## Facts

- Airline-passenger plaintiffs brought consolidated antitrust actions against several major airlines and Airlines Reporting Corporation (ARC).
- Defendants operated hub-and-spoke networks and sometimes priced spoke-to-hub tickets higher than spoke-to-hub-to-spoke itineraries that connected through the same hub.
- Passengers could exploit this pricing by buying a cheaper spoke–hub–spoke ticket and exiting at the hub, discarding the final leg (“hidden-city” ticketing).
- Plaintiffs alleged defendants adopted and enforced prohibitions on hidden-city ticketing to preserve supracompetitive “hub premium” fares at hub airports.
- Plaintiffs claimed defendants coordinated these prohibitions and enforcement mechanisms through industry discussions and ARC.
- Plaintiffs asserted Sherman Act § 1 claims for concerted restraint of trade and § 2 claims (including monopolization/attempted monopolization theories) based on alleged hub market power and exclusionary conduct.
- The court addressed plaintiffs’ Rule 23 class-certification motion and defendants’ summary-judgment motions on the federal antitrust claims.

## Issues

1. Whether coordinated efforts to prevent hidden-city ticketing were exempt from Sherman Act § 1 scrutiny as “fraud prevention.”
2. Whether plaintiffs produced sufficient evidence of concerted action and anticompetitive effects under § 1, and monopoly power and exclusionary conduct under § 2, to survive summary judgment.
3. Whether proposed purchaser classes and subclasses satisfied Rule 23(a) and Rule 23(b)(2) and/or (b)(3) for injunctive and damages relief.

## Decision

- The court rejected defendants’ argument that coordinated hidden-city prohibitions were immune from § 1 scrutiny under a categorical “fraud prevention” theory.
- The court denied summary judgment, finding genuine disputes of material fact on the alleged § 1 conspiracy to eliminate hidden-city ticketing and on § 2 market power and exclusionary-conduct questions tied to hub pricing.
- The court granted class certification, concluding Rule 23(a) requirements were met and that common issues predominated for damages claims, with class treatment superior given dispersed, relatively small individual harms.

## Legal Principles

- There is no general Sherman Act “fraud-prevention exception” that automatically shields competitor coordination from § 1 analysis; asserted anti-fraud justifications remain subject to ordinary antitrust scrutiny.
- Summary judgment is improper where the record permits competing inferences on agreement versus lawful parallel conduct and on whether challenged practices produce anticompetitive effects.
- Monopolization-related claims under § 2 commonly turn on fact-intensive questions of relevant market power and whether the challenged practice is exclusionary rather than legitimate competition.
- Rule 23 certification may be appropriate in complex antitrust cases where liability questions are common, named plaintiffs’ claims are typical, counsel and representatives are adequate, and class treatment is a superior mechanism for small, widely distributed damages.

## Conclusion

The court allowed Sherman Act §§ 1–2 challenges to coordinated hidden-city ticketing prohibitions and hub-pricing practices to proceed to trial, refused to treat the conduct as categorically justified by “fraud prevention,” and certified purchaser classes and subclasses for injunctive and damages relief under Rule 23.


In re Northwest Airlines Corp. Antitrust Litig., 208 F.R.D. 174 (E.D. Mich. 2002)