United broke its contract with frequent flyers — Noah Feldman
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APRIL 16 — Most of the coverage of the United Airlines bumping debacle assumes something like, “United Airlines had a right to remove that flier. But should it have?” But a close reading of the fine print of the contract included in every ticket purchased from United Continental Holdings Inc strongly suggests that United in fact breached its contract with passenger David Dao.
The contract allows the airline to deny boarding involuntarily in case of overbooking. But that’s not what happened; the airplane wasn’t oversold. And Dao wasn’t denied boarding. As far as we know, he was removed from a seat he had already taken after being assigned to it. The contract’s specific provisions for removing travellers or refusing to transport them don’t include the airline’s desire to free up seats, whether for its own employees, as in this case, or for other passengers.
What’s especially interesting about this legal analysis is that it matches what I’ve always assumed was the airlines’ norm.
Every frequent flyer knows that you might occasionally be involuntarily bumped from a flight before you’ve gotten on, because of overbooking or late check-in or another reason. But I have long believed that, once you’re on board, in the seat that’s marked on your boarding pass, you’re golden — and can’t be removed.
I say “long believed” because I have no idea how or when I came to hold that view. I certainly never bothered to read the fine print of the airline contract or the federal regulations about bumping. The most accurate thing would be to say that my belief was based on widespread custom.
Most of the time, such customs are based in some sort of legal norms. We’re called “customers” for a reason. Buying and selling takes place in a social framework of mutual expectation based on past practice. We all know the rules of such repeat transactions. Those of us who fly a lot know the customs especially well.
The coverage of the United incident seemed to suggest that the custom as I knew it was different from the written contract. That sent me to the actual contract of carriage, as it’s called.
And sure enough, the custom does seem to be reflected in the terms of the contract.
Rule 25(A)(2) of the contract applies to “oversold flights.” It says that “no one may be denied boarding against his/her will” until the airline asks for volunteers. Then, “if there are not enough volunteers, other Passengers may be denied boarding involuntarily in accordance with United Airlines’ boarding priority.”
The contract then explains what that priority order is. Unaccompanied minors and disabled people will be denied boarding last. As for the rest, the airline’s decision “may be determined based on a passenger’s fare class, itinerary, status of frequent flyer program membership, and the time in which the passenger presents him/herself for check-in without advanced seat assignment.”
Presumably this paragraph, with the highly loose language “may be determined,” was the basis on which United thought it could remove passengers.
But all this is about “oversold flights,” which are defined in the contract as “a flight where there are more passengers holding valid confirmed tickets that check-in for the flight within the prescribed check-in time than there are available seats.” That’s a grammatically poor definition, but it’s pretty clear that it doesn’t apply to a situation where the flight isn’t oversold, but the airline wants to add its own employees.
What’s more, this entire section of the contract is about denial of boarding — which is legally different from “removal,” which is discussed in an entirely different section of the contract.
Rule 21 of the contract covers “refusal of transport” and includes involuntary removal of a passenger from a plane. It includes a wide variety of misdeeds, from the serious (deadly weapons) to the trivial (barefoot).
But nowhere does this section authorise removal or refusal to transport for no reason other than that the airline needs the seat.
To be clear, the fact that United seems to have breached its contract with Dao doesn’t mean its action was illegal, as the headline of this otherwise helpful article by a non-lawyer on a frequent traveller website suggests. There’s nothing illegal about breaching a contract. If you do so, you simply have to pay damages. Dao’s lawyer, Thomas Demetrio, said Thursday that he is investigating possible claims against United.
And once United in effect told Dao that it was breaching its contract with him and told him to get off, he was probably under a legal duty to comply.
But the bottom line is that once United broke with accepted custom, it was going to reap the whirlwind. It’s always a bad idea to rely on the contractual fine print when the contract is in reality based on mutual trust. And it’s a really bad idea to read the fine print wrong, as United seems to have done. — Bloomberg View
* This is the personal opinion of the columnist.
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