Kaye Scholer Successfully Defends Penguin Random House in Antitrust Class Action

Kaye Scholer played a key role in obtaining the dismissal of a putative class action brought in the US District Court for the Southern District of New York against Amazon.com and major publishers of electronic books.

In The Bookhouse of Stuyvesant Plaza, et al. v. Amazon.com et al., three independent booksellers alleged that Amazon and the five biggest publishing houses in the United States, including Kaye Scholer client Penguin Random House LLC, had conspired to prevent retail booksellers from selling electronic books by agreeing to use digital rights management software proprietary to Amazon that prevents Kindle owners from purchasing electronic books from sources other than Amazon. The plaintiffs asserted claims for unlawful restraint of trade under Sector 1 of the Sherman Act against all of the defendants, and claims for monopolization and attempted monopolization under Section 2 of the Sherman Act against Amazon.

Kaye Scholer Partner Saul Morgenstern led the motion to dismiss on behalf of the publishers, which he argued in April 2013. On December 6, 2013, US District Judge Jed S. Rakoff rejected the plaintiffs’ allegations and dismissed all claims with prejudice.

In addition to Morgenstern, the Kaye Scholer team representing Penguin Random House included Associates Amanda Croushore and Alice Huling.