apple inc.'s proposed conclusions of law

8/22/2019 Apple Inc.'s Proposed Conclusions of Law

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-------------------------------- - - - - -xAPPLE NC.'S PROPOSEDCONCLUSIONSOFLAW

Proof of he E x i s t e n c e of aConspiracvl1 . S e c t i o n 1 of h e Sherman Act r o v i d e s t h a t " [ e ] v e r y c o n t r a c t , c o m b i n a t i o n

i n t h e form of r u s t or t h e r w i s e , or o n s p i r a c y , n r e s t r a i n t of r a d e ... s h e r e b y d e c l a r e dt o be l l e g a l . " 15 U.S.C. .

1 Of h e s t a t e p l a i n t i f f s ' t h r e e c o n s p i r a c y c o u n t s , Apple s a l l e g e d t o be a a r t y o n l y t oone of h em. S t a t e s ' Second Am. ompl . 126- 2 8 .


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2 . P l a i n t i f f s a l s o b r i n g c l a i m s u n d e r s t a t e l a w . S t a t e s ' Second Am. ompl. 129- 9 8 . These c l a i m s p a r a l l e l t h e s e c t i o n 1 c l a i m i n t h i s c a s e a s s t a t e c o u r t s

"overwhelminglyl o o k t o f e d e r a l a n t i t r u s t d e c i s i o n s t o c o n s t r u e t h e i r ownn t i t r u s ts t a t u t e s . " I n r e D i g i t a l Musi c n t i t r u s t L i t i g . , 592 . Supp. 2d 435, 47- S O&n . 19- 2 1(S.D.N.Y.2008) c o l l e c t i n g a u t h o r i t i e s ) , r e v ' d on o t h e r grounds by t a r r v . SonyBMGMusi c n t m ' t , 592 . 3 d 314, 27 2d C i r . 2 0 1 0 ) .

3 . P l a i n t i f f s " must p r o v e an a n t i t r u s t v i o l a t i o n b y a p r e p o n d e r a n c e of h ee v i d e n c e . " Concor dBoat Corp. . Brunswick C o r p , , 207 . 3 d 1039, 1058 8 t h C i r . 2 0 0 0 ) .P l a i n t i f f s must p r o v e "two s s e n t i a l e l e m e n t s": 1)[ t ] h a t d e f e n d a n t s e n t e r e d i n t o ac o n t r a c t , c o m b i n a t i o n o r c o n s p i r a c y"; and( 2)[ t ] h a t s u c h c o n t r a c t , c o m b i n a t i o n o rc o n s p i r a c y amounted o an u n r e a s o n a b l e r e s t r a i n t ofr a d e o r c omme rc e a mo n g h e s e v e r a lS t a t e s . " C o n t ' l C a b l e v i s i o n o f h i o , n c . v . Am . l e c . Po w e r C o . , 715 F . 2 d 1115,1118 6 t hC i r . 1 9 8 3 ) .

4 . P l a i n t i f f s " must i r s t e s t a b l i s h a c o m b i n a t i o n o r s o me form of o n c e r t e da c t i o n . " C a p i t a l Imag i ng s s o c s . , P.C. . Mohawk a l l e y Me d . s s o c s . , I n c . , 996F . 2 d537, 54 2 2d C i r . 1993) emphasis d d e d ) . I f l a i n t i f f s c a n n o t p r o v e t h a t Applep a r t i c i p a t e d i n ac o n s p i r a c y , h e n t h e i r s e c t i o n 1 c l a i m " mus t a i l " and h e Courtn e e d n o tr e a c h ana n a l y s i s of n r e a s o n a b l e n e s s . V i r g i n A t l . Airways t d . v . B r i t i s h Airways PLC,257 . 3 d 256, 63 2d C i r . 2 0 0 1 ) .

5 . P l a i n t i f f s a r e r e q u i r e d t o i n t r o d u c e " d i r e c t o r c i r c u m s t a n t i a l e v i d e n c e t h a t

r e a s o n a b l y t e n d s t o p r o v e t h a t [Apple]hada o n s c i o u s commitment o a o m m o n scheme"w i t h t h e p u b l i s h e r s " d e s i g n e d t o a c h i e v e [ t h e ] u n l a w f u l o b j e c t i v e " of a i s i n g paces

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t h r o u g h o u t t h e e-book m a r k e t . MonsantoCo. . Spray- R i t e S e r v . C o r p . , 465 U.S. 752, 64(1984) q u o t a t i o n markso m i t t e d ) em phasis a d d e d ) .

6 . P l a i n t i f f s a l s o b e a r t h e b u r d e n o f r o v i n g t h a t Apple hada u l p a b l e i n t e n t ,a s t h e " l a c k o f n t e n t b yo ne p a r t y . . . r e c l u d e s a c o n s p i r a c y t o [ r e s t r a i n t r a d e ] . " GenevaPh arms. T e c h . Corp. . Barr a b s . , I n c . , 386F . 3 d 485, 507 2d C i r . 2 0 0 4 ) .

7 . Th e SupremeCourth a s h e l d t h a t "genuinec o n t r a c t s o f gency" r e n o t" v i o l a t i o n s o f h e A n t i - T r u s t Act" p e r s e o r o t h e r w i s e ) a s a m a t t e r o f r i n c i p l e . " U n i t e dS t a t e s v . Gen . l e c . C o . , 2 7 2 U.S.476, 88 1 9 2 6 ) ; e e a l s o V a l u e p e s t . c o m o fh a r l o t t e ,I n c . v . BayerC o r p . , 561 F . 3 d 282, 94 4 t h C i r . 2009) u p h o l d i n g l a w f u l n e s s o f e n u i n eagency a g r e e m e n t s ) .

8 . Th eApple agencya g r e e m e n t s a r e g e n u i n e c o n t r a c t s o f g e n c y , ac o n c l u s i o n p l a i n t i f f s d o n o t c o n t e s t r e s e r v i n g t h e i r r i g h t t o a l l e g e a i s t i n c t c o n s p i r a c y ) .

9 . Th eSupremeCourth a s r e c o g n i z e d t h a t v e r t i c a l l y r e l a t e d f i r m s have" l e g i t i m a t e r e a s o n s t o ex change n f o r m a t i o n " o n p r i c i n g , Monsanto,465 U S . t 762, andt h a t v e r t i c a l b u s i n e s s r e l a t i o n s h i p s a r e l i k e l y t o have p r o c o m p e t i t i v e b e n e f i t s and t o

promote h e p u r p o s e ofthe n t i t r u s t l a w s , e e , . g . , B u s . E l e c s . C o r p . . Sharp l e c s . C o r p . ,485 U.S. 717, 7 241988) v e r t i c a l a g r e e m e n t s "halve] e a l p o t e n t i a l t o s t i m u l a t ei n t e r b r a n d c o m p e t i t i o n , h e p r i m a r y c o n c e r n o f n t i t r u s t law" ) q u o t a t i o n marks o m i t t e d ) .

1 0 . Th eSupreme Court h a s " r e j e c t e d t h e a p p r o a c h o fe l i a n c e o n r u l e s

g o v e r n i n g h o r i z o n t a l r e s t r a i n t s w h en d e f i n i n g r u l e s a p p l i c a b l e t o v e r t i c a l o n e s , " and nol o n g e r t r e a t s " v e r t i c a l a g r e e m e n t s a m a n u f a c t u r e r mak esw i t h i t s d i s t r i b u t o r s a s a n a l o g o u st o ah o r i z o n t a l c o m b i n a t i o n a m o n g competing d i s t r i b u t o r s . " L e e g i n C r e a t i v e L e a t h e rP r o d s . , n c . v . P SKS, n c . , S51 U.S. 877, 888 2 0 0 7 ) .

