Bugarin v. All Nippon Airways Co.

• Decision Date: 19 January 2021
• Docket Number: Case No. 20-cv-03341-BLF
• Court: U.S. District Court — Northern District of California
• Parties: Ashley BUGARIN, Plaintiff, v. ALL NIPPON AIRWAYS CO., LTD., Defendant.

513 F.Supp.3d 1172

Ashley BUGARIN, Plaintiff,

v.ALL NIPPON AIRWAYS CO., LTD., Defendant.

Case No. 20-cv-03341-BLF

United States District Court, N.D. California, San Jose Division.

Signed January 19, 2021

Yeremey O. Krivoshey, Bursor Fisher, P.A., Walnut Creek, CA, for Plaintiff.

Scott David Cunningham, Condon & Forsyth LLP, Los Angeles, CA, for Defendant.

ORDER GRANTING IN PART AND DENYING IN PART MOTION TO DISMISS, WITH LEAVE TO AMEND IN PART AND WITHOUT LEAVE TO AMEND IN PART

[Re: ECF 18]

BETH LABSON FREEMAN, United States District Judge

In this putative nationwide class action, Plaintiff Ashley Bugarin ("Bugarin") claims that Defendant All Nippon Airways Co., Ltd. ("ANA") breached its Conditions of Carriage by failing to issue refunds to thousands of passengers whose flights were cancelled as a result of the COVID-19 pandemic. Bugarin asserts two state law claims on behalf of herself and the putative class, one for breach of contract and the other for rescission. ANA moves to dismiss those claims under Federal Rule of Civil Procedure 12(b)(1) for lack of subject matter jurisdiction, under Rule 12(b)(2) for lack of personal jurisdiction, and under Rule 12(b)(6) for failure to state a claim upon which relief may be granted.

ANA's motion is DENIED to the extent it is brought under Rules 12(b)(1) and 12(b)(2), and GRANTED to the extent it is brought under Rule 12(b)(6). Leave to amend is GRANTED on the contract claim and DENIED on the rescission claim.

I. BACKGROUND¹

Bugarin, who resides in San Jose, California, purchased a round-trip flight to Japan on ANA. FAC ¶¶ 809, 19, ECF 15. The outbound flight was from San Jose, California to Tokyo, Japan, while the return flight was from Tokyo, Japan to San Francisco, California. FAC ¶¶ 8, 19. Bugarin made the purchase through a third party, Asaptickets.com ("ASAP"). FAC ¶ 9; Ito Decl. ¶ 19, ECF 18-1. ASAP is not an authorized ticket agent of ANA and does not have a contractual relationship with ANA. Ito Decl. ¶ 11. However, pursuant to industry practice, an unauthorized ticket agent such as ASAP may sell ANA tickets through an authorized ticket agent. Ito Decl. ¶ 19. In this case, ASAP sold Bugarin the ANA ticket through an authorized ticket agent, Downtown Travel, which is based in New York. Ito Decl. ¶¶ 17-19.

Bugarin's departing flight from San Jose, California to Tokyo, Japan operated as scheduled on March 23, 2020, but Bugarin was not on the flight. Ito Decl. ¶ 24. Bugarin's return flight was cancelled due to the COVID-19 pandemic. FAC ¶ 19. Bugarin "attempted to request a cash refund from All Nippon by calling All Nippon." Id. She "called All Nippon several times and was on the phone for several hours each time, but she was never able to reach a representative of All Nippon." Id. Bugarin never spoke to an ANA representative and she was not refunded for the cancelled return flight. Id.

Bugarin claims that ANA's failure to issue her a refund breached the applicable Conditions of Carriage ("COC"),² attached as Exhibit A to the FAC. FAC ¶¶ 38-44 & Exh. A, ECF 15. Section 13 of the COC, "Refunds," states that ANA will provide a refund when a passenger is prevented from using his or her ticket as a result of ANA's cancellation of a flight. COC § 13(A), (C). Section 13 specifies that "ANA will make a refund to the person named in a Ticket or, to the person who purchased the Ticket upon presentation to ANA of satisfactory evidence to prove that he/she is entitled by these Conditions of Carriage to such refund." COC § 13(B).

The FAC does not allege that Bugarin presented ANA with evidence of entitlement to a refund or, indeed, that she ever asked ANA for a refund. Bugarin claims that ANA nonetheless was obligated to refund her return fare under the plain language of the COC. According to Bugarin, the COC's provision regarding evidence merely clarifies who may obtain a refund, but does not establish a condition precedent to a refund. She also claims that the COC incorporates an Enforcement Notice issued by the Department of Transportation ("DOT") on April 3, 2020 ("DOT Enforcement Notice"), which requires issuance of a refund upon cancellation of a flight. FAC ¶¶ 41-44. The notice, titled "Enforcement Notice Regarding Refunds by Carriers Given the Unprecedented Impact of the COVID-19 Public Health Emergency on Air Travel," states that "passengers should be refunded promptly when their scheduled flights are cancelled or significantly delayed." DOT Enforcement Notice, https://www.transportation.gov/airconsumer/enforcement_notice_refunds_apr_3_2020 (last accessed Jan. 13, 2021). Bugarin also points to the DOT's Frequently Asked Questions ("FAQs") page, posted May 12, 2020, addressing airline passengers’ entitlement to refunds for flights cancelled due to the COVID-19 pandemic. FAC ¶ 4. The FAQs state that "Airlines and ticket agents are required to make refunds promptly. For airlines, prompt is defined as being within 7 business days if a passenger paid by credit card, and within 20 days if a passenger paid by cash or check." FAQs, https://www.transportation.gov/airconsumer/FAQ_refunds_may_12_2020 (last accessed Jan. 13, 2021).

