MN Airlines, LLC v. Global Aviation Services USA, Inc.

Background

MN Airlines, LLC, doing business as Sun Country Airlines, entered into a contract with Global Aviation Services USA, Inc. for ground-handling services at Minneapolis–Saint Paul International Airport. Sun Country alleged that Global failed to perform, causing flight delays, lost baggage, and customer complaints. Sun Country’s original claims included breach of contract against Global and fraud against Global and its chief executive officer, Carmel Borg.

Global and Borg asserted counterclaims for breach of contract and defamation. After Sun Country moved to dismiss those counterclaims, Global and Borg filed amended counterclaims instead of opposing the first motion. Sun Country then moved to dismiss the amended counterclaims. Global and Borg also moved for permission to amend again if the dismissal motion were granted.

Motion to Dismiss

The court applied Rule 12(b)(6), which requires a pleading to contain enough factual matter to make a claim plausible rather than merely possible. At this stage, the court treated plausible factual allegations as true and viewed them favorably to Global and Borg.

Breach of Contract Counterclaim

Global alleged that Sun Country had “set up [Global] to fail” and had an understanding that Sun Country would pay for a staffing company that Sun Country directed Global to hire. The court held that Global did not adequately plead the elements of a contract claim: formation of a contract, performance of required conditions, a material breach by Sun Country, and damages. The court also stated that an understanding is not itself a contract and that an alleged breach of the implied duty of good faith and fair dealing is not the same as a breach of contract. The court granted Sun Country’s motion as to Counterclaim I.

Defamation Counterclaim

Global and Borg alleged that Sun Country defamed them in the media, to people in the airline industry, and in the lawsuit by making statements about Global’s work at the airport. The court held that the allegations lacked the required specificity. They did not identify who made the statements, what the statements were, or why the statements were false. The court granted Sun Country’s motion as to Counterclaim II.

Motion to Amend

The court denied Global and Borg’s motion for leave to amend. It noted that their prior amended counterclaims had not cured the pleading deficiencies and that they did not explain how the proposed pleading would differ from the operative pleading. The motion also failed to comply with a local rule requiring a proposed amended pleading and a marked version showing the changes. The court further concluded that another amendment would be futile, meaning it would still not present plausible claims. The order therefore granted Plaintiff’s Motion to Dismiss and denied Defendants’ Motion to Amend.