Sabre to Court: US Airways Merger Settles Lawsuit

US Airways’ antitrust lawsuit against Sabre Holdings Corp. is subject to the settlement of the similar American Airlines-Sabre lawsuit, according to Sabre. The settlement was reached in late October.

“Upon combining with American, US Airways became subject to the American/Sabre settlement agreement, including provisions by which American released certain claims and agreed not to seek relief against Sabre for injury suffered after Oct, 30, 2012,” Sabre attorney Steven J. Kaiser wrote to Judge Lorna G. Schofield of the U.S. District Court, Southern District of New York. (Schofield replaced Judge Miriam Goldman Cedarbaum on the case earlier this month.)

The case dates to April 2011, when US Airways accused Sabre Holdings Corp. of “anti-competitive and anti-consumer practices” in a federal civil antitrust lawsuit. The carrier said Sabre had coerced it into accepting a full-content contract earlier that year.

In its filing last week, Sabre argued that the American-Sabre settlement agreement “specifically binds American’s subsidiaries and any entity that merges or consolidates with American – including US Airways – and therefore precludes US Airways’ requests for injunctive relief and at least certain damages.”

Counterpunch
US Airways countered that the gist of Sabre’s argument is that “a settlement agreement it entered into in unrelated litigation with American Airlines and its parent, AMR Corp., over a year before they merged with US Airways, extinguishes US Airways’ claims here.”

Sabre’s move is an “attempt to leverage its American settlement to avoid scrutiny of its conduct,” wrote Andrew J. Frackman, an attorney representing US Airways.

“Sabre could have insisted, and American could have agreed, that upon consummating a merger with US Airways, American or its parent would release the US Airways claims,” Frackman wrote.

“Both Sabre and American knew of the pending US Airways litigation and the potential of a US Airways-American merger at the time they entered their settlement. Yet, they chose not to incorporate language in the release addressing US Airways’ litigation or claims in any manner whatsoever.”

Seeks trial date
Meanwhile, US Airways has asked the court to set a trial date as the case nears its third anniversary, and Sabre filed its Amended Answer to Plaintiff’s First Amended Complaint.

US Airways’ lawsuit accuses Sabre of using its “massive power” over airlines to maintain “antiquated and inefficient technology, to preserve its supra-competitive booking fees and to harm competition.” It charges that Sabre conspired with Travelport and Amadeus in this endeavor.

Sabre denied all the allegations in the amended complaint, which was filed in July 2013.

Judge Schofield ordered the parties to appear for a pre-motion conference on March 12.