In re Airline Ticket Com'n Antitrust Litigation, 02-1639.

• Decision Date: 04 October 2002
• Docket Number: No. 02-1639.,02-1639.
• Citation: 307 F.3d 679
• Parties: In re: AIRLINE TICKET COMMISSION ANTITRUST LITIGATION Travel Network, Ltd., a New Jersey corporation, individually and on behalf of all others similarly situated, Plaintiff/Appellee, American Society of Travel Agents, Plaintiff/Appellant, National Association for Public Interest Law, Intervenor on Appeal, v. United Air Lines, Inc.; American Airlines, Inc.; Continental Airlines, Inc.; Delta Air Lines, Inc.; Northwest Airlines, Inc.; USAirways, Inc., Defendants.
• Court: U.S. Court of Appeals — Eighth Circuit

307 F.3d 679

In re: AIRLINE TICKET COMMISSION ANTITRUST LITIGATION

Travel Network, Ltd., a New Jersey corporation, individually and on behalf of all others similarly situated, Plaintiff/Appellee, American Society of Travel Agents, Plaintiff/Appellant, National Association for Public Interest Law, Intervenor on Appeal, v. United Air Lines, Inc.; American Airlines, Inc.; Continental Airlines, Inc.; Delta Air Lines, Inc.; Northwest Airlines, Inc.; USAirways, Inc., Defendants.

No. 02-1639.

United States Court of Appeals, Eighth Circuit.

Submitted: September 9, 2002.

Filed: October 4, 2002.

Rehearing and Rehearing En Banc Denied: November 18, 2002.

Eric J. Magnuson, argued, Minneapolis, MN (John R. Neve, Minneapolis, MN, Paul M. Ruden, Burton J. Rubin, Alexandria, VA, on the brief), for appellant.

Stephen C. Willey, argued, Menlo Park, CA (Matthew T. Findley, Menlo Park, CA, Julia A. Hatcher, Washington, DC, Robert A. Skirnick, New York City, on the brief), for appellee.

Before LOKEN, FAGG, and RILEY, Circuit Judges.

RILEY, Circuit Judge.

This class action lawsuit was filed against several major airlines by travel agencies, individual travel agents, and the American Society of Travel Agents (ASTA). The case settled in 1996. After the class members were paid under the settlement agreement, some settlement funds remained unclaimed and undistributed. The district court initially ordered a cy pres distribution of these funds to several organizations, including educational and charitable institutions in the vicinity of Minneapolis, Minnesota. We reversed that decision on appeal. In re Airline Ticket Comm'n Antitrust Litig., 268 F.3d 619 (8th Cir.2001). When the case was remanded, the district court ordered the funds distributed to the National Association for Public Interest Law (NAPIL). Today we reverse that decision as well. We remand the case for a distribution of the unclaimed funds to travel agencies in Puerto Rico and the U.S. Virgin Islands and, if necessary, further distribution consistent with our two opinions in this case.

I. BACKGROUND

The named plaintiffs brought this class action lawsuit on behalf of travel agencies and agents, alleging violations of the Sherman Antitrust Act, 15 U.S.C. §§ 1 & 2. They claimed seven major airlines colluded in order to place caps on commissions paid to travel agents. By 1996, all of the original parties had settled the lawsuit. Because the district court could not locate all of the class members, approximately $500,000 of the settlement funds was left undistributed. (That figure has now grown to approximately $600,000.)

ASTA proposed that the district court distribute the unclaimed funds to 578 travel agencies in Puerto Rico and the U.S. Virgin Islands. ASTA first argued that the travel agencies were included in the class of plaintiffs, which the class certification order limited to "travel agencies in the United States." ASTA also argued that if the Puerto Rican and U.S. Virgin Islands travel agencies were not class members, the district court should nevertheless distribute the unclaimed funds to them, as the next best recipients, under the doctrine of cy pres. The district court rejected both arguments and ordered that the unclaimed funds be distributed to a list of organizations recommended by liaison counsel. This list included three Minnesota law schools and several Minnesota charities.

ASTA appealed, and we affirmed, in part, and reversed, in part. In re Airline Ticket Comm'n Antitrust Litig., 268 F.3d at 626. We affirmed the district court's determination that the travel agencies in Puerto Rico and the U.S. Virgin Islands were not part of the class. Id. at 622-25. However, we set aside the cy pres award. Id. at 626. In reversing, we considered ASTA's proposal that the funds be distributed to agencies in Puerto Rico and the U.S. Virgin Islands, but wondered "whether travel agencies in other United States territories and possessions, such as Guam or American Samoa, which were affected by the caps also would be entitled to a cy pres distribution." Id. Finding the district court had not "carefully weighed all of the considerations" necessary to tailor an award to the parties' original intentions, we remanded the case for "a distribution or distributions more closely related to the origin of this nation-wide class action case concerning caps on commissions paid to travel agencies." Id.

