Antitrust Law Daily Wrap Up, ANTITRUST NEWS: US Airways willing to jettison millions in damages for bench trial, (Apr 29, 2015)

By Greg Hammond, J.D.

US Airways sent a letter to Judge Lorna G. Schofield on Monday, requesting a bench trial in its suit against Sabre Holdings Corp. The airline company stated that it was prepared to forego its stake in “tens of millions of dollars in overcharge damages” arising under a 2011 contract with Sabre (US Airways, Inc. v. Sabre Holdings Corp., Case No. 11 Civ. 2725 (LGS)).

US Airways filed suit in April 2011, claiming that Sabre engaged in anticompetitive conduct in the market for flight and reservation information. Sabre operates a Global Distribution System (GDS)—a computerized system that helps travel suppliers, such as airlines, distribute tickets to travel agents and travelers. US Airways challenged two contracts with Sabre, which were signed in 2006 and 2011. These contracts contained the same basic terms—including challenged “full content” provisions. US Airways alleged that the full content and related terms in its contracts with Sabre were an “unreasonable restraint of trade” in violation of Section 1of the Sherman Act.

The “complexities and the many sophisticated and nuanced economic, accounting and legal arguments the case presents, would likely tax the patience and attention of the average juror who will have to sit through many weeks of testimony,” US Airways wrote. “Given this, the case’s potential game-changing effect on the airline ticket business (not to mention consumers’ pocketbooks), and the importance both sides attach to a credible decision-making process, US Airways believes this lawsuit is most suitably resolved at a bench trial.”

While Sabre is currently entitled to a jury trial, due to US Airways seeking tens of millions of dollars in overcharge damages under the 2011 Sabre contract, US Airways noted its willingness to waive anything but nominal damages and declaratory relief. Specifically, the airline is prepared to submit a formal waiver of its right to receive anything other than: (1) a detailed equitable declaration that the contractual restraints in the 2011 Sabre contract, and Sabre’s understanding with its competitors not to compete away those restraints, violate Section 1 of the Sherman Act; and (2) post-trebled damages not to exceed $20.

US Airways asserts that, after its formal waiver, its claims would only entitle the parties to a bench trial because: (1) there is no right to a jury trial for equitable claims, such as US Airways’ request for declaratory judgment; (2) the right to a jury trial only attaches where the value in controversy is over $20; and (3) US Airways’ claim for a nominal amount of damages ensures that the case remains justiciable.

“To be clear, we are offering to trade damages for a bench trial that could result in an award of nominal damages and a declaration of the lawfulness of Sabre’s contractual restraints having collateral estoppel effect,” US Airways stated. “Though Sabre will be free to offer judgment under Rule 68 (assuming it is willing to pay US Airways’ costs including attorney’s fees), we would not expect that we would be compelled to accept a judgment on the declaratory relief claim having any less collateral estoppel effect than one entered after trial.”

Attorneys: Charles P. Diamond (O’Melveny & Myers LLP) for US Airways, Inc.

Companies: US Airways, Inc.; Sabre Holdings Corp.

News: Antitrust