In re Domestic Airline Travel Antitrust Litigation

Docket number: 15-mc-1404 (U.S. District Court for District of Columbia)

CCAF attorneys Ted Frank and Frank Bednarz object to settlements with two airlines in In re Domestic Airline Travel Antitrust Litigation because neither the settlement agreements nor notice explain how class members will be compensated. Given the large number of class members—anyone who has booked a domestic flight with the four largest U.S. airlines—the settlements leave open the possibility that the entire settlement fund may be diverted to third party cy pres recipients, a practice that CCAF challenged before the Supreme Court in Frank v. Gaos, which is awaiting decision.

The underlying lawsuit alleged that the four largest airlines—American, Delta, Southwest, and United—conspired to fix prices on domestic air flights by coordinating to limit the number of available seats. The Department of Justice opened an investigation into this alleged price fixing in 2015, but closed it in January 2017 without finding evidence of collusion.

In 2018, Southwest and American settled with the plaintiffs for $15 million and $45 million respectively, amounting to less than five cents per flight over the class period, which spans from 2011 to 2017-18. Litigation against Delta and United continues. While class notice clearly states that class counsel may ask for attorneys’ fees of up to 30% of the settlement fund, not including expenses, neither the notice nor the settlement agreements specify how class members will be compensated. In a previous antitrust settlement, the lead attorney in this case diverted $5.1 million of settlement money away from the class, to fund the development of future litigation, while accomplishing a sizable donations to his alma mater—an abuse so egregious it was cited in the merits brief in the pending case Frank v. Gaos as an example of why Rule 23 should not permit all-cy pres settlements.

To protect against this result, Bednarz and Frank filed an objection asked the court to delay final approval and any award of attorneys’ fees until the actual benefits to class members is known. After the fairness hearing on March 22, 2019, the district court overruled the objections and granted final approval to the settlements with Southwest and American. While it is disputed whether the ruling is final for the purpose of appeal, CCAF has filed an appeal to preserve the objection. Oral argument in the appeal will occur on April 14, 2021.

The D.C. Circuit decided that the order approving the settlement was not a final order under the rules and therefore the appeal lacked jurisdiction. Frank and Bednarz still contend the district court erred when it approved a settlement where the settlement and notice was missing material terms, and will appeal again when a final order issues. The settling parties’ jurisdictional maneuver to oppose Rule 54(b) judgment precludes review now, but the defense attorneys have given the plaintiffs’ attorneys a free option to scuttle the settlement if plaintiffs decide their antitrust case is stronger than they thought in 2018.

The appeal was necessary to avoid being told later that appellate objection to cy pres was forfeited. We are monitoring the case and will appeal again when final judgment issues if our objection is not mooted by the threat of litigation over cy pres.

As of April 2023, the objectors still await final judgement.

Case Documents