Coronavirus Reporter v. Apple Inc Ninth Circuit
Coronavirus Reporter v. Apple Inc Ninth Circuit
I. NO. 22-15166
Defendant
KEITH MATHEWS
ASSOCIATED ATTORNEYS OF NEW ENGLAND
1000 Elm Street #800
Manchester, NH 03101
(603) 622-8100
Attorneys for Appellants
Coronavirus Reporter, Calid Inc.,
Primary Productions LLC
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Coronavirus Reporter, CALID Inc. and Primary Productions LLC do not have
any parent corporations, and no publicly held corporation owns 10% or more of their
stock.
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TABLE OF CONTENTS
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TABLE OF AUTHORITIES
Cases
3500 Sepulveda, LLC v. Macy’s West Stores, Inc.,
980 F.3d 1317 (9th Cir. 2020) .......................................................................38
Agnew v. National Collegiate Athletic Ass’n,
683 F.3d 328 (7th Cir. 2012) ...........................................................................8
Allied Orthopedic Alliance Inc. v. Tyco Health Care Group LP,
592 F.3d 991 (9th Cir. 2010) .........................................................................34
Bell Atlantic Corp. v. Twombly,
550 U.S. 544 (2007)............................................................................ 9, 13, 14
Berkey Photo, Inc. v. Eastman Kodak Co.,
603 F.2d 263 (2d Cir. 1979) ..........................................................................35
Brady v. Dairy Fresh Products Co.,
974 F.2d 1149 (9th Cir. 1992) .......................................................................46
Breier v. Northern Cal. Bowling Proprietors’ Ass’n,
316 F.2d 787 (9th Cir. 1963) .........................................................................11
Brown Shoe Co. v. United States,
370 U.S. 294 (1962)............................................................................ 9, 27, 33
Cal. Computer Prods. v. International Buis. Machines Corp.
613 F.2d 727 (9th Cir. 1979) ..........................................................................20
Cameron v. Apple ............................................................................................. passim
Careau & Co. v. Security Pacific Business Credit, Inc.,
222 Cal.App.3d 1371 (1990) .........................................................................37
Carvalho v. Equifax Info. Servs., LLC,
629 F.3d 876 (9th Cir. 2010) .........................................................................10
Celebrity Chefs Tour, LLC v. Macy’s, Inc.,
16 F. Supp. 3d 1141 (S.D. Cal. 2014) ...........................................................43
Corley v. Rosewood Care Ctr., Inc.,
142 F.3d 1041 (7th Cir. 1998) .......................................................................42
Cost Mgmt. Servs. v. Wash. Natural Gas,
99 F.3d 937 (9th Cir. 1996) ...........................................................................25
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Other Authorities
5 Charles Alan Wright & Arthur R. Miller,
Federal Practice and Procedure § 1357 (3d ed. 2004) .....................................9
Emma C. Smizer,
Epic Games v. Apple: Tech-Tying and the Future of Antitrust,
41 Loy. L.A. Ent. L. Rev. 215 (2021) ...........................................................23
U.S. Dep’t of Justice and Federal Trade Comm’n,
Antitrust Guidelines for Collaborations Among Competitors from April
2000 (Section 3.2) ............................................................................................8
Rules
Fed.R.Civ.P. 15(a)....................................................................................................48
Fed.R.App.P. 4(a)(4)(A)(iv) ......................................................................................2
Fed.R.Civ.P. 12(b)(6)........................................................................ 9, 13, 37, 39, 49
Rule 9(b)...................................................................................................................46
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ISSUES PRESENTED
2. Whether the District Court should have granted a Preliminary Injunction that
invoked per se liability for Defendant tying hardware, the iPhone smartphone,
(Counts 8-9).
5. Whether the District Court erred in dismissing Plaintiffs’ RICO and fraud
claims (Counts 10-11) for failure to cite fraud with particularity, when in fact,
photographic App Store connect portal evidence for three developers was
provided.
6. Whether the District Court abused its discretion in dismissing all claims
without leave to amend, when represented Plaintiffs had only amended their
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STATUTORY PROVISIONS
JURISDICTIONAL STATEMENT
The Ninth Circuit Court of Appeals has jurisdiction over this appeal of a final
Notice of Appeal on February 2, 2022, following the District Court’s November 30,
2021 Order Denying Motion for Preliminary Injunction and Granting Motion to
Motion for Reconsideration. The appeal is timely, as the deadline for filing of a
INTRODUCTION
Most everyone knows a loved one or a friend whose life was touched by Dr.
muscle tissue. In the 1980s, Dr. Roberts pioneered the MBCK blood test used for
two decades as a “gold standard,” and which directly laid the foundation for the
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current troponin lab test. Apple deprived its userbase the benefit of Dr. Roberts’
scientific expertise and dedication towards saving lives, when the Defendant
corporation improperly blocked his app in February 2020 to develop their own.
States, some two years later. Dr. Roberts’ voluntary symptom reporting app, the first
of its kind, was exactly the app needed over two years ago at the onset of the
pandemic. Notably, Apple blocked the entire class of startup COVID apps, even
States government spent decades building what is now known as the Internet, we as
operating software, and communication devices, in the hands of nearly every citizen,
generations.
The underlying action was brought to assert that the vast network capabilities
of interconnected smartphones are the property of the customers who paid for them.
Apple iPhone users should enjoy unrestricted use of their smartphones to run
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necessary applications, such as Coronavirus Reporter, that ultimately are the raison
d’être of this network. Free markets should define what apps are selected by end-
There exist serious and growing ramifications of the status quo monopoly.
Apple’s anticompetitive proceeds, a de facto tax on the Internet and developers, are
increasingly influencing geopolitical matters. Just this week, the company took a
stance adverse to United States interests, changing product labels from “Made in
Taiwan” to “Made in Chinese Taipei.” Similarly, the company’s CEO was recently
party, the Parler app, was highlighted in the Motion for Preliminary Injunction.
reasons the Sherman Act was legislated to avoid one company taking on monopoly
powers that could ultimately endanger not only the progress of scientific medical
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Senator Blumenthal words is the “most offensive [practice] of how [Apple] strangles
When the United States sought regulation of AT&T, the monopolist warned
that telecommunication quality and cost would suffer from government intervention.
fear-based arguments already disproven by the historic AT&T example: safety and
quality will suffer. The stakes here are higher than in 1984: 80% of commerce now
takes place on Apple devices, and the entire free speech of a nation depends on its
Apple has thus far evaded Sherman Act enforcement because smartphone
The underlying class action was filed in the District Court to redress the
injustices Apple committed to the developer base that labors to create functionality
for the smartphone. The case brings together four developers to represent a sample
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suppression.
