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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