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

Filing 426

DECLARATION of CYNTHIA E. RICHMAN in Support re: 425 Letter. Document filed by Apple, Inc.. (Attachments: # 1 Exhibit A, # 2 Exhibit B, # 3 Exhibit C, # 4 Exhibit D, # 5 Exhibit E, # 6 Exhibit F)(Boutrous, Theodore)

EXHIBIT C

Case 1:12-cv-02826-DLC Document 412-1

Filed 11/27/13 Page 1 of 15

Exhibit A

Theodore J. Boutrous Jr.
Direct: +1 213.229.7804
Fax: [phone]
[e-mail]

October 31, 2013
VIA E-MAIL
J. Robert Kramer, II, Esq.
United States Department of Justice
950 Pennsylvania Avenue, NW, Suite 3220
Washington, D.C. 20530
Gabriel R. Gervey, Esq.
Office of the Texas Attorney General
P.O. Box 12548
Austin, TX 78711
Re:

United States v. Apple Inc. et al., 12-cv-2826 (DLC);
State of Texas, et al. v. Penguin Group (USA) Inc., et al., 12-cv-3394 (DLC)

Dear Bob and Gabriel:
Pursuant to Section VI.H of the Final Judgment, we write to provide the United States
and Plaintiff States with notice of Apple’s objections to certain actions by the External
Compliance Monitor. As set forth in detail in Apple’s letter to the External Compliance
Monitor (attached hereto as Attachment 1), Apple objects to the timing and scope of requests
by the External Compliance Monitor to interview Apple’s entire Board of Directors, its
executive team, and additional senior executives. See Final Judgment at § VI.C (ordering the
monitor to “conduct a review . . . [of] Apple’s internal antitrust compliance policies and
procedures” and “Apple’s training program” “as they exist 90 days after his or her
appointment”) (emphasis added). Apple also objects to the financial terms of the External
Compliance Monitor’s engagement, which the Final Judgment requires be “reasonable and
customary” and approved by the Plaintiffs. Final Judgment at § VI.I. The External
Compliance Monitor has proposed fees that are well above typical hourly fees paid to law
firm partners, as well as an additional administrative fee, and has not indicated a willingness
to agree to Apple’s standard expense policy. See Email Exchange between Michael
Bromwich and Kyle Andeer, October 23-26, 2013 (attached hereto as Attachment 2). Apple
does not believe the proposed fee structure is reasonable and customary, whether for a
monitor or a lawyer.

October 31, 2013
Page 2

We are available to discuss these issues with you at your convenience.

Sincerely,
/s Theodore J. Boutrous, Jr.
Theodore J. Boutrous, Jr.

Attachments

cc:

John R. Read, Esq.
Lawrence J. Buterman, Esq.

Theodore J. Boutrous Jr.
Direct: +1 213.229.7804
Fax: [phone]
[e-mail]

October 31, 2013
VIA E-MAIL
Michael R. Bromwich
The Bromwich Group LLC
901 New York Avenue, NW 5th Floor
Washington, D.C. 20001
Re:

External Antitrust Compliance Monitoring

Dear Michael:
It was a pleasure meeting you last week, and Apple looks forward to working with
you to achieve our shared objective of developing a comprehensive and effective antitrust
training program consistent with Judge Cote’s Final Judgment. Apple is fully committed to
ensuring that its antitrust training program, and its policies and procedures related thereto,
are both robust and effective.
I am writing to follow up on three issues arising from our discussion last week and
your recent correspondence (letter of October 23, 20131 and e-mails on October 26 and 29,
2013). First, Apple believes that the timing and scope of your requests are inconsistent with
the letter and spirit of the Final Judgment. Judge Cote was very clear that the injunction
should be narrowly tailored to address the antitrust violation she found in this case and
sought to avoid unnecessarily burdening Apple or limiting its ability to innovate and do
business in this dynamic industry. See Hearing Transcript, United States v. Apple Inc., et al.,
No. 1:12-CV-2826, at 8-9 (Aug. 27, 2013) (“I want this injunction to rest as lightly as
possible on the way Apple runs its business.”) (hereinafter “Aug. 27, 2013 Hearing Tr.”).2
Notably in this regard, the Final Judgment provides that the External Compliance Monitor’s
review of Apple’s internal antitrust compliance policies and procedures and antitrust training
program is not to commence until “90 days after his or her appointment.” Final Judgment at
§ VI.C. Second, Apple also has concerns over the financial terms of your engagement,
which the Final Judgment requires be “reasonable and customary” and approved by the
1

As you are aware, Apple received a letter from you, in draft form, on October 23, 2013, which was not
finalized until October 26, 2013.
2

See also Aug. 27, 2013 Hearing Tr. at 27 (“I’m trying to think about, as I’ve indicated, where the real risks are
and to minimize the burdens on Apple.”)

October 31, 2013
Page 2

Department of Justice (“DOJ”). Third, we also need to ensure that the confidentiality of any
information Apple may share with you during the course of your activities as monitor is
appropriately protected.
Apple is hopeful that these issues can be resolved quickly so that we can move
forward together to achieve the objectives of the Final Judgment. Each of these issues is
discussed in more detail below.
1.

Timing and Scope of Monitor’s Responsibilities

As you mentioned at the outset of our introductory meeting, the Final Judgment
defines the scope of your responsibilities in a manner that is clear and straightforward. The
monitor’s primary responsibility is to “conduct a review . . . [of] Apple’s internal antitrust
compliance policies and procedures, as they exist 90 days after his or her appointment” and
to “also conduct a review to assess whether Apple’s training program, required by Section
V.C of this Final Judgment, as it exists 90 days after his or her appointment, is sufficiently
comprehensive and effective.” Final Judgment at § VI.C (emphasis added).
During the August 27 hearing Judge Cote explained, “I don’t think that the [Monitor]
should conduct a review or assessment of the current policies. I would expect that Apple
would revise its current policy substantially and procedures and create an effective training
program. That will require some time. So I think this should be revised to have the
[Monitor] doing an assessment in three months from appointment and beginning to engage
Apple in a discussion at that point.” Aug. 27, 2013 Hearing Tr. at 20-21(emphasis added).
Apple is in the process of revising and enhancing its compliance training programs to
ensure that they are robust, comprehensive, effective, and compliant with the terms of the
Final Judgment. In this regard, Apple will soon be bringing on board its new Antitrust
Compliance Officer, as directed by the Final Judgment, and adding new lawyers with
antitrust compliance expertise in the legal department. In light of the express language of the
Final Judgment, as well as Judge Cote’s elaboration at the August 27 hearing, the time period
for your review of Apple’s antitrust policies and procedures and training program does not
commence until January 14, 2013 (90 days from the date of appointment).
Accordingly, your request to begin interviewing Apple’s entire board and its
executive team, as well as additional senior executives on November 18 is premature, not
authorized by the Final Judgment, and would not only be disruptive to Apple’s business
operations but also directly contrary to Judge Cote’s intent. We fully understand and expect
that there will be a need to conduct interviews with certain personnel at some point once
Apple’s new training programs are up and running. And you have Apple’s assurance that it
will be a most willing partner in facilitating those meetings. Furthermore, there will be
ample opportunity over the course of your engagement to determine whether Apple’s new
training program is consistent with the Judge’s Order and is effective in its impact.

October 31, 2013
Page 3

However, it makes no sense, and would be extremely disruptive, to schedule those interviews
before Apple has completed its internal assessment and developed its new antitrust training
program.
2.

Financial Terms and Fiduciary Responsibilities

The Final Judgment requires the monitor to operate on “reasonable and customary
terms” that are “consistent with reasonable expense guidelines.” Final Judgment at § VI.I.
Apple has already raised concerns regarding your hourly fees, the administrative fee you
seek to impose in addition to those fees, the need for additional personnel, and finally,
adherence to a defined expense policy. Apple does not believe your proposed fee structure is
reasonable and customary, whether for a monitor or a lawyer, and respectfully objects to it.
Moreover, your dictate that we simply accept these fees and costs at face value without any
support or explanation is inconsistent with the company’s fiduciary responsibilities to its
shareholders, and to the customary practices of Apple and other companies in conducting
business or legal activities. And, while the Final Judgment requires DOJ and Plaintiff States
to approve your fee and expense structure (see Final Judgment at § VI.I), it appears from
your correspondence you have not secured such approval but instead have simply submitted
your proposed approach to DOJ and it has not acted upon it.
3.

Confidentiality

To protect the confidentiality of any information Apple may share with you during
the monitorship, we have attached a non-disclosure agreement for your signature that is
consistent with Apple’s standard confidentiality agreements and the Stipulated Protective
Order in this matter. Apple also reserves its right to assert attorney-client privilege and work
product protections as appropriate throughout this process. Finally, Apple again requests
that, consistent with its policies, you, the Bromwich Group, Goodwin Procter, and Fried
Frank refrain from using Apple’s name in any marketing materials or media communications
like the press release Goodwin Procter issued announcing your appointment and containing a
direct quote from you.
*****
Concurrent with this response, Apple has submitted to DOJ and Plaintiff States a
notice of its objections. Please direct any future communications on these issues to me. As
we work to resolve these issues, Apple will continue to focus its efforts on its internal
assessment and enhancement of its antitrust policies and procedures and the training program
mandated by the Final Judgment. As you know, Apple has retained seasoned antitrust
practitioners and former government officials at the law firm of Simpson Thacher to aid it in
this process. We appreciate an honest and open dialogue on these issues, and look forward to

October 31, 2013
Page 4

working with you to establish antitrust compliance policies and training programs that are
comprehensive and effective in satisfaction of the Final Judgment.

Very truly yours,
s/ Theodore J. Boutrous, Jr.
Theodore J. Boutrous, Jr.

Enclosure

CONFIDENTIALITY AGREEMENT
This Confidentiality Agreement (the “Agreement”) is entered into and is effective as
of ________ (the “Effective Date”) by and between Michael Bromwich, on behalf of the Bromwich
Group, and Bernard Nigro (hereinafter “ECM”) and Apple Inc. (“Apple” and, collectively, the
“Parties”) in connection with Section VI.I of the September 5, 2013 Final Judgment (the “Final
Judgment”) entered in United States of America v. Apple, Inc., No. 1:12-CV-2826 (S.D.N.Y. Sept.
5, 2013) (the “Action”), and consistent with the May 7, 2012 Stipulated Protective Order entered in
the Action (the “Protective Order”).
Whereas, the Final Judgment contemplates that the Parties will execute customary
confidentiality agreements in connection with ECM’s monitoring responsibilities pursuant to the
Final Judgment; and
Whereas, Apple contemplates that certain highly sensitive information and materials
may be disclosed in connection with ECM’s performance of his responsibilities pursuant to the
Final Judgment; and
Whereas, the Parties agree that such materials should be kept confidential subject to
the terms and conditions set forth below,
NOW, THEREFORE, the Parties do hereby agree and stipulate as follows:
1.
DEFINITION OF CONFIDENTIAL INFORMATION. ECM agrees that all
information disclosed by Apple to ECM in any manner in connection with ECM’s monitoring
responsibilities pursuant to the Final Judgment will be considered and referred to collectively in this
Agreement as “Confidential Information.” Confidential Information, however, does not include
information that: (a) is now or subsequently becomes generally available to the public through no
fault or breach on the part of ECM; (b) ECM can demonstrate to have had rightfully in his
possession prior to disclosure to ECM by Apple; (c) is independently developed by ECM without
the use of any Confidential Information; or (d) ECM rightfully obtains from a third-party who has
the right to transfer or disclose it to ECM without limitation.
2.
NONDISCLOSURE AND NONUSE OF CONFIDENTIAL INFORMATION. ECM
agrees to protect Apple’s Confidential Information, using at least the same degree of care that he
uses to protect his own confidential and proprietary information of similar importance, but no less
than a reasonable degree of care. ECM agrees to use Apple’s Confidential Information for the sole
purpose of performing his monitoring responsibilities in connection with the Final Judgment. ECM
will not disclose, publish, or disseminate Confidential Information to anyone, and will not use
Confidential Information in any manner, except as set forth in this Agreement.
3.
INADVERTENT DISCLOSURE BY APPLE OF PRIVILEGED OR PROTECTED
INFORMATION. If Apple inadvertently discloses to ECM material subject to the attorney-client
privilege, work-product protection, or any other applicable privilege or protection that ECM is not
authorized to receive pursuant to the Final Judgment, the applicable privilege and/or protection will
not be waived if Apple makes a request for return of such inadvertently produced material promptly
after learning of its inadvertent production. Upon such notice, ECM will promptly return or destroy
the materials subject to privilege and/or protection.

2
4.
INADVERTENT DISCLOSURE BY ECM OF CONFIDENTIAL INFORMATION.
In the event of disclosure by ECM of any Confidential Information to any person or persons not
authorized to receive such disclosure pursuant to this Agreement, ECM will promptly notify Apple
of the disclosure and provide to Apple all known relevant information concerning the nature and
circumstances of the disclosure. ECM will promptly thereafter take all reasonable measures to
retrieve the improperly disclosed material and to ensure that no further or greater unauthorized
disclosure and/or use thereof is made. Unauthorized or inadvertent disclosure will not change the
confidential status of any Confidential Information.
5.
AUTHORIZED DISCLOSURE OF CONFIDENTIAL INFORMATION BY ECM.
Information and materials designated as Confidential Information pursuant to this Agreement may
only be disclosed by ECM to the persons and in the manner set forth below:
(a)

To the extent necessary to discharge ECM’s monitoring responsibilities
pursuant to the Final Judgment, attorneys, employees, and associates of
ECM, including attorneys and employees of The Bromwich Group LLC, and
attorneys and employees of Fried, Frank, Harris, Schriver & Jacobson.

(b)

United States Department of Justice attorneys and employees, in connection
with their enforcement or monitoring of compliance with the Final Judgment;

(c)

Attorneys and employees of the Attorney General’s Office of any
Representative Plaintiff State (as defined in the Final Judgment), in
connection with their enforcement or monitoring of compliance with the
Final Judgment; and

(d)

The Court and all persons assisting the Court in the Action, in connection
with enforcement or monitoring of the Final Judgment, including law clerks,
court reporters, and stenographic or clerical personnel.

In addition, before any information designated as Confidential Information may be disclosed to any
person described in subparagraphs 5(a)-(c) above, he or she must first read this Agreement or must
have otherwise been instructed on his or her obligations pursuant to this Agreement, and must
execute the Agreement included as Appendix A hereto prior to receiving Confidential Information.
Each individual described in subparagraphs 5(a)-(c) above and to whom Confidential Information is
disclosed must not disclose that information to any other individual, except as set forth in this
Agreement.
Nothing in this Agreement prevents disclosure by ECM of Confidential Information to any current
employee of Apple, and nothing in this Agreement prevents the United States or any Representative
Plaintiff State (as defined in the Final Judgment), subject to taking appropriate steps to preserve the
confidentiality of such information, from using or disclosing Confidential Information as permitted
or required by the Final Judgment, for law enforcement purposes, or as may otherwise be required
by law or binding court order.

3
6.

NOTICE OF DISCLOSURE AND USE OF CONFIDENTIAL INFORMATION IN
COURT PROCEEDINGS. Before disclosure of Confidential Information is made to any person or
persons not authorized to receive the information pursuant to paragraph 5 above, ECM must give
Apple at least ten (10) calendar days’ advance notice in writing, including the name(s), address(es),
and employer(s) of the person(s) to whom the disclosure will be made and the reason for the
disclosure. If, within that ten-day period, Apple objects to the disclosure, ECM must make a
written request to the United States and Representative Plaintiff States (as defined in the Final
Judgment) within ten (10) calendar days’ receipt of Apple’s objection. In addition, in connection
with any disclosure or use of Confidential Information in any court proceeding, ECM must take
reasonable steps to maintain the confidentiality of those materials, including but not limited to filing
documents under seal and satisfying the other requirements of paragraph 20 of the Protective Order.
7.

PROCEDURES UPON COMPLETION OF ECM’S MONITORING
RESPONSIBILITIES. The obligations imposed by this Agreement survive the termination of ECM’s
monitoring responsibilities as set forth in the Final Judgment. Within ninety (90) days after
termination of ECM’s monitoring responsibilities in connection with the Final Judgment, ECM
must certify to Apple in writing that it has destroyed or returned to Apple all Confidential
Information and that it has endeavored in good faith to ensure that any Confidential Information
disclosed pursuant to paragraph 5 above has been destroyed or returned to Apple. However,
nothing in this paragraph prevents the United States or the Representative Plaintiff States (as
defined in the Final Judgment) from retaining or using Confidential Information, subject to taking
appropriate steps to preserve the confidentiality of such information, as permitted or required by the
Final Judgment, for law enforcement purposes, or as may otherwise be required by law or binding
court order.
8.
EQUITABLE RELIEF. ECM hereby acknowledges that unauthorized
disclosure or use of Confidential Information could cause irreparable harm and significant injury to
Apple that may be difficult to ascertain. Accordingly, ECM agrees that Apple will have the right to
seek and obtain immediate injunctive relief to enforce obligations under this Agreement in addition
to any other rights and remedies it may have.
9.
NO IMPLIED WAIVER. Apple’s failure or delay in exercising any of its
rights will not constitute a waiver of such rights unless expressly waived in writing.
10.
ENTIRE AGREEMENT AND GOVERNING LAW. This Agreement, in
conjunction with the terms set forth in the Final Judgment, constitutes the entire Agreement with
respect to the Confidential Information disclosed pursuant to this Agreement and supersedes all
prior or contemporaneous oral or written Agreements concerning such Confidential Information.
This Agreement may not be amended except by written Agreement signed by authorized
representatives of both Parties. This Agreement shall be governed by and construed in accordance
with the laws of the State of California, excluding that body of California law concerning conflicts
of law. The Parties further submit to and waive any objections to the exclusive jurisdiction of and
venue in the United States District Court for the Southern District of New York for any litigation
arising out of this Agreement.

4
Understood and agreed to by the parties:
MICHAEL BROMWICH:
By: _______________________________
Name: _____________________________
Title: ______________________________

BERNARD NIGRO:
By: _______________________________
Name: _____________________________
Title: ______________________________

On behalf of APPLE INC.:
By: _______________________________
Name: _____________________________
Title: ______________________________

Appendix A
I am employed as ______________ by __________________. I hereby certify that:
1.
I have read the Confidentiality Agreement between Michael Bromwich and
Apple Inc. (the “Agreement”) and understand its terms.
2.
I agree to be bound by the terms of the Agreement, including the terms
relating to disclosure of Confidential Information (as defined in the Agreement) in paragraph 5 and
the terms relating to the destruction or return of Confidential Information in paragraph 7 of the
Agreement.
3.
I agree to use the information provided to me in connection with the
Agreement only for the purpose of enforcement and monitoring of the Final Judgment (as defined in
the Agreement).
4.
I understand that my failure to abide by the terms of the Agreement will
subject me, without limitation, to liability for breach of the Agreement and this Appendix A.
5.
I submit to the jurisdiction of the United States District Court for the
Southern District of New York solely for the purpose of enforcing the terms of the Agreement and
this Appendix A and freely and knowingly waive any right I may otherwise have to object to the
jurisdiction of said court.
I make this certificate on this ______ day of _____ , ______.
By: _____________________________________
Name: ___________________________________
Title: ____________________________________

ATTACHMENT 2

Subject:

Monitoring Letter

On Oct 26, 2013, at 8:47 AM, Michael Bromwich <[e-mail]> wrote:

Dear Kyle,
Thanks very much for your response to my cover note and our draft letter. Unfortunately, I think you
may have misconceived its purpose. It was not to begin a negotiation about fees, rates, and expenses,
nor was it meant to provide you with an opportunity to provide us with guidelines that are applicable
to providers of legal services where Apple is the client -- but that are inapplicable to firms providing
independent monitoring services. It was to give you an opportunity to modify or revise the
confidentiality provision. In light of your response, it probably makes sense to execute any
enhancements to the confidentiality agreement separately. I have attached a signed copy of the
monitoring letter. The only change is the date.
Without responding to each item in your note, I wanted to clarify the following:
1. Administrative fees are completely standard for consulting firms. The Bromwich Group is not a
law firm and does not practice law. The normal range for the administrative/management fees for
consulting firms is between 10% and 25%. Therefore, the 15% is at the low end of the range.
2.

