JetBlue and Spirit Challenge $34 Million Legal Fees Over Abandoned Merger

JetBlue Airways (B6, New York JFK) and Spirit Airlines (NK, Fort Lauderdale International) are contesting a request for up to USD 34 million in legal fees from law firms involved in blocking their now-abandoned USD 3.8 billion merger. The dispute centers on fees claimed by eight law firms representing 25 passengers and travel agents in an antitrust lawsuit against the merger, which was ultimately terminated in March 2024.

The lawsuit, originally filed in November 2022 in the Northern District of California and later moved to the US District Court of Massachusetts, was initiated while the Department of Justice (DOJ) was still reviewing the merger. The plaintiffs argued that the merger would reduce competition and increase fares. Although the Massachusetts court dismissed most of the complaints due to lack of legal standing, two complaints remained. The merger was blocked in January 2024 when the court sided with the DOJ, which argued that the merger would harm competition.

Following the ruling, JetBlue and Spirit initially appealed but ultimately abandoned the merger in March after realizing that securing necessary legal and regulatory approvals would be unlikely. The US First Circuit Court later dismissed the appeal as moot.

The law firms, seeking fees based on over 6,700 hours of legal work, argue that their efforts were crucial in persuading the airlines to drop their appeal and contributing to the merger’s collapse. They assert that the lawsuit played a significant role in the merger’s demise.

In response, JetBlue and Spirit contend that the lawsuit was largely redundant and ineffective, paralleling the DOJ’s own case. They criticize the claim for fees as “excessive and insufficiently supported,” arguing that it includes charges for plaintiffs dismissed for lack of standing and for work conducted after the DOJ’s lawsuit was already in progress.

Sources: AirGuide Business airguide.info, bing.com, ch-aviation.com