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August 14, 2013

Airline antitrust attorneys: Ready to litigate DOJ challenge

Antitrust attorneys for American Airlines and US Airways told reporters on a conference call Wednesday that the government's lawsuit against their proposed merger is weak and they are ready to litigate the case in federal court. They said that while there have been antitrust settlements in past cases, only once in the past eight years has the federal government won an  antitrust challenge that was ultimately decided by a federal judge.

Asked if there was a parallel track of settlement talks, Paul Denis, an attorney representing US Airways who has been involved in the talks from the start, answered: "We're litigating this case, period." Richard Parker, an attorney with O'Melveny & Myers brought into the case more recently, added that "if the government has a creative alternative, we'll certainly listen to it." But for now, he said, "we're preparing for trial."

Other highlights of the conference call:

  • When the airlines learned of the suit: The morning it was filed.
  • What the government's lawsuit means: Some news reports make it sound that because of the suit, the merger isn't gong to happen, and that's not so, said Joe Sims, a Jones Day attorney representing American. "The fact of the matter is, of course, is all the government has done is lay down a marker. It's a very long marker, 56 pages, but they have to convince the judge that this merger is anti-competitive."
  • Whether the lawsuit was a surprise: "While it may have been a surprise to people outside the process, it was not a surprise to people inside the process," said Denis. Until the government says its objections are satisfied, it can sue, he said. "We're surprised at the complaint because it's not as strong as we thought" it would be, he said. Said Sims: Antitrust negotiations "all follow the same path -- discussions, concerns, answers, and eventually you get to meetings with the decision-makers, which we did not too long ago, and it's only after you have those meetings that the decision-makers make up their minds. The timing really was driven by the DOJ's process, and the way it always works is, until you get to the end, as long as there are concerns you don't know what the answer is going to be." Added Denis: "To take some of the drama out of this, DOJ has a strong preference to sue before the transaction is closed. It was not a secret the bankruptcy court confirmation hearing was (Aug.) 15th. It was not a surprise they chose to  file before the 15th."

-- Jim Fuquay

 

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Comments

Raf

Eric Holder will have his butt handed to him on a silver platter by the attorneys representing US Air and American. The DOJ decision is clearly a political move and has no merits to stand on. This idea that Eric Holder who is a long time close and personal Obama friend and has no political agenda behind preventing the Merger is absolutely ridiculous. United headquarters is located in Chicago, Obama's home town and they didn't find any problems approving that merger ( which if DOJ applied the same rules to that merger and that of Delta they should have rejected both of thos mergers. What is astonishing is that the numbers the DOJ is throwing around are false and misleading. How are they going to defend their opposition to the merger using false and misleading facts and statement. I hope that his honorable Judge Sean Lane is not distracted by the circus sideshow the DOJ is engaging in. He has the power to approve the merger.

Raf

The reason the DOJ timed their decision two days before the Judge ruled was because they were trying to sway Judge Lane into not approving the merger. If the Judge approved the Merger the DOJ would have been hopelessly handicapped by his decision and the DOJ would have had to play a defensive uphill defense of their decision.

life realist

@ Raf,
If the DOJ engaged in politics filing a motion to block the merger how does one explain the half dozen states, including AZ and TX, joining the lawsuit?

Did George Bush and his DOJ also engage in politics when they blocked the proposed merger between Usair and United?

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