Bugarin seeks damages for ANA's alleged breach of its COC or, in the alternative, rescission of the COC, on behalf of herself and the following nationwide class: "All persons in the United States who purchased tickets for travel on an All Nippon flight scheduled to operate to, from, or within the United States whose flights were cancelled or were subject to a significant schedule change and not refunded." FAC ¶¶ 24, 46, 53. She also seeks to represent "a subclass of all Class members who purchased tickets in California." FAC ¶ 25. According to Bugarin, "there are hundreds of thousands of individuals that are members of the proposed Classes." FAC ¶ 29.

Bugarin filed the complaint in this action on May 15, 2020 and filed the FAC as of right in response to a motion to dismiss filed by ANA. See Compl., ECF 1; FAC, ECF 15. ANA now moves to dismiss the FAC.

II. DISCUSSION

ANA moves to dismiss the FAC on several grounds. First, ANA seeks dismissal under Rule 12(b)(1) for lack of subject matter jurisdiction, arguing that Bugarin cannot demonstrate Article III standing and that her claims are both unripe and moot. Second, ANA seeks dismissal under Rule 12(b)(6) for failure to state a claim upon which relief may be granted. Third, ANA seeks dismissal under Rule 12(b)(2) for lack of personal jurisdiction. Bugarin contends that all of ANA's asserted grounds for dismissal are without merit.

"[J]urisdiction generally must precede merits in dispositional order." Ruhrgas AG v. Marathon Oil Co. , 526 U.S. 574, 577, 119 S.Ct. 1563, 143 L.Ed.2d 760 (1999). Only if the Court is satisfied that it has both subject matter jurisdiction and personal jurisdiction may it proceed to address ANA's merits arguments under Rule 12(b)(6). See id. ("Jurisdiction to resolve cases on the merits requires both authority over the category of claim in suit (subject-matter jurisdiction) and authority over the parties (personal jurisdiction), so that the court's decision will bind them."). Consequently, the Court first takes up ANA's Rule 12(b)(1) challenge, then its Rule 12(b)(2) challenge, and finally its Rule 12(b)(6) challenge. Before doing so, however, the Court briefly addresses ANA's submission of evidence in the form of a declaration from one of its executives, Yutaka Ito, and Bugarin's request for judicial notice.

Mr. Ito's declaration describes ANA's structure, business practices, and contacts with California. See generally Ito Decl., ECF 18-1. Mr. Ito also states that ANA has provided refunds to thousands of passengers, and that ANA has no record of a request for refund by Bugarin. See Ito Decl. ¶¶ 25-29. Bugarin contends that ANA's arguments based on Mr. Ito's declaration "go well beyond the four corners of the pleadings and are inappropriate for consideration at the motion to dismiss stage." Opp. at 2 n.1, ECF 25. This contention is without merit insofar as ANA seeks dismissal for lack of subject matter jurisdiction and lack of personal jurisdiction, because the Court properly may consider evidence extrinsic to the pleadings when evaluating motions to dismiss under Rules 12(b)(1) and 12(b)(2). See Safe Air For Everyone v. Meyer , 373 F.3d 1035, 1039 (9th Cir. 2004) (court may consider evidence beyond the complaint in deciding factual attack under Rule 12(b)(1) ); Schwarzenegger v. Fred Martin Motor Co. , 374 F.3d 797, 800 (9th Cir. 2004) (challenge to personal jurisdiction under Rule 12(b)(2) may be based on materials outside the complaint). Bugarin is correct that Mr. Ito's declaration may not be considered in evaluating ANA's Rule 12(b)(6) motion, as the Court's consideration of that motion is limited to the face of the complaint, matters that may be judicially noticed, and documents that are incorporated by reference into the complaint. See Louisiana Mun. Police Employees’ Ret. Sys. v. Wynn , 829 F.3d 1048, 1063 (9th Cir. 2016).

Bugarin requests judicial notice of the California Secretary of State's business records showing that ANA maintains a registered agent for service of process in California. See RJN, ECF 26. The request for judicial notice is GRANTED. See L'Garde, Inc. v. Raytheon Space & Airborne Sys. , 805 F. Supp. 2d 932, 938 (C.D. Cal. 2011) (finding it appropriate to take judicial notice of results of records searches on the California Secretary of State's corporate search website).

The Court next turns to ANA's asserted grounds for dismissal.

A. Challenge to Subject Matter Jurisdiction under Rule 12(b)(1)

1. Legal Standard

A party may challenge the Court's subject matter jurisdiction by bringing a motion to dismiss under Federal Rule of Civil Procedure 12(b)(1). "A Rule 12(b)(1) jurisdictional attack may be facial or factual." Safe Air , 373 F.3d at 1039. In a facial attack, the movant asserts that the lack of subject matter jurisdiction is apparent from the face of the...