Appellants asserted first-to-file class action claims that Apple’s censorship of free
apps violates the Sherman Act. District Judge Yvonne Gonzalez Rogers ruled that
this case was to remain independent from Cameron v. Apple, which was a class
action for paid app fees. That case recently settled, without reforming digital
censorship. It is also noted that Gonzalez Rogers oversaw the Epic v. Apple case,
which is presently pending appeal in the Ninth Circuit. Epic has some ramifications
distributors for paid gaming. The Appellants’ proposed injunction seeks various
other solutions, such as sideloading, App Store non-preferencing, and App Store due
process arbitration rights. Epic is not a class action and deals with gaming revenues
of paid apps, per the verdict reached after a three week bench trial. Nonetheless, the
court below heavily relied upon Epic findings of fact in its decision on Coronavirus
Reporter.
the market, increased app prices, or otherwise harmed competition” is not reasonably
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supported by the pleadings. The court below claims “the allegations of injury
contained in the FAC are either confined to specific harms experienced by Plaintiffs
or a small group of competitors, rather than harm to the market,” but that is simply
Subcommittee Report, and pleadings. But even if damage to competition was limited
to COVID startups— it cost lives, and as Dr. Roberts said during his CNBC
penicillin. This itself is widespread damage, even foregoing damage to other types
reform Apple’s conduct. After years of fruitless efforts by other parties and
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government agencies, thus far Appellants have made the most compelling case to
STANDARD OF REVIEW
Restraints analyzed under the per se rule are those that are always (or almost
always) so inherently anticompetitive and damaging to the market that they warrant
condemnation without further inquiry into their effects on the market or the existence
150 (1940); United States v. Sealy, Inc., 388 U.S. 350 (1967); United States v. Topco
Associates, Inc., 405 U.S. 596 (1972); Craftsmen Limousine, Inc. v. Ford Motor Co.,
363 F.3d 761 (8th Cir. 2004); U.S. Dep’t of Justice and Federal Trade Comm’n,
(Section 3.2).
prove that the specific anticompetitive conduct actually took place. The plaintiff
negative competitive effects in the relevant product and geographic markets. Second,
under the per se rule, defendants are not entitled to justify their behavior based on
any objective competitive justifications. (Northern Pac. Ry. Co. v. US, 356 US
(1940); Agnew v. National Collegiate Athletic Ass’n, 683 F.3d 328 (7th Circ. 2012);
or In re Flat Glass Antitrust Litigation, 385 F.3d 350 (3rd Cir. 2004)).
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Finally, a plaintiff has less responsibility to analyze the market where the
300 (2010); or In re Southeastern Milk Antitrust Litigation, 739 F.3d 262 (2014).
and assess market concentration. Brown Shoe Co. v. United States, 370 U.S. 294,
320-21 (1962). But “[t]hat is not to say that market definition will always be crucial,”
and it “does not exhaust the possible ways to prove” competitive effects. FTC v.
Whole Foods Market, Inc., 548 F.3d 1028, 1036 (D.C. Cir. 2008).
Mendiondo v. Centinela Hosp. Med. Ctr., 521 F.3d 1097, 1102 (9th Cir. 2008), and
the Court must accept as true all material factual allegations in plaintiff’s complaint,
draw inferences from those allegations in the light most favorable to plaintiff, and
construe the complaint liberally. Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 556
(2007). “It is only the extraordinary case in which dismissal is proper.” United States
v. Redwood City, 640 F.2d 963, 966 (9th Cir. 1981); 5 Charles Alan Wright & Arthur
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to leave to amend and for discovery is reviewed for abuse of discretion. United
States v. Corinthian Colleges, 655 F.3d 984, 995 (9th Cir. 2011). This Court reviews
Arthur Andersen LLP, 734 F.3d 854, 859 (9th Cir. 2013). Leave to amend is to be
“freely given when justice so requires,” and denial of a motion to amend is proper
only if it is clear “the complaint would not be saved by any amendment.” Carvalho
v. Equifax Info. Servs., LLC, 629 F.3d 876, 892-93 (9th Cir. 2010).
ARGUMENT
Apple submitted a Motion to Dismiss to the District Court that was fatally
flawed with knowingly incorrect case law citations and that relied upon the
Defendant’s preferred portrayal of the facts. The District Court injected its own
opinion into the ruling (“the Order”), chiefly, that Apple’s “curation” of apps was
classifieds in one town.’ The Order contained large verbatim portions written by
Gibson Dunn, and in a concerning trend, the District Court failed to check plainly
incorrect application of case law. Even after acknowledging Epic is “not controlling
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here,” the Order repeatedly and erroneously relied upon Epic as precedent, failing to
developers that represented a class of all free smartphone apps, in contrast to the
Epic market for non-zero priced gaming transactions. Appellants cannot raise new
facts on appeal, “and in any event it is inappropriate for an appellate court to evaluate
possible amendments not yet considered by the court below.” Breier v. Northern
Cal. Bowling Proprietors’ Ass’n, 316 F.2d 787, 790 (9th Cir. 1963). Nonetheless,
the District Court was presented on Motion for Relief with a DOJ amicus brief and
DOJ/26 AG relevant market definition. The District Court, and Apple, still claimed
these to be futile pleadings, reinforcing the Subcommittee concern that district courts
simply are not upholding the intent of the Sherman Act. The Preliminary Injunction
should have issued; the Motion to Dismiss should have been denied, or at a
The elements for a violation of Section 1 of the Sherman Act are: (1) the
restrains trade; (3) that the restraint affects interstate or foreign commerce; and (4)
that the restraint caused plaintiff to suffer an injury to its business or property. (ABA
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The face of the FAC contains facts supporting all these elements. Appellants
have sufficiently pled the existence of a contract that unreasonably restrains trade.
The damage to Appellants’ business due to the restraint is also pled on the face of
the FAC. (5-ER-1021 ¶ 204). Thus, the facts pleaded on the face of the FAC establish
this claim. The only argument provided by Apple to suggest otherwise is a lack of
concerted action. Yet again, Apple was solely depending on the holding from Epic
Games, a District Court case currently on appeal, for its assertion that the DPLA is
a unilateral contract. (5-ER-810, ln. 22-25.) This is the only case that has held this,
and it is currently on appeal. This should not be enough to dismiss Appellants’ claim
with prejudice.
but was transferred into this case from the Maine District because Apple persuaded
the Maine District Court that an app developer was “bound to sign the DPLA to
qualify as a publisher... even if it hadn’t actually signed the document.” There are
anywhere in the world, is bound to this contract without any intent to sign it.
Where the unilateral conduct extends beyond announcing a policy and refusing to
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deal with non-compliant partners to coercing an agreement, the conduct falls under
Section 1. See Monsanto Co. v. Spray-Rite Serv. Corp., 465 U.S. 752, 765; see also
Dimidowich v. Bell & Howell, 803 F.2d 1473, 1478 (9th Cir. 1986) (recognizing an
exception to the “unilateral refusal to deal” rule where a party “imposes restraints on
restraints”). Appellants’ FAC pleads coercion. (FAC ¶ 199) This allegation would
be conduct that falls under Section 1. Monsanto, 465 U.S. at 765. When considering
a motion to dismiss, a court must accept as true the complaint’s allegations and
analysis of the unilateral DPLA and a related tying claim subject to per se analysis.
