A Conversation with Vinson & Elkins' Antitrust Aces

“Our practice is very well-balanced,” says Craig Seebald, co-head of Vinson & Elkins’ Litigation & Regulatory department and co-leader of its global Antitrust practice.

That’s one reason why Jason Powers joined the Houston office of Vinson & Elkins when he graduated from the University of Texas School of Law in 1998. He was attracted to its reputation for headline-making antitrust victories and hoped his undergraduate degree in business would give him an edge.

Early in his tenure, Powers began working with antitrust leaders like Harry Reasoner, dubbed the “$1 billion lawyer” for his landmark victory in an antitrust suit against railroad Santa Fe Southern Pacific Corp. in the 1980s and partner Allan Van Fleet, each of whom would eventually serve as chair of the American Bar Association’s Section on Antitrust Law. He was hooked.

“They had access to all these fantastic cases and clients and gave me an opportunity to get involved in the kind of work I still enjoy doing today,” says Powers, now a partner in Vinson & Elkins’ complex commercial litigation group.

His initial cases involved financial services and the business of health care. From there, Powers kept adding industries — the growth in his practice mirroring the expansion of the firm’s more than 50-year-old antitrust group to technology, transportation, aerospace, agriculture and consumer products.

Today, Vinson & Elkins is a leader taking on the 21^st century’s thorniest competition law issues, from Texas to Washington, D.C., and throughout the world. With expertise in fields from cartel investigations to monopolization lawsuits to clearing hurdles for mergers and acquisitions, the practice boasts a who’s who of clients including Google, the $1.57T tech giant known for its eponymous search engine, and Chevron Phillips Chemical Co.

There are other firms known for excellent work in corporate transactions and the Hart-Scott-Rodino Act, the federal law requiring companies to notify regulatory authorities of merger deals, but Vinson & Elkins’ practice offers those specialties as well as a renowned cartel practice and civil litigation department, he says.

“We’re one of the few firms that are highly ranked that have that range,” Seebald says. “You normally look at a large firm like ours and say, ‘Oh, they’re really good at investigations, but maybe not so good at Hart-Scott-Rodino Act compliance and civil litigation.’”

Added to that is the heft of Vinson & Elkins’ decades-old reputation in antitrust: Reasoner, now in his 80s, is still practicing full-time, says Seebald, who discussed the widening scope of the firm’s practice recently during a Lawdragon roundtable forum.

Also participating were Powers; Lindsey Vaala, Washington, D.C.-based antitrust counsel and head of the American Bar Association’s cartel subcommittee; Alden Atkins, D.C.-based partner in commercial and business litigation; Hill Wellford, D.C.-based head of the firm’s antitrust government investigations team; and Darren Tucker, current head of the Antitrust practice, also based in D.C.

Lawdragon: Vinson & Elkins’ track record has made it a force to be reckoned with in the antitrust arena. Can you tell me about your path to specializing in this field and how that led you to the firm?

Craig Seebald: I always knew that I wanted to practice law in Washington, D.C., though I wasn’t sure what kind. I found antitrust issues interesting when I was in law school at George Washington University, and when I was a summer associate in the D.C. office of a national firm, I had an opportunity to work with some of the antitrust partners. I finished law school just as President Bill Clinton was going into office and the U.S. was ramping up antitrust enforcement, so I worked on cases ranging from the food industry to the defense industry, and I liked the diversity of it all.

FROM MEDICINE TO LAW

Alden Atkins: I’ve been practicing for almost 40 years, and the reason I got interested in antitrust was that I studied economics, industrial organization and antitrust in college. When I started practicing in 1984, the very first cases I worked on were antitrust cases. Those I handled in the ’80s were mostly in the publishing, telecommunications and cable television area, for example, representing HBO, Time Magazine and Manhattan Cable. In ’91, I came to V&E, where I’d been a summer associate in law school, and since then, I have had a pretty steady diet of antitrust.

Much of my work has been in transportation, and I’ve also been involved in the technology space, usually on the defense side in private civil cases. I have done antitrust investigations, too, because civil antitrust cases in recent years have often arisen from parallel government investigations.

Lindsey Vaala: I never planned to be an antitrust lawyer. I studied Spanish and chemistry at Davidson College and I intended to work in pediatrics, perhaps pediatric oncology. I took tons of chemistry, but by the time I took the Medical College Admission Test, I had realized that maybe that wasn’t really what I wanted to do. I didn’t love organic chemistry, and the idea of four years of medical school just didn’t sound appealing. My mom kept saying, ‘Are you sure about this medical school thing? This doesn’t sound like the best use of your people skills. Have you thought about law school?’ I hadn’t.

