Travel law: Evolution of the ticket agent in the Internet age

This article begins a two part analysis of the U.S. Department of Transportation’s (DOT) Notice of Proposed Rule Making (NPRM) entitled Transparency of Airline Ancillary Fees and Other Consumer Protection Rules [70 Federal Register 29970 (May 23 2014)]. This first article discusses the DOT’s proposed definition of who and what should be included within its new “statutory definition of ‘ticket agent’” and the 40 year evolution of the duties and responsibilities of the old “ticket agents”, i.e., retail travel agents. In our next article we will discuss the DOT’s additional proposals “to require airlines and (newly defined) ticket agents to disclose at all points of sale the fees for certain basic Ancillary services associated with the air transportation consumers are buying…Currently, some consumers may be unable to understand the true cost of travel searching for airfares, due to insufficient information concerning fee for Ancillary services”.

Old Definition Of “Ticket Agent”

Before we examine to the DOT’s proposed “new” definition of “ticket agent” let’s look at the old definition of “ticket agent” i.e., retail travel agents and the 40 year evolution of travel agents from ticket dispensers to fiduciaries [Travel Law § 5.05]. Travel agents interact with consumers in face-to-face transactions and their influence can be profound, although the information that they provide may or may not be accurate. With the introduction of Internet travel sellers and reduced airline commissions, the number of traditional store front travel agencies has declined. Travel agents are best viewed as information specialists upon whom consumers rely for the provision of accurate and concise information. When marketing studies show that travel agents influence 30% to 60% of all consumer travel choices, including destinations, it is clear that travel agents are, primarily, information specialists, and, secondarily, order takers and ticket dispensers. The contemporary travel agent is a professional, holds himself or herself out as a travel expert and is relied upon much like other professionals.

Fiduciaries

In 1970 the Civil Aeronautics Board (CAB) first enunciated the fiduciary status of the travel agent. “The agent, thus, is not a mere dispenser of tickets. Rather, his (or her) role is more analogous to that of a fiduciary in whom the client places his trust (or her) trust for the optimum attention of his travel needs” [55 C.A.B. Reports 824 (1970)].

Over the years since then the elements of consumer reliance and professional expertise have served as a basis for many courts in the United States to expressly hold travel agents to be fiduciaries including those in New York [Pelegrini v. Landmark Travel Group (travel agent as professional, consumer’s agent and fiduciary); Marcus v. Zenith Travel, Inc. (Travel agent is fiduciary and must reveal information which would adversely effect travel contract); Levin v. Kasmir World Travel, Inc. (travel agent is fiduciary; liable for failing to recommend visa); Trip Tours, Ltd. v. Zamani (travel agent is fiduciary; liable for failing to confirm reservations)], District of Columbia [Craig v. Eastern Airlines], Illinois [Karkoni v. American Airlines], Louisiana [Philippe v. Lloyd’s Aero Boliviano (travel agent and tour operator fiduciaries)], Oklahoma [Douglas v. Steele], Arizona [Mauer v. Cerkvenik-Anderson Travel, Inc.], Ohio [Grigsby v. O.K. Travel], Mew Jersey [Rodriquez v. Cardona Travel Bureau; Miloseska v. Liberty Travel, Inc. (“New Jersey courts have imposed a limited duty of care on travel agents to warn of known dangers and dangers of which it should be aware”)], Pennsylvania [Touhey v. Trans National Travel] and California [McCollum v. Friendly Hills Travel Center].

The virtue of being held to be a fiduciary [and agent of the consumer] is that the travel agent’s duties to the consumer are independent from the travel agent’s relationship with the supplier [see. e.g., In re Bishop, Debtor (“the Agent Reporting Agreement between ARC and its accredited travel agents creates fiduciary obligations on the part of those agent in favor of ARC and its member carriers”)].