We will add additional personnel, whether from Fried Frank or elsewhere, only as necessary and appropriate. We will keep
you informed if we add personnel performing significant substantive responsibilities but not if we use a lawyer to do a discrete
research project or a legal assistant to provide support. We will do this as a courtesy and we do not intend to provide a
rationale. It will be because we need additional assistance.

3. On expenses, please advise whether your lawyers from Gibson Dunn working on this matter, your
Wilmer lawyers working on the Samsung matter in the ND of California, and other lawyers working
on high-end litigation and corporate matters follow these expense guidelines without exception. If
they do, we will seriously consider doing so. We are happy to receive from you a list of Apple's
preferred hotels.
4. We are serving as an independent compliance monitor pursuant to a Court order, not as counsel to
Apple subject to its direction and control. Accordingly, we will not be providing a budget. You are
incorrect in stating that this is standard practice in monitorships. We will do everything we
reasonably can to keep fees and expenses to a minimum. We plan to provide you each month with a
statement of the number of hours spent by each timekeeper on this matter but not to provide
descriptions of the amount of time spent on specific tasks. We will maintain such records and will
share them with the Department of Justice, the Plaintiff States, and the Court if requested to do so.
5. We will submit our invoices directly to you, or to someone you designate. We will be happy to
execute W-9s.
1

6. My consulting firm did not issue a press release. Goodwin Procter posted an item on its web site
without my advance knowledge or consent to clarify that the firm itself would not be involved in the
monitorship.
We very much look forward to your responses to the various substantive matters we discussed on
Tuesday and to your confirming the particulars of our initial visit to Cupertino the week of November
18.
Best regards.

MRB
On Fri, Oct 25, 2013 at 10:45 PM, Kyle Andeer <[e-mail]> wrote:
Dear Michael,
Thank you for sharing your draft letter It is very helpful in that it tees up a number of different issues that make
sense to address at the outset of our relationship. As you noted, the treatment of confidential information is one
of several issues that will require additional research and thought. Although the disclosure of such information
is highly unlikely given the narrow scope of the External Compliance Monitor's responsibilities, we agree that
this is an issue we should seek to address at the outset. It likely makes sense for us to execute one of our
"customary confidentiality agreements" as contemplated in the Final Judgment. Final Judgment at § VI.I, U.S.
v. Apple, Inc., No. 1:12-CV-2826 (S.D.N.Y. Sept. 5, 2013). We will provide a full response on these and other
issues in the next week, as well as a retention obligations agreement and confidentiality agreements to address
this point.
I do want to raise concerns with the compensation and expense terms outlined in your letter which are in tension
with the terms of the Final Judgment which require the External Monitor to operate on "reasonable and
customary terms" that are "consistent with reasonable expense guidelines.” Final Judgment at § VI.I, U.S. v.
Apple, Inc., No. 1:12-CV-2826 (S.D.N.Y. Sept. 5, 2013). From our perspective they do not reflect the
competitive realities of the marketplace. We expect that your firm – like all of Apple’s legal service providers –
will comply with Apple’s Outside Service Provider Policy (“OSP”) (attached) and its standard expense policy
(also attached).
1. Administrative Fee. You request that the Bromwich Group be paid a “management/ administrative fee” of
15% of all billable hours. As you will note in the attached policies, Apple does not pay any of its legal vendors
a "management/administrative fee."
2. Hourly Rates. You have requested that Apple pay you $1,100 per hour and Mr. Nigro $1,025 per
hour. These rates are very high, particularly when compared to the average rate Apple pays a law firm partner
($565 per hour). Even if one looks at the top 25%, the average rate per partner is $801 per hour. Apple is
prepared to compensate you at $800 per hour and Mr. Nigro at a rate of $700 per hour. With the foregoing
principles in mind, we also ask that you provide the hourly rate for Maria Cirincione.
3. Additional Personnel. Pursuant to Apple’s Outside Service Provider Policy, the Bromwich Group (and Fried
Frank) should notify Apple before adding new timekeepers to its team and provide a rational for the additional
resources. As you appreciate, this is a standard requirement that ensures costs do not spiral out of control.
2

4. Expense policy. Apple expects that you will adhere to its standard expense policy (attached) Apple will pay
for coach airfare, lodging at Apple preferred hotels, and per diems of $15 for breakfast, $25 for lunch and $30
for dinner. The policy also outlines our guidelines on telephone and copying charges. Apple will not reimburse
for data storage and information technology services. This is consistent with these policies is in keeping with
the “reasonable expense guidelines” language in Section VI.I of the Final Judgment.
5. Budget and Invoicing. The Bromwich Group should submit an expected budget for its services for the
coming year. As you know this is standard practice in any engagement, including in monitorships. In addition,
Apple expects that your invoices will describe time spent on tasks and a description of those tasks. Apple
reserves the right to challenge fees that are excessive, outside the scope your responsibilities, and/or unjustified
pursuant to Sections VI.I. and VI.J. of the Final Judgment.
6. Billing. Apple requires firms to submit invoices - within 30 days of service - via an electronic portal. We
can set up a meeting with our eBilling team as soon as you are ready. Apple will also require a signed W9 in
order to pay invoices for your firm.
7. Marketing. Apple does not allow the firms it works with to market their representation of Apple (see OSP at
6). We noted that your firm, Goodwin Proctor, your consulting practice, The Bromwich Group, and Mr. Nigro's
firm, Fried Frank all issued press releases announcing your appointments. We ask that you please refrain from
using Apple's name in any marketing materials or media communications.
The requests in your letter do not reflect market realities. That raises significant concerns on our part. We
sincerely hope that you will reflect on these points and that we can work out these issues without going to the
Department of Justice and the courts. Please let me know if you would like to discuss.
Best regards,
Kyle

On Oct 23, 2013, at 3:58 PM, Michael Bromwich <[e-mail]> wrote:

Dear Kyle,
I have attached a draft letter that sets forth our duties and responsibilities as the external antitrust
compliance monitor under the Final Judgment, and touches on other matters relevant to our
monitoring work, including information about fees, expenses, and confidentiality. This letter is
specifically tailored to the provision of monitoring services under the Final Judgment. Accordingly, it
is different in various ways from the engagement letter that would be appropriate if Apple were a
client of a law firm or my consulting firm.

3

Before I provided a signed version of the letter, I wanted to make sure it should be addressed to you
rather than someone else at Apple, and give you the opportunity to suggest any revisions to Section 10
of the letter dealing with confidentiality. I realize this may be a sensitive issue and I wanted to make
sure the language I have crafted is acceptable. I am willing to consider reasonable modifications.
Please confirm that you should be the recipient of this letter (or provide an alternative addressee) and
suggest any reasonable changes to the confidentiality language as promptly as you can.
Thanks very much.
MRB
<Apple Monitoring Letter -- 10-23.doc>

<Apple -- 10-26 Letter.pdf>
_______________________
Confidentiality Notice: The information contained in this e-mail and any attachments may be legally privileged and confidential. If you are not an intended recipient,
you are hereby notified that any dissemination, distribution or copying of this e-mail is strictly prohibited. If you have received this e-mail in error, please notify the
sender and permanently delete the e-mail and any attachments immediately. You should not retain, copy or use this e-mail or any attachment for any purpose, nor
disclose all or any part of the contents to any other person. Thank you.

4

Case 1:12-cv-02826-DLC Document 412-2

Filed 11/27/13 Page 1 of 7

Exhibit B

Case 1:12-cv-02826-DLC Document 411

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
-------------------------------------x
:
UNITED STATES OF AMERICA,
:
:
Plaintiff,
:
:
v.
:
:
APPLE INC.,
:
:
Defendant.
:
:
-------------------------------------x
-------------------------------------x
:
THE STATE OF TEXAS,
:
THE STATE OF CONNECTICUT, et al.,
:
:
Plaintiffs,
:
:
v.
:
:
PENGUIN GROUP (USA) INC., et al.,
:
:
Defendants.
:
:
-------------------------------------x

Filed 11/27/13 Page 1 of 31

12 Civ. 2826 (DLC)

12 Civ. 3394 (DLC)

DEFENDANT APPLE INC.’S OBJECTIONS
TO THE COURT’S ORDER FILED ON NOVEMBER 21, 2013

Case 1:12-cv-02826-DLC Document 411

Filed 11/27/13 Page 2 of 31

TABLE OF CONTENTS
Page
INTRODUCTION .......................................................................................................................... 1
OBJECTIONS................................................................................................................................. 3
I.

The Court Lacks Jurisdiction to Modify the Injunction During Apple’s
Appeal ..................................................................................................................... 3

II.

The Modifications to the Injunction Are Not Authorized by Rule 53 and
Violate the Separation of Powers, Which Is Highlighted by Mr.
Bromwich’s Conduct to Date.................................................................................. 5
A.

The Court’s Proposed Amendments Are Not Authorized by Rule
53 and Would Violate the Separation of Powers ........................................ 5

B.

Mr. Bromwich Has Already Exceeded His Authority .............................. 10

III.

The Court Cannot Simultaneously Receive Ex Parte Reports from the
Monitor and Preside Over the Pending Damages Trial and Putative Class
Action .................................................................................................................... 15

IV.

The Court’s Proposed Order Deprives Apple of Its Right to a
“Disinterested Prosecutor” .................................................................................... 20
A.

The Monitor’s Personal Financial Interest in the Proceedings Is
Unconstitutional ........................................................................................ 20

B.

Mr. Bromwich’s Excessive Fees, Which He Refuses to Justify as
Either Reasonable or Customary, Violate the Final Judgment ................. 22

CONCLUSION ............................................................................................................................. 24

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TABLE OF AUTHORITIES

Page(s)

Cases
Benjamin v. Fraser,
343 F.3d 35 (2d Cir. 2003) ......................................................................................................... 7
Bloom v. Illinois,
391 U.S. 194 (1968) .................................................................................................................. 10
Bordenkircher v. Hayes,
434 U.S. 357 (1978) .................................................................................................................. 23
Buckley v. Valeo,
424 U.S. 1 (1976) ...................................................................................................................... 11
Caperton v. A.T. Massey Coal Co.,
556 U.S. 868 (2009) ............................................................................................................ 21, 25
City of N.Y. v. Mickalis Pawn Shop, LLC,
645 F.3d 114 (2d Cir. 2011) ....................................................................................................... 8
Cobell v. Norton,
334 F.3d 1128 (D.C. Cir. 2003) .................................................................................. 7, 9, 11, 12
Diamondstone v. Macaluso,
148 F.3d 113 (2d Cir. 1998) ..................................................................................................... 20
Griggs v. Provident Consumer Disc. Co.,
459 U.S. 56 (1982) ...................................................................................................................... 3
Heckler v. Chaney,
470 U.S. 821 (1985) .................................................................................................................. 10
Ideal Toy Corp. v. Sayco Doll Corp.,
302 F.2d 623 (2d Cir. 1962) ....................................................................................................... 4
In re Kensington Int’l Ltd.,
368 F.3d 289 (3d Cir. 2004) ......................................................................................... 19, 20, 21
In re Murchison,
349 U.S. 133 (1955) .................................................................................................................. 25
In re Peterson,
253 U.S. 300 (1920) .................................................................................................................... 6
Int’l Ass’n of Machinists v. E. Airlines, Inc.,
847 F.2d 1014 (2d Cir. 1988) ................................................................................................. 3, 4

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TABLE OF AUTHORITIES (cont.)

Page(s)

Juan F. v. Weicker,
37 F.3d 874 (2d Cir. 1994) ..................................................................................................... 6, 8
Kidder, Peabody & Co. v. Maxus Energy Corp.,
925 F.2d 556 (2d Cir. 1991) ....................................................................................................... 4
La Buy v. Howes Leather Co.,
352 U.S. 249 (1957) ................................................................................................................ 5, 7
Leonhard v. United States,
633 F.2d 599 (2d Cir. 1980) ....................................................................................................... 4
Lorain Journal Co. v. United States,
342 U.S. 143 (1951) .................................................................................................................... 4
Marshall v. Jerrico, Inc.,
446 U.S. 238 (1980) .................................................................................................................. 23
Missouri v. Jenkins,
515 U.S. 70 (1995) .................................................................................................................... 11
Mistretta v. United States,
488 U.S. 361 (1989) .................................................................................................................... 9
Morrison v. Olson,
487 U.S. 654 (1988) .................................................................................................................. 10
Muskrat v. United States,
219 U.S. 346 (1911) .................................................................................................................. 10
N.Y. State Ass’n for Retarded Children Inc. v. Carey,
706 F.2d 956 (2d Cir. 1983) ....................................................................................................... 8
Nat’l Mut. Ins. Co. of D.C. v. Tidewater Transfer Co.,
337 U.S. 582 (1949) .................................................................................................................... 9
People ex rel. Clancy v. Superior Court,
39 Cal. 3d 740 (1986) ............................................................................................................... 24
Plaut v. Spendthrift, Inc.,
514 U.S. 211 (1995) .................................................................................................................. 12
Reed v. Rhodes,
691 F.2d 266 (6th Cir. 1982) ...................................................................................................... 7
Sierra Club v. U.S. Army Corps of Engineers,
701 F.2d 1011, 1048 (2d Cir. 1983) .......................................................................................... 9

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TABLE OF AUTHORITIES (cont.)

Page(s)

Tumey v. Ohio,
273 U.S. 510, 532 (1927) .......................................................................................................... 25
United States v. AT&T,
552 F. Supp. 131 (D.D.C. 1982) ............................................................................................... 13
United States v. ITT Cont’l Baking Co.,
420 U.S. 223 (1975) .................................................................................................................... 8
United States v. Nixon,
418 U.S. 683 (1974) .................................................................................................................. 11
United States v. Philip Morris USA Inc.,
566 F.3d 1095 (D.C. Cir. 2009) .................................................................................................. 7
Young v. U.S. ex rel. Vuitton et Fils S.A.,
481 U.S. 787 (1987) .............................................................................................. 2, 9, 23, 24, 25
Constitution
U.S. Const. Art. III § 1 .................................................................................................................... 7
Statutes
28 U.S.C. § 455(a) ........................................................................................................................ 20
Other Authorities
2 The Records of the Federal Convention of 1787 (Max Farrand, ed., 1911) ................................ 9
Code of Conduct for United States Judges, Canon 3(A)(4).......................................................... 20
Fed. R. Civ. P. 53 Advisory Committee’s Note...................................................................... 18, 19
Goodwin Proctor Press Release, Oct. 18, 2013, available at
http://www.goodwinprocter.com/News/Press-Releases/2013/10_18_13_GoodwinPartner-Michael-R-Bromwich-Appointed-Antitrust-Monitor-for-Apple.aspx......................... 27
Robert Jackson, The Federal Prosecutor, Address Delivered at the Second Annual
Conference of the United States Attorneys (Apr. 1, 1940) ....................................................... 24
The Federalist No. 78 (A. Hamilton) (J. Cooke ed. 1961)............................................................ 10
Vikramaditya Khanna & Timothy L. Dickinson, The Corporate Monitor: The New
Corporate Czar?, 105 Mich. L. Rev. 1713, 1716 (2007) ........................................................... 8

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TABLE OF AUTHORITIES (cont.)

Page(s)

Rules
Fed. R. Civ. P. 53 .................................................................................................................... 1, 5, 7
Fed. R. Civ. P. 53(a) ................................................................................................................... 5, 6
Fed. R. Civ. P. 53(a)(1) ................................................................................................................... 8
Fed. R. Civ. P. 53(a)(1)(A) ............................................................................................................. 6
Fed. R. Civ. P. 53(a)(1)(C) ....................................................................................................... 6, 15
Fed. R. Civ. P. Rule 65(d) ............................................................................................................... 7

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INTRODUCTION
Michael

Bromwich

is

already

operating in

an

unfettered

and

inappropriate

manner, outside the scope of the Final Judgment, admittedly based on secret communications
with the Court, and trampling Apple’s rights; the Court’s proposal out of the blue to grant him
even greater powers as monitor would only make things worse. Since his appointment, Mr.
Bromwich has run far afield from his mandate and informed Apple that his fee structure is
designed to “generate profits” for himself and the law firm he has retained to make up for the
antitrust experience he lacks. The $1,100 hourly rate he proposes for himself and the $1,025 rate
for his legal support system are higher than Apple has ever encountered for any task—and he
insists on adding a 15% markup on top of that. Apple does not know what prompted the Court’s
proposed amendments to the Final Judgment but objects for the following reasons:
First, the Court lacks jurisdiction to substantively amend the September 5 Final Judgment
during the pendency of Apple’s appeal. The proposed amendments would authorize the monitor
to interview Apple’s personnel without counsel and to report the substance of those interviews to
the Court ex parte—neither of which is allowed by the Final Judgment.

The proposed

amendments therefore would impermissibly expand the scope of the monitorship beyond what is
set forth in the Final Judgment.
Second, because the additional authority conferred by the proposed amendments is not
“judicial” in nature, the amendments would exceed this Court’s authority under Federal Rule of
Civil Procedure 53 and the constitutional separation of powers. To make matters worse, Mr.
Bromwich has already exceeded in multiple ways the mandate this Court originally afforded
him—pressing for immediate interviews with the very top executives at the company, such as
CEO Tim Cook, and including others who have nothing whatsoever to do with the day-to-day

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operation of the business unit at issue—including lead designer Jony Ive and board member Al
Gore—even before the 90-day deadline for Apple’s compliance has run. See Boutrous Decl.
Exs. A at 2, B at 4. Mr. Bromwich’s unreasonable investigation to date has been anything but
“judicial,” and the Court cannot constitutionally further augment his mandate.
Third, the proposed amendments would unfairly prejudice Apple’s defense in the
ongoing parens patriae and class action damages actions by giving the presiding judge access to
ex parte oral briefings regarding ex parte interviews with Apple personnel and potentially
revealing privileged, confidential, and irrelevant information about Apple to the Court, and even
the plaintiffs and the public. Such ex parte communications would certainly lead a reasonable
observer to question the impartiality of these proceedings, and could be potential grounds for
judicial disqualification in this case and the pending damages trial.
Fourth, it is unconstitutional for Apple to be investigated by an individual whose
personal financial interest is for as broad and lengthy an investigation as possible.

Mr.

