Donald Wortman v. All Nippon Airways , 854 F.3d 606 ( 2017 )

FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
DONALD WORTMAN, individually and No. 15-15362
on behalf of all others similarly
situated; WILLIAM ADAMS; D.C. No.
MARGARET GARCIA; BRENDEN G. 3:07-CV-05634-
MALOOF; MICAH ABRAMS; MARTIN CRB
KAUFMAN; RACHEL DILLER; LORI
BARRETT; CLYDE H. CAMPBELL;
MATTHEW EVANS; THOMAS
SCHELLY; MARK FOY; JASON
GREGORY TURNER; STEPHEN
GAFFIGAN; BRUCE HUT; DICKSON
LEUNG; KEVIN MOY; RUFUS
BROWNING; LOLLY RANDALL;
CHRISTIAN DUKE; ANDREW BARTON;
TRACEY WADMORE SMITH; MICHAEL
BENSON; TORI KITAGAWA;
WOODROW CLARK, II; JAMES EVANS;
MEOR ADLIN; JUSTIN LABARGE;
SCOTT FREDERICK; REIKO HIRAI;
IREATHA DIANE MITCHELL; LARRY
CHEN; DAVID KUO; DAVID MURPHY;
TITI TRAN; ROBERT CASTEEL, III,
Plaintiffs-Appellees,
v.
2 WORTMAN V. ALL NIPPON AIRWAYS
ALL NIPPON AIRWAYS,
Defendant-Appellant.
DONALD WORTMAN, individually and No. 15-15364
on behalf of all others similarly
situated; WILLIAM ADAMS; D.C. No.
MARGARET GARCIA; BRENDEN G. 3:07-cv-05634-
MALOOF; MICAH ABRAMS; MARTIN CRB
KAUFMAN; RACHEL DILLER; LORI
BARRETT; CLYDE H. CAMPBELL;
MATTHEW EVANS; THOMAS OPINION
SCHELLY; MARK FOY; JASON
GREGORY TURNER; STEPHEN
GAFFIGAN; BRUCE HUT; DICKSON
LEUNG; KEVIN MOY; RUFUS
BROWNING; LOLLY RANDALL;
CHRISTIAN DUKE; ANDREW BARTON;
TRACEY WADMORE SMITH; MICHAEL
BENSON; TORI KITAGAWA;
WOODROW CLARK, II; JAMES EVANS;
MEOR ADLIN; JUSTIN LABARGE;
SCOTT FREDERICK; IREATHA DIANE
MITCHELL; LARRY CHEN; DAVID
KUO; DAVID MURPHY; TITI TRAN;
ROBERT CASTEEL, III,
Plaintiffs-Appellees,
WORTMAN V. ALL NIPPON AIRWAYS 3
v.
CHINA AIRLINES; EVA AIRWAYS,
Defendants-Appellants.
Appeal from the United States District Court
For the Northern District of California
Charles R. Breyer, District Judge, Presiding
Argued and Submitted January 13, 2017
San Francisco, California
Filed April 14, 2017
Before: J. CLIFFORD WALLACE, RICHARD R.
CLIFTON, and MILAN D. SMITH, JR., Circuit Judges.
Opinion by Judge Milan D. Smith, Jr.;
Partial Concurrence and Partial Dissent by Judge Wallace
4 WORTMAN V. ALL NIPPON AIRWAYS
SUMMARY *
Antitrust
Affirming the district court’s partial denial of defendant
airlines’ motions for summary judgment, the panel held that
the filed rate doctrine did not preclude a suit for antitrust
damages challenging defendants’ unfiled fares, fuel
surcharges, or special “discount” fares.
The plaintiffs alleged that the airlines colluded to fix the
prices of certain passenger tickets and fuel surcharges on
flights between the United States and Asia, in violation of
Section 1 of the Sherman Antitrust Act.
The filed rate doctrine prohibits individuals from
asserting civil antitrust challenges to an entity’s agency-
approved rates. The panel held that the doctrine did not
preclude plaintiffs’ antitrust claims premised on unfiled
fares because there were genuine issues of material fact as to
whether the Department of Transportation effectively
abdicated its authority over the unfiled air fares. The panel
held that there were also genuine issues of material fact
regarding the DOT’s exercise of regulatory authority over
fuel surcharges. Addressing one airline’s “discount” fares,
which differed in both price and terms from the airline’s filed
tariffs, the panel held that the district court did not err in
declining to apply the filed rate doctrine given questions of
fact regarding whether the discount fares constituted the
same product as the fares actually filed.
*
This summary constitutes no part of the opinion of the court. It
has been prepared by court staff for the convenience of the reader.
WORTMAN V. ALL NIPPON AIRWAYS 5
Concurring in part and dissenting in part, Judge Wallace
concurred in the bulk of the majority’s opinion. He
dissented from the majority’s conclusion, in Section III,
Subsection B of its opinion, that genuine issues of material
fact remained as to whether the DOT effectively abdicated
its authority over fuel surcharges that the defendants actually
filed with the DOT. Judge Wallace wrote that the filed rate
doctrine should not be expanded by the rule the courts must
determine when an agency has “effectively abdicated” its
authority, notwithstanding the actual filing of rates.
COUNSEL
Gary J. Malone (argued), Ankur Kapoor, and Alysia Solow,
Constantine Cannon LLP, New York, New York; Douglas
R. Rosenthal, Richard O. Levine, and Aymeric Dumas-
Eymard, Constantine Cannon LLP, Washington, D.C.; for
Defendant-Appellant All Nippon Airways.
