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

Filing 50

Memorandum in opposition to re 34 MOTION to Intervene & [34-3] MOTION for Additional Relief Under the Protective Order filed by AT&T INC., DEUTSCHE TELEKOM AG, T-MOBILE USA, INC.. (Hansen, Mark)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA

UNITED STATES OF AMERICA, et al.,
Plaintiffs,
v.

Case No. 1:11-cv-01560-ESH

AT&T INC., et al.,
Defendants.

MEMORANDUM OF DEFENDANTS IN OPPOSITION TO NON-PARTY
GOOGLE INC.’S MOTION TO AMEND THE PROTECTIVE ORDER
The Protective Order in this case reflects the carefully negotiated agreement of the
Department of Justice (“DOJ”) and Defendants regarding the appropriate procedures to protect
the confidential information of parties and non-parties that will be essential to the resolution of
this case. Google Inc. (“Google”) — alone among the more than 60 companies that have already
received notice of the Protective Order, because they provided confidential information to the
DOJ or the Plaintiff States (“States”) during their extensive pre-suit investigations — has moved
to modify the Protective Order in three ways. The Court should deny Google’s motion because
the modifications it proposes are prejudicial to Defendants, unnecessary, and unduly
cumbersome for a case on an expedited schedule.
First, Google would require Defendants to give a non-party five days’ advance notice of
the identities of Defendants’ consulting and potential testifying experts before disclosing that
non-party’s confidential information to those experts. Moreover, Google would grant each nonparty the right to veto those disclosures and require Defendants to seek Court approval before
disclosing the information. Defendants’ ability to prepare their case will be severely prejudiced
if, before providing a non-party’s confidential information to their chosen experts, they must

obtain permission from — or persuade this Court to override the veto of — each of the dozens of
non-parties producing relevant confidential material in this case. Moreover, Google’s proposal
would force Defendants to identify their consulting and potential testifying experts to dozens of
non-parties, even though the Federal Rules of Civil Procedure protect the identities of those
experts from disclosure. In all events, Google’s proposal is unnecessary: experts must abide by
the Protective Order’s terms and are subject to significant sanctions should they violate them.
Second, Google would require Defendants to provide each non-party with three days’
advance notice before filing confidential material with the Court. The Local Rules of the Court,
as well as the Protective Order, ensure that pleadings containing or attaching confidential
material must be filed under seal. The need to file motions to seal provides non-parties with both
notice and all necessary safeguards. Moreover, a strict three-day notice period is impractical,
particularly as trial approaches and the pleading cycle for filings shortens.
Third, Google would require Defendants to provide non-parties 24 hours’ advance notice
that they might introduce their confidential information at trial and three days’ advance notice
that they might do so in pre-trial proceedings. Google’s proposal is likely to impede the efficient
conduct of court proceedings and, in particular, the trial. Defendants may not know 24 hours in
advance that they may seek to use a non-party’s confidential material at trial, whether on crossexamination or during rebuttal testimony. Nor can Defendants anticipate every matter that may
arise at a pre-trial hearing, for which Google proposes three days’ advance notice to non-parties.
Google’s proposed rule would force Defendants to choose between forgoing the effective
presentation of their case and repeatedly asking the Court to delay the trial or pre-trial
proceedings. In all events, the Court already has sufficient ability to protect confidential material
from public disclosure.

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BACKGROUND
On March 20, 2011, AT&T Inc. (“AT&T”) entered into a stock purchase agreement to
acquire T-Mobile USA, Inc. (“T-Mobile”) from its parent company, Deutsche Telekom AG
(“DT”), and to merge the two companies’ mobile wireless telecommunications services
businesses. During the course of the DOJ’s and the States’ investigations into the proposed
merger, more than 60 companies other than Defendants produced material to the DOJ and the
States pursuant to Civil Investigative Demands (“CID”) or Subpoenas.
On August 31, 2011, the United States filed an action under § 7 of the Clayton Act, 15
U.S.C. § 18, seeking permanently to enjoin the transaction. On September 15, 2011, the United
States filed an unopposed motion to enter the Protective Order. The same day, the Court granted
that motion and entered the Protective Order.1
Pursuant to the terms of the Protective Order, Google received notice of the DOJ’s
intention to produce Google’s CID materials to Defendants so they may prepare for trial.
Following discussions with counsel for Defendants and the government concerning the scope of
protection offered by the Protective Order, Google filed a motion for relief under the Protective
Order on September 26, 2011.
ARGUMENT
I.

