Stephens Media LLC response to lawsuit filed by Sun publisher

7/30/2019 Stephens Media LLC response to lawsuit filed by Sun publisher

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CAMPBELL & WILLIAMSDONALD J. CAMPBELL, ESQ. (1216)[email protected]. COLBY WILLIAMS, ESQ. (5549)[email protected]

700 South Seventh StreetLas Vegas, Nevada 89101Telephone: (702) 382-5222Facsimile: (702) 382-0540

NIXON PEABODY, LLPGORDON L. LANG, ESQ. (pro hac vice to be filed)[email protected] Ninth Street NW, Suite 900Washington, D.C. 20004Telephone: (202) 585-8000

Facsimile: (202) 585-8080

Attorneys for Defendants

UNITED STATES DISTRICT COURT

DISTRICT OF NEVADA

BRIAN L. GREENSPUN, an individual; THE ) Case No. 2:13-cv-01494-JCM-PALBRIAN L. GREENSPUN SEPARATE )PROPERTY TRUST, DATED JULY 11, 1990; )THE AMY GREENSPUN ARENSON 2010 )

LEGACY TRUST, ))

Plaintiffs, ))

vs. ) DEFENDANTS OPPOSITION) TO PLAINTIFFS EMERGENCY

STEPHENS MEDIA, LLC, a Nevada limited ) MOTION FOR TEMPORARYliability company; STEPHENS HOLDING ) RESTRAINING ORDER ANDCOMPANY OF ARKANSAS, an Arkansas ) FOR PRELIMINARYcorporation; SF HOLDING CORP., an Arkansas ) INJUNCTIONforeign corporation, d/b/a STEPHENS MEDIA )GROUP; DR PARTNERS, a Nevada general )partnership, d/b/a STEPHENS MEDIA GROUP; ) Hearing Date: September 6, 2013

STEPHENS MEDIA INTELLECTUAL ) Hearing Time: 10:00 a.m.PROPERTY, LLC, a Delaware limited liability )company; MICHAEL FERGUSON, an individual; )WARREN STEPHENS, an individual; DOES, I-X, )inclusive, )

)Defendants. )

_________________________________________ )

Case 2:13-cv-01494-JCM-PAL Document 16 Filed 08/30/13 Page 1 of 29
mailto:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]


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Plaintiffs filed their Emergency Motion for Temporary Restraining Order and for Preliminary

Injunction [Dkt. No. 2] on August 20, 2013. Though the Court entered a Temporary Restraining

Order on August 27, 2013 [Dkt. No. 9], it raised a number of concerns about the viability of the

ultimate relief requested by Plaintiffs. Defendants (collectively the Stephens Media Defendants or

Stephens Media) will now demonstrate why the Courts concerns are well -founded and why

Plaintiffs Emergency Motion should be denied.

POINTS AND AUTHORITIES

I. INTRODUCTION

The instant case represents a poorly camouflaged attempt to transform a long-simmering

family feud between the owners of the Las Vegas Sun newspaper (i.e., Plaintiff Brian L. Greenspun

on the one hand, and his three siblings on the other hand) into an inflammatory antitrust lawsuit

against the Stephens Media Defendants in their capacity as the owners and operators of the Las

Vegas Review-Journal (Review-Journal), another print and on-line newspaper serving the Las

Vegas valley and beyond. Plaintiffs Verified Complaint [Dkt. No. 1] and Emergency Motion for a

Temporary Restraining Order and Preliminary Injunction (Motion) are classic examples of

misdirection and overreaching. Having been soundly defeated by the other directors and

shareholders of The Greenspun Corporation and Las Vegas Sun, Inc. when voting on whether to

pursue various corporate transactions with Stephens Media that would neither end the on-line

version of the Las Vegas Sun nor prevent the print version from being published by Las Vegas Sun,

Inc., the Greenspuns or another party, Plaintiff Brian Greenspun now seeks an end-run around the

business judgment exercised by his fellow directors/shareholders and is asking this Court to enjoin

Stephens Media from pursuing a non-binding letter of intent and a definitive contract (for which

negotiations have not even begun) to effectuate the contemplated transactions with the Greenspun



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entitiesneither of which, tellingly, have been named as parties herein. Suffice it to say, Plaintiffs

Complaint and Motion fail on the facts and law alike.

From a factual standpoint, the Motion is predicated on multiple, material

mischaracterizations. As a threshold matter, Plaintiff Brian Greenspun partially bases his standing to

seek relief under the Newspaper Preservation Act, the Sherman Act, and the Clayton Act on grounds

he is a subscriber to the LVRJ/Las Vegas Sun and plans to continue to purchase a newspaper

subscription from the LVRJ/Las Vegas Sun in the future. Comp. 4. The reality, however, is that

Brian Greenspun is not a paid subscriber to the Review-Journal/Las Vegas Sun as copies of the

newspapers are delivered to him for free.

1

Even more baseless is the Motions provocative and

hyperbolic contention that Stephens Media is attempting to destroy the Las Vegas Sun by seeking

to acquire the Uniform Resource Locator (URL) lasvegassun.com and requiring the Greenspun

family members to execute a five-year non-compete pertaining to the local news business. Mot. at

7:10-28. Neither allegation is true. While an early proposal raised these items as potential deal

points, they were specifically omitted from the parties subsequent discussions, and they are not part

of the proposed letter of intent about which Plaintiffs complain. See Mot. at Exh. 2 (Letter of Intent

(LOI)).2

The Motion fares no better from a legal standpoint as Plaintiffs cannot establish a reasonable

likelihood of success on the merits or any of the other criteria for injunctive relief.

1

See Declaration of Janice Holloway at 3-5.2 See also Declaration of Michael R. Ferguson at 13-14 (clarifying that the Greenspunentities (or another party) may continue to operate the website version of the Las Vegas Sun even ifthe proposed transactions are ultimately consummated, and that the Greenspun entities (or anotherparty) may also continue to publish the print version of the Las Vegas Sun on their own as noGreenspun family members will be bound by a non-compete that prevents them from working in thelocal news business).



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First, Brian Greenspun lacks standing to pursue this case in his capacity either as (i) a paid

subscriber to the Review-Journal/Las Vegas Sun because he is not a paid subscriber, or (ii) the

trustee of two family trusts that own shares in Las Vegas Sun, Inc. since he is simply trying to

interfere with internal management decisions he disfavors notwithstanding that they were lawfully

made in good faith by a majority of the corporations directors and ratified by a majority of its

shareholders. Moreover, shareholders and employees of corporations do not have standing to pursue

claims for alleged antitrust injury to the corporations with which they are affiliated.

Second, this action presents no actual dispute between adverse litigants and, thus, no live

case or controversy as required by the United States Constitution. See U.S. Const., Art. III, sec. 2.

Plaintiffs lawsuit seeks to enjoin acts contemplated by a non-binding LOI and a subsequent contract

(premised on the LOI) that may or may not be finalized and executed in the future. Assuming the

contemplated transactions do move forward in the future, the parties to the underlying putative

agreements intend to seek review from the United States Department of Justice (DOJ) as part of

finalizing any deal. See Mot. at Exh. 2 3. In other words, there are multiple contingencies that

must occur before this matter is ripe for judicial resolution including negotiation, finalization and

execution of a subsequent long-form contract addressing the items contained in the LOI, and DOJ

review of any definitive contract. Until then, Plaintiffs claims present a hypothetical dispute and

seek an improper advisory opinion.

