Michael Malaney v. Ual Corporation

NOT FOR PUBLICATION
UNITED STATES COURT OF APPEALS FILED
FOR THE NINTH CIRCUIT JAN 16 2014
MOLLY C. DWYER, CLERK
U.S. COURT OF APPEALS
MICHAEL C. MALANEY; et al., No. 12-15182
Plaintiffs - Appellants, D.C. No. 3:10-cv-02858-RS
v.
MEMORANDUM*
UAL CORPORATION; et al.,
Defendants - Appellees.
Appeal from the United States District Court
for the Northern District of California
Richard Seeborg, District Judge, Presiding
Argued and Submitted December 4, 2013
San Francisco, California
Before: HAWKINS, GOULD, and PAEZ, Circuit Judges.
Plaintiffs-Appellants (“Appellants”), forty-nine private individuals, appeal the
dismissal of their Clayton Act Section 7 challenge to the merger between Defendants-
Appellees UAL Corp., United Airlines, Inc., and Continental Airlines, Inc.
(“Appellees”). We have jurisdiction pursuant to 28 U.S.C. § 1291, and we affirm.
*
This disposition is not appropriate for publication and is not precedent except
as provided by Ninth Circuit Rule 36-3.
LAW OF THE CASE
In general, our review of a district court’s order concerning a preliminary
injunction does not constitute binding law of the case. Ranchers Cattlemen Action
Legal Fund United Stockgrowers of Am. v. U.S. Dep’t of Agric., 499 F.3d 1108, 1114
(9th Cir. 2007) (“Ranchers Cattlemen”). However, purely legal conclusions we
reached during review of a preliminary injunction order do constitute binding law of
the case. Id.
When this case was previously before us, we reviewed the district court’s order
denying a preliminary injunction which would have halted the then-proposed and
now-consummated merger between Appellees. See Malaney v. UAL Corp., 434 F.
App’x 620 (9th Cir. 2011) (unpub.) (“Malaney I”). Affirming the district court’s
denial of a preliminary injunction, we held that Appellants had not shown a likelihood
of success on the merits of their claim, Winter v. Natural Resources Defense Council,
555 U.S. 7, 20 (2008), by failing to demonstrate the proposed national market for air
travel is the relevant market for purposes of Appellants’ Section 7 claim, Brown Shoe
Co. v. United States, 370 U.S. 294, 324 (1962). Malaney I, 434 F. App’x at 621. This
purely legal conclusion constitutes binding law of the case. Ranchers Cattlemen, 499
F.3d at 1114.
We may depart from the law of the case only in limited circumstances. See
2
Ingle v. Circuit City, 408 F.3d 592, 594 (9th Cir. 2005). Appellants offer two
arguments why we should do so here. First, Appellants claim Appellees previously
argued in In re Air Passenger Computer Reservations Systems Antitrust Litigation,
694 F. Supp. 1443, 1472 (C.D. Cal. 1988) (“CRS”), that a national market for air
travel is an appropriate market for antitrust purposes. Appellants contend that, on
remand, the district court should have departed from the law of the case and estopped
Appellees from opposing a national market theory because neither the district court
nor we were aware of this previous litigation when ruling on the preliminary
injunction motion and subsequent appeal. Second, Appellants argue our decision in
Malaney I is clearly erroneous and should be reconsidered.
JUDICIAL ESTOPPEL
Though judicial estoppel is “probably not reducible to any general formulation
of principle, several factors typically inform the decision whether to apply the doctrine
in a particular case.” Ah Quin v. Cnty. of Kauai Dep’t of Transp., 733 F.3d 267, 270
(9th Cir. 2013) (quoting New Hampshire v. Maine, 532 U.S. 742, 750 (2001) (internal
modification omitted)). These factors ask whether (1) a party’s later position is
clearly inconsistent with its earlier position, (2) the first court accepted the advanced
position, and (3) the party seeking to assert an inconsistent position would obtain an
unfair advantage or impose an unfair detriment on the opposing party if not estopped.
3
Id. (quoting New Hampshire, 532 U.S. at 750) (internal quotations and citations
omitted). We review for abuse of discretion the district court’s application of the law
of the case doctrine in light of Appellants’ citation to CRS on remand. Ingle, 408 F.3d
at 594.
