UPDATED at 4PM PT: A lawyer for Dish Network’s decision to furnish Warren Schlichting, group president of Sling TV, with transcripts from last Thursday’s proceedings earned a rebuke from the judge, a long delay to the exec’s testimony and a 90-minute blast of white noise via the courtroom PA system.
Turner Broadcasting CEO John Martin had been slated to follow Schlichting to the stand, but his appearance was delayed by the kerfuffle, which was made even more puzzling by the deployment of the “shusher,” as one lawyer referred to the white-noise sound.
“This is a trial that is going to have a lot of third-party witnesses,” explained exasperated U.S. District Court Judge Richard J. Leon as the court returned from lunch recess. Schlichting is among 30 witnesses being called by the Department of Justice in its case against AT&T. Not only are there sensitive trade secrets in play, Leon said, but witnesses are not permitted to have an advantage by reading transcripts. The DOJ’s opening argument and lead witness testimony were offered to Schlichting as preparation over the weekend, arousing already wary parties in the case.
“This was a mess-up,” Leon said. “It shouldn’t have happened and they have apologized.” Legal precedent could have enabled the judge to strike Schlichting’s testimony altogether, he said, but he allowed it to proceed, promising to “deal with” Dish’s outside lawyers separately. The offense could potentially merit a contempt of court citation, though those details were not hashed out in the courtroom.
Mindful of the passage of time in the long-running corporate merger drama, Leon sighed, “We can’t really afford the time and argument we have had to devote to this today.”
Instead of testimony from a Sling TV exec and Turner Broadcasting CEO John Martin, today’s trial action was pre-empted this morning by a mysterious debate about emails, confidentiality and admissible evidence. It isn’t clear when Martin will take the stand.
“I’m not sure what the consequences will be,” said U.S. District Court Judge Richard J. Leon, more than a little ominously, after a 90-minute delay opened Monday’s action. As attorneys huddled and held a series of sidebar discussions at the judge’s bench, white noise was piped into the courtroom, a standard (if Guantanamo Bay-like) tactic designed to prevent the 150 or so observers, including the press, from hearing any of the exchanges.
“My sense is there are going to be quite a few emails to go through,” he said. “Hopefully we will be able to review them all before we return” from lunch recess.
Warren Schlichting, group president at Sling, was about to begin testifying in the Department of Justice’s lawsuit against AT&T when DOJ attorneys asked to approach the bench. Leon never divulged the exact nature of the discussion, leaving observers to speculate about leaked emails or sensitive disclosures. By this afternoon, when the trial resumes, Schlichting and Martin may or may not testify, and it wasn’t clear what may be learned (other than a new threshold for white noise endurance).
Martin’s appearance as a government witness was slated to be a marquee event of the week. At a conference last month, Martin dismissed the DOJ as “clueless” and said “the theory of the case just makes absolutely no sense. Zero.”
The case, which began last week, is expected to last until early May, with the outcoming determining the direction of the media business in the near term. During opening arguments last Thursday, the government outlined its case, insisting that the $85 billion merger would suppress innovation and raise prices for rival consumers and other companies. AT&T countered that the deal would benefit consumers and that, as a vertical transaction, it involves only complementary business units. No vertical deal has been challenged in court by the DOJ for decades, and the media business has to go back to the late-1990s to the Microsoft saga to find even an adjacent case with these kinds of stakes.