Third, in the unlikely event Plaintiffs can surmount the justiciability doctrines of standing

and ripeness, their antitrust claims nonetheless lack merit. In addition to not having antitrust

standing, Plaintiffs cannot establish the relevant market they allege. There simply is too much

competition from other media for the relevant market to be limited to the sale of local daily

newspapers to readers and the operation of their related websites. Furthermore, the termination of



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the parties Joint Operating Agreement would not harm competition. Finally, Plaintiffs cannot

succeed on their claim under Section 7 of the Clayton Act for the additional reason that the Stephens

Media Defendants are not acquiring any assets or stock.

II. FACTUAL BACKGROUND

The following background is taken primarily from the Declaration of Michael R. Ferguson,

the President and Chief Executive Officer of Stephens Media, LLC, and, where appropriate,

Plaintiffs Verified Complaint and moving papers.3

A. The Parties

Certain of the Stephens Media Defendants, specifically Stephens Media, LLC, own and

publish the Review-Journal, a daily print and on-line newspaper that serves metropolitan Las Vegas

and beyond. Ferguson Decl. at 3. Michael Ferguson is the President and Chief Executive Officer

of Stephens Media, LLC. Id. at 1. Other Stephens Media Defendants, specifically Stephens Media

Intellectual Property, LLC, own the URL lasvegas.com and related marks, which are presently the

subject of a license agreement with the Greenspun entity known as Vegas.com, LLC. Id. at 3.

Las Vegas Sun, Inc. owns a print and on-line newspaper known as the Las Vegas Sun, which

serves metropolitan Las Vegas and beyond. Comp. at 20; 24. The Las Vegas Suns website is

maintained at the URL lasvegassun.com. Id. at 24. Paul Hamilton is the President of Las Vegas

Sun, Inc. and one of its directors. Id. at 37;see also Declaration of J. Colby Williams at 4 and

3 By citing to Plaintiffs Verified Complaint and/or the Declarations submitted with the

Motion, the Stephens Media Defendants are by no means endorsing the accuracy of Plaintiffspapers as a whole. At this early stage of the proceedings and given the expedited nature of theMotion, Stephens Media instead refers to Plaintiffs papers for certain uncontested facts in an effortto reduce the volume of paper before the Court. All Defendants reserve their right to respondformally to Plaintiffs Verified Complaint, if necessary, at the appropriate time.



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Exh. 1.4 The other directors of Las Vegas Sun, Inc. are Plaintiff Brian Greenspun and his siblings,

Susan Greenspun Fine, Jane Greenspun Gale, and Danny Greenspun (the Greenspun Siblings). Id.

Through a series of trusts established for their benefit and the benefit of their respective children,

including the Plaintiff trusts named herein, the Greenspun Siblings own and/or have the power to

vote all the shares of Las Vegas Sun, Inc. Id. at 28-36; 72. Brian Greenspun is the publisher and

editor of the Las Vegas Sun and lasvegassun.com. B. Greenspun Decl. at 1.

B. History Of The Joint Operating Agreement

Donrey of Nevada, Inc., a corporate predecessor to Defendants DR Partners and Stephens

Media, LLC, entered into the original Joint Operating Agreement with Las Vegas Sun, Inc. in June

1989 (the 1989 JOA). Ferguson Decl. 4. At the time of the 1989 JOA, the Las Vegas Sun

newspaper was operating at a substantial loss. Id. Under the agreement, the Review-Journal became

responsible for the Las Vegas Suns business operations, including advertising, sales, printing, and

distribution. Id. The two newspapers maintained independent reporting and editorial operations, the

Review-Journal continued to be published as a morning newspaper, and the Las Vegas Sun was

published as an afternoon newspaper. Id.

In 2005, the Review-Journal, through DR Partners, and the Las Vegas Sun amended and

restated the 1989 JOA. See Mot. at Exh. 4 (the 2005 JOA). Pursuant to the 2005 JOA, the

Review Journal maintained responsibility for the business operations of the Las Vegas Sun, and the

two newspapers maintained their news and editorial autonomy, but the Las Vegas Sun was reduced

to an 8-12 page insert with no advertising that would be delivered as part of the morning Review-

4 Paul Hamilton is also the President of The Greenspun Corporation, which is the manager ofGreenspun Media Group, LLC, one of the contemplated parties to the LOI. See Williams Decl. at 4 and Exhs. 2-3. The Greenspun Siblings are the directors of the Greenspun Corporation. Id. atExh. 2.



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Journal. See id.at 5.1 and Appx A; see also Ferguson Decl. at 5. Absent earlier termination,

the term of the 2005 JOA continues to 2040 with two 10-year renewal periods. Id. at 1.2.

Notably, the 2005 JOA does not encompass the on-line versions of the Review-Journal or the

Las Vegas Sun or the respective URLs at which those publications may be found on the internet.

Ferguson Decl. at 6. The Review-Journal has no right to control, title, or interest in the URL

lasvegassun.com, and the 2005 JOA imposes no restrictions or limitations on how Las Vegas Sun,

Inc. utilizes the foregoing URL when publishing the on-line version of the Las Vegas Sun

newspaper. Id.

The printed Las Vegas Sun is a financial drain on the 2005 JOA. Ferguson Decl. at 7. It

costs the Review-Journal over $1 million dollars a year in newsprint, plates, ink, labor, electricity,

supplies, and maintenance to produce and distribute the Las Vegas Sun. Id. But the Las Vegas Sun

brings in no additional revenue to the 2005 JOA. Id. The Review-Journal believes that if the 2005

JOA is terminated, it will suffer no loss in advertising, circulation, or other revenue. Id.

C. The Contemplated Transactions

In his capacity as the President and CEO of Stephens Media, LLC, Michael Ferguson

routinely communicates with the principals of Las Vegas Sun, Inc. to discuss items pertaining to the

2005 JOA. Ferguson Decl. at 8;see also Mot. at Exh. 4 5.1.6. Ferguson originally met with

Brian Greenspun when discussing these matters. Id. In or about November 2012, Paul Hamilton

became the new President of Las Vegas Sun, Inc. Id. Thereafter, Ferguson met with both Brian

Greenspun and Hamilton when discussing performance under the 2005 JOA and related matters. Id.

During the course of their dealings, Ferguson and Brian Greenspun routinely discussed the

decline of the print newspaper business in general, the growing shift to the internet as a means of

accessing news sources, and the resulting impact these forces had on the revenues generated under



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the 2005 JOA. Ferguson Decl. 9. Over time, Ferguson came to learn that a majority of the owners

of Las Vegas Sun, Inc. were potentially interested in modifying or terminating the 2005 JOA. Id.

Ferguson understood that the interest of certain Greenspun Siblings in this regard was attributable in

part to the decline of the print newspaper business referenced above and the resulting financial strain

imposed on the family to keep the Las Vegas Sun in operation. Id. Greenspun advised Ferguson

that any potential transaction involving the 2005 JOA would need to be addressed to Hamilton given

his status as President of Las Vegas Sun, Inc. and, therefore, Greenspuns boss. Id.

After continuing to discuss the matter periodically, Ferguson and Hamilton exchanged

several e-mails in the early through mid-summer regarding the shape of a potential transaction that

would include termination of the 2005 JOA. See Mot. at Exh. 1. Though Stephens Media, LLC was

originally interested in obtaining (i) a termination of the 2005 JOA, (ii) an acquisition of the

lasvegassun.com URL, and (iii) a 5-year non-compete precluding the Greenspun Siblings from

entering the local news business in exchange for providing certain consideration (i.e., the termination

of the lasvegas.com licensing agreement and transfer of that URL from Stephens Media Intellectual

Property, LLC to The Greenspun Corporation), this was simply an opening position. Id.; see also

Ferguson Decl. at 10.

