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UNITED STATES DISTRICT
COURT
FOR THE DISTRICT OF
COLUMBIA
_________________________
UNITED STATES OF AMERICA,
et al
Plaintiffs
v.
THE THOMSON CORPORATION
and
WEST PUBLISHING COMPANY
Defendants
_________________________
Docket No: 96-1415
MOTION OF HYPERLAW, INC. TO PARTICIPATE AS AMICUS
CURIAE IN OPPOSITION TO ENTRY OF PROPOSED FINAL
JUDGMENT
PLEASE TAKE NOTICE that HyperLaw, Inc, moves to
participate as amicus curiae in opposition to entry of
the proposed final judgment pursuant to the Antitrust
Procedures & Penalties Act, 15 U.S.C § 16(f)(3).
1. HyperLaw, Inc. is a publisher of CD-ROMs of
federal appellate opinions. HyperLaw was founded in
1991 and is located in New York, New York. HyperLaw
also provides formatted federal court opinions to
Lawyers Cooperative Publishing Company ("LCP") pursuant
to several contracts.
2. HyperLaw is a Plaintiff-Intervenor in an action
against West Publishing Company presently pending in
the Southern District of New York, Martin, J., seeking
a declaratory judgment which would permit HyperLaw to
copy the text of court opinions and pagination
published in West Publishing Company case law
reporters. [See opinion of Martin, J., Matthew Bender
and HyperLaw v. West, 94 Civ. 0589, U.S.D.C. S.D.N.Y.,
August 2, 1996, granting intervention of HyperLaw, Inc.
attached hereto as Exhibit 1]. HyperLaw is a publisher
which has been threatened by West as found by Judge
Martin.
3. HyperLaw has submitted four letters to the
Department of Justice in opposition to the proposed
consent decree: two letters dated June 26, 1996, a
letter dated June 28, 1996, and a letter dated
September 3, 1996. In addition, HyperLaw met twice
with Justice Department officials during its merger
review. Subsequent to HyperLaw's June 28, 1996 letter,
HyperLaw held a two hour telephone conversation with
five Justice Department attorneys. HyperLaw desires
among other things to file a response to the comments
of the Justice Department which are due on September
23, 1996, and is mindful of the recent decision of this
Court that emphasized its preference to waiting for
these comments.
4. Obviously, the Department's final position cannot
be known until it files its comments, and potential
intevenors and amicus curiae need to have an
opportunity to respond subsequent to the September 23,
1996 filings. We also note that Thomson has already
acquired West, the consolidation of the two companies
is under way, and joint marketing has already
commenced.
5. If LCP is not divested by West-Thomson, LCP will
have no need to continue to purchase data from
HyperLaw. HyperLaw is in the position of thousands of
providers of legal information, including authors of
legal texts such as judges, professors, and private
practitioners, who are being ushered in by the
Department of Justice to a new world with the market
for publication and dissemination of their works being
dominated by a single publisher. Some whose works are
published by West or Thomson may even find their works
"orphaned" and now in the hands of a disinterested
publisher–West, Thomson, or the acquirer of divested
products.
6. Absent a meaningful license agreement and a
meaningful entity divestiture, HyperLaw believes it
would be in the public interest for there to be no
Consent Decree and for the Department of Justice to
withdraw its Complaint. This would free the Department
of Justice to seek meaningful relief in the future when
the devastating anticompetitive impact of this merger
becomes to obvious to ignore and will deny West-Thomson
the ability to misrepresent an illusory license
agreement so as to further solidify its monopoly.
7. HyperLaw has reviewed the letter by Lexis Nexis
dated August 29, 1996 and is aware of the papers
submitted by Lexis Nexis in opposition to entry of the
proposed final judgment. HyperLaw believes that a
legal information marketplace completely dominated by
one company establishes a hostile competitive
environment. The combination of the two largest
competitors and a damaging blow to the third largest is
not in the public interest.
8. It was for that reason that HyperLaw met with
Department of Justice officials in 1993 and objected to
a sole source contract that the Department of Justice
was proposing to enter into with West as the sole
provider of on-line legal research for the Department.
The Department had so prepared its request for proposal
for the contract as to require the vendor to provide
comprehensive databases. The contract request was
slanted in favor of West. Lexis-Nexis was the only
other vendor able to bid on the contract. Lexis Nexis
was only able to be in the running because of its
access to databases provided by Thomson companies to
Lexis Nexis. The Department could not provide a
justification as to why a sole source contract was
required, and why both Westlaw and Lexis-Nexis could
not be made available to Department attorneys.
