Legal Radar

Apple Looking to Make $400 M Settlement on E-Books Case

Apple Inc. has finally agreed to make a settlement payment of as much $400 million on a civil suit regarding the pricing of e-books, contingent on the manufacturer’s appeal in last year’s antitrust litigation.

Just this Wednesday, Apple continued to shoot down allegations of conspiring to fix pricing on e-books and indicated it would defend itself. A spokesperson also added the firm didn’t do anything wrong.

The amount Apple will be paying is dependent on Apple’s appeal on a finding last year that it was in violation of antitrust laws by collaborating with several publishers to raise pricing of e-books. If the court ruling is confirmed, Apple may pay as much as $400 million.

Plaintiffs are claiming the American electronics giant to overcharging its consumers by $280 million for e-books and that Apple should pay three times the amount.

In the antitrust suit prosecutors from the Justice Department said that Apple utilized dissatisfaction of publishers with Amazon’s e-book discounting to place itself in the e-book market when it released the iPad in 2010.

Halifax Hospital Agreeing to Settlement on False Claims Act

The Halifax Staffing Inc. and Halifax Hospital Medical Center recently agreed on an $85 million settlement to close out allegations in which Halifax was in violation of the False Claims Act by handing out claims to Medicare --- a violation of the Stark Law.

The case is worth paying attention to as it’s the biggest penalty made against a hospital regarding Stark Law violations, doubling its last record of $39 million.

The suits alleged that Halifax knew of violating the Stark Law but still deploying contracts with multiple oncologists that offered incentive pay which included prescription drug tests ordered and improperly billing MediCare

The government also claimed Halifax paid several neurosurgeons more than the market share of their work.

The deal doesn’t completely resolve claims pending in the suits against Halifax. A trial will be scheduled later this month to concentrate on whether the hospital falsely look in patients for short says who didn’t actually need inpatient care and then charging Medicare for the admissions.

DC Circuit: Internal Probes Still a Privilege

In case that was frequently monitored by corporate legal groups, a federal Court of Appeals indicated last Friday that files from an internal probe conducted by a defense contractor are shielded by attorney-client privilege.

The Appeals Court of the D.C. Circuit, overturning a district judge, made a ruling that Kellogg Brown & Root Inc. won’t be required to pass documents regarding an internal probe made into allegations of price inflation and receiving commission while providing military deals in Iraq.

An ex-employee who is filing a case against the firm under the False Claims Act, wanted the documents during the discovery phase of the litigation, where parties are required to exchange information relevant to the lawsuit.

The judge ruled that the main purpose of the probe was in line with government regulations which prompt contractors to seek any wrongdoings as opposed to retrieving or offering legal advice --- which is shielded by the privilege.

A unanimous ruling by the D.C. Circuit indicated that the analysis basically relied on false dichotomy.

 

Apple Choosing Its Spots in E-Book Lawsuit

Apple made a basic approach on a current litigation regarding its alleged price-fixing of e-books. A damage settlement landed recently with multiple state lawyers and a class of plaintiffs making way for the American firm to concentrate on a July ruling where their alleged fixed pricing violates antitrust laws.

Apple agreed to make a deal with U.S. states and consumers seeking as much $840 million in damages.

The upcoming July trial involved one of several litigations to develop in a Justice Department probe regarding fixed pricing on e-books from multiple companies including Simon & Schuster, Hachette Book Group, and HarperCollins. All defendants except for Apple made a settlement on several state and federal lawsuits.

This Monday’s settlement doesn’t stop the primary legal battle between Apple and the Justice Department, which was tried last year where Apple lost.

The current settlement now concentrates on a pending appeal, which will likely determine the future of the filed class actions and state damages lawsuits.

Court Appeals Asks Solicitor General Regarding Motorola Antitrust Lawsuit

In most cases, judges would assume that if a U.S. Solicitor General is talking for the executive branch when he’s conducting a legal argument, he seriously means well. But that’s not often the case.

In a dialogue this week between the 7^th U.S. Circuit Court of Appeals and a U.S. Solicitor General with regards to an antitrust litigation filed by Motorola, the court is skeptic as to whether the government’s chief attorney was precise in conveying the perspective of the Department of State and Commerce included in the filing.

The litigation is an appeal of an earlier decision made against Motorola regarding the firm’s lawsuit against internationally-based manufacturers of LCD screens bought by international subsidiaries of Motorola and utilized in mobile devices sold in the United States and overseas. The American company alleges of price fixing on the screens.

Judge Posner and other judges on the panel, ruled that almost all of Motorola’s claims goes way off the United States jurisdiction law. Currently, Motorola is asking all the 7^th Circuit to look into the case.

Ahold to Make Settlement on Waterbury Class Lawsuit

Ahold NV, a Dutch supermarket chain, said it recently agreed to make a $297 million settlement to end a Waterbury class action awaiting in the Connecticut U.S. District Court. This is in regards to the pricing acts of U.S. Foodservice, a former subsidiary of Ahold, during the 1998 to 2005 period.

The deal will close out a legacy lawsuit since 2006 in relation to the U.S. Foodservice. Based on the agreement, the payment will occur in return from claims of all class members regarding the pricing practices.