Hamilton responded to Ferguson on July 15, 2013 and advised that a controlling majority of

the Greenspun entities would be interested in a transaction that simply terminated the 2005 JOA in

exchange for the termination of the lasvegas.com licensing agreement and transfer of that URL to

The Greenspun Corporation. Id. The majority of Greenspun Siblings, in other words, was

apparently not interested in any transaction that contemplated Stephens Medias acquisition of the

Las Vegas Suns website and/or a non-compete requiring any of the Greenspun Siblings to stay out

of the local news business. Id. Ferguson responded to Hamilton on July 22 and advised that



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Stephens Media would accept and move to accomplish a transaction in the form outlined by

Hamilton. Id.

Stephens Media understands that a majority of the directors of The Greenspun Corporation

and Las Vegas Sun, Inc. thereafter voted to approve Stephens Medias offer to terminate the

lasvegas.com licensing agreement, voted to approve the dissolution of the 2005 JOA, and instructed

Hamilton to progress toward an initial non-binding agreement with Stephens Media to accomplish

the contemplated transactions. See Mot. at 8:9 9:12. Stephens Media further understands that a

majority of Las Vegas Sun, Inc. shareholders voted to approve and ratify the actions, motions, and

resolutions taken by the companys board of directors, and that Brian Greenspun was the lone

dissenter who voted against the foregoing items. Id.

D. The Letter Of Intent

Based on the approvals referenced above, Stephens Media commenced with the preparation

of a draft, non-binding LOI. Ferguson Decl. at 12. Stephens Media representatives forwarded a

draft LOI to Hamilton on or about August 18, 2013, who then provided it to various members of the

Greenspun family and various representatives of the Greenspun entities. See Motion at Exhs. 3-4.

The LOI is notable both for what it includes and for what it omits.

There are two contemplated transactions in the LOI: (i) the termination of the lasvegas.com

license agreement and transfer of that URL from a Stephens Media entity to a Greenspun entity; and

(ii) the termination of the 2005 JOA. See Mot. at Exh. 3 1. Both transactions are to close

simultaneously upon which Stephens Media would pay the Greenspun Siblings $70,000 each. Id.

The LOI further provides that the contemplated transactions will be the subject of review by the

United States Department of Justice, see id. at 3, with an intended closing date on or before

December 31, 2013. Id. at 2. Once final, the LOI would supersede all prior agreements and



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understandings of the parties, including the expressions of interest exchanged in the e-mails between

Ferguson and Hamilton earlier in the summer. Id. at 7;see also Mot. at Exh. 1.

Consistent with the progression of Fergusons and Hamiltons earlier e-mails, and contrary to

the theme set forth in the Verified Complaint and Motion, nowhere in the LOI is there any reference

to Stephens Media acquiring the lasvegassun.com URL or the Greenspun Siblings being bound by a

non-compete that would keep them out of the local news business for any period of time. See

generally Mot. at Exh. 3. Simply put, these items are not part of the contemplated transactions

between the parties. Ferguson Decl. at 14. Moreover, nothing in the proposed transactions would

prevent Las Vegas Sun, Inc. or the Greenspuns from continuing to publish the print version of Las

Vegas Sun on their own or selling it to another party after termination of the 2005 JOA.

Prior to the Courts entry of the Temporary Restraining Order, the parties continued to

exchange drafts of the LOI and presently appear close to signing it. Ferguson Decl. at 15. There

is, however, no material difference regarding the scope of the transactions set forth in the draft LOI

presently before the Court as Exhibit 2 to Plaintiffs Motion and the subsequent drafts exchanged

between the parties. Id.5 Once the LOI is signed by all parties, only then will they commence with

the negotiation of a long-form contract that seeks to implement the transactions contemplated in the

LOI. Id. There is no guarantee the parties will finalize and execute a definitive contract in the future

or, for that matter, any way of presently knowing the exact terms that will be included therein. Id.

Assuming all of the foregoing events occur, the parties intend to submit the final agreement to the

DOJ for its review. Id. Of course, there is similarly no way to predict at the present time what

DOJs response will be to theparties agreement after its review.

5 A true and correct copy of the current version of the LOI is being submitted herewith asExhibit 1 to the Ferguson Declaration.



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It is against this uncertain factual backdrop that Brian Greenspun filed his Verified

Complaint and seeks emergency injunctive relief from the Court. We now turn to the many legal

infirmities that doom Plaintiffs Motion.

III. LEGAL ARGUMENT

A. Standards Governing The Issuance Of A Preliminary Injunction.

A preliminary injunction is an extraordinary remedy and is appropriate only when the

party seeking the injunction establish[es] that he is likely to succeed on the merits, that he is likely

to suffer irreparable harm in the absence of preliminary relief, that the balance of equities tips in his

favor, and that an injunction is in the public interest. Managed Pharmacy Care v. Sebelius, 716

F.3d 1235, 1244 (9th Cir. 2012) (quoting Winter v. Natural Res. Def. Council,Inc., 555 U.S. 7, 20,

24 (2008)). A moving party is required to make a showing that all of these requirements have been

met. Loretero v. City of Henderson, 2012 WL 6135646, at *2-3 (D. Nev. Dec. 10, 2012) (citing

Amer. Trucking Assoc. v. City of Los Angeles, 559 F.3d 1046, 1052 (9th Cir. 2009)). This is a

heavy burden and a difficult task. Earth Island Institute v.Carlton, 626 F.3d 462, 469 (9th Cir.

2010). In short, [a] party seeking a preliminary injunction must make a clear showing that it is

entitled to such an extraordinary and drastic remedy. Carneyv.Bank of America Corp., 481 Fed.

Appx 317, 318 (9th Cir. 2012) (quotingMazurek v. Armstrong, 520 U.S. 968, 972 (1997));see also

Loretero,supra at *2. Plaintiffs have not remotely satisfied this heavy burden.6

6 Though they acknowledge the applicability of the four-pronged Winter test required for

issuance of a preliminary injunction, Plaintiffs also seek to invoke the seemingly more lenientstandard articulated in Alliance for Wild Rockies v. Cottrell, 632 F.3d 1127 (9th Cir. 2011). SeeMot. at 11:1812:6. WhileAlliance for Wild Rockies has not been overruled, it is worth noting thatmany courts have criticized its reasoning and questioned its viability in light of Winters rejection ofthe Ninth Circuits previous sliding scale test. E.g., Special Clays Corp. v. VR Business Brokers,2012 WL 4092659, *2 (D.Nev. Sept. 17, 2012) (stating [t]his case presents some difficulty in lightofWinterand prior Ninth Circuit cases.);Fox Television Stations, Inc. v. BarryDriller Content Sys.,PLC, 915 F.Supp.2d 1138, 1141 n. 6 (C.D.Cal. 2012) (refusing to apply standard set forth in



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B. Plaintiffs Cannot Establish A Likelihood Of Success On The Merits.

Plaintiffs cannot satisfy the first requirement necessary for injunctive relief, a reasonable

likelihood of success on the merits, as Plaintiffs lack standing to bring suit, and the action is not ripe.

Even if Plaintiffs could overcome the barriers to this Courts subject matter jurisdiction, their

substantive antitrust claims fail because they are premised on an improperly defined market and

there is no threat to competition from the contemplated transactions. We will address each of these

issues in turn.

