Conditions of carriage withstand tort claims by delayed passengers

February 1, 2012

Lavine v. American Airlines, Inc. (Md. Special App. Dec. 1, 2011).  Using, the plaintiffs bought two American Airlines tickets for roundtrip transportation originating and terminating at Reagan National Airport, with an intermediate stop at Key West International Airport.  Their outbound itinerary included a connecting flight from Miami International Airport to Key West.  They received an email confirmation that referred to, incorporated, and contained a link to, American’s Conditions of Carriage.

According to the plaintiffs, American personnel at DCA informed them that the flight to MIA was delayed.  The plaintiffs claimed that they requested seats on another flight or a refund and that they only boarded the delayed flight after having been assured by American personnel that, despite the delay, the airline “would provide” them with the connecting flight to Key West.  The plaintiffs alleged that, upon arrival at MIA, American personnel informed them that they only had 15 minutes to reach the gate for the connecting flight.  The plaintiffs asserted that they ran through the airport, inhaling construction debris along the way, but that American did not permit them to board the connecting flight because they had arrived too late.  American obtained and paid for a hotel room for the plaintiffs and gave them a stipend for dinner and breakfast.  The plaintiffs traveled to Key West on an American flight the next day.

In their lawsuit against American, the plaintiffs alleged five counts based on common law theories of negligent and intentional misrepresentation and demanded $10,000 in compensatory damages and $10,000 in punitive damages.  The plaintiffs appealed after the trial court granted the airline’s motion for summary judgment.

The appeals court affirmed the trial court’s judgment.  First, the appeals court held that American was entitled, under 49 U.S.C. § 41707 and 14 C.F.R. Part 253, to incorporate the Conditions of Carriage by reference, that the airline had in fact done so and that the plaintiffs’ allegation that they had not seen, or agreed to, the Conditions of Carriage did not create a genuine dispute of material fact.

The court then held that the Conditions of Carriage operated to prevent the plaintiffs from being able to prove the “false statement” and “reliance” elements of their negligent and intentional misrepresentation claims.  The court held that the plaintiffs could not prove the “false statement” element due to the limitation of liability clauses of the Conditions of Carriage, which provided as follows:  “American is not responsible for or liable for failure to make connections, or to operate any flight according to schedule, or for a change to the schedule of any flight.  Under no circumstances shall American be liable for any special, incidental or consequential damages arising from the foregoing.”

Next, the court held that the plaintiffs had failed to prove reliance on any alleged verbal representations by American personnel because Mr. Lavine, as “an experienced attorney licensed to practice law in Maryland,” could not have justifiably relied on any such representations in view of the limitation of liability clauses in the Conditions of Carriage and a clause providing that “times shown in timetables or elsewhere are not guaranteed and form no part of this contract.”

The court then held that the plaintiffs had failed to establish the proximate cause element of the causes of action because “it is not foreseeable that [appellants] would inhale construction debris and sustain personal injury as a result of an airline scheduling delay.”

Finally, even if the plaintiffs had been able to establish the elements of their causes of action, their claims would not have made it past 49 U.S.C. § 41713(b)(1), the preemption provision of the Airline Deregulation Act, which provides that “a State . . . may not enact or enforce a law, regulation, or other provision having the force and effect of law related to a price, route, or service of an air carrier.”  The court held that this provision preempted the plaintiffs’ tort claims because they were “related to” American’s boarding procedures, which constituted a “service” provided by the airline.

Note:  This opinion has generated interest among non-aviation business litigators and transactional attorneys in Maryland.  In holding that the Conditions of Carriage were part of the parties’ contracts, the court rejected the plaintiffs’ argument that, even if the Conditions were part of the contracts, there was a dispute of fact because American personnel, by their verbal statements at the airport, had modified the Conditions.  The court relied on the “non-modification” clause of the Conditions in rejecting this argument; that clause stated that “[n]o agent, employee or representative of American has authority to alter, modify or waive any provision of the Conditions of Carriage unless authorized in writing by a corporate officer of American,” and the plaintiffs had not offered proof of a corporate officer’s written modification.  Some commentators have opined that this decision appears to conflict with prior Maryland decisions holding that, despite a contractual requirement that any modifications be written, parties can nevertheless verbally modify contracts.  It appears that the more rigorous “corporate officer” written modification requirement gave the court comfort to enforce the non-modification clause in this case.

