Summary of Pending Litigation in the United States Arising from European Union Regulation EC 261

Since its enactment in 2004, European Union Regulation 261 (“EC 261”)1 has generated significant media coverage and litigation in the European Union (“EU”) and various EU national courts. This broad and controversial consumer regulation addresses airline passenger rights in the event of a denied boarding, flight delay or flight cancellation on flights into or out of EU member states. Currently, the scope, applicability and enforceability of EC 261 is being contested in U.S. courts in six putative class action lawsuits filed in the U.S. District Court for the Northern District of Illinois.

European Union Regulation EC 261 

In 2004, the European Commission passed EC 261 to enhance airline passengers‟ rights in certain instances. EC 261 expanded upon an existing regulation concerning passengers‟ rights in cases of denied boarding2 to require air carriers servicing airports located in the European Union to provide passengers with various forms of care and assistance in the event passengers become stranded because they are denied boarding or their flights are delayed or cancelled. While the specific accommodations afforded to each passenger differ depending on various factors3 under the Regulation, affected passengers may be entitled to meals, phone calls, the option of re-routing or ticket reimbursement, and hotel accommodations and transport to and from the airport.

Expanding upon the existing obligation to compensate passengers in cases of denied boarding, EC 261 also provides passengers who experience flight cancellations with the right to receive a standardized monetary payment. EC 261 does not expressly provide the right to standardized monetary compensation to passengers who experience flight delays. However, in deciding Sturgeon v. Condor Flugdienst GmbH, in November 2009, the European Court of Justice (“ECJ”) ruled that, under EC 261, passengers who experience delays of three hours or more should be treated like passengers who experience flight cancellations and entitled to standardized monetary compensation.4 The ECJ reasoned that passengers who experience lengthy delays suffer the same inconvenience as passengers whose flights are cancelled.5

Enforcement of EC 261 in the United States 

As drafted, EC 261 applies to flights destined for the EU that are operated by a carrier pursuant to a license issued by the EU (a EU “Community carrier”) and to all flights departing from the EU, regardless of the carrier‟s nationality. The regulation further states that carriers operating flights covered by EC 261 must notify passengers of their EC 261 rights and cannot evade their EC 261 obligations in their contracts of carriage.6 In response to this requirement, affected carriers began to provide EC 261 notices on their websites and refer to EC 261 in their contracts of carriage, either by expressly referencing EC 261 or indirectly tracking the language contained in the Regulation.

Relying on the EC 261 notices and references adopted by six airlines, U.S. residents who had experienced flight delays and/or cancellations as passengers on flights between the United States and the EU filed six putative class action complaints in the U.S. District Court for the Northern District of Illinois. The six separate class actions were commenced against Iberia, British Airways, Lufthansa, Alitalia, Delta and Continental.7 Each class action sets forth the same theory of liability: the airline breached its contract of carriage by failing to pay the named plaintiffs, and others similarly situated, the compensation provided for by EC 261, which plaintiffs allege had been incorporated into the carriers‟ contracts of carriage. In the case of transatlantic flights between Europe and the United States, EC 261 compensation would be 600 Euros per passenger.

In each of the actions, the defendant airline moved for dismissal of the complaint on various legal grounds. Despite similar defenses asserted by the airlines, the district court judges assigned to the cases agreed that, because of factual differences in the travel circumstances of each of the named plaintiffs and the different contracts of carriage at issue, each case should proceed separately and each motion to dismiss independently decided. To date, the motions to dismiss filed by Iberia, Lufthansa, British Airways, and Alitalia have been decided, with varying outcomes.

Giannopoulos v. Iberia 

In July 2011, Judge Joan Humphrey Lefkow issued the first of the EC 261 decisions in Giannopoulos v. Iberia.8 In Giannopoulos, the representative plaintiffs alleged that they were entitled to EC 261 compensation because they experienced a 24-hour delay in their travel from Chicago to Athens, Greece in May 2009, caused by the delayed departure of their Iberia flight out of Chicago. Plaintiffs alleged that Iberia was contractually obligated to pay them EC 261 compensation because Iberia‟s contract of carriage contained a “Notice” setting forth passengers‟ rights under EC 261, including the right to EC 261 compensation in the event of flight cancellations. Plaintiffs claimed that Iberia breached its contract by failing to pay them the standardized compensation.