It’s expected for the court to address the matter in the later part of this year or early next year, and is subject to a likely reduction and/or elimination resulting on compensable sales related to class members electing to opt out of the deal.

Ahold NV indicted it will make a provision record for about 215 million euros in the first quarter of this year. It will also be sending payment funding from its remaining cash balances. Payment is expected to happen later this year or in the early 2015.

Bridgestone's Price-Fixing Probe, Agrees to Pay $425m Fine

Bridgestone Corporation pleaded guiilty to conspiring to fix the prices of rubber car parts. From 2001-2008, the company met with competitors to discuss splitting up the market for rubber parts (used to reduce vibrations). They then submitted false bids with inflated prices to auto makers such as Nissan and Toyota. This ensured that particular supplies won certain pieces of business.

This isn't the first time the company had been accused of such a crime. In 2011, Bridgestone pleaded guilty to conspiring to price fixing of marine hoses and other agreement. Back then, the company cooperated with investigators and therefore received a reduced penalty. Bridgestone did not do the same this time in the anti-vibration parts business, leading to an increased penalty.

The $425m fine will be reflected on Bridgestone's 2013 results.

Court Decision Backs Consumers in Price Fixing Lawsuit Against Tech Giants, Says Hagens Berman

Consumers nationwide demand a refund saying they overpaid for certain hi-tech devices

Consumers won a victory in their fight against a group of technology companies including Sony (NYSE: SNE), Hitachi (NYSE: HIT) and Philips (NYSE: PHG), who are accused of fixing prices of optical disc drives (ODD) common in computers, DVD and Blu-Ray players among other devices.

In a ruling on June 24, Judge Walker rejected a motion to postpone evidence gathering for a class-action lawsuit filed by consumers while the defendants address criminal charges. The judge's ruling allows the attorneys representing consumers to continue to build the case against these corporations that dominate the ODD market. 

Published reports state that ODD manufacturers sell 313 million drives a year for use in personal computers, and another 200 million for other applications, with revenue topping $45 billion between 2004 and 2008, and estimated at $14 billion for 2010.

Individual losses vary depending on the number of ODDs purchased, but attorneys believe the amounts are significant. "We intend to prove that the defendants conspired to inflate and sustain prices of ODDs simply to increase profit, all at the expense of consumers," said Steve Berman, founding partner of Hagens Berman and lead attorney representing consumers.

"While the Department of Justice is working on the criminal investigation, we think it is vitally important for us to push forward with our civil class action," said Berman. "While one of the goals of the criminal action is to punish the guilty, our goal is solely to return what we believe are ill-gotten profits to the pockets of consumers."

The relatively small numbers of ODD manufacturers, including the defendants, have a long history of joint ventures and other close working arrangements that gave ample opportunity to share information, the complaint states.

Berman said that the high cost of entry into the ODD market adds to the tight control the defendants have over the ODD marketplace. "When you can lock out competition, it makes it much easier to artificially - and illegally - set prices and bar competition."

Earlier this month, the Department of Justice (DOJ) asked the court to postpone Hagens Berman's efforts to collect evidence, saying the actions could interfere with its criminal investigation. The court's ruling allows the civil case to continue forward parallel to the criminal investigation.

"The court's decision supports our belief that consumers' claims are as important as the criminal investigation and that our prosecution of those claims can commence alongside the DOJ investigation," Berman added.

Some of the defendants have been involved in the DOJ investigations on related issues in the past. Samsung, for example, paid a $300 million fine following claims of price fixing involving Dynamic Random Access Memory chips (DRAM). Hagens Berman was lead counsel in the DRAM litigation.

The DOJ also launched an investigation of Samsung, LG Electronics, Toshiba and Hitachi, among others, probing claims of collusion in the manufacture of liquid crystal displays. The ongoing criminal investigation has led to admissions of guilt by LG Electronics, who paid a $400 million fine and Hitachi who paid $31 million.

On Monday, October 26, 2009, Toshiba Samsung Storage Technology Corp., a joint venture between defendants Toshiba and Samsung Electronics; Hitachi-LG Data Storage, a joint venture between defendants Hitachi and LG Electronics; and Sony Optiarc America confirmed that they received subpoenas from the DOJ concerning a criminal antitrust investigation including possible price fixing charges. In Philips Electronics' 2009 annual report issued a few weeks later, the Dutch electronics company also disclosed it was a subject of the same investigation. 

Since the investigation was launched, the defendants have been the subject of a grand-jury investigation. "Rarely does the Department of Justice go to the extent of convening a grand jury unless they have solid reasons to believe that a crime has occurred," Berman added.

Under antitrust law, customers who can prove that they have been overcharged as a result of price fixing may collect damages worth three times the amount of the overcharge. Attorneys intend to prove that the defendants in the ODD case agreed to manipulate prices and overcharged consumers for certain devices. 

Hagens Berman is representing consumers who purchased ODD devices after November 1, 2005. Consumers interested in tracking the progress of the case can view court documents and relevant updates at www.hbsslaw.com/ODD.