Delta Air Lines is allegedly ‘refusing’ to hand over potentially key evidence in a lawsuit that Alaska Airlines is pursuing against Sir Richard Branson’s Virgin Group in the British High Court, despite a subpoena to provide a treasure trove of highly sensitive documents to its Seattle-based rival.
The development is the latest twist in a messy legal battle between Alaska Airlines and Virgin Group, which stems from Alaska’s purchase of the now-defunct Virgin America brand nearly eleven years ago.
Delta refuses to hand over evidence to Alaska Airlines
In October, Alaska Airlines won a legal fight to subpoena Delta for sensitive business documents that might help it prove to the High Court in London that the Virgin Group owes it millions of dollars.
While the dispute doesn’t directly involve Delta Air Lines, the Atlanta-based carrier is a major investor in Branson’s Virgin Atlantic airline and operates a significant joint venture with the British carrier.
As a result, Alaska Airlines believes Delta has documents and communications that will help prove its legal case for compensation from Virgin Group.
An Atlanta district court approved Alaska’s request to serve a subpoena for these documents, but Delta is now fighting back.
A spokesperson for Alaska Airlines slammed its bigger competitor, saying: “It is disappointing, but not surprising, that Delta has decided to refuse to comply with a straightforward request to obtain critical evidence that will help illustrate how Virgin’s conduct benefited both Virgin and Delta at Alaska’s expense and in violation of the trademark license agreement.”
Delta says Alaska is on a ‘strategic fishing expedition’
Attorneys acting on behalf of Delta are now fighting the subpoena, saying Alaska Airlines has embarked on a “strategic fishing expedition seeking sweeping, competitively sensitive documents and testimony from a major competitor before the English High Court.”
Essentially, Delta is claiming that Alaska Airlines has gotten ahead of itself and is demanding sensitive documents from a major rival even before litigation has started in the High Court.
Perhaps, unsurprisingly, Alaska’s lawyers argue that Delta’s legal bid to have the subpoena quashed should be rejected by the court on the grounds that trying to protect commericial sensitive documents proves that Delta has information that could be of relevance to the case.
The origin of this messay legal dispute
The origin of this legal drama dates back to 2014, when Alaska Airlines acquired Virgin America in a multi-million-dollar deal that required it to pay royalties to the Virgin Group for use of the Virgin trademark and logo until 2039.
Alaska Airlines initially intended and promised to run Virgin America as its own, standalone business, and to retain the iconic branding that it had paid so much to use.
But just two years later, Alaska Airlines changed its mind. Virgin America would be shut down as its own airline, and its planes, routes, employees, and everything else would move over to Alaska Airlines.
Once Alaska Airlines had retired the Virgin America brand, it believed it no longer had to pay the royalty payments. The Virgin Group disagreed and took Alaska Airlines to court.
After years of legal wrangling, the English High Court ruled that whether Alaska Airlines used the Virgin branding or not, it was still required to pay a minimum annual royalty of $10 million for use of the brand.
What’s Alaska’s new lawsuit about?
Alaska Airlines now claims it is paying $10 million a year for exclusive rights to use the Virgin brand for domestic flights in the United States, but that this right is being infringed by Virgin Group because it is marketing and selling standalone Delta domestic flights on Virgin Atlantic’s Flying Club loyalty program website.
In a nutshell, Alaska Airlines argues that marketing Delta’s domestic flights on Virgin Group websites interfered with the trademark agreement it had reached with Alaska Airlines, and, therefore, the carrier is entitled to monetary damages.
While Delta isn’t the direct target of Alaska’s ongoing legal battle, it sure seems like there is animosity between the two carriers. Less than a week after Alaska completed its acquistion of Virgin America, Delta terminated a longstanding partnership with Alaska and attempted to muslce in on Alaska’s Seattle hub.
What happens next?
An Atlanta district court is yet to set a date to consider Delta’s application quash the subpoena, and, in the meantime, we can be confident that the airline won’t be handing over any documents to Alaska.
Meanwhile, in London, Alaska Airlines and Virgin Group are re-pleading their cases to the High Court, which will then hold a case management conference to decide next steps.
Even if Delta succeeds in having the subpoena quashed in a U.S. court, the English High Court could still order the airline to hand over key documents to its rival.
