It’s been a decade-plus since Twombly (2007) and Iqbal (2009), but courts are still fleshing out the answer to that question. This past week, the D.C. Circuit made clear that if your claim is that the government caused your client a competitive injury, don’t skimp on the facts.
The case was brought by an Alaskan airline, which faulted the government for distributing Covid-relief funds to a competitor that bought the right to the funds from an airline in bankruptcy. According to the plaintiff airline, the disbursements violated the government’s agreement with the bankrupt airline. Worse, the unlawful payments let the competitor airline “engage in anticompetitive behavior—first, by charging below-market fares for its services and, second, by negotiating a sublease for airport gate space with [the plaintiff airline] in bad faith, costing [the plaintiff airline] a lucrative business opportunity.”
Sound plausible? Not to the D.C. Circuit, which held that the plaintiff airline failed even to allege standing. Here’s what the court said:
- the plaintiff airline “makes only conclusory allegations connecting [its competitor’s] receipt of [Covid-relief] funds with the outcome of the sublease negotiations”;
- “the complaint contains no factual matter regarding the timing of [its competitor’s] pricing decisions or otherwise suggesting that [its competitor’s] receipt of [funds] had anything to do with its fare pricing”; “[i]ndeed, the complaint supplies no factual support for its allegation that [the competitor] charges below-market fares in the first place”;
- “[t]o invoke competitor standing, a plaintiff must show that the challenged government action results in an actual or imminent increase in competition, which … will almost certainly cause an injury in fact to any competitor in the relevant market”; but “an agency action does not confer competitor standing if it merely creates a skewed playing field, by, for example, providing a windfall to a competitor”; and
- “[a]lthough the [Covid-relief] payments may create a skewed playing field in the Alaskan air transportation market, a competitor’s receipt of a windfall, by itself, is not enough, to demonstrate the actual or imminent increase in competition required … [to] invoke competitor standing[.]”
In short, a tough decision for the plaintiff. But good if you’re looking to get a case dismissed at the pleading stage, especially if the case involves the government supposedly helping a competitor.
The case is No. 22-5125, Air Excursions LLC v. Yellen.