American Airlines 2008 Annual Report Download - page 26

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cargo facilities in Sao Paulo, Brazil. On April 28, 2008, the Brazilian competition authorities preliminarily charged
the Company with violating Brazilian competition laws. The authorities are investigating whether the Company and
certain other foreign and domestic air carriers violated Brazilian competition laws by illegally conspiring to set fuel
surcharges on cargo shipments. The Company is vigorously contesting the allegations and the preliminary
findings of the Brazilian competition authorities. On June 27, 2007 and October 31, 2007, the Company received
requests for information from the Australian Competition and Consumer Commission seeking information
regarding fuel surcharges imposed by the Company on cargo shipments to and from Australia and regarding the
structure of the Company's cargo operations. On September 1, 2008, the Company received a request from the
Korea Fair Trade Commission seeking information regarding cargo rates and surcharges and the structure of the
Company’s activities in Korea. On December 18, 2007, the European Commission issued a Statement of
Objection (“SO”) against 26 airlines, including the Company. The SO alleges that these carriers participated in a
conspiracy to set surcharges on cargo shipments in violation of EU law. The SO states that, in the event that the
allegations in the SO are affirmed, the Commission will impose fines against the Company. The Company intends
to vigorously contest the allegations and findings in the SO under EU laws, and it intends to cooperate fully with all
other pending investigations. In the event that the SO is affirmed or other investigations uncover violations of the
U.S. antitrust laws or the competition laws of some other jurisdiction, or if the Company were named and found
liable in any litigation based on these allegations, such findings and related legal proceedings could have a
material adverse impact on the Company.
Approximately 44 purported class action lawsuits have been filed in the U.S. against the Company and certain
foreign and domestic air carriers alleging that the defendants violated U.S. antitrust laws by illegally conspiring to
set prices and surcharges on cargo shipments. These cases, along with other purported class action lawsuits in
which the Company was not named, were consolidated in the United States District Court for the Eastern District
of New York as In re Air Cargo Shipping Services Antitrust Litigation, 06-MD-1775 on June 20, 2006. Plaintiffs are
seeking trebled money damages and injunctive relief. The Company has not been named as a defendant in the
consolidated complaint filed by the plaintiffs. However, the plaintiffs have not released any claims that they may
have against the Company, and the Company may later be added as a defendant in the litigation. If the Company
is sued on these claims, it will vigorously defend the suit, but any adverse judgment could have a material adverse
impact on the Company. Also, on January 23, 2007, the Company was served with a purported class action
complaint filed against the Company, American, and certain foreign and domestic air carriers in the Supreme
Court of British Columbia in Canada (McKay v. Ace Aviation Holdings, et al.). The plaintiff alleges that the
defendants violated Canadian competition laws by illegally conspiring to set prices and surcharges on cargo
shipments. The complaint seeks compensatory and punitive damages under Canadian law. On June 22, 2007,
the plaintiffs agreed to dismiss their claims against the Company. The dismissal is without prejudice and the
Company could be brought back into the litigation at a future date. If litigation is recommenced against the
Company in the Canadian courts, the Company will vigorously defend itself; however, any adverse judgment could
have a material adverse impact on the Company.
On June 20, 2006, 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 passenger carriers. At this
time, the Company does not believe it is a target of the DOJ investigation. The Company intends to cooperate fully
with this investigation. On September 4, 2007, the Attorney General of the State of Florida served the Company
with a Civil Investigative Demand as part of its investigation of possible violations of federal and Florida antitrust
laws regarding the pricing of air passenger transportation. In the event that this or other 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.
Approximately 52 purported class action lawsuits have been filed in the U.S. against the Company and certain
foreign and domestic air carriers alleging that the defendants violated U.S. antitrust laws by illegally conspiring to
set prices and surcharges for passenger transportation. On October 25, 2006, these cases, along with other
purported class action lawsuits in which the Company was not named, were consolidated in the United States
District Court for the Northern District of California as In re International Air Transportation Surcharge Antitrust
Litigation, Civ. No. 06-1793 (the “Passenger MDL”). On July 9, 2007, the Company was named as a defendant in
the Passenger MDL. On August 25, 2008, the plaintiffs dismissed their claims against the Company in this action.
On March 13, 2008, and March 14, 2008, two additional purported class action complaints, Turner v. American
Airlines, et al., Civ. No. 08-1444 (N.D. Cal.), and LaFlamme v. American Airlines, et al., Civ. No. 08-1079
(E.D.N.Y.), were filed against the Company, alleging that the Company violated U.S. antitrust laws by illegally
conspiring to set prices and surcharges for passenger transportation in Japan and certain European countries,
respectively. The Turner plaintiffs have failed to perfect service against the Company, and it is unclear whether
they intend to pursue their claims. On February 17, 2009, the LaFlamme plaintiffs agreed to dismiss their claims
against the Company without prejudice. In the event that the Turner plaintiffs pursue their claims or the LaFlamme