"Airline Collusion" Private Class Actions
Last week, we discussed public reports of an investigation by the DOJ of four major airlines (American, Delta, Southwest, and United) regarding possible collusion. Over the past two months, a number of consumers have filed class action complaints against the airlines, putting forward their own theories regarding collusion.
While more than two dozen complaints have been filed to date in various District Courts across the country (including in the Northern District of California, the District for the District of Columbia, the Southern and Middle Districts of Florida, the Northern and Southern Districts of Illinois, the District of Minnesota, the Eastern and Southern Districts of New York, the Eastern District of Pennsylvania, and the Northern District of Texas), they appear to rely on similar facts and theories.
The complaint in Price v. American Airlines Group Inc. is representative of most of the others. The plaintiff alleges that the airlines have colluded with one another to limit the growth of seat capacity on domestic flights, in order to raise the price for those flights as the economy grows and demand rises—a practice she claims is enabled by the consolidation of the airline industry over time. The plaintiff claims that this alleged collusion was maintained through public references to “capacity discipline” (i.e., self-imposed limits on growth) by the airlines, including on earnings calls and in other public fora, and at trade association meetings. Plaintiff alleges that by making such references, each airline assured the others of its commitment to continue to limit seating capacity. The plaintiff claims that this amounts to a horizontal per se violation of Section 1 of the Sherman Act, and seeks damages on behalf of a class of persons who purchased domestic tickets between January 1, 2010 and the present. (Some other plaintiffs have added violations of Section 3 of the Sherman Act—which extends Section 1 to U.S. territories and the District of Columbia—and violations of the Clayton Act.)
Whether the plaintiffs’ claims are found to have any merit will of course depend on factual discovery and motion practice, as well as the results (if any) of the DOJ’s investigation. A number of the actions have already been referred to the Judicial Panel on Multidistrict Litigation as MDL No. 2656, In re Domestic Airline Travel Antitrust Litigation, and a hearing is set for October 1, 2015 in the Daniel Patrick Moynihan United States Courthouse in Manhattan. We will continue to monitor these cases as they progress for any developments of interest.