GOOGLE’S PROPOSAL WOULD PREJUDICE DEFENDANTS BY HANDING
NON-PARTIES A VETO RIGHT OVER DEFENDANTS’ CHOICE OF EXPERTS
AND VIOLATES THE FEDERAL RULES BY REQUIRING DISCLOSURE OF
EXPERTS WITHOUT A SHOWING OF EXCEPTIONAL CIRCUMSTANCES
A.

Google proposes to require Defendants to notify a non-party at least five days in

advance of disclosing that non-party’s confidential information to a consulting or potential
testifying expert. This proposal would grant every non-party the effective ability to veto
1

On September 30, 2011, following the addition of a number of States as Plaintiffs, the
Court approved an amended Protective Order to reflect the additional parties to the case.
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Defendants’ choice of experts, by denying them access to confidential information that is
necessary to their work as experts in this case. Faced with objections from non-parties,
Defendants would be forced to choose between abandoning their chosen expert and incurring the
time and expense of engaging in motions practice before this Court to challenge the non-party’s
objections.
Given the number of non-parties that have already provided the DOJ and the States with
confidential information — and the many more that soon will respond to subpoenas —
Defendants may be required to seek permission from many dozens of non-parties. Moreover, the
decision that a non-party’s confidential information is relevant to the work of a particular expert
will be made on a rolling basis, as counsel for Defendants’ review the material that the DOJ, the
States, and subpoenaed entities produce. Google’s proposal, therefore, raises “the potential for a
long series of expert vetoes.” Medtronic, Inc. v. Guidant Corp., Nos. Civ. 00-1473(MJD/JGL) &
Civ. 00-2503(MJD/JGL), 2001 WL 34784493, at *3 (D. Minn. Dec. 20, 2001), aff ’d, 2002 WL
171711 (D. Minn. Jan. 29, 2002). Because “[f ]inding an appropriate expert can be a time
consuming and expensive process” — and this case is proceeding under expedited deadlines for
expert reports and depositions — Defendants would be severely prejudiced if non-parties could
effectively veto their chosen experts. Id. These vetoes, moreover, would “needlessly ‘bog
down’ the discovery process” and delay these proceedings. Id.
In support of its proposal, Google cites (at 10) Bank of New York v. Meridien BIAO Bank
Tanzania Ltd., 171 F.R.D. 135 (S.D.N.Y. 1997), but that case is inapposite. In that case, the
Bank of New York objected to the defendants’ experts viewing a narrow, specific set of
documents that “collectively indicate [the plaintiff ’s] credit policies, provide a specimen
signature for its officers, and demonstrate how [the plaintiff ’s] internal audit procedures are

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developed to prevent fraud.” Id. at 141 (internal quotation marks omitted). After emphasizing
that the objecting party bears a heavy burden of proving that “exceptional circumstances” justify
its request for advance notice, the court granted limited relief that required the defendants to
identify any expert who planned to view the few specific documents at issue and allowed the
plaintiff an opportunity to object to that expert. Id. at 144-45. Google’s request, by comparison,
seeks carte-blanche authority for every non-party to object to an expert viewing any part of that
non-party’s confidential documents. Even as to its own documents, Google merely alludes
generally to the confidential nature of the documents it produced in response to the DOJ’s CID.
See Mem. at 10. Google has thus failed to demonstrate “exceptional circumstances” that justify
allowing it — or any other third party — this veto power, particularly in light of the prejudice it
would impose on Defendants.
B.