1. Plainti ff s Lack Standing.

To hear a case, a federal court must have subject matter jurisdiction, and the party invoking

federal jurisdiction bears the burden of establishing jurisdiction. Righthaven, LLC v. Newman, 838

F.Supp.2d 1071, 1073 (D.Nev. 2011) (quoting Lujan v. Defenders of Wildlife, 504 U.S. 555, 560-61

(1992)). The issue of standing is central to establishing subject matter jurisdiction, id., and

requires a showing that the plaintiff will suffer injury to a legally protected interest, a causal

relationship between the injury and the challenged conduct, and a likelihood that the injury will be

redressed by a favorable decision. See Northeastern Florida Contractors v. Jacksonville, 508 U.S.

656, 663 (1993).

Brian Greenspun alleges that he is bringing suit in two capacities. First, he claims to be a

subscriber to the LVRJ/Las Vegas Sun and plans and expects to continue to purchase a newspaper

subscription from the LVRJ/Las Vegas Sun in the future. Comp. at 5. Second, he alleges that he

is the trustee of The Brian L. Greenspun Separate Property Trust Dated July 11, 1990 and The Amy

Greenspun Arenson 2010 Legacy Trust, both of which are minority shareholders of Las Vegas Sun,

Inc. Id. at 6-8. Neither capacity provides a basis for standing to bring suit here.

Alliance for Wild Rockies as being in conflict with Winterand Ninth Circuits subsequent adoptionof the Winterstandard).



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a. Brian Greenspun is not a paid subscriber to the newspapers.

As touched on above, Brian Greenspuns status as an alleged paid subscriber to the Review

Journal and Las Vegas Sun is without factual basis. Mr. Greenspun receives a complimentary copy

of the newspaper delivered to his Las Vegas addresses for free. See Holloway Decl. at 3-5 and

Exh. 1;see also Righthaven, 838 F.Supp.2d at 1074 (a facial attack to plaintiffs standing may be

accompanied by extrinsic evidence.). Even if Mr. Greenspun were to purchase a newspaper

subscription in the future, such action would still fail to confer standing as [t]he existence of federal

jurisdiction ordinarily depends on the facts as they exist when the complaint was filed. Righthaven,

838 F.Supp. at 1075 (parties are not permitted to amend jurisdictional facts themselves in order to

create standing) (quotations omitted) (emphasis in original). Given that Brian Greenspun is not, in

fact, a paid subscriber to the Review Journal and Las Vegas Sun, this allegation cannot establish the

requisite standing to sue.7

b. Nevadas business judgment rule.

Mr. Greenspuns alternative capacity as the trustee of two family trusts that are minority

shareholders of Las Vegas Sun, Inc. likewise fails to establish standing to sue. Though he has

conspicuously failed to name either Las Vegas Sun, Inc. or The Greenspun Corporation (or the

companies directors) as defendants, the transparent goal of Mr. Greenspuns lawsuit is to stymie

business decisions made by a majority of the directors for the respective corporations (and ratified

by a majority of the Las Vegas Sun, Inc. shareholders) through the use of the courts. This is

improper as [t]he remedy of injunction is ordinarily not available for interfering with the internal

management of a corporation. Fletcher Cyc. Corp. 5821 (Sept. 2012 Update).

7 Stephens Media acknowledges that an ordinary consumer of news, features and opinions mayhave standing to assert an antitrust claim in some circumstances. See Reilly v. Hearst Corp., 107F.Supp.2d 1192, 1194-95 (N.D.Cal. 2000). Mr. Greenspuns Verified Complaint does not, however,allege standing on this basis and his concerns are clearly otherwise.



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While majority stockholders are bound not to act fraudulently or in bad faith . . . where the

acts of the majority are neither fraudulent nor ultra vires, the minority or dissenting stockholders

have no ground of complaint. Smith v. Gray, 250 P. 369, 374 (Nev. 1926);see also Fletcher,supra

at 5821 (stating the same principle in the context of corporate directors and officers). Known as

the business judgment rule, Nevada has codified the foregoing principle in Chapter 78 of the

Nevada Revised Statutes. See Nev. Rev. Stat. 78.138. In order to overcome the statutory

presumption that directors and officers of Nevada corporations (like Las Vegas Sun, Inc. and The

Greenspun Corporation) act in good faith, on an informed basis and with a view to the interests of

the corporation, see Nev. Rev. Stat. 78.138(3), a plaintiff must affirmatively allege that the

subject act or omission constitutes a breach of fiduciary duty that involves misconduct, fraud, or a

knowing violation of the law. See Nev. Rev. Stat. 78.138(7). The Nevada Supreme Court has held

that because Nev. Rev. Stat. 78.138(7) requires a plaintiff pleading a breach of fiduciary duty

claim to allege fraud or its equivalent on the part of the director defendants, such a claim must be

pleaded with particularity pursuant to Fed. R. Civ. P. 9(b). SeeIn re AMERCO Deriv. Litig., 252

P.3d 681, 700 (Nev. 2011).

Here, of course, Brian Greenspun has not even sued the directors or officers of Las Vegas

Sun, Inc. or The Greenspun Corporation, let alone asserted any allegations in the Verified Complaint

to overcome the protections of Nevadas business judgment rule. Application of the business

judgment rule is essentially a standing issue: if the doctrine is applicable, then plaintiffs have no

standing to sue. Lewis v. Anderson, 615 F.2d 778, 784 (9th Cir. 1980) (affirming dismissal of

action brought by minority shareholders). Where a plaintiff lacks standing by virtue of the business

judgment rule, it necessarily follows that he is likewise precluded from obtaining injunctive relief to

thwart the corporate acts resulting from the boards exercise of its business judgment. E.g.,



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Horowitz v. Southwest Forest Indus., Inc., 604 F.Supp.1130, 1134-36 (D.Nev. 1985) (denying

motion for preliminary injunction based on business judgment rule).8 That is precisely the situation

here.9

c. Plaintiffs do not have antitrust standing.

Standing is an essential element of a private antitrust claim. To have standing for injunctive

relief, Plaintiffs must establish both threatened loss or damage from a violation of the antitrust

laws, and antitrust injurythat is, injury the antitrust laws were intended to prevent and which flows

from that which makes the defendants acts unlawful. See 15 U.S.C. 26; Cargill, Inc. v. Monfort of

Colorado, Inc., 479 U.S. 104, 112-13 (1986). As a threshold matter, Plaintiffs cannot demonstrate a

8 See also Danaher Corp. v. Chicago Pneumatic Tool Co., 633 F.Supp. 1066, 1072 (S.D.N.Y.1982) (stockholder certainly cannot enjoin corporate transactions taken in good faith by the

corporation[.]); Poirier v. Welch, 233 F.Supp. 436, 438-39 (D.D.C. 1964) (denying motion forpreliminary injunction based on business judgment rule); Fletcher, supra 4860 (So long as thedirectors or officers act within their legal power and not fraudulently, injunction will not issue tocontrol the discretion lodged in them in respect to the internal affairs and the conduct of thecorporation.).

