The BLT: The Blog of Legal Times

DOJ, Ticketmaster Settle Merger Case

Seeking to bolster competition in the ticket service arena, Justice Department antitrust regulators today announced a proposed settlement with Ticketmaster Entertainment and Live Nation that would require what officials called "significant" changes to their planned merger.

Antitrust Division lawyers simultaneously filed a complaint against and a settlement with Ticketmaster and Live Nation in the U.S. District Court for the District of Columbia today. Seventeen state attorneys general joined in the suit, which sought to block the merger. Live Nation, the country’s largest concert promoter, has been Ticketmaster’s largest client for a number of years. The merger was announced in February 2009.

The settlement requires Ticketmaster, represented by Gibson, Dunn & Crutcher, to license its ticketing software, divest certain ticketing assets and subject itself to behavioral remedies that prohibit retaliatory action against venues that do not use Ticketmaster. Justice officials said they expect ticket prices to fall with increased competition in the market.

Assistant Attorney General Christine Varney, who announced the settlement in a meeting with reporters this afternoon, said the Justice Department concluded the merger, as originally proposed, was anti-competitive.

“The required divestitures and behavioral prohibitions alleviate our concerns,” Varney, head of the Antitrust Division, said in prepared remarks. The settlement “will preserve competition in primary ticketing and maintain incentives to innovate and discount, thereby benefiting consumers. This is the right result.”

Under the settlement, Ticketmaster must divest the ticketing business Paciolan, which sells millions of tickets annually. Ticketmaster, according to the Justice Department, will divest more ticketing than it will gain through its acquisition of Live Nation. Also, Ticketmaster will be required to license its ticketing software to AEG, a competitor.

A lawyer for Live Nation, Daniel Wall, called the settlement a “fair compromise between a very aggressive enforcement theory and a remedy that still allows the parties to realize the value from the deal.” Wall is a partner in Latham & Watkins' San Francisco office and chair of the firm’s global antitrust and competition practice.

Gibson Dunn partner Steven Sletten, an antitrust litigator in the firm’s Los Angeles office, said in a statement that “we felt that the DOJ's case against the merger was not particularly strong on existing antitrust law.”

The parties, Sletten said, negotiated a resolution that allows the “merger to proceed without the need for lengthy litigation, and the business guys at Ticketmaster and Live Nation can get on with integrating the two companies for the benefit of consumers, artists, sports teams, venues, and pretty much everyone in the chain of live entertainment."

Appeals Court Warm to Comcast in Fight Against FCC

It was the hottest ticket in town, a hearing in the high-profile fight about Internet network regulation between media giant Comcast Corp. and the Federal Communications Commission. The FCC had a seat at the front table. But for this show, the FCC perhaps wishes it had been in the back.

A three-judge panel of the U.S. Court of Appeals for the D.C. Circuit didn’t seem keen on letting stand an FCC finding that Comcast violated “federal internet policy” in interfering with use for certain subscribers. Those consumers were using peer-to-peer software to exchange, among other things, bandwidth-heavy video. Comcast has since abandoned the network management practice that was subject to a complaint at the FCC. The commission did not fine Comcast.

Wiley Rein partner Helgi Walker, representing Comcast, argued today that the FCC was outside its bounds when it crafted and enforced a policy statement—“basically a piece of paper,” Walker called it—against Comcast. That statement, Walker argued, isn’t enforceable. The FCC is now in the rule-making process, a move that began after the August 2008 order was lodged against Comcast. Walker said Comcast has suffered, among other things, harm to its reputation.

The appellate panel—Chief Judge David Sentelle was sitting with Judge David Tatel and Senior Judge A. Raymond Randolph—pressed FCC General Counsel Austin Schlick to back up the FCC’s position that it has the authority to enforce the policy.

Randolph commented that the FCC’s position in the case is “antiquated”—that the FCC is acting on its own without statutory authority from Congress. “What independent authority did the commission have to regulate the Internet?” Randolph asked. Tatel questioned the limits of the FCC policy enforcement—whether the FCC could regulate the volume of e-mail any one subscriber sends and receives.

Supporting Comcast, Howard Symons, chair of the communications practice at Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, argued for intervenors who included NBC Universal and the National Cable & Telecommunications Association. Symons said the order subjects the entire industry to “vague” standards and provides no guidance on determining permitted conduct.

Backing the FCC in the litigation were consumer groups that included Free Press, Consumer Federation of America and the Open Internet Coalition. Free Press General Counsel Marvin Ammori argued for the intervenors who are supporting the FCC.

It’s rarely hard to get a seat for argument at the D.C. Circuit. Today’s case drew a crowd of more than 125 people. Some spectators lined the back wall of the courtroom. With all the talk of technology, no recording devices—video and audio—were not allowed in the courtroom.

A court staffer jokingly said “see you all in a couple of years” as the court observers left and grabbed their coats after the hearing.

