Court Grants Preliminary Injunction Against Peabody-Arch Joint Venture for Powder River Basin Coal

On September 29, 2020, Judge Pitlyk of the United States District Court for the Eastern District of Missouri issued a Memorandum Opinion granting the Federal Trade Commission a Preliminary Injunction blocking the joint venture proposal by Peabody Energy Corporation and Arch Resources, Inc., to combine their operations and marketing for Powder River Basin coal. Arch terminated the joint venture later that morning.

On behalf of the Western Coal Traffic League and other clients, Slover & Loftus LLP worked closely with the FTC in its investigation and litigation of the joint venture. A number of Slover & Loftus clients appeared as witnesses at the hearing and otherwise submitted testimony in the proceeding.

Peabody and Arch, by far the two largest coal producers in the Southern Powder River Basin, claimed that their joint venture would create efficiencies that would benefit customers, but customers were concerned about the resulting loss of competition. A central issue was whether competition from natural gas and other sources of electric power would prevent the joint venture from raising coal prices. Judge Pitlyk found there was a reasonable probability that the proposed joint venture would substantially impair competition and that the equities supported the injunction.

Questions regarding this decision may be directed to William L. Slover, Kelvin J. Dowd, Frank J. Pergolizzi, Andrew B. Kolesar III, or any other Slover & Loftus LLP attorney.