Court Overturns Second Order Halting Embraer/Boeing Deal
A federal appeals judge chastises lower courts for judicial overreach.

Brazilian appeals courts moved with lightning speed to strike down a second restraining order freezing the Boeing/Embraer merger negotiations. The court issued the order last Wednesday and announced it Thursday; the solicitor general’s office said it would appeal Friday afternoon; and in the early morning hours of Saturday of the pre-Christmas weekend, regional federal court presiding judge Therezinha Cazerta struck down the order. “The courts aren’t the owner of the ‘golden share,’” she said, in reference to the Brazilian government’s veto prerogative. “Their jurisdiction is the preservation of rights, in the strongest sense of the term, and not determining the direction of the largest Brazilian aviation company.”


The second restraining order, in response to a petition by machinists’ unions, came from the same judge who earlier in the month issued the first such order, in response to a petition by the same lawyer, who that time represented a group of left-wing congressmen. In his 36-page decision, the judge defended returning to the topic by saying that the arguments were similar, but not identical, and that the parties were different.


The federal courts are entering a month’s recess for the southern hemisphere summer, with judges on rotating duty for emergencies, raising the possibility that a well-timed bid might catch a favorable judge’s shift and cause another few days’ tumult on the stock market.  The country’s new president takes office on January 1 and favors the merger.


Perhaps the most notable aspect of the decision is its speed: Parties often take issues to the courts to provide not justice, but delay. The outgoing president postponed and might cancel the traditional Christmas pardon of prisoners because the supreme court has still not ruled on the legality of last Christmas’s pardons. AIN covered the shredding of Boeing airliners once operated by bankrupt airline VASP that sat for years on a ramp at Congonhas Airport in SĂŁo Paulo, where they deteriorated from airworthy condition to scrap aluminum while the courts carefully weighed the rights of everyone with a claim on them.