Laker Airways, Inc. v. British Airways, PLC

PUBLISH

IN THE UNITED STATES COURT OF APPEALS
FILED
FOR THE ELEVENTH CIRCUITU.S. COURT OF APPEALS
ELEVENTH CIRCUIT
_______________ 07/30/99
THOMAS K. KAHN
CLERK
Nos. 98-4229, 98-5561
_______________

D. C. Docket No. 97-6766-Cv-WDF

LAKER AIRWAYS, INC.,

Plaintiff-Appellant,

versus

BRITISH AIRWAYS, PLC,

Defendant-Appellee.

______________________________

Appeals from the United States District Court
for the Southern District of Florida
______________________________
(July 30, 1999)

Before BIRCH and CARNES, Circuit Judges, and MILLS*, Senior District Judge.
_________________
*Honorable Richard Mills, Senior U.S. District Judge for the Central District of
Illinois, sitting by designation.
BIRCH, Circuit Judge:

Laker Airways, Inc. (“Laker”) appeals the district court's order dismissing its

antitrust action against British Airways PLC (“BA”) pursuant to Federal Rule of

Civil Procedure 19 and the “act of state” doctrine. For the reasons that follow, we

affirm in part, reverse in part, and remand for further proceedings.

I. BACKGROUND

Laker sued BA under federal and Florida state antitrust laws alleging that

BA combined and conspired to restrain and monopolize scheduled passenger air

service between Miami, Florida and London, England. Laker named as co-

conspirators certain individuals and Airport Coordination Ltd. (“ACL”), a private

English corporation appointed by the government of the United Kingdom to

coordinate requests for landing and take-off times (“slots”) at British airports. As

relief, Laker sought treble damages and a permanent injunction requiring BA to (1)

cease violating antitrust laws, (2) transfer to Laker a single daily arrival and

departure slot at London's Gatwick Airport, and (3) enter into an interline ticketing

and baggage agreement with Laker.1

1
Although Laker sought a transfer of slots at the time this case was before the district
court, because the airline no longer operates in the transatlantic market, Laker now asserts that it
seeks only monetary relief. Because the specific form of relief does not change our analysis, we
need not further address this issue.

2
 The district court dismissed Laker's complaint because Laker failed to join

ACL, an indispensable party within the meaning of Rule 19, and further concluded

that even had ACL been joined, the act of state doctrine barred Laker's suit. Laker

then filed a motion for relief from the judgment pursuant to Federal Rule of Civil

Procedure 60(b)(3), which the district court denied.

On appeal, Laker argues that the district court improperly applied Federal

Rule of Civil Procedure 19 because it did not consider whether in equity and good

conscience Laker's suit should be allowed to proceed in the absence of ACL.

Laker also contends that the district court should not have applied the act of state

doctrine to the actions of ACL because the government of the United Kingdom has

no role in slot allocation.

II. DISCUSSION

A. Slot Allocation Process

The transatlantic airline industry is a highly regulated business controlled, to

a great extent, through negotiations among national governments.2 The

governments of the United States and the United Kingdom have signed two

bilateral treaties which control many aspects of the transatlantic industry, including

2
Although in the past decade there has been an increased push to deregulate the
international air transportation business in order to increase competitiveness, national
governments remain highly involved.

3
factors such as the number of carriers, fares, capacity, and route designations.3 As

a result of these international agreements, a backdrop of national sovereignty

pervades discussions about transatlantic air transport issues.

While bilateral treaties control the number of entrants into the Miami-

London market and designate the U.S. airlines given access to London's Heathrow

Airport, forcing Laker to land at London's Gatwick Airport, the gravamen of

Laker's complaint is that BA conspired with ACL to prevent Laker from being

allocated desirable landing and take-off slots at Gatwick.4 We must first consider,

then, the United Kingdom's procedure for slot allocation. On January 18, 1993, the

Council of the European Communities issued a regulation setting forth the

common rules for the allocation of slots at Community airports. See Council

Regulation 95/93, 1993 O.J. (L 14). This regulation required Member States to

“ensure the appointment of a natural or legal person” to act as airport coordinator,

after consultations with the air carriers regularly using the airport facilities. Id., art.

3
Agreement Between the Government of the United States of America and the
Government of the United Kingdom of Great Britain Relating to Air Services Between Their
Respective Territories, Feb. 11, 1946. U.S.-U.K., 60 Stat. 1499 [Bermuda I], and 23 July 1977,
28 U.S.T. 5367, T.I.A.S. No. 8641 [Bermuda II].
4
Although Laker receive slots at Gatwick Airport for the summer 1997 season, it
contends that BA and ACL acted in tandem to prevent Laker from obtaining time slots that are
more commercially advantageous. Laker asserts that slots allowing for arrival in London in the
early morning hours and departures between 10:00am and 1:00pm local time are the most
commercially desirable because they allow for convenient connections to other flights and
enable passengers to reach Miami before dark.

