for siegel mr allen and mr atkins are here for delta air tran and mr russell you may begin when you're ready agreed that would constitute plain price fixing there are three principal differences between that scenario and what happened here but none of them changes the outcome of the first is that defendants dispute our characterization of the substance of air tran communications as inviting delta impose a first bag fee and promises and i was in the follow suit they say it's not an invitation to collude second rather than writing a letter air tran made some of the statements through a public earnings call  as they claim now their leaders were convinced that bad fees don't produce share shift and so they didn't care what their trend if this court was always the case in defendant's favor on either of the first two grounds on the eve of the first two distinctions you will set up a template for lawful price fixing if you say that what air tran said here didn't amount to an invitation to collude coke can write a letter to pepsi in saying look we have the mechanisms in place to raise prices we haven't done so thus far because our main competitor hasn't done  an earnings call should be construed as an all for you know your best interest at home i don't have a case that goes one way or the other about earnings calls we have a case from the ninth circuit that says public nature of  at his deposition well it's going to be up to the jury to decide whether he was lying in his deposition or his line and his e mail that is a quintessential question for a jury to decide but even setting aside fits on how we have their earnings call and i don't think there's any dispute about what they said in that case and if you hold that you can say these kinds of things in an earnings call than coke isn't going to write the letter up to they're just going to say this in an earnings call and as i said the statute doesn't provide any basis for a carve out from its calls in their policy concerns i think are  based on a misconception of what we think is the critical features of the statements here the thing that crossed the line here is the fact that they may they said what they would do in response to price leading they made a contingent statement about what they would do if a competitor did something and that is not what happens in earnings calls and his calls are about saying what we're going to do what we have done they have not cited a single other earnings call in which somebody has made a contingent statement like this much less one that is directed specifically at another competitor and can base of them that you don't have to worry about us following up price leading and that's important because the principal thing that is protecting consumers from monopoly prices in an oligopoly is the price leaders uncertainty about whether it's lead will be followed and what a statement like this does is remove that uncertainty and it doesn't in a way that costs the speaker nothing let me ask you this question the two should light moms might these two individuals talked about is that your best evidence in this case that there was a conspiracy to upright between delta and i are trying and i think they're probably the best evidence but i don't think so the other plus factor that we've identified we call in ordinary price fixing cases you don't have any evidence about the communications between the defendants usually a black box and what you have to rely on is objective evidence of what was going on before and after and so what we have is evidence that air tra said we are not willing to impose this fee ourself they've said we're not willing to act independently they said that to their investors and delta in its value proposition right before it made its decision had calculated that it was in seemingly risky for it to be a price leader that if air tran didn't follow suit they would lose hundreds of millions of dollars and that at the moment before they are trying to earning cause they had no better than a fifty fifty confidence that they're trying to follow suit and it's not credible for them to claim that they went ahead and did in a way what what do you say though about delta's argument they've got a merger pending before the department of justice with northwest the department of justice approves the mar but before the merger was approved northwest is already charging this baggage fee so delta has sort of put in a catch twenty two now their merger partners mike in full one hundred million dollars a year on the baggage price but there is strong evidence that they had to make a decision and they had to choose either we're going to go with delta's no fiero or northwest rule and we have direct evidence from their records that their regional plan was to impose delta's no fee is plaintiff's exhibit one hundred forty nine from gil west who was the person assigned to make this tended to make the proposal to do this and he told his colleague gil granted that his plan was as of september fifth to propose that the current deal fares the delta bag fees for the new deal the post merger airline and then the b matrices that were produced that list the bat fees for the merger airline it was listed as free until after the air tran earnings in addition we have plaintiff's exhibit two hundred fifteen another email from gail west who defended themselves identify as the principal proponent of the bag is the person who does not believe in share shift and he says in that email this is the day before the day of their friends earning call gail has analyzed the book away sensitivity says the revenue management she forwarded me a rough draft of the analysis this is the value proposition sounds like it's about washing terms and net revenue which means we would not implemented first bag fee he doesn't say that the value proposition is premised on share shift and i