The United States District Court for the Central District of California granted defendant Norwegian Air Shuttle ASA's ("Norwegian") motion to dismiss, finding that Norwegian did not breach its contract by allegedly failing to timely refund Plaintiff after cancelling Plaintiff's flight due to the COVID-19 pandemic.
Plaintiff bought a Norwegian airline ticket; however, her flight was cancelled because of the coronavirus travel ban imposed between the United States and Europe in March 2020.
Plaintiff filed suit against Norwegian, alleging breach of contract. Plaintiff maintained that the applicable contract – the General Conditions of Carriage ("GCC") – incorporated Department of Transportation ("DOT") regulations as implied terms of the contract. Plaintiff further maintained that these implied, incorporated terms imposed a seven-day deadline on airlines by which to process refunds. Defendant did not process Plaintiff's refund within seven days of cancellation, and Plaintiff brought suit.
Specifically, Plaintiff argued that the following provisions of the GCC effectively incorporated the DOT seven-day reimbursement deadline:
"'[Norwegian] compl[ies] with all applicable laws, verdicts, conventions and regulations.'"
"'[Norwegian is] subject to national and international Conventions and regulations when transporting its customers. [The] General Conditions of Carriage will apply insofar as they do not conflict with applicable Tariffs or Conventions. In those cases where an inconsistency exists between [Norwegian's] General Conditions of Carriage and applicable Tariffs and Conventions, the Tariffs and/or Conventions will always take precedence over [the] General Conditions of Carriage.'"
The Court disagreed with Plaintiff and concluded that the GCC's general language did not incorporate the seven-day refund requirement. Specifically, the Court held:
boilerplate contractual language guaranteeing compliance with international or domestic aviation laws does not incorporate extraneous law into the terms of an airfare contract. Instead, only language explicit enough to reflect an intent to be affirmatively bound by a specific aviation law or regulation is sufficient to result in incorporation.
In this case, the Court determined that the GCC's language was not specific enough to incorporate the seven-day reimbursement deadline regulation and stated that "[a] redundant and passive proclamation that an airline is 'subject to' applicable law ... is insufficient to warrant incorporation.'"
In the alternative, Plaintiff also alleged that (1) the mere cancellation of the flight was a breach of contract and (2) Norwegian 'breached a statutorily imposed 'duty to refund' by failing to refund her in a reasonable amount of time." Again, the Court disagreed, noting that "'[w]here, after a contract is made, a party's performance is made impracticable without his fault by the occurrence of an event the non-occurrence of which was a basic assumption on which the contract was made, his duty to render that performance is discharged.'" Here, the government- imposed coronavirus travel ban rendered contract performance impracticable.
Finally, with respect to Plaintiff's second alternative allegation, the Court held that "Plaintiff cannot rely on state law extraneous to a binding agreement to state a viable breach of contract claim [because] the Airline Deregulation Act ("ADA") preempts state regulations creating obligations related to airline fares, routes, and services."
In sum, the Court dismissed Plaintiff's complaint because (1) the GCC's general language did not incorporate the seven-day refund requirement; (2) performance of the contract was made impracticable by the government imposed travel ban; and, (3) the Airline Deregulation Act preempts state regulations creating obligations related to airline fares, routes, and services. DaversaEvdyriadis v. Norwegian Air, No. EDCV 20-767-JGB (SPx), 2020 U.S. Dist. LEXIS 173854 (C.D. Cal. Sep. 17, 2020)
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