Schultz v. United Air Lines Inc et al, No. 2:2010cv01263 - Document 71 (W.D. Wash. 2011)
Court Description: ORDER granting dft's 64 Motion to Dismiss by Judge Ricardo S Martinez.(RS)
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Schultz v. United Air Lines Inc et al Doc. 71 1 2 3 4 5 6 7 UNITED STATES DISTRICT COURT WESTERN DISTRICT OF WASHINGTON AT SEATTLE 8 9 10 11 TONY SCHULTZ, individually, and on behalf of a class of others similarly situated, Plaintiffs, 12 13 14 15 16 17 CASE NO. C10-1263 RSM ORDER GRANTING DEFENDANT’S MOTION TO DISMISS v. UNITED AIRLINES, INC., a Delaware corporation d/b/a UNITED AIRLINES; NORTHWEST AIRLINES, INC., a Delaware corporation; and DELTA AIR LINES, INC., a Delaware corporation, Defendants. 18 19 20 I. INTRODUCTION This matter comes before the Court on Motion to Dismiss (Dkt. #64) brought by 21 Defendant Delta Air Lines, Inc. (“Defendant”). Plaintiff Tony Schultz (“Plaintiff”) alleges in his 22 Second Amended Complaint (Dkt. #63) that Defendant breached a contract as a result of their 23 failure to deliver his baggage in a timely manner after Plaintiff paid the checked baggage fee. 24 ORDER GRANTING DEFENDANT’S MOTION TO DISMISS - 1 Dockets.Justia.com 1 Plaintiff seeks to bring a class action consisting of all passengers whose baggage was lost, 2 delayed, or damaged after having been charged a baggage fee by Defendant. Plaintiff brings 3 claims for breach of contract, breach of covenant of good faith and fair dealing, and unjust 4 enrichment. Defendant seeks dismissal of all claims on the grounds that Plaintiff’s claims are 5 preempted by the Airline Deregulation Act, and that Plaintiff does not state a claim for breach of 6 contract. 7 8 9 II. BACKGROUND Plaintiff alleges that on June 25, 2009, Defendant charged him a baggage fee to transport 10 his bag on a flight from Hawaii to Seattle. Defendant allegedly delivered the baggage after a 11 delay of over twenty-four hours. Plaintiff argues that by charging a fee, an implied contract was 12 created. However, Defendant contends that no contract was created by Plaintiff’s payment; and 13 therefore Plaintiff has no right to a refund. 14 Defendant argues that the terms of the ticket establish the contract of carriage, also 15 known as the Conditions of Carriage, which is the controlling contract in this dispute. This 16 Court, in a previous Order (Dkt. #60), determined that it may take judicial notice of the 17 Conditions of Carriage. Furthermore, Defendant contends that the Airline Deregulation Act 18 prohibits states from regulating prices, routes, and services of air carriers, and that as such 19 Plaintiff’s claims relating to baggage transport are preempted. 20 21 22 23 24 ORDER GRANTING DEFENDANT’S MOTION TO DISMISS - 2 1 III. DISCUSSION 2 A. Preemption 3 The issue of whether a state-law claim is preempted by the Airline Deregulation Act, 49 4 U.S.C. § 41713(b)(1) (“ADA”) has been addressed by the Supreme Court. See Rowe v. N.H. 5 Motor Transp. Ass’n, 552 U.S. 364 (2008); Am. Airlines, Inc. v. Wolens, 513 U.S. 219 (1995); 6 Morales v. Trans World Airlines, Inc., 504 U.S. 374 (1992). In a recent interpretation of these 7 decisions, the Ninth Circuit noted that “Congress enacted the ADA to deregulate domestic air 8 transport, and included the preemption clause ‘to ensure that the States would not undo federal 9 deregulation with regulation of their own.’” Sanchez v. Aerovias De Mexico, S.A. De C.V., 590 10 F.3d 1027, 1030 (9th Cir. 2010) (quoting Morales, 504 U.S. at 378). The preemption clause of 11 the ADA provides that a “State … may not enact or enforce a law, regulation, or other provision 12 having the force and effect of law related to a price, route, or service of an air carrier….” 49 13 U.S.C. § 41713(b)(1). The Morales decision concluded that “a state law or enforcement action is 14 ‘related to’ a ‘price, route, or service’ if it ‘has a connection with or reference to’ a ‘price, route, 15 or service.’” Id. (quoting Morales, 504 U.S. at 384-88). 