Passenger antitrust class action alleges ticket, fuel surcharge and discount fare price fixing

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In this week’s article, we discuss the case of Wortman v. All Nippon Airways, 854 F. 3d 606 (9th Cir. 2017) wherein a class of airline passengers alleged that defendant airlines violated the provisions of Section 1 of the Sherman Antitrust Act by colluding to fix the prices of tickets, fuel surcharges and special discount fares. Specifically, the Court sought to determine the extent to which the filed rate doctrine applies to airline fares and fees and, if so, whether the Wortman antitrust class action is precluded from being litigated. “The filed rate doctrine is a judicially created rule that prohibits individuals from asserting civil antitrust challenges to an entity’s agency-approved rates”, in this case, filed rates approved by the U.S. Department of Transportation (DOT).

Trying To Get Home To Houston

In Minsberg, Between Vacation and Disaster: Trying to Get Home to Houston, nytimes (8/31/2017) it was noted that “Many Houston residents who were out of town when Hurricane Harvey made landfall are stuck between home and somewhere else. More than 9,300 flights have been canceled to and from Houston’s major airports-George Bush International Airport, the city’s largest, and William P. Hobby Airport-since the storm made landfall on Friday according to FlightAware…The uncertain situation has left many Houston residents away from home longer than expected, on what some are calling an unwanted ad unexpected ‘hurrication’”.

Terror Targets Update

Marawi, Philippines

In Solomon & Villamor, In City of Ruins, Philippines’ Battle Against ISIS Rages On, nytimes (9/1/2017) it was noted that “The houses still standing after more than three months of fierce urban combat in Marawi are barely holding on-pocked with bullet holes on the outside and blackened by fire from within…With the battle now past the 100-day mark, it was the first time in months that the military had allowed the press in…Marawi and the surrounding area…is now a mostly emptied-out field of wreckage, contested by a dwindling group of Islamist militants who claim loyalty to the Islamic State”.

London, England

In Kirkpatrick, Man With 4-Foot Sword Shouted ‘Allahu Akbar’ Outside Buckingham Palace, Police Say, nytimes (8/26/2017) it was noted that “A man arrested outside Buckingham Palace on Friday night had deliberately driven his blue Toyota at a police van, attempted to pull out a four-foot sword and repeatedly shouted ‘Allahu Akbar’…The police identified the man, who is in custody, only as a 26-year-old from Luton”.

In Police Arrest 2nd Man in Buckingham Palace Terror Incident, AP, nytimes (8/27/2017) it was noted that “London police arrested a second man Sunday in connection with a suspect who drove up to a police van…then reached for a 4-foot (1.2 meter) sword, an incident detectives called a terrorism attempt…during the incident…The officers used tear gas to incapacitate the man and arrested him at the scene”.

Madrid, Spain

In Mob attacks hijab-wearing woman in Spain in ‘Islamophobic’ assault, travelwirenews(8/26/2017) it was noted that “A mob in Spain has brutally assaulted a hijab-wearing Muslim woman in the country’s capital of Madrid, in what police described as an ‘Islamophobic’ attack. A group of young men attacked and beat the Muslin woman up in front of the Usera Metro Station in the south of the Spanish capital”.

Brussels, Belgium

In Man shot in Brussels after knife attack on soldiers-report, travelwirenews (8/25/2017) it was noted that “A knife wielding man has been shot in the center of the Belgian capital of Brussels after attacking a group of soldiers…Police confirmed to the Belgian media that the suspect was shot dead…The attacker was a Somalian man about 30 years old who shouted ‘Allahu Akbar’ during his assault”.

Yangon, Myanmar

In US urges Myanmar to avoid reprisals after attack kills 71, travelwirenews (8/26/2017) it was noted that “An attack by ethnic Rohimgya militants in western Myanmar left 12 security personnel and 59 Rohingya Muslims dead in a dramatic escalation of communal violence that had plagued the region …Police fought off groups of as many as 100 Rohingya attackers armed with guns, machetes and homemade grenades”.