I went to Spain for a year, pursued a master’s degree and then came back and worked as a paralegal for a big law firm in D.C., where a bunch of my college classmates were working. I hadn’t seriously considered law school before then, but I loved being a litigation paralegal, so I went to law school at the College of William & Mary. I intended to be a civil lawyer, but my Vinson & Elkins summer mentor was a now-retired white-collar partner from Rochester, which is where I’m from, and he urged me to work on a case with him. I did, and I enjoyed it, so after clerking in the Eastern District of Virginia, I came to V&E as a general litigation white-collar associate.

In 2011, the white-collar team said to me, “We’ve trained you to do internal investigations, and we need you to jump over and do them on the antitrust side with Craig Seebald, who just joined with a whole bunch of criminal antitrust work.” So I jumped over to start doing antitrust investigations and litigation, thinking I would jump back, and I never did. It’s been a really terrific mix for me. No two days are the same.

LD: That may be a first, going from pediatric oncology to antitrust lawyer. What about you, Hill?

Hill Wellford: I actually started out as a “media law” lawyer, which included antitrust but is a specialty that doesn’t really exist anymore. There was a time when this was a specialty because the big newspapers and the big broadcasting companies were the Facebooks of their day. They were considered to be the 800-pound gorillas and for the exact same reason, which is they controlled advertising and information flow to consumers; they were the gatekeepers. I found that very interesting, and media law was a great specialty for me because it involved intellectual property, antitrust, and First Amendment and press-access issues, and those were all areas that I was independently interested in. So that’s what I was trained to do.

THE RISE OF BROADBAND

By the happenstance of history, within two or three years of my becoming a media lawyer, the world changed with the Telecommunications Act of 1996. That law created the ability to put fiber in the ground all over the country, which enabled broadband and made the Internet something more than a curiosity. Internet companies were forming overnight, and all of a sudden, law firms wanted media lawyers. They had this phrase, “Websites are like magazines. And we need lawyers who understand magazines and newspapers.” That, in fact, is not what they needed, but I was perfectly willing to be hired on that basis and then to pivot into technology.

I already was a patent and intellectual property lawyer and understood things like the First Amendment, and when Big Data issues popped up, they involved issues similar to those discussed in the First Amendment area. So it was pretty easy for me to shift focus. And of course, antitrust was the same. My practice became an Internet and antitrust practice.

LD: And in 2004, you joined the Department of Justice Antitrust Division?

HW: I did. I headed to the Department of Justice’s Antitrust Division, which was a fantastic opportunity. I stayed there for five or six years, working as a staff attorney, special counsel, and roving litigator in the legal policy section. Then I became counsel to the Assistant Attorney General for Antitrust and later, chief of staff of the Division. Afterward, I went to Bingham McCutchen as a partner and started working with some Internet companies, one of which was Google. That was my largest client. When Darren started preparing to leave the FTC, Google called me before anybody else and said, “This guy is going on the market; he’s great. We think you would be good together; you should hire him.” And so we interviewed him, and they were right.

Darren Tucker: I’m one of those freaks of nature who wanted to go into antitrust when I was still a law student. Early on, I wanted to find a field of law that would allow me to take advantage of my economic background. Antitrust was naturally attractive to me because it involved the use of industrial organization economics. The fact that you frequently work with noted economists was also very appealing to me. As a summer associate I came in saying, “I think I want to do antitrust. Can you give me some assignments in that area?” By the end of my second summer, I was hooked on antitrust, and that’s all I’ve done other than clerk for a federal judge. When the Great Recession hit in 2009, I moved to the Federal Trade Commission, where I worked for two commissioners until 2013. I then joined Bingham, and have worked with Hill ever since.

Jason Powers: I had earned a business degree as an undergraduate and when I took an antitrust class in law school, I realized that having studied economics and finance, I understood the concepts in a way that a lot of my classmates didn’t. It struck me that antitrust might be a place where I could add something and contribute in a unique way.

It’s one of the few areas of commercial litigation where you can spend time thinking about policy issues on a broad macroeconomic scale. That’s something I’ve always enjoyed about it: actually getting to participate in important debates where you’re talking about how the economy ought to work.

LD: Tell me about some of your favorite cases?

