Keith Dean Bradt v. T-Mobile US, Inc.

Background

Twenty-four individual customers of national cellular mobile service providers sued to stop the proposed merger of T-Mobile US, Inc. and Sprint Corporation. They alleged that the merger would violate antitrust laws and, on the same day they filed the complaint, sought a temporary restraining order (TRO), an emergency order intended to preserve the status quo. The parties’ initial briefing schedule effectively paused the TRO application while related litigation in the Southern District of New York proceeded. After that court entered final judgment for the defendants, the plaintiffs asked this court to treat their TRO application as a motion for a preliminary injunction and requested expedited briefing, limited discovery, and an expedited hearing.

Analysis

The court applied the same standard to the TRO and preliminary-injunction requests. The plaintiffs had to show a likely chance of success on the merits, likely irreparable harm without relief, a favorable balance of equities, and that an injunction would serve the public interest. Under Section 7 of the Clayton Act, a merger is unlawful if it may substantially lessen competition.

The plaintiffs argued that the merger would increase concentration in an already highly concentrated national wireless-service market. Using the Herfindahl-Hirschman Index, a measure of market concentration, they relied on a market index of 2,899 and an asserted 443-point increase from the merger. The court found that this made a prima facie showing—a sufficient initial showing—that the merger could have an anticompetitive effect.

The burden then shifted to the defendants. They presented evidence that the Department of Justice’s Antitrust Division and the Federal Communications Commission had investigated the merger and required divestitures and other relief. The agencies concluded that the remedies would preserve four nationwide providers by enabling DISH Network Corporation to become an effective competitor. The court also considered the related Southern District of New York court’s findings about the remedies and the merger’s expected efficiencies.

The court concluded that the defendants had successfully rebutted the plaintiffs’ initial showing. The burden therefore shifted back to the plaintiffs, but they provided no analysis or evidence addressing whether the government remedies would be insufficient or unlikely to occur. The court concluded that the plaintiffs had not shown either a likely chance of success or serious questions going to the merits. It also found that the balance of equities strongly favored the defendants because the plaintiffs had waited substantial periods after the merger was announced, related litigation began, and the Department of Justice approved the merger before seeking a TRO.

Rulings

The court DENIED the plaintiffs’ application for a temporary restraining order and order to show cause why a preliminary injunction should not issue. It also DENIED the plaintiffs’ administrative motion seeking an expedited briefing schedule, a preliminary-injunction hearing, and limited expedited discovery. Because the court denied the TRO and applied the same standard to a preliminary injunction, it found expedited proceedings and discovery unwarranted. The order stated that the denials were without prejudice to the plaintiffs’ filing a motion for a preliminary injunction.