In Ongoing Myanmar clashes leave 96 dead, including 6 civilians, travelwirenews (8/27/2017) it was noted that “An announcement posted online…said the death toll from the violence that started Thursday night had reached 96, mostly alleged Rohingya attackers but also 12 security personnel”.

Clovis, New Mexico

In Multiple dead as police respond to active shooter in Clovis, New Mexico, travelwirenews (8/28/2017) it was noted that “Multiple people have been killed, as police confront an active shooter situation at the Clovis-Carver Public Library in Clovis, New Mexico…A suspect has reportedly been taken into custody”.

Bekasi, Indonesia

In Emont, Lynched Over an Amplifier: Mob Justice Alarms Indonesians, nytimes(8/30/2017) it was noted that “His last words were: ‘I’m not a thief’. But the mob, believing he had stolen an amplifier from a mosque, refused to accept the denial. They beat him to death and burned his body as onlookers filmed the proceeding. A triumphant cry went up as he burst into flames…Last month in Surabaya, a large city in East Java, two young men accused of stealing were beaten by a huge crowd and struck with stones…That same month, a video surfaced of residents tying up, interrogating, beating and burning a man on suspicion of stealing in Madura, an island off East Java…In June, a theft suspect in Madura was tied to a tree and fatally beaten by villagers”.

Kenya

In Three civilians killed in Kenya landmine blast, travelwiremews (8/31.2017) it was noted that “Three civilians were killed after their vehicle ran over a landmine on a road near Kenya’s border with Somalia…the fifth such incident in the area in three months. There was no immediate claim of responsibility for the blast”.

Civil Unrest In Ethiopia

In U.S. Department of State: Ethiopia Travel Warning, August 25, 2017, travelwirenews (8/26/2017) it was noted that “The Department of State warns U.S. citizens of the risks of travel to Ethiopia due to the potential for civil unrest and arbitrary detention. There continue to be reports of unrest, particularly in the Gondar region and Bahir Dar in Amhara State and parts of Oromia State”.

Carjacking In Mexico

In Mexico Travel Warning, travelwirenews (8/26/2017) it was noted that “US citizens have been the victims of violent crimes, including homicide, kidnaping, carjacking and robbery in various Mexican states…Gun battles between rival criminal organizations or with Mexican authorities have taken place on streets and in public places during broad daylight …U.S. citizens have been murdered in car jackings and highway robberies, most frequently at night and on isolated roads. Carjackers use a variety of techniques, including roadblocks, bumping/moving vehicles to force them to stop and running vehicles off the road at high speeds”.

ISIS In Bangladesh

In Bangladesh Travel Warning, travelwirenews (8/26/2017) it was noted that “The Department of State is updating this travel warning…While Bangladeshi security forces continue to identify and counter terrorist elements, the Islamic State of Iraq and ash Sham (ISIS) and al-Qaeda in the Indian Subcontinent (AQIS) persist in their efforts to plot and/or carry out terrorist attacks throughout the country. In March, two suicide bombing attempts occurred at Dhaka’s Hazrat Shahjalal International Airport and an explosion in the city of Sylhet killed seven people”.

Missouri “No Safe Space”

In Vora, N.A.A.C.P. to Missouri: You’re No Safe Space (Still), nytimes (8/31/2017) it was noted that “The N.A.A.C.P. has reviewed and decided to retain its recent advisory urging African-Americans to steer clear of Missouri in the wake of the finding that African-Americans are 75 percent more likely to be stopped by the police then whites and after a new state law that the organization said makes it harder to sue businesses for racial discrimination”.