JP: One of my favorite cases of all time was our 2014 trial on behalf of HeartBrand Beef, a company involved in the production of wagyu beef. It comes from a Japanese breed of cattle, and they got into a piece of litigation against one of the Koch brothers, Bill Koch, who runs Oxbow Coal. He had invested in that breed of cattle and was going to be a co-producer with our client. Afterward, he decided he didn’t care for the terms of the deal and brought a monopolization case against HeartBrand, contending that they were trying to monopolize the sale of this particular breed, which is called Akaushi.

We didn’t get to try that claim; they actually abandoned it after about a year of economic analysis and motions practice. Then we ended up going to trial on other pieces of the case, getting a significant jury verdict in our client’s favor on a counterclaim. It was a tremendously interesting case because even though I had grown up in Texas, I didn’t know anything about the cattle business, and this was an opportunity to learn something new and meet some really interesting people in the process.

WHO’S PAYING CAR TAXES?

LD: What a fascinating case, and you got to learn about the wagyu beef market. Any other cases come to mind?

JP: A case that cemented my excitement about antitrust came when I was a young associate and involved automobile taxes: Robinson v. Texas Auto Dealers Association. A class of plaintiffs was contending that auto dealers had conspired to pass their property taxes on to consumers as a line item on the invoice. The plaintiff’s counsel in the case was a state legislator who had argued during a debate over vehicle inventory taxes in Austin that dealers’ property taxes shouldn’t be imposed on a car-by-car basis, because dealers would start putting those taxes on vehicle invoices. The legislature nonetheless decided to allocate the taxes that way, and many car dealers did exactly what he had predicted. They listed the taxes on their invoices and tried to get consumers to cover those taxes as part of the sale. Like anything else on the invoice, some customers refused to cover it, some negotiated, and some accepted the fees. And this legislator, who was not happy about the way the vote had gone in Austin and who was also a practicing lawyer, decided that he would sue all of the auto dealers, arguing that they had conspired to pass these taxes on to consumers. Economically, of course, if those taxes were aggregated at the business level rather than itemized by car, the cost of those taxes would still have been ultimately borne by consumers, but I suspect the hope was that consumers wouldn’t realize they were bearing the tax burden and, consequently, wouldn’t hold their legislators accountable for it.

We defended one of the large auto dealer groups in that litigation and showed the 5^th U.S. Circuit Court of Appeals that it was not a proper antitrust class action, because the way people negotiate car purchases is really individualized—one car at a time—and it wasn’t possible in a class action setting to know which consumers negotiated and which accepted the fees. At the end of the day, it was clear the classes couldn’t be certified for a trial, and the dealer groups were able to reach a settlement with the plaintiffs that resolved the issue.

As a young lawyer at the time, it was very heady stuff—being in the room with representatives from all the big auto dealer groups, people who had been part of the state legislative fight, and some prestigious mediators and attorneys from around the state—all engaging in an intellectual argument about the economic effect of tax policy. Now, whenever I go buy a car, I look at the invoice and I see the item and I get to have a conversation with the dealer about what it is, and where it comes from, and I think back on all the big questions we got to handle in that case. 

LD: That’s fascinating: It gives you unique insight into a purchase that so many people make and which so few feel like they understand well. Can each of you tell me about some of the hottest topics in your practices today, and what types of cases are taking up most of your time?

‘SLOW BURN’ ON EMPLOYEE-POACHING AGREEMENTS

LV: I’ve been following no-poach enforcement from the beginning in 2016, when the Department of Justice and the Federal Trade Commission announced they were going to start prosecuting no-poach agreements as crimes. Until that time, such conduct had been subject to civil enforcement, but was never treated as criminal. In 2010 and 2012, DOJ had a series of civil enforcement actions on the West Coast, which all settled as consent decrees: no money, but injunctive relief. And then immediately, class actions were filed and they settled to the tune of $400M. The subsequent decision in 2016 to begin treating those cases as crimes seemed to come out of nowhere for a lot of people, and it wasn’t clear that it would actually happen, since President Obama’s second term was ending. But we kept hearing that it was a hot area and that the Justice Department was serious about it and then, in December 2020, came the first indictment. On Jan. 5, 2021, we got another one. There are now half a dozen indicted cases with several more investigations that are not public underway.

It was a slow burn to try to convince companies that these agreements were now crimes, but now that indictments have started dropping, it’s what everybody’s talking about. From the beginning, we’ve been advising clients on how to thoughtfully beef up their compliance programs in this space. We have to address labor and employment as part of antitrust training if we’re doing our jobs right.

