Dog Bites Man, Texas federal court kills antitrust suit against Travelocity using arbitration clause

The plaintiffs make what sound like serious and detailed allegations involving price fixing against Travelocity (agreement not to resell hotel rooms below fixed price, most favored nation restrictions, etc.).  

But wait, you can guess what happens.  Because, of course, Travelocity has a forced arbitration clause.  The district court (N.D. Texas) decision finds that the arbitration clause was adequately prominent communicated (this holding doesn’t seem surprising, given the unbelievably lame and permissive standard for what passes for “consent” for form contract arbitration clauses in America).  The plaintiffs objected to the clause on the grounds that it was illusory, because Travelocity retains the power to re-write the arbitration clause (or pretty much any aspect of the contract) whenever it wants to do so.  There are a lot of cases finding such remarkably one-sided contracts (“hey, we have a deal, except that I can change it any way I want at any time, you not so much”).  But in this case, the district court notes that Travelocity has NOT said that it will make these changes retroactively (the sole of generosity, Mother Theresa nods approvingly in heaven), and thus the court concludes that the re-writing provision is not a very big deal.  

There’s nothing particularly surprising about the district court’s decision, so far as I can see.  So this is really another case of Michael Kinsley’s rule that the Real Scandal is what IS legal.

The upshot, as with so many other forced arbitration cases handed down in the last few years, is that we’ll never know if these plaintiffs are right that Travelocity is violating the antitrust laws, because their case was wiped away without respect to whether they were right or wrong.  (Why would that matter, when we have Forced Arbitration?  Laws are optional for the powerful.)  And, accordingly, yet another case has been sacrificed onto the altar of the Amazing Growing Arbitration Act.

0 thoughts on “Dog Bites Man, Texas federal court kills antitrust suit against Travelocity using arbitration clause

  1. Louise says:

    (the sole of generosity, Mother Theresa nods approvingly in heaven)
    Mr. Bland, please use your “Spell-check” feature.
    Travelocity may be a corporate “heel” but Mother Theresa has her “Soul” in Heaven, not her shoe.
    This remark that your writing prompted can be shared with many others who wrote hurriedly before you and ignored the spell-check too.
    Let us preserve the clean image of legal writing, it may be incomprehensible to most but at least it should be written accurately.
    P.S. I do agree with what you wrote

  2. Jon McClanahan, UNC School of Law says:

    While this result may not be surprising, I think that this type of argument could gain traction in the right jurisdiction depending on how the terms are drafted. If the agreement allows the offeror to make unilateral changes to too many aspects of the agreement, there’s a strong argument that there is no contract at all. A problem could arise, however, if the modification terms are more specifically tied to the arbitration clause itself. If that’s the case, I worry this would end up going the same way as Concepcion–the jurisdiction would be invalidating the provision because it’s related to arbitration, and thus impeding the objectives of the FAA.

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