Carlos M. Soto

Apple asked the Ninth Circuit to reconsider part of a panel decision that largely affirmed an injunction in the case being brought by Epic Games Inc. that blocked the tech giant from charging developers "prohibitive" commissions on iPhone app purchases made outside its payment systems. Apple filed a petition Monday seeking a rehearing from the panel, or the full Ninth Circuit, for a December ruling that largely affirmed an injunction mandating changes to its App Store policies, issued after the lower court found that Apple violated a previous order. The petition said that although the panel held that the injunction can only bar "prohibitive" commissions, or fees so high they prevent developers from linking to cheaper payment options, it also suggested in its ruling that Apple can only recover the direct costs of implementing linked-out purchases. "Apple respectfully seeks rehearing and, if need be, rehearing en banc on a narrow but extraordinarily important question: whether this court has imposed, and, if so, can impose, a direct-cost-only rate on linked-out purchases on the Apple App Store," Monday's petition said. "That critical question affects not just the judiciary's authority to regulate economic rates, but also an innovator's ability to earn a return on the enormous investment necessary to create and grow a novel marketplace with global reach." U.S. District Judge Yvonne Gonzalez Rogers issued the original injunction after finding that Apple violated California's unfair competition law by blocking developers from steering app users to outside payment methods. The judge later found that Apple willfully violated her order barring the antisteering rules by imposing new fees and restrictions, including a 27% commission on purchases made through a link, rather than the 30% it charges for most in-app purchases. She then issued a new injunction that sought to bar Apple from collecting any commissions on the linked purchases. The Ninth Circuit largely affirmed the new injunction but found it went too far and could only block "prohibitive" commissions that prevent developers from using the links. Apple's petition Monday said the appeals court also offered some possible courses of action for the lower court on remand, including suggesting that Apple only be able to recover the direct costs of implementing the linked-out purchases, even if a higher commission would not be prohibitive. The petition said Epic's CEO has even said the ruling only allows for a "de minims commission," which Apple said would resurrect "the zero-commission rule this court reversed." "To eliminate any doubt on this critical question, Apple asks the panel to clarify that Apple may charge a nonprohibitive commission on linked-out purchases as long as it is not prohibitive, even if such a commission exceeds the amount necessary to recover Apple's 'direct costs' for coordinating such purchases," the petition said. Apple said California law bars rate-setting to remedy unfair competition violations and said a ruling mandating a direct cost only rate would be rate-setting, "pure and simple." The petition also said limiting Apple's commissions to its cost of implementing the linked-out purchases would "grossly" undercompensate it for investments made in developing the App Store and other services it provides to developers. "It would wrongly deprive Apple of the basic economic right to recover a portion of its enormous investment in creating — and sustaining — one of the best, and most important, marketplaces ever created," the petition said. "And it would amount to a judicial takeover of the app economy — a matter far afield from the judiciary's expertise." Apple said the appeals court should also reconsider applying the injunction to all developers, citing the U.S. Supreme Court's recent ruling in litigation challenging President Donald Trump's birthright citizenship executive order that dealt with nationwide injunctions and their impact on nonparties. "Epic is the only plaintiff in this case," the petition said. "Yet the panel held that injunctive relief must apply with respect to all developers — even developers that do not wish to link out to the Epic Games store." Epic launched the high-stakes battle with Apple in 2020, along with a similar case targeting Google LLC over restrictions on apps for Android devices, after getting its popular Fortnite video game intentionally booted from the platforms for violating policies against using outside payments systems. The original order from Judge Yvonne Gonzalez Rogers followed a bench trial and the rejection of Epic's federal antitrust claims targeting Apple's broader policies that block rival stores and require use of its payment system for in-app purchases. The Supreme Court declined petitions from both Apple and Epic contesting aspects of the ruling after the Ninth Circuit largely affirmed the decision. Judge Gonzalez Rodgher later found that Apple violated her order barring the antisteering rules by imposing new fees and restrictions she said were intended to preserve the company's "anticompetitive revenue stream." Apple sought to impose a 27% commission on purchases made through a link, rather than the 30% it charges for most in-app purchases. The appeals panel found that the trial judge didn't clearly err in finding that Apple's antitrust compliance efforts had been in bad faith and didn't abuse her discretion in holding Apple in contempt for willfully violating her earlier 2023 injunction. The panel agreed with Apple, however, that a "zero-commissions rule" went too far by barring Apple from collecting a "nonprohibitive, reasonable commission or fee to ensure security and privacy for users." Epic reached a settlement in its case against Google last year, after the Ninth Circuit affirmed a California jury's 2023 finding that Google monopolized the Android app distribution market and the market for in-app billing services on Android devices. U.S. District Judge James Donato issued a three-year injunction requiring Google to open the Android operating system to Play Store rivals. The judge is now expressing serious doubts about the settlement and proposed changes to the court's order. A representative for Epic declined to comment Tuesday. Representatives for Apple did not immediately respond to a request for comment. U.S. Circuit Judges Sidney R. Thomas and Milan D. Smith Jr. and U.S. District Judge Michael J. McShane sat on the panel for the Ninth Circuit. Epic Games is represented by Gary A. Bornstein, Yonatan Even, Lauren A. Moskowitz, Michael J. Zaken and M. Brent Byars of Cravath Swaine & Moore LLP and Paul J. Riehle of Faegre Drinker Biddle & Reath LLP. Apple is represented by Gregory G. Garre, Roman Martinez, Soren J. Schmidt, Ben Harris and Kristin C. Holladay, Sarah M. Ray and Nicholas Rosellini of Latham & Watkins LLP and Mark A. Perry, Zachary D. Tripp, Joshua M. Wesneski, Cynthia E. Richman, Theodore J. Boutrous Jr. and Daniel G. Swanson of Gibson Dunn & Crutcher LLP. The case is Epic Games Inc. v. Apple Inc., case number 25-2935, in the U.S. Court of Appeals for the Ninth Circuit.