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1 1 . The Supreme C o u r t h a s o v e r r u l e d i t s own r e c e d e n t s t h r e e t i m e s t o r e d u c es c r u t i n y on e r t i c a l r e l a t i o n s h i p s . C o n t ' l T . . , I n c . v . GTEy l v a n i a , I n c . , 433U.S. 36 , 9

(1977) h o l d i n g t h a t v e r t i c a l non- p r i c e r e s t r i c t i o n s a r e s u b j e c t t o t h e r u l e of e a s o n ,o v e r r u l i n g U n i t e d S t a t e s v . A r n o l d , Schwinn&o . , 388 U.S. 36 5 1 9 6 7 ) ) ; t a t e O i l Co. .Khan, 22 U.S. 3,71997)h o l d i n g t h a t v e r t i c a l a g r e e m e n t s s e t t i n g m axi m u m p r i c e s a r es u b j e c t t o t h e r u l e of e a s o n , o v e r r u l i n g A l b r e c h t . Her ald o . , 390 U.S. 1451 9 6 8 ) ) ;L e e g i n , 551U.S. t 907 h o l d i n g t h a t l l " [ v ] e r t i c a l p r i c e r e s t r a i n t s a r e t o beudgeda c c o r d i n g t o t h e r u l e of e a s o n , " o v e r r u l i n g Dr. i l e s Med . Co. . John D . ark &Sons,C o . , 220 U.S.373 1 9 1 1 ) ) .

1 2 . As o Apple,l a i n t i f f s a l l e g e a e s t r a i n t of r a d e t h a t i s v e r t i c a l i n n a t u r e .1 3 . To r o v e a hub and spoke" o n s p i r a c y , l a i n t i f f s mustshow h a t t h e

a l l e g e d v e r t i c a l "hub " f h e c o n s p i r a c y was h e p a r t y t h a t a l l e g e d l y implemented ande n f o r c e d t h e p l a n . I n t e r s t a t e C i r c u r t v . U n i t e d t a t e s , 306 . S . 208 , 22 1939) n o t i n gt h a t t h e d e f e n d a n t o r g a n i z e d and implemented h e p l a n ) ; Toy s "R" s , I n c . v . FTC, 21F . 3 d 928 , 33 7 t h C i r . 2000) n o t i n g t h a t t h e d e f e n d a n t communicated messages fromm a n u f a c t u r e r t o competing m a n u f a c t u r e r and s e r v e d a s t h e c e n t r a l c l e a r i n g h o u s e f o rc o m p l a i n t s abou t r e a c h e s i n t h e ag reement" ) ; accord14B P. reeda&. avenkamp,A n t i t r u s t Law 426&. 4 7 (3de d . 2010) c a u t i o n i n g a g a i n s t a p p l i c a t i o n of n t e r s t a t eC i r c u r t and Toys "R" s t o an l t o g e t h e r d i f f e r e n t s e t ofa c t s")

The EvidenceMust Tend t o Exc ludethe o s s i b i l i t y ofndependentA c t i o n1 4 . " D i r e c t e v i d e n c e i s e x t r e m e l y r a r e i n a n t i t r u s t c a s e s . " Am. h i r o p r a c t i c

A ssn . T r i g o n H e a l t h c a r e , I n c . , 36 7 . 3 d 212, 26 4 t h C i r . 2 0 0 4 ) . Such v i d e n c e must

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be a "smoking g u n . " Mayor &City C o u n c i l o f B a l t . , Md. . C i t i g r o u p , I n c . , 709 . 3 d 1 2 9 ,1362d C i r . 2 0 1 3 ) .

1 5 . D i r e c t e v i d e n c e i n a e c t i o n 1 c o n s p i r a c y must be e v i d e n c e t h a t " i s e x p l i c i tand e q u i r e s no n f e r e n c e s t o e s t a b l i s h t h e p r o p o s i t i o n o r c o n c l u s i o n b e i n g a s s e r t e d . " I n r eBa by Food n t i t r u s t i t i g . , 166 . 3 d 1 1 2 , 118 3d i r . 1 9 9 9 ) . Far example, i r e c t e v i d e n c emight o n s i s t of a e c o r d e d phone a l l i n which two o m p e t i t o r s a g r e e d t o f i x p r i c e s a t ac e r t a i n l e v e l . " C i t i g r o u p , 709 . 3 d a t 1 3 6 .

1 6 . T h e r e i s no i r e c t e v i d e n c e a g a i n s t Appleof o n s p i r a c y . Th e s s u e ofw h e t h e r Ap ple o n s p i r e d w i t h t h e p u b l i s h e r s must be s t a b l i s h e d t h r o u g h c i r c u m s t a n t i a le v i d e n c e .

1 7 . Tos t a b l i s h a o n s p i r a c y by i r c u m s t a n t i a l e v i d e n c e , p l a i n t i f f s must meett h e " s t r i n g e n t s t a n d a r d s i n Mo nsanto." L e e g i n , 551U.S.t 903 . I n Mo nsanto,h eS u p r e n n e Court e l d t h a t a n t i t r u s t l aw l i m i t s t h e r a n g e ofe r m i s s i b l e i n f e r e n c e s fromambiguous v i d e n c e i n a c a s e . " M a t s u s h i t a E l e c . I n d u s . Co. . Z e n i t h Radio C o r p . , 475Y J . S . 574, 88 1 9 8 6 ) .

1 8 . Conduct h a t i s "as o n s i s t e n t w i t h p e r m i s s i b l e c o m p e t i t i o n a s w i t h i l l e g a lc o n s p i r a c y does o t , s t a n d i n g a l o n e , s u p p o r t r z i n f e r e n c e of n t i t r u s t c o n s p i r a c y . "M a t s u s h i t a , 475U . S . a t 588; accordAD/S A T. A s s o c i a t e d P r e s s , 1 8 l F . 3 d 216, 35 2dC i r . 1 9 9 9 ) .

1 9 . A e c t i o n 1 p l a i n t i f f"must r e s e n t e v i d e n c e t h a t ` t e n d s t o e x c l u d e t h ep o s s i b i l i t y ' t h a t t h e a l l e g e d c o n s p i r a t o r s a c t e d i n d e p e n d e n t l y . " M a t s u s h i t a , 475 U . S . t588 q u o t i n g Monsanto , 65 U.S . t 764)emphasis d d e d ) . To r o v e a o n s p i r a c y ,

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p l a i n t i f f s must r e s e n t e v i d e n c e t h a t " t e n d s t o e x c l u d e t h e p o s s i b i l i t i y " t h a t Apple a c t e di n d e p e n d e n t l y .

TheStrength ofEvidenceRequir ed To s t a b l i s h Aonsniracv2 0 . I t t a k e s s t r o n g " v i d e n c e t o s a t i s f y Mon san to's t e n d s t o e x c l u d e " t a n d a r d

i n c a s e s where l a i n t i f f s ' t h e o r y i s i m p l a u s i b l e and t h e c h a l l e n g e d c o n d u c t can r e a s o n a b l y

be p e r c e i v e d a s p r o c o m p e t i t i v e . Inr e Publ'n P a p e r n t i t r u s t L i t i g . , 690 . 3 d 51,63 2dC i r . 2 0 1 2 ) .

2 1 . " ( I ] f h e f a c t u a l c o n t e x t r e n d e r s p l a i n t i f f s ' ] c l a i m i m p l a u s i b l eifh e c l a i m

i s one h a t s i m p l y m ake s n o economic s e n s ep l a i n t i f f s ] must c o m e o r w a r d w i t h m o r ep e r s u a s i v e e v i d e n c e t o s u p p o r t t h e i r c l a i m s t h a n would o t h e r w i s e be n e c e s s a r y . "M a t s u s h i t a , 475 U.S. t 587.

2 2 . Th eS u p r eme Court a s emphasized t h e p r o c o m p e t i t i v e b e n e f i t s of markete n t r y f o r n e w i r m s and b r a n d s . " L e e g i n , 551 U.S. t 891.

