In re Domestic Airline Travel Antitrust Litigation

378 F.Supp.3d 10

IN RE DOMESTIC AIRLINE TRAVEL ANTITRUST LITIGATION

This Document Relates To: All Cases

MDL Docket No. 2656

Misc. No. 15-1404 (CKK)

United States District Court, District of Columbia.

Filed May 13, 2019

MEMORANDUM OPINION

(May 9, 2019)

COLLEEN KOLLAR-KOTELLY, UNITED STATES DISTRICT JUDGE

Presently before the Court is Plaintiffs' [299] Motion for Final Approval of Settlement Agreements with Southwest Airlines Co. and American Airlines, Inc. ("Pls. Motion"). Class Plaintiffs, on their own behalf and on behalf of the Settlement Classes, as defined herein, move for final approval of the settlements ("Settlements") reached with Defendants Southwest Airlines Co. ("Southwest") and American Airlines, Inc. ("American"). Plaintiffs' Motion, which is fully briefed and ripe for adjudication, was the subject of a March 22, 2019 Fairness Hearing, where the following persons gave oral presentations: Michael Hausfeld and Adam Zapala, Interim Class Counsel (hereinafter referred to as "Settlement Class Counsel"); Roberta Liebenberg, Counsel for Southwest; Richard Parker, Counsel for American, and Class Members Theodore Frank and Michael Suessmann. Counsel for Non-Settling Defendants Delta Air Lines, Inc. and United Airlines, Inc. were also present in the courtroom, as were several other Class Members.

Upon consideration of the pleadings,¹ the relevant legal authorities, and the entire record in this case, the Court GRANTS Plaintiffs' [299] Motion for Final Approval of Settlement Agreements with Southwest and American for the reasons described herein.

I. BACKGROUND

A. The Multidistrict Litigation

The United States Judicial Panel on Multidistrict Litigation ("the Panel") consolidated 23 actions pending in seven districts involving claims that four major airlines —Southwest, American, Delta Air Lines, Inc. ("Delta"), and United Airlines, Inc. ("United") — violated Section 1 of the Sherman Act, 15 U.S.C. § 1, by colluding to limit capacity and increase prices for domestic airfares. The Panel transferred these consolidated actions to this Court on October 13, 2015. The Panel subsequently transferred additional related actions to be consolidated into the instant litigation, and at present, there are a total of 105 cases consolidated in this action.

On October 30, 2015, the Court entered its [4] Initial Practice and Procedure Order Upon Transfer Pursuant to 28 U.S.C. § 1407, in which the Court set out a general outline of how it intended to proceed in this matter. On February 4, 2016, the Court appointed Hausfeld LLP and Cotchett, Pitre & McCarthy LLP as Interim Co-Lead Counsel ("Settlement Class Counsel"), and on March 25, 2016, Plaintiffs filed their Consolidated Amended Class Action Complaint. See Order Appointing Plaintiffs' Interim Class Counsel, ECF No. 76 ; Consolidated Amended Class Action Complaint, ECF No. 91. On May 11, 2016, Defendants filed their [106] Motion to Dismiss Plaintiffs' Consolidated Amended Complaint, which was denied by this Court. See Order, ECF No. 123 ; Memorandum Opinion, ECF No. 124. The Court entered a [152] Scheduling Order on January 30, 2017; discovery commenced shortly thereafter and continues for the two Non-Settling Defendants, Delta and United. Fact discovery closes on July 31, 2019; summary judgment motions, if any, are due on December 16, 2019; and a class certification briefing schedule will be determined following resolution of any summary judgment motions. See Stipulated Am. Sch. Order, ECF No. 290.

B. The Settlements with Southwest and American

On December 27, 2017, Plaintiffs filed their [196] Motion for Preliminary Approval of Settlement with Defendant Southwest Airlines Co., which included a declaration by counsel in support of the motion, and a copy of the Plaintiffs' Settlement Agreement with Southwest ("Southwest Settlement Agreement"). Pursuant to the Southwest Settlement Agreement, Southwest stipulates to the certification of the following Settlement Class:

All persons and entities that purchased air passenger transportation services for flights within the United States and its territories and the District of Columbia from Defendants or any predecessor, subsidiary or affiliate thereof, at any time between July 1, 2011 and December 20, 2017. Excluded from the class are governmental entities, Defendants, any parent, subsidiary or affiliate thereof, Defendants' officers, directors, employees, and immediate families and any judges or justices assigned to hear any aspect of this action.

