Delta, AirTran Try to Beat Back Bag Fee Collusion Claim

ATLANTA (CN) – Attorneys for Delta Air Lines and Air Tran Airways argued before the 11th Circuit on Wednesday that there is no evidence they colluded to institute a first-checked baggage fee and that a lower court ruling in their favor should be upheld.

Martin Siegel, a New Jersey resident, filed a class action against the two air lines in 2009, claiming they conspired to impose a $15 first-check bag fee in violation of the Sherman Antitrust Act.

In his complaint, Siegel said the airlines “would benefit in the form of hundreds of millions of dollars a year in increased revenue, if they both agreed to charge the same first bag fee at the same time, so that neither would risk losing sales to the other and both would profit.”

On Tuesday, Seigel’s attorney, Kevin Ross, said allowing a lower court’s grant of summary judgment to the airlines “will set up a template for lawful price fixing.”

But Senior U.S. Circuit Judge Joel Dubina suggested that before worrying about the potential impact of allowing the lower court ruling to stand, attorneys for the class needed to convince the court a conspiracy had in fact happened.

“We have evidence that AirTran told investors they would not act independently,” Ross said in reply.

Delta merged with Northwest Airlines in April 2008, and announced it would implement a first-checked bag fee seven months later. AirTran imposed a similar fee the very next day.

But Delta attorney Randall Allen, of Alston & Bird LLP in Atlanta, said there is no evidence that AirTran’s plan factored at all into Delta’s decision-making process regarding the bag fee.

And AirTran attorney Alden Atkins, of Vinson & Elkins LLP in Washington, D.C., went a step further, accusing attorneys for the class of trying to pursuade the three-judge panel to establish a new legal standard by which to judge business decisions.

Atkins said Delta made bag fee decision in connection with its then just-completed merger with Northwest.

“The facts are pretty straightforward on this point,” Atkins said. “What we know is two companies were making independent decisions.”

The panel gave no indication when they will hand down their decision.

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