Suit against Delta-NWA deal seeks to question CEOs
ATLANTA — A lawyer for 28 air travelers suing to block Delta Air Lines Inc.’s acquisition of Northwest Airlines Corp. wants court permission to question the chief executives of four other major carriers about their views on airline industry consolidation.
Lawyers for Delta and Northwest say granting the request would allow an “ immaterial sideshow” and they are asking a federal judge to reject it.
They say they are mindful of the current trial schedule and the carriers’ ability to complete the combination by year end.
U. S. District Judge Vaughn Walker is set to preside over the Nov. 5 trial in San Francisco. Testimony is expected to last 10 days, and Walker could rule by Thanksgiving.
The Delta- Northwest stock- swap deal announced April 14 would create the world’s largest carrier in terms of traffic.
The deal is likely to gain shareholder and regulatory approval, leaving court intervention as the only thing that might stand in the way.
In a letter to Walker on Monday, plaintiffs’ lawyer Joseph Alioto said he wants to depose the CEOs of American Airlines, Continental Airlines, US Airways and United Airlines about public statements they have previously made about industry consolidation. Alioto said some of the comments were included in a document submitted by Northwest’s CEO to Northwest’s board of directors.
Alioto acknowledged that a deadline for depositions to be taken has passed, but he said he doesn’t believe there should be a problem.
“ I felt there was no undue prejudice,” Alioto wrote.
In a joint letter Tuesday responding to Alioto’s request, Northwest lawyer Henry Thumann and Delta lawyer Donald Flexner said the request is inappropriate and should be denied.
“ To now depart from the established schedule to pursue this collateral and ultimately immaterial sideshow will place extreme and unwarranted stress on the parties’ ability to timely meet both the remaining deadlines and the established trial date,” the lawyers wrote.
They also said that the earliest possible closing of the deal to combine Atlanta- based Delta and Eagan, Minn.- based Northwest is important to achieving consumer benefits and efficiencies that the transaction will afford.
If the plaintiffs’ request is granted, the lawyers for Delta and Northwest said, subpoenas would have to be issued for the four CEOs and some of them would likely fight the subpoenas, which would take time.
“ The likelihood of accomplishing all of this in the approximately seven weeks remaining before trial is simply not realistic,” the lawyers wrote.
There was no immediate ruling by Walker on the plaintiffs’ request for court permission to question the four CEOs.
The plaintiffs are seeking an injunction to block the combination, arguing that it violates antitrust law and will substantially lessen competition.
The lawsuit was filed June 18 in U. S. District Court in San Francisco.
INFORMATION COURTESY OF THE POTTING SHED