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Column: Apple consumers urge appeals court to skip review in app store class action
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Column: Apple consumers urge appeals court to skip review in app store class action
Mar 6, 2024 2:02 PM

(The opinions expressed here are those of the author, a

columnist for Reuters.)

By Alison Frankel

March 6 (Reuters) - In the latest case to pose the

question of precisely how rigorous trial courts must be in

certifying gargantuan class actions, Apple ( AAPL ) consumers on Tuesday

told a federal appeals court that there's no need to

double-check the decision allowing tens of millions of iPhone

and iPad users to bring classwide antitrust claims.

Apple ( AAPL ) asked the 9th U.S. Circuit Court of Appeals

last month to grant rare mid-case, or interlocutory, review of

the Feb. 2 class certification ruling by U.S. District Judge

Yvonne Gonzalez Rogers of Oakland, California, in a long-running

case alleging that Apple ( AAPL ) monopolized the market for iPhone apps

by banning purchases outside its App Store.

As my Reuters colleague Jonathan Stempel reported, Rogers

had previously refused in 2022 to certify the class because of

concerns that plaintiffs' economic model swept in millions of

consumers - nearly 20% of the originally proposed class - who

did not actually overpay for apps. But the judge held in her

decision last month that plaintiffs' lawyers adequately

addressed the issue of uninjured class members by limiting the

class to account holders who spent at least $10 on apps or

in-app purchases.

Apple ( AAPL ) told the 9th Circuit in its Feb. 16 petition for

interlocutory review that even with the narrowed class

definition, plaintiffs' own expert found that the class would

still contain "at least 10 million uninjured Apple App Store

accounts."

The 9th Circuit, as you may recall, has refused to set a

specific limit on the number or percentage of uninjured class

members in a certified class. But when the en banc appeals court

considered that question a couple of years ago in antitrust

class actions against tuna fish suppliers, the 9th Circuit told

trial judges that before they certify a class, they must

carefully weigh whether individual questions about class

membership will predominate over classwide issues.

Apple ( AAPL ) contended that Rogers wasn't sufficiently rigorous.

Its specific criticisms - including skepticism about the "crude

and ineffective" $10 minimum for class membership - are

particular to this case, but Apple ( AAPL ) lawyers at Gibson, Dunn &

Crutcher told the 9th Circuit that the judge's ruling shows why

the appeals court needs to offer more guidance on class

certification standards.

"This court should make clear that certification cannot be

premised on a model that flouts real-world evidence and

foundational tenets of economics," Apple ( AAPL ) said, "particularly

where the model itself has not been proven capable of screening

out uninjured members."

In their new brief opposing Apple's ( AAPL ) petition, plaintiffs'

lawyers from Wolf Haldenstein Adler Freeman & Herz and Kellogg,

Hansen, Todd, Figel & Frederick argued that in evaluating their

class certification motion, Rogers did just what the 9th Circuit

demanded in the tuna decision, exhaustively analyzing Apple's ( AAPL )

criticism of their classwide damages model before determining

that the model could reliably show the impact of Apple's ( AAPL )

allegedly monopolistic conduct across the class.

The 9th Circuit only recently clarified the rules for class

certification in the tuna case, the Apple ( AAPL ) plaintiffs said.

Rogers "faithfully applied" those rules, they argued, so there's

no reason for the appeals court to take the extraordinary step

of delving into the specifics of Rogers' analysis.

Plaintiffs' lawyer Mark Rifkin of Wolf Haldenstein said in

an email that the opposition brief "clearly lays out why

[Apple's ( AAPL )] petition is without merit." Neither an Apple ( AAPL )

spokesperson nor Apple ( AAPL ) counsel Ted Boutrous of Gibson Dunn

responded to my query.

Apple ( AAPL ) seems to be hoping that the 9th Circuit is still

hankering to refine its class certification rules after losing a

chance to revisit them in an antitrust case accusing Alphabet

subsidiary Google of monopolizing the Android app

market via its Google Play Store. In February 2023, the appeals

court granted Google's petition to review a class certification

ruling by U.S. District Judge James Donato of San Francisco.

Google, like Apple ( AAPL ), argued that the trial judge failed to

grapple with both the problem of uninjured class members and

real-world data undercutting plaintiffs' economic models. After

the 9th Circuit agreed to hear Google's case, the appellate

docket was swamped with amicus briefs from business-friendly

groups, including the U.S. Chamber of Commerce and the Business

Roundtable, that viewed the appeal as an opportunity to tighten

class certification standards.

The Google plaintiffs, like the plaintiffs in the Apple ( AAPL )

case, insisted that the trial judge applied requisite rigor when

he evaluated their economic model and concluded that it was

adequate to establish classwide injury, regardless of whether

some class members suffered no actual harm.

The 9th Circuit was scheduled to hear oral arguments last

September but the appeal was withdrawn when Donato decided in

August to decertify the Google Play class.

Apple ( AAPL ) told the 9th Circuit in its Feb. 16 petition that its

case "presents the same important issues this court was poised

to address" in Google's appeal.

The Apple ( AAPL ) plaintiffs countered in their new opposition brief

that any perceived problems with class certification in the

Google case are irrelevant because their economic model relies

on different (and better) methodology.

Regardless of what happens at the 9th Circuit, there's a

chance that the U.S. Supreme Court will revisit class

certification requirements in an appeal brought by Visa

and Mastercard ( MA ). As I told you in January, the credit card

companies' have petitioned for Supreme Court review of decisions

certifying three classes to proceed with $9 billion in antitrust

claims over ATM fees.

Visa and Mastercard ( MA ), like Apple ( AAPL ) and Google, told the

justices that too many lower courts are not rigorously policing

classes to be sure that classwide issues predominate over

individual questions about class members' injuries (or lack

thereof). They're calling on the Supreme Court to clear up

"rampant confusion" on class certification standards.

Plaintiffs' lawyers in those cases told me that the credit

card defendants are really carping about the fact-specific

outcome, not the process that resulted in class certification.

Like the Apple ( AAPL ) and Google plaintiffs, they said there's no need

to tinker with class action precedent.

Their Supreme Court brief opposing review is due next week.

Read more:

Judge certifies Apple ( AAPL ) app store class action

Visa, Mastercard ( MA ) ask U.S. Supreme Court to fix 'rampant

confusion' on class certification

US judge set to decertify Google Play class action

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