App Store Competitor Files for Rehearing After 9th Circuit Sides With Apple
SaurikIT, whose appeal of a district court’s dismissal of an antitrust suit vs. Apple was rejected by the 9th U.S. Circuit Court of Appeals last month, filed a petition Thursday (docket 22-16527) for rehearing and rehearing en banc.
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U.S. District Judge Yvonne Gonzalez Rogers ruled against SaurikIT, parent of the Cydia App store, in its 2020 antitrust complaint that was based on conduct that occurred in 2008, saying SaurikIT’s pleadings didn’t allege new conduct within the four-year statute of limitations.
In its Thursday petition, SaurikIT argued the panel’s 3-1 decision in favor of Apple on statute-of-limitations grounds warrants en banc review “because it conflicts with decisions of the Supreme Court and this Court on questions of exceptional importance”: the applicable pleading standard for a complaint to defeat a statute-of-limitations affirmative defense and what constitutes an overt act under the continuing violation doctrine of antitrust laws.
The panel majority held that a plaintiff must preemptively refute a statute-of-limitations defense with detailed allegations in a complaint, and that a defendant accused of monopolizing a market by imposing and enforcing anticompetitive restraints does not commit overt acts restarting the limitations period if it imposed or enforced similar restraints before the limitations period, it said.
The panel majority “cites no case ever adopting either of these holdings” but instead “creates new and problematic law” that conflicts with “numerous precedents,” including a 1968 SCOTUS case, Hanover Shoe, Inc. v. United Shoe Machinery Corp., that Apple didn’t address in its brief and the panel doesn’t address in its opinion, said the petition.
In its opening brief, SaurikIT explained that the district court’s requirement that a defendant’s anticompetitive restraints change during the limitations period conflicts with Hanover Shoe, but Apple’s reply brief “ignored Hanover Shoe,” said the petition. Apple also failed to respond to SaurikIT’s reply, which again highlighted the conflict with Hanover Shoe, the petition said. The panel majority in the appeal decision never mentioned Hanover Shoe and only briefly referenced Samsung Electronics Co. v. Panasonic Corp., “while disregarding its holding that a ‘restatement’ of a prior anticompetitive restraint, applied to new products, is an overt act,” it said.
That's what Cydia is alleging, the petition said. “Apple imposed new tying and exclusive dealing arrangements every year within the limitations period for every new iPhone and every new or updated app,” so it could maintain a monopoly over iOS app distribution “by preventing customers from using alternative app stores” such as the Cydia store Apple put out of business in 2020, it said.
The panel majority’s holding that “these millions of new restraints were not overt acts” puts the 9th Circuit “at odds with the Supreme Court, creates an intra-Circuit split of authority, and would substantially harm enforcement of the antitrust laws by effectively immunizing continuing violations of the antitrust laws in countless cases,” said the petition.