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CAMPBELL & WILLIAMS DONALD J. CAMPBELL, ESQ. (1216) djc@campbellandwilliams.com J. COLBY WILLIAMS, ESQ. (5549) jcw@campbellandwilliams.com 700 South Seventh Street Las Vegas, Nevada 89101 Telephone: (702) 382-5222 Facsimile: (702) 382-0540 NIXON PEABODY, LLP GORDON L. LANG, ESQ. (pro hac vice to be filed) glang@nixonpeabody.com 401 Ninth Street NW, Suite 900 Washington, D.C. 20004 Telephone: (202) 585-8000 Facsimile: (202) 585-8080 Attorneys for Defendants UNITED STATES DISTRICT COURT DISTRICT OF NEVADA BRIAN L. GREENSPUN, an individual; THE BRIAN L. GREENSPUN SEPARATE PROPERTY TRUST, DATED JULY 11, 1990; THE AMY GREENSPUN ARENSON 2010 LEGACY TRUST, ) ) ) ) ) ) Plaintiffs, ) ) vs. ) ) STEPHENS MEDIA, LLC, a Nevada limited ) liability company; STEPHENS HOLDING ) COMPANY OF ARKANSAS, an Arkansas ) corporation; SF HOLDING CORP., an Arkansas ) foreign corporation, d/b/a STEPHENS MEDIA ) GROUP; DR PARTNERS, a Nevada general ) partnership, d/b/a STEPHENS MEDIA GROUP; ) STEPHENS MEDIA INTELLECTUAL ) PROPERTY, LLC, a Delaware limited liability ) company; MICHAEL FERGUSON, an individual; ) WARREN STEPHENS, an individual; DOES, I-X, ) inclusive, ) ) Defendants. ) _________________________________________ ) Case No. 2:13-cv-01494-JCM-PAL

DEFENDANTS’ OPPOSITION TO PLAINTIFFS’ EMERGENCY MOTION FOR TEMPORARY RESTRAINING ORDER AND FOR PRELIMINARY INJUNCTION Hearing Date: September 6, 2013 Hearing Time: 10:00 a.m.

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1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 I.

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 Court’s concerns are well-founded and why Plaintiffs’ Emergency Motion should be denied. POINTS AND AUTHORITIES 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,

23 24 25 26 27 28 Page 2 of 29 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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entities—neither 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 Motion’s 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 Greenspun entities (or another party) may continue to operate the website version of the Las Vegas Sun even if the proposed transactions are ultimately consummated, and that the Greenspun entities (or another party) may also continue to publish the print version of the Las Vegas Sun on their own as no Greenspun family members will be bound by a non-compete that prevents them from working in the local news business). Page 3 of 29

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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 corporation’s 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

23 24 25 26 27 28 Page 4 of 29 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 Sun’s 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

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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 Plaintiffs’ papers as a whole. At this early stage of the proceedings and given the expedited nature of the Motion, Stephens Media instead refers to Plaintiffs’ papers for certain uncontested facts in an effort to reduce the volume of paper before the Court. All Defendants reserve their right to respond formally to Plaintiffs’ Verified Complaint, if necessary, at the appropriate time. Page 5 of 29

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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 Sun’s 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

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4

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

Paul Hamilton is also the President of The Greenspun Corporation, which is the manager of Greenspun 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. at Exh. 2. Page 6 of 29

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Journal. See id. at § 5.1 and App’x 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

23 24 25 26 27 28 Page 7 of 29 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, Greenspun’s “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

23 24 25 26 27 28 Page 8 of 29 The Greenspun Corporation. Id. The majority of Greenspun Siblings, in other words, was

apparently not interested in any transaction that contemplated Stephens Media’s acquisition of the Las Vegas Sun’s 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 Media’s 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 company’s 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

23 24 25 26 27 28 Page 9 of 29 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 Ferguson’s and Hamilton’s 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 Court’s 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

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5

DOJ for its review. Id. Of course, there is similarly no way to predict at the present time what DOJ’s response will be to the parties’ agreement after its review.

A true and correct copy of the current version of the LOI is being submitted herewith as Exhibit 1 to the Ferguson Declaration. Page 10 of 29

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6

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 succe ed 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.’” Carney v. Bank of America Corp., 481 Fed. App’x 317, 318 (9th Cir. 2012) (quoting Mazurek v. Armstrong, 520 U.S. 968, 972 (1997)); see also Loretero, supra at *2. Plaintiffs have not remotely satisfied this heavy burden.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 lenient standard articulated in Alliance for Wild Rockies v. Cottrell, 632 F.3d 1127 (9th Cir. 2011). See Mot. at 11:18 – 12:6. While Alliance for Wild Rockies has not been overruled, it is worth noting that many courts have criticized its reasoning and questioned its viability in light of Winter’s rejection of the Ninth Circuit’s 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 light of Winter and 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 Page 11 of 29

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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 Court’s 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. Plaintiffs 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 Winter and Ninth Circuit’s subsequent adoption of the Winter standard). Page 12 of 29

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a.

