By Adrian Cruz

Law360 (April 28, 2020, 6:12 PM EDT ) The Federal Trade Commission asked a Missouri federal judge for an additional three weeks to prepare for a preliminary injunction hearing in a suit disputing a joint venture between two coal companies, citing challenges presented by the coronavirus outbreak.

The FTC said Monday that it would be extremely difficult, if not outright impossible, to properly prepare for the hearing, originally scheduled for June 22 because it has ordered all employees to work remotely until June 20. Employees would be unable to travel for the prehearing conference originally scheduled for June 18 or have enough time to complete preparations unless the delay was granted, the FTC said.

The hearing would determine whether or not the FTC's concerns on the merger between Peabody Energy Corp. and Arch Coal Inc. warrant a preliminary injunction that would block the joint venture while the agency conducts a separate in-house administrative trial to halt the merger permanently.

"Defendants naturally want to consummate their joint venture sooner rather than later, so that they can stop competing with one another," the FTC said. "But defendants' commercial interests must give way to the imperative to safeguard human life during a national emergency."

The FTC also said that the court has already approved one delay in the dispute, moving the date of the administrative hearing from Aug. 11 to Oct. 27, and as a result, delaying the injunction hearing by three weeks wouldn't cause any problems.

The original suit, filed in February, alleges that the coal companies' planned joint venture to mine coal in northeastern Wyoming should be stopped because it would trigger spikes in consumer energy bills by charging power companies more for the coal being mined.

On the same day, the two companies refuted the FTC's request, calling it unnecessary because the federal agency has proven in the past to be capable of conducting much of the preparation remotely.

They also said delaying the injunction hearing would harm them economically by blocking a transaction that would save both companies more than a billion dollars, savings they said would be passed on to consumers.

"Coal producers are under immense pressure and cannot compete effectively with low-cost natural gas and subsidized renewable energy unless they can reduce costs," the companies said. "This reality is amplified by shocks posed by the COVID-19 crisis. While further delay of this litigation may be convenient to the FTC, it will rob defendants' and their customers of important cost savings."

The companies said a decision to delay should wait until June, when it would be easier to determine if COVID-19 restrictions would have a significant effect on either side's ability to prepare for the injunction hearing.

"We continue to believe the proposed joint venture offers a clear and compelling path to strengthen both our and our customers' ability to compete in today's marketplace with electricity produced from coal," a Peabody representative told Law360. "We intend to demonstrate that coal faces intense competition driven by historically low natural gas prices, availability of subsidized renewable generation and impacts of coal plant retirements."

A representative from the FTC declined to comment Tuesday.

Arch Coal Inc. is represented by Baker Botts LLP.

Peabody Energy Corp. is represented by Debevoise & Plimpton LLP, Akin Gump Strauss Hauer & Feld LLP and Husch Blackwell LLP.

The case is Federal Trade Commission v. Peabody Energy Corp. et al., case number 4:20-cv-00317, in the U.S. District Court for the Eastern District of Missouri.

--Editing by Jay Jackson Jr.

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