IN RE DOMESTIC AIRLINE TRAVEL ANTITRUST LITIGATION MDL Docket No. 2656 | Misc. No. 15-1404 (CKK) United States District Court, District of Columbia Filed August 30, 2019 Levie, Richard A., Special Master REPORT AND RECOMMENDATION NO. 9 REGARDING PLAINTIFFS’ MOTION TO COMPEL DEFENDANT DELTA AIR LINES, INC., TO PRODUCE CERTAIN DATA *1 Before the Special Master is Plaintiffs’ Motion to Compel Defendant Delta Air Lines, Inc., to Produce Certain Data that Plaintiffs state is responsive to Plaintiffs’ First Set of Requests for Production of Documents (RFPs). Specifically, Plaintiffs seek Delta’s: (a) detailed fuel cost and price data pursuant to [RFP] Nos. 13, 28, and 36; and (b) hurdle rates and weighted average hurdle rates pursuant to [RFP] No. 10.[1] (Mot. at 1). Delta filed an Opposition, Plaintiffs filed a Reply, and the Special Master heard oral argument telephonically. Following oral argument, the Special Master requested copies of the materials that the parties deemed pertinent to the negotiations between the parties over the RFPs, which materials Plaintiffs and Delta thereafter provided.[2] For the reasons set forth below, the Special Master recommends the Court deny Plaintiffs’ Motion. Procedural Background Plaintiffs served the relevant RFP Nos. 10, 13, 28, and 36 in February 2017. (See Mot. Ex. 5 at 23). Thereafter the parties exchanged numerous, detailed letters and emails about the RFPs and meet and conferred apparently multiple times in attempt to reach a consensus on the scope of the document productions. As the exchange of email between Plaintiffs and Delta makes clear, in the summer 2017 the parties had extensive communications about the nature of the structured data to be produced, responsive to RFP 13 (and 36). Reciting every detail of these exchanges here is not necessary.[3] What is salient is that, of the many questions posed by Plaintiffs, only one concerned the designation “fuel” – whether that was net of hedging. (Mot. Ex. 9 – Question 23). Notably, other questions posed by Plaintiffs relating to FPS indicate that Plaintiffs did identify other aspects of FPS where Plaintiffs sought additional information – Questions 19, 21, 22, 24 and 32. (Id.). Plaintiffs specifically asked for explanation of whether “categories of Other Revenue [can] be broken out” and how the costs for “maintenance overhead; technology overhead; advertising and promotion; flight crew overhead; and corporate overhead” were “allocated.” (Id. – Questions 22 and 32). In other words, during more than two years of back and forth between Plaintiffs and Delta over the documents produced and the answers to questions posed by Plaintiffs, Plaintiffs did not raise issues about the broad category of “fuel” used by Delta. To be sure, Plaintiffs did not ask if there were any additional breakdown. *2 The parties do not appear to have discussed “hurdle rates” until Spring of 2019, in the context of the deposition of Delta’s 30(b)(6) designee, Mr. Baldino. The relevant discovery deadlines relating to the instant Motion were: • core document discovery - completed on April 30, 2018 (ECF No. 207), • additional requests for production of documents was August 31, 2018 (id.), and • end of fact discovery - July 31, 2019. (ECF No. 290). Plaintiffs’ first Rule 30(b)(6) depositions were conducted in Spring of 2019. They deposed Mr. Baldino on May 9-10, 2019. Discussion A. Fuel Costs Plaintiffs do not dispute that Delta has produced data on its “fuel costs.” Rather they argue that the “fuel costs” Delta produced was an aggregate or summary number that included more detailed costs. In particular, Plaintiffs state that they learned during the Baldoni Rule 30(b)(6) deposition that Delta’s “fuel costs” included “fuel, fuel tax, in-to-plane fueling, fuel hedging and fuel premium.” (Baldoni Depo. Tr. at 176, 178, 182). Plaintiffs now seek production of this granular information or, in the alternative, “the fuel price by station by date and the burn rates by flight.” (July 2, 2019, Oral Argument Tr. at 36). Plaintiffs argue the granular data is responsive to several RFPs. Specifically, Plaintiffs point to: documents sufficient: to ‘show [Delta’s] costs ... by category and the components of such costs ... (RFP No. 13(c)); ‘to show the costs you paid for jet fuel, including any hedging of fuel prices, pre-hedge or post-hedge price ...’ (RFP No. 28); and ‘to provide a detailed breakdown of all cost components ... including but not limited to fuel costs ....’ (RFP No. 36). (Mot. at 2 n. 2). Plaintiffs also contend that they “did not know—and could not have known—during their prior negotiations of the granularity at which Delta maintains its cost data.” (Mot. at 3). Plaintiffs argue that “Delta never represented that it maintained fuel cost data in any other manner than total ‘rolled-up’ fuel costs.” (Reply at 2). Implicitly Plaintiffs argue that Delta withheld information from Plaintiffs. [See, e.g., Mot. at 3; see also July 2, 2019, Tr. at 56:9-15 (“the plaintiffs I think have been suggesting that Delta was somehow hiding the ball on information that it had.”) ]. Finally, Plaintiffs argue that this underlying data is relevant to their antitrust case. They explain “that a multiple regression analysis is required to analyze whether changes in [airfare] price can be explained solely by market factors or are the result of a supply fixing conspiracy,” and “[f]uel costs and prices are one of those market factors.” (Reply at 3). Delta responds that it provided Plaintiffs the fuel costs for “every single flight over the seven or eight year period....” (July 2, 2019, Tr. at 37-38). In essence, Delta argues that Plaintiffs sought “data sufficient to show Delta’s cost and Delta’s fuel cost ... [and] that is what [Delta] provided.” (Id. at 40). Delta asserts that Plaintiffs did not ask for jet fuel “prices,” as they now claim, but they asked for[4] the fuel “costs”, and the latter is what Delta produced. (Id. at 55). *3 Delta also argues the Motion to Compel should be denied because Plaintiffs have failed to explain why the “actual per flight fuel cost data Delta already provided is insufficient.” (Opp. at 4). Finally, Delta asserts that Plaintiffs have unduly delayed to seek the underlying data: Delta “should not be faulted for Plaintiffs’ apparent inability to adequately specify what they wanted, or that they only began to take the most basic 30(b)(6) depositions weeks from the close of discovery, instead of the outset.” (Opp. at 3).[5] Having read the briefs, the attached exhibits, and having held oral argument, the Special Master believes this essence of this dispute depends on what “costs” mean. It appears that Delta operationally distinguishes between “costs” and “prices.” [See, e.g., Tr. 57:20-23 and 59:7-10 (Delta stated “plaintiffs asked for costs and the costs of fuel,” yet Plaintiffs are “now two years later say we’re asking for fuel prices when that wasn’t in the request in the first place”); see also Tr. 48:15-19 (“Delta admits, that fuel item is a lot more than just fuel prices and thus is not sufficient to show the costs paid for jet fuel.”) ]. Plaintiff did not define either “costs” or “prices” in its First Request for Production of Documents. At issue here and pertinent to the issue presented is how these terms are used and defined by the business in question – Delta. The business world generally has its own lexicon, as do individual corporations. Significant is how Delta defines and uses these terms in its day-to-day business. In addition, corporations presumably keep and use information different ways, likely depending on the corporate department and project.[6] *4 The Federal Rules of Civil Procedure provide litigants multiple tools to discover the operational meaning of words and operational documents, including 30(b)(6) depositions, fact depositions, additional document requests, etc. Plaintiffs waited until almost the close of fact discovery to take Rule 30(b)(6) depositions. This is not to say the Special Master considers Plaintiffs’ discovery strategy as a basis to recommend denying this Motion — all litigants are entitled to conduct discovery as they see fit, yet they must live with their choices. With those observations in mind, the Special Master finds: 1. Plaintiffs worded their RFP Nos. 13(c), 28, and 36, in a manner of their choosing. They asked for Delta’s “fuel costs,” and Delta produced “fuel costs.” That “fuel costs” is an aggregate number of multiple subcategories does not, without more, indicate that the information Delta provided