Travel Ban Update

In Kulish, Challenge That Blocked First Trump Travel Ban Is Settled, nytimes (8/31/2017) it was noted that “The legal challenge that helped to free scores of travelers who were detained at airports around the country in the confusing early days of President Trump’s travel ban, prompting thousands of demonstrators to demand their release, was quietly settled… Under the settlement agreement, the federal government is required to identify and a send a letter to every individual who was improperly barred from entering the country under the original travel ban, providing a list of free legal services organizations that can help recipients obtain visas or other entry documents. Approval is not guaranteed, but the government agreed to process their applications in good faith”.

Don’t Get Sick In Germany

In German killer nurse murdered at least 90 patients: Police, travelwirenews (8/28/2017) it was noted that “A make nurse jailed for life two years ago for killing two hospital patients with lethal drug overdoses has murdered at least 90 patients in total, and possibly twice as many, police say, calling it post-war Germany’s worst killing”.

Death In The Alps

In Eight Die in the Alps in Three Climbing Accidents, AP, nytimes (8/27/2017) it was noted that “Eight mountain climbers died in three accidents this weekend in the Austrian and the Italian Alps. The Austrian Red Cross said five mountain climbers died Sunday in the Austrian Alps in Wilfgerlostal on Mount Gabler…and a sixth climber was severely injured…The group of six men…was roped together when they fell in a remote area of the mountain at an altitude of about 6,500 feet”.

$24 Chocolate Cigars, Anyone?

In Rogers, Trump Hotel at Night: Lobbyists, Cabinet Members, $60 Steaks, nytimes (8/25/2017) it was noted that “It was nearing midnight at the Trump International Hotel…In this first tumultuous summer of the Trump Administration, the hotel has cemented its status as a gathering spot for prominent conservatives and a place for the president’s supporters to see, be seen and curry favor with people in power, one $24 chocolate cigar at a time. (The selfies are free). The hotel-a melting pot for Trump family members, Trump surrogates, tourists, YouTube celebrities, journalists…has earned that status in no small part because it is home to the only Washington restaurant that President Trump visits”.

Gelato, Anyone?

In Vora, Five Places to Learn to Make Gelato in Italy, nytimes (8/25/2017) it was noted that “What’s more pleasurable on a vacation to Italy than enjoying a scoop or two of gelato? There may only be one answer, and that’s savoring the gelato you made yourself. Luckily, travelers can now try their hand at the craft of taking one of the several gelato-making classes for amateurs offered throughout Italy…Here are five options…In Turin, IC Bellagio offers a two-hour private class at a popular gelateria…In Padua…Mama Isa, the owner of Mama Isa’s Cooking School, offers a four-hour private gelato-making lesson at her house…In Rome Cooking, a cooking school in Rome…runs a small-group, two hour gelato classes…Also in Rome, Access Europe offers a two-hour class at Giolitti, a gelato shop near the Pantheon that opened in 1900 and is famous for its long lines…In Florence, Florencetown offers a two-hour private gelato class where guests first visit four well-known gelaterias”. Enjoy.

Hotel Time-Share Scam

In Brown, Time-share scam costs Manhattan hotel $6.5M, nydailynews (8/16/2017) it was noted that “A Midtown hotel has agreed to cough up $6.5 million to customers duped into a luxury time-share scam. The Manhattan Club tricked thousands of marks into buying time shares, then rented out rooms to the general public. That meant the time-share owners couldn’t get the rooms they paid for, Attorney General Eric Schneiderman said Wednesday”.

Snakes & Geckos, Anyone?

In Wood, Five Snakes Discovered Inside Package at JFK Airport, msn ( (7/12/2017) it was noted that “Employees at (JFK) Airport’s mail inspection facility discovered five juvenile king cobras and three geckos hidden inside a package last month”.

Uber Uptick In Bookings

In Isaac & Hsu, Uber, Mired in Corporate Scandals, Sees Uptick in Bookings, nytimes (8/23/2017) it was noted that “Uber has spent the past eight months reeling from a series of corporate scandals. Yet those have done little to deter people from hailing an Uber for rides…In the second quarter, Uber’s gross bookings rose to $8.7 billion, up 17 percent from the previous quarter. Uber’s adjusted net revenue-or the amount of money earned after paying out its drivers-jumped to $1,75 billion from $1.5 billion over the same period. Ride requests increased 150 percent from a year ago”.