Tammy Tsoumas (argued), Jonathan J. Faria, and Jason Y.
Kelly, Kirkland & Ellis LLP, Los Angeles, California; James
H. Mutchnik, Chicago, Illinois; for Defendant-Appellant
Eva Airways.
Steven N. Williams (argued) and Adam J. Zapala, Cotchett
Pitre & McCarthy LLP, Burlingame, California; Michael P.
Lehmann and Christopher L. Lebsock, Hausfeld LLP, San
Francisco, California; for Plaintiffs-Appellees.
6 WORTMAN V. ALL NIPPON AIRWAYS
OPINION
M. SMITH, Circuit Judge:
Defendants-Appellants All Nippon Airways (ANA),
China Airlines, and EVA Airways (collectively,
Defendants) challenge the district court’s holding that the
filed rate doctrine does not preclude Plaintiffs-Appellees’
putative class action suit for antitrust damages based on
allegations of collusion and price fixing. We have not
previously addressed the application of the filed rate doctrine
to airline fares and fees. For the reasons set forth in this
opinion, we hold that, based on the record in this case, the
filed rate doctrine does not preclude Plaintiffs’ suit for
antitrust damages challenging Defendants’ unfiled fares,
fuel surcharges, or “discount” fares. We therefore affirm the
district court’s partial denial of Defendants’ motions for
summary judgment.
FACTUAL AND PROCEDURAL BACKGROUND
Plaintiffs claim antitrust violations by Defendants in
connection with three categories of Defendants’ charged
rates: (1) unfiled fares, (2) fuel surcharges, and (3) special
“discount” fares.
The DOT’s present regulations require airlines to file
their base-fare rates to differing extents, depending upon
whether a particular airline is included within Country
Category A, B, or C. Airlines headquartered in or traveling
between the United States and a Category A country need
not file any fares. Airlines headquartered in or traveling
between the United States and a Category C country must
file all fares. Finally, airlines headquartered in or traveling
between the United States and a Category B country must
file certain, but not all, of their fares. Those fares not
WORTMAN V. ALL NIPPON AIRWAYS 7
required to be filed are the “unfiled fares” at issue in this
appeal.
In addition to charging base-fare rates, some airlines
impose fuel surcharges, which are additional per-ticket fees
based on the carrier’s fuel costs. Prior to 2004, the DOT did
not permit separate fuel surcharges. Rather, airlines were
required to incorporate the cost of fuel into the base ticket
price. However, in October 2004, the DOT lifted its
prohibition on separate fuel surcharges. The parties dispute
whether the DOT required filing of these newly allowed
surcharges. Defendants argue that it did, citing a 1999 DOT
statement that “all surcharges are to be filed,” while
Plaintiffs argue that the DOT’s 1999 statement has no
relevance to fuel surcharges given that the DOT did not
permit fuel surcharges at the time the statement was made.
In any event, the record reflects that regardless of whether
the DOT required airlines to file fuel surcharges, in many
cases airlines did file them.
Finally, Defendant ANA offers a number of special
“discount” fares. These include the “Satogaeri” fares and
the “Business Discount,” “Biziwari,” or “Buz-Wari” fares,
all of which operate in the same manner: Specifically, ANA
files the respective fares with the DOT, then authorizes
certain travel agents to sell tickets with more restrictive
terms to consumers for some amount less than the filed rate.
This lesser amount constitutes the “net fare,” which travel
agents remit to ANA as payment for the ticket. The travel
agent retains as a commission any difference between the net
fare and the amount charged to the consumer.
The terms governing the fares actually filed by ANA
differed substantially from the terms governing the discount
fares. For instance, while one of ANA’s publicly-filed fares
8 WORTMAN V. ALL NIPPON AIRWAYS
could be used for “circle trips” 1 and “double open jaw
trips,” 2 the discounted version of that fare could not. The
same public fare had a minimum stay of three days and
allowed for a stopover in Japan and up to six transfers, while
the discounted fare had no minimum stay, and did not allow
stopovers or transfers. Some other of ANA’s filed fares
similarly differed from their discounted versions in regard to
the types of trips permitted, maximum stay required, the
amount of time in advance the ticket needed to be purchased,
restrictions on stopovers, and applicable cancellation fees.
Plaintiff Donald Wortman filed a putative class action
against Defendants on November 6, 2007, alleging that
Defendants (as well as other airlines no longer in the suit)
colluded to fix the prices of certain passenger tickets and fuel
surcharges on flights between the United States and Asia, in
violation of Section 1 of the Sherman Antitrust Act,
15 U.S.C. § 1. On November 23, 2009, Defendants filed
motions to dismiss Plaintiffs’ complaint, in part on the
ground that the filed rate doctrine barred Plaintiffs’ claims.
The district court granted Defendants’ motions in part on
May 9, 2011, but denied their motions in regard to their
assertion of the filed rate doctrine as a defense against claims
for antitrust damages.
1
“Circle trips” begin and end at the same point, but involve multiple
stopovers.
2
“Double open jaw” trips are those in which the origin and
destination of the first flight are different from the origin and destination
of the second, such that instead of traveling outbound from A to B and
back from B to A, the customer travels outbound from A to B, but, then,
on the second trip, from C to D.
