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POWER TRAVEL INTERNATIONAL, INC. v. AMERICAN AIRLINES

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,
v.
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

OPINION

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.

Prior Proceedings

  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 5, 2005.

  The Reconsideration Standard

  The parties are not in disagreement as to the standard for reconsideration.

  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 "[1] controlling questions of law [2] as to which there is substantial ground for difference of opinion and that [3] 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. 1990).
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[1], 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 case.").

  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 issue.

  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.

  Conclusion

  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.

20050519

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