American Airlines 2005 Annual Report Download - page 25

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On July 12, 2004, a consolidated class action complaint, that was subsequently amended on November 30, 2004,
was filed against American and the Association of Professional Flight Attendants (APFA), the Union which
represents the Company’s flight attendants (Ann M. Marcoux, et al., v. American Airlines Inc., et al. in the United
States District Court for the Eastern District of New York). While a class has not yet been certified, the lawsuit
seeks on behalf of all of American’s flight attendants or various subclasses to set aside, and to obtain damages
allegedly resulting from, the April 2003 Collective Bargaining Agreement referred to as the Restructuring
Participation Agreement (RPA). The RPA was one of three labor agreements the Company successfully reached
with its unions in order to avoid filing for bankruptcy in 2003. In a related case (Sherry Cooper, et al. v. TWA
Airlines, LLC, et al., also in the United States District Court for the Eastern District of New York), the court denied
a preliminary injunction against implementation of the RPA on June 30, 2003. The Marcoux suit alleges various
claims against the Union and American relating to the RPA and the ratification vote on the RPA by individual
Union members, including: violation of the Labor Management Reporting and Disclosure Act (LMRDA) and the
APFA’s Constitution and By-laws, violation by the Union of its duty of fair representation to its members, violation
by the Company of provisions of the Railway Labor Act through improper coercion of flight attendants into voting
or changing their vote for ratification, and violations of the Racketeer Influenced and Corrupt Organizations Act of
1970 (RICO). Although the Company believes the case against it is without merit and both the Company and the
Union are vigorously defending the lawsuit, a final adverse court decision invalidating the RPA and awarding
substantial money damages would have a material adverse impact on the Company.
On February 14, 2006, the Antitrust Division of the United States Department of Justice (the “DOJ”) served the
Company with a grand jury subpoena as part of an ongoing investigation into possible criminal violations of the
antitrust laws by certain domestic and foreign air cargo carriers. At this time, the Company does not believe it is a
target of the DOJ investigation. On February 22, 2006, the Company received a letter from the Swiss
Competition Commission (the “Commission”) informing the Company that the Commission is investigating
whether the Company and certain other cargo carriers entered into agreements relating to fuel surcharges,
security surcharges, war risk surcharges, and customs clearance surcharges. The Company intends to
cooperate fully with these investigations. In the event that these investigations uncover violations of the U.S.
antitrust laws or the competition laws of some other jurisdiction, such findings and related legal proceedings could
have a material adverse impact on the Company.
Two purported class action lawsuits have been filed against the Company and certain foreign and domestic air
carriers alleging that the defendants violated the U.S. antitrust laws by illegally conspiring to set prices and
surcharges on cargo shipments (Animal Land, Inc. v. Air Canada et al., filed February 17, 2006, and Adams v.
British Airways, et al, filed February 22, 2006, both of which were filed in the United States District Court for the
Eastern District of New York). Plaintiffs are seeking trebled money damages and injunctive relief. American will
vigorously defend these lawsuits; however, any adverse judgment could have a material adverse impact on the
Company.