WORTMAN V. ALL NIPPON AIRWAYS 9
On September 10, 2013, following over two years of
discovery, Defendants moved for summary judgment, again
on the basis of the filed rate doctrine. On September 23,
2014, the district court granted in part and denied in part
Defendants’ respective motions for summary judgment. The
district court held that while the filed rate doctrine applied to
bar Plaintiffs’ antitrust damages claims based on actually-
filed fares, the doctrine did not preclude Plaintiffs’ claims
regarding unfiled fares, fuel surcharges, or ANA’s
“discount” fares. 3 The district court then granted
Defendants’ respective motions to certify its order partially
denying summary judgment for interlocutory appeal. We
similarly granted Defendants’ petitions for permission to
appeal. See 28 U.S.C. § 1292(b).
ANALYSIS
I. The History and Application of the Filed Rate
Doctrine
The filed rate doctrine is a judicially created rule that
prohibits individuals from asserting civil antitrust challenges
to an entity’s agency-approved rates. The doctrine
originated in Keogh v. Chicago & Northwest Railway Co.,
260 U.S. 156 (1922). The plaintiffs in that case sought
damages under the Sherman Act, alleging that the rates
charged by common carriers exceeded those that would be
charged in a competitive market. Id. at 159–160. The rates
in question, however, had been filed with, and approved by,
3
Although the order is arguably susceptible to different readings,
Plaintiffs acknowledged at oral argument that the district court’s order
did not implicitly or explicitly grant summary judgment in Plaintiffs’
favor as to the unfiled fares, fuel surcharges, and discount fares. We treat
the order as merely denying summary judgment in Defendants’ favor as
to these rates.
10 WORTMAN V. ALL NIPPON AIRWAYS
the Interstate Commerce Commission (ICC). Id. at 160. The
Supreme Court held that the plaintiffs’ suit was precluded,
explaining that that
[i]njury implies violation of a legal right. The
legal rights of shipper as against carrier in
respect to a rate are measured by the
published tariff. Unless and until suspended
or set aside, this rate is made, for all purposes,
the legal rate . . . . The rights as defined by
the tariff cannot be varied or enlarged by
either contract or tort of the carrier.
Id. at 163. The Supreme Court stated that the “paramount
purpose” of this rule was to prevent “unjust discrimination”
between consumers. Id.The Supreme Court reaffirmed its Keogh holding six
decades later, in Square D Co. v. Niagara Frontier Tariff
Bureau, Inc., 476 U.S. 409 (1986), once again applying the
filed rate doctrine to bar shippers’ challenges to carriers’
filed rates. The Court rejected the plaintiffs’ argument that
Congress’ stated intention to promote competition in the
shipping industry, as set forth in the Motor Carrier Act of
1980, implied a private right to seek antitrust damages. Id.
at 420. Rather, the Court held that absent a “specific
statutory provision or legislative history indicating a specific
congressional intention to overturn the long-standing Keogh
construction,” a private antitrust suit’s “harmony with the
general legislative purpose is inadequate” to justify
deviation from the rule. Id.; see also Maislin Indus., U.S.,
Inc. v. Primary Steel, Inc., 497 U.S. 116, 135 (1990)
(“Generalized congressional exhortations to ‘increase
competition’ cannot provide the ICC authority to alter the
well-established statutory filed rate requirements.”). The
WORTMAN V. ALL NIPPON AIRWAYS 11
Court also noted that the filed rate doctrine is not properly
characterized as antitrust “immunity,” because other
sanctions or equitable relief remain available. Square D,
476 U.S. at 422. Rather, the doctrine simply precludes treble
damages based on a hypothetically lower rate. Id.While the filed rate doctrine initially grew out of
circumstances in which common carriers filed rates that a
federal agency then directly approved, we have applied the
doctrine in contexts beyond this paradigmatic scheme, and
most frequently in the realm of energy rates. In E. & J. Gallo
Winery v. EnCana Corp., 503 F.3d 1027 (9th Cir. 2007), we
considered a suit by customers against a natural gas supplier.
The Federal Energy Regulatory Commission (FERC) had
jurisdiction over the relevant transactions. Gallo, 503 F.3d
at 1031. The defendants had not filed the challenged rates
with FERC. See id. Rather, FERC had adopted a market-
based approach to rate setting. Id. at 1041–42. We held that
“to the extent Congress has given FERC authority to set rates
under the [Natural Gas Act] and FERC has exercised that
authority, such rates are just and reasonable as a matter of
law and cannot be collaterally challenged under federal
antitrust law or state law.” Id. at 1035 (emphasis added).
The question in that case was whether FERC had actually
“authorized” the rates in question, the lack of a filing
requirement notwithstanding. Id. at 1041 (citing Pub. Util.
of Snohomish Cty. v. Dynegy Power Mktg., 384 F.3d 756,
760 (9th Cir. 2004), for the proposition that “[t]he
fundamental question . . . is whether, under the market-based
system setting wholesale electricity rates, FERC is doing
enough regulation to justify federal preemption of state
laws.”). In Gallo, we found that it had. 503 F.3d at 1042–
43.
