Consolidation Sought For COVID-19 Lawsuits Over Airline Refunds For Canceled Flights Due to Pandemic

The airline industry faces a growing number of lawsuits over the failure to offer full refunds for flights cancelled due to the ongoing COVID-19 pandemic, and several plaintiffs have called for the cases to be consolidated before one judge in the federal court system, for coordinated discovery and pretrial proceedings.

Various airlines face at least 38 class action lawsuits, which are currently pending in 16 different federal district courts. Each of the claims raise similar allegations, indicating that consumers were not offered required refunds for foreign and domestic flights that were cancelled amid the coronavirus outbreak. That number is expected to grow in the coming months, as the pandemic and resulting lockdowns and cancellations continue.

Last week, a group of plaintiffs filed a motion to transfer (PDF) with the U.S. Judicial Panel on Multidistrict Litigation, seeking to create a federal multidistrict litigation (MDL) in the U.S. District Court for the Northern District of Illinois.

Plaintiffs say the refusals to provide full flight refunds goes against the airlines’ own contractual agreements and federal law.

“Instead, they have offered their customers an unwanted raincheck, functionally taking an interest free bridge loan (which in many cases will never be repaid before the voucher expires) from their customers in addition to the billions of taxpayer dollars provided in the form of federal bailouts,” the motion states. “As a result, passengers nationwide have been deprived of refunds to which they are entitled for flights that they did not take, in the midst of the greatest economic crisis in living memory.”

The motion notes that the U.S. Department of Transportation (DOT) issued a notice on April 3, 2020, specifically to remind airlines that they were required to promptly refund passengers when their scheduled flights are cancelled or delayed, and that those obligations remain unchanged in the face of the pandemic.

The U.S. DOT noted that it was receiving an increasing number of complaints from ticketed passengers about the lack of refunds, which are required by law, and apply to even so-called “non-refundable tickets.”

“Carriers have a longstanding obligation to provide a prompt refund to a ticketed passenger when the carrier cancels the passenger’s flight or makes a significant change in the flight schedule and the passenger chooses not to accept the alternative offered by the carrier,” the DOT notice stated. “The focus is not on whether the flight disruptions are within or outside the carrier’s control, but rather on the fact that the cancellation is through no fault of the passenger. Accordingly, the Department continues to view any contract of carriage provision or airline policy that purports to deny refunds to passengers when the carrier cancels a flight, makes a significant schedule change, or significantly delays a flight to be a violation of the carriers’ obligation that could subject the carrier to an enforcement action.”

Plaintiffs note that the 38 lawsuits filed to date involve 12 foreign and nine domestic air carriers of all sizes, making virtually the exact same allegations and justifying the need for consolidation.

Centralization of the claims is intended to reduce duplicative discovery into common issues in the cases, avoid conflicting pretrial schedules from different judges and serve the convenience of the common parties, witnesses and the judicial system.

If the cases are consolidated, it is likely the presiding judge would create a bellwether trial program meant to send a series of test cases before juries to see how they process arguments and evidence likely to be used throughout the litigation, which could help parties potentially reach a settlement agreement. If no settlement or other solution is found, the cases would be remanded back to the original districts where they were filed for individual trial dates.