In re Apple iPhone Antitrust Litigation
874 F. Supp. 2d 889
N.D. Cal.2012Background
- Plaintiffs file a putative class action alleging Sherman Act §2 claims against Apple (and ATTM by implication) related to iPhone voice/data services and iPhone applications.
- Defendant moves to compel arbitration and to dismiss; hearing held June 18, 2012.
- Allegations include an Exclusivity Agreement with ATTM granting ATTM five-year exclusive provision of iPhone voice/data services, revenue sharing, and SIM-lock controls to enforce exclusivity (unlocked codes not disclosed to purchasers).
- Plaintiffs allege they were effectively locked into ATTM for five years and could not switch providers or unlock SIM cards.
- Plaintiffs also allege monopoly power over iPhone applications via app approval/restrictions and OS design.
- Court denies without prejudice the motion to compel arbitration and grants in part the motion to dismiss, finding ATTM must be joined as a party under Rule 19 and ordering amended complaint; case management conference rescheduled.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether equitable estoppel allows non-signatory to compel arbitration. | Mundi remains valid; Allianz unpublished cannot overrule; basis for equitable estoppel still applies. | Equitable estoppel applies because the dispute is intertwined with the arbitration contract. | Equitable estoppel not satisfied; Mundi remains valid; arbitration not compelled. |
| Whether ATTM is a necessary and joinable party under Rule 19. | ATTM is not necessary; case can proceed without it. | ATTM is a necessary party and joinable; without ATTM relief cannot be complete. | ATTM is necessary; joinder feasible; court grants dismissal for failure to join and orders ATTM joined. |
Key Cases Cited
- Samson v. NAMA Holdings, LLC, 637 F.3d 915 (9th Cir. 2011) (arbitration and jurisdiction principles guidance)
- Lifescan, Inc. v. Premier Diabetic Servs., Inc., 363 F.3d 1010 (9th Cir. 2004) (arb. clause scope and enforceability guidance)
- Mundi v. Union Security Life Insurance Co., 555 F.3d 1042 (9th Cir. 2009) (equitable estoppel in arbitration; non-signatories possible to compel)
- Arthur Andersen v. Carlisle, 556 U.S. 624 (U.S. 2009) (state law applicability to contract validity issues in arbitration context)
- First Options of Chicago, Inc. v. Kaplan, 514 U.S. 938 (U.S. 1995) (arbitration agreements; standard for scope of arbitration)
- Hart v. Massanari, 266 F.3d 1155 (9th Cir. 2001) (precedent binding within circuit; unpublished opinions caveat)
- Laker Airways, Inc. v. British Airways, PLC, 182 F.3d 843 (11th Cir. 1999) (rule about necessary party involvement in conspiracy/antitrust context)
- Occidental Petroleum Corp. v. Buttes Gas & Oil Co., 461 F.2d 1261 (9th Cir. 1972) (contextual rule on joint tortfeasors and Rule 19(a))
- Comer v. Micor, Inc., 436 F.3d 1098 (9th Cir. 2006) (ordinary contract principles govern who is bound to arbitration)
- Chiron Corp. v. Ortho Diagnostic Sys., Inc., 207 F.3d 1126 (9th Cir. 2000) (contract formation principles; arbitration)