9

As His Honor correctly observed in the Temporary Restraining Order,see Dkt. No. 9 at 2:12-15,Mr. Greenspuns failure to name his familys entities as defendants raises serious questions as towhether he has joined all necessary parties under Fed. R. Civ. P. 19. Las Vegas Sun, Inc. and TheGreenspun Corporation, as parties to the LOI and owners and/or licensees of the assets at issuetherein, certainly have a legally protected interest in the action that make them necessary partiesunder Fed. R. Civ. P. 19(a). See Hi-Tech Gaming.com Ltd. v. IGT, 2008 WL 4952208, *4 (D.Nev.Nov. 18, 2008) (setting forth circumstances that make a party necessary under Rule 19(a)). Whileno definitive contract has been entered between Stephens Media and the Greenspun entities, theultimate relief Plaintiffs seek is to enjoin the performance of this prospective agreement. Wheretwo parti es enter i nto a contract, and a th ir d party sues one of the contracting parties to enjoin

that contracting party f rom performing under i ts contract, the presence of the other party to the

contract is requi red in the lawsui t. Natural Res. Def, Council v. Kempthorne, 539 F.Supp.2d 1155,1186 (E.D.Cal. 2008) (denying motion to dismiss for failure to join necessary party under Fed. R.Civ. P. 12(b)(7) without prejudice, but requiring plaintiff to file supplemental complaint namingnecessary parties as defendants) (emphasis added) (citing Crouse-Hinds Co. v. InterNorth, Inc., 634F.2d 690 (2d Cir. 1980)). Unless Brian Greenspun names the Greenspun entities (and likely theirdirectors) as additional defendants herein, this action is certainly subject to dismissal under Fed. R.Civ. P. 12(b)(7).



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significant threat of injury from an impending violation of the antitrust laws or from a

contemporary violation,Zenith Radio Corp. v. Hazeltine Research, 395 U.S. 100, 131 (1971), given

the absence of a definitive agreement between Stephens Media and the Greenspun entities as well as

the need for DOJ review once an agreement is reached. SeeMahaffey v. Detroit Newspaper Agency,

1998 WL 739902, at *2-3 (6th Cir. Oct. 9, 1998) (no threat of injury justifying injunction from JOA

newspapers strike publication plan which could only be implemented, if at all, in the event of an

actual or threatened strike);see also infra at Point III(B)(2).

But even if there was a threat of antitrust injury to someone, and there is none, Plaintiffs still

lack standing. It is hornbook law that shareholders do not have standing to bring an antitrust claim.

Any purported harm to Plaintiffs in this capacity is derivative of the alleged harm to Las Vegas Sun,

Inc., and it is that corporation, not its shareholders, that would have to bring a claim. E.g., Vinci v.

Waste Management, Inc., 80 F.3d 1372, 1375 (9th Cir. 1996) (denying standing of plaintiff

shareholder and former employee to bring suit); Siti-Sites.com v. Verizon Communications, Inc., 428

Fed. Appx. 100, 102 (2d Cir. 2011) (denying standing to creditor because derivative injury

sustained by employees, officers, stockholders, and creditors of an injured company do not constitute

antitrust injury sufficient to confer antitrust standing.) (internal citations omitted); Phillip E.

Areeda and Herbert Hovenkamp,Antitrust Law 353 (2013 Update).

Finally, Mr. Greenspun cannot gain standing as the editor of the Las Vegas Sun newspaper.

An employees purported injury is generally not the type of wrong the antitrust laws are designed to

remedy. Vinci, 80 F.3d at 1376 (denying terminated employee standing since a plaintiff who is

neither a competitor nor consumer in the relevant market does not suffer antitrust injury.) (internal

quotations omitted);Province v. Cleveland Press Publishing Co., 787 F.2d 1047, 1050-54 (6th Cir.

1986) (employees of defunct newspaper lacked standing to pursue claims that sale of newspaper to



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rival helped the rival monopolize local newspaper publishing business);Reibert v. Atlantic Richfield

Company, 471 F.2d 727 (10th Cir. 1973) (terminated employee of acquired company denied

standing to seek equitable or damage relief under antitrust laws).

Regardless of which hat he chooses to wearalleged newspaper subscriber, trustee of the

family trust (minority) shareholders in Las Vegas Sun, Inc., or newspaper editor of the Las Vegas

Sun, Brian Greenspun lacks standing to bring the instant lawsuit. Accordingly, he cannot establish a

reasonable likelihood of success on the merits and his Motion must be denied.

2. Thi s Matter I s Not Ripe.

Like standing, [t]he question of ripeness generally goes to whether the district court has

subject matter jurisdiction. Moores Federal Practice 3d 101.70[1] (citing Southern Pac. Transp.

Co. v. Los Angeles, 922 F.2d 498, 502 (9th Cir. 1990)). The ripeness doctrine rests, in part, on the

Article III requirement that federal courts decide only cases and controversies and in part on

prudential concerns. Addington v. U.S. Airline Pilots Assn, 606 F.3d 1174, 1179 (9th Cir. 2010).10

In this regard, ripeness is peculiarly a question of timing . . . and a federal court normally ought not

resolve issues involving contingent future events that may not occur as anticipated, or indeed may

not occur at all. Clinton v. Acequia, Inc., 94 F.3d 568, 572 (9th Cir. 1996) (quotations and citations

omitted). The instant case is just the type of premature lawsuit the federal courts refrain from

deciding under the ripeness doctrine.

Plaintiffs seek injunctive relief preventing the Stephens Media Defendants from taking steps

to terminate the 2005 JOA, taking steps that are inconsistent with the 2005 JOA, and taking

actions that cause any material adverse change to the Las Vegas Sun. See Mot. at 2:6-19. The

problem for Plaintiffs is that the conduct they seek to enjoin hinges on multiple contingencies that

10 Prudentialconcerns address the wisdom, rather than the constitutionality, of having thecourt adjudicate the matter in question. Moores,supra at 101.70[3].



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may or may not occur. The first contingency is whether Stephens Media and the Greenspun entities

actually execute a LOI that seeks, in part, to terminate the 2005 JOA. Assuming this contingency

occurs, the next contingency is whether Stephens Media and the Greenspun entities are able to

negotiate, finalize and execute a long-form agreement that implements the concepts outlined in the

LOI. Assuming the first two contingencies occur, yet another contingency develops because the

parties intend to seek DOJ review of any final contract agreed upon. Whether the DOJ will object to

the parties proposed contract and, if so, the resulting impact on any deal are additional unknowns at

this point. Courts have consistently dismissed cases involving uncertain contractual dealings similar

to those present here.

InAddington, for example, a group of airline pilots obtained an injunction against its union

on grounds the union was negotiating a collective bargaining agreement (CBA) that would favor

certain pilots over others. 606 F.3d at 1177-79. At the time of the injunction, the proposed CBA

had not been ratified by the union members or the airline. The Ninth Circuit reversed and directed

that the case be dismissed on ripeness grounds:

We conclude that this case presents contingencies that couldprevent effectuation of [the Unions] proposal and accompanying injury.

As this point, neither the [Plaintiffs] nor [the Union] can be certain whatseniority proposal ultimately will be acceptable to both [the Union] andthe airline as part of the final CBA. Likewise, it is not certain whether theproposal will be ratified by [the Union] membership as part of a new,single CBA. Not until the airline responds to the proposal, the partiescomplete negotiations, and the membership ratifies the CBA will[Plaintiffs] actually be affected by [the Unions] seniority proposal-whatever [the Unions] final proposal ultimately is. Because thesecontingencies make the claim speculative, the issues are not yet fit forjudicial decision.

Id. at 1179-80. Cf. Clinton, supra, 94 F.3d at 572 (breach of contract claim presented no live case or

controversy where the claim hinged on future conduct by one of the parties).



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Also instructive on this point is Westlands Water Dist. Distribution Dist. v. Natural Res. Def.

