Ninth Circuit Permits Baggage Delay Class Action To Continue Based on Breach of Contract

The Ninth Circuit recently reinstated a class action against US Airways for the return of baggage fees in the event of delay.1 This holding is notable because it narrowed the preemptive scope of the Airline Deregulation Act (ADA)2 when a passenger’s claim is based on terms in the Conditions of Carriage.3

In 2010, the plaintiff in this matter brought an action against US Airways for the return of a $15 baggage fee charged on a flight from Colorado to California. Plaintiff sought a refund of the fee based on a breach of contract claim because her bag was delivered one day late, and sought to certify a class of individuals who paid the fee and whose bag was delayed. The district court dismissed the complaint based on federal preemption, never reaching class certification.

Generally speaking, the ADA prohibits states from enacting or enforcing a law “related to a price, route, or service of an air carrier.”4 As noted by the Ninth Circuit, the preemptive scope of the ADA is broad in that it preempts almost any law or action that affects the cost of a flight whether based in statute or common law.5 Nevertheless, a longstanding exception to ADA preemption is where the airline has made a “voluntarily assumed obligation,” in other words, where a claim is based on an express contract. The scope of this exception was the issue addressed by the Ninth Circuit.

The exception for contract claims was established in the oft-cited U.S. Supreme Court case, American Airlines, Inc. v. Wolens,6 and recently was reassessed by the Court in Northwest, Inc. v. Ginsberg.7 The Ninth Circuit interpreted these cases to mean that a contract claim is preempted only if state law requires the airline to include a specific term on which the claim is based. Otherwise, if the plaintiff can identify a contract term supporting their claim, preemption does not apply.

In examining US Airways’ Conditions of Carriage, the Ninth Circuit found that the airline had voluntarily committed to delivering baggage “on-time.” Within the context of the agreement, it interpreted the term on-time to mean delivery of the baggage at the same time as the passenger.

The airline argued that the language in the Conditions of Carriage was merely a general promise and that the contract does not “explicitly promise” a refund in the event of delay. In other words, because the Conditions of Carriage do not specifically mention a refund as an available remedy, this remedy should be preempted; the only damages mentioned are consequential damages.

The Ninth Circuit rejected this argument, concluding that the contract’s language was specific enough to create an obligation to deliver baggage on-time and that a refund is merely a general contract remedy, available in all contract cases.

Finally, the airline warned that if the plaintiff prevailed on her claim, this would require airlines to deliver checked baggage on-time or to provide that service for free. The appellate court was unconvinced, finding that airlines are free to make any arrangement regarding the delivery of baggage. In this instance, US Airways promised to deliver baggage specifically “on-time” in exchange for the $15 fee.

In reversing the lower court’s dismissal and reinstating plaintiff’s breach of contract claim, the Ninth Circuit appears to have widened the universe of potential contract claims against an airline that are not subject to ADA preemption.

US Airways merged with American Airlines in 2013.

2 49 U.S.C. § 1301 et seq; see also Airline Deregulation Act of 1978, Pub. L. No. 95-504, 92 Stat. 1705 (1978).

3 Hickcox-Huffman v. US Airways, Case No. 1:11-cv-16305, (May 3, 2017), D.C. No. 5:10-cv-05193-HRL.

4 49 U.S.C. § 40101(a)(6).

5 See also Morales v Trans World Airlines, Inc., 504 U.S. 374 (1992).

6 513 U.S. 219 (1995).

7 134 S. Ct. 1422 (2014).