2 3 . Th e S u p r e me Court a s c o n s i s t e n t l y r e c o g n i z e d t h a t r e s t r i c t e d i n f e r e n c e sa r e n e c e s s a r y i n a n t i t r u s t c a s e s t o a v o i d e n f o r c e m e n t t h a t " c o u l d d e t e r o r p e n a l i z e p e r f e c t l y

l e g i t i m a t e conduct" an d c r e a t e " ` i r r a t i o n a l d i s l o c a t i o n ' i n t h e m a r k e t . " Monsanto, 65U.S. t 763- 6 4 ; seea l s o I n r e F l a t Glass n t i t r u s t i t i g . , 38 5F . 3 d 350, 35 7 3dC i r . 2004)(a i g h e r t h r e s h o l d i s imposedi n a n t i t r u s t c a s e s t o a v o i d d e t e r r i n g i n n o c e n t c o n d u c t t h a t

r e f l e c t s e n h a n c e d , a t h e r t h a n r e s t r a i n e d , c o m p e t i t i o n" ) .2 4 . Becausep l a i n t i f f s ' c l a i m s m a ke n oeconomic e n s e " andc h a l l e n g e

c o n d u c t i n t e g r a l l y r e l a t e d t o m a r k e t e n t r y , p l a i n t i f f s must r o v i d e " s t r o n g " e v i d e n c e t os u p p o r t an i n f e r e n c e of o n s p i r a c y .


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Apple's Conduct Was rive n By t s Indep ende nt B u s i n e s s I n t e r e s t s25. When[ t ] h e mos t a t u r a l i n f e r e n c e from t h e e v i d e n c e " s t h a t t h e

d e f e n d a n t hada l e g i t i m a t e , i n d e p e n d e n t r e a s o n " o r t s a c t i o n s , nn i n f e r e n c e of o n s p i r a c yi s p o s s i b l e u n d e r h e Sup reme C o u r t ' s c a s e l a w . Euromoda s ,n c . v . Z a n e l l a , L t d . , 368 . 3 d1 1 , 2 01 s t C i r . 2 004) c i t i n g M a t s u s h i t a , 475 U.S. t 5 8 8 ) ; s e e a l s o 14A Areeda, u p r a , 413 a{noc o n s p i r a c y c a n bei n f e r r e d from p a r a l l e l b e h a v i o r wh e n"an a l l e g e dc o n s p i r a t o r "had an ` i n d e p e n d e n t ' o x goodb u s i n e s s r e a s o n ' f o r t h e c h a l l e n g e d a c t" ) .

26. Me re p r o o f h a t t h e d e f e n d a n t had a l a u s i b l e m o t i v e t o c o n s p i r e i s n e v e rs u f f i c i e n t f o r l i a b i l i t y . C i t i g r o u p , 709 . 3 d a t 13 9(e v i d e n c e t h a t t h e d e f e n d a n t had am o t i v e t o e n t e r i n t o an n t i t r u s t c o n s p i r a c y m a y n d i c a t e s i m p l y t h a t t h e d e f e n d a n t [ ]o p e r a t e s ] n ano l i g o p o l i s t i c m a r k e t , h a t i s , may i m p l y r e s t a t e t h e ( l e g a l l y i n s u f f i c i e n t )f a c t t h a t market b e h a v i o r i s i n t e r d e p e n d e n t andc h a r a c t e r i z e d by c o n s c i o u s p a r a l l e l i s m")( q u o t i n g I n r e I n s . Brokerage A n t i t r u s t L i t i g . , 618 . 3 d 300,32 2 3d C i r . 2010)) q u o t a t i o nmark s o m i t t e d ) ; s e e a l s o 14 A Areeda, u p r a , t 411(M o t i v a t i o n t o e n t e r a o n s p i r a c yi s n e v e r enough o e s t a b l i s h a r a d i t i o n a l c o n s p i r a c y" ) .

2 7 . " [ I ] n d e p e n d e n t b u s i n e s s r e a s o n s " p r e c l u d e a o n s p i r a c y f i n d i n g where h ed e f e n d a n t a c t e d p u r s u a n t t o i t s own u s i n e s s p o l i c y and p h i l o s o p h y , n c l u d i n g t o p r o t e c t t sb r a n d and b u s i n e s s r e p u t a t i o n . H.L. H ayde nCo. . Siemens Me d. y s . , I n c . , 879 . 2 d 1 0 0 5 ,1014 2 dC i r . 1 9 8 9 ) ; s e e a l s o B u r l i n g t o n Coat a c t o r y Warehous e C o r p . v . E s p r i t de

C o r p . , 769 . 2 d 919,92 42 dC i r . 1 9 8 5 ) .28. P l a i n t i f f s ' e x p e r t s , P r o f e s s o r s G i l b e r t and B a l s e r , don o t c o n t e s t A p p l e ' s

i n d e p e n d e n t b u s i n e s s u s t i f i c a t i o n s f o r i t s c o n d u c t . See W h i t e v . R.M. Packer C o . , 635 . 3 d571, 81, 85-86 l s t C i r . 2 011) c o n c l u d i n g t h a t p l a i n t i f f s " a n t i t r u s t c l a i m s f a i l " where

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" [ p ] l a i n t i f f own x p e r t s t a t e d t h a t `no un ambiguo us c o n c l u s i o n can be g l e a n e d fro md e f e n d a n t s ' p a t t e r n o fa r a l l e l p r i c i n g"' nd r e s u l t s o f n a l y s i s were "mixe d" ) ; e e a l s o

U n i t e d A i r L i n e s , I n c . v . A u s t i n T r a v e l C o r p . , 867 F . 2 d 737,73 9 2d C i r . 1989) a f f i r m i n gg r a n t o f u m m ary judgm e nt n s e c t i o n 2a s e where e x p e r t con ceded t h a t t h e r e wa sn or e a s o n a b l e o x r e a l i s t i c p o s s i b i l i t y t h a t d e f e n d a n t ] c o u l d a c h i e v e a m ono po ly" ) .

2 9 . P l a i n t i f f s c a n n o t e s t a b l i s h a c o n s p i r a c y byc o n c e d i n g t h a t t h e d e f e n d a n tm a d e u s i n e s s d e c i s i o n s u s t i f i e d by v a l i d i n d e p e n d e n t b u s i n e s s i n t e r e s t s , an d r g u i n g o n l yt h a t t h e d e f e n d a n t ' s conduct w as a l s o p l a u s i b l y c o n s i s t e n t w i t h a c o n s p i r a c y . S e e , . g . ,C ' i t i g r o u p , 709 F . 3 d a t 138 d i s m i s s i n g c o n s p i r a c y a l l e g a t i o n s where d e f e n d a n t s ' c o n d u c t"m a d e p e r f e c t b u s i n e s s s e n s e " and w a s "n ot u s t a a t i o n a l b u s i n e s s d e c i s i o n , b u t t h e o n l yr a t i o n a l b u s i n e s s d e c i s i o n " ) ;AD/SAT, 8 1 F . 3 d a t 241 c o n c l u d i n g s u m m a ryudgme n t w a sw a r r a n t e d b e c a u s e each d e f e n d a n t ' s c o n d u c t w a s "asc o n s i s t e n t w i t h t h e d e f e n d a n t ' sl e g i t i m a t e , i n d e p e n d e n t b u s i n e s s i n t e r e s t a s w i t h an i l l e g a l c o m b i n a t i o n i n r e s t r a i n t o ft r a d e" ) ; H . L . Hayden , 879 F . 2 d a t 1014 a f f i r m i n g g r a n t o f s u m m a r yjudgmen t where t h ed e f e n d a n t p r e s e n t e d e v i d e n c e t h a t i t t e r m i n a t e d b u s i n e s s r e l a t i o n s w i t h p l a i n t i f f f o r

