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American Airlines, Inc. and Sabre Travel Information Network (Enforcement
Proceeding, Violations of 14 CFR Part 255 and 49 USC)
OST-95-430 / Issued and Served October 28, 1996
Notice
of Enforcement Proceeding and Proposed Assessment of Civil Penalties
In my opinion, there are reasonable grounds to believe that American and
Sabre have violated 14 CFR §255.4 and 49 U.S.C. §41712 and that
investigation of the alleged violations is in the public interest. Accordingly,
pursuant to Rule 206 of the Department's Rules of Practice, 14 CFR §302.206,
I institute a formal enforcement proceeding to investigate the allegations
set forth in the attached complaint.
Enforcement
Complaint
American Airlines, Inc. and Sabre Travel Information Network (Enforcement
Proceeding)
OST-95-430 / Served October 29, 1996
Notice of Assignment of Proceeding
This proceeding has been assigned to Administrative Law Judge Burton S.
Kolko. All future pleadings and other communications regarding the proceeding
shall be served on him and on the DOT Hearing Docket and the other persons
named in the attached service list.
By: John J. Mathias, Chief Administrative Law Judge
This is the FullText
American Airlines and Sabre Travel Information Network (Enforcement
Proceeding)
OST-95-430 / Served October 31, 1996
Notice
of Hearing
Notice is given that the hearing in this matter will start at 10:00 am
on March 11, 1997.
Northwest Airlines, Inc. v. American Airlines, Inc. and Sabre Travel
Information Network (Complaint)
OST-95-430 / Filed November 12, 1996
Answer
of American Airlines and Sabre Travel to Enforcement Complaint
Re:
Enforcement Complaint - Letter from Sabre Group to Samuel Podbersky
Counsel: American
American Airlines, Inc. and Sabre Travel Information Network (Enforcement
Proceeding)
OST-95-430 / Filed November 15, 1996
Petition
of Alaska Airlines for Leave to Intervene
Alaska is a competitor of American Airlines, Inc. ("American"),
and a participating carrier in the SABRE Computer Reservation System ("SABRE").
Alaska also participated in the underlying proceeding involving the third
party enforcement complaint filed by Northwest Airlines, Inc. against American
and SABRE. Alaska did so because of its profound concern that American's
and SABRE's active involvement in designing and distributing software intended
to recreate carrier-specific display bias would result in unjustified and
unlawful revenue diversion from Alaska as well as mislead Alaska's passengers.
Alaska therefore has a direct and substantial financial interest in the
outcome of this proceeding.
Counsel: Alaska and Squire Sanders
American Airlines, Inc. and Sabre Travel Information Network (Enforcement
Proceeding)
OST-95-430 / Filed November 25, 1996
Petition
of Midwest Express Airlines for Leave to Intervene
Midwest Express has and will continue to suffer financial injury if travel
agencies employing American-supplied and Sabre-developed software which
manipulates CRS flight displays in favor of American.
Counsel: Bagileo Silverberg
American Airlines, Inc. and SABRE Travel Information Network (Enforcement
Proceeding)
OST-95-430 / Served December 20, 1996
Revised
Notice of Hearing
There is a change in the hearing date. The hearing will start at high noon
on Monday, March 24, 1997, and will proceed for the necessary number of
consecutive business days during that week. The hearing site is room 5332,
U.S. Department of Transportation, 400 Seventh Street, SW, Washington,
DC.
The Service List adds Midwest Express and Alaska Airlines, each of which
has petitioned to intervene, and whose petitions being unopposed, will
in the course of time be granted by separate order.
American Airlines, Inc. and Sabre Travel Information Network (Enforcement
Proceeding)
OST-95-430 / Filed December 31, 1996
Motion
of the Office of Aviation and Enforcement Proceedings for Summary Judgement
and Stay of Proceedings
Even if Your Honor should conclude that Sabre's development of Preference
MAAnager and American's distribution of this software to Sabre subscribers
is not a violation of the CRS rules on the grounds that these rules do
not expressly proscribe such conduct, the legislative histories of both
the 1992 CRS rules, NPRM, supra, and Final Rule, supra, and the 1984 CRS
rules, Carrier-Owned Computer Reservations Systems, Notice of Proposed
Rulemaking, 49 FR 11644 (March 27, 1984) and Final Rule, 49 FR 32540 (August
15, 1984), leave no doubt that the type of bias attributable to the creation
and distribution of Preference MAAnager is an unfair and deceptive practice
and an unfair method of competition within the meaning of 49 U.S.C. §41712.
American and Sabre must therefore be required to cease and desist from
distributing Preference MAAnager and to take whatever steps are necessary
to recover or disable it, and they must be assessed civil penalties in
an amount commensurate with the extent and duration of their violations.
