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US v AMR CORP AMERICAN AIRLINES INC and AMR EAGLE HOLDING CORPORATION Click to find out why . . .



Keywords & Phrases
CaseNo: 50, CourtName: US DEPARTMENT OF JUSTICE, Plaintiff: US, State: KS Kansas, UniqueCaseRef: LCD>50, Cost, Antitrust Law, Supplement, Predatory, Aircraft, Airline, Footnote, Depreciation, Capacity, Predatory Pricing, United States, Declaration, Motion, Review, Route, Planes, Investment, Opportunity Costs, Price, Herbert Hovenkamp, Granting Defendants, Hub, Memorandum, First Time, Obsolescence, Magistrate Judge, Humphreys, Purpose, Airplane , ContentID: 120245959

Case Documents
1 2000-09-28 HERBERT HOVENKAMP IN SUPPORT OF PLAINTIFFS MOTION FOR RECONSIDERATION COURT ORDER
[ see first page and extracted highlights below  ] ItemID: 112972
4 pages
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Total Documents: 1 document , 4 pages
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1 . HERBERT HOVENKAMP IN SUPPORT OF PLAINTIFFS MOTION FOR RECONSIDERATION COURT ORDER

EXTRACTED KEY WORDS
LAW
ANTITRUST LAW
SUPPLEMENT
PREDATORY
AIRCRAFT
AIRLINE
FOOTNOTE
DEPRECIATION
CAPACITY
PREDATORY PRICING
UNITED STATES
DECLARATION
MOTION
REVIEW
ROUTE
PLANES
INVESTMENT
OPPORTUNITY COSTS
PRICE
HERBERT HOVENKAMP
GRANTING DEFENDANTS
HUB
MEMORANDUM
FIRST TIME
OBSOLESCENCE
MAGISTRATE JUDGE
HUMPHREYS
PURPOSE
AIRPLANE
                        IN THE UNITED STATES DISTRICT COURT
                                FOR THE DISTRICT OF KANSAS


                                              )
UNITED STATES OF AMERICA,                     ))
                        Plaintiff,            ))              Civil Action No. 99-1180-JTM
               v.                             ))
AMR CORPORATION,                              )
AMERICAN AIRLINES, INC, and                   )
AMERICAN EAGLE HOLDING                        )
CORPORATION,                                  ))
                        Defendants.           )
____________________________________)


               DECLARATION OF HERBERT HOVENKAMP IN SUPPORT
                     OF PLAINTIFF'S MOTION FOR RECONSIDERATION
                      OF THE COURT'S SEPTEMBER 28, 2000, ORDER
                      GRANTING DEFENDANTS' MOTION TO REVIEW

       I, Herbert Hovenkamp, hereby declare the following to be true and correct, based on my

personal knowledge, unless otherwise indicated:

       1.      I am the Ben V. & Dorothy Willie Distinguished Professor of Law at the

University of Iowa, College of Law, and have held that position since 1987.  I am co-author, with

the late P. Areeda and the late D. Turner, of ANTITRUST LAW: An Analysis of Antitrust

Principles and Their Application and its annual supplements (referenced in the Court's

September 28 Order as " Antitrust Law").

       2.      In my capacity as a litigative consultant for the United States Department of

Justice, I wrote a letter to Joel Klein dated October 2, 1998.  In that letter, I expressed my view

that when considering an allegation of predation by a dominant air passenger carrier in response



to new entry at its hub, the definition of average variable cost "must take into account all costs

that could be avoided if the airline chose not to make those flights in that hub during the alleged

predation period."   That position was consistent with my long-held views on average variable

SNIPPETS:
  • IN THE UNITED STATES DISTRICT COURT
  • DECLARATION OF HERBERT HOVENKAMP IN SUPPORT
  • OF PLAINTIFF'S MOTION FOR RECONSIDERATION
  • GRANTING DEFENDANTS' MOTION TO REVIEW
  • I, Herbert Hovenkamp, hereby declare the following to be true and correct, based on my
  • University of Iowa, College of Law, and have held that position since 1987.
  • to new entry at its hub, the definition of average variable cost "must take into account all
  • that could be avoided if the airline chose not to make those flights in that hub during the
  • American's Reply Memorandum in Support of American's Motion to Review;
  • Court's September 28, 2000, Order Granting Defendants' Motion to Review Magistrate Judge
  • Humphreys' June 13, 2000, Memorandum and Order.
  • The purpose of this declaration is to address American's allegation that I added a
  • adding a footnote which suggested for the first time that the entire cost of an airplane (in
  • addition to depreciation and obsolescence) should be considered a variable cost."
  • The view I expressed in the 1999 Supplement concerning the appropriate
  • characterization of aircraft costs is consistent with the view that Professor Areeda and I
  • See note 46 to ¶714.6 of the 1986 Supplement to Antitrust Law:
  • As another example in which a superficial definition of the relevant variable costs would be
  • To what extent should the investment in the shifted aircraft be included for predatory
  • planes depreciate with use and that depreciation is a variable cost.
  • the defendant expanded capacity on the route in question in order to lower his price there;
  • When the question is whether the airline's rate structure as a whole is below relevant costs,
  • just as in my earlier statements I referenced depreciation and opportunity costs to explain
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