12 WORTMAN V. ALL NIPPON AIRWAYS
Specifically, we found that while Congress actively
removed FERC’s authority “to set prices for first sales,” and
thereby left “the determination of natural gas prices at the
wellhead to market forces,” id. at 1037, FERC continued to
regulate rates by (1) determining ex ante that “no seller of
natural gas could obtain market power and that market-based
rates would be just and reasonable,” (2) issuing “blanket
certificates for sales” of natural gas, which only then
suspended FERC’s rate-filing requirements for those sales,
and (3) monitoring the “operation of the market through the
complaint process,” id. at 1038 (internal quotation marks
omitted); see also Public Util. of Grays Harbor v. Idacorp,
379 F.3d 641, 651 (9th Cir. 2004) (identifying ways in which
FERC maintained regulation of market-based rates). We
also found in a prior case that FERC “imposed various
reporting requirements on sellers,” and that the agency had
“clearly stated its belief that these procedures satisf[ied] the
filed rate doctrine.” Id. at 1041 (quoting Grays Harbor,
379 F.3d at 651). FERC therefore had “not abdicated its
responsibilities but ha[d] acted, albeit with a light hand, to
authorize just and reasonable rates” such that the filed rate
doctrine applied. Id. at 1042. We cautioned, however, that
“a failure by FERC to exercise its statutory authority to
approve rates would cast doubt on the underlying premise of
the Filed Rate Doctrine.” Id. at 1040 (emphasis added).
We considered the filed rate doctrine in a wholly
different context in Carlin v. DairyAmerica, Inc., 705 F.3d
856 (9th Cir. 2013). That appeal arose from a putative class
action brought by dairy farmers seeking monetary and
injunctive relief due to the misreporting of pricing data to the
United States Department of Agriculture (USDA), which
affected the rates for raw milk set under Federal Milk
Marketing Orders (FMMOs) pursuant to the Agricultural
Marketing Agreement Act, 7 U.S.C. § 601 et seq. Carlin,
WORTMAN V. ALL NIPPON AIRWAYS 13
705 F.3d at 864–66. We conceded that FMMO prices were
not the paradigmatic “filed rates” contemplated in Keogh
because (1) they consisted only of minimum prices, (2) they
were not nationally uniform, and (3) FMMOs did not exist
at all in some locations. Id. at 870. Nevertheless, we found
“sufficient attributes which justify the application of the
doctrine.” Id. In particular, we reiterated our holding from
Gallo that “meaningful review” by an agency is not a
prerequisite to the application of the filed rate doctrine. Id.
at 871. Rather, “the essential question [is] whether the
market rates were authorized by the [agency].” Id.
(emphasis in original). In other words, we must ask
“whether the [agency] was doing enough regulation to
justify federal preemption of state laws.” Id. at 872 (citing
Gallo, 503 F.3d at 1041). “[T]he USDA did possess the
authority and did exercise it to address problems as to the
agency-set minimum prices for raw milk.” Id. at 873. Thus,
the filed rate doctrine applied.
Nevertheless, despite the general applicability of the
filed rate doctrine, we held in Carlin that the farmers’ suit
was not barred because the federal agency in question had
effectively—if retroactively—rejected the FMMO prices as
incorrect, and “the policy considerations behind the doctrine
d[id] not justify applying the doctrine as a bar in [that] case.”
Id. at 874. In particular, calculating damages “would not []
involve the kind of ‘hypothetical’ speculation about agency
decisions that Keogh forbids.” Id. at 882.
We have also addressed a scenario in which the filed rate
doctrine did not apply at all, in Ting v. AT&T, 319 F.3d 1126(9th Cir. 2003). There, we held that the filed rate doctrine
did not bar a putative class action in which customers alleged
that a telecommunication provider’s new contract rates
violated state contract and consumer protection laws, despite
14 WORTMAN V. ALL NIPPON AIRWAYS
the fact that the Federal Communications Act (FCA)
required telecommunication carriers to file tariffs with the
FCC. Id. at 1130. We explained that the
Telecommunications Act of 1996 “fundamentally altered the
[FCA’s] regulatory scheme” by directing the FCC to
“forbear from applying any regulation or any provision”
where “enforcement of such regulation or provision [wa]s
not necessary to ensure that [rates] . . . are just and
reasonable” and nondiscriminatory, and where enforcement
was neither necessary for consumer protection nor in the
public interest. Id. at 1132 (quoting 47 U.S.C. § 160(a)).
The FCC promptly acted on its authority to forbear,
explicitly stating that tariffs were no longer necessary due to
market competition and that the filed rate doctrine would no
longer apply. Id. at 1139 n.7. This new forbearance from
requiring rate filings did not leave the market without some
safeguards: The FCC retained a consumer complaint process
as a means for consumers to seek a remedy for
anticompetitive rates, and the FCC would not defer to the
market where it determined the market to be “seriously
flawed or not competitive.” Id. at 1143–45.
As these cases illustrate, the focus of the filed rate
doctrine has somewhat expanded beyond its original
application, in which an agency’s express approval of a rate
precluded civil antitrust challenges to that rate.
Nevertheless, our decisions make equally clear that this
expansion is not without bounds. See, e.g., Carlin, 705 F.3d
874.
II. Regulation of the International Airline Industry
The Federal Aviation Act of 1958 (FAA), Pub. L. No.
85-726, 72 Stat. 731, established a regulatory structure for
airline rates. The FAA gave the Civil Aeronautics Board—
WORTMAN V. ALL NIPPON AIRWAYS 15
which has since been replaced by the DOT—authority to
approve or disapprove international airline rates in service to
its responsibility for preventing “unfair, deceptive,
predatory, or anticompetitive practices in air transportation.”
49 U.S.C. §§ 41501, 41504. The FAA required airlines to
file all tariffs with the DOT, and authorized the DOT to hold
hearings, either on its own initiative or upon consumer
complaint, to determine the lawfulness of those rates.
