Montreal Convention applies, and time-bars, passenger’s claims despite injury’s occurrence during domestic flight

October 11, 2015

Cattaneo v. American Airlines, Inc. (N.D. Cal. Sept. 24, 2015).  The passenger/plaintiff traveled roundtrip on American’s flights between LAX and Cozumel, Mexico, via DFW, in June 2011.  In her complaint filed in November 2014, the plaintiff alleged that, during the DFW-LAX flight, a flight attendant gave her “an unlidded cup of hot water,” which spilled on her lap when the aircraft encountered turbulence, causing injuries.

American moved to dismiss on the ground that the plaintiff’s claims were time-barred by Article 35(1) of the Montreal Convention, which extinguishes the right to damages if an action is not commenced within two years “from the date of arrival at the destination.”  American noted that the Convention applied even though the alleged injury occurred during the domestic DFW-LAX flight because, under Article 1(2), “international carriage” triggering the application of the Convention exists “where or not there be a break in the carriage.”

The plaintiff responded by arguing that the Convention did not apply because the DFW-LAX flight was “completely domestic.”  The court agreed with American, finding that the plaintiff’s itinerary, which included same-day travel from Cozumel to LAX, objectively demonstrated that the DFW-LAX flight was “part of her longer international trip.”  Accordingly, the court granted American’s motion to dismiss.

ATSA immunizes airline and employee from liability to customer who made bomb reference and disparaged TSA

September 30, 2015

Baez v. JetBlue Airways Corporation (2d. Cir. July 16, 2015).  The plaintiff checked baggage for her JetBlue flight from JFK to Austin, Texas.  However, she appeared at the gate late, after the aircraft’s door had been closed, so the gate agent refused to let her board.  The plaintiff admitted that she then made what the Second Circuit described as a “cryptic reference to the possibility of a bomb in her luggage”:  “Isn’t it a security risk to let a bag go on a plane without a passenger, what if there was a bomb in the bag?”  The plaintiff alleged that the agent responded, “TSA agents would know if there was a bomb in the bag,” to which the plaintiff replied, “TSA–my ass,” and walked away.

The gate agent reported the conversation to her supervisor, who alerted the airline’s security personnel and TSA.  JetBlue rerouted the aircraft as a security measure and searched all the checked baggage after it landed.  The plaintiff’s bag did not contain a bomb.  But it did contain marijuana residue.  The plaintiff was charged under 49 U.S.C. § 46507(1) with making a false bomb threat.  The government dropped the charge, and the plaintiff pleaded guilty to charges based on the marijuana residue found in her bag.

The plaintiff sued JetBlue for “a host of claims,” including negligent supervision, retention, training and hiring, defamation, false arrest and intentional infliction of emotional distress.  She sued the gate agent as well.

The district court granted summary judgment to the defendants on the ground that they were immune from suit under the Aviation and Transportation Security Act, 49 U.S.C. § 44941.  Among other things, ATSA immunizes airlines and their employees from any liability for reporting “any suspicious transaction relevant to a possible violation of law or regulation, relating to air piracy, a threat to aircraft or passenger safety, or terrorism” to a law enforcement officer.  Immunity is not provided for reports that are “materially false.”  A report is materially false if an accurate report regarding the “suspicious transaction” at issue would have had a different effect on the mind of a “reasonable security officer,” i.e., if an accurate report would have caused such officer to decide not to investigate the report.

Before the Second Circuit, the plaintiff argued that the district court had erred by deciding whether the gate agent’s statements were materially false at the summary judgment stage, as that issue should been decided by a jury.  The appeals court disagreed and affirmed the district court.  It concluded that the gate agent’s report was not materially false because “a reasonable officer would necessarily have followed up on the statements Baez admitted she made,” i.e., such officer would have investigated the “report of a disgruntled passenger who adverted to a bomb in luggage and deprecated the agency responsible for detecting such bombs.”

Delta obtains $22 million default judgment against operator of travel club scheme

August 20, 2015

Delta Air Lines v. John Wunder, John VanGinhoven et al. (N.D. Ga. May 29, 2015).  In its 84-page, 292-paragraph complaint, Delta alleged that John Wunder, John VanGinhoven and 37 other individual and corporate defendants had violated federal and state trademark and racketeering statutes by using Delta’s name and trademarks, without authorization, on “a massive number” of postcards and letters to carry out a fraudulent scheme to sell “travel club” memberships.  The complaint alleged that the defendants designed the mailings to create the impression that Delta had send them; they bear Delta’s logos and some even appear to have been signed by a high-ranking Delta officer (who in fact is fictitious).

According to the complaint, the mailings gleefully announce that the addressee has won two roundtrip Delta tickets for travel anywhere in the continental United States.  Those who call the listed number are screened by call-center operators; those callers who report a sufficient income are informed they must attend a nearby travel-related sales meeting in order to obtain their Delta tickets.  The meetings, which are typically held in hotel conference rooms, are high-pressure presentations during which the attendees are pushed to buy a travel club membership costing thousands of dollars.  The attendees are promised significant discounts on future travel expenses, but the memberships are in fact worthless.

After obtaining a preliminary injunction against Wunder, VanGinhoven and other defendants, Delta moved for a default judgment and permanent injunction against Wunder and his companies.  According to Delta, Wunder and his companies were involved in “nearly every phase” of the travel club scheme.  The court granted Delta’s motion, awarding it a judgment of over $22 million against Wunder and his companies.  The court’s award consisted of statutory damages under the Lanham Act for use of counterfeit marks, attorneys’ fees under the Lanham Act and the federal and Georgia RICO statutes, trebling of the Lanham Act damages and attorneys’ fees under the RICO statutes and, finally, punitive damages.  The court also entered a permanent injunction prohibiting Wunder and his companies from using the name “Delta” or any Delta trademarks in any printed materials and from representing they have any affiliation with Delta.

In the lawsuit, Delta describes VanGinhoven as an “unapologetic intellectual property pirate” and alleges that he and his company handle the printing and mailing aspects of the travel club scheme.  Delta alleges that, in 2011 and 2012, VanGinhoven and his company printed and mailed 5.5 million travel club promotional items that infringed Delta’s trademarks and that they have also printed and mailed similar promotional items infringing trademarks of Continental, American, Southwest, Orbitz, Travelocity and United.  Delta has moved for partial summary judgment and VanGinhoven has moved for summary judgment; briefing of the motions was completed in July 2015.

Court shows the door to passenger’s exit row seating claims

April 3, 2015

Naqvi v. Turkish Airlines, Inc. (D.D.C. Feb. 23, 2015).  While checking in for his Turkish Airlines flight from Washington Dulles International Airport to Istanbul, Turkey, the passenger/plaintiff requested an exit row seat.  According to the plaintiff, airline personnel denied his request but promised him a “leg space seat.”  The plaintiff alleged that, upon boarding the aircraft, he discovered that the exit row seats were occupied by passengers who did not meet the minimum height requirement for such seats and that his assigned seat was not a “leg space seat.”  The plaintiff also alleged that the airline violated several safety requirements, including by not illuminating the seat belt signs before landing.  The plaintiff asserted that the airline’s conduct caused him to suffer “extreme emotional and physical distress.”

In his pro se complaint, the plaintiff advanced causes of action for breach of contract and for discrimination under what the court described as a “kaleidoscope of federal statutes.”  The plaintiff demanded compensatory damages of $250,000 and punitive damages of $150,000.  After removing the case to federal court, Turkish Airlines moved to dismiss the complaint on the grounds that the Montreal Convention preempted its claims and that it failed to state an actionable breach of contract or discrimination claim.

The court granted the motion.  First, the court ruled that the Montreal Convention governed the plaintiff’s claims because they arose from “international carriage” within the meaning of the Convention.  The court then ruled that the Convention preempted the plaintiff’s contract and discrimination causes of action.  According to the court, the result of the preemption was that, unless the plaintiff could “shoehorn his allegations into an actionable claim” under Article 17 of the Convention, which governs compensation “for the type of personal injury alleged” in the case, he could not state any claim whatsoever against the airline.

Article 17(1) of the Montreal Convention provides as follows:  “The carrier is liable for damage sustained in case of death or bodily injury of a passenger upon condition only that the accident which caused the death or injury took place on board the aircraft or in the course of any of the operations of embarking or disembarking.”  The court ruled that the plaintiff had failed to plead that his injuries had been caused by an “accident,” as is required to state a claim under Article 17.  Citing cases, the court ruled that, because “disputes over airline seat assignments are neither unexpected nor unusual,” the dispute alleged by the plaintiff did not qualify as an “accident” within the meaning of Article 17.

The court also ruled that the plaintiff’s Article 17 claim failed, even assuming the occurrence of an “accident,” because the plaintiff had failed to “allege that an actionable ‘bodily injury’ resulted from defendant’s purported transgressions.”  The plaintiff had asserted that he had suffered “extreme emotional and physical distress,” but, in accordance with the governing caselaw, the court ruled that physical manifestations of mental injuries did not satisfy the Article 17 “bodily injury” requirement.

Note:  The plaintiff has another pro se case against an airline, Naqvi v. Saudi Arabian Airlines, pending in the same court.


Airline’s conditions of carriage withstand tropical storm

February 19, 2015

Chen v. China Eastern Airlines Co., Ltd. (N.Y. City Civ. Nov. 20, 2014).  The passenger/plaintiff bought a six-segment China Eastern ticket from an online travel agent.  After taking the first two flights (New York to Shanghai and Shanghai to Manila), the plaintiff took a side trip in the Philippines on a different airline.  The plaintiff alleged that “an unexpected and strangely behaving tropical storm” prevented him from traveling on the third and fourth flights in the sequence (Manila to Shanghai and Shanghai to Urumqi, China) and that he informed China Eastern that he would be available to travel on the fifth and sixth flights (Urumqi to Shanghai and Shanghai to New York).  The third and fourth flights departed as scheduled.

China Eastern refused to allow the plaintiff to travel on the fifth or sixth flights in the sequence.  The airline relied on the conditions of carriage applicable to the ticket, which required that the flight coupons “be used in sequence as specified on the Ticket” and that the failure to use them in sequence “will result in the refusal of CEAIR to provide carriage.”

The passenger arranged for transportation to New York on a different airline and then brought a lawsuit against China Eastern, alleging breach of contract.  After conducting discovery, the parties filed cross-motions for summary judgment.

The court granted the airline’s motion and denied the plaintiff’s motion.  The court ruled that China Eastern’s conditions of carriage had been incorporated in the parties’ contract of carriage by reference because, in accordance with federal regulations, the plaintiff had received notice of such incorporation and the conditions of carriage were available for inspection at the departure airport.  The court also ruled that the conditions of carriage required that the flight coupons be used in sequence and that the plaintiff’s failure to comply with this requirement permitted the airline to refuse him carriage on the remaining flights.  Thus, the court held that the airline had not breached the contract of carriage.

In his motion, the plaintiff, an attorney, advanced several creative arguments.  One argument was that his inability to comply with the flight coupon sequence requirement was excused under the force majeure doctrine.  He contended that his flight to Manila had been canceled due a force majeure event, the tropical storm, and that such event excused his failure to use the coupons in sequence.  China Eastern responded that the force majeure doctrine did not have any logical application to the plaintiff because such doctrine is a defense that is only available to a non-performing party that is alleged to have breached a contract, and that the plaintiff had taken the position that he was the non-breaching party.  The court agreed with the airline.

Court downgrades passengers’ seating upgrade lawsuit

January 21, 2015

Gulilat v. Delta Air Lines, Inc. (S.D. Fla. Oct. 29, 2014).  After boarding their flight from New York to Ghana, the two passenger/plaintiffs made a request to a flight attendant that they be reassigned to “upgraded comfort seats,” according to their amended complaint.  The plaintiffs asserted that Delta employees not only denied their request, but that the employees upgraded white passengers to the “comfort seats,” shouted racial epithets at the plaintiffs as they were escorted off the aircraft by authorities in Ghana and falsely stated to such authorities that the plaintiffs had engaged in unlawful conduct during the flight.

The plaintiffs’ amended complaint sought $1 million in damages under Article 17 of the Montreal Convention.  Article 17(1) provides as follows:  “The carrier is liable for damage sustained in case of death or bodily injury of a passenger upon condition only that the accident which caused the death or injury took place on board the aircraft or in the course of any of the operations of embarking or disembarking.”

Delta moved to dismiss, and the court granted Delta’s motion.  The court held that the plaintiffs had failed to plead that their injuries had been caused by an “accident,” as is required to state a claim under Article 17.  Citing numerous cases, the court ruled that, because a dispute related to aircraft seating “is neither unexpected nor unusual,” the dispute alleged by the plaintiffs did not qualify as an “accident” within the meaning of Article 17.

The court also ruled that the plaintiffs’ Article 17 claim failed, even assuming the occurrence of an “accident,” because the seating dispute did not result in any “bodily injury” to either plaintiff.  The plaintiffs asserted that they had suffered emotional distress and anxiety, but, in accordance with the governing caselaw, the court ruled that these physical manifestations of emotional distress did not satisfy the Article 17 “bodily injury” requirement.

Brokers battle in federal court over “bank” of frequent flyer points and miles

November 25, 2014

AZ DNR, LLC d/b/a ERC, LLC v. Luxury Travel Brokers, Inc. and Timothy W. Gibson (D. Kan. Oct. 24, 2014).  Litigation between brokers has revealed some of the inner workings of the secondary wholesale market for frequent flyer program points and miles.  In its complaint, ERC alleged that it is “in the business of purchasing and repurposing unwanted credit card reward points and frequent flyer miles” from consumers.  ERC deposits the purchased points and miles in a “bank” it maintains and then resells them to travel agencies and other customers.  Luxury Travel Brokers, which does business as “Flyer Miles” and “Flyer Smiles,” bought points and miles from ERC for resale to its own wholesale and retail customers.

Over time, ERC and Luxury Travel became so chummy that ERC permitted Luxury Travel to “self-serve” by accessing the bank directly and withdrawing points and miles as needed.  However, according to ERC, Luxury Travel became too familiar with the bank, helping itself to points and miles but not paying for them, and even taking points and miles that were not available for purchase.  When the parties’ negotiations over compensation for the excessive self-service failed, ERC filed suit.  ERC sued not only Luxury Travel but Timothy Gibson, the owner of Flyer Miles and Flyer Smiles, as well.  ERC’s complaint asserted claims for tortious interference with contracts and prospective contracts, violation of the federal Computer Fraud and Abuse Act, breach of contract and unjust enrichment.

The defendants filed a motion to dismiss.  Their main argument was that ERC lacked standing to bring the lawsuit because ERC “has no legitimate property rights” in the points and miles in the bank because “[p]ursuant to the contracts between these customers and the airlines and financial institutions, these frequent flier miles and reward points are generally the property of the airlines and financial institutions, until redeemed by the customer.”  The court denied the motion to dismiss, primarily because the motion raised various factual defenses that the court could not consider in deciding a motion to dismiss.  For example, the court ruled that ERC had “sufficiently alleged” that it “purchased points and miles from others.”

The defendants then filed their answer to the complaint.  Ironically, one of their affirmative defenses, entitled “public policy,” mirrored the primary claim that airlines typically assert in lawsuits against brokers; the defendants explained their “public policy” defense as follows:  “Plaintiff’s recovery in this matter is barred for the reason that Plaintiff’s alleged sale of frequent flier miles and credit card reward points necessarily involves the breach of Plaintiff’s ‘customers’ [sic] third party contracts with airlines and financial institutions.  Thus, Plaintiff cannot show that it has any lawful right that has been interfered with.  Furthermore, it would be against public policy to allow an individual to sue for interference with property rights that are only ‘acquired,’ to the extent they are so acquired, if at all, via the necessary breach of an individual’s third party contract with another individual.”

However, the defendants will not have the opportunity to prove at trial that the brokerage of points and miles fundamentally violates public policy.  Due to what the court described as the defendants’ “pattern of intransigence and violations of Court orders,” it entered a default judgment against them.  The remainder of the case will be limited to litigation over the quantification of the damages to which ERC is entitled and whether ERC is entitled to injunctive relief.  The damages phase of the lawsuit should provide an additional insight into this secondary wholesale market by showing the value that market participants place on points and miles.

Note:  ERC operates the website, which advertises that “We Buy CREDIT CARD POINTS and AIRLINE MILES! Safe. Simple. Discreet. Guaranteed.”  Timothy Gibson was the founder of Alpha Media Group, LLC, which does business as Alpha Flight Guru and operates the website

Update:  On May 21, 2015, the court entered a judgment in ERC’s favor for $502,543.46 against Luxury Travel Brokers and Timothy Gibson.


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