Similarly, the Administrative Office of United States
Courts has issued for the federal courts a sole source
contract for Westlaw. Thus, West holds the franchise
as the gateway to provide on-line research to
Department of Justice and the federal courts.
9. If Lexis-Nexis is permitted to intervene, for the
first time since 1988, West and Lexis-Nexis will be
before an open court and an opportunity will be
provided for these parties to explain and justify why
their 1988 settlement and license agreements are bound
in secrecy. Those license agreements covered not only
the license by West of citations to court opinions but
also applied to the license of text of court opinions,
the license of the text of statutory information, and
the license of citations to statutory information. See
Entry No. VI-27, Docket Sheet Excerpt, West v. Mead, 4-
85-931, District of Minnesota, attached hereto as
Exhibit 2. This is a proper issue to raise in the
present context, especially because all of the parties
have made public, and conflicting, references to these
secret agreements.
10. All of the parties to this proceeding, including
the Department of Justice, West, Thomson, and now Lexis
Nexis, have commented openly about these agreements
that were sealed in 1988 at the request and for the
convenience of West and Lexis-Nexis, without any
specific ruling by the court. In an article in the
September, 1996 issue of the American Lawyer (attached
hereto as Exhibit 3), which includes the posed
photographs of Department of Justice attorneys, and
West and Thomson attorneys, the following statements
were made on page 81:
"LEXIS's license is based on a similar kind of
formula–it's based on characters–and their license
fee now is huge," says Fullerton.
"Likewise, West's chief lawyers on the deal, James
Schatz –to whom Shearman and Stearlng deferred on
the pagination issues–says the new form agreement
is "not analogous at all" to the Lexis agreement
with West–"[it is] different in almost every way."
References to the West-Lexis agreements by Lexis Nexis
CEO Ira Siegel are also contained in the article.
Similarly, Lexis Nexis in Paragraph 7 of its letter to
the Department of Justice dated August 29, 1996 makes
references to the content of the agreement. These
agreements are the keystone to eight years of anti-
competitive activities in this industry, and, no one,
certainly this court, can fully appreciate the context
of the merger of West and Thomson without access to
these agreements, as well as the agreements between
Thomson and Lexis-Nexis, which resulted in Thomson
absenting itself as an on-line database competitor of
West and Lexis-Nexis.
11. Because these agreements are significant
agreements for each of these companies, it is apparent
that all of the large publisher competitors who were
serious bidders on the acquisitions of West in 1996 and
of Lexis Nexis several years ago would have had access
to these secret agreements. Similarly, former
executives of those companies now with other legal
publishers are similarly aware of the content of these
agreements: an example is Kathryn Downing who is not
President of Matthew Bender & Company and when she was
with Lexis-Nexis in 1988, negotiated the agreement on
behalf of Lexis-Nexis. Accordingly, were these
agreements to be made public, there could be no
competitive harm, and the public would benefit greatly.
12. We believe that open review of these agreements
would show how the License Agreement being falsely
promoted as an "open" agreement is so severely crippled
in its failure to deal with statutory information and
importantly access to text of court opinions.
13. With respect to the failure of the proposed
License Agreement to cover text, HyperLaw will not
repeat the statements made in its comment letters.
However, HyperLaw emphasizes that this is not an issue
of concern to Lexis-Nexis which has its own archive of
court opinions as well as its own license agreement
from West. Similarly, Matthew Bender has recently
entered into its own joint venture with Lexis-Nexis and
for that reason does not have the same critical
concerns about the court opinion text.
14. HyperLaw is also concerned that counsel for West-
Thomson will make representations and statements to the
Court as to how the License Agreement will be
interpreted, and that the court will rely on those
representations. However, representations and
statements made by West's counsel, have been completely
repudiated by West and Thomson, when it is in their
interests. Indeed, only several weeks ago, West and
Thomson repudiated representations made by West's
counsel Brady Williamson on March 21, 1995, to the
Wisconsin Supreme Court that first page citations were
in the "public domain", as shown in a transcript
prepared by West and submitted by Mr. Williamson to
that court. West and Thomson on page 5 of a brief filed
August 19, 1996 in Matthew Bender and HyperLaw v. West
repudiated the statements. West Publishing Company's
Memorandum of Law In Opposition to Plaintiff Matthew
Bender & Company's Motion for Summary Judgment. West-
Thomson described the statements of counsel as "certain
unsworn statements allegedly made on occasions outside
the litigation". Moreover, Thomson has completely
repudiated statements it made to Congress in 1992
concerning the copyright of page citations, when
Thomson claimed that West was a monopoly. See Prepared
Statement of Kathryn M. Downing, President and Chief
Operating Officer of Thomson Electronic Publishing, p.
