Court Opinion

ID: 4246512
Source: CourtListenerOpinion
Date Created: 2018-02-20 19:00:51.289573+00
Date Added: 2024-06-11T14:43:59.425375
License: Public Domain

UNITED STATES DISTRICT COURT

 

FoR THE DISTRICT oF CoLUMBIA F I L E D
UNITED sTATEs oF AMERICA, ) FEB 2 0 2013
Plaintiff, § c(i':iié idrs£h[iisbi;irts§igi'ii:\iiiiia
v. § Civil Case No. 17-2511 (RJL)
AT&T INC., ex al., §
Defendants. §
-¢H/
MEMoRANDUM oPlNIoN AND oRDER
(February _Zg, 2018)

On November 2(), 2017, the United States, acting through the Department of
Justice’s Antitrust Division (“plaintiff’ or “the Government”), brought this action to enjoin
the merger of defendants AT&T/DirecTV and Time Warner (collectively, “defendants”)
under Section 7 of the Clayton Act, 15 U.S.C. § 18. See generally Compl. [Dkt. # l]. In
answering the complaint, defendants raised the defense that plaintiff’s claim _“reflects
improper selective enforcement of the antitrust laws.” Answer 28 [Dkt. # 20].
Speciflcally, defendants assert that the challenge to their vertical merger was brought not
due to any credible antitrust concerns, but because one of the Time Warner networks to be
acquired, CNN, has engaged in political speech disfavored by President Trump. See, e.g.,
2/16/2018 Hr’g Tr. (“Hr’g Tr.”) 35:12-24 [Dkt. # 67].

In December 2017, defendants asked plaintiff to produce discovery relating to their
“selective enforcement” defense. Id. at 21 : 12. In particular, defendants have asked

plaintiff to compile and produce summary documents, known as privilege logs, cataloguing

the existence (but not the contents) of certain written and oral communications regarding
the White House’s views of the proposed AT&T-Time Warner merger. Plaintiff has
completed and produced one Such log setting forth a list of “all written communications
between the White House and the Antitrust Division that relate to the subject of th[e]
merger.” Icl. at 39:21-4():2. Although that log apparently indicates that there were no
“untoward” communications between the White House and the Antitrust Division, id. at
41 :4, defendants, through document requests and interrogatories, have asked plaintiff to
produce similar logs listing: 1) all written “communications between the Antitrust Division
and the Attorney General’s Offlce” in which “the White House[’s] views are expressed
about the merger,” id. at 55:5-8; 2) all written communications and documents “between
the Attorney General’s Office and the White House about this merger,” id. at 55112-14;
and 3) all “oral communications between the White House and the Antitrust Division with
regard to the AT&T merger,” id. at 46:8-9, 19-20; see also id. at 56:7-1(). Plaintiff objects
to providing any of that information. That brings us to the dispute currently before the
Court.

By joint letter dated February 13, 2018, the parties, in accordance with the
procedures established in the Case l\/lanagement Order [Dkt. # 54], informed the Court that
they were at an impasse in their negotiations over defendants’ entitlement to the requested
privilege logs. The parties explained their dispute at a status hearing held on February 16,
2018. On the one hand, defendants assert that they are entitled to the requested privilege
logs because those logs are relevant to their selective enforcement defense. Accordingly,

defendants ask that this Court require plaintiff to compile and turn over privilege logs that

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are responsive to the outstanding discovery requests. See l-Ir’g Tr. 55:5-56:23. Plaintiff,
for its part, argues that defendants have failed to establish their right to discovery on the
issue ofselective enforcement See id. at 5911-16. Plaintiff has moved to strike defendants’
selective enforcement defense as well as to quash any outstanding discovery requests
related to that defense. See id. at 60:4-9.

With the trial date in this case fast approaching, all agree that we cannot afford to
spend much of the little remaining preparation time litigating this matter. Even without
the luxury of back-and-forth briefing, however, the parties, through arguments of able
counsel, have made their positions clear. Both sides acknowledge that the Supreme Court’s
decision in United Stales v. Armslrong, 517 U.S. 456 (1996), controls the analysis of
defendants’ entitlement to additional selective enforcement discovery. See Hr’g Tr. 11:1 1-
18, 21:23-24. Thus, the issue here is whether defendants have satisfied Armstrong’s
requirements For the reasons discussed below, l conclude they have not.

