Can CO be sued?
 

I am making this a separate thread from the one that spawned this thought.

Now before anyone knee-jerks, I am not a big fan of lawsuits especially frivolous ones but I find something very troubling in this International Upgrade business that seems unethical and may even constitute fraud. If so, it must be stopped.

If I buy a ticket on a HoKeY fare even when a lower fare is available because CO tells me that the fare is upgradeable, I buy it under the representation that I will be placed in a waiting list and that an upgrade would be provided if one becomes available. If the BF seats all get sold then CO will have a good case to make that no upgrade seats became available and I will be out of the "upgrade lottery" money.

However, consider the case that not all seats got sold and some BF seats fly empty (or filled with employees). Couldn't I make a case that CO broke the contract for the "upgrade money" I paid?

It is implicitly expected when I paid the "upgrade money" that CO will make best-effort attempts to satisfy my upgrade request (otherwise, they can just take the money and not do anything about it). So CO will have to show that it has a procedure in place for reasonable effort. It will then come down to the "reasonableness" of the 72 hour rule because all they can claim is that the seats became available only within the 72 hours and their policy is not to provide upgrades in the last 72 hours.

But this is where CO's argument will be weak. I can show that it is entirely under CO's control when the seats are released (unless they became available only because of cancellations) and that the 72-hour upgrade rule is arbitrary and not reasonable since none of the other airlines do it and it is quite possible for the airline to do even last minute upgrades.

Your thoughts?

The only ethical solution to this, in my opinion, is that CO should return any additional money that people have paid over the lowest fare available at the time of purchase if an upgrade is not provided and there are empty or non-revenue seats on the flight. But then so many American corporations have shown themselves incapable of being governed by ethics so unfortunately laws and lawsuits are needed.

Unless CO's purported promise to you were part of the written contract of carriage, you would likely have a very hard time stating a valid claim.

True...but consider this a vote of support and a promise to contribute to a fund should you decide to pursue it...

(Spoken as a CO Platinum flying United business class to europe this weekend.)

[This message has been edited by NJDavid (edited 07-04-2002).]

In talking to the folks at onepass, I think you are wrong that all BF seats have to be "sold" in order for you not to get your upgrade. The way it was explained to me is that CO sets aside "a certain amount of reward upgrade BF seats; usually 4 to 6 on a 777."
Once those 4 to 6 reward upgrade seats are given away, that's it for mileage upgrades.
I spent over an hour talking to a supervisor at onepass just so I could get clarification on some things, as I am being forced to change carriers, and am considering CO. I have flown them three legs in the last week, and have been impressed so far. As I read thru the program guide, partner guide, and elite guide (try getting your hands on one of those without having elite status...GEEZ!) I liked what I read, except that BF upgrade stuff was very unclear to me. Why don't they just raise the amount of miles required, and at least make it available, if they are that proud of it? I've always had a problem redeeming all the miles I earn anyway, and that's always been my favorite way to get rid of them: using them for upgrades to FC on my Asian and European trips.
So, to sum up, I think your argument about BF having to be completely sold out is flawed. Just so long as there is an alloted "reward upgrade seat" available, then you should get your upgrade. When those are gone, and there are no more takers for a full-fare BF seat, then they fill any unsold seats with employees.
Also, don't forget that CO is known as "the law firm with wings."

CO most definitely does not necessarily set aside a fixed number of seats to be given away for upgrades. If they did, they could award these more than 30 days out like all other airlines. If they fill these seats with revenue or it looks like a large number of revenue seats are occupied and may be further occupied, then they will not release any seats for awards or upgrades. And the people on the waiting list having bought higher fares than necessary are still out that money (never mind the fact that they get the privilege of sitting in the worst of the coach seats available amongst the big airlines)

So let us assume that it is "upto 4-6 seats may be released". Why do I still have to pay a higher fare to see if they will release the seats or not? Give me one parallel example in real life (other than the lottery system) where I pay an extra non-refundable amount of money just to be considered if they choose to sell more http://www.flyertalk.com/forum/smile.gif

Imagine going to a hotel and paying a higher rate the lowest available rate to be considered for an upgrade at their discretion and then if they do not provide an upgrade forfeiting the additional money paid for the privilege of waiting for the upgrade. Do you think the hotels can get away with it?

Now one can claim that in the new system, one can buy a lower fare and pay the difference if you get an upgrade (it is possible that their legal department warned them of the consequences of a complete lottery as they had earlier, it would have been even easier to sue then, I think). But they get lower priority than the HoKeY fares. So you can say the additional amount is to get you ahead in the queue. But if you still do not get an upgrade (because they did not release even the award seats before the 72 hours), they have not reasonably honored the representation they have made.