Sex and the City to Sport Its Manolo Blahniks at Hogan's New York Office

It's not often here at the BLT that we get to write that a law office is going to get a little sexier. But on Sept. 2, Hogan & Hartson's New York office can expect just that, thanks to its selection as a filming location for the sequel to the Sex and the City movie.

The Am Law Daily reports that the atrium on the 25th floor of Hogan's offices at 875 Third Ave. will be transformed into Mr. Big's on-screen office, according to an internal e-mail from the firm. The internal e-mail warns partners to clean up their offices "so your boxes are not in the movie!"

Unfortunately, if you happen to be in New York that day, you’re probably not going to get a chance to see Carrie, Samantha, Charlotte, Miranda, et al. flirting shamelessly and sipping cosmos.

"We understand that your friends and family are BIG fans (and Mr. Big fans) of the series," the internal memo says. "Unfortunately, as much as we want to, we cannot accommodate guests, friends and family members and fellow fashionistas. If at all possible, we will try to arrange for Hogan employees to meet the stars and get autographs, but we cannot guarantee this."

The Am Law Daily has more here.

In Granting New Trial, Judge Questions Prosecution 'Tactic'

Calling a prosecutor’s failure to turn over favorable evidence to the defense conscious and deliberate, a D.C. Superior Court judge this afternoon granted a new trial to a D.C. man accused of fatally stabbing another man in a park in Southeast Washington in August 2007.

Judge Frederick Weisberg barely looked up from the bench as he questioned the prosecutor’s decision to conceal testimony that cast doubt on the credibility of the government’s chief witness against Joseph Harrington.

The new information—grand jury testimony from a woman whom the government did not call at trial last year—was not given to Harrington’s Public Defender Service lawyers until January, a month after Harrington was convicted. Assistant U.S. Attorney Vivien Cockburn argued in briefs that the testimony wasn’t material and would not have changed the outcome of the trial.

Harrington’s lawyers, Thomas Dybdahl and Christopher Roberts, say the concealed testimony was crucial to the defense and they alleged Cockburn violated her obligation to produce exculpatory material. “We believe what was done was not done inadvertently,” Dybdahl said in court today. The judge agreed.

“In my opinion,” Weisberg said, “it was patently disclosable, not a debatable point.” Weisberg called the failure to the disclose the information a prosecution tactic, saying the testimony “could be mischievous in the hands of a good defense lawyer.”

It is the jury's role, and not that of the prosecution, to determine the credibility of witnesses, Weisberg said. Granting a new trial motion, the judge said, is “extreme” and costly, and it should serve to remind prosecutors of their obligations. Weisberg said he did not see his role as one requiring him to bring sanctions against the prosecutor.

The judge set a May 1 status conference. Harrington was ordered held in custody pending trial.

Leahy on the Supreme Court, Detainees, and Batman

In addition to floating the creation of a “truth commission” for the Bush administration, Sen. Patrick Leahy (D-Vt.) had a few nuggets of interest this morning in his speech at Georgetown University, where he got his law degree. Let’s empty our notebook.

Friends on the bench: Judge Robert Katzmann of the U.S. Court of Appeals for the 2nd Circuit introduced Leahy and offered kind words. A former Georgetown professor and Brookings Institution fellow, Katzmann said he was nervous before being nominated to the 2nd Circuit in 1999 but that Leahy put him at ease by showing him some recent photography. Also in the audience today: Judge J. Garvin Murtha of the U.S. District Court for the District of Vermont.

Supreme Court diversity: Noting the disclosure last week that Justice Ruth Bader Ginsburg had undergone surgery for pancreatic cancer, a student asked Leahy, who is chairman of the Senate Judiciary Committee, to share any insights he might have into future nominations and his thoughts on the Court’s diversity. Leahy sidestepped the first part of the question, sending his best wishes to Ginsburg, then said: “I would like to see a Supreme Court that more directly resembles America. I would like to see more women on the Supreme Court. I would like to see more minorities on the Supreme Court.” He added that he would like to see more nominees “from outside what I call the judicial monastery,” giving former Justice Hugo Black as an example. (Black had been a U.S. senator from Alabama before joining the Court.)

What to do with detainees: Leahy revealed that he’s been meeting with White House Counsel Greg Craig to discuss what to do with the remaining detainees at the Guantánamo Bay detention camp. A student asked Leahy his opinion on the most feasible legal options for moving the detainees, and Leahy replied, “It is an extraordinarily complicated issue. ... We’re trying to find a way to do that.” He didn’t give further details.

The Batman question: Leahy’s appearance in "The Dark Knight" has earned $125,000 in residuals for a Montpelier, Vt., public library where Leahy got his first library card. The topic came up when, during today’s question-and-answer session, a student praised Leahy’s acting skills. Nearly every student raised a hand when Leahy, a longtime Batman fan, asked who had seen the film. He then reenacted his part, minus the Joker: “We’re not intimidated by thugs!”

