DOJ wanted to play 'four corners' against American Airlines/US Airways, but court calls a foul.
The US Department of Justice ripped a page from an old basketball coach’s playbook, but a US federal court has disallowed the scheme. What’s DOJ’s new game plan?
Let me explain: In the old days of basketball, legendary University of North Carolina coach Dean Smith would often employ the “four corners” strategy. If North Carolina was ahead with several minutes left in the game, Smith would order his players to spread out to the four corners of the offensive side of the court and simply pass the ball around endlessly (there was no rule against holding the ball; now there is a shot-clock that requires American college basketball teams to shoot the ball at least once every 35 seconds).
The strategy had two purposes: 1) Run out the clock. 2) Frustrate the opponent, which often made foolish mistakes that allowed North Carolina to grow its lead. DOJ tried to deploy its version of Smith’s four corners strategy in requesting that the American Airlines/US Airways antitrust trial be delayed until March 2014.
DOJ lawyers appeared to be hoping the airlines would get frustrated by the delay, perhaps causing the carriers’ leadership teams to make mistakes and/or one or both airlines to pull out of the merger long before the case ever got to a trial. But US federal judge Colleen Kollar-Kotelly blew the whistle on DOJ’s four corners ploy, setting a Nov. 25 trial date.
So now that DOJ’s first strategy has been rejected, where does the department go? I see two choices: aggressively pursue a settlement or aggressively prepare for and litigate the trial.
It all depends on whether DOJ thinks it will win or lose the case. The main reason why the four corners strategy was made illegal in basketball was that it skewed the game. Rather than “playing it out,” one team pulled the rug out from under the game. Though North Carolina under Smith was usually a top team, the four corners strategy was actually most copied by lesser teams that knew they would lose to a superior team if the game was played under fair terms. Was that why DOJ tried to delay the trial? Because it thinks it will lose in court?
If that’s the situation, then look for DOJ to move toward some sort of face-saving settlement. But if DOJ really believes it can win, it’s time for the government’s lawyers to shoot the ball: Take the case to court full-throated, present your best evidence, explain in detail why you think the merger would be anticompetitive and why this proposed combination is different than Delta-Northwest and United-Continental.
It’s hard to predict which way DOJ will go. The lawsuit to block the merger was a surprise move. Filing the lawsuit could have been a mere gambit (particularly when coupled with attempting to significantly delay a trial start date). Did DOJ ever really intend to go to trial?
As Dean Smith once said, “When I use the four corners and win, I’m a genius. When I use it and we lose, I’m all wrong."