was not responsive to the wording of Plaintiffs’ RFPs. Given the wording of the RFPs, the Special Master finds that Plaintiffs got what they asked for;[7] 2. No evidence exists in the record before the Special Master that Delta mislead or misrepresented to Plaintiffs what information it had and what it was producing in response to Plaintiffs written RFP Nos. 13, 28, or 36. The Special Master notes that, having reviewed the numerous emails submitted by the parties in support of their positions on this motion to compel, Delta participated in the discovery process as to “fuel costs” actively and in good faith. (See supra n. 3). Further, the Special Master credits Delta’s statement that “there was never -- never a representation that this was all of the information that could have possibly been provided from Delta’s system.” (July 2, 2019, Tr. 57:23-58:4). The Special Master notes the parties had already negotiated whether Defendants would be affirmatively obligated to identify all the fields in their structured data in the context of the ESI protocol, (see id. at 41:14-42:12), and Defendants had objected to that approach stating, “some Defendants have multiple potentially responsive databases, and many of those databases have hundreds if not thousands of individual fields.” (See Pl. Ex. 11 at 12). 3. Plaintiffs provided no persuasive explanation as to why the actual per flight fuel cost data Delta already provided to them is insufficient;[8] 4. Plaintiffs provided no persuasive explanation, let alone affidavits or declarations from their experts, as to why this granular data is needed by their experts. This absence diminishes the weight of Plaintiffs current claims that the granular fuel prices are important to them. If the granular information now sought truly is so important to Plaintiffs’ experts, then one would have expected the current issue to have been teed up for resolution, with the support of experts, years ago. If the information is insufficient now, it was insufficient when provided and the newly acquired knowledge that Delta possesses additional information regarding fuel does not change the original (or continuing according to Plaintiffs) insufficiency. *5 Based on those findings, the Special Master recommends the Court deny Plaintiffs’ request to compel Delta to produce the granular data underlying the “fuel cost” data it has produced.[9] B. Hurdle Rates Plaintiffs also move to compel production of “hurdle rates,” arguing they are responsive to RFP No. 10. In August 2017, the parties agreed to modify Plaintiffs’ RFP No. 10 to require Delta to produce “documents that refer to or describe the policies, methods, formulas or algorithms used to price domestic airlines passenger transportation services ....” (July 25, 2019, Joint submission by Plaintiffs and Delta to the Special Master, Chart, “Summary of Plaintiffs’ Original Requests & Agreements of the Parties,” at 4).[10] Plaintiffs understand “hurdle rates” to be “a pricing mechanism,” which is the “minimum dollar value that Delta is willing to accept on [a] particular leg for [a] particular time, departure date, [and] flight [in a] booking period,” recorded on a nightly basis or at the time of booking and associated with a particular itinerary. Ex. 2 at 187:14-198:10; 409:20-410:21; Ex. 12 (Dep. Ex. 163) at DLT1_07852511.” (Mot. at 4).[11] Plaintiffs assert in their Motion that RFP No. 10 requires Delta to produce hurdle rates, arguing “hurdle rates fundamentally ‘refer to’ formulas and methodologies because they are used to determine the minimum price at which seats will be available on any given flight and at any given time ... and hurdle rate data implicitly describe how that formula or methodology is applied to individual flights or coupons.” (Id.).[12] *6 During oral argument, however, Plaintiffs seemed to take a different tack, styling the hurdle rates as a “policy:” So yeah, it’s data, but it’s a policy with respect to each flight and each booking request, so every night they calculate this. And you can call it data or you can just call it a bunch of numbers, but what in effect those rates are is Delta’s policy that is not going to sell a ticket on this flight below this price on that particular day. That was the policy now [sic] those rates change. (July 2, 2019, Tr. 71:17-72:4). Delta counters that the hurdle rates are not responsive to RFP No. 10.[13] The Special Master does not find the hurdle rates to be responsive to RFP No. 10. On its face, RFP No. 10 seeks “policies, methods, formulas or algorithms.” Delta’s Exhibit I to its opposition brief contains a “Hurdle” column which is list of dollar values. For example, the first entry lists $116 for CY Hurdle, and $5 for YoY Hurdle. Delta explains that Plaintiffs current motion seeks “a spreadsheet listing millions of dollar figures” (Opp. at 5), a statement Plaintiffs do not dispute. Notwithstanding Plaintiffs’ creative characterizations, what Plaintiffs seeks are individual dollar values which Plaintiffs’ RFP No. 10 did not request. The Special Master notes that Delta states that it has produced its pricing “policies, methods, formulas or algorithms” —again without apparent dispute. Thus, it appears that Delta has produced what Plaintiffs requested in RFP No. 10. In any event, the Special Master finds that Delta’s “hurdle rates” are not responsive to Plaintiff’s RFP No. 10. The Special Master also finds that Plaintiffs have not satisfactorily demonstrated that these hurdle rate numbers are needed by their experts to conduct their analysis. Indeed, in neither their opening brief nor their reply did Plaintiffs address the relevancy of this information, although Delta questioned its relevancy in its opposition brief. (See Opp. at 6). Furthermore, Plaintiff has filed no affidavit or declaration from its experts explaining the need for this data. Conversely, Plaintiffs have not argued that the information Delta produced on pricing and capacity is insufficient. *7 While the “hurdle rates” have a superficial appeal that they could be relevant, Plaintiffs have not satisfactorily demonstrated that these numbers are in fact relevant.[14] Accordingly, the Special Master recommends the Court deny Plaintiffs’ request to compel production of Delta’s “hurdle rates.” Conclusion For the foregoing reasons, the Special Master recommends that the Court deny Plaintiffs’ Motion to Compel. Footnotes [1] Originally, Plaintiffs’ Motion to Compel also sought “(c) customer payment and collection information pursuant to [RFP] No. 34(g).” After briefing on this motion was complete, however, Plaintiffs and Delta agreed that Plaintiffs would withdraw this portion of the motion in exchange for Delta’s agreement that Plaintiffs may renew that motion at a later date pending review of Defendants’ arguments in motion practice or expert opinions; Delta reserved all arguments except for untimeliness. (See, e.g., July 25, 2019, Email, Plaintiffs to Special Master). [2] See July 22, 2019, Emails, Special Master to Plaintiffs and Delta; July 22, 2019, Emails, Plaintiffs and Delta to Special Master with attachments; July 24, 2019, Email Plaintiffs to Special Master; July 25, 2019, Email, Plaintiffs and Delta jointly to Special Master, with attachments). [3] Some of the most significant events are: • On May 15, 2017, Delta emailed Plaintiffs in an effort to reach an agreement with Plaintiffs that the samples of structured data sent by Delta would be satisfactorily responsive to Plaintiffs’ RFP No. 13 in terms of content and format. (Mot., Ex. 8 at 1). Attached to the email was a chart which reflected, in pertinent part, “fuel” as a single number as part of Delta’s Flight Profitability System (FPS). • On May 22, 2017, Delta emailed Plaintiffs asking them to let Delta know as soon as possible if Plaintiffs had “further questions about the samples [Delta had] provided...” of the structured data request. (Opp., Ex. C at 3). Two days later, Plaintiffs responded with a list of 33 questions pertaining to structured data; 18 of those questions dealt with FPS data. (Id. at 1-2). None of these questions, however, concerned “fuel costs.” • On June 8, 2017, Delta wrote Plaintiffs that it would produce structured data from its FPS for Delta-operated domestic flights in a defined time period and sent an attached exhibit responding to the 33 questions posed by Plaintiffs. (Opp., Ex. D June 8 letter at 1-5). • On June 12, 2017, Plaintiffs responded with a list of follow-up questions to some of the answers provided on June 8; none of the follow-up questions dealt with fuel issues. (Opp., Ex. E at 1-2). • On July 6, 2017, apparently in response to a series of questions Plaintiffs posed, Delta sent an email regarding the structured data that it intended to produce as responsive to RFP No. 13, along with the answers to Plaintiffs’ questions and follow-up questions. (Mot. Ex. 9). Delta responded to 18 questions Plaintiffs posed as to the FPS. Notwithstanding Delta’s submission of its May 13 chart containing Fuel as a single line item number, Plaintiffs only posed one out of 18 FPS questions on fuel -- “is Fuel net of hedging?” (Mot. Ex. 9 at 6). Delta answered the question in the negative. (Id.). • On August 14, 2017, Plaintiffs responded to an earlier letter chart outlining Delta’s positions on Plaintiffs’ RFPs. As to RFP No. 13, Plaintiffs included that RFP under a heading of “RFP’s on which further agreements have been reached” and specifically wrote: “[s]ubject to and without waiving the aforementioned objections, Delta will produce data sufficient to show ... Delta’s costs and revenues relating to those flights as that information is maintained in the ordinary course of Delta’s business ....” (Mot., Ex. 6 at 9). The same letter stated that “[s]ubject to and without waiving the aforementioned objections, Delta will produce nonprivileged documents sufficient to show the costs Delta paid for jet fuel, to the extent such documents exist and can be located after a reasonable search.” (Id. at 6). As to RFP 36, Plaintiffs wrote that: Subject to and without waiving the aforementioned objections, Delta directs Plaintiffs to its response to Request No. 13 .... Delta has indicated that they will provide all cost components and allocations in connection with their Flight Profitability System data production; having reviewed the sample Delta has produced, this is acceptable to Plaintiffs, subject to review of the complete data production. Plaintiffs reserve the right to seek further information regarding Delta’s response to RFP 13. [Id. at 7 (emphasis in original) ]. [4] “[W]hat they ultimately want is the fuel prices. But plaintiffs’ requests do not ask for Delta’s fuel prices. They do not. They ask for the cost Delta pays for jet fuel. That information is then provided. The cost Delta pays for jet fuel is all of these things put together. That is the cost. And so, the request asks for the cost, we provided the cost.” (July 2, 2019, Tr. 55:15-56:4). [5] Delta notes that Plaintiffs could have served additional questions or taken the 30(b)(6) before the August 31, 2018, deadline for serving document requests. (Id. at 3-4). From Delta’s perspective, Plaintiffs could have learned the more detailed information about the data Delta maintains much earlier. [6] For example, to get a sense as to how Delta employs certain terms in its business, in response to questions by Plaintiffs, Mr. Baldino testified about “the revenue and cost line items available within [Delta’s] Flight Profitability System:” Q And some of these are direct costs, correct? A The way that there are things here listed as direct operating costs as Delta defines them, yes. Q And what are direct operating costs as Delta defines them? A So they’re the line items that are – that are the components that make up that -- the column that says direct operating cost in this file. So things like fuel, airport security, engine maintenance labor, so all those line items are --would be considered direct at Delta. Q And are direct costs variable costs associated with each flight? A It depends. Q What does it depend on? A It depends on the particular scenario that you are looking at. Q So, for example, pilots are a direct cost, identified as a direct -- direct operating cost. A That is correct. Q So -- well, help me understand what Delta means by a direct cost as opposed to a fixed cost. A So I think -- let’s take a step back from fixed and variable because fixed and variable depend on is it fixed relative to a passenger; is it fixed relative to a flight; is it fixed relative to a particular time period. So none of these items are really getting at fixed or variable because that definition depends on the scope at which you’re looking at the data. So what direct operating cost is for Delta is just a way to categorize costs that are directly related to the flight. That doesn’t mean that they are necessarily variable or fixed. (Mot., Ex. 5 at 171:4-172:17). [7] Although Plaintiff offered to limit its motion to “the fuel price by station by date and the burn rates by flight,” (July 2, 2019, Tr. at 36), that offer appears to be broader than the information sought in RFP Nos. 13(c), 28, and 36. [8] Given Plaintiffs’ claimed need for the more “granular” information regarding fuel in the FPS, it is surprising that, relying upon what their experts needed, Plaintiffs did not immediately reach out to Delta upon receipt of the bare “fuel” designation in the FPS to request additional information or follow-up in any one of the various communications containing follow-up questions with Delta to demand/seek more detailed information. The absence of such timely follow-up does undercut Plaintiffs’ argument the granular fuel pricing is important. [9] Delta indicated it would take three weeks to one month to produce that information. (See July 2, 2019, Tr. 55:9-11). As tempting as it is on a practical basis to recommend that Delta be ordered to undertake this production, this temptation must be balanced with the fact that Plaintiffs have neither demonstrated that the information Delta has produced is insufficient nor that the Plaintiffs RFP No. 13, 28 and 39 seek the granular data as to “fuel prices” as opposed to “fuel costs.” [10] Plaintiffs’ original RFP No. 10 requested in pertinent part: Your monthly and annual operative business or strategic plans for or relating to Your sales of domestic airline passenger transportation services; and Documents sufficient to show: (a) Your plans, policies, methods, formulas, guidelines, or factors used to set, determine, compute, calculate, quote, or issue prices; [11] During the Rule 30(b)(6) deposition of Delta’s Mr. Baldoni, testified: Each flight at every point in the life cycle of its booking has a hurdle rate, and that is the minimum dollar value that Delta is willing to accept on that particular leg for that particular time, departure date, flight at this booking period .... [they are] stored in RPAD is what is known as the weighted average hurdle rate, and I believe they also have the hurdle rate at the time of booking. (May 9, 2019, Tr. at 194-95). He also testified that there are “different ways” to state the hurdle rate and “the two most common ways to weight them in the way that we use them is by flight departure.” (Id. at 197). [12] Delta takes issue with Plaintiffs’ statement that hurdle rates “are used to determine the minimum price at which seats will be available on any given flight,” stating these rates “do not necessarily represent a fare available for purchase.” (Opp. at 6 n.5; see also July 2, 2019, Tr. at 82-83). [13] Delta also argues that Plaintiff unreasonably delayed in seeking discovery about hurdle rates, claiming that Plaintiffs knew about hurdle rates relatively early in the document production process because hurdle rates were referenced in documents produced to Plaintiffs in documents produced in 2017 and 2018.Plaintiffs, however, did not seek additional information or raise questions about hurdle rates during the period allotted in this case for document production and fact discovery or identify this as an issue during 2017 negotiations on responses to RFP No. 10. (Opp. at 5-6). The Special Master, again, declines to make recommendations to the Court based on how Plaintiffs chose to conduct its discovery. On the one hand the Special Master is sympathetic that Plaintiffs had a large volume of documents to review, (see, e.g., July 22, 2019, Email, Mr. Trott to Special Master, quantifying volume of documents produced on the dates the documents containing information about hurdle rates). On the other hand, taking 30(b)(6) depositions early in the discovery process would have allowed Plaintiffs to learn how Delta defined terms and how it set airfares and determined capacity. [14] Similar to the representations noted in fn. 9 above, Delta stated that it could produce hurdle rates in a few months even though it would entail a more labor-intensive process. For the reasons set out in fn. 9 and the text above, the Special Master declines to recommend that course be ordered.