01 Jul
2015

Second Circuit Affirms Antitrust Ruling Against Apple in E-Books Case

In a 2-1 opinion yesterday, the Second Circuit affirmed the bench trial findings of Judge Cote that Apple orchestrated a price fixing conspiracy with book publishers to collectively raise the $9.99 per-book price that Amazon was charging and that publishers believed was damaging to their business in the long term.

Apple signed contracts with the publishers for its own e-bookstore under an “agency model” (in which the publishers set the price and Apple would take a cut), and those contracts included a “most-favored nations” clause requiring the publishers to price the books in Apple’s store at the lowest offered anywhere else.

The Second Circuit agreed with Judge Cote that the intended effect of these terms was to compel the publishers to act together to challenge Amazon’s flat, $9.99 pricing:

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24 Jun
2015

Judge Hellerstein Scolds Patent Plaintiff For Cat-and-Mouse Games Over Patent Infringement Contentions

In an opinion Monday, resolving “the latest in a long, tedious series of discovery disputes,” Judge Hellerstein chided a patent plaintiff, Intellectual Ventures, for having disclosed infringement contentions that were “discursive, disorganized, and, at times, confusing” and for repeatedly shifting positions about what it believed was the infringing conduct of the defendant, JP Morgan:

Intellectual Ventures has demonstrated a disturbing pattern of casting a wide net of claims and allegations, resulting in significant discovery costs and delays, only to withdraw certain claims when it confirms what it should have learned prior to bringing the claims in the first place — that they lack any basis in fact. Further, counsel for Intellectual Ventures appears to have been less than forthright with the Court when explaining its purported factual basis for its infringement claims. This sort of gamesmanship and discovery abuse is precisely what Rule 11 seeks to prevent. Strict adherence to Rule 11 is particularly important in patent litigation, where discovery costs can be substantial. Because Intellectual Ventures listed accused products for which it likely had no “objectively reasonable” basis for believing infringed the ’574 Patent, and apparently represented the contrary position to the Court, a sanction in the amount of discovery costs incurred by JPMC related to the withdrawn accused products may be appropriate. In the interest of efficiency, however, the Court declines to impose such costs at this stage of the litigation. JPMC may file a comprehensive motion for such sanctions following the close of all discovery. Further gamesmanship on the part of Intellectual Ventures will not be tolerated.

16 Jun
2015

Judge Engelmayer Reduces “Cadillac Escalade” Attorney’s Fees in Beastie Boys Case to “Honda Civic” Levels

In an opinion yesterday, Judge Engelmayer awarded the Beastie Boys attorney’s fees for their successful suit against the makers of Monster energy drinks, which a jury found had wrongfully used Beastie Boys songs in promotional videos.  But Judge Engelmayer reduced the amount requested by 30% because he found that, while the Beastie Boys were fully entitled to hire “Cadillac Escalade”-level attorneys, the law required the fees to be shifted only at regular (or “Honda Civic”) levels.

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10 Jun
2015

Judge Torres: Hurricane Sandy Was Unforeseeable “Act of God”

In an opinion dated Monday, Judge Torres ruled, after a bench trial, that a shipping company was not liable for the damage caused by Hurricane Sandy to 211 shipping containers that were sitting in the New York Container Terminal and that were filled with Lord & Taylor sweaters and cardigans.  The controlling question was whether the storm was an “Act of God,” which, at least legally speaking, turns on whether the scope of the storm was foreseeable enough for the defendant to have prevented the damage.

Judge Torres answered the question “no,” because accurate predictions about the size of the storm surge did not materialize until it was too late:

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29 May
2015

Judge Engelmayer: Lawyers Using Confidential Witnesses in Complaints Should Confirm Their Testimony and Warn of Risks of Being Outed

In an opinion today allowing a securities class action to be dismissed without prejudice, Judge Engelmayer expressed concern about the lawyers using confidential witnesses in complaint without confirming the accuracy of the statements attributed to them or warning the witnesses that their identity might have to be revealed.

On the first point, the complaint’s 11 confidential witnesses were not given the chance to confirm the statements attributed to them and at least four believed they were misquoted or misleadingly quoted.  This risk of error, Judge Engelmayer concluded, counsels in favor of better diligence before filing a complaint.

On the second point, Judge Engelmayer concluded that it was a matter of “decency” to alert confidential witnesses that their identities might eventually be revealed:

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29 May
2015

Bankers Association Renews Challenge to City Regulation of Banks as Preempted by State and Federal Law

The New York Bankers Association filed a complaint Tuesday seeking to invalidate “Local Law 38,” which calls for the creation of a Community Investment Advisory Board (the “CAIB”) to gather information about banks that take deposits from the City and to establish “best practices” for those banks regarding various initiatives, including (for example) offering financial services most needed by low and moderate income individuals.

The New York Bankers Association brought a similar challenge last year, but Judge Failla dismissed the case without prejudice, largely because then-Mayor Bloomberg did not enforce it.  The renewed complaint argues that the CAIB is up and running and that its regulation is preempted by state and federal banking laws:

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26 May
2015

Judge Abrams: Boxer Entitled to Injunction Over Heavyweight Title Rematch

In an entertaining opinion Friday, Judge Abrams granted heavyweight boxer Fres Oquendo $775,000 and injunctive relief against a German promotional firm referred to as Terek, which failed to pay Oquendo his fill purse after a WBA world heavyweight tile match in Chechnya against Ruslan Chagaev.  Oquendo lost the fight and, under the parties’ contract, was entitled to a rematch.  Judge Abrams rejected Terek’s primary defense — that the contract was unenforceable — and, in addition to awarding Oquendo his payment shortfall, enjoined Terek from promoting any bout for Chagaev within the next 18 months unless it first scheduled the promised rematch.

She explained that an injunction was appropriate in these circumstances because of the unique nature of a title fight:

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20 May
2015

Judge Pauley Orders Sprint and Regulator to Provide Details on Proposed Settlement

In an order yesterday, Judge Pauley rejected the joint request of the Consumer Financial Protection Bureau and Sprint to move forward on court approval of a $50 million settlement of the regulator’s investigation into the telecom company.  The parties had submitted a proposed one-sentence joint motion for approval of a final judgment and settlement, and indicated that no further briefing would be provided.  Judge Pauley was unimpressed.

How the Bureau believes a judge can evaluate the proposed settlement with a one sentence joint motion, no memorandum of law, and no declarations, eludes this Court. It is especially ironic, given the Bureau’s core mission as described on its website to “give consumers the information they need to understand the terms of their agreements …. ” See “About Us,” Consumer Financial Protection Bureau, http://www.consumerfinance.gov/the-bureau/ (last visited May 19, 2015).

Judge Pauley ordered the parties to submit a motion as soon as practicable explaining why the “proposed settlement is fair, reasonable, and does not disserve the public interest.”