Members of British Airways mileage program challenge fuel surcharge

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judgebritishairways

In this week’s article, we discuss the case of Dover v. British Airways, PLC (UK), 2017 U.S. Dist. LEXIS 51530 (E.D.N.Y. 2017) (class certification granted) (see also: Dover v. British Airways, PLC (UK), 2017 U.S. Dist. LEXIS 86709 (E.D.N.Y. 2017) (Daubert hearing on admissibility of testimony of five experts). “In this putative class action, Plaintiffs, four members of the Executive Club, British Airways’ frequent flyer program, allege that the airline breached its frequent flyer contract (‘the Contract’) by imposing impermissible fuel surcharges on frequent flyer reward flights. Plaintiffs now move for class certification…the motion is granted”.

Terror Targets Update

Ukraine

In Kramer, Ukraine Cyberattack Was Meant to Paralyze, not Profit, Evidence Shows, nytimes.com (6/28/2017) it was noted that “The day started like most for Roman N. Klimenko, an accountant in Kiev who had just settled in at this desk, typing at a computer keyboard and drinking coffee. He was unaware that concealed within his tax preparation software lurked a ticking bomb (which) soon exploded, destroying his financial data and quickly spreading through computer systems vital to Ukraine’s government-and beyond. The cyberattack on Tuesday was caused by a virus similar to one that wreaked global havoc less than two months ago. Both had the appearance of hacker blackmail assaults known as ransomware attacks: screens of infected computers warn users their data will be destroyed unless ransoms are paid. But in Ukraine’s case, a more sinister motive-paralysis of the country’s vital computer systems-may have been the motive”.

Caracas, Venezuela

In Londono & Casey, Police Officers in Helicopter Attack Venezuela’s Supreme Court, nytimes.com (6/27/2017) it was noted that “A rogue faction of the Venezuelan police attacked the country’s Supreme Court in Caracas on Tuesday, dropping grenades from a helicopter…It was a rare uprising by government personnel in a country that has been on edge from mass protests and economic crises”.

Malawi, Philippines

In ISIS-linked fighters decapitate civilians as Philippines city siege enters 6th week, travelwirenews.com (6/28/2017) it was noted that “The Philippines military has uncovered five decapitated bodies of civilians among a total of 17 dead bodies found in Malawi City. The macabre find comes amongst reports of widespread looting and sex slavery by Islamic State-affiliated Maute fighters”.

Parachinar, Pakistan

In Twin blasts kill dozens in Parachinar market, travelwirenews.com (6/23/2017) it was noted that “At least 26 people have been killed and 75 others wounded when two explosions ripped through a crowded market in northwest Pakistan…’When people rushed to the site…to rescue the wounded, a second blast took place’”.

Magdeburg, Germany

In 15 police officers injured in mob riot in Magdeburg, Germany, www.eturbonews.com (6/24/2017) it was noted that “A mob of about 150 people…went on a rampage in the city of Magdeburg in eastern Germany. The crowd threw bottles and stones in ‘a massive and targeted attack’ that injured fifteen officers”.

Travel Ban Gets Green Light

In Shear & Liptak, Supreme Court Takes Up Travel Ban Case, and Allows Parts to go Ahead, nytimes.com (6/26/2017) it was noted that “The Supreme Court cleared the way on Monday for President Trump to prohibit the entry of some people into the United States from countries he deems dangerous, but the justice imposed strict limits…while they examine the scope of presidential power over the border”.

In Harris, Shear & Nixon, Administration Moves to Carry Out Partial Travel Ban, nytimes.com (6/29/2017) it was noted that “The Trump administration moved aggressively on Thursday to fulfill one the president’s most contentious campaign promises, banning entry into the United States by refugees from around the world and prohibiting most visitors from six predominantly Muslin countries. Freed by the Supreme Court to partly revive President Trump’s travel ban, administration officials said the American border would be shut to those groups unless specific individuals can prove they have close family members living in the United States, or are coming to attend a university or accept a job offer”.