49 U.S.C. §§ 41504(a)–(b), 41509(a). The DOT
implemented its authority through detailed regulations. See
14 C.F.R. Part 221.
In the late 1970s, Congress passed legislation intended
to increase competition and reduce governmental regulation
in the airline industry. The Airline Deregulation Act of 1978
(ADA) wholly deregulated the domestic airline market,
leading the DOT to cease accepting tariff filings for
domestic air carriers. See 14 C.F.R. § 399.40; Tariffs for
Post-1982 Domestic Travel (April 7, 1982), 47 FR 14892-
01. In the international airline market, however, Congress
stopped short of full deregulation. Under the International
Air Transportation Competition Act of 1979 (IATCA), the
DOT retained jurisdiction over international airline rates, but
had increased discretion over filing requirements. 49 U.S.C.
§ 40109(c). IATCA correspondingly decreased DOT’s
ability to grant antitrust immunity to fare agreements among
carriers as part of Congress’ “determination that airline
service levels and fares should be controlled by competition,
not by government regulation.” Int’l Air Transport Assoc.
Tariff Conf. Proceeding July 6, 2006 at *78; see also
49 U.S.C. § 41308(b). DOT continued to be responsible for
providing a complaint process for consumers to challenge
international air transport rates as anticompetitive. 14 C.F.R.
§§ 302.501-507, 14 C.F.R. §§ 302.401–420.
16 WORTMAN V. ALL NIPPON AIRWAYS
In 1997, 20 years after the passage of IATCA, the DOT
announced that, in keeping with “the continuing evolution of
a policy where we rely on market forces rather than continual
government oversight to set prices for air transportation,”
rate filing no longer served a purpose in competitive foreign
markets. 62 Fed. Reg. 10758, 10760. Accordingly, in 1999,
DOT issued a final rule creating its three Country Categories
(A, B, and C), each with different filing requirements.
64 Fed. Reg. 40654; 14 C.F.R. § 293.10. As noted, supra,
the rule required airlines flying between Category C
countries and the United States, or that were “nationals” of a
Category C country (i.e. those airlines headquartered in
Category C countries), to file all tariffs with the DOT.
14 C.F.R. § 293.10(a)(1)(iii). Airlines headquartered in or
flying to and from Category B countries had to file only their
standard one-way economy fares with the DOT. 14 C.F.R.
§ 293.10(a)(1)(ii). Airlines headquartered in or flying to and
from Category A countries were not subject to any filing
requirements, except to the extent that they operated flights
to or from Category B or C countries. 14 C.F.R.
§ 293.10(a)(1)(i). The Country Categories corresponded
roughly to the strength of bilateral agreements between the
United States and a particular country. 64 Fed. Reg. at
40656. The DOT stated that it “has always had the statutory
authority to take action directly against unfiled passenger
fares,” and “reserve[s] the option of reinstating the tariff-
filing obligation . . . where consistent with the public
interest.” 62 Fed. Reg. at 10763.
Airlines submit tariffs by filing them with the Airline
Tariff Publishing Company (ATPCO), which acts as a
private clearinghouse to distribute fares to various entities,
including the Government Filing System (GFS) through
which the DOT reviews filed fares. ATPCO filters
submitted fares based on the DOT’s country categories, and
WORTMAN V. ALL NIPPON AIRWAYS 17
flags certain fares to be “presented” to the DOT for review.
The DOT does not consider a fare as filed until it has been
so presented, and the DOT does not appear to have access to
unpresented fares.
In 1999, the DOT required that “all surcharges . . . be
filed.” DOT Notice of Exemption from the Department’s
Tarriff-Filing Requirements, Dkt. OST-97-2050-14.
However, the DOT prohibited airlines from charging
separate fuel surcharges prior to 2004. In 2004, the DOT
explained that the prohibition on fuel surcharges was
“established at a time when the Department was regulating
fares much more actively than is the case today, and [it was]
concerned that tariff surcharges could undermine [its]
regulatory supervision of fare levels.” However, it stated
that increasingly competitive market conditions rendered
this prohibition “no longer necessary to support the limited
degree of pricing supervision that continues.”
As of October 2004, the DOT directed that “carriers
[we]re free to file surcharges in general rules tariffs.” The
following month the DOT announced that carriers could no
longer advertise surcharges as being “government-
approved,” stating that it could not “effectively monitor”
fuel charges filed separately from base fares, and that listing
separate surcharges as approved would constitute “an unfair
and deceptive trade practice.” 69 Fed. Reg. 65676, 65676–
77.
18 WORTMAN V. ALL NIPPON AIRWAYS
III. Application of the Filed Rate Doctrine to
International Airline Fares and Fees
A. Application of the Filed Rate Doctrine to Unfiled
Fares
We have previously applied the filed rate doctrine to
circumstances in which the relevant rates were not literally
filed. See Gallo, 503 F.3d at 1042; Grays Harbor, 379 F.3d
at 651–52; Wah Chung v. Duke Energy Trading, 507 F.3d
1222, 1225 (9th Cir. 2007). In so doing, we have found that
even though the regulating agency did not oversee rates via
a filing system, the agency engaged in sufficient regulation
through other means to satisfy the purposes of the doctrine.
See, e.g., Gallo, 503 F.3d at 1042. In the present instance,
by contrast, we agree with the district court’s determination
that there were genuine issues of material fact as to whether
the DOT effectively abdicated its authority over the unfiled
air fares. Accordingly, we hold that the filed rate doctrine
does not preclude Plaintiffs’ antitrust claims premised on the
unfiled fares.