don't believe in share shift and he doesn't even autopen he's not even open to the possibility that somebody else in the organization is going to think that share shift is not a thing and as a consequence they don't face any real catastrophic risk of imposing this fee unless they're sure that air tran will follow this directly contradicts their claims that they don't care about their time but there's other evidence as well  the last major legacy carrier without one and what he says is quote i assume we still want to hold until air tran moves that is shows that there is an understanding as of september fifth that contrary to their claims that they don't care about what richard anderson the c e o there is ample evidence from which a jury could infer that in fact their sole reason that they give for disbelieving the conclusions of the value proposition that is that they don't believe in share shift just isn't true it's made up it's a their conduct in your briefs you also in addition to the e mails you make reference to what you call back channel communications between go to air tran employees that's right we're kind of where is that in the record now so there are and his superiors at air tran where he is communicating to them probably the most important one is one twenty six where he says he met with somebody very connected on the high level operational and planning side of the house and who told him that delta was waiting on the air trying to make a move and of airline following the merger council focused on the fact that that at the beginning shockingly at the beginning of delta's consideration delta employed go west concluded that delta's position would populate the feed matrix that's on september the fifth on september the twenty six the record reflects that mr gill west department and i think counsel correctly identified that his superior was steve gorman who is the c e o and chief operating officer of delta airlines a nd the lead of the airport customer services or the a c s department that group proposed a budget to the leadership of delta and that budget included charging for our first  so this is a month before mr fanaa rose statement on his earnings call that leadership of a c s was proposing that delta adopt the bag fee and that that would solve some of the budget shortfall issues that the delta was confronting in the fall of two thousand and eight also an approximate that same time when a c s presented that budget showing that delta would make something in the range of two hundred fifty million dollars a year as a result of adopting the bagby delta's c e o richard anderson and its president ed bastion engaged in a email exchange in which mr anderson reported we need to think about implementing the fee post merger a lot of revenue involved and mr bachchan responded think we probably should but as part of integrating the two companies glenn that's glenn how and stephen who is the head of the revenue management service that that prepared this study that mr russell referred to well this sounds like a good closing argument   your honor is whether or not the evidence indicates or is probative to the fact that it is more likely than not that delta did not act independently and so so the question is looking at the decision that they made is it to use the language of of tuscaloosa versus harp ross chemicals is it inexplicable that that delta took this action and the evidence that what we've seen from the evidence is that at the time that delt made its decision when i look at the earnings call air tran's c e o but tells delta they would implement the delta did it first that seems like that alone is enough even absent the back channel communications in the e mails that that you know let lateral public statement is insufficient no matter what what what williamson oil tells us is that a public statements and his way i'm so annoyed pointed out and i think twamley are crossing other other cases make this point that competitors are entitled to consider to hear and consider those public statements my only point to you that in this instance there is insufficient evidence that they did consider them or that they did factor into delta's decision making process but if they had williamson oil tells us that that those the to consider those statements  eritrean implemented the not that we have those documents in the record i believe that the document that there are for into is the but the value proposition slides and i take great exception at the characterization of that but i think it's important that the document does not stablish that it would be adverse to delta's economic interest to implement the first bag fee in the fall of two thousand and eight it just unequivocally does not establish that but you have to look at that kind that document in what i think is an unstated context that is a document that was prepared by the revenue management group to advocate against adopting the backing it was an advocacy piece presented to management to convince management management not to adopt  have not crossed that hurdle and that document doesn't push them across that hurdle is my point thank you mr allen we'll hear from mr atkins good morning your honour's all the nat can see for air tram i'd like to make two points this morning the first is that mr for nor rose public comments during an earnings call do not tend to exclude the possibility that air acted independently and therefore not a plus factor monsanto said has said in this court said in williamson oil that the test for whether they have enough evidence to go to a jury is it must tend to exclude the possibility of independent conduct my second point is that mr facade knows efforts to communicate with delta so overall months before it makes the summary judgment burden to tougher on your  that mean if that's the standard you have to produce if they have to produce