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American Seeks to Squash COVID-19 Refund Lawsuit

American Seeks to Squash COVID-19 Refund Lawsuit
Joe Cortez

American Airlines is asking a Texas judge to dismiss a class-action lawsuit brought forward by a group of flyers demanding refunds for flights cancelled due to the COVID-19 pandemic. The airline is hopeful a judge will compel the group to enter arbitration, instead of continuing in court.

American Airlines has asked a judge in the United State District Court Northern District of Texas to block a class action lawsuit from flyers seeking refunds due to COVID-19 related flight cancellations, and force them into arbitration instead. The motion on behalf of American Airlines was filed on Aug. 13, 2020, saying where they purchased their tickets makes the difference.

Class Says American Denied Refunds, Causing Flyers to Outright Lose Money

The amended class action complaint was filed on July 15, 2020 by three individuals who held tickets with American Airlines. The group claims that American “often refuses to issue monetary refunds to passengers with cancelled flights.” Additionally, the group is claiming American is acting especially unjust because of the $5.8 billion in support offered to the airline from the CARES Act.

“[The] Plaintiffs requested refunds for tickets on cancelled flights and were entitled to a refund. But, like so many other passengers, American denied those requests,” the complaint reads. “Not only has American breached its contract with Plaintiffs and the Class, it has engaged in unfair and deceptive conduct through its policy to refuse refunds for cancelled and/or significantly delayed flights, thereby forcing customers into a rebooked flight or travel voucher instead of returning their money.”

In the three plaintiff stories provided in the complaint, each purchased their tickets through an online travel agency. Before or during their travel, they say American cancelled a portion of their trip, and gave them mixed messages about refunds. The group cites the airline’s conditions of carriage as justification they are owed refunds.

American Says Lawsuit Should Go to Arbitration Instead

In their response to the court, lawyers for American argue that the lawsuit should be dismissed entirely, and sent either to small claims court or through arbitration. They claim that because the tickets in question were purchased through the online travel agency, the claims should go through their original agents first.

“Two of the three named plaintiffs in this action entered into binding arbitration agreements when purchasing their tickets from Expedia and Hotwire,” the motion to dismiss reads. “Those agreements expressly state that the purchaser must bring any claims against travel suppliers (like American) in individual arbitration or small claims court, and that travel suppliers like American are intended beneficiaries of the agreements to arbitrate.”

In the third case, American claims the lawsuit shouldn’t continue because the flyer didn’t purchase their travel from the Fort Worth-based carrier. Instead, the flyer purchased tickets through partner LATAM. Accordingly, American says the flyer should seek refund from the Chilean airline, instead of from American Airlines.

Lawsuit Complicates Already Muddied Waters of COVID-19 Refunds

Although no decision is made in the lawsuit, the suit itself creates even more complications for those who are seeking refunds from airlines. Flyers already report difficulty in getting refunds where they claim its due. The result of this lawsuit could set further precedent on how flyers get refunds from air carriers.

View Comments (11)


  1. alangore


    August 17, 2020 at 6:52 pm

    When an airline cancels, they owe the passenger a refund. It’s the law. Any attemptto pettifog their way around this just causes passengers in these uncertain times to choose a road trip over flights, meaning still fewer bookings for the passenger-parched carriers. Then they can whine for another bailout.

    The average big city street food vendor knows more about customer retention than these yokels. It’s time we replaced the upper management and imposed strict customer service standards as a condition for the next bailout.

  2. Prof_Dr_G

    August 18, 2020 at 4:24 am

    AA doesn’t care about customers. Their routes are secure, with the support of the US Justice Department and its inactive Anti-trust Division. There is no news here; just a continuation of fraud and abuse by AA executives.

  3. woolfson

    August 18, 2020 at 6:48 am

    When I use my credit card to purchase something, I am not obligated to go to arbitration because of the agreement that I have with my credit card company, because the contract was with the seller of the goods, not with the credit card company. Common sense contract law.

  4. MRM

    August 18, 2020 at 7:33 am

    Let’s just say I’m stunned that airlines are so willing to pass off liability for refunds to third-part vendors. STUNNED.

  5. Catty

    August 18, 2020 at 9:06 am

    I had tickets to Australia and not only AA refunded them, but they called me and offered either a refund or change of date. Sorry to hear that people had problems with that.

  6. fholt

    August 18, 2020 at 9:38 am

    This right here is why you don’t go buy tickets on Hotwire or Expedia. If you bought your ticket from American (perish the thought but still) then you have a contract with American and your refund is honored (maybe not the first time you ask) because that’s in the contract of carriage. Put 3rd parties in the mix and it’s asking for trouble. Same when you have to reroute or miss a flight – don’t talk to the airline – you paid Orbitz talk to them

  7. DeltaFlyer123

    August 18, 2020 at 9:54 am

    I have not had any of these issues because I haven’t travelled since the pandemic started. However, i avoid third party ticket purchases because of potential issues such as these described in the article, plus the possibility of not getting frequent flyer points and related perks.
    My only experience is that once my wife booked a hotel reservation for a funeral while I was out of town and busy, and I was at the time a Hilton diamond member, so I told her just to go on the internet and book a couple of nights at our destination. Well, she thought she was on the Hilton site, but turned out to be some travel agency, and not only was the price higher, but I got no points nor my usual diamond upgrade.
    So the issue in the case of these ticket refunds seems to revolve around third parties imposing their own contractual obligations on the customers that override the airline contract, because they are technically not buying the tickets from the airline, so the airline contract doesn’t apply. .

  8. deadmoneywalking

    August 19, 2020 at 10:50 am

    Most likely they just want the Court to enforce the arbitration provision but had to make a motion to dismiss at that time or they could lose the right to do so.

  9. polinka

    August 20, 2020 at 7:40 am

    Agree with deadmoney, they want all that **** to go to arbitration, not class action. Actually, I think it may be better for the ticketholders, too. Of course, the right thing would be for AA to refund the money. But even in Europe where the laws are very strict and the passengers know it, some airlines still aren’t refunding. Those who bought through 3rd party are always left holding the bag.

  10. davidb4775

    August 21, 2020 at 6:26 am

    Of course, AA wants arbitration. Class action suits are very costly and AA wants to minimize that exposure. Not familiar with the arbitration process. That being said, can there be a class action arbitration or does the process address injured parties one case at a time. One case at a time could take years (not that a class action suit is fast).

  11. kelly0522

    August 23, 2020 at 3:06 pm

    When you use a 3rd party such as Expedia, Hotwire, etc, you are the sellers customer. You are Expedia’s customer, you are Hotwires customer, you are NOT AA’s customer, or the Hotels customer.

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