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Plaintiffs lawyers fight for control of e-book price-fixing case

12/8/2011 COMMENTS (0)

How often does it happen that private antitrust plaintiffs file class actions before regulators announce price-fixing investigations? You know the answer: not often at all, which is why the lawyers who filed more than 15 price-fixing class actions this summer against Apple and various e-book publishers must have been celebrating the news this week that both the European Union and the Justice Department are conducting probes of an alleged cartel in the market for electronic books. The entrance of antitrust regulators can only boost the value of the private litigation.

And that means the scrap over control of the private antitrust cases is going to be even more furious than it's already become. Last Friday, the Judicial Panel on Multidistrict Litigation heard oral arguments in competing plans to consolidate the e-book class actions in federal court in either Oakland or Manhattan. Hagens Berman, which filed the first e-book class action in early August, wants the cases brought together in Oakland, near Apple's Northern California headquarters. Douglas Thompson of Finkelstein Thompson -- which lost the race to the courthouse to Hagens Berman by one day -- advocated for consolidation in Manhattan, where most of the publisher defendants are based. This isn't a mere jurisdictional fight; whichever plaintiffs firm prevails in the JPML's venue decision will have the edge in winning appointment as lead counsel in the consolidated litigation.

Hagens Berman has been in a pique ever since Finkelstein Thompson filed its suit a day after Hagens kicked off the e-book price-fixing litigation. Within two weeks of the Finkelstein filing, Hagens Berman brought a motion to intervene in Manhattan federal court, accusing Finkelstein and subsequent New York filers of piggy-backing on its hard work.

"The details and impact of the conspiracy took months to investigate and set forth in a cogent matter, including economic analysis," the Aug. 24 Hagens Berman brief said. "The day after the [Hagens Berman] complaint was filed, the first of five copycat complaints filed (so far) in the Southern District of New York reached the clerk's office, with others spun off of word processors shortly thereafter. With de minimis exceptions, each of the imitation related actions brings nearly identical causes of action against Apple and the publisher defendants as brought in the first-filed [Hagens] complaint, doing so on behalf of the same group of people."

Hagens also asked the Manhattan federal judge overseeing the New York e-book litigation (first George B. Daniels, now Denise Cote) to transfer all of the cases to Oakland federal court.

But the Finkelstein firm had made a pre-emptive move that undercut the Hagens strategy: Before Hagens Berman appeared in the New York docket, Finkelstein moved the JPML to consolidate the e-book cases in New York. In their response to the Hagens Berman motion in New York, the publisher defendants argued that it didn't make sense to transfer cases to Oakland or let Hagens Berman into the New York litigation before the JPML decided what to do with the e-book suits. (The publisher defendants also agreed with Finkelstein, in a brief to the JPML, that the cases should be consolidated in New York; Apple said it supports consolidation but took no position on whether Oakland or Manhattan was the preferable jurisdiction.)

Finkelstein, meanwhile, said in response to Hagens Berman that its price-fixing investigation had been underway for a year before it filed the New York complaint, which was in no way a copycat of the Hagens Berman suit. "The [Finkelstein] complaint is, in its entirety, original work product and the filed version was substantially complete by July 1, 2011," the firm's opposition to Hagens' intervention said. "Finkelstein Thompson made absolutely no additions, deletions, or other changes to the [Finkelstein] complaint in response to Hagens Berman's Petru complaint, and there is no foundation for Hagens Berman's assertions."

Steve Berman said in an e-mail that Hagens Berman expects the MDL panel to rule as soon as Friday on where the cases will be consolidated. (He also said his firm was aware of the DOJ price-fixing investigation.)

I left messages with Doug Thompson of Finkelstein and Jeff Friedman of Hagens Berman, who argued their firms' respective positions before the JPML Friday. Neither got back to me. The publishers are represented by Akin Gump Strauss Hauer & Feld (Penguin); Freshfields Bruckhaus Deringer (Hachette); Skadden, Arps, Slate, Meagher & Flom (Harper Collins); Sidley Austin (Macmillan); and Weil, Gotshal & Manges (Simon & Schuster). I left requests for comment with lawyers at each firm but didn't hear back. Apple's counsel at Gibson, Dunn & Crutcher declined comment.

(Reporting by Alison Frankel)

Follow Alison on Twitter: @AlisonFrankel 

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