Race discrimination claim preempted by Warsaw Convention

March 8, 2011

Sewer v. LIAT (1974) Ltd. (D. Virgin Islands Feb. 16, 2011).  The plaintiff had purchased a ticket for a LIAT flight from the British Virgin Islands to Antigua.  The flight was overbooked, so airline personnel informed the plaintiff that he would have to take a later flight.  Undeterred, the plaintiff (and the other waiting would-be passengers) pushed past the airline’s gate personnel and boarded the aircraft.  Airline personnel asked the plaintiff to leave the aircraft because he did not have a seat, and he did so.  An off-duty police officer arrested and handcuffed the plaintiff, who was briefly detained in an airport holding cell and released without being charged with any crime.

The plaintiff filed suit against the airline, asserting claims of race discrimination, defamation and intentional or negligent infliction of emotional distress, although the plaintiff only pursued the discrimination claim.  The court described the plaintiff as “a black West Indian with dreadlocks in his hair who believes in the underlying tenets of Rastafarianism.”

LIAT moved for summary judgment, and the court granted the motion.  The court agreed with the airline that the plaintiff’s discrimination claim was preempted by the Warsaw Convention, citing King v. American Airlines (written by now-Justice Sotomayor) and several other cases.  The court also held that the plaintiff had no claim under the Warsaw Convention because bumping is a well-established airline industry practice and, thus, is not an “unexpected or unusual event” constituting an “accident” under Article 17.  Finally, the court held that, even if the bumping had constituted an “accident,” the plaintiff’s claim still failed because his injuries, bruised and swollen wrists, were caused by the off-duty police officer in the airport, not by airline personnel on the aircraft.

Note:  Plaintiff filed the case in 2002, and LIAT filed its summary judgment motion in 2009.  Cases seem to move at a leisurely pace in the Virgin Islands, in both federal and state courts.

Third Circuit upholds summary judgment for airline in overbooking case

June 6, 2010

Kalick v. Northwest Airlines Corp. (3d Cir. (N.J.) Mar. 29, 2010).  Northwest bumped the customer from a flight from Kansas City to Philadelphia.  The customer responded by filing a lawsuit in federal district court, alleging that Northwest had violated 14 C.F.R. § 250.9 by failing to provide him compensation for the bumping and also asserting state common law breach of contract and fraud claims.  The plaintiff demanded compensatory and punitive damages totaling approximately $163,000.

The Third Circuit upheld the trial court’s order granting summary judgment in favor of Northwest on the grounds that the court lacked subject matter jurisdiction over the case.  First, the appeals court held that federal question jurisdiction was lacking because Section 250.9 does not create a private right of action, noting that every other circuit addressing this issue had ruled in the same manner.

Next, the appeals court agreed that diversity jurisdiction was also lacking because the plaintiff had failed to show, by a preponderance of the evidence, that he could recover an amount exceeding $75,000 on his contract and fraud claims.  The plaintiff had demanded compensatory damages of $1,433 and punitive damages of $161,600.  The appeals court, assuming that punitive damages were recoverable (the trial court had – correctly – held that punitive damages were preempted by the federal Airline Deregulation Act), held that the “drastic ratio” between the punitive and compensatory damages demanded by the plaintiff “would almost certainly violate the constitution.”

Finally, the appeals court upheld the trial court’s refusal to exercise supplemental jurisdiction over the plaintiff’s state law claims, holding that the plaintiff had failed to prove the “exceptional circumstances” necessary for the exercise of such jurisdiction.

Update:  On October 4, 2010, the Supreme Court denied the plaintiff’s certiorari petition.