Instead, the District Court determined that no antitrust injury was even possible,
halting further Sherman Act analysis. The District Court harpooned Appellants’
concerns about Apple’s 40,000 weekly app rejections, opining the rejections could
only evidence Defendant’s “quality control.” This is a rather surprising position for
the District Court declared—with zero discovery into facts—that the entire
Subcommittee and European Union were simply wrong, and that no jury could
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researcher, to be anti-competitive.
competitors is in paragraph 53 of the FAC. (5-ER-977 ¶ 53.) Thus, the FAC alleged
an injury not only to Plaintiff Coronavirus Reporter, but to other competitors who
were hoping to enter the app market. The relevant market here is the National App
Marketplace, which includes the US institutional app market and the corresponding
consumer app distribution market. COVID start-up firms are just participants in that
market. Harm to competitors other than Appellants or harm to the market are further
pled throughout the FAC. (5-ER-983-1020 ¶¶ 81, 173, 174, 179, 200.) It is enough
that Appellants pleaded that there was harm to Appellants and competition
marketwide. When considering a motion to dismiss, a court must accept as true the
550 U.S. at 556. The descriptions of the harm to competition stemming from
408), which includes the Congressional Subcommittee report, and the allegations in
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revolve around the antitrust injury caused by censorship of iOS apps. The lower
court’s assertion that Plaintiffs only offered a “threadbare recital” (i.e., a conclusory
The FAC starts with the television censorship example—which the judge
rejected and replaced with his own newspaper example. The FAC opening paragraph
states censorship blocks “60% of the country (and 80% of movie ticket sales) from
the first paragraph—that this case concerns vast censorship harm. FAC paragraph 3
identifies the specific harm in Apple censoring Plaintiff’s lifesaving COVID app,
and all COVID startup apps. (5-ER-953 ¶ 3.) FAC Paragraph 6 puts a number on the
harm—40,000 apps rejected per week. (5-ER-954 ¶ 6.) Paragraph 10 explains that
Plaintiffs’ five apps, and the class members’ apps, represent “millions of person-
hours of work tossed away by Apple, with improper rejections [uncovered by]
efficiency, i.e. millions of person-hours, that results from Apple’s denial of some
40,000 apps weekly.” (5-ER-954-5 ¶ 10.) This is not boilerplate. This is global
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Apple’s history of “closely monitoring the success of apps in the App Store, only to
copy the most successful. Apple takes other companies innovative features.” There,
the FAC asserts this was the case with Coronavirus Reporter and Facetime
verbatim “the report describes how apple has ‘absolute discretion’ in approving
Preferring its own facts, Apple improperly argues in a Rule 12 motion that
App Store rankings are a zero-sum game, where one app is lifted at another’s
expense, but in sum, the net selection of choice and quality are unaffected by
rankings. However, the reality is most users only look at the first ranking result—or
perhaps the first three—or first ten, even. Imagine (which is what is alleged) Apple
hand-picks the first several results, amongst the three million apps. If users only
effectively see Apple’s handpicked Top Three results, and those are picked for anti-
competitive reasons, then it is not a zero-sum game. Apple (and their favored
that ranking suppression self-preferences Apple and its cronies, which must be
accepted in a Rule 12 motion. The District Court should investigate this matter, via
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discovery, rather than accept Apple’s implausible factual assertion. The District
2. Tying (Count 5)
apps, through the proprietary App Store. The pleadings in this case make clear that
before this tie, people almost exclusively bought software in brick-and-mortar stores.
Modern software stores, such as an open market in China, are four times the size of
outside of their own proprietary store. The book publisher analogy was used
throughout the case documents to describe how a healthy app distribution market
would look. These facts, taken together, make it abundantly clear that Apple has,
remarkably, tied its smartphone to eighty percent of all software distribution stores.
upon a per se analysis of this Sherman-prohibited tying that bottlenecks the entire
software industry. The Motion for Preliminary Injunction should have been granted
after applying the per se standard, because Apple failed to raise any valid defenses
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on the likelihood to prevail. This injunction represents the most foreseeable1 solution
question whether Congress even needs new antitrust legislation, if the courts
demonstrate that the Sherman Act can be enforced for smartphone digital products.
opposition is that they purportedly weren’t put on proper notice of the tied and tying
respectively. But no sooner than the ink had dried on the District Court’s rejection
of the preliminary injunction, did Apple plead that a Southern Florida District case
asserted the “same app market and app distribution market alleged in Coronavirus
notice—what the smartphone and software markets are. They were able to compare
and seek consolidation of a case all the way in Southern Florida which used wording
authored by a totally different source (26AGs) yet alleged the same hardware and
software.
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Other similar attempts, e.g. Coalition for App Fairness, Cameron, Epic, and
the aforementioned Senate Open App legislation with 73% popular support have
thus far failed to change the unacceptable status quo. This preliminary injunction is
now long overdue—and the Congressional Subcommittee has directed the courts to
enforce Sherman Act with regard to this exact issue.
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to invoke the Rule of Reason, rather than the per se standard for hardware-software
tying. Apple mislead the District Court that Microsoft exempted per se analysis for
the iOS operating system. The problem with this argument is Apple vigorously
argued the opposite point in Epic; in Epic, Apple argued the Sherman market for
operating systems was “entirely litigation driven” and not based on economic reality,
raised disingenuous defenses to the per se tying claim. Apple claimed “the rule of
reason, rather than per se analysis” governs Plaintiffs’ tying claims because they
United States v. Microsoft Corp., 253 F.3d 34, 89 (D.C. Cir. 2001). This defense
contradicts the Microsoft ruling, and moreover, contradicts Apple’s own position in
Epic that it is the hardware iPhone, not the iOS software, that is an actual product
market.
The Microsoft court cautioned not to use that ruling for all software, let alone,
hardware:
“Because this claim applies with distinct force when the tying product
is platform software, we have no present basis for finding the per se
rule inapplicable to software markets generally. Nor should we be
interpreted as setting a precedent for switching to the rule of reason
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patently incorrect premises: 1) that Microsoft exempted it from per se tying analysis,
and similarly, 2) that the tying product was iOS rather than the iPhone, and 3) that
the FAC’s “smartphone” and “app distribution” markets weren’t actual marketplaces
based on reality. All three arguments fail. When it suited them in Epic, Apple argued
that a relevant market for iOS was “artificially drawn and entirely litigation based”—
indeed, that finding exists in USDJ Gonzalez Rogers’ final order on Epic. Apple
can’t argue it both ways—if the proper market is smartphones/iPhones, then per se
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analysis applies to the App Store tie, which itself is a software store yielding credit
card transactions more than it is a software platform. The reality in 2022 is that
Apple’s rumored Apple Car to its so-called metaverse goggles. Apple would be hard
pressed to argue that smartphones and software stores don’t exist, are all part of a
single platform, or are litigation driven. But that is exactly what the company did—
and the court below was conspicuously silent on performing per se analysis.
Indeed, the tying arrangement of all smartphones to one single software store
represents exactly the sort of tying that concerned Justice Black in Northern Pacific:
To most smartphone users, the only “publisher” of apps they ever knew was
Apple. This, fundamentally, is what has stalled Sherman Act enforcement, and the
The elements of a tying claim are: (1) that the purportedly tied and tying items
entail separate products or services in the sense that there is separate market demand
for each of them without the other; (2) that the availability of the tying item has been
conditioned upon purchase, rental, or license of the tied item or on not dealing with
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the defendant’s competitors in the market for the tied item; (3) that the party
imposing the tie has sufficient market power in the market for the tying item to
“appreciably restrain free competition” in the tied market; and (4) that a “not
arrangement. Eastman Kodak v. Image Technical Services, Inc., 504 U.S. 451, 462-
4 (1992).