" i n d e p e n d e n t b u s i n e s s r e a s o n s" ) ; B u r l i n g t o n , 769 . 2 d a t 924 a f f i r m i n g g r a n t o f um ma ryjudgm en t an d c o n c l u d i n g t h a t p l a i n t i f f f a i l e d t o meet Monsanto's t e s t where" u n c o n t r a d i c t e d e v i d e n c e " sho wed d e f e n d a n t had z i i n d e p e n d e n t b u s i n e s s u s t i f i c a t i o n ) . 2

2 See a l s o Am. C h i r o p r a c t z e Assn n c . v . T r i g o n H e a l t h c a r e I n c . , 367 F . 3 d 212,226-27 4 t h C i r . 2004)f i n d i n g n o c o n s p i r a c y where e v i d e n c e i n r e c o r d sh owe da c t i o n swere " a p p r o p r i a t e and r e a s o n a b l e " andi n d e p e n d e n t ) ; Ferguson v . G r e a t e r P o c a t e l l oCh a m b e r o f Co m m e r c e , 848 F . 2 d 976, 981-82( 9 t h C i r . 1988) a f f i r m i n g s um m a ryjudgmen t where each d e f e n d a n t " p r e s e n t e d e v i d e n c e o f a c i a l l y v a l i d i n s t i t u t i o n a l andb u s i n e s s r e a s o n s f o r i t s d e c i s i o n" ) ; Ho user . F o x T h e a t r e s M g m t .C o r p . , 845 F . 2 d 1225,1232-33(3 d C i r . 1988) a f f i r n n i n g s u m m a ry judgmen twhere d e f e n d a n t s ' a c t i o n s were i nt h e i r owneco n omic n t e r e s t s ) ; I n r e T r a v e l Agent Co m m 'n A n t i t r u s t L i t i g . , 583 F . 3 d 896,[ F o o t n o t e c o n t i n u e d o n n e x t page]


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[ F o o t n o t e c o n t i n u e d from p r e v i o u s page]908 ( 6 t h C i r . 2009) d i s m i s s i n g c o n s p i r a c y a l l e g a t i o n s where "each d e f e n d a n t had ar e a s o n a b l e , i n d e p e n d e n t economic i n t e r e s t " i n i t s a c t i o n s ) ; Kreuzer v . Am. Acad. ofP e r z o d o n t o l o g y , 735 F.2d 1479, 1488 (D.C. C i r . 1984) h o l d i n g t h a t i f a d e f e n d a n t" o f f e r [ s ] an i n n o c e n t e x p l a n a t i o n of h e q u e s t i o n e d conduct" and t " i s p l a u s ib l e and morel o g i c a l t h a n a t h e o r y of c o n c e r t e d a c t i o n , then a c o n s p i r a c y m a y not be found" ) ;Merck-Medco M a n a g e d Care,LLC . R i t e Ai d o r p . , 201 F . 3 d 436, 1999WL 91840, t* 5 4 t h C i r . 1999) per curiam) a f f i r m i n g g r a n t of summary judgment where e v i d e n c ew a s q u a l l y c o n s i s t e n t w i t h d e c i s i o n s t h a t "were independent r were m a d e o r l e g i t i m a t eb u s i n e s s r e a s o n s" ) ; M i l e s D r s t r i b s . I n c . v . S p e c i a l t y C o n s t r . Brands, n c . , 4 76 F . 3 d 442,4 50 7 t h C i r . 2007) a f f i r m i n g g r a n t of u mm a ry udgment where e f e n d a n t s ' a c t i o n s were"as c o n s i s t e n t w i t h p e r m i s s i b l e c o m p e t i t i o n a s w i t h a c o n s p i r a c y" ) ; Todorov v . DCHH e a l t h c a r e A u t h . , 921 F.2d 1438, 1457-58 11th C i r . 1991) a f f i r m i n g summary udgmentwhere " r e c o r d amply s u p p o r t s t h e p r o c o m p e t i t i v e r e a s o n s " d e f e n d a n t o f f e x e d f o r i t sa c t i o n s ) ; W a l l a c e v . B a n k of a r t l e t t , 55 F . 3 d 1 166, 1169-70 6 t h C i r . 1995) a f f i r m i n gg r a n t of u m m a ry u dgment where d e f e n d a n t s ' conduct wa s a s e d on l e g i t i m a t e i n t e r e s t "and where [ p ] l a i n t i f f ' s e x p e r t e v i d e n c e [was] q u a l l y c o n s i s t e n t w i t h i n d e p e n d e n t a c t i o na s i t [was] w i t h c o n s p i r a c y" ) ; W i l l i a m s o n O i l Co. . P h i l i p Morris U S . ~ , 34 6 F . 3 d 1287,1306-07 (11th C i r . 2003) a f f i r m i n g g r a n t of summary judgment where d e f e n d a n t s 'conduct wa s r e a d i l y e x p l a i n e d a s e c o n o m i c a l l y r a t i o n a l , s e l f -i n t e r e s t e d r e s p o n s e s " andwhere p l a i n t i f f s conceded t h a t d e f e n d a n t s ' conduct " w a s an e x c e p t i o n a l l y c o m p e t i t i v emo v e" ) ; Alpha Lyracom Space Commc'ns, n c . v . Comsat o r p . , 968 F. Supp . 876, 894(S.D.N.Y. 1996) f i n d i n g no c o n s p i r a c y d e s p i t e p a r a l l e l r e f u s a l s and e v i d e n c e t h a t a o i n tv e n t u r e me t on numerous o c c a s i o n s where d e f e n d a n t p r e s e n t e d "ample e v i d e n c e " ofi n d e p e n d e n t b u s i n e s s r e a s o n s ) ; Kramer . P o l l o c k - Krasner Found.,890 F. Supp . 250, 56(S.D.N.Y. 1995) f i n d i n g no c o n s p i r a c y where c h a l l e n g e d a c t i o n s "could e q u a l l y havebeen prompted by l a w f u l , i n d e p e n d e n t g o a l s ." ) ; Reading I n t l , I n c . v . O a k t r e e C a p i t a lMgmt.LLC , o. 3 Civ. 1895, 007 U.S. i s t . LEXIS 504, t *36 S.D.N.Y. a n . 9, 2007)( f i n d i n g no c o n s p i r a c y where e v i d e n c e showed d e f e n d a n t s e x e r c i s e d " t h e i r i n d e p e n d e n tb u s i n e s s judgment" ) ; Reborn E n t e r s . I n c . v . Fine C h i l d , I n c . , 590 F. Supp. 1423, 1 4 42(S.D.N.Y. 1984)([ I ] f a d e c i s i o n ...was o l e l y based on e g i t i m a t e b u s i n e s s r e a s o n s ..t h e n p l a i n t i : C f ' s c l a i m must be d i s m i s s e d . " ( q u o t a t i o n marks and b r a c k e t s o m i t t e d ) ) ;Sample, n c . v , Pendleton Woolen M i l l s , I n c . , 704 F. Supp. 498, 50 1-03(S.D.N.Y. 1989)( f i n d i n g no c o n s p i r a c y where d e f e n d a n t ' s a c t i o n s were c o n s i s t e n t w i t h " l e g i t i m a t eb u s i n e s s c o n c e r n s" ) ; U . S . I n f o S y s . v . I13EW Local Union No. 3, N o.00 i v . 4763, 2007U.S. i s t . LEXIS 56229, t *4 9-50 S.D.N.Y.Aug.3, 2007) f i n d i n g no c o n s p i r a c y whered e f e n d a n t s ' conduct w a s e q u a l l y c o n s i s t e n t w i t h own e l f -i n t e r e s t ) ; Balaklaw v . L o v e l l ,822 . Supp. 892, 902 N.D.N.Y. 993) f i n d i n g no c o n s p i r a c y where d e f e n d a n t s "had al e g i t i m a t e , b u s i n e s s reason" o r i t s c o n d u c t ) ; Br eakdown e r v s . , L t d . v . Now a s t z n g , n c . ,S50 F.Supp.2d 1123, 1137 C.D. a l . 2007) f i n d i n g no c o n s p i r a c y where d e f e n d a n t s e tf o r t h a p l a u s i b l e and j u s t i f i a b l e r e a s o n f o r i t s conduct t h a t i s c o n s i s t e n t w i t h p r o p e rb u s i n e s s p r a c t i c e ." ) ; Flash E l e c s . , I n c . v . U n i v e r s a l Music & z d e o D z s t r i b . C o r p . , N o.CV- 0 1 -0979, 2009 WL 266571, a t *1 , *1 0-1 4 (E.D.N.Y. O c t . 19, 2009) Report andRecommendation), dopted n u l l , 2010 WL 390176 E.D.N.Y. Dec. 22 , 2010) f i n d i n g[ F o o t n o t e c o n t i n u e d on n e x t page]