As our Circuit has often recognized, “[p]rosecutors have broad discretion to enforce
the law, and their decisions are presumed to be proper absent clear evidence to the
contrary.” United Stales v. Slalten, 865 F.3d 767, 799 (D.C. Cir. 2017) (citing Armstrong,
517 U.S. at 464). To be sure, defendants are correct that Executive Branch enforcement
decisions are “subject to constitutional constraints,” including a prohibition on selectively
prosecuting individuals for exercising their constitutional rights. Armstrong, 517 U.S. at
464 (internal quotation marks omitted); see Att ’y Gen. OfUm`lea’ Slates v. Irish People, lnc.,
684 F.Zd 928, 932, 935 & n.1l (D.C. Cir. 1982). But the Supreme Court has emphasized

that court orders allowing discovery into the exercise of prosecutorial discretion_just as

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those resolving the merits ofa selective enforcement claim_raise a number of “substantial
concerns.” Wayte v. United States, 470 U.S. 598, 607 (1985); see Armstrong, 517 U.S. at
468. Those concerns range from a recognition of the judiciary’s inability to competently
assess the basis for a decision to prosecute, to the threat that courts may “unnecessarily
impair” the Executive Branch’s performance of a “core” constitutional function, to the
practical fact that selective enforcement discovery “will divert prosecutors’ resources and
may disclose the Government’s prosecutorial strategy.” Armstrong, 517 U.S. at 465, 468.

For those reasons, the Supreme Court and our Circuit have established a “rigorous
standard” that defendants must meet before even obtaining discovery on a selective
enforcement defense. Ia’. at 468. Under that standard, defendants must put forward “some
evidence tending to show the existence of the essential elements of the defense,
discriminatory effect ana discriminatory intent.” Icl. (emphasis added) (internal quotation
marks omitted); see Irz`sh People, 684 F.Zd at 932. “lf either part of the test is failed, the
defense fails,” meaning that defendants cannot “subject[] the Government to discovery”
unless they make a colorable showing that this enforcement action was in fact selective.
lrz`sh People, 684 F.2d at 947; see Armstrong, 517 U.S. at 469-70. They cannot do so here.

Defendants have fallen far short of establishing that this enforcement action was
selective»that is, that there “exist persons similarly situated who have not been
prosecuted.” lrz`sh People, 684 F.2d at 946; see also ia’. (“Discrimination cannot exist in a
vacuum; it can be found only in the unequal treatment of people in similar
circumstances.”). As our Circuit has noted, defendants are “similarly situated” for

purposes of a selective enforcement claim “when their circumstances present no

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distinguishable legitimate prosecutorial factors that might justify making different
prosecutorial decisions with respect to them.” Branch Minz`strz'es v. Rossottz`, 21 1 F.3d 137,
145 (D.C. Cir. 2000) (quoting Unitea’ Staz‘es v. Hastz`ngs, 126 F.3d 310, 315 (4th Cir.
1997)). lt is therefore difficult to even conceptualize how a selective enforcement claim
applies in the antitrust context, where each merger “must be functionally viewed” in “the
context of its particular industry” and in light of a “variety of factors”_including the
transaction’s size, structure, and potential to generate efficiencies or enable evasion of rate
regulation;that “are relevant in determining whether a transaction is likely to lessen
competition.” Unitea’ Slates v. Baker Haghes Inc., 908 F.2d 981, 985 (D.C. Cir. 1990)
(internal quotation marks omitted); see generally Dep’t of Justice & Fed. Trade Comm’n,
Non-Horizontal Merger Guidelines (June 14, 1984).

