Antitrust Merger Trials - Lessons Learned and Strategies for Success - November 10, 2020
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Antitrust Merger Trials – Lessons Learned and Strategies for Success November 10, 2020
Recent Merger Litigation
Recent Merger Litigation
• United States v. AT&T Inc., et al.,
No. 1:17-cv-02511, 2018 WL 3752091 (D.D.C. June 12, 2018), aff’d,
No. 18-5214, 916 F.3d 1029 (D.C. Cir. Feb. 26, 2019)
• State of New York, et al. v. Deutsche Telekom AG, et al.,
No. 1:19-cv-05434, 439 F.Supp.3d 179 (S.D.N.Y. Feb. 11, 2020)
• United States v. Sabre Corp., et al.,
No. 1:19-cv-01548, 452 F.Supp.3d 97 (D. Del. Apr. 7, 2020), vacated,
No. 20-1767, 2020 WL 4915824 (3d Cir. July 20, 2020)
• FTC v. Peabody Energy Corp. and Arch Coal, Inc.,
No. 4:20-cv-00317, 2020 WL 5893806 (E.D. Mo. Oct. 5, 2020)
• United States v. VISA Inc. and Plaid Inc.,
No. 3:20-cv-07810 (N.D. Cal., filed Nov. 5, 2020)
3
What the Agencies Look For During a Merger Investigation
What the Agencies Look For During a Merger
Investigation
• Modern cases are built on “hot documents”
Ordinary course documents authored by
executives
Government calls authors—often executives—
adversely as part of case-in-chief
• Market share estimates in party documents
Market share is basis for Phila. Nat’l Bank
structural presumption
Evidence of relevant product/geographic market
5
What the Agencies Look For During a Merger
Investigation
6
What the Agencies Look For During a Merger
Investigation
7
What the Agencies Look For During a Merger
Investigation
• Supportive customers
Once was foundation for government’s case-in-
chief
Now frequently limited to a handful of customers
to provide industry background
• Minimum contacts in D.D.C.
Government prefers to litigate in D.C. federal
district court
Will look for ties to D.C., including sales to federal
agencies, D.C.-based customers, D.C. offices, etc.
8
Preparing For Trial During the Investigation Phase
Preparing For Trial During the Investigation
• The importance of getting trial counsel involved during the agency investigation
• Defend investigational hearings
• Ensure the privilege log does not create problems in court
• Become familiar with the documents and witnesses
• The role of appellate counsel
• The role of experts at the investigation phase
• Whether to use the same experts during the investigation and trial?
• Either way, trial counsel should be involved
10Winning at Trial
Winning at Trial – Experts
• Experts should not be the focal point of the defense
case
• Experts supplement the fact witnesses
• Clarity and simplicity
• Address competitive effects
12Winning at Trial – Executives
• The government will call at least some executives as adverse
witnesses
• Executive preparation time is critical
• The executives have two primary roles at trial
• First, they must tell the procompetitive story
• Second, they must be able to handle sound bites in
documents
13Telling the Procompetitive Story at Trial
14Telling the Procompetitive Story at Trial
15Handling Sound Bites from Documents
16Handling Sound Bites from Documents
17Overcoming the Philadelphia National Bank
Presumption
•Litigating the Fix
•Efficiencies
18Litigating the Fix
• Many merger trials involve a fix – a proposal to eliminate or mitigate any
perceived anticompetitive effects of the merger
• The first Arch Coal trial involved a spin-off of a mine to a very strong
buyer
• In the Sprint/T-Mobile trial, the DOJ and FCC approved a fix (divestitures
to DISH), but the State AGs attacked the fix
• Evidence from DISH
• Evidence from non-parties
• In the AT&T/Time Warner trial, the merging parties addressed DOJ’s
claim that the merged entity would withhold valuable channels
19Efficiencies
Can efficiencies redeem an anticompetitive merger?
“The Agencies will not challenge a merger if cognizable efficiencies are of
a character and magnitude such that the merger is not likely to be
anticompetitive in any relevant market.” HMG § 10.