Big Fire In Portugal

In Minder, Portugal Fire Survivors Recount Confusion Amid a Search for Escape, nytimes.com (6/19/2017 it was noted that “‘People fought to save their houses’, Mr. Graieta said. ‘I knew that, with road completely cut and the whole forest on fire, firefighters were never going to get here quick enough to help us’. At least 64 people were not as fortunate, perishing in the wildfire, many of them while in their cars trying to flee. With 135 people injured, the authorities warned that the death toll could still rise from the fire…apparently ignited by lightning strikes”.

Bigger Fire In London

In Hakim, Products at Center of London Fire Face Tougher Rules in U.S., ntyimes.com (6/16/2017) it was noted that “Two products made by American manufacturers that played a major role in the deadly inferno in London had been assailed for their fire risks and faced tighter restrictions in the United States. Such regulatory gaps expose how multinational corporations can take advantage of the vulnerabilities in government oversight. The companies, Arconc and Whirlpool, are widely expected to be central players in litigation over the fire, which killed at least 70 people this month”. See also: Specia, Would This London High Rise Pass Muster In New York? The Short Answer: No, nytimes.com (6/27/2017).

No Japanese Encephalitis, Please

In Australian dies after catching rare disease from mosquitoes, travelwirenew.com (6/22/2017) it was noted that “Japanese encephalitis is endemic to Southeast Asia… Melbourne: An Australian man dies on Thursday after catching a rare mosquito-borne disease while on holiday overseas. The 60-year-old Victoria state resident contracted Japanese encephalitis while on a 10-day holiday in Southeast Asia in May”.

Turkey’s Women Only Trains

In Turkey’s Bursa launches ‘women only’ train carriages, travelwirenesw.com (6/16/2017) it was noted “Starting from this month, women in the affluent Turkish city of Bursa will have priority boarding rights on designated inter-rail coaches. The innovation-mimicking those in Japan and Germany-has drawn anger from feminists and opposition politicians”.

Popular New York City Ferry

In Goodman & McGeehan, NYC Ferry, More Popular Than Expected, Scrambles to Meet Demand, nytimes.com (6/15/2017) it was noted that “When New York City took over ferry routes along the East River, using a new fleet of small boats, and lowering the fares, officials anticipated that weekend demand might be higher in the summer. But the city underestimated just how much demand would outstrip supply, forcing it to charter two extra boats-each capable of carrying 400 people-to handle summer weekend crowds, at a cost of $485,000 for the summer, is about $60,000 per weekend”.

Surprise Airport Exit Fees

In Hale, 4 Airlines Sues Over Surprise Miami Airport ‘Exit Fees’, law360.com (6/2/2017) it was noted that “Four airlines were hit in Florida federal court this week with proposed class actions that claim the carriers forced passengers to pay surprise ‘exit fees’ that were not mentioned in their ticket contracts before boarding flights at Miami International Airport”. The airlines identified in the complaint are Aruba Airlines, Insel Air, Avior Airlines and SBA Airlines.

Legionnaires’ Disease In New York City

In Southhall, Bacteria Behind Legionnaires’ Disease Found in New York Police Station, nytimes.com (6/11/2017) it was noted that “Traces of the bacteria that cause Legionnaires’ disease have been found in the water at a Manhattan police station where an officer who recently fell ill works, the police and health officials said on Sunday”. In Nir. Legionnaires’ Outbreak on Upper East Side Kills One and Sickens Six, nytimes.com (6/16/2017) it was noted that “One person is dead and six other people have been sickened in an outbreak of Legionnaires’ disease on the Upper East Side of Manhattan, the city health department announced on Friday”.

Death By Citi Bike

In Haag & Alani, Cyclist Killed by Bus in New York’s First Citi Bike Fatality, nhytimes.com (6/12/2017) it was noted that “A 36-year old investment banker was killed in Manhattan on Monday morning when the Citi Bike he was rising collided with a charter bus, the first fatality involving New York City’s four-year-old bike-share program, the authorities said”.

One Good Reason To Fly Jet Airways

In Women Gives Birth On Flight, Baby Gets Free Travel For Life, travelwirenews.com (6/19/2017) it was noted that “An Indian women gave birth to a baby boy on an international commercial flight as it flew 35,000 feet, the airline said on Monday…The Boeing 737 flight, which had 162 passengers on board, was diverted to Mumbai where the woman and her newborn were rushed to a hospital…Jet Airways said it was the first time a baby has been borne on one of its flights and that it had given him free travel for life on the airline”.

