ContractsProf Blog

Editor: D. A. Jeremy Telman
Valparaiso Univ. Law School

A Member of the Law Professor Blogs Network

Friday, November 15, 2013

Judge Refuses to Dismiss Class Action Brought by British Airways Frequent Flyers

On November 2, 2013, Judge Dearie of the U.S. District Court for the Eastern District of New York denied British Airways' motion to dismiss a putative class action suit in Dover v. British Airways, PLC.  Plaintiffs, British Airways Executive Members, allege that British Airway was charging fuel charges on rewards flights that were not actually based on the cost of fuel.  British Airways moved to dismiss based on federal preemption and based on the claim that plaintiffs could not show that the surcharge was not based on fuel costs.

BA

The terms and conditions of the Executive Membership agreement provide as follows: 

Members will be liable for all taxes and other charges associated with Reward travel on British Airways or a Service Partner airline, including without limitation, airport departure tax, customs fines, immigration fees, airport charges, customer user fees, fuel surcharges, agricultural inspection fees, security and insurance surcharge or other incidental fees or taxes charged by any person or relevant authority or body.

Despite British Airways' claim on its website that fuel surcharges "reflect the fluctuating price of worldwide oil," plaintiffs allege that the fuel surcharges are just an excuse for British Airways to increase revenue by charging passengers hundreds of dollars on free flights.  For example, one plaintiff paid $854 for two "free" round-trip tickets between San Francisco and London.  Another plaintiff paid nearly $3300 in fees, including fuel surcharges, for five tickets from Los Angeles to London.  Plaintiffs put in evidence suggesting that the fuel surcharges are a hedging mechanism that bear little relationship to the actual cost of fuel.  The District Court found these allegations sufficient to surive a motion to dismiss.

British Airways also argued that dismissal was warranted because plainiffs' claims are preempted by the Federal Airline Deregulation Act (ADA), which forbids states from "enact[ing] or enforc[ing] a law, regulation, or other provision having the force and effect of law related to a price, route, or service of an air carrier[.]" 49 U.S.C. ยง 41713(b)(l).   The District Court found this argument foreclosed by Am. Airlines, Inc. v. Wolens, 513 U.S. 219, 222 (1995), in which the U.S. Supreme Court ruled that "the ADA does not preempt contract claims, whether or not they relate to pricing or would otherwise be precluded if articulated under state consumer protection laws."  

The District Court also rejected British Airways' argument that plaintiffs claims are preempted because enhanced or enlarged by state laws or policies external to the agreement.  The District Court found that plaintiffs, like those in Wolens, were merely seeking to enforce the terms of their agreement with the airline.  Finally, the District Court rejected an implied preemption based on the ADA's occuption of the field on the ground that the U.S. Supreme Court had declined to recognize any such preemption.

[JT]

 

http://lawprofessors.typepad.com/contractsprof_blog/2013/11/judge-refuses-to-dismiss-class-action-brought-by-british-airways-frequent-flyers.html

Recent Cases, Travel | Permalink

TrackBack URL for this entry:

http://www.typepad.com/services/trackback/6a00d8341bfae553ef019b0124b512970b

Listed below are links to weblogs that reference Judge Refuses to Dismiss Class Action Brought by British Airways Frequent Flyers:

Comments

Post a comment