16 However, the Supreme Court created an exception to this general doctrine in Wolens. In 17 Wolens, the Court held that where a claim would be otherwise preempted, the preemption clause 18 of the ADA does not afford shelter to airlines from suits that do not allege a violation of 19 obligations imposed by states. Rather, where suits seek recovery solely for the airline’s alleged 20 breach of a self-imposed undertaking or obligation, the claims are not preempted. Wolens, 513 21 U.S. at 228. Thus, the Court found that although the plaintiffs’ claims in Wolens did relate to 22 “rates” and “services,” the ADA does not preempt court enforcement of “privately-ordered 23 contract terms set by the parties themselves.” Sanchez, 590 F.3d at 1030 (citing Wolens, 513 U.S. 24 ORDER GRANTING DEFENDANT’S MOTION TO DISMISS - 3 1 at 226-33). As such, even where an obligation is self-imposed, maintaining that obligation must 2 not rely on state law or policies to enhance or enlarge the existing contract. Onoh v. Northwest 3 Airlines, Inc., 613 F.3d 596, 600 (5th Cir. 2010); Howell v. Alaska Airlines, Inc., 994 P.2d 901, 4 905 (Wash. Ct. App. 2000). Therefore, “an otherwise preempted claim may remain viable under 5 the ADA if it falls within the two-prongs of the Wolens exception: 1) the claim alleged only 6 concerns a self-imposed obligation; and 2) no enlargement or enhancement of the contract occurs 7 based on state laws or policies external to the agreement.” Onoh, 613 F.3d at 600. 8 The Wolens case involved a class action against an airline arising out of a dispute related 9 to the airline’s frequent flyer program. The Supreme Court held that the ADA preempted claims 10 based on the Illinois Consumer Fraud and Deceptive Business Practices Act, but that the ADA 11 did not preempt state law breach of contract claims alleging that the airline had breached an 12 agreement with its passengers regarding frequent flyer miles. See Wolens, 513 U.S. 219. As 13 such, the Court drew a distinction between self-imposed and state-imposed obligations, finding 14 that claims relating to the self-imposed obligations were not preempted by the ADA. See id. 15 The Washington case of Howell v. Alaska Airlines is factually similar to the case at hand. 16 994 P.2d 901 (Wash. App. 2000). Howell addressed claims brought in a prospective class action 17 seeking to collect refunds of nonrefundable tickets under theories of impossibility of 18 performance, frustration of purpose, illusory promises, procedural and substantive 19 unconscionability, breach of duty of good faith and fair dealing, and unjust enrichment. Howell 20 noted that the plaintiffs were not seeking to enforce the contract according to its terms. Id. at 21 905. Rather, they sought to have the airline’s actions declared unlawful by application of state 22 laws and policies external to the contract. Id. at 905. Thus, the Howell Court held that plaintiffs’ 23 claims were preempted because the plaintiffs were attempting to enlarge or enhance their 24 ORDER GRANTING DEFENDANT’S MOTION TO DISMISS - 4 1 agreement with defendant based on the external laws or policies of the state. Id. at 905. 2 Similarly, in the case at hand Plaintiff sues for a refund of a baggage fee charged by the airline, 3 and alleges that a breach of contract resulted from the delay in transporting Plaintiff’s baggage. 4 To permit Plaintiff to proceed with these claims would be to allow Plaintiff to enlarge the alleged 5 contract by operation of external state law. 6 Any liability resulting from damage or delay to baggage is expressly governed by the 7 airline’s Conditions of Carriage. The Conditions of Carriage permit the airlines to create a 8 consistent policy governing liability arising from the transport of baggage. Moreover, the 9 Conditions of Carriage are federally regulated and must comply with 14 C.F.R. § 254, which is 10 promulgated by the U.S. Department of Transportation and establishes the limits carriers are 11 permitted to impose on liability for lost, damaged, or delayed baggage. As were the 12 circumstances in Howell, Plaintiff has not sued to enforce the terms of a contract, but has sought 13 to enhance his agreement by seeking a refund of the baggage fee based on the external laws of 14 the state. 15 As discussed supra, Howell presents a similar scenario to the case at hand. While the 16 Wolens court found that claims regarding the airline’s self-imposed obligations regarding 17 frequent flyer programs were not preempted, Howell held that claims regarding ticket refunds 18 were, in fact, preempted. In examining the facts and rationales of both Howell and Wolens, the 19 facts before this Court, which concern claims for baggage refunds, are strikingly more similar to 20 claims for ticket refunds than to claims relating to frequent flyer agreements. Disparate state 21 policies and treatment of liability arising from the handling of baggage, an activity that is central 22 to the business of the airlines, could greatly complicate the operation of airlines. Moreover, 23 federal rules have been promulgated by the Department of Transportation addressing airline 24 ORDER GRANTING DEFENDANT’S MOTION TO DISMISS - 5 1 liability for baggage. By contrast, airline policies regarding frequent flyer miles are not central 2 to the operation of the airlines and have not been directly regulated by federal agencies. 