Appellees have the stronger argument as to each judicial estoppel factor. The
relevant portion of the CRS opinion is short and somewhat cryptic. Given this scant
record, we cannot discern United’s relevant position in CRS with sufficient clarity.1
Even assuming United did advance a national market theory there, it is not obvious
from the CRS opinion that the district court affirmatively accepted whatever argument
United asserted. In short, the CRS opinion itself is too thin a reed to support
Appellants’ judicial estoppel claim.2
More significantly, Appellants fail to identify the specific unfair advantage
Appellees gained or the unfair detriment Appellants would suffer as a result of
United’s position in the CRS litigation. While judicial estoppel is designed to stop
1
Appellants have not included in this record United’s filings in the CRS case.
These may have identified United’s position more clearly.
2
Appellants ask us to take judicial notice of additional court records which,
Appellants argue, show that Appellee Continental also advanced a national market
theory in previous litigation. We deny Appellants’ First Motion to Take Judicial
Notice (ECF. No. 7). See Baccei v. United States, 632 F.3d 1140, 1149 (9th Cir.
2011); Int’l Union of Bricklayers & Allied Craftsman Local Union No. 20 v. Martin
Jaska, Inc., 752 F.2d 1401, 1404 (9th Cir. 1985). We deny as moot Appellants’
Second and Third Motions to Take Judicial Notice (ECF Nos. 23 & 36).
4
litigants from “playing fast and loose with the courts,” Wagner v. Prof’l Eng’rs in Cal.
Gov’t, 354 F.3d 1036, 1050 (9th Cir. 2004) (quoting Russell v. Rolfs, 893 F.2d 1033,
1037 (9th Cir. 1990)), we cannot automatically assume bad faith each time a litigant’s
position shifts. In 1988, the airline industry, then adapting to deregulation, was
fundamentally different than it is today. The courts must balance a litigant’s need to
react to economic change against the notions of fair play undergirding the equitable
doctrine of judicial estoppel. With this in mind and reviewing for abuse of discretion,
we see no reason to disturb the district court’s determination that judicial estoppel is
inappropriate here.
MALANEY I IS NOT CLEARLY ERRONEOUS
Appellants argue Malaney I is clearly erroneous and thus merits
reconsideration. We review our previous decision for clear error when deciding
whether to depart from the law of the case. See Leslie Salt Co. v. United States, 55
F.3d 1388, 1393 (9th Cir. 1995).
Appellants argue Malaney I, in affirming the district court’s denial of a
preliminary injunction, fails to account for the cross-elasticity of supply within the
passenger airline industry. See Equifax, Inc. v. F.T.C., 618 F.2d 63, 66 (9th Cir. 1980)
(recognizing it is “well settled that cross-elasticity of supply is a valid basis for
determining that two commodities should be within the same market”); Twin City
Sportservice, Inc. v. Charles O. Finley & Co., 512 F.2d 1264, 1271 (9th Cir. 1975)
5
(similar). We disagree.
Appellants have not pleaded any specific facts establishing the relevance of
supply interchangeability to the product market inquiry in this case. Appellants
cobble together bald factual allegations with a citation to out-of-circuit authority to
allege the cross-elasticity of supply is relevant to the passenger airline industry.3 But
conclusory allegations unsupported by specific facts fail to state a specific, plausible
theory describing how supply interchangeability is relevant to an analysis of the
industry.4 See Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). Because Appellants have
failed to allege a theory in which supply cross-elasticity is relevant to the product
market definition, we cannot say Malaney I is clearly erroneous or that the district
court clearly erred in adhering to it.
CONCLUSION
Appellants’ minor amendments on remand do not cure the defect identified in
Malaney I. The district court was correct to adhere to our prior panel’s purely legal
conclusion in that case and it did not abuse its discretion when it declined to estop
Appellees from opposing the national market theory.
AFFIRMED.
3
See United Air Lines v. Civil Aeronautics Board, 766 F.2d 1107, 1115 (7th Cir.
1985).
4
Although Malaney I notes this problem with Appellants’ claim, 434 F. App’x
at 621, Appellants failed to amend their complaint on remand to address this omission.
6