Apple did not contest that elements two (2) through four (4) have been
established,2 but rather focuses on two alleged issues—the separateness of the tied
and tying products (the first element) (5-ER-811 ln. 10-28–5-ER-812 ln. 1-11.) and
greater detail below, neither of these arguments are enough to defeat the injunction,
Appellants pleaded the separateness of the tied and tying products throughout
the FAC. (5-ER-1024-5 ¶¶ 218, 220, 222.) Note that the tying product is always
Apple’s iOS smartphone device (i.e. an Apple iPhone), while different tied products
are plead (the App Store, notary stamps, and onboarding software). Moreover,
Appellants explain the consumer interest/demand for each of these tied products on
2
Regardless, Plaintiffs have pled facts establishing these elements on the face
of the FAC. (See, e.g., FAC ¶¶ 217, 219, 221 for the second element, FAC ¶ 216 for
third element, and FAC ¶223 for the fourth element.)
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the face of the FAC.3 Apple would have the court believe that Epic Games (a case
ER-812, ln. 6-8.) However, the Epic Games Court made a factual decision on this
issue at trial, and the purported tied product in Epic Games (in-app purchases) differs
from the tied products plead by Appellants (the app store, notary stamps, and
onboarding software). Moreover, Epic Games should not be used to decide this issue
Appellants should be permitted to enter the aftermarkets of both iOS app distribution
and iOS in-app payments processing. See analysis on this issue in Emma C. Smizer,
Epic Games v. Apple: Tech-Tying and the Future of Antitrust, 41 Loy. L.A. Ent. L.
Rev. 215, 216–51 (2021). As noted in that law review article, Epic’s claims did “not
Appellants have standing to bring this claim and seek an injunction. Apple’s
Motion admits that competitors who are restrained from entering the market for the
tied product have standing to bring forth this claim. (5-ER-812, ln. 12-15.)
3
“The U.S. Supreme Court has held that ‘the answer to the question whether
one or two products are involved turns not on the functional relation between them,
but rather on the character of demand for the two items.’ Thus, the most important
factor in determining whether two distinct products are being tied together is whether
customers want to purchase the products separately. Here, the tied products meet
the SCOTUS requirement for consumer interest. Clearly, consumers are interested
in purchasing apps separately from smartphones.” (5-ER-1027 ¶ 228, emphasis
added.)
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Appellants have alleged that they are competitors who are restrained from entering
the market for the tied product on the face of the FAC. Appellants are developers,
who are competitors that could open their own app stores (one of the tied products
alleged) if not for Apple’s EULA and notarization requirements. (See 5-ER-1024 ¶
218.) It follows that if Appellants were allowed to open their own app stores, they
would also be in the market for their own notary stamps (one of the tied products
alleged) to use for the apps in their app stores, making Appellants’ competitors in
Based on the authority used by Apple itself, Appellants have standing to bring
this claim based on the facts on the face of the FAC. (See 5-ER-812, ln. 12-15.)
such as “But nothing in antitrust law requires Apple to give away its intellectual
property for free.” (5-ER-809, ln.11-12.) Not only was this not the stage of
judicial notice of which was requested when the Opposition was filed, the Court in
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in the relevant markets; (2) defendant has willfully acquired or maintained that
power; and (3) defendant’s conduct has caused antitrust injury. See Cost Mgmt.
Servs. v. Wash. Natural Gas, 99 F.3d 937, 949 (9th Cir. 1996).
Appellants have plainly laid out a relevant foremarket on the face of the FAC,
the market for US Smartphones (and an alternative single-brand market for iPhones.)
(See, e.g., 5-ER-958-960 ¶¶ 16, 18.) Related downstream markets exist and are also
plead on the face of the FAC. (See, e.g., 5-ER-955 ¶ 8, fn. 1) Each of these markets
The relevant market inquiry has two dimensions. Standard Oil Co. of New
Jersey v. U.S., 221 U.S. 1, 61 (1911). First, it is necessary to identify the cluster of
identify the geographic area within which the defendant practicably competes in
marketing its product or service, termed the “relevant geographic market.” Id. All of
the relevant markets plead in the FAC have a clear geographic area—the United
States, as pled in paragraph 128 of the FAC. This is further evident by the description
of the markets as “US” or “national” markets throughout the FAC. (See, e.g., 5-ER-
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955-1028 ¶¶ 8, 16, 18, 76, 121, 129, 197, 209, 233.) The Preliminary Injunction
offers additional evidence of FCC geographic licensure and applicable product SKU
numbers, which the Court is given judicial notice thereof. Furthermore, Apple’s
Motion does not argue a lack of geographic market and is solely focused on the
Downstream from smartphones are the app market and userbase market (and
App Marketplace… app distribution is two sided; the consumer facing side and the
side.” (FAC ¶ 11). (See, e.g., 5-ER-955 ¶ 8, fn. 1) Item 2 on this list is a single-brand
market are smartphone apps, which is plead in the FAC. (5-ER-1022 ¶ 209.) The
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FAC explains that an app store is a consumer facing side of the app market, and
institutional sales are the wholesale side. This distinction, as will be evident, is
critical for free apps, which have a zero-price to consumers, but often have multi-
venture capitalists, banks, etc. The products included in the other markets are further
discussed throughout the FAC but are largely different redundant mechanisms to
describe Apple’s sale of userbase access. The product of the notary stamps market
is the notary stamps. (5-ER-1014 ¶ 171.) The product of the onboarding software
market is the software onboarding. (5-ER-1014 ¶ 172.) The product of the iOS
userbase market is access to the userbase. (5-ER-1012 ¶ 163.) Hence, as Apple has
even conceded in related pleadings, this case primarily deals with the app market for
“all apps,” and related distribution and userbase access channels. Every one of these
Court:
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customers, distinct prices, sensitivity to price changes, and specialized vendors for
the submarkets plead in the FAC. Moreover, a relevant market was alleged without
the District Court’s rejection of their marketplace definitions, the court invoked the
Epic verdict regarding the App Store as a “two-sided platform,” and applied it to the
and sellers are matched and there is always “symmetry” in a transaction with a buyer
and a seller paying and receiving the same price. The transaction platform receives
a fee—such as a stock market, where a buyer and seller exchange stock shares and
pay a fee to the exchange. The second concept is that of corresponding supply and
demand, in a market of a supply chain. Every economic market has a supply, and
related demand, but that does not mean every market is a transaction platform.
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a wholesaler.
The court below incorrectly viewed these related supply and demands as one-
to-one. But the FAC referenced the wholesale side of the app market, meaning the
Apple, after purchasing an app from a developer, subsequently becomes the seller
buys a book from an author in the “institutional wholesale book” market, then turns
around and sells the book to a bookstore, who has a consumer-facing distribution
platform.
In short, capitalist supply chains have multiple levels of supply and demand,
by definition, and Plaintiffs have specifically alleged that the entire app supply chain
platform. Despite Plaintiffs best and reasonable efforts to describe the complexities
of digital product capital supply chains, Apple has in turn created chaos in this
largely only know of one “bookstore”—the App Store. Hence it is conceptually easy
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to confound the markets of app supply from creators, and app distributors to
consumers. Apple has been the only “wholesale” demand in this market since its
finally, allows us to understand why the FAC called this wholesale market “largely
alternate buyer—or seller—of apps. As the FAC plainly points out—Apple is the
only merchant of record for billions of app transactions. All credit card app
purchases are, for iOS, from Apple. This is in violation of the Sherman Act.
