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