Ninth Circuit Declines to Apply Filed Rate Doctrine to Airfares

On April 14, 2017, the United States Court of Appeals for the Ninth Circuit affirmed the district court’s partial denial of All Nippon Airways, EVA Airways, and China Airlines’ motions for summary judgment, holding that the filed rate doctrine does not bar an antitrust class action challenging the airlines’ unfiled fares, fuel surcharges, and special discount fares. This marked the first time the Ninth Circuit addressed the application of the filed rate doctrine to airfares and fees.

Cotchett, Pitre & McCarthy, LLP represents plaintiffs that purchased airfare from one of more defendant airlines that included at least one flight segment between the United States and Asia/Oceania. In this multidistrict litigation, plaintiffs allege that various airlines colluded to fix the prices of certain passenger tickets and fuel surcharges on flights between the United States and Asia/Oceania between January 1, 2000 and the present in violation of Section 1 of the Sherman Antitrust Act.

The filed rate doctrine is a judicial rule prohibiting individuals from asserting antitrust claims against an entity’s government agency-approved rates. Agreeing with the district court, the three-judge panel echoed that the filed rate doctrine did not apply to defendant airlines’ unfiled fares, fuel surcharges, or special discount fares because there were factual disputes as to whether the United States Department of Transportation (“DOT”) was regulating fares and surcharges that airlines did not directly filed with the DOT.

In the decision by Judge Milan D. Smith Jr., the Ninth Circuit asserted that the doctrine does not preclude plaintiffs’ antitrust claims based on unfiled fares because there was a genuine issue of material fact as to whether the effectively abdicated its authority over such airfares. “[T]he evidence shows that the DOT’s actual actions regarding unfiled fares have been minimal at best,” Judge Smith acknowledged.

The panel stressed that there were also genuine issues of material fact as to whether the DOT exercised its regulatory authority over fuel surcharges and discount fares because regardless of its intent, it was unclear whether the DOT had the ability and capacity to regulate such surcharges and fares. As to fuel surcharges, Judge Smith remarked, “[S]ummary judgment based on the application of the filed rate doctrine was inappropriate in light of the DOT’s express statement that it lacks the ability to ‘effectively monitor’ fuel surcharges.” Further, in addressing one airline’s discount fares, which differed in both price and terms from the airline’s filed fares, the panel explained it was unclear whether the discount fares constituted the same product as the filed fares. “[T]he terms of the unfiled discount tickets differed substantially from those of the filed fares,” Judge Smith wrote. These material factual disputes must therefore be settled at trial.

Judge Wallace issued a separate concurrence and dissent, writing that while he agreed with “the bulk of the majority’s well-reasoned opinion,” he opined that any claims relating to fuel surcharges filed with the DOT should have been dismissed under the filed rate doctrine. 

The 28-page decision is available at http://cdn.ca9.uscourts.gov/datastore/opinions/2017/04/14/15-15362.pdf. This case--In re Transpacific Passenger Air Transportation Antitrust Litigation, No. 07-CV-5634-CRB (N.D. Cal.)--began in 2007. Ten years later, defendant airlines continue to fight the litigation. The remaining defendants cannot employ federal price regulations, however, to evade price-fixing claims.