In this case, the District Court erred by requiring Plaintiffs fully describe
of demand for free apps is not possible using traditional metrics, and by definition,
it doesn’t even exist. How can a change in price be measured when an app is free?
Plaintiffs would invoke a new metric from a congressional expert for free apps, if
permitted to proceed according to the “Antitrust and Big Tech” report to the United
4
https://sgp.fas.org/crs/misc/R45910.pdf (Page 7 of the Report explains
SSNDQ).
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In the opposition to the Motion to Dismiss, it was already noted that the Court
should not require “small but significant and non-transitory increase in price”
(“SSNIP”) type pleadings for free apps, and instead, defer to expert witnesses in
discovery for defining free apps. Nonetheless, SSNIP type boundaries were included
for the US Smartphone market. But this Appeals Court should acknowledge, as
above, that zero-price markets are different, and difficult, and allow expert debate
It should be noted in the Epic case that the word “foremarket” was not even
used in Quinn Emmanuel’s Complaint, and Judge Gonzalez Rogers stated that
definitions. Appellants have taken on a challenging topic, the District Court and
Apple did not (and cannot) find any bad faith in their endeavors, and as such, the
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Coronavirus Reporter has met the “substance over form” bar for free app censorship.
Moreover, Apple cannot reasonably claim the DOJ and 26 AGs, and the
Congressional report on SSNDQ, are wrong under the applicable Rule 12 threshold.
As the lower court was reviewing its order, the DOJ filed an amicus brief with
the Ninth Circuit not to “[take] position on the merits of the [Epic] claims,” but
rather, to “ensure that the Sherman Act is not unduly narrowed through legal error.”
(2-ER-62, 100.) The District Court was requested to take judicial notice of the DOJ
The DOJ contends the “Epic District Court’s Opinion could be read as
adopting inflexible market-definition principles that would improperly
limit the Sherman Act’s scope…
The District Court refused to take judicial notice of the DOJ amicus, let alone,
consider the valid arguments made that market definition is not a crucial element to
a Sherman claim, especially with regard to free digital products. The Ninth Circuit
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should adopt the position of the DOJ, and not reject digital product cases—moreover
the free digital products in this case—for marketplace definition requirements that
are simply not part of the Sherman statute nor the Brown Shoe Supreme Court
precedent.
To satisfy the requirement for alleged willful conduct, Appellants must allege
facts showing that Apple engaged in anticompetitive conduct, with the intent to
control prices or destroy competition. See Foremost Pro Color, Inc. v. Eastman
Kodak Co., 703 F.2d 534 (9th Cir.1983). The House Subcommittee on Antitrust
weakened the vibrancy of the free and diverse press, and undermined Americans’
(See 3-ER-233-408) and is incorporated into the FAC. (5-ER-968 ¶ 36.) This Report
explains Apple anticompetitive conduct in greater detail, but regardless, the face of
that Apple used its overwhelming monopoly power to restrict others from publishing
competing apps, or becoming app distributors, by restricting the iOS notary stamps
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market and iOS onboarding software.5 Apple did not do this based on any
meritorious reasoning. Instead, Apple abused its monopoly power and intentionally
Ninth Circuit in Image Tech. Srvs., Inc. v. Eastman Kodak Co., 125 F.3d 1195 (9th
Cir. 1997), and, in Allied Orthopedic Alliance Inc. v. Tyco Health Care Group LP,
592 F.3d 991 (9th Cir. 2010). In Eastman Kodak, the Ninth Circuit affirmed the
jury’s finding that Kodak violated Section 2 by taking steps to exclude independent
service organizations (“ISOs”) from competition in the market for servicing Kodak
action ... if that conduct harms the competitive process in the absence of a legitimate
business justification.” Eastman Kodak, 125 F.3d at 1209. Just as Apple does here,
Kodak argued that it was entitled to exclude competitors from the market to protect
its intellectual property rights. Id. at 1214-20. However, the jury rejected Kodak’s
Appellants allege in the FAC, Apple refused to sell notarization stamps, onboarding
173.) Likewise, they offered infra-competitive wholesale prices for free apps. The
5
See, e.g., 5-ER-1013-4 ¶¶ 168, 169, 171, 172.
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FAC furthers pleads that there was no legitimate business justification for Apple’s
pretextual and cannot support a motion to dismiss. See Berkey Photo, Inc. v. Eastman
Kodak Co., 603 F.2d 263, 286 n.30 (2d Cir. 1979) (product introductions are not
immune from antitrust scrutiny); Verizon Commc’ns Inc. v. Law Offices of Curtis V.
Trinko, LLP, 540 U.S. 398, 408 (2004) (“Under certain circumstances, a refusal to
cooperate with rivals can constitute anticompetitive conduct and violate Section 2.”).
has the following elements: (1) control of the essential facility by a monopolist; (2)
(3) the denial of the use of the facility to a competitor; and (4) the feasibility of
providing the facility. MCI Communications Corp. v. American Tel. & Tel. Co., 708
F.2d 1081, 1132 (7th Cir. 1983). Each of these elements is pled on the face of the
FAC.6 Apple argues that it is not on notice as to what the essential facilities are, yet
cites to the portions of the FAC which plainly state what the different essential
facilities are. (5-ER-807, ln. 1-4.) Apple wants to the Court to believe that
Appellants’ FAC should be dismissed simply because they are pleading more than
6
See 5-ER-1017-8 ¶¶ 183-185 for the first element, ¶ 188 for the second
element, ¶ 186 for the third element, and ¶ 188 for the third element.
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one essential facility. Appellants plainly pled what the three different essential
facilities at issue are. (See 5-ER-1017 ¶ 185, “Notary stamps, application loaders,
and contractual iOS userbase access are therefore essential facilities under Apple’s
control.”) Moreover, Appellants pled that they are competitors to Apple (5-ER-
Apple uses its IP rights to argue that it is entitled to exclude competitors from
these essential facilities, citing only an antitrust textbook (5-ER-807, ln. 15-24.)
However, this reason alone cannot be used as a basis for deciding a Motion to
similar to what the jury found regarding Kodak’s IP justification in Eastman Kodak
Co. v. Image Technical Servs., Inc. See Eastman Kodak, 125 F.3d at 1218-19.
Clearly, it is too early to resolve this factual question at this stage of the proceedings,
and the Motion to Dismiss should have been denied. Whether or not a patent gives
a Big Tech company “Big Brother” control over the final end-user is a choice for the
jury to determine.
The free app class action claims were deemed not subject to consolidation
Plaintiffs also had paid apps and sought redress in this action as opt-outs from
Cameron. As the FAC states, “In order to streamline litigation, and to avoid
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confusion, Plaintiffs CALID and Jeffrey Isaacs assert claims for non-zero price apps
action, and all supporting facts from that complaint are incorporated herein, as if
The elements of a claim for breach of contract are: (i) the existence of a valid
contract; (ii) performance by the plaintiff or excuse for non-performance; (iii) breach by
the defendant; and (iv) damages. See First Commercial Mortgage Company v. Reece
(2001) 89 Cal.App.4th 731, 745; Careau & Co. v. Security Pacific Business Credit, Inc.
