Lawyers for the transportation giant made a last-ditch effort to have a class-action lawsuit thrown out of court. But customers may have effectively stopped that from happening.
When the coronavirus pandemic hit, United cancelled flights right and left.
Instead of issuing refunds, the airline gave ticketholders vouchers for future travel. In a court filing, the plaintiffs said the true reason United cancelled flights was to “stem financial losses due to decreased demand”.
United’s lawyers maintain that COVID-19 is the classic force majeure event and that a provision in the April 2020 CARES Act allowed it to issue vouchers instead of refunds.
United received about $5 billion in government assistance through the CARES Act.
In more bad news on the legal front, at least for United Airlines, a separate group of plaintiffs claimed that United’s discounts for travelers aged 18 to 22 violated California’s age discrimination prohibition.
Procedural Motions in Federal Court and What They Mean
Class action lawsuits allow individual plaintiffs, like airline ticket holders, to face off against huge defendants, like airlines.
Normally, David vs. Goliath faceoffs like these end very badly for David. But in class action lawsuits, since individual plaintiffs pool their resources, life often mirrors fairy tales.
Many civil claims settle out of court. These settlements hasten the outcome and give the parties more control over the result.
But before settlement negotiations begin in earnest, at least in most class actions, they must clear two major procedural hurdles.
Federal Rules of Procedure 12(b)(6) allows judges to throw cases out of court before all the pleadings are even filed, for “failure to state a claim upon which relief can be granted.” 12(b)(6) usually applies if there is no legal or factual basis for the action.
Despite the general settlement timeline mentioned above, a few class actions might settle very early in the process, even before the judge rules on a motion to dismiss due to failure to state a claim.
However, the defendant usually only offers the nuisance value.
The settlement amount must usually be less than the value of negative publicity associated with the lawsuit. That’s usually not very much money, at least at this early stage.
This area is a factor in other civil settlements as well, such as personal injury claims. Everyone wants to settle cases as quickly as possible.
But if a New York personal injury attorney settles individual or class action claims too quickly, the settlement amount might fall short of fair compensation.
Rule 56 summary judgement motions are normally next.
Essentially, these motions admit that the plaintiff has a legally valid claim. But, there is so little evidence that no reasonable juror could possibly side with the victim.
Lawyers often refer to the amount of proof needed at this stage as a scintilla of evidence.
At this point, a crumb on the kitchen floor could prove that the resident had a Domino’s pepperoni pizza for lunch at 1:00 p.m. That’s obviously quite a stretch.
But the plaintiff could uncover additional evidence during discovery, and make the claim more compelling.
If a class action claim makes it past summary judgement, there is a very good chance that the plaintiff could win a trial, mostly because of the low burden of proof in civil claims.
That burden of proof is a preponderance of the evidence (more likely than not). That’s not much higher than a scintilla. A pepperoni crumb, as opposed to a breadcrumb, might be sufficient.
Force Majeure and Other Contract Defenses
Contrary to film magnate Samuel Goldwyn’s famous remark that “An oral contract isn’t worth the paper it’s printed on,” both oral and written contracts for airline tickets or anything else are generally enforceable in court.
Force majeure, which is French for a “superior force,” is one of the most common contract defenses.
In practical terms, force majeure is not quite synonymous with an act of God, but it’s close. If an outside event, like a global pandemic, makes contract performance pragmatically impossible or hopelessly unprofitable, the contract is void as a matter of law.
United’s lawyers probably thought their force majeure argument was a slam dunk.
But this defense does not apply if the fear of that event, as opposed to the event itself, was the triggering event. In the spring of 2020, when this dispute occurred, fear of the coronavirus, instead of the virus itself, might have triggered United’s reaction.
Goldwyn was partially right about oral contracts.
Such actions are more difficult to prove and easier to defend. Some other contract defenses include lack of capacity, unconscionability, and mistake.
Class actions enable individual victims to take down big corporations. For a free consultation with an experienced civil litigation attorney in New York, contact Napoli Shkolnik PLLC. We do not charge upfront legal fees in these matters.