Apple 2.0

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Apple e-book judge: 'I don't need to go into that further'

August 15, 2013: 8:46 AM ET

Judge Cote makes short work of Apple's list of nine evidentiary "errors."

Judge Cote

Judge Cote

FORTUNE -- This may be too deep in the weeds for anyone who hasn't been following the Apple (AAPL) e-book antitrust case as closely as I have.

But I was curious how Judge Denise Cote would deal with nine evidentiary issues Apple says it will raise in its appeal of her ruling last month (pdf here) that the company was the ringleader of an illegal conspiracy to fix the prices of e-books.

Judge Cote had asked Apple to supply her with a list of evidence that the company believes was "improperly admitted, excluded, or disregarded" during the trial.

Apple supplied a list of nine items last week (pdf here), and at a hearing Friday the judge whipped right through them.

Below, I've interspersed Apple's nine paragraphs with Judge Cote's responses from the bench.

If you skip over the footnotes and references, I think you'll get flavor of the way this judge conducts herself when challenged in court.

"And then we have a letter about the evidentiary issues," Judge Cote begins, according to the court transcript. "And that's Apple's letter of August 8, which lists nine categories of error. And I think we can -- I can address those quickly."

COURT: The first has to do with Ms. Macintosh's testimony, which was received in the form of her direct testimony by affidavit.

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COURT: Apple indicates that, in its opinion, I disregarded her testimony.  I assure it, I did not.  I'm not sure that Apple's characterization here actually correctly captures Ms. Macintosh's testimony.  Ms. Macintosh chose, in her direct testimony, not to discuss each of the issues that led Random House to adopt an agency agreement.  She chose, instead, for whatever reasons, not to discuss some of the e-mails and correspondence, that path of communications between Apple and Random House.  But instead, paragraph 23 talked about what the decision had been, based upon, in her words, primarily.

When it came time for me to address Random House, I did that in a separate section of the opinion, which is entitled Random House Adopts an Agency Model.  Because the focus of the trial was on Apple and its motives, and what Apple did and thought, I didn't find it necessary to make a judgment with respect to Random House's, all of its motives or judgments.  And, instead, recited some of the principle interactions between Random House and Apple.  And those are set forth in a paragraph that deals with Apple's own evaluation that its retaliatory conduct towards Random House was one of the facts that drove Random House to finally, in Mr. Cue's words, capitulate.

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COURT: With respect to the second issue identified by Apple, and that has to do with Ms. Horner's testimony, again I didn't disregard her testimony.  In connection with Ms. Horner's testimony, Apple purports or suggests that I disregarded her testimony that Barnes & Noble was the first retailer to propose agency, and pursued agency, with publishers.

Well, in my opinion I make a reference to the fact that in their discussions with Apple, Hachette actually told Apple that it had already discussed switching to an agency model with Barnes & Noble.  So I don't think it can be fairly said that I disregarded that one.

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COURT: The third issue has to do with the pattern of phone calls. I think the opinion speaks for itself. I have Appendix A, which shows the data from which I was relying. I don't believe counsel, or anyone, actually gave me the data with respect to phone call patterns beyond a two-month period. And that's a choice that was made to not give me that additional data. And that's just fine.

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COURT: Point number 4, has to do with the characterization of what happened at a dinner on January 20th between Apple and MacMillan. I don't think it is correct, as Apple would like it to be construed, that the documents and testimony to which it refers was directly inconsistent with my fact findings.

Indeed, I think PX208 and 42 are, especially are confirmatory but, largely, that was based on an assessment of credibility. And I don't need to go into that further.

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COURT: The next three categories listed have to do with expert testimony. And while I enjoyed each of the experts who testified here, obviously from the opinion, the findings of fact were principally drawn from the business records from the  time, and the testimony of witnesses who were engaged in those activities. This is not one of those cases in which expert testimony was a principle driver of a decision.

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COURT: I don't think I need to say more about paragraph eight, which is the issue about Google and Amazon credibility. I found those witnesses credible in any pertinent part to the facts at issue.

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COURT: The last point made was a question about the adequacy of discovery concerning Amazon. And, again, there is a record of those discovery rulings. I think Apple had more than adequate discovery of Amazon witnesses' depositions. They testified, three of them, at trial. And they were available for cross-examination. I have a duty to balance the Rule 1 and Rule 26 factors in assessing the extent of any discovery. And, therefore, I don't find that that is likely to be a successful argument on appeal either.

And so the case moved forward. On Wednesday, Judge Cote issued a schedule for a second trial to determine damages, which Apple estimates could run into the hundreds of millions of dollars.

The judge put the case on the trial docket for May 2014, instructing all parties to be ready to begin with 24 hours notice.

Unlike the first trial, which Judge Cote decided on her own, this one will be decided by a jury.

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About This Author
Philip Elmer-Dewitt
Philip Elmer-DeWitt
Editor, Apple 2.0, Fortune

Philip Elmer-DeWitt has been following Apple since 1982, first for Time Magazine, and now on the Web for Fortune.com.

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