Antitrust and Unfair Competition Law

Competition: Spring 2017, Vol 26, No. 1

IN RE: COX ENTERPRISES, INC. SET-TOP CABLE TELEVISION BOX ANTIRUST LITIGATION: A PANEL DISCUSSION WITH TRIAL COUNSEL

Moderated by Jill M. Manning1

In 2009, subscribers of Cox’s cable service sued the company for allegedly tying the service to its box rentals. The Judicial Panel on Multidistrict Litigation consolidated the cases and transferred them to the Western District of Oklahoma. Following the district court’s ruling that the case could not proceed as a class action, the plaintiffs re-filed similar suits around the country and sought to certify classes for isolated geographic regions. The cases alleged violations of the Sherman Act and state antitrust and unfair competition laws.

U.S. District Court Judge Robin Cauthron denied Cox’s motion to dismiss the suit and rejected Cox’s argument that the plaintiffs had failed to present facts demonstrating the existence of a properly defined geographic market. About a year later, the judge certified a class for certain of Cox’s premium cable subscribers in the Oklahoma City market. Cox moved to compel arbitration. The district court denied the motion on the grounds that Cox had waived its right to arbitration by extensively participating in the litigation. The case proceeded to trial.

After a nine-day jury trial, the Oklahoma federal judge entered a verdict for plaintiffs, finding that Cox had violated antitrust law by tying premium cable services to set-top box rentals and awarded $6.31 million in damages that the plaintiffs believe could be trebled under antitrust law.

That was not the end of the story, though. Following the verdict, Cox filed a motion for judgment as a matter of law, arguing that the plaintiffs’ evidence was insufficient to support the verdict and the jury instructions were flawed. The judge granted the motion, plaintiffs appealed and the matter is now pending before the Tenth Circuit Court of Appeals.

Counsel for the plaintiff and defendants shared their experiences with the Golden State Institute in a panel discussion moderated by Jill Manning.

MS. MANNING: Let me start by introducing our panelists. For the plaintiffs, joining us today is Todd Schneider, the founding partner of Schneider Wallace Cottrell Konecky & Wotkyns and its senior partner. He is a long-time civil rights advocate with an extensive background in employment and consumer rights litigation. With numerous court victories in cases involving consumer and securities fraud, race, gender and national origin and disability discrimination, he is a published author and lectures widely. He is president of the San Francisco Trial Lawyers Association and serves on its Board of Directors. He has served as a member of the Board of Governors of the Consumer Attorneys of California, and as a vice president for the organization. Mr. Schneider was named 2005 Trial Lawyer of the Year by the San Francisco Trial Lawyers Association and has been honored as a super-lawyer in the area of class actions and mass torts by San Francisco Magazine for each year that the list has been published. Welcome, Mr. Schneider.

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Also on the plaintiffs’ side, we are joined by Kyle Bates, an associate with Schneider Wallace who participated in the trial. Mr. Bates will offer a fresh and unique perspective from the young lawyer’s perspective in the trial. Thank you so much for joining us, Mr. Bates. Welcome.

MR. PFEIFFER: Young as opposed to the rest of us.

MS. ZWISLER: Speak for yourself.

MS. MANNING: For the defense side, we have Peggy Zwisler, a partner in the Litigation and Trial Department of Latham & Watkins’ Washington, D.C. office. She is a past global co-chair of Latham’s nationally recognized global antitrust and competition practice. She is an antitrust lawyer with more than 40 years of experience. She has successfully represented antitrust defendants in numerous trials and achieved significant victories for them on both procedural and substantive dispositive motions. She has defeated class certification motions involving industries as diverse as cars, cranberries, graphic processing chips, and contact lenses. Every significant legal publication that ranks antitrust lawyers and trial lawyers has ranked Ms. Zwisler at the top of the list. Thank you so much for being here Ms. Zwisler.

Last, but certainly not least, we have Al Pfeiffer, the vice chair of Latham & Watkins’ Global Litigation and Trial Department and former co-chair of the firm’s Antitrust and Competition practice. He has extensive experience in civil antitrust cases, civil and criminal government antitrust investigations, and other competition-related commercial cases.

With more than 25 years of antitrust experience covering numerous industries, Mr. Pfeiffer has a wide range of practical experience, having won numerous trials, arbitrations, summary judgments and appeals in antitrust communications and other complex cases. He has developed a particular focus on claims involving dominant firm conduct in the information technologies and telecommunications areas. Mr. Pfeiffer also advises companies regarding the antitrust aspect of acquisitions, joint ventures, and distribution agreements. He has successfully represented clients involved in investigations conducted by the U.S. Department ofJustice and the California Attorney General. Thank you so much for joining us today, Mr. Pfeiffer.

MS. MANNING: This was a bellwether antitrust trial. How did that affect how the case was tried?

MR. SCHNEIDER: Interesting, right? We initially filed a national class. The Court in its ruling found that, and I’m paraphrasing, that because of differences in local markets it wasn’t going to certify a national class. So we refiled regional classes. This first case went forward as a bellwether, and we had to, as plaintiffs, think about how the evidence in this case could be used in other markets as we went forward in the other bellwethers. It does change your thinking, because everything you do has a domino effect.