On remand, ASTA again sought to have the funds distributed to travel agencies in Puerto Rico and the U.S. Virgin Islands. Counsel for ASTA also informed the district court of ASTA's "current understanding that travel agents in Guam and American Samoa were not in fact subject to the airline commission caps." ASTA suggested that counsel for the airlines could confirm its understanding. No contrary evidence was offered, and the district court did not otherwise receive any information contradicting this statement.

NAPIL also sought to receive the funds.¹ In its application, NAPIL explained its commitment to public interest law and described some of its programs. NAPIL also documented its success in obtaining cy pres distributions from other courts. NAPIL did not, however, draw any connection between its purposes and the subject matter of this class action lawsuit.

The district court decided to distribute all of the unclaimed funds to NAPIL. The court did not address ASTA's statement that agents in Guam and American Samoa were not subject to the caps. Instead, it held ASTA's proposal would be "an inappropriate distribution for reasons previously discussed and approved by the Court of Appeals in its opinion." Determining that "there simply are no immediate, obvious, or automatic entities clearly entitled to the funds," the court awarded the funds to NAPIL. The district court ordered the money "be used to support attorneys providing legal services to low income clients by paying the interest on grant recipients' outstanding student loans."

ASTA now appeals the district court's award to NAPIL, arguing that the district court abused its discretion and did not follow our mandate. NAPIL has intervened on appeal. First, NAPIL contends ASTA lacks standing to assert the interests of travel agencies in Puerto Rico and the U.S. Virgin Islands. Second, NAPIL contends those travel agencies are not appropriate recipients of the funds. Finally, NAPIL concludes that its own nationwide work in the area of public interest law makes it a suitable cy pres recipient. Neither the defendant airlines nor any of the other plaintiffs have taken a position on who should receive the unclaimed funds.

II. DISCUSSION

A. Standing of ASTA

As an initial matter, we reject NAPIL's assertion that ASTA lacks standing to contest the distribution. According to the complaint, ASTA has members in "about 16,000 locations throughout the continental United States, Hawaii, Alaska, Puerto Rico, and the U.S. Virgin Islands." (The emphasis is our own.) ASTA has standing to bring this appeal on behalf of its members in Puerto Rico and the Virgin Islands, whose individual participation is not required to resolve the cy pres issue. See Hunt v. Wash. State Apple Adver. Comm'n, 432 U.S. 333, 343-44, 97 S.Ct. 2434, 53 L.Ed.2d 383 (1977).

B. The Cy Pres Distribution

We generally review a district court's cy pres distribution for an abuse of discretion. In re Airline Ticket Comm'n Antitrust Litig., 268 F.3d at 625. On remand, however, the district court's discretion is limited by the terms of our prior mandate, and we retain authority to determine whether the terms of the mandate were scrupulously carried out. See Duncan Energy Co. v. United States Forest Serv., 109 F.3d 497, 499 (8th Cir.1997).

The cy pres doctrine takes its name from the Norman French expression, cy pres comme possible, which means "as near as possible." In re Airline Ticket Comm'n Antitrust Litig., 268 F.3d at 625 (citing Democratic Cent. Comm. v. Washington Metro. Area Transit Comm'n, 84 F.3d 451, 455 n. 1 (D.C.Cir.1996)). The doctrine originated to save testamentary charitable gifts that would otherwise fail. See Note, Damage Distribution in Class Actions: The Cy Pres Remedy, 39 U. Chi. L. Rev. 448, 452 (1972). Under cy pres, if the testator had a general charitable intent, the court will look for an alternate recipient that will best serve the gift's original purpose. See id. In the class action context, it may be appropriate for a court to use cy pres principles to distribute unclaimed funds. In such a case, the unclaimed funds should be distributed for a purpose as near as possible to the legitimate objectives underlying the lawsuit, the interests of class members, and the interests of those similarly situated. See In re Airline Ticket Comm'n Antitrust Litig., 268 F.3d at 625-26.

In Powell v. Georgia-Pacific Corporation, 119 F.3d 703 (8th Cir.1997), we approved a cy pres distribution that is instructive in this case. Powell involved a class of African American workers who alleged the Georgia-Pacific Corporation had violated their rights under Title VII. Id. at 704. After the class members...