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30. Wheret h e d e f e n d a n t o f f e r s "overwhelminge v i d e n c e t h a t t h e c h a l l e n g e da c t i o n was t a k e n u n i l a t e r a l l y f o r so und b u s i n e s s r e a s o n s , " t h e n p l a i n t i f f s ' c o n s p i r a c y

a l l e g a t i o n s "cannots t a n d . " Comfort Tran e A i r C o n d i t i o n i n g Co. v . Tran e Co., 592 F . 2 d1373 , 1 3 84 5th C i r . 1979)q u o t a t i o n marks m i t t e d ) .

31. C o u r t s haveo v e r t u r n e d t r i a l v e r d i c t s where, under Monsanto, h e e v i d e n c e

was a s c o n s i s t e n t w i t h t h e d e f e n d a n t ' s i n d e p e n d e n t b u s i n e s s i n t e r e s t a s w i t h a c o n s p i r a c y .See Intl D i s t r i b . C t r s . , I n c . v . WalshTrucking Co., 81 2 F . 2 d 786, 7 94 (2d C i r . 1987)( o v e r t u r n i n g a u r y v e r d i c t f o r t h e p l a i n t i f f s where, t a k e n a s awhole,h e e v i d e n c e p o i n t e dw i t h a t l e a s t a s m u c h f o r c e toward independent a c t i o n byt h e d e f e n d a n t s a s toward

[ F o o t n o t e c o n t i n u e d fromp r e v i o u s page]no c o n s p i r a c y where d e f e n d a n t s had" l e g i t i m a t e b u s i n e s s r e a s o n s " f o r i t s c o n d u c t ) ;Friedman v . D e l . C n t y . Mem'l Hosp., 672F. Supp . 171, 188 E.D. Pa. 1987 ) f i n d i n g noc o n s p i r a c y where d e f e n d a n t "had l e g i t i m a t e b u s i n e s s u s t i f i c a t i o n s " f o r i t s c o n d u c t ) ; I n r eGrap hics Processing U n i t s A n t i t r u s t L i t i g . , 527 F. Sup p . 2d 1011, 1022 N .D. a l . 20 0 7)( d i s m i s s i n g a n t i t r u s t c o n s p i r a c y a l l e g a t i o n s where d e f e n d a n t s " [ e ] a c h h a [ d ] i t s owni n d e p e n d e n t reason" o r i t s a c t i o n s ) ; LaFl am m e v . S o c i e t e Air F r . , 7 0 2F. Supp. 2d 136,152 E.D.N. Y. 20 1 0 ) d i s m i s s i n g a n t i t r u s t c o n s p i r a c y a l l e g a t i o n s wherechange i n marketc o n d i t i o n s p l a u s i b l y " i n s t i g a t e d independent d e c i s i o n s by d e f e n d a n t s " t o p e r f o r mc h a l l e n g e d a c t i o n ) ; Maxi m I n t e g r a t e d P r o d s . , I n c . v . A nalog D e v i c e s , I n c . , No .C- 9 2 -20716, 1994 WL14024, t *2N. D. C a l . S e p t . 7, 1 9 9 4 ) , r e v ' d z n part on o t h e rgrounds, 79F.3d 1153 ( 9 t h C i r . 1996) ( u n p u b l i s h e d ) ( f i n d i n g n o c o n s p i r a c y whered e f e n d a n t s "hadsound, e g i t i m a t e b u s i n e s s r e a s o n s " f o r t h e i r c o n d u c t ) ; Ral ph C. W i l s o nI n d u s . , 1 ' n c . v . Am. Broad. C o s . , 598 F. Sup p . 694, 7 0 8 ( N.D. C a l . 1984) f i n d i n g noc o n s p i r a c y where d e f e n d a n t s " s u b m i t t e d over whelming e v i d e n c e t h a t t h e i r . . . p r a c t i c e swere u n d e r t a k e n i n t h e e x e r c i s e of t h e i r i n d e p e n d e n t and sound b u s i n e s s judgment." ) ;Templev . C i r c u i t C i t y S t o r e s , I n c . , No . 06 CV 30 3 , 2007 WL 790154, t *7 E.D.N.Y.S e p t . 25, 20 0 7 ) ( d i s m i s s i n g a n t i t r u s t c o n s p i r a c y a l l e g a t i o n s where p l a i n t i f f a l l e g e dd e f e n d a n t s a c t e d " f o x b u s i n e s s r e a s o n s " and t o " p r o t e c t t h e i r ownp r o f i t s " ( i n t e r n a lb r a c k e t s o m i t t e d ) ) ; Tomina~a v . Shepherd , 6 82 F. Sup p . 1489, 1496 ( C. D. C a l . 1988)( f i n d i n g n o c o n s p i r a c y whered e f e n d a n t r a i s e d [a] l a u s i b l e b u s i n e s s u s t i f i c a t i o n " f o r i t sc o n d u c t ) ; Wright v . S . MonoHosp. D i s t . , 63 1 F. Supp . 1294,1321 (E.D. C a l . 198 6)( f i n d i n g no c o n s p i r a c y where d e f e n d a n t s "c[ a]me o r t h w i t h more t h a n s u f f i c i e n t e v i d e n c et o e s t a b l i s h t h a t t h e i r a c t s b e n e f i t t e d t h e i r s e l f n t e r e s t s w h i l e a t t h e samet i m e a d v a n c i n gl e g i t i m a t e b u s i n e s s d e c i s i o n s" ) .

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c o n s p i r a c y , and a u r y would havet o engage i n i m p e r m i s s i b l e s p e c u l a t i o n t o r e a c h t h el a t t e r c o n c l u s i o n")q u o t a t i o n marksanda l t e r a t i o n s o m i t t e d ) ; L o v e t t . Ge n. Motors ' o r p . ,

988 F . 2 d 575, 579, 81 ( 8 t h C i r . 1993) o v e r t u r n i n g a u r y v e r d i c t b a s e d on h e p l a i n t i f f ' s"ambig uous" e v i d e n c e b e c a u s e of h e " s t r o n g competing i n f e r e n c e " t h a t t h e d e f e n d a n ta c t e d i n d e p e n d e n t l y t o me e t t s " l e g i t i m a t e b u s i n e s s g o a l s" ) .

3 2 . A p p l e ' s c h a l l e n g e d c o n d u c t wasm o t i v a t e d by l e g i t i m a t e , i n d e p e n d e n tb u s i n e s s r e a s o n s , and i n d e p e n d e n t c o n d u c t s t h e r e f o r e t h e more a t u r a l i n f e r e n c e from h ee v i d e n c e r a t h e r t h a n c o n s p i r a c y .

