Antitrust Law Daily Wrap Up, ANTITRUST NEWS: Apple unable to bar iPod commercial resellers from iPod iTunes antitrust trial, (Nov 19, 2014)

By Linda O’Brien, J.D., LL.M.

In a class action suit by consumers alleging that Apple unlawfully maintained its monopoly power in the market for portable digital music players, the federal district court in Oakland has refused to rule on Apple’s motion for decertification of the class to exclude commercial resellers of iPods on the eve of trial. Apple’s motion was held and submitted by the court (The Apple iPod ITunes Antitrust Litigation, Case No. 4:05-cv-00037).

The consumers were individuals and businesses who purchased certain models of iPods directly from Apple between September 2006 and March 2009. After recertifying the class in November 2011, the court determined that the plaintiffs could represent all direct purchasers, including resellers, such an electronic stores, retail stores, and online retailers.

In their motion to add a class representative filed November 3, the plaintiffs sought to add Kenneth Riegel, sole owner of K&N Enterprises, formerly doing business as Delaware Computer Exchange. It was noted that K&N Enterprise was no longer in existence and Riegel sold Delaware Computer Exchange in 2008. In its response in opposition of the plaintiffs’ motion, Apple contended that the plaintiffs’ motion was futile, since Delaware Computer Exchange was not a legal entity capable of bringing suit but merely a trade name as part of a business that was sold. The contracting party for the iPod purchases from Apple was K&N Enterprises, which no longer existed by the plaintiffs’ own admission.

In its motion for decertification of the class, Apple argued that the requirements of Federal Rule of Civil Procedure 23 had not been met. Apple asserted that the individual consumers could not fairly represent resellers who: (1) have inconsistent injury and damages; (2) have issues as to impact and damages; and (3) benefit from the alleged conduct by increasing sales volume of iPods and other products. According to Apple, Delaware Computer Exchange was not a proper class representative for those resellers who purchased iPods at individually negotiated prices or who sold products from Apple competitors. Moreover, the applicable reseller agreement between Apple and K&N Enterprises contained a limitation of claims provision, which required mediation prior to filing suit, a one-year statute of limitations on claims, and a waiver of jury trial rights, Apple contended.

Jury selection was to begin today.

Companies: Apple Inc.

News: Antitrust CaliforniaNews