Iberia‟s motion to dismiss was based on the following grounds: (1) plaintiffs‟ breach of contract claim was preempted by the Airline Deregulation Act (“ADA”)9 and the Montreal Convention; (2) the Air Transport Agreement (“ATA”) between the United States and the EU prohibited the application of EC 261 to flights departing the United States; (3) the named plaintiffs failed to exhaust administrative remedies required by EC 261 in the EU; and (4) claims for EC 261 compensation should be adjudicated in the EU under the principle of international comity. Judge Lefkow rejected all of the airline‟s arguments and denied Iberia‟s motion to dismiss.

While acknowledging that the ADA preempts the enforcement of laws that “relate to” an airline‟s services through a state law breach of contract claim,10 Judge Lefkow found that the Giannopoulos plaintiffs‟ claims fell within an exception to ADA preemption. The exception, articulated by the United States Supreme Court in American Airlines v. Wolens,11 provides that the ADA does not preempt state law contract claims based on an airline‟s breach of “self-imposed undertakings” that the airline voluntarily includes as conditions of its contract with the passenger. Plaintiffs argued that the Wolens exception applied because Iberia voluntarily incorporated the terms of EC 261 into its contract of carriage and thus willingly agreed to abide by those terms. Iberia argued that the Wolens exception did not apply because, regardless of the references to EC 261 in its contract of carriage, Iberia‟s notice of EC 261 compensation applied only to cases of denied boarding and flight cancellations, not to flight delays as the Sturgeon court had held. Iberia contended that interpreting its contract of carriage as an agreement to pay EC 261 compensation for flight delays required the court to look beyond the terms of the contract – i.e., beyond the airline‟s “self-imposed undertakings” – and find that Iberia voluntarily agreed to abide by the ECJ‟s holding in Sturgeon. The court disagreed.

Specifically, Judge Lefkow held that: “Iberia‟s agreement to pay compensation according to EC 261 must be read as an agreement to abide by EC 261, as interpreted by the ECJ” and, as such “[t]he ECJ‟s decision in Sturgeon [] cannot be considered external to the contract.” In so holding, Judge Lefkow distinguished Iberia‟s contract from other airline contracts that contained “generic references to „applicable laws‟” and remained subject to ADA preemption.12 Because “Iberia specifically refers to complying with EC 261 in its conditions of contract,” Judge Lefkow found that the Wolens exception applied and the ADA did not preempt the plaintiffs‟ breach of contract claims.

The court also held that the Giannopoulos plaintiffs‟ state law breach of contract claims were not preempted by the Montreal Convention, the international treaty governing passenger delays in international air transportation. Relying on the Supreme Court‟s decision in El Al Israel Airlines v. Tseng,13 and Article 29 of the Convention,14 Iberia argued that the Montreal Convention exclusively governs plaintiffs‟ claims for damages arising from a delay in their international transportation from the United States to Greece and preempted plaintiffs from seeking non-compensatory damages by stating their claim as one for breach of contract.

With regard to the argument that plaintiffs‟ claims for damages can only be brought under the Montreal Convention, Judge Lefkow, relying on the Seventh Circuit‟s decision in Sompo Japan Ins., Inc. v. Nippon Cargo Airlines Co.,15 held that the Montreal Convention does not preempt state law causes of action that are consistent with the Convention. Moreover, Judge Lefkow found that “if the claims fall within the scope of the Montreal Convention, . . . the claims are not preempted; instead the Montreal Convention‟s limitation on liability simply applies.”

Iberia‟s third ground for dismissal was that, pursuant to the terms of the 2007 ATA between the United States and EU, flights departing the United States are governed by U.S. law and not subject to the requirements of EC 261. Rejecting the argument, Judge Lefkow found that the ATA does not provide for the exclusive application of U.S. law to flights departing the U.S. but only ensures that U.S. laws will be respected while an airline operates in U.S. territory. Moreover, Judge Lefkow found that the ATA did not relate to issues such as consumer protection, but only concerned laws relating to subjects like immigration and customs.

Judge Lefkow also rejected the argument that EC 261 required the Giannopoulos plaintiffs to exhaust their administrative remedies in the EU, finding that nothing in the text of EC 261 precluded passengers from seeking judicial relief in the first instance. Judge Lefkow used similar reasoning to dismiss Iberia‟s last argument that plaintiffs‟ claims are more appropriate for adjudication in the EU and should be dismissed in accordance with the principle of international comity. Again, finding nothing in EC 261 to indicate that the Regulation could only be enforced by an authorized body in the EU, Judge Lefkow rejected comity as adequate grounds for dismissal. Judge Lefkow was unswayed by the pending challenges to the Sturgeon decision in the ECJ,16 finding that U.S. courts “will be just as able as European courts to apply the ECJ‟s forthcoming ruling and could, if necessary, stay a merits decision on compensation for passengers on flights delayed for over three hours until the ECJ addresses the questions before it.”

Judge Lefkow rendered her Opinion and Order denying Iberia‟s motion to dismiss on July 27, 2011.17 While not binding on the other district courts assigned to other EC 261 class actions, Judge Lefkow‟s legal analysis with respect to the arguments asserted by Iberia played an integral role in the decisions that followed in the class action cases filed against Lufthansa and British Airways.

Polinovsky and Baumeister v. Lufthansa 

The EC 261 class action complaint against Lufthansa involved two distinct flight disruptions experienced by named plaintiffs Pavel and Ilona Polinovsky and Hans-Peter Baumeister. The Polinovsky plaintiffs‟ claims arose from the delayed departure of their Lufthansa flight from the United States to Germany in December 2010; Mr. Baumeister‟s claim arose from the cancellation of his flight out of Stuttgart, Germany, in October 2010, which delayed his travel from Germany to the United States. The named plaintiffs asserted that Lufthansa violated its contract of carriage by failing to pay them EC 261 compensation for their delayed and cancelled flights. Lufthansa moved to dismiss the Polinovsky/Baumeister complaint on the same grounds as Iberia in the Giannopoulos action. Lufthansa also asserted an additional defense with respect to Mr. Baumeister‟s claim, namely that under EC 261 Lufthansa was not required to pay Mr. Baumeister compensation because it was not the operating carrier of the cancelled flight.

On March 30, 2012, Judge Sharon Johnson Coleman denied Lufthansa‟s motion to dismiss. Judge Coleman rejected the ADA, Montreal Convention, ATA, the principle of administrative exhaustion, and the principle of international comity as grounds warranting dismissal. Without referencing Judge Lefkow‟s opinion in Giannopoulos, Judge Coleman‟s decision followed nearly identical reasoning. For instance, Judge Coleman found that the Polinovsky and Baumeister plaintiffs‟ breach of contract claims were not preempted by the ADA because Lufthansa‟s contract of carriage specifically referenced EC 261 and included language stating its intent to provide compensation in accordance with the Regulation. Thus, similar to Judge Lefkow, Judge Coleman found that the Wolens exception applied and that the ADA did not preempt the Polinovsky and Baumeister claims.

With respect to Lufthansa‟s “operating carrier” defense against Mr. Baumeister‟s claim, the court ruled that, while EC 261 limits liability to operating carriers only, the pleadings alone were insufficient to establish that Lufthansa was entitled to this defense. Rather, Judge Coleman found that discovery was needed in this regard.

Polinovsky v. British Airways 

Pavel and Ilona Polinovsky also asserted breach of contract claims against British Airways for the cancellation of their British Airways flight in December 2010.18 In a separate class action complaint, the Polinovskys‟ alleged that British Airways violated its contract of carriage by failing to compensate them in accordance with EC 261. British Airways moved to dismiss the Polinovskys‟ claims, advancing the same legal arguments that Iberia asserted in its motion to dismiss the Giannopoulos class action.

Recognizing the similarity between the legal theories advanced by British Airways and Iberia and acknowledging Judge Lefkow‟s July 27, 2011 Opinion and Order, District Judge Ruben Castillo requested additional briefing on “why this court should not fully adopt Judge Lefkow‟s opinion and deny the pending motion to dismiss.” Following supplemental briefing and oral argument by the parties, Judge Castillo found that “there is meaningful reason to depart from Judge Leflow‟s well reasoned legal analysis” and granted British Airways‟ motion to dismiss on the ground that the Polinovskys‟ breach of contract claims with respect to British Airways were preempted by the ADA.

Basing his ruling on key differences between British Airways‟ and Iberia‟s contracts of carriage, Judge Castillo found that the Polinovsky plaintiffs‟ breach of contract claim was preempted by the ADA because the Wolens exception did not apply. Referring to Judge Lefkow‟s analysis of the type of airline contracts subject to ADA preemption, Judge Castillo held that the “the key factor [in determining ADA preemption] was [whether] the defendant airline had promised to abide by applicable law without specifying which particular law or body of laws was intended.” Applying this principle, Judge Castillo found that, unlike Iberia‟s express reference and agreement to provide compensation as established by EC 261 in its contract of carriage, British Airways‟ contract only provided that British Airways “will give you additional assistance, such as compensation . . . if required to do so by any law which may apply.” Judge Castillo concluded that British Airways‟ reference to the applicable law “is exactly the type of generic reference that Judge Lefkow concluded would not satisfy the Wolens exception.” Thus, applying the same reasoning as Judge Lefkow‟s decision to the different contract at issue in the Polinovsky v. British Airways action, the court granted British Airways‟ motion to dismiss with prejudice.

