Court Opinion

ID: 2649607
Source: CourtListenerOpinion
Date Created: 2014-01-16 21:21:28.044146+00
Date Added: 2024-06-11T09:09:35.314779
License: Public Domain

NOT FOR PUBLICATION

                     UNITED STATES COURT OF APPEALS                            FILED
                            FOR THE NINTH CIRCUIT                               JAN 16 2014

                                                                            MOLLY C. DWYER, CLERK
                                                                             U.S. COURT OF APPEALS

MICHAEL C. MALANEY; et al.,                       No. 12-15182

              Plaintiffs - Appellants,            D.C. No. 3:10-cv-02858-RS

  v.
                                                  MEMORANDUM*
UAL CORPORATION; et al.,

              Defendants - Appellees.

                    Appeal from the United States District Court
                       for the Northern District of California
                     Richard Seeborg, District Judge, Presiding

                      Argued and Submitted December 4, 2013
                             San Francisco, California

Before: HAWKINS, GOULD, and PAEZ, Circuit Judges.

       Plaintiffs-Appellants (“Appellants”), forty-nine private individuals, appeal the

dismissal of their Clayton Act Section 7 challenge to the merger between Defendants-

Appellees UAL Corp., United Airlines, Inc., and Continental Airlines, Inc.

(“Appellees”). We have jurisdiction pursuant to 28 U.S.C. § 1291, and we affirm.

       *
        This disposition is not appropriate for publication and is not precedent except
as provided by Ninth Circuit Rule 36-3.
                               LAW OF THE CASE

      In general, our review of a district court’s order concerning a preliminary

injunction does not constitute binding law of the case. Ranchers Cattlemen Action

Legal Fund United Stockgrowers of Am. v. U.S. Dep’t of Agric., 499 F.3d 1108, 1114

(9th Cir. 2007) (“Ranchers Cattlemen”). However, purely legal conclusions we

reached during review of a preliminary injunction order do constitute binding law of

the case. Id.

      When this case was previously before us, we reviewed the district court’s order

denying a preliminary injunction which would have halted the then-proposed and

now-consummated merger between Appellees. See Malaney v. UAL Corp., 434 F.

App’x 620 (9th Cir. 2011) (unpub.) (“Malaney I”). Affirming the district court’s

denial of a preliminary injunction, we held that Appellants had not shown a likelihood

of success on the merits of their claim, Winter v. Natural Resources Defense Council,

555 U.S. 7, 20 (2008), by failing to demonstrate the proposed national market for air

travel is the relevant market for purposes of Appellants’ Section 7 claim, Brown Shoe

Co. v. United States, 370 U.S. 294, 324 (1962). Malaney I, 434 F. App’x at 621. This

purely legal conclusion constitutes binding law of the case. Ranchers Cattlemen, 499
F.3d at 1114.

      We may depart from the law of the case only in limited circumstances. See

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Ingle v. Circuit City, 408 F.3d 592, 594 (9th Cir. 2005). Appellants offer two

arguments why we should do so here. First, Appellants claim Appellees previously

argued in In re Air Passenger Computer Reservations Systems Antitrust Litigation,

694 F. Supp. 1443, 1472 (C.D. Cal. 1988) (“CRS”), that a national market for air

travel is an appropriate market for antitrust purposes. Appellants contend that, on

remand, the district court should have departed from the law of the case and estopped

Appellees from opposing a national market theory because neither the district court

nor we were aware of this previous litigation when ruling on the preliminary

injunction motion and subsequent appeal. Second, Appellants argue our decision in

Malaney I is clearly erroneous and should be reconsidered.

                              JUDICIAL ESTOPPEL

      Though judicial estoppel is “probably not reducible to any general formulation

of principle, several factors typically inform the decision whether to apply the doctrine

in a particular case.” Ah Quin v. Cnty. of Kauai Dep’t of Transp., 733 F.3d 267, 270

(9th Cir. 2013) (quoting New Hampshire v. Maine, 532 U.S. 742, 750 (2001) (internal

modification omitted)). These factors ask whether (1) a party’s later position is

clearly inconsistent with its earlier position, (2) the first court accepted the advanced

position, and (3) the party seeking to assert an inconsistent position would obtain an

unfair advantage or impose an unfair detriment on the opposing party if not estopped.