Airline prevails on summary judgment by proving it took all reasonable measures to avoid delaying passengers

December 2, 2010

Cohen v. Delta Air Lines, Inc. (S.D.N.Y. Nov. 8, 2010).  The plaintiffs had tickets for travel from New York (JFK) to Buenos Aires, Argentina, connecting in Atlanta.  Due to an air traffic control mandate, the flight to Atlanta was delayed, and, as a result, the plaintiffs missed the flight to Buenos Aires.  Delta booked the plaintiffs on a flight to Buenos Aires the next day and provided them with hotel accommodations, meal vouchers and transportation to and from the hotel.

The plaintiffs sued Delta in state court, alleging that the airline had engaged in multiple acts of “willful misconduct” by failing to provide a gate crew in Atlanta quickly enough, failing to hold the Buenos Aires flight for them and failing to rebook them on a later flight to Santiago, Chile.  The plaintiffs demanded damages of $10,000 as compensation for one lost vacation day in Buenos Aires, the “great discomfort” they suffered due to the “low 30’s” temperature in Atlanta and “the great stress and anguish” they suffered from “being told to run for [the Buenos Aires] flight that the Delta representative knew or should have known was a wasted effort.”

Delta removed the case to federal court, and, after discovery, moved for summary judgment, relying primarily on Article 19 of the Montreal Convention.  Article 19 imposes liability (limited by Article 22(1)) on an airline for delay in the carriage of passengers, but it also provides that “the carrier shall not be liable for damage occasioned by delay if it proves that it and its servants and agents took all measures that could reasonably be required to avoid the damage or that it was impossible for it or them to take such measures.”

The court granted Delta’s motion, holding that no reasonable juror could conclude, based on the evidence in the record, that Delta “willfully caused” the delay at issue or that the airline “did not take all measures that could reasonably be necessary to avoid the delay.”  The court reasoned that no reasonable juror could conclude that it was possible for Delta to disobey the ATC mandate, to dispatch a gate crew in Atlanta to handle the plaintiffs’ flight before all the flights that had landed earlier, to delay the departure of the flight to Buenos Aires or to rebook the plaintiffs on the Santiago flight, given the insufficient time available to do so.

Note:  For carriage subject to the Montreal Convention, if an airline cannot prove that it took all reasonable measures to avoid the damage caused by the delay or that it was impossible to take such measures, then the passenger can – without having to prove that the airline engaged in “willful misconduct” – recover under Article 19, subject to the liability limit of 4,694 Special Drawing Rights (currently about US$7,200) set forth in Article 22(1).  However, pursuant to Article 22(5), if the passenger can prove that the delay damage resulted from airline conduct “done with intent to cause damage or recklessly and with knowledge that damage would probably result,” the liability limit does not apply.  The term “willful misconduct” does not appear in the Montreal Convention; it does appear (as “wilful misconduct”) in the Warsaw Convention.

Plaintiff avoids preemptive effect of Montreal Convention by court’s holding that claims are for non-performance, not delay

July 29, 2009

Mullaney v. Delta Air Lines, Inc. (S.D.N.Y. June 3, 2009).  According to the plaintiff, Delta canceled his return flight from Paris to New York due to a strike by employees of Air France (Delta’s codeshare partner) and breached its written promise to reimburse customers who booked substitute flights on other airlines.  In his class action complaint, the plaintiff sought the refund of his unused Paris-New York ticket, the expenses he incurred during the extra days he spent in Paris waiting for a flight to New York, attorneys’ fees and punitive damages.  The complaint set forth causes of action for violation of New York’s consumer protection statute, promissory estoppel and unjust enrichment.

Delta moved to dismiss on the grounds that the Montreal Convention preempts the complaint’s state law causes of action.  The airline characterized the plaintiff’s claims as delay claims, and argued that, as such, they are preempted because Article 19 of the Convention provides that an airline is liable for “damage occasioned by delay in the carriage by air of passengers, baggage or cargo.”