Mar 3

5 min

Gibson, Dunn & Crutcher LLP is advising IPI Partners, a digital infrastructure fund manager, in connection with the sale of its business to Blue Owl Capital Inc., a leading alternative asset manager, for a purchase price of approximately $1.0 billion. The Gibson Dunn corporate team is led by partners Shukie Grossman and Michael Piazza, and includes partners Andrew Friedman, Jesse Myers and Carlos Soto; of counsel Patrick Cowherd, Tyler Cox and David Koch-Weser; and associates Héctor González Medina, Robert Harrington, Houston Morgan, Rachel Spinka, Elise Widerlite and Jeff Xu. Team members advising on additional aspects of the transaction include: partner Brian Kniesly and associates Duncan Hamilton and Nathan Sauers (Tax); partner Attila Borsos and associates Molly Heslop and Elsie Stone (Antitrust); partner Cassandra Gaedt-Sheckter and associates Ruby Lang and Peter Moon (Data Privacy); partner Michael Collins (Employee Benefits); partner Meghan Hungate (Intellectual Property); partner Kevin Bettsteller (Investment Funds Regulatory); and partner Stuart Graiwer and associate Ryan Dosh (Real Estate). Download PDF

Oct 7

1 min

Gibson, Dunn & Crutcher LLP has elected 35 lawyers to its partnership, effective January 1, 2024. Commenting on the partnership class, Gibson Dunn Chair and Managing Partner Barbara L. Becker said: “These extraordinary lawyers have already made innumerable contributions to the firm and to our clients. They are integral parts of their offices and practices, and we are thrilled to celebrate this milestone achievement with them.” The newly elected partners are: Ryan S. Appleby (Litigation / Los Angeles) focuses his practice on complex civil litigation and trial advocacy and has helped clients navigate disputes in state and federal courts, as well as in domestic and international arbitrations. He received his law degree from the University of Southern California Gould School of Law in 2013. Melissa L. Barshop (Global Finance / Los Angeles) has experience in a broad range of financing transactions, including acquisition financings, secured and unsecured corporate credit facilities, Rule 144A transactions, private placements, convertible debt offerings, exchange offers, mezzanine transactions, and work-outs and debt restructurings. She earned her JD from Columbia Law School in 2006. Jeremy M. Christiansen (Litigation / Washington, D.C.) represents clients from a wide variety of industries in high-stakes litigation, appellate and administrative law matters. He graduated from the S.J. Quinney College of Law at The University of Utah in 2014. Lee R. Crain (Litigation / New York) represents clients in a broad array of high-stakes trial and appellate litigation in federal and state courts involving media and entertainment, tech, employment law, and the First Amendment. He graduated from the University of Michigan Law School in 2014. Elizabeth Aislinn Dooley (Litigation / San Francisco) represents clients across industries with a focus on high-stakes employment and appellate matters. She graduated from Stanford Law School in 2013. Samuel Eckman (Appellate and Constitutional Law / Los Angeles) is an appellate litigator with extensive experience representing clients in the U.S. Supreme Court and federal and state appellate courts across the country. He graduated from The University of Chicago Law School in 2013. Melissa L. Farrar (White Collar Defense and Investigations / Washington, D.C.) represents and advises multinational corporations in internal and government investigations on a wide range of issues, including compliance with the U.S. Foreign Corrupt Practices Act and other anti-corruption laws, anti-money laundering, export controls and fraud. She graduated from the George Washington University Law School in 2013. Jamie E. France (Antitrust and Competition / Washington, D.C.) represents clients in antitrust merger and non-merger investigations before the Federal Trade Commission, Department of Justice, state Attorneys General and international competition authorities, as well as in complex private and government