Southwest Settlement Agreement, ECF No. 196-2 (Ex. A), at 10; Pls.' Mem., ECF No. 299-1, at 6.

The Southwest Settlement Agreement is considered an "ice-breaker settlement" because it is the first settlement in the litigation. The Southwest Settlement Agreement requires Southwest to make a $ 15 million cash payment. Southwest is required further to significantly cooperate with Plaintiffs regarding the pursuit of their case against the Non-Settling Defendants by: (1) providing a full account of information known to Southwest that is relevant to the claims asserted in the Action; (2) arranging an informational meeting or meetings between Settlement Class Counsel and an industry expert, with some payment provided by Southwest; (3) using its best efforts to make available for interviews up to seven current or former Southwest employees at the Vice President level or lower; (4) using its best efforts to make available for depositions up to three current or former Southwest employees; (5) using its best efforts to make available up to two current or former Southwest employees to provide a declaration or affidavit; (6) providing information gathered from senior executive management through an attorney proffer session, and using best efforts to later provide some of it in an affidavit or declaration; and (7) using its best efforts to make available for testimony at trial one then-current Southwest employee at the Vice President level or lower who possesses information that would assist the Plaintiffs at trial. Southwest Settlement Agreement, ECF No. 196-2 (Ex. A). In exchange for the payment of cash and cooperation, Settlement Class Members release Southwest from any and all claims that were or could have been alleged in this legal action arising out of the identical factual predicate. The Southwest Settlement was preliminarily approved by this Court on January 3, 2018. See Order Preliminarily Approving Settlement with Defendant Southwest, ECF No. 197. Settlement Class Counsel was ordered to submit to the Court for approval a Notice Plan for purposes of advising the Settlement Class members of their rights.

On March 23, 2018, Plaintiffs' filed their [218] Motion for Approval of Settlement Notice Program, and in connection with the documentation filed with that [218] Motion, the Court instructed the Plaintiffs to provide additional information. See April 16, 2018 Minute Order; April 25, 2018 Minute Order.

On June 15, 2018, Plaintiffs filed their [248] Motion for Preliminary Approval of Settlement with Defendant American Airlines, Inc., which included a declaration by counsel in support of the motion, and a copy of the Settlement Agreement with American ("American Settlement Agreement"). Pursuant to American Settlement Agreement, American stipulates to the certification of the following Settlement Class:

All persons and entities that purchased air passenger transportation services for flights within the United States and its territories and the District of Columbia from Defendants or any predecessor, subsidiary or affiliate thereof, at any time between July 1, 2011 and June 14, 2018. Excluded from the class are governmental entities, Defendants, any parent, subsidiary or affiliate thereof, Defendants' officers, directors, employees, and immediate families and any judges or justices assigned to hear any aspect of this action.

American Settlement Agreement, ECF No. 248-1 (Ex. A) at 10; Pls.' Mem., ECF No. 299-1, at 13.

The settlement with American requires it to make a $ 45 million cash payment. American is required further to significantly cooperate with Plaintiffs regarding the pursuit of their case against the Non-Settling Defendants by: (1) responding to questions regarding American's documents and transactional data; (2) using its best efforts to make available for depositions up to three current or former American employees; (3) using its best efforts to make available current and former American employees, for the provision of declarations, certifications, and affidavits regarding the authenticity and certification of documents; and (4) at Plaintiffs' request, meet and confer regarding additional deposition, declarations and/or affidavits. American Settlement Agreement, ECF No. 248-2 (Ex. A) at 18-20. In exchange for the payment of cash and cooperation, Settlement Class Members release American from any and all claims that were or could have been alleged in this legal action arising out of the identical factual predicate.²

On June 16, 2018, this Court granted preliminary approval of the Plaintiffs' settlement with Defendant American. Order granting Motion for Preliminary Approval of Settlement with Defendant American Airlines, Inc., ECF No. 249. On August 2, 2018, Plaintiffs made a [257] Motion for Approval of Settlement Notice Program, which combined notice for both the Southwest and American Settlements. The Notice Program proposed direct notice by email, to be supplemented by publication through print and media outlets, as well as additional online services. The Settlement Notice Program was approved by this Court in its [267] Order and [268] Memorandum Opinion, wherein the Court deemed that the proposed notice via email and publication was the "best notice practicable under the circumstances of this case[,]" consistent with the standard set forth in Fed. R. Civ. P. 23(c)(2)(B). Memorandum Opinion, ECF No. 268, at 6, 13; Fed. R. Civ. P. 23 (c)(2)(B) (requiring the court to direct to class members "the...