Stay current on the latest developments from agencies including the CFPB, Federal Reserve, FDIC, and OCC to advise clients on real-life regulatory situations.
Apple Inc. is off the hook on potentially hundreds of thousands of dollars worth of discovery sanctions in the Federal Trade Commission’s antitrust case against Qualcomm Inc.
Apple isn’t a party to that dispute, which is pending before Judge Lucy H. Koh in the U.S. District Court for the District of Northern California. Qualcomm demanded that Apple produce documents in the lawsuit as a third party. The FTC claims in the suit that Qualcomm’s licensing practices are anticompetitive, and Apple is a major customer. The situation is particularly complicated because Apple and Qualcomm are also suing each other in a separate antitrust lawsuit over patent licensing in Southern California.
The magistrate judge overseeing discovery disputes in the FTC case, Nathanael M. Cousins, sanctioned Apple $25,000 a day for failing to meet a court-ordered deadline to turn over 1.3 million documents Qualcomm demanded in the FTC case. Apple asked for relief.
It’s unusual for a court to sanction a party for dragging its feet on discovery. It is practically unheard of for a court to sanction a third party, which is subject to different rules than an active party, for failing to turn over documents on time.
Koh held in a Feb. 7 order that Apple won’t have to pay those sanctions because Cousins’ authority to sanction Apple as a nonparty to this lawsuit is unclear.
Qualcomm’s discovery demand and the harsh penalty caused the advocacy group Lawyers for Civil Justice (LCJ) to file a brief on Apple’s behalf. LCJ said Cousins didn’t adhere to procedural protections for nonparties forced to produce documents in lawsuits. The order sets a “dangerous precedent” that would permit litigants to threaten egregious sanctions on nonparties that are late with onerous discovery demands. That could increase the frequency and stakes of ugly discovery disputes and ultimately increase costs to everyone, the brief said.
LCJ’s brief, which Koh noted in setting aside Cousins’ order, said those outcomes are “not an imagined threat.” An “emboldened” Qualcomm asked for similar daily monetary sanctions against five other nonparties for failing to meet discovery deadlines, LCJ said. Qualcomm also asked Cousins to fine Apple $1 million per day rather than the $25,000 he actually imposed.
Koh didn’t rule “on the propriety of a sanction or the amount of any sanction.” But she set aside Cousins’ order and remanded the issue for his reconsideration.
The case is FTC v. Qualcomm Inc. , N.D. Cal., No. 17-cv-00220, 2/7/18 .
To contact the reporter on this story: Eleanor Tyler in Washington at firstname.lastname@example.org
To contact the editor responsible for this story: Fawn Johnson at email@example.com
The court's order is at http://src.bna.com/wgM.
Copyright © 2018 The Bureau of National Affairs, Inc. All Rights Reserved.
All Bloomberg BNA treatises are available on standing order, which ensures you will always receive the most current edition of the book or supplement of the title you have ordered from Bloomberg BNA’s book division. As soon as a new supplement or edition is published (usually annually) for a title you’ve previously purchased and requested to be placed on standing order, we’ll ship it to you to review for 30 days without any obligation. During this period, you can either (a) honor the invoice and receive a 5% discount (in addition to any other discounts you may qualify for) off the then-current price of the update, plus shipping and handling or (b) return the book(s), in which case, your invoice will be cancelled upon receipt of the book(s). Call us for a prepaid UPS label for your return. It’s as simple and easy as that. Most importantly, standing orders mean you will never have to worry about the timeliness of the information you’re relying on. And, you may discontinue standing orders at any time by contacting us at 1.800.960.1220 or by sending an email to firstname.lastname@example.org.
Put me on standing order at a 5% discount off list price of all future updates, in addition to any other discounts I may quality for. (Returnable within 30 days.)
Notify me when updates are available (No standing order will be created).
This Bloomberg BNA report is available on standing order, which ensures you will all receive the latest edition. This report is updated annually and we will send you the latest edition once it has been published. By signing up for standing order you will never have to worry about the timeliness of the information you need. And, you may discontinue standing orders at any time by contacting us at 1.800.372.1033, option 5, or by sending us an email to email@example.com.
Put me on standing order
Notify me when new releases are available (no standing order will be created)