States seek to intervene in Hewlett Packard-Juniper merger review

Twelve states, including California, and the District of Columbia have asked a San Jose federal judge to intervene in his review of Hewlett Packard Enterprise Co.'s merger with Juniper Networks Inc. that was approved by the Trump administration.

The move is a rare one that could allow the states to participate in an evidentiary hearing under the Tunney Act to argue against the merger's approval because they say it was "the product of undue influence by well-connected lobbyists."

The states cite allegations by former principal deputy assistant attorney general Roger P. Alford, who said two Justice Department officials "perverted justice" in approving the settlement.

But in motions filed this week, the U.S. Department of Justice and Hewlett Packard Enterprise argued that the states have no right to intervene.

"The Tunney Act does not, however, empower the Moving States to second-guess the federal government's decision-making," Justice Department Senior Litigation Counsel Henry C. Su wrote in a brief filed Tuesday. "Nor does it authorize their proposed intrusive inquiry into the Department of Justice's internal deliberations."

Gibson, Dunn & Crutcher LLP partner Samuel G. Liversidge argued in his brief for Hewlett Packard Enterprise that the companies do not want to end up "serving as the collateral damage in a political proxy war" -- either between the Democratic attorneys general and the Republican Justice Department, or a squabble between Justice Department officials.

"Allowing the Non-Parties' requested intervention would violate the Constitution and Rule 24 [of the Federal Rules of Civil Procedure], be contrary to every Tunney Act intervention case, and create a sideshow that would prolong this proceeding and cause extreme prejudice to HPE," he wrote.

The Justice Department sued to block the companies' merger in January, shortly after President Donald Trump took office, but it reversed course in June, approving it over internal objections.

U.S. District Judge P. Casey Pitts, an appointee of President Joe Biden, is scheduled to consider the states' motion to intervene on Nov. 18. U.S. v. Hewlett Packard Enterprise Co. et al., 25-cv-00951 (N.D. Cal., filed Jan. 30, 2025).

"The States are well-positioned to intervene in light of their role as sovereigns and joint enforcers of the antitrust laws," the attorneys general wrote. "Without the States' intervention, the only parties will be those that support the settlement, and the Court would hear a one-sided argument."

Liversidge, however, countered that the absence of objections from competitors or customers is revealing.

"There is no reason to allow the Non-Parties to hold up final review of the settlement when no actual market participants have expressed concerns with its terms," he wrote in the brief, also filed Tuesday.

The dispute has been driven by an extraordinary speech by Alford to the Tech Policy Institute Aspen Forum on Aug. 18. He worked for the Trump administration during the president's first term and was appointed in June as principal deputy assistant attorney general in the antitrust division.

A month later, Alford was fired after objecting to the Justice Department's settlement with Hewlett Packard Enterprise and Juniper Networks, allowing their $14 billion merger to go through in exchange for divestment of HPE's Instant On business and an agreement that the merged firm license Juniper software to independent competitors.

In his speech, Alford blamed top Justice Department officials as well as Mike Davis, who helps Trump choose federal judges, for pushing the merger through.

"The cost to the country of this new pay-to-play approach to antitrust enforcement is enormous," he said. "For 30 pieces of silver, MAGA-In-Name-Only lobbyists are influencing their allies within the DOJ and risking President Trump's populist conservative agenda."

"Their goal is to line their own pockets by working for any corporation that will pay top dollar to settle antitrust cases on the cheap," Alford added. "Doing so undermines the rule of law and desperately harms the average American."

He said he hopes the judge blocks the merger.

"As part of the forthcoming Tunney Act proceedings, it would be helpful for the court to clarify the substance and the process by which the settlement was reached," Alford said. "Although the Tunney Act has rarely served its intended purpose, this time the court may demand extensive discovery and examine the surprising truth of what happened."

Colorado First Assistant Attorney General Bryn A. Williams cited Alford's speech and his firing - along with former DOJ official Bill Rinner - to call for an evidentiary hearing into the settlement under the Tunney Act.

"If there were ever a settlement that demanded a thorough investigation and an evidentiary hearing under the Tunney Act, it is this one," Williams wrote in an Oct. 14 brief. "If the public reports and Mr. Alford's comments about the process that led to the settlement are true, then the settlement must be rejected."

But Su rejected the states' argument, urging Pitts to deny their motion to intervene.

"The process sought by the Moving States would also chill merger enforcement and discourage settlement," he wrote. "This would contravene the public interest and undermine the Tunney Act's goal of encouraging settlements that conserve enforcement resources and provide prompt relief."

A Hewlett Packard Enterprise spokesperson said Thursday that the company was disappointed "by the continued efforts of certain Attorneys General to politicize the Tunney Act process, which ignores the substantial pro-competitive benefits of this transaction."

"Any suggestion that HPE acted unethically or improperly to reach this settlement is patently false," the company added.

A Hogan Lovells article on its website said that Tunney Act reviews are usually a "perfunctory exercise," but warned companies seeking mergers that state attorneys general - with plenty of experience handling antitrust reviews - may seek to block a federal settlement.

"Allegations that the Trump administration approved a $14 billion merger because of backroom deals with their buddy lobbyists are extremely alarming," California Attorney General Rob Bonta wrote earlier this month. "My office is fully prepared to engage in the investigation -- it is our duty to ensure the Trump administration is using their power lawfully."