United States: Face Off Over Refunds and Face Masks Over COVID: The Pandemic and Legal Challenges Facing Airlines

The coronavirus has wracked transportation networks around the world, and the airline industry is an exemplar. Several recent developments around refunds for flights canceled over coronavirus concerns, and the use of face masks on flights, are beginning to have legal repercussions.

Dozens of airlines face around 40 class action lawsuits over alleged failures to remit refunds for tickets on canceled or delayed flights. And now some plaintiffs seek to coordinate a multidistrict litigation over these suits, requesting that a federal judge in Illinois, Georgia, or Florida coordinate pretrial issues in these cases.¹ The motion before the U.S. Judicial Panel on Multidistrict Litigation would involve 38 cases and 21 airlines.

A major impetus for the filing is the federal Department of Transportation’s (DOT) decision that airlines should refund tickets.² On April 3 the DOT publicized an Enforcement Notice stating that in the face of the COVID-19 crisis, airlines operating in the U.S.:

[R]emain obligated to provide a prompt refund to passengers for flights to, within, or from the United States when the carrier cancels the passenger’s scheduled flight or makes a significant schedule change and the passenger chooses not to accept the alternative offered by the carrier.

The DOT cites Enhancing Airline Passenger Protections, 76 Fed. Reg. 23110-01, at 23129 (Apr. 25, 2011) as its basis. According to the DOT, this obligation does not change when the flights are disrupted due to circumstances outside of the airlines’ control. The notice was prompted by a large number of complaints from passengers who were denied refunds for canceled or delayed flights, and allegedly offered vouchers or credits for future flights instead. (Indeed, the MDL motion indicates that the DOT received over 16 times the normal number of monthly complaints in March and April of 2020). The notice also warns that the department’s enforcement arm would undertake enforcement action, but would give time for compliance.

To the plaintiffs seeking to consolidate the refund litigation, the DOT’s conclusion that federal law supports full refunds dovetails with their claims that nation-wide breach of contract claims against airlines are well-suited for MDL litigation.

The status quo has not escaped the attention of Congress. Several members of Congress have introduced the Cash Refunds for Coronavirus Cancellations Act of 2020³, which would go a step further and require cash refunds to customers who cancel their own flight plans if the reason is related to the COVID-19 pandemic. Currently, there is no obligation on the part of airlines to refund customers (or offer vouchers) when the customer cancels the ticket. However, observers are skeptical that the act will pass in the current legislative session. For now, litigation seems to be the alternative.

The COVID-19 crisis is also impacting how airlines conduct ongoing flights. With no federal requirements for passengers to use personal protective equipment on planes, many of the largest airlines are themselves enforcing such equipment, including Alaskan, American, United, and Delta. (Similarly, at least one case has been filed against a charter airline where the crew allegedly did not wear PPE as agreed to in a contract). While those rules may be hard to enforce in practice onboard flights due to safety concerns and de-escalation needs, airlines’ threats to ban non-complying customers from future flights may provide a simpler mechanism.

The need to consider these requirements is apparent: like cruise lines at the start of the pandemic, airlines could face negligence suits if passengers allege they contracted COVID-19 during a flight. The relatively small spaces and large numbers of people on flights, combined with the rapidly changing understanding of the virus, could create issues of fact that might make such suits hard to dismiss early in litigation. Airlines would be well-advised to follow appropriate standards of case and take reasonable measures to prevent the spread of the virus on flights.

1 In re COVID-19 Airfare Refund Litig., No. 114, Motion for Transfer Of Actions Pursuant to 28 U.S.C. § 1407 for Coordinated Pretrial Proceedings (Dkt. 1) (J.P.M.L. June 16, 2020).

2 Dep’t of Trans., Enforcement Notice Regarding Refunds by Carriers Given the Unprecedented Impact of the COVID-19 Public Health Emergency on Air Travel, (April 3, 2020), available athttps://www.transportation.gov/sites/dot.gov/files/2020-04/Enforcement%20Notice%20Final%20April%203%202020_0.pdf.

3 S. 3727, 116th Cong. (2020).