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Schultz v. American Airlines, Inc.

United States District Court, S.D. Florida

July 9, 2019

MARGARET SCHULTZ, individually, and on behalf of a putative class, Plaintiff,



         On May 14, 2018, the Plaintiff, Margaret Schultz (“Schultz”), filed a putative class action against American Airlines, Inc. (“AA”), alleging breach of contract and unjust enrichment [ECF No. 1]. The operative complaint, now in its third iteration (“TAC”) [ECF No. 59], contains a single breach of contract claim and is the subject of AA's Motion to Dismiss (“Motion”) [ECF No. 38], filed on November 16, 2018.[1] This Court referred the Motion to the Magistrate Judge for a Report & Recommendation (“R&R”) [ECF No. 49]. On March 27, 2019, after oral argument, and with the benefit of briefing by both parties, the Magistrate Judge issued an R&R recommending that the Plaintiff's claims be dismissed with prejudice [ECF No. 61].

         Schultz timely filed her objections to the R&R [ECF No. 63]. AA filed its response [ECF No. 66], and Schultz filed a reply [ECF No. 69]. When, as here, a party timely and properly objects to a magistrate judge's recommended “disposition, ” the district court must review that disposition de novo. Fed.R.Civ.P. 72(b)(3).


         The Court adopts the R&R's recitation of the facts as alleged in the TAC. R&R at 2. In short, on May 25, 2017, the Plaintiff saw a flight listed for $197.00 on AA's website. When she “clicked” on the corresponding link to pay-and after proceeding through a series of screens that required her to enter her passenger and credit card information-AA's website informed her that the price of the ticket had increased to $297.00. Id.

         The Parties' Arguments

         This matter turns, in part, on the Court's application of the Airline Deregulation Act (“ADA”) to the Plaintiff's breach of contract claim. On a motion to dismiss, the Court must construe the complaint in the light most favorable to the plaintiff and must accept the plaintiff's factual allegations as true. See Brooks v. Blue Cross & Blue Shield of Fla., Inc., 116 F.3d 1364, 1369 (11th Cir. 1997) (citing SEC v. ESM Grp., Inc., 835 F.2d 270, 272 (11th Cir. 1988)). While the Court “must make reasonable inferences in Plaintiffs' favor, ” it need not “draw Plaintiffs' inference.” Aldana v. Del Monte Fresh Produce, N.A., Inc., 416 F.3d 1242, 1248 (11th Cir. 2005). “Likewise, ‘unwarranted deductions of fact' are not admitted as true in a motion to dismiss.” Id. (quoting So. Fla. Water Mgmt. Dist. v. Montalvo, 84 F.3d 402, n. 10 (11th Cir.1996)).

         AA's central argument is that the TAC should be dismissed for failure to state a claim. Specifically, AA says that, as a matter of law, the parties never entered into a valid contract for a $197.00 ticket-and that, as a result, AA could not have breached that non-existent contract. Motion at 13-17. AA also contends that the ADA preempts the Plaintiff's breach of contract claim. See generally Motion at 9-13. In support of this position, AA argues that the Plaintiff's claim would require the Court to “create a new, enforceable state law right . . . to purchase a particular flight at a particular price once American advertises it on its website.” See Def. Reply [ECF No. 16 at 2]. And, because this new state law right would obligate AA's behavior with respect to “price and ticket services, ” AA says the Plaintiff's breach of contract claim does not meet the “voluntary commitment” exception the Supreme Court recognized in Am. Airlines, Inc. v. Wolens, 513 U.S. 219 (1995). Def. Mot. at 15, 17.

         Schultz unsurprisingly disagrees. In her account, AA offered her an airline ticket for $197.00 and then reneged on that offer once she clicked “pay now.” Pl. Resp. at 10-21 [ECF No. 42]. Moreover, Schultz adds, citing the Supreme Court's holding in Wolens, the ADA does not preempt her state-law breach of contract claim. Id. at 8.

         The Law

         A breach of contract claim requires a plaintiff to prove (1) the existence of a contract; (2) a material breach of that contract; and (3) damages stemming from the breach. Vega v. T-Mobile USA, Inc., 564 F.3d 1256, 1272 (11th Cir. 2009). In Florida, a plaintiff must plead the existence of a contract by showing (1) an offer; (2) acceptance; (3) consideration; and (4) sufficient specification of the essential terms. De La Flor v. Ritz-Carlton Hotel Co., No. 12-23689-CIV, 2013 WL 1874618, at *4 (S.D. Fla. May 1, 2013), aff'd, 556 Fed.Appx. 938 (11th Cir. 2014). The existence of a valid contract is a question of law for the Court. Id. (citing Kolodziej v. Mason, 774 F.3d 736, 740 (11th Cir. 2014)).


         Congress enacted the ADA in 1978 to deregulate domestic air transportation. Koutsouradis v. Delta Air Lines, Inc., 427 F.3d 1339, 1343 (11th Cir. 2005). The ADA preempts state-law claims, statutes, or regulations “relating to rates, routes, or services of any air carrier.” Morales v. Trans World Airlines, 504 U.S. 374, 378-79 (1992). For a state “obligation” to be expressly preempted by the ADA, a state must “enact or enforce a law that relates to airline rates, routes, or services, either by expressly referring to them or by having a significant economic effect upon them.” Parise v. Delta Airlines, Inc., 141 F.3d 1463, 1466 (11th Cir. 1998) (citation omitted); see also Nw., Inc. v. Ginsberg, 572 U.S. 273, 286 (2014) (finding that an implied covenant of good faith and fair dealing is a state-imposed obligation preempted by the ADA).

         The Supreme Court has, however, carved out a narrow exception to the ADA's preemption provisions for suits alleging that an airline breached its obligations under a contract. Koutsouradis, 427 F.3d at 1343 (citing Wolens, 513 U.S. at 228). As the Wolens Court noted, the “terms and conditions airlines offer and passengers accept are privately ordered obligations” that are not preempted by the ADA. Wolens, 513 U.S. at 228-29. This limit on the ADA's preemptive scope allows state-law claims against airlines for “routine breach-of-contract claims” because analyzing these claims “simply holds the parties to their agreements.” Wolens, 513 U.S. at 220. The Wolens exception, then, permits state-law suits against airlines only where an airline has “dishonored a term the airline itself stipulated” to, and “confines courts, in breach-of-contract actions, to the parties' bargain, with no enlargement or enhancement based on state laws or policies external to the agreement.” Id. ...

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