81, Hearing, Subcommittee on Intellectual Property and
Judicial Administration of the Committee on the
Judiciary, House of Representatives, 102nd Congress,
H.R. 4426, Exclusion of Copyright Protection for
Certain Legal Compilations, May 14, 1992. Thus, one
can easily anticipate that West-Thomson counsel will
make grandiose representations to this court –which
will then be ignored, and, if not ignored, cleverly
abused to construe all ambiguity to West-Thomson's
favor. Our letters establish that the Department of
Justice is unable to commit the necessary resources to
identify, if not address, these ambiguities as well as
the adverse provisions in the License Agreement.
15. HyperLaw believes that the Proposed Final Judgment
is not in the public interest, as required by the
Antitrust Procedures & Penalties Act, 15 U.S.C. §
16(e). It does not remedy the abuses described in the
complaint, does not provide adequate enforcement, and
is ambiguous. This is completely documented in our
letters.
16. HyperLaw requests participation as amicus curiae.
See 15 U.S.C. § 16(f)(3). HyperLaw has knowledge of
the issues raised in this matter, and a special
interest in its outcome. The Court may allow non-party
participation as amicus curiae within its sole
discretion. Ellsworth Associates, Inc. v. United
States, 917 F.Supp. 841, 846 (D.D.C. 1996), dismissed,
926 F.Supp. 207 (D.D.C. 1996); Clark v. Sandusky, 205
F.2d 915, 917 (7th Cir. 1953). Where the information
offered is "timely and useful." a court may generally
grant leave to appear as amicus curiae. Ellsworth, 917
F. Supp. at 846; Waste Management v. City of New York,
162 F.R.D. 34, 36 (M.D.Pa. 1995), aff'd, 782 F.2d 1033
(3d Cir.), cert denied 476 U.S. 1141 (1986). Although
HyperLaw believes it to be in the public interest to
allow the intervention of Lexis-Nexis, HyperLaw has
certain positions that differ from the interests of
Lexis-Nexis.
Dated: September 12, 1996
Respectfully Submitted:
_____________________________
Lorence L. Kessler (D.C. Bar #
203-521)
Counsel for HyperLaw, Inc.
Suite 400
1825 I Street, N.W.
Washington, D.C. 20006
202-857-8067
Of counsel:
Alan D. Sugarman. Esq.
CERTIFICATE OF SERVICE
I hereby certify that on September 12, 1996 I
caused copies of the MOTION OF HYPERLAW, INC. TO
PARTICIPATE AS AMICUS CURIAE IN OPPOSITION TO ENTRY OF
PROPOSED FINAL JUDGMENT to be served by pre-paid, first
class U. S. Mail:
Craig W. Conrath, Esq.
U.S. Department of Justice
Antitrust Division
Merger Task Force
1401 H Street N.W.
Washington, D.C. 20005
Wayne D. Collins, Esq.
Attorney for The Thomson Corporation
Shearman & Sterling
Citicorp Center
New York, New York 10022
James E. Schatz, Esq.
Attorney for Defendant West Publishing Company
Schatz Paquin Lockridge Grindal & Holstein P.L.L.P.
Suite 2200
100 Washington Avenue So.
Minneapolis, MN 55401
Attorney General of New York
Steven D. Houck, Esq.
Chief Antitrust Bureau
120 Broadway, Suite 2601
New York, NY 10271
State of Washington
Tina E. Kondo, Esq.
Assistant Attorney General
900 Fourth Avenue
Suite 2000
Seattle, WA 98164
Attorney General of the State of California
Kathleen E. Foote
Deputy Attorney General
1300 I Street
Sacramento, CA 95814
Attorney General of the State of Connecticut
Aaron S. Bayer
Deputy Attorney General
110 Sherman Street
Hartford, Connecticut 06105
Attorney General of the State of Illinois
Christine H. Rosso
Chief, Antitrust Bureau
100 Randolph St.
12th Floor
Chicago, IL 60601
Commonwealth of Massachusetts
George K. Weber
Assistant Attorney General
Chief, Consumer Protection and Antitrust Division
Public Protection Bureau
One Ashburton Place
Boston, MA 02109
Attorney General of the State of Wisconsin
Kevin J. O'Connor
Assistant Attorney General
123 West Washington Ave.
Madison, Wisconsin 53717
____________________________
Alan D. Sugarman, Esq.
September 12, 1996
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