United States District Court, S.D. New York
May 19, 2005.
POWER TRAVEL INTERNATIONAL, INC., on behalf of itself and all others similarly situated, Plaintiffs,
AMERICAN AIRLINES, INC., CONTINENTAL AIRLINES, INC., DELTA AIRLINES, INC., UNITED AIRLINES, INC. and NORTHWEST AIRLINES CORP., Defendants.
The opinion of the court was delivered by: ROBERT SWEET, Senior District Judge
The defendants American Airlines, Inc. ("American"),
Continental Airlines, Inc. ("Continental"), Delta Airlines, Inc.
("Delta"), United Airlines, Inc. ("United"), and Northwest
Airlines Corp. ("Northwest") (collectively the "Defendants") have
moved under Local Civil Rule 6.3 for reconsideration of the
opinion of this Court entered October 29, 2004 (the "Opinion")
denying Delta's motion to strike class allegations from the
complaint of plaintiff Power Travel International, Inc. ("Power
Travel"). In the alternative, the Defendants have moved for a
stay of this action and a certification of the Opinion of the
Court of Appeals pursuant to 28 U.S.C. § 1292(b). For the reasons
set forth below, Defendants' motions are denied.
The Power Travel putative class action complaint was filed in
the Supreme Court of the State of New York and removed to this
Court. It sought damages to travel agents arising out of the
decision by the Defendants to decrease and eliminate commissions
to travel agents who sold airline tickets through the Airlines
Reporting Corporation ("ARC"). The Opinion was preceded by an opinion of April 17, 2003 which
dealt with the motion of the Defendants to dismiss the complaint.
An amended complaint was filed on May 7, 2003.
The Opinion, familiarity with which is assumed, denied Delta's
motion to strike the class action allegations in the amended
complaint on res judicata grounds arising out of the summary
judgment entered on October 30, 2002, dismissing the class action
complaint in Hall v. United Air Lines, 296 F. Supp. 2d 652 (the
"Hall Action"). The denial was based on the Defendants'
acquiescence in the prosecution of this action despite their
having alleged res judicata as an affirmative defense and
having sought a stay of this action to permit preparation for
trial of the Hall Action.
The motion for reconsideration was fully submitted on January
The Reconsideration Standard
The parties are not in disagreement as to the standard for
Local Rule 6.3 provides the requirements for a motion for
reconsideration: "There shall be served with the notice of motion
a memorandum setting forth concisely the matters or controlling decisions which counsel believes the court has overlooked." The
issue then becomes whether or not the Defendants have
demonstrated facts or authorities which were overlooked.
Reconsideration Is Denied
It is recognized that the Opinion is one of a limited number of
decisions dealing with acquiescence to continued litigation as a
bar to the invocation of res judicata. It is also recognized
that the decision of the Defendants to eliminate travel agents'
commissions resulted in litigation of an extended scope and
complexity as described in the Opinion. Notwithstanding, the
Defendants have not demonstrated authorities that were overlooked
and the additional facts advanced are not determinative.
The cases Defendants mention in their motion for
reconsideration are those they cite from the Court's decision:
Kendall v. Avon Prods., Inc., 711 F. Supp. 1178 (S.D.N.Y. 1989)
(also discussed in Power's opposition and Defendants' reply
brief); Calderon Rosado v. General Elec. Circuit Breakers,
Inc., 805 F.2d 1085 (1st Cir. 1986); Brown v. Lockwood,
76 A.D.2d 721, 432 N.Y.S.2d 186 (2d Dep't, 1980); and Diversified
Foods, Inc. v. First National Bank of Boston, 985 F.2d 27 (1st
Cir. 1993) (also argued in Defendants' Reply Brief). The Opinion rejected Defendants' reading of Diversified Foods
advanced in their reply brief. (Defendants' Motion to Strike
Reply Brief at 8, 9).
The Defendants have noted that the defendants in Albany Travel
Co. v. Orbitz LLC, No. 2:02-CV-3459 (C.D. Cal.) (the "Albany
Travel Action") did not include Northwest or Continental.
However, the significance of the Albany Travel Action in the
Opinion related to the distinction between the prompt action
taken there to stay that proceeding in contrast to the absence of
any court action sought in this action to stay this litigation.
This absence of action, according to Power Travel, is explained
by the rulings unfavorable to the Defendants in the Hall Action
prior to the summary judgment decision. (Plaintiff's Memorandum
in Oppos. p. 7-8).
Defendants further explain the difference between the stay
efforts in Albany Travel and the lack thereof in this action by
referencing their motion to dismiss the complaint. However,
neither in that motion nor in any other was the Court requested
to stay this action pending a decision in Hall.
The authorities referred to by the Defendants in this
application were not overlooked. The additional facts referred to
are not determinative and do not warrant reconsideration. Finally, even if it were concluded that the acquiescence
grounds in the Opinion should be reconsidered, which it is not,
the motion to strike the class action allegations would still be
denied on the basis set forth in footnote 6 of the Opinion,
namely the substantial number of opt-outs from the Hall Action.
Certification Is Denied
This Court has previously articulated the requirements for
interlocutory review under 28 U.S.C. § 1292(b) as follows:
Title 28 United States Code section 1292 grants
district courts discretion to issue interlocutory
orders when an issue or issues involve "
controlling questions of law  as to which there is
substantial ground for difference of opinion and that
 an immediate appeal from the order may materially
advance the ultimate termination of the litigation."