And for the earlier comment about a written contract, there are certain implied contracts in any sale based on the representation made at the time of sale (we have enough witnesses to testify to the representations) and the rules for upgrades as published seem sufficient to establish the expectations of the buyer. The fact that they have left the rules unspecified clearly will actually hurt them. If they wrote the fine print to cover themselves legally, I doubt anyone would go for the higher fares.

It is the situation where they do not release the upgrade seats before the 72 hours because of yield management (quite common for transatlantic flights in summer) and yet land up with empty seats is where they appear to be most vulnerable for a lawsuit if they have a number of "deposits" for upgrades.

I can see their defense, of course. No one has to pay the HoKeY fares. People buy HoKeY fares not necause of upgrade possibilities but because of less restrictions, etc, etc. But the representations their agents make will go against it. I suppose one will need to tape a couple of these representations.

You pose an interesting argument. I would like to get EnhancedbyCO's opinion.

In any case, your assumption about the opening and closure of the "upgrade" buckets may happen, but CO's defense is that it needs to protect seats for possible full-fare business passengers who book at the last minute. At one time, I also thought it never happened, but now I realize that it does quite frequently.

Revenue management, both our friend and enemy.

I would like some more perspectives on this as well.

About revenue management, I fully respect their need to do it and their rights to not make any upgrades/awards available at all. They are not unique in this respect. UA also has upgradeable fares structure and one will need to buy the upgradeable fares to stand a chance of getting upgraded even if lower fares are available. Both UA and AA manage their award/upgrade seat buckets sometimes till the last minute.

However, UA and AA differ from CO in one very important respect which, in my opinion, places them in the "honest" category. They make every effort till the last minute before the flight to upgrade anyone on the waiting list. So if one did not get an upgrade, you can be certain that there are no empty seats (there are some anecdotal allegations that non-reves have been selected over people on the upgrade list but complete circumstances are not known and in any case against company policy). I would gladly accept this as the airline is making reasonable attempts to provide me with an upgrade.

CO, on the other hand, couldn't care less if there are empty seats on the flight and there are people in the upgrade waiting list. They have a 72 hour rule for their own convenience not the customers waiting for the upgrade. This is where the revenue management combined with the upgrade policy, in my opinion, turns unethical if not fraudulent. The concurrent thread of the person waiting with a $300 deposit is an example of this repugnant situation.

Sorry, but I have absolutely no sympathy for anyone who elects, selects and doesnt deflect, and still purposely purchases a HoKeY ticket in order to enter the NonePass™ “upgrade lottery”. Zillions of words have been written about this on FT and other sites. Do a search. It is DUMB, DUMB and DUMB!

This sounds like the chap who goes to Las Vegas with his trailer-rent money, loses it and then complains (1) the Keno odds are heavily in the casinos favor, (2) he was plied with free drinks by the casino, (3) he was “distracted” by the noise, glitter, cleavage etc all around him, etc.

Read my lips……………….. ”DON’T EVER DO THE HoKeY”. The sooner NonePass™ members quit doing the HoKeY, the sooner it will be replaced by a more friendly to the vanishing customer policy. Think about it.

MisterNice

Legally, I think you'd have an extremely tough time coming up with a colorable action.

Considering contract law, the main problem is that you seem to know the terms. The "offer" Continental made to you is, you can pay more for this H class seat and if an upgrade comes available within 72 hours, you can possibly have it (I say possibly because other ticketed H class pax might be ahead of you in line). You "accept" this offer by buying the ticket.

There doesn't seem to be any fraud or misrepresentation - you're just not happy (nor I am) with their "offer." But you can't accept knowing the terms, then turn around and sue them because you don't like those terms. You agreed to them!

There is a mutuality of assent and there is no fraud in the inducement. They aren't making you an offer to give you any access to seats within 72 hours, and they aren't making you an offer to be "reasonable" in controlling yield management decisions. And since what they are doing is lawful, the only way to stop them is to speak with yuor wallet and not purchase this product.

You mentioned warranties, but, there is no warranty to cover this type of situation (i.e., neither the implied warranty of merchantability nor the implied warranty of fitness would apply here).

Considering tort law, unless you could prove that there was fraud or false pretenses or misrepresentation at the time they reached out to you, again, no luck. And I think the same argument applies. You know what you're getting (your initial facts seem to indicae, in fact, that you deeply understand what they are selling you.

As much as I hate HOKEY, I don't think you'd have one iota of success in court challenging it.