Bromwich’s extraordinary fee demand has already generated nearly 75% of a yearly judicial
salary (almost $140,000) over the course of only two weeks, and he has refused to propose any
sort of budget going forward. Other than to emphasize his need to “generate profits,” he has
refused to justify this approach by past billing practices in this area, even though the Final
Judgment expressly limits his fees to what is “reasonable and customary.” Due process “requires
a disinterested prosecutor with the unique responsibility to serve the public … and to seek justice
that is unfettered.” Young v. U.S. ex rel. Vuitton et Fils S.A., 481 U.S. 787, 814–15 (1987)
(Blackmun, J., concurring). The proposed amendments would violate this important right.
Apple has diligently accommodated Mr. Bromwich’s premature and inappropriate
demands (see Boutrous Decl. Exs. C, D), but it has become clear over the past six weeks that Mr.

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Bromwich views himself as an independent investigator whose role is to interrogate Apple
personnel about matters unrelated to the injunction in an effort to ferret out any wrongdoing, all
at Apple’s expense. The Court’s Final Judgment imposing a monitor was unprecedented, and the
proposed expansion of the monitor’s authority to investigate would be contrary to law and
unconstitutional.
OBJECTIONS
I.

The Court Lacks Jurisdiction to Modify the Injunction During Apple’s Appeal
This Court lacks jurisdiction to impose the proposed amendments because, as described

above and as set forth in more detail below, the amendments would materially modify the
injunction the Court filed on September 5, 2013. That injunction—including its validity and
scope—is presently on appeal to the Second Circuit (Dkt. 379 at 1), which deprives this Court of
jurisdiction to further modify the injunction.
“The filing of a notice of appeal is an event of jurisdictional significance—it confers
jurisdiction on the court of appeals and divests the district court of its control over those aspects
of the case involved in the appeal.” Griggs v. Provident Consumer Disc. Co., 459 U.S. 56, 58
(1982) (per curiam). After a party notices an appeal, the district court’s authority is narrowly
circumscribed. The Court may take actions “only ‘in aid of the appeal or to correct clerical
errors,’ and may not ‘adjudicate substantial rights directly involved in the appeal.’” Int’l Ass’n
of Machinists v. E. Airlines, Inc., 847 F.2d 1014, 1017 (2d Cir. 1988) (quoting Leonhard v.
United States, 633 F.2d 599, 609–10 (2d Cir. 1980)).
Because injunctions must “not impose unnecessary restrictions” and the “procedure
prescribed” should “not [be] unduly burdensome,” new terms affecting Apple’s substantive and
procedural rights under the injunction bear directly on the validity of the injunction itself. Lorain
Journal Co. v. United States, 342 U.S. 143, 156 (1951).
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The limited jurisdiction the Court retains under Rule 62(c) to “suspend, modify, restore
or grant an injunction” “has been narrowly interpreted to allow district courts to grant only such
relief as may be necessary to preserve the status quo pending an appeal ….” Int’l Ass’n of
Machinists, 847 F.2d at 1018; see also Kidder, Peabody & Co. v. Maxus Energy Corp., 925 F.2d
556, 564–65 (2d Cir. 1991). This exception is meant only to “preserve the status of the case as it
sits before the court of appeals,” protecting the appellate court’s exercise of exclusive
jurisdiction. Ideal Toy Corp. v. Sayco Doll Corp., 302 F.2d 623, 625 (2d Cir. 1962). The
proposed amendments to the Final Judgment in no way maintain the status quo.
The Final Judgment contemplates an external compliance monitor of limited scope and
duration. See Dkt. 374 § VI. The Court crafted the injunction specifically “to rest as lightly as
possible on the way Apple runs its business,” and did not “charge[ the monitor] with assessing
Apple’s compliance generally with the terms of the final judgment.” Dkt. 371 (Aug. 27, 2013
Hr’g Tr.) at 8–9, 17–18. Although the Department of Justice asked for a monitor with sweeping
powers to review Apple’s compliance with the antitrust laws for a period of ten years (see Dkt.
330 at 14), the Court authorized a monitor solely to review and report on Apple’s antitrust
compliance and training programs as they exist 90 days after the monitor’s appointment. Dkt.
374 § VI. The Court authorized the appointed monitor to interview Apple personnel “who may
have counsel present” “subject to the[ir] reasonable convenience.” Id. § VI.G.1. The monitor
was also directed to make a report 180 days after appointment by the Court, which would be
provided to Apple, the United States, the plaintiff states, and the Court. Id. § VI.C.
But as set forth below, the proposed amendments—which would allow Mr. Bromwich to
interview Apple personnel ex parte (Dkt. 410 ¶ 3) and deliver ex parte oral briefings every month
to the Court (id. ¶ 4), which the Court would have authority to publish to the public (id. ¶ 5)—

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would dramatically expand the monitor’s role as set forth in the Final Judgment and would
aggravate Mr. Bromwich’s overreaching assertion of authority to date. As a matter of law, these
substantive changes are prohibited while the Final Judgment is on appeal to the Second Circuit.
II.

The Modifications to the Injunction Are Not Authorized by Rule 53 and Violate the
Separation of Powers, Which Is Highlighted by Mr. Bromwich’s Conduct to Date
The monitor’s authority, especially if augmented through the proposed amendments,

would violate the Federal Rules of Civil Procedure and constitutional separation of powers.
Although Rule 53 authorizes the Court to appoint a special master, that authority is limited to
what is necessary “to aid judges in the performance of specific judicial duties.” La Buy v. Howes
Leather Co., 352 U.S. 249, 256 (1957) (emphasis added); see also In re Peterson, 253 U.S. 300,
312–13 (1920). Rule 53 does not authorize district courts to appoint special masters or monitors
to exercise authority not otherwise allowed by Article III.

Ex parte interviews and

communications with the Court and Apple’s adversaries are not part of the “judicial duty” courts
exercise under Article III.

Especially when considered along with Mr. Bromwich’s own

misguided view of the scope of his authority under the September 5 Final Judgment and his
unreasonable actions so far, it is clear that the investigation the Court has proposed to authorize
Mr. Bromwich to undertake would far exceed the Court’s authority under Rule 53 and violate the
separation of powers.
A.

The Court’s Proposed Amendments Are Not Authorized by Rule 53 and
Would Violate the Separation of Powers

To the extent that a “monitor” may be appointed by the Court as a “special master[],
albeit by another name” (Juan F. v. Weicker, 37 F.3d 874, 880 (2d Cir. 1994)), the Court’s
appointment authority is governed by Rule 53, as the Court acknowledged for the first time in its
November 21 order (Dkt. 410). In relevant part, Rule 53(a) provides that a court “may appoint a

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master only to: … address … posttrial matters that cannot be effectively and timely addressed by
an available district judge or magistrate judge of the district.” Fed. R. Civ. P. 53(a)(1).
A valid appointment under Rule 53(a) gives a master (or monitor) the authority to address
issues that would otherwise be addressed “by an available district judge or magistrate judge.”
Fed. R. Civ. P. 53(a)(1)(C); see La Buy, 352 U.S. at 256 (masters may “aid judges in the
performance of specific judicial duties”). Examples of appropriate delegations include giving
masters “the ability to convene and to regulate hearings, to rule on the admissibility of evidence,
to subpoena and swear witnesses, and to hold non-cooperating witnesses in contempt.”
Benjamin v. Fraser, 343 F.3d 35, 45 (2d Cir. 2003), overruled on other grounds by Caiozzo v.
Koreman, 581 F.3d 63 (2d Cir. 2009). These are judicial functions normally exercised by Article
III judges; and masters, as “quasi-judicial officers,” exercise this delegated judicial power.
Benjamin, 343 F.3d at 45; see also Reed v. Rhodes, 691 F.2d 266, 269 (6th Cir. 1982) (special
masters act “in a quasi-judicial capacity”); Cobell v. Norton, 334 F.3d 1128, 1139 (D.C. Cir.
2003) (“Special Master-Monitor ... was serving as a judicial officer”). But there is no longstanding tradition of charging monitors with “wide-ranging extrajudicial duties” to fill “an
investigative, quasi-inquisitorial, quasi-prosecutorial role that is unknown to our adversarial legal
system.” United States v. Philip Morris USA Inc., 566 F.3d 1095, 1149 (D.C. Cir. 2009).
The parties here did not enter into a consent decree and confer authority on a special
master by contract. Cf. Fed. R. Civ. P. 53(a)(1)(A) (a court may appoint a master to “perform
duties consented to by the parties”). Generally, “[c]orporate monitors are appointed as part of a
negotiated settlement before judgment between a firm and a government enforcement agency.”
Vikramaditya Khanna & Timothy L. Dickinson, The Corporate Monitor: The New Corporate
Czar?, 105 Mich. L. Rev. 1713, 1716 (2007). And in such cases, consent decrees “‘should be

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construed basically as contracts.’” Juan F., 37 F.3d at 878 (quoting United States v. ITT Cont’l
Baking Co., 420 U.S. 223, 236–37 (1975)); see also N.Y. State Ass’n for Retarded Children Inc.
v. Carey, 706 F.2d 956, 963 (2d Cir. 1983) (upholding appointment of special master pursuant to
consent judgment because the “powers of the Special Master to inspect, to interview, and to
make recommendations [went] no further than those agreed to in the Consent Judgment”); cf.
City of N.Y. v. Mickalis Pawn Shop, LLC, 645 F.3d 114, 146 (2d Cir. 2011) (“Parties may
consent to settlement terms that would otherwise, if imposed unilaterally, violate Rule 65(d) or a
defendant’s due process rights”). Apple, by contrast, opposed appointment of a monitor in a
civil antitrust case as unprecedented, unwarranted, and legally improper, reserved all of its rights
to challenge the appointment, and has appealed the Final Judgment. See Dkt. 331 at 9–13
(opposing appointment of external monitor); Dkt. 379 (notice of appeal). “When a party has for
a nonfrivolous reason denied its consent, ... the district court must confine itself (and its agents)
to its accustomed judicial role.” Cobell, 334 F.3d at 1142; see also Sierra Club v. U.S. Army
Corps of Engineers, 701 F.2d 1011, 1048 (2d Cir. 1983) (vacating appointment of special master
due to the “highly intrusive nature of the mandate given the special master”).
In the absence of agreement between the parties, Rule 53 does not authorize the Court to
delegate duties to a master which the Court itself would be powerless to perform. Nor could it.
The Constitution vests the federal courts with “[t]he judicial power.” U.S. Const. art. III
§ 1. And the judicial power is “the only kind of power that federal judges may exercise by virtue
of their Article III commissions.”

Young, 481 U.S. at 816 (Scalia, J., concurring in the

judgment); see also Nat’l Mut. Ins. Co. of D.C. v. Tidewater Transfer Co., 337 U.S. 582, 590
(1949) (“it was ‘generally supposed that the jurisdiction given [to Article III judges] was
constructively limited to cases of a Judiciary nature’”) (quoting 2 The Records of the Federal

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Convention of 1787, at 430 (Max Farrand, ed., 1911)); Mistretta v. United States, 488 U.S. 361,
385 (1989) (“According to express provision of Article III, the judicial power of the United
States is limited to ‘Cases’ and ‘Controversies’”); Muskrat v. United States, 219 U.S. 346, 355
(1911) (“The power conferred on [federal courts] is exclusively judicial, and it cannot be
required or authorized to exercise any other”) (internal quotation marks omitted).

The

“executive or administrative duties of a nonjudicial nature may not be imposed on judges holding
office under Art. III of the constitution.” Morrison v. Olson, 487 U.S. 654, 677 (1988) (quoting
Buckley v. Valeo, 424 U.S. 1, 123 (1976)). Indeed, as Alexander Hamilton famously observed,
the judiciary “must ultimately depend upon the aid of the executive arm even for the efficacy of
its judgments.” The Federalist No. 78, at 522–523 (A. Hamilton) (J. Cooke ed., 1961). Courts
may issue injunctions, but they do not have unlimited power to conduct investigations in the
name of enforcing those injunctions or otherwise policing the conduct of the enjoined litigant.
Federal courts do not, for example, have the autonomous power to punish litigants for
criminal contempt as a means of enforcing their judgments. See Bloom v. Illinois, 391 U.S. 194,
207 (1968). The enforcement of court orders, like the enforcement of legislation, is reserved to
the executive branch. Likewise, governmental investigation of potentially illegal conduct (such
as disregard for a court order or ongoing antitrust violations) is a quintessentially executive
function. See Heckler v. Chaney, 470 U.S. 821, 832 (1985); Buckley, 424 U.S. at 138; United
States v. Nixon, 418 U.S. 683, 693 (1974). “There simply are certain things that courts, in order
to remain courts, cannot and should not do.” Missouri v. Jenkins, 515 U.S. 70, 132 (1995)
(Thomas, J., concurring). And because these powers are not part of the judicial authority
conferred by Article III, district courts may not authorize “quasi-judicial” special masters or
monitors to undertake them. See Fed. R. Civ. P. 53(a)(1)(C).

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The unilateral investigation the Court has empowered Mr. Bromwich to undertake is not
a judicial function, and therefore cannot be delegated by the Court. The injunction, particularly
as the Court proposes to amend it and in light of how Mr. Bromwich interprets his authority (see
infra pp. 10–16), goes well beyond any reasonable and limited role of assessing compliance and
training policies (as they exist 90 days after entry), and plainly (and wrongly) vests the monitor
with wide-ranging, intrusive, and excessive inquisitorial powers of a sort reserved to prosecutors.
See Cobell, 334 F.3d at 1141 (reversing appointment of monitor where district court “authorized
the Monitor to engage in ex parte communications, and required the [defendant] to ‘facilitate and
assist’ the Monitor, to ‘provide him with access to any offices or employees to gather
information,’ and to pay his hourly fees and expenses”) (alterations omitted).

Indeed, the

injunction gives the monitor the same powers that it bestows on the Department of Justice and
State Attorneys General.

Compare Dkt. 374 § VII.A.1-2 (plaintiffs permitted “access [to]

inspect and copy” documents, and “to interview ... Apple’s officers, employees, or agents”), with
id. § VI.G.1–3 (monitor may interview witnesses and demand documents).
If the proposed amendments were adopted, Mr. Bromwich’s powers would exceed those
of the government entities, because he would be authorized to interview witnesses ex parte, and
report ex parte to the Court. Dkt. 410 ¶¶ 3–4; compare Dkt. 374 § VII.A.2 (Apple personnel
may have counsel present during interviews) with id. § VII.C (“No information or documents
obtained by [the plaintiffs] ... shall be divulged … to any person other than an authorized
representative of the Executive Branch of the United States, the Attorney General’s Office of any
Plaintiff State, or the External Compliance Monitor, except in the course of legal proceedings”).
Roving investigations with a commission to ferret out wrongdoing—including the powers
to “interview,” “inspect,” and “discover evidence”—are well outside the boundaries of “[t]he

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judicial power.” Rather, they are prosecutorial powers vested in the President by Article II, § 1.
The Court may not, therefore, appoint a monitor “to act[] as an internal investigator” who
“report[s] ... to the district court.” Cobell, 334 F.3d at 1141.
The separation of powers is no mere “remedy to be applied when specific harm, or risk of
specific harm, can be identified.” Plaut v. Spendthrift, Inc., 514 U.S. 211, 239 (1995). Rather, it
is “a structural safeguard” embedded in our constitutional system. Id.; see also Nat’l Mut. Ins.,
337 U.S. at 590–91 (“The doctrine of separation of powers is fundamental in our system”).
Appointing special masters to oversee ongoing compliance with antitrust injunctions “could
contravene the separation of powers doctrine because it would involve the creation of a
substantial quasi-legislative, quasi-executive bureaucracy within the Judicial Branch of
government.” United States v. AT&T, 552 F. Supp. 131, 168 n.158 (D.D.C. 1982). The Court’s
proposed amendment would turn a “quasi-judicial” monitor into a mini-executive—a role Mr.
Bromwich has quickly embraced and, as discussed below, already abused.
B.

Mr. Bromwich Has Already Exceeded His Authority

Mr. Bromwich’s interpretation of his mandate and his conduct to date have exceeded the
authority that this Court could permissibly and constitutionally delegate to him, and highlight the
serious problems with the Final Judgment and the proposed amendments.
After Apple reached out to Mr. Bromwich on October 17 (Boutrous Decl. Ex. D)—the
day after he was appointed—the parties agreed to meet in New York on October 22. At that
meeting, Mr. Bromwich declared that he would begin interviewing Apple’s top executives and
board members starting on November 18. Apple explained, however, that the timing of the
requests was premature given that Apple was still putting its new compliance and training
programs in place in advance of the January 14 deadline. See id. Ex. E.

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The terms of the Final Judgment are clear that the monitor’s “review of Apple’s internal
antitrust compliance policies and procedures and antitrust training program is not to commence
until ‘90 days after his or her appointment.’” Boutrous Decl. Ex. A at 1 (quoting Dkt. 374
§ VI.C). Indeed, at the August 27 hearing, the Court stated:
I don’t think that the [Monitor] should conduct a review or assessment of the
current policies. I would expect that Apple would revise its current policy
substantially and procedures and create an effective training program. That will
require some time. So I think this should be revised to have the [Monitor] doing
an assessment in three months from appointment and beginning to engage Apple
in a discussion at that point.
Dkt. 371 (Aug. 27, 2013 Hr’g Tr.) at 20–21 (emphasis added). Accordingly, Apple explained
that Mr. Bromwich’s request “to begin interviewing Apple’s entire board and its executive team,
as well as additional senior executives on November 18 is premature, not authorized by the Final
Judgment, and would not only be disruptive to Apple’s business operations but also directly
contrary to Judge Cote’s intent.” Boutrous Decl. Ex. A at 2; see also id. at 3 (“It makes no sense
and would be extremely disruptive, to schedule those interviews before Apple has completed its
internal assessment and developed its new antitrust training program”).
Despite its good-faith and legitimate concerns, Apple nonetheless sought to
accommodate Mr. Bromwich’s demands and agreed to arrange interviews with nine high-level
business and legal executives if Mr. Bromwich was willing to wait until the week of December
2.

See Boutrous Decl., Ex. C.

Mr. Bromwich nonetheless continued to demand to

“interview/meet Tim Cook, Phil Schiller, and Edd[y] Cue,” as well as any other “Senior VPs
who touch antitrust-related issues in a meaningful way.” Id. Ex. B at 4. He also sought to
interview three members of Apple’s Board of Directors—including Al Gore—who happen to
live in or frequently visit Northern California. Id. at 5.
Most of the executives and board members Mr. Bromwich sought to interview are not

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even relevant to his mandate.

Filed 11/27/13 Page 18 of 31

By contrast, Apple’s proposed interviewees were the key

individuals involved in rolling out Apple’s enhanced compliance and training efforts.
Nevertheless, because Apple could not produce its entire slate of directors and board members
on a few weeks’ notice, Mr. Bromwich accused Apple of not taking “its obligations and [Mr.
Bromwich’s] responsibilities under the Final Judgment very seriously.” Boutrous Decl. Ex. B
at 2. He then demanded that Apple “[b]e prepared to support any representations concerning
[the] availability [of the individuals he wanted to interview] with detailed copies of their
schedules for that entire week.” Id. (emphasis added). He said he “was not prepared to drag
things out any longer” than the week of November 18. Id.
Mr. Bromwich’s “demands and approach [were] unreasonable, unnecessary and
unwarranted, and [went] well beyond the scope of the Final Judgment and Judge Cote’s
guidance.” Boutrous Decl., Ex. B at 1. The Final Judgment states that all Apple interviews “be
subject to the reasonable convenience of such personnel and without restraint or interference by
Apple” (Dkt. 374 § VI.G.1 (emphasis added)), but Mr. Bromwich reasserted his demand for a
“slate of interviews and meetings next week.” Boutrous Decl. Ex. E at 1.
Apple offered to make available on November 18 for interviews its Chief Compliance
Officer and Head of Global Security (Tom Moyer), and Associate General Counsel and Legal
Liaison to the Audit and Finance Committee (Gene Levoff). See Boutrous Decl. Ex. F at 1.1
Mr. Bromwich accepted this proposal (Boutrous Decl., Ex. F at 1 (“We accept”)), and on

1

Apple again urged Mr. Bromwich to postpose the meetings until the week of December 2 or
December 9 so that he could interview others, including Bruce Sewell (Apple’s General
Counsel) and Deena Said (the new Antitrust Compliance Officer). See Boutrous Decl. Ex. F
at 2 (“Apple respectfully submits that this will be more efficient and effective in getting you
the information you seek and in working together to ensure that the company has
comprehensive and effective antitrust compliance and training programs”).