Duties Of Travel Agents

Over the last 40 years the Courts have found that travel agents have the following duties; duty to make and confirm reservations [Pelegrini, supra (travel agent fails to confirm meal plan on tour); Rosen v. DePorter-Butterworth Tours, Inc. (failure to inform consumer lf change of itinerary)], duty to investigate availability of travel services [Barton v. Wonderful World of Travel, Inc. (hotel closed; travel agent liable for failing to investigate conditions); Rodriquez, supra (charter air carrier defaults; travel agent liable for failing to warn of risks of charters)], duty to select reliable suppliers, tour operators and destination ground service providers [see Smolnikar v. Royal Caribbean Cruises, Ltd. (excellent example of due diligence in investigating background of ground provider of zip-line services)]; duty to convey needed information including the financial instability of suppliers and tour operators [Marcus, supra (travel agent liable for failing to reveal reports in travel trade press about financial instability of tour operator); Fix v. Travel Help, Inc. (travel agent negligently misrepresents financial stability of bankrupt airline); Douglas, supra (travel agent liable for failing to reveal information regarding financial instability of tour operator)] and their ability to deliver services [Barton, supra (hotel closed); Slade v. Cheung & Risser Enterprises, Inc. (travel agent liable for failing to discover that cruiseship impounded by the Sheriff)], duty to advise of needed travel documentation such as visas [Levin, supra], health and safety hazards [Gartland v. Doucette (tourist died in hotel room of severe respiratory infection; travel agent misrepresented the tour as ‘fully escorted tour which would be of the easiest type’”)], incidence of crime and terrorism [Creteau v. Liberty Travel, Inc. (Tourist raped and robbed at gunpoint in Jamaica)], need for insurance [Rodriquez, supra (travel agent liable for default f air carrier; “there was no testimony that the agent advised his “principal (the traveler) of any way to avoid, or insure against the risks f contracting with a charter carrier, such as trip cancellation insurance, which is available at a nominal cost to cover such hazards”)], itinerary changes [McCoy v. MTI Vacations, Inc. (travel agent failed to notify consumers of flight changes)], currency conversions [Shaw v. Hyatt International Corp. (guest claims misrepresented conversion rates in renting in Moscow hotel), prior accidents [Mauer, supra (student traveler falls to death under the steel wheels of the Party Train to Mazatlan, Mexico; tour operator failed to reveal three prior deaths of students on same train)], restrictions in transportation tickets [Craig, supra (failure to inform travelers of restricted-use tickets)], refund restrictions [Pelegrini, supra (travel agent failed to advise of refund restrictions)] and disabled accessible transportation and facilities [Briefer v. Carnival Corp. (“Whether a travel agency can be liable under the (Americans with Disabilities Act) for the (services) it provides appears to be a case of first impression”)].

DOT Meets The Internet

The DOT notes in its NPRM that “The means by which airline itineraries are commonly displayed and sold has changed dramatically and continues to evolve. New entities that were not previously involved in the distribution of air transportation are now an important source of information for consumers as well as a means of distribution for carriers. Online entities, such as Web sites that provide a variety of travel information, advertising and links as well as meta-search engines that provide flight search tools including fare and schedule information, are now frequently used by consumers to research airfares and schedules and to connect to the airline or travel agent Web site that ultimately books and/or fulfills the consumer’s ticket purchase. Meanwhile, some airlines provide direct electronic access to their own internal systems providing fare, schedule and availability information to certain Internet entities with the condition that when displaying that carrier’s flight itineraries in flight search results, the entity must provide a link only to the airline’s Web site and not to travel agent Web sites that have similar information”.

Expanding The Definition of “Ticket Agent”

In its NPRM the DOT seeks to expand the definition of “ticket agent” from traditional travel agents and their Internet analogues [e.g., Expedia, Travelosity, Hotels.com (Chiste v. Hotels.com L.P. (Priceline may be subject to fiduciary duties to consumers under Illinois law), Priceline.com (Johnson. v. Priceline.com Inc.)(Priceline not a fiduciary to consumers under Connecticut law)] by including “entities involved in the sale or distribution of air transportation (and) those…commercial entities that are involved in arranging for the sale of air transportation through the Internet (among other channels) regardless of whether an entity received a share of revenue from a third party for transactions that originated on the entity’s Web site, or the entity charged a commission for each transaction that originate on its Web site, or the entity was simply compensated on a cost-per-click for advertisement, or was compensated on some other basis…To be clear, only entities operating Web sites that provide flight search tools that manipulate, manage and display fare, schedule and availability information and are tools that the Web site operator creates or manipulates and has ultimate control over would be covered. For example, entities such as Kayak and Goggle would be covered. An entity that operated a Web site that simply displayed airfare advertisements without actual flight search capability under its control would not covered”.

Conclusion

It seems that the fiduciary duties of ticket agents (i.e., travel agents) developed over the last 40 years may have been circumvented by the new entities [see Johnson, supra and Chiste, supra] selling or marketing travel services over the Internet. In our next article we will look at the DOT’s proposed duties and obligations in its NPRM for air carriers and the newly defined “ticket agents” to see if the old C.A.B.’s 1970 determination that travel agents are fiduciaries has been expanded [or diluted] to cover the new travel purveyors now inhabiting the Brave New World of the Internet.

Justice Dickerson been writing about Travel Law for 38 years including his annually updated law books, Travel Law, Law Journal Press (2014) and Litigating International Torts in U.S. Courts, Thomson Reuters WestLaw (2014), and over 300 legal articles many of which are available at www.nycourts.gov/courts/9jd/taxcertatd.shtml.

This Article May Not Be Reproduced Without The Permission Of Thomas A. Dickerson.