Apple at odds with e-book antitrust monitor over $70K per week fee, 'unreasonable' demands
Apple this week filed an official complaint with a U.S. district court, saying the antitrust compliance monitor tasked with keeping tabs on the company's dealings is requiring excessive pay, over $138,000 for the past two weeks, and is making unreasonable requests outside of his mandated jurisdiction.
In July, Apple lost its case against the federal government over e-book price fixing in the iBookstore and was subsequently handed a punishment that was, at the time, considered fairly lenient. Apple is appealing the ruling.
The court restricted Apple from entering unfavorable agreements with book publishers for at least five years, called for staggered iBookstore negotiations and assigned a "compliance monitor" to protect against further price-fixing. Now Apple claims the monitor, former Department of Justice Inspector General and federal prosecutor Michael Bromwich, is overstepping his bounds with a gratuitous fee, which comes out of the company's pockets, and "inappropriate" requests in the name of fact finding.
In a strongly-worded complaint filed with the U.S. District Court for the Southern District of New York earlier this week, Apple lawyer Theodore J. Boutrous Jr. outlines Bromwich's recent activities since he was assigned as a monitor in October.
As for Bromwich's pay structure, Apple said it is unconstitutional for the company to be investigated by "an individual whose personal financial interest is for as broad and lengthy an investigation as possible."
So far, pay stands at $138,432.40 for two weeks of work, which will go to Bromwich and his four-member legal team. Apple points out that the amount accrued is nearly 75 percent of a yearly judicial salary. The monitor has also failed to outline a budget, saying only that he needs to "generate profit."
For his part, Bromwich said he has seen a "surprising and disappointing lack of cooperation" on the part of Apple. In a letter to the company's board of directors, he noted Apple did not provide interviews despite being requested in advance due to unavailability of its senior executives. Bromwich explained the meetings were intended to get a better understanding of the company's compliance framework.
Additionally, Bromwich in a letter to Apple's lawyers explained the required fees are acceptable because his group is not a law firm and thus does not practice law. In comparison to consulting firms, the rates are at the low end. Further, because he is an outside compliance monitor and not Apple counsel, the submission of a budget is not required.
It appears Apple and Bromwich have gotten off to a rocky start, but this is just the beginning of what will likely be a long-term relationship. Unless Apple quickly and successfully concludes its appeal of the court ruling, Bromwich will be on the job for the next two years.
In July, Apple lost its case against the federal government over e-book price fixing in the iBookstore and was subsequently handed a punishment that was, at the time, considered fairly lenient. Apple is appealing the ruling.
The court restricted Apple from entering unfavorable agreements with book publishers for at least five years, called for staggered iBookstore negotiations and assigned a "compliance monitor" to protect against further price-fixing. Now Apple claims the monitor, former Department of Justice Inspector General and federal prosecutor Michael Bromwich, is overstepping his bounds with a gratuitous fee, which comes out of the company's pockets, and "inappropriate" requests in the name of fact finding.
In a strongly-worded complaint filed with the U.S. District Court for the Southern District of New York earlier this week, Apple lawyer Theodore J. Boutrous Jr. outlines Bromwich's recent activities since he was assigned as a monitor in October.
Boutrous is referring to an order from presiding Judge Denise Cote that extends further power to Bromwich by allowing him to interview Apple executives and personnel without the presence of a lawyer. While the nature of the monitor's proposed meetings is unknown, he demanded time with "the very top executives" of the company, including those who do not in any way deal with the daily operations of the iBookstore. One such ask was SVP of Design Jony Ive.Michael Bromwich is already operating in an unfettered and inappropriate manner, outside the scope of the Final Judgment, admittedly based on secret communications with the Court, and trampling Apple's rights; the Court's proposal out of the blue to grant him even greater powers as monitor would only make things worse. Since his appointment, Mr. Bromwich has run far afield from his mandate and informed Apple that his fee structure is designed to "generate profits" for himself and the law firm he has retained to make up for the antitrust experience he lacks.
As for Bromwich's pay structure, Apple said it is unconstitutional for the company to be investigated by "an individual whose personal financial interest is for as broad and lengthy an investigation as possible."
Bromwich and his team have accrued pay of $138,432 over the past two weeks, almost 75% of what a federal judge makes in a year.
So far, pay stands at $138,432.40 for two weeks of work, which will go to Bromwich and his four-member legal team. Apple points out that the amount accrued is nearly 75 percent of a yearly judicial salary. The monitor has also failed to outline a budget, saying only that he needs to "generate profit."
For his part, Bromwich said he has seen a "surprising and disappointing lack of cooperation" on the part of Apple. In a letter to the company's board of directors, he noted Apple did not provide interviews despite being requested in advance due to unavailability of its senior executives. Bromwich explained the meetings were intended to get a better understanding of the company's compliance framework.
