Judge sets November trial for suit against US Airways-American deal

Herald Washington BureauAugust 31, 2013 

BIZ AMR-USAIRWAYS 14 FT

FILE: Pilots from both airlines gather for a photo with Doug Parker, left, of U.S. Airways and Tom Horton of American Airlines after the announcement of the airlines' merger during a news conference at Dallas-Fort Worth International Airport, Thursday, February 14, 2013. (Ron T. Ennis/Fort Worth Star-Telegram/MCT)

RON T. ENNIS — MCT

WASHINGTON -- The trial in the government's antitrust lawsuit against the creation of the world's largest airline will begin Nov. 25, a federal district judge decided Friday.

American Airlines and US Airways wanted their day in court before the end of the year in hopes of salvaging their $11 billion merger, while the Justice Department wanted more time to prepare.

"It's a big case," said Mark Ryan, director of litigation in the Justice Department's antitrust division.

But Judge Colleen Kollar-Kotelly, who has presided over other antitrust cases, expressed skepticism at the government's request for a trial date in March, calling it "too far off."

The judge also seemed wary of the government's request for 50 depositions, or out of-court-testimony from witnesses prior to the trial. "That takes time," Ryan said.

The airlines, however, planned to take only 10.

"This is not U.S. v. Microsoft," said Rich Parker, an attorney for US Airways, referring to a past antitrust case the judge had considered.

Addressing reporters outside the U.S. District Court, Parker predicted victory.

"We're going to win," he said.

In a preview of the trial's substance, Parker noted that the Justice Department had given its blessing to three large mergers in recent years: Delta-Northwest, United-Continental and Southwest-AirTran, and accused the government of trying to change the rules.

"They approved other mergers," he said. "Our merger passes muster by 10 miles."

Ryan, however, cited a number of concerns with the deal, including the transparency of pricing, the possibility of anticompetitive coordination with other airlines, the end of head-to-head competi

tion for numerous city pairs, the end of a popular discount program and the combined airline's dominance at Reagan National Airport.

Ryan said that the Justice Department's approval of past mergers was "not a defense" for this one.

After meeting with the two sides behind closed doors Friday, Kollar-Kotelly scheduled the trial for the week of Thanksgiving.

The trial could last from 10 to 15 days, with both sides seeking testimony from airline executives and economists, among others.

Carl Tobias, a law professor at the University of Richmond, called Kollar-Kotelly a "tough-minded" judge who will put both sides through their paces in an attempt to resolve the case quickly.

"She will encourage them to try to settle it, if possible," he said.

Meanwhile, a federal bankruptcy judge in New York was expected to rule on the merger by Sept. 12.

The merger is American's plan to exit from Chapter 11 bankruptcy, and Judge Sean Lane indicated Thursday that he's inclined to approve it but wants to hear more about the airlines' response to the government's antitrust case.

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