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November 18, he interviewed Messrs. Moyer and Levoff (Boutrous Decl. ¶ 3). He also met with
Noreen Krall (Apple’s Chief Litigation Counsel) to discuss Mr. Bromwich’s fees and the details
of the confidentiality agreement. See id.
Not content to wait, however, Mr. Bromwich pressed for more interviews. Upon learning
that Apple General Counsel Bruce Sewell was attending the important Apple v. Samsung trial
during the week of November 18, Mr. Bromwich proposed to “stop by the courthouse and meet
him.” Id. Ex. H. Mr. Bromwich also again sought to interview the new Antitrust Compliance
Officer, even though the day of the interviews was literally her first day on the job. Id.
Mr. Bromwich’s incessant “demands for immediate attention” compelled Apple to once
again explain how “incredibly disruptive” Mr. Bromwich’s requests had become. See Boutrous
Decl. Ex. I at 1. Apple reminded Mr. Bromwich that the “reason for th[e] three-month window
is of course to provide Apple and its counsel with time to develop new, comprehensive antitrust
training and compliance materials in accordance with the Final Judgment, without hampering
Apple’s business.” Id. at 2. And Apple tried to persuade Mr. Bromwich that his “continual
requests for additional interviews and other information before January 14, 2014[] affirmatively
hamper Apple’s efforts to develop a new antitrust training and compliance program as efficiently
and effectively as possible within the deadline set by Judge Cote.” Id. at 3. Nevertheless, “[i]n
the spirit of cooperation,” Apple proposed a schedule for eleven additional interviews to take
place between December 4 and 6. Id. at 4.
Not only has Mr. Bromwich continued to press for interviews with Apple’s Board
members and senior executives, he has begun contacting them directly (not through counsel) in
an explicit effort to “promote” a “relationship between the company liaisons and the monitoring
team that is unfiltered through outside counsel.” Boutrous Decl. Ex. J at 5 (emphasis added).

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His letter, sent directly to the board members, specifically asking them to respond without aid of
their counsel, is manifestly inappropriate.
Even worse, Mr. Bromwich does not base his aggressive investigative approach on the
terms of the Court’s Final Judgment or statements on the record, but rather on his ex parte
conversations with the Court.
For example, the record indicates quite clearly that the monitor’s duties do not commence
until January 14. See Dkt. 374 § VI.C (“The [Monitor] shall conduct a review to assess whether
Apple’s internal antitrust compliance policies and procedures, as they exist 90 days after his or
her appointment, are reasonably designed to detect and prevent violations of the antitrust laws.
The [Monitor] shall also conduct a review to assess whether Apple’s training program, ... as it
exists 90 days after his or her appointment, is sufficiently comprehensive and effective.”)
(emphasis added); Dkt. 384 (appointing monitor on October 16, 2013). This makes sense given
that the monitor’s first report is not due until 180 days after the monitor’s appointment. Dkt. 374
§ VI.C; see also Dkt. 375 (Sept. 5, 2012 Hr’g Tr.) at 10 (“we have provided for a six-month
report from the monitor”); id. (“I would appreciate six-month reports”).
Mr. Bromwich, however, has determined that his duties must commence immediately.
And his basis for rejecting Apple’s reading of the record is what he termed his “distinct
advantage of having discussed [his] intentions to get off to a fast start directly with [the Court]
during the interviewing process.” Boutrous Decl. Ex. K (emphasis added). He gives “that
discussion far more weight” than what he called Apple’s “snippets of transcript taken out of
context” (id. (emphasis added))—i.e., the public record. See also id. Ex. L at 1 (“[I]n my
interviews during the monitor selection process with the Department of Justice and the Plaintiff
States, and separately with Judge Cote, I made clear that one of the keys to a successful

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monitorship was getting off to a fast start and promptly making contact with top executives at the
company .... There was no suggestion at any time from anyone that these activities needed to be
deferred for 90 days after the appointment of the External Compliance Monitor.”)

It is

exceedingly problematic and disturbing that Apple does not know how many of these
conversations occurred or what has been discussed.
As these communications and activities make clear, Mr. Bromwich has no intention of
limiting his role to the terms of the Final Judgment or to handling judicial matters that the Court
itself could not “effectively and timely address[].” Fed. R. Civ. P. 53(a)(1)(C). Rather, cloaked
in the mandate given to him by this Court, he is asserting investigative powers that belong
exclusively to the Executive Branch and is assuming that he can function without regard to the
restrictions imposed by the Federal Rules of Civil Procedure, or any other rules, that govern
discovery and exchange of information in a civil case.
The Court has no authority to travel the country to interview Apple’s employees
(particularly without counsel present), review all of Apple’s corporate documents, or initiate
contempt charges against Apple, all at Apple’s expense, and it may not escape that constitutional
limitation by appointing a “quasi-judicial officer” to accomplish that end. Because the Court’s
proposed amendments purport to confer executive powers on a quasi-judicial officer, they are not
supported by Rule 53 and violate the constitutional separation of powers.
III.

The Court Cannot Simultaneously Receive Ex Parte Reports from the Monitor and
Preside Over the Pending Damages Trial and Putative Class Action
The injunction, if modified as proposed, would allow the monitor to “communicate with

a party or a party’s agent on an ex parte basis if reasonably necessary” (Dkt. 410 ¶ 3), and would
direct the monitor to “provide the Court with ex parte oral briefings at least once a month, or
more frequently as the Monitor or Court decide in the exercise of their discretion is appropriate”

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(id. ¶ 4). This is a 180-degree turn from the September 5 order, which authorized interviews
with “counsel present.” Dkt. 374 § VI.G.1. This invitation to Mr. Bromwich to circumvent
Apple’s counsel risks disclosure of privileged and confidential information to the Court and
raises serious due process concerns—particularly while the Court is simultaneously presiding
over proceedings on the class and state plaintiffs’ claims for damages and penalties.
“Ex parte communications between a master and the court present troubling questions.”
Fed. R. Civ. P. 53(b) Advisory Committee’s Note; cf. In re Kensington Int’l Ltd., 368 F.3d 289,
311 (3d Cir. 2004) (ex parte contacts with consulting advisors are an “egregious problem”). For
this reason, the Rules Advisory Committee advises that “[o]rdinarily the [appointment] order
should prohibit such communications.” Fed. R. Civ. P. 53(b) Advisory Committee’s Note.
These “troubling questions” are magnified here where ex parte contact with the Court
may be preceded by ex parte contact with Apple personnel. The Final Judgment permits Mr.
Bromwich to conduct interviews (but with counsel present and subject to reasonable
convenience), to “inspect any documents in the possession, custody, or control of Apple,” and to
“require Apple to provide compilations of documents, data, or other information” related to his
responsibilities as expressly delineated. Dkt. 374 § VI.G.2–3.
As discussed above, however, Mr. Bromwich has already shown a proclivity to leap far
beyond his mandate, and now this Court proposes amendments that would give him power to
interview Apple personnel ex parte, something he will no doubt be quick to exploit. Indeed, the
day after the Court filed its proposed amendments, Mr. Bromwich directly contacted Apple’s
entire Board of Directors, citing the Court’s order and encouraging them to “promote” a “direct
relationship between the company liaisons and the monitoring team that is unfiltered through
outside counsel.” Boutrous Decl. Ex. J at 5. The proposed amendments would allow Mr.

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Bromwich to then take such “unfiltered” information to the Court, again without Apple’s counsel
present (Dkt. 410 ¶ 4), and the Court would be allowed in turn to disclose the information to the
public (id. ¶ 5), including, of course, Apple’s adversaries in the parens patriae and putative class
action seeking nearly $1 billion pending before this Court.
Receipt of such information, delivered ex parte, is grounds for disqualification of a judge
presiding over continuing proceedings in the matter and in related litigation. See 28 U.S.C.
§ 455(a) (“Any ... judge … of the United States shall disqualify himself in any proceeding in
which his impartiality might reasonably be questioned”); see also In re Kensington, 368 F.3d at
310 (“If judges engage in ex parte conversations with the parties or outside experts, the
adversary process is not allowed to function properly and there is an increased risk of an
incorrect result”). It is also a violation of the ethics rules. See Code of Conduct for U.S. Judges,
Canon 3(A)(4) (“a judge should not initiate, permit, or consider ex parte communications or
consider other communications concerning a pending or impending matter that are made outside
the presence of the parties or their lawyers”).2 Where a presiding judge who is expected to
render impartial rulings based on a transparent record developed in open court in compliance
with the rules of evidence receives any (much less regular) ex parte briefings regarding
information that a monitor has gathered by interviewing the defendant’s employees and
reviewing the defendant’s corporate documents, “an objective, disinterested observer fully
informed of the underlying facts, [would] entertain significant doubt that justice would be done
absent recusal.”

Diamondstone v. Macaluso, 148 F.3d 113, 121 (2d Cir. 1998); see also

Kensington, 368 F.3d at 310 (“ex parte communications run contrary to our adversarial trial

2

The Code of Conduct recognizes four exceptions to the general rule against ex parte
communications (Canon 3(A)(4)(a)–(d)), none of which is applicable here.

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system”); Caperton v. A.T. Massey Coal Co., 556 U.S. 868, 886 (2009) (due process may require
disqualification where the circumstances offer the temptation “to the average ... judge to ... lead
him not to hold the balance nice, clear and true”) (internal quotation marks omitted).
In Kensington, for example, the Third Circuit ordered the district judge to recuse himself
from two asbestos-related bankruptcy proceedings over which he was presiding after the judge
appointed consulting advisors who had played a role in other asbestos-related litigation and then
engaged in ex parte communications with these advisors. 368 F.3d at 294. Describing the ex
parte meetings with the advisors as an “egregious problem,” the Third Circuit held that the
district judge’s “unrecorded” ex parte communications with those advisors “support[ed]
disqualification,” in part because there was “no official record of what was said.” Id. at 309–10.
The exact same concerns are present here.
The twin ex parte provisions in the proposed amendments risk—indeed, they
encourage—disclosure of privileged and confidential information, including information wholly
unrelated to the very narrow scope of Mr. Bromwich’s assigned role. Without counsel present,
interviewees might unknowingly disclose information protected by the attorney-client privilege
in describing the contents of privileged conversations to Mr. Bromwich—information which Mr.
Bromwich would then be free to convey ex parte to the Court. Dkt. 410 ¶ 4. According to the
proposed amendments, once the information is in the Court’s hands, the Court has discretion to
reveal that information to the public. Dkt. 410 ¶ 5. There is no legitimate need to allow Mr.
Bromwich to potentially gain access to privileged and confidential information as well as
information having nothing to do with his narrow mandate—which Apple could not be
compelled to disclose—through ex parte conversations with Apple’s personnel.
This potential disclosure of privileged information is particularly problematic here where

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there is ongoing litigation. In addition to the risk of the judge being prejudiced by information
received by the monitor, there is a very real risk that the plaintiff states and putative class
plaintiffs will benefit from the investigation, as Mr. Bromwich retains and discloses to the Court
information that the Court proposes it will potentially disclose on the public record.
Additionally, ex parte communications between Mr. Bromwich and the Court create
confusion as to the scope of his powers and responsibilities. For example, as discussed above,
Apple reads this Court’s order and statements on the record to mean that the monitor’s principal
duties do not commence until January 14. Mr. Bromwich, however, on the basis of apparent ex
parte communications with the Court, claims that his duties commence immediately and that he
is authorized to immediately interview the top officials and the board before Apple even has a
chance to revise its compliance and training programs as envisioned by the Court. This assertion
of authority on the basis of private conversations between Mr. Bromwich and the Court is the
antithesis of the rule of law. There can be no doubt that the Final Judgment and this Court’s
explanation of it on the public record define the scope of his role and responsibilities, but Mr.
Bromwich is using private conversations with the Court as a basis for exceeding his authority.
No litigant could possibly take comfort in the objectiveness of a court’s judgment in
ruling on fiercely contested motions and proceedings when the court is regularly meeting
privately with a judicially appointed investigator charged with looking to uncover evidence of
possible wrongdoing by that litigant. And to the extent the Court actually intended to unleash
Mr. Bromwich as its agent in this manner, such order transforms the Court from an impartial
arbiter of “Cases” and “Controversies” into Apple’s litigation adversary. Apple therefore objects
to the Court’s proposed amendments and requests that the Court disclose the existence and scope
of any ex parte communications it has had with Mr. Bromwich.

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IV.

Filed 11/27/13 Page 26 of 31

The Court’s Proposed Order Deprives Apple of Its Right to a “Disinterested
Prosecutor”
The Due Process Clause entitles a defendant to a disinterested prosecutor. Marshall v.

Jerrico, Inc., 446 U.S. 238, 249–50 (1980) (citing Bordenkircher v. Hayes, 434 U.S. 357, 365
(1978)).

This requirement prevents executive decisions from being tainted by “a personal

interest, financial or otherwise.” Young v. U.S. ex rel. Vuitton et Fils S.A., 481 U.S. 787, 808
(1987) (internal quotation marks omitted). The monitorship the Court has imposed—particularly
with the proposed amendments—would violate this due process protection.
A.

The Monitor’s Personal Financial Interest in the Proceedings Is
Unconstitutional

Mr. Bromwich views his role as akin to that of an independent prosecutor or investigator
assigned by the Court to investigate a single corporate citizen.

He regularly cites his

independence in seeking to commence interviews with Apple executives and board members
even before Apple has had a chance to revise its antitrust compliance and training programs as
contemplated by the Court. See Boutrous Decl. Ex. M at 2 (“Apple and the other parties must
respect our independence”); id. Ex. N at 3 (asserting that providing details about his invoices
would “compromise [his team’s] independence”). The Final Judgment itself directs the monitor
to keep his eyes and ears open for any signs of illegal behavior and to pass such information
along to the plaintiffs. Dkt. 374 § VI.F (“If the [Monitor] ... discovers ... evidence that suggests
... that Apple is violating or has violated this Final Judgment or the antitrust laws, the [Monitor]
shall promptly provide that information to the United States and the Representative Plaintiff
States”). Thus, unlike a normal law enforcement officer or prosecutor, Mr. Bromwich does not
have “a detached and impartial view of all groups in his community,” but rather a singular focus
on Apple. Robert Jackson, The Federal Prosecutor, Address Delivered at the Second Annual

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Conference of the United States Attorneys (Apr. 1, 1940).
Moreover, Mr. Bromwich is not disinterested.

The Court’s proposed amendments

incorporate the Final Judgment’s requirement that Apple pay Mr. Bromwich for the time he
spends investigating Apple. See Dkt. 410 ¶ 8; Dkt. 374 ¶ VI.I (“The [Monitor] shall serve at the
cost and expense of Apple”). And Apple’s adversaries, including the plaintiff states, have the
authority to approve the expenses that Mr. Bromwich intends to bill to Apple. See Dkt. 374
§ VI.I. They too have every incentive to inflict on Apple the broadest and most expensive
investigation possible.
This “personal incentive” to run as broad and intrusive an investigation as possible
deprives Apple of its due process right to a neutral prosecutor. See Young, 481 U.S. at 804 (“A
prosecutor may be tempted to bring a tenuously supported prosecution if such a course promises
financial or legal rewards for the private client”); People ex rel. Clancy v. Superior Court, 39
Cal. 3d 740, 746 (1986) (“When a government attorney has a personal interest in the litigation,
the neutrality so essential to the system is violated”). To the extent Article III courts are
empowered to appoint private lawyers to police their injunctions, those lawyers must be
“disinterested,” just like “a public prosecutor who undertakes such a prosecution.” Young, 481
U.S. at 804. As an arm of the court, such an appointed lawyer must meet the highest standards
of financial impartiality. See Caperton, 556 U.S. at 886 (recusal required “whether or not actual
bias exists or can be proved,” so long as the financial interest “offer[s] a possible temptation to
the average ... judge to ... lead him not to hold the balance nice, clear and true”) (emphasis
added) (quoting Tumey v. Ohio, 273 U.S. 510, 532 (1927).
The proposed amendments provide by reference that the appointment shall “be for a
period of two years.” Dkt. 374 § VI.A; Dkt. 410 ¶ 6. Likewise, the order provides that the Court

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“may sua sponte ... extend the appointment by one or more one-year periods.” Dkt. 374 § VI.A.
Mr. Bromwich is therefore financially incentivized to recommend extending the appointment
period—at Apple’s expense.

Indeed, Mr. Bromwich has repeatedly expressed the need to

establish a fee structure that will allow him to “generate profits.” See Boutrous Decl. Ex. N at 2,
Ex. O at 2. This is a vicious circle that violates due process. Young, 481 U.S. at 814-15
(Blackmun, J., concurring) (due process “requires a disinterested prosecutor with the unique
responsibility to serve the public, rather than a private client, and to seek justice that is
unfettered”); Caperton, 556 U.S. at 876 (“It is axiomatic that ‘[a] fair trial in a fair tribunal is a
basic requirement of due process’”) (quoting In re Murchison, 349 U.S. 133, 136 (1955)). There
is no support in the federal rules or the Constitution for ordering Apple to self-fund the
investigation of itself by a court-appointed lawyer, acting on the Court’s behalf, who has a
financial incentive to make the investigation as expansive and expensive as possible.
B.

