Airline Merger Case to Proceed After U.S. Seeks a Delay

The U.S. lawsuit seeking to block the proposed merger of AMR Corp. (AAMRQ) and US Airways Group Inc. (LCC) will proceed as scheduled after a judge denied a Justice Department request to suspend the case because of the government shutdown.

U.S. District Judge Colleen Kollar-Kotelly in Washington said today a “speedy disposition” is needed, partly because of a Jan. 18 deadline to complete the merger.

“It is essential that the Department of Justice attorneys continue to litigate this case,” the judge wrote in an order.

The Justice Department asked the judge today to hold up the case until Congress restores funding, saying its attorneys are “generally prohibited” from working except in “very limited circumstances.”

“If the court denies the request, the government will comply with the court’s order, which would constitute express legal authorization for the activity to continue,” the Justice Department said.

Gina Talamona, a department spokeswoman, declined to comment on the request for delay.

The U.S. sued the airlines in August seeking to block the merger, saying the tie-up of Fort Worth, Texas-based American and Tempe, Arizona-based US Airways would reduce competition and harm consumers. The case is scheduled for trial starting Nov. 25, with both sides returning to court in January for final arguments.

“You can see from the schedule that we are planning on a Nov. 25 trial date, and we are working very hard toward that end,” Rich Parker, an attorney for US Airways at O’Melveny & Myers LLP, said after today’s hearing.

The case is U.S. v. US Airways Group Inc., 13-cv-01236, U.S. District Court, District of Columbia (Washington).

To contact the reporters on this story: David McLaughlin in federal court in Washington at dmclaughlin9@bloomberg.net; Sara Forden in federal court in Washington at sforden@bloomberg.net.

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net.

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