The Protective Order already protects Google and other non-parties from the

potential for misuse of their confidential information. Before receiving confidential information,
experts must sign Appendix A to the Protective Order, in which they “agree to be bound by the
terms of the Protective Order” and to use confidential information “only for the purpose of this
litigation,” and acknowledge that “failure to abide by the terms of the Protective Order” will
subject the expert “to civil and criminal penalties for contempt of Court.” Protective Order
App. A.
Because the Court has the full “spectrum of sanctions” at its disposal to “deter” the
improper use of confidential information, Google’s claim to require advance notice of
Defendants’ experts’ identities is unwarranted. National Hockey League v. Metropolitan Hockey
Club, Inc., 427 U.S. 639, 643 (1976) (per curiam); see id. (reinstating sanctions for violations of
discovery orders “to deter those who might be tempted to such conduct in the absence of such a

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deterrent”); Quinter v. Volkwagen of Am., 676 F.2d 969, 974 (3d Cir. 1982) (sanctioning an
expert for revealing information obtained under a protective order); Hi-Tek Bags, Ltd. v. Bobtron
Int’l, Inc., 144 F.R.D. 379, 383-84 (C.D. Cal. 1992) (noting the availability of sanctions under
Federal Rule of Civil Procedure 37 to deter violations of a protective order).
Sanctions are a serious penalty for experts and attorneys alike, and may harm an expert’s
professional reputation. Cf. Johnson v. Board of County Comm’rs, 85 F.3d 489, 492-93 (10th
Cir. 1996) (noting that disqualification order as sanction “could harm his or her professional
reputation”). Google’s speculation (at 10) that an expert for Defendants who also works for “a
significant competitor of Google” will risk those severe sanctions and misuse its — or another
non-party’s — confidential information is far too speculative to constitute “good cause” for
modifying the Protective Order. Fed. R. Civ. P. 26(c); see Phillips ex rel. Estates of Byrd v.
GMC, 307 F.3d 1206, 1210-11 (9th Cir. 2002) (“[f ]or good cause to exist, the party seeking
protection bears the burden of showing specific prejudice or harm will result”); Arvco Container
Corp. v. Weyerhaeuser Co., No. 1:08-cv-548, 2009 WL 311125, at *5 (W.D. Mich. Feb. 9, 2009)
(“Where a business is the party seeking protection, it is obliged to show that ‘disclosure would
cause significant harm to its competitive and financial position. That showing requires specific
demonstrations of fact, supported where possible by affidavits and concrete examples, rather
than broad, conclusory allegations of potential harm.’ ”) (quoting Deford v. Schmid Prods. Co.,
120 F.R.D. 648, 653 (D. Md. 1987)).
C.

Google’s proposal regarding Defendants’ experts is additionally flawed because it

violates the Federal Rules’ protections against disclosure of non-testifying experts. Google
would require Defendants to reveal the identities of their consulting and potential testifying
experts to dozens of non-parties. More than 60 companies and individuals received CIDs or

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subpoenas or otherwise provided materials to the DOJ or the States in connection with their
investigation of the merger; dozens more have already received subpoenas in this litigation.
Under Google’s proposal, every one of these non-parties would have the right to learn the
identities of Defendants’ experts.
Google has failed to show “exceptional circumstances” to justify revealing the identities
of non-testifying experts retained solely for consulting purposes. Fed. R. Civ. P. 26(b)(4)(D);
see Layne Christensen Co. v. Purolite Co., 271 F.R.D. 240, 251 (D. Kan. 2010) (noting that Rule
26(b)(4) extends to “ ‘the identity, and other collateral information’ concerning any nontestimonial expert who is retained or specially employed in anticipation of litigation”) (quoting
Ager v. Jane C. Stormont Hosp. & Training Sch. for Nurses, 622 F.2d 496, 503 (10th Cir. 1980)).
Moreover, Google’s proposed language would disclose Defendants’ non-testifying experts to
dozens of other non-parties that have not made any showing to warrant an exception to the
Federal Rules. See In re Pizza Time Theatre Sec. Litig., 113 F.R.D. 94, 98 (N.D. Cal. 1986)
(“When these decisions relate to the identity of experts who will not testify, they should be
disclosed only after a very substantial showing of need.”). This proposal endangers Defendants’
important interest in maintaining the confidentiality of the identity of their consulting experts.
Nor is Google (or any other non-party) entitled to learn the identities of Defendants’
testifying experts prior to their designation as such. The Court’s Scheduling Order adopted two
deadlines: one for designation of experts that each side will call for its respective case-in-chief
(November 22, 2011), and a later date for designation of rebuttal experts (December 7, 2011).
Until those deadlines pass and Defendants designate an individual as a testifying expert, he or
she remains a “non-testifying expert,” whose identity is protected from disclosure, subject only
to the “exceptional circumstances” standard in Rule 26(b)(4)(D). See FMC Corp. v. Vendo Co.,

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196 F. Supp. 2d 1023, 1044 (E.D. Cal. 2002) (“Parties should be encouraged to consult experts
to formulate their own cases, to discard those experts for any reason, and to place them beyond
the reach of an opposing party, if they have never indicated an intention to use the expert at
trial.”) (internal quotation marks omitted).
II.