We spent hours and hours and hours trying to puzzle how the dominoes would fall going forward. And the problem with able lawyers on the other side is they do the same thing. And if you can’t forget where their dominoes are and your dominoes are, you could walk down a path that leads you to victory in one trial and a loss in another, so it’s really interesting.

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MR. PFEIFFER: I may have a somewhat different perspective on that, because my answer to that would have been "not at all." In terms of how we actually tried the case, I can’t think of a day where we were thinking—apparently, we were getting more credit than we deserved from our opposing counsel. But I can’t think of a day where we were really thinking about, "Well, this is a bellwether." This is one in a series. Instead, we were thinking about, "How do we win this case? What are the things we’re doing today? What’s the part of the story we’re telling today? What are the plaintiffs trying to do today?" It was very much in the moment in that sense.

What was a factor that affected the trial, the specific day-to-day life of the trial, was the fact that this was a trial of a case in which the Court had already certified a class. And I think for the plaintiffs, as well, that was the issue you had to deal with. You’ve got one plaintiff there who is the one representative testifying, and you have to have that person both embody the group and also make clear to the jury and have the appropriate instructions given to make clear to the jury what we’re doing, even though they are only seeing Mr. Healy, the named plaintiff in the case.

MS. ZWISLER: And that actually caused a lot of conversation, because you have to figure out do you have a plaintiff or do you have plaintiffs with an "s"? And we made it as a convention in the trial. I think the judge made the decision that we would say "plaintiff," even though the individual plaintiff was representing a class. And we never got to interview the jury after the conclusion of the trial, because in that district the Court precluded that from happening unless everybody did it together or something like that. So we don’t know how it worked. But it seemed to me it would be confusing. In other class actions that I have tried, antitrust class actions, we’ve always referred to the plaintiffs in the plural. As a defendant, I would prefer it to be in the plural, this huge plaintiff class chasing my small multi-billion dollar family-owned client.

So it really was plaintiff, Mr. Healy, who was a delightful man who testified against a large corporation. So I didn’t like that convention, but the judge is the one who decided it.

MR. SCHNEIDER: You know, I think that we as lawyers spend a lot of time on hand wringing about these things. And we didn’t interview the jury, but I think at the end of the day it might be lost on them. Whether we called it "plaintiffs," "plaintiff," "a group of panels," whatever you call it, I think they understood that it was the customers against the company. But we, like they, spent hours and hours and hours discussing these minute details. I’m not sure that it was time well spent.

MS. MANNING: Speaking of the clients in this case, what strategies do you employ when you are trying or defending a case where the corporation is a defendant? How does that affect your strategy?

MR. SCHNEIDER: Well, we joke that on opening statement we could have had a really short opening which could have been, "We think your cable bill is too high."

MS. ZWISLER: It probably would have worked.

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MR. SCHNEIDER: Again, I think that there are attitudes that jurors bring into a trial, just like a judge does, just like witnesses do, and a lawyer does. From the plaintiff’s perspective, I think there is probably a distrust of corporations in the world, which can’t hurt. I don’t think at the end of the day that that biases a corporation in any way. I think jurors get through that pretty quickly and decide cases on their facts.

MS. ZWISLER: So he’s right, that one of the challenges of representing a corporation generally is that our jury—general jury research, not anything particular with this case—will tell you that a lot of the population has a distrust of corporations. So—at least the people who will sit on your jury may have that distrust.

As a defense lawyer, most of the time I always have to humanize the company that I’m representing. It was particularly a challenge in this case, because what Todd just said, which is that "Your cable bill is too high" is the truth. Now, it’s not the truth the cable bill is too high, but cable companies typically have a bad reputation. Now, we have market research that will tell you that Cox’s reputation, however, is positive and all of that. But the fact remains that jurors may assign that general attribute to corporations.

As the defense lawyer we had to humanize the company, and I will give you two thoughts on that. One is it is a family-owned company. It was founded by a guy who was a governor of Ohio, James Cox—we put this in the opening statement and we had pictures going back from the 1890s and everything—I should have brought them with me. And then it’s his descendants who today still run the company and own the company, which was not the word we used. We just said they ran the company, but they do own this 14-billion-dollar company. It’s I think the fourth generation. So in our opening statement I put up—right before the trial, Forbes had run an article—thank you, Forbes—on the family and taken pictures of the family and the family-owned company, Cox Communications. So we put up the picture of the family and we talked about who they were.

The other way to humanize a corporation, and maybe this is obvious, but is that you have to bring the people to the courtroom, the live people who made the decisions so that they can sit in the chair and tell the jury why they did what they did. Most corporations make decisions—humans make the decisions, so you’ve got to humanize the people to the jury. And that depends on who your witnesses are. Just like everything else in the trial, the credibility of the witnesses and the lawyers is what’s going to win the day.