Brian Greenspun is not a paid subscriber to the newspapers.

As touched on above, Brian Greenspun’s 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 plaintiff’s 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. Nevada’s “business judgment rule.”

Mr. Greenspun’s 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. Greenspun’s 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

23 24 25 26 27 28 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 may have standing to assert an antitrust claim in some circumstances. See Reilly v. Hearst Corp., 107 F.Supp.2d 1192, 1194-95 (N.D.Cal. 2000). Mr. Greenspun’s Verified Complaint does not, however, allege standing on this basis and his concerns are clearly otherwise. Page 13 of 29

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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). See In 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 Nevada’s 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 board’s exercise of its business judgment. Page 14 of 29 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 injury – that 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 for preliminary injunction based on business judgment rule); Fletcher, supra § 4860 (“So long as the directors or officers act within their legal power and not fraudulently, injunction will not issue to control the discretion lodged in them in respect to the internal affairs and the conduct of the corporation.”).
9

As His Honor correctly observed in the Temporary Restraining Order, see Dkt. No. 9 at 2:1215, Mr. Greenspun’s failure to name his family’s entities as defendants raises serious questions as to whether he has joined all necessary parties under Fed. R. Civ. P. 19. Las Vegas Sun, Inc. and The Greenspun Corporation, as parties to the LOI and owners and/or licensees of the assets at issue therein, certainly have a “legally protected interest in the action” that make them necessary parties under 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)). While no definitive contract has been entered between Stephens Media and the Greenspun entities, the ultimate relief Plaintiffs seek is to enjoin the performance of this prospective agreement. Where “two parties enter into a contract, and a third party sues one of the contracting parties to enjoin that contracting party from performing under its contract, the presence of the other party to the contract is required in the lawsuit.” 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 naming necessary parties as defendants) (emphasis added) (citing Crouse-Hinds Co. v. InterNorth, Inc., 634 F.2d 690 (2d Cir. 1980)). Unless Brian Greenspun names the Greenspun entities (and likely their directors) as additional defendants herein, this action is certainly subject to dismissal under Fed. R. Civ. P. 12(b)(7). Page 15 of 29

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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. See Mahaffey 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 employee’s 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 Page 16 of 29

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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 wear—alleged 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. This Matter Is Not Ripe.

Like standing, “[t]he question of ripeness generally goes to whether the district court has subject matter jurisdiction.” Moore’s 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 Ass’n, 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

23 24 25 26 27 28 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

“Prudential concerns” address “the wisdom, rather than the constitutionality, of having the court adjudicate the matter in question.” Moore’s, supra at § 101.70[3]. Page 17 of 29

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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. In Addington, 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 could prevent effectuation of [the Union’s] proposal and accompanying injury. As this point, neither the [Plaintiffs] nor [the Union] can be certain what seniority proposal ultimately will be acceptable to both [the Union] and the airline as part of the final CBA. Likewise, it is not certain whether the proposal will be ratified by [the Union] membership as part of a new, single CBA. Not until the airline responds to the proposal, the parties complete negotiations, and the membership ratifies the CBA will [Plaintiffs] actually be affected by [the Union’s] seniority proposalwhatever [the Union’s] final proposal ultimately is. Because these contingencies make the claim speculative, the issues are not yet fit for judicial 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 district’s 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 III’s “cases or controversies” requirement, the Westlands court further explained: Regardless of whether the relief sought is monetary, injunctive or declaratory, in order for a case to be more than a request for an advisory opinion, there must be an actual dispute between adverse litigants and a substantial likelihood that a favorable federal court decision will have some effect. [ ] Here, the case concerns a hypothetical, rather than an “actual” legal dispute concerning proposed contract terms that may or may not be executed in the future. The question of whether a favorable resolution 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 Page 19 of 29

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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-Mik Enterprises, Inc. v. Equilon Enterprises, Inc., 532 F.3d 963, 972-75 (9th Cir. 2008) (dismissing complaint for, inter alia, failure to allege facts establishing defendant’s 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 14:24 – 16:13. 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 Page 20 of 29

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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 stations and twenty-eight television stations broadcasting in the San Francisco Bay area. Cable television imports a multitude of distant signals and provides a plethora of specialized programming and advertising. The Internet has opened a staggering array of news sources. With relative ease, a person can select from a host of suppliers of newspaperlike news, features and opinions. Most major newspapers have web sites making it possible to access a substantial part of their content on line. An Internet user can design a unique individually tailored on-line newspaper by roaming all news content servers and selecting stories and subjects of interest. . . .

