Metropolitan News-Enterprise

 

Monday, October 15, 2018

 

Page 1

 

Ninth Circuit Judges Express Doubt That Action Against Southwest Airlines Is Viable

 

By a MetNews Staff Writer

 

Ninth U.S. Circuit Court of Appeals Judges A. Wallace Tashima, left, and Mary H. Murguia are joined by Senior District Court Judge Robert Neil Chatigny of the District of Connecticut, sitting by designation, in hearing argument I a case in which the appellants seek reinstatement of their dismissed action over Southwest Airlines’s policy with respect to future use of funds in payment for unused non-refundable tickets

 

Judges of the Ninth U.S. Circuit Court of Appeals have signaled at oral argument that they have no intention of resuscitating a lawsuit against Southwest Airlines alleging that it rooks ticket-purchasers by proclaiming that if non-refundable tickets aren’t used, a credit toward future bookings will be applied for up to one year, without advising, through conspicuous notice, of exceptions.

The plaintiffs, attorney Jean Shrem and real estate agent Marni Fischer, both of Contra Costa County, on Oct. 2, 2015, brought a putative class action in the U.S. District Court for the Northern District of California against the airline on various theories. District Court Judge Haywood S. Gilliam Jr. whittled the case down to an action for breach of contract, then, after the plaintiffs repled, dismissed the action  with prejudice.

Shrem and Fischer had purchased Southwest tickets on Aug. 24, 2014, but cancelled their plans and accepted credit for future travel, with the credit expiring Aug. 23, 2015. On Feb. 21, 2015, they bought two roundtrip tickets, paying $784 and using their $16 in credit.

Forfeit Declared

They then cancelled the new tickets. On Sept. 15, 2015, they planned yet another trip and sought application of the credits from the cancelled tickets—$16 and $784—but were told that they had forfeited, entirely, the $800 in credits because the $16 credit had expired 23 days earlier.

After suit was brought, Southwest agreed to honor the $800 credit the plaintiffs claimed; they declined the offer; Gilliam held that the matter was not moot.

Southwest relied on a provision in the contract of carriage (available online) which says:

“If a Ticket is purchased with multiple travel credits, the earliest expiration date will apply to the entire Ticket.”

Skepticism Expressed

Attorney Peter Fredman presents argument to Ninth U.S. Circuit Court of Appeals.

At oral argument on Thursday in San Francisco, Circuit Judges A. Wallace Tashima and Mary H. Murguia provided clear signs of their rejection of contentions by the plaintiffs’ attorney, Peter B. Fredman of Berkeley; Senior District Court Judge Robert Neil Chatigny of the District of Connecticut, sitting by designation, appeared to be in agreement with the regular members of the panel.

“What are you saying, now?” Tashima asked Fredman after he asserted that the 41-page contract would be difficult for the average traveler to comprehend, if it were even read.

Was he contending, Tashima asked, “[t]hat the contract shouldn’t be construed to mean what it says?”

Regulation Cited

Fredman’s position was that what mattered was the wording on the ticket. He pointed to a federal regulation (which Gilliam held was not incorporated into the contract of carriage) providing:

“A carrier may not impose any terms restricting refunds of the ticket price, imposing monetary penalties on passengers, or raising the ticket price...unless the passenger receives conspicuous written notice of the salient features of those terms on or with the ticket.”

The lawyer maintained that language in small print on the ticket indicating that there were exceptions to the one-year availability of credits constituted “the opposite of conspicuous written notice” asserting:

“It’s a hidden limitation on the right to use the reusable fund.”

Murguia’s Questioning

Murguia declared:

“It’s clear on the face of the ticket what the contract is.”

With apparent reference to the ticket purchased on Sept. 15, 2015, she asked:

“Isn’t that expiration date clearly noted on the face of the ticket, right next to the confirmation number?”

Fredman agreed that it was, but insisted the customer would not understand the significance of the notation.

“Why wouldn’t it mean the date the ticket expires?” she asked.

She went on to inquire:

“What should the more conspicuous notice look like?”

The lawyer replied:

“It should say something like Southwest says now, which is:

“ ‘New reservations inherit the earliest expiration date from any funds applied from the old ticket. Therefore, the expiration date of your new reservation and all associated funds may be less than 12 months’—or something like that.”

Southwest’s Attorney

Dallas attorney Richard Barrett Phillips Jr., representing the Texas-based Southwest Airlines, told the judges:

“It’s clear on the face of the ticket what the contract is.”

He said the plaintiffs cited as an example of a conspicuous warning the statement in the ticket that reservations are forfeited if the passenger does not check in at least 10 minutes before boarding. That statement Phillips pointed out, is slightly above the warning on forfeiture of  unused ticket funds, in the same typeface and same sized type.

 

Copyright 2018, Metropolitan News Company