HERRERA V. CATHAY PACIFIC AIRWAYS LIMITED, No. 21-16083 (9th Cir. 2024)
Annotate this Case
The United States Court of Appeals for the Ninth Circuit heard an appeal by Cathay Pacific Airways Limited, from a district court's decision denying its motion to compel arbitration in a class action lawsuit. The plaintiffs, Winifredo and Macaria Herrera, alleged that Cathay Pacific breached their contract by failing to issue a refund following flight cancellations for tickets they purchased through a third-party booking website, ASAP Tickets.
The court ruled that when a non-signatory, in this case Cathay Pacific, seeks to enforce an arbitration provision, an order denying a motion to compel arbitration based on the doctrine of equitable estoppel is reviewed de novo. Applying California contract law, the court held that the plaintiffs' allegations that Cathay Pacific breached its General Conditions of Carriage were intimately intertwined with ASAP’s alleged conduct under its Terms and Conditions. Thus, it was appropriate to enforce the arbitration clause contained in ASAP’s Terms and Conditions.
Accordingly, the court reversed the district court’s denial of Cathay Pacific’s motion to compel arbitration and remanded with instructions to either dismiss or stay the action pending arbitration of the plaintiffs’ breach-of-contract claim.
Court Description: Arbitration The panel reversed the district court’s denial of Cathay Pacific Airways Limited’s motion to compel arbitration in plaintiffs’ putative class action alleging that Cathay Pacific breached their contract by not issuing a refund following flight cancellations for tickets that they purchased through a third-party vendor.
Plaintiffs purchased international flights on Cathay Pacific through a third-party booking website, ASAP Tickets, which had Terms and Conditions that included an arbitration clause. Cathay Pacific cancelled plaintiffs’ return flight, and they alleged that Cathay Pacific’s failure to provide a refund was a breach of contract under the airline’s General Conditions of Carriage for Passengers and Baggage (“GCC”).
The panel held that, when a nonsignatory seeks to enforce an arbitration provision, an order denying a motion to compel arbitration based on the doctrine of equitable estoppel is reviewed de novo.
As a threshold issue, the panel held that 14 C.F.R.
§ 253.10 did not bar Cathay Pacific’s motion to compel arbitration on equitable estoppel grounds. Section 253.10 clearly and unambiguously regulates a carrier’s ability to impose a choice-of-forum clause in contracts of carriage. However, nothing in the plain language of section 253.10 prohibits airline carriers from enforcing arbitration agreements between passengers and third parties if the applicable law permits them to do so.
Applying California contract law, the panel held that because plaintiffs’ allegations that Cathay Pacific breached the GCC was intimately intertwined with ASAP’s alleged conduct under the Terms and Conditions, it was appropriate to enforce the arbitration clause contained in the Terms and Conditions. Plaintiffs’ contention—that it would be unfair to apply equitable estoppel against them because the refund process was not clear under ASAP’s Terms and Condition and Cathay Pacific’s GCC—was without merit. Accordingly, the panel reversed the district court’s denial of Cathay Pacific’s motion to compel arbitration and remanded with instructions to either dismiss or stay the action pending arbitration of plaintiffs’ breach-of-contract claim.
Dissenting, Judge Forrest would affirm the district court’s denial of Cathay Pacific’s motion to compel arbitration because plaintiffs’ claim against Cathay Pacific—as they presented it—did not rely or depend on the terms of their ASAP Tickets contract.
Some case metadata and case summaries were written with the help of AI, which can produce inaccuracies. You should read the full case before relying on it for legal research purposes.
This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.