So you want to elide the difference between the big, bad corporation and the five or six nice people that you brought in to sit in a chair and tell the jury their story. So that’s what we did. And we had an advantage in that regard, which was that Todd wanted to call several of them adverse, and that means in the plaintiffs’ case. And we made an agreement—he generously agreed to do this, sometimes we’d have to fight this in front of the judge—but when our business people came and testified in his case we would get to put in our case right in the middle of his.

So we humanized our people right from the get-go because he had to call them or wanted to call them live.

MR. PFEIFFER: One other thing that we probably should fess up on that we tried to do to humanize the client was to show things that the client had done for the industry, which was fine. We were able to talk about how they had basically built out this cable competition in the Oklahoma City area. We were also trying to show that they were basically a good corporate citizen, and the judge was having none of it. We were just absolutely cut off.

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MS. ZWISLER: Right. Well, Todd objected. That’s why we got cut off. The Judge said, "It’s not relevant. I understand it’s a good company. Not relevant."

MR. SCHNEIDER: No, and she made clear she meant it.

MS. ZWISLER: No, she didn’t play poker very well.

MR. SCHNEIDER: I think it’s also important to recognize that the only entities in the courtroom that have a bigger jury bias against them than the corporation are the lawyers. I have tried cases I think all over this country, and you walk into the courtroom, you open your mouth, and the first thing the jury thinks is: This is a lawyer. He’s not telling me the truth. I don’t want to be here anyway. Why is he wasting my time?

So I think it’s important to humanize yourself, to laugh with the jury, if you can. If there is a time that you can poke fun at your own client or your own case, do something so that the jury believes that you are a human and not a robot just there to try and convince them that whatever your point of view happens to be is the right point of view, so that they don’t feel manipulated, honestly. I think both sides did a reasonable job of doing that at this trial. We will talk about funny moments of the trial later, but I think those are really important.

MS. MANNING: Okay. So tell us, what was a funny moment during the trial?

MR. SCHNEIDER: You see that? We prepped for this thing.

I mean, for me they were both funny and embarrassing. Al and I did the experts in this case, and he has this technique that is actually quite effective, where he listens to your expert’s testimony, he writes down key words that they say, and then he walks up to the ELMO and writes down those keywords and tries to make them look like they were silly for using them.

It’s a good thing. "You define this word as this, but if you read this treatise, it means this. You are stupid, aren’t you?"

MR. PFEIFFER: I did not actually ask that question.

MR. SCHNEIDER: I’m paraphrasing. But my only counter to that was to write down the same words on the ELMO. I wasn’t prepared for the words he was going to write down, so I had to handwrite them and say, "You know, you used this word, Witness. Can you explain to the jury what you actually meant versus what this person is trying to do to you?"

So one of my biggest flaws is that I can’t spell. So I wrote down the word "separate" and I spelled it wrong, and the judge corrected me. And I crossed it out and I wrote it a second time and misspelled it again. And I was just red, and it was a funny moment.

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MS. ZWISLER: My favorite moment at the trial was when we had Steve Necessary on the stand. So Steve Necessary is an employee of Cox. Todd called him live and then I got up to go and tell the entire story of my case through my witness.

And we had a lot of technology in the courtroom. We had technology to show pictures and stuff like that, but we also brought set-top boxes, we brought a cable card, which is what you put in the back of a TiVo to make it be able to access your cable provider. We had these big television sets that are cable-ready, and you stick the card in the back of the television set. So I’m taking Steve through this. The jury is paying attention, everybody is loving it, and I wanted him to get down off the witness stand and show the jury how simple it is to take this little cable card, which is the encryption stuff that allows the stranger device to access the cable system, and stick it in the back of the television set, in part to keep the jury awake, but in part because you could see how easy it is to do this. So Todd did not like that, and he objected. And he said, "Your Honor, I object. Relevance" or something. So we go up to have our sidebar.

MR. SCHNEIDER: She’s paraphrasing.

MS. ZWISLER: I don’t remember exactly. It was like, "Your Honor, I object. This hurts us and so let’s not do it."

MR. SCHNEIDER: If you read the Federal Rules of Evidence, that is an objection.

MS. ZWISLER: Steve Necessary’s testimony was one of the turning points for the defense in the trial because the Judge hadn’t understood the technology and how it worked and all of that, and we took him through the entire story of why this was not a violation of the antitrust laws, but it was through the facts that we did this, so we’re teaching her. So Todd is saying, "I don’t want Mr. Necessary to get off the stand. There is no evidence that this Samsung or other DVR was ever in Oklahoma City. They just brought it here for the trial." And I made my argument, "Your Honor, it’s very important." The judge says, "I’m going to overrule your objections, Mr. Schneider, and it’s for the best of reasons. I want to see how it works."

MR. SCHNEIDER: There is another objection that she overruled when you objected to something our witness was saying, and her reasoning for overruling it was, quote, "The jury doesn’t understand what she’s saying anyway."

MR. PFEIFFER: I have a different, less substantive one. The plaintiffs were in the midst of examining a witness. It was a pretty important witness, and the room is silent. Everybody is paying attention.