By: Samuel Podbersky, 202.366.9356
American Airlines, Inc. and SABRE Travel Information Network (Enforcement
Proceeding)
OST-96-430 / Filed January 2, 1997
Motion
of American Airlines to Establish Procedural Schedule
Counsel: American, Carl Nelson, 202.967.1258
American Airlines, Inc. and Sabre Travel Information Network (Enforcement
Proceeding)
OST-95-430 / Filed January 3, 1997
Answer
of the Office of Aviation Enforcement and Proceedings to Motion of American
Airlines to Establish Procedural Schedule
We do not believe that replies would add anything useful to the record
in this case. Northwest Airlines, Inc.'s initial complaint in this
docket precipitated several rounds of pleadings before the Enforcement
Office began attempting to settle the complaint win American nearly a year
ago. Our settlement efforts entailed several further rounds of communication,
some in writing and some in person. As a result, our motion for summary
judgment contains no arguments that we have not already made to American,
albeit in somewhat less detail, just as American's answer to the enforcement
complaint contained no arguments that American had two already made to
us. Perhaps American and other parties may raise new arguments in their
summary judgment motions, but even if so, all parties will have the opportunity
to respond in their answers. We thus believe that with the filing of answers,
all legal arguments will have been exhaustively developed, and the filing
of replies would serve no purpose other than to delay Your Honor's decision
unnecessarily.
Counsel: Aviation Enforcement and Proceedings, Samuel Podbersky, 202-366-9356
American Airlines, Inc. and SABRE Travel Information Network (Enforcement
Proceeding)
OST-95-430 / Served January 7, 1997
Order
Staying Proceedings
There being agreement by the Enforcement Office with the premise of American's
motion to establish a procedural schedule that would culminate in a decision
based upon the pleadings rather than after a formal hearing, I grant American's
motion to establish the following procedural schedule in lieu of the hearing
that is scheduled for March 24th and the attendant pretrial submissions:
January 21, 1997: Cross-motions for summary judgment and answers to the
Enforcement Office's initial motion
January 31, 1997: Answers to the motions for summary judgment
To the extent not granted, American's motion is denied. The hearing date
will remain on the books in the event that the cross motions for summary
judgment reveal a need for the resolution of a dispute of material fact.
American Airlines, Inc. and SABRE Travel Information Network (Enforcement
Proceeding)
OST-95-430 / Filed January 21, 1997
Counsel: Alaska and Squire Sanders, Marshall Sinick, 202.626.6651
Counsel: American, Carl Nelson, 202.496.5647
Counsel: Delta and Shaw Pittman, Robert Cohn, 202.663.8060
Counsel: Bagileo Silverberg, Robert Silverberg, 202.944.3300
Counsel: Northwest, Megan R. Poldy, 202.842.3193 and Crowell Moring,
Wm. Randolph Smith, 202.624.2700
Counsel: SABRE Group, Sterling Miller, 817.967.6932
American Airlines, Inc. and Sabre Travel Information Network (Violations
of 14 CFR Part 255 and 49 USC 41712)
OST-95-430 / Filed January 31, 1997
Answer
of American Airlines
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American based its belief that it could distribute Preference MAAnager
on the Department's own explicit statements that it was not regulating
software distributed to travel agents by vendors. The Department made that
statement at a time other vendors were already distributing software to
travel agents, yet gave no indication that these vendors were violating
Section 255.4.
Counsel: American, Carl Nelson, 202.496.5647
Answer
of the Office of Aviation Enforcement and Proceedings to (1) Motion
to Dismiss the Complaint Against Sabre Travel (2) Cross-Motion for Summary
Judgment of American Airlines and Answer to Motion (3) Northwest Airlines'
Motion for Summary Judgment and Memorandum
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In its conclusion, American complains that if the CRS rules mean what the
Enforcement Office says they mean, then they are unfair not only to American
but to subscribers of CRSs that have multiple owners. Because Sabre has
the largest market share of any U.S. CRS, American alone would be barred
from distributing biasing software to the greatest number of travel agents.
We have no evidence so far that any carrier besides American has distributed
software like Preference MAAnager, so the issue American raises is not
ripe for resolution, and in any event, American may petition for an amendment
of the rules. American also sheds crocodile tears over the subscribers
of CRSs that are owned by more than one airline, because these subscribers
are deprived of the hypothetical competition among all owner airlines for
developing and providing biasing software. Curiously, to date, no subscriber
has complained to us of this alleged hardship.
Counsel: Aviation Enforcement and Proceedings, Samuel Podbersky
Consolidated
Answer of Delta Air Lines to Motion to Dismiss, and to Motion and
Cross-Motion for Summary Judgment
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Delta Air Lines urges the Administrative Law Judge: (1) to grant the Motion
for Summary Judgment of Northwest, (2) to deny the Cross-Motion for Summary
Judgment filed by American, and (3) to deny the Motion to Dismiss filed
by SABRE; and to grant such other relief, consistent with Summary Judgment
Motions of AEP and Northwest, as the Judge deems appropriate.
