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Apple and its court-appointed e-books monitor


While we previously covered Apple's dissatisfaction with its new court-appointed monitor, a more thorough reading of Apple's complaint reveals deep-seated concerns the company has with Michael Bromwich, and perhaps, with Judge Denise Cote herself.

Broadly speaking, Apple takes issue with the fact that Bromwich is charging more than US$1,000 for an hour of his time and is seemingly seeking to broaden the scope of what his duties entail.

What's more, Apple's complaint expresses concern that Bromwich may be holding ex parte discussions with Cote.

Fortune summarizes Apple's objection thusly:

The immediate triggering event for Apple's tirade was an order by Judge Cote issued on November 21, proposing that Bromwich be permitted to hold regular ex parte meetings with herself -- that is, meetings where only she and he would be present and where no transcript would be made to preserve a record of what was said. At those meetings, Apple said it feared, Bromwich could potentially share with her everything he had learned from his meetings with Apple officials and his perusals of potentially confidential and privileged Apple documents.

Apple labels this an "exceedingly problematic and disturbing" issue, arguing that Cote cannot in good faith "simultaneously receive ex parte reports from the monitor and preside over the pending damages trial and putative class action."

That Apple is not pleased with Cote is no secret:

"No litigant," it concludes, "could possibly take comfort in the objectiveness of a court's judgment in ruling on fiercely contested motions and proceedings when the court is regularly meeting privately with a judicially appointed investigator charged with looking to uncover evidence of possible wrongdoing by that litigant. And to the extent the Court actually intended to unleash Mr. Bromwich as its agent in this manner, such order transforms the Court from an impartial arbiter of "Cases" and "Controversies" into Apple's litigation adversary.

Apple's complaint also alleges that Bromwich was dead set on beginning his monitoring duties well before Apple finished putting its new compliance and training programs in place. Note that per Cote's order, Apple has until January 14 to begin implementing internal compliance measures and protocols. But Bromwich's zealous effort to get the ball rolling immediately, the complaint reads, placed an undue burden upon Apple. The complaint reads in part:

... to begin interviewing Apple's entire board and its executive team, as well as additional senior executives on November 18 is premature, not authorized by the Final Judgment, and would not only be disruptive to Apple's business operations but also directly contrary to Judge Cote's intent.

In addition to requests for interviews with Apple executives such as Tim Cook and Phil Schiller, Bromwich also put in requests to interview Apple board members, including Al Gore.

In a specific example cited by Apple, Bromwich suggested that he stop by the courthouse where Apple and Samsung where having their re-trial on damages so that he could meet with Apple General Counsel Bruce Sewell. Apple also notes that Bromwich wanted to meet with Apple's new antitrust compliance officer on what was "literally" her first day on the job.

On top of that, Bromwich informed Apple that when a requested interviewee could not be made available, the company should provide him with "detailed copies of their schedules for that entire week" in order to corroborate that they are, in fact, busy.

Apple's complaint further reads:

Mr. Bromwich's incessant "demands for immediate attention" compelled Apple to once again explain how "incredibly disruptive" Mr. Bromwich's requests had become. Apple reminded Mr. Bromwich that the "reason for th[e] three-month window is of course to provide Apple and its counsel with time to develop new, comprehensive antitrust training and compliance materials in accordance with the Final Judgment, without hampering Apple's business." And Apple tried to persuade Mr. Bromwich that his "continual requests for additional interviews and other information before January 14, 2014[] affirmatively hamper Apple's efforts to develop a new antitrust training and compliance program as efficiently and effectively as possible within the deadline set by Judge Cote."

So why is Bromwich so eager to get the ball rolling?

Well, Apple says it's on account of him having an ex-parte meetings with Cote:

Mr. Bromwich, however, has determined that his duties must commence immediately. And his basis for rejecting Apple's reading of the record is what he termed his "distinct advantage of having discussed [his] intentions to get off to a fast start directly with [the Court] during the interviewing process."

As for the very fact that Apple has a court-appointed monitor to begin with, Fortune notes that the penalty from the outset seemed rash.

Apple had strenuously opposed the appointment of a monitor, contending that it was an unusual and unnecessary step. In the first place, the conduct the government was complaining about ended years ago. Each of the five publishers -- who settled long ago -- committed back then to stop using the sorts of agency contracts to which the government objected, all without the appointment of any compliance monitors. Compliance monitors are usually required in cases where a defendant has acted egregiously over a long period of time, manifesting longstanding contempt and resistance to the law...

This may get really interesting really soon, folks.

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