GOOGLE’S PROPOSAL REGARDING COURT FILINGS IS UNNECESSARY
AND BURDENSOME, AND EXISTING SAFEGUARDS ADEQUATELY
PROTECT NON-PARTIES’ CONFIDENTIAL INFORMATION
Google’s request for three days’ advance notice before confidential information is

attached to court filings would impose a heavy burden on parties to protect against a negligible
risk to non-parties. If Defendants seek to file a pleading, motion, or other paper with the Court
containing confidential information — whether of a party or a non-party — they must file that
document under seal, unless they can convince the party to withdraw or waive its designation.
The Local Rules contain extensive safeguards for the protection of confidential third-party
information attached to filings, requiring physical filing of documents under seal to be marked
“ ‘DOCUMENT UNDER SEAL’ or ‘DOCUMENTS SUBJECT TO PROTECTIVE ORDER,’ or
the equivalent.” LCvR 5.1(d), (j)(2). The Protective Order imposes obligations consistent with
that Local Rule. See Protective Order ¶ D.12.
Defendants will comply with these requirements, as well as LCvR 5.1( j)(1), by filing a
motion to seal in conjunction with its filings that include confidential material. Those motions
will identify the owner of the confidential information included in the document, whether that is
a party or a non-party. These motions ensure that non-parties can learn when their confidential
information is filed under seal and allow the Court to put the burden on the non-party to justify
maintaining that information under seal if the Court questions the validity of the confidentiality
designation. See Leucadia, Inc. v. Applied Extrusion Techs., Inc., 998 F.2d 157, 166 (3d Cir.
1993) (“[T]he party seeking to maintain the seal would have the burden of proof with respect to
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those documents.”); Tavoulareas v. Washington Post Co., 111 F.R.D. 653, 658 (D.D.C. 1986)
(holding that non-parties carry the burden of proving that their confidential documents should
remain under seal).
Google offers no reason to believe these safeguards are inadequate or why its proposed
three-day notice is necessary. As trial draws near and pleading cycles are expedited, a strict
three-day rule will become ever more cumbersome and inefficient, unfairly prejudicing
Defendants in their ability to make use of confidential information to present their arguments.
Moreover, Google’s proposal is incompatible with the deadlines in the Court’s Order [ECF No. 46]
appointing the Special Master, which provides only 48 hours for responses to discovery motions
and 24 hours for replies.
III.

GOOGLE’S REQUEST FOR ADVANCE NOTICE OF THE POTENTIAL
USE OF CONFIDENTIAL INFORMATION IN COURT PROCEEDINGS
IS UNNECESSARY AND WOULD UNFAIRLY HAMPER DEFENDANTS’
ABILITY TO PRESENT THEIR CASE
Google’s request for advance notice — either 24 hours or three days — before

