Lawsuits seeking refunds for COVID-canceled flights hit turbulence
Federal judges dismissed cases against Norwegian Air Shuttle and Deutsche Lufthansa, concluding they did not breach passenger contracts.
Lawsuits filed demanding refunds for flights the airlines canceled because of the COVID-19 pandemic have barely gotten off the ground, with at least two dismissed by federal judges so far.
Major airlines, both domestic and international, face more than two dozen class actions, most asserting breach-of-contract claims. But in the past month, federal judges in California have dismissed cases against Norwegian Air Shuttle and Deutsche Lufthansa after concluding that the plaintiffs did get refunds — just not as soon as the seven days required by U.S. Department of Transportation notices in April and May.
Further, they concluded, plaintiffs had not established that the airlines breached a contract—the sole exception to the Airline Deregulation Act’s preemption of claims related to fares, routes and services.
“The language of the GCC does not reflect an intent to incorporate DOT regulations into its terms,” wrote U.S. District Judge Jesus Bernal of the Central District of California, referring to Norwegian Air’s general conditions of carriage—the contract with its passengers. “As a result, the terms of the operative contract do not require the defendant to refund the plaintiff within seven days.”
He dismissed the case on Sept. 17.
Developments in the Norwegian Air case
Then, on Oct. 7, U.S. District Judge Michael Fitzgerald of the Central District of California cited the Norwegian Air decision in dismissing a similar case against Lufthansa.
“Lufthansa’s conditions of carriage require Lufthansa to issue a full refund upon cancellation of an unused flight,” Fitzgerald wrote. “The agreement is silent as to the timing of the refund.”
Both judges allowed the plaintiffs to amend their complaints, but the rulings flag some of the flaws in the airline refund cases.
“It seems to me the airline cases so far have not generally been successful,” said Deborah Hensler, of Stanford Law School. “If I were a plaintiffs’ attorney, I would not invest in these cases.”
The cases already face headwinds with U.S. Supreme Court decisions that make it difficult due to the Airline Deregulation Act to sue airlines for anything outside the express terms of their contracts.
In his decision last month, Bernal acknowledged that federal law “is a significant obstacle” for plaintiffs suing airlines but found their dependence on the contract’s language cited in the Norwegian Air case—that it would comply with all applicable laws—was much “too vague and non-specific.”
“Multiple federal courts have addressed whether similar language in airfare contracts incorporates federal regulations; nearly all have answered the question in the negative,” Bernal wrote. “The GCC’s refund provision contains no terms requiring the defendant to refund passengers within a certain period of time; the plaintiff cannot add such a term to the agreement through state law or policy because the ADA preempts her attempts to do so.”
Cases filed across the airline industry
Several airlines, including American Airlines, Southwest and United, have filed motions to dismiss similar refund class actions against them.
“In these cases, the rulings aren’t going to be uniform because they’re breach of contract claims, and so it turns on what the conditions of carriage are for each airline,” said Jacob Sorensen, a San Francisco partner at Pillsbury Winthrop Shaw Pittman who represents Norwegian Air. That said, he added, there are some similarities among airline contracts, so “our ruling should put a lot of the other airlines in good shape.”
British Airways cited the Norwegian Air decision earlier this month in support of its motion to dismiss a similar class action pending in the Southern District of New York.
But the cases also turn on the facts of the plaintiff, some of whom didn’t receive refunds.
“What I can tell you about the cases is they generally fall into two different categories: they fall into ‘refund denied,’ and ‘slow refund’ cases,” said Adam Polk, of San Francisco’s Girard Sharp, who represents the plaintiff in the British Airways case. “The ‘slow refund’ cases are the ones that so far haven’t fared well.”
As a result, the Norwegian Air decision may not apply to cases where passengers did not get refunds.
“British Air is a unique case because we alleged they took the refund button down from their website so people couldn’t access the refund electronically, and denied refunds outright,” he said.
But plaintiffs have additional challenges. Some of the airlines, in their dismissal motions, allege that the plaintiffs failed to request refunds or canceled their reservation themselves. Other issues could include class action waivers and arbitration agreements.
The latest developments
Last month, lawyers for Spirit Airlines cited an Aug. 31 decision tossing breach-of-contract cases brought over the airline’s “shortcut security program,” in which customers paid $6 each to bypass standard airport security lines. U.S. District Judge Rodolfo Ruiz of the Southern District of Florida found a class action waiver in the contract applied.
That “same class action waiver provision,” wrote Steven Marcus, of Frank, Weinberg & Black in Plantation, Florida, for Spirit Airlines in the COVID-19 refund case, “is the subject of the motion to dismiss pending before this court.”
On Sept. 23, plaintiffs attorney Brian Kopelowitz, of KO Lawyers in Fort Lauderdale, Florida, dismissed all four consolidated cases against Spirit Airlines.
Plaintiffs have voluntarily dismissed cases against at least four other airlines, including JetBlue Airways and China Eastern Airlines.
“In court statistics, they are often instances in which there was a settlement and essentially, the plaintiffs’ attorney decides not to continue the litigation,” Hensler said.
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