Mr. Bromwich’s Excessive Fees, Which He Refuses to Justify as Either
Reasonable or Customary, Violate the Final Judgment

The Court’s proposed amendments incorporate the Final Judgment’s statement that
“compensation of the [Monitor] shall be on reasonable and customary terms commensurate with
the individuals’ experience and responsibilities and consistent with reasonable expense
guidelines.” Dkt. 410 ¶ 8; Dkt. 374 § VI.I. Mr. Bromwich’s billing rates, the 15% “service
charge,” and his refusal to justify his fees for this monitorship all directly conflict with the
Court’s Final Judgment, and aggravate the due process concern with his investigation.
Mr. Bromwich has proposed an hourly rate for himself of $1,100. See Boutrous Decl.
Ex. O at 2. And because he lacks any antitrust experience, Mr. Bromwich has also retained the
law firm Fried Frank to assist him, whose partner’s hourly rate is $1,025. Id. at 3. Mr.
Bromwich has made no attempt to justify why his lack of any substantive experience with the
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matter at issue justifies hiring another law firm with a four-digit billing rate.
As Apple explained to Mr. Bromwich, of all known past Apple matters, “not a single
partner had an effective billing rate as high as or higher than those that [Mr. Bromwich has]
proposed.” Boutrous Decl. Ex. O at 1. And Mr. Bromwich’s rates in this matter dramatically
exceed what he has quoted in the past. For instance, in a proposal to monitor the New Orleans
Police Department five months ago, he suggested a $495 hourly rate, without an administrative
fee, which the Department of Justice termed “relatively expensive.” Id. Ex. O at 2.
On top of these rates, Mr. Bromwich proposes to charge a 15% “administrative fee” to be
applied to all fees generated by him, Fried Frank, and other lawyers from other firms he proposes
to include on his team.3 See Boutrous Decl. Ex. O at 2, Ex. N at 2–3. This is unprecedented in
Apple’s experience; no law firm Apple has ever engaged has charged a 15% administrative fee
on top of the billing rate (id. Ex. O at 2), and Mr. Bromwich has not identified a single other
instance in which he has collected such a fee from a corporate client or monitored entity. Id. Ex.
N at 2–3. Mr. Bromwich appears to be simply taking advantage of the fact that there is no
competition here or, in his view, any ability on the part of Apple, the subject of his authority, to
push back on his demands.
3

Mr. Bromwich has sought to justify this 15% markup on the grounds that he is handling this
assignment through his “consulting firm,” the Bromwich Group, rather than through
Goodwin Proctor—the law firm where he is a partner and which is located in the same office
building as the Bromwich Group. Boutrous Decl. Ex. O at 2. But this Court appointed Mr.
Bromwich himself, not the Bromwich Group, to serve as monitor (Dkt. 384), and Mr.
Bromwich has not cited anything to suggest that it is “reasonable and customary” for lawyers
to form consulting groups to handle monitorships and charge additional fees on that
basis. Moreover, this distinction seems slippery at best, given that Goodwin Proctor issued a
press release, clearly meant to drum up more business, trumpeting, “Goodwin Partner
Michael R. Bromwich Appointed Antitrust Monitor for Apple.” See Goodwin Proctor Press
Release, Oct. 18, 2013, available at http://www.goodwinprocter.com/News/PressReleases/2013/10_18_13_Goodwin-Partner-Michael-R-Bromwich-Appointed-AntitrustMonitor-for-Apple.aspx.

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Mr. Bromwich flatly refused Apple’s request that Mr. Bromwich provide a budget and a
work plan and adhere to Apple’s billing guidelines, and rejected Apple’s proposal of a fee
structure comparable to that of the many major law firms working on Apple matters. See
Boutrous Decl. Ex. N at 3–4. And he has refused to justify either his rates or his billing practices
as being either “reasonable” or “customary.” See id. at 3 (“your requests for additional support
for the administrative fee, and for the billing rates of ... other timekeepers ... are ... a thinly-veiled
attempt to substitute a fee negotiation and approval process, in which Apple sets the terms of the
relationship, for the process the Court prescribed in its September 5 Order”). Nor has the
Department of Justice been able to defend his demands as either “reasonable” or “customary.”
As a result of the foregoing and Mr. Bromwich’s overbroad view of his mandate, Mr.
Bromwich’s invoice for his first two weeks of work was for $138,432.40. See Boutrous Decl.
Ex. O at 3. (As a supposed agent of the Court, he racked up nearly 75% of a district judge’s
yearly pay in only two weeks.)

These charges were incurred before any documents were

exchanged, interviews scheduled, or meaningful travel conducted, and indeed before the 90-day
deadline triggering his review of Apple’s compliance and training programs under the injunction.
The Final Judgment does not give Mr. Bromwich a blank check to unilaterally impose his
billing practices. His total failure to engage with Apple on whether his billing structure is
“reasonable” or “customary” plainly violates the Final Judgment and confirms that he is not a
disinterested pubic official seeking to fulfill the public interest as required by due process.
CONCLUSION
The proposed amendments in the Court’s November 21, 2013 order are unnecessary,
contrary to law, and unconstitutional. The Court therefore should not amend the injunction as
proposed, and should issue an order directing Mr. Bromwich to limit his monitorship to the four

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corners of the Final Judgment and this Court’s contemporaneous statements on the public record
explaining it.
Dated: November 27, 2013

Respectfully submitted,
By:

__/s/ Theodore J. Boutrous, Jr.____________
Theodore J. Boutrous, Jr.
Theodore J. Boutrous, Jr. (Pro Hac Vice)
Daniel G. Swanson (Pro Hac Vice)
Gibson, Dunn & Crutcher LLP
333 South Grand Avenue
Los Angeles, CA 90071
[phone]
[e-mail]
[e-mail]
Cynthia Richman (Pro Hac Vice)
Gibson, Dunn & Crutcher LLP
1050 Connecticut Avenue, N.W.
Washington, DC 20036
[phone]
[e-mail]
Howard E. Heiss
Edward N. Moss
O’Melveny & Myers LLP
Times Square Tower
7 Times Square
New York, NY 10036
[phone]
[e-mail]
On behalf of Defendant Apple Inc.

25

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Exhibit A

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Filed 11/27/13 Page 2 of 15

Theodore J. Boutrous Jr.
Direct: +1 213.229.7804
Fax: [phone]
[e-mail]

October 31, 2013
VIA E-MAIL
Michael R. Bromwich
The Bromwich Group LLC
901 New York Avenue, NW 5th Floor
Washington, D.C. 20001
Re:

External Antitrust Compliance Monitoring

Dear Michael:
It was a pleasure meeting you last week, and Apple looks forward to working with
you to achieve our shared objective of developing a comprehensive and effective antitrust
training program consistent with Judge Cote’s Final Judgment. Apple is fully committed to
ensuring that its antitrust training program, and its policies and procedures related thereto,
are both robust and effective.
I am writing to follow up on three issues arising from our discussion last week and
your recent correspondence (letter of October 23, 20131 and e-mails on October 26 and 29,
2013). First, Apple believes that the timing and scope of your requests are inconsistent with
the letter and spirit of the Final Judgment. Judge Cote was very clear that the injunction
should be narrowly tailored to address the antitrust violation she found in this case and
sought to avoid unnecessarily burdening Apple or limiting its ability to innovate and do
business in this dynamic industry. See Hearing Transcript, United States v. Apple Inc., et al.,
No. 1:12-CV-2826, at 8-9 (Aug. 27, 2013) (“I want this injunction to rest as lightly as
possible on the way Apple runs its business.”) (hereinafter “Aug. 27, 2013 Hearing Tr.”).2
Notably in this regard, the Final Judgment provides that the External Compliance Monitor’s
review of Apple’s internal antitrust compliance policies and procedures and antitrust training
program is not to commence until “90 days after his or her appointment.” Final Judgment at
§ VI.C. Second, Apple also has concerns over the financial terms of your engagement,
which the Final Judgment requires be “reasonable and customary” and approved by the
1

As you are aware, Apple received a letter from you, in draft form, on October 23, 2013, which was not
finalized until October 26, 2013.
2

See also Aug. 27, 2013 Hearing Tr. at 27 (“I’m trying to think about, as I’ve indicated, where the real risks are
and to minimize the burdens on Apple.”)

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October 31, 2013
Page 2

Department of Justice (“DOJ”). Third, we also need to ensure that the confidentiality of any
information Apple may share with you during the course of your activities as monitor is
appropriately protected.
Apple is hopeful that these issues can be resolved quickly so that we can move
forward together to achieve the objectives of the Final Judgment. Each of these issues is
discussed in more detail below.
1.

Timing and Scope of Monitor’s Responsibilities

As you mentioned at the outset of our introductory meeting, the Final Judgment
defines the scope of your responsibilities in a manner that is clear and straightforward. The
monitor’s primary responsibility is to “conduct a review . . . [of] Apple’s internal antitrust
compliance policies and procedures, as they exist 90 days after his or her appointment” and
to “also conduct a review to assess whether Apple’s training program, required by Section
V.C of this Final Judgment, as it exists 90 days after his or her appointment, is sufficiently
comprehensive and effective.” Final Judgment at § VI.C (emphasis added).
During the August 27 hearing Judge Cote explained, “I don’t think that the [Monitor]
should conduct a review or assessment of the current policies. I would expect that Apple
would revise its current policy substantially and procedures and create an effective training
program. That will require some time. So I think this should be revised to have the
[Monitor] doing an assessment in three months from appointment and beginning to engage
Apple in a discussion at that point.” Aug. 27, 2013 Hearing Tr. at 20-21(emphasis added).
Apple is in the process of revising and enhancing its compliance training programs to
ensure that they are robust, comprehensive, effective, and compliant with the terms of the
Final Judgment. In this regard, Apple will soon be bringing on board its new Antitrust
Compliance Officer, as directed by the Final Judgment, and adding new lawyers with
antitrust compliance expertise in the legal department. In light of the express language of the
Final Judgment, as well as Judge Cote’s elaboration at the August 27 hearing, the time period
for your review of Apple’s antitrust policies and procedures and training program does not
commence until January 14, 2013 (90 days from the date of appointment).
Accordingly, your request to begin interviewing Apple’s entire board and its
executive team, as well as additional senior executives on November 18 is premature, not
authorized by the Final Judgment, and would not only be disruptive to Apple’s business
operations but also directly contrary to Judge Cote’s intent. We fully understand and expect
that there will be a need to conduct interviews with certain personnel at some point once
Apple’s new training programs are up and running. And you have Apple’s assurance that it
will be a most willing partner in facilitating those meetings. Furthermore, there will be
ample opportunity over the course of your engagement to determine whether Apple’s new
training program is consistent with the Judge’s Order and is effective in its impact.

Case 1:12-cv-02826-DLC Document 412-1

Filed 11/27/13 Page 4 of 15

October 31, 2013
Page 3

However, it makes no sense, and would be extremely disruptive, to schedule those interviews
before Apple has completed its internal assessment and developed its new antitrust training
program.
2.

Financial Terms and Fiduciary Responsibilities

The Final Judgment requires the monitor to operate on “reasonable and customary
terms” that are “consistent with reasonable expense guidelines.” Final Judgment at § VI.I.
Apple has already raised concerns regarding your hourly fees, the administrative fee you
seek to impose in addition to those fees, the need for additional personnel, and finally,
adherence to a defined expense policy. Apple does not believe your proposed fee structure is
reasonable and customary, whether for a monitor or a lawyer, and respectfully objects to it.
Moreover, your dictate that we simply accept these fees and costs at face value without any
support or explanation is inconsistent with the company’s fiduciary responsibilities to its
shareholders, and to the customary practices of Apple and other companies in conducting
business or legal activities. And, while the Final Judgment requires DOJ and Plaintiff States
to approve your fee and expense structure (see Final Judgment at § VI.I), it appears from
your correspondence you have not secured such approval but instead have simply submitted
your proposed approach to DOJ and it has not acted upon it.
3.

Confidentiality

To protect the confidentiality of any information Apple may share with you during
the monitorship, we have attached a non-disclosure agreement for your signature that is
consistent with Apple’s standard confidentiality agreements and the Stipulated Protective
Order in this matter. Apple also reserves its right to assert attorney-client privilege and work
product protections as appropriate throughout this process. Finally, Apple again requests
that, consistent with its policies, you, the Bromwich Group, Goodwin Procter, and Fried
Frank refrain from using Apple’s name in any marketing materials or media communications
like the press release Goodwin Procter issued announcing your appointment and containing a
direct quote from you.
*****
Concurrent with this response, Apple has submitted to DOJ and Plaintiff States a
notice of its objections. Please direct any future communications on these issues to me. As
we work to resolve these issues, Apple will continue to focus its efforts on its internal
assessment and enhancement of its antitrust policies and procedures and the training program
mandated by the Final Judgment. As you know, Apple has retained seasoned antitrust
practitioners and former government officials at the law firm of Simpson Thacher to aid it in
this process. We appreciate an honest and open dialogue on these issues, and look forward to

Case 1:12-cv-02826-DLC Document 412-1

Filed 11/27/13 Page 5 of 15

October 31, 2013
Page 4

working with you to establish antitrust compliance policies and training programs that are
comprehensive and effective in satisfaction of the Final Judgment.

Very truly yours,
s/ Theodore J. Boutrous, Jr.
Theodore J. Boutrous, Jr.

Enclosure

Case 1:12-cv-02826-DLC Document 412-1

Filed 11/27/13 Page 6 of 15

CONFIDENTIALITY AGREEMENT
This Confidentiality Agreement (the “Agreement”) is entered into and is effective as
of ________ (the “Effective Date”) by and between Michael Bromwich, on behalf of the Bromwich
Group, and Bernard Nigro (hereinafter “ECM”) and Apple Inc. (“Apple” and, collectively, the
“Parties”) in connection with Section VI.I of the September 5, 2013 Final Judgment (the “Final
Judgment”) entered in United States of America v. Apple, Inc., No. 1:12-CV-2826 (S.D.N.Y. Sept.
5, 2013) (the “Action”), and consistent with the May 7, 2012 Stipulated Protective Order entered in
the Action (the “Protective Order”).
Whereas, the Final Judgment contemplates that the Parties will execute customary
confidentiality agreements in connection with ECM’s monitoring responsibilities pursuant to the
Final Judgment; and
Whereas, Apple contemplates that certain highly sensitive information and materials
may be disclosed in connection with ECM’s performance of his responsibilities pursuant to the
Final Judgment; and
Whereas, the Parties agree that such materials should be kept confidential subject to
the terms and conditions set forth below,
NOW, THEREFORE, the Parties do hereby agree and stipulate as follows:
1.
DEFINITION OF CONFIDENTIAL INFORMATION. ECM agrees that all
information disclosed by Apple to ECM in any manner in connection with ECM’s monitoring
responsibilities pursuant to the Final Judgment will be considered and referred to collectively in this
Agreement as “Confidential Information.” Confidential Information, however, does not include
information that: (a) is now or subsequently becomes generally available to the public through no
fault or breach on the part of ECM; (b) ECM can demonstrate to have had rightfully in his
possession prior to disclosure to ECM by Apple; (c) is independently developed by ECM without
the use of any Confidential Information; or (d) ECM rightfully obtains from a third-party who has
the right to transfer or disclose it to ECM without limitation.
2.
NONDISCLOSURE AND NONUSE OF CONFIDENTIAL INFORMATION. ECM
agrees to protect Apple’s Confidential Information, using at least the same degree of care that he
uses to protect his own confidential and proprietary information of similar importance, but no less
than a reasonable degree of care. ECM agrees to use Apple’s Confidential Information for the sole
purpose of performing his monitoring responsibilities in connection with the Final Judgment. ECM
will not disclose, publish, or disseminate Confidential Information to anyone, and will not use
Confidential Information in any manner, except as set forth in this Agreement.
3.
INADVERTENT DISCLOSURE BY APPLE OF PRIVILEGED OR PROTECTED
INFORMATION. If Apple inadvertently discloses to ECM material subject to the attorney-client
privilege, work-product protection, or any other applicable privilege or protection that ECM is not
authorized to receive pursuant to the Final Judgment, the applicable privilege and/or protection will
not be waived if Apple makes a request for return of such inadvertently produced material promptly
after learning of its inadvertent production. Upon such notice, ECM will promptly return or destroy
the materials subject to privilege and/or protection.

Case 1:12-cv-02826-DLC Document 412-1

Filed 11/27/13 Page 7 of 15
2

4.
INADVERTENT DISCLOSURE BY ECM OF CONFIDENTIAL INFORMATION.
In the event of disclosure by ECM of any Confidential Information to any person or persons not
authorized to receive such disclosure pursuant to this Agreement, ECM will promptly notify Apple
of the disclosure and provide to Apple all known relevant information concerning the nature and
circumstances of the disclosure. ECM will promptly thereafter take all reasonable measures to
retrieve the improperly disclosed material and to ensure that no further or greater unauthorized
disclosure and/or use thereof is made. Unauthorized or inadvertent disclosure will not change the
confidential status of any Confidential Information.
5.
AUTHORIZED DISCLOSURE OF CONFIDENTIAL INFORMATION BY ECM.
Information and materials designated as Confidential Information pursuant to this Agreement may
only be disclosed by ECM to the persons and in the manner set forth below:
(a)

To the extent necessary to discharge ECM’s monitoring responsibilities
pursuant to the Final Judgment, attorneys, employees, and associates of
ECM, including attorneys and employees of The Bromwich Group LLC, and
attorneys and employees of Fried, Frank, Harris, Schriver & Jacobson.

(b)

United States Department of Justice attorneys and employees, in connection
with their enforcement or monitoring of compliance with the Final Judgment;

(c)

Attorneys and employees of the Attorney General’s Office of any
Representative Plaintiff State (as defined in the Final Judgment), in
connection with their enforcement or monitoring of compliance with the
Final Judgment; and

(d)

The Court and all persons assisting the Court in the Action, in connection
with enforcement or monitoring of the Final Judgment, including law clerks,
court reporters, and stenographic or clerical personnel.

In addition, before any information designated as Confidential Information may be disclosed to any
person described in subparagraphs 5(a)-(c) above, he or she must first read this Agreement or must
have otherwise been instructed on his or her obligations pursuant to this Agreement, and must
execute the Agreement included as Appendix A hereto prior to receiving Confidential Information.
Each individual described in subparagraphs 5(a)-(c) above and to whom Confidential Information is
disclosed must not disclose that information to any other individual, except as set forth in this
Agreement.
Nothing in this Agreement prevents disclosure by ECM of Confidential Information to any current
employee of Apple, and nothing in this Agreement prevents the United States or any Representative
Plaintiff State (as defined in the Final Judgment), subject to taking appropriate steps to preserve the
confidentiality of such information, from using or disclosing Confidential Information as permitted
or required by the Final Judgment, for law enforcement purposes, or as may otherwise be required
by law or binding court order.

Case 1:12-cv-02826-DLC Document 412-1

Filed 11/27/13 Page 8 of 15
3

6.

NOTICE OF DISCLOSURE AND USE OF CONFIDENTIAL INFORMATION IN
COURT PROCEEDINGS. Before disclosure of Confidential Information is made to any person or
persons not authorized to receive the information pursuant to paragraph 5 above, ECM must give
Apple at least ten (10) calendar days’ advance notice in writing, including the name(s), address(es),
and employer(s) of the person(s) to whom the disclosure will be made and the reason for the
disclosure. If, within that ten-day period, Apple objects to the disclosure, ECM must make a
written request to the United States and Representative Plaintiff States (as defined in the Final
Judgment) within ten (10) calendar days’ receipt of Apple’s objection. In addition, in connection
with any disclosure or use of Confidential Information in any court proceeding, ECM must take
reasonable steps to maintain the confidentiality of those materials, including but not limited to filing
documents under seal and satisfying the other requirements of paragraph 20 of the Protective Order.
7.

