MDL Request Against Four Majors U.S. Airlines Approved
The Airline Carriers Delta, American, United and Southwest have been named as defendants in a number of antitrust lawsuits recently transferred into multidistrict litigation by the Judicial Panel on Multidistrict Litigation.
Thursday, October 29, 2015 - A motion to transfer lawsuits pending against four of the largest airline carriers in the U.S. into multidistrict litigation was approved following the Judicial Panel on Multidistrict Litigation (JPML) October hearing session. The allegations claim that Delta Airlines Inc., American Airlines Inc., Southwest Airlines Co. and United Airlines Inc. conspired to artificially raise the prices of airline tickets for travelers and in doing so violated the antitrust laws laid out in the Sherman Act.
23 lawsuits were consolidated as a result of the transfer order, which also mentioned 69 additional tag-along actions that will more than likely be added to the MDL. The actions were transferred to the District Court of the District of Columbia, where they will be heard before U.S. District Judge Colleen Kollar-Kotelly. It will be the justice‘s first time presiding over a multidistrict litigation.
The allegations at the heart of the MDL lawsuits claim that Delta Airlines Inc., American Airlines Inc., Southwest Airlines Co. and United Airlines Inc. all agreed to unilaterally raise airline prices in attempt to circumvent competition between the airlines and boost their revenue streams. The plaintiffs claimed that the airlines, which combined to make up roughly 80 percent of the country‘s airline market, kept the capacity on their flights artificially low. This caused for less travelers to be able to fit on each flight, driving up the demand and cost for those seats when more could have been made available by the companies.
The U.S. Department of Justice began looking into the allegations against the airline companies in July and announced they would look into the practice of generating price hikes in regards to limiting to seat capacity. This includes claims that airline would unnecessarily limit unprofitable flights if they determined that having less flights available for particular destinations would allow them to bump up the price for those trips. If one airline conducted such a scheme, the others may step in with a lower price and keep the practice from happening. However, the lawsuits claim that because the airlines worked in collusion with each other, they were able to avoid this outcome and eliminate competition among airlines and collectively suppress seat capacity and raise prices.
Plaintiffs involved in the motion to transfer had disparate requests for the district to which they wanted the MDL to be centralized. Twelve plaintiffs in potential tag-along actions requested the Northern District of Illinois federal court. The federal court in the Eastern District Of New York received support from the plaintiffs in six actions. The Northern District of California and the Southern District of New York federal courts also received support, but it was the District of the District of Columbia federal court with the support of plaintiffs from two actions that eventually received the green light from the JPML.
Plaintiffs are seeking to recover damages caused by the price hikes the defendants allegedly orchestrated and are seeking to receive reimbursements for the flights that were affected by this practice. The decision to centralize the lawsuits came after 4 separate motions to transfer were filed before the JPML.
