Courts, however, deny permissive

intervention for those who seek merely to advance their own view
as to what might be preferable for the public.

See Buckeye Coal

& Railway Co. v. Hocking Valley Railway Co., 269 U.S. 42, 49
(1925)

(the United States "must alone speak for the public

interest

ff

)

i

see also United States v. Associated Milk Producers,

Inc., 534 F.2d 113, 117-118 (8th Cir. 1976) i cf. Sam Fox Pub.
Co. v. United States, 366 U.S. 683, 689 (1961)

(denying

Kohn argues that his motion to intervene should be granted
since this Court allowed him to appear as amicus curiae. As is
customary, this Court granted every application it received to
be heard as a friend of the Court. A motion to intervene,
however, is governed by a federal rule of procedure and the
well-established principles set forth above.
3

7

Case 1:12-cv-02826-DLC Document 136

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intervention as of right absent a claim of "bad faith or
malfeasance on the part of the Government") .
Apple has represented that it will appeal the Final
Judgment.

Assuming it is determined that Apple has a right to

do so, Kohn will then have the opportunity to apply to the Court
of Appeals to appear as an amicus curiae in that forum.

4

If

granted that right, Kohn will be able to present those arguments
that he believes it is important for the appellate court to
consider, including any arguments that appellants do not choose
to make.
Kohn suggests that a motion to intervene in a Tunney Act
proceeding for the purposes of filing an appeal is governed by
different standards than other Rule 24 motions.

But, in all the

cases on which he relies, the courts grounded their decisions to
grant or deny intervention on the provisions of Rule 24.
J. Inc. v. Van Hollen, 578 F.3d 569, 571-73

(7th Cir. 2009) i

Massachusetts v. Microsoft Corp., 373 F.3d 1199, 1234
2004) i

Flying

(D.C. Cir.

Massachusetts School of Law at Andover, Inc. v. United

States, 118 F.3d 776, 779-80

(D.C. Cir. 1997) i United States v.

LTV Corp., 746 F.2d 51, 54-55 (D.C. Cir. 1984) i United States v.
American Tel. & Tel. Co., 642 F.2d 1285, 1291-93
1980)

(D.C. Cir.

("AT&T I") i United States v. American Tel. & Tel. Co., 552

Kohn does not suggest, nor could he, that he would have a
superior right to file an appeal from the Final Judgment than
Apple, who is a defendant in the action.
4

8

Case 1:12-cv-02826-DLC Document 136

F. Supp. 131, 218-20

Filed 10/02/12 Page 9 of 10

(D.D.C. 1982), aff'd, Maryland v. United

States, 460 U.S. 1001 (1983)

("AT&T II").

Moreover, the parties

who were granted leave to intervene for purposes of appeal in
these cases all shared identifiable legal claims with the main
action and were not simply members of the public who had
expressed a view during the Tunney Act proceedings. s
~,

578 F.3d at 572-73

See Flying

(association of competitor gasoline

dealers); Microsoft, 373 F.3d at 1234-35 (competitor
communications and software firms); AT&T I, 642 F.2d at 1291,
1293, 1295 (creator of database documents at issue in the
dispute) .

Kohn's reliance on AT&T II to support his contention that
"courts have routinely authorized post-judgment intervention for
purpose of appeal by individuals or organizations who submitted
comments to the Justice Department during Tunney Act
proceedings" is misguided. When considering the question of
what participation, if any, should be afforded to applicants for
intervention in "post-judgment proceedings," the D.C. District
Court suggested that it would apply the standard for
intervention as of right outlined in Rule 24(a), and that
"interested persons.
. will be allowed to intervene for the
purpose of appealing the entry of the decree."
Id. at 219 n.365
(emphasis supplied) .
S

9

Case 1:12-cv-02826-DLC Document 136

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CONCLUSION
Bob Kohn's September 7, 2012 motion to intervene is denied.

SO ORDERED:
Dated:

New York, New York
October 2, 2012

United

10

Judge