Milosevic v. Turk Hava Yollari A.O, Inc.

Background

Svetlana Sholopa and Milica Milosevic brought claims on behalf of themselves and others similarly situated. They purchased Turkish Airlines tickets for flights canceled because of the COVID-19 pandemic. Sholopa purchased her ticket through a third-party travel website, while Milosevic purchased her tickets directly from Turkish Airlines. Both alleged that the airline’s refusal to issue refunds breached the General Conditions of Carriage, which the opinion describes as a contract between the parties.

The court had consolidated Sholopa’s case with Milosevic’s earlier case. The defendants moved to dismiss under Federal Rule of Civil Procedure 12, arguing that the complaint did not establish jurisdiction or state a legally sufficient claim.

Standing and mootness

The defendants argued that Sholopa lacked standing because she received a refund after filing suit, or that the refund made her claim moot. Standing concerns whether a plaintiff had a sufficient injury and stake when the lawsuit began. Mootness concerns whether that interest continues during the lawsuit.

The court held that Sholopa had standing when she filed the original complaint. Filing the consolidated, second amended complaint did not restart the case in a way that eliminated that standing. The court also held that the refund did not make her claim moot. It reasoned that, if a class were certified and the plaintiffs prevailed, Sholopa could receive an additional award as a class representative. The opinion also noted that no judgment had been entered and that the defendants had not claimed that a formal settlement offer had been made, accepted, or rejected.

Forum-selection clause

The defendants argued that Milosevic’s claim had to be brought in the Istanbul/Bakirkoy courts under a forum-selection clause on the airline’s website. The court found that the clause was adequately communicated to Milosevic because she checked a box stating that she had read and accepted the website’s terms. The court also found that the clause was mandatory for claims it covered.

The court nevertheless held that the clause did not cover Milosevic’s claim for breach of the General Conditions of Carriage. The court found no evidence that her ticket was “Material” contained in, accessed from, or downloaded from the website. It also relied on the website’s definition of “Material,” which included software, programs, data, information, and databases. According to the court, that language addressed problems with using the website, not alleged violations of the separate carriage contract. The court therefore rejected dismissal based on the forum-selection clause.

Airline Deregulation Act

The defendants argued that the Airline Deregulation Act preempted the plaintiffs’ claims. Preemption means that federal law displaces a state-law claim. The court held that the Act does not preempt claims seeking recovery for an airline’s breach of its own contractual promises. Because the plaintiffs asserted breach-of-contract claims, the court rejected this argument.

Adequacy of the contract claim

The defendants also argued that the complaint failed to state a breach-of-contract claim because the General Conditions of Carriage allowed the airline to comply in ways other than providing a refund. The court explained that, when a flight is canceled, the contract allowed Turkish Airlines to provide a refund, carry the passenger on another scheduled flight, reroute the passenger through its own or another carrier’s flights, or use ground transportation.

The court held that the airline would not breach the contract merely because the flight was canceled. A breach could occur if the airline failed to provide any of the alternatives required by the contract. At the pleading stage, the plaintiffs did not claim—and the record did not show—that the defendants had provided one of those alternatives. The court therefore held that the plaintiffs had stated a plausible breach-of-contract claim. It added that later factual discovery could lead to a different result, but not at this stage.

Disposition

The court stated that the defendants’ other arguments lacked merit and denied the motion in its entirety. Because this was a Rule 12 motion to dismiss, the classification is procedural under the stated classification rules, even though the court interpreted the parties’ contract and rejected the defendants’ legal arguments.