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

Filing 84

MOTION Seeking Relief to Facilitate Efficient Trial Preparation by UNITED STATES OF AMERICA (Attachments: # 1 Memorandum in Support, # 2 Text of Proposed Order by Special Master)(Hammond, Matthew)

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA
UNITED STATES OF AMERICA et al.,
Plaintiffs,
v.
AT&T INC. et al.,

Civil Action No. 11-01560 (ESH)
Referred to Special Master Levie

Defendants.

MEMORANDUM IN SUPPORT OF PLAINTIFFS’ MOTION SEEKING RELIEF
TO FACILITATE EFFICIENT TRIAL PREPARATION
To facilitate efficient trial preparation, the Court should permit Plaintiffs to show certain
outside lawyers and consultants representing potential witnesses a discrete and limited set of
materials—Defendants’ efficiencies models and related materials that Defendants have already
submitted to the Federal Communications Commission and are at the heart of Defendants’
efficiencies defense.
As the Court is aware, the transaction at issue in this litigation is also subject to review by
the FCC, which is required to approve the anticipated transfer of radio frequency spectrum
licenses. Under FCC procedures, Defendants have submitted voluminous materials to the FCC
regarding virtually every aspect of the transaction. The materials at issue on this motion are
limited to detailed models and related documents concerning the alleged efficiencies that may
arise if the transaction is consummated (“Efficiencies Materials”). (The specific documents at
issue are listed in our Proposed Order.) After submitting the Efficiencies Materials to the FCC,
Defendants produced the Materials to Plaintiffs in this action in response to a discovery demand

and designated them as Confidential under the Protective Order. Consequently, Plaintiffs cannot
share or discuss the Materials with anyone else.
Under FCC procedures, interested parties may participate in the FCC’s proceedings,
review Defendants’ FCC filings, and submit their own responsive filings. Thus, outside lawyers
and consultants for such interested parties have the right to access the Efficiencies Materials
Defendants submitted to the FCC. But the Protective Orders in the FCC proceeding and in this
case erect a wall preventing Plaintiffs from sharing or discussing Materials produced by
Defendants to the FCC and then subsequently produced in this litigation, even with outside
counsel and experts who have access to the FCC filings. That is, both Plaintiffs and interested
parties have the Efficiencies Materials, but cannot discuss them together. Plaintiffs accordingly
seek limited relief to permit Plaintiffs in this case to provide and discuss the Efficiencies
Materials submitted to the FCC by Defendants with outside counsel and experts who have the
right to view the Materials in the FCC proceeding. This request imposes no additional burdens
on Defendants, and exposes Defendants to no additional competitive risks beyond those already
accounted for and protected against in the FCC’s and this Court’s Protective Orders.
The requested relief is appropriate for several reasons:
First, discussing the factual assumptions underlying Defendants’ models with
knowledgeable outside lawyers and consultants will better enable Plaintiffs to present focused
testimony relevant to Defendants’ efficiencies defense. Issues relevant to that defense could
include, for instance, comparing Defendants’ claims in their efficiencies models about how
wireless firms improve their networks to the way wireless firms actually go about improving
their networks. Allowing Plaintiffs to discuss such issues with outside lawyers and consultants
in light of Defendants’ specific assertions will facilitate identifying the most relevant witnesses

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and preparing focused, non-redundant testimony on these issues. This is particularly important
here in light of the compressed discovery schedule, the technical complexity of the issues, and
Defendants’ direct access to, and intimate knowledge of, the relevant technical facts.
Second, under its Protective Order, the FCC already permits outside lawyers and
consultants to review Defendants’ FCC filings on the condition that the material be used only in
connection with the FCC proceeding. In re AT&T Inc., 26 F.C.C.R. 8801, ¶ 9 (6/22/11). Thus,
the requested relief would not increase the pool of those who have the ability to access
Defendants’ models because access through the FCC is already available.
Third, to prevent disclosure of Defendants’ confidential business information to
competitors’ executives, Plaintiffs only seek permission to share the models with outside counsel
and consultants, just as in the FCC proceeding.
Fourth, the requested relief merely accelerates a limited disclosure of Defendants’
efficiencies defense, which Defendants have focused on during the FCC proceedings and in this
action. For instance, the first page of Defendants’ Answer is dedicated to the transaction’s
alleged efficiencies. (Answer to Second Amended Complaint (10/5/11) at 1; id. at 24.)
Defendants’ efficiencies claims will become public at trial (subject to the possibility of sealing
the courtroom), so it makes sense for those assertions to be examined now, in advance of trial, to
enable a focused record.
Fifth, the requested relief is consistent with the limited disclosure discussed during the
last Court hearing. Tr. 10/24/11 at 112 (“Mr. Wayland: … It would be a relevant set of
documents that we narrowed down. The Court: All right.”).

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The requested relief will help avoid trial by surprise and permit the Court a more focused
record respecting the assumptions underlying Defendants’ efficiencies defense.
Dated: November 16, 2011

Richard L. Schwartz
Geralyn J. Trujillo
Mary Ellen Burns
Keith H. Gordon
Matthew D. Siegel
Counsel for the State of New York
David M. Kerwin
Jonathan A. Mark
Counsel for the State of Washington
Quyen D. Toland
Ben Labow
Counsel for the State of California
Robert W. Pratt
Chadwick O. Brooker
Counsel for the State of Illinois

Respectfully submitted,
/s/ Joseph F. Wayland
Joseph F. Wayland
Deputy Assistant Attorney General
/s/ Matthew C. Hammond
Matthew C. Hammond
Laury E. Bobbish
Claude F. Scott, Jr. (D.C. Bar #414906)
Kenneth M. Dintzer
Christine A. Hill (D.C. Bar #461048)
U.S. Department of Justice
Antitrust Division
450 Fifth Street, N.W., Suite 7000
Washington, D.C. 20530
Tel: [phone]
Fax: [phone]
[e-mail]
Counsel for the United States of America

William T. Matlack
Michael P. Franck
Counsel for the Commonwealth of Massachusetts
Jessica L. Brown
Counsel for the State of Ohio
James A. Donahue, III
Joseph S. Betsko
Counsel for the Commonwealth of Pennsylvania
José G. Díaz-Tejera
Nathalia Ramos-Martínez
Counsel for the Commonwealth of Puerto Rico

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