Fasten Your Seat Belts, Please

In At least 26 hurt after China Eastern Airlines flight hits turbulence, travelwirenesw.com (6/19/2017) it was noted that “Passengers onboard flight MU774 suffered injuries such as fractures when strong turbulence caused them to hit the overhead lockers (on a flight) from Paris to the Southwestern Chinese city of Kunming”. In United Airlines passengers in hospital after turbulence hits flight, travelwiremews.com (6/21/2017) it was noted that “United Airlines Flight 1031 touched down in Houston with over a dozen passengers reportedly injured onboard after the plane encountered strong turbulence caused by Tropical Storm Cindy. At least three of the passengers were taken to the hospital Tuesday”.

Phony Sickness Claims?

In Brits warned: You could end up in a Spanish prison over bogus travel claims, travelwirenews.com (6/21/2017) it was noted that “British holidaymakers who make bogus sickness claims have been warned they could face up to three years in jail. The caution comes from the travel trade body Abta which highlighted there has been a 500 per cent increase in the number of compensation claims for holiday sickness since 2013. This is despite reported sickness levels at resorts stagnating. Abta said caps on personal injury payouts in the UK have led to no-win-no-fee lawyers setting their sights on filing gravel insurance claims. There have been some reports of some lawyers posting agents at larger European resorts to sign up would be claimants”.

Please Hide A Grizzly Bear

In Robbins, Yellowstone Grizzly Bear to Lose Endangered Species Protection, nytimes.com (6/23/2017) it was noted that “After 42 years on the endangered species list, the Yellowstone grizzly bear-whose numbers have grown to more than 700 from fewer than 150-will lose its protected status, the Interior Department announced on Thursday…the long term efforts that have allowed the bear to thrive: ‘This achievement stands as one of America’s great conservation successes; the culmination of decades of hard work and dedication on the part of state, tribal, federal and private partners’”.

Too Hot To Fly?

In Wichter, Too Hot to Fly? Climate Change May Take a Toll on Air Travel, ntyimes.com (6/20/2017) it was noted that “Excess heat in Phoenix grounded more than 40 flights in recent days and scientists say a warming climate could also mean more turbulent rides…The reason With daytime highs hovering around 120 degrees, it was simply too hot for some smaller jets to take off. Hotter air is thinner air, which makes it more difficult-and sometimes impossible-for planes to generate enough lift”.

Uber, Time To Recognize Drivers As Employees

Now that Travis Kalanick has been forced to resign as C.E.O. [see In Isaac, Uber Founder Travis Kalanick Resigns as C.E.O., nytimes.com (6/21/2017)] and Uber’s needlessly aggressive ways put on hold, it may be time for Uber’s Board of Directors to recognize that Uber’s drivers are employees and provide them with benefits required by state law. Uber now has the dominant market share in most of the venues it operates in and, frankly, people love the efficiency of the Uber app and not having to handle cash and pay tips [But see Uber finally, finally adds tipping, travelwirenews.com (6/20/2017)]. Enough wealth has been spent on litigation over the issue of whether Uber’s drivers are independent contractors or employees and, of course, whether Uber’s mandatory arbitration clause prohibits the use of the class action device which is the only way drivers can afford to challenge Uber’s employment policy. There is no longer any reason [such as keeping costs down] not to give it up and join the rest of the mega tech companies in the United States that treat their workers properly.

New York’s Labor Department

One of the most instructive analyses of the nature of the employment relationship between Uber and its drivers was rendered on June 9, 2017 by Administrative Law Judge Michelle Burrowes in affirming a Department of Labor ruling that former Uber drivers were eligible to receive benefits and that “claimants and all others similarly situated to claimants (are) employees of the employer Uber Technologies, Inc. And the employer (is) liable for contributions for claimants and other similarly situated as of January 2014″.