antitrust litigation. She graduated from the University of Texas School of Law in 2011. Stéphane Frank (Antitrust and Competition / Brussels) has significant experience in merger control, abuse of dominance and cartel enforcement. He received his LL.M. from the University of Chicago Law School in 2011 and a Master of Laws from Université Paris 1 Panthéon-Sorbonne in 2010. Robert D. Giannattasio (Capital Markets / New York) has broad corporate and capital markets experience representing issuers and underwriters on a variety of public and private debt and equity offerings, as well as advising public companies on SEC and governance matters. He received his law degree from Boston College Law School in 2013. Matt Gregory (Appellate and Constitutional Law / Washington, D.C.) represents corporate clients in a wide range of appellate, administrative law, and litigation matters. He graduated from the University of Michigan Law School in 2014. Evan M. Gusler (Tax / New York) focuses on domestic and international tax planning for corporations, partnerships, REITs, and investment funds and their investors. He received his law degree from Columbia Law School in 2014. Natalie J. Hausknecht (Litigation / Denver) is a trial and consumer protection/privacy defense attorney, who handles high-priority investigations involving state Attorneys General and/or the Federal Trade Commission. She received her law degree from Yale Law School in 2015. Meghan M. Hungate (Technology Transactions / New York) represents both public and private companies and financial sponsors in connection with complex intellectual property and technology transactions issues. She received her JD from the University of Pennsylvania Law School in 2009. Andrew G.I. Kilberg (Labor and Employment / Washington, D.C.) focuses on administrative law, appellate, and litigation matters concerning labor and employment issues and has significant experience challenging federal regulations, advising on regulatory proposals, and defending agency enforcement actions and investigations. He earned his JD from the University of Virginia School of Law in 2014. Julian W. Kleinbrodt (Antitrust and Competition / San Francisco) has broad antitrust experience and represents clients in trial and appellate litigation, as well as government investigations. He received his law degree from the University of Michigan Law School in 2014. Jillian N. London (Litigation / Los Angeles) represents media, entertainment, and technology clients and has particular experience in media relations, First Amendment, breach of contract, antitrust, and class action disputes. She earned her law degree from Harvard Law School in 2013. Cynthia Chen McTernan (Litigation / Los Angeles) represents clients in high-exposure complex commercial actions, class actions, and mass actions, with a focus on consumer protection and employment matters. She earned her JD from Harvard Law School in 2013. Katherine Moran Meeks (Appellate and Constitutional Law / Washington, D.C.) litigates appeals in state and federal courts involving complex constitutional and statutory questions, with a particular focus on First Amendment matters. She graduated from the University of Pennsylvania Law School in 2012. Alex D. Meirowitz (Real Estate / New York) represents clients in a broad range of complex commercial real estate transactions, with a focus on purchase and sales, joint ventures, and borrower and lender side financings.  He earned his JD from Georgetown University Law Center in 2013. Negin Nazemi (Private Equity / Los Angeles) advises companies and private equity firms across a wide range of industries, focusing on public and private merger transactions, stock and asset deals, joint ventures, and strategic partnerships. She graduated from the University of Chicago Law School in 2011. Lissa M. Percopo (Securities Litigation / Washington, D.C.) focuses her practice on securities litigation, with an emphasis in securities class actions and shareholder derivative actions. She graduated from the George Washington University Law School in 2007. Christine Ranney (Intellectual Property / Denver) focuses on patent and appellate litigation and is knowledgeable across a range of arts and practices, including pharmaceuticals, biotechnology, consumer goods, software and telecommunications. She received her JD from New York University School of Law in 2013. Sonja Ruttmann (Mergers and Acquisitions / Munich) advises on complex domestic and international cross-border mergers and acquisitions across a wide range of industries, as well as joint ventures and carve-out scenarios, private equity, and venture capital transactions. She earned her law degree at Ludwig Maximilian University of Munich in 2005. Jennifer L. Sabin (Tax / New York) represents clients in a broad range of domestic and international tax matters, including taxable and tax-free mergers and acquisitions (public and private), spin-offs, joint ventures, financings, and restructurings. She received her law degree from the University of Pennsylvania Law School in 2011. Tina Samanta (Litigation / New York) represents financial institutions, corporations and individuals in sensitive and high-stakes securities-related investigations and litigation. She received her JD from the University of Michigan Law School in 2002. Phillip R. Sanders (Mergers and Acquisitions / New York) represents both strategic companies and private equity firms across a wide range of industries in connection with all aspects of their domestic and cross-border M&A activities. He graduated from Southern Methodist University Dedman School of Law in 2014. Carlos M. Soto (Mergers and Acquisitions / Los Angeles) advises companies, private equity firms and investment advisors on complex merger, acquisition and divestiture transactions, joint ventures and strategic investments, and partnerships. He received his JD from the University of Chicago Law School in 2009. James O. Springer (Mergers and Acquisitions / Washington, D.C.) advises public and private companies, private equity firms, boards of directors, and special committees in connection with a variety of complex transactional matters. He earned his law degree from the George Washington University Law School in 2014. Andrew Steele (Mergers and Acquisitions / Abu Dhabi and Dubai) advises on public and private mergers, acquisitions and disposals, joint ventures, private equity and sovereign wealth fund investments, securities issues, and related regulatory advice. He received his LL.B from the University of Bristol Law School in 2003. Ryan C. Stewart (Labor and Employment / Washington, D.C.) represents clients in a wide range of employment matters, including those involving wage-hour and discrimination laws, whistleblower protection statutes, and non-competition agreements. He received his law degree from Harvard Law School in 2014. Connor S. Sullivan (Media, Entertainment and Technology / New York) represents technology and media companies in a broad range of complex, high-stakes litigation in state and federal courts and has significant experience in First Amendment matters. He graduated from Yale Law School in 2013. Christopher T. Timura (International Trade / Washington, D.C.) helps clients solve legal problems that arise at the intersection of national security, foreign policy, and international trade and develop strategies for implementing ESG social commitments in their international supply chains. He received his JD from the University of Michigan Law School in 2003. Chris W. Trester (Mergers and Acquisitions / Palo Alto) focuses his corporate practice on mergers and acquisitions and emerging companies, with a specific emphasis on the tech, entertainment, and life science industries. He received his JD from the University of California College of the Law, San Francisco in 2013. Chris Whittaker (Antitrust and Competition / Orange County) represents clients in a wide range of high-stakes, complex commercial cases, with an emphasis in antitrust and competition, technology, intellectual property, and employment matters. He received his law degree from the Brigham Young University J. Reuben Clark Law School in 2011. Download PDF