PROCEDURES UPON COMPLETION OF ECM’S MONITORING
RESPONSIBILITIES. The obligations imposed by this Agreement survive the termination of ECM’s
monitoring responsibilities as set forth in the Final Judgment. Within ninety (90) days after
termination of ECM’s monitoring responsibilities in connection with the Final Judgment, ECM
must certify to Apple in writing that it has destroyed or returned to Apple all Confidential
Information and that it has endeavored in good faith to ensure that any Confidential Information
disclosed pursuant to paragraph 5 above has been destroyed or returned to Apple. However,
nothing in this paragraph prevents the United States or the Representative Plaintiff States (as
defined in the Final Judgment) from retaining or using Confidential Information, subject to taking
appropriate steps to preserve the confidentiality of such information, as permitted or required by the
Final Judgment, for law enforcement purposes, or as may otherwise be required by law or binding
court order.
8.
EQUITABLE RELIEF. ECM hereby acknowledges that unauthorized
disclosure or use of Confidential Information could cause irreparable harm and significant injury to
Apple that may be difficult to ascertain. Accordingly, ECM agrees that Apple will have the right to
seek and obtain immediate injunctive relief to enforce obligations under this Agreement in addition
to any other rights and remedies it may have.
9.
NO IMPLIED WAIVER. Apple’s failure or delay in exercising any of its
rights will not constitute a waiver of such rights unless expressly waived in writing.
10.
ENTIRE AGREEMENT AND GOVERNING LAW. This Agreement, in
conjunction with the terms set forth in the Final Judgment, constitutes the entire Agreement with
respect to the Confidential Information disclosed pursuant to this Agreement and supersedes all
prior or contemporaneous oral or written Agreements concerning such Confidential Information.
This Agreement may not be amended except by written Agreement signed by authorized
representatives of both Parties. This Agreement shall be governed by and construed in accordance
with the laws of the State of California, excluding that body of California law concerning conflicts
of law. The Parties further submit to and waive any objections to the exclusive jurisdiction of and
venue in the United States District Court for the Southern District of New York for any litigation
arising out of this Agreement.

Case 1:12-cv-02826-DLC Document 412-1

Filed 11/27/13 Page 9 of 15
4

Understood and agreed to by the parties:
MICHAEL BROMWICH:
By: _______________________________
Name: _____________________________
Title: ______________________________

BERNARD NIGRO:
By: _______________________________
Name: _____________________________
Title: ______________________________

On behalf of APPLE INC.:
By: _______________________________
Name: _____________________________
Title: ______________________________

Case 1:12-cv-02826-DLC Document 412-1

Filed 11/27/13 Page 10 of 15

Appendix A
I am employed as ______________ by __________________. I hereby certify that:
1.
I have read the Confidentiality Agreement between Michael Bromwich and
Apple Inc. (the “Agreement”) and understand its terms.
2.
I agree to be bound by the terms of the Agreement, including the terms
relating to disclosure of Confidential Information (as defined in the Agreement) in paragraph 5 and
the terms relating to the destruction or return of Confidential Information in paragraph 7 of the
Agreement.
3.
I agree to use the information provided to me in connection with the
Agreement only for the purpose of enforcement and monitoring of the Final Judgment (as defined in
the Agreement).
4.
I understand that my failure to abide by the terms of the Agreement will
subject me, without limitation, to liability for breach of the Agreement and this Appendix A.
5.
I submit to the jurisdiction of the United States District Court for the
Southern District of New York solely for the purpose of enforcing the terms of the Agreement and
this Appendix A and freely and knowingly waive any right I may otherwise have to object to the
jurisdiction of said court.
I make this certificate on this ______ day of _____ , ______.
By: _____________________________________
Name: ___________________________________
Title: ____________________________________

Case 1:12-cv-02826-DLC Document 412-1

Filed 11/27/13 Page 11 of 15

ATTACHMENT 2

Case 1:12-cv-02826-DLC Document 412-1

Subject:

Filed 11/27/13 Page 12 of 15

Monitoring Letter

On Oct 26, 2013, at 8:47 AM, Michael Bromwich <[e-mail]> wrote:

Dear Kyle,
Thanks very much for your response to my cover note and our draft letter. Unfortunately, I think you
may have misconceived its purpose. It was not to begin a negotiation about fees, rates, and expenses,
nor was it meant to provide you with an opportunity to provide us with guidelines that are applicable
to providers of legal services where Apple is the client -- but that are inapplicable to firms providing
independent monitoring services. It was to give you an opportunity to modify or revise the
confidentiality provision. In light of your response, it probably makes sense to execute any
enhancements to the confidentiality agreement separately. I have attached a signed copy of the
monitoring letter. The only change is the date.
Without responding to each item in your note, I wanted to clarify the following:
1. Administrative fees are completely standard for consulting firms. The Bromwich Group is not a
law firm and does not practice law. The normal range for the administrative/management fees for
consulting firms is between 10% and 25%. Therefore, the 15% is at the low end of the range.
2.

We will add additional personnel, whether from Fried Frank or elsewhere, only as necessary and appropriate. We will keep
you informed if we add personnel performing significant substantive responsibilities but not if we use a lawyer to do a discrete
research project or a legal assistant to provide support. We will do this as a courtesy and we do not intend to provide a
rationale. It will be because we need additional assistance.

3. On expenses, please advise whether your lawyers from Gibson Dunn working on this matter, your
Wilmer lawyers working on the Samsung matter in the ND of California, and other lawyers working
on high-end litigation and corporate matters follow these expense guidelines without exception. If
they do, we will seriously consider doing so. We are happy to receive from you a list of Apple's
preferred hotels.
4. We are serving as an independent compliance monitor pursuant to a Court order, not as counsel to
Apple subject to its direction and control. Accordingly, we will not be providing a budget. You are
incorrect in stating that this is standard practice in monitorships. We will do everything we
reasonably can to keep fees and expenses to a minimum. We plan to provide you each month with a
statement of the number of hours spent by each timekeeper on this matter but not to provide
descriptions of the amount of time spent on specific tasks. We will maintain such records and will
share them with the Department of Justice, the Plaintiff States, and the Court if requested to do so.
5. We will submit our invoices directly to you, or to someone you designate. We will be happy to
execute W-9s.
1

Case 1:12-cv-02826-DLC Document 412-1

Filed 11/27/13 Page 13 of 15

6. My consulting firm did not issue a press release. Goodwin Procter posted an item on its web site
without my advance knowledge or consent to clarify that the firm itself would not be involved in the
monitorship.
We very much look forward to your responses to the various substantive matters we discussed on
Tuesday and to your confirming the particulars of our initial visit to Cupertino the week of November
18.
Best regards.

MRB
On Fri, Oct 25, 2013 at 10:45 PM, Kyle Andeer <[e-mail]> wrote:
Dear Michael,
Thank you for sharing your draft letter It is very helpful in that it tees up a number of different issues that make
sense to address at the outset of our relationship. As you noted, the treatment of confidential information is one
of several issues that will require additional research and thought. Although the disclosure of such information
is highly unlikely given the narrow scope of the External Compliance Monitor's responsibilities, we agree that
this is an issue we should seek to address at the outset. It likely makes sense for us to execute one of our
"customary confidentiality agreements" as contemplated in the Final Judgment. Final Judgment at § VI.I, U.S.
v. Apple, Inc., No. 1:12-CV-2826 (S.D.N.Y. Sept. 5, 2013). We will provide a full response on these and other
issues in the next week, as well as a retention obligations agreement and confidentiality agreements to address
this point.
I do want to raise concerns with the compensation and expense terms outlined in your letter which are in tension
with the terms of the Final Judgment which require the External Monitor to operate on "reasonable and
customary terms" that are "consistent with reasonable expense guidelines.” Final Judgment at § VI.I, U.S. v.
Apple, Inc., No. 1:12-CV-2826 (S.D.N.Y. Sept. 5, 2013). From our perspective they do not reflect the
competitive realities of the marketplace. We expect that your firm – like all of Apple’s legal service providers –
will comply with Apple’s Outside Service Provider Policy (“OSP”) (attached) and its standard expense policy
(also attached).
1. Administrative Fee. You request that the Bromwich Group be paid a “management/ administrative fee” of
15% of all billable hours. As you will note in the attached policies, Apple does not pay any of its legal vendors
a "management/administrative fee."
2. Hourly Rates. You have requested that Apple pay you $1,100 per hour and Mr. Nigro $1,025 per
hour. These rates are very high, particularly when compared to the average rate Apple pays a law firm partner
($565 per hour). Even if one looks at the top 25%, the average rate per partner is $801 per hour. Apple is
prepared to compensate you at $800 per hour and Mr. Nigro at a rate of $700 per hour. With the foregoing
principles in mind, we also ask that you provide the hourly rate for Maria Cirincione.
3. Additional Personnel. Pursuant to Apple’s Outside Service Provider Policy, the Bromwich Group (and Fried
Frank) should notify Apple before adding new timekeepers to its team and provide a rational for the additional
resources. As you appreciate, this is a standard requirement that ensures costs do not spiral out of control.
2

Case 1:12-cv-02826-DLC Document 412-1

Filed 11/27/13 Page 14 of 15

4. Expense policy. Apple expects that you will adhere to its standard expense policy (attached) Apple will pay
for coach airfare, lodging at Apple preferred hotels, and per diems of $15 for breakfast, $25 for lunch and $30
for dinner. The policy also outlines our guidelines on telephone and copying charges. Apple will not reimburse
for data storage and information technology services. This is consistent with these policies is in keeping with
the “reasonable expense guidelines” language in Section VI.I of the Final Judgment.
5. Budget and Invoicing. The Bromwich Group should submit an expected budget for its services for the
coming year. As you know this is standard practice in any engagement, including in monitorships. In addition,
Apple expects that your invoices will describe time spent on tasks and a description of those tasks. Apple
reserves the right to challenge fees that are excessive, outside the scope your responsibilities, and/or unjustified
pursuant to Sections VI.I. and VI.J. of the Final Judgment.
6. Billing. Apple requires firms to submit invoices - within 30 days of service - via an electronic portal. We
can set up a meeting with our eBilling team as soon as you are ready. Apple will also require a signed W9 in
order to pay invoices for your firm.
7. Marketing. Apple does not allow the firms it works with to market their representation of Apple (see OSP at
6). We noted that your firm, Goodwin Proctor, your consulting practice, The Bromwich Group, and Mr. Nigro's
firm, Fried Frank all issued press releases announcing your appointments. We ask that you please refrain from
using Apple's name in any marketing materials or media communications.
The requests in your letter do not reflect market realities. That raises significant concerns on our part. We
sincerely hope that you will reflect on these points and that we can work out these issues without going to the
Department of Justice and the courts. Please let me know if you would like to discuss.
Best regards,
Kyle

On Oct 23, 2013, at 3:58 PM, Michael Bromwich <[e-mail]> wrote:

Dear Kyle,
I have attached a draft letter that sets forth our duties and responsibilities as the external antitrust
compliance monitor under the Final Judgment, and touches on other matters relevant to our
monitoring work, including information about fees, expenses, and confidentiality. This letter is
specifically tailored to the provision of monitoring services under the Final Judgment. Accordingly, it
is different in various ways from the engagement letter that would be appropriate if Apple were a
client of a law firm or my consulting firm.

3

Case 1:12-cv-02826-DLC Document 412-1

Filed 11/27/13 Page 15 of 15

Before I provided a signed version of the letter, I wanted to make sure it should be addressed to you
rather than someone else at Apple, and give you the opportunity to suggest any revisions to Section 10
of the letter dealing with confidentiality. I realize this may be a sensitive issue and I wanted to make
sure the language I have crafted is acceptable. I am willing to consider reasonable modifications.
Please confirm that you should be the recipient of this letter (or provide an alternative addressee) and
suggest any reasonable changes to the confidentiality language as promptly as you can.
Thanks very much.
MRB
<Apple Monitoring Letter -- 10-23.doc>

<Apple -- 10-26 Letter.pdf>
_______________________
Confidentiality Notice: The information contained in this e-mail and any attachments may be legally privileged and confidential. If you are not an intended recipient,
you are hereby notified that any dissemination, distribution or copying of this e-mail is strictly prohibited. If you have received this e-mail in error, please notify the
sender and permanently delete the e-mail and any attachments immediately. You should not retain, copy or use this e-mail or any attachment for any purpose, nor
disclose all or any part of the contents to any other person. Thank you.

4

Case 1:12-cv-02826-DLC Document 412-2

Filed 11/27/13 Page 1 of 7

Exhibit B

Case 1:12-cv-02826-DLC Document 412-2

From:
Sent:
To:
Cc:
Subject:

Filed 11/27/13 Page 2 of 7

Boutrous Jr., Theodore J.
Monday, November 11, 2013 7:48 AM
Michael Bromwich
Nigro, Barry; Cirincione, Maria; Swanson, Daniel G.; Richman, Cynthia
RE: Apple -- Expense Guidelines

Dear Michael:
I am very surprised and disappointed in your email below. I thought that we had set things on a
productive and collaborative path in our call last week and with my follow up list of potential
interviewees (which was much broader and longer than the one I had suggested during the cordial
November 6 call). During our call, I specifically noted that the week of November 18 might not be
feasible or convenient and suggested that the week of December 2 (the week after the intervening
Thanksgiving holiday week) might work well. When I then followed up and proposed December 2,
you responded in your November 7 email that you would be in Europe the week of December 2 and
had some other scheduling conflicts that week and the week of December 9. I then simply wrote back
and asked if you could reshuffle your schedule so that we could make the December 9 timeframe
work.
Your response below was not in the spirit of our efforts and offer to host you at Apple
headquarters for a full slate of interviews and provide other information well in advance of the date on
which your review of the new compliance and training programs is to commence under the Final
Judgment (January 14). As set forth in my October 31 letter, Judge Cote and the Final Judgment could
not have been clearer regarding the timing and scope of your review and the need to avoid unduly
intruding on Apple’s business operations. The Final Judgment is also clear that any “interview [is] to
be subject to the reasonable convenience of such personnel….” Final Judgment at VI.G.1. Contrary to
your suggestions below, and as Apple’s General Counsel Bruce Sewell made clear in his letter to you
and I emphasized when we spoke and in my letter to you and in my conversations with the Justice
Department and States on these issues, Apple takes its obligations and responsibilities under the Final
Judgment very seriously. To that end, and among the other things it is doing on this front, Apple has
made a reasonable proposal regarding the requested interviews and for working collaboratively and
productively with you. Under the circumstances, your demands and approach are unreasonable,
unnecessary and unwarranted, and go well beyond the scope of the Final Judgment and Judge Cote’s
guidance.
Ted

Theodore J. Boutrous Jr.

GIBSON DUNN
Gibson, Dunn & Crutcher LLP
333 South Grand Avenue, Los Angeles, CA 90071-3197
Tel [phone] • Fax [phone]
[e-mail] • www.gibsondunn.com
1

Case 1:12-cv-02826-DLC Document 412-2

Filed 11/27/13 Page 3 of 7

From: Michael Bromwich [mailto:[e-mail]]
Sent: Saturday, November 09, 2013 2:48 PM
To: Boutrous Jr., Theodore J.
Cc: Nigro, Barry; Cirincione, Maria; Swanson, Daniel G.; Richman, Cynthia; [e-mail]
Subject: Re: Apple -- Expense Guidelines

Ted,
This is a very disappointing response, and very much at odds with what my understanding was during
and after our call last Wednesday. The company was put on notice on October 22 that we intended to
make our initial visit the week of November 18. Your response suggests that our request was not -and is not -- taken seriously by the company. Apple is a can-do company, and I am confident that
they can pull this together. If they maintain that they cannot, that suggests to me that they do not
take its obligations and my responsibilities under the Final Judgment very seriously. The questions
below need only be answered if the company maintains that that it unable to comply with our request
for a series of interviews and meetings the week of November 18.
Please advise which of the 15 people (Sewell, Moyer, Levoff, Vetter, Andeer, Said, Persamperi, Moerer,
McDonald, Cook, Schiller, Cue) identified in your e-mail and my response are unavailable for as little
as an hour any day the week of November 18 (Monday through Friday). Be prepared to support any
representations concerning their unavailability with detailed copies of their schedules for that entire
week.
Please confirm that contact has been made with the 2-3 Board members identified in my e-mail who
appear to work in the vicinity of Apple's headquarters, and that they are also unavailable for a
meeting/interview of similar length.
Please advise which of the subjects identified in my recent e-mail cannot be addressed in a
presentation/discussion (with almost two weeks notice) and why that is the case.
I remain willing to upend my schedule and make the trip this coming week rather than the week of
November 18 if that will mean the company is better able to comply with our quite reasonable
requests. I am not prepared to drag things out any longer than that.
Thanks.

MRB
On Sat, Nov 9, 2013 at 4:01 PM, Boutrous Jr., Theodore J. <[e-mail]> wrote:

Michael:
I have now heard back and, unfortunately, that week is very bad in terms of
scheduling. I know you will be out of the country the week of December 2, but we would very much
appreciate it if you could work on your scheduling conflicts the week of December 9 and make the trip
that week. Apple will be able to have a full slate of interviewees for you to meet with that week along
the lines of my prior email and the new ACO will have had time to get acclimated and up and
running. This will get things off to a strong start and would be much better from the standpoints of
efficiency and effectiveness. It doesn’t make sense to have you fly all the way to California only to
2

Case 1:12-cv-02826-DLC Document 412-2

Filed 11/27/13 Page 4 of 7

meet with a few people the week of November 18. In the meantime, we can start getting you some of
the information you have requested. We are also working on a new confidentiality arrangement based
on the protective order. Can we make this work?

Theodore J. Boutrous Jr.

GIBSON DUNN
Gibson, Dunn & Crutcher LLP
333 South Grand Avenue, Los Angeles, CA 90071-3197
Tel [phone] • Fax [phone]
[e-mail] • www.gibsondunn.com

From: Michael R. Bromwich [mailto:[e-mail]]
Sent: Saturday, November 09, 2013 11:30 AM
To: Boutrous Jr., Theodore J.
Cc: Nigro, Barry; Cirincione, Maria; Swanson, Daniel G.; Richman, Cynthia; [e-mail]
Subject: Re: Apple -- Expense Guidelines

Thanks, Ted. We appreciate it. We will plan to fly in late Sunday and be ready to go first thing Monday
morning unless a Tuesday start would be significantly better for the company.

Also, we would be grateful for any of the materials we originally requested October 22.
Best.

MRB

On Nov 9, 2013, at 2:13 PM, "Boutrous Jr., Theodore J." <[e-mail]> wrote:

Checking to see what can be pulled together for that week Will report back

Theodore J. Boutrous Jr.

GIBSON DUNN
Gibson, Dunn & Crutcher LLP
333 South Grand Avenue, Los Angeles, CA 90071-3197
Tel [phone] • Fax [phone]
[e-mail] • www.gibsondunn.com

3

Case 1:12-cv-02826-DLC Document 412-2

Filed 11/27/13 Page 5 of 7

From: Michael Bromwich [mailto:[e-mail]]
Sent: Thursday, November 07, 2013 12:58 PM
To: Boutrous Jr., Theodore J.
Cc: Nigro, Barry; Cirincione, Maria; Swanson, Daniel G.
Subject: Re: Apple -- Expense Guidelines

Thanks, Ted. Let's keep trying for the week of November 18. The following two weeks
are bad for me -- I'm out of the country and otherwise committed the week of December
2 and have some real scheduling difficulties the following week as well. And then we're
into the holidays when we can expect people to be traveling everywhere.
We have always understood that we would not be able to grab everyone we would like to
meet or interview the week of the 18th, but let's resolve to do the best we can. The list
you have generated is an excellent start.
In addition to the people on this list, all of whom we want to meet/interview either the
week of the 18th or at some point soon thereafter, we would like to interview/meet Tim
Cook, Phil Schiller, and Eddie Cue. If there are other Senior VPs who touch antitrustrelated issues in a meaningful way, we would like to add them to the list as well.
In addition, we would be very interested in gathering information while we are out there
on the following.
1. A discussion of the overall compliance structure at Apple -- spheres of responsibility,
reporting structure, and personnel involved in compliance.
2. Overview of the compliance activities that were commenced after the Final
Judgment, as referred to in Bruce Sewell's November 4 letter.
3. Overview of the structure and operation of the Risk Management Committee.
4. Overview of the role of the Audit Committee in compliance
5. Overview of the evaluative tools -- e.g., outside audits and reviews -- currently used to
review and monitor the compliance program.
6. Discussion of the tools and methods currently used within the company to promote
compliance.
7. Structure for reporting and investigating suspected compliance violations (antitrust
and other issues).
8. Existing system for imposing discipline on company personnel who violate
compliance policies.
9. Mechanisms for reporting compliance violations and preventing retaliation.
These are just a few ideas about topics that I have found very worthwhile to explore at
the outset of monitoring. I will leave to Apple which of these it wants to take up the
week of 11/18 and which it would prefer to defer until our next trip -- realistically,
4

Case 1:12-cv-02826-DLC Document 412-2

Filed 11/27/13 Page 6 of 7

probably in early January. I am open to interviewing people who are the most
knowledgeable on these subjects, or receiving presentations, which can then be later
followed up on with interviews. I want to be as flexible as possible about this, but I have
no doubt we will be able to usefully fill 2-3 days the week of 11/18.
We would also very much ask for the company's assistance in arranging interviews with
its Board members. In addition to Mr. Cook, I note that Mr. Levenson and Mr.
Campbell, both of whom are members of the Audit Committee, are based in Mountain
View (Campbell) and South San Francisco (Levenson). My understanding is that Mr.
Gore either lives of frequently visits Northern California. If one or more of these outside
directors are available the week of the 18th, we would very much like to meet with them.
Thanks very much for your continued assistance and cooperation on this.
Best.

