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

Filing 420

LETTER addressed to Judge Denise L. Cote from Lawrence Buterman dated December 13, 2013 re: Apple's Proposed Order to Show Cause. Document filed by United States of America.(Buterman, Lawrence)

Lawrence E. Buterman
Direct Dial: [phone]
Fax: [phone]
e-mail: [e-mail]

Liberty Square Building
450 5th Street, NW
Suite 4000
Washington, DC 20530

December 13, 2013
The Honorable Denise L. Cote
United States District Judge, S.D.N.Y.
Daniel P. Moynihan U.S. Courthouse
500 Pearl Street
New York, NY 10007-1312
Re:

United States v. Apple, Inc., et al., No. 12-cv-2826 (DLC)
State of Texas v. Penguin Group (USA), Inc., No. 12-cv-3394 (DLC)

Dear Judge Cote:
Despite proclaiming to this Court its intention to be a “model citizen,” Apple recently has
engaged in a systematic and untoward campaign to publicly malign the External Compliance
Monitor and prevent him from carrying out his responsibilities. The United States and Plaintiff
States have reviewed Apple’s filings, and have spoken on multiple occasions with both Apple
and Mr. Bromwich concerning Apple’s objections. Based on our review, Mr. Bromwich’s
actions to date have been wholly within the scope of his authority under the Final Judgment, and
at all times appropriate and consistent with his impeccable reputation.
At the moment, there are no ripe disputes regarding the External Compliance Monitor for
the Court to consider. Apple’s concerns, as articulated in recent conversations, revolve chiefly
around the fact that the Monitor was seeking to conduct certain interviews during the first 90
days of his appointment, as well as the fees he is charging for his services. Consistent with the
Court’s direction in its December 2 Order, the United States and Plaintiff States spoke with
Apple on Monday, December 9 regarding its objections. During that conversation, Apple
refused to articulate how it wanted the External Compliance Monitor to proceed moving forward,
and what resolution it wanted on the fee dispute. Instead, Apple repeatedly stated that it had
broader “constitutional” and other concerns with the trial and the imposition of a monitor.
Nonetheless, Plaintiffs informed Apple that they planned to speak with Mr. Bromwich in an
attempt to reach a workable compromise. On December 10, Mr. Bromwich reached out to Apple
to address its concerns. In his email to Apple, Mr. Bromwich suggested that further interviews
could take place after the 90-day period elapsed and Apple’s new antitrust policies were in
effect. Mr. Bromwich also requested the opportunity to discuss with Apple and resolve the fee
dispute. Remarkably, Apple has not responded to Mr. Bromwich’s email (or even brought it to
the Court’s attention), but instead filed the instant proposed Order to Show Cause.

At the heart of Apple’s current filing lay its arguments that the Court should not have
imposed the External Compliance Monitor in the first place because it had no authority to do so.
Those arguments are wholly without merit. Moreover, if Apple intended to raise them at all,
Plaintiffs submit Apple should have done so prior to the entry of the Final Judgment. Apple did
not. Nor did Apple raise its current objections when it was negotiating the terms of the Final
Judgment, or arguing before the Court against the imposition of an External Compliance
Monitor. This Court should not give any weight to these arguments.
Apple’s counsel now seeks to resurrect its arguments (and avoid potential claims of
waiver) by casting them as constitutional challenges and proffering them to this Court within the
context of analyzing its likelihood of succeeding in having this Court’s injunction reversed on
appeal. (Apple first sought unsuccessfully to raise these untimely arguments in connection with
objecting to the Court’s ministerial November 20 Order.) In apparent violation of the Court’s
procedures, Apple filed its papers without meeting and conferring with Plaintiffs regarding its
intention to seek a stay.
As part of Apple’s attempt to avoid claims of waiver, Apple’s primary current argument
regarding “success on the merits” is that the Court lacked jurisdiction to modify the injunction
during Apple’s appeal. The problem with Apple’s argument is that the Court never did so. The
November 20 Order on which Apple bases its argument addressed the October 16 Order
appointing the External Compliance Monitor—not the September 5 Final Judgment. And the
reality is that the November 20 Order did not modify anything. Apple claims that paragraph 3 of
the Order, which allows the Monitor to communicate with a party or a party’s agent ex parte,
granted Mr. Bromwich the authority to deprive Apple of the right to counsel in interviews. As
Plaintiffs have informed Apple now on numerous occasions, neither Plaintiffs nor Mr. Bromwich
read paragraph 3 that way. Mr. Bromwich has never requested that Apple’s executives not have
counsel at interviews, and our understanding is that Mr. Bromwich has zero intention of ever
doing so. At this point, Apple’s misreading appears to be nothing more than strategic.
Plaintiffs respectfully submit that Apple has not presented a clear and specific showing of
good and sufficient reasons why it should be permitted to depart from the Court’s customary
procedures for motions. Accordingly, Apple’s proposed Order to Show Cause should be denied.
And, because Apple has not presented any legitimate arguments as to why its motion will be
successful on the merits, Plaintiffs submit Apple’s application for a stay can be denied summarily.
Nonetheless, should the Court be inclined to set a briefing schedule on Apple’s motion, Plaintiffs will
respond in full at the appropriate time.

Respectfully Submitted,
/s/ Lawrence E. Buterman
Lawrence E. Buterman

Copy: Apple’s Counsel

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