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In re Domestic Airline Travel Antitrust Litigation

United States District Court, District of Columbia

November 6, 2019




         Pending before this Court is the Special Master's [411] Report and Recommendation No. 9 Regarding Plaintiffs' Motion to Compel Defendant Delta Air Lines to Produce Certain Data. Plaintiffs filed under seal their [417] unredacted Objections to Report and Recommendation No. 9;[1] Defendant Delta Air Lines, Inc. (‘Delta”) filed its [416] Response to Plaintiffs' Objections; and Plaintiffs filed their [419-1] Reply to Delta's Response. Accordingly, Plaintiffs' Objections are ripe for review by this Court. In considering Plaintiffs' Objections, this Court not only reviewed the briefing with regard to Plaintiffs' Objections but also reviewed the materials which were presented to the Special Master.[2] The Court understands the Special Master's Report and Recommendation in light of the briefing initially made by Plaintiffs regarding their motion to compel, which has since been clarified and refined through briefing on Plaintiffs' Objections. For the reasons explained herein, the Court ADOPTS IN PART, OVERRULES IN PART, and REMANDS IN PART to the Special Master Report and Recommendation No. 9.

         The two contested issues before this Court involve the production of Delta's fuel costs data, and production of Delta's hurdle rates. Beginning with fuel costs data, this Court notes that Plaintiffs issued document requests (“RFPs”) seeking documents sufficient to show:

• [Delta's] costs . . . by category and the components of such costs . . . (RFP No. 13(c))
• the costs [Delta] paid for jet fuel, including any hedging of fuel prices, pre-hedge or post-hedge price. . . (RFP No. 28) and
• a detailed breakdown of all cost components. . . including but not limited to fuel costs. . . (RFP No. 36)

         Plaintiffs assert that Delta responded to their requests by producing “a single line item that aggregated all of Delta's costs related to fuel - that is, by cost category, not by cost component.” Pls.' Objections, ECF No. 417, at 8. Plaintiff notes that the cost components include the cost of jet fuel purchased, cost of services to transport jet fuel from storage to plane, fuel taxes, costs paid to enter into fuel hedges, and losses (or gains) resulting from the variance between actual and hedged fuel prices. Id.

         The Report and Recommendation notes that because Plaintiffs did not clearly distinguish between costs and prices in its RFPs, Delta interpreted Plaintiffs' requests by using its own internal terminology and subsequently, Delta produced information in an aggregate format. The Report and Recommendation further indicates that there was a two-year discovery period following service of Plaintiffs' requests, during which “the parties exchanged numerous, detailed letters and emails about the RFPs” and held multiple meet and confer sessions in an “attempt to reach a consensus on the scope of the document production.” Report and Recommendation No. 9, ECF No. 411, at 2. Notably, only one of the many questions posed by Plaintiffs to Delta concerned the designation “fuel' and whether it was “net of hedging.” Id. at 3.

         The Court finds a general lack of clarity in Plaintiffs' RFPs, which left them open to interpretation by Delta. Neither does it appear that Plaintiffs focused on the responsiveness of Delta's production in as timely a manner as they should have nor were Plaintiffs crystal clear in their communications with Delta regarding the granular level of detail that was being requested. In attempting to reconstruct the negotiations between the parties, the Court is left with the impression that there was little agreement on the manner in which terms relating to costs and pricing were defined/used or on identifying distinctions between cost categories and components of costs, with the effect that responsive information was produced by Delta, but its usefulness to Plaintiffs is limited. The Court notes that while Delta asserts that Plaintiffs raise a new argument with regard to cost categories and components, the record in this case indicates that there was a discussion of cost components and costs categories in connection with the briefing on the underlying motion to compel and the exhibits accompanying that briefing.