In the back of the gallery in the audience, a cell phone goes off very loudly. The judge, who was great—we loved the judge, but she was not fooling around—shoots a look, just freezes the gallery. Silence. It stops. Ten, 15 seconds later, the same phone, loud, goes off again. She says, "Who is that? Stand up. Turn off your phone." Who stands up but one of our expert witnesses. And she says to him, "Get out of my courtroom." We did not end up putting him on the stand.

MS. ZWISLER: But not for that reason.

MR. PFEIFFER: That was only funny after.

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MS. MANNING: I hope it wasn’t one of your economic experts.

MS. ZWISLER: It was.

MR. PFEIFFER: We had two economists. We decided we’d do the job with one.

MS. MANNING: So obviously economic evidence is critically important in antitrust cases. How do you choose and prepare experts differently in a jury trial?

MR. SCHNEIDER: Wow. So the first thing you have to explain to them is that they have to speak English. That sounds like a flip thing to say. But, you know, these are people that are used to talking to lawyers, and when they are not talking to lawyers, they are talking to graduate students. And they are very fluent in economics, obviously.

Our jurors—I don’t remember the demographics of this jury—but typically are not college educated. Sometimes have not even completed high school. And you are talking about what are of necessity very high-brow economic principles. And you’ve got to get your expert to step back and explain it in the most lay terms they can, while at the same time protecting your appellate record.

Where those two things collide is, in my view, where the secret sauce is in preparing an economics expert. It is critical make it both factually and academically correct, while simple enough for a juror to understand. And, look, I don’t know whether we failed or succeeded at it, but they apparently got it.

MR. PFEIFFER: So I think you could sum it up as sort of the difference between the panel before us [See UNITED STATES V. AB ELECTROLUX AND GENERAL ELECTRIC COMPANY: A PANEL DISCUSSION WITH TRIAL COUNSEL, supra], which was talking about how they tried a bench trial, and our trial. That’s the wonky side. We’re the Donald Trumpian side here.

MS. ZWISLER: No, we are not.

MR. PFEIFFER: Not in that sense.

MR. SCHNEIDER: The court reporter wrote that down.

MR. PFEIFFER: But I agree with Todd. You really have to work hard with the experts. Two things: Obviously, they have to have just absolute unimpeachable credibility. So from the get-go you want to be working with them so they are not stretching themselves, not exposing themselves to things that they can get dinged on.

But, also, they have to be able to just, as Todd said, speak English to the jury, in a very simple believable way. Not come across like they are pandering to them. But they really have to take economics and put it into understandable, day-to-day things, things that will be familiar to the jury. That’s a real challenge, and more of a challenge that we face, for sure.

MS. ZWISLER: Can we tell the story about your expert?

MR. SCHNEIDER: You mean where the judge threatened to strike all of her testimony if she didn’t answer your questions?

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MS. ZWISLER: Yes. It was the first in my experience of putting experts on in trials of all sorts. And this expert I think illustrated exactly what Todd said. She was not that experienced in testifying to a jury, and so she was teaching it like it was a graduate school class, to some degree. And then when Al started asking her questions on cross, her technique about answering the cross-examination questions wasn’t very practiced and so she just tried to teach him what was wrong about his question, even though she had already answered the question in deposition in a different way, and the judge became as frustrated as the jury about that.

MR. SCHNEIDER: I don’t quite remember it quite that way, but I get what you are saying.

MR. PFEIFFER: I think I would describe it as she was certainly too defensive in how she was approaching my questions, particularly ones where she should have known that I had deposition testimony and she shouldn’t have fought, and the judge got very tired of the fighting. I think that’s a fair characterization, Todd. Right?

At one point she called us up to a bench conference as the lawyers and said, "I’m going to break with our rule against talking to a witness while they are under cross-examination, because I want you," saying to Todd, "to go talk to your witness and tell her to stop doing what she’s doing and start answering his questions or I’m going to strike her testimony in its entirety."

MR. SCHNEIDER: I actually thought that that was a practical solution for a judge.

MR. PFEIFFER: I agree.

MR. SCHNEIDER: I think both sides wanted to get the testimony out, to get it in front of the jury. And what many witnesses, not only experts, don’t remember is that there is something called redirect. So even if you feel like you are getting beat up on a cross, a good lawyer is going to get up at redirect and let you fix it by explaining what you really mean, and to fight under cross is really not a safe place to fight to begin with.

And the judge knew that, too. And so it was just a very practical way to move the trial forward without having this big back-and-forth fight between a lawyer cross-examining a witness and the witness. So obviously she’s done this before, our judge—not my expert. But our judge had done this before, and I thought she handled it really well.

MR. PFEIFFER: I agree. I thought that was a very practical way to deal with it.

MR. SCHNEIDER: Going back to a prior question I was asked, though, how does the fact that this is a bellwether affect how you try a case? I think with regards to the experts, it was one place where at least we thought about it a lot. Unless you are going to put on, you know—and I can’t remember how many—

MS. ZWISLER: Seventeen.

