February 12, 2014
As expected, appeals court tells Apple it’s stuck with its monitor
by Alex Shephard
Apple‘s still stuck with an external monitor it hates, but a three-judge panel gave the tech giant a bit more breathing room in a decision handed down on Tuesday.
Over the last several months, as we’ve written about here, here, and here, Apple has argued that Michael Bromwich, a lawyer ordered to monitor the company’s compliance with antitrust laws following the U.S. v. Apple decision, was acting unconstitutionally. Apple was particularly miffed by Bromwich’s requests to meet with board members and executives and examine documents that weren’t related to its ebook business, though they also complained that he was expensive and kind of a jerk. Judge Denise Cote, who presided over U.S. v. Apple, had previously denied a stay of the monitor.
As Fortune‘s Philip Elmer-Dewitt put it, the court “sidestepped the sticky constitutional traps Apple’s legal team had tried to lay and found a path right down the middle.” For the most part, the ruling—which begins with the sublimely understated, “During the argument, it became apparent that the parties differed considerably regarding the proper interpretation of the order as to the scope of the monitor’s duties”—uses the language of the government’s lawyers to make its point:
As the government explained at oral argument, the injunction “ensur[es] not just that [Apple] ha[s] an anti-trust compliance program in place but [that Apple’s] employees particularly, senior executives and board members are being instructed on what those compliance policies mean and how they work. The government conceded that the injunction would not allow the monitor to investigate whether such personnel were in fact complying with the antitrust or other laws.
Thus, according to appellees, the monitor was empowered to demand only documents relevant to his authorized responsibility as so defined, and to interview Apple directors, officers, and employees only on subjects relevant to that responsibility. We agree with that interpretation of the district court’s order. In addition, we take counsel’s statement as a formal representation that appellees also accept that interpretation, and that the monitor will conduct his activities within the bounds of that order, absent further action by the district court or by the panel that will in due course hear the merits of the appeal.
The Department of Justice claimed victory and released a statement saying “Today’s ruling makes abundantly clear that Apple must now cooperate with the court-appointed monitor.” Apple declined to comment but, as Elmer-Dewitt argues in his dispatch, they have a lot to be happy about as well: “The Judge didn’t get her wrist slapped, as they might have wished. But the company’s complaints about the monitor’s activities seemed vindicated. Implicit in the ruling is the higher court’s judgment that much of what Bromwich had demanded of Apple’s executives and board members was beyond the scope of his—or Judge Cote’s—authority.”
Bromwich will still get paid and Apple will still seethe about his fees, but hopefully this marks the end of Apple’s long and odd public battle with Bromwich. Its appeal of U.S. v. Apple is, of course, still pending.
Alex Shephard is the director of digital media for Melville House, and a former bookseller.