{"ID":63000,"name":"Apple v. Pepper","href":"https:\/\/api.oyez.org\/cases\/2018\/17-204","view_count":0,"docket_number":"17-204","additional_docket_numbers":null,"manner_of_jurisdiction":"Writ of \u003Ci\u003Ecertiorari\u003C\/i\u003E","first_party":"Apple, Inc.","second_party":"Robert Pepper, et al.","timeline":[{"event":"Granted","dates":[1529298000],"href":"https:\/\/api.oyez.org\/case_timeline\/case_timeline\/54297"},{"event":"Argued","dates":[1543212000],"href":"https:\/\/api.oyez.org\/case_timeline\/case_timeline\/54378"},{"event":"Decided","dates":[1557723600],"href":"https:\/\/api.oyez.org\/case_timeline\/case_timeline\/54509"}],"lower_court":{"ID":5,"name":"United States Court of Appeals for the Ninth Circuit","href":"https:\/\/api.oyez.org\/taxonomy\/term\/5"},"facts_of_the_case":"\u003Cp\u003EThis lawsuit arose out of Apple\u2019s handling of the sale of apps for its iPhone devices. Apple released the iPhone in 2007, and from the outset, it has been a \u201cclosed system,\u201d meaning that Apple controls which apps can be loaded onto an iPhone, which it does via the \u201cApp Store.\u201d Although Apple develops some of the apps sold in the App Store, most are developed by third parties. For every App Store sale made by a third-party developer, Apple receives 30% of the sale price.\u003C\/p\u003E\n\u003Cp\u003EIn 2011, four named plaintiffs filed a putative antitrust class action complaint against Apple, alleging monopolization and attempted monopolization of the iPhone app market. The complaint was dismissed on technical grounds, as were several subsequent attempts at similar lawsuits by both the same and other plaintiffs. In September 2013, a set of plaintiffs included in their allegations sufficient facts for the lawsuit to move forward. Among these facts was the key allegation that each plaintiff had purchased iPhone apps from the App Store, and that these transactions involved Apple collecting the entire purchase price and paying the developers after the sale.\u003C\/p\u003E\n\u003Cp\u003EApple filed yet another motion to dismiss the lawsuit, contending that the plaintiffs lacked statutory standing to sue under the US Supreme Court\u2019s precedent in \u003Ca href=\u0022https:\/\/www.oyez.org\/cases\/1976\/76-404\u0022\u003E\u003Cem\u003EIllinois Brick Co. v. Illinois\u003C\/em\u003E, 431 U.S. 720 (1977)\u003C\/a\u003E. Under \u003Cem\u003EIllinois Brick\u003C\/em\u003E, \u201conly the overcharged direct purchaser, and not others in the chain of manufacture or distribution\u201d may bring a lawsuit for antitrust violations. If the plaintiffs are considered to have purchased their iPhone apps directly from the app developers, then they cannot sue Apple. However, if they are considered to have bought the apps from Apple, then they may sue Apple.\u003C\/p\u003E\n\u003Cp\u003EThe district court found that the plaintiffs lacked standing to sue under \u003Cem\u003EIllinois Brick\u003C\/em\u003E and dismissed the case with prejudice. On appeal, the Ninth Circuit reviewed the district court\u2019s decision de novo and found that, contrary to a ruling on the same issue by the US Court of Appeals for the Eighth Circuit, the plaintiffs are direct purchasers from Apple within the meaning of \u003Cem\u003EIllinois Brick\u003C\/em\u003E and thus have standing.\u003C\/p\u003E\n","question":"\u003Cp\u003EMay consumers sue for antitrust damages against anyone who delivers goods to them, even where they seek damages based on prices set by third parties who would be the immediate victims of the alleged offense?\u003C\/p\u003E\n","conclusion":"\u003Cp\u003EConsumers who purchase goods or services at higher-than-competitive prices from an allegedly monopolistic retailer may sue the retailer under antitrust law. In a 5-4 opinion authored by Justice Brett Kavanaugh, the Court held that the plaintiff iPhone owners in this case, who purchased apps through Apple\u2019s App Store, are direct purchasers under the Court\u2019s precedential case \u003Ca href=\u0022https:\/\/www.oyez.org\/cases\/1976\/76-404\u0022\u003E\u003Cem\u003EIllinois Brick Co. v. Illinois\u003C\/em\u003E, 431 U.S. 720 (1977)\u003C\/a\u003E, and thus may sue Apple.\u003C\/p\u003E\n\u003Cp\u003ESection 4 of the Clayton Act, 15 U.S.C. \u00a7 15(a), provides that \u201cany person who shall be injured in his business or property by reason of anything forbidden in the antitrust laws may sue.\u201d The Court has previously interpreted this provision to mean that \u201cimmediate buyers\u201d from the alleged antitrust violators may sue the antitrust violators, but \u201cindirect purchasers\u201d (those who are two or more steps removed from the violator in a distribution chain) may not. The plaintiff iPhone owners in this case are not so distantly removed from Apple to foreclose a lawsuit; the Court found the absence of an intermediary between the consumers and Apple to be dispositive.\u003C\/p\u003E\n\u003Cp\u003EThis interpretation is consistent not only with the statutory text and the Court\u2019s precedent, but also the policy behind antitrust law. To hold otherwise would \u201cprovide a roadmap for monopolistic retailers\u201d to evade antitrust law.\u003C\/p\u003E\n\u003Cp\u003EJustice Neil Gorsuch filed a dissenting opinion, in which Chief Justice John Roberts and Justices Clarence Thomas and Samuel Alito joined. The dissent argues that \u003Cem\u003EIllinois Brick\u003C\/em\u003E broadly prohibits \u201cpass on\u201d theories of damages for antitrust violations, rather than the narrower reading based in contract embraced by the majority. As such, the dissent would find that the suit by the plaintiff consumers here is precisely the type of lawsuit proscribed in \u003Cem\u003EIllinois Brick\u003C\/em\u003E.\u003C\/p\u003E\n","advocates":[{"advocate":{"ID":63056,"name":"Daniel M. Wall","href":"https:\/\/api.oyez.org\/people\/daniel_m_wall","view_count":0,"last_name":"Wall","roles":null,"thumbnail":null,"length_of_service":0,"identifier":"daniel_m_wall"},"advocate_description":"for the Petitioner","href":"https:\/\/api.oyez.org\/case_advocate\/case_advocate\/22593"},{"advocate":{"ID":37093,"name":"Noel J. Francisco","href":"https:\/\/api.oyez.org\/people\/noel_j_francisco","view_count":0,"last_name":"Francisco","roles":null,"thumbnail":null,"length_of_service":0,"identifier":"noel_j_francisco"},"advocate_description":"as amicus curiae, supporting the Petitioner","href":"https:\/\/api.oyez.org\/case_advocate\/case_advocate\/22594"},{"advocate":{"ID":20869,"name":"David C. 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