4
4(1). The coordinator is then responsible for the allocation of slots. Id., art. 4(5).

The regulations further provide that the Member State “shall ensure that the

coordinator carries out his duties . . . in an independent manner.” Id., art. 4(2).

The coordinator is to act in “a neutral, non-discriminatory and transparent way.”

Id., art. 4(3). Finally, the regulations provide that “[s]lots may be freely exchanged

between air carriers or transferred by an air carrier from one route, or type of

service, to another, by mutual agreement or as a result of a total or partial takeover

or unilaterally. Any such exchanges or transfers shall be transparent and subject to

confirmation of feasibility.” Id., art. 8(4).

To implement the European Community regulation, the Parliament of the

United Kingdom enacted The Airports Slot Allocation Regulations 1993, S.I.

1993, No. 1067 (”ASAR”). This legislation provides that the appointment of any

person as a coordinator must be approved by the Secretary of State for Transport,

the Minister designated for the purpose of monitoring, among other things, the

allocation of slots. The Secretary may withdraw approval of a coordinator if he

has not performed in an independent manner. ASAR, ¶ 4(3). ACL is the

designated slot allocation coordinator for London's Gatwick Airport. ACL is

composed of a representative of all United Kingdom airlines who wish to

participate. Each member of ACL may designate a representative to the Board of

5
ACL. Each representative, or director, has an equal, single vote in the actions of

the organization. Laker alleges that by virtue of its size and importance in the

airline business, BA has been able to control the decisions of ACL.

B. Rule 19 Dismissal – Slot Allocation

We review dismissal for failure to join an indispensable party for abuse of

discretion. Mann v. City of Albany, 883 F.2d 999, 1003 (11th Cir. 1989). Federal

Rule of Civil Procedure 195 sets forth a two-part analysis. First, the court must

determine whether the person in question should be joined. If the person should be

5
Rule 19 provides:
(a) Persons to be Joined if Feasible. A person who is subject to service of process and whose
joinder will not deprive the court of jurisdiction over the subject matter of the action shall be
joined as a party in the action if (1) in the person's absence complete relief cannot be accorded
among those already parties, or (2) the person claims an interest relating to the subject of the
action and is so situated that the disposition of the action in the person's absence may (i) as a
practical matter impair or impede the person's ability to protect that interest or (ii) leave any of
the persons already parties subject to a substantial risk of incurring double, multiple, or
otherwise inconsistent obligations by reason of the claimed interest. If the person has not been
so joined, the court shall order that the person be made a party. If the person
should join as a plaintiff but refuses to do so, the person may be made a defendant, or, in a
proper case, an involuntary plaintiff. If the joined party objects to venue and joinder of that
party would render the venue of the action improper, that party shall be dismissed from the
action.
(b) Determination by Court Whenever Joinder not Feasible. If a person as described in
subdivision (a)(1)-(2) hereof cannot be made a party, the court shall determine whether in equity
and good conscience the action should proceed among the parties before it, or should be
dismissed, the absent person being thus regarded as indispensable. The factors to be considered
by the court include: first, to what extent a judgment rendered in the person's absence might be
prejudicial to the person or those already parties; second, the extent to which, by protective
provisions in the judgment, by the shaping of relief, or other measures, the prejudice can be
lessened or avoided; third, whether a judgment rendered in the person's absence will be
adequate; fourth, whether the plaintiff will have an adequate remedy if the action is dismissed
for nonjoinder.

6
joined, but for some reason cannot be, the court must analyze the factors outlined

in Rule 19(b) to determine whether “in equity and good conscience the action

should proceed among the parties before it, or should be dismissed, the absent

person thus regarded as indispensable.” Fed. R. Civ. P. 19(b). See also Wymbs v.

Republican State Executive Comm., 719 F.2d 1072, 1079 (11th Cir. 1983)

(applying Rule 19(a) & (b)).

A. Necessary Party

A party is considered “necessary” to the action if the court determines either

that complete relief cannot be granted with the present parties or the absent party

has an interest in the disposition of the current proceedings. Id. Laker argues that

ACL need not be joined in the suit because (1) it seeks now only monetary

damages, which BA can provide without ACL and (2) even if Laker were still

pursuing slots, BA could transfer a slot to Laker without the involvement of ACL.

Laker is correct in arguing that courts have held that joint tortfeasors need not all

be joined in one lawsuit. See Temple v. Synthes Corp., 498 U.S. 5, 7, 111 S. Ct.

315, 316, 112 L.Ed.2d 263 (1990) (“It has long been the rule that it is not

necessary for all joint tortfeasors to be named as defendants in a single lawsuit. . . .

The Advisory Committee Notes to Rule 19(a) explicitly state that a tortfeasor with

7
the usual