UNITED STATES OF AMERICA v. AT&T INC. et al

Filing 30

MEMORANDUM re 29 Notice of Proposed Order filed by UNITED STATES OF AMERICA by UNITED STATES OF AMERICA. (Hammond, Matthew)

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA

UNITED STATES OF AMERICA,
STATE OF NEW YORK, STATE OF
WASHINGTON, STATE OF
CALIFORNIA, STATE OF ILLINOIS,
COMMONWEALTH OF
MASSACHUSETTS, STATE OF OHIO,
and COMMONWEALTH OF
PENNSYLVANIA,

Civil No. 11-01560 (ESH)

Plaintiffs,
v.
AT&T INC., T-MOBILE USA, INC., and
DEUTSCHE TELEKOM AG,
Defendants.

UNITED STATES’ MEMORANDUM IN SUPPORT
OF ITS PROPOSED SCHEDULE
The remaining scheduling dispute concerns the date by which the parties must submit
expert reports. Defendants propose that the government’s expert reports be delivered by
November 15, 2011, eight weeks before the close of fact discovery. This date is both (1)
unreasonable given the complexity of the issues and the importance of expert testimony in this
case, and (2) inconsistent with the Manual for Complex Litigation, which recognizes that, in
antitrust cases, “some studies may require considerable time to prepare and review.” 1 In contrast,
the date proposed by the United States, January 5, while aggressive, will permit the parties to
develop complete reports well in advance of the trial date.
1

MANUAL FOR COMPLEX LITIGATION (FOURTH) § 30.2 (2004).

Plaintiffs will be severely prejudiced if they are required to complete their expert reports
by November 15. The expert reports in this case will address complex technical, economic and
competitive issues requiring the review and analysis of voluminous documents and data
concerning the nature, scope and effect of competition in the mobile wireless
telecommunications industry, including in 97 of the top 100 local markets specifically identified
in the Complaint. To take just one example, the question of whether this merger will result in
significant engineering efficiencies is a critical and highly technical issue that will require
extensive factual development and expert analysis.
The experts will require as full a factual record as possible as they complete their reports,
including deposition and document discovery regarding (1) regional carriers and potential
entrants identified by Defendants as potential competitive restraints; (2) business customers
identified by AT&T as supporting the merger; (3) numerous enterprise customers that have
benefitted from T-Mobile’s competitive presence; (4) economic and engineering models
Defendants have only recently produced in revised form; 2 and (5) the “real world” support for
the assumptions used in these models. This discovery cannot be completed, analyzed and
included in expert reports by November 15. Indeed, to complete this analysis and prepare reports
by January 5, as Plaintiffs propose, will already require extraordinary effort.
There is no basis for Defendants’ claim that Plaintiffs’ pre-complaint investigation should
allow for the early submission of expert reports. First, although the government obtained a
substantial volume of investigative material, critical materials were not produced until late in the

2

Defendants submitted multiple complex engineering and economic models, which they have continued to revise,
and which will require substantial discovery. Defendants have submitted three different versions of a complex
engineering model that includes over 22,000 cells of data. Many of the inputs to this model appear to lack factual
support. Defendants only very recently submitted a 40-page description of the technical operation of the engineering
model, but even that description provides little or no support for the many factual assumptions underlying the model.

2

investigation and, significantly, the pre-complaint discovery was directed at making an
enforcement decision, not preparing for trial. As courts have recognized, Plaintiffs’ investigative
efforts are not a substitute for pre-trial discovery. 3 Second, the government’s pre-complaint
investigation and issue analysis is not prepared in the form of expert trial reports, which will be
submitted by outside experts retained as trial witnesses. These experts require sufficient time to
undertake their independent analysis of the still developing factual record and complete their
reports. They cannot reasonably complete this work by November 15.
The fact that the Court has set a trial date one month sooner than originally proposed by
Plaintiffs (and three months later than proposed by Defendants) does not change the amount of
work necessary to prepare the reports. The expert schedule proposed by Plaintiffs will permit the
orderly completion of expert discovery several weeks before the start of trial. For these reasons,
Plaintiffs respectfully request that the Court include Plaintiffs’ proposed dates for expert reports
in Paragraph 11 of the CMO as follows: January 5, 2012 for Plaintiffs’ case-in-chief expert
reports and Defendants’ expert reports on efficiencies of the merger; January 16, 2012 for
responsive expert reports for both sides; January 23, 2012 for rebuttal expert reports; January 30,
2012 for completion of expert depositions.

3

See, e.g., SEC v. Sargent, 229 F.3d 68, 80 (1st Cir. 2000) (“Here, even though the [agency] had already conducted
a pre-filing investigation, . . . ‘there is no authority which suggests that it is appropriate to limit the [agency]’s right
to take discovery based upon the extent of its previous investigation into the facts underlying its case.’” (quoting
SEC v. Saul, 133 F.R.D. 115, 118 (N.D. Ill. 1990))); see also Saul, 133 F.R.D. at 118–19 (concluding plaintiff
agency “is entitled to review its investigation and avail itself of its discovery rights in order to prepare its case for
trial”).

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