Southern District of New York Judge Denise L. Cote stayed multidistrict litigation against HarperCollins Publishers LLC and Hachette Book Group Inc. after the two publishers agreed to settle with the 15 states and Puerto Rico that had filed antitrust claims similar to those filed by the United States Department of Justice, Antitrust Division, against Apple and other publishers. Using their parens patriae power, the states may seek damages to their citizens, a remedy not available to the federal enforcement authorities.
The case alleges that the publishers switched from the traditional book resale model, in which publishers sell books outright to retailers, to an agency model, in which the publishers set the retail price for the e-books, including a retailer commission.
Three of the publishers — Hachette, HarperCollins and Simon & Schuster Inc. — quickly agreed to settle the DOJ’s claims, while Apple and two others are vowing to litigate.
The stay of the state cases will last until early July and is intended to give the parties time to work out the details of the settlement. These settlements, because they can include damages, may trump private class action litigation except for library and small business plaintiffs not covered by the states’ parens patriae authority.