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McLafferty v. Lufthansa

October 16, 2009


The opinion of the court was delivered by: Pollak, J.


Plaintiff Mieko McLafferty brought this putative class action on behalf of direct purchasers of Europe-Japan passenger air travel for alleged price fixing in violation of the Sherman Act against the defendants, Lufthansa, Air France, KLM, and Alitalia. Defendants filed a motion pursuant to Rule 12(b)(6) to dismiss the plaintiff's First Amended Complaint for failure to state a claim (Docket No. 56). The plaintiff responded (Docket No. 62) and defendants filed a reply brief (Docket No. 65). I ordered further briefing on the court's subject matter jurisdiction (Docket No. 76) to which the plaintiff (Docket No. 78) and defendants (Docket No. 80) responded. The issue of subject matter jurisdiction and the motion to dismiss are ripe for disposition.

I. Background

Plaintiff Mieko McLafferty alleges that she purchased European-Japanese passenger air transportation directly from one or more of the defendants. Am. Compl. ¶ 7. The defendants are foreign airlines, Lufthansa, Air France, KLM, and Alitalia*fn1 that provide European-Japanese air transportation and have sold these airline tickets within the United States. Am. Compl. ¶ 8-11. Plaintiff alleges that the defendants conspired to fix the price of European-Japanese passenger air transportation. Am. Compl. ¶ 26. Plaintiff contends that the conspiracy generally consisted of meeting in person to fix prices, using electronic means to communicate about fixing prices, and monitoring cartel members. Am. Compl. ¶ 27. Specifically, plaintiff alleges that the defendants met at the Traffic Conference of the International Air Transport Association (IATA) in Geneva, Switzerland from July 14-18 of 2003. Am. Compl. ¶ 28. Allegedly, at the Passenger Tariff Conference's Steering Groups in July of 2003, the defendants agreed to impose surcharges on passenger fares between Europe and Japan. Am. Compl. ¶ 29. Plaintiff further alleges that there are related government investigations, including Lufthansa participating in the Department of Justice's (DOJ) corporate leniency program for those that voluntarily report illegal antitrust activity, Am. Compl. ¶ 38-40, a European Commission investigation of the Defendants' conduct, Am. Compl. ¶ 41-45, and consent agreements between Lufthansa and South Africa regarding price fixing. Am. Compl. ¶ 46.

In the footnotes to their original brief, defendants noted their belief that subject matter jurisdiction was lacking, but they appeared to perceive the issue as one that was latent rather than requiring immediate attention, and they did not seek dismissal on that ground. Mem. Of Law in Support of Mot. to Dismiss the First Am. Compl. (Docket No. 56) at 18 n.10. Cognizant that it is the duty of a federal court not to proceed without assurance that the court has subject matter jurisdiction, Huber v. Taylor, 532 F.3d 237, 249 (3d Cir. 2008), acting mea sponte, I ordered briefing of the issue. The question addressed by the supplemental briefs was whether the Foreign Trade Antitrust Improvement Act of 1982 excludes this case from the subject matter jurisdiction of the federal courts. On September 15, 2009, argument was heard on the issue of subject matter jurisdiction and the motion to dismiss.

II. Discussion

The defendants, in their court-ordered supplemental briefing, presented a facial attack on the plaintiff's claim of subject matter jurisdiction. A facial attack, as opposed to a factual one, challenges the sufficiency of the pleadings, and the trial court must accept the complaint's allegations as true. Taliaferro v. Darby Tp. Zoning Bd., 458 F.3d 181, 188 (3d Cir. 2006). Plaintiff, as the party invoking the court's jurisdiction, bears the burden of establishing that jurisdiction exists. Common Cause of Pennsylvania v. Pennsylvania, 558 F.3d 249, 257 (3d Cir. 2009).

The subject matter jurisdiction issue arises under the Foreign Trade Antitrust Improvements Act of 1982 (FTAIA). The FTAIA is an amendment to the Sherman Act which somewhat inartfully states:

Sections 1 to 7 of this title shall not apply to conduct involving trade or commerce (other than import trade or import commerce) with foreign nations unless--

(1) such conduct has a direct, substantial, and reasonably foreseeable effect-

(A) on trade or commerce which is not trade or commerce with foreign nations, or on import trade or import commerce with foreign nations; or

(B) on export trade or export commerce with foreign nations, of a person engaged in such trade or commerce in the United States; and

(2) such effect gives rise to a claim under the provisions of sections 1 to 7 of this title, other than this section.

If sections 1 to 7 of this title apply to such conduct only because of the operation of paragraph (1)(B), then sections 1 to 7 of this title shall apply to such conduct only for injury to export business in the United States. 15 U.S.C. ยง 6a. The FTAIA limits the federal courts' subject matter ...

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