MR. SCHNEIDER: Yes, seventeen. So unless we’re going to use seventeen different experts and seventeen different bellwethers, everything my expert says on the stand is going to be fair game for the next trial. So you have got to think about that in the way that you put on your expert, because essentially each trial is a new deposition and new fodder for cross-examination for your expert.

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MS. MANNING: Kyle, I want you to jump in here. Some important nuts-and-bolts aspects of trial are things like designating deposition transcripts and creating exhibits. How did you efficiently communicate with the other side on some of those issues?

MR. BATES: That’s a great question. This trial presented a challenge for us in that about four or five of the witnesses who we were going to present testimony from were third-party witnesses, other people who worked in the cable industry who weren’t appearing live at trial. One big takeaway for me—and these depositions happened a while ago, and the case had been going on a long time—but when you are deposing a third-party witness—you are not thinking about trial maybe at this point. But for these four or five witnesses, their deposition testimony was all we had, and that was what we presented at trial. And the judge had a very practical rule. She only wanted to hear deposition testimony one time, and so whoever was going to present a third-party witness by deposition testimony, both sides had to agree on what portions of that testimony was going to be read into the record. And so we were talking sometimes very late at night with the lawyers for the defendants.

And that’s the other practical point for the young lawyer, whatever side of the bar you practice, when you find yourself in trial like this and you are talking about this issue late at night with your adversary, be gracious to them; be professional to them. There were times at 2:00 a.m. where I was tired and I made a mistake, and there were times that the lawyers at Latham, it was 2:00 a.m. and they were tired and they made a mistake, but we worked really well together. They were great to work with, and I thought we did a good job presenting that testimony.

MR. SCHNEIDER: You know, it’s interesting. We as first chairs in trials focused like a laser on what’s going on the next day, what we’re doing, what’s going to happen when we get to the courtroom. I have got to tell you, what went on behind the scenes, and we both had just legions of second, third, fourth, fifth chairs in this trial, it seemed, they worked together. They worked towards a common goal of figuring out what the next day was going to look like. They fought the fights that were important. If they fought the fights that weren’t important they didn’t tell us about it, which was great, so I don’t know if they did or didn’t. And the trial went so smoothly because you had these dedicated, smart people putting all these pieces together, and it just ran. I can’t you how impressed I was with both sides on that.

MS. MANNING: Sometimes unexpected things happen during trials, no matter how much planning you do. And in this trial, the judge’s mother passed away in the middle of the trial. Describe how that affected you and how it affected the trial.

MS. ZWISLER: So we were in the middle, actually, of Todd’s expert economist, a late morning on—I think it was a Monday, and the judge got a note, and she interrupted the testimony, and she said, "I hate to do this," and she said out loud with the jury sitting there, "I have just gotten a note that my 90-year-old mother has been found unresponsive," and there was an audible gasp both from the jury and from us, of course. So she recessed the trial.

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Those of you who have been in jury trials know that the judge is the parent of the jurors. The jury trusts the judge more than they trust the lawyers. If the judge is hard on the lawyers, they see that. If the judge demonstrates respect for the lawyers and the witnesses, they get that. And they make a lot of decisions in the trial about the credibility of the witnesses and the lawyers based on what they see the judge do. So I think they bond with the judge in each of these trials. So when that happened, they gasped and she stopped the trial.

So we recessed and came back a couple hours later, and she decided to go ahead with the trial and to explain to the jury—she wanted to apologize to the jury that she had told them that her mother was found unresponsive and felt that she needed then to tell them that she had died. So that was difficult. And the judge didn’t tell the jury that. The clerk did. But she said, "Let’s take the rest of the afternoon off, and then we will start again in the morning."

We both said all the things that you do when somebody faces that. She said two things to us. One is, "She was 90 years old. She was still living in her own home. She went the way she wanted to. We’re not going to do the funeral this week because my children don’t live in Oklahoma City. We will do it over the weekend." And the third thing she said, "I appreciate so much your accommodating me in this instance, and just give us the afternoon off." We both said, all four of us—five, however many people were back in chambers, "Your Honor, whatever you need. Whatever you need." She said, "We have the jury here and your clients and you have invested a lot of time in this trial, and I really do want to see it through."

MR. SCHNEIDER: It was interesting. It’s a moment when you have to kind of step back from the battle and remember that judges are human. You know, we both told her, "If you need a mistrial, Judge, yeah, we have spent a lot of time and money but certain things are more important." So I think both sides realized. I’m not sure how or if it affected the trial itself. I mean, it was a somber note. I think, oddly enough, it bonded the jury even more with the judge. They bought her a nice condolence card that they all signed and things like that.

But I think it could have affected the trial if, A, the judge didn’t handle it so graciously and gracefully. I think all of us sort of just defaulted to, "Whatever you need, Judge. We’re here for you." I think that’s the right and the best way to do it.

