Legal Fee Tracker: American Airlines presses $139 mln fee bid after $1 verdict
By David Thomas
Oct 10 (Reuters) -The largest U.S. airline by fleet size is taking another stab at reaping almost $140 million in attorney fees after winning just $1 in damages in an antitrust lawsuit that originally sought $1 billion.
American Airlines has been battling over the fees for two years with Sabre Corp, the country's largest owner and operator of an electronic network travel agents use to search and book flights listed by the airlines. American's lawyers on Monday asked a Manhattan federal judgeto order Sabre to pay more than $139 million in legal fees for more than a decadeof work on the case.
The legal fight began in 2011 when US Airways accused Sabre of impeding travel agents and others from using less expense alternatives for booking seats, and imposing an unduly restrictive distribution agreement. American took over the case after it merged with US Airways.
A juryagreed with American in 2022 that Sabre had monopoly power, but determined that its contract with US Airways did not constrain trade as American had alleged. American sought more than $1 billion in damages in its lawsuit, but the jury only awarded the airline $1. Sabre never appealed the verdict.
American's lawyers at O'Melveny & Myers and Yetter Coleman said in Monday's fee petition that the verdict was a victory for the airline and the entire industry, leading to a new contract with Sabre that allowed for greater competition.
"We had hoped to resolve this issue amicably and without the court's assistance, but it's clear the parties still disagree on the importance of this litigation and US Airways and American’s statutory right to recover attorneys' fees," American said in a statement.
A spokesperson for Sabre declined to comment.
Andre Barlow, an antitrust lawyer at Washington, D.C.-based law firm Doyle Barlow & Mazard who is not involved in the case, said in an email that such a high fee award in a case involving nominal damages would be unusual.
"That said, antitrust cases are complex and I don't doubt that the reasonable attorneys fees are significant in this case and would far exceed the damages award," Barlow said. He noted there's no rule requiring attorney fees to be proportionate to a damages award.
Sabre has maintained that it prevailed in the 2022 trial, noting the size of the award and that American did not win on all of its claims. American and Sabre, which is now represented by a team of lawyers from Davis, Polk & Wardwell, tried to resolve the fee dispute via settlement talks.
U.S. District Judge Lorna Schofield denied American's first request for more than $139 million in February as the airline and Sabre tried to work resolve their dispute. She said American could refile "when and if settlement negotiations break down."
In the renewed request it filed on Monday, American argued its success should be judged by the effect the verdict had on the broader market, not by the specific damages it was awarded. It said it was already seeking 15% less than the $159 million it believes it is fairly owed.
"A finding that Sabre possesses monopoly power and abused it over the course of many years is far more significant for the industry and market as a whole than a mere finding that the 2011 contract between US Airways and Sabre was anticompetitive," American said.
American's lawyers and other legal staff billed more than 185,000 hours on the case between its 2011 inception and June 1, 2023, according to court filings. The firm's $139 million request amounts to an average of $750 an hour, and excludes work done by the airline's former counsel at Cadwalader, Wickersham & Taft.
Sabre has not yet submitted a formal response to American's fee requests, but it has stated its opposition in other court papers. In December 2022 it said a "nine-figure fee for a so-called $1 'win' is plainly unsupportable, and any recoverable fees should be slashed by at least 99%."
Sabre's opposition brief is due in January.
-- In other legal news, plaintiffs' lawyers who worked out a tentative $750,000 data breach settlement with snack food giant Mondelez and law firm Bryan Cave Leighton Paisner can receive up to one-third -- or $250,000 -- of that amount in fees.
The settlement resolves claims by a proposed class of 51,100 current and former Mondelez employees who alleged their data was not property protected after a 2023 data breach at the law firm compromised their personal information. Mondelez and BCLP denied wrongdoing and made no admission of liability in the settlement.
-- A U.S. judge on Monday gave tentative approval to the National Collegiate Athletic Association's landmark $2.7 billion settlement agreement to compensate student athletes for past and future commercial use of their names, images and likenesses.
The two law firms that spearheaded the litigation, Hagens Berman Sobol Shapiro and Winston & Strawn, are poised to earn hundreds of millions of dollars thanks to the unusual, multifaceted fee structure they've proposed.
(Legal Fee Tracker is a weekly feature exploring attorney compensation awards and disputes in class actions, bankruptcies and other matters. Please send tips or suggestions to D.Thomas@thomsonreuters.com.)
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Reporting by David Thomas
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