Justia Contracts Opinion Summaries

In this case, a woman was severely injured while moving an inoperable airplane owned by her husband. She sought recovery from her husband's homeowner's insurance policy. The insurance policy, however, excluded injuries "arising out of" the ownership, maintenance, use, loading or unloading of an aircraft. The woman argued that the policy should cover her injury because, in her view, the aircraft had become mere "parts" after her husband removed the wings, elevators, and tail rudder. The lower court disagreed and concluded that her injuries were not covered by the policy. The woman appealed this decision.The Supreme Court of the State of Alaska agreed with the lower court’s interpretation of the homeowner's insurance policy exclusion. The court maintained that regardless of whether the airplane was considered an aircraft or a collection of airplane “parts” when it injured the woman, the injury arose out of the husband’s ownership of the airplane. This interpretation was supported by the clear language of the policy which excluded coverage for bodily injury arising out of ownership or maintenance of an aircraft. As a result, the court affirmed the lower court’s decision. View "Thompson v. United Services Automobile Association" on Justia Law

On a Mesa Airlines flight, a flight attendant grew concerned about two passengers. She alerted the pilot, who, despite the reassurance of security officers, delayed takeoff until the flight was canceled. The passengers were told the delay was for maintenance issues, and all passengers, including the two in question, were rebooked onto a new flight. After learning the real reason behind the cancellation, Passenger Plaintiffs sued Mesa under 42 U.S.C. Section 1981. The airline countered that it had immunity under 49 U.S.C. Section 44902(b). The district court granted Mesa’s motion for summary judgment. At issue is whether such conduct constitutes disparate treatment under Section 1981, whether a Section 1981 claim can exist without a “breach” of contract, and whether Section 44902(b) grants immunity to airlines for allegedly discriminatory decisions.   The Fifth Circuit reversed. The court explained that the right to be free from discrimination in “the enjoyment of all benefits, privileges, terms and conditions” means that one has the right to be free from discrimination in the discretionary “benefits, privileges, terms and conditions” of a contract, too. Defendants cannot claim that flying at the originally scheduled time is not a “benefit” of the contract at all. Further, the court explained that a hand wave, refusing to leave one’s assigned seat, boarding late, sleeping, and using the restroom are far from occurrences so obviously suspicious that no one could conclude that race was not a but-for factor for the airline’s actions. The court wrote that because “a reasonable jury could return a verdict for” Plaintiffs, the dispute is genuine. View "Abdallah v. Mesa Air Group" on Justia Law

The City and County of San Francisco (the City) owns and operates San Francisco International Airport (SFO or the Airport). Airlines for America (A4A) represents airlines that contract with the City to use SFO. In 2020, in response to the COVID-19 pandemic, the City enacted the Healthy Airport Ordinance (HAO), requiring the airlines that use SFO to provide employees with certain health insurance benefits. A4A filed this action in the Northern District of California, alleging that the City, in enacting the HAO, acted as a government regulator and not a market participant, and therefore the HAO is preempted by multiple federal statutes. The district court agreed to the parties’ suggestion to bifurcate the case to first address the City’s market participation defense. The district court held that the City was a market participant and granted its motion for summary judgment. A4A appealed.   The Ninth Circuit reversed the district court’s grant of summary judgment. The court concluded that two civil penalty provisions of the HAO carry the force of law and thus render the City a regulator rather than a market participant. The court wrote that because these civil penalty provisions result in the City acting as a regulator, it need not determine whether the City otherwise would be a regulator under the Cardinal Towing two-part test set forth in LAX, 873 F.3d at 1080 View "AIRLINES FOR AMERICA V. CITY AND COUNTY OF SAN FRANCISCO" on Justia Law

Schmutzler, the owner and president of Jadair, was a pilot with decades of experience. Schmutzler applied to American National for an insurance policy on its Cessna airplane in 2019. The application listed Schmutzler as the Cessna’s only authorized pilot; Schmutzler indicated that he was a licensed pilot with an FAA medical certificate. The application included “Minimum Pilot Requirements,” which stated that “there is no coverage in flight unless the aircraft is being operated by the pilot(s) designated on this document who has/have at least the certificates, ratings, and pilot experience indicated, and who … is/are properly qualified for the flight involved.” Schmutzler initialed this provision. The Cessna crashed in May 2020, killing Schmutzler, who was piloting the plane. The crash was caused by a mechanical failure.American National denied coverage because Schmutzler did not have a current and valid FAA medical certificate at the time of the accident; his previous certificate had expired. The district court granted American National summary and declaratory judgment. The Seventh Circuit affirmed. The policy unambiguously excludes coverage for any accident involving the Cessna where the pilot lacks a current FAA medical certificate. That requirement is an exclusion of coverage, not a failed condition of coverage. View "Jadair International, Inc. v. American National Property & Casualty Co." on Justia Law

Tessco Technologies Inc. hired Landstar Ranger, Inc. as a transportation broker to secure a motor carrier to transport an expensive load of Tessco’s cargo to a purchaser across state lines. But Landstar mistakenly turned the shipment over to a thief posing as a Landstar-registered carrier, who ran off with Tessco’s shipment. Tessco’s insurer, Aspen American Insurance Company, sued Landstar, claiming Landstar was negligent under Florida law in its selection of the carrier. The district court dismissed Aspen’s negligence claims against Landstar, concluding those claims were expressly preempted by the Federal Aviation Administration Authorization Act (“FAAAA”).   The Eleventh Circuit affirmed. The court explained that just as the phrase “with respect to the transportation of property” “massively limits” the preemption provision, the court reads the phrase “with respect to motor vehicles” to impose a meaningful limit on the exception to the preemption provision. Second, the court found that the phrase “with respect to motor vehicles” has an operative effect only by requiring a direct connection between the state law and motor vehicles. The court reasoned that the specifics of Aspen’s complaint make us even more confident that Aspen’s claims are not “with respect to motor vehicles” within the meaning of the safety exception. Aspen’s complaint says nothing at all about motor vehicles. And Aspen’s negligence and gross negligence counts challenge only Landstar’s “selection of the motor carrier.” The complaint does not purport to enforce any standard or regulation on the ownership, maintenance, or operation of “a vehicle, machine, tractor, trailer, or semitrailer propelled or drawn by mechanical power and used on a highway in transportation.” View "Aspen American Insurance Company v. Landstar Ranger, Inc." on Justia Law

The Professional Airline Flight Control Association complained that Spirit is attempting to change its agreement. Spirit responded that its unilateral decision to open a second operations control center is permitted by the parties’ agreement. The district court agreed with Spirit that this dispute is minor and dismissed the action for lack of subject-matter jurisdiction.   The Eleventh Circuit affirmed. The court explained that the Railway Labor Act, 45 U.S.C. Section 151 et seq., divides labor disputes into two categories: disputes over the interpretation of an existing agreement are “minor” and resolved exclusively through binding arbitration, and disputes over proposed changes to an agreement or over a new agreement are “major” and addressed through bargaining and mediation. During a major dispute, district courts have subject-matter jurisdiction to enjoin violations of the status quo. But district courts ordinarily lack jurisdiction over minor disputes. Accordingly, the court affirmed the district court’s dismissal. View "Professional Airline Flight Control Association v. Spirit Airlines, Inc." on Justia Law

Plaintiffs purchased tickets for Defendant’s commercial flights from Miami to Venