Westways World Travel, Inc. v. AMR Corp.
Opinion
lead Opinion
*474 MEMORANDUM **
1.
The plaintiffs-appellants (“the Travel Agents”) have failed, as a matter of law, to demonstrate the predicate “racketeering activity” necessary to succeed on a claim under the Racketeer Influenced and Corrupt Organizations Act (“RICO”), 18 U.S.C. § 1962 (c). While extortion and mail fraud are “racketeering activity” for purposes of RICO, 18 U.S.C. §§ 1961 (1), 1962(c); see Rothman v. Vedder Park Mgmt., 912 F.2d 315 , 316-18 (9th Cir.1990), the Travel Agents have not established that acts by any of the defendants-respondents 1 constitute extortion or mail fraud.
First, American Airlines’ threat to terminate the contracts does not constitute extortion because American Airlines had a contractual right to terminate the contract with the Travel Agents without cause at any time, and the Travel Agents do not allege that American Airlines sought any benefit from its threat other than payment under its interpretation of the contract. See id. at 317-18.
Second, the Travel Agents have not established that any of the defendants-respondents formed a scheme or artifice to defraud and had the specific intent to deceive or defraud, two elements necessary to establish a…
dissent Opinion
Berzon, J.
dissenting in part:
I part ways with the majority only on the decertification issue.
None of the cases relied upon by the majority, nor any others that I have found, address the situation presented here: The “new” information revealed when the defendants moved for decertification was in their possession all along. Defendants offer no explanation for why the contracts were not presented at the time of the initial class certification motion.
Whether a case is likely to proceed as a class or individual action may greatly impact resource allocation decisions made by plaintiffs and them counsel. Of course, as the majority notes, district courts have the discretion to reconsider a prior order certifying a class. But litigants have an obligation to bring forward pertinent information on the class certification question as soon as possible, so as to avoid wasting resources on a case that ultimately will not be treated as a class action. Where this obligation has not been met, the district court, at a minimum, should consider alternative class management options—for example, here, whether subclasses could be created based on each type of contract.