evidence that tends to exclude the possibility that's a lighter burden on their part no it's not a lighter it's not a lighter burden all it must tend to exclude the possibility that the parties were acting independently and as the so so after nine years of litigation the facts are pretty straightforward at this point which is that in the summer and fall of two thousand and eight the major other major airlines most of them other major airlines had adopted first bag fees it was a subject of great interest to the investment community they had adopted them analysts investors had asked them over and over again the correct but but but if you look at it from it it's a question is does it tend to exclude the possibility so on the one hand you have air tran and you have mr fitz for four naro sorry the names do get a little tough to keep straight mr for naro who is answering an exclusive question from a from an analyst the analyst was the one who asked him the question if if your competitor would do it would you do it and he gave a non committal response you said he would strongly consider it he didn't say that they would do it and strongly consider is not a commitment we've cited cases to you on that on that score but here's the other thing is where does it not you know that's the evidence that you're rely on that kind of evidence in order to the courts starting with the supreme court have said that competitors can consider what other competitors are saying and doing for example in bell atlantic v twamley this is a pages five fifty three and fifty four the court said it is well established the two competitors may lawfully observe each other's public statements and decisions without running afoul of the n i trust was in text messaging judge posner said that competitors walk watch each other like hawks and he referred to exactly this type of situation the adoption of bag fees in clamp all this is a justice brier when he was sitting on the first circuit how does one order a firm to send its prices without regard to the likely reaction of competitors and of course in baby foods and valves for the third circuit said it would be impossible for an actor not to consider what others are saying and doing and so the question is on the air tran side was it acting independently does his statement tend to exclude the possibility that air tran was acting independently and the answer is no and we know that because this court said so and williamson oil not just with a single statement but with a whole series of statements which describe things like we will not be a price leader which said things like things like one of the competitors would forego further price increases another competitor said we shall be ready to respond tactically when necessary and the court held this court held as a matter of law that those were not sufficient so back to the question the court has to answer which is does mr statement tend to exclude the possibility of independent conduct and on the delta side what we have is that delta was making its decision it had planned all along to make its to at the time of the merger it hadn't decided whether it would be a yes or no but that it was going to make that decision and it stuck to its knitting and it did that and along the way there is evidence that one of the factors considered in the value proposition is the possibility that air tran would  follow suit and the supreme court has said and this court has said and the other courts of appeals have all said that it was lawful for delta to take that into consideration the fact that mr  does not tend to exclude the possibility of independent conduct by either of them and of course as the sherman act section one it's a conspiracy it takes two to tango so regardless of what air tran may have been doing it required both of them and it required acceptance on the side of delta and so what we know is that the two companies were making their own independent decisions and the fact that delta may have considered what it said is something that this court in the courts of appeals have said is lawful mr for naro statement bears no resemblance to the small number of cases under section five of the f t c act which have held  unilateral invitation to collude a public statement is sufficient judge to bean it to answer your question there are no cases that have held that this evidence is sufficient to find and i trust file ation the plaintiffs are asking you to break new ground the supreme court said in monsanto and i think that this is illustrated an important in monsanto you have a deal or terminations case so you have competing dealers talking to the manufacturer and telling the  manufacturer that they would like for another dealer to be terminated and what months santos said when it adopted the ten to exclude language is that even if monsanto received those communications from from the dealers it could thank you and let's start with the earnings call i think there are two questions for you with respect to the first is is the substance of what was said there reasonably construed by a jury to be an invitation to collude i think that it is if you say that it is and you're going to have these similar statements being made all the time among competitors the second question is whether assuming it constitutes an invitation to collude there's something special about the context of an earnings call that makes it none the less permissible and we know that that's not true among other reasons because at least delta knowledge is although air tran denies it that section five of the federal trade at the federal trade communications act independently prohibits making these kinds of statements including an earnings calls congress made the determination that you can't make these kind of statements because they remove the kind of uncertainty which is the only break against clue