Apple’s latest financial report provides an update on the status of the six-plaintiff lawsuit led by former reseller Tom Santos, whose downtown store in San Francisco was a common destination for Mac enthusiasts before Apple’s own retail operation cranked up.
The original Santos lawsuit dates from 2002, and additional plaintiffs joined in the following years. The original complaints were amended along the way, and now Apple reports that the proceedings are in the discovery phase and due for trial this November… except for Santos’ case, which is set for a Feb. 17th hearing in a Santa Clara County (Calif.) court on various matters.
According to Apple, Santos’ complaint alleges fraud, violations of California Business & Professional Code Section 17200 (unfair competition), California Business & Professional Code Section 17500 (false advertising) and the state’s Consumer Legal Remedies Act.
Apple stated that it filed a cross complaint against Santos on Jan. 20, 2006 alleging violations of California’s Business & Professional Code related to unfair competition and false or misleading advertising. More significantly, Apple alleged a violation of Penal Code Section 502, which covers a wide variety of offenses related to unlawful computer access. According to sources, the allegation stems from documents that Santos is using to prove his allegations that Apple has engaged in unfair pricing practices, and which Apple claims were obtained from its computer systems without authorization.
Apple’s report goes on to say, “On October 1, 2003, one of the reseller Plaintiffs, Macadam, was deauthorized as an Apple reseller. Macadam filed a motion for a temporary order to reinstate it as a reseller, which the Court denied. The Court denied Macadam’s motion for a preliminary injunction on December 19, 2003.” On December 6, 2004 Macadam filed for Chapter 11 bankruptcy, which placed a stay on the litigation related to Macadam, Apple explained. Apple filed a claim in the bankruptcy proceedings in Feb. 2005, and the bankruptcy case was converted to Chapter 7 in April, 2005. Apple has now reached a tentative settlement of the Macadam case with the bankruptcy trustee, and both sides are awaiting the court’s approval.
Apple says the resellers involved in the lawsuit are: MacTech Systems, Macadam, Computer International, Inc., Elite Computers and Software, Inc., The Neighborhood Computer Store, MacAccessory Center, Inc., and MacAccessory Center, Inc.
Lastly, Apple reseller Macsolutions Inc. filed a lawsuit on Jan. 20, 2006 against Apple, the quarterly report says, alleging breach of contract, fraud, misappropriation of trade secrets, intentional interference with economic advantage, violation of the Cartwright Act, violation of California Business & Professions Code §17200 and fraudulent concealment. “Principally, Plaintiffs allege that the Company has treated Macsolutions unfairly compared to other resellers,” Apple said, “(in) that the Company has competed unfairly in opening the Apple Retail stores, and has allegedly sold used goods as new.” Apple’s response to the lawsuit isn’t due yet.
You can download (pdf) the entire quarterly financial report from Apple’s Web site.
