Opinions and Legal Insights

Customers Reject United’s Force Majeure Defense in Ticket Refund Class Action

In Illinois federal court, United Airlines customers objected to the airline’s attempt to dismiss their suit with a claim that a force majeure event forced flight cancellations. The lead plaintiffs in the class action lawsuit, initially filed in April 2020, called United’s bid to have the case tossed a “self-serving” move to avoid issuing widespread refunds for flights canceled due to COVID-19. In an opposition brief, the plaintiffs implore the court to reject United’s force majeure argument.

Claims Against United Airlines

The initial lawsuit, Rudolph v. United Airlines Holdings, Inc. et al, was filed in response to thousands of United flight cancellations due to the pandemic. Per the complaint, United did not refund tickets, but instead offered “only rebook and/or provide travel vouchers, which expire in one year from the original ticket date.” The complaint characterizes United’s actions during the pandemic as “unfair and deceptive conduct through its policy to refuse refunds, limiting and forcing customers into a rebooked flight or travel voucher instead of returning their money.”

This arrangement is unacceptable, claim the plaintiffs, because COVID-19 has created significant financial hardship for many passengers. The money spent on their airplane tickets is even more urgently needed for those who have lost their jobs or shuttered businesses due to the pandemic. The plaintiffs also allege that United acted unlawfully given that the U.S. Department of Transportation requires airlines to refund customers if the airline cancels a flight

United’s Response

According to United Airlines, the pandemic qualifies as a force majeure event—a factor outside a party’s control that forces its hand. Given the current COVID-19 crisis, United says that a force majeure clause in their contract of carriage nulls the contract and, thus, allows it to cancel flights without the obligation to refund customers. In September 2020, the company brought this argument to the court in an attempt to dismiss the pending class action completely.

Plaintiffs have disputed this characterization, however, and filed an opposition brief in response. They state that the pandemic did not ground United’s flights. Rather, they describe grounded flights as a deliberate choice by United to avoid losing money by carrying out flights they could not fill to a profitable capacity.

Airline Disputes and the Pandemic

United Airlines is not the only air travel company facing disputes over the COVID-19 pandemic and its effect on travel. American Airlines, Frontier, Southwest, and Delta have all come under intense customer scrutiny and are now facing similar lawsuits.

In April 2020, the Department of Transportation released an Enforcement Notice of its longstanding policy, stating that “passengers should be refunded promptly when their scheduled flights are canceled or significantly delayed.” The agency also urges that despite the public health crisis, this rule still stands. “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,” the Department of Transportation added.

In response to the plaintiffs’ citation of this policy in the complaint, United claims that the notice lacks the force of law. United also asserts that, in any case, its flights were canceled by a force majeure event, not by United itself.

Is COVID-19 a Force Majeure Event?

In contract law, a force majeure event is a unique occurrence in which an outside force prevents a party to a contract from executing its end of the deal. In this United Airlines ticket refund case, United claims that the COVID-19 pandemic is just such an event. Therefore, United says it was prevented from holding up its end of the agreement to provide air travel for passengers who bought tickets through no fault of its own.

The crux of United’s argument is that even if it has a responsibility to refund ticket prices for flights it cancels, the trips at issue in the lawsuit are not flights United chose to cancel. Rather, they were flights that the force majeure of COVID-19 canceled. Typically, force majeure clauses are interpreted narrowly. These clauses also tend to list specific events that could trigger the clause. Common events listed in force majeure clauses include wars, riots, terrorist activities, acts of God or government, strikes, and equipment damage from an outside source.

United contends that COVID-19 is such an event. The plaintiffs, however, disagree. They claim that interpreting the ticket agreement to cover this situation would “grant [United] carte blanche to cancel flights well in advance of scheduled departure dates, then claim the changes were indirectly caused by unforeseen events…in order to retain passenger funds.” Whether COVID-19 counts as a force majeure event generally remains a matter of contention in a number of cases involving the pandemic and contract disputes. Resolving these claims will require attention to contract law. It may also require the assistance of expert witnesses who can opine on the effects of the pandemic on specific industries’ practices when it comes to meeting their end of a deal.

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