I thought that the Hokey thing was over...aren't you able to purchase any fare now and pay the extra each way for a chance at upgrades....and if you don't receive the upgrade...the money is returned to you. Is this not the way it works?Maybe I'm ignorant on this topic...I just usually obtain full reward tix..... http://www.flyertalk.com/forum/smile.gif

theSilb, thanks for the cogent reply.

It is my assertion that there is a misrepresentation (or lack of full disclosure) since the terms do not disclose the chances of getting an upgrade which is very often under their control.

To advance this argument, consider the extreme hypothetical case that they never give any upgrades whatsoever and do no changes to any of the current terms and representations. Would there still be no grounds for a law suit? Even under consumer protection laws? Would that be satisfied by giving one upgrade a year? Two? Three? What is the criterion to establish legality of the current representation?

There is a reason why raffles and lotteries have to announce the odds of winning. So people can make informed choices when they plunk down the money and then they have nothing to complain about unless the odds are violated. But that is not the case here. Although I know the terms, I am not told of the odds of getting an upgrade (in fact the thread that spawned this has the subject asking for his chances).

They can get around this in one of two ways. Either publish the odds of getting an upgrade (in which case they will most likely get a marketing black eye) or have a process that makes them honor the contract while under their control (as UA and AA do). It appears they are trying to have their cake and eat it too at the expense of the consumer.

Of course, if there was a lawsuit it wouldn't come from me with the above understanding of terms. It would be a grandma in Peoria who plunked down her savings money in the hopes of getting an upgrade on her trip to visit her relatives in Germany and has problems sitting in coach because of her arthritis and yet had to travel in coach. She would have spent $300 less on a cheaper ticket and used it on the needed medication for her arthritis if the agent had told her what the real chances of getting an upgrade are before taking her money. http://www.flyertalk.com/forum/smile.gif

PS: No, I am not a lawyer!

Not quite. On a recent EWR-AMS flight, 3 weeks prior I was told that at that point all upgrade seats were gone, but there was still a chance of CO 'reopening the bucket of upgrades' at some point before the 72 hr cutoff. That event did occur and I was granted my upgrade 1 week before the flight.

In answer to why the 72 hour rule and empty seats. CO surmises that there is a chance it may still get to sell (at full BF fare) a few seats within the 72 hrs so some desparate/unwiting traveller/business person. Therefore, they have a tendency to leave a few available for 'walk ups'. If they gave them all away, there is a chance (slim though it might be) that CO would lose the revenue othewise attainable from that sale.
(The above is only my opinion/interpretation of CO's rules).

venk:
I had written a letter to COs legal department when HoKeY started with the same arguments: that it was a lottery, that someone with no status had no chance of an upgrade and that it was misrepresentation, bordering on fraud since there was no listing of the odds of actually getting an upgrade. I will have to look for the letter Monday at the office, if I still have it, but as I remember, the response was, and I'm paraphasing, "You knew the policy when you bought the ticket" and you chose to do so yourself."

mauld: A long time ago, when HoKeY started, I was told by a manager at OP that for good (I assume Platinum) customers, CO "might" look at the load situation within the 72 hour window and "may" decide to do "something" for them.

I am not familiar with any specific consumer protection laws and so perhaps there is some cause of action I am not aware of.

But, let me address your hypo in terms of contract law. Yes, if there were never any upgrade seats released, I would absolutely agree with you that you would have a cause of action.

You could make several arguments under contract and tort law, such as [in order of most dollars recovered to least] (i) an action in which you argue that a valid contract was formed but that there was a misrepresentation (since they never intended to nor actually did make any seats available) in which you would recover expectation damages, which you could argue is the cost to purchase a business class ticket minus the cost of the coach ticket and the cost of accumulating the miles needed for upgrade; (ii) you could also more easily argue that no contract ever formed since there was no meeting of the minds over what the term "upgrade" meant, and so you are entitled to cancel the contract and have your money returned. If you successfully proved a tort, you could be entitled to yet additional damages.

If I were Continental, I would in turn argue that you paid for this "H" ticket for other reasons as well - i.e., does it have a lower change fee? Less restriuctive day of week travel options? And so forth. If you took advantage of any of these options that a Q fare did not offer, then, you'd have yet another issue to contend with.

And of course, this is based on your hypothetical.

While I'm not happy with the quantity of seats CO releases for upgrades nor the fly-seats-empty-72-rule, I can't say they don't release any seats. They certainly do, and in fact, they probably release a significant amount of seats per year.

I am not aware of any consumer protection law which would require them to make a disclosure of the percentage of seats released in this fashion, although you could research this (or, ask your local Congressman to enact such legislation).

Definitely correct. I've seen as many as 10 seats released to R and/or Z class in the week before a flight, though not at spectacular times of the year.