COVID-19 Airline Refund Lawsuits: Litigation Guide

On March 19, 2020, the State Department issued a Level 4 advisory—its highest warning—recommending that Americans should not travel. Per the advisory, those who travel internationally may experience severe disruptions and “be forced to remain outside of the United States for an indefinite time frame.” Upon this issuance, many concerned travelers canceled any planned travel, both domestic and international. Year over year data from the TSA revealed a 91% drop in travelers through its checkpoints during April 2020.

Southwest Airlines, the largest domestic air carrier in the United States, is being sued for breach of contract due to its failure to offer refunds for canceled flights. The lawsuit was filed on behalf of a Pennsylvania man whose flight was canceled due to COVID-19.

In Bombin v. Southwest Airlines, filed in the United States District Court for the Eastern District of Pennsylvania, the plaintiff alleges that the airline canceled flights that would not be profitable due to COVID-19. According to the complaint, by March 24, 2020, Southwest canceled an additional 1,500 daily flights, representing 40% of its flights, due to declining demand for air travel. Further, the complaint outlines that Southwest did not offer customers refunds, and instead offered a rebooking to a different Southwest route or a travel credit redeemable through June 30, 2021.

The plaintiff, Adrian Bombin, was personally affected when his flight from Fort Lauderdale, Florida, to Havana, Cuba, was cancelled and his request for a refund was denied. Southwest did not offer him an alternate flight or issue him a refund. Rather, Bombin was given a credit to use toward a future flight. The plaintiff alleges that this conflicts with Southwest’s Contract of Carriage, which mandates refunds if another flight cannot be arranged. The plaintiff further claims that Southwest is in violation of the Department of Transportation’s Enforcement Notice that requires airlines to offer refunds to customers impacted by COVID-19-related cancellations. The notice specifically mandates, “that passengers should be refunded promptly when their scheduled flights are canceled or significantly delayed.” Southwest also issued a statement concerning their policies, “If a flight is canceled by Southwest, customers may select a new flight between the same origin and destination on any date (currently extended until 60 days from the original date of travel) without paying any difference in fare, may receive travel funds for future use (currently extended to June 30, 2021), or may request a refund…”

The Proposed Class

The plaintiff seeks class certification on the basis that the proposed class members include people throughout the United States that are “so numerous and geographically dispersed” that joinder would be impractical. Although the exact number of class members is unknown, the plaintiff alleges the class may comprise hundreds of thousands similarly situated Southwest customers.

United Airlines also faces a class action lawsuit, Rudolph v. United Airlines Inc., filed in the United States District Court for the Northern District of Illinois Eastern Division. The plaintiff, Jacob Rudolph, booked flights for April 2020 on United from Hilton Head Island, South Carolina to Minneapolis, Minnesota, however, in March, Rudolph’s employer—a police department—canceled all vacation for officers as the pandemic began to surge. This prompted the plaintiff to request a refund from United which was denied. United explained that a refund would only be issued in the event that the flight was canceled and instead offered to rebook him on another flight or issue a travel credit. The plaintiff’s flight was ultimately canceled, but United continued to deny any refund.

The complaint alleges that United took steps to prevent refunds in the face of COVID-19 related cancellations. This includes changing its refund policy four times over the course of a week in March 2020 while also canceling 50% of flights for April and May. The complaint further asserts that United has violated the Department of Transportation’s Enforcement Notice that asserts consumer rights to travel refunds for any pandemic cancellation. The complaint also cites a letter to United’s CEO from several Senators urging the company to issue refunds, especially given the $25 billion in federal aid recently issued to the airline industry.

The Proposed Class

The plaintiff seeks class certification for a class defined as others in the United States who booked flights with United from March 1, 2020, through present day and were also denied a refund. The class definition also extends to those who seek a refund in the future. The large potential volume of members— based on the thousands of canceled United flights—is so numerous that individual lawsuits would be impractical.

A similar lawsuit, Daniels v. Delta Airlines, Inc. was filed on behalf of the plaintiff, Elliot Daniels, in the United States District Court for the Northern District of Georgia on April 17, 2020. The complaint alleges breach of contract, unjust enrichment, conversion, fraudulent misrepresentation, as well as violations of consumer protection laws for failing to provide full refunds for Daniels’ twice canceled flight to Cairo, Egypt. In response to the first cancellation on March 11, 2020, he elected to rebook on a different date instead of canceling and receiving a refund. However, when Delta canceled the second flight, Daniels sought a refund but was denied. He was informed that he could instead receive a voucher for travel credit valid for one year from his original booking date. By March 18, 2020, Delta announced it would be canceling 70% of its flights.

The complaint alleges that Delta’s actions were in contradiction to its Contract of Carriage, which states that a full refund will be given for any canceled flight. The complaint further alleges that, “Delta is focused on keeping passenger money through providing travel credits, not refunds,” and cites Delta’s “Coronavirus Travel Updates” webpage which does not reference the refund request form. The complaint alleges that Delta violated a number of state consumer protection acts by its unfair and deceptive acts and practices in failing to issue refunds.