Wh et h e r the Evidence Can Me e tThe M o n s a n to Standard3 3 . Wh e r e a e f e n d a n t h a s o f f e r e d " s u b s t a n t i a l e v i d e n c e s u p p o r t i n g [ a ]

p l a u s i b l e and l e g i t i m a t e e x p l a n a t i o n of i t s ] c o n d u c t " a s App le h a s , l a i n t i f f s "may o t r e s ton c o n c l u s o z y a s s e r t i o n s of o n s p i r a c y " and i n s t e a d mustc o m e o r w a r d w i t h s t r o n ga d d i t i o n a l e v i d e n c e ofh e d e f e n d a n t ' s c o n s p i r a t o r i a l a c t i v i t i e s . H.L. H ayd e n , 879 . 2 d a t1 014c i t i n g B u r l i n g t o n , 7 69 . 2 d a t 9 2 3 ) ; e e a l s o Todorov . DC'HHe alth care A u t h . , 921F . 2 d 1438,14561 1 t h C i r . 1991)(w h e n h e d e f e n d a n t p u t s f o r t h a l a u s i b l e ,p r o c o m p e t i t i v e u s t i f i c a t i o n f o r h i s a c t i o n s , we i l l n o t beq u i c k t o i n f e r , fromc i r c u m s t a n t i a l e v i d e n c e , h a t a v i o l a t i o n ofh e a n t i t r u s t laws h a s o c c u r r e d ; t h e p l a i n t i f fmust r o d u c e more p r o b a t i v e e v i d e n c e t h a t t h e lawhas been v i o l a t e d" ) .

3 4 . ForMonsanto's t r i c t s t a n d a r d t o be a t i s f i e d , t h e p l a i n t i f f must f f e r

c o m p e l l i n g f a c t s t h a t c l e a r l y t e n d e d t o e x c l u d e t h e p o s s i b i l i t y ofn d e p e n d e n t a c t i o n . See,e . g . , C a p i t a l Imaging,996 . 2 d a t 5 45 t h e e v i d e n c e " s t r o n g l y s u g g e s t [ e d ] " t h a t t h ed e f e n d a n t ' s u s t i f i c a t i o n s f o r i t s c o n d u c t werea o m p l e t e sham).

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3 5 . Evidence t h a t a d e f e n d a n t a c t e d i n a i m i l a r way n e n t e r i n g i n t o s e p a r a t ev e r t i c a l a g r e e m e n t s p r o v e s n o t h i n g , b e c a u s e " [ s ] i m i l a r c o n t r a c t termscan r e f l e c t s i m i l a r

b a r g a i n i n g powe r an d commercial g o a l s [ . ] " I n r e E l e v a t o r A n t i t r u s t L i t i g . , 502 . 3 d 47,51(2d C i r . 2 0 0 7 ) ; e e a l s o I n s . B r o k e r a g e , 61 8 F . 3 d a t 327(on e c a n n o t p l a u s i b l y i n f e r " ah u b -and- s p o k e c o n s p i r a c y from t h e m e r e a c t t h a t s e v e r a l i n s u r e r s e n t e r e d s i m i l a rcom mission a g r e e m e n t s w i t h an i n s u r a n c e b r o k e r ) .

3 6 . Ahange n m a r k e t c o n d i t i o n s t h a t makes t n e c e s s a r y f o r a i r m t o changei t s b u s i n e s s m o d e l s n o t e v i d e n c e of a o n s p i r a c y . See C i t i g r o u p , 7 09 F . 3 d a t 1 38( d e f e n d a n t s ' e n mas s e e x i t from m a r k e t i n r e a c t i o n t o m a r k e t c o n d i t i o n s wa s "not u s t ar a t i o n a l b u s i n e s s d e c i s i o n , b u t h e o n l y r a t i o n a l b u s i n e s s d e c i s i o n" ) ; T r a v e l Agent Comm 'n ,S83 . 3 d a t 898, 08h o l d i n g t h a t a e c i s i o n by e v e n a i r l i n e s t o e l i m i n a t e , w i t h i n d a y s , h ep r a c t i c e of a y i n g b a s e -commission s o t r a v e l a g e n c i e s was b a s e d on e a c h a i r l i n e ' s" r e a s o n a b l e , i n d e p e n d e n t economic n t e r e s t " wher e h e market had "changedf u n d a m e n t a l l y s i n c e 1983due o t e c h n o l o g i c a l a d v a n c e s i n a i r l i n e t i c k e t p u r c h a s i n g" ) .

3 7 . Th e u s e ofMFNs o b a r g a i n f o r l ow p r i c e s " i s t h e s o r t of o n d u c t t h a t t h ea n t i t r u s t laws s e e k t o e n c o u r a g e " an d t h e r e f o r e d o n o t s u p p o r t a i n d i n g of a c o n s p i r a c y .Blue Cross &Blue h i e l d U n i t e d o f i s c . v . M a r s h f i e l d C l i n i c , 65 F . 3 d 1406, 1415 7 t hC i r . 1 9 9 5 ) ; s e e a l s o i d . (Most a v o r e d n a t i o n s ' c l a u s e s a r e s t a n d a r d d e v i c e s by whichb u y e r s by o b a r g a i n f o r l ow p r i c e s , by e t t i n g t h e s e l l e r t o a g r e e t o t r e a t t h e m a s f a v o r a b l y

a s anyof h e i r o t h e r c u s t o m e r s . . . . t i s n o t p r i c e f i x i n g ." ) .3 8 . " [ C ] o u r t s have n o t found MFN r o v i s i o n s i l l e g a l . " ABA e c t i o n of

A n t i t r u s t Law, n t i t r u s t Law Developments 222 7 t h e d . 2 0 1 2 ) . F u r t h e r , h e p a r t i c u l a r

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MFN h e o r y advan c edh e r e i s n o v e l , h a s n e v e r been examin e db e f o r e , andh a s n o t beens u b s t a n t i a t e d by l a i n t i f f s .

3 9 . Communications d u r i n g c o n t r a c t n e g o t i a t i o n s a r e n o t e v i d e n c e ofc o n s p i r a c y , b e c a u s e " t h e f a c t t h a t a m a n u f a c t u r e r and t s d i s t r i b u t o r s a r e i n c o n s t a n tcommun ic a tion a b o u t p r i c e s and m a r k e t i n g s t r a t e g y does n o t a l o n e s ho w t h a t t h ed i s t r i b u t o r s a r e n o t makin g i n d e p e n d e n t p r i c i n g d e c i s i o n s . A a n u f a c t u r e r and t sd i s t r i b u t o r s have e g i t i m a t e r e a s o n s t o exchange i n f o r m a t i o n a b o u t t h e p r i c e s and t h er e c e p t i o n o f h e i r p r o d u c t s i n t h e m a r k e t . " Monsanto,465 U . S . a t 762 .

40. No o n s p i r a c y ca n be n f e r r e d from p a r a l l e l c o n d u c t where t i m e i s ] ofh ee s s e n c e . " Fed. B r o a d . S y s . , I n c . v . Am. road. C o . , 167 F . 2 d 349 ,3 52 2 d C i r . 1948)t h ec o u r t c o u l d n o t i n f e r a o n s p i r a c y from t h e f a c t t h a t t h e d e f e n d a n t s a l l t e r m i n a t e d t h e i rr e s p e c t i v e a g r e e m e n t s w i t h t h e p l a i n t i f f o n h e s ame d a y , b e c a u s e t i m e wa s of h e e s s e n c e ) .

41. O f f e r i n g t h e s a me t e r m s t o m u l t i p l e c o n t r a c t i n g p a r t i e s i s a t a n d a r dn e g o t i a t i o n t a c t i c t h a t i s n o t e v i d e n c e of o n s p i r a c y . See n s . B r o k e r a g e , 618 F . 3 d a t3 2 9-30 n o c o n s p i r a c y can be n f e r r e d from t h e f a c t t h a t a b r o k e r t o l d i t s i n s u r e r-p a r t n e r st h e t e r m s t ha do f f e r e d t o i t s o t h e r i n s u r e r- p a r t n e r s , b e c a u s e t h a t s h a r i n g " c o u l d be ap o w e r f u l t o o l f o r a r o k e r a t t e m p t i n g t o n e g o t i a t e a m ore a v o r a b l e a g r e e m e n t w i t h ap a r t i c u l a r i n s u r e r-p a r t n e r " ) .