The court sided with the plaintiff, holding that his claims are not preempted because they are not for delay but for non-performance of the airline’s carriage obligation.  The court reasoned that the claims are for non-performance because the plaintiff had tried, without success, to obtain alternative transportation on another Delta flight and that, despite his efforts, the airline was unable to transport him.

In the typical case in which a court holds that a plaintiff’s claims are for delay rather than non-performance, the plaintiff impatiently obtained alternative transportation on a different airline’s flight without waiting to find out whether the defendant airline would be able to transport him.  Here, according to the court, the plaintiff waited three days beyond his scheduled departure date, during which time Delta was unable to transport him, before he departed on a different airline’s flight.  The court noted that, even on the day the plaintiff departed, Delta could not have transported him due to the ongoing strike.

Update:  On July 29, 2009, the court denied the plaintiff’s motion for class certification.  The court held that, because individualized proof would be required to establish the airline’s liability for fraud, the plaintiff, who the court described as “a lawyer who obviously does not have enough client work to keep him busy,” had failed to meet the requirement that the proposed class members’ common questions be susceptible to generalized rather than individualized proof.  In support of its ruling, the court also noted that the plaintiff’s claims might differ from those of the other members of the proposed class because the plaintiff is subject to the “particular defense” that he failed to comply with Delta’s procedure for obtaining a refund.  That procedure, which is set forth in Delta’s Conditions of Carriage, required that the plaintiff turn in the unused portion of his ticket before its expiration, i.e., within one year from the date of travel from the point of origin.

Court’s narrow view of Montreal Convention preemption results in remand to state court

January 31, 2009

Narkiewicz-Laine v. Scandinavian Airlines Systems (N.D. Ill. Sept. 12, 2008).  In his state court complaint, the passenger claimed that (i) the airline’s delay of a certain international flight in March 2008 caused him to miss his connecting flight, and (ii) the airline refused to refund his ticket for an international flight scheduled for June 2006, even though he had called on the day of departure to advise the airline that he was sick and thus unable to travel that day.

The airline removed the case to federal court, contending that the Montreal Convention provided, in Article 19, the exclusive cause of action for the passenger’s delay claim, thus preempting his state law breach of contract claim for delay and giving the court original jurisdiction over such claim, and that the court had supplemental jurisdiction over the passenger’s state law breach of contract refund claim.  The plaintiff moved to remand the case to state court.

The court sided with the passenger.  Citing a recent Seventh Circuit case, the court held that because the Montreal Convention’s conditions and limits, including Article 19, only operate as affirmative defenses to a passenger’s claims, such provisions do not provide a basis for federal question subject matter jurisdiction.  Accordingly, the court remanded the case to state court.

Note:  In making its ruling, the court acknowledged that in Knowlton v. American Airlines, Inc., which is discussed here, the Maryland federal district court took a much broader view of Montreal Convention preemption.

Court rules on summary judgment motions in charter flights class action

April 28, 2008

In re Nigeria Charter Flights Contract Litigation (E.D.N.Y. Oct. 25, 2007).  In 2002, World Airways, Inc. and Ritetime Aviation and Travel Services, Inc. entered into a charter aircraft services agreement under which World agreed to supply Ritetime with round-trip flights between points in the U.S. and Lagos, Nigeria.  The charter flights began but, by the end of 2003, Ritetime owed World over $2 million, leading World to discontinue its U.S.-Nigeria operations.  World’s action stranded hundreds of passengers who had traveled on outbound flights and left others who had bought tickets for 2004 unable to travel at all.

After the passengers sued World, Ritetime and its CEO in courts throughout the U.S., the federal cases were consolidated in the Eastern District of New York, which certified a class of plaintiffs in 2006.  The plaintiffs alleged that World is liable under the Montreal Convention for its failure to transport them, and they also alleged state law claims for breach of contract, negligence and fraud.

World moved for summary judgment, contending that (i) the Montreal Convention preempts the plaintiffs’ state law claims, (ii) even if the plaintiffs’ state law contract claims are not preempted, they should be dismissed because there is no privity of contract between World and the plaintiffs, and (iii) even if the Convention does not preempt the plaintiffs’ negligence and fraud claims, the federal Airline Deregulation Act preempts those claims.  The plaintiffs filed a cross-motion for summary judgment.

The court granted World’s motion as to the plaintiffs’ delay claims under the Convention but denied it as to their breach of contract and tort claims.  The court also denied the plaintiffs’ cross-motion.  The court’s specific rulings are as follows.

Montreal Convention preemption.  Delay in international air transportation is governed by Article 19 of the Convention, and whenever the Convention applies, it preempts all state law claims for matters that fall within the scope of its application.  Article 22(1) limits an airline’s liability for a passenger’s delay claim to 4,150 Special Drawing Rights, or about $6,750.  The Convention does not govern nonperformance of a contract of carriage.  The court held that the Convention did not preempt the plaintiffs’ state law claims, ruling that their claims were for nonperformance, not for delay.  The court reasoned that World had “simply refused to transport” the plaintiffs, without offering them alternate transportation, “rather than merely delaying them.”  Of course, this ruling meant that the plaintiffs could not maintain their delay claims under the Convention, and the court granted World’s motion with respect to such claims.

Privity/agency.  The court held that while the tickets themselves did not establish contracts between the plaintiffs and World, factual issues prevented it from granting summary judgment to either side on the issue of World’s liability for Ritetime’s conduct.  The court ruled that the evidence presented was insufficient for it to decide whether the plaintiffs had bought their tickets directly from World; the plaintiffs presented evidence that they had done so, while World presented contradictory evidence.  Similarly, the court held that the existence of disputed facts prevented it from determining whether, as the plaintiffs alleged, Ritetime was World’s agent under theories of actual or apparent authority or that World had ratified Ritetime’s ticket sales.

ADA preemption.  The court rejected World’s contention that the federal Airline Deregulation Act preempted the plaintiffs’ fraud and negligence claims.  The ADA preempts certain state tort (and other) claims “related to a price, route, or service” of an airline.  However, some New York federal courts will refuse to rule that a tort claim is preempted where an airline has engaged in “outrageous” conduct that went “beyond the scope of normal aircraft operations.”  The court held that the ADA did not preempt the tort claims in this case because World’s refusal to transport the plaintiffs constituted “outrageous” conduct.

Passengers’ state law seating and routing claims held preempted

June 8, 2007

Onwuteaka v. Northwest Airlines, Inc. and KLM Royal Dutch Airlines (S.D. Tex. May 10, 2007).  The passengers, a family of four, had two grievances concerning their international flight.  First, their request for “adjoining seats” was not honored.  Second, “[f]ive hours into their flight from Amsterdam to Nigeria, the plane was abruptly piloted back to Amsterdam where the Plaintiffs were forced to remain in the airplane for three hours until the plane again departed for Nigeria.”

Based on these allegations, the passengers’ lawsuit advanced causes of action against the airlines for deceptive trade practices, common law fraud, false imprisonment, negligent misrepresentation, breach of contract, “economic and actual damages,” “damages for mental anguish,” “multiple damages” and attorneys’ fees.  In their motion for judgment on the pleadings, the airlines contended that because the passengers’ claims arose during international air carriage, the Montreal Convention governed such claims and preempted the passengers’ causes of action, all of which were based on Texas statutes or common law.

In a brief but forceful opinion, the court agreed with the airlines and granted their motion.  The court noted that the passengers had tried to salvage their case by asserting a claim under Article 19 of the Convention in their (two-page) opposition to the motion.  Article 19 provides that an airline is “liable for damage occasioned by delay in the carriage by air of passengers, baggage or cargo” (but not if it took all reasonable measures to avoid the damage or if it was impossible to take such measures).  But the court then shot down the passengers’ delay argument by holding that the type of damages they were claiming – “mental anguish” damages – is not recoverable under Article 19.

Note:  The docket report for this case appears to show an impressive display of docket control by the court.  The report suggests that, two weeks after the airlines filed their answer, the court reviewed the pleadings filed in the case on its own initiative, ordered that the airlines file a motion to dismiss and that the passengers then file an opposition “showing cause why this case should not be dismissed as frivolous.”

Passenger “bill of rights” legislation is now pending before Congress

May 5, 2007

In the wake of the highly publicized on-board ground delays that occurred in December 2006 and February 2007, the “Airline Passenger Bill of Rights Act of 2007” was introduced in the Senate on February 17, 2007 and in the House of Representatives on March 1, 2007.  If enacted, the more extensive House bill would require that domestic airlines:

  • “Provide customers at an airport and on board an aircraft, in a timely, reasonable, and truthful manner, the best information available to the air carrier regarding a delay, cancellation, or diversion affecting the customers’ flight, including the cause of the delay, cancellation, or diversion; and for a delayed flight, the air carrier’s best estimate of departure time [by using] airport overhead announcements, on aircraft announcements, and postings on airport television monitors.”
  • “Establish and implement procedures to allow passengers to exit the aircraft in the case of a departure or arrival delay which would otherwise require passengers to remain on the aircraft on the ground prior to departure or arrival for a period exceeding 3 hours” except “if the pilot of such flight reasonabl[y] determines that such flight will depart or arrive not later than 30 minutes after the 3-hour delay; or if the pilot of such flight reasonabl[y] determines that permitting a passenger to deplane would jeopardize passenger safety or security.  A pilot may extend the 30-minute period referred to [above] by not more than an additional 30 minutes in the case of an unanticipated extension of the delay.”
  • “Provide for the essential needs of passengers at all times during which the aircraft is on the ground in the event of a departure or arrival delay, including the needs of passengers for food, water meeting the standards of the Safe Drinking Water Act or the Federal Food, Drug, and Cosmetic Act, as appropriate, sanitary facilities, medical access, adequate ventilation, and comfortable cabin temperatures.”
  • “Publish and update monthly on the Internet website of the air carrier a list of chronically delayed flights operated by the air carrier.”
  • “Disclose, without being requested, the on-time performance for a chronically delayed flight of the air carrier whenever a customer makes a reservation or purchases a ticket on such a flight.  The term ‘chronically delayed flight’ means a regularly scheduled flight in air transportation that has failed to arrive within 30 minutes of the scheduled arrival time of the flight at least 40 percent of the time during the most recent 3-month period for which data is available.”
  • “Publish lowest fare information, and information on schedules and itineraries, with respect to regularly scheduled flights of the air carrier in air transportation.  Information to be published . . . shall be updated in a timely manner and shall be made available to the public on the Internet website of the air carrier.”
  • “Make every reasonable effort to return [lost] baggage to the passenger within 24 hours.”

If enacted, the House bill would require that the Department of Transportation:

  • “Work in coordination with air carriers to ensure that a pilot operating an aircraft in a flight in air transportation that is affected by a long departure delay is permitted to return the aircraft to the airport terminal to allow passengers to exit the aircraft without losing the position of the flight in the departure sequence.”
  • “Review the emergency contingency plans of air carriers and airports to ensure that the plans will effectively address weather emergencies in a coordinated manner.  In carrying out this subsection, the Secretary shall convene a meeting of representatives of air carriers, airports, and the Federal Aviation Administration to develop procedures to better respond to weather emergencies resulting in long departure delays.”

My guess is that a scaled-down version of H.R. 1303 will be enacted unless the airlines can persuade Congress that they have implemented very specific and effective systems for preventing extremely long on-board delays and for making moderately long delays more tolerable.

Any effort to legislate airline customer service changes is invariably accompanied by a push to impose new economic regulations on airlines, such as the H.R. 1303 requirement that airlines “publish lowest fare information” on their websites.  What does that requirement have to do with on-board delays?  In the words of Alfred E. Kahn, chairman of the Civil Aeronautics Board in 1977 and 1978 and the chief architect of the Airline Deregulation Act of 1978:  “Airline deregulation has worked.  It would be ironic if, by misdiagnosing our present discontents, we were to return to policies of protectionism and centralized planning.”


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