Defendants use any confidential documents, other than those on their exhibit list or in deposition
designations, in pre-trial proceedings or at trial is unfounded and would unfairly prejudice
Defendants, especially at trial. The Protective Order already includes safeguards to ensure that
non-parties receive written notice of any trial exhibits or deposition testimony containing their
confidential information, as well as a provision whereby non-parties may object to such
disclosure in advance of trial. See Protective Order ¶ D.13(a). Google, however, would like to
go further and impose an additional three-day notice period for pre-trial proceedings and a
24-hour notice period for trial. Such inflexible rules are unrealistic and burdensome.
In particular, Google’s proposal would unfairly and unreasonably restrict Defendants’
ability to introduce confidential information on cross-examination in order to impeach
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unexpected witness testimony. Cf. United States v. Vest, 116 F.3d 1179, 1187 (7th Cir. 1997)
(noting the need for “flexibility” during cross-examination of expert witnesses at trial). Without
the ability to use confidential information — the need for which may not be anticipated 24 hours
in advance — Defendants will not fully be able to engage in “[v]igorous cross-examination” and
“presentation of contrary evidence,” both of which “are the traditional and appropriate means of
attacking shaky but admissible evidence.” Daubert v. Merrell Dow Pharm., Inc., 509 U.S. 579,
596 (1993). Defendants may also not know 24 hours in advance that they will use a non-party’s
confidential information during re-direct questioning or in presenting rebuttal evidence. If
Google’s 24 hours’ notice requirement were in place, Defendants would have to choose between
forgoing the use of that evidence and asking the court to delay the trial proceedings to give the
non-party the required notice. Such a requirement would inevitably delay trial proceedings,
interfere with the Court’s management of its docket, and threaten Defendants’ right to a fair
hearing.
Likewise, Google’s request (at 8-9) for three days’ advance notice of the potential
disclosure of confidential information in pre-trial court proceedings would cause Defendants
significant harm. It would stifle preparation for pre-trial hearings, which may be convened on
short notice, and constrain Defendants’ ability to reference confidential materials in court,
including in response to questioning from the Court.
In the event that Defendants have reason to introduce additional information marked
confidential, the Protective Order already contains a built-in remedy. The Court must decide
whether to seal the courtroom each time Defendants or another party seeks to introduce
confidential information not previously designated as a trial exhibit. See Protective Order
¶ D.13(b). To the extent they can anticipate these occasions, Defendants have a strong incentive

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to notify the non-party in advance and request that the non-party waive its designation, which
will allow trial or pre-trial hearings2 to proceed without interruption. If the non-party declines to
waive its designation, Defendants can request that counsel for the non-party be present in the
courtroom, so that the Court will not need to delay proceedings in order to hear argument from
the non-party on whether to close the courtroom. Halting the proceedings each time Defendants
need to use a non-party’s confidential information does not serve the interests of Defendants or
the Court.
CONCLUSION
For the reasons set forth above, the Court should deny Google’s motion.

2

Defendants interpret Section D of the Protective Order (“Disclosure of Confidential
Information in This Action”), and in particular Paragraph D.13, to encompass pre-trial
proceedings. See Protective Order ¶ A.1(k) (“ ‘This Action’ means the above-captioned action
pending in this Court, including any pretrial, trial, post-trial, or appellate proceedings.”).
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Dated: October 11, 2011
Respectfully submitted,

/s/ Mark C. Hansen
Mark C. Hansen, D.C. Bar # 425930
Michael K. Kellogg, D.C. Bar # 372049
Kellogg, Huber, Hansen, Todd,
Evans & Figel, P.L.L.C.
1615 M Street, NW, Suite 400
Washington, DC 20036
[phone]
Richard L. Rosen, D.C. Bar # 307231
Donna E. Patterson, D.C. Bar # 358701
Arnold & Porter LLP
555 Twelfth Street, NW
Washington, DC 20004-1206
[phone]
Wm. Randolph Smith, D.C. Bar # 356402
Kathryn D. Kirmayer, D.C. Bar # 424699
Crowell & Moring, LLP
1001 Pennsylvania Avenue, NW
Washington, DC 20004
[phone]
Counsel for AT&T Inc.

George S. Cary, D.C. Bar # 285411
Mark W. Nelson, D.C. Bar # 442461
Cleary Gottlieb Steen & Hamilton LLP
2000 Pennsylvania Avenue, NW
Washington, DC 20006
[phone]
Richard G. Parker, D.C. Bar # 327544
O’Melveny & Myers LLP
1625 Eye Street, NW
Washington, DC 20006
[phone]
Counsel for T-Mobile USA, Inc. and
Deutsche Telekom AG
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CERTIFICATE OF SERVICE
I hereby certify that on October 11, 2011, I caused the foregoing Memorandum of
Defendants in Opposition to Non-Party Google Inc.’s Motion To Amend the Protective Order to
be filed using the Court’s CM/ECF system, which will send e-mail notification of such filings to
counsel of record. This document is available for viewing and downloading on the CM/ECF
system.
Two copies of the foregoing Memorandum, together with cases and other cited materials,
shall be served on Special Master Richard A Levie.
/s/ Mark C. Hansen
Mark C. Hansen