Ron Klain Dishes on HBO's "Recount"

When Washington lawyer Ron Klain served as general counsel of the Florida recount effort for Al Gore’s 2000 presidential campaign, he thought the debacle might one day make a good “horror flick.” Instead, it’s the subject of HBO’s movie, “Recount,” which debuts Sunday night, and stars Kevin Spacey as Klain. “The guy’s a great actor. It’s a little surreal,” says the real Klain, who is today general counsel of investment firm Revolution, based in the District.

The infamous 36-day recount culminated, of course, with the U.S. Supreme Court confirming George W. Bush as the winner of Florida’s electoral votes. Klain says he’ll never get over that decision, but it certainly didn’t turn him off to politics. He has since served on the presidential campaigns of Sens. John Kerry and Joseph Biden. Before joining Revolution in 2005, he spent five years as a partner in O’Melveny & Myers’ D.C. office.

Klain has seen “Recount” three times, and will spend Sunday evening watching its HBO debut with his family in Indianapolis. He says the movie is generally accurate, but “a lot of the behind-the-scenes stuff is fictionalized.” Klain adds that there were 100 lawyers working on the recount, while only eight of them appear on screen. As a consequence, he says those lawyers get more credit — and more blame — than they deserve. “It looks a lot more like a one-man show than it was in real life.”

Another star performance in “Recount” is Laura Dern’s portrayal of Katherine Harris, who was both Florida Secretary of State and co-chair of Bush’s Florida campaign. Throughout the ordeal, Harris developed as one of the most controversial figures involved. As for Dern’s portrayal of her, Klain says, “If I were allowed to pass out Emmys, she definitely would get one.”

Legal Times Goes to the Movies

Here at the LT, we just can’t seem to escape from the attorney world even on the weekend. So, much as an associate might spend those precious free days poring over depositions, Sunday evening movie night turned lawyerly with the new law firm film Michael Clayton.

And true to the rave reviews from critics, Clayton, (played by Hollywood’s dream machine George Clooney) has good taste. That’s right, he reads Legal Times. He has a copy on his desk.

But even with Clayton’s estimable choice in reading material, he seems to be lacking in job satisfaction. Sure, he works for a top New York law firm and drives around in the firm’s Mercedes S-Class sedan, working magic for his fellow attorneys’ trouble-ridden clients. Yet he see himself as a glorified janitor who can’t even make equity partner.  Sound familiar?

Despite his special counsel status, Clayton is called upon to “fix” all of the firm’s nasty little problems, including troubles surrounding a $3 billion class action lawsuit. Not to bust any plot bubbles or anything.

The film is smart, has solid acting, an engaging storyline, and a decent number of scenes with Clooney staring off into the distance. The LT office poll says go see this movie at the theater. And, no, it’s not just because of the product placement.

YouTube, Texas Bar Style

Let no one suggest the State Bar of Texas is not au courant: The bar has launched a YouTube contest, seeking original videos that dramatize the promise of justice for all, according to Texas Lawyer.

Bar President Gib Walton proclaims, "We are the first bar association in the United States — in the world — to have a YouTube contest." And a spokeswoman for the American Bar Association says that, as far as the ABA knows, this is true. "New media, new ways to do things — that's all I can say," comments Debbie Weixl.

There’s a cash prize of $2,500 for the 18-and-over crowd. Rules and the entry form are posted online here. Sadly, the contest is open only to Texans and lawyers licensed in the state.

But even if you lack that critical Texan connection, don’t suppress your inner Martin Scorsese just yet. Says Walton, "I believe every bar association is going to want to do one of these."

Michael Clayton, For Real

Will the real Michael Clayton please stand up? The WSJ Law Blog has discovered the “true” identity of the lawyer upon whom George Clooney based his character in the new legal thriller “Michael Clayton.” See Slate’s review of the movie.

And the real Michael Clayton lives right here in Washington. Though instead of being “the fixer” portrayed on the big screen, he actually heads Morgan, Lewis & Bockius’ global trademark and copyright practice. Artistic license, no doubt. 

Money quote from the Law Blog’s interview with Clayton: “Well I wonder how he would feel if I made a movie about a movie star named George Clooney and the trailers blared ... ‘Michael Clayton is George Clooney!’”

Trustbusting on TV

Live in the D.C. area and need a legal reason to laze on the couch this weekend? Want to practice your TiVo skills before the fall TV season starts up next month? On Sunday, WETA is showing “Fair Fight in the Marketplace,” a half-hour documentary on the role of antitrust law.

Besides a brief history, the program features three case studies involving Archer Daniels Midland, Mylan Pharmaceuticals, and Microsoft. Robert Pitofsky, former FTC chair, calls the documentary “clear,” “balanced,” and “entertaining.”

“Fair Fight” is the brainchild of the American Antitrust Institute. The program and related educational materials were paid for, in part, by a grant from a cy pres fund established in the 2002 settlement of a California consumer class action over vitamins price-fixing.

For those of you outside the Beltway, sorry. AAI reports that “Fair Fight” has already been shown on 75 PBS stations around the country.