Zamber v. Am. Airlines, Inc., Case Number: 16–23901–CIV–MARTINEZ–GOODMAN

• Citation: 282 F.Supp.3d 1289
• Decision Date: 16 October 2017
• Docket Number: Case Number: 16–23901–CIV–MARTINEZ–GOODMAN
• Parties: Kristian ZAMBER, on behalf of himself and all others similarly situated, Plaintiff, v. AMERICAN AIRLINES, INC., a Delaware corporation. Defendant.
• Court: U.S. District Court — Southern District of Florida

282 F.Supp.3d 1289

Kristian ZAMBER, on behalf of himself and all others similarly situated, Plaintiff,

v.AMERICAN AIRLINES, INC., a Delaware corporation. Defendant.

Case Number: 16–23901–CIV–MARTINEZ–GOODMAN

United States District Court, S.D. Florida, Miami Division.

Signed October 16, 2017

Filed October 17, 2017

Jeremy L. Kahn, Scott Brian Cosgrove, John Richard Byrne, Alec Huff Schultz, Leon Cosgrove, LLC, Coral Gables, FL, for Plaintiff.

Humberto H. Ocariz, Michael Aaron Holt, Shook Hardy & Bacon LLP, Miami, FL, for Defendant.

OMNIBUS ORDER ADOPTING MAGISTRATE JUDGE GOODMAN'S REPORT AND RECOMMENDATION, DENYING DEFENDANT'S MOTIONS TO DISMISS AND TO CERTIFY INTERLOCUTORY APPEAL, AND GRANTING MOTION TO LIFT STAY AND ENTER NEW SCHEDULING ORDER

JOSE H. MARTINEZ, UNITED STATES DISTRICT JUDGE

THE MATTER was referred to the Honorable Jonathan Goodman, United States Magistrate Judge, for a Report and Recommendation on Defendant's Motion to Dismiss (the "Motion") [ECF No. 13]. Magistrate Judge Goodman filed a Report and Recommendation [ECF No. 65], recommending that the Motion be denied without prejudice. The Court has reviewed the entire file and record and has made a de novo review of the issues that the objections to the Magistrate Judge's Report and Recommendation present. After careful consideration, it is hereby:

ADJUDGED that United States Magistrate Judge Goodman's Report and Recommendation [ECF No. 65] is AFFIRMED and ADOPTED . Accordingly, it is ADJUDGED that Defendant's Motion to Dismiss [ECF No. 13] is DENIED without prejudice.

Moreover, in apparent anticipation of this Court entering an order adopting the Report and Recommendation and denying Defendant's motion to dismiss, Defendant has also moved to certify this order for interlocutory appeal, pursuant to 28 U.S.C. § 1292(b) [ECF No. 69]. A district court may certify an order in a civil action for interlocutory appeal if the Court believes that the order "involves a controlling question of law as to which there is a substantial ground for difference of opinion and that an immediate appeal from the order may materially advance the ultimate termination of the litigation." 28 U.S.C. § 1292(b). As such, a district court may certify for immediate review an order disposing of an important question of law, which the Court of Appeals may address, in its discretion, if application is made to it within ten days after entry of the order. See McFarlin v. Conseco Servs., LLC, 381 F.3d 1251, 1256–59 (11th Cir. 2004). In interpreting the "controlling question of law" requirement, the Eleventh Circuit has held that the question must be a purely legal one that is "controlling of at least a substantial part of the case." McFarlin, 381 F.3d at 1258, 1264. In other words, " § 1292(b) appeals were intended, and should be reserved, for situations in which the court of appeals can rule on a pure, controlling question of law without having to delve beyond the surface of the record in order to determine the facts." Id. at 1259.

Here, the Court agrees with Magistrate Judge Goodman's analysis that "an issue of first impression about ADA preemption should be deferred until the summary judgment stage, where the factual record can be more fully developed .... Determining whether Plaintiff's claims have an impermissible effect on [Defendant]'s prices or services is an inherently factual question; evidence is required to determine whether and how Plaintiff's claim would have such an effect." [ECF No. 65 at 18, 21].

Accordingly, because significant factual questions remain at this stage, Defendant's motion to certify this order for interlocutory appeal, pursuant to 28 U.S.C. § 1292(b) [ECF No. 69], is DENIED . Plaintiff's Motion to Lift Stay and Enter New Scheduling Order [ECF No. 74] is GRANTED . The Clerk shall LIFT the stay in this action. The Court shall reset any applicable pretrial deadlines and the trial date by separate order.

DONE AND ORDERED in Chambers at Miami, Florida, this 16 day of October, 2017.

