BRITISH AIRWAYS PREVAILS IN EU 261 CALIFORNIA LAWSUIT BROUGHT BY CLICK 2 REFUND, INC.
January 25, 2021
EU 261 protects passengers departing from a European airport (and those flying into Europe under certain circumstances) who have suffered a flight delay, cancellation or been denied boarding due to overbooking. This regulation’s compensation provisions have spawned an industry of web-based “claims management companies” that offer to assist airline customers in obtaining compensation for delays or cancellations on a “no win, no fee” basis.
Click 2 Refund filed suit in California state court against British Airways after the airline refused to pay Click’s demand based on its customer’s EU 261 claim. The complaint alleged that British Airways cancelled a flight from Berlin to London, causing customers to miss their connecting flight and arrive in Boston more than four hours late. Click claimed damages of over $2,600.00. British Airways removed the case to federal court (Case 2:19-cv-05399-CAS-SK) and filed a motion for summary judgment. It argued that (1) Click was not the real party in interest, (2) claims under EU 261 cannot be brought in U.S. courts, and (3) the delay claim fails because there was no allegation that Click’s customers had sustained any compensable damages. The U.S. District Court of Central California agreed and granted the motion.
First, the Court found that the “power of attorney” signed by customers did not assign any of their claims to Click. Thus, Click lacked authority to sue in its own name and was not a real party in interest. Second, the Court found that EU 261 claims are not enforceable in U.S. courts as previously decided in Volodarskiy v. Delta Airlines, Inc., 784 F.3d 349 (7th Cir. 2015). Third, the Court found that the complaint only alleged unrecoverable EU 261 damages while asserting no out-of-pocket losses under Article 19 of the Montreal Convention.
The Court permitted Click to amend its complaint to add real parties in interest and to state an actionable Article 19 delay claim “if possible,” but Click failed to file an amended complaint by the applicable deadline. Accordingly, on March 11, 2020, the Court dismissed the case with prejudice.
If you have any questions, please contact Evelyn Sahr (esahr@eckertseamans.com or 202-659-6622); Drew Derco (dderco@eckertseamans.com or 202-659-6665), or Andy Orr (aorr@eckertsemans.com or 202-659-6625).
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