American Seeks to Squash COVID-19 Refund Lawsuit
Joe Cortez August 17, 2020
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.
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.
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).
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.
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.
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. .