U.S. Blocking Your Merger? Better Call Skadden’s Sunshine

Steven Sunshine of Skadden, Arps, Slate, Meagher & Flom LLP is the antitrust lawyer to call when a multi-million dollar deal faces fierce opposition and for good reason.

In the span of weeks, he secured victories in back-to-back antitrust trials, salvaging T-Mobile US Inc.'s $26.5 billion acquisition of Sprint Corp. and spearheading Sabre Corp’s successful counterattack against a Justice Department lawsuit blocking its merger with Farelogix.

For most litigators, defeating one major government merger challenge is a career-setting achievement; winning two suits within months of one another is almost unheard of.

“People who do this work, they often have deals that get challenged in succession, but I don’t think I’ve ever seen anybody jump from one trial to another that quickly,” said David Gelfand, an antitrust partner at Cleary Gottlieb Steen & Hamilton LLP who worked with Sunshine on the Sprint, T-Mobile deal.

“It’s a remarkable accomplishment for him to be able to go from one case to another that seamlessly,” Gelfand said.

Big Deals

When not in the courtroom, Sunshine and his team at Skadden are advising Visa Inc. on its $5.3 billion acquisition of fintech startup Plaid Inc. He’s also recently helped Anheuser-Busch InBev fend off antitrust conspiracy claims in a case involving Molson Coors Brewing Co.

Sunshine has worked on many of the largest deals in the past decade, spanning practically every industry imaginable from software to healthcare, diamond manufacturing to energy, and chemical compounds to airlines.

He worked on the other side of the table in the mid 1990’s with the Justice Department, suing to block mergers including Microsoft Corp.'s proposed acquisition of Intuit Inc.

Sunshine is known for remaining levelheaded and collected in high-stakes mergers where millions if not billions are on the line.

During Sabre’s case against the DOJ, Sunshine “was calm, he was confident and he listened,” said Kevin Murphy, an economics professor at the University of Chicago who served as a key witness for the companies during the merger trial.

Sunshine “built his case around the facts and didn’t try to fit the facts into his case,” Murphy said.

By Chance

It was a matter of chance and a bit of indecision that led Sunshine to pursue a career in antitrust.

Sunshine majored in physical chemistry at Brown University and then opted for law school at Boston College. He intended to pursue business school, but an MBA never panned out.

“When I was interviewing for jobs as a summer associate everybody saw my chemistry degree and wondered what the heck I was doing there,” Sunshine said during a phone interview.

Sunshine was sure he’d end up as an M&A attorney, but he was forced to pick a second practice group as a summer associate. He chose antitrust and soon found it to be where lawyers “have more fun.”

Sunshine later joined Shearman & Sterling LLP as an antitrust attorney and discovered his chemistry degree came in handy during one of his first cases. He worked under William Baxter, the former Reagan-era head of the DOJ’s antitrust division, on a deal involving lasers used to transmit data along optical fibers.

“He went back and told everybody in my group that I was the smartest antitrust lawyer that he had ever worked with,” Sunshine said. “And I never told Bill about my undergraduate degree,” he added.

Baxter went on to recommend Sunshine to Anne Bingaman, the head of the DOJ’s antitrust division during the Clinton Administration, as she was searching for attorneys to join the department.

Sunshine was tapped at 34 to lead the DOJ’s merger enforcement efforts as a deputy assistant attorney general, a position he held for two years.

He reviewed more than 200 mergers, which resulted in the DOJ intervening in dozens of deals, including suing to block Microsoft’s $2 billion acquisition of Intuit. Microsoft later abandoned the deal.

Simplify It

Sunshine left the DOJ in 1995 and has spent the last 25 years representing companies before the government and in federal court.

Antitrust trials are by their nature complex, as lawyers must explain the intricate economic structure of an industry and prove how a merger won’t lead to one company dominating a sector. Attorneys must also present witnesses and evidence that tells a convincing story to a generalist judge.

“Antitrust can be rather dense,” Vonya McCann, Sprint’s senior vice president of government affairs, said. “One of the things that kept me going back to Steve is that he could always make it understandable.”

Sunshine said he learned that lesson during his time at the DOJ, when the government lost a case seeking to block a deal between two hospitals in Dubuque, Iowa.

Sunshine said the DOJ “didn’t appropriately translate our story from an economic textbook to the real life story of two hospitals in Dubuque.”

Since then, he’s made a point of telling each deal’s technical antitrust story in the most clear, logical terms possible. His defense of the Sabre-Farelogix merger rarely required notes and didn’t sound scripted.

In a packed courtroom filled with top airline executives and high ranking DOJ officials, including antitrust chief Makan Delrahim, Sunshine put on a case that generated only limited questioning from U.S. District Court Judge Leonard Stark, who presided over the merger trial.

“It always sort of felt that he was in command of the whole case,” Murphy, of the University of Chicago, said.

The ability to be clear and concise is a major reason why Sunshine and his colleagues at Skadden have been Sprint’s go-to outside law firm for more than 10 years, including the company’s 2011 challenge of rival AT&T Inc.'s $39 billion acquisition of T-Mobile.

McCann said it was a no-brainer to choose Sunshine and the team at Skadden to represent Sprint when T-Mobile offered to buy the company in 2018.

Boot Camp

Sunshine found himself preparing to argue on behalf of Sprint in its tie-up with T-Mobile at the same time as he was working on Sabre and Farelogix.

Sunshine said jumping from the telecom trial in New York to the Sabre-Farelogix case in Delaware was the most challenging point of his career. He said it was only possible because of the work of fellow Skadden antitrust attorneys including partners Karen Hoffman Lent, Tara Reinhart, and Julia York.

“Going through a merger trial creates teams and solidifies bonds between those who went through it together,” he said. " In the legal profession, it’s about as close as we get to boot camp.”

Love of Trial

The Sprint T-Mobile case brought a challenge of the non-legal variety for Sunshine: an endless supply of Häagen-Dazs ice cream provided to attorneys. He follows a strict no-sugar rule to stay sharp and lighthearted for trials.

“You really can’t go part way—there are always way too many cookies, candy and ice cream hanging around a war room,” he said.

Despite a strict diet, Sunshine is able to enjoy himself while putting on a case in court.

“Steve’s love of trial was palpable both in the war room and the court room,” said Hallie Levin, a trial lawyer at Wilmer Cutler Pickering Hale and Dorr LLP, who worked with Sunshine during the Sprint merger trial, serving as counsel to T-Mobile and Deutsche Telekom.

In merger cases, parties can go from being sued by the government to defending the deal in court in less than four months.

Months of preparation, including multiple depositions and thousands of pages of document production climax in two weeks or less in court.

“What matters is what happens in court. And what happens in court has to look easy and effortless,” WilmerHale’s Levin said. “You can never let them see you sweat, and Steve really lives that.”