787 F.3d 131
2d Cir.2015Background
- Apple was found liable under Sherman Act §1 after a bench trial for conspiring with five major publishers to raise e-book prices and for Apple's role in facilitating that conspiracy.
- An omnibus injunction entered September 5, 2013 required Apple to adopt compliance policies/training and to appoint an external monitor under Rule 53 to review Apple’s compliance with the injunction.
- The injunction granted the DOJ and states control over monitor selection; Apple could object to the plaintiffs’ recommendations but could not unilaterally nominate a monitor.
- Michael Bromwich was appointed as external monitor on October 16, 2013 after the plaintiffs recommended him.
- Bromwich began inquiries within days of appointment, including interviews of Apple directors, which Apple opposed as premature and improperly scope-limited by the 90-day period to formulate policies.
- Disputes intensified over Bromwich’s communications with Apple officers/directors and over his proposed hourly fees; Apple objected to the process and the rates, while the district court noted the monitor’s compensation would be on reasonable and customary terms.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Disqualification of the monitor | Apple argues Bromwich’s ex parte communications show bias and require disqualification. | Bromwich did not demonstrate bias; record shows limited ex parte activity, not disqualifying. | No abuse of discretion in denying disqualification. |
| Implicit modification of the injunction | Apple contends Bromwich’s conduct and district court acquiescence expanded the injunction beyond its terms. | The injunction was not substantially modified; any changes remain within limits set by the court and further constrained by law. | Injunction not substantially modified; later interpretation imposes sharp limits on monitor’s power. |
| Limitations on monitor conduct and dispute-resolution | Apple objects to ex parte communications and to the monitor exceeding the monitoring scope. | Monitor actions are bounded by the injunction and applicable law; dispute-resolution procedures exist and were available. | Monitor remains constrained by injunction and law; Apple’s objections should be resolved via district court processes. |
Key Cases Cited
- EEOC v. Local 40, Int'l Ass’n of Bridge, Structural & Ornamental Iron Workers, 76 F.3d 76 (2d Cir. 1996) (modification standards for injunctions and agency actions)
- Liljeberg v. Health Serv. Acquisition Corp., 486 U.S. 847 (1988) (appearance of partiality and impropriety concerns)
- Carson v. American Brands, Inc., 450 U.S. 79 (1981) (structural considerations in modification of injunctions)
- Firestone Tire & Rubber Co. v. Risjord, 449 U.S. 368 (1981) (standards for injunctive relief and remedies)
- Yonkers Bd. of Educ., 946 F.2d 180 (2d Cir. 1991) (post-judgment remedial review jurisdiction)
- In re Basciano, 542 F.3d 950 (2d Cir. 2008) (abuse of discretion standard in disqualification rulings)