Roger Parloff

Never get between an Apple antitrust monitor and his per diem

December 3, 2013: 12:23 PM ET

Tempers flared and motions flew when Apple balked at $138,432 for two weeks work.

Bromwich

Bromwich

FORTUNE -- My colleague Roger Parloff has posted a fascinating back-channel account of the rapidly deteriorating relations between Apple (AAPL) and Michael Bromwich, its court-appointed e-book antitrust monitor.

The trigger, as it so often is, was money.

"On October 24," Parloff reports, "Apple liaison [Kyle] Andeer angered Bromwich by sending him an email questioning Bromwich's proposed $1,100 hourly fee and 15% 'administrative fee.'

"Andeer offered, as a counterproposal, a $800 hourly rate for Bromwich and a $700 rate for his antitrust specialist... Andeer further informed Bromwich -- in gestures that we now know were seen as quite insulting by Bromwich -- that, in accordance with Apple's standard expense policy, Bromwich would be limited to 'per diems of $15 for breakfast, $25 for lunch, and $30 for dinner'...

"Bromwich responded with a tart reminder that he was a court-appointed monitor, not one of Apple's outside counsel, and that the propriety of his fees was a matter to be determined by the court, the Justice Department, and the state attorneys general.

"He also wryly suggested that he would consider following Apple's expense policy only upon being advised 'whether your lawyers from Gibson Dunn working on this matter ... follow these expense guidelines without exception.'"

"But legal fees are clearly not the crux of this dispute," Parloff adds, pointing out that Gibson Dunn, Apple's outside counsel, bills more than $1,000 per hour and that its appellate ace, Ted Olson, has reportedly charged as much as $1,800.

Judge Cote.

Judge Cote.

Apple's real target, Parloff suggests, is the court that appointed Bromwich.

"Lurking beneath Apple's bristling at the monitor's legal fees and bridling at his 'disruptiveness' is a more fundamental issue," he writes. "Should a monitor have ever been appointed here at all -- an unusual step in a case like this one, in which the defendant has no long history of either egregious wrongdoing or recalcitrant behavior...

"Directly or indirectly, the company appears to be arguing that the overkill that such an appointment reflects is of a piece with a loss of perspective that Apple claims has characterized Judge [Denise] Cote's rulings throughout the case. In the end, Apple's key target here appears not to be Bromwich at all, but rather Judge Cote."

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About This Author
Anne VanderMey
Roger Parloff
Fortune

Roger Parloff has been a Fortune staffer since 2004, and is now its senior editor (legal affairs). Before turning to full-time journalism in 1988, he was an assistant district attorney and private criminal defense lawyer in Manhattan. His journalism has appeared in The New York Times and The American Lawyer, among other publications, and he is the author of Triple Jeopardy (Little Brown), a nonfiction book about the death penalty. He has won a National Magazine Award and three SABEW Best in Business awards. His J.D. is from Yale Law School (1982) and his B.A. is from Harvard (1977).

Email Roger Parloff | @rparloff
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