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Federal appeals court judges suggest they may let Apple monitor work but restrict his duties

NEW YORK, N.Y. - Federal appeals judges suggested Tuesday they may let a court monitor get back to reviewing Apple's antitrust procedures but only after limiting his duties.

A three-judge panel of the 2nd U.S. Circuit Court of Appeals heard oral arguments Tuesday on Apple Inc.'s request that the monitor be shut down until the appeals judges decide whether his appointment is appropriate. The monitor's work was temporarily suspended two weeks ago so the appeals panel could consider the issue.

U.S. District Judge Denise Cote concluded last year that Apple colluded with book publishers to raise electronic book prices. She appointed Washington lawyer Michael Bromwich as monitor for two years after concluding Apple was not doing enough on its own to ensure it no longer violated antitrust laws.

Apple is challenging Cote's decision and her remedies. The appeals court didn't immediately rule whether the monitor's duties should remain suspended until it considers the merits of those challenges months from now.

Appeals court Judge Gerald Lynch asked Apple lawyer Theodore J. Boutrous Jr. if it would be acceptable if the 2nd Circuit spelled out the limits of Bromwich's duties while the appeals process proceeds.

Boutrous said such an order would help the situation but was not adequate to cure the constitutional deficiencies the company sees with the appointment of a monitor.

"Here we have a quasi-prosecutorial agent who's been appointed by the court," the attorney said.

In court papers, Boutrous called the appointment of Bromwich the first time a court has imposed a monitor over the objection of a party in a civil antitrust case. He said the judge gave Bromwich "extremely broad and extrajudicial powers" and let him "engage in investigatory, inquisitorial activities that far exceed the traditional role and powers of a judicial officer."

He said the monitor's stated objectives were to "'crawl into (the) company,' and persuade Apple to 'take down barriers' to his access so he can explore Apple's 'tone' and 'culture.'"

Boutrous added that Bromwich had already interfered with Apple's ability to manage its business by demanding that Apple's senior leaders meet with him on short notice.

"The district court has authorized him to interview essentially anyone at Apple, and to copy and review any of Apple's documents and deliver them to the judge, who is presiding over ongoing damages proceedings in a related case," the lawyer wrote.

Finnuala Tessier, a Department of Justice antitrust attorney, told the appeals court that a narrowed description of Bromwich's job duties was not necessary, because he was already limited to a passive role in which he reviews and evaluates antitrust compliance policies but has no authority to force Apple to make changes.

"The language of the injunction makes clear his tasks," she said. "He may not demand that Apple do anything."

In a ruling last month, Cote said the deteriorating relationship between Apple and the monitor was "unfortunate and disappointing," but she declined to disqualify Bromwich, a former inspector general for the Justice Department.

Cote noted that the Cupertino, Calif.-based company had turned over 303 pages of documents and permitted Bromwich over a three-month period to conduct 13 hours of interviews with 11 people, seven of them lawyers.

"If this limited amount of access constitutes 'irreparable harm' to Apple then the standard for irreparable harm is low indeed," the judge said.

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