Adhesion Contracts

“[C]laimants and Uber entered into certain contacts that designated claimants as independent contractors. These contracts, drafted solely by Uber, were adhesion contracts, the nature of which did not allow claimants to negotiate the terms of said agreements. The contractual designation of claimants as independent contract[ors], standing alone, does not end the inquiry…It remains necessary to consider the actual interactions and continuing relationship between claimants and Uber throughout their association”.

A Transportation Company

Uber’s assertion that it is only a “technology company that generates leads for [d]rive[rs] is a non sequiter. Uber (complies) with the rules and regulations of the NYC TLC (Taxi and Limousine Commission) which governs the for-hire driver industry…Uber describes itself as a transportation company…in its 2016 internal publication stating ‘our goal at Uber is transportation as reliable as running water everywhere, and for everyone’. Uber is a transportation company (and as such its) [d]rivers (are) a crucial aspect of Uber’s operation”.

Specific Type Of Vehicle Required

Claimants were required to use vehicles acceptable to Uber

and were provided with assistance in obtaining credit to obtain the required vehicle. “Uber not only referred them to their third-party affiliates to lease vehicles without credit” but withheld monies from their fares in order pay the lease payments”.

Not A Lead Generator

“[When] the claimants accepted a ride request they were informed only of the Rider’s name and pick-up location and that the claimants first learned of the requested drop-off location after picking-up the rise. This belies Uber’s assertion that it serves only as a lead generator for rides for the [d]rivers. Kit would seem reasonable to assume that an independent [d]river would be afforded information about the length of the requested trip and drop-off site to autonomously decide if they should accept that lead…all claimants (asserted) that they had no input in determining the fare charged (which) was determined solely by Uber’s app algorithm”.

Monitoring And Control of Behavior

“Uber took steps to modify the claimant’s behavior, as typical of an employer-employee relationship. Uber published… its Code of Conduct that placed them on notice of what constituted acceptable behavior and what consequences might attach; for example, deactivation (such as accepting) ninety percent of all ride requests…[d]rivers who failed to accept two consecutive ride requests were logged-out of the App, by Uber, for ten-minute periods…[d]rivers were similarly deactivated for what (Uber) deemed excessive cancellations after they had accepted ride requests”.

Method Of Payment

Claimants were paid by Uber with weekly direct deposits and issued weekly pay statements which reported the fares earned based on completed rides and deductions for Uber’s fees and lease payments. “Uber unilaterally set, and modified the base rates charged to the [r]iders and in doing so, affected the claimant’s earning potential”.

Conclusion

“Based on these aforementioned factors and current New York Labor Law, I find that while there are some indicia of claimant’s independence, the overriding evidence establishes that Uber exercised sufficient supervision, direction and control over key aspects of the services rendered …such that an employee-employee relation was created”.

Travel Law Case Of The Week

By way of background the Court noted that “Under the Contract, Executive Club members accumulate points called Avios’ in exchange for flying with British Airways, staying in certain hotels or renting cars. These frequent flyer points may be redeemed for reward flights on British Airways”.

Additional Fees & Charges

“The Contract provides that when a frequent flyer redeems his or her points for a reward flight. British Airways may impose certain additional charges, fees and taxes. Among these are the fuel surcharges at issue in this lawsuit. The Contract states in relevant part: Members will be liable for all taxes and other charges associated with Reward travel on British Airways or a Service Partner airline, including without limitation, airport departure tax, custom fees, immigration fees, airport charges, customer user fees, fuel surcharges, agricultural inspection fees, security and insurance surcharge or other incidental fees or taxes charged by any person or relevant authority or body”.

Defining Fuel Surcharges

“The parties agree that the Contract permits British Airways to impose a fuel surcharge. The Contract does not, however, define the term ‘fuel surcharge’. Although not necessarily binding on future rulings, the Court held in ruling on British Airways’ motion to dismiss that ‘the plain meaning of the term ‘fuel surcharge’ is a supplemental charge this reasonably related to or based upon the cost or price of fuel’ and that ‘the typical consumer would consider a fuel surcharge to be an added charge imposed by an airline in order to defray rising fuel costs’”.

