Plaintiffs in one of the two remaining
travel agent lawsuits stemming from the loss of airline commissions
are struggling to keep their case alive.
A federal court
dismissed the agents' case last fall, saying it lacked plausible
evidence of a conspiracy to set airline commissions. The agents
have requested reconsideration at the district court level and have
filed notice that they will appeal to a higher court if
necessary.
The agents launched
their case in San Francisco in 2003 on behalf of nearly 50 named
agencies. The lead plaintiff is Tamalpais Travel in Corte Madera,
Calif.
Charging conspiracy,
the agencies sued 21 airlines, seeking damages for lost
commissions, beginning with the September 1997 cuts. The lawsuit is
not a class action.
The case was moved to
the U.S. District Court in Cleveland so a single judge could hear
three similarly structured cases.
In the latest
developments, 11 carriers filed motions to dismiss the Tamalpais
case on the grounds it did not meet new standards, spelled out in a
2007 Supreme Court decision, for bringing a conspiracy case to
court. That decision, dubbed Twombly for one of the plaintiffs,
held that a plaintiff must state a claim that is "plausible on its
face" and must offer the court "enough factual matter (taken as
true) to suggest an agreement was made."
The carriers' charged
that the Tamalpais case failed to meet the "plausibility standard,"
therefore the antitrust claims must be dismissed. Also, Delta,
Northwest and United said claims against them had already been
discharged by bankruptcy courts.
The court essentially
agreed with the carriers. The agencies had cited carriers' quick
moves to match commission cuts as evidence of an agreement, but the
court said "assertion of parallel conduct alone" did not meet the
Twombly standard. The court also said it was not sufficient to
assert that the carriers had an opportunity to conspire or to note
that commission rates were widely publicized and thus easy to
match.
In addition, the
court permanently enjoined the agencies from pursuing antitrust
claims against Delta, Northwest and United.
The plaintiffs asked
the district court to reconsider.
For one thing, they
said in a court document, "No one ever said this case only concerns
parallel conduct." On another point, the plaintiffs said that the
allegation was not that commission rates were widely known but that
"some plaintiffs were told on the QT" about cuts in
advance.
They said the court
looked at the agencies' evidence in fragments, failing to consider
the cumulative package.
In addition, they
said, the formerly bankrupt carriers effectively rejoined the
conspiracy to cut pay by continuing, after emergence from
bankruptcy, to withhold pay from most agencies. The agencies argued
each failure to pay was an overt act "in furtherance of the
conspiracy."
The Tamalpais case
had been one of three similar lawsuits. Plaintiffs in one case
dropped their suit in 2005.
The lead plaintiff in
the other antitrust lawsuit is Swope Travel in Beaumont, Texas. The
Swope case was not challenged by the airlines in the wake of the
Supreme Court's Twombly decision.
Its plaintiffs took a
different approach, naming only three carriers -- American,
Continental and Delta -- as well as Orbitz. They contended the
creation of Orbitz was an agreement to control the ticketing of air
transportation and that the online agency's airline founders had to
get rid of agents and force consumers to Orbitz.
To
contact the reporter who wrote this article, send e-mail to Nadine
Godwin at [email protected].