Lawyers on both coasts are engaged in a furious tug of war, each
side trying to convince travel agents that its case has the best
chance of winning billions of dollars from the airlines.
Soon, agents are going to have to decide which suit to
support.
The first suit, set to go to trial in April, was initiated by
Sarah Hall, a North Carolina travel agent. It alleges that airlines
expressly agreed among themselves to eliminate commissions.
Senior U.S. Judge W. Earl Britt recently ruled that the suit has
class-action status, agreeing that Hall’s suit can be pursued on
behalf of other agents as they have the same grounds for
action.
Judge Britt concluded: “Plaintiffs have made a threshold showing
that a conspiracy to cut, cap or eliminate travel agents’ base
commissions, if proven, would have had a common impact for members
of that proposed class.”
The decision is the most significant development yet in the
3-year-old lawsuit a class action can lead to larger awards than a
individual’s suit would, making the case economically feasible for
the lawyers to pursue.
The second suit, which has not yet achieved class-action status,
is set for trial in July. Albany Travel of Albany, Calif. is the
plaintiff, and Blecher & Collins of Los Angeles is the law
firm.
The Albany suit alleges: “Various airlines each decided to
eliminate commissions as part of their scheme to dominate the
distribution of airline tickets through Orbitz.”
The North Carolina and California cases “are based on
fundamentally different theories,” said attorney Maxwell Blecher.
“We believe ours is a tight fit with the evidence.”
So, which case has the better chance of success? It depends on
who is talking.
“What has to be proved for the two cases is quite a bit
different,” said Rob Noblin, another attorney in the Albany action.
In the North Carolina case, he said, plaintiffs must prove “that
the airlines, at some level, communicated with each other ahead of
time and agreed, at least implicitly, to reduce and then eliminate
commissions.”
He maintained that will be hard to prove.
However, Hall’s attorney, Henry L. “Andy” Anderson of Anderson,
Daniel & Coxe in North Carolina, has a different opinion. He
said that his investigators and expert witnesses have “amassed
overwhelming evidence, including direct evidence, of the cartel
fix.”
He contends that a jury verdict against the carriers “is a
no-brainer.”
California attorneys are using a different argument.
Noblin said: “What we have to prove is that when they reduced or
eliminated commissions even doing it independently they were doing
it pursuant to this overall plan to make Orbitz the dominant player
in the ticket-distribution market.”
That, asserted the California attorney, reduces the requirement
of proof.
As for travel agents, Blecher said that those who become party
to the Hall case might be legally barred from later participating
in the Albany case. Why not participate in both suits, and double
the chances of winning? It can’t be done, said Noblin.
“If you’re in both, your fate is going to be dictated by
whichever one concludes first,” he said. “If it’s an unfavorable
result, you’re going to be bound by that. It won’t do you any good
if the second class wins.”
J.C. Poindexter, professor at North Carolina State University,
has estimated that travel agents have lost some $13.5 billion in
commissions during recent years. Under federal antitrust laws, jury
awards are tripled automatically so the damages could amount to $40
billion.
If the airlines lose, however, there will be a lengthy appeals
process and no one is sure how the struggling carriers would find
such large sums of money anyway.
Still, agents will need to choose which suit to join, the Albany
attorneys said.
If the law firms’ statements sound like tit-for-tat political
ads, in a way, they are.
“It’s almost like an election,” Noblin said.
ARE YOU IN OR OUT?
The mechanics of joining a class-action suit are
straightforward.
When the court decides that a suit has class-action status,
notification is sent to members of that classin this case, travel
agents, said Rob Noblin, an attorney for Albany Travel.
As a general rule, class members automatically are considered
parties in the suit unless they explicitly opt out.
If the plaintiff prevails, Noblin said, any award is divided
among the class members who were parties in the suit.
Jerry Chandler