Counsel: Delta and Shaw Pittman, Robert Cohn, 202.663.8060
Consolidated
Answer of Midwest Express Airlines to Dispositive Motions filed
by American and Sabre
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When the objectives sought to be accomplished by the Depart-ment through
the CRS rules, as revealed in the plain language of the rules and in the
explanatory text accompanying both the proposed and final rules, are fairly
considered, it is clear that American's distribution of biasing software
developed by Sabre is prohibited by the CRS rules and is the proper subject
of enforce-ment action by the Department. Accordingly, Midwest Express
respectfully requests that the Administrative Law Judge grant summary judgment
in favor of the Enforcement Office and deny American's cross motion for
summary judgment and the motion to dismiss of the Sabre Group, Inc.
Counsel: Bagileo Silverberg, Robert Silverberg, 202.944.3300
Northwest
Airlines' Answer to American Airlines' Cross-Motion for Summary Judgment
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American's practice of distributing Preference MAAnager should be recognized
for what it is-a blatant attempt to end-run the CRS rules and to undermine
the pro-competition and anti-deception foundations of those rules, and
a plain violation of Section 411.
Counsel: Northwest, Elliott Seiden, 202.842.3193 and Crowell Moring
Petition
for Leave to Intervene and Answer of United Air Lines
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Pursuant to Rule 15 of the Department's Rules of Practice, United Air Lines,
Inc. ("United") hereby petitions for leave to intervene in this
proceeding. At issue here is whether American Airline's distribution to
subscribers to its SABRE CRS system of software that enables the subscribers
to reconfigure the system's neutral displays violated §255.4 of the
Department's CRS rules and was an unfair or deceptive practice in violation
of 49 U.S.C. §41712. The resolution of that issue, in turn, requires
an interpretation of the Department's CRS rules that will impact all carriers
that are "system owners," as defined in Part 255.
Counsel: United and Ginsburg Feldman, 202.637.9130
American Airlines, Inc. and Sabre Travel Information Network (Enforcement
Proceeding)
OST-95-430 / Filed February 10, 1997
Motion
of the Office of Aviation Enforcement and Proceedings for Leave to File
an Otherwise Unauthorized Document and Reply to Answer of United Air Lines
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United's concern over the "chilling effect" that a decision against
American in this case might have on system owners' development of software
for their subscribers is unwarranted. Whatever a system and its owners
may not do directly, they also may not do by means of ancillary software.
Counsel: Samuel Podbersky, Asst General Counsel, 202.366.9356
American Airlines, Inc. and Sabre Travel Information Network (Enforcement
Proceeding)
OST-95-430 / Filed February 11, 1997
Motion
for Leave to File an Unauthorized Document and Reply of Northwest Airlines
to Answer of United Air Lines
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While it is not surprising that United/Apollo once again would lock arms
with American/Sabre to defend display bias and resist this Department's
efforts to protect competition and consumers, United's Answer ultimately
offers no basis for denying the Enforcement Office's and Northwest's Motions
for Summary Judgment.
Counsel: Crowell Moring and Northwest, Megan Rae Poldy, 202.842.3193
American Airlines, Inc. and Sabre Travel Information Network (Enforcement
Proceeding)
OST-95-430 / Served February 18, 1997
Order Vacating Notice of Hearing
The previous order left the March 24th hearing date "on the books
in the event that the cross motions for summary judgment reveal a need
for the resolution of a dispute of material fact." There is no need
to do that since whatever the resolution of the outstanding motions for
summary judgment a hearing could not be held on that date; should a new
one be needed it will be set. Accordingly, the Notice of Hearing setting
the hearing date of March 24th is vacated.
All outstanding petitions for leave to intervene are granted to the extent
and for the purposes provided in Rule 214, 14 CFR 302.214, and all outstanding
motions to file documents/pleadings are granted.
By: Burton S. Kalko, Administrative Law Judge
This is the FullText
American Airlines, Inc. and Sabre Travel Information Network (Enforcement
Proceeding)
OST-95-430 / Served March 17, 1997
Order
Denying Motions of AEP and Northwest Airlines and Granting Cross-Motion
of American Airlines for Summary Judgment
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I have found and concluded that Respondents, by developing and distributing
the Preference MAAnager software, have violated neither §255.4 of
the CRS rules nor 49 U.S.C. §41712 as charged. Therefore, I deny summary
judgment to AEP and to Northwest on their respective motions for summary
judgment; I grant summary judgment to American on its cross-motion for
summary judgment; and I dismiss the complaint.
By: Burton S. Kolko, Administrative Law Judge
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