Antitrust Law Daily Wrap Up, TOP STORY—Government amends complaint in challenge to U.S. Airways/American Airlines combination, (Sep 5, 2013)
Law Firms Mentioned:Cadwalader, Wickersham & Taft, LLP | Dechert LLP | Jones Day | O’Melveny & Myers LLP | Paul Hastings LLP
Organizations Mentioned:AMR Corp. | American Airlines, Inc. | Cadwalader Wickersham & Taft, LLP | Dechert, LLP | Jones Day, LLP | O'Melveny & Myers, LLP | Paul Hastings, LLP | U.S. Department of Justice | US Airways Group, Inc.
By Jeffrey May, J.D.
The State of Michigan has joined the U.S. Department of Justice, six other states, and the District of Columbia in challenging the proposed $11 billion merger between US Airways Group Inc. and American Airlines’ parent corporation, AMR Corporation. Today, an amended complaint was filed in the federal district court in Washington, D.C., including the additional plaintiff and tweaking the approximately 1,000 city pair markets that allegedly would be harmed by the creation of the “world’s largest airline” (U.S. v. US Airways Group Inc., Case 1:13-cv-01236).
The government alleges that the transaction would “particularly hurt” passengers traveling to and from the Washington, D.C. area” and would be presumptively illegal in markets identified by approximately 1,000 city-pairs in which American and US Airways currently compete head-to-head. These city-pairs are listed in an appendix to the complaint and are based on Herfindahl-Hirschman Index (HHI) calculations for measuring market concentration.
According to the Justice Department, the complaint has been amended to drop 29 city pairs from, and to add three city pairs to, the appendix, based on revised HHI calculations. Additionally, nine city pairs that included a city not served in 2013 by one of the defendants were removed.
The filings come as the parties prepare for a trial starting November 25. Last week, the court resolved a dispute between the parties on the appropriate amount of time needed to prepare for trial. The airlines were seeking a November 12 trial start, while the government had asked for a trial date in February 2014. The airlines have agreed not to complete their planned merger until seven days after a final order is issued following the trial.
The court issued a scheduling order yesterday. Under the schedule, fact discovery will close on October 25, and expert discovery will close on November 20.
Attorneys: Ryan J. Danks for U.S. Department of Justice. Richard G. Parker(O’Melveny & Myers LLP), Paul T. Denis (Dechert LLP), and Charles F. Rule (Cadwalader, Wickersham & Taft, LLP) for US Airways Group, Inc. John M. Majoras (Jones Day) and Mary Jean Moltenbrey (Paul Hastings LLP) for AMR Corp.
Companies: AMR Corp.; American Airlines, Inc.; US Airways Group, Inc.
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