Las Vegas Sun, Inc. v. Adelson

• Court: U.S. Court of Appeals — Ninth Circuit
• Writing for the Court: COLLINS, Circuit Judge
• Citation: 147 F.4th 1103
• Docket Number: 24-2287
• Decision Date: 04 August 2025
• Parties: LAS VEGAS SUN, INC., Plaintiff-Appellee, v. Sheldon ADELSON; Patrick Dumont; News+Media Capital Group, LLC; Las Vegas Review-Journal, Inc.; Interface Operations, LLC d/b/a ADFAM, Defendants-Appellants.

147 F.4th 1103

LAS VEGAS SUN, INC., Plaintiff-Appellee, v. Sheldon ADELSON; Patrick Dumont; News+Media Capital Group, LLC;Las Vegas Review-Journal, Inc.; Interface Operations, LLC d/b/a ADFAM, Defendants-Appellants.

No. 24-2287

United States Court of Appeals, Ninth Circuit

Argued and Submitted December 5, 2024 San Francisco, California

Filed August 4, 2025

Appeal from the United States District Court for the District of Nevada Anne R. Traum, District Judge, Presiding, D.C. No. 2:19-cv-01667-ART-MDC

E. Leif Reid (argued), Nicole S. Scott, Lucy C. Crow, and Kristen L. Martini, Lewis Roca Rothgerber Christie LLP, Las Vegas, Nevada; James J. Pisanelli, Todd L. Bice, and Jordan T. Smith, Pisanelli Bice PLLC, Las Vegas, Nevada; Joseph M. Alioto Sr., Alioto Law Firm, San Francisco, California; for Plaintiff-Appellee.

Ian H. Gershengorn (argued) and Illyana A. Green, Jenner & Block LLP, Washington, D.C.; David R. Singer, and Amy M. Gallegos, Jenner & Block LLP, Los Angeles, California; Gabriel K. Gillett, Jenner & Block LLP, Chicago, Illinois; J. Randall Jones, Mona Kaveh, and Michael J. Gayan, Kemp Jones LLP, Las Vegas, Nevada; Richard L. Stone, Los Angeles, California; for Defendants-Appellants.

Before: Daniel P. Collins, Lawrence VanDyke, and Salvador Mendoza, Jr., Circuit Judges.

OPINION

COLLINS, Circuit Judge:

In 1990, the U.S. Attorney General approved a 1989 joint operating arrangement ("JOA") between the owners of the Las Vegas Review-Journal and the Las Vegas Sun, pursuant to the Newspaper Preservation Act ("NPA" or "the Act"). 15 U.S.C. § 1801 et seq. The NPA seeks to preserve otherwise failing newspapers by granting them an exemption from the antitrust laws allowing them, with the Attorney General's "prior written consent," to combine publishing operations with another newspaper while preserving the independence of the respective newspapers' "editorial [and] reportorial staffs." Id. §§ 1802(2), 1803(b). In the absence of such advance approval, however, the NPA generally provides that such JOAs are "unlawful." Id. § 1803(b).

In 2005, the parties to the 1989 JOA submitted an amended JOA to the U.S. Department of Justice, but they neither sought nor obtained written approval from the Attorney General. When the new owners of the Las Vegas Review-Journal later sought in 2019 to terminate the 2005 JOA on state-law grounds, the owner of the Las Vegas Sun brought this suit against those owners and several affiliated persons, alleging that Defendants' efforts to terminate the 2005 JOA violated the antitrust laws. Although the parties initially stipulated to an order requiring them to continue to perform under the 2005 JOA pending the litigation, Defendants later moved to dissolve that injunctive order on the ground that the 2005 JOA was unlawful and unenforceable because it had not been approved by the Attorney General under the NPA. The district court denied Defendants' motion to dissolve the injunction, concluding that the Attorney General's approval was not required by the NPA. Defendants have timely appealed that order pursuant to 28 U.S.C. § 1292(a)(1). We reverse.

I

We begin by providing a brief overview of the relevant statutory background, which provides important context for the ensuing discussion of the factual and procedural history of this case.

A

In Citizen Publishing Co. v. United States, 394 U.S. 131, 89 S.Ct. 927, 22 L.Ed.2d 148 (1969), the Supreme Court affirmed a decree invalidating, under §§ 1 and 2 of the Sherman Act and § 7 of the Clayton Act, a JOA between two Tucson, Arizona newspapers, as well as the subsequent merger of the two newspaper companies. Id. at 134-35, 89 S.Ct. 927. The Tucson JOA was one of nearly two dozen such arrangements throughout the United States. Committee for an Indep. P-I v. Hearst Corp., 704 F.2d 467, 473 (9th Cir. 1983). The Tucson JOA, like those in other jurisdictions, was ostensibly an effort to maintain editorial diversity by allowing an otherwise failing newspaper to preserve its "own news and editorial department," while "end[ing] any business or commercial competition between the two papers." Citizen Publ'g, 394 U.S. at 133-34, 89 S.Ct. 927. But the Supreme Court held that, in the Government's enforcement action against the Tucson JOA, the district court correctly concluded that the defendants had failed to satisfy the requirements of the so-called " 'failing company' defense—a judicially created doctrine." Id. at 136, 89 S.Ct. 927. Specifically, the Court agreed that there was no showing that the assertedly failing newspaper was "then on the verge of going out of business" or that, if that newspaper was to be sold, its cross-town rival was "the only available purchaser." Id. at 137-38, 89 S.Ct. 927 (citation omitted).

