747 F.3d 145 (2nd Cir. 2014), 12-4867-cv, DPWN Holdings (USA), Inc. v. United Air Lines, Inc.
|Citation:||747 F.3d 145|
|Opinion Judge:||JON O. NEWMAN, Circuit Judge.|
|Party Name:||DPWN HOLDINGS (USA), INCORPORATED, Plaintiff-Counter-Defendant-Appellee, v. UNITED AIR LINES, INC., DBA UNITED AIRLINES, UNITED CONTINENTAL HOLDINGS, INCORPORATED, FKA UAL CORPORATION, Defendants-Counter-Claimants-Appellants|
|Attorney:||Charles A. Rothfeld, Mayer Brown, LLP, Washington, DC (Richard J. Favretto, John Roberti, Michael B. Kimberly, Mayer Brown LLP, Washington, DC, on the brief), for Appellants. J. Peter Coll, Jr., Orrick, Herrington & Sutcliffe LLP, New York, N.Y. (Garret G. Rasmussen, Robert M. Loeb, Rachel Wainer...|
|Judge Panel:||Before: NEWMAN, POOLER, and LIVINGSTON, Circuit Judges.|
|Case Date:||March 27, 2014|
|Court:||United States Courts of Appeals, Court of Appeals for the Second Circuit|
Heard September 30, 2013
Interlocutory appeal from the May 18, 2012, order of the United States District Court for the Eastern District of New York (John Gleeson, District Judge), denying a motion to dismiss a complaint alleging an antitrust claim. Appellants contend the claim was discharged in bankruptcy.
The issue on this interlocutory appeal from an order denying a motion to dismiss an antitrust price-fixing claim is whether
the plaintiff had sufficient notice of the availability of the claim against a Chapter 11 debtor to satisfy due process requirements and render the claim discharged. This issue arises on an appeal by Defendants-Appellants United Air Lines, Inc., DBA United Airlines, and United Continental Holdings, Inc., FKA UAL Corp. (collectively " United" ), from the May 18, 2012, order of the United States District Court for the Eastern District of New York (John Gleeson, District Judge), denying United's motion to dismiss an antitrust complaint brought against it by Plaintiff-Appellee DPWN Holdings (" DHL" ). See DPWN Holdings (USA), Inc. v. United Air Lines, Inc . (" Dist. Ct. Op ." ), 871 F.Supp.2d 143 (E.D.N.Y. 2012).
We conclude that, in the circumstances of this case, the District Court applied an incorrect standard in accepting as true DHL's allegation that it was not aware of, or with due diligence could not have become aware of, sufficient facts to plead an antitrust claim that would survive a motion to dismiss in the context of a bankruptcy proceeding. We therefore remand for further development of the facts concerning (a) what DHL knew or reasonably should have known in time to present an antitrust claim in the bankruptcy proceeding, or to file a late proof of claim or move to amend the reorganization plan and (b) what United knew or reasonably should have known concerning DHL's claim.
Facts concerning the alleged price-fixing conspiracy. Because this appeal is from the denial of a motion to dismiss, the facts regarding United's alleged involvement in the price-fixing conspiracy are taken from DHL's complaint and are assumed to be true. See Bryant v. N.Y. State Education Department, 692 F.3d 202, 210 (2d Cir. 2012). United was a member of the International Air Transport Association (" IATA" ) at all times relevant to this appeal. IATA enjoyed limited antitrust immunity in the European Union through a " block exemption." In 1993, the European Union's Directorate General for Competition (" DGC" ) sent a letter to an official at IATA specifying that the block exemption did not cover the coordinated implementation of surcharges. This letter was shared with IATA members. The United States Department of Transportation (" DOT" ) communicated a similar conclusion to IATA. Nevertheless, in 1993 IATA adopted a surcharge " upon the pretext of recouping increased costs." As a result, the DGC withdrew IATA's block exemption and subsequently denied an application for an individual exemption for the surcharge.
On August 9, 1996, United and two other airlines, Lufthansa and Scandinavian Airlines (" SAS" ) entered into an agreement to provide " globally integrated air transportation services in competition with other carriers and carrier alliances while remaining independent companies." On November 1, 1996, DOT issued an order permitting the alliance and providing it limited antitrust immunity. However, the agreement prohibited the airlines from " exchang[ing] information, discuss[ing], agree[ing] upon, or coordinat[ing] . . . on any subject or in any manner that would cause any Party to contravene (i) any law . . . ."
In early 1997, members of IATA considered joint strategies to manage increases in the price of aviation fuel, including implementing fuel surcharges. At that time, members of IATA considered the antitrust risks of coordinated surcharging. Minutes from an IATA conference on the topic, quoting Andrew Charlton, director of the IATA legal department, stated:
Antitrust laws prohibit competitors reaching any form of agreement, understanding
or arrangement which is likely to have an impact on price. . . . [A] relevant exception is where immunity has been granted by the relevant authority for rates reached pursuant to a particular procedure and within the strict confines of the terms of the approval itself.
. . . Without any immunity, authorities regard with great suspicion any situation where competitors charge the same rate. In the event that there is any evidence whatsoever that competitors have had an opportunity to communicate in any way, and charge the same rate, there is a very strong assumption that they do so having colluded. Until the particular approval is granted for any rate agreed at this conference, that situation would apply. In other words, in my opinion, any airline which moves to charge the rate which is agreed at this conference before government approval, and therefore antitrust immunity, is obtained, would face a very strong evidential presumption that the rate being charged had been agreed between competitors and without antitrust immunity.
On August 7, 1997, IATA approved Resolution 116ss, under which member airlines would introduce a fuel surcharge tied to changes in the spot price of aviation fuel as tracked by...
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