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

Filing 60

REPLY to opposition to motion re 52 MOTION to Intervene Petitioners' Reply Memorandum in Support of Joint Motion to Amend the Protective Order Pursuant to Rule 26(c) filed by SPRINT NEXTEL CORPORATION. (Craig, Gregory)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA

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

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

PETITIONERS’ REPLY MEMORANDUM IN SUPPORT OF
JOINT MOTION TO AMEND THE PROTECTIVE ORDER PURSUANT TO RULE 26(c)

In their Opposition to Petitioners’ Joint Motion to Amend the Protective Order
Pursuant to Rule 26(c) (“Opp’n Br.”), Defendants assert that “nothing has changed since the
[September 21] Status Hearing [to] warrant reconsideration” (Opp’n Br. at 1); that their
subpoenas are “routine non-party” discovery (id. at 5); that Petitioners should be treated no
differently from the “‘more than 100’ [other] non-parties to this case” (id. at 6); and that
“allowing Petitioners access to all discovery in this case would ‘gum up the works.’” Id.
Defendants utterly ignore the issue of fundamental fairness that is at the core of Petitioners’
argument: In addition to the more than 2.2 million pages of Petitioners’ documents they already
have, Defendants have served subpoenas on Petitioners that seek enormously broad discovery,
and Defendants will use that discovery to prepare for trial against Petitioners while Petitioners
are permitted no discovery at all. Such an arrangement gives Defendants an advantage that will
seriously handicap Petitioners’ capacity to prepare for trial. The prejudice is indisputable.

Defendants do not attempt to explain how their requests can possibly be
appropriate nonparty discovery; nor can they. For example, Request 5 of the Sprint subpoena
seeks almost eight years worth of records relating to Sprint’s past transactions with other mobile
wireless providers. Defendants want Sprint to provide:
All documents relating to transactions entered into from January 1, 2004 through
the present involving: (a) Nextel, (b) Virgin Mobile, (c) Clearwire, or (d) any
other mobile wireless provider, that: (i) the Company submitted to the U.S.
Department of Justice in response to Item 4(c) of the Notification and Report
Form filed by the Company pursuant to the Hart-Scott-Rodino Antitrust
Improvement Act, or (ii) reflect any analysis of anticipated or achieved
efficiencies or synergies for such transaction.
(emphasis added). Requests for these types of documents go far beyond ordinary, nonparty
merger case discovery, which focuses on the current competitive landscape, not on the details of
every transaction entered into by a competitor in the last eight years.
Other requests are clearly inappropriate when directed at Petitioners. For example,
Defendants seek “[a]ll documents analyzing the Transaction, including but not limited to . . .
financial, economic, engineering or technical models analyzing the effects of the Transaction.”
(Sprint subpoena Request 3; Cellular South subpoena Request 4). It cannot be appropriate for
Defendants to discover all internal analyses of the transaction, including expert models and
business models, from companies that are plaintiffs in parallel litigations when discovery has
been deferred in those parallel actions. Such materials are not even required to be produced by
the parties to the DOJ case until December 28. The fact is that Petitioners are not just like other
nonparties in the DOJ case, and the discovery being sought is not routine third-party discovery.
The Petitioners are plaintiffs in their own cases, and so the documents being sought go well
beyond the boundaries of ordinary third-party discovery.
Defendants insist that the subpoenas are just like all the others they served on
nonparties in the DOJ case, Opp’n Br. at 4-5, but, inexplicably, they do not append examples to
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permit comparison. It is telling, however, that the subpoena to Verizon, the largest player in the
wireless industry, includes only 39 requests to Sprint’s 47. Opp’n Br. at 5. Moreover, even as
they insist that these broad subpoenas are ordinary, nonparty discovery, Defendants ignore the
fact that they already have more than 2.2 million pages of Sprint documents from 15 senior
executives with responsibility for the business groups relevant to this litigation, as well as the
core relevant Cellular South documents.
Incredibly, Defendants imply that this Court gave them carte blanche to propound
any discovery they like regardless of the Rules. They quote, in a misleading way, a question that
this Court asked Sprint’s counsel during the status conference while discussing party discovery.
Defendants quote the Court (erroneously) as making the statement: “[T]his Court recognized at
the Status Hearing that Petitioners would face ‘subpoena[s]’ for ‘all your confidential
information.’” Opp’n Br. at 4. In truth, the Court asked Sprint’s counsel a question about what
would happen if Sprint obtained party discovery. The Court asked: “[W]hat happens when they
[the Defendants] subpoena all your confidential information? You would be happy to give it to
your competitors?”1 Sept. 21 Status Hr’g Tr. 40:21-22 (“Tr.”). Nothing in the transcript
remotely suggests that the Court was willing to permit the Defendants to take the broadest
possible discovery of Petitioners that could be used in all actions while Petitioners were not
permitted access to any materials.
Rather than contest Petitioners’ motion on the merits, Defendants manufacture
imaginary inefficiencies that they argue would flow from the proposed relief, but none of these is