REPORT AND RECOMMENDATIONS ON DEFENDANT'S MOTION TO DISMISS

Jonathan Goodman, UNITED STATES MAGISTRATE JUDGE

This purported class action case concerns the language which appears on an airline's website when a customer purchases optional travel insurance (a/k/a trip insurance). It also concerns the reasonable inferences which a customer could or would make and how a customer would interpret the information provided. Although the website does not exactly say what Plaintiff Kristian Zamber ("Plaintiff" or "Zamber") claims it says, it does make enough representations to meet the minimum Florida state law standard for alleged deception and unjust enrichment claims (when analyzed through the prism of a permissible and rationale interpretation of these representations).

Plaintiff might not ultimately be able to certify a class, and he might not later survive a summary judgment motion either. But for now, for purposes of a threshold motion to dismiss, Plaintiff's Complaint survives, and the Undersigned therefore respectfully recommends that United States District Judge Jose E. Martinez deny the dismissal motion.

Nevertheless, the Undersigned feels compelled to note that the issue is a close one. In addition, as outlined below, some of the allegations appear to overstate or incorrectly state what language is actually on the website. Plaintiff may therefore wish to clean up the problematic allegations in a newer version of the Complaint.

Moreover, Plaintiff may need to confront again the threshold issue of whether the Airline Deregulation Act ("ADA") forecloses (or preempts) the claims here. Neither party has called my attention to an on-point authority addressing the critical issue of whether travel insurance is encompassed by the ADA's prohibition—i.e., whether travel insurance is "related to a price, route or service of an air carrier that may provide air transportation." 49 U.S.C. § 41713(b)(1).

Because this issue appears to be one of first impression, the Undersigned recommends that the Court postpone ruling on this issue until discovery generates additional facts necessary to better inform the analysis of the ADA preemption issue.

In an effort to highlight some of the points which affect the analysis of the two counts here, the Undersigned will outline later in this Report the allegations which Plaintiff did not make in his Complaint (and the representations which Plaintiff did make, but in an arguably inconsistent or problematic way). I will also note the allegations which Defendant American Airlines, Inc. ("American") did not expressly make either (in its website or ticket/travel insurance confirmation). Plaintiff's omissions or inaccurate summaries of what American represented may ultimately be just as important as the representations and allegations which were in fact expressly made.

By way of overall procedural background, American filed a Motion to Dismiss [ECF No. 13], which is ripe for a ruling. Judge Martinez referred the motion to the Undersigned, [ECF No. 39], and I held a hearing on March 7, 2017.

Factual and Procedural Background

Because this Report concerns a motion to dismiss, the Undersigned must treat the allegations as true. But I will flag those allegations that are inconsistent with the actual facts (i.e., at odds with the specific and actual representations made by American).

The Complaint alleges the following scenario:

Plaintiff bought a travel insurance policy on American's website. On its website, American represents that, despite being sold via American's website, the travel insurance is "sold by third-party insurance providers, not American ." [ECF No. 1, ¶ 33]. (emphasis added). Plaintiff contends that this representation necessarily informs a reasonable consumer that the insurance premium is a "pass through" fee paid to the third-party insurer. But, according to Plaintiff, "in reality, [American] receives an undisclosed kickback from every policy sold." [ECF No. 1, ¶ 1] (emphasis supplied).

When a customer buys an airline ticket on American's website, American requires the customer to elect whether to purchase a trip insurance policy from an independent insurer, Allianz Global Assistance ("Allianz"). [ECF No. 1, ¶¶ 2, 8]. The customer must check either a "yes" or "no" box before American allows the customer to complete the ticket purchase. [ECF No. 1, ¶ 5]. The "yes" option is highlighted in bold type, next to which is a checkmark in bright green typeface, followed immediately by the word "Recommended," which is also in bright green typeface. [ECF No. 1, ¶ 5].

Following the bright green checkmark and "Recommended" line, American includes a quote from U.S. News & World Report that states: "It's a smart idea to consider investing in travel insurance." [ECF No. 1, ¶ 6]. The "no" option is below the "yes" option and not in bold type. [ECF No. 1, ¶ 5]. A customer is unable to proceed with buying a ticket until electing whether to buy trip insurance. [ECF No. 1, ¶ 4].

On the same website, American makes the following representations:

• "This insurance is offered by a third party, Allianz Global Assistance, not American Airlines."

• "Recommended by AGA Service Company, the licensed producer and administrator of this plan."

• "Trip insurance products are sold by third-party insurance providers, not American, so you'll receive a separate confirmation."¹

• "When you purchase a plan from Allianz Global Assistance...."

[ECF Nos. 1, ¶¶ 8, 29, 33; 1–1; 1–2; 1–3].

Further, when a customer buys trip insurance (a/k/a travel insurance) on American's website, the premium is not itemized on the airfare bill. Rather, it is itemized separately even though paid via a one-time credit card charge on American's website. [ECF No. 1, ¶ 31]. This contrasts with the election of other "add-ons," like seat selection, which are included as part of the listed fare price. [ECF No. 1, ¶ 31].

Plaintiff contends that these representations inform a reasonable consumer that the premiums paid for a trip insurance...