Epic Games' Cravath team wins fees in Apple contempt ruling

By Mike Scarcella

May 1 (Reuters) - (Billable Hours is Reuters' weekly report on lawyers and money. Please send tips or suggestions to D.Thomas@thomsonreuters.com)

A federal judge's contempt ruling against Apple AAPL.O has created a major new legal headache for the iPhone maker, and also requires it to write a check to its adversary in the case: "Fortnite" maker Epic Games.

U.S. District Judge Yvonne Gonzalez Rogers on Wednesday found Apple willfully violated an injunction she issued in Epic's 2020 lawsuit that was meant to open up the company's App Store to greater competition.

The decision immediately bars Apple from restricting App Store customers' use of third-party payment systems. The judge held Apple in civil contempt and referred the case to federal prosecutors to probe whether Apple was in criminal contempt of court.

Apple said it disputed the ruling and will appeal.

As a sanction, Gonzalez Rogers also said Apple must pay legal fees to Epic's legal team, led by Cravath, Swaine & Moore, for the many months the lawyers spent fighting Apple for information about its compliance with the earlier injunction.

Epic's team at Cravath was led by partners Gary Bornstein, Yonatan Even, Lauren Moskowitz and Michael Zaken.

Bornstein declined to discuss the size of the Epic's legal tab on a call with reporters. The fee sanction could be in the tens of millions of dollars, based on the number of lawyers working for Epic, and the all-out battle that was waged over trying to pry information from Apple.

Some Cravath litigation partners, including Moskowitz, have billed this year at $2,360 an hour, according to a Reuters review of U.S. court filings.

"Epic's obviously not out here for fees," Epic Games chief executive Tim Sweeney told reporters. "We're fighting for the freedom of ourselves and all developers to do business directly with our customers, freedom from Apple interference and Apple taxation."

Apple is represented by a team from Weil Gotshal led by Mark Perry. Lawyers from Gibson Dunn also represented Apple, which has denied violating the court's injunction.

The court's order faulted Apple's lawyers, without naming them, for not correcting what the judge called "obvious lies" in testimony by an Apple executive.

Two of Apple's chief lawyers in the Epic case did not immediately respond to requests for comment.

Gonzalez Rogers' order also addressed a separate bid from Apple to recoup more than $73 million in legal fees from Epic for violating the App Store's developer agreement.

The court's ruling suggested Apple will not recover that much but is due some fees from Epic. Epic's legal team predicted any award would concern only a "small amount."

-- A founder of law firm Kramer Levin's Paris office has sued the firm in New York state court, accusing it of failing to make certain payments in breach of their partnership agreement.

Antoine Paszkiewicz, who had worked at Kramer Levin since 1999, alleged he is owed compensation following the firm's move in late 2024 to end its agreements with Paris partners as part of a plan to merge with law firm Herbert Smith Freehills.

Some of Kramer Levin's Paris team jumped to rival law firm Morgan Lewis. Paszkiewicz said he was excluded from those negotiations because he was over the firm's mandatory retirement age of 65. Kramer Levin, he alleged, then failed to pay him the full compensation he was due under their partnership terms.

Kramer Levin in a statement said it appreciated "the contributions of our former partners in Paris. The orderly winddown of the Paris office has fully complied with our partnership agreement."

A lawyer for Paszkiewicz did not immediately respond to requests for comment.

--Law firms including Constantine Cannon and Shinder Cantor Lerner said they will ask a U.S. judge to award them up to $76 million in fees as part of a $228 million antitrust class action settlement involving California's Sutter Health.

Employers and individuals who sued Sutter in 2012 filed the proposed settlement in the San Francisco, California federal court, seeking a judge’s approval. Sutter, represented by Jones Day, denied any wrongdoing in agreeing to settle.

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