The parties do not dispute that the DOT had the authority
to regulate unfiled rates, only whether it actually did so. As
in the energy rate context, the DOT maintains a consumer
complaint process through which consumers may challenge
a rate as unreasonable or anticompetitive. The maintenance
of a consumer complaint process is not, however,
dispositive. See, e.g., Ting, 319 F.3d at 1143–44.
We acknowledge that, unlike the FCC’s affirmative
disavowal of telecommunications regulation, the DOT has at
least paid lip-service to the notion that it continues to
exercise some oversight of unfiled rates. In particular, when
the DOT first set forth its three-tiered filing scheme, it stated
that the new system would “not materially lessen the
WORTMAN V. ALL NIPPON AIRWAYS 19
Department’s ability to intervene in passenger pricing
matters” because
First, the review of [International Air
Transport Association] passenger fare
agreements will continue. Second, the
Department has always had the statutory
authority to take action directly against
unfiled passenger fares and rules under a
variety of circumstances. And third, the
Department will reserve the option under the
proposed rule of revoking the exemption, and
thus of reinstating the tariff-filing obligation,
with regard to a particular carrier or carriers,
or for specific markets, where consistent with
the public interest.
62 Fed. Reg. at 10763. Nevertheless, the evidence shows
that the DOT’s actual actions regarding unfiled fares have
been minimal at best. Appellants point only to the 2005
reassignment of Argentina to a stricter Country Category as
evidence of any ongoing regulation. Additionally, there
remains some question regarding whether—despite the
DOT’s representation that it would maintain authority over
unfiled fares—the DOT has the ability to actually access or
review those fares. The DOT’s only means of considering
unfiled rates appears to be through (1) assessment of the
strength of bilateral pricing agreements between the United
States and a given country, and (2) consumer complaints.
See 14 C.F.R. §§ 302.501–507, 302.401–420.
In short, there are genuine issues of fact as to whether the
DOT has effectively abdicated the exercise of its authority
to regulate unfiled fares. Accordingly, the district court did
not err in denying summary judgment to Defendants as to
20 WORTMAN V. ALL NIPPON AIRWAYS
those fares based on the filed rate doctrine. See Gallo,
503 F.3d at 1040 (“[A] failure by FERC to exercise its
statutory authority to approve rates would cast doubt on the
underlying premise of the Filed Rate Doctrine. . . .”).
B. Application of the Filed Rate Doctrine to Fuel
Surcharges
As with unfiled fares, the parties do not contest that the
DOT had authority to regulate fuel surcharges, but only
whether it actually did so. The district court did not err by
finding that genuine issues of material fact regarding the
DOT’s exercise of regulatory authority over fuel surcharges
precluded entry of summary judgment for Defendants.
The DOT did not permit airlines to impose fuel charges
separately from base airfares prior to 2004, at which time the
DOT appears to have permitted, but not required, airlines to
file any such surcharges in their general rules tariffs.
Admittedly, affording airlines the freedom to file surcharges,
but not requiring them to do so, makes little sense—
businesses are unlikely to expend time and money
complying with optional regulations. Thus Defendants
argue that the DOT did actually require airlines to file fuel
surcharges, and that the language “permitt[ing]” airlines to
file surcharges in their general rules tariffs indicates
discretion on the part of airlines regarding the procedural
manner in which they file their fuel charges, not whether
they file at all. Defendants further argue that the DOT
required filing of fuel surcharges pursuant to its 1999 rule
notice stating that “all surcharges are to be filed.” The record
reflects that some of the airlines involved in this appeal did,
WORTMAN V. ALL NIPPON AIRWAYS 21
or at least attempted to, file fuel surcharges during the class
period. 4
Application of the filed rate doctrine to fuel surcharges
does not, however, turn on whether the DOT requires
airlines to file those rates. Rather, summary judgment based
on the application of the filed rate doctrine was inappropriate
in light of the DOT’s express statement that it lacks the
ability to “effectively monitor” fuel surcharges. 69 Fed.
Reg. at 65676–77. As we stated in Gallo, “a failure by [the
agency] to exercise its statutory authority to approve rates []
cast[s] doubt on the underlying premise of the Filed Rate
Doctrine.” 503 F.3d at 1040. 5 In the context of fuel
surcharges, the DOT may have intended to exercise some
4 Some airlines privately filed fuel surcharges, but entered them into
the database incorrectly such that they were not flagged to be presented
to the DOT and thus were not considered “filed” within the meaning of
the DOT’s regulations.
5
Notwithstanding Gallo’s instruction that actual filing does not end
the filed rate doctrine inquiry, Judge Wallace cites Gallo and Carlin as
establishing a “clear barrier” between filed and unfiled rates, such that
an agency’s failure to regulate is only relevant where the rate in question
was not filed. We do not find this reading of Gallo and Carlin
persuasive. On the contrary, while those cases may have dealt with rates
not actually filed, their reasoning expressly invokes “the principles
underlying [the] doctrine” to find that its application does not turn on
“the act of literal rate filing.” Gallo, 503 F.3d at 1040. Our opinion does
not effect the unbounded expansion that Judge Wallace cautions against.
Rather, it consistently applies the logic expressly set forth in our prior
cases. To hold, as Judge Wallace advocates, that merely filing a rate
triggers application of the doctrine in every circumstance, would permit
carriers to avoid civil antitrust damages by filing rates even where the
relevant agency has expressly stated that it cannot or will not engage in
regulation. Such application of the doctrine completely untethers it from
both its underlying justification and the reasoning of our prior decisions.
We decline to adopt such a rule.
