First Class case against Sabre moves forward

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WASHINGTON -- First Class International agreed to pay Sabre $30,000 if it loses an appeal on a pending lawsuit that alleges the computer reservations system conspired with American Airlines to steal its clients.

The agreement could help advance the 3-year-old case, which seeks unspecified damages, forward to trial, said Stephen Gardner, attorney for the Newport Beach, Calif.-based agency.

"It is something we have been pushing for and finally they agreed to it," Gardner said.

"The probability was excellent that my client would come out owing money," Gardner said. "So what we agreed to do was to pay Sabre to the penny what we offered to pay American three years ago before we brought the lawsuit."

Gardner said there is still some question over whether First Class is liable for Sabre's attorneys' fees, which could run in excess of $100,000.

Gardner said it could be several months before the presiding judge has an opportunity to review the agreement.

The agreement is the latest legal maneuver in a case that has been closely watched by the trade because of its far-reaching implications.

At issue is a contractual dispute between First Class, American and Sabre.

However, the judge presiding over the case ruled that a pre-emption clause within the Airline Deregulation Act of 1978 prohibits the agency, and ostensibly any other agency, from using state laws to sue an airline over alleged abuses.

The judge also determined that contract disputes between agencies and airlines should be settled by the Transportation Department.

First Class filed a complaint with the DOT, while maintaining its contention that private business disputes are beyond the DOT's scope. So far, the DOT has not responded.

But once the judge approves First Class' agreement with Sabre, Gardner said the agency will file an appeal, essentially turning the clock back and starting the case all over.

"If we lose, the [$30,000] judgment becomes enforceable and we have to pay it," Gardner said. "But I am very sanguine that the court of appeals will reverse the broad set of pre-emptions. I'm not promising we will win on every aspect of it. But I don't think pre-emption can be applied to a situation where you can steal business and get away with it."

Sabre officials had no comment on the case.

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