(1990) 222 Cal.App.3d 1371, 1388. As shown below, Appellants have pled each of the
As Apple has attempted to do throughout its 12(b)(6), Apple ignores that the
Apple was completely rewriting Plaintiff’s allegations in the First Amended Complaint
and the Breach of Contract cause of action. Appellants pled the contract, Appellants’
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performance, Apple’s breach and damages. Accepting as true that some contractual
clauses violate Sherman and UCL, the contract claim may not be dismissed under
Apple’s suggestion they have “sole discretion” to deny any app. The contract claim must
be viewed in the context of the entire lawsuit, not a vacuum. If a jury may find some of
breach may be inevitable. Appellants met the pleading requirements of a claim for breach
The elements of a claim for breach of implied covenant of good faith and fair
dealing are: (1) existence of a contract between the parties; (2) the plaintiff’s
performance of that contract; (3) conduct by the defendant that breached the implied
covenant of good faith and fair dealing; and (4) damages. See Racine & Laramie,
Ltd. v. Department of Parks & Recreation (1992) 11 Cal. App. 4th 1026, 1031-32.
fair dealing. This means that each party will not do anything to unfairly interfere
with the right of any other party to receive the benefits of the contract. 3500
Sepulveda, LLC v. Macy’s West Stores, Inc., 980 F.3d 1317, 1324 (9th Cir. 2020).
251–253.) Appellants pleaded conduct by Apple breaching the implied covenant of good
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faith and fair dealing by Apple. (5-ER-1035 ¶¶ 263–265.) Appellants pleaded damages.
(5-ER-1035 ¶ 266.) Appellants have sufficiently stated a claim for breach of the implied
contradictory. On the one hand, Apple was arguing that Appellants’ Breach of the
Covenant of Good Faith and Fair Dealing cause of action “merely rehashes
Appellants’ breach allegations.” (5-ER-814, ln. 1–2.) On the other hand, Apple
argues that a specific contractual term that was breached by the implied covenant
must be alleged. In fact, the case cited by counsel for Apple, which counsel for
Apple briefed and argued, specifically held ‘“breach of a specific provision of the
covenant of good faith and fair dealing. . .” Soundgarden v. UMG Recordings, Inc.,
2020 WL 1815855, 17. Apple’s own case citation, itself a ruling on a 12(b)(6),
contradicts Apple’s arguments. The threshold for good covenant is clearly below
that of breach of contract; a jury may reasonably find that Apple invoked its “sole
discretion” clause in bad faith, even if it weren’t to violate the Sherman Act.
Appellants have sufficiently pled a claim for breach of the implied covenant and,
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To allege a claim under RICO, a plaintiff must allege facts establishing four
elements: (1) conduct, (2) of an enterprise, (3) through a pattern, (4) of racketeering
activity. Jarvis v. Regan, 833 F.2d 149, 151-52 (9th Cir. 1987). The FAC properly
alleges facts demonstrating all of these elements in the context of a classic and
screening their ideas for purported compliance with DPLA, meanwhile lifting and
appropriating their ideas into their own competing apps and suppressing the original
mail and wire fraud. See, e.g., Jepson, Inc. v. Makita Corp., 34 F.3d 1321, 1327 (7th
Cir. 1994). Therefore, for at least two acts of mail or wire fraud, “a plaintiff must,
within reason, describe the time, place, and content of the mail and wire
to state a RICO claim. Id. at 1328; Lachmund v. ADM Investor Servs., Inc., 191 F.3d
777, 784 (7th Cir. 1999) (“a plaintiff must allege with particularity two predicate
acts”). Further, “[t]he allegations must be specific enough to provide the defendants
with a general outline of how the alleged fraud scheme operated and of their
purported role in the scheme.” Rohlfing v. Manor Care, Inc., 172 F.R.D. 330, 347
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(N.D. Ill. 1997) (emphasis added). In addition, the complaint must indicate “what
is false or misleading about a statement, and why it is false” and “be specific enough
to give defendants notice of the particular misconduct that they can defend against
the charge and not just deny that they have done anything wrong.” Vess v. Ciba–
Geigy Corp. USA, 317 F.3d 1097, 1107 (9th Cir. 2003) (internal citations omitted).
general standard enunciated in Rule 8 .... we must take care not to permit the more
pleading that Congress has established in Rule 8.” Lachmund v. ADM Investor
Servs., Inc., 191 F.3d 777, 783 (7th Cir. 1999); see Hurd v. Monsanto Co., 908 F.
Supp. 604, 613 (S.D. Ind. 1995). Moreover, “Rule 9(b) does not require that the
complaint explain the plaintiffs theory of the case, but only that it state the
misrepresentation, omission, or other action or inaction that the plaintiff claims was
fraudulent.” Midwest Commerce Banking Co. v. Elkhart City Centre, 4 F.3d 521,
523 (7th Cir. 1993). Regarding mail and wire fraud, “[a]ll Rule 9(b) require[s] ... [is]
that [plaintiff] set forth the date and content of the statements or omissions that it
claim[s] to be fraudulent. [Plaintiff is] not required to go further and allege the facts
necessary to show that the alleged fraud was actionable.” Id.; Midwest Grinding Co.
v. Spitz, 976 F.2d 1016, 1020 (7th Cir. 1992); Hurd, 908 F. Supp. at 614, n.9.
Certain additional principles relating to the application of Rule 9(b) are also
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where the plaintiff lacks access to all facts necessary to detail his claim, and that is
most likely to be the case where, as here, the plaintiff alleges a fraud against one or
more third parties.” Corley v. Rosewood Care Ctr., Inc., 142 F.3d 1041, 1051 (7th
Cir. 1998); see Hirata Corp. v. J.B. Oxford and Co., 193 F.R.D. 589, 592 (S.D. Ind.
(predicate acts maybe pled more generally when facts are exclusively known to
defendants).
Further, specific actors need not be identified when the “role of each corporate
defendant in the scheme is reasonably clear.” Rohlfing, 172 F.R.D. at 348; see
defendants were “related corporations that can most likely sort out their involvement
without significant difficulty”); Wabash Valley Power Ass’n, 678 F. Supp. at 762
Kayport Package Exp., Inc., 885 F.2d 531, 540 (9th Cir. 1989)
See Neubronner v. Milken, 6 F.3d 666, 672 (9th Cir. 1993) (noting that
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elements of fraud claim can be pleaded “on information and belief” when plaintiff
provides basis for that belief and fact is one that is within defendant’s knowledge);
Immobiliare, LLC v. Westcor Land Title Ins. Co., 424 F. Supp. 3d 882, 890 (E.D.
Cal. 2019) (noting that plaintiffs must allege the names of employees that made
fraudulent statements or, “at a minimum identify them by their titles and/or job
Applying these standards and principles, there can be no doubt that Appellants
the racketeering activity here involves predicate acts of fraud which requires a
scheme to defraud, intent to defraud and use of wire communications or the mail in
furtherance of the scheme. Appellants specifically allege all such elements. (5-ER-
1035-49 ¶¶ 267–308). See, e.g., Celebrity Chefs Tour, LLC v. Macy’s, Inc., 16 F.