Council, Inc., 276 F.Supp.2d 1046 (E.D.Cal. 2003). In Westlands, a California water distribution

district filed suit against an environmental group (NRDC) seeking a declaration that its proposed

long-term water contract with the United States did not violate federal law. 276 F.Supp.2d at 1048.

The proposed contract at issue had not been finalized and was still subject to agency review. Id.

NRDC moved to dismiss based on lack of jurisdiction, which the district court granted.

In so doing, the court found that the water districts suit sought a prohibited advisory opinion

and was not ripe. Id. at 1050-52. After recounting the prohibition against advisory opinions in light

of Article IIIs cases or controversies requirement, the Westlands court further explained:

Regardless of whether the relief sought is monetary, injunctive ordeclaratory, in order for a case to be more than a request for an advisoryopinion, there must be an actual dispute between adverse litigants and asubstantial likelihood that a favorable federal court decision will havesome effect. [ ] Here, the case concerns a hypothetical, rather than anactual legal dispute concerning proposed contract terms that may or maynot be executed in the future. The question of whether a favorableresolution will have any effect hinges on the same contingencies. Thus,the case would appear to seek nothing more than an advisory opinion.

Id. at 1050 (citations omitted). With respect to ripeness, the court concluded that the tentative nature

of the contract terms and the lack of administrative agency approval counseled against a finding of

ripeness: Here, the contract over which Westlands sues has not even been executed; the actual

terms of the contract at the time of execution and the execution of the contract itself are both

contingent future events that may or may not occur as anticipated, or indeed may not occur at all.

Id. at 1052.

Like the proposed contract in Westlands, the proposed agreement Brian Greenspun

challenges here has not been finalized or executed. Indeed, its actual terms have not even been

negotiated. Also like the proposed contract in Westlands, any agreement reached between Stephens



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Media and the Greenspun entities is to be submitted for government review. Because these future

events may not occur as anticipated, or may not occur at all, the controlling precedent clearly

dictates that the claims asserted in the Verified Complaint are simply not ripe.

3. Plaintiffs Antitrust Claims Lack Merit.

a. Plaintiffs have not adequately alleged the relevant market.

To succeed on any of their antitrust claims, Plaintiffs must allege and prove, among other

things, harm to competition in a properly defined relevant market. E.g., Tanaka v. the University of

Southern California, 252 F.3d 1059, 1063-64 (9th Cir. 2001) (complaint dismissed which contained

only a conclusory assertion of the relevant market); Golden Gate Pharmacy Services, Inc. v. Pfizer,

Inc., 433 Fed.Appx. 598, 599 (9th Cir. 2011) (dismissing complaint under Sherman Act and Section

7 of the Clayton Act for failure to sufficiently allege a relevant product market); Big Bear Lodging

Association v. Snow Summit, Inc., 182 F.3d 1096, 1105 (9th Cir. 1999) (dismissing Sherman Act

complaint for failing to identify relevant market); Rick-MikEnterprises, Inc. v. Equilon Enterprises,

Inc., 532 F.3d 963, 972-75 (9th Cir. 2008) (dismissing complaint for, inter alia, failure to allege

facts establishing defendants market power and the demand for credit card services that would

support the allegation of a separate product market). Plaintiffs have no probability of success on

their claims because they have not adequately alleged, and cannot prove, their purported relevant

market of the sale of local newspapers to readers, and the interrelated operation of a newspaper

website in Las Vegas. See Comp. at 59; Mot. at 14:2416:13.

The relevant market includes both a product market and geographic market. The product

market must be determined by the reasonable interchangeability of use or the cross-elasticity of

demand between the product itself and substitutes for it. Golden Gate Pharmacy Services, 433 Fed.

Appx. at 598 (quoting Brown Shoe Co. v. United States, 370 U.S. 294, 325 (1962)). The failure to



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allege a product market that does not include reasonably interchangeable goods is facially

unsustainable and subject to dismissal. Id. at 599 (citations omitted).

Plaintiffs proposed market of the sale of local daily newspapers to readers, and the operation

of their related websites falls woefully short of the mark. Las Vegas has a robust media market

place: it boasts 16 broadcast television stations (many of which have their own websites); at least 33

radio stations (same); more than 56 local physical and online newspapers and magazines (not

including those owned by any of the Stephens Media Defendants); and numerous local websites and

blogs. See Declaration of Yashika Jain at 4-5 and Exh. 1. And that does not include the ability of

consumers to create their own custom news feed through Google, Yahoo, or any number of other

internet service providers. Plaintiff Greenspun alleges that online newspaper websites are adequate

substitutions for printed newspapers, Comp. at 57, but he never explains, nor could he, why any

of these other sources of news, information, and entertainment are not.

Unsurprisingly, the competition that newspapers face in Las Vegas corresponds with the

trend throughout the United States. In 2000, another district court in this Circuit recognized the

importance of media choices on readers when he, sua sponte, questioned whether newspapers could

constitute an antitrust market:

In 1999, there were thirty-two AM stations, forty-three FM stationsand twenty-eight television stations broadcasting in the San Francisco Bayarea. Cable television imports a multitude of distant signals and providesa plethora of specialized programming and advertising.

The Internet has opened a staggering array of news sources. Withrelative ease, a person can select from a host of suppliers of newspaper-

like news, features and opinions. Most major newspapers have web sitesmaking it possible to access a substantial part of their content on line. AnInternet user can design a unique individually tailored on-line newspaperby roaming all news content servers and selecting stories and subjects ofinterest. . . .



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In addition, there are many weekly newspapers that circulate in SanFrancisco and the surrounding counties and several alternative newsweeklies [ ], ethnic publications [ ] and special interest publications [ ].

Reilly, supra, 107 F.Supp. at 1200;see also Reilly v. MediaNews Group, Inc., 2006 WL 2419100, at

*6 (N.D.Cal. July 28, 2006) (There will undoubtedly continue to be other sources that continue to

provide consumers with news, editorial, entertainment and advertising content, such as the

television, radio, and the Internet. While the court reserves for another day the determination

whether those sources occupy the same market as newspapers, they nonetheless provide services that

overlap with the services Reilly complains he will be deprived of.); Drake v. Cox Communications,

2011 WL 2680688, at *3 (D. Kan. July 8, 2011) ([C]able television itself must compete with a

variety of other media outlets, such as broadcast television, radio, the internet, and newspapers.).

SinceReilly v. Hearstcompetition has only intensified, causing many newspapers to retrench

or shut down. The Court aptly recognized this fact in its Temporary Restraining Order when it took

judicial notice that newspapers around the country are ceasing publication, due in large part to the

consumers preference for media sources like those identified in the previous paragraphs. Id. at

2:16-17. Since 2008:

Leading newspaper groups, such as the Tribune Company, PhiladelphiaNewspapers LLC (publisher of the Philadelphia Inquirer and thePhiladelphia Daily News), the Journal Register (twice), and AffiliatedMedia (holding company for MediaNews Group) have gone bankrupt;

Brand name newspapers like the Rocky Mountain News (Denver), theAlbuquerque Tribune, and the Honolulu Advertiser have closed;

JOAs ended in Tucson, Denver, and Albuquerque;

Newspapers have eliminated printed editions or reduced the number ofhome delivery dayse.g., Ann Arbor News (now online only, except twodays of print available for pick-up); Christian Science Monitor (onlineonly weekdays); Seattle Post-Intelligencer (online only); Cleveland PlainDealer (home delivery four days per week), Times Picayune (NewOrleans) (print edition three days per week), Detroit Free Press and Detroit



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News (home delivered print editions three days and two days per weekrespectively), and Oregonian (Portland) (home delivery four days perweek).