Uber Settles With FTC

In Uber settles with FTC over privacy and data security promises, consumer.ftc (8/15/2017) it was noted that “Today, the FTC announced it reached an agreement with Uber to settle FTC charges that Uber abandoned its promises to take reasonable steps to protect consumers’ personal information and to make sure that Uber employees only accessed consumer information for appropriate business purposes”.

Travel Law Case Of The Week

In the Wortman case the “Plaintiffs claim antitrust violations by Defendants in connection with three categories of Defendants’ charged rates: (unfiled fares, (2) fuel surcharges and (3) special ‘discount’ fares”.

Base-Fare Filing

“The DOT’s present regulations require airlines to file their base-fare rates to differing extents, depending upon whether a particular airline in included with the Country Category A, B or C. Airlines headquartered in or traveling between the United States and a Category A country need not file any fares…a Category C country must file all fares…a Category B country must file certain, but not all, of their fares. Those fares not required to be filed as the ‘unfiled fares’ at issue in this appeal.

Fuel Surcharge Filing

“[S]ome airlines impose fuel surcharges, which are additional per-ticket fees based on the carrier’s fuel costs. Prior to 2004, the DOT did not permit separate fuel surcharges. Rather, airlines were required to incorporate he costs of fuel into the base ticket price. However, in October 2014, the DOT lifted its prohibition on separate fuel surcharges. The parties dispute whether the DOT required filing of these newly allowed surcharges.

Special Discount Fare Filing

“Defendant ANA offers a number of special ‘discount’ fares (and) files the respective fares with the DOT, then authorizes certain travel agents to sell tickets with more restrictive terms to consumers for amount less than the filed ate. The lesser amount constitutes the ‘net fare’ which travel agents remit to ANA as payment for the ticket”.

The History Of The Filed Rate Doctrine

“The filed rate doctrine is a judicially created rule that prohibits individuals from asserting civil antitrust challenges to an entity’s agency-approved rates. The doctrine originated in Keough v. Chicago & Northwest Railway Co., 260 U.S. 156 (1922). The plaintiffs in that case sought damages under the Sherman Act, alleging that the rates charged by common carriers exceeded those that would be charged in a competitive marker. The rates in question, however, has been filed with, and approved by, the Interstate Commerce Commission (ICC). The Supreme Court held that the plaintiffs’ suit was precluded explaining that ‘[i]njury implies violation of a legal right. The legal rights of the shipper as against carrier in respect to a rate are measured by the published tariff. Unless and until suspended or set aside, this rate is made, for all purposes, the legal rate…The rights as defined by the tariff cannot be varied or enlarged by either contract or tort of the carrier’. The Supreme Court stated that the ‘paramount purpose’ of this rule was to prevent ‘unjust discrimination’ between consumers”.

Regulation of International Airlines

“The Federal Aviation Act of 1958 (FAA) established a regulatory structure for airline rates. The FAA gave the Civil Aeronautics Board- which has since been replaced by the DOT-authority to approve or disapprove international airline rates in service to its responsibility for preventing ‘unfair, deceptive, predatory or anticompetitive practices in air transportation’. The FAA required airlines to file all tariffs with the DOT, and authorized the DOT to hold hearings, either on its own initiative or upon consumer complaint, to determine the lawfulness of those rates”.

Airline Deregulation

“In the late 1970’s, Congress passed (the Airline Deregulation Act (ADA)) intended to increase competition and reduce government regulation in the airline industry. The (ADA) wholly deregulated the domestic airline market, leading the DOT to cease accepted tariff filings for domestic air carriers. In the international airline market, however, Congress stopped short of full deregulation. Under the International Air Transportation Competition Act of 1979 (IATCA), the DOT retained jurisdiction over international airline rates, but had increased discretion over filing requirements”.