MRB

On Thu, Nov 7, 2013 at 3:16 PM, Boutrous Jr., Theodore J. <[e-mail]>
wrote:
Thank you Michael. I look forward to reviewing this and very much appreciated our call
yesterday. The week of November 18 is looking bad from a scheduling standpoint (including
because the new Antitrust Compliance Officer will be officially starting work that week and a
number of other folks will be traveling), so we would like to propose the week of December 2. I
am still working to confirm, but interviewees could potentially include:

Bruce Sewell, Senior Vice President, General Counsel, and Secretary Member of Management
Risk Oversight Committee
Tom Moyer, Chief Compliance Officer and Head of Global Security
Gene Levoff, Senior Director, Associate General Counsel - Corporate Law and Assistant
Secretary, Legal Counsel to Audit and Nominating and Corporate Governance Committee,
Liaison to Board of Directors, Counsel Risk Management Committee
Doug Vetter, Vice President, Associate General Counsel Product Law and Assistant
Secretary. Assumed responsibility in July 2013 for legal groups supporting hardware, software,
and iTunes (including App Store and iBooks Store).
Kyle Andeer, Senior Director, Competition Law & Policy
Deena Said, Antitrust Compliance Officer
Annie Persamperi, Legal Counsel, iBooks Store
5

Case 1:12-cv-02826-DLC Document 412-2

Filed 11/27/13 Page 7 of 7

Keith Moerer, Director, iTunes content
Rob McDonald, Head of iBooks Store for the United States

I hope we can work together to make this a productive first trip for you to Apple and sets us on a
joint path to achieving the objectives of this effort.
Ted
Sent from my iPad

On Nov 7, 2013, at 1:00 PM, "Michael Bromwich" <[e-mail]>
wrote:
Dear Ted,
As promised during our call yesterday afternoon, attached please find a
letter that sets forth the items included in Apple's expense policies that we
feel comfortable signing on to. As you will see, we have no objection to
agreeing to follow those polices that don't raise independence concerns or
otherwise seem inappropriate. Please let us know if you have any
questions or need to discuss any of the specific items.
Again, I want to thank you for the very productive discussion we had
yesterday. We look forward to receiving the list of people and groups the
company is proposing we meet and/or interview the week of November 18
so we can reach closure on the issue as soon as possible and schedule the
trip.
Best regards.

MRB
<Apple -- Letter to Boutrous -- 11-7.PDF>

This message may contain confidential and privileged information. If it has been sent to you in
error, please reply to advise the sender of the error and then immediately delete this message.

6

Case 1:12-cv-02826-DLC Document 412-3

Filed 11/27/13 Page 1 of 3

Exhibit C

Case 1:12-cv-02826-DLC Document 412-3

From:
Sent:
To:
Cc:
Subject:

Filed 11/27/13 Page 2 of 3

Boutrous Jr., Theodore J.
Thursday, November 07, 2013 12:17 PM
Michael Bromwich
Nigro, Barry; Cirincione, Maria; Swanson, Daniel G.
Re: Apple -- Expense Guidelines

Thank you Michael. I look forward to reviewing this and very much appreciated our call yesterday. The week
of November 18 is looking bad from a scheduling standpoint (including because the new Antitrust Compliance
Officer will be officially starting work that week and a number of other folks will be traveling), so we would
like to propose the week of December 2. I am still working to confirm, but interviewees could potentially
include:
Bruce Sewell, Senior Vice President, General Counsel, and Secretary Member of Management Risk Oversight
Committee
Tom Moyer, Chief Compliance Officer and Head of Global Security
Gene Levoff, Senior Director, Associate General Counsel - Corporate Law and Assistant Secretary, Legal
Counsel to Audit and Nominating and Corporate Governance Committee, Liaison to Board of Directors,
Counsel Risk Management Committee
Doug Vetter, Vice President, Associate General Counsel Product Law and Assistant Secretary. Assumed
responsibility in July 2013 for legal groups supporting hardware, software, and iTunes (including App Store and
iBooks Store).
Kyle Andeer, Senior Director, Competition Law & Policy
Deena Said, Antitrust Compliance Officer
Annie Persamperi, Legal Counsel, iBooks Store
Keith Moerer, Director, iTunes content
Rob McDonald, Head of iBooks Store for the United States

I hope we can work together to make this a productive first trip for you to Apple and sets us on a joint path to
achieving the objectives of this effort.
Ted
Sent from my iPad
On Nov 7, 2013, at 1:00 PM, "Michael Bromwich" <[e-mail]> wrote:
Dear Ted,
As promised during our call yesterday afternoon, attached please find a letter that sets
forth the items included in Apple's expense policies that we feel comfortable signing on
to. As you will see, we have no objection to agreeing to follow those polices that don't
raise independence concerns or otherwise seem inappropriate. Please let us know if you
have any questions or need to discuss any of the specific items.
Again, I want to thank you for the very productive discussion we had yesterday. We look
forward to receiving the list of people and groups the company is proposing we meet
1

Case 1:12-cv-02826-DLC Document 412-3

Filed 11/27/13 Page 3 of 3

and/or interview the week of November 18 so we can reach closure on the issue as soon
as possible and schedule the trip.
Best regards.

MRB
<Apple -- Letter to Boutrous -- 11-7.PDF>

2

Case 1:12-cv-02826-DLC Document 412-4

Filed 11/27/13 Page 1 of 2

Exhibit D

Case 1:12-cv-02826-DLC Document 412-4

Filed 11/27/13 Page 2 of 2

From: Kyle Andeer [mailto:[e-mail]]
Sent: Thursday, October 17, 2013 12:08 AM
To: Bromwich, Michael; [e-mail]
Subject: Introduction

Hi Michael & Barry,
I wanted to drop you a quick note of introduction in light of today's news. I am responsible for Apple's in-house
antitrust/competition legal team; I have spent three years here after a decade at the DOJ and the FTC.
I don't believe I have met either of you before but I am looking forward to it. The circumstances (at least from
my perspective) could be better but I am committed to working with both of you and developing a best of class
antitrust compliance program for iTunes. We are already hard at work developing such a program working with
our internal compliance team here at Apple and Kevin Arquit and Matt Reilly at Simpson Thacher. We are
hopeful that the program that we will present to you in 90 days will meet our lofty goals. That said, we
recognize and expect that you will have thoughts and comments. I really do hope this can be a collaborative
effort.
I thought it might be helpful to at least introduce myself at the outset. I am more than willing to get on a call (or
a plane) at any time if that would be of interest. And Michael, I apologize for using your Goodwin address . . .
I did not have one for your consulting practice. Let me know if there is a better contact.
Kyle

Kyle Andeer | Apple Legal | Senior Director, Competition Law & Policy/Commercial & Retail Law
1 Infinite Loop, Cupertino, California 95014 | T [phone] | C [phone] | [e-mail]
The information in this e-mail and any attachment(s) is intended solely for the personal and confidential use of the designated recipients. This
message may be an attorney-client communication protected by privilege. If you are not the intended recipient, you may not review, use, copy,
forward, or otherwise disseminate this message. Please notify us of the transmission error by reply e-mail and delete all copies of the message and
any attachment(s) from your systems.

2

Case 1:12-cv-02826-DLC Document 412-5

Filed 11/27/13 Page 1 of 8

Exhibit E

Case 1:12-cv-02826-DLC Document 412-5

From:
Sent:
To:
Cc:
Subject:

Filed 11/27/13 Page 2 of 8

Michael Bromwich <[e-mail]>
Monday, November 11, 2013 8:34 AM
Boutrous Jr., Theodore J.; Carroll, Sarah
Nigro, Barry; Cirincione, Maria; Swanson, Daniel G.; Richman, Cynthia
Re: Apple -- Expense Guidelines

Ted, let's see if we can make some progress on a phone call this afternoon rather than exchanging
additional e-mails. We don't think a slate of interviews and meetings next week, almost a full month
after we identified it as the time we would like to begin our on site work, is at all unreasonable,
especially because we have made clear that we will understand if some of the people we want to meet
are unavailable next week. I'm hopeful that we can work something out that isn't overly burdensome
to the company but that doesn't cause us further delay. I think we can.
Please let us know what times this afternoon would work for you. Thanks.

MRB
On Mon, Nov 11, 2013 at 10:48 AM, Boutrous Jr., Theodore J. <[e-mail]> wrote:

Dear Michael:

I am very surprised and disappointed in your email below. I thought that we had set things on a
productive and collaborative path in our call last week and with my follow up list of potential
interviewees (which was much broader and longer than the one I had suggested during the cordial
November 6 call). During our call, I specifically noted that the week of November 18 might not be
feasible or convenient and suggested that the week of December 2 (the week after the intervening
Thanksgiving holiday week) might work well. When I then followed up and proposed December 2,
you responded in your November 7 email that you would be in Europe the week of December 2 and
had some other scheduling conflicts that week and the week of December 9. I then simply wrote back
and asked if you could reshuffle your schedule so that we could make the December 9 timeframe
work.
Your response below was not in the spirit of our efforts and offer to host you at Apple
headquarters for a full slate of interviews and provide other information well in advance of the date on
which your review of the new compliance and training programs is to commence under the Final
Judgment (January 14). As set forth in my October 31 letter, Judge Cote and the Final Judgment could
not have been clearer regarding the timing and scope of your review and the need to avoid unduly
intruding on Apple’s business operations. The Final Judgment is also clear that any “interview [is] to
be subject to the reasonable convenience of such personnel….” Final Judgment at VI.G.1. Contrary to
your suggestions below, and as Apple’s General Counsel Bruce Sewell made clear in his letter to you
and I emphasized when we spoke and in my letter to you and in my conversations with the Justice
1

Case 1:12-cv-02826-DLC Document 412-5

Filed 11/27/13 Page 3 of 8

Department and States on these issues, Apple takes its obligations and responsibilities under the Final
Judgment very seriously. To that end, and among the other things it is doing on this front, Apple has
made a reasonable proposal regarding the requested interviews and for working collaboratively and
productively with you. Under the circumstances, your demands and approach are unreasonable,
unnecessary and unwarranted, and go well beyond the scope of the Final Judgment and Judge Cote’s
guidance.

Ted

Theodore J. Boutrous Jr.

GIBSON DUNN
Gibson, Dunn & Crutcher LLP
333 South Grand Avenue, Los Angeles, CA 90071-3197
Tel [phone] • Fax [phone]
[e-mail] • www.gibsondunn.com

From: Michael Bromwich [mailto:[e-mail]]
Sent: Saturday, November 09, 2013 2:48 PM
To: Boutrous Jr., Theodore J.
Cc: Nigro, Barry; Cirincione, Maria; Swanson, Daniel G.; Richman, Cynthia; [e-mail]
Subject: Re: Apple -- Expense Guidelines

Ted,

This is a very disappointing response, and very much at odds with what my understanding was during
and after our call last Wednesday. The company was put on notice on October 22 that we intended to
make our initial visit the week of November 18. Your response suggests that our request was not -and is not -- taken seriously by the company. Apple is a can-do company, and I am confident that
they can pull this together. If they maintain that they cannot, that suggests to me that they do not
take its obligations and my responsibilities under the Final Judgment very seriously. The questions
below need only be answered if the company maintains that that it unable to comply with our request
for a series of interviews and meetings the week of November 18.

Please advise which of the 15 people (Sewell, Moyer, Levoff, Vetter, Andeer, Said, Persamperi, Moerer,
McDonald, Cook, Schiller, Cue) identified in your e-mail and my response are unavailable for as little
as an hour any day the week of November 18 (Monday through Friday). Be prepared to support any
2

Case 1:12-cv-02826-DLC Document 412-5

Filed 11/27/13 Page 4 of 8

representations concerning their unavailability with detailed copies of their schedules for that entire
week.

Please confirm that contact has been made with the 2-3 Board members identified in my e-mail who
appear to work in the vicinity of Apple's headquarters, and that they are also unavailable for a
meeting/interview of similar length.

Please advise which of the subjects identified in my recent e-mail cannot be addressed in a
presentation/discussion (with almost two weeks notice) and why that is the case.

I remain willing to upend my schedule and make the trip this coming week rather than the week of
November 18 if that will mean the company is better able to comply with our quite reasonable
requests. I am not prepared to drag things out any longer than that.

Thanks.

MRB

On Sat, Nov 9, 2013 at 4:01 PM, Boutrous Jr., Theodore J. <[e-mail]> wrote:

Michael:
I have now heard back and, unfortunately, that week is very bad in terms of
scheduling. I know you will be out of the country the week of December 2, but we would very much
appreciate it if you could work on your scheduling conflicts the week of December 9 and make the trip
that week. Apple will be able to have a full slate of interviewees for you to meet with that week along
the lines of my prior email and the new ACO will have had time to get acclimated and up and
running. This will get things off to a strong start and would be much better from the standpoints of
efficiency and effectiveness. It doesn’t make sense to have you fly all the way to California only to
meet with a few people the week of November 18. In the meantime, we can start getting you some of
the information you have requested. We are also working on a new confidentiality arrangement based
on the protective order. Can we make this work?

Theodore J. Boutrous Jr.

3

Case 1:12-cv-02826-DLC Document 412-5

Filed 11/27/13 Page 5 of 8

GIBSON DUNN
Gibson, Dunn & Crutcher LLP
333 South Grand Avenue, Los Angeles, CA 90071-3197
Tel [phone] • Fax [phone]
[e-mail] • www.gibsondunn.com

From: Michael R. Bromwich [mailto:[e-mail]]
Sent: Saturday, November 09, 2013 11:30 AM
To: Boutrous Jr., Theodore J.
Cc: Nigro, Barry; Cirincione, Maria; Swanson, Daniel G.; Richman, Cynthia; [e-mail]
Subject: Re: Apple -- Expense Guidelines

Thanks, Ted. We appreciate it. We will plan to fly in late Sunday and be ready to go first thing Monday
morning unless a Tuesday start would be significantly better for the company.

Also, we would be grateful for any of the materials we originally requested October 22.
Best.

MRB

On Nov 9, 2013, at 2:13 PM, "Boutrous Jr., Theodore J." <[e-mail]> wrote:

Checking to see what can be pulled together for that week Will report back

Theodore J. Boutrous Jr.

GIBSON DUNN
Gibson, Dunn & Crutcher LLP
333 South Grand Avenue, Los Angeles, CA 90071-3197
Tel [phone] • Fax [phone]
[e-mail] • www.gibsondunn.com

From: Michael Bromwich [mailto:[e-mail]]
Sent: Thursday, November 07, 2013 12:58 PM
To: Boutrous Jr., Theodore J.
Cc: Nigro, Barry; Cirincione, Maria; Swanson, Daniel G.
Subject: Re: Apple -- Expense Guidelines

4

Case 1:12-cv-02826-DLC Document 412-5

Filed 11/27/13 Page 6 of 8

Thanks, Ted. Let's keep trying for the week of November 18. The following two weeks
are bad for me -- I'm out of the country and otherwise committed the week of December
2 and have some real scheduling difficulties the following week as well. And then we're
into the holidays when we can expect people to be traveling everywhere.
We have always understood that we would not be able to grab everyone we would like to
meet or interview the week of the 18th, but let's resolve to do the best we can. The list
you have generated is an excellent start.
In addition to the people on this list, all of whom we want to meet/interview either the
week of the 18th or at some point soon thereafter, we would like to interview/meet Tim
Cook, Phil Schiller, and Eddie Cue. If there are other Senior VPs who touch antitrustrelated issues in a meaningful way, we would like to add them to the list as well.
In addition, we would be very interested in gathering information while we are out there
on the following.
1. A discussion of the overall compliance structure at Apple -- spheres of responsibility,
reporting structure, and personnel involved in compliance.
2. Overview of the compliance activities that were commenced after the Final
Judgment, as referred to in Bruce Sewell's November 4 letter.
3. Overview of the structure and operation of the Risk Management Committee.
4. Overview of the role of the Audit Committee in compliance
5. Overview of the evaluative tools -- e.g., outside audits and reviews -- currently used to
review and monitor the compliance program.
6. Discussion of the tools and methods currently used within the company to promote
compliance.
7. Structure for reporting and investigating suspected compliance violations (antitrust
and other issues).
8. Existing system for imposing discipline on company personnel who violate
compliance policies.
9. Mechanisms for reporting compliance violations and preventing retaliation.
These are just a few ideas about topics that I have found very worthwhile to explore at
the outset of monitoring. I will leave to Apple which of these it wants to take up the
week of 11/18 and which it would prefer to defer until our next trip -- realistically,
probably in early January. I am open to interviewing people who are the most
knowledgeable on these subjects, or receiving presentations, which can then be later
followed up on with interviews. I want to be as flexible as possible about this, but I have
no doubt we will be able to usefully fill 2-3 days the week of 11/18.
We would also very much ask for the company's assistance in arranging interviews with
its Board members. In addition to Mr. Cook, I note that Mr. Levenson and Mr.
5

Case 1:12-cv-02826-DLC Document 412-5

Filed 11/27/13 Page 7 of 8

Campbell, both of whom are members of the Audit Committee, are based in Mountain
View (Campbell) and South San Francisco (Levenson). My understanding is that Mr.
Gore either lives of frequently visits Northern California. If one or more of these outside
directors are available the week of the 18th, we would very much like to meet with them.
Thanks very much for your continued assistance and cooperation on this.
Best.