22 WORTMAN V. ALL NIPPON AIRWAYS
regulatory authority, insofar as it required surcharges to be
filed. The DOT’s intent in this regard is unclear given its
lack of participation in this lawsuit. However, the evidence
on record created a genuine issue of material fact as to
whether the DOT retained the practical ability to do so.
Inability to regulate, just as much as willful abdication,
constitutes a “failure by [an agency] to exercise its statutory
authority.” Id. In accordance with the DOT’s expression of
its inability to regulate fuel surcharges, we decline to apply
the filed rate doctrine to preclude Plaintiffs’ claims regarding
those surcharges.
C. Application of the Filed Rate Doctrine to
Discount Fares
The third category of fares for which the district court
considered the application of the filed rate doctrine is that of
ANA’s “discount” fares—as relevant here, those fares that
differ in both price and terms from ANA’s filed tariffs. We
acknowledge that the filed rate doctrine prohibits suits based
not only on a difference between filed and actually-applied
rates, see Maislin, 497 U.S. at 127, but also on any difference
between filed and actually-applied terms, AT&T Corp. v.
Central Office Tel., Inc., 524 U.S. 214, 223–27 (1998).
However, we have not previously considered the application
of the filed rate doctrine to a situation in which both the rate
and the terms deviate from those on file with the regulating
agency. We face that situation now, and we conclude that
the district court did not err in declining to apply the doctrine
given the questions of fact regarding whether the discount
fares constitute the same product as the fares actually filed.
In Central Office, the Supreme Court stated that “the
policy of nondiscriminatory rates is violated when similarly
situated customers pay different rates for the same services.”
524 U.S. at 223 (emphasis added). In this case, the terms of
WORTMAN V. ALL NIPPON AIRWAYS 23
the unfiled discount tickets differed substantially from those
of the filed fares. Moreover, the filed rate doctrine is
grounded in the notion that courts should not be interpreting
“reasonable” pricing when an agency has already approved
a given rate, and the concomitant desire to avoid
discriminatory pricing between customers. Keogh, 260 U.S.
at 163–64. Neither of these justifications supports
application of the doctrine to ANA’s discount-fare scheme.
In regard to the latter, the entire system of discount fares is
premised on varied pricing between consumers—
accompanied, of course, by differing terms. As to the former
consideration, it is somewhat disingenuous to label the filed
rates as “approved rates” for a corresponding discount fare
since the service being purchased differs materially from that
described in the filed tariff.
Economy class and business class fares are considered to
be different products by the DOT, and are, accordingly, filed
separately, despite the fact that each may apply to the same
departure and arrival point. See 62 Fed. Reg. at 10760
(distinguishing between “economy” fares, which must be
filed by Category B countries, and “promotional” or
“premium” fares, which need not be filed by Category B
countries). The district court did not err in denying summary
judgment to Defendants as to these discount fares. Given the
differences in both the prices and terms, a question of fact
existed as to whether the DOT could effectively regulate the
actual fares because they arguably constituted different
products from the filed fares.
CONCLUSION
The record as it currently stands indicates that the DOT
has not exercised its authority to regulate unfiled airfares,
fuel surcharges, or discount fares in a manner sufficient to
justify the application of the filed rate doctrine. Should
24 WORTMAN V. ALL NIPPON AIRWAYS
additional evidence indicate a greater degree of regulation
by the DOT than is currently reflected in the record, the
district court is free to reassess whether the filed rate doctrine
bars any of Plaintiffs’ claims. Pursuant to 28 U.S.C. § 517,
the United States may submit a statement in a case
expressing its views on relevant issues in which it has an
interest. See, e.g., Dept. of Fair Empl. and Hous. v. L. Sch.
Admis. Council Inc., 896 F. Supp. 2d 849, 854 (N.D. Cal.
2012) (non-party United States entering statement of interest
pursuant to 28 U.S.C. § 517); Berglund v. Boeing Co., Inc.,
02-193-AS, 2006 WL 1805965, at *1 (D. Or. June 22, 2006)
(same). On remand, we urge the parties to solicit the DOT’s
views regarding its regulatory authority on the various rates
here at issue.
We AFFIRM the district court’s partial denial of
Defendants’ motions for summary judgment, and we
REMAND this matter for further proceedings consistent
with this opinion.
WALLACE, Circuit Judge, concurring in part and dissenting
in part:
I concur in the bulk of the majority’s well-reasoned
opinion. I dissent, however, from the majority’s conclusion
that genuine issues of material fact remain as to whether the
DOT effectively abdicated its authority over fuel surcharges
that Defendants actually filed with the DOT.
In Section III, Subsection B, the majority discusses the
second type of rate at issue in this appeal: fuel surcharges. In
1999, when the DOT implemented the category A, B, and C
rate-filing system, the DOT explicitly stated that “all
surcharges are to be filed.” At the same time, however, the
WORTMAN V. ALL NIPPON AIRWAYS 25
DOT did not allow fuel surcharges to be filed separately
from airfares. Instead, the DOT insisted that carriers should
recoup fuel expenses through increases in their base fares. In
2004, the DOT changed this policy, and allowed, but did not
require, airlines to file separate fuel surcharges.
The parties disagree vigorously as to what the record
reflects regarding the filing of fuel surcharges. Defendants
assert that they “are unambiguously required to file all
surcharges, including fuel surcharges, with DOT. . . . While
the district court concluded that DOT did not require fuel
surcharges to be filed, that conclusion was simply incorrect.”
