In a response made public today, Apple attorneys are disputing an expert report by Stanford economist Roger Noll that put potential damages in its e-book price-fixing case at over $307 million.
In a letter to the court, Apple argues that it should get more than one seven hour deposition in which to question Noll’s complex findings. “Plaintiffs have submitted a declaration from economist Dr. Roger Noll, purporting to calculate damages of $307.8 million ($923.4 after trebling) for claimed overcharges paid by e-book purchasers,” Apple attorneys write, adding that Noll’s calculation is “more than 40% higher (by almost $90 million or $270 million post-trebling) than the $218.9 million damage estimate endorsed by Plaintiffs just three months ago.”
The dispute over a damage figure comes as the consumer class seeks class certification from the court. As such, Apple contends that “an adequate opportunity to depose Dr. Noll is critical to Apple’s ability to defend itself against Plaintiffs' inflated damage claims,” noting that Noll’s model to calculate damages involves “complex econometric techniques applied to a massive database.”
Constructed using purchase records and some estimates, Noll's report is based on a data set of 1,348,121 e-book titles “purchased at least once” after April 1, 2010 through May, 21, 2012, of which 83,463 titles were sold by the five Publisher Defendants. Under his model, Noll calculated damages of $307,808,414, on total combined revenue of $1,548,223,900 for the five settling publishers—an average added margin due to “the effect of collusion” of about 19.9%.
The publishers of course have settled the charges against them, and have paid over $166 million, based on an earlier estimate that, as Apple attorneys state, put total damages at around $218 million. The final two settlements, Macmillan and Penguin, are set for a final hearing on December 6, after which payouts to consumers could begin.
Following Judge Denise Cote’s July 10 verdict finding Apple liable for its role in a scheme to fix e-book prices, Apple and the states and consumer class are still on track for a damages trial in May of 2014, with Apple attorneys fighting hard on the degree to which liability in its federal price-fixing case translates to liability for money damages in its state and consumer case, and also fighting class certification.
Apple has also appealed Judge Cote’s verdict, and the proceedings could at some point be stayed until the appeal is decided.