Rate Filing Requirements

“In 1997, 20 years after the passage of IATCA, the DOT announced that, in keeping with ‘the continuing evolution of a policy where we rely on market forces rather than continual government oversight to set prices for air transportation’, rate filing no longer served a purpose in competitive foreign markets. Accordingly, in 1999, DOT issued a final rule creating three Country Categories (A, B and C) (as noted above) each with different filing requirements”.

ATPCO Filing Of Tariffs

“Airlines submit tariffs by filing them with the Airline Tariff Publishing Company (ATPCO) which acts as a private clearinghouse to distribute fares to various entities, including the Government Filing System (GFS) through which the DOT reviews filed fares, ATPCO filters submitted fares based the DOT’s country categories and flags certain fares to be ‘presented’ to the DOT for review. The DOT does not consider a fare as filed until it has been so presented, and the DOT does not appear to have access to unrepresented fares”.

The Unfiled Fares

“We have previously applied the filed rate doctrine to circumstances in which the relevant rates were not literally filed. In so doing, we have found that even though the regulating agency did not oversea\e rates vis a filing system, the agency engaged in sufficient regulation through other means to satisfy the purposes of the doctrine. In the present instance, by contrast, we agree with the district court’s determination that there were genuine issues of material fact as to whether the DOT effectively abdicated its authority over the unfiled air fares… We hold that the filed rate doctrine does not preclude Plaintiffs’ antitrust claims premised on the unfiled fares. The parties do not dispute that the DOT had the authority to regulate unfiled rates, only whether it actually did so”.

Fuel Surcharges

“As with unfiled fares, the parties do not contest that the DOT had authority to regulate fuel surcharges, but only whether it actually did so. The district court did not err by finding that genuine issues of material fact regarding the DOT’s exercise of regulatory authority over fuel surcharges precluded entry of summary judgment for defendants…Application of the filed rate doctrine to fuel surcharges does not, however, turn on whether the DOT requires airlines to file those rates. Rather, summary judgment based on the application of the filed rate doctrine was inappropriate in light the DOT’s express statement that it lacks the ability to ‘effectively monitor’ fuel surcharges…In accordance with the DOT’s expression of its inability to regulate fuel surcharges, we decline to apply the filed rate doctrine to preclude Plaintiffs’ claims regarding those charges”.

Discount Fares

“The third category of fares…is that of ANA’s ‘discount’ fares (which) differ in both price and terms from ANA’s filed tariffs. We acknowledge that the filed rate doctrine prohibits suits based not only on a difference between filed and actually-applied rates…but also on any difference between filed and actually-applied terms. However, we have not previously considered the application of the filed rate doctrine to a situation in which both the rate and the terms deviate from those on file with the regulating agency. We face that situation now, and we conclude that the district court did not err in declining to apply the (filed rate) doctrine given the questions of fact regarding whether the discount fares constitute the same product as the fares actually filed”.

Conclusion

“The record as it currently stands indicates that the DOT has not exercised its authority to regulate unfiled airfares, fuel surcharges or discount fares in a manner sufficient to justify the application of the filed rate doctrine”.

tomdickerson | eTurboNews | eTN

The author, Thomas A. Dickerson, is a retired Associate Justice of the Appellate Division, Second Department of the New York State Supreme Court and has been writing about Travel Law for 41 years including his annually updated law books, Travel Law, Law Journal Press (2016), Litigating International Torts in U.S. Courts, Thomson Reuters WestLaw (2016), Class Actions: The Law of 50 States, Law Journal Press (2016) and over 400 legal articles many of which are available at nycourts.gov/courts/9jd/taxcertatd.shtml. For additional travel law news and developments, especially, in the member states of the EU see IFTTA.org

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Hon. Thomas A. Dickerson

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