Nov 13

7 min

Federal Trade Commission staffers got more time Tuesday for settlement talks with OptumRx and Caremark that could end the agency's case accusing the pharmacy benefit managers of inflating insulin prices, with staffers citing considerable progress in the weeks since inking a deal with Express Scripts. In a brief order Tuesday, the commission granted a joint request from staffers and OptumRx and Caremark to extend the pause put in place to allow settlement talks. The parties had sought more time Monday, seeking the extension for all deadlines, including for the summer trial and a hearing that had been set for March 5. "Complaint counsel and respondents are making significant progress in settlement discussions. This extension of the stay will provide time for the parties to further advance these discussions and determine whether there is an opportunity to resolve this proceeding," the parties said in their joint filing. Under Tuesday's order, the pause in the administrative case will run through March 24, pushing back oral arguments on the PBMs' motion to dismiss the claims to April 17 and the evidentiary hearing that had been set for a July 30 kickoff to Aug. 20. The FTC declined to comment, and OptumRx did not immediately respond Tuesday to a press inquiry. David Whitrap, CVS Health's vice president of communications, declined to comment other than to reiterate that the talks "would enable CVS Caremark to avoid prolonged litigation and instead focus on its primary job of making prescription drugs more affordable in the United States." The commission first hit pause in January as enforcers mulled a deal with Express Scripts, which was finalized in early February. Staffers sought a further extension Feb. 9, which the commission promptly granted, to facilitate talks with the remaining PBMs. That pause was set to expire Tuesday. The FTC accuses the country's three largest pharmacy benefit managers of preventing patients from accessing lower-priced insulin drugs by using rebate schemes that prioritize medications with high list prices. Pharmacy benefit managers negotiate prescription drug prices with pharmaceutical manufacturers for insurers and other benefit plans. The companies named in the case are all owned by larger healthcare conglomerates — Express Scripts by Cigna Group, OptumRx by UnitedHealth Group Inc. and Caremark by CVS, which also owns Aetna. The commission said Feb. 4 that it had reached a "landmark settlement" with Express Scripts after it agreed to make major changes to its drug formulary practices. The FTC billed the changes as promising "up to $7 billion" in patient savings for out-of-pocket drug costs over the course of 10 years. The companies have consistently argued that manufacturers alone set pharmaceutical prices and that benefit managers work to lower prices for insurers and others who pay for healthcare. The commission's deal with Express Scripts bars the company from preferencing drugs with high wholesale costs in its formularies. It also requires out-of-pocket expenses to be based on a drug's net cost, rather than its artificially inflated list price. Express Scripts agreed to offer plan sponsors ways to transition off of rebate guarantees as well, and to uncouple the compensation drugmakers pay to Express Scripts from drug list prices. The company also agreed to provide covered access to the new direct-to-consumer platform TrumpRx and to bring its group purchasing organization, Ascent, back from Switzerland to the U.S. The PBMs have their own case pending in federal court challenging the FTC's in-house administrative process on constitutional grounds. Like other similar cases, the companies allege the commission's in-house proceedings violate due process rights and their right to have the claims decided by a federal judge. The companies urged an Eighth Circuit panel in November to reverse a lower court's refusal to issue a preliminary injunction that would pause the administrative case while the constitutional challenge plays out. A ruling remains pending. Express Scripts also has a separate case accusing the FTC of defamation over an interim agency report on the PBM industry that was released ahead of the enforcement action. That case has been put on hold pending the outcome of the appeal in the constitutional challenge. The FTC is represented in-house by Bradley S. Albert, Lauren Peay and Rebecca L. Egeland. Caremark and Zinc Health Services are represented by Enu Mainigi, Craig D. Singer, Jonathan B. Pitt, Kathryn E. Hoover and Steven M. Pyser of Williams & Connolly LLP and Mike Cowie, Gregory P. Luib and Rani A. Habash of Dechert LLP. Express Scripts, Evernorth Health Services, Medco Health Services and Ascent Health Services are represented by Daniel J. Howley, Charles F. Rule, Margot Campbell, Derek W. Moore and Justin T. Heipp of Rule Garza Howley LLP and Jennifer Milici, Perry A. Lange and John W. O'Toole of WilmerHale. OptumRx and Emisar Pharma Services are represented by Ryan S. Appleby, Samuel Liversidge, Sophia A. Hansell, Kristen C. Limarzi, Michael J. Perry and Matthew C. Parrott of Gibson Dunn & Crutcher LLP. The case is In the Matter of Caremark Rx et al., docket number 9437, before the Federal Trade Commission.