SeeIn re Philadelphia Newspapers, LLC, 599 F.3d 298 (3d Cir. 2010);see also Williams Decl. at

5-7 and Exh. 4.11

Today, only 29% of Americans say they read a newspaper online or in print the previous

day.12 For 55% of Americans, television is the main source for news.13 Perhaps the surest sign that

Plaintiffs market definition cannot stand comes from Plaintiffs themselves as they complain that the

Las Vegas Sun, Inc.s profit payments from the 2005 JOA have declined 90%, and that the

traditional printed newspaper will soon be a thing of the past. See B. Greenspun Decl. at 7;

Comp. at 57 (Newspaper websites will be the likely successor to the traditional printed

newspaper.). Yet, only the printed newspaper is part of the 2005 JOA. In fact, the Las Vegas Sun

newspaper and its website, according to Plaintiff Greenspun, are actually dependent on the profits

from other publications of Greenspun Media Group that are outside the JOA including the tourist

publications, Vegas2Go and Las Vegas Magazine. B. Greenspun Decl. at 7.

11 The Court may judicially notice a fact that is not subject to reasonable dispute because it:

(1) is generally known within the trial courts territorial jurisdiction; or (2) can be accurately andreadily determined from sources whose accuracy cannot reasonably be questioned. Fed. R. Evid.201(b). Given that the Court has already taken judicial notice of certain failing or failed printnewspapers in its Temporary Restraining Order, Stephens Media respectfully submits that the Courtmay properly take judicial notice of the additional newspaper failures and transactions set forthabove, all of which may be accurately and readily ascertained from the compendium of articlesidentified in Exhibit 4 to the Williams Declaration.

12 Seehttp://www.pewresearch.org/daily-number/number-of-americans-who-read-print-

newspapers-continues-decline/

13 Seehttp://www.poynter.org/latest-news/mediawire/189819/pew-tv-viewing-habit-grays-as-digital-news-consumption-tops-print-radio/;see alsohttp://www.poynter.org/latest-news/mediawire/217525/gallup-more-than-half-of-americans-get-their-news-from-tv/

http://www.pewresearch.org/daily-number/number-of-americans-who-read-print-newspapers-continues-decline/http://www.pewresearch.org/daily-number/number-of-americans-who-read-print-newspapers-continues-decline/http://www.pewresearch.org/daily-number/number-of-americans-who-read-print-newspapers-continues-decline/http://www.pewresearch.org/daily-number/number-of-americans-who-read-print-newspapers-continues-decline/http://www.poynter.org/latest-news/mediawire/189819/pew-tv-viewing-habit-grays-as-digital-news-consumption-tops-print-radio/http://www.poynter.org/latest-news/mediawire/189819/pew-tv-viewing-habit-grays-as-digital-news-consumption-tops-print-radio/http://www.poynter.org/latest-news/mediawire/189819/pew-tv-viewing-habit-grays-as-digital-news-consumption-tops-print-radio/http://www.poynter.org/latest-news/mediawire/189819/pew-tv-viewing-habit-grays-as-digital-news-consumption-tops-print-radio/http://www.poynter.org/latest-news/mediawire/217525/gallup-more-than-half-of-americans-get-their-news-from-tv/http://www.poynter.org/latest-news/mediawire/217525/gallup-more-than-half-of-americans-get-their-news-from-tv/http://www.poynter.org/latest-news/mediawire/217525/gallup-more-than-half-of-americans-get-their-news-from-tv/http://www.poynter.org/latest-news/mediawire/217525/gallup-more-than-half-of-americans-get-their-news-from-tv/http://www.poynter.org/latest-news/mediawire/217525/gallup-more-than-half-of-americans-get-their-news-from-tv/http://www.poynter.org/latest-news/mediawire/217525/gallup-more-than-half-of-americans-get-their-news-from-tv/http://www.poynter.org/latest-news/mediawire/189819/pew-tv-viewing-habit-grays-as-digital-news-consumption-tops-print-radio/http://www.poynter.org/latest-news/mediawire/189819/pew-tv-viewing-habit-grays-as-digital-news-consumption-tops-print-radio/http://www.pewresearch.org/daily-number/number-of-americans-who-read-print-newspapers-continues-decline/http://www.pewresearch.org/daily-number/number-of-americans-who-read-print-newspapers-continues-decline/


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All of the foregoing demonstrates that Plaintiffs definition of the purported relevant market

is not only cramped, but contrary to reality.

b. Plaintiffs cannot establish harm to competition.

The termination of the 2005 JOA cannot harm competition under any theory because there is

no economic competition between the printed Las Vegas Sun and the Review-Journal. Under the

2005 JOA, the Review-Journal and the Las Vegas Sun are distributed jointly. The Review-Journal

is responsible for all business decisions and operations, including advertising and circulation sales,

the determination of advertising and circulation prices, the area of distribution, and production. The

Review-Journal and the Las Vegas Sun split the profits from the 2005 JOA under a formula set forth

in the agreement. The two newspapers do not compete economically with each other under the

2005 JOA, but are instead a single economic entity. See Texaco v. Dagher, 547 U.S. 1 (2006)

(Texaco and Shell formed a joint venture to refine and sell gasoline, shared profit and loss, and sold

products under two brand names; the joint ventures setting of a common price for the sale of

Texaco and Shell gas was not price fixing because the joint venture was a single entity.).14

To create the appearance of economic competition within the 2005 JOA, Plaintiffs argue that

the Review-Journal and Las Vegas Sun compete for readers to place themselves in better position for

a potential renewal of a JOA or for operating outside a JOA. See Comp. at 77. Plaintiffs intra-

JOA competition theory is contradicted by the facts, and is inconsistent with their Complaint. First,

the Las Vegas Sun cannot build a circulation edge over the Review-Journal: under the 2005 JOA, it

14 Indeed, the DOJ opposed the passage of the Newspaper Preservation Act, which created anantitrust exemption for newspaper JOAs, because the Act would eliminate all commercialcompetition between the newspapers in the JOA. See Statement of Richard W. McLaren, AssistantAttorney General, Antitrust Division, United States Department of Justice, Hearings before theAntitrust Subcommittee of the Committee on the Judiciary, House of Representatives on H.R. 279and Related Bills, 91st Cong., 1st Sess. (1969) at 360.



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has a limited number of pages each day, and those pages in all cases are distributed with the Review-

Journal. Furthermore, Las Vegas Sun, Inc. is not interested in renewing the 2005 JOAit wants to

end it. And given Plaintiffs belief the traditional printed newspaper will become a thing of the

past, they cannot seriously argue that the printed Las Vegas Sun is jockeying for post-JOA position.

Plaintiffs heavy reliance onHawaii v. Gannett Pacific Corp., 99 F.Supp.2d 1241 (D. Hawaii

1999), which the court described as [a] difficult, close call on an issue of first impression, is

misplaced. See Mot. at 12:15 13:9. In Gannett Pacific, unlike the 2005 JOA here, the two

newspapers were sold separately, and thus one newspaper could gain a circulation edge over the

other, and both newspapers carried advertising (there is no advertising in the printed Las Vegas

Sun). 99 F.Supp.2d at 1248. And no less important, the media world of Las Vegas in 2013 is not

that of Honolulu in 1999. There simply is too much competition from other media outlets for the

Las Vegas Sun and Review-Journalcollectively or individuallyto have market power.

