Somers v. Apple, Inc.

A plaintiff voluntarily abandons and thus waives a claim on appeal if she fails to raise an issue in response to defendant’s motion to dismiss; a suit for antitrust is barred if the plaintiff is an indirect purchaser; there must be an “antitrust injury” for a suit alleging antitrust.

Stacie Somers brought a suit against Apple, Inc. alleging state and federal antitrust claims. Somers sought to represent a class of indirect purchasers of the iPod, which was predicated on an individual claim based on the Sherman Act, as well as direct purchasers of iTunes music. Somers alleged that Apple encoded its music and iPod with software making it compatible only with each other and that Apple excluded competitors through software updates, thus obtaining a monopoly over the portable digital media players and music download markets. The district court denied the certification of class of the indirect purchasers under Fed. R. of Civ. Pro. 23(b)(3) and dismissed the antitrust claims with prejudice under Fed. R. Civ. Pro. 12(b)(6). On appeal, the Ninth Circuit held that Somers voluntarily abandoned her individual claim under the Sherman Act and waived her right to appeal by not raising the issue in an amended complaint. The panel also held that Somers failed to allege sufficient facts for an antitrust violation because Apple used the proprietary encoding from the beginning; the software updates only “served to maintain the status quo.” Somers’ monopolization claim, based on a theory of diminution in value of the iPod, was barred by Illinois Brick Co. v. Illinois because she was an indirect purchaser of the iPod and lacked standing since she purchased after the anti-competitive behavior began. The panel also held that Somers did not state a claim for monopolization based on overcharging of music because Apple has charged the same price whether or not a competitor is present in the market. Finally, the panel held that Somers failed to state a claim for injunctive relief in the form on non-proprietary music to use on other devices because the inability to play music on non-iPods is not an antitrust injury. AFFIRMED.