Two summaries (one per case):
(1) Apple appeals consumer class certification
Context: On February 2, 2024, a U.S. district court finally certified a consumer class that seeks to reduce Apple’s 30% App Store cut to less than half of that percentage (February 3. 2024 games fray article).
What’s new: Unsurprisingly, Apple is appealing the class certification decision to the United States Court of Appeals for the Ninth Circuit, as revealed in a filing with the district court late on Friday. In its previous coverage of the case, games fray noted that the order appears very well-reasoned, but an appeal wouldn’t be wholly unreasonable. In the event the class certification decision stands, the case would likely go to trial in about two years from now.
Direct impact: Should Apple’s appeal of the class certification order fail, a jointly-stipulated case schedule that would allow the case to go to trial in the first half of 2026 will likely be kept. Otherwise there could be another major delay.
Wider ramifications: This is the seminal App Store antitrust case and already about 12 years old. Unlike most class actions, this is not the kind of claim that Apple can easily settle, as it would have to recognize that a lower App Store cut than 30% would have been appropriate. That would affect Apple in many ways, throughout and beyond the United States.
(2) Epic Games opposes fee shifting
Context: In Epic Games’ parallel App Store case, Apple wants more than $73 million in litigation costs reimbused (February 17, 2024 games fray X thread), arguing that Epic prevailed on only one of ten claims.
What’s new: Unsurprisingly, Epic Games is opposing Apple’s motion for fee shifting. Epic filed its opposition brief late on Friday.
Direct impact: Epic raises various arguments and points to important precedent that Apple’s motion didn’t address, which Apple will presumably do in its reply brief.
Wider ramifications: Apple is pursuing its motion for fee shifting not only because of the amount at stake, but even more so because it wants to discourage any other parties from picking a fight with Apple over the App Store, particularly on the basis of breaching a contract on the basis of the assumption that the contract is unenforceable due to an antitrust violation.
At this point there isn’t much to add to the above summaries, other than showing the actual documents.
First, a joint statement on the case schedule in the App Store class action (the case that reached the Supreme Court under the Pepper caption):
Apple’s part of the statement notes that the iPhone maker “will be filing a Rule 23(f) petition with the Ninth Circuit, seeking review of the Court’s Order.” The latter means the February 2, 2024 class certification order.
Apple would like a stay of discovery, particulary with a view to user data that Apple considers sensitive and believe could be abused by bad actors. The class-action lawyers, however, argue that Apple’s appeal isn’t meritorious enough to justify a stay.
In any event, the parties did agree on an overall case schedule, according to which (unless Apple’s appeal results in further delay) the court would resolve final pretrial motions by the end of December 2025 and the case would go to trial in the first half of 2026. Considering that the case is already twelve years old and that there’ll almost certainly be appeals after the trial, the Pepper litigation could even celebrate its 20th birthday at some point.
Now, the other document: Epic’s opposition to Apple’s motion for reimbursement of litigation expenses (attorneys’ fees as well as expert fees):
Epic makes interesting points, but games fray prefers to see Apple’s reply brief before taking a position, as it appears that Apple purposely didn’t address certain precedent (such as a no-fee-shifting ruling in a case named Carver) and didn’t explain how, if at all, it separated its costs of defending against Epic’s claims from parallel cases (the Pepper consumer class action and the Cameron small-developer class action). Epic’s opposition brief mentions repeatedly that Epic is under no obligation to subsidize Apple’s defenses against third-party claims.
Apple tries to make it all a matter of contract law: under the take-it-or-leave-ot developer agreement, Epic agreed to reimburse for litigation expenses related to a breach of contract. In order to clarify whether there was a breach, Apple first had to fend off Epic’s antitrust claims, as Epic argued that the relevant parts of the developer agreement were unenforceable for antitrust reasons. Now, Epic stresses that antitrust litigation expenses are not recoverable under certain precedent, and that this even applies to non-antitrust claims that are inextricably linked to the antitrust part.
Apart from Apple simply trying to make this litigation as costly as possible for Epic, and even beyond Apple’s desire to deter others from a similar course of action, it could also be that Apple believes Judge Yvonne Gonzalez Rogers may side with Apple over fee shifting as she has previously indicated her misgivings of how Epic triggered the dispute.
With respect to both matters (the class certification appeal and the Epic fee-shifting dispute) it now appears to make most sense to await further filings, such as Apple’s formal appeal in the first case and Apple’s reply brief in the second case, before commenting further and offering predictions.