Supp. 3d 1141, 1150 (S.D. Cal. 2014) (concluding that the plaintiff had alleged false
who made the statements, the date on which they were made, and in what form they
were said). The App Review team correspondence was directly included in the FAC,
showing the time, place and identity of the App Review team member. A pattern,
through multiple screenshots, shows the App Review team used misleading, false,
and fraudulent communications to make small developers think their works were
somehow improper, when, in fact, cronies’ similar works were widely permitted on
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RICO’s “predicate acts” are certain listed federal and state offenses, including
mail and wire fraud. See 18 U.S.C. §§ 1341, 1343. To state a claim for mail or wire
fraud, a plaintiff must allege “(1) that [defendant] engaged in a scheme to defraud,
(2) with the intent to defraud, and (3) that [defendant] used the mails or interstate
wires in furtherance of that scheme.” McDonald v. Schencker, 18 F.3d 491, 494 (7th
Cir. 1994). “[A] defendant may be held liable for mail or wire fraud if (1) the
defendant was a knowing participant in a scheme to defraud; (2) the defendant had
the intent to defraud; and (3) a co-schemer committed acts of mail or wire fraud
during the defendant’s participation in the scheme, and those acts were within the
scope of the scheme.” In re Volkswagen “Clean Diesel” Mktg., Sales Practices, &
Prod. Liab. Litig., No. MDL 2672 CRB, 2017 WL 4890594, at *12 (N.D. Cal. Oct.
30, 2017) (citing United States v. Stapleton, 293 F.3d 1111, 1117–18 (9th Cir.
2002)). The Ninth Circuit in Stapleton reasoned that the “scheme to defraud”
element of the mail and wire fraud statutes is akin to conspiracy. Stapleton, 293 F.3d
at 1116–17. The predicate acts of mail and wire fraud themselves do not require use
of the mail or wire by each member of the scheme. See In re Volkswagen, 2017 WL
communication and mail fraud specifically alleged in the First Amended Complaint.
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(5-ER-1039-48 ¶¶ 275–303).
Apple relied heavily on Rae v. Union Bank, 725 F.2d 478, 481 (9th Cir. 1984),
which was limited and explained in River City Markets, Inc. v. Fleming Foods West,
Inc., 960 F.2d 1458, 1460–61 (9th Cir. 1992). According to the court in River City:
Id.
Here, Appellants pled the enterprise as being not only Apple’s App Review
team and executives, but other persons and entities working in concert with Apple,
including PR firms, law firms, and rival developers. (5-ER-1036 ¶ 270). Lobbyists
that corruptly influence state legislative pleadings also form the enterprise. By way
of addendum, Appellants have incorporated state law violations in Georgia and other
elsewhere tantamount to bribery and corruption of public officials. Plainly from the
face of the First Amended Complaint, the enterprise is not limited to Apple. Apple
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Additionally, Defendant Apple was named as defendant for this RICO claim
under the principle of respondeat superior. The Ninth Circuit has adopted the
reasoning of Petro-Tech and Liquid Air, holding that liability may arise under
benefited by its employee or agent’s RICO violations. See Brady v. Dairy Fresh
Products Co., 974 F.2d 1149, 1154 (9th Cir. 1992) Here, Apple’s App Review team
carried out the enterprise, along with senior Apple management, PR firms, law
firms/lobbying firms, and a select group of crony rival developers. Plaintiff alleged
this theory of liability in the First Amended Complaint as well. (5-ER-1036 ¶ 270).
activity through legal entities beyond its control, such as independent banks, law
firms, accounting firms, or public relations firms, the person / enterprise distinction
will more than likely be satisfied. Living Designs, Inc. v. E.I. Dupont De Nemours
and Co., 431 F.3d 353, 362 (9th Cir. 2005). This is precisely the conduct alleged
Defendant works with other numerous other entities to form the RICO enterprise.
(5-ER-1037 ¶ 271).
fraud under Rule 9(b) of the Federal Rules of Civil Procedure. The elements of fraud
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(b) knowledge of falsity (or “scienter”); (c) intent to defraud, i.e., to induce reliance;
(d) justifiable reliance; and (e) resulting damage.’” Lazar v. Superior Court (1996)
12 Cal.4th 631, 638. A plaintiff must show that he or she changed position in
reliance upon the alleged fraud and was damaged by that change of position. Civ.
Code, § 1709. For example, in Lazar, evidence that the plaintiff had quit his job and
Appellants must allege who, what, when, where and how the representations
were made to the best of Appellants’ ability. Appellants identified who made the
fraudulent misrepresentations, when they were made and what was said sufficient to
state a claim for fraud when dealing with a corporate defendant as discussed above.
(5-ER-1039-52 ¶¶ 275–303, 311–318). The FAC was clear that many small
Complaint based on the guidance of the District Court, in a plain showing of abuse
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Fed.R.Civ.P. 15(a); Foman v. Davis, 371 U.S. 178, 182 (1962); United States v.
Webb, 655 F.2d 977, 979 (9th Cir. 1981); DCD Programs, Ltd. v. Leighton, 833
F.2d 183, 186 (9th Cir. 1987) (reversing denial of leave to amend to file fourth
granting leave to amend.” Eminence Capital, LLC et al. v. Aspeon, Inc., 316 F.3d
1048, 1052 (9th Cir. 2003) “Dismissal without leave to amend is improper unless it
is clear, upon de novo review, that the complaint could not be saved by any
amendment.” Polich v. Burlington Northern, Inc., 942 F.2d 1467, 1472 (9th Cir.
1991). Here, Plaintiffs/Appellants were never given at least one chance to amend
their complaint after a responsive pleading had been filed. Fed.R.Civ.P. 15(a) (A
In other antitrust cases, a district court refusal to grant leave to amend has
Hicks v. PGA Tour, Inc., 897 F.3d 1109, 1124 (2018), the Ninth Circuit Court stated:
While Appellants believe the product market here was properly identified, the
holding in Hicks demonstrates that even if there was a failure to plead a plausible
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Further, the facts of this case are more compelling and supporting of reversal
of the District Court’s order dismissing the complaint without leave to amend in
Eminence Capital, LLC et al. v. Aspeon, Inc., 316 F.3d 1048 (9th Cir. 2003). In
Eminence Capital, the Ninth Circuit reversed a district court’s dismissal of leave to
amend after the ‘district court concluded that leave to amend should be denied
because “[p]laintiffs have had three ‘bites at the apple’.” The Court ruled that “we
believe that the district court did not appropriately exercise its discretion by denying
plaintiffs leave to amend where, as here, plaintiffs’ allegations were not frivolous,
requirements and to comply with court guidance, and, most importantly, it appears
that plaintiffs had a reasonable chance of successfully stating a claim if given another
opportunity.” Id.
Here, Plaintiffs/Appellants had no ‘bites at the apple’ and had never been
given opportunity for any court commentary or guidance to cure any pleading
defects. Instead, the District Court abused its discretion by using other earlier actions
against Apple as its basis to deny leave to amend the complaint in this case.
Plaintiffs are correct to note that this will be the first ruling under
rule 12(b)(6) concerning Plaintiff’s complaint, Apple is also correct in
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observing that between the various iterations of this case being filed
across jurisdictions and by different configurations of Plaintiffs—all
challenging the same conduct by Apple and all by the same counsel—
this is Plaintiff’s seventh amended complaint on these claims…
Plaintiffs have had the benefit of responding to Apple’s fully briefed
motions to dismiss in this case and previous cases, and, yet, in this
seventh complaint they still fail to state any claims. Accordingly, the
Court finds that it would be futile to grant leave to Plaintiffs to bring an
eighth amended complaint, and thus dismisses the claims with
prejudice.