DOT considering whether to increase denied boarding compensation

August 21, 2007

Way back in 1978, the CAB increased to $400 the maximum amount of compensation due from an airline that involuntarily denies a passenger boarding due to overbooking.  At the time of the increase, Jimmy Carter was president and the most popular TV show in the U.S. was “Laverne & Shirley” (followed closely by “Happy Days” and Three’s Company”).  On July 10, 2007, DOT issued an advance notice of proposed rulemaking seeking comment on whether it should increase the $400 limit, as well as make its denied boarding compensation regulations apply to aircraft seating 30 to 60 passengers, which are currently exempt from such regulations.

The regulations regarding “oversales” are set forth in 14 C.F.R. Part 250.  They apply to both domestic and foreign airlines but only to flights originating in the U.S. (and utilizing aircraft with more than 60 seats).  If a flight is oversold, the airline is required to seek volunteers willing to accept compensation in exchange for their seats.

If the airline needs to bump passengers, each bumpee is entitled to compensation “at the rate of 200 percent of the sum of the values of the passenger’s remaining flight coupons up to the passenger’s next stopover, or if none, to the passenger’s final destination, with a maximum of $400.  However, the compensation shall be one-half the amount described above, with a $200 maximum, if the carrier arranges for comparable air transportation, or other transportation used by the passenger that, at the time either such arrangement is made, is planned to arrive at the airport of the passenger’s next stopover or if none, at the airport of the passenger’s destination, not later than 2 hours after the time the direct or connecting flight on which confirmed space is held is planned to arrive in the case of interstate air transportation, or 4 hours after such time in the case of foreign air transportation.”  The bumped passenger is also entitled to a refund of the unused portion of the ticket.

A passenger is ineligible for denied boarding compensation under certain circumstances, most notably when “the passenger does not comply fully with the carrier’s contract of carriage or tariff provisions regarding ticketing, reconfirmation, check-in, and acceptability for transportation.”

Last year, the 18 largest U.S. airlines bumped at a rate of 1.01 passengers per 10,000 enplanements, resulting in a total of 55,828 bumped passengers.  Comments to DOT are due by September 10, 2007.

Note:  As one commenter on this post correctly pointed out, if a bumped passenger declines the airline’s payment of denied boarding compensation, “the passenger is entitled to ‘seek to recover damages in a court of law or in some other manner’ under 14 C.F.R. § 250.9(b), which language is universally regarded as permitting a claim for contract damages which may exceed the amount of compensation offered by an airline.”  Stone v. Continental Airlines (N.Y. City Civ. Ct. 2005).  Section 250.9(b) also provides that acceptance of the denied boarding compensation “may relieve [the airline] from any further liability to the passenger caused by its failure to honor the confirmed reservation.”

Tardy passengers’ state common law “bumping” claims held preempted

January 14, 2007

Igwe v. Northwest Airlines, Inc. and KLM Royal Dutch Airlines (S.D. Tex. Jan. 4, 2007).  Because the passengers failed to check in at the gate counter in a timely manner, KLM gave their seats to other passengers.  The passengers were “irate” and refused the airline’s offer of transportation on a later flight on a different airline (plus two $500 credit vouchers).  Instead, the passengers bought tickets on a different airline (on an even later flight).

The passengers filed a lawsuit in which they alleged an array of state common law causes of action.  In its summary judgment motion, KLM contended that these claims were preempted by the Montreal Convention because its Article 19 provides the exclusive remedy for delays in international air transportation.  The critical question was whether the passengers’ “bumping” claims were for contractual non-performance and thus not covered by the Convention (as the passengers argued) or for delay and thus covered by the Convention (as the airline argued).

When the “bumping” airline proves that the passenger refused the airline’s reasonable offer of alternative transportation, the passenger’s lawsuit begins to emit a “giant sucking sound.”  Hearing that sound, the court held that the passengers’ bumping claims were for delay, and thus preempted by the Convention, because the passengers had repudiated the airline’s effort to perform its contractual obligations.  The court also noted that even if the passengers’ claims were not preempted, they still failed because “[a]ll of [the passengers’] troubles were the direct result of their own tardiness.”  Accordingly, the court granted KLM’s summary judgment motion.