42 . The e v i d e n c e does n o t t e n d t o e x c l u d e t h e p o s s i b i l i t y of n d e p e n d e n t

c o n d u c t an ddoes n o t p e r m i t t h e i n f e r e n c e t h a t Apple engaged i n a o n s p i r a c y .Statemen ts A t t r i b u t e d t o S t e v e Jobs

4 3 . Am bi gu o u s t a t e m e n t s from a o r p o r a t e e x e c u t i v e d o n o t a l l o w t h e c o u r t t oi n f e r a o n s p i r a c y . See O . S . C . Corp. . Apple Computer, n c . , 7 9 2 . 2 d 1464, 1468 9 t h

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C i r . 1986) a p p l y i n g Monsanto and i n d i n g t h a t a remark"byA p p l e ' s P r e s i d e n tt h a t ...somethingwas g o i n g t o be done a b o u t p r i c e e r o s i o n " was n s u f f i c i e n t e v i d e n c e of

a o n s p i r a c y ) .44. Th e s t a t e m e n t s by S t e v e J o b s on which l a i n t i f f s r e l y don o t p e r m i t t h e

i n f e r e n c e t h a t Apple engaged n a o n s p i r a c y .The l a u s i b i l i t y of l a i n t i f f s ' Th eory

4 5 . Wh er e , s h e r e , l a i n t i f f s ' t h e o r y i s " i m p l a u s i b l e , " and where h ed e f e n d a n t ' s conduct i s c o n s i s t e n t w i t h o t h e r , e q u a l l y p l a u s i b l e e x p l a n a t i o n s , " t h ee v i d e n c e "does n o t g i v e r i s e t o an n f e r e n c e of o n s p i r a c y . " M a t s u s h i t a , 4 75U.S. t 587,

N o n a p p l i c a b i l i t y of he Pe r S e Ru le46. V e r t i c a l p r i c e r e s t r a i n t s , i n c l u d i n g v e r t i c a l p r i c e c e i l i n g s , a r e s u b j e c t t o t h e

r u l e of e a s o n . S t a t e O i l Co . v . Khan,22 U.S. ,22 1 9 9 7 ) . When r i c e c a p s a r e a l l e g e d l yu s e d t o e f f e c t u a t e per seu n l a w f u l a r r a n g e m e n t s , h e r u l e of e a s o n must t i l l be employed.I d . a t 1 7 . MFNsr e a l s o e v a l u a t e d u n d e r t h e r u l e of e a s o n . B l u e Cross&B l u e h i e l dU n i t e d o f i s c . v . M a r s h f i e l d C l i n i c , 65 F . 3 d 1406,14 15 7 t h C i r . 1995) MFNs r e "notp r i c e-f i x i n g" ) ; U n i t e d S t a t e s v . B l u e Cross Blue S h i e l d of i c h . , 80 9 F. S upp. 2d 665, 7](E.D. Mich. 0 1 1 ) .

4 7 . Th e S u pre m e C o u r t h a s s t a t e d t h a t "a e p a r t u r e fromt h e r u l e - o f -r e a s o ns t a n d a r d mu st be b a s e d u pon d e m o n s t r a b l e economic f f e c t r a t h e r t h a n u pon o r m a l i s t i cl i n e d r a w i n g . " L e e g i n , 551 U.S. t 887 q u o t a t i o n marks and l l i p s i s o m i t t e d ) .

4 8 . Th e per e r u l e i s r e s e r v e d f o r p r a c t i c e s t h a t have m a n i f e s t l ya n t i c o i n p e t i t z v e " e f f e c t s and l a c k ...anyredeeming v i r t u e . " L e e g r n , 551 U . S . a t 886.

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49. "TheSupreme Court a s r e p e a t e d l y e x p r e s s e d r e l u c t a n c e t o a d o p t p e r s er u l e s wher e h e economic impact ofe r t a i n p r a c t i c e s i s n o t i m m e d i a t e l y o b v i o u s . " Ma jor

League B a s e b a l l P r o p s . v . S a l v i n o , I n c . , 542 . 3 d 290, 316 2d C i r . 2 0 0 8 ) . Put u c c i n c t l y ," [ i ] t i s a bad i d e a t o s u b j e c t a n o v e l w a y o f oing b u s i n e s s o r a n o l d w a y n a n ew a n dp r e v i o u s l y unexamined c o n t e x t . .. ) o p e r s e t r e a t m e n t u n d e r a n t i t r u s t l a w . " I n r e S u l f u r i cAcid n t i t r u s t L i t i g . , 703 . 3 d 1004, 1011 7 t h C i r . 2 0 1 2 ) .

50 . C o u r t s have h u s r e f u s e d t o a p p l y t h e p e r s e r u l e i n m a r k e t s l i k e t h e one o rd i g i t a l books) h a t a r e i n n o v a t i v e ande v o l v i n g , b e c a u s e t r a d e r e s t r a i n t s " i n s u c h m a r k e t smay r o d u c e e f f i c i e n c i e s t h a t c o u r t s ha ve n o t p r e v i o u s l y e n c o u n t e r e d and t h u s t h eSupremeCourt ha d n o t a c t o r e d i n t o t h e p e r s e r u l e a s o r i g i n a l l y c o n c e i v e d . " U n i t e d t a t e sv . M i c r o s o f t C o r p . , 253 F . 3 d 34, 3 D.C . i r . 2 0 0 1 ) . I t i s n o t i m m e d i a t e l y o r m a n i f e s t l yo b v i o u s t h a t A p p l e ' s c h a l l e n g e d c o n d u c t s a n t i c o m p e t i t i v e o r a l l s i n a a t e g o r y ofc o n d u c t t h a t i s a l w a y s , r a l m o s t a l w a y s , n t i c o m p e t i t i v e .

5 1 . A p p l e ' s c h a l l e n g e d c o n d u c t does n o t l a c k a l l redeeming v i r t u e and mightp l a u s i b l y befoundt o have a e t p r o c o m p e t i t i v e e f f e c t . E n t r y t h a t l e a d s t o "a n v e n t u a l a l li n . . . p r i c e " s "an n e q u i v o c a l l y s o c i a l l y b e n e f i c i a l e f f e c t"; f a g r e e m e n t s a c i l i t a t e d t h a te n t r y , h e i r n e t e f f e c t o n ec onomicw e l f a r e may e l l [be] o s i t i v e . " S u l f u r i c A c i d ,703 . 3 da t 1 0 1 1 .

52. Ae r s e a n a l y s i s i s t h e r e f o r e i n a p p l i c a b l e t o t h i s c a s e .53. " [ F ] o r t h e s a me e a s o n s t h a t p e r s e i a b i l i t y i s u n w a r r a n t e d h e r e , " Apple

c a n n o t be h e l d l i a b l e u n d e r t h e " q u i c k lo ok" o c t r i n e . T e x a c o , n c . v . Dagher, 4 7 . S . 1 ,7. 3 2 0 0 6 ) .

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The p p l i c a t i o n of h e Rule of Reason5 4 . The u l e of e a s o n " d i s t i n g u i s h e s between e s t r a i n t s w i t h a n t i c o m p e t i t i v e

e f f e c t t h a t a r e h a r n n f u l t o t h e consumer and e s t r a i n t s s t i m u l a t i n g c o m p e t i t i o n t h a t a r e i n t h ec o n s u m e r ' s b e s t i n t e r e s t . " L e e g i n , 551 U.S. t 886.

5 5 . The a n t i t r u s t laws a r e d e s i g n e d p r i m a r i l y t o p r o t e c t i n t e r b r a n dc o m p e t i t i o n , from which lower r i c e s can a t e r r e s u l t . " L e e g i n , 551 U.S. t 895.

