In Re: Domestic Airline Travel Antitrust Litigation
221 F. Supp. 3d 46
| D.D.C. | 2016Background
- Consolidation: Multidistrict litigation transferred to D.D.C.; 105 consolidated cases alleging four major U.S. carriers (American, Delta, Southwest, United) conspired to restrict capacity and inflate domestic airfares from 2009 to present; plaintiffs seek treble damages for July 1, 2011–present.
- Plaintiffs: purchasers of domestic air travel (individuals and entities) asserting industry‑wide conspiracy (‘capacity discipline’) caused pecuniary injury via artificially high fares.
- Allegations: executives’ public statements (earnings calls, industry conferences, IATA materials) endorsing capacity discipline beginning in 2009; economic evidence showing higher fares/profits despite lower jet fuel costs and stagnant demand; industry features (oligopoly, high entry barriers, fare‑data systems like ATPCO) that facilitate monitoring and coordination.
- Southwest: distinctive business model noted by defendants (point‑to‑point network, all‑inclusive pricing) and announced 2015 capacity increase followed by public statements emphasizing discipline; plaintiffs allege Southwest nonetheless participated.
- Procedural posture: Defendants moved to dismiss under Rules 12(b)(1) and 12(b)(6) for lack of Article III standing and for failure to plead a plausible §1 Sherman Act conspiracy; Court denied the motion in full and ordered answers.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Article III standing (injury in fact) | Plaintiffs paid artificially inflated fares during the alleged conspiracy; industry‑wide injury sufficient without route‑level specificity | Plaintiffs must identify specific routes/city‑pairs affected and show they purchased on those routes | Court: standing satisfied; alleged economic injury from inflated fares is a classic injury‑in‑fact; route‑level specificity not required at pleading stage |
| Pleading a §1 Sherman Act conspiracy | Alleged parallel conduct (capacity discipline across carriers) plus circumstantial "plus factors": executive statements, industry structure, economic anomalies, ATPCO monitoring, Southwest responses | No direct ‘‘smoking gun’’; allegations are isolated, insufficient; plaintiffs must plead specific agreement terms and route details; courts should consider defendants’ documentary exhibits | Court: Complaint plausibly alleges a §1 claim via parallel conduct coupled with plus factors; plaintiffs need not plead direct evidence or city‑pair detail at this stage; must be viewed holistically |
| Use of extrinsic documents on motion to dismiss | Plaintiffs relied on cited public statements and data in the complaint | Defendants asked court to consider full texts of 39 exhibits and other documents to rebut plaintiffs’ selective quotations and undermine inferences | Court: declined to incorporate or judicially notice uncited portions; refused to resolve factual disputes on 12(b)(6); limited consideration to complaint and permissible materials |
| Southwest‑specific participation | Plaintiffs point to Southwest executives’ capacity statements, re‑joining ATPCO, common shareholders, and industry trends | Southwest emphasized distinct business model, prior disruptive role, and that its 2015 growth announcement shows non‑participation | Court: allegations suffice to plausibly allege Southwest’s participation; differences in business model do not preclude liability at pleading stage |
Key Cases Cited
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007) (parallel conduct requires plus factors to plead an agreement under §1)
- Ashcroft v. Iqbal, 556 U.S. 662 (2009) (complaint must contain factual enhancements showing plausibility)
- Lujan v. Defenders of Wildlife, 504 U.S. 555 (1992) (Article III standing requirements: injury, causation, redressability)
- Monsanto Co. v. Spray‑Rite Serv. Corp., 465 U.S. 752 (1984) (conspiracy may be proven by direct or circumstantial evidence showing a conscious commitment to a common scheme)
- Am. Needle, Inc. v. Nat’l Football League, 560 U.S. 183 (2010) (§1 applies only to concerted action that restrains trade)
- Osborn v. Visa, Inc., 797 F.3d 1057 (D.C. Cir. 2015) (economic harm is a classic injury‑in‑fact; courts should not evaluate empirical economic theories on 12(b)(1) beyond plausibility)