Posted on 05/28/2015 10:37:34 PM PDT by Swordmaker
Apple is outraged about the conduct of Michael Bromwich, who was assigned to investigate its antitrust practices. On Thursday, the iPhone maker got some vindication.
A New York appeals court had harsh words for the lawyer assigned to monitor Apple’s compliance with an antitrust program, which was imposed on the company in the wake of a price-fixing conspiracy between Apple AAPL -0.14% and five book publishers.
In a ruling published on Thursday, the Second Circuit Court of Appeals ruled that the conduct of the monitor, Michael Bromwich, gave “pause” and was “the opposite of best practice” but nonetheless refused to grant Apple’s request to remove Bromwich from his position.
Bromwich took up the role of monitor at the behest of U.S. District Judge Denise Cote, who ruled in 2013 that Apple had been the mastermind of an ebook price-fixing conspiracy. The judge appointed Bromwich to assess Apple’s compliance with a court-ordered antitrust program. Bromwich’s behavior, however, soon enraged Apple.
The company objected in particular to Bromwich’s billing $138,432.40 in his first two weeks, despite a lack of antitrust expertise, and his teaming up with the Justice Department lawyers who are suing Apple (the original antitrust verdict is still under appeal). Apple also objected to Bromwich’s demands to interview Apple executives without their lawyers present.
This conduct led Apple to seek his disqualification. Meanwhile, the Wall Street Journal ridiculed Bromwich for demanding interviews with Apple executives like Jony Ive, who had nothing to do with the ebook program, and asked if he planned to disinter Steve Jobs next.
Thursday’s ruling, then, comes as vindication for Apple, albeit a largely symbolic one. The appeals court suggests that Bromwich acted in a role unbefitting of an agent of the court, and explains the tough position that confronted Apple:
These perceptions (the findings are not for us to make) place Apple in the position of either tolerating the monitor’s conduct (including interference with counsel) or registering complaints that threaten the financial expectation of an agent acting for a powerful court. This was a machine for making conflict, hostility and unhealthy appearances. [my emphasis]
The ruling also suggests that Bromwich’s fees, which are more than $1,000 an hour, could create an incentive for him to take an aggressive and extended approach to his monitor duties.
Ultimately, however, the appeals court did not remove Bromwich. The court cited its limited jurisdiction in the matter, and points out that Bromwich is now constrained by an earlier procedural ruling that limits his activities.
The ruling comes as the Second Circuit continues to deliberate Apple’s appeal to set aside Cote’s original price-fixing verdict. Here’s Thursday’s ruling (I’ve underlined some of the key parts):
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Here's where Apple's antitrust monitor crossed the line
by Philip Elmer-DeWitt — Fortune— MAY 28, 2015, 4:52 PM EDTHarsh words for lawyer Michael Bromwich from the appellate court.
My colleague Jeff John Roberts reported the news: The Second Circuit Court of Appeals on Thursday scolded but did not remove Michael Bromwich, the former U.S. inspector general who has been monitoring Apple’s antitrust compliance in the wake of the e-books price-fixing case.
“Scold” is the right word. Reading the decision, I’m struck by how many ways the Court found to say that Bromwich had crossed the line. Excerpts:
- “Bromwich’s submission in conjunction with a litigant’s brief was the opposite of best practice for a court-appointed monitor.”
- “The manner in which the declaration was filed, and the fact that it was preceded by at least some ex parte communications with the plaintiffs… may raise ‘an appearance of partiality’ and ‘an appearance of impropriety.’”
- “Bromwich coordinated with the plaintiffs in their opposition to Apple’s stay motion in the district court, and submitted an affidavit as an integral part of the opposition papers.”
- “It is certainly remarkable that an arm of the court would litigate on the side of a party in connection with an application to the court he serves.”
- “Bromwich is … subject to his professional responsibilities: as a lawyer, he is bound to respect the role of counsel and the adversarial system; as an impartial arm of the court, his responsibility to those institutions is a public trust.”
- “These largely procedural questions have considerable resonance because the fairness and integrity of the courts can be compromised by inadequate constraint on a monitor’s aggressive use of judicial power.” .
Apple had asked that Bromwich be removed. Judge Denise Cote, who appointed him, refused. It was with some reluctance that the appeals court let that refusal stand:
While some of Apple’s allegations against the monitor give pause, we are limited by both the record and our appellate jurisdiction.Apple still insists it did nothing wrong when it encouraged publishers to raise the price of e-books. A decision on its appeal of Judge Cotes’ original decision is expected this summer.
Do you understand that? I confess I don't.
“Never mind the price fixing scandal - look, the monitor is a greedy laywer!”
There's no prostitute in the world worth that much.
Not even a law prostitute.
I just read the decision and I think I've figured it out.
The full appeal of the Judge Cote's insane eBook anti-trust decision, which found Apple somehow to be the "ring leader" of a conspiracy that occurred before they ever even thought about selling ebooks, and somehow, in this judge's warped legal mind occurred because Apple independently, and not in concert, offered to sell ebooks using a perfectly legal "agency model", is being held before a different panel of the Fifth Circuit Court of Appeals than this panel hearing the pleas to remove the monitor.
This panel hearing the monitor question, although they agrees Bromwich, the monitor, acted egregiously and beyond the scope of his instructions, has ruled that Judge Cote had the power under her verdict of guilty to appoint him and did NOT exceed her authority in doing so or in refusing to remove him when Apple asked her to when he started doing things far beyond merely monitoring anti-trust activities related to ebooks and demanding to see new products under development, etc.
The monitor panel further decided they did not have jurisdiction to remove him because the anti-trust appeal panel was hearing the overall appeal and would be stepping on their toes to do so and when their decision on its validity was made, they'd either approve monitoring or not. They did, however, spank Bromwich as severely as they could, and because Bromwich is Judge Cote's agent, they were really spanking Judge Cote through their spanking of Monitor Bromwich by indicating that his egregious and ethically questionable behavior should have been curtailed and perhaps been grounds for her to have removed him herself.
They certainly questioned the justification for many of his actions. They certainly expressed severe displeasure with his actions as being NOT those of an even handed judicial nature, bur rather those of an arm of the advocate for the opposing side.
Now, that’s funny!
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