Antitrust Law Daily Wrap Up, ANTITRUST NEWS: Airline passengers urge affirmance of $39.5M settlement in air cargo price fixing case, (Jan 6, 2016)

By Linda O’Brien, J.D., LL.M.

A group of air passengers have filed an answering brief with the U.S. Court of Appeals in San Francisco, urging affirmance of the district court’s order approving the combined $39.5 million settlement they made with several airlines in price fixing multidistrict litigation (Wortman v. Societe Air France, Case No. 15-16280).

The plaintiff airline passengers alleged in their complaint that, beginning in 2000, at least 13 airlines participated in a long-running conspiracy to fix the price of international air passenger travel and fuel surcharges. After extensive discovery and overcoming summary judgment motions predicated on the filed-rate doctrine, the plaintiffs settled their claims against eight of the defendants, resulting in an aggregate recovery of $39.5 million. The terms of the settlement are substantially uniform—releasing claims from domestic-originating transpacific air travel— with the exception of the settlement with Japanese Airlines (JAL), which releases claims for both domestic-originating and foreign-originating transpacific air travel.

According to the brief, in granting final approval to the settlement, the district court noted that the presence of one, lone objector out of a class of hundreds of thousands suggested that the settlements were fair. As to the objections raised on appeal, plaintiffs argued that the court correctly ruled against the objector’s argument—that some class members might face varied defenses that, if resolved on the merits against them, could create intra-class conflicts defeating the adequacy requirement under Federal Rule of Civil Procedure 23(a). At the time of settlement, the asserted defenses were contingent on future events, and there is no requirement for class certification that class members state viable claims of exactly the same litigation value, the brief maintained.

There is no heightened scrutiny of the class settlements that is applicable to the particular objections of the dissenter, the plaintiffs contended. There was no disproportionate distribution of settlement funds or inappropriate conflicts of interest or collusive behavior in this case, the brief states. Furthermore, the objector’s contention that the unequal treatment of the JAL settlement class members created a conflict was illusory, since those class members merited compensation for releasing their claims for foreign-originating transpacific air travel. If the objector was dissatisfied with the JAL settlement, she could have excluded herself from the settlement class and preserved her right to sue JAL on her own. However, she failed to do so.

Additionally, the brief argues that the dissenter lacks standing to raise objections concerning an overbroad class definition. The class did not lack temporal boundaries since the end date was defined in the settlement agreements and notice, and all current and potential class members received that notice in advance of Rule 23(c) and (e) deadlines.

Attorneys: Steven N. Williams and Adam J. Zapala (Cotchett, Pitre & McCarthy, LLP) and Michael P. Lehmann and Christopher L. Lebsock (Hausfeld LLP) for Donald Wortman.

Companies: Societe Air France; Malaysian Airline System Berhad; Signapore Airlines Limited; Vietnam Airlines Company Limited; Japan Airlines Company, Ltd.

News: Antitrust