The Proposed Class

The proposed class members would cover all consumers who purchased airline tickets on flights scheduled between March 1, 2020, and present day and were denied a refund or intend to seek one in the future. Delta has countered the complaint’s allegations, stating that it issued one million refunds in March and that the plaintiff was issued his refund a day after the class action was filed.

Just days after filing the class action against Delta, the same counsel filed Ward v. American Airlines, Inc. in the United States District Court for the Northern District of Texas. In this case, the plaintiff, Lee Ward, had a portion of his return trip from Lima, Peru to Las Vegas, Nevada book through American Airlines. However, Ward’s flight was canceled on March 27, 2020 and the next available return flight was not until May 7, 2020. At the time, American Airlines was reducing its international flights by 75% and its domestic capacity by 20%-30%. American Airlines refused to issue a refund, despite stating such in their Conditions of Carriage. Like the allegations in the Delta complaint, the plaintiff alleges that American Airlines “focused on keeping passenger money through providing travel credits, not refunds.” The complaint alleges breach of contract, unjust enrichment, conversion, fraudulent misrepresentation, and violations of state consumer protection acts.

The Proposed Class

The proposed class is defined as any person in the United States who purchased flights with American Airlines between March 1, 2020, and present day and were not issued a refund for a canceled flight. The complaint asserts that the proposed class is well over 100 given the thousands of canceled American Airlines flights.

The airline class actions all reference the Department of Transportation’s coronavirus-related Enforcement Notice. This April 3, 2020 notice was released by the DOT’s Office of Aviation Enforcement and Proceedings in an effort to, “remind the traveling public and U.S. and foreign carriers that passengers should be refunded promptly when their scheduled flights are canceled or significantly delayed.”

The Department also has an array of resources aimed at protecting consumers’ rights in relation to all types of travel. In the context of air travel, this includes the terms under which travelers are entitled to refunds and guidance for filing a consumer complaint. In response to COVID-19 conditions, the DOT clearly states, “Although the COVID-19 public health emergency has had an unprecedented impact on air travel, the airlines’ obligation to refund passengers for canceled or significantly delayed flights remains unchanged.” Especially from the perch of a government agency, the DOT offers direct support for consumers in the fight against the airlines.

As thousands of passengers have been denied refunds for canceled air travel, there is a great amount of momentum currently behind building these class action cases. Major consumer litigation firms are actively recruiting class members for these suits and pursuing immense damages. The cases present substantial evidence and allege violations of state laws along with direct dismissal of the DOT’s assertions of consumer rights. Though the judgment is ultimately up to the courts, these class actions show no signs of subsiding.

In addition to legal action, a pending Congressional response is also in the works. Five Democratic Senators—Edward J. Markey and Elizabeth Warren of Massachusetts, Richard Blumenthal and Chris Murphy of Connecticut and Kamala Harris of California— recently introduced the Cash Refunds for Coronavirus Cancellations Act. The act proposes refund requirements for airlines and third-party sellers for any tickets canceled during the coronavirus pandemic. The refunds would apply for any flight canceled by an airline or if a customer decided not to travel. As the name suggests, these refunds would be issued in cash.

The proposal, which is still in committee, has gained support from consumer advocates. But the outlook on passage through Congress isn’t overly optimistic. According to Robert Mann, a former airline executive who runs aviation consulting firm R.W. Mann & Co., “My sense is that the Department of Transportation is fairly allied with airlines, as opposed to consumers, which is to say they rarely — except in truly unique circumstances — react in favor of customers.” Though this bill represents a major step for consumer rights, Nick Calio, CEO of airline industry group Airlines for America, also commented that it would potentially lead to airline bankruptcies, “very quickly.”

A key component of class action suits aimed at major airlines is the Contract of Carriage. This is the agreement between the passenger and airline which details the airline’s obligations in the event of a cancellation. All lawsuits cite these respective contracts in alleging that refunds were mandated. The protocol of issuing these refunds, however, may become an issue in cases like Delta’s, which claim they issued a refund to the plaintiff shortly after the lawsuit. Experts in airline administration and management may be useful in establishing the pragmatic aspects of issuing refunds and whether this constitutes a willful breach of the contract.

All lawsuits also cited the Department of Transportation’s Notice, which not just mandates prompt refunds to customers but states that failure to do so “could subject the carrier to an enforcement action.” An expert in aviation enforcement can establish the legal parameters of an airline’s actions and whether its conduct rose to a violation of consumer protection acts and other statutory claims above and beyond breach of contract.

Lastly, a travel crisis expert may be helpful for both sides in providing context to the effects that COVID-19 has had on the airlines. For example, the Tourism Crisis Management Initiative at the University of Florida conducts studies concerning disasters that may threaten the travel industry. In January, the Initiative began conducting surveys of Americans, asking whether their perceptions of risk and anxiety affected their decisions to travel in the future. By April, 74% of the 517 surveyed indicated that they were feeling anxious about traveling within the United States.

It is undeniable that this is just the beginning of the pandemic ramifications for the airline industry. It will be up to the courts to determine the unprecedented impacts of COVID-19 on travel as a whole and the future of commercial aviation.