         Plaintiffs' Objections focus on RFP 28, and as such, the Court will not revisit Plaintiffs' RFPs 13 and 36. The Court finds, however, that Plaintiffs' RFP 28 - which specifies jet fuel and asks for pre-hedge and post-hedge prices - is specific enough to require that Delta provide data that will permit Plaintiffs to discern the actual purchase cost for fuel and variance between price paid and hedged prices. According to the Plaintiffs, Delta possesses this fuel cost data at a more granular level, which will permit these inquiries to be answered. The Court notes that Delta has not indicated that production of such data on a more granular level will be unduly burdensome. In contrast, Plaintiffs' need for this information requested in RFP 28 - actual fuel costs, excluding ancillary costs - will “allow Plaintiffs to identify whether and when Delta's costs for fuel purchases rose or fell, and whether and the extent to which those costs were offset by hedging.” Pls.' Objections, ECF No. 417, at 15. “This will allow Plaintiffs' experts to control for the effect of fuel purchase costs on airfares in their regression models to assess whether the alleged conspiracy elevated fares.” Id. (citations omitted). Accordingly, with regard to fuel price data, the Court adopts the Special Master's recommendations as to resolution of Plaintiffs' RFPs 13 and 36, and the Court overrules the recommendations as to resolution of Plaintiffs' RFP 28. That issue shall be remanded to the Special Master for oversight of Delta's production of more granular information in response to Plaintiffs' RFP 28.

         The Court turns next to production of Delta's hurdle rates, which hinge on Plaintiffs' RFP 10. That RFP was modified by the parties to require production of “documents that refer to or describe the policies, methods, formulas or algorithms used to price domestic airlines passenger transportation services . . .” Report and Recommendation, ECF No. 411, at 10 (citations omitted). Plaintiffs indicate that they learned during Delta's Rule 30(b)(6) deposition that Delta maintains historical “hurdle rates” data by transaction, where hurdle rates reflected “the minimum dollar value that Delta is willing to accept” for a particular flight, and they moved to compel production of that data pursuant to RFP 10. Pls.' Objections, ECF No. 417 at 2 (citing Transcript of Oral Hearing (“Tr.”) at 66:1-22) (additional citations omitted). Plaintiffs theorize that the Report and Recommendation “faults” Plaintiffs for first learning of hurdle rates in Delta's Rule 30(b)(6) deposition, but that theory is discredited by this Court as the Special Master specifically noted that Plaintiffs' discovery strategy was not used as a basis to recommend denying its motion to compel.

         The Special Master found that Plaintiffs understood “hurdle rates” to be a “pricing mechanism, ” which was described as equivalent to the “minimum dollar value that Delta is willing to accept on [a] particular leg for [a] particular time, departure date, [and] flight [in a] booking period.” Report and Recommendation, ECF No. 411, at 10. In contrast, during oral argument, Plaintiffs styled hurdle rates as a “policy” with respect to each flight and booking request. Id. at 11. The Special Master found that hurdle rates were not responsive to Request No. 10, and he noted that it appeared that Delta had produced what Plaintiffs requested in RFP 10. Id. at 12.[3]

         Plaintiffs assert that, even after oral argument, it was unclear what hurdle rates represented insofar as Delta indicated that they are “sort of an internal reference mechanism.” Pls.' Objections, ECF No. 417, at 3 (citing Tr. at 82:20-83:2). In their Objections, Plaintiffs request clarification and articulation by Delta as to their definition of hurdle rates since there is no apparent agreement on this subject. “If Plaintiffs are to be deprived of this information that is well within the scope of Request 10, both Delta and the R&R9 should be able to articulate what the data do refer to [but] [n]either does.” Pls' Objections, ECF No. 417, at 4. Notably absent from Delta's Response to Plaintiffs' Objections is any definition or clear explanation of what hurdle rates are, and in fact, Delta makes clear its position that ‘[i]t is not Delta's burden, and certainly not the Special Master's burden, “ to “adequately explain what hurdles rates ‘refer to.'” Delta's Response, ECF No. 416, at 3-4. This Court finds this assertion by Delta flawed because without knowing how Delta defines hurdle rates, the Court is unable to determine if hurdle rates fall within the scope of Plaintiffs' RFP 10.[4]

         In its Response to Plaintiffs' Objections, Delta relies first on the fact that hurdle rate [data] was determined to be non-responsive to RFP 10 pursuant to the Report and Recommendation. Delta argues that Plaintiffs may not now “rewrite” their definition of hurdle rates to cover anything used by Delta to price services, and Delta asserts further that Plaintiffs already have testimony and documentary evidence referring to or describing how hurdle rates are used. Delta focuses next on the fact that because hurdle rate [data] “consists of a field containing a numerical value for the hundreds of millions of tickets for which Delta has already produced detailed data, ” by its very nature, the hurdle rate values do not “refer to or describe [ ] policies, methods, formulas or algorithms.” Delta's Response, ECF No. 416, at 3. Delta contends further that because the parties agreed RFP 10 did not request structured data, and hurdle rate data is structured data, production of such data is outside the scope of the agreement with respect to RFP 10. ...

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