Plea to block big airline merger (UPDATED: Challenge denied)
on Dec 7, 2013 at 11:53 pm
UPDATE: Sunday 7:51 a.m. Justice Ruth Bader Ginsburg has denied this challenge, without issuing an opinion.
A group of consumers seeking to block the imminent merger of American Airlines and U.S. Airways moved on to the Supreme Court Saturday evening, seeking an order to keep the creation of the nation’s largest airline from taking place next week. The application in Fjord v. AMR Corporation (docket 13A579) can be read here.
The Justice Department earlier had challenged the American-U.S. Airways union, contending that it would curtail competition in important markets for air travel. However, that dispute ended with a settlement last month, requiring the two airlines after the merger to give up more than one hundred of their takeoff and landing slots at major airports, yielding them to smaller, low-cost airlines such as commuter carriers.
That deal has now won approval in federal bankruptcy court, with American pursuing the merger as a way for it to emerge from the status of a failing debtor. The two airlines have said they plan to put the merger into effect on Monday, the challengers told the Supreme Court.
The thirty-nine consumers now seeking help from the Justices had filed their own, private antitrust lawsuit to challenge the merger, but so far their efforts have failed in lower courts. A federal judge in New York City turned aside their latest challenge on Friday. The Second Circuit Court on Saturday refused to provide any relief.
Their plea to the Supreme Court was filed with Justice Ruth Bader Ginsburg, who has the authority to deal with emergency legal matters from the Second Circuit, the geographic area where the merger has been under review in lower courts. Ginsburg can act on the challenge alone, or share it with her colleagues.
The request for a delay of the merger argued that the American-U.S. Airways deal is only the latest of a string of combinations of major U.S. commercial airlines. If this one, too, goes through, their filing contended, just four airlines will control some ninety-six percent of the domestic air travel market. That, alone, should be sufficient reason to block this latest union, they contended.
Lower courts have turned aside the challenge, concluding that the consumers had not shown that they would be personally harmed if the merger occurs.
Justice Ginsburg or the Court could act after getting a response from the merging partners, but either also has the authority to act on it without any further filings.