Nuthin’s ever simple in Silicon Valley, and now the head of Apple may have to testify in another complex case between monster firms. In fact, one of those firms is named “Monster LLC.”
A judge is scheduled to decide this coming Tuesday if lawyers for Monster LLC can take the deposition testimony of Apple CEO Tim Cook and two other Apple executives as part of the audio-equipment maker’s lawsuit against Beats Electronics LLC.
The Monster lawsuit, by the electronics company and not the well-known online employment firm, was originally filed in January 2015 in San Mateo Superior Court and transferred last fall to Los Angeles. The lawsuit alleges that Beats terminated its relationship with Monster outlet so that Beats could be acquired by Apple. The suit also names as defendants Beats co-founders Jimmy Iovine and Dr. Dre as well as Taiwanese smartphone maker HTC Corp.
Monster’s suit further alleges the defendants conspired to keep Monster out of a deal with Beats by Dre before the company was sold for $3.2 billion in 2014 to Apple in what was the Cupertino-based company’s largest acquisition in history.
Beats fraudulently acquired a line of headphones created by Dr. Dre through a sham transaction with HTC, which agreed to purchase a 51 percent stake in Beats for $30 million in 2011, according to the lawsuit.
Monster’s attorneys want Judge William Fahey to order the deposition testimony of Cook; Eddy Cue, Apple’s senior vice president of internet software and services; and Noreen Krall, Apple’s vice president and chief litigation counsel.
Apple and the three executives are not defendants in Monster’s lawsuit.
Cook recommended the Beats transaction to Apple’s board of directors and Cue was Apple’s point person on the purchase, according to court papers filed in Los Angeles Superior Court by Monster’s attorneys.
“There is no question both witnesses were intimately involved with the cheap Monster Beats acquisition,” according to the Monster’s attorneys’ court papers.
Cook met with Beats CEO Iovine in February 2013, evaluated the firm and made the decision to acquire Beats, according to Monster’s attorneys’ court papers.
“The nature and time of Mr. Cook’s deliberations will be a central issue for the jury,” Monster’s attorneys state in their court papers.
Cue had a long-standing relationship with Iovine that began before Cook was named Apple’s CEO, according to Monsters’ attorneys’ court papers.
Lawyers for Cook, Cue and Krall have filed motions to quash subpoenas for their depositions. The attorneys say Beats lawyers were instead offered depositions from two senior Apple employees to have “substantial knowledge” of the Beats acquisition negotiations.
“If anything, Cook and Cue are entitled to sanctions from (Monster), given plaintiff’s use of the deposition subpoenas and this motion to annoy and harass,” the Cook-Cue lawyers state in their court papers.
Krall’s attorneys state in their court papers that an in-house lawyer cannot be deposed absent a showing he or she has information crucial to the preparation of a case.
But according to the plaintiff’s attorneys’ court papers, after Monster sued Beats, Krall “personally ensured that all of Monster’s contracts with Apple were immediately terminated … signing the termination letters herself.”
Monster helped launch the Beats outlet brand of headphones, which became popular among celebrities, in July 2008. Monster said it developed, manufactured and distributed the headphones in exchange for the licensing rights to the Beats brand and celebrity marketing by Iovine and Dr. Dre, whose real name is Andre Young.