MRB

On Thu, Nov 7, 2013 at 3:16 PM, Boutrous Jr., Theodore J. <[e-mail]>
wrote:
Thank you Michael. I look forward to reviewing this and very much appreciated our call
yesterday. The week of November 18 is looking bad from a scheduling standpoint (including
because the new Antitrust Compliance Officer will be officially starting work that week and a
number of other folks will be traveling), so we would like to propose the week of December 2. I
am still working to confirm, but interviewees could potentially include:

Bruce Sewell, Senior Vice President, General Counsel, and Secretary Member of Management
Risk Oversight Committee
Tom Moyer, Chief Compliance Officer and Head of Global Security
Gene Levoff, Senior Director, Associate General Counsel - Corporate Law and Assistant
Secretary, Legal Counsel to Audit and Nominating and Corporate Governance Committee,
Liaison to Board of Directors, Counsel Risk Management Committee
Doug Vetter, Vice President, Associate General Counsel Product Law and Assistant
Secretary. Assumed responsibility in July 2013 for legal groups supporting hardware, software,
and iTunes (including App Store and iBooks Store).
Kyle Andeer, Senior Director, Competition Law & Policy
Deena Said, Antitrust Compliance Officer
Annie Persamperi, Legal Counsel, iBooks Store
Keith Moerer, Director, iTunes content
Rob McDonald, Head of iBooks Store for the United States

I hope we can work together to make this a productive first trip for you to Apple and sets us on a
joint path to achieving the objectives of this effort.
6

Case 1:12-cv-02826-DLC Document 412-5

Filed 11/27/13 Page 8 of 8

Ted
Sent from my iPad

On Nov 7, 2013, at 1:00 PM, "Michael Bromwich" <[e-mail]>
wrote:
Dear Ted,
As promised during our call yesterday afternoon, attached please find a
letter that sets forth the items included in Apple's expense policies that we
feel comfortable signing on to. As you will see, we have no objection to
agreeing to follow those polices that don't raise independence concerns or
otherwise seem inappropriate. Please let us know if you have any
questions or need to discuss any of the specific items.
Again, I want to thank you for the very productive discussion we had
yesterday. We look forward to receiving the list of people and groups the
company is proposing we meet and/or interview the week of November 18
so we can reach closure on the issue as soon as possible and schedule the
trip.
Best regards.

MRB
<Apple -- Letter to Boutrous -- 11-7.PDF>

This message may contain confidential and privileged information. If it has been sent to you in
error, please reply to advise the sender of the error and then immediately delete this message.

7

Case 1:12-cv-02826-DLC Document 412-6

Filed 11/27/13 Page 1 of 3

Exhibit F

Case 1:12-cv-02826-DLC Document 412-6

From:
Sent:
To:
Cc:
Subject:

Filed 11/27/13 Page 2 of 3

Michael Bromwich <[e-mail]>
Tuesday, November 12, 2013 3:10 PM
Boutrous Jr., Theodore J.
Nigro, Barry ([e-mail]); Cirincione, Maria
([e-mail]); Richman, Cynthia; Swanson, Daniel G.
Re: Apple

Ted,
Thanks very much for your timely response and the offer of interviews with Mr. Moyer and Mr. Levoff
next Monday, November 18. We accept. We are hopeful that once you advise the company that we
will be conducting these interviews on Monday, other people whom we have identified, or whom you
have suggested, will become available on Monday, Tuesday, or even Wednesday. I think it is very
much in the company's interests for us to meet, if only briefly, those people with whom we will be
having the most contact over the next two years.
Please let us know whether we should be prepared to conduct the interviews Monday morning or
Monday afternoon. Also, we would very much appreciate obtaining the materials we originally
requested on October 22, especially those most relevant to Mr. Moyer's and Mr. Levoff's
responsibilities, as soon as possible.
Please let us know if the company has any suggestions on hotels where we should try to make
reservations.
Again, thanks very much for your cooperation in this matter.
Best regards.

MRB
On Tue, Nov 12, 2013 at 4:55 PM, Boutrous Jr., Theodore J. <[e-mail]> wrote:

Dear Michael:
It was good speaking with you yesterday. I have
confirmed that Apple would be able to make available for 1-hour
intenrviews on Monday November 18 Tom Moyer, who is Chief
Compliance Officer and Head of Global Security, and Gene Levoff,
who serves as Senior Director, Associate General Counsel - Corporate
Law - and Assistant Secretary, Legal Counsel to Audit and
Nominating and Corporate Governance Committee, Liaison to Board
of Directors, and Counsel to Risk Management Committee. While
1

Case 1:12-cv-02826-DLC Document 412-6

Filed 11/27/13 Page 3 of 3

they would be able to cover many of the topics you have expressed
interest in discussing at the outset of your work, we strongly
encourage you to hold off and make the trip the week of December 2
or December 9, when Apple can make a fuller slate of folks available
to you, including Bruce Sewell, who will be attending the Samsung
trial next week, and Deena Said, the new Antitrust Compliance
Officer, who will be starting her job at the company and attending
new employee orientation next week, along with other relevant
members of the legal and business teams mentioned in my prior
correspondence. Apple respectfully submits that this will be more
efficient and effective in getting you the information you seek and in
working together to ensure that the company has comprehensive and
effective antitrust compliance and training programs. Regards,

Ted

This message may contain confidential and privileged information. If it has been sent to you in error, please
reply to advise the sender of the error and then immediately delete this message.

2

Case 1:12-cv-02826-DLC Document 412-7

Filed 11/27/13 Page 1 of 4

Exhibit G

Case 1:12-cv-02826-DLC Document 412-7

From:
Sent:
To:
Cc:
Subject:
Attachments:

Filed 11/27/13 Page 2 of 4

Swanson, Daniel G.
Sunday, November 17, 2013 12:11 AM
'Michael Bromwich'
Richman, Cynthia; 'Nigro, Barry'; 'Cirincione, Maria'; 'Carroll, Sarah'; 'Matthew J. Reilly';
Boutrous Jr., Theodore J.
RE: Apple -- Trip to CA
AppleAgenda.docx; ECM Stipulated Protective Order.docx

Michael: Ted is out of pocket today but we wanted to get you a copy of Monday’s agenda. Matt Reilly will be
in attendance and Ted will dial in as soon as he gets out of a morning court hearing. Also attached is a draft
protective order reflecting Apple’s changes.

Daniel G. Swanson

GIBSON DUNN
Gibson, Dunn & Crutcher LLP
333 South Grand Avenue, Los Angeles, CA 90071-3197
Tel [phone] • Fax [phone]
Avenue Louise 480, Brussels, 1050
Tel [phone] • Fax [phone]
[e-mail] • www.gibsondunn.com

From: Michael Bromwich [mailto:[e-mail]]
Sent: Friday, November 15, 2013 9:51 AM
To: Boutrous Jr., Theodore J.
Cc: Swanson, Daniel G.; Richman, Cynthia; Nigro, Barry; Cirincione, Maria; Carroll, Sarah; Matthew J. Reilly
Subject: Apple -- Trip to CA

Dear Ted,
1. The hotel you recommended was sold out. We're staying at the Sheraton in Sunnyvale.
2. Our return flight is late afternoon Tuesday. We remain hopeful that you will identify additional
people for us to meet Monday or Tuesday.
3. We think it would be useful for us to meet Deena Said if only briefly during our visit.
4. You had mentioned that Bruce Sewell will be attending the Apple-Samsung trial next week. I
would be happy to stop by the courthouse and meet him briefly over a cup of coffee at the courthouse
on Monday or Tuesday if that's convenient for him. I think it's important that the two of us meet as
soon as possible.
5. We were not planning to have a court reporter attend next week's interviews, unless that is your
preference.
6. Please advise who, if anyone, will be attending the interviews along with the witnesses.
1

Case 1:12-cv-02826-DLC Document 412-7

Filed 11/27/13 Page 3 of 4

7. We still have not received any of the written materials we have been promised since October
22. We would appreciate receiving these as soon as possible.
Please let me know if you have any questions.

MRB

2

Case 1:12-cv-02826-DLC Document 412-7

Filed 11/27/13 Page 4 of 4

AGENDA
9:00-9:40: Noreen Krall, Apple Vice President Litigation
Confidentiality and Engagement Agreements
10:15-11:15: Tom Moyer, Chief Compliance Officer and Head of Global Security
Compliance Program Overview
11:15-12:15: Gene Levoff , Senior Director, Associate General Counsel Corporate Law - and Assistant Secretary, Legal Counsel to Audit and Nominating
and Corporate Governance Committee, Liaison to Board of Directors, and Counsel
to Risk Management Committee.
Audit Committee Overview

Case 1:12-cv-02826-DLC Document 412-8

Filed 11/27/13 Page 1 of 2

Exhibit H

Case 1:12-cv-02826-DLC Document 412-8

From:
Sent:
To:
Cc:
Subject:

Filed 11/27/13 Page 2 of 2

Michael Bromwich <[e-mail]>
Friday, November 15, 2013 9:51 AM
Boutrous Jr., Theodore J.
Swanson, Daniel G.; Richman, Cynthia; Nigro, Barry; Cirincione, Maria; Carroll, Sarah;
Matthew J. Reilly
Apple -- Trip to CA

Dear Ted,
1. The hotel you recommended was sold out. We're staying at the Sheraton in Sunnyvale.
2. Our return flight is late afternoon Tuesday. We remain hopeful that you will identify additional
people for us to meet Monday or Tuesday.
3. We think it would be useful for us to meet Deena Said if only briefly during our visit.
4. You had mentioned that Bruce Sewell will be attending the Apple-Samsung trial next week. I
would be happy to stop by the courthouse and meet him briefly over a cup of coffee at the courthouse
on Monday or Tuesday if that's convenient for him. I think it's important that the two of us meet as
soon as possible.
5. We were not planning to have a court reporter attend next week's interviews, unless that is your
preference.
6. Please advise who, if anyone, will be attending the interviews along with the witnesses.
7. We still have not received any of the written materials we have been promised since October
22. We would appreciate receiving these as soon as possible.
Please let me know if you have any questions.

MRB

1

Case 1:12-cv-02826-DLC Document 412-9

Filed 11/27/13 Page 1 of 6

Exhibit I

Case 1:12-cv-02826-DLC Document 412-9

Filed 11/27/13 Page 2 of 6

Case 1:12-cv-02826-DLC Document 412-9

Filed 11/27/13 Page 3 of 6

Case 1:12-cv-02826-DLC Document 412-9

Filed 11/27/13 Page 4 of 6

Case 1:12-cv-02826-DLC Document 412-9

Filed 11/27/13 Page 5 of 6

Case 1:12-cv-02826-DLC Document 412-9

Filed 11/27/13 Page 6 of 6

Case 1:12-cv-02826-DLC Document 412-10

Filed 11/27/13 Page 1 of 6

Exhibit J

Case 1:12-cv-02826-DLC Document 412-10

Filed 11/27/13 Page 2 of 6

Case 1:12-cv-02826-DLC Document 412-10

Filed 11/27/13 Page 3 of 6

Case 1:12-cv-02826-DLC Document 412-10

Filed 11/27/13 Page 4 of 6

Case 1:12-cv-02826-DLC Document 412-10

Filed 11/27/13 Page 5 of 6

Case 1:12-cv-02826-DLC Document 412-10

Filed 11/27/13 Page 6 of 6

Case 1:12-cv-02826-DLC Document 412-11

Filed 11/27/13 Page 1 of 2

Exhibit K

Case 1:12-cv-02826-DLC Document 412-11

From:
Sent:
To:
Cc:
Subject:

Filed 11/27/13 Page 2 of 2

Michael Bromwich <[e-mail]>
Friday, November 22, 2013 8:02 PM
Reilly, Matt
Nigro, Barry; Carroll, Sarah; Boutrous Jr., Theodore J.; Cirincione, Maria; Arquit, Kevin;
Noreen Krall
Re: Letter and Confidentiality Agreement

Matt,
Thanks for your letter and the draft confidentiality agreement. We will review the agreement and get
back to you promptly.
In response to your letter, we simply disagree with the oft-repeated claim that Judge Cote never
meant for us to begin our work before January 14. We have the distinct advantage of having
discussed our intentions to get off to a fast start directly with her during the interviewing process. We
give that discussion far more weight than snippets of transcript taken out of context.
We appreciate the schedule you have provided. We may have some follow-up, but we appreciate the
effort that you have made. I thought we had mentioned that we would not be arriving until the late
morning of December 4; I don't arrive back in the US from overseas until late in the day on December
3. I'm hopeful that we can make adjustments to accommodate our later arrival.
Thanks again.

MRB
On Fri, Nov 22, 2013 at 10:31 PM, Reilly, Matt <[e-mail]> wrote:
Michael,
Please see the attached letter and confidentiality agreement pursuant to our discussion at Monday’s meeting.
Best,
Matt

1

Case 1:12-cv-02826-DLC Document 412-12

Filed 11/27/13 Page 1 of 4

Exhibit L

Case 1:12-cv-02826-DLC Document 412-12

Filed 11/27/13 Page 2 of 4

The Bromwich Group LLC
901 New York Avenue, NW, 5th Floor
Washington, DC 20001
November 5, 2013

BY EMAIL
D. Bruce Sewell, Esq.
Senior Vice President and General Counsel
Apple, Inc.
One Infinite Loop
Cupertino, CA 95014
Dear Bruce:
Thanks very much for your letter of November 4. I am pleased to hear about the
work that Apple has been doing with respect to antitrust compliance since the Court
entered the Final Judgment on September 5, including the selection of the internal
Antitrust Compliance Officer (“ACO”). Based on your letter, it appears that we fully
share the objective of establishing and maintaining a professional, constructive, and
collaborative relationship.
First, let me briefly respond to your suggestion that our interactions with Apple
should not begin in any meaningful way until the expiration of the 90 days provided by
the Final Judgment. The Final Judgment makes clear that our initial assessment of the
company’s antitrust policies, procedures, and training should be as they exist as of
January 14, 2014, but the Final Judgment in no way precludes us from beginning our
work upon appointment. Indeed, in my interviews during the monitor selection
process with the Department of Justice and the Plaintiff States, and separately with
Judge Cote, I made clear that one of the keys to a successful monitorship was getting off
to a fast start and promptly making contact with top executives at the company,
including conducting preliminary interviews. These early contacts lay the groundwork

Case 1:12-cv-02826-DLC Document 412-12

Filed 11/27/13 Page 3 of 4

D. Bruce Sewell, Esq.
November 5, 2013
Page 2
for the type of relationship that benefits both the company and the monitor. There was
no suggestion at any time from anyone that these activities needed to be deferred for 90
days after the appointment of the External Compliance Monitor.
I have no doubt, as you suggest, that your newly selected ACO will be quite busy
over the next two months, but I also have no doubt that he or she would be available for
a brief meeting within the next 2-3 weeks. I am sure the same is true for many of the
senior executives in the company, including you and Mr. Cook. That is why from the
outset we have been willing to limit each of these initial sessions to one hour. From our
perspective, we would benefit from an early window into the work the company has
been doing since the Final Judgment. From your perspective, there is a substantial
benefit in allowing us to become aware of those efforts as they are taking place rather
than having them summarized for the first time when they are complete. It would
allow us to comment about such activities in our semi-annual reports and make clear
that our information was based on something other than an after-the-fact report.
As I am sure you are aware, monitors often have specific deadlines, some of
which can be very demanding. Even so, the existence of such deadlines has never, to
my knowledge, been viewed as a reason for the monitor to defer his work until the
deadlines have passed. I have been involved in four monitorships over the past eleven
years, three as monitor and one as counsel to the monitored entity. In every case, the
monitor has met with the top management within 14 days of appointment. Those
introductory meetings and interviews have helped create the foundation for the type of
relationships that must exist between the monitor and entity being monitored. In none
of these cases was the work of the monitor deferred until any of the deadlines, even
those that were most demanding, had passed.
As to your concern about a request for “voluminous historical documents,” I am
afraid you may have been misinformed. Our requests were limited to the company’s
compliance policies and training materials, organization charts for three specific
business divisions, information that describes the company’s compliance reporting
structure and the roles played by the Audit and Risk Oversight Committees, and any
materials referred to in an August 19 letter sent to the Department of Justice, which was
provided to us in New York on October 22, that are not duplicative of our other
requests. These are very specific and narrowly drawn requests, and we have heard no
previous suggestion that the volume was viewed as significant. My impression is that
they were viewed as quite modest and reasonable. If that impression is incorrect, we
would welcome further discussion on the issue.

Case 1:12-cv-02826-DLC Document 412-12

Filed 11/27/13 Page 4 of 4

D. Bruce Sewell, Esq.
November 5, 2013
Page 3
I am scheduled to speak with Mr. Boutrous tomorrow to discuss these issues.
Our hope is that you will fully authorize him to resolve these issues so that we can
move forward without further delay. I ask that you support our efforts to begin our
work as promptly as possible, including meeting with me at your earliest convenience.
Please feel free to contact me at any time to discuss these matters directly. I can
be reached at 202-682-4268.
Very truly yours,

Michael R. Bromwich
cc:

Tim Cook, Chief Executive Officer
Theodore J. Boutrous Jr., Esq.
Bernard A. Nigro Jr., Esq.

Case 1:12-cv-02826-DLC Document 412-13

Filed 11/27/13 Page 1 of 5

Exhibit M

Case 1:12-cv-02826-DLC Document 412-13

Filed 11/27/13 Page 2 of 5

Case 1:12-cv-02826-DLC Document 412-13

Filed 11/27/13 Page 3 of 5

Case 1:12-cv-02826-DLC Document 412-13

Filed 11/27/13 Page 4 of 5

Case 1:12-cv-02826-DLC Document 412-13

Filed 11/27/13 Page 5 of 5

Case 1:12-cv-02826-DLC Document 412-14

Filed 11/27/13 Page 1 of 5

Exhibit N

Case 1:12-cv-02826-DLC Document 412-14

Filed 11/27/13 Page 2 of 5

Case 1:12-cv-02826-DLC Document 412-14

Filed 11/27/13 Page 3 of 5

Case 1:12-cv-02826-DLC Document 412-14

Filed 11/27/13 Page 4 of 5

Case 1:12-cv-02826-DLC Document 412-14

Filed 11/27/13 Page 5 of 5

Case 1:12-cv-02826-DLC Document 412-15

Filed 11/27/13 Page 1 of 4

Exhibit O

Case 1:12-cv-02826-DLC Document 412-15

Filed 11/27/13 Page 2 of 4

Case 1:12-cv-02826-DLC Document 412-15

Filed 11/27/13 Page 3 of 4

Case 1:12-cv-02826-DLC Document 412-15

Filed 11/27/13 Page 4 of 4

Case 1:12-cv-02826-DLC Document 412-16

Filed 11/27/13 Page 1 of 3

Exhibit P

Case 1:12-cv-02826-DLC Document 412-16

Filed 11/27/13 Page 2 of 3

From: Bruce Sewell <[e-mail]>
Subject: Apple Board of Directors Notification
Date: November 25, 2013 at 12:32:06 PM PST
To: [e-mail]
By E-mail

November 25, 2013

Re: External Antitrust Compliance Monitoring

Michael R. Bromwich
The Bromwich Group LLC
901 New York Avenue, NW 5th Floor
Washington, D.C. 20001

Dear Michael,
Thank you for your letter of November 22, 2013, to Apple’s Board of Directors, which we have provided
electronically to the entire Board. It appears that our letters may have crossed; as set out in our correspondence
of November 22, we have now laid out in great detail proposed next steps, including confirming the interviews
of approximately a dozen senior Apple witnesses over two-and-a-half days during the first week of
December. I hope that we can continue to work cooperatively to conduct those interviews as efficiently and
effectively as possible and to address any further requests that you may have.
Feel free to contact me with any questions.

Sincerely,
1

Case 1:12-cv-02826-DLC Document 412-16
Bruce Sewell

Noreen Krall
[e-mail]
408-862-5159 Office
408-203-1074 Cell

2

Filed 11/27/13 Page 3 of 3