US Airways v. Sabre Holdings Corporation
US Airways, Inc., for American Airlines, Inc. as Successor and Real Party in Interest v. Sabre Holdings Corporation
- Lorna Schofield
- 1:11-cv-02725
- U.S. District Court · Southern District of New York
- 7
In US Airways v. Sabre, Judge Schofield ruled that US Airways may recover more-than-zero reasonable attorneys’ fees under the Clayton Act.
US Airways, Inc., acting for American Airlines, may recover a nonzero amount of reasonable attorneys’ fees from the Sabre defendants under the Clayton Act, but the final amount remained to be determined. The ruling rejected Sabre’s objection that the fee award should be zero.
What happened
US Airways, Inc., acting for American Airlines, won a Sherman Act monopolization claim against Sabre after a second trial, but received only one dollar in nominal damages, trebled to three dollars. The jury rejected US Airways’ separate claim involving contract restraints.
US Airways then sought attorneys’ fees and litigation costs. Sabre argued that the fee award should be zero because US Airways received only nominal damages. A magistrate judge recommended finding US Airways eligible for reasonable fees, subject to a later reduction and determination of the amount.
Judge Lorna G. Schofield overruled Sabre’s objections and adopted the recommendation in full. She held that the Clayton Act requires a person injured by antitrust violations to recover reasonable attorneys’ fees, and that the amount must be determined later; the court did not set the final fee amount in this opinion.
The detailed version
- US Airways v. Sabre Holdings Corporation · No. 1:11-cv-02725
- Lorna Schofield
- June 1, 2023
Background
US Airways, Inc. ("US Air"), acting for American Airlines, brought federal antitrust claims against Sabre Holdings Corporation, Sabre GLBL Inc., and Sabre Travel International Limited (collectively, "Sabre"). The claims sought treble damages and litigation costs, including reasonable attorneys’ fees. After a second trial, the jury found for US Air on its claim that Sabre monopolized a market in violation of section 2 of the Sherman Act. The jury rejected US Air’s claim concerning contract restraints under section 1 of the Sherman Act. It awarded one dollar in nominal damages, which was trebled to three dollars under section 4 of the Clayton Act.
US Air moved for attorneys’ fees and costs. The motion was referred to Magistrate Judge James L. Cott, who first addressed whether US Air was entitled to fees and whether any reduction was warranted before considering the amount. Judge Cott recommended finding that US Air was entitled to reasonable attorneys’ fees, subject to a downward adjustment after additional briefing. Sabre objected, arguing that US Air should receive no fees because its damages award was nominal. US Air responded to the objections.
Court’s analysis
The district court reviewed the challenged portions of the recommendation anew. Section 4 of the Clayton Act provides that a person injured in business or property by an antitrust violation shall recover three times the damages sustained and the cost of suit, including a reasonable attorneys’ fee. The court concluded that the jury’s finding that Sabre’s exclusionary conduct injured US Air placed US Air within that provision.
The court rejected Sabre’s argument that Farrar v. Hobby required a fee award of zero. Farrar involved a civil-rights claim, nominal damages, and a fee statute that made an award discretionary. The Clayton Act, by contrast, makes recovery of a reasonable attorneys’ fee mandatory for a person injured by an antitrust violation. The court stated that reasonableness, including whether a downward adjustment is appropriate, must be evaluated during the later stage of fee briefing.
The court also held that the Second Circuit’s decision in U.S. Football League v. National Football League controlled. That case likewise involved a section 2 monopolization verdict, one dollar in nominal damages, unsuccessful additional claims, and a request for attorneys’ fees. The Second Circuit held that finding an antitrust injury made an attorneys’ fee award compulsory, regardless of the amount of damages. The district court found no error in the unchallenged portions of the recommendation.
Disposition
The court overruled Sabre’s objections and adopted the Report and Recommendation in full. As a result, US Air was found entitled to reasonable attorneys’ fees in an amount greater than zero under the Clayton Act, subject to a possible downward adjustment and later determination of the amount. The opinion did not determine the final amount of fees. The clerk was directed to close the motion at Docket No. 1266.
Read the full 7-page opinion on CourtListener, the free public archive maintained by the Free Law Project.