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Apple Loses Bid to Disqualify Antitrust Monitor

Apple had raised objections to the monitor appointed in the wake of an e-book pricing case.


A federal appeals court on Thursday rejected Apple’s bid to disqualify an antitrust compliance monitor who was appointed after the company was found liable for conspiring with five publishers to raise e-book prices.

While saying some allegations against the monitor, Michael Bromwich, “give pause,” the 2nd U.S. Circuit Court of Appeals in New York said a lower court judge did not abuse her discretion in rejecting Apple’s bid to disqualify him.

Bromwich was installed through a permanent injunction by U.S. District Judge Denise Cote, after she ruled in favor of the U.S. Department of Justice in July 2013 by finding that Apple had played a “central role” in conspiring to raise e-book prices and impede rivals such as Amazon.

The Cupertino, Calif.-based company is appealing that decision. Apple separately entered a $450 million settlement of related claims by 31 states, Washington, D.C., Puerto Rico and consumers, contingent on the decision being upheld.

In seeking Bromwich’s ouster, Apple claimed he collaborated improperly with the Justice Department and the states, was too aggressive in demanding interviews with executives, and charged hourly fees that began at $1,100 before being cut to $1,000, an amount revealed on Thursday.

For his part, Bromwich has faulted Apple for adopting an “adversarial tone” in dealing with him.

Writing for the appeals court, Circuit Judge Dennis Jacobs criticized Bromwich for submitting an affidavit supporting the plaintiffs when they opposed Apple’s request to stay the injunction.

“Bromwich’s submission in conjunction with a litigant’s brief was the opposite of best practice for a court-appointed monitor” and may raise “an appearance of impropriety,” Jacobs wrote.

But Jacobs said the injunction “contemplates at least some interaction” between Bromwich and the plaintiffs, and that Cote was not required to disqualify him.

Jacobs also said Bromwich’s billing rate, “rich as it may be,” was no reason for a disqualification.

Apple spokesman Josh Rosenstock and Apple’s lawyer Theodore Boutrous declined to comment. Bromwich’s spokeswoman declined to comment. The Justice Department did not respond to requests for comment.

U.S. District Judge Jesse Furman, sitting by designation, joined Thursday’s decision but faulted Apple for being slow to raise its concerns with Cote. “The company largely sat on its hands, allowing issues with the monitor to fester and the relationship to deteriorate,” he wrote.

The case is U.S. v. Apple Inc, 2nd U.S. Circuit Court of Appeals, No. 14-60.

(Reporting by Jonathan Stempel and Nate Raymond in New York; Editing by Frances Kerry and Jonathan Oatis)

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