(1-ER-39-40.)
The above quote is the only reasoning given for denial of leave to amend.
There is no discussion of the Foman factors7 whatsoever by the District Court here,
just like the district court in Hicks, whose decision to deny leave to amend was
7
In Foman v. Davis, 371 U.S. 178 (1962), the Supreme Court offered the
following factors a district court should consider in deciding whether to grant leave
to amend: “In the absence of any apparent or declared reason—such as undue delay,
bad faith or dilatory motive on the part of the movant, repeated failure to cure
deficiencies by amendments previously allowed, undue prejudice to the opposing
party by virtue of allowance of the amendment, futility of amendment, etc.—the
leave sought should, as the rules require, be ‘freely given.’” Id. at 182.
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disallowed an SAC in that case—and as the court below noted, the subsequent
Complaint filed in this case was “substantially similar claims to the two prior
Similarly, Primary Productions was filed by this counsel in the Maine District
Court, and as Apple has noted, was “nearly identical” to the Coronavirus Reporter
Finally, a pro se party joined in the FAC in this case, and the claims by that
developer didn’t even exist until a month before filing of the FAC.
fundamentally twice, absent the necessity to amend and include new parties and
The District Court has no basis to suggest that an amendment (if even
necessary) would be futile or lacking in good faith. To the contrary, Appellants and
their counsel have made substantial contribution towards increasing visibility of the
The Order also implicitly suggests that further amendment would be futile,
due to the sheer number of markets alleged. This, again, was an unfortunate instance
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where the District Court verbatim copied Apple’s MTD, without applying the
variations. For example, Apple counts “the App market” six times—the “iOS App
market” (a single brand alternative), the “US iOS Device App market,” the
wholesale “institutional app market,” and the “iOS institutional app market,” and the
harpooning such an important antitrust matter for such minor technicalities is simply
In sum, while the District Court mentions futility, it abused its discretion in
concluding that granting leave to amend would be futile because Plaintiffs would be
Court was erroneous in counting complaints and markets, and ultimately its rubber
stamp was an assent to Apple’s shameful litigation conduct. This conduct included
accusations at the time of the first “iteration” that Dr. Roberts, a renowned scientist
who saved countless lives, filed the New Hampshire complaint “in disregard for the
Cameron—there were no more than three true “iterations” filed by all parties
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Motion to Strike. Relying on these earlier “iterations of this case” to conclude that
First, one of the earlier “iterations of this case” involved only one of the
Plaintiffs present in this case. Primary Prods LLC v. Apple Inc. (“D. Me. Dkt.”), No.
21-cv-137, Dkt. 1 (D. Me.) was filed in the District Court of Maine. It was an abuse
Complaint filed by three additional Plaintiffs, who were not involved in that other
action whatsoever, was futile. Using this case as a basis to conclude amendment
would be futile is extremely prejudicial to the Plaintiffs who were not involved
not based on Appellants’ ability to state a claim. The amendments concerned these
jurisdictional issues. Apple admitted that the reason for the voluntary dismissal in
that earlier case was due to a jurisdictional issue. (5-ER-798, ln. 24-25.) An earlier
should not be used to decide that leave to amend would be futile here.
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Third, the earlier “iterations” were filed in different Federal Circuits with
throughout its Motion to Dismiss, and Plaintiffs/Appellants used Ninth Circuit cases
to oppose the Motion. Indeed, the vast majority of the cases cited in the District
Court’s Order were from the Ninth Circuit. This was first time a ruling based on
Ninth Circuit case law was ever made and Plaintiffs/Appellants should be allowed
to amend their Complaint for the first time according to the guidance of Ninth Circuit
precedent. The earlier “iterations” that were used by the District Court to reach its
District Court), and not just in a different federal district, but completely different
federal circuits.
None of the past “iterations” should have had any bearing on the decision to
grant leave to amend in this case. The Complaint here was the first time that these
specific plaintiffs brought these claims against Apple in the Ninth Circuit without
jurisdictional issues. The Complaint here was only amended once as a matter of
afforded the opportunity to amend their Complaint after a responsive pleading was
filed under the guidance of a Ninth Circuit court, so it was an abuse of discretion to
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CONCLUSION
and all other represented parties hereby request the Ninth Circuit reverse the
Judgment and Order and direct the District Court to issue the proposed preliminary
deciding the multiple complex issues that arose in the dismissal of a Sherman Act
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[X] I am unaware of any related cases currently pending in this court other than
the case(s) identified in the initial brief(s) filed by the other party or parties.
[X] I am aware of one or more related cases currently pending in this court. The
case number and name of each related case and its relationship to this case
are:
22-15167
This brief contains __12,997__ words, excluding the items exempted by Fed. R.
App. P. 32(f). The brief’s type size and typeface comply with Fed. R. App. P.
32(a)(5) and (6).
in restraint of trade or commerce among the several States, or with foreign nations,
is declared to be illegal. Every person who shall make any contract or engage in any
of the court.
conspire with any other person or persons, to monopolize any part of the trade or
commerce among the several States, or with foreign nations, shall be deemed guilty
of the court.
Addendum 1
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“While we agree with the district court that the Caddies failed to plead a
plausible product market, we vacate the dismissal with prejudice of the antitrust and
California unfair competition law claims. “Dismissal with prejudice and without
leave to amend is not appropriate unless it is clear on de novo review that the
Inc., 316 F.3d 1048, 1052 (9th Cir. 2003). “A simple denial of leave to amend
without any explanation by the district court is subject to reversal.” Id. “Such a
inconsistent with the spirit of the Federal Rules.’ ” Id. (quoting Foman v. Davis, 371
The district court made a “simple denial of leave to amend” here without
adequate explanation. Id. It only noted that the Caddies were not “able to explain
how they could state an antitrust claim using a plausible product market definition.”
abuse of discretion considering that the district court only dismissed the complaint
once, the Tour fails to identify any specific prejudice it would experience, and we
cannot conclude that amendment would be futile. See, e.g., id. (“[P]rejudice to the
opposing party ... carries the greatest weight” when deciding whether to grant leave
Addendum 2
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to amend.). Therefore, we remand this issue for the district court to reconsider its
decision to deny the Caddies leave to amend the antitrust and unfair competition
claims.”
“[Antitrust experts] maintain that antitrust law has an important role to play
transactions are not in fact “free” to consumers, and that consumers ultimately “pay”
for putatively “free” goods and services with both their attention and personal data.
overpaying. That is, some observers have argued that certain “free” products and
meaning that firms in the relevant markets would pay consumers for their attention
and the use of their data if faced with sufficiently robust competition.
Other commentators have argued that firms offering zero-price products and
privacy, and that antitrust law can promote consumer welfare in zero-price markets
Addendum 3
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While many observers accordingly agree that zero-price markets are not
categorically immune from antitrust scrutiny, the optimal approach to defining the
SSNDQ TEST
Some commentators have argued that regulators should modify the SSNIP test
to account for quality-adjusted prices, creating a new methodology called the “small
these academics, decreases in the quality of “free” services (e.g., a decline in the
quality-adjusted prices of those services. Under the SSNDQ test, then, a firm
offering “free” goods or services would possess monopoly power if it had the ability
Addendum 4