Antitrust Law Daily Wrap Up, ANTITRUST—E.D. La.: Airline ticket price fixing suit stayed pending JPML transfer ruling, (Oct 2, 2015)

By Linda O’Brien, J.D., LL.M.

An action by a consumer against the four largest commercial airlines in the United States for engaging in a conspiracy to fix the prices of domestic airline tickets by limiting the seating capacity on flights was stayed by the federal district court in New Orleans, pending a ruling by the Judicial Panel on Multidistrict Litigation (JPML) to consolidate and transfer all related actions to a single forum (Ates v. Delta Air Lines, Inc., September 30, 2015, Brown, N.).

In August 2015, Paula Ates filed a putative class action against four major airlines—American, Delta, Southwest, and United Airlines—alleging a conspiracy to restrict output and thereby manipulate the prices of passenger airline tickets in violation of Section 1 of the Sherman Act. The complaint asserted that the airlines colluded to limit seat capacity and illegally signaled each other on how to add new flights, routes, and extra seats to limit the capacity of passenger airline travel in the United States.

In June 2015, the U.S. Department of Justice began a civil investigation into possible unlawful coordination to limit capacity on flights and requested information from the airlines relating to that investigation. Subsequently, numerous civil actions were filed against the four airlines. Plaintiffs in various actions have moved to transfer and consolidate all such actions and, on October 1, the JPML heard motions seeking to centralize and transfer all of the related cases to a single forum.

The airlines moved to stay the proceedings pending the ruling by the JPML. The airlines contended that the instant case was one of 97 substantially identical cases filed against the defendants as of September 24. All parties agreed that the cases should be centralized and the only issue was where to transfer them.

The court found that the factors of any potential prejudice to the non-moving party, hardship and inequity to the moving party absent a stay, and judicial economy weighed in favor of staying the proceedings pending a decision by the JPML. There was minimal activity in the case since its date of filing, the case will likely be consolidated with the other related cases, and the plaintiff filed no opposition to the defendants’ motion. Continuing the litigation while waiting for the JPML ruling would prove a substantial hardship and inequity to the defendants. Given the number of substantially identical suits filed nationwide, the immediacy of the JPML’s ruling, and the risk of inconsistent outcomes if the stay was not granted, judicial economy was best served by granting the motion to stay, the court concluded.

The case is No. 15-3228.

Attorneys: Daniel E. Becnel, Jr. (Becnel Law Firm, LLC) for Paula A Ates. Amy L. Neuhardt (Boies, Schiller & Flexner, LLP) for Delta Air Lines, Inc. E. Paige Sensenbrenner (Adams & Reese, LLP) for American Airlines, Inc. Mark Aaron Cunningham (Jones Walker) for Southwest Airlines, Co. Howard Shapiro (Proskauer Rose, LLP) for United Airlines Inc.

Companies: Delta Air Lines, Inc.; American Airlines, Inc.; Southwest Airlines, Co.; United Airlines, Inc.

Cases: Antitrust LouisianaNews