28 U.S.C. § 1292(b); see SEC v. Credit Bancorp,
Ltd., 103 F. Supp. 2d 223, 226 (S.D.N.Y. 2000). "The
statute must be strictly construed and `only
exceptional circumstances [will] justify a departure
from the basic policy of postponing appellate review
until after the entry of a final judgment.'" Colon
v. BIC USA, Inc., No. 00 Civ 3666 (SAS), 2001 WL
88230 at *2 (S.D.N.Y. Jan. 30, 2001) (quoting
Klinghoffer v. S.N.C. Achille Lauro, 921 F.2d 21,
25 (2d Cir. 1990)).
Wausau Business Ins. Co. v. Turner Constr. Co.,
151 F. Supp. 2d 488
, 491 (S.D.N.Y. 2001). Courts interpreting this standard have
maintained that "the `question of law' must refer to a `pure'
question of law that the reviewing court `could decide quickly
and clearly without having to study the record.'" See
Ahrenholz v. Board of Trustees of the University of Illinois,
219 F.3d 674
, 676-77 (7th Cir. 2000), quoted in In re Worldcom, Inc., No. M-47 (HB),
2003 WL 21498904 (S.D.N.Y. June 23, 2003).
Courts in the Second Circuit and elsewhere have noted that
certification is appropriate only in "exceptional cases," where
interlocutory review "might avoid protracted and expensive
litigation." Telectronics Proprietary, Ltd. v. Medtronic, Inc.,
690 F. Supp. 170, 172 (S.D.N.Y. 1987), quoted in Wausau,
151 F. Supp. 2d at 492. "Interlocutory appeal was not intended as a
vehicle to provide early review of difficult rulings in hard
cases . . . The benefit to the district court in avoiding an
unnecessary trial must be weighed against the inefficiency of
having the Court of Appeals hear multiple appeals in the same
case." Wausau, 151 F. Supp. 2d at 492 (citing cases).
In addition, the party seeking an interlocutory
appeal has the burden of showing "exceptional
circumstances," see, e.g., Perera v. Cogan,
265 B.R. 32, 34 (S.D.N.Y. 2001); In re Alexander,
248 B.R. 478, 483 (S.D.N.Y. 2000); In re Ionosphere,
179 B.R. 24, 29 (S.D.N.Y. 1995), to overcome the
"general aversion to piecemeal litigation," In re
AroChem Corp., 176 F.3d 610, 619 (2d Cir. 1999), and
to show that the circumstances warrant "a departure
from the basic policy of postponing appellate review
until after entry of a final judgment." Coopers,
437 U.S. 463, 475 (1978); see also Klinghoffer
v. S.N.C. Achille Lauro, 921 F.2d at 25 (2d Cir.
In re Worldcom, Inc., No. M-47 (HB), 2003 WL 21498904, at *10
(S.D.N.Y. June 30, 2003). "The criteria are conjunctive, not disjunctive. `The federal
scheme does not provide for an immediate appeal solely on the
ground that such an appeal may advance the proceedings in the
district court.'" Ahrenholz, 219 F.3d at 676 (quoting
Harriscom Svenska AB v. Harris Corp., 947 F.2d 627
, 631 (2d
Cir. 1991)). See also 19 James Wm. Moore, et al., Moore'
Federal Practice, § 203.31, at 203-86-87 (ed. 1999) ("[I]n
practice the courts treat the statutory criteria as a unitary
requirement, and the decisions granting and discussing
interlocutory appeals under 28 U.S.C. § 1292(b) uniformly cite
all three of the elements as being present in any particular
In the case at hand, Defendants ask this Court to certify the
following question: "Whether a defendant that has asserted a
defense of res judicata and obtained a stay of litigation can
nonetheless be held to waive the defense by the two strategic
litigation decisions relied upon by the district court." As
formulated, the question raises fact-sensitive and specific
questions of the proceedings which would require a review of the
record to determine what the litigation decisions were and what
motivated the Defendants to make those decisions. This is
demonstrated by the charts and graphs submitted by Defendants to
clarify the factual history. See Defendants' Brief at 3, 12
(chart) & n. 10 (referencing attached time-line). In addition, the issue sought to be presented to the Court of
Appeals is not "controlling." The action presumably will proceed
on behalf of class members who opted out of the Hall Action as
described above. However, a decision adverse to Power on class
certification would render Defendants' motion to strike a moot
Stay is Denied
For the same reasons that reconsideration and certification for
interlocutory review are not appropriate here, the Defendants
have failed to make a showing of good cause for a stay. See In
re Currency Conversion Fee Antitrust Litig., MDL 1409, M 21-95
(WHP), 2002 WL 88278, at *1 (S.D.N.Y. Jan. 22, 2002) (quoting
Chrysler Capital Corp. v. Century Power Corp., 137 F.R.D. 209,
209-10) (S.D.N.Y. 1991) (stating "that a stay of discovery is
appropriate pending resolution of a potentially dispositive
motion where the motion `appear[s] to have substantial grounds'
or, stated another way, `do[es] not appear to be without
foundation in law'"); Association Fe Y Allegria v. The Republic
of Ecuador, No. 98-8650 (BSJ), No. 98-8693 (BSJ), 1999 WL
147716, at *1 (S.D.N.Y. Mar. 16, 1999) (stating that a stay of
discovery is appropriate only when resolution of a preliminary
matter may dispose of the entire case). In addition, the delay of a full year that has resulted from
Defendants' unsuccessful motion to strike militates against any
further delay of proceedings, not in favor of it.
For the reasons stated above, the Defendants' motions for
reconsideration or to certify an issue for appeal, and to stay
this action, are denied.
It is so ordered.
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