Viamedia, Inc. v. Comcast Corporation et al

Northern District of Illinois, ilnd-1:2016-cv-05486

MEMORANDUM by Viamedia, Inc. in Opposition to motion to compel {{123}} Response to Defendants' First Set of Interrogatories

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Case: 1:16-cv-05486 Document #: 135 Filed: 06/08/17 Page 1 of 9 PageID #:3833 IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF ILLINOIS EASTERN DIVISION VIAMEDIA, INC., Plaintiff, v. No. 16 C 5486 COMCAST CORPORATION and Honorable Amy J. St. Eve COMCAST SPOTLIGHT, LP, Defendants. MEMORANDUM OF LAW IN OPPOSITION TO DEFENDANTS’ MOTION TO COMPEL RESPONSES TO DEFENDANTS’ FIRST SET OF INTERROGATORIES __________________________________________________________________________ Plaintiff Viamedia, Inc. ("Viamedia") respectfully opposes Defendants’1 motion seeking to compel verified responses by Viamedia to two contention interrogatories: (1) the precise description of the tying and tied products sold by Comcast and (2) the precise contours of the relevant market that Defendants have allegedly monopolized. The Court should reject Defendants’ motion because these interrogatories are a premature attempt to pin down Viamedia’s position on factually complex economic issues that are routinely—and appropriately—addressed through Rule 26 expert disclosures after fact discovery. It is not correct that the information needed to answer the interrogatories is in Viamedia’s possession: relevant product and market definition depend on market facts and economic analysis that Viamedia intends to develop in discovery. That discovery process is still in its early stages: Comcast just made its first substantial production of non-DOJ documents today; no depositions have yet been taken; and expert disclosures are not due for more than four months. Accordingly, as even Defendants acknowledge, any response at this juncture 1 Defendants are Comcast Corporation and Comcast Spotlight, LP (together, "Comcast").-1-Case: 1:16-cv-05486 Document #: 135 Filed: 06/08/17 Page 2 of 9 PageID #:3834 would necessarily be subject to amendment or supplementation as further fact and expert discovery unfolds. Comcast’s motion should be denied. BACKGROUND In opposing Comcast’s initial motion to dismiss the complaint in this case, Viamedia explained that its "tying allegations are straightforward: Comcast has tied access to Comcast-controlled Interconnects for MVPDs that wish to sell regional advertising to those firms’ agreement to use Comcast Spotlight as their sole spot cable advertising representative." ECF No. 32, at 2. Viamedia went on to explain that "[t]he Complaint unmistakably describes two distinct markets:'Spot Cable Advertising’ regional markets and'The Market for Spot Cable Advertising Representation,’ " id. at 2, and that its claims are based on "Comcast’s scheme to monopolize the market for providing third-party spot cable representation services to [MVPDs]," id. at 1.2 The Court accepted these allegations, holding that Viamedia had "plausibly alleged distinct markets for spot cable advertising representation service and Interconnect services." ECF No. 36, at 28. Less than three weeks after the Court’s initial motion-to-dismiss ruling, in its very first set of discovery requests, Comcast asked Viamedia to identify "the relevant product market and geographic markets" for its "tying" and "exclusive deal [sic]" claims. ECF No. 125-1, at 6 ("Interrogatories No. 4 and 5"). Comcast similarly asked Viamedia to "identify the'tying’ product and the'tied’ product" and "estimated market share(s)" for the "relevant market(s)." Id. Viamedia raised timely objections to Interrogatories No. 4 and 5 on several bases, including that significant 2 See also, e.g., Am. Compl. ¶ 180, ECF. No. 40 ("The provision of Spot Cable Advertising Representation services constitutes a relevant product market and the regional DMAs in which Comcast controls the Interconnect constitute relevant geographic markets under the antitrust laws."); id. ¶ 192 ("Because of Comcast’s monopoly control of regional Interconnects and its unilateral ability to exclude competitors from this infrastructure, which is essential to market participation, there is a dangerous probability that Comcast will be able to leverage its position to gain and maintain monopoly power in the markets for Spot Cable Advertising Representation where Comcast controls the Interconnect.").