Ide v. British Airways PLC

Background

Four passengers brought proposed class claims against British Airways after the airline canceled their spring or summer 2020 flights. They alleged that British Airways’s General Conditions of Carriage gave customers three choices after a canceled flight: immediate rebooking, rebooking later within the ticket’s validity period, or a refund. The passengers alleged that British Airways instead directed customers toward travel vouchers, removed or obscured online refund procedures, and made telephone refund requests difficult to complete.

Stephen Ide alleged that British Airways canceled his Boston-to-London flight, gave him a voucher after he tried to obtain a refund, and later denied his refund request. Karen Steele-Clarke alleged that British Airways sent her a voucher after her flight was canceled and refused her subsequent refund requests, although it refunded $114 for seat selection. Philip Tenn alleged that British Airways canceled his return flight and refused to provide either a refund or a voucher. Donald Dominique, Jr., who bought his tickets through Expedia, alleged that his return flight was canceled and that he received neither a refund nor a voucher.

Arbitration of Dominique’s Claim

Dominique agreed through Expedia to arbitrate individually any claims against travel suppliers or companies offering services through Expedia, including British Airways. His opposition did not contest arbitration. The court therefore granted British Airways’s motion to compel arbitration of Dominique’s claim and stayed the case as to him. The court declined to dismiss his claim with prejudice and required Dominique and British Airways to notify the court within thirty days after the arbitration ended.

Claims of Ide, Steele-Clarke, and Tenn

British Airways moved to dismiss the other three passengers’ claims under Rule 12(b)(6), which tests whether a complaint alleges enough facts for a legally plausible claim. British Airways argued that the passengers had not adequately alleged breach of contract or damages and that the Airline Deregulation Act preempted their claims.

The court applied New York law. It held that the passengers plausibly alleged damages because a restricted travel voucher could be worth less than cash. The court also held that they plausibly alleged two forms of breach: British Airways allegedly failed to offer one of the three remedies required by the contract, and it allegedly prevented the passengers from choosing refunds by removing online refund procedures and directing requests to overburdened telephone lines. Under the prevention doctrine, a party generally cannot rely on the failure of a contractual condition when that party allegedly prevented the condition from occurring.

The court declined to consider Tenn’s passenger record at the motion-to-dismiss stage because the complaint did not refer to it and the record was outside the limited materials ordinarily considered on such a motion. The court therefore would not dismiss Tenn’s claim based on that record.

The court also rejected British Airways’s federal-preemption argument. The Airline Deregulation Act generally preempts state laws concerning an airline’s prices, routes, or services, but it does not preempt a claim seeking enforcement of the airline’s own contractual promises. The court concluded that the passengers’ claims sought to enforce British Airways’s contractual obligations, including the obligation not to frustrate their ability to choose a contractual remedy.

Damages and Other Relief

The court granted British Airways’s request to strike the passengers’ requests for statutory damages, which the passengers did not oppose. It also struck their requests for punitive or exemplary damages and injunctive relief. The court explained that punitive damages were preempted and that monetary damages would adequately compensate the alleged contract injury, leaving no basis for injunctive relief. The court declined to allow amendment to restore those requests because it found the defects could not be cured.

Disposition

The court granted the motion to compel Dominique to arbitrate and stayed the case as to him only. It granted in part and denied in part the motion to dismiss: it denied the motion as to Ide, Steele-Clarke, and Tenn’s contract claims, and granted it as to their requests for statutory, punitive or exemplary, and injunctive relief. The court directed British Airways to answer the remaining claims within three weeks and reinstated the initial pretrial conference.