Plaintiff’s Theory

“Plaintiffs’ theory is that the Contract required that the fuel surcharges British Airways imposed, referred to internally as ‘YQ charges’, genuinely compensates for fluctuations in the fuel market. Plaintiffs argue, however, that in setting the YQ charge throughout the class period, British Airways relied on a factor not substantially or temporarily relevant to the actual cost or price of fuel: British Airways’ cost of fuel in 2003-2004. According to Plaintiffs, British Airways used the YQ charge as a way to recover the difference between its present fuel coasts and its fuel costs in 2003-2004. In plaintiffs’ view, setting the amount of the YQ charge based on the cost of fuel in an arbitrary year is irrelevant and contractually impermissible, and as a result of this inappropriate baseline, British Airways’ breached the Contract”.

The YQ Charge

“Since 2004, when the YQ charge was introduced, it has taken several different forms. Prior to the class period, British Airways imposed uniform YQ charges on all flights. Subsequently, however, British Airways began imposing different rates for short and long-distance flights. After the class period began in 2007 British Airways began setting different YQ charges for long distance flights of fewer than 9 hours and long-distance flights of greater than 9 hours. In 2008, British Airways began charging different rates depending on the class of services and the; point of sale (e.g., the YQ charge could be substantially higher for a customer in New York buying a round trip ticket from New York to London than for a customer who purchased the same ticket in London”.

Class Definition

“Plaintiffs now move to certify the following class: All members of the British Airways Executive Club who redeemed frequent flyer miles for an award ticket from November 9, 2006 through April 17, 2013 and who paid a BA-imposed ‘fuel surcharge’ so long as that member provided British Airways with a valid United States address at the time of booking…Based on the records kept in a British Airways database, Plaintiffs estimate that the class includes 168,259 people”.

Commonality

“British Airways argues that Plaintiffs cannot satisfy the commonality requirement because the YQ charges it imposed over the class period varied substantially in structure and amount. Specifically, British Airways contends that the YQ charges changed 15 times over the class period, that those charges were based on varying economic circumstances and other factors, and that those changes did not always affect reward flights uniformly. As a result, British Airways concludes that Plaintiffs cannot show that ‘the class members have suffered the same injury’ (citing Wal-Mart, 564 U.S. at 349)”.

One Common Question Predominates

“British Airways’ argument ignores, however, one common question that is central to Plaintiffs’ case and undisputedly capable of common resolution: the proper interpretation of the term ‘fuel surcharges’ in the Contract…As British Airways’ English law expert admitted…the phrase ‘fuel surcharges’ in the Contract has a uniform meaning that did not vary throughout the class period. Thus, this is not a case in which Plaintiffs’ claims ‘require examination of individual contract language’…Because Plaintiffs have shown the existence of a common question capable of a common answer, Plaintiff have satisfied the commonality requirement’…Plaintiffs central contention, however, is that British Airways breached the Contract during the entire class period because its YQ charges were not, in fact, genuine fuel surcharges required by the Contract. This contention is common to the class and is the predominant question in this lawsuit”.

Defenses

“British Airways’ argument that two defenses, the voluntary payment doctrine and waiver, defeat predominance in unavailing as well. First, both sides agree that English law, which governs the Contract, does not recognize the voluntary payment doctrine… Second, British Airways argues that some number of class members waived ‘any and all claims’ that they ‘ever had, how has, or hereafter can, shall or may have’ against British Airways in the settlement of In re International Air Transportation Surcharge Antitrust Litigation, 2998 U.S. Dist. LEXIS 50415 (N.D. Cal…The applicability of this release does not, however destroy predominance either…At beat, the release applies only to class members who paid long-haul fuel surcharges to British Airways…six months before the class period in this case began”.

tomdickerson | eTurboNews | eTN

The author, Thomas A. Dickerson, is a retired Associate Justice of the Appellate Division, Second Department of the New York State Supreme Court and has been writing about Travel Law for 41 years including his annually updated law books, Travel Law, Law Journal Press (2016), Litigating International Torts in U.S. Courts, Thomson Reuters WestLaw (2016), Class Actions: The Law of 50 States, Law Journal Press (2016) and over 400 legal articles many of which are available at nycourts.gov/courts/9jd/taxcertatd.shtml. For additional travel law news and developments, especially, in the member states of the EU see IFTTA.org

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Hon. Thomas A. Dickerson

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