Judge Cote Dismisses Part of eBook Retailers’ Lawsuit Against Apple, Publishers

8626260902_94a1167b82_bApple has scored a minor victory in its ongoing legal battles over the 2010 conspiracy to raise and fix ebook prices.

A little over a month ago Judge Denise Cote issued a summary judgement in the class-action suit brought by three ebook retailers who alleged that the 2010 conspiracy, and the subsequent price controls, harmed their businesses and eventually forced two of the three to shut down.

The suit was originally filed in 2013 by Australian ebook company DNAML, and later joined by BooksonBoard and Diesel eBooks (now Diesel Digital). Following discovery, the case went through mediation (which apparently did not succeed). This was followed by motions for summary judgement filed in September 2015. On 16 December 2015, Judge Cote ruled in favor of the defendants, and dismissed part of the case with prejudice.

Judge Cote concluded that one of the three retailers, DNAML, lacked standing because it was not directly injured by the conspiracy.

Because the plaintiff was not the entity injured by the violation of the antitrust laws alleged here, and did not receive an assignment of the right to pursue this claim from the injured party, it lacks standing to bring its antitrust claim and the defendants’ motion for summary judgment is granted.

This is a little complicated, but DNAML apparently got booted from the case because some time after the conspiracy (in 2011) DNAML went through a reorganization where a new company with the name DNAML bought the assets of the old DNAML for $14,000.

Judge Cote ruled that the new company doesn't have standing because it didn't exist at the time, and that the right to sue over the injury was not transferred during the reorganization.

So DNAML is out, but I don't have any info on how this will impact the lawsuits filed by the other retailers, BooksonBoard and Diesel Digital. There is a second ruling from last month (PDF) which excluded some expert testimony from the lawsuit but did not dismiss the case, so it could still be in motion.

Edit: And there is a third ruling (PDF) from last Friday which says that BooksonBoard's lawsuit was dismissed as well. Apple settled with the retailer on 21 April 2015, and was dismissed from the suit, but the five publishers went on to convince Judge Cote that BooksonBoard was already in trouble when Agency happened.

Here's an interesting factoid from the ruling:

In an email to an investor on March 24, 2010, (BooksonBoard founder) Bob LiVolsi recommended accepting OverDrive’s offer to acquire BOB, observing that “Overdrive has moved a little. Agency pricing is scaring the heck out of me so I think it might be wise to go forward with this deal where it is.” LiVolsi does not elaborate in this email on what about agency pricing scared him. Acknowledging, however, that BOB had yet to make a profit and had no immediate prospect of doing so, LiVolsi added that OverDrive’s offer was “not a big return, but something bigger than no return.”

So BooksonBoard was already unhealthy at the time of agency. Interesting. I'm still reading the rulings, but at this time I can say that at least two cases are gone, and a third (Diesel Digital) may remain. I'll keep looking for more info.

P.S. Hat tip to Gary price of InfoDocket for helping me find the filing (PDF).

P.P.S. PW beat me to the story, but I am pretty sure they got it wrong.

image by final gather

About Nate Hoffelder (11165 Articles)
Nate Hoffelder is the founder and editor of The Digital Reader: "I've been into reading ebooks since forever, but I only got my first ereader in July 2007. Everything quickly spiraled out of control from there. Before I started this blog in January 2010 I covered ebooks, ebook readers, and digital publishing for about 2 years as a part of MobileRead Forums. It's a great community, and being a member is a joy. But I thought I could make something out of how I covered the news for MobileRead, so I started this blog."

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