Additionally, Bromwich in a letter to Apple's lawyers explained the required fees are acceptable because his group is not a law firm and thus does not practice law. In comparison to consulting firms, the rates are at the low end. Further, because he is an outside compliance monitor and not Apple counsel, the submission of a budget is not required.
It appears Apple and Bromwich have gotten off to a rocky start, but this is just the beginning of what will likely be a long-term relationship. Unless Apple quickly and successfully concludes its appeal of the court ruling, Bromwich will be on the job for the next two years.
Comments
Just another scumbag lawyer...
"$138,432 over the past two weeks... the submission of a budget is not required."
Yup, this guys is just making shit up as he goes. I would not be surprised he has ties to the judge.
Apple needs to push for a quicker appeal and when they win, I'm looking at Apple suing this jerk for everything he has. One of these days someone will also go after the legal system in this country, exposing all the payments these judges get on the side. Then they'll need to go after Amazon and expose all their anti-competitive operations and discover how much they are paying off the government and judges.
Of course Apple could just tell the government to stick it and move all their operations off-shore, not sell anything to Americans and see how long these judges and government agencies last before citizens vote them out of office.
Before people jump all over the lawyer for his fee, bear in mind that's split between six people. That's an hourly rate of under $200 per person, which makes it 12.5% of what a judge makes in a year. Lawyers are a much more highly paid profession than judges - this sort of fee really isn't that bad compared to what it would cost Apple to hire six separate lawyers.
Before people jump all over the lawyer for his fee, bear in mind that's split between six people. That's an hourly rate of under $200 per person - which is frankly not that bad for high-end lawyers.
I don't care. Did the judge assign the monitoring to Bromwich or to his bogus company? I believe it was only to him. How much did Apple make on this supposed violation? From the look of his bill, Bromwich will surpass any profits Apple made in short order.
I don't care if it's considered "reasonable." This entire episode is a government-sanctioned shakedown. I'd be in favor of Apple moving their data centers outside the US...Canada and Mexico, anyone?...to get beyond the clutches of our insane, out of control politicians.
I don't care. Did the judge assign the monitoring to Bromwich or to his bogus company? I believe it was only to him. How much did Apple make on this supposed violation? From the look of his bill, Bromwich will surpass any profits Apple made in short order.
If Apple cooperated with him as much as possible, their bill would be all the smaller. Reading the actual letters here involved here, it sounds like Apple have made it very hard for him to do his job - declining interviews at times without giving any reasons, failing to provide documents he asks for, and in several cases ignoring his queries entirely. Whether that's intentional or just due to Apple's corporate culture in some way, it's still a problem that's going to cost Apple a boatload of cash. If they can't manage an interview with a particular person on a particular date, they *need* to be explaining why to the court-appointed monitor. Ignoring him will only end in disaster and bigger charges.
I'd actually recommend reading the documents involved (http://allthingsd.com/20131129/apple-doesnt-want-to-pay-the-feds-e-book-lawyer-70000-a-week/ ) - they're very interesting on both sides.
Apple is busy. Tim Cook and Jony Ive are in meetings, designing new products, etc. They're not the guy's slave, the Judge never said they had to submit to him.
I agree 100%, although id miss apple, they should stop ALL sales to Americans for about 1 month and see what happens. They should also make OS X and iOS cease to work in America too, that way, we could get so mad and vote all these stinking politicians out! I AM SICK OF THIS GOVERNMENT. All I've got to say is Obama better intervene and support Apple, otherwise, I'll be mad. Agreed too. And to be honest, I doubt Apple really did any of that. They are giving Authors the choice to pick their price. And you're telling me Amazon hasn't done any of this? Think again, I bet they have.
To learn that Bromwich had a legal team assisting him raised a lot of red flags as well. Isn't Apple fighting a patent infringement case now with a lawyer on one of its legal teams? I can see something like this happening with Bromwich.
$138 thousand-plus for two weeks worth of work! In two years this guy would earn north of $13 million!! Talk about being opportunistically greedy.
I am researching Bromwich and his company now and will report my findings. This whole case and punishment wreaks of pockets being lined with payoff money.
Six people working 80 hrs each(2 weeks) is 480 man hours. I'd like to see the 480 hours worth of work done here. Aside from that your numbers don't add up at all. 480 hours times $200 an hour is $96,000.
Before people jump all over the lawyer for his fee, bear in mind that's split between six people. That's an hourly rate of under $200 per person, which makes it 12.5% of what a judge makes in a year. Lawyers are a much more highly paid profession than judges - this sort of fee really isn't that bad compared to what it would cost Apple to hire six separate lawyers.
Actually, no it's not. Read the submission to the court. This scam-artist plainly states he's billing for 1,100.00$ per hour for himself, and another 1,025.00$ per hour for his support staff, which he's hired from another law firm because he admits he has no antitrust experience (I'm not clear on whether that's 1025 per person, or 1025 for all five, but let's give him the benefit of the doubt). Then on top of that, he's claiming he deserves another 15% as an "administrative charge" on all the billed fees. He's also flatly refusing to justify any of those fees, only claiming he needs to "generate a profit" for himself and his firm.