Mar 3

4 min

Federal Trade Commission staffers got more time Tuesday for settlement talks with OptumRx and Caremark that could end the agency's case accusing the pharmacy benefit managers of inflating insulin prices, with staffers citing considerable progress in the weeks since inking a deal with Express Scripts. In a brief order Tuesday, the commission granted a joint request from staffers and OptumRx and Caremark to extend the pause put in place to allow settlement talks. The parties had sought more time Monday, seeking the extension for all deadlines, including for the summer trial and a hearing that had been set for March 5. "Complaint counsel and respondents are making significant progress in settlement discussions. This extension of the stay will provide time for the parties to further advance these discussions and determine whether there is an opportunity to resolve this proceeding," the parties said in their joint filing. Under Tuesday's order, the pause in the administrative case will run through March 24, pushing back oral arguments on the PBMs' motion to dismiss the claims to April 17 and the evidentiary hearing that had been set for a July 30 kickoff to Aug. 20. The FTC declined to comment, and OptumRx did not immediately respond Tuesday to a press inquiry. David Whitrap, CVS Health's vice president of communications, declined to comment other than to reiterate that the talks "would enable CVS Caremark to avoid prolonged litigation and instead focus on its primary job of making prescription drugs more affordable in the United States." The commission first hit pause in January as enforcers mulled a deal with Express Scripts, which was finalized in early February. Staffers sought a further extension Feb. 9, which the commission promptly granted, to facilitate talks with the remaining PBMs. That pause was set to expire Tuesday. The FTC accuses the country's three largest pharmacy benefit managers of preventing patients from accessing lower-priced insulin drugs by using rebate schemes that prioritize medications with high list prices. Pharmacy benefit managers negotiate prescription drug prices with pharmaceutical manufacturers for insurers and other benefit plans. The companies named in the case are all owned by larger healthcare conglomerates — Express Scripts by Cigna Group, OptumRx by UnitedHealth Group Inc. and Caremark by CVS, which also owns Aetna. The commission said Feb. 4 that it had reached a "landmark settlement" with Express Scripts after it agreed to make major changes to its drug formulary practices. The FTC billed the changes as promising "up to $7 billion" in patient savings for out-of-pocket drug costs over the course of 10 years. The companies have consistently argued that manufacturers alone set pharmaceutical prices and that benefit managers work to lower prices for insurers and others who pay for healthcare. The commission's deal with Express Scripts bars the company from preferencing drugs with high wholesale costs in its formularies. It also requires out-of-pocket expenses to be based on a drug's net cost, rather than its artificially inflated list price. Express Scripts agreed to offer plan sponsors ways to transition off of rebate guarantees as well, and to uncouple the compensation drugmakers pay to Express Scripts from drug list prices. The company also agreed to provide covered access to the new direct-to-consumer platform TrumpRx and to bring its group purchasing organization, Ascent, back from Switzerland to the U.S. The PBMs have their own case pending in federal court challenging the FTC's in-house administrative process on constitutional grounds. Like other similar cases, the companies allege the commission's in-house proceedings violate due process rights and their right to have the claims decided by a federal judge. The companies urged an Eighth Circuit panel in November to reverse a lower court's refusal to issue a preliminary injunction that would pause the administrative case while the constitutional challenge plays out. A ruling remains pending. Express Scripts also has a separate case accusing the FTC of defamation over an interim agency report on the PBM industry that was released ahead of the enforcement action. That case has been put on hold pending the outcome of the appeal in the constitutional challenge. The FTC is represented in-house by Bradley S. Albert, Lauren Peay and Rebecca L. Egeland. Caremark and Zinc Health Services are represented by Enu Mainigi, Craig D. Singer, Jonathan B. Pitt, Kathryn E. Hoover and Steven M. Pyser of Williams & Connolly LLP and Mike Cowie, Gregory P. Luib and Rani A. Habash of Dechert LLP. Express Scripts, Evernorth Health Services, Medco Health Services and Ascent Health Services are represented by Daniel J. Howley, Charles F. Rule, Margot Campbell, Derek W. Moore and Justin T. Heipp of Rule Garza Howley LLP and Jennifer Milici, Perry A. Lange and John W. O'Toole of WilmerHale. OptumRx and Emisar Pharma Services are represented by Ryan S. Appleby, Samuel Liversidge, Sophia A. Hansell, Kristen C. Limarzi, Michael J. Perry and Matthew C. Parrott of Gibson Dunn & Crutcher LLP. The case is In the Matter of Caremark Rx et al., docket number 9437, before the Federal Trade Commission.

Mar 3

4 min