Two Qualcomm antitrust appeals are pending with the United States Court of Appeals for the Ninth Circuit, awaiting three key decisions:
Earlier this year, the Ninth Circuit allowed Qualcomm an interlocutory appeal of the certification of a consumer class seeking $5 bilion in damages (an average of approximately $20 for an estimated 250 million consumers who purchased a smartphone in the U.S. during the relevant period) from Qualcomm on the heels of the FTC v. Qualcomm antitrust case. Judge Lucy H. Koh of the United States District Court for the Northern District of California had certified the class, but stayed the case when the Ninth Circuit allowed the interlocutory appeal. Meanwhile, Qualcomm received support in the form of an amicus brief from its long-standing friends at the Department of Justice in this context, too. Further below I'll publish the consumers' answering brief.
The strategically more important one is the appeal of the FTC's antitrust victory:
In the shortest term, Qualcomm is seeking a stay of the enforcement of the FTC's injunctive relief (antitrust remedies). The motion for a stay has been fully briefed, and most likely we'll see a decision in a matter of days. There's a bit of anxiety on Wall Street after Qualcomm missed estimates. In this climate it's possible that the QCOM stock price will be significantly affected by the ruling on the motion for an enforcement stay, though in my opinion the question of whether or not the stay is granted is unimportant compared to the future ruling on the merits.
The Ninth Circuit granted Qualcomm's motion to expedite the merits appeal. On that basis, we'd have seen the opening brief next Friday, and briefing would have been complete well ahead of the end of October. However, Qualcomm's lawyers realized that the case is so complex that they (and, quite likely, the FTC) will need a bit more time than anticipated. With the FTC's consent, Qualcomm has now asked for two more weeks (i.e., until August 23) for its opening brief. Normally, the TC's answering brief would then be due October 25 (and Qualcomm's reply brief on November 15), but should Qualcomm's opening brief be substantially in excess of the defalut word-count limitation, then the FTC would also get an extra two weeks, which Qualcomm would not oppose. Here's the consent motion (this post continues below the document):
The extension is needed not only by Qualcomm but also by persons and entities who will submit amicus curiae briefs in support of Qualcomm's appeal.
The Ninth Circuit will schedule a hearing as soon as possible after briefing is complete. For various practical reasons, it appears highly unlikely at this stage that the hearing would still be held this year. The question is probably just exactly when in the first quarter of 2020 it will take place.
In the appeal relating to the consumer class certification, the schedule also had to be extended (by a total of two months). Yesterday (Friday, August 2), the consumers' attorneys made several filings:
public testimony by Qualcomm more than a decade ago in an ITC investigation of a Broadcom complaint (there's a typo in the motion: the investigation number is 337-TA-543, not just -43), where Qualcomm (as the respondent) argued that consumers ultimately pay the bill in the form of higher prices, and
Qualcomm's 10-Q (SEC) form for the first calendar quarter of 2019, which contained information on the financial impact of the recent settlement with Apple;
a motion (which Qualcomm apparently intends to oppose) to supplement the record (or, as a fallback, for judicial notice (Scribd) of various documents from the class action in the district court, where the consumers apparently sought guidance and permission to make some improvements of the class notice with a view to the pending certification appeal; and, most importantly,
the consumers' answering brief to Qualcomm's appeal (this post continues below the document):
At this point I can only share some general observations regarding the appellate argument. Not only am I more interested in the FTC case but I'm also a lot more familiar with IP and unilateral-conduct issues than with class certifications.
I noticed that the consumers' attorneys place particular emphasis on why California law (which allows such class actions) should apply even though the vast majority of the consumers falling under the class definition made their purchases in other states, many of them in states that don't have similarly permissive rules. Apart from Qualcomm's legal domicile, the consumer class stresses the impact of Qualcomm's dealings with Apple and Intel, two California companies.
The recently-adjudicated Apple v. Pepper Supreme Court appeal (which also involved the admissibility of a class action, as opposed to the underlying App Store-related merits, which have yet to be litigated) is mentioned in footnote 11:
"The DOJ is joined by Louisiana, Ohio, Texas, Alaska, Missouri, and Oklahoma. Several of these states took a contrary position just months ago in Apple v. Pepper, advocating in favor of the repeal of Illinois Brick and the virtues of indirect purchaser suits. See Br. for Texas, Iowa, and 29 Other States as Amici Curiae in Support of Respondents, Apple Inc. v. Pepper, 139 S. Ct. 1514, No. 17-1204."
Another key amicus curiae here is the Chamber of Commerce, which (according to the consumers' brief) "argues that applying California law violates the Due Process, Full Faith and Credit, and Dormant Commerce Clauses." Similarly, the DOJ "suggests that 'federalism' prevents California from applying its antitrust laws extraterritorially." Those are constitutional arguments, and the consumers' attorneys say that no new issues can be raised on appeal, so any such constitionality arguments have--they say--been waived by not raising them earlier.
The consumers' lawyers present different theories based on which Judge Koh's class-certification decision could be upheld, but I'd have to conduct more research to form an opinion on how strong those theories are.
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