Plaintiffs, on the other hand, contend that Defendants “were
never required to file them as a matter of law.”
Notwithstanding the factual disagreement over whether the
DOT required the filing of surcharges after 2004, the record
is also unclear as to whether Defendants actually filed them
in a consistent manner.
In sorting through the record on the filing of fuel
surcharges, the majority concludes that “summary judgment
based on the application of the filed rate doctrine was
inappropriate in light of the DOT’s express statement that it
lacks the ability to ‘effectively monitor’ fuel surcharges.”
For the fuel surcharges that were not actually filed, I agree
with the majority’s analysis, and assert that these unfiled
surcharges should be treated the same as the unfiled airfares.
Defendants have not pointed to any evidence indicating the
DOT’s regulation of unfiled fuel surcharges. Instead,
Defendants merely assert that the DOT required all
surcharges to be filed (which, as described above, is
contested). Accordingly, I agree with the majority’s holding
that the filed rate doctrine does not bar, as a matter of law,
antitrust challenges to unfiled fuel surcharges.
26 WORTMAN V. ALL NIPPON AIRWAYS
I conclude, however, that the majority is incorrect as to
any fuel surcharges that were actually filed. In Square D Co.
v. Niagara Frontier Tariff Bureau, Inc., the Supreme Court
affirmed the filed rate doctrine’s viability and held that the
filed rate doctrine was not limited to instances in which
“rates had been investigated and approved” but rather
extended to instances “whenever tariffs have been filed.”
476 U.S. 409, 417 n.19 (1986), quoting Square D Co. v.
Niagara Frontier Tariff Bureau, Inc., 760 F.2d 1347, 1351
(2d Cir. 1985).
The facts and the Supreme Court’s holding in Square D
are not the same as in our case. Moreover, Square D merely
made the assertion in a footnote that the filed rate doctrine
bars claims “whenever tariffs have been filed.”
Nevertheless, this footnote from Square D is the closest the
Supreme Court has come to answering the question of
whether challenges to rates that were actually filed are
permissible under the filed rate doctrine. The Supreme Court
answered no to this critical question. Thus, I assert that the
fuel surcharges that have actually been filed in our case fall
under the umbrella of Square D’s holding.
The majority’s conclusion on this issue seems to rely
solely on the DOT’s statement that it lacked the ability to
“effectively monitor” fuel surcharges. The DOT’s statement,
however, must be read in its full context. In 2004, the DOT
stated:
[T]he desire of carriers to pass on the higher
cost of certain expenses discretely, such as
insurance and fuel, has led to such expenses
being filed separately from the “base” fare in
tariffs, a situation that the Department cannot
effectively monitor. . . . [T]he Enforcement
Office will no longer allow the separate
WORTMAN V. ALL NIPPON AIRWAYS 27
listing of “government-approved” surcharges
in fare advertising. We will consider the
separate listing of such charges in fare
advertisements an unfair and deceptive trade
practice. . . .
69 Fed. Reg. at 65676–77. From this single statement,
regarding “the separate listing of ‘government-approved’
surcharges in fare advertising,” the majority formulates a
genuine issue of material fact as to whether the filed rate
doctrine is inapplicable to all fuel surcharges, whether or not
they were filed. I assert that the majority reads far too much
into the DOT’s statement relating to advertising.
Accordingly, I would reverse the district court to the
extent it held that Plaintiffs could challenge the literally-filed
fuel surcharges. The existence of the rates that were actually
filed, combined with the existence of the DOT’s consumer
complaint process, negates any issue of material fact as to
whether the DOT effectively abdicated its authority to
regulate actually-filed fuel surcharges.
When we create and expand judge-made doctrines, such
as the filed rate doctrine, we must do so with an eye towards
the lower courts’ application of those doctrines. In Gallo and
Carlin, we employed the “effective abdication” exception to
the filed rate doctrine in situations when rates had not
actually been filed. 1 This rule erected a clear barrier between
1
The majority, in footnote 5, asserts that Gallo stands for the
proposition that the filed rate doctrine’s application “does not turn on
‘the act of literal rate filing’” (Majority Opinion at n.5, quoting Gallo,
503 F.3d at 1040). The majority’s statement is misleading. The full
sentence from Gallo, from which the majority selectively clips, is:
“Moreover, although the Supreme Court initially applied the Filed Rate
28 WORTMAN V. ALL NIPPON AIRWAYS
treatment of rates that had actually been filed versus those
that had not. Here, the majority muddles that barrier, and
expands the exception by adopting the rule that courts must
determine when an agency has “effectively abdicated” its
authority, notwithstanding the actual filing of rates. I fear
this expansion has no limiting principle, and could lead to
the crumbling of the filed rate doctrine, in contravention of
the Supreme Court’s guidance. Adhering to a rule—that the
literal filing of rates means the filed rate doctrine applies—
is more workable than the nebulous standard the majority
has constructed here. Thus, I respectfully dissent from
Section III, Subsection B of the majority opinion.
Doctrine to actual filed rates, courts have held that the principles
underlying this doctrine preclude challenges to a wide range of FERC
actions, not just the act of literal rate filing.” Id. In essence, what Gallo
conveys here is that while the filed rate doctrine has commonly applied
only to actually-filed rates, its reach can expand even further, to
scenarios in which rates have not been filed. In no way does Gallo
suggest that the filed rate doctrine does not apply to actually-filed rates.
Indeed, application to filed rates makes sense and is not “unbounded,”
because it allows the DOT to rely on complaints about a filed rate to
exercise its supervision.