791 F.3d 1041
9th Cir.2015Background
- Plaintiffs (Ward & Buchar) sued Apple alleging Apple conspired with AT&T Mobility (ATTM) via an exclusivity agreement and software locks that prevented iPhone users from switching carriers, enabling supra‑competitive pricing. ATTM was not named in this suit (Apple III).
- Earlier related suits: Apple I (Apple + ATTM named) where arbitration was compelled after Concepcion; Apple II (ATTM not named) where Judge Ware held ATTM was a required Rule 19 party for certain aftermarket monopolization claims and dismissed or limited those claims.
- Plaintiffs filed Apple III (narrowed to aftermarket claims) and stipulated to import Apple II briefing; Judge Rogers dismissed Apple III under Rule 12(b)(7) for failure to join ATTM, citing Judge Ware’s reasoning. Plaintiffs appealed.
- Central procedural question: whether the district court erred in finding ATTM a "required party" under Fed. R. Civ. P. 19, and whether the record shows ATTM claimed legally protected interests that would be impaired by litigating in ATTM’s absence.
- On appeal the Ninth Circuit majority reversed: it found the district court abused its discretion by failing to identify specific legally protected interests ATTM claimed and by not assessing how those interests would be impaired; the record did not show ATTM had cognizable contractual, reputational, or regulatory interests warranting joinder.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether an alleged antitrust co‑conspirator (ATTM) must be joined under Rule 19 | Plaintiffs: general rule allows suing one conspirator; absent co‑conspirator not required unless it claims a legally protected interest that would be impaired | Apple: ATTM is necessary because adjudication will require evaluating ATTM’s conduct and could impair ATTM’s interests (regulatory, reputational, contractual, arbitration rights) | Reversed: court must identify specific legally protected interests under Rule 19(a)(1)(B) before finding joinder required; mere allegation of conspiracy insufficient |
| Whether the district court adequately identified ATTM’s claimed interests | Plaintiffs: district court failed to specify ATTM’s interests or explain how they’d be impaired | Apple: prior declarations and facts show ATTM claimed interests and risk of impairment | Held for Plaintiffs: district court abused discretion by not identifying the specific interests and assessing impairment under Rule 19(a)(1)(B) |
| Whether speculative regulatory or reputational harms make an absent co‑conspirator a required party | Plaintiffs: speculative regulatory scrutiny or reputational harm are insufficient | Apple: such collateral consequences could be significant and require joinder | Held for Plaintiffs: speculative regulatory scrutiny or reputational injury alone do not establish a legally protected interest for Rule 19 joinder |
| Whether ATTM’s contract / arbitration rights in the record warranted joinder | Plaintiffs: record does not show current, substantial contractual rights of ATTM that would be impaired; arbitration clause would not bind nonparties | Apple: contractual terms (unlock codes, WSAs, arbitration) could be impaired by relief sought | Held for Plaintiffs: record fails to show existing substantial contract rights (e.g., unlock‑code control unclear); arbitration clause and WSAs do not give ATTM a legally protectable interest sufficient for joinder |
Key Cases Cited
- Temple v. Synthes Corp., 498 U.S. 5 (per curiam) (not all joint tortfeasors must be joined)
- United States v. Socony‑Vacuum Oil Co., 310 U.S. 150 (antitrust conspirators jointly and severally liable)
- Lawlor v. Nat’l Screen Serv. Corp., 349 U.S. 322 (joinder of alleged coconspirators not mandatory)
- Blonder‑Tongue Labs., Inc. v. Univ. of Ill. Found., 402 U.S. 313 (non‑party protections against collateral estoppel; due process limits binding absent parties)
- Laker Airways, Inc. v. British Airways PLC, 182 F.3d 843 (11th Cir.) (absent party subject to unique regulatory consequences may be necessary)
- Wilbur v. Locke, 423 F.3d 1101 (9th Cir.) (party to contract may be necessary where suit would decimate contract)
- Cachil Dehe Band of Wintun Indians of the Colusa Indian Cmty. v. California, 547 F.3d 962 (9th Cir.) (interest must be legally protected and more than speculative)
- Northrop Corp. v. McDonnell Douglas Corp., 705 F.2d 1030 (9th Cir.) (joinder contingent on absent party claiming a legally protected interest)