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The CRA essentially acts as an intermediary in the airline industry. ARC-accredited travel agencies are equipped with standard transportation documents that travel agencies issue to their customers as airfares for travel on certain airlines. Airlines honour these tickets as if they were issued directly by themselves. In return, travel agencies declare their sale and pay the airlines the money owed for the tickets, minus commissions, via ARC. The CRA is then responsible for transmitting the proceeds of the sale to the appropriate air carrier. One hundred and forty-three airlines have agreed to participate in this ticket distribution system by running a Carrier Services Agreement (CSA) with ARC. Section XVIII of the CSA gives ARC the authority to enter into contracts with travel agencies on behalf of airlines and to take legal action against any agent to recover funds against air carriers for transactions on ARC tickets. In accordance with this power of attorney, ARC enters into an Agent Reporting Agreement (ARA) with travel agencies on behalf of themselves and airlines. By signing, ARA travel agencies expressly agree to sell tickets on behalf of participating air carriers in the manner described in the ARA and to conduct transactions with those airlines exclusively through ARC.
There is no evidence in the minutes to indicate where the appropriate air carriers are registered or where they are conducting transactions. The 1050 defendants state unequivocally that two airlines, including Pan Am, have major business offices in New York. These two institutions do not meet the requirements of diversity of citizenship. In Kramer v. Caribbean Mills, 394 U.S. 823, 89 P. Ct. 1487, 23 L Ed. 2d 9 (1969), a foreign company forwarded its claims against the defendant, another foreign company, directly to a Texas lawyer. The lawyer and the company executed a separate agreement that the lawyer would retain 5% of the proceeds of any lawsuit, or legal fees, depending on the larger amount, and the rest of the proceeds would go to the company.
The lawyer then filed a complaint with his own hand against the accused. Counsel acknowledged that the assignment was made to a large extent in support of jurisdiction in a federal court. The Court found that this was a collusive assignment in violation of the . 1359 and that, in determining diversity competence, the nationality of the foreign body would be used.