CHICAGO — A federal appeals panel has grounded a class action against Southwest Airlines, accusing the company of breaching contracts with customers when the airline cancels flights.
Brian Hughes sued Southwest for breach of contract after the carrier canceled his February 2018 flight from Phoenix to Chicago Midway International Airport. According to Hughes, Southwest grounded hundreds of flights — at a time other airlines ran normal schedules — because it ran out of de-icing solution in Chicago.
Hughes was represented in the suit by attorneys Thomas F. Burke, of Chicago; Terrence Buehler, of Chicago; and Kent A. Heitzinger, of Winnetka.
U.S. District Judge Sara Ellis had dismissed the complaint, determining the contract Hughes’ ticket created contained neither an explicit or implicit requirement for Southwest to maintain de-icer reserves, and that for her to impose such a requirement would be an impermissible implication.
On appeal to the U.S. Seventh Circuit Court of Appeals, judges there also ordered the lawsuit down.
Seventh Circuit Judge Joel Flaum wrote the opinion on Hughes’ appeal, issued June 10; circuit judges David Hamilton and Amy St. Eve concurred.
“The primary issue facing Hughes’s claim is that Southwest’s cancellation of his flight is not itself a breach of the contract, because the contract allows Southwest to fulfill its duties to Hughes by placing him on an alternate flight or refunding his fare,” Flaum wrote.
Southwest offered to rebook Hughes’ Chicago flight for a few days later or to send him to Omaha, which he accepted. Yet Hughes insisted the cancellation of his initial flight was an implied contractual breach because a Midwestern airport should have sufficient de-icer solution, just as any airline should have a ready supply of fuel and eligible pilots.
“Having determined that Southwest did not breach the contract by canceling a scheduled flight, it would be strange to hold that the circumstances underlying the cancellation somehow constituted a breach of an unstated contractual duty,” Flaum wrote. “To read in such an implied duty would violate Texas law regarding contracts.”
Southwest is based in Dallas.
The panel said the contract considers airlines can’t have the resources to launch every flight as scheduled. Since the contract wasn’t breached, it continued, there wasn’t a need to resolve the question of liability. Southwest’s contract obligates it to rebook or reroute passengers on canceled flights regardless of the underlying reason.
“It would be unreasonable to read the contract’s limited liability provision to create liability precisely where an earlier provision lays out the steps Southwest can take to fulfill its duties in the case of cancellation,” Flaum wrote, affirming Ellis’ dismissal.
In a concurring opinion, Hamilton explained the affirmation should be on narrower legal ground. He said the “disagreement hinges on an old and subtle issue in contract law: the difference between liquidated damages and limited remedies, on one hand, and alternative modes of performance on the other.”
Specifically, Hamilton said Southwest did breach its promise to get Hughes to his destination. But Hamilton said Hughes still lacks standing because the airline “provided all remedies required under the contract. The difference has little practical effect here, but it could be important in other cases. Treating Southwest’s cancellation as a breach with limited remedies fits the parties’ expectations better than reading the contract as giving Southwest a free choice among flying on time, flying late, not flying at all and refunding the ticket price, or not flying and giving the passenger only credit toward a future flight.”
Hamilton said the majority opinion treats all cancellations identically under the law, turning the contract into a one-sided option that doesn’t obligate Southwest to actually fly so long as it offers passengers’ some recourse, even if that recourse might be useless to a patron.
Southwest has been represented by attorneys Leonard A. Gail and Eli Johnson Kay-Oliphant, of the firm of Massey & Gail, of Chicago.