Antitrust Law Daily Wrap Up, ANTITRUST—SDNY: Travel Company Sabre Not Permitted to Assert Counterclaim in Action Brought by US Airways, (Apr 8, 2013)

By Jeffrey May, J.D.

The federal district court in New York City on Friday denied a request from Sabre Holdings Corporation and related entities to amend their answer to an antitrust complaint filed by US Airways, Inc. to include an antitrust counterclaim against the carrier. Even assuming that Sabre’s delay was justifiable, allowing Sabre leave to add a counterclaim would prejudice US Airways, the court concluded (US Airways, Inc. v. Sabre Holdings Corp., April 5, 2013, Cedarbaum, M.).

In April 2011, US Airways filed an antitrust complaint against Sabre. According to the court, the "case currently centers on allegations … that Sabre has entered into horizontal and vertical agreements in restraint of trade in violation of Section 1 of the Sherman Act."

Almost two years after the complaint was filed, Sabre moved on January 18, 2013, to amend its answer to add an antitrust counterclaim. Sabre alleged that US Airways colluded with other airlines and various other entities to restrict Sabre’s access to "content," such as airline tickets, assigned seats and bag fees, that the global distribution systems (GDSs) can offer to travel agents. In its memorandum of law in support of its motion to add the counterclaim, Sabre argued that there was no undue delay and that it would be some time before discovery was concluded.

In denying Sabre’s request, the court noted the advanced stage of the proceedings and the parties' "hope to bring this case to trial in 2014." The court called "exceptionally, and unrealistically, optimistic" Sabre's contention that allowing its counterclaim would have "no appreciable impact on discovery."

The court also suggested that permitting Sabre’s counterclaim would make the trial itself unmanageable. "Expanding the case to encompass the actions of a host of additional entities will inevitably expand the scope, length and complexity of trial."

The court opined that even if Sabre had asserted its counterclaim at the beginning of the case, it might have been severed to be presented at a separate trial. The court said that if Sabre wished to assert an antitrust claim against US Airways, it would have to do so in a different action.

The case is 11 Civ. 2725 (MGC).

Attorneys: Charles P. Diamond (O'Melveny & Myers LLP) for US Airways, Inc. George S. Cary (Cleary Gottlieb Steen & Hamilton LLP) for Sabre Holdings Corp.

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

Cases: Antitrust NewYorkNews.