3 Both Howell and Wolens emphasize the need for uniformity in regulation of the airline 4 industry. Howell notes that “a plaintiff’s claims could potentially and improperly cause the rate 5 of airline tickets in the state in which [an] action was brought to differ from those available in 6 other states.” Howell, 994 P.2d at 904. Furthermore, Wolens explains that “[t]he ADA’s 7 preemption clause is meant to stop [s]tates from imposing their own substantive standards with 8 respect to rates, routes, or services, but not from affording relief to a party who claims and 9 proves that an airline dishonored a term the airline itself stipulated.” Wolens, 513 U.S. at 232. 10 In the case at hand, Plaintiff’s claims for a refund of the baggage fee as a result of the alleged 11 breach of contract employ external state law to enlarge an existing agreement regarding baggage 12 transport. The purpose of the ADA would be frustrated by permitting the kind of inconsistency 13 that would result from imposing substantive state theories of liability arising from baggage 14 transport. 15 B. Self-Imposed Undertaking 16 Plaintiff argues that his breach of contract claim is based on a “self-imposed undertaking” 17 and that, consequently, his claims fall within the Wolens exception and are not preempted by the 18 ADA. This Court directed Plaintiff to identify in his Second Amended Complaint the source and 19 substance of the “self-imposed undertaking” upon which his claims are based. See Dkt. #61, 20 Order on Motion to Dismiss. Upon examination of the Second Amended Complaint, Plaintiff 21 has failed to identify the source and substance of the alleged “self-imposed undertaking.” 22 Having already determined that the Contract of Carriage is an express contract which governs the 23 relationship between the parties, Plaintiff has not alleged facts that would tend to prove the 24 existence of a distinct, self-imposed contractual obligation. ORDER GRANTING DEFENDANT’S MOTION TO DISMISS - 6 1 Plaintiff relies on the theory that a self-imposed undertaking was created in the form of 2 an implied contract. However, the mere fact that Plaintiff paid an additional charge for the 3 checked baggage, along with language on Defendant’s website expressing its aspirational 4 intention to deliver baggage in a timely manner is insufficient to create an implied contract. In 5 Washington, an implied contract exists if there is an offer; there is an acceptance; the acceptance 6 is in the terms of the offer; it is communicated to the offeror; there is mutual intention to 7 contract; and there is a meeting of the minds of the parties. Milone and Tucci, Inc. v. Bona Fide 8 Builders, Inc., 301 P.2d 759, 762 (Wash. 1956). There is simply insufficient evidence to support 9 the conclusion that Defendant intended to create a distinct contract or that the parties reached a 10 meeting of the minds. The language to which Plaintiff refers on Defendant’s website is merely 11 precatory, and falls far short of evincing an intent to contract. The absence of intent to enter a 12 distinct contract is especially true in light of the existence of the Conditions of Carriage, which 13 govern the parties’ contractual relationship. As such, no implied contract exists, and Defendant 14 cannot be said to have entered into a self-imposed undertaking that would avoid preemption 15 under the ADA. 16 C. Breach of the Covenant of Good Faith and Fair Dealing 17 Because no implied contract exists, and because there is no evidence that a breach of the 18 terms of the Conditions of Carriage has occurred, Plaintiff cannot bring a claim for breach of the 19 covenant of good faith. 20 D. Unjust Enrichment 21 Having held that the Conditions of Carriage serve as the contract between the parties, and 22 that therefore a contract exists, Plaintiff may not bring a claim on the theory of unjust 23 enrichment. 24 ORDER GRANTING DEFENDANT’S MOTION TO DISMISS - 7 1 2 IV. CONCLUSION Having reviewed the relevant pleadings, the declarations and exhibits attached thereto, 3 and the remainder of the record, the Court hereby finds and ORDERS: 4 (1) Defendant’s Motion to Dismiss (Dkt. #64) is GRANTED. 5 (2) This action is DISMISSED with prejudice. The Clerk is directed to close this case. 6 7 Dated June 22, 2011. 8 9 10 11 A 12 RICARDO S. MARTINEZ UNITED STATES DISTRICT JUDGE 13 14 15 16 17 18 19 20 21 22 23 24 ORDER GRANTING DEFENDANT’S MOTION TO DISMISS - 8
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