Court continues to trim airline lawsuit against Internet service vendor

Deutsche Lufthansa AG v. The Boeing Company (S.D.N.Y. Feb. 2, 2007).  In 2003, Lufthansa and Boeing entered into a contract in which Boeing agreed to provide high-speed Internet service for passengers on long-haul Lufthansa flights.  In 2006, after Lufthansa had spent substantial sums in developing the service, Boeing notified Lufthansa that it had decided to discontinue its Internet service business, in its entirety, at the end of the year.

In response to Boeing’s notice, Lufthansa filed a lawsuit seeking specific performance and damages.  As reported earlier, in October 2006 the court dismissed the portion of Lufthansa’s complaint seeking specific performance because the parties had agreed in their contract to limit their remedies against each other to damages.

Boeing had also moved to dismiss the portion of Lufthansa’s complaint seeking damages in excess of the $1,000,000 damages limit in the parties’ contract, but the court did not rule on that issue in its October decision.  Earlier this month, the court upheld the damages limit.  The court reasoned that “the conduct alleged by Lufthansa falls well below the levels required by the New York courts to invalidate a mutually agreed upon limitation of liability” because Boeing had acted rationally, and without malice toward Lufthansa, in discontinung its Internet service business.

DOT increases baggage liability limit for domestic air travel

On January 29, 2007, the U.S. Department of Transportation issued a Final Rule increasing the minimum limit of an airline’s liability for baggage lost, damaged or delayed during domestic travel from $2,800 to $3,000 per passenger.  The change takes effect on February 28.  Thus, for domestic travel beginning that date, “an air carrier shall not limit its liability for provable direct or consequential damages resulting from the disappearance of, damage to, or delay in delivery of a passenger’s personal property, including baggage, in its custody to an amount less than $3,000 for each passenger.”  See 14 CFR sec. 254.4.

Federal regulations require that DOT periodically revise the baggage liability limit to reflect changes in the Consumer Price Index.

Airline summary judgment motion denied in jetway incident case

Gunther v. AirTran Holdings, Inc. (S.D.N.Y. Jan. 24, 2007).  The passenger sustained injuries when she fell out of the motorized wheelchair she was operating on a jetway used for boarding a flight at LGA.  She brought a negligence action against the airline, which moved for summary judgment.

The airline’s first argument was that it did not owe the passenger a duty of care because it did not “own, lease, occupy, maintain or control” the jetway.  The court rejected this argument, holding that the airline, as a common carrier, owed a “well-settled” duty arising under New York law to provide prospective passengers with a “reasonably safe” entrance onto its aircraft.

The airline then argued that it did not breach its duty of care (assuming it had one) and that the passenger was solely responsible for causing her injuries.  The court held that summary judgment on these issues was improper given the parties’ many factual disputes, including as to the number of airline employees escorting the passenger along the jetway, the slope of the jetway and the speed of the passenger’s wheelchair.

First Circuit ruling confirms that “nonrefundable” tickets are totally nonrefundable

Buck v. American Airlines, Inc. (1st Cir. Mass. Feb. 7, 2007).  Some airline customers find it difficult to accept that their “nonrefundable” tickets are truly nonrefundable.  Some have filed lawsuits against airlines, but the courts routinely dismiss these claims as preempted by the federal Airline Deregulation Act (“ADA”), which prohibits the enactment or enforcement of any state “law, regulation, or other provision having the force and effect of law related to a price, route, or service of an air carrier.”  See, e.g., Howell v. Alaska Airlines, Inc., 994 P.2d 901 (Wash. App. 2000).  A group of airline customers thought they had come up a clever way to avoid ADA preemption.  They were mistaken.

The plaintiffs in Buck were purchasers of nonrefundable tickets that they were unable to use.  They conceded that they were not entitled to a refund of their base fares but claimed that the 13 airlines they named as defendants had acted unlawfully by not refunding the various fees and taxes that had been collected as part of the ticket prices.  As their causes of action, the plaintiffs alleged an implied private right of action under two federal regulations governing the disclosure of certain terms in airline contracts of carriage, as well as numerous state law claims.

Like the district court, the First Circuit did not buy what the plaintiffs were selling.  The court held that only a statute, not a regulation, can serve as the source of a private right of action and that the ADA, the statute underlying the regulations on which the plaintiffs were relying, does not “permit the imputation of a private right of action against an airline.”

The court also held that the plaintiffs’ state law claims were preempted by the ADA.  The plaintiffs argued that they were making state claims in an attempt to right federal wrongs, since federal rules govern the airlines’ collection of the fees and taxes at issue.  The court rejected this inventive argument, correctly concluding that the plaintiffs’ state claims were attempts to further a state policy that those who are wronged should have “access to the courts in order to remediate that wrong.”

Note:  Just about every paragraph of this opinion features at least one vocabulary-expanding word or phrase; here are my favorites:  pleochroic (a new word for me), raiment, multitudinous, tamisage (new word #2), periphrastic (new word #3), circumlocutions, cornucopia, asseverate (new word #4), dichotomy, contextualized, supererogatory (new word #5), aperture, cabining, vagarious, ipse dixit, irreducible, elucidated.

Montreal Convention eats passenger’s breakfast claim

Knowlton v. American Airlines, Inc. (D. Md. Jan. 31, 2007).  The passenger’s ticket for international travel included the notation “breakfast” for one of the flights.  However, during that flight the passenger was told by a flight attendant that the airline had changed its policy and that she had to pay $3.00 if she wished to have breakfast.

The passenger filed a class action in a state court, alleging that the ”breakfast” notation had created a contractual obligation that the airline provide her with breakfast at no additional charge and that the airline had breached this obligation.  Asserting federal question removal jurisdiction, the airline removed the case to federal court on the grounds that the passenger’s state law claim arose under, and was completed preempted by, the Montreal Convention, an international treaty.

The passenger moved to remand the case to the state court.  The passenger contended that because her claim was for non-performance of a contractual obligation, it was not covered by the Convention - unlike the three types of claims for which airlines are liable under the Convention (death or bodily injury (Article 17), cargo damage (Article 1 and flight delay (Article 19)) - and thus not preempted by the Convention.

Recognizing that there is a “split of authority” in the courts on this issue, the court ruled that the Convention completely preempts all state law claims arising out of international flights.  The court explained that it had been persuaded to find in favor of complete preemption by the Convention’s emphasis on creating a uniform system of liability, but its concluding statement shows that it had also been influenced by the minimal nature of the alleged breach of contract:  “As a matter of public policy, airlines should not be subject to contract claims in state courts involving a three-dollar breakfast.”

Thus, in this court and in many others, where the Convention applies but does not specifically provide a remedy for the passenger, the passenger cannot look to state law for a remedy.  One can only wonder whether the ruling would have been different if the passenger had been traveling in first class and had been told that she had to pay $50 for her dinner.

Airline summary judgment motion denied in personal injury case

Kirkham v. Societe Air France (D.D.C. Jan. 10, 2007).  While being guided through Orly Airport to her Air France flight by a person she believed to be an Air France employee, the plaintiff was struck by a luggage cart and suffered permanent ankle injuries.  She brought a negligence action against the airline.

The airline moved for summary judgment on the grounds that it owed no duty of care to the plaintiff because no reasonable trier of fact could conclude that the guide was an Air France employee.  Apparently, the only evidence in the case suggesting that the guide was an Air France employee was the plaintiff’s deposition testimony.

In its ruling on the summary judgment motion, the court noted that the plaintiff had testified at her deposition that the guide had been dressed in a blue uniform that “carried the Air France insignia” and that he had been standing at an Air France counter.  The court held that summary judgment was improper because the plaintiff’s deposition testimony created a genuine issue of material fact as to the guide’s employment status.