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Id. (quoting New Hampshire, 532 U.S. at 750) (internal quotations and citations

omitted). We review for abuse of discretion the district court’s application of the law

of the case doctrine in light of Appellants’ citation to CRS on remand. Ingle, 408 F.3d

at 594.

      Appellees have the stronger argument as to each judicial estoppel factor. The

relevant portion of the CRS opinion is short and somewhat cryptic. Given this scant

record, we cannot discern United’s relevant position in CRS with sufficient clarity.1

Even assuming United did advance a national market theory there, it is not obvious

from the CRS opinion that the district court affirmatively accepted whatever argument

United asserted. In short, the CRS opinion itself is too thin a reed to support

Appellants’ judicial estoppel claim.2

      More significantly, Appellants fail to identify the specific unfair advantage

Appellees gained or the unfair detriment Appellants would suffer as a result of

United’s position in the CRS litigation. While judicial estoppel is designed to stop

      1
      Appellants have not included in this record United’s filings in the CRS case.
These may have identified United’s position more clearly.
      2
       Appellants ask us to take judicial notice of additional court records which,
Appellants argue, show that Appellee Continental also advanced a national market
theory in previous litigation. We deny Appellants’ First Motion to Take Judicial
Notice (ECF. No. 7). See Baccei v. United States, 632 F.3d 1140, 1149 (9th Cir.
2011); Int’l Union of Bricklayers & Allied Craftsman Local Union No. 20 v. Martin
Jaska, Inc., 752 F.2d 1401, 1404 (9th Cir. 1985). We deny as moot Appellants’
Second and Third Motions to Take Judicial Notice (ECF Nos. 23 & 36).

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litigants from “playing fast and loose with the courts,” Wagner v. Prof’l Eng’rs in Cal.

Gov’t, 354 F.3d 1036, 1050 (9th Cir. 2004) (quoting Russell v. Rolfs, 893 F.2d 1033,

1037 (9th Cir. 1990)), we cannot automatically assume bad faith each time a litigant’s

position shifts. In 1988, the airline industry, then adapting to deregulation, was

fundamentally different than it is today. The courts must balance a litigant’s need to

react to economic change against the notions of fair play undergirding the equitable

doctrine of judicial estoppel. With this in mind and reviewing for abuse of discretion,

we see no reason to disturb the district court’s determination that judicial estoppel is

inappropriate here.

                MALANEY I IS NOT CLEARLY ERRONEOUS

      Appellants argue Malaney I is clearly erroneous and thus merits

reconsideration. We review our previous decision for clear error when deciding

whether to depart from the law of the case. See Leslie Salt Co. v. United States, 55
F.3d 1388, 1393 (9th Cir. 1995).

      Appellants argue Malaney I, in affirming the district court’s denial of a

preliminary injunction, fails to account for the cross-elasticity of supply within the

passenger airline industry. See Equifax, Inc. v. F.T.C., 618 F.2d 63, 66 (9th Cir. 1980)

(recognizing it is “well settled that cross-elasticity of supply is a valid basis for

determining that two commodities should be within the same market”); Twin City

Sportservice, Inc. v. Charles O. Finley & Co., 512 F.2d 1264, 1271 (9th Cir. 1975)

                                           5
(similar). We disagree.

      Appellants have not pleaded any specific facts establishing the relevance of

supply interchangeability to the product market inquiry in this case. Appellants

cobble together bald factual allegations with a citation to out-of-circuit authority to

allege the cross-elasticity of supply is relevant to the passenger airline industry.3 But

conclusory allegations unsupported by specific facts fail to state a specific, plausible

theory describing how supply interchangeability is relevant to an analysis of the

industry.4 See Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). Because Appellants have

failed to allege a theory in which supply cross-elasticity is relevant to the product

market definition, we cannot say Malaney I is clearly erroneous or that the district

court clearly erred in adhering to it.

                                    CONCLUSION

      Appellants’ minor amendments on remand do not cure the defect identified in

Malaney I. The district court was correct to adhere to our prior panel’s purely legal

conclusion in that case and it did not abuse its discretion when it declined to estop

Appellees from opposing the national market theory.

      AFFIRMED.

      3
          See United Air Lines v. Civil Aeronautics Board, 766 F.2d 1107, 1115 (7th Cir.
1985).
      4
        Although Malaney I notes this problem with Appellants’ claim, 434 F. App’x
at 621, Appellants failed to amend their complaint on remand to address this omission.

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