In re Transpacific Passenger Air
| Decision Date | 09 May 2011 |
| Docket Number | No. C 07-05634 CRB,C 07-05634 CRB |
| Parties | IN RE TRANSPACIFIC PASSENGER AIR TRANSPORTATION ANTITRUST LITIGATION This Document Relates to: ALL ACTIONS |
| Court | U.S. District Court — Northern District of California |
This case involves allegations that 26 airlines engaged in a ten year international conspiracy to fix the prices of transpacific air passenger travel, in violation of Section 1 of the Sherman Antitrust Act, 15 U.S.C. § 1. In November 2009, the Court denied a Motion to Dismiss filed by Continental Airlines. See dkt. 278. The remaining Defendants subsequently filed thirteen additional Motions to Dismiss, see dkt. 287, 288, 290, 293, 294, 295, 299, 300, 303, 304, 310, 311, 312, which the Court herein grants in part and denies in part.1
According to the Consolidated Amended Complaint ("CAC"), Defendants are various airlines that agreed to fix, raise, maintain, and/or stabilize air passenger travel, including associated surcharges, for international flights between the United States and Asia/Oceania.2 CAC ¶¶ 1-2. Plaintiffs are a class of individuals who purchased air transportation services from one or more of the Defendants that included at least one flight segment between the United States and Asia/Oceania. CAC ¶¶ 8-21. The CAC alleges that, beginning no later than January 1, 2000, Defendants and their co-conspirators3 agreed, and began, to impose air passengers air fare increases, including fuel surcharge increases, that were in substantial lockstep both in their timing and amount. CAC ¶ 2.
Now pending are thirteen motions to dismiss. They are:
Under Federal Rule of Civil Procedure 12(b)(6), a party may move to dismiss a cause of action which fails to state a claim upon which relief can be granted. On a motion to dismiss, all well-pleaded allegations of material fact are taken as true and construed in the light most favorable to the non-moving party. Wyler-Summit Partnership v. Turner Broadcasting System, Inc., 135 F.3d 658, 661 (9th Cir. 1998). To survive a Rule 12(b)(6) motion to dismiss, the complaint must state a claim to relief that is "plausible on its face." Ashcroft v. Iqbal,---U.S. —, —, 129 S.Ct. 1937, 1949, 173 L.Ed.2d 868 (2009). A claim has "facial plausibility" when the pleaded factual allegations "allow the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Id.
Under Federal Rule of Civil Procedure 12(b)(1), a complaint may be dismissed for lack of subject matter jurisdiction. Though the defendant makes the motion, the plaintiff bears the burden of establishing subject matter jurisdiction. See Kokkonen v. Guardian Life Ins. Co. of America, 511 U.S. 375, 377 (1994); Stock West, Inc. v. Confederated Tribes of the Colville Reservation, 873 F.2d 1221, 1225 (9th Cir. 1989). A Rule 12(b)(1) jurisdictional attack may be facial or factual. See Safe Air v. Meyer, 373 F.3d 1035, 1039 (9th Cir. 2004). "In a facial attack, the challenger asserts that the allegations contained in a complaint are insufficient on their face to invoke federal jurisdiction." Id. In resolving a facial attack, a motion will be granted if the complaint, when considered in its entirety, on its face fails to allege facts sufficient to establish subject matter jurisdiction. See, e.g., Savage v. Glendale Union High School, 343 F.3d 1036, 1040 n.2 (9th Cir. 2003).
All Defendants bring a Consolidated Motion to Dismiss, which makes three primary arguments: (A) the foreign injury claims are barred by the FTAIA; (B) the damages claims are barred by the filed rate doctrine; and © the CAC has not been adequately pleaded. See generally Mot. (dkt. 290). As explained below, the Court finds one of the three persuasive.
Defendants argue that the FTAIA, 15 U.S.C. § 6a, bars the Court from exercising subject matter jurisdiction over Plaintiffs' claims of foreign injury-that is, the overcharges associated with flights originating in Asia. Id. at 8. The FTAIA limits the courts' subject matter jurisdiction over Sherman Act claims involving foreign commerce. It provides in part:
15 U.S.C. § 6a (emphasis added). Defendants argue that the FTAIA bars Plaintiffs' foreign injury claims, because such claims (a) do not involve import commerce; and (b) do not have domestic effects that give rise to Plaintiffs' foreign claims. See Mot. at 9-16. The Court agrees.
The CAC alleges that "Defendants are engaged in the business of delivering air passengers from place to place," and that "[p]ursuant to the FTAIA, the delivery of air passengers from airports in Asia/Oceania to airports in the United States and vice versa constitutes or involves import trade or import commerce." CAC ¶ 48. In support of this assertion, Plaintiffs rely on a dictionary definition of import that defines the verb "import" but not the noun. See Opp'n (dkt. 339) at 5 (). They contend that "[i]dentical allegations to those set forth in the CAC have been thoroughly examined in the Air Cargo action4 and have been found to pass muster," id. at 5-6, without acknowledging that there are significant differencesbetween cargo and (most) people.5 Plaintiffs also cite to a variety of cases from vastly different legal contexts in which courts have used the word "import" as something that can be done to a person. See id. at 7 (). And Plaintiffs rely on outdated, pre-FTAIA authority. Id. at 8. These arguments are unavailing.
Faced with a similar argument, that "passengers traveling from Korea to the U.S. are 'a type of import, '" the court in In re Korean Air Lines Co., Ltd. Antitrust Litigation, Case No. MDL 07-01891, 2008 U.S. Dist. LEXIS 111722, at *18 (C.D. Cal. 2008) (internal quotation marks omitted), held that "the sole authority offered in support of [Plaintiffs'] position is strained and without context." The court concluded that "[a]ir passengers are not products like the oriental rugs that were found to be the object of import commerce in Carpet Group, 227 F.3d at 72, 6 and Plaintiffs have failed to make a strong case for why they should be treated as such." Id.
Courts addressing this issue focus on "whether the conduct of defendants, not plaintiffs, involves 'import trade or commerce.'" See, e.g., Turicentro, S.A. v. Am. Airlines Inc., 303 F.3d 293, 303 (3d Cir. 2002). The Third Circuit has noted that the FTAIA "does not define the term 'import, ' but the term generally denotes a product (or perhaps a service) [that] has been brought into the United States from abroad." Id. Thus, in Turicentro, the court held that a conspiracy to set commissions paid to travel agents for bookings services on passenger flights outside the United States did not involve "import commerce" even though some of the flights were for...
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