5 6 . P l a i n t i f f s b e a r t h e i n i t i a l b u r d e n u n d e r t h e r u l e of e a s o n , which n t a i l s"showing h a t t h e c h a l l e n g e d a c t i o n h a s had an a c t u a l a d v e r s e e f f e c t on c o m p e t i t i o n as awholei n t h e r e l e v a n t m a r k e t . " C a p i t a l Imaging, 9 6 . 2 d a t 543 emphasi s a d d e d ) ; s e eKM.B. arehouse i s t r i b s . v . W a l k e r Mfg. C o . , 61 F . 3 d 1 2 3 , 127 2d C i r . 1 995 ) s a m e ) ;Major League a s e b a l l , 5 42 . 3 d a t 31 7 s a m e ) . Without e t e r m i n i n g t h e p r o p e rd e f i n i t i o n of h e r e l e v a n t m a r k e t , t i s a p p r o p r i a t e t o e v a l u a t e p l a i n t i f f s ' c l a i m s ofa n t i c o m p e t i t i v e e f f e c t i n t h e r e l e v a n t market h e y have d e f i n e d : t r a d e e- b o o k s s o l d i n t h eU n i t e d S t a t e s .

5 7 . " S u p r a c o m p e t i t i v e p r i c i n g e n t a i l s a e s t r i c t i o n i n o u t p u t . " Brooke GroupL t d . v . B r o w n&Williamson Tobacco C o r p . , 509 U . S . 209, 33 1 9 9 3 ) . Tha t u t p u ta l l e g e d l y "expandeda t a s l o w e r r a t e t h a n i t [ o t h e r w i s e ] would have" s a c o u n t e r f a c t u a lp r o p o s i t i o n " h a t i s d i f f i c u l t t o p r o v e i n t h e b e s t of i r c u m s t a n c e s . " I d . P l a i n t i f f s have n o tproven h a t o u t p u t w as e s t r a i n e d i n t h e a l l e g e d r e l e v a n t m a r k e t .

5 8 . The Supreme Court h a s e x p l a i n e d t h a t " p r i c e s can be n c r e a s e d i n t h ec o u r s e of r o m o t i n g p r o c o m p e t i t i v e e f f e c t s . " L e e g i n , 551U.S. t 8 9 5- 9 6 .

5 9 . Every r i t i c a l i n d i c a t o r ofmarket e a l t hlo w er r i c e , h i g h e r o u t p u t , mores e l e c t i o n , h i g h e r q u a l i t y , lower o n c e n t r a t i o ni g n a l s t h a t t h e t r a d e e- b o o k s m a r k e t h a s

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been h r i v i n g s i n c e agency and consumers have beenr e a p i n g t h e b e n e f i t s . Wheno n t r a c t sa r e c h a l l e n g e d under h e r u l e ofe a s o n and h e r e i s "n o showing h a t t h e market a s a whole

h a s been a f f e c t e d a t a l l b y h e c o n t r a c t [ s ] , " s e c t i o n 1 h a s n o t b e e n v i o l a t e d . J e f f e r s o nP a r i s h Hosp. i s t . No.2. Hy de ,466 U.S.2,31 1 9 8 4 ) .

60 . A p p l e ' s c o n d u c t h a s n o t v i o l a t e d t h e r u l e o f e a s o n and s n o t u n r e a s o n a b l e .P l a i n t i f f s ' Requested R e l i e f

I . Th e U n i t e d S t a t e s61. Th e U n i t e d S t a t e s "may e e k i n j u n c t i v e r e m e d i e s on b e h a l f of h e g e n e r a l

p u b l i c " i n an n t i t r u s t c a s e . U n i t e d t a t e s v . Borde n C o . , 347U . S . 514,5181 9 5 4 ) .62. "[W]het her r n o r i n j u n c t i v e r e l i e f s h o u l d b e r a n t e d depends r e a t l y o n h e

d i c t a t e s o f u b l i c i n t e r e s t . P r o t e c t i o n of h e p u b l i c s h o u l d be a paramoun t o n s i d e r a t i o n i nd e t e r m i n i n g t h e p r o p r i e t y o f ni n j u n c t i o n . " U n i t e d S t a t e s v . ~l M. r i n c e T e x t i l e s , I n c . ,2 62 F.Supp. 383,389-90 S.D.N.Y. 1 9 6 6 ) .

63 . Because e n j o i n i n g A p p l e ' s p r o c o m p e t i t i v e c o n d u c t woul d n o t s e r v e t h ep u b l i c i n t e r e s t i n a ny e s p e c t , h e U n i t e d S t a t e s ' r e q u e s t s f o r i n j u n c t i v e r e l i e f s h o u l d b ed e n i e d .

I I . Th e S t a t e P l a i n t i f f s

64. Th e t a t e p l a i n t i f f s a r e t r e a t e d a s p r i v a t e p a r t i e s w h e n s e e k i n g an n j u n c t i o np u r s u a n t t o s e c t i o n 16 of h e C l a y t o n A c t , 1 S U . S . C . 6. SeeC a l i f o r n i a v . Am. t o r e sC o . , 495 U.S. 271, 95 1 9 9 0 ) ; NewYork . K r a f t Gen. Foods,852 F . Supp. 1030, 10 33(S.D.N.Y.1993).

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65. As r i v a t e l i t i g a n t s under e c t i o n 16, h e s t a t e p l a i n t i f f s "must r o v et h r e a t e n e d l o s s o r damage o [ t h e i r ]own n t e r e s t s i n o r d e r t o o b t a i n r e l i e f . " Am. t o r e s Co.

495 U.S. t 295; e e a l s o C a r g i l l , I n c . v . Monfort o f o l o . , 479 U.S. 104, l3 1 9 8 6 ) .66. Because Apple's p r o c o m p e t i t i v e does o t t h r e a t e n an y o s s o r damage o

t h e s t a t e p l a i n t i f f s , t h e i r r e q u e s t s f o r i n j u n c t i v e r e l i e f h o u l d be d e n i e d .67. The t a t e p l a i n t i f f s ' s r e q u e s t f o r t r e b l e damages under s e c t i o n 4c of h e

Clayon Act, 1 5 U.S.C. 5 c , o n b e h a l f of n j u r i e s t o n a t u r a l p e r s o n s , i s l i m i t e d t o t h o s edamages h a t a r i s e from v i o l a t i o n s of h e Sherman A c t . See n r e Wyo. T i g h t SandsA n t i t r u s t Cases,85 5 F . 2 d 1286, 1290 . l (10th C i r . 1 9 8 9 ) .

68. Because h e conduct of Apple c h a l l e n g e d by h e s t a t e p l a i n t i f f s does o tg i v e r i s e t o a i o l a t i o n of h e Sherman Act, h e s t a t e p l a i n t i f f s ' r e q u e s t f o r t r e b l e damagess h o u l d be d e n i e d .

Dated: Apri126,2 0 1 3 Re e c t f u y mi d,B y: ~_

O r i n SnyderL i s a H. RubinGibson, u n n& r u t c h e r , LLP2 0 0 Park Avenue, 47th F l o o rNew ork,NY 1 0 1 6 6( 2 1 2)351-4000o s n y d e [email protected] r u b i n@gibsondunn. o mD a n i e l S . Floyd P r o Hac i c e )D a n i e l G . Swanson P r o Hac V i c e )Gibson, D u n n& r u t c h e r , LLP33 3 South Grand AvenueLos Angeles,CA 0071( 213) 29-7000d f l o y [email protected]@gibsondunn.com

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C y n t h i a RichmanGibson,Dunn& r u t c h e r , LLP1050 C o n n e c t i c u t Avenue,N.W.Washington,D.C. 200 36(202) [email protected] E. e i s sO'Melveny &MyersLLPTimes Square Tower7 imes SquareNew ork,NY 10036(212) 26-2000h h e i s [email protected] b e h a l f f e f e n d a n t A p p l e I n c .

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apple inc.'s proposed conclusions of law

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