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The Court’s question arose in the context of a discussion regarding the consolidation or coordination of the
three pending litigations, which would grant Sprint and Cellular South party or party-like status. The Court
asked Sprint’s counsel if Sprint would mind, in the event that the proceedings were consolidated or coordinated,
providing confidential information to a competitor. Because the Court declined to consolidate the proceedings,
that discussion has no bearing on this motion.

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implicated by Petitioners’ request. In particular, Defendants quote the Court out of context to
claim that the requested relief would “gum up the works.”2 See Opp’n Br. at 2, 3 (quoting Tr.
63:8). This fear is unfounded, however. First, Petitioners are not seeking to serve their own
discovery requests on parties or nonparties at this time. Second, Petitioners seek access only to
Defendants’ materials at this time; contrary to Defendants’ suggestion, the proposed order does
not provide a mechanism to give Petitioners access to third-party materials.3 Third, the only
action to be taken under the proposed order is for the DOJ to give Petitioners access to
Defendants’ documents after Petitioners have agreed to be bound by the protective order. Fourth,
Defendants do not dispute that the requested relief would not burden them. Defendants’
suggestions of inefficiency simply are illusory.
Defendants do not dispute the obvious efficiencies that would result from
Petitioners’ requested relief. First, this Court made clear at the status conference that the cases,
although not consolidated, should proceed in parallel. See Tr. 65:2-3 (the Court “will treat
[Petitioners’ and DOJ’s cases] as parallel”). And, Defendants themselves have conceded that the
“core” of the cases is the same. See Defs.’ Motion to Dismiss Reply Br. at 1 (recognizing that
the “core” of Sprint’s case “mimics the horizontal case brought by the Department of Justice”).
The most efficient way to ensure that these cases remain parallel is to permit the requested relief
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The Court’s comments occurred in the context of a discussion of the potential for privilege issues to become
complicated in coordinated proceedings, which could affect the pretrial schedule. Because Petitioners’
requested relief is only for access to Defendants’ documents, no special privilege issues are implicated. The
only possible “gumming up” of the works would occur if the Court denies Petitioners’ request for relief and
Petitioners find it necessary to file motions asking the Court to quash these overbroad subpoenas, or if
Defendants continue to take the position that the requests are reasonable and move to compel.

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The proposed amendments to the protective order simply add Petitioners’ outside counsel and experts to the list
of individuals who may access information under the terms of the protective order and requires them to be
bound by the confidentiality provision. For Petitioners to receive disclosures of confidential third-party
information, provision would have to be made for the DOJ to give notice to third parties of a proposed
production to Petitioners and allow them time to object just as Google has objected to production to the
Defendants. Petitioners seek no such mechanism.

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so that Petitioners do not fall behind irretrievably in their litigation. The DOJ and Plaintiff States
likewise agree that the requested relief would ensure efficiency in the pretrial schedule: “as
Plaintiffs prepare on an expedited basis for trial, it will be much more efficient in developing the
factual record for Plaintiffs to have the ability to discuss with Petitioners’ counsel the same type
of information produced from Defendants that Defendants are seeking from Petitioners.” See
Plaintiffs’ Statement in Support of Sprint’s, Cellular South’s, and Corr Wireless’s Motion to
Amend the Protective Order at 2.

