United States v. U.S. Airways Grp., Inc., Civil Action No. 13-cv-1236 (CKK)
| Decision Date | 25 April 2014 |
| Docket Number | Civil Action No. 13-cv-1236 (CKK) |
| Parties | UNITED STATES OF AMERICA, et al. Plaintiffs, v. US AIRWAYS GROUP, INC., et al. Defendants. |
| Court | U.S. District Court — District of Columbia |
Presently before the Court is the United States' [161] Motion for Entry of the Proposed Final Judgment. Upon consideration of the pleadings1, the relevant legal authorities, and the record as a whole, the Court GRANTS the United States' Motion for Entry of the Proposed Final Judgment.
At the time of the filing of the Complaint in this litigation, Defendant US Airways was a Delaware corporation headquartered in Tempe, Arizona. CIS at 3. In the year 2012, it flew over fifty million passengers to approximately 200 locations worldwide, taking in more than $13 billion in revenue. Id. American Airlines was a Delaware corporation headquartered in FortWorth, Texas. Id. Defendant AMR Corporation was the parent company of American Airlines. Id. In the year 2012, American flew over eighty million passengers to approximately 250 locations worldwide, taking in more than $24 billion in revenue. Id. US Airways and AMR Corporation agreed to merge on February 13, 2013. Id. at 4.
On August 13, 2013, the United States and the States of Arizona, Florida, Tennessee, and Texas, the Commonwealths of Pennsylvania and Virginia, and the District of Columbia filed a civil antitrust Complaint seeking to enjoin the proposed merger of Defendants.2 See Complaint, ECF No. [1]. The initial Complaint, as well as the Amended Complaint3 filed on September 5, 2013, alleged that the likely effect of this merger would be to lessen competition substantially for the sale of scheduled air passenger service in city pair markets throughout the United States, and in the market for takeoff and landing authorizations ("slots") at Ronald Reagan Washington National Airport ("Reagan National") in violation of Section 7 of the Clayton Act as amended, 15 U.S.C. § 18. See Am. Compl. ¶ 96. The Court subsequently set a trial date of November 25, 2013. See Order, ECF No. [56].
On November 12, 2013, the parties reached a settlement, and the United States filed a proposed Final Judgment designed to remedy the harm to competition that was likely to result from the proposed merger. The proposed Final Judgment requires the divestiture of slots, gates, and ground facilities at seven airports around the country. CIS at 2-3. Specifically, theDefendants are required to divest or transfer to purchasers approved by the United States, in consultation with the Plaintiff States:
Id. at 2-3. The United States argues that this remedy permits the entry or expansion of airlines that can provide meaningful competition in numerous markets, eliminates the significant increase in concentration of slots at Reagan National that otherwise would have occurred, and enhances the ability of low-cost carriers to compete with legacy carriers on a system-wide basis. The subject slots and facilities have been or are in the process of being divested to several airlines, specifically Southwest Airlines, JetBlue Airways, and Virgin America. Gov't Resp. at 7.
In addition to the relief provided by the proposed Final Judgment, Defendants reached an agreement with the Plaintiff States to maintain service from at least one of the merged airline's hubs to specified airports in the Plaintiff States for a period of five years. Supplemental Stipulated Order, ECF No. [151] at 4-6. Defendants also reached an agreement with the United States Department of Transportation to use all of the merged airline's commuter slots (as opposed to air carrier slots) at Reagan National to serve airports designated as medium, small and non-hub airports (i.e. airports accounting for less than one percent of annual passenger boardings) for a period of at least five years. See Gov't Resp. at 8 & n. 11.