One of the things that makes this area tricky is that a no-poach agreement is a very broad term: Basically, if you’re an employer agreeing with a competing employer – even one who’s not in the same industry but is trying to attract the same type of employees – you’re considered a competitor from the Justice Department’s perspective. If you agree not to hire, not to cold-call, not to recruit or not to solicit one another’s employees, any of those things qualifies as a no-poach agreement. So we’re getting lots of questions, not just about the hardcore cartel conduct, but also, “Is my non-solicitation agreement OK?”

For companies, the penalties are up to $100M or two times the gain or loss caused by the conspiracy. Depending on how many people are implicated, how many jobs are involved and how the figures are calculated, that could be more than $100M. If you’re an individual, it’s up to a $1M fine and up to 10 years in prison.

EUROPE’S BILLION-DOLLAR FINES

AA: A lot of my work in recent years has been transportation, including airlines. One case alleged that two airlines conspired to adopt bag fees at the same time, and we won summary judgment on that. I recently represented Southwest Airlines in a case alleging that the airlines, pre-COVID, conspired to reduce capacity – the number of seats and the number of miles they operate – so as to drive up prices.

Our team is also representing about 13 plaintiffs in railroad price-fixing antitrust litigation over fuel surcharges. Multi-district litigation brought a number of years ago failed to win a class certification, which meant that these companies that paid a lot of money to railroads for fuel surcharges have to bring their own cases, and there are now 106 cases that have been brought on behalf of more than 300 different plaintiffs alleging that some fuel surcharges adopted by the major railroads in 2003 were imposed pursuant to an antitrust conspiracy. I’ve been appointed as one of four lawyers to supervise and manage these 106 cases, and sometimes find myself as the spokesman for the plaintiffs in court. So that’s just a massive, massive undertaking with hundreds of billions of dollars potentially at stake.

LD: That’s fascinating, and it brings up the increasingly global nature of antitrust issues, with regulation differing between countries. Lawyers can advise clients on how litigation might go in one country, only to have another market pop up with a completely different landscape. Where does U.S. regulation rank relative to the rest of the world these days?

CS: In the U.S., our largest criminal fine hasn’t broken a billion dollars, whereas Europe had a $5B civil fine against a U.S. technology company a few years ago. If you look at Europe versus the U.S., I think maybe it’s easier for companies to write a check to cover regulatory penalties and move forward in Europe.

The U.S. has got a strong system because of its criminal enforcement, though. It’s one thing to be an executive of a company and have your company write a big check, but it’s another one to be an executive of a company facing potential criminal action. One of the things that I’ve always found interesting when I talk to companies outside of the U.S. is that if you look at the largest fines in this country, only two out of the top 10 payees are U.S. companies. The other eight are foreign. Europe, which is at the forefront on some of the issues involving high tech, is the jurisdiction assessing big fines against the U.S. companies.

LD: On the topic of the big tech and media companies, tell me about the evolution of your counseling, how the playing field has changed from the earlier days into the global arena that exists today.

HW: You can split the world up into content and infrastructure. I came from the content side more than the infrastructure side, from the newspapers and broadcasters who primarily thought of themselves as content entities. As they declined in market power and garnered less of the nation’s advertising budget, they became infrastructure companies. They had a lot of spectrum and when they weren’t using it, other people wanted to. Some of the media companies that have complained about Internet companies eating their lunch were built by the same people who created the secondary media companies: not the Googles and Facebooks, but cars.com, CarMax, Expedia, Orbitz. So I followed that infrastructure and I also followed the sale of spectrum to the new mobile phone companies. That became important, and gradually I became more involved in what I would say is the infrastructure of mobile telephony and the Internet.

That was the sector that Google came from. It wasn’t providing content and it didn’t produce a television show; it was helping users find things on the Internet. Yahoo was helping people find stuff.

And because I had that background, Google approached me in my first six months as a partner and said, “Apple has just come out with this iPhone and we are doing something similar called the Android phone. And we don’t have anybody who understands that stuff. Do you?” And I said, “Oh yes, I understand. I was a coder at one time. I love open source. I understand all the telephony that needs to be done.” And they said, “Great, just learn it.” And so I was on the ground floor of that, learning Android and the phones from the very beginning.

It was just total luck that that turned out to be one of the most important projects that Google has ever done. I can’t take credit for that, but I happen to be the antitrust lawyer who was on the ground floor. And now, Android-related work accounts for at least 50 percent of the work that we do with Google.

Read the Lawdragon.com article here.