So, that's 2,125.00$ plus 15% for a total of 2,443.75$ per hour he's billing to do his "job".
At the very best, that's at least ~407$ per hour per person (a much more than reasonable fee), if and only of the fee is being split evenly between six practicing lawyers (and none of them are just paralegals or administrative assistants, which would command much lower billing rates). But that's not the case, as he states outright his personal fee is 1100$+15% (1265.00$) per hour. And he has to hire the additional outside help in the first place because he admits he doesn't have the experience to do the job himself (which begs the question of how he was appointed to this role at all - you gotta' raise an eyebrow to that, no?).
Doing the math, at ~138K for two weeks, he's actually only billing for about 56-ish hours of time for each of the six persons in his 'team' - but the final kicker is (again, according to the court documents), because the court-appointed three month window for establishing a new "anti-trust compliance program" hasn't closed, there's nothing he's even supposed to be doing yet in support of the court order (despite his apparent witch-hunt aspirations). So really, he shouldn't be billing for anything at all yet, never mind for 336 man-hours of questionable "work".
(Correct me if I did any of the math wrong.
)
Before people jump all over the lawyer for his fee, bear in mind that's split between six people. That's an hourly rate of under $200 per person, which makes it 12.5% of what a judge makes in a year. Lawyers are a much more highly paid profession than judges - this sort of fee really isn't that bad compared to what it would cost Apple to hire six separate lawyers.
No, attorney "billable hours" are not split among a team. Each person who makes up an hour of work (heavily padded), bills for an hour. In this case, $1,100 per hour plus "handing." This is pure horseshit.
If Apple cooperated with him as much as possible, their bill would be all the smaller. Reading the actual letters here involved here, it sounds like Apple have made it very hard for him to do his job
You mean his job which is to start reviewing documents and/or interviewing Apple personnel on 14 January?
[quote]declining interviews at times without giving any reasons,[/quote]
No interviews were declined. Apple simple stated that they could not arrange the interviews on such short notice and at the time he requested. ("Mr. Bromwich also again sought to interview the new Antitrust Compliance Officer, even though the day of the interviews was literally her first day on the job")
[quote] If they can't manage an interview with a particular person on a particular date, they *need* to be explaining why to the court-appointed monitor. [/quote]
They diid explain to him why they couldn't. But he didn't care.
This is what the filing is all about.
He seems to think he can do anything he wants, charge Apple any fee he wants he wants and discuss anything with anyone at Apple and with the judge, with no counsel available and no record of these discussions.
Before people jump all over the lawyer for his fee, bear in mind that's split between six people. That's an hourly rate of under $200 per person
No it's not.
His hourly rate is $1100 and his "legal team's" rate is is $1025. All this is per person per hour..
[quote], which makes it 12.5% of what a judge makes in a year. Lawyers are a much more highly paid profession than judges - this sort of fee really isn't that bad compared to what it would cost Apple to hire six separate lawyers.[/quote]
But he is not acting as a private lawyer. He is acting as an independent auditor/monitor for the court (i.e. a public servant)
Before people jump all over the lawyer for his fee, bear in mind that's split between six people. That's an hourly rate of under $200 per person, which makes it 12.5% of what a judge makes in a year. Lawyers are a much more highly paid profession than judges - this sort of fee really isn't that bad compared to what it would cost Apple to hire six separate lawyers.
Oh, only $200.00 an hour! That level of pay for that kind of work is so unreasonably undervalued! How can they possibly manage to live on $200 an hour?! Must be because of all the workplace insurance needed to coverage workplace injuries like paper cuts. At those paltry rates and sweatshop-like working conditions, they should strike!
That makes it so much different considering people are working harder, for much much much less.
This news is an absolute obscenity. People who do real work in crap jobs with crap bosses get squat. But those at the top like the judge? Well, she just throws highly-overpaid work to friends that look just like her and run in the same elevated hoity-toity circles to save each other from ECONOMIC REALITY the rest of us live in.
Sickest part? We, the consumers end up paying for these parasites, both in terms of taxes as well as Apple passing the costs of the "monitor" eventually to us when at the time of purchase.
FFS, the world is a sh*thole filled with idiots with degrees thinking they're actually intelligent when all they are is an explosion of parasites...
Only $200 an hour... ffs
Originally Posted by GoodGrief
he's actually only billing for about 56-ish hours of time for each of the six persons in his 'team' - but the final kicker is (again, according to the court documents), because the court-appointed three month window for establishing a new "anti-trust compliance program" hasn't closed, there's nothing he's even supposed to be doing yet in support of the court order (despite his apparent witch-hunt aspirations). So really, he shouldn't be billing for anything at all yet, never mind for 336 man-hours of questionable "work".
(Correct me if I did any of the math wrong.
)
I guarantee you those "hours" are inflated by a factor of at least 2.