Judge stays e-book class action case against two publishers

Publishers Hachette and HarperCollins slipped further away from the class action lawyer who wants them to pay over an alleged e-book price-fixing conspiracy. In an order signed in New York federal court, Justice Denise Cote ruled that the class action could be halted on the grounds that the publishers are close to a consumer restitution settlement with state governments.

What this means in practice is that the class action lawyers will be frozen out because the state governments’ deal trumps the consumer class action. In a letter to Justice Cote, lead class action lawyer Steve Berman said the court should only suspend part of the proceedings because many states might not take part in the agreement. He also said the two publishers should have to share documents related to the Justice Department’s antitrust investigation, but the judge’s order means that will not happen for now. The two publishers, for their part, have entered a memorandum of understanding with several states, and have suggested a deal with all 50 states is imminent. The publishers would likely have to pay millions under a settlement, but it would allow them to escape the class action proceedings and avoid the risk of a jury award that could be even higher.