2/7/2012

Airlines Struggle with Rules Created to Minimize “Flightmares”

With the uptick in domestic air travel, airlines are facing ever-increasing lawsuits and being deemed liable for actions against passengers. The challenge in each occurrence is determining who is at fault.

By Mary Anne Medina

U.S. domestic passenger travel has been trending upward for the past two years, with 630 million departures in 2010 according to the Bureau of Transportation Statistics. With the uptick, airlines are facing ever-increasing lawsuits and being deemed liable for actions against passengers. Passenger complaints cover a wide range including lost luggage, cancelled flights, passenger discrimination, food poisoning, inhumane treatment, excessive flight delays, and rude treatment by flight attendants. The challenge in each occurrence is determining who is at fault.

Rules and Regulations

The Federal Aviation Regulations, or FARs, are rules prescribed by the FAA that govern all U.S. aviation activity, including pilot training, airplane design, hot-air ballooning, ultra-light aircraft, and model rocket launches. The rules are designed to promote aviation safety for airline personnel, passengers, and the general public. They also serve to protect the national security of the U.S.

The Airline Passengers’ Bill of Rights, developed in response to several high-profile events in which passengers were held on flights for exorbitant amounts of time, places a limit on tarmac delays for domestic flights. As of April 29, 2010, airlines are subject to a $27,500 per-passenger fine for delays that are longer than three hours. In 2011, international flights were added to the list for delays of four hours or more.

The tarmac rule came into focus recently when a potent storm system hit the U.S. Northeast on Oct. 29, 2011, causing 23 flights to be diverted to Bradley International Airport in Hartford, Conn., including six New York-bound JetBlue Airways flights. Despite warnings issued up and down the seaboard preceding the storm, airlines continued flying as scheduled until the storm hit. Passengers became stranded in their planes on the tarmac and were alleged to have been subjected to deplorable conditions for more than seven hours. In this scenario, who is to blame and what duty is owed to the passengers?

A lawsuit was filed in U.S. District Court for the Northern District of New York seeking class-action status on behalf of the U.S. residents onboard the JetBlue flights that day. It alleges that passengers were subjected to intolerable and inhumane conditions including rolling blackouts; malfunctioning toilets that backed up and would not flush; and a lack of potable water and food. The lawsuit also alleges violations of New York’s Unfair and Deceptive Trade Practices Act; false imprisonment; negligence and negligence per se; and negligent infliction of emotional distress. It seeks declaratory and injunctive relief on behalf of the plaintiffs and all members of the proposed class.

The lawsuit was filed by the firm Parker Waichman LLP. Jordan L. Chaikin, a partner at the firm and the lawyer who filed the suit, stated that there are about 500-800 in the class who are identifiable to get certified with class-action status.

“While the fines levied upon the airlines for this egregious behavior are a step in the right direction in holding the airlines responsible for their actions and treatment of passengers, the passengers are not receiving any compensation for the damages suffered from the airline’s breach of duties owed or their breach of the implied covenant or breach of the good faith covenant,” says Chaikin.

While JetBlue has filed a motion to dismiss by citing that federal regulations and laws pre-empt state laws, Chaikin states that federal regulations only apply to “rates, routes, or services.” Chaikin’s firm is in the process of amending the complaint to exclude any allegations that may be pre-empted by federal regulations or the FAA. “The damages that those represented by the lawsuit sustained must be compensated by JetBlue,” says Chaikin. “Jetblue is the only responsible party for these damages.”

Michael Carbone, director of litigation for JetBlue, was unable to comment or provide any information regarding JetBlue or the lawsuit involving the alleged delays of Oct. 29, 2011. However, Cozen O’Connor’s James. E. Robinson offered a defense attorney’s point of view.

“Overall, since the enactment of the tarmac rule, excessive ground delays have fallen drastically without disruption of the system,” says Robinson, who also serves as editor of Aviation Law Advisor, an online source of insights and information for the aviation industry. “Unfortunately, airlines operate subject to often-unpredictable weather and must sometimes inconvenience passengers in the interests of safety. Should such decisions run afoul of the tarmac rule, the FAA has demonstrated its willingness to take action against the offending airline when necessary. Such decisions should not be left to the states, which could lead to multiple and inconsistent regulation of the airlines.”

Additional Baggage

While delays on the tarmac make the news, lost or damaged luggage claims are far more frequent and should not be taken lightly. Delta Airlines is currently facing legal action due to the way they have chosen to handle claims of lost luggage.

On Dec. 23, 2011, a class-action lawsuit was filed in U.S. district court in Miami, Fla., which states that “Delta uniformly ignores its contractual obligations to reimburse passengers for expenses while their bags are delayed. Such tactics allow Delta to pocket millions and millions that it would have had to pay out if it had abided by its contract with passengers.”

First, let‘s examine the duty owed by Delta and other airlines to passengers with regard to their luggage. Once a passenger checks his bag and pays the fees for his seat and baggage transport, it would be reasonable to assume that both he and his luggage would arrive at the same destination. If the luggage is lost, the duty owed to the passenger is then breached. But are there damages?

I would consider reimbursement for the loss of luggage to include not only the actual cost of replacement but also the expense and inconvenience incurred in procuring necessary items during the trip. Other costs could include damages owed due to breach of contract by the airline. It’s fair to assume that the cause of those costs would not be attributable to the traveler.

According to federal regulations, passengers are allowed to claim up to $3,300 in reasonable expenses for their lost or delayed luggage. The lawsuit alleges that Delta would only reimburse passengers for a portion of their claim. The airline was fined $100,000 by the USDOT for advising passengers in a pamphlet that they would only be reimbursed $25.00 a day, $125 total.

Approximately 130,000 bags are mishandled by the domestic airlines per month, according to the USDOT, and Delta reported a total of about 328,000 in 2010. In these cases, the duty owed by the airlines is breached. However, the sticky issue seems to be in the payment and assessment of the damages owed.

When assigning fault in complex cases such as these, there are many more questions to address. Are others at fault, such as air traffic controllers, service employees, and independent contractors? When assessing damages, how do you assign a value on the anguish caused by the incident?

The bottom line: If the duty is owed by the airlines and the duty is breached by the airlines and associated entities, they are responsible for the resulting damages.  


Mary Anne Medina is an instructor and course developer for Vale Training Solutions. She has extensive experience in claims process redesign and claims handling training, with an emphasis on liability loss adjusting. She has been a CLM fellow since 2010 and can be reached at MMedina@vale-ts.com.



Mary Anne Medina is an instructor and course developer for Vale Training Solutions. She has extensive experience in claims process redesign and claims handling training, with an emphasis on liability loss adjusting. She has been a CLM fellow since 2010 and can be reached at MMedina@vale-ts.com.

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