There can be no antitrust violation for an additional reason: the printed Las Vegas Sun is a

failing newspaper, and its termination in the 2005 JOA cannot, therefore, harm competition. A

failing JOA newspaper is one which would be failing if operated outside the JOA. Reilly, 107 F.

Supp. 2d at 1203 (holding San Francisco Examiner was a failing newspaper); see also USDOJ

Business Review Letter concerning News-Herald Printing Company and Derrick Publishing

Company, B.R.L. 85-19 (D.O.J.), 1985 WL 71887, at *3-4 (April 29, 1985) (concluding the JOA

newspaper News-Herald would fail if operated outside the JOA; the proponent postulated the

revenues that would be generated, and the expenses incurred, in one years operation as an

independent entity.)

In Reilly, the court concluded that the most reliable evidence at trial was the change in

JOA profits that would result from closing one of the JOA newspapers. 107 F.Supp 2d at 1204-05.



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That analysis here shows the Las Vegas Sun is failing: if the 2005 JOA were ended, the Review-

Journal would save over a million dollars per year in costs (not including its profit payments to Las

Vegas Sun, Inc.), but would not suffer any decline in revenue. Notably, the DOJ has argued to the

Ninth Circuit that a decision to terminate a newspaper whose incremental costs exceed the

incremental revenues attributable to its operation is unlikely to violate the antitrust laws. Id. at

1204 (quoting Amicus Brief of the United States in State of Hawaii v. Gannett Pacific). That is

exactly the case here. The Las Vegas Suns incremental costs exceed its incremental revenues.

Accordingly, terminating the Las Vegas Suns publication as part of the 2005 JOA (while preserving

its potential publication through other vehicles) does not violate the antitrust laws.

15

Plaintiffs have not properly alleged, and cannot otherwise support, their purported relevant

market. Nor can they demonstrate that termination of the 2005 JOA will result in harm to

competition. These are yet two more reasons why Plaintiffs cannot establish a reasonable likelihood

of success on the merits.

C. Plaintiffs Have Not Shown They Are Likely To Suffer Irreparable Harm.

Plaintiffs seeking preliminary relief must establish that irreparable harm is likely, not just

possible, to obtain an injunction. See Winter, 555 U.S. at 22;see also Small v.Operative Plasterers

& Cement Masons Intl Assn, Local 200, 611 F.3d 483, 491 (9th Cir. 2010) ([I]ssuance of a

preliminary injunction based only on the possibility of irreparable harm is inconsistent with the

15 Plaintiffs First Cause of Action seeking relief under Section 7 of the Clayton Act fails forthe additional reason that that statute only applies to mergers and acquisitions that substantially

lessen competition and tend to promote a monopoly. See 15 U.S.C. 18 (making it unlawful for anyperson to acquire . . . thestockor other share capital . . . or any part of the assets of another personwhere the effect may be to substantially lessen competition or tend to create a monopoly[.])(emphasis added). Because Stephens Media is not merging with or acquiring any of the Greenspunentities stockor their assets as part of the contemplated transactions, this claim cannot survive here.Plaintiffs appear to suggest their Section 7 claim is satisfied because Stephens Media is acquiringLas Vegas Sun, Inc.s interest in the 2005 JOA. See Mot. at 17:13-14. This is false. Under theproposed transactions, the 2005 JOA would terminate. Stephens Media is not acquiring anything.



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extraordinary nature of the remedy.). As this Court has recently instructed, speculative and

uncertain harm is not sufficient for an injunction. Gladwill v. Ruby Pipeline, LLC, 2013 WL

144268, at *7 (D. Nev. Jan. 10, 2013) (quotation omitted). Plaintiffs, at best, have done nothing

more than allege speculative harm.

The preceding sections make plain that the conduct Plaintiffs seek to enjoin is premised on a

series of contingencies that may not even occur. Until those contingencies become realities,

Plaintiffs are not threatened with any harm let alone harm that is irreparable.

Ignoring the proposed terms contained in the LOI being challenged, Plaintiffs contend that

they will be irreparably harmed because the Las Vegas Sun would no longer be a viable print or

online newspaper thereby resulting in the loss of an editorial and reportorial voice. See Mot. at

21:26 -22:13 (citing Gannett, 99 F.Supp.2d at 1253-54). This is wrong. While the contemplated

transactions between Stephens Media and the Greenspun entities may envision that the printed 8-12

page Las Vegas Sun insert will no longer be published and distributed with the Review-Journal, Las

Vegas Sun, Inc. or the Greenspuns will be free to publish the print version of the newspaper on their

own or sell it to another party that may wish to do so.

Nor do the transactions contemplate anything happening to the on-line version of the Las

Vegas Sun. This is no mere trifle. As Plaintiffs themselves acknowledge, newspapers have begun

focusing substantial time and effort on their websites and have become increasingly more reliant on

their websites for the dissemination of opinions and news, thereby making websites a viable and

accepted substitut ion for many readers of the pri nted newspaper. Mot. at 4:26 5:3 (emphasis

added). We agree. Because the Las Vegas Sun website will be unaffected by the contemplated



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transactions, there is no threatened loss of the Las Vegas Suns reportorial and editorial voices and,

consequently, no threat of irreparable harm to Plaintiffs.16

D. The Balance Of Hardships And Public Interest Favor Denial Of The Motion.

Plaintiffs analysis of the final two injunction factors, balance of the hardships and the public

interest, is based almost exclusively on the straw-man that the contemplated transactions between

Stephens Media and the Greenspun entities will result in the loss of the Las Vegas Suns reportorial

and editorial voices. See Mot. at 22:1425:2. Because these voices may continue to be accessed

(at a minimum) via the Las Vegas Suns websitea viable and accepted substitution for the

printed newspaperneither factor supports the issuance of an injunction.

IV. CONCLUSION

Based on the foregoing, the Stephens Media Defendants respectfully submit that Plaintiffs

Motion should be denied in its entirety.

DATED this 30th day of August, 2013.

CAMPBELL & WILLIAMS

By__/s/ Donald J. Campbell__________________DONALD J. CAMPBELL, ESQ. (1216)J. COLBY WILLIAMS, ESQ. (5549)

NIXON PEABODY, LLPGORDON L. LANG, ESQ. (pro hac vice to be filed)

Attorneys for Defendants

16 Plaintiffs also appear to contend that if the Las Vegas Sun, Inc. were to lose its annual profitspayment from the 2005 JOA, it would be unable to operate the on-line version of the Las Vegas Sun.See Comp. at 52. Even if that were relevant, it is contradicted by Plaintiffs own allegations:although the Las Vegas Sun would lose an annual profit payment which is presently about $1.3million, Greenspun Media Group would save, as a result of the transfer of the lasvegas.com license,annual licensing fees of up to $2.5 million per year. See Mot. at 7:1-8.



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CERTIFICATE OF SERVICE

The undersigned hereby certifies that service of the foregoing Defendants Opposition to

Plaintiffs Emergency Motion for Temporary Restraining Order and Preliminary Injunction,

was served on the 30th day of August, 2013 via the Courts CM/ECF electronic filing system

addressed to all parties on the e-service list.

In addition, the undersigned provided courtesy copies of the foregoing via e-mail to the

following counsel for Plaintiffs:

E. Leif [email protected]

Darren J. [email protected]

Tara C. [email protected]

Joseph M. [email protected]

__/s/ J. Colby Will iams_________________An employee of Campbell & Williams

mailto:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]

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Stephens Media LLC response to lawsuit filed by Sun publisher

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