Congress promptly responded to Citizen Publishing by enacting the NPA, see Pub. L. No. 91-353, 84 Stat. 466 (1970), which has been classified as Chapter 43 of the unenacted Title 15 of the United States Code. See 15 U.S.C. § 1801 et seq. The declared policy of the Act is to "maintain[ ] a newspaper press" that is "editorially and reportorially independent and competitive in all parts of the United States" by "preserv[ing] the publication of newspapers" in any area "where a joint operating arrangement has been heretofore entered into because of economic distress or is hereafter effected in accordance with the provisions" of the NPA. Id. § 1801. The Act seeks to accomplish this goal by creating a limited express exemption from the antitrust laws for certain existing and future newspaper JOAs.

Specifically, § 4(a) of the Act generally exempts then-existing newspaper JOAs from certain antitrust laws—including the provisions at issue in Citizen Publishing—if, at the time the JOA "was first entered into, . . . not more than one of the newspaper publications involved in the performance of such arrangement was likely to remain or become a financially sound publication." 15 U.S.C. § 1803(a). This requirement to show only that the weaker newspaper was likely to remain financially unsound was intended to be a less stringent standard than Citizen Publishing, which we have described as essentially requiring a showing that "the financially troubled newspaper [was] on its deathbed." Committee for an Indep. P-I, 704 F.2d at 474.

For JOAs entered into after the Act's passage, § 4(b) of the Act grants a comparable antitrust exemption, if the parties obtain "the prior written consent of the Attorney General of the United States." 15 U.S.C. § 1803(b). That consent may be granted, under the Act, if the Attorney General determines (1) that the weaker newspaper is a "failing newspaper," i.e., that it "is in probable danger of financial failure," id. § 1802(5); see also id. § 1803(b); and (2) "that approval of such arrangement would effectuate the policy and purpose" of the NPA, id. § 1803(b). Although this, too, was intended to be a less stringent standard than Citizen Publishing, we have held that it is nonetheless stricter than the "financially sound standard" applicable to then-existing JOAs under § 4(a). Committee for an Indep. P-I, 704 F.2d at 477; see also id. at 480 (holding that the "probable danger" standard requires a showing that, if "analyzed as a free-standing entity," the "failing newspaper" would probably "be closed and an editorial voice lost"). Section 4(b) states, however, that, in the absence of the Attorney General's "prior written consent," it "shall be unlawful for any person to enter into, perform, or enforce a joint operating arrangement, not already in effect." 15 U.S.C. § 1803(b).

With respect to pre-NPA JOAs that are amended or renewed after the enactment of the NPA, the statute provides that the "terms" of any such renewed or amended JOA "must be filed with the Department of Justice" and that no such amendment may "add a newspaper publication or newspaper publications to such arrangement." 15 U.S.C. § 1803(a).

Several years after the NPA's passage, the U.S. Department of Justice ("DOJ") promulgated regulations implementing the Act, and those regulations remain in effect today in substantially unchanged form. See 28 C.F.R. § 48.1 et seq. Even though the statute explicitly states that it "shall be unlawful" to enter into or enforce a post-NPA JOA "except with the prior written consent of the Attorney General," 15 U.S.C. § 1803(b), the DOJ's regulations took the position that post-NPA JOAs were not required by the Act to obtain the prior approval of the Attorney General, see 28 C.F.R. § 48.1. Rather, the regulations opine that the NPA merely "provide[s] a method for newspapers to obtain the benefit of a limited exemption from the antitrust laws if they desire to do so." Id. The regulations adopting that construction were upheld, by a divided vote, in Newspaper Guild v. Levi, 539 F.2d 755, 755-56 (D.C. Cir. 1976).

B

In June 1990, Attorney General Dick Thornburgh approved a 1989 JOA between the owner of the Las Vegas Review-Journal (then Donrey of Nevada, Inc. ("Donrey")) and the owner of the Las Vegas Sun (i.e., Las Vegas Sun, Inc. ("LVSI")). In his written opinion explaining his approval, Attorney General Thornburgh briefly sketched the history of the two papers. The newspaper now known as the Las Vegas Review-Journal began publication in 1909 and "was the only daily newspaper serving the area" until the Las Vegas Sun was introduced in 1950. Both papers continued publication for many years, but by the late 1980s, the Sun was in substantial financial trouble. The Sun had "lost money every year since 1981"; its advertising revenues had declined "every year since 1982, without exception"; and it had total debts of $11 million. In addition, the Sun's circulation had dropped "considerably." Attorney General Thornburgh concluded that "the Sun's losses are, in all likelihood, irreversible," and that the Sun therefore had "been shown to be a 'failing newspaper' within the meaning of the NPA."

Attorney General Thornburgh also found that approval of the terms...