surprising in oligopolies and we also know that these kinds of statements are commonly made because of d reaction to them dealt with surprise some of their officials even thought it were willing to say they were inappropriate their own antitrust manual says don't make statements like these don't make statements about future pricing decisions and again they haven't cited to a single example of another in calls where somebody made a statement that was both contingent a statement about what they would do in response to price leading and directed at a particular competitor second the other major question i think is whether delta imposed the fee independently or because it did so only because it had been assured that are trying to follow suit and the principle question there i think is whether the value proposition position was accepted by the decision makers at delta and there's ample reason to believe that it was it was specifically commissioned for this purpose and the principal reason that delta gives for its officials just believing in it is that they disbelieve that bag fees cause share shift and that's not credible delta conducted three internal studies on that question a brand tracking study a handling study and the value proposition itself all of them found that bad fees do produce share shift it is a premise of their class action appeal that basic economics tells us that consumers are responsive to the total price of air travel and there are the internal e mails that i've already cited to you that make clear that they did care about what air tran was doing and they did care about competitive effects and so i don't think and one other thing thing i would point to as kind of circumstantial evidence that a reasonable jury could adopt  conclusion that they cared about share shift is that the department of justice when confronted with these same arguments said look we're not convinced and looked at the same e mails that they've presented in their e mails and say we're not convinced that the show either that the decision was made before the airplane call or that they show that delta didn't care what air tran did with respect to their admin some arguments about williamson oil establishments some kind of principle that defendants are entitled to take into account public statements by competitors that's true as a general matter but the loons in oil certainly didn't say your and entitled to act on public invitations to collude because if you did that you would just open the door to collusive statements being made and acted on all the time with all the same harms  associated with a backdoor agreement to do this a couple points about the record there was a reference to the baggage a c s presenting a baggage a budget which included the first fee we discussed this in our briefs it wasn't a budget it was a proposal of a series of potential actions that could be taken if you look at the list of them many of them you know are there potentials but certainly they weren't being taken seriously they'd suggest deferring engine maintenance until two thousand and nine for example and i don't think there's much prospect that they were going to do that and in fact you know we know from the subsequent email from gil west the day of the air tran call that to the extent there was any belief prior to that that this was a good idea once he saw the traffic value value proposition and showed that the share shift was so significant as to erase the entire potential new revenue plus a lot more that he was convinced that this wasn't something that was worth doing and again it's notable that their principal evidence that this wasn't their position is not contemporaneous documents from the time it is their post hoc deposition testimony which requires an assessment of their thank you thank you you know on a just a couple of quick points first of all the idea that that there's being some rule advocated here that's going to create i think the phrase that was used as a template for price fixing in the public arena is simply an appropriate if in fact a statement is made in the public arena that is properly characterized as an invitation to collude that statement would be actionable under section five of the f of course is this is an action that would be a unilateral action against the speaker of the statement so so the suggestion that we're creating some sort of safe haven for that kind of conduct is it to the extent it occurs is not appropriate you know i'm sure you get were the reason that we are that we are here on ascertain ability issue is the same reason that the court confronted and ascertain ability issue in car and it's in the reasons that it's appropriate here are the same as the reasons in car who  interview see that the reason is that the plaintiffs did not do any work or any work up or any discovery to determine whether or not the class that they were advocating was in fact ascertainable or otherwise identifiable through three itself the court has determined that the class has to be identified and carr who do you see define or or expound on that requirement that has to be identified through some administratively feasible means the problem i have with it if we have to reach it is you go i'm happy to discuss attainability but i don't know that i need to i would just say that you know the reasons for not recognizing in the ministry the feasibility requirement are laid out in our brief they're laid out and for circuit decisions which we think are convincing we've also i even if there was such a requirement it's met here because there is a much greater information from which we can confirm the allegations in an affidavit from somebody who says that they paid the first bag fee then they were in care who for example and this is very similar to the amount of data that this court thought was sufficient and you say thank you thank you