Pursuant to the requirements of the Antitrust Procedures and Penalties Act ("APPA" or "Tunney Act"), 15 U.S.C. § 16(b)-(h), the United States published the proposed Final Judgment and the accompanying Competitive Impact Statement ("CIS") in the Federal Register on November 27, 2013. See 78 Fed. Reg. 71377. The United States also had summaries of the terms of the proposed Final Judgment and CIS, together with directions for submission of written comments relating to the proposed Final Judgment, published in the Washington Post, Dallas Morning News, and Arizona Republic for seven days, beginning on November 25, 2014, and ending on December 9, 2013. Gov't Resp. at 4. The sixty-day period for public comment on the proposed Final Judgment ended on February 7, 2014. Id. The United States received a total of fourteen comments by the deadline. Id. The United States received an additional fifteen e-mails from individuals expressing concerns about competition that were sent through means other than those designated for submitting comments under the Tunney Act. Id. at 2 n. 1. On March 10, 2014, the United States filed with the Court its [159] Response to Public Comments on the Proposed Final Judgment along with the public comments and e-mails that it received. This filing responds to both the comments and the e-mails the United States received. Pursuant to 15U.S.C. § 16(d), and with the Court's authorization, see Order, ECF No. [154] at 2-3, the United States posted the comments and its Response to Comments on the Antitrust Division's website. See U.S. Department of Justice: Antitrust Division, U.S. and Plaintiff States v. US Airways Group, Inc. and AMR Corporation, http://www.justice.gov/atr/cases/usairways/index.html (last visited Apr. 25, 2014). On March 13, 2014, the United States published in the Federal Register its Response to Public Comments on the Proposed Final Judgment and the location on the Antitrust Division's website at which the comments are accessible. See 79 Fed. Reg. 14279.
Because Defendant AMR Corporation was in bankruptcy at the time of the settlement, the parties' agreement also required approval by the bankruptcy court. Gov't Resp. at 3. On November 27, 2013, the United States Bankruptcy Court for the Southern District of New York entered an order finding that the settlement satisfied the requirements for approval under the Bankruptcy Code, granted AMR's motion to consummate the merger, and denied a request for a temporary restraining order filed by a private plaintiff seeking to enjoin the merger on antitrust grounds. See Order Pursuant to Bankruptcy Rule 9019(a) Approving Settlement Between Debtors, US Airways, Inc. and United States Department of Justice, In re AMR Corp., No. 11-15463 (Bankr. S.D.N.Y. Nov. 27, 2013), ECF No. 11321. AMR exited bankruptcy protection, and the merger closed on December 9, 2013. Gov't Resp. at 3. The Bankruptcy Court has retained jurisdiction to hear the private case. Fjord v. AMR Corp., (In re AMR Corp.) Adv. Pr. No. 13-01392 (Bankr. S.D.N.Y. filed Aug. 6, 2013).
On March 13, 2014, the United States filed with this Court the present Motion for Entry of the Proposed Final Judgment. Alongside this motion, the United States filed a [161-2] Certificate of Compliance which states that all of the requirements of the APPA have been satisfied. After receiving this motion along with the accompanying certification, the Court leftthe record in this case open for an additional twenty-one days until 5:00 PM on April 3, 2014, in order to allow filings by parties seeking to lodge additional comments prior to the Court's decision on the proposed Final Judgment. See Order, ECF No. [162] at 2.
On April 1, 2014, the American Antitrust Institute ("AAI") sought leave to file an amicus brief in reply to the United States' response to the public comments on the proposed Final Judgment. See Unopp. Mot. of the Am. Antitrust Inst. for Leave to File Brief as Amicus Curiae to Reply to the Response of Pl. United States to Public Comments on the Proposed Final Judgment, ECF No. [163] ("AAI Mot."). On April 4, 2014, a group of consumers and travel professionals (the "Fjord amici") also sought leave to participate as amici, attaching a proposed brief replying to the United States' response to public comments. See Unopp. Mot. for Leave to File Brief Amici Curiae by Carolyn Fjord, et al., and in Opp. to Pl.'s Mot. for Entry of Final Judgment and for a Hearing on the Proposed Final Judgment, ECF No. [165] ("Fjord Mot."). The parties do not oppose either group's participation as amici. AAI Mot. at 2; Fjord Mot. at 2. In light of this Court's "inherent authority" to permit amici participation, Jin v. Ministry of State Sec., 557 F.Supp.2d 131, 136 (D.D.C. 2008), the Court will grant AAI leave to file its amicus brief. In addition, although the Fjord amici filed their brief after the Court's deadline and provide no explanation for this delay, the Court will nevertheless grant the motion and consider their brief in light of the fact that their participation is unopposed and in the interests of considering all available information. Accordingly, by separate Order issued this day, the Court grants both AAI and the Fjord amici...
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