“Despite, however, widespread acceptance of the potential benefit of
efficiencies as an economic matter, see, e.g., Guidelines § 10, it is not at all
clear that they offer a viable legal defense to illegality under Section 7. In
FTC v. Procter & Gamble Co., 386 U.S. 568 (1967), the Supreme Court . . .
held that ‘[p]ossible economies cannot be used as a defense to illegality.’”
United States v. Anthem (D.C. Cir. 2017).
“In sum, the Court concludes that Defendants’ proposed efficiencies are
cognizable . . . [h]owever, mindful of the uncertainty in the state of the law
regarding effiencies . . . the Court stresses that the Proposed Merger
efficiencies it has recognized constitute just one of many factors that it
considers and do not alone possess dispositive weight in this inquiry.”
New York v. Deutsche Telekom AG (S.D.N.Y. 2020).
20Efficiencies
What efficiencies count?
Merger Specific
• Cannot be achieved by either company alone
Verified
• Not speculative
• Shown in “real” economic terms
• Substantiated by past experience
21Upholding a Favorable Result on Appeal
Upholding a Favorable Result on Appeal
Litigating the Stay Pending Appeal
• Likelihood of success on the merits
• Possibility of injury
• Public interest
Appellate Standard of Review
• Conclusion of law are reviewed de novo
• Findings of fact are reviewed for clear error
23Today’s Presenters
Kristen Limarzi is a partner in the Washington, D.C. office. Before joining Gibson Dunn, Ms. Limarzi was the Chief of the
Appellate Section of DOJ’s Antitrust Division where she advised Division leadership and investigative teams on merger
matters involving novel antitrust issues across a variety of industries and litigated appeals the AT&T/TimeWarner and
Anthem/Cigna mergers.
Richard Parker is a partner in the Washington, D.C. office. Mr. Parker is a leading antitrust lawyer who has successfully
represented clients before both enforcement agencies and the courts. He has been involved in many major antitrust
representations, including merger clearance cases, cartel matters, class actions, and government civil investigations.
Mike Raiff is a partner in the Dallas and Houston, TX offices. Mr. Raiff has a wide range of litigation experience and has
tried numerous cases (jury trials, bench trials, and arbitrations), including helping try the AT&T/Time Warner merger trial
in D.C. federal court. In addition to his trial and arbitration practice, Mr. Raiff has argued numerous cases before
appellate courts, including Texas appellate courts and several United States Circuit courts.
Brian Robison is a partner in the Dallas, TX office. Mr. Robinson has experience in a wide range of business litigation and
antitrust matters in both state and federal courts. He has handled antitrust cases involving claims of monopolization,
predatory pricing, price-fixing, supply control, bid rigging, bid rotation, and immunity under the Capper-Volstead Act, the
McCarran-Ferguson Act, and the act of state doctrine.
Rob Walters is a partner in the Dallas, TX office. Mr. Walters is a nationally recognized trial and antitrust lawyer. He served
as lead trial counsel in a wide array of antitrust trials and cases, including as lead trial counsel to AT&T in the DOJ’s 2018
challenge to its $106 billion acquisition of Time Warner, Inc. He also counsels clients in government investigations and
the antitrust aspects of mergers and acquisitions.
Chris Wilson is of counsel in the Washington, D.C. office. Mr. Wilson assists clients in navigating DOJ, FTC, and
international competition authority investigations as well as private party litigation involving complex antitrust and
consumer protection issues, including matters implicating the Sherman Act, the Clayton Act, the FTC Act, the Hart-Scott-
Rodino (HSR) merger review process, as well as international and state competition statutes.
24Final Thoughts
• If you have any unanswered questions, please feel free to contact any of
our presenters:
Kristen Limarzi (202-887-3518, klimarzi@gibsondunn.com)
Rich Parker (202-955-8503, rparker@gibsondunn.com)
Mike Raiff (214-698-3350, mraiff@gibsondunn.com)
Brian Robison (214-698-3370, brobison@gibsondunn.com)
Robert Walters (214-698-3114, rwalters@gibsondunn.com)
Chris Wilson (202-955-8520, cwilson@gibsondunn.com)
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