Gurevich v. Alitalia 

The remaining EC 261 class action in which the defendant airline‟s motion to dismiss has been decided is Gurevich v. Alitalia. The Gurevich claims for breach of contract arose from the cancellation of two flights between Chicago and Italy in April 2009 and Alitalia‟s alleged failure to pay EC 261 compensation to the Gurevich plaintiffs. Similar to Iberia‟s contract of carriage, Alitalia‟s contract provided that Alitalia would pay compensation to passengers in accordance with EC 261. Alitalia‟s motion to dismiss asserted arguments under the ADA, Montreal Convention and international comity – three of the same legal theories asserted by Iberia, Lutfhansa and British Airways. However, unlike the other EC carriers, Alitalia‟s lead argument was that the tariff Alitalia had filed with the U.S. Department of Transportation (“DOT”) in accordance with 49 U.S.C. § 41504(a), stated that its contract of carriage did not apply to air travel to and from the United States. Thus, Alitalia contended, any contractual obligation it had to comply with EC 261 did not apply to the plaintiffs‟ claims.

On January 17, 2012, Judge Sharon Johnson Coleman granted, without prejudice, Alitalia‟s motion to dismiss based on Alitalia‟s tariff argument but stayed all future proceedings pending a decision by the DOT on Alitalia‟s tariff argument. The court held that a tariff – if validly filed with the DOT – is binding on passengers even if the terms of the tariff are not included in the passengers‟ transportation documents and even when the terms of the tariff conflict with the contract of carriage. Judge Coleman found that, because the DOT had accepted Alitalia‟s tariff, it was presumptively valid and that, to the extent the Gurevich plaintiffs contested the validity of the tariff, they must first raise the issue with the DOT, not the district court. In granting Alitalia‟s motion to dismiss, however, the court used its discretion and ordered that the dismissal be without prejudice to allow the Gurevich plaintiffs to file an action with the DOT to determine the validity of Alitalia‟s tariff. On March 15, 2012, the Gurevich plaintiffs filed a complaint with the DOT. The DOT has yet to render a decision.

Volodarskiy v. Delta Airlines, Inc. and Lozano v. United Continental Holdings, Inc. 

The two remaining EC 261 class actions pending in the Northern District of Illinois assert breach of contract claims against two U.S. carriers, Delta Airlines and Continental Airlines (now merged with United Airlines). While the breach of contract claims involved in these two class actions mirror the claims of the other EC 261 plaintiffs, the Volodarskiy and Lozano plaintiffs‟ breach of contract allegations are not solely based on airline contracts of carriage. Rather, the Volodarskiy and Lozano plaintiffs allege that EC 261 notices found on each airline‟s website, in conjunction with their respective contracts of carriage, contractually obligates both Delta and Continental to pay EC 261 compensation to passengers who experience delays and cancellations on flights departing the EU.

Similar to the European carriers, both Delta and Continental have moved to dismiss the complaints. Neither of the two judges assigned to the cases has ruled on these motions. At this time, it is unclear how the uniqueness of the factual allegations against these carriers, in addition to the previous rulings of Judge Lefkow, Judge Coleman and Judge Castillo, will impact the forthcoming decisions in these cases.


The varying rulings on the motions to dismiss the EC 261 class actions filed against Iberia, Lufthansa, British Airways and Alitalia confirm that the issue of whether Regulation EC 261 can be validly enforced in the United States is far from resolved. In addition to the potential impact of decisions in the Delta and Continental cases, the question of whether Article 29 of the Montreal Convention prohibits claims for EC 261 compensation or whether a foreign carrier‟s tariff can validly supersede its conditions of carriage remain open and could determine whether Iberia, Lufthansa, Delta and Continental have additional defenses to claims for EC 261 compensation. In addition, the challenge to the Sturgeon decision currently pending before the ECJ will impact whether the individual EC 261 class action plaintiffs can assert EC 261 compensation to the extent that their claims are based on flight delays.


1 The full title of the Regulation is: Regulation (EC) No 261/2004 of the European Parliament and of the Council of 11 February 2004 establishing common rules on compensation and assistance to passengers in the event of denied boarding and of cancellation or long delay of flights, and repealing Regulation (EEC) No 295/91.

2 Regulation (EEC) No 295/91 of 4 February 1991 establishing common rules for a denied boarding compensation system in scheduled air transport.