MS. ZWISLER: You may be sitting there thinking, Of course. All humans react like this to something like that. I tried a case once where something happened personally and the other side would not agree to recess the trial. It was in Wilmington, Delaware. I was trying a case against the government. So there were ten government lawyers there, and we were running on the clock, meaning that each side had a certain number of hours to get the evidence in over the course of the six-week trial.

I said, "I have got to go back to Bethesda," which for those of you who don’t know, Bethesda is a suburb of Washington. Wilmington in Delaware is about a two-hour drive. And they would not agree unless we took the hours out of our client’s time. So if we had 48 hours for the trial and 64 hours for the trial, and we needed to get off the afternoon, "You can do that, I will be happy to do that, but you are going to have to deduct these four hours this afternoon from your client’s time." So I took that to the judge. I didn’t even get the first sentence out of my mouth. She said, "We’re not taking this time from anybody. Do you need tomorrow, too?" That’s what happened.

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This piece of this trial was unremarkable. You are thinking, Of course, all people would be kind about that, and even in the middle of the trial. And that didn’t happen in that instance, and they paid for it, in my view.

MR. PFEIFFER: The judge could have had different timing. Everybody was actually prepared to lose the jury if we had to support the judge, even though everybody liked the jury. We had a really good group. But that was sort of how it could have affected things, but the judge was remarkably strong about it. It worked out well.

MS. MANNING: As we mentioned earlier, this trial took place in Oklahoma City. What survival skills do you employ when you are trying a case far away from home?

MR. PFEIFFER: Don’t eat the sushi.

MR. SCHNEIDER: I was going to say, "Get used to barbecue."

MS. ZWISLER: You told us that would be the last time.

MR. SCHNEIDER: I think that you guys had an advantage, because you have got different resources. They were able to have real office space using their local counsel’s office, and I assumed, though I wasn’t there, support staff that goes along with that. We were—I don’t want to use the word "ragtag," but we were working out of the hotel. I think next time if I was going to camp out for a trial of this length, I might actually do what you did and rent some temporary office space. I thought that was a good idea.

MS. ZWISLER: We rented temporary office space and we had a secretary, but that’s all we did. We weren’t in our local counsel’s office.

One of the survival skills, whether it’s an antitrust trial or not, that’s long is—well, we’ve tried a couple of cases together so we enjoyed it. We have this thing called post game shows. Maybe this is the same thing everybody does but—so we all come back to the trial site, and we had brought most of our young people into trial every day so that they could keep up. The trial was going pretty quickly, so we needed to make sure that they knew everything. So most of them were there every day. And that traded off depending on which witness was up. So we had this post game show. We’d come home from the trial, we’d go into a conference room, and we’d sit around and blow off steam, telling stories about the trial, "Can you believe what he said? Can you believe what the judge said?" and just do that, and it’s really bonding.

The other thing that I always encourage is that we cater in dinner Sunday through Thursday so that we eat as family during the week and then we go out for—especially the younger people go out Friday and Saturday. You build such a team spirit in a trial that those two pieces of survival skills I think made it a lot easier for us to get through the 2:00 in the morning and be back here at 6:30 in the morning kind of a day.

[Page 155]

MR. PFEIFFER: I think those kind of team things, family, building that sense, are critical. But you also need, whatever your individual decompression device is, you have to have that.

MS. ZWISLER: Chardonnay.

MR. PFEIFFER: You have to bring it with you. Peggy runs every day; even in trial, goes for a run. I bring my bike with me wherever I go. The bike came along for the five or six weeks, whatever it was, we were in Oklahoma City. Actually, Oklahoma City has an incredible bike trail system, it turns out. But you need to find whatever your device is and keep doing that. Take a little bit of a break, even an hour a day, whatever it is, to do something that’s your decompression.

MR. SCHNEIDER: Yeah, I think that’s super-important. By the way, our post game show was called cocktail hour.

MR. SCHNEIDER: Remembering to sleep is much more difficult on the road than it is at home, at least for me. You know, when you are working out of the hotel and you are there and everything is right there and you just pop up and say, "Oh, I have got an idea," and start working on it, it’s different than when I’m at home and I’m in my own environment. For me, getting at least most of a night’s sleep is super-important for the next day, and I felt like in the hotel in Oklahoma I had to remind myself of that.

MS. MANNING: How about you, Mr. Bates? Is there anything you would like to share about survival skills you employed during the trial?

MR. BATES: I would just say, especially if you knew it was going to be a long trial, and we knew this was going to be at least three weeks, you know, if you can get home for—even if it’s just one day on the weekend, at least in the beginning part of the trial, that’s a good idea. In the first weekend of the trial, I went back.

There was one direct flight a day, Oklahoma City to San Francisco, and so we took that the first weekend of the trial, and that was great, because that ended up being the only time that I was able to be back here in San Francisco for almost four weeks.

My wife is not an attorney, so when you are talking to someone who is not a trial lawyer, they don’t really understand that you have got to be there the whole time. So the last weekend of trial we had closing arguments that Monday, we had a wedding out here in California, and my wife said, "What do you mean, you are not coming?" So if you can get home at least in the beginning of the trial, that’s always good.