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CONCLUSION
For the foregoing reasons, Petitioners respectfully request that the Court grant
Petitioners’ motion to amend the protective order so that Petitioners’ counsel and experts may
have access to materials produced by Defendants to the DOJ.
Dated: October 19, 2011

Respectfully submitted,

/s/ Chong S. Park
Chong S. Park (D.C. Bar No. 463050)
Kenneth P. Ewing (D.C. Bar No. 439685)
Matthew Kepniss (D.C. Bar No. 490856)
STEPTOE & JOHNSON LLP
1330 Connecticut Avenue, N.W.
Washington, DC 20036-1795
Tel: [phone]
[e-mail]

/s/ Gregory B. Craig
Steven C. Sunshine (D.C. Bar No. 450078)
Gregory B. Craig (D.C. Bar No. 164640)
Tara L. Reinhart (D.C. Bar No. 462106)
SKADDEN, ARPS, SLATE,
MEAGHER & FLOM LLP
1440 New York Avenue, N.W.
Washington, DC 20005-2111
Tel: [phone]
[e-mail]
[e-mail]
[e-mail]

Alan W. Perry (pro hac vice)
Daniel J. Mulholland (pro hac vice)
Walter H. Boone (pro hac vice)
FORMAN PERRY WATKINS KRUTZ &
TARDY LLP
City Centre, Suite 100
200 South Lamar Street
Jackson, Mississippi 39201-4099
Tel: [phone]
[e-mail]

James A. Keyte (pro hac vice)
Matthew P. Hendrickson (pro hac vice)
SKADDEN, ARPS, SLATE,
MEAGHER & FLOM LLP
4 Times Square
New York, NY 10036-6522
Tel: [phone]
[e-mail]
[e-mail]

Charles L. McBride, Jr. (pro hac vice)
Joseph A. Sclafani (pro hac vice)
Brian C. Kimball (pro hac vice)
BRUNINI, GRANTHAM, GROWER &
HEWES, PLLC
The Pinnacle Building, Suite 100
190 East Capitol Street
Jackson, Mississippi 39201
Tel: [phone]
[e-mail]

Counsel for Sprint Nextel Corporation

Counsel for Plaintiffs Cellular South, Inc. and
Corr Wireless Communications, L.L.C.

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CERTIFICATE OF SERVICE
I hereby certify that, on October 19, 2011, I caused the foregoing Petitioners’ Reply
Memorandum in Support of Joint Motion to Amend the Protective Order Pursuant to Rule 26(c)
to be filed using the Court’s CM/ECF system. I also caused the foregoing document to be
mailed via electronic mail to counsel for the parties listed below:
Matthew C. Hammond
202-305-8541
[e-mail]
Katherine Celeste
U.S. Department of Justice, Antitrust Division
450 Fifth Street, N.W., Suite 7000
Washington, DC 20001
202-532-4713
202-514-5381 (fax)
[e-mail]
Counsel for the United States

Geralyn J. Trujillo
STATE OF NEW YORK
Office of the Attorney General
Antitrust Bureau
120 Broadway, 26th Floor
New York, NY 10271
Tel: [phone]
Fax: [phone]
[e-mail]
David M. Kerwin
STATE OF WASHINGTON
Office of Attorney General
Antitrust Division
800 Fifth Avenue, S. 2000
Seattle, WA 98104
Tel: [phone]
Fax: [phone]
[e-mail]
Representative Counsel for the Plaintiff States

Michael K. Kellogg
Kellogg, Huber, Hansen, Todd, Evans & Figel, P.L.L.C.
1615 M Street, N.W.
Suite 400
Washington, DC 20036
202-326-7902
[e-mail]
Counsel for AT&T Inc.

Mark W. Nelson
Cleary Gottlieb Steen & Hamilton LLP
2000 Pennsylvania Avenue, NW
Washington DC 20006
202-974-1622
[e-mail]
Counsel for Defendants T-Mobile USA, Inc., and Deutsche Telekom AG

/s/ Tara L. Reinhart
Tara L. Reinhart (D.C. Bar No. 462106)
Counsel for Sprint Nextel Corporation

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