3 These factors include: the nature of the delay in transportation, the distance the passenger is travelling, and whether the passenger received sufficient notice of the flight disruption.

4 Joined Cases C-402/07 and C-432/07, 2009 E.C.R. I-10923 (Nov. 19, 2009).

5 In December 2010, national courts in the United Kingdom and Germany referred two cases to the ECJ for reconsideration of the issues raised in, and implicated by, the Sturgeon decision. See TUI Travel et al. v. Civil Aviation Authority, Case C-629/10 (Dec. 24, 2012);

Nelson v. Deutsche Lufthansa AG, Case C-581/10 (Dec. 13, 2010). The ECJ heard oral arguments in these cases on March 20, 2012, and is expected to render its opinion as to the validity of Sturgeon in late 2012 or early 2013.

6 See EC 261, Article 15.

7 Giannopoulos v. Iberia, Líneas Aéreas de España, S.A., Case No. 11 C 775 (N.D. Ill. Feb. 3, 2011) (Lefkow, J.); Polinovsky v. British Airways PLC, Case No. 11 C 779 (N.D. Ill. Feb. 3, 2011) (Castillo, J.); Polinovsky and Baumeister v. Deutsche Lufthansa AG, Case no. 11 C 780 (N.D. Ill. Feb. 3, 2011) (Coleman, J.); Volodarskiy v. Delta Airlines, Inc., Case No. 11 C 782 (N.D. Ill. Feb. 3, 2011) (Chang, J.); Gurevich v. Compagnia Aereas Italiana, SPA d/b/a Alitalia Airlines, Case No. 11 C 1890 (N.D. Ill. Mar. 17, 2011) (Coleman, J.); and Lozano v. United Continental Holdings, Inc., Case No 11 C 8258 (N.D. Ill. Nov. 18, 2011) (Nordberg, J.). Plaintiffs in the class action lawsuit against Continental amended their complaint to assert a second cause of action for “Violation of EU Regulation 261.”

8 Case No. 11 C 780, 2011 WL 3166159 (N.D. Ill. July 27, 2011).

9 49 U.S.C. § 41713.

10 Following federal deregulation of the airline industry, Congress passed the ADA to prevent States from enacting or enforcing “a law, regulation, or other provision having the force and effect of law related to a price, route, or service of an air carrier.” 49 U.S.C. § 41713.

11 513 U.S. 219 (1995).

12 In its moving papers, Iberia cited Onoh v. Northwest Airlines, Inc., 613 F.3d 596 (5th Cir. 2000), for the proposition that contractually agreeing to comply with the law does not constitute a “self-imposed undertaking.”

13 525 U.S. 155 (1999).

14 Article 29 of the Montreal Convention states: “In the carriage of passengers, baggage and cargo, an action for damages, however founded, whether under the Convention or in contract or in tort or otherwise, can only be brought subject to the conditions and limits of the liability as are set out in this Convention . . . In any such action, punitive, exemplary or any other non compensatory damages shall not be recoverable.” Condon & Forsyth llp- 7

15 522 F.3d 776 (7th Cir. 2008).

16 TUI Travel et al. v. Civil Aviation Authority, Case C-629/10 (Dec. 24, 2010); Nelson v. Deutsche Lufthansa AG, Case C-581/10 (Dec. 13, 2010).

17 On December 13, 2011, the Giannopoulos plaintiffs amended their complaint to add additional class representative plaintiffs, James and Lauren Varsamis. On January 13, 2012, Iberia filed a motion to dismiss the claims of the Varsamis plaintiffs, relying primarily on the Montreal Convention as reason to dismiss the Varsamis plaintiffs‟ claims. Iberia‟s motion to dismiss the Varsamis plaintiffs‟ claims is still pending before Judge Lefkow. On January 13, 2012, Iberia also filed a motion for summary judgment to dismiss the Giannopoulos plaintiffs‟ claims. Iberia argued that evidence produced during fact discovery established that plaintiffs‟ delayed transportation was caused by volcanic ash emissions in March – May 2009. According to Iberia, flight delays caused by volcanic ash constituted “extraordinary circumstances” and fell into EC 261‟s exception to the payment of compensation. Iberia‟s motion for summary judgment also remains pending before Judge Lefkow.

18 The Polinovsky plaintiffs‟ original travel plans in December 2010 called for transportation on British Airways flights. However, when the Polinovskys‟ British Airways flight was cancelled, British Airways rebooked them on flights operated by Lufthansa, including one of the subject flights at issue in the Polinovsky/Baumeister action.