Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

Travelport, Lp, A Delaware Limited Partnership v. American Airlines

September 21, 2011

TRAVELPORT, LP, A DELAWARE LIMITED PARTNERSHIP,
PLAINTIFF-APPELLEE,
v.
AMERICAN AIRLINES, INC., DELAWARE COMPANY,
DEFENDANT-APPELLANT.



Appeal from the Circuit Court of Cook County. 10 CH 48028 Honorable Lee Preston, Judge Presiding.

The opinion of the court was delivered by: Justice Neville

JUSTICE NEVILLE delivered the judgment of the court, with opinion. Justice Quinn and Justice Murphy concurred in the judgment and opinion.

OPINION

¶ 1 Travelport, LP, sued American Airlines for anticipatory breach of contract and sought a preliminary injunction to prevent American from taking the steps it threatened to take that, according to Travelport, would breach the contract. After the judge who denied the motion for a preliminary injunction was transferred, Travelport moved for reconsideration. The successor judge heard the motion and granted Travelport the preliminary injunction it sought. We hold that the successor judge correctly found that the initial judge erred and correctly reconsidered the entire motion. Because American did not object when the successor judge heard the motion for reconsideration without hearing live testimony from the witnesses, we find that American forfeited, for this appeal, any issue concerning the successor judge's determination of the motion without live testimony. We also find that the trial court did not abuse its discretion by entering the preliminary injunction. Accordingly, we affirm the trial court's judgment.

¶ 2 BACKGROUND

¶ 3 Travelport owns and operates a global delivery system (GDS) for travel information. The GDS includes computerized reservation systems (CRSs) designed to help travel agents find airline flights and associated products and services. Travelport obtains data from airlines and other service providers and makes the data searchable online. Travelport earns its income by charging fees when customers book flights using a CRS Travelport operates.

¶ 4 In 1993, Travelport agreed to carry flight data for American. The parties amended their agreement in 2006, in a document labeled "Preferred Fares Agreement" (PFA). In that contract, American agreed to provide complete information about its flights to Travelport for distribution to travel agencies that received their booking information through Travelport. In the contract, American specifically promised that for five years it would not "remove its grant of ticketing authority" to CheapTickets.com, a travel agency affiliated with Travelport. American acknowledged Orbitz as an affiliate of Travelport, but it did not expressly commit to granting Orbitz ticketing authority for the five-year term of the PFA.

¶ 5 In 2008, American began negotiations to replace GDSs with a different system designed to lower the costs American incurred in distributing its tickets. American asked Orbitz, in particular, to use its direct system instead of using the GDS operated by Travelport to book tickets. American and Orbitz failed to reach any agreement. On November 1, 2010, American sent Orbitz a letter in which American said it would terminate its contract with Orbitz as of December 1, 2010. In particular, American would revoke the permission it had granted Orbitz to sell tickets for American's flights.

¶ 6 On November 5, 2010, Travelport sued American for a judgment declaring that the termination of the agreement with Orbitz would breach the PFA. Travelport moved for a temporary restraining order to preclude American from discontinuing its relationship with Orbitz pending a determination on Travelport's request for a preliminary injunction.

¶ 7 Preliminary Injunction Hearing

¶ 8 The trial court granted the temporary restraining order and held an evidentiary hearing on the motion for a preliminary injunction. Three witnesses testified: Bridget Blaise-Shamai and William Hopping of American and Kurt Ekert of Travelport. Blaise-Shamai explained American's efforts to reduce its costs through its new system, which would eliminate use of GDSs like Travelport. She recounted negotiations with Orbitz and their inability to reach any agreement. Hopping, an attorney who helped negotiate the PFA, testified about his understanding of the terms of the agreement.

¶ 9 Ekert testified that Travelport earns its income as a GDS only when its customers -- mostly travel agencies -- book flights through Travelport. American sold, through Travelport's affiliated agencies, $3.4 billion worth of tickets in the 12 - month period before the hearing. On cross-examination, Ekert admitted that American flights booked through Orbitz accounted for only 21/2 % of Travelport's revenues.

¶ 10 Ekert explained that a customer using Orbitz (or another online travel agency) searches the information available from Travelport for an appropriate flight, and when the customer finds the flight he wants, he books the flight. The GDS helps the customer compare prices and times for flights from many different airlines. If the customer cannot book the flight through Orbitz, the customer must find another way to buy the ticket, usually through a different online agency that uses a competing GDS. If the court permitted American to deny Orbitz permission to sell American tickets, Orbitz would need to choose between two courses of action. Orbitz could continue to post the information American supplied to Travelport under the PFA, but then customers who searched for airline information through Orbitz would encounter the frustration of finding an American flight they wanted, but which they could not book through Orbitz. Ekert said, "it would effectively be like having a supermarket where people came to walk around and then they left to go buy elsewhere." If Orbitz stopped carrying American's information, its customers would have a strong motive to use competitors who provided more complete flight information. In either case, Orbitz and Travelport could lose customers and sales. Ekert added that Travelport's reputation, and its ability to attract new customers, depended on its ability to provide its customers full information and related services. Ekert could not estimate the number of customers or sales Travelport would lose if American revoked Orbitz's ticketing authority. Ekert testified that if its customers switched to using programs like American's, that allowed the airlines direct contact with consumers, Travelport would go out of business.

¶ 11 Counsel for American signed a document, admitted at trial, in which counsel said, "American Airlines will not be claiming that American has or will suffer irreparable injury because of the entry of injunctive relief in this action."

¶ 12 In its complaint, Travelport alleged that a corporation that owned Travelport also owned many shares of Orbitz's stock and that stock lost value when American announced its decision to withdraw Orbitz's ticketing authority. But at oral argument, Travelport relied on the assertion in its complaint that if American disallowed ticketing by Orbitz, Travelport would lose bookings, and bookings provided Travelport its revenue. American answered that discontinuing Orbitz's ticketing authority would not breach the PFA, and American had revoked the ticketing authority of other travel agencies without protest from Travelport. Although American had raised the issue of standing in a pretrial motion, at trial neither party argued standing.

¶ 13 On December 21, 2010, Judge Martin Agran entered an order denying Travelport's motion for a preliminary injunction. Judge Agran recounted the elements of proof needed for a preliminary injunction and said:

"Orbitz is a separate and distinct publically traded corporation. [American] in its November 10, 2010 email advised Orbitz that it was terminating its rights under the 0charter agency agreement ***, an agreement separate and apart from the PFA. It is the Court's opinion that Travelport does not have standing to sue on behalf of Orbitz. If it does not have standing, it does not have a protectable interest.

Without a protectable interest there can be no fair question of a likelihood of success on the merits of the case.

Travelport argues that its existing and prospective customer relationships have been irreparably damaged. Kurt Ekert testified at his deposition that he was not aware of any accounts that have left Travelport; that he is not aware of any travel agency that is currently a travel agency of Travelport who has signed an agreement with American to use their Direct Connect system and to not use the Travelport GDS[.] *** He also stated in court that 'if American is successful in its actions here, I believe the customer migration away from Travelport to American's direct connect or other solutions will be massive.' *** The irreparable harm that is claimed at this juncture is based on beliefs and fears and is too speculative to allow the entry of a preliminary injunction.

Because it appears that money damages will be ascertainable in the event of a breach of contract, the plaintiff has not established that there is no adequate remedy at law.

Because it is the Court's opinion that the aforementioned criteria for entry of a preliminary injunction have not been met, the balancing of equities is not, ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.