MS. MANNING: How do you keep the jury’s attention during a long trial, especially when it involves complicated economic issues?

MS. ZWISLER: So in an antitrust trial you have complicated economic issues, and that’s not the way to think about a trial. A trial is like a Broadway play. That’s what I always say. In fact, sometimes I use a saying in opening statement that tells a story. I forget which piece I used in this trial, but it likens being in a trial to being in a play, and that’s the way I think of it. So the antitrust trial is really no different than any other. It has economics but you have to make them in English. We all know that.

[Page 156]

How do you keep the jury involved? Well, the jury is used to seeing multi-sensory devices, so like when I first started doing trials in the ’70s, everything was on paper, so there was no video. There was no PowerPoint. There was nothing. The whole thing was paper. So people read depositions to the jury. "Your Honor, may I publish this exhibit to the jury?" "Yes." What did that mean? Walk up to the jurors and hand them the document. Of course none of that is done anymore.

To keep their attention, you need to be mindful of the three senses: The visual, oral, and kinesthetic. That’s the manipulative and things like that. And that’s why we brought those actual set-top boxes and televisions and cable cards to the courtroom, because you want to address the learning styles of the population that’s in the jury. Seventy percent of the population in the United States are visual learners. So they are used to seeing— especially now with videogames and everything—things on the screen. And the juries now are sensitized to watching, in the old days, LA Law and now Law and Order where they see trials. So you need to use the screen. You need to give them manipulatives. You need to sing and dance so they pay attention, change the tone of your voice, change the pace of what you are doing.

In federal courts you have to stick behind the podium pretty much, but you need to be kind of an entertainer and try to keep their attention. But mostly mixing those techniques. Any jury trial, you will need to do that, and especially ones that are drawn, as most antitrust trials are.

MR. SCHNEIDER: I can’t believe I’m about to say this, but I agree with most of what Peggy said.

MS. ZWISLER: That is the first time.

MR. SCHNEIDER: She’s referring to what I call the Jon Stewart effect. If you notice on any of those shows, whether it be Fox News, whether it be Jon Stewart, whether it be any of that stuff, when they are talking, there is always the square box next to their head with some relevant picture in it. It may be a document, it may be a picture of a person, but something to ground the viewers’ eyes while using their ears, and that’s how we as modern consumers of information have learned to consume information. So you have got to do that. But I think as important is that, we as lawyers think of trials as checkboxes, right? You have got to check off all of your elements, and when you have hit all of your elements, you then go to closing argument and you explain to the jury how all the elements fit together.

My view of a trial is that’s dead wrong, that you have got to try a case linearly. The jury needs to know why you are doing it now and what you are doing, and so you have got to try to figure out in your examination how to explain to the jury within the bounds of the rules of evidence why you are doing what you are doing, because they want to know that. It’s not okay just to wait until the close to explain to the jury how the pieces fit together, and they frankly don’t remember your opening, so that won’t work for you either.

You have got to do it as you go along, and that’s how you keep a juror involved in the case. And then, as Peggy said, particularly on cross, you have got to be a showman. They expect the Perry Mason moment. You are never going to get the Perry Mason moment. But build your cross towards some moment, whether it be a document that you want to get in, if you have got an admission in a deposition, your admission, whatever it is, you have got to build to that moment. That keeps them watching because they know in your next cross there is going to be a moment.

[Page 157]

MR. PFEIFFER: I think it can be a particular challenge for the defendants, because we’re going second. As Peggy said, some of our case has already come in during the case in chief. At that point you are really trying the patience of both the Court and jury, so you want to make sure you are not telling your story by having three people get up and say the same thing. And you make a lot of cuts of people you were intending to call. The phone going off was not the only reason we didn’t call that economist. It was because we really did have two of them. We thought, we can cover this with one.

MR. SCHNEIDER: It wasn’t my killer cross, that I didn’t waste my time preparing?

MR. PFEIFFER: We didn’t tell him immediately we were doing that.

MS. MANNING: Unfortunately, our time is running out soon. I want to make sure that we have a few minutes for questions from the audience. Does anyone have any questions for our panel? Yes, Mr. Alioto.

MR. ALIOTO: What was the basis of the judge throwing out the jury verdict?

MS. ZWISLER: Truth.

MR. SCHNEIDER: I’m going to pass on answering that—well, I can give you her basis was that she didn’t believe we proved the foreclosure element. As for my editorial, I am just going to wait until we argue our appeal in two weeks.

MR. PFEIFFER: I was going to say, the appeal is being argued in two weeks, so I don’t think anybody wants to say too much.

MS. ZWISLER: I said it all. Our case was true.

MR. ALIOTO: Well, how about just this: Did she state any particular case that she was relying on?

MS. ZWISLER: The answer to that is no, because the question, and this is in the appeal, was is it Cox’s fault and is it—put aside the legal dispute as to whether it’s necessary—that there is nobody that sells set-top boxes at retail that can access any cable provider’s video on demand?

