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US Airways, Inc. v. Sabre Holdings Corpopation

United States District Court, S.D. New York

March 5, 2015

US AIRWAYS, INC., Plaintiff,
v.
SABRE HOLDINGS CORPOPATION, et al., Defendants.

OPINION AND ORDER

LORNA G. SCHOFIELD, District Judge.

An Order and Opinion dated January 6, 2015, granted in part and denied in part a motion for summary judgment filed by Defendants Sabre Holdings Corporation, Sabre Travel International Ltd., and Sabre GLBL Inc. (collectively, "Sabre") ("Opinion"). By notice of motion filed under seal on January 12, 2015, Plaintiff moves for reconsideration of the portions of the Opinion (1) granting Sabre's motion for summary judgment on Plaintiff's claim for damages arising out of an agreement entered into by the parties in 2006 ("2006 Agreement"); and (2) granting Sabre's motion for summary judgment on Plaintiff's claim for lost profits arising out of Sabre's alleged refusal to implement Plaintiff's preferred seating program, Choice Seats ("Motion"). For the reasons that follow, the Motion is denied.

I. BACKGROUND

For purposes of the Motion, relevant facts and procedural history are as follows.[1] On April 1, 2014, Sabre filed its motion for summary judgment, asserting, inter alia, that Plaintiff's claims under the 2006 Agreement were time-barred and that Plaintiffs claim for lost profits due to Sabre's failure to implement Choice Seats did not constitute antitrust injury. Both issues were fully briefed by the parties, and summary judgment was granted in Sabre's favor on both grounds.

A. Statute of Limitations

On the statute of limitations defense, Plaintiff argued that its overcharge damages "accrued only as it paid each excessive segment fee to Sabre." In making that argument, Plaintiff relied on the holding in Berkey Photo, Inc. v. Eastman Kodak Co., 603 F.2d 263, 295 (2d Cir. 1979), where the Second Circuit found that a Section 2 monopoly cause of action by a purchaser who paid overcharges as a result of the monopolist's conduct accrues on the date of payment. In the alternative, Plaintiff argued that its damages were overly speculative at the time the 2006 Agreement was executed and therefore fell within the "speculative damages" exception to the general accrual rule enunciated in Zenith Radio Corp. v. Hazeltine Research, Inc., 401 U.S. 321 (1971). In Zenith, the Court held, with two limited exceptions, that an antitrust cause of action "accrues and the statute begins to run when a defendant commits an act that injures a plaintiffs business." Id. at 338. The two exceptions the Zenith Court identified were the speculative damages exception, and the continuing violation exception. Under the first exception, which applies only where future damages are "speculative or... unprovable, " a cause of action accrues on the date the damages are suffered. Id. at 339. Under the second exception, where an antitrust violation is of a continuing nature, a cause of action accrues "whenever the defendant commits an overt act in furtherance of an antitrust conspiracy or, in the absence of an antitrust conspiracy, commits an act that by its very nature is a continuing antitrust violation." Kaiser Aluminum & Chemical Sales, Inc. v. Avondale Shipyards, Inc., 677 F.2d 1045, 1051 (5th Cir. 1982) (citing Zenith, 401 U.S. at 338-40).

By Order dated October 7, 2014, the Court directed the parties to appear for oral argument to "address the statute of limitations arguments presented in the briefing and any additional authority supporting their respective arguments" and "to submit via ECF any legal authority upon which they wish to rely at oral argument that has not been cited in prior briefing." (Emphasis added). On October 13, 2014, each party submitted additional authorities, with Plaintiff submitting Hanover Shoe, Inc. v. United Shoe Machinery Corp., 185 F.Supp. 826 (M.D. Pa. 1960), Hanover Shoe, Inc., v. United Shoe Machinery Corp., 245 F.Supp. 258 (M.D. Pa. 1965), National Souvenir Ctr., Inc. v. Historic Figures, Inc., 728 F.2d 503 (D.C. Cir. 1984) and Andrea Theatres, Inc. v. Theatre Confections, Inc., 787 F.2d 59 (2d Cir. 1986).

On October 14, 2014, oral argument was held. Plaintiff appeared to have abandoned both of its prior arguments in favor of an entirely new argument, that the 2006 Agreement was a "contract outside of the limitations period that has ongoing anticompetitive effects and hann during the limitations period that is distinct from the mere payment of an overcharge during the limitations period." According to Plaintiff, the cases it submitted on October 13 supported its new theory. Plaintiff expressly disavowed reliance on the continuing violation exception.

The Opinion held that, consistent with Zenith's general accrual rule, Plaintiff's cause of action for overcharges under the 2006 Agreement accrued on the date of that agreement's execution, because the injury alleged by Plaintiff - the overcharges - was fixed by the terms of the 2006 Agreement. It declined to extend Berkey's holding - made in the context of a section 2 monopoly case - to Plaintiff's section 1 claim, for reasons articulated in the Opinion. It similarly rejected Plaintiff's alternative argument regarding the speculative damages exception, finding that the facts of the case did not warrant application of that exception. It did not expressly address the new theory that Plaintiff raised at oral argument.

B. Choice Seats

On the Choice Seats claim, Plaintiff argued in its opposition to Sabre's motion for summary judgment that Plaintiff suffered damages in the form of lost profits from Sabre's failure to implement Plaintiff's Choice Seats product. Plaintiff asserted that Sabre imposed both vertical restraints on Choice Seats, because it used "its market power to suppress competition and avoid the expense of state of the art distribution, like U.S. Airways' Choice Seats offering, " and horizontal restraints, by conspiring with its competitors to resist implementation of the "push model" used for Choice Seats.

The Opinion concluded that the Choice Seats damages did not constitute antitrust injury for two reasons. First, on the vertical restraints argument, the Opinion reasoned that a company's decision to adopt or not adopt a new product, such as Choice Seats, is typically considered a business decision immune from antitrust scrutiny. Second, on the horizontal restraints argument, the Opinion found that the antitrust laws should not facilitate the foisting of a particular product on a company or group of companies, but that a decision by competitors to refuse a particular product "could run afoul of the antitrust laws, if a plaintiff were able to show that the collective decision harmed competition, for example, by reducing output or restricting prices." Plaintiff, however, had not shown that the refusal to implement Choice Seats, even if collective, had harmed competition in such a way.

II. STANDARD

The standard for granting a motion for reconsideration is "strict, and reconsideration will generally be denied unless the moving party can point to controlling decisions or data that the court overlooked." Analytical Surveys, Inc. v. Tonga Partners, L.P., 684 F.3d 36, 52 (2d Cir. 2012) (citation and internal quotation marks omitted). "A motion for reconsideration should be granted only when the defendant identifies an intervening change of controlling law, the availability of new evidence, or the need to correct a clear error or prevent manifest injustice." Kolel Beth Yechiel Mechil of Tartikov, Inc. v. YLL Irrevocable Trust, 729 F.3d 99, 104 (2d Cir. 2013) (citation and internal quotation marks omitted). A motion for reconsideration is "not a vehicle for relitigating old issues, presenting the case under new theories, securing a rehearing on the merits, or otherwise taking a second bite at the apple." Analytical Surveys, 684 F.3d ...


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