Court Nixes Bid to Stay E-Books Monitor as Apple Presses Appeal

, The Litigation Daily

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Michael Bromwich
Michael Bromwich

Apple Inc. lost its bid to stop court-appointed e-books monitor Michael Bromwich in his tracks, at least for now. But Apple's lawyers at Gibson, Dunn & Crutcher nevertheless succeeded Monday in curtailing Bromwich's authority as they continue fighting the government's antitrust case.

In a brief order issued on Monday, the U.S. Court of Appeals for the Second Circuit denied Apple's motion for a stay of Bromwich's activities as compliance monitor in the case, ruling that the tech giant hadn't shown it was suffering irreparable harm. But the court also clarified the limits of Bromwich's role, emphasizing that he doesn't have carte blanche to investigate Apple's compliance with antitrust laws.

Siding with the Department of Justice, U.S. District Judge Denise Cote in Manhattan ruled in July 2013 that Apple illegally fixed e-book prices. As part of her final judgment, Cote ordered Apple to beef up its antitrust compliance programs and appointed Bromwich, a partner at Goodwin Procter, to monitor Apple's progress. In a Jan. 17 motion, Apple urged the Second Circuit to stay the portion of Cote's judgment appointing Bromwich, arguing that he's inflicting "real and irreparable harm" by demanding access to Apple executives and board members and charging a $1,100 hourly fee that Apple won't be able to recoup if it ultimately prevails on appeal.

The Second Circuit brushed aside Apple's irreparable harm argument in Monday's order, ruling that Bromwich can stay on the job as Apple pursues its appeal of Cote's findings. A DOJ spokesperson said in a statement that the ruling "makes abundantly clear that Apple must now cooperate with the court-appointed monitor."

But the Second Circuit also wrote that Bromwich's role is limited to "determining whether Apple had instituted appropriate compliance." What he can't do, the court made clear, is investigate whether Apple is in fact complying with antitrust laws. He can't "demand access to any document, and to interview Apple executives with respect to any subject, without limitation," the court wrote.

As the monitorship continues, you can expect to see both sides spin that part of the Second Circuit ruling to their advantage. The government will likely say that the Second Circuit's interpretation of Bromwich's role is consistent with how it and Bromwich have defined his role from the get-go. But Apple may now feel emboldened to oppose some of Bromwich's requests on the grounds that he's policing the company, rather than simply ensuring that it has sufficient compliance programs in place.

Gibson Dunn partner Theodore Boutrous Jr., who represents Apple at the Second Circuit, had no immediate comment on the decision.

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