In re Apple iPhone Antitrust Litigation

Plaintiffs who purchased applications from Apple’s App Store are direct purchasers from Apple and can sue it for monopolizing the market for distribution of applications that run on the iPhone.  Following the Third and Tenth Circuits and declining to follow contrary Seventh Circuit precedent, this decision holds that Rule 12(h)(2) generally bars a defendant from raising on a later motion to dismiss an argument that could have been but was not raised on an earlier motion to dismiss.  The unraised defense, however, may be alleged in the answer, may be the basis for a motion for judgment on the pleadings under Rule 12(c) and may be raised at trial.  Because all of those three alternatives generally result in greater expense and wasted time and effort, a district court may choose in its discretion to hear the unraised defense on the later motion to dismiss despite Rule 12(h)(2), and on review any error in doing so is likely to be deemed harmless error, as it was in this case.  Following Delaware Valley Surgical Supply, Inc. v. Johnson & Johnson (9th Cir. 2008) 523 F.3d 1116, this decision holds that plaintiffs who purchased applications from Apple’s App Store are direct purchasers from Apple and can sue it for monopolizing the market for distribution of applications that run on the iPhone.  The application developers are manufacturers and Apple is the distributor of their products.  As plaintiffs bought directly from Apple, they can sue it for the alleged monopolization of its distribution business.

Ninth Circuit Court of Appeals (Fletcher, W., J.); January 12, 2017; 2017 WL 117153

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