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In addition, there are many weekly newspapers that circulate in San Francisco and the surrounding counties and several alternative news weeklies [ ], 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.”). Since Reilly v. Hearst competition 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 consumer’s 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, Philadelphia Newspapers LLC (publisher of the Philadelphia Inquirer and the Philadelphia Daily News), the Journal Register (twice), and Affiliated Media (holding company for MediaNews Group) have gone bankrupt; Brand name newspapers like the Rocky Mountain News (Denver), the Albuquerque Tribune, and the Honolulu Advertiser have closed; JOAs ended in Tucson, Denver, and Albuquerque; Newspapers have eliminated printed editions or reduced the number of home delivery days—e.g., Ann Arbor News (now online only, except two days of print available for pick-up); Christian Science Monitor (online only weekdays); Seattle Post-Intelligencer (online only); Cleveland Plain Dealer (home delivery four days per week), Times Picayune (New Orleans) (print edition three days per week), Detroit Free Press and Detroit Page 22 of 29

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11

News (home delivered print editions three days and two days per week respectively), and Oregonian (Portland) (home delivery four days per week). See In 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. The Court may judicially notice a fact that is not subject to reasonable dispute because it: “(1) is generally known within the trial court’s territorial jurisdiction; or (2) can be accurately and readily 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 print newspapers in its Temporary Restraining Order, Stephens Media respectfully submits that the Court may properly take judicial notice of the additional newspaper failures and transactions set forth above, all of which may be accurately and readily ascertained from the compendium of articles identified in Exhibit 4 to the Williams Declaration.
12

See http://www.pewresearch.org/daily-number/number-of-americans-who-read-printnewspapers-continues-decline/
13

See http://www.poynter.org/latest-news/mediawire/189819/pew-tv-viewing-habit-grays-asdigital-news-consumption-tops-print-radio/; see also http://www.poynter.org/latestnews/mediawire/217525/gallup-more-than-half-of-americans-get-their-news-from-tv/

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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 venture’s 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’ intraJOA 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

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14

Indeed, the DOJ opposed the passage of the Newspaper Preservation Act, which created an antitrust exemption for newspaper JOAs, because the Act would eliminate “all commercial competition” between the newspapers in the JOA. See Statement of Richard W. McLaren, Assistant Attorney General, Antitrust Division, United States Department of Justice, Hearings before the Antitrust Subcommittee of the Committee on the Judiciary, House of Representatives on H.R. 279 and Related Bills, 91st Cong., 1st Sess. (1969) at 360. Page 24 of 29

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has a limited number of pages each day, and those pages in all cases are distributed with the ReviewJournal. Furthermore, Las Vegas Sun, Inc. is not interested in renewing the 2005 JOA—it 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 on Hawaii 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-Journal—collectively or individually—to 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 year’s 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. Page 25 of 29

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That analysis here shows the Las Vegas Sun is failing: if the 2005 JOA were ended, the ReviewJournal 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 Sun’s incremental costs exceed its incremental revenues. Accordingly, terminating the Las Vegas Sun’s 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’ Int’l Ass’n, 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

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Plaintiffs’ First Cause of Action seeking relief under Section 7 of the Clayton Act fails for the 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 any person to “acquire . . . the stock or other share capital . . . or any part of the assets of another person where 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 Greenspun entities’ stock or 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 acquiring Las Vegas Sun, Inc.’s “interest in the 2005 JOA.” See Mot. at 17:13-14. This is false. Under the proposed transactions, the 2005 JOA would terminate. Stephens Media is not acquiring anything. Page 26 of 29

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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

23 24 25 26 27 28 Page 27 of 29 accepted substitution for many readers of the printed 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 Sun’s 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 Sun’s reportorial and editorial voices. See Mot. at 22:14 – 25:2. Because these voices may continue to be accessed (at a minimum) via the Las Vegas Sun’s website—a “viable and accepted substitution” for the printed newspaper—neither 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, LLP GORDON 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 profits payment 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 $1.3 million, 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. Page 28 of 29

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1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Joseph M. Alioto jmalioto@aliotolaw.com

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 Court’s 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 Reid lreid@lrlaw.com Darren J. Lemieux dlemeiux@lrlaw.com Tara C. Zimmerman tzimmerman@lrlaw.com

__/s/ J. Colby Williams_________________ An employee of Campbell & Williams

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