Court Opinion

ID: 217284
Source: CourtListenerOpinion
Date Created: 2011-05-24 00:01:41+00
Date Added: 2024-06-11T17:28:31.656844
License: Public Domain

NOT FOR PUBLICATION

                    UNITED STATES COURT OF APPEALS                            FILED
                           FOR THE NINTH CIRCUIT                              MAY 23 2011

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

MICHAEL C. MALANEY; KATHERINE                    No. 10-17208
R. ARCELL; KEITH DEAN BRADT;
JOSE M. BRITO; JAN MARIE BROWN;
ROBERT D. CONWAY; ROSEMARY                       D.C. No. 3:10-cv-02858-RS
D’AUGUSTA; BRENDA K. DAVIS;
PAMELA FAUST; CAROLYN FJORD;
DON FREELAND; TED FRIEDLI;                       MEMORANDUM*
DONALD V. FRY; GABRIEL
GARAVANIAN; HARRY
GARAVANIAN; YVONNE JOCELYN
GARDNER; LEE M. GENTRY; JAY
GLIKMAN; DONNA M. JOHNSON;
VALARIE ANN JOLLY; GAIL S.
KOSACH; ROZANN KUNSTLE; STEVE
KUNSTLE; JOHN LOVELL; LEN
MARAZZO; LEE MCCARTHY; LISA
MCCARTHY; PATRICIA ANN
MEEUWSEN; L. WEST OEHMIG, Jr.;
CYNTHIA PROSTERMAN; DEBORAH
M. PULFER; SHARON HOLMES REED;
DANA L. ROBINSON; ROBERT A.
ROSENTHAL; BILL RUBINSOHN;
SONDRA K. RUSSELL; SYLVIA N.
SPARKS; JUNE STANSBURY; CLYDE
D. STENSRUD; SHERRY LYNNE
STEWART; WAYNE TALEFF; GARY
TALEWSKY; ANNETTE M. TIPPETTS;
DIANA LYNN ULTICAN; J. MICHAEL

        *
             This disposition is not appropriate for publication and is not precedent
except as provided by 9th Cir. R. 36-3.
WALKER; PAMELA S. WARD; DAVID
P. WENDELL; CHRISTINE O.
WHALEN; SURAJ ZUTSHI,

               Plaintiffs - Appellants,

  v.

UAL CORPORATION; UNITED AIR
LINES, INC.; CONTINENTAL
AIRLINES, INC.,

               Defendants - Appellees.

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

                        Argued and Submitted May 10, 2011

                              San Francisco, California

Before:        D.W. NELSON and W. FLETCHER, Circuit Judges, and DUFFY,
               District Judge.**

       Plaintiffs airline travelers and travel agents moved for a preliminary

injunction under §§ 7 and 16 of the Clayton Act against the merger of United

Airlines and Continental Airlines (collectively “Defendants”). The district court

denied Plaintiffs’ motion. Plaintiffs argue on appeal that the district court erred in

          **
            The Honorable Kevin Thomas Duffy, United States District Judge for
the Southern District of New York, sitting by designation.
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concluding that the appropriate market for antitrust analysis is the city-pair market,

rather than Plaintiffs’ proposed national market in air travel. We affirm.

      To obtain a preliminary injunction, Plaintiffs must demonstrate that they are

“likely to succeed on the merits.” Winter v. Natural Res. Def. Council, Inc., 129 S.

Ct. 365, 374 (2008). Defining and proving the relevant market for antitrust

analysis is a “necessary predicate” to Plaintiffs’ success on the merits of their

Clayton Act claim. Brown Shoe Co. v. United States, 370 U.S. 294, 324 (1962);

Fount-Wip, Inc. v. Reddi-Wip, Inc., 568 F.2d 1296, 1301 (9th Cir. 1978).

      In defining the outer bounds of a relevant antitrust market, we consider “the

reasonable interchangeability of use or the cross-elasticity of demand between the

product itself and substitutes for it.” Brown Shoe, 370 U.S. at 325. To meet this

standard, products do not have to be perfectly fungible, see United States v. E. I. du

Pont de Nemours & Co., 351 U.S. 377, 394 (1956); United States v. Cont’l Can

Co., 378 U.S. 441, 449 (1964), but must be sufficiently interchangeable that a

potential price increase in one product would be defeated by the threat of a

sufficient number of customers switching to the alternate product. See Cont’l Can,

373 U.S. at 453-54 (holding that, although not entirely fungible, metal and glass

containers are in the same market because “[i]n differing degrees for different end

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uses manufacturers in each industry take into consideration the price of the

containers of the opposing industry in formulating their own pricing policy”).

      Plaintiffs have failed to demonstrate that the national market in air travel

satisfies this standard. As the district court noted, a flight from San Francisco to

Newark is not interchangeable with a flight from Seattle to Miami. No matter how

much an airline raised the price of the San Francisco-Newark flight, a passenger

would not respond by switching to the Seattle-Miami flight.

      The city-pair market endorsed by the district court does satisfy the

reasonable interchangeability standard. A price increase on a flight from San

Francisco to Newark could be defeated by the threat of travelers switching to a

flight from Oakland to LaGuardia. The city-pair market has also been endorsed as

the most appropriate market for antitrust analysis by all academics and government

agencies in the record, including the Department of Justice and the Government

Accountability Office.

      Because Plaintiffs failed to establish a relevant market for antitrust analysis,

a necessary predicate for making a claim under § 7 of the Clayton Act, we do not

reach Plaintiffs’ other arguments on appeal.

      AFFIRMED.

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