Monday, September 28, 2015 - Four of the largest airline companies in the U.S. have been named as defendants in a series of lawsuits that have been included in a motion to transfer filed by a group of plaintiffs made up of airline passengers. The motion intends to consolidate at least six lawsuits stemming from California, Illinois, New York and the District of Columbia. The claims allege that four major American airlines coordinated to artificially inflate the price of airline tickets for consumers.
The defendants named in the Domestic Airline Travel Antitrust Litigation include the airline companies Delta Airlines Inc., American Airlines Inc., Southwest Airlines Co. and United Airlines Inc., which are facing charges that they colluded in order to raise airline prices in violation of antitrust laws established under the Sherman Act. The Judicial Panel on Multidistrict Litigation (JPML) will hear the arguments for and/or against consolidation this Thursday.
The plaintiffs from two of the three states and the District of Columbia have all filed motions to have the lawsuits transferred to their home district, with California receiving no requests and New York having been named on two separate submissions for the Southern and Eastern District federal courts in the state. The motion to transfer also leaves open the possibility for the addition of tag along lawsuits.
The initial lawsuits came shortly after word spread that the Department of Justice would officially begin looking into the actions taken by the airline companies in July. In addition to price hikes, the Department of Justice announced that they would be investigating the practice of suppressing seat capacity for flights in order to raise ticket prices. Plaintiffs claim that the idea behind the limiting of seat capacity was that as demand rose among consumers, the airlines would suppress their supply so they could charge more for the seats that were made available. The plaintiffs claim that the defendants intentionally began to discontinue flights that were not largely profitable and colluded to do so together as to eliminate competition among the companies. This resulted in artificially high prices for consumers as the airlines did not have to compete with each other for prices or worry about another company beating out their seat capacity standards.
The four defendants named in the lawsuits reportedly control roughly 80 percent of the American airline market. Plaintiffs are seeking to recover damages and possible reimbursements for the illegal fare hikes they claim impacted the price of tickets they purchased while using the services of these airlines. The decision to centralize the lawsuits will come October 1 in New York.
Lawsuits have been filed against the airlines from a number of different states including Minnesota and Pennsylvania, however these are likely to be identified as tag along actions as they are not listed on the JPML hearing session notice as lawsuits involved in the initial motion to transfer. The JPML will hear arguments as to if the lawsuits should be consolidated and where they could potentially be centralized.