Use this button to switch between dark and light mode.

Experience a New Era in Legal Research with Free Access to Lexis+

Somers v. Apple, Inc.

Somers v. Apple, Inc.

United States Court of Appeals for the Ninth Circuit

February 11, 2013, Argued and Submitted, San Francisco, California; September 3, 2013, Filed

No. 11-16896

Opinion

 [*956]  SUMMARY1

Antitrust

The panel affirmed the district court's dismissal of a putative class action against Apple, Inc., alleging antitrust violations in connection with Apple's iPod and iTunes Music Store.

The panel held that the plaintiff waived review of the district court's order denying certification of a class of indirect purchasers of the iPod because she abandoned her underlying individual claim under § 2 of the  [**2] Sherman Act based on inflated iPod prices.

The panel also held that the plaintiff failed to allege sufficient facts to state antitrust claims for damages and injunctive relief. The plaintiff alleged that Apple encoded iTunes Music Store music files with its proprietary Digital Rights Management (DRM), called FairPlay, which rendered the music files and the iPod compatible only with each other. She alleged that through certain software updates, Apple excluded competitors and obtained a monopoly in the portable digital media player and music download markets, which inflated Apple's music prices and deflated the value of the iPod.

The panel held that a monopolization claim for damages based on the theory of diminution in iPod value was barred by Illinois Brick Co. v. Illinois, 431 U.S. 720, 97 S. Ct. 2061, 52 L. Ed. 2d 707 (1977), because the plaintiff was an indirect purchaser of the iPod. In addition, she lacked standing to bring this claim because she alleged that she purchased her iPod after Apple's purported anti-competitive conduct began. The panel concluded that because Apple used FairPlay from the beginning, when it first launched the iTunes Music Store, its use of subsequent software updates only served to maintain  [**3] the status quo at the time of purchase, and therefore could not plausibly be the basis for diminishing the value of the iPod.

The panel held that the plaintiff failed to state a monopolization claim for damages based on overcharged music downloads because she failed to plead sufficient facts to state a plausible antitrust injury. The panel concluded that the fact that Apple continuously charged the same price for its music irrespective of the absence or presence of a competitor rendered implausible the plaintiff's assertion that Apple's software updates affected music prices.

OPINION

Read The Full CaseNot a Lexis Advance subscriber? Try it out for free.

Full case includes Shepard's, Headnotes, Legal Analytics from Lex Machina, and more.

729 F.3d 953 *; 2013 U.S. App. LEXIS 18246 **; 2013-2 Trade Cas. (CCH) P78,503; 2013 WL 4712731

STACIE SOMERS, On Behalf of Herself and All Others Similarly Situated, Plaintiff-Appellant, v. APPLE, INC., Defendant-Appellee.

Prior History:  [**1] Appeal from the United States District Court for the Northern District of California. D.C. No. 5:07-cv-06507-JW. James Ware, District Judge, Presiding.

Somers v. Apple, Inc., 2011 U.S. Dist. LEXIS 77165 (N.D. Cal., June 27, 2011)

Disposition: AFFIRMED.

CORE TERMS

music, iPod, prices, purchasers, antitrust, download, software, district court, alleges, updates, indirect, overcharge, monopoly, damages, files, iTunes, supracompetitive, competitors, digital, monopolization, injunctive relief, antitrust claim, inflated, consumer, class certification, claim for damages, anti trust law, markets, songs, music store

Civil Procedure, Appeals, Standards of Review, Abuse of Discretion, Special Proceedings, Class Actions, Appellate Review, Certification of Classes, Clearly Erroneous Review, Antitrust & Trade Law, Regulated Practices, Private Actions, General Overview, De Novo Review, Defenses, Demurrers & Objections, Motions to Dismiss, Failure to State Claim, Pleadings, Complaints, Prelitigation Notices, Requirements for Complaint, Evidence, Inferences & Presumptions, Inferences, Amendment of Pleadings, Leave of Court, Responses, Motions to Dismiss, Reviewability of Lower Court Decisions, Preservation for Review, Purchasers, Indirect Purchasers, Trade Practices & Unfair Competition, State Regulation, Scope, State Regulation, Monopolies & Monopolization, Actual Monopolization, Claims, Attempts to Monopolize, Elements, Sherman Act, Sherman Act, Scope, Monopolization Offenses, Clayton Act, Remedies, Damages, Prioritizing Resources & Organization for Intellectual Property Act, Standing, Requirements, Clayton Act, Monopoly Power, Injunctions

Civil Procedure, Appeals, Standards of Review, Abuse of Discretion, Special Proceedings, Class Actions, Appellate Review, Certification of Classes, Clearly Erroneous Review, Antitrust & Trade Law, Regulated Practices, Private Actions, General Overview, De Novo Review, Defenses, Demurrers & Objections, Motions to Dismiss, Failure to State Claim, Pleadings, Complaints, Prelitigation Notices, Requirements for Complaint, Evidence, Inferences & Presumptions, Inferences, Amendment of Pleadings, Leave of Court, Responses, Motions to Dismiss, Reviewability of Lower Court Decisions, Preservation for Review, Purchasers, Indirect Purchasers, Trade Practices & Unfair Competition, State Regulation, Scope, State Regulation, Monopolies & Monopolization, Actual Monopolization, Claims, Attempts to Monopolize, Elements, Sherman Act, Sherman Act, Scope, Monopolization Offenses, Clayton Act, Remedies, Damages, Prioritizing Resources & Organization for Intellectual Property Act, Standing, Requirements, Clayton Act, Monopoly Power, Injunctions