As such, it is no surprise that defendants have mustered only one specific
transaction_Comcast’s 2011 acquisition of NBC Universal (“NBCU”)~as the requisite
comparator for their selective enforcement claim. See Hr’g Tr. 30:7-32:21. As plaintiff
points out, however, the Antitrust Division clia’file a Section 7 enforcement action to enjoin
the Comcast-NBCU transaction. See Complaint, United Staz‘es v. Comcast Corp., No. l l-
cv-106 (D.D.C. Jan. 18, 2011), ECF No. 1. And although the Comcast-NBCU suit was
resolved through a settlement, that settlement occurred in the context of “distinguishable

legitimate prosecutorial factors,” Branch Minz'stries, 211 F.3d at 145_including FCC
oversight_not present here. See Hr’g Tr. 12:22-13:22. Defendants’ attempt to use the

Comcast-NBCU transaction as the basis for their selective enforcement claim is therefore

unavailingl The same goes for defendants’ efforts to distinguish this enforcement action
from the Government’s treatment of vertical mergers generally. As counsel for the
Government explained at length during the hearing, history belies the notion that this action
is the first and only time that the Government has found an antitrust problem with a
proposed vertical merger or insisted on a structural remedy as a condition to settlement.
See z'cl. at 13:23-16:1; see also Steven C. Salop & Daniel P. Culley, Poz‘enll`al Competz`tl`ve
Ejj’ects of Verlz'cal Mergers.' A How-To Gaia’e for Practitioners app. (Dec. 8, 2014)
(collecting vertical merger challenges from 1994-2013).2 So while it may, indeed, be a
rare breed of horse, it is not exactly a unicorn l

For all of those reasons, defendants have not made a “credible showing” that they
have been “especially singled out” by plaintiff Arrnstrong, 517 U.S. at 470; lrz'sh People,
684 F.2d at 946. On that basis alone, their request for additional selective enforcement
discovery fails. See Iri`sn People, 684 F.2d at 947 (requiring a “colorable claim of both”
selection and motivation “before subjecting the Government to discovery”).3 As such, it

follows that defendants are not entitled to an order compelling plaintiffs completion of

 

l ln citing the Comcast-NBCU transaction as the basis for their selective enforcement claim here,
defendants invite this Court to accept their premise that the Comcast-NBCU transaction “presented far more
challenges” under the antitrust laws “than this merger present[s].” l-lr’g Tr. 30:11-12. I decline the
invitation, which at thisjuncture would require me to reach a conclusion about the merits ofthis case based
simply on defendants’ confidence in_rather than evidence of_their position. Defendants will have ample
opportunity to argue “how weak this case is,” ia’, at 33:21-22, during the upcoming trial.

2 This article is available at http://scholarship.law.georgetown.edu/facpub/1392.

3 Having reached this conclusion, l “need not examine whether [plaintiff] was improperly motivated
in undeltaking” this action, Branch Ml'nislries, 21 l F.3d at 145, nor the dueling declarations and deposition
testimony that both sides have proffered to support their respective positions on the motivation issue.

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privilege logs responsive to defendants’ outstanding selective enforcement discovery
requests. Therefore, for the foregoing reasons, it is hereby

ORDERED that defendants’ oral motion to compel production of the requested
privilege logs relating to their selective enforcement defense is DENIED; and it is further

ORDERED that plaintiffs oral motion to strike defendants’ outstanding discovery
and interrogatory requests for: 1) all written communications about the merger between the
White House and the Attorney General’s office; 2) all written communications about the
White House’s view of the merger between the Attorney General’s office and the Antitrust
Division; and 3) all oral communications between the White House and the Antitrust
Division with regard to the AT&T merger is GRANTED.

SO ORDERED. 4

t

M

RICHARD J.@$N
United States Dls rict Judge

 

4 As discussed at the hearing, defendants, out of an abundance of caution, included Assistant
Attorney General (“AAG”) Makan Delrahim on their final fact witness list lest they be foreclosed from
doing so later. See Hr’g Tr. 24:22-25:1. However, based on follow up discussions between the Court and
counsel on both sides during our last hearing, the Court is now proceeding on the beliefthat AAG Delrahirn
will be stricken from the list, subject to the general right-available to both sides-to seek leave to amend
the witness list upon a showing of good cause. See id. at 36:17-37:4.

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