Federal court slices, dices and dismisses ticket-related complaint on subject matter jurisdiction grounds

Onyiuke v. Cheap Tickets, Inc. & Virgin Atlantic Airways Limited (D.N.J. Dec. 31, 2009).  In August 2008, the plaintiff purchased a ticket, through CheapTickets.com, for roundtrip travel from Newark Liberty International Airport to Lagos, Nigeria, connecting in Gatwick Airport.  The first segment was to be on a Continental flight in mid-December 2009, and the connecting flight was on Virgin Nigeria Airways.  The ticket cost $1,563.

In early December, CheapTickets notified the plaintiff that Continental had discontinued service between Newark and Gatwick and offered him the choice of a modified flight arrangement or a full refund.  The plaintiff refused to accept either alternative.  Instead, he purchased a replacement ticket through a different online travel agency for $3,163 and, acting pro se, filed a lawsuit in federal court.

In his 85-paragraph, 25-page amended complaint, the plaintiff asserted diversity jurisdiction under 28 U.S.C. § 1332 and set forth causes of action for breach of contract and conversion against each defendant.  He demanded damages of approximately $127,000 from each defendant, including “mental agony” damages of $25,000 in connection with his contract claims and punitive damages of $80,000 in connection with his conversion claims.

Each defendant moved to dismiss pursuant to Rule 12(b)(1) on the grounds that the court lacked subject matter jurisdiction because the amount in controversy did not exceed $75,000 and, in fact, was limited to the refund value of the plaintiff’s ticket.  In addition, Virgin Atlantic moved to dismiss under Rule 12(b)(6) on the separate grounds that, except for the refund value of his ticket, the plaintiff’s claims were preempted by the Airline Deregulation Act, 49 U.S.C. § 41713(b)(1), because they were based on state law and “related to a price, route, or service” of an airline.

The court agreed that it lacked subject matter jurisdiction.  First, the court struck the plaintiff’s $80,000 punitive damages demands, which the plaintiff had requested in connection with his conversion claims, from the amount in controversy.  The court ruled that the plaintiff had failed to allege any facts indicating that either defendant had acted with “actual malice,” which a plaintiff must prove to recover punitive damages for a conversion claim under New Jersey law.  The court also pointed out that any “actual malice” assertion was undercut by the fact that it was Continental, and not either defendant, which had discontinued the Newark to Gatwick service, and by both parties’ offers to refund the ticket price to the plaintiff.

Next, the court struck the plaintiff’s $25,000 “mental agony” damages demands, which the plaintiff had requested in connection his contract claims, from the amount in controversy.  The court ruled that the plaintiff’s alleged “mental anguish arising from the loss of a bargain,” embarrassment from having to borrow money from friends and relatives and stress and inconvenience did not amount to the “severe emotional distress” required under New Jersey law to establish a claim for emotional distress arising from a contract breach.

After striking the plaintiff’s demands for punitive and mental agony damages, the plaintiff’s claims were below the jurisdictional minimum, so the court dismissed the amended complaint for lack of subject matter jurisdiction.  Because the court dismissed the amended complaint on this basis, it did not reach Virgin Atlantic’s alternative preemption argument.

Update:  On August 23, 2010, the court denied the plaintiff’s motion for reconsideration.  On September 17, 2010, the plaintiff filed a notice of appeal.


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