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19 December 2018
In an interesting decision that may have significant repercussions for air carriers, Magistrate Judge Jacqueline Scott Corley of the US District Court for the Northern District of California issued an order on 4 October 2018 dismissing a putative class action brought against Air France based on a limitations provision set out in Air France's General Conditions of Carriage (GCC) and the pre-emption provisions of the Airline Deregulation Act.(1)
The putative class action contended that Air France had breached its contract with the class representative, Abraham Hakimi, when it allegedly promised – in advertising – that a premium economy class seat offered 40% more space than an economy seat. The complaint contended that the premium economy seat was only two inches wider than a coach seat and only reclined six inches more. It further contended that Hakimi had booked the more expensive premium economy seat based on this claimed promise and, as such, he suffered damage from the advertising's misrepresentation. The putative class claim included numerous causes of action, including claims for breaches of:
Hakimi's counsel apparently overlooked the fact that Air France's GCC provides a two-year period in which claims for liability can be brought (no doubt following the two-year jurisdictional limitation set out in the Montreal Convention with regard to passenger claims for personal injury or death).(2) Luckily for Air France, the GCC did not specify the nature of the liability subject to the two-year limitation and, therefore, Air France argued that any claim for liability against Air France of whatever nature would be time-barred after two years. Hakimi claimed to have purchased his ticket in June 2014. Since the GCC provides that a ticket is valid only from one year of the date of purchase, the latest Hakimi could have flown was June 2015. Consequently, any window to file a claim closed on 30 June 2017, and the plaintiff filed its complaint only on 2 March 2018.
Air France moved to dismiss on the basis of the time bar and also the contention that the claim was really one for disguised false advertising – even though it was framed as a breach of contract claim – and that therefore, because the advertising related to "prices, routes, or services" (ie, the level of comfort or space offered in premium economy), the complaint was pre-empted by the Airline Deregulation Act under Morales v Trans World Airlines, Inc and its progeny.(3)
As far as the time-bar argument was concerned, the plaintiff attempted to argue that the two-year limitation was "harsh". That claim fell on deaf ears since under California law, claims for a breach of an implied contract are barred by an identical two-year statute. Thus the court enforced the two-year limitation in the GCC and held that the contract claims were time-barred.
The plaintiff dropped its claims for breach of a self-imposed undertaking, breach of contract under federal law and breach of the covenant of good faith and fair dealing without even submitting an opposition to the motion regarding those counts. However, the plaintiff persisted in contending that its claim for unjust enrichment was not pre-empted. The court disagreed. The court argued that, notwithstanding the exemption for an express breach of contract claim carved out in American Airlines, Inc v Wolens, the claim for unjust enrichment was actually extra-contractual since it looked outside of the four corners of any alleged agreement between the parties.(4) Further, the court found that the comfort level of a seat in premium economy clearly related to a 'service'. As a result, the court determined that this claim was pre-empted by the Airline Deregulation Act. This is a significant determination, even at the district court level, because it essentially means that any quasi-contract claim or claim for unjust enrichment that is extra-contractual in nature and is outside the four corners of any alleged contract running between a passenger and an airline will be pre-empted under the Airline Deregulation Act if it relates to a "price, route or service of an air carrier", and is therefore not cognisable.
The time in which to appeal this decision has run. However, the door has been left open to reassert a breach of contract claim (even though the court expressed doubt that a mere advertisement constituted a contract) if such a claim is brought by a putative class member who travelled within the two-year period between the purchase of the ticket and the date the complaint is filed.
For further information on this topic please contact Christopher B Kende at Cozen O'Connor by telephone (+1 212 509 9400) or email (email@example.com). The Cozen O'Connor's website can be accessed at www.cozen.com.
The views and opinions expressed in this article are those of the author and do not necessarily reflect the views of the New York City Bar Association.
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