The only way you could get Cox video on demand, Time Warner video on demand, Comcast video on demand is to rent a set-top box from the cable provider, because that box has to talk to the head end in order to access video on demand, whereas TiVo doesn’t talk to the head end. TiVo receives the signal just like the set-top box does and displays its own thing. So what the appeal in part is about—there are 14 issues on this appeal, but this particular aspect of it, which was the win, was that the judge held that it was necessary in a tying case to prove that there was competition foreclosed for set-top boxes and the plaintiffs had presented no evidence at all that Cox had anything to do with the decisions of Cisco and Samsung and Sony not to sell set-top boxes at Best Buy. So that’s the factual basis for the Court’s ruling.

[Page 158]

MR. ALIOTO: Did she deny directed verdict?

MS. ZWISLER: We made the directed verdict at the close of the plaintiffs’ evidence and she said, and this was public, so I’m not telling stories out of school, she says to me, "I’m 90 percent sure I’m going to grant your motion for a directed verdict." I thought she was sarcastic, Al thought she was telling the truth. But then she said, "Do you have your witnesses here?" We said, "Yes." She says, "Go forward with the witnesses. If I don’t grant it, then at least we will have some of the witnesses done." So she took it under advisement, and then she granted it—she let the jury come back, and then she granted it after that.

MR. PFEIFFER: Technically, she had us refile it at that point and then granted it.

MR. SCHNEIDER: I am not going to argue my appeal now. All I can say is that no evidence is in the eye of the beholder, and the jury has the right to weigh all inferences with regard to the evidence that’s in front of them, and the judge shouldn’t be making inferences.

MR. ALIOTO: That’s right.

MS. MANNING: I think we know which side Mr. Alioto is on.

MS. ZWISLER: Stay tuned on that one.

MS. MANNING: Yes. We will wait to hear from the 10th Circuit. Any more questions from the audience? Mr. Riehle?

MR. RIEHLE: Yes. Sometimes courts allow you to have summations during the course of the trial. You had a four-week trial. Did you ask for that? Did the Court allow that?

MR. SCHNEIDER: We didn’t ask for it. Al had several summations in the form of questions.

MR. PFEIFFER: We didn’t ask for it. I think, in part, everybody got the pretty strong sense she would not have allowed that. This was a judge who was in control of her courtroom. She did not want us taking control of it.

MR. SCHNEIDER: An interesting thing did happen, though. After we had finished our case, while the defense was presenting their case, she said, "Do you guys mind if the jury starts asking questions as long as they give them to me first?" which happens all the time in trials. Of course, the defense said, "That’s great," and I said to her, "Wait a minute. It’s a huge advantage to them to know what the jury is thinking during their case when I had no idea what the jury was thinking in my case." So she thought about it and she said, "That’s right. Let’s do it this way. I will wait for them to ask a question, and if I think that’s true, we won’t ask the question." The first question came in, and she said, "Yeah, it would be a huge, unfair advantage." But then she ended up reading us the question while the jury was out. All of us just went white. Like, "Oh my God, I can’t believe we didn’t talk about that."

MS. ZWISLER: There was no actual summation and Todd was only halfjoking by saying that Al was putting the summation into the questions with the plaintiffs’ expert. So the opening statement tells your story, and then your main witnesses tell your story, and then your expert tells your story, and then in closing you tell the story.

[Page 159]

So while the lawyers aren’t speaking, as you plan the trial—this is just not an antitrust trial; this is the same with everything—you want to use the same vocabulary and the same theme—obviously, you have themes, and you want to use the same vocabulary, so basically the jury is learning by repetition through each of the iterations, including your expert, because the expert is just a mouthpiece for the opening and closing statement.

MR. PFEIFFER: No, that was quite right. I took it as a compliment.

MR. SCHNEIDER: You did an able job arguing his case while cross-examining my witnesses, which is what we’re supposed to do.

MS. ZWISLER: Yes. So did you, though. Mostly on the fact witnesses. Because, you know, in a lot of class actions I tell the jury in the closing, "The plaintiffs didn’t bring anybody to this courtroom who sat in that chair and told you that"—fill-in-the-blank defendant—"did what the plaintiff is complaining about. We, on the other hand, brought all these live people in here and they sat in that chair from the company and they told you what they thought, and that’s why you should vote for us." It’s a credibility kind of thing. But that credibility can certainly be heard during the cross-examination.

And antitrust trials have a tendency to—just like everything else—be decided solely on the basis of the credibility. So if the plaintiffs’ lawyer is successful in crossing your corporate witnesses in a way that makes them look like they can’t be believed, then obviously the jury is going to react to that.

MS. MANNING: Unfortunately, we are out of time. I want to thank our panelists for sharing their experiences and insights in trying the Cox antitrust case, and we will anxiously await the opinion from the Tenth Circuit Court of Appeal.

[Page 160]

——–

Notes:

1. Partner at Steyer Lowenthal Boodrookas Alvarez & Smith LLP in San Francisco and member of the Executive Committee of the California State Bar Antitrust, UCL and Privacy Section.

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