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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 1