US Airways v. Sabre Holdings Corporation

Background

US Airways brought claims under Sections 1 and 2 of the Sherman Act against Sabre Holdings Corporation, Sabre Travel International Ltd., and Sabre GLBL Inc., collectively called Sabre. Sabre operates a global distribution system that connects airlines with travel agencies. US Airways challenged provisions in contracts signed in 2006 and 2011 that required it to provide Sabre the same flight and fare content available through other channels, offer prices no higher than those charged elsewhere, refrain from steering customers away from Sabre, and avoid surcharges on Sabre bookings. US Airways also alleged that Sabre engaged in other conduct that maintained monopoly power.

A jury had previously found for US Airways on its Section 1 claim, but the Court of Appeals vacated the award and sent the case back for further proceedings. The Court of Appeals also reinstated US Airways’ Section 2 claim, which had earlier been dismissed.

Expert-testimony motion

Sabre asked the court to exclude testimony from US Airways’ damages expert, Dr. Rosa Abrantes-Metz, under Federal Rule of Evidence 702. The court explained that this rule requires expert testimony to be relevant, based on sufficient facts, grounded in reliable methods, and reliably applied to the case.

The court rejected Sabre’s challenges to Dr. Abrantes-Metz’s estimates of overcharge and lost-profit damages. It held that her models appropriately addressed the hypothetical competitive market, and that Sabre’s criticisms concerning price sensitivity, demand, and opportunity costs generally went to the weight of her opinions rather than whether the opinions were admissible. The court therefore denied Sabre’s motion to exclude her testimony.

Summary-judgment motion

Sabre also sought summary judgment, which would have resolved claims or issues without a trial. Sabre argued that some damages were barred by the statute of limitations, that the connection between its conduct and US Airways’ injury was too speculative, and that US Airways lacked sufficient evidence of monopoly power.

The court granted Sabre’s request to exclude damages arising from the 2006 contract—those incurred before the 2011 contract took effect on February 23, 2011. The court reasoned that, under the Court of Appeals’ prior ruling in this case, payments under the 2006 contract were manifestations of the earlier contract rather than new acts that restarted the limitations period.

The court did not bar damages based on other alleged anticompetitive conduct, including retaliatory costs, exclusionary contracts with travel agents, and efforts to thwart potential competitors. Those damages could proceed if US Airways proved that the conduct was independent of the 2006 contract, that Sabre had monopoly power when it acted, and that the resulting injury occurred within the four-year limitations period.

The court also rejected Sabre’s arguments that US Airways’ causation and damages theories were too speculative. It found that expert testimony described multiple ways a more competitive market could have developed and that the involvement of other participants was reasonable because the case concerned a two-sided market.

Finally, the court held that a reasonable jury could find monopoly power in either a Sabre-only market or the broader market for global distribution services connecting airlines and traditional travel agencies. The evidence included Sabre’s market share, high and stable prices, excessive profits, barriers to entry, lack of successful entry by a competing global distribution system, and alleged conduct discouraging competition. The court stated that the jury, rather than the court on summary judgment, should weigh that evidence.

Disposition

Judge Lorna G. Schofield denied Sabre’s Daubert motion. She granted in part and denied in part Sabre’s motion for summary judgment: the request to exclude damages arising from the 2006 contract was granted, while damages arising from other anticompetitive conduct were not precluded, and the motion was otherwise denied. Sabre’s request for oral argument was denied as moot. The clerk was directed to strike the opinion identified as Docket No. 1129.