-2-Case: 1:16-cv-05486 Document #: 135 Filed: 06/08/17 Page 3 of 9 PageID #:3835 discovery has not yet been completed and that the interrogatories were premature requests for a disclosure of expert opinions. ECF No. 125-2, at 7-8. Counsel for Viamedia have stood by those objections after Comcast’s counsel continued to seek responses. See, e.g., ECF No. 125-4, at 3; ECF No. 125-6, at 4; Ex. 1 (Apr. 20, 2017 Email from K. Fetterman to C. Lynch). To date, the parties have collectively served a total of 95 document requests on each other, and the parties have also collectively served 13 subpoenas seeking documents from non-parties. Fetterman Decl. ¶ 3.3 Other than Comcast’s re-production of documents, advocacy, and deposition testimony provided to the U.S. Department of Justice ("DOJ"), Comcast has made only one substantial document production, which Viamedia counsel received today, and neither party has conducted any depositions. Id. ¶¶ 4-5. Fact discovery is not scheduled to end for another three and a half months, and expert opinions are scheduled to be disclosed shortly after fact discovery ends. ECF No. 98. ARGUMENT I. Product and Geographic Market Definition Are Appropriately Addressed Through Expert Disclosures Defining "what constitutes a relevant market" in an antitrust case requires answering "complex economic question[s]." Depuy Inc. v. Zimmer Holdings, Inc., 343 F. Supp. 2d 675, 686 (N.D. Ill. 2004).4 As a result, questions of market definition, whether product market or geographic 3 Citations to "Fetterman Decl." refer to the Declaration of Kenneth M. Fetterman dated June 8, 2017, which is attached hereto. 4 See also ABC Rail Prods. Corp. v. Progress Rail Servs. Corp., 1998 WL 641369, at *2 (N.D. Ill. Sept. 11, 1998) (observing that "the definition of the market," "respective market shares," and the like "involve highly complex legal and factual questions"); A.O. Smith Corp. v. Lewis, Overbeck & Furman, 777 F. Supp. 1405, 1411 (N.D. Ill. 1991), rev’d on other grounds, 979 F.2d 546 (7th Cir. 1992) (to find market power, "the court typically examines a multitude of complex factors such as market share, uniqueness of the product and definition of the product market as contrasted with the geographic market"); 10 Phillip E. Areeda & Herbert Hovenkamp, Antitrust Law ¶ 1743c (3d ed. 2011) ("Areeda & Hovenkamp") ("determining separate products is a technical, often difficult issue beyond the ken of most juries").-3-Case: 1:16-cv-05486 Document #: 135 Filed: 06/08/17 Page 4 of 9 PageID #:3836 market, are appropriately addressed, and in some circuits must be addressed, through expert opinions. See, e.g., Bailey v. Allgas, Inc., 284 F.3d 1237, 1246 (11th Cir. 2002) ("Construction of the relevant market and a showing of monopoly power must be based on expert testimony."); U.S. Healthcare, Inc. v. Healthsource, Inc., 986 F.2d 589, 599 (1st Cir. 1993) (Boudin, J.) ("[T]he frustrating but routine question how to define the product market is answered in antitrust cases by asking expert economists to testify."). It is therefore no surprise that Comcast is unable to point to a single case where a court has compelled a party in an antitrust action to respond to an interrogatory seeking definitions of relevant products or markets. It is similarly unsurprising that Comcast marshals no authority for its assertion (at 5) that questions of market and product definition in an antitrust case are "principally factual in nature." Such questions are, of course, "deeply fact-intensive." See, e.g., Right-Field Rooftops, LLC v. Chicago Baseball Holdings, LLC, 87 F. Supp. 3d 874, 886 (N.D. Ill. 2015) (quoting Todd v. Exxon Corp., 275 F.3d 191, 199-200 (2d Cir. 2001). But they also require the application of economic analysis to market facts. Courts have thus appropriately treated interrogatories about market definition and related concepts as contention interrogatories. See In re eBay Seller Antitrust Litig., 2008 WL 5212170, at *1-2 (N.D. Cal. Dec. 11, 2008) (denying motion to compel responses to "contention interrogatories" that "seek answers to two of the major issues in the case: market definition and damages"). Requiring lay responses to such expert-oriented interrogatories would not "serve to clarify the issues or narrow the scope of the litigation at" an "early stage of discovery." Id. Moreover, Comcast is incorrect to argue (at 7) that Viamedia must already be able to define the relevant products and markets with "specificity" because it "is an active participant in the Spot Cable Advertising Representation business" and "operates Interconnects in three DMAs." Viamedia’s experience as a market participant, and any intuition gained from that experience, is not alone sufficient to conduct the economic and market analysis required to respond to Interrogatories-4-Case: 1:16-cv-05486 Document #: 135 Filed: 06/08/17 Page 5 of 9 PageID #:3837 No. 4 and 5.5 Indeed, when defining products in the context of a tying claim, "relying on unguided intuition poses serious dangers" because "the essence of what constitutes'one product’ cannot be resolved by logic, linguistic, or even physical considerations." 10 Areeda & Hovenkamp ¶ 1741a. There is no heuristic or experiential shortcut to defining relevant antitrust markets. If there were one, Comcast would already have equal access to it. II. Compelling Responses to Interrogatories No. 4 and 5 Would Be Premature and Inefficient Because Discovery Is Still In Its Early Stages Because Interrogatories No. 4 and 5 "ask[] for an opinion or contention" about the definition of relevant antitrust products and markets, "the court may order that the interrogator[ies] need not be answered until designated discovery is complete, or until a pretrial conference or some other time." Fed. R. Civ. P. 33(a)(2). "The general policy is to defer contention interrogatories until discovery is near an end, in order to promote efficiency and fairness." Ziemack v. Centel Corp., 1995 WL 729295, at *2 (N.D. Ill. Dec. 7, 1995). An interrogating party has the burden of "cit[ing] a specific, substantive reason as to why it requires early answers to... contention interrogatories." In re H&R Block Mortg. Corp., Prescreening Litig., 2007 WL 325351, at *6 (N.D. Ind. Jan. 30, 2007). "The requesting party must do more than argue that it is entitled to understand the opposing party’s factual theories." Medical Assurance Co. v. Weinberger, 2011 WL 2471898, at *6 (N.D. Ind. June 20, 2011). The policy of deferring answers to contention interrogatories is driven by "the twin purposes of efficiency and fairness." Ziemack, 1995 WL 729295, at *2. "[B]ecause one of the chief purposes of contention interrogatories is to narrow the issues for trial,'fairness dictates that parties not be 5 Although Comcast emphasizes (at 7-8) that "Viamedia has had Comcast’s DOJ production for nearly six months," Viamedia itself has been unable to review the vast majority of Comcast’s DOJ production because Comcast has over-designated documents in that production as "Highly Confidential" under the Agreed Confidentiality Order in this case. See ECF No. 132.-5-Case: 1:16-cv-05486 Document #: 135 Filed: 06/08/17 Page 6 of 9 PageID #:3838 forced to prematurely take a position, which would force an artificial narrowing of the issues, instead of an informed pairing down.’ " United States ex rel. Tyson v. Amerigroup Ill., Inc., 230 F.R.D. 538, 542 (N.D. Ill. 2005) (quoting Ziemack, 1995 WL 729295, at *2 n.3). And "[e]fficiency prescribes that the parties should not be obliged to answer contention interrogatories repeatedly." Ziemack, 1995 WL 729295, at *2 n.3. Because the answers to interrogatories are not binding, early answers to contention interrogatories—especially those covering material that will be addressed by experts—are likely to have to be supplemented multiple times and "could be abandoned during the course of expert discovery." Tyson, 230 F.R.D. at 541.6 In these circumstances, compelling an early response to an expert-oriented contention interrogatory "would serve no useful purpose" and would "defeat[] the goals of the interrogatory" because the responding party’s expert reports will "be fully revelatory of the theory or theories actually to be relied on and would render [the interrogating party’s] discovery efforts exercises in futility." Id. at 541-42. Thus, even where "plaintiffs likely possess most of the information they would need to answer completely [defendant]’s contention interrogatories" (a circumstance not present here) those answers should nevertheless be deferred when "it is too early in the case to lock parties tightly into theories that might change a bit with discovery of additional facts." Vosen v. Warren, 2004 WL 1946396, at *2 (W.D. Wis. Aug. 31, 2004).7 In this case, as discussed supra pages 1, 4-5, discovery is still in its early stages, and therefore compelling a response to contention interrogatories at this time would be premature and inefficient. Viamedia simply does not possess sufficient facts at this time to answer Interrogatories No. 4 and 5 6 See also, e.g., Fed. R. Civ. P. 33(b) advisory committee note to 1970 amendment ("[T]he interrogating party will ordinarily not be entitled to rely on the unchanging character of the answers he receives and cannot base prejudice on such reliance."); 8B Charles Alan Wright et al., Fed. Prac. & Proc. § 2167 (3d ed. 2004) ("[A] party is not inexorably bound to its answers to interrogatories."). 7 See also, e.g., H&R Block, 2007 WL 325351, at *7 (where contention interrogatories "seek information as to central issues," permitting responding party to defer answers until approximately one month before deadline for summary judgment motions).-6-Case: 1:16-cv-05486 Document #: 135 Filed: 06/08/17 Page 7 of 9 PageID #:3839 "fully", see Fed. R. Civ. P. 33(b)(3), in large part because, other than re-producing documents, advocacy and testimony it provided to DOJ, Comcast has made only one production of documents collected in response to Viamedia’s document requests, which Viamedia is still evaluating because it was just received today. See Fetterman Decl. ¶¶ 4-5. Thus, it would be misleading to focus on when Comcast made its "knee jerk filing" of contention interrogatories that "systematically track[ed] all the allegations" of the complaint and this Court’s motion-to-dismiss ruling. In re Convergent Techs. Sec. Litig., 108 F.R.D. 328, 337 (N.D. Cal. 1985) (calling such practice "a serious form of discovery abuse"). Because discovery in this case is still in its infancy and any preliminary answers would be subject to substantial revision later in the case, compelling answers to Interrogatories No. 4 and 5 at this point "would serve no useful purpose," and Comcast "would gain nothing in terms of the efficiency it so strongly espouses." See Tyson, 230 F.R.D. at 541-42 & n.5. III. Comcast Has Fair Notice of Viamedia’s Allegations Concerning the Contours of Its Tying and Exclusive Dealing Claims Compelling responses to Interrogatories No. 4 and 5 would also be unnecessary because Comcast already possesses more than enough information about the contours of Viamedia’s claims to conduct informed discovery. Comcast claims (at 1, 7) it has no "notice of its alleged wrongdoing" and would be forced to "guess[]" at which products and markets are at issue because, it says, Viamedia has taken "shifting" and "inconsistent" positions on those issues. Claims that Comcast is ignorant of Viamedia’s claims or that it must try to hit a "moving target," ECF No. 124 at 5, however, are unfounded. The only supposed inconsistency Comcast identifies (at 3) is a handful of passing remarks made by Viamedia’s counsel at a recent status conference which mentioned "local spot cable advertising." Those remarks were consistent with Viamedia’s complaint and prior briefing because the use of the word "local" was not intended to exclude other levels of spot cable advertising or spot cable advertising representation, and the phrase "local spot cable advertising" is often used-7-Case: 1:16-cv-05486 Document #: 135 Filed: 06/08/17 Page 8 of 9 PageID #:3840 colloquially to distinguish advertising availabilities controlled by MVPDs from advertising availabilities controlled by networks. In any event, the cited remarks, which were made in a completely different context, certainly were not offered as a statement of Viamedia’s formal litigation position on market or product definition. Thus, even if Viamedia counsel’s statements were somehow inconsistent with Viamedia’s prior articulations of market or product definition at the pleading stage, such inconsistency was inadvertent and immaterial. Armed with the complaint, motion-to-dismiss briefing, and this Court’s rulings, Comcast has ample information "to prepare its defense." ECF No. 124 at 5; see, e.g., Vosen, 2004 WL 1946396, at *2 (denying motion to compel where defendant had "received a fairly detailed complaint along with investigative reports from law enforcement agencies"). CONCLUSION For the foregoing reasons, Comcast’s motion to compel should be denied.-8-Case: 1:16-cv-05486 Document #: 135 Filed: 06/08/17 Page 9 of 9 PageID #:3841 Dated: June 8, 2017 Respectfully submitted,/s/Richard J. Prendergast__ James M. Webster, III (pro hac vice) Aaron M. Panner (pro hac vice) Derek T. Ho (pro hac vice) Kenneth M. Fetterman (pro hac vice) KELLOGG, HANSEN, TODD, FIGEL & FREDERICK, P.L.L.C. 1615 M Street, N.W., Suite 400 Washington, D.C. 20036 (202) 326-7900 jwebster@kellogghansen.com apanner@kellogghansen.com dho@kellogghansen.com kfetterman@kellogghansen.com Richard J. Prendergast Michael T. Layden Collin M. Bruck RICHARD J. PRENDERGAST, LTD. 111 W. Washington Street, Suite 1100 Chicago, Illinois 60602 (312) 641-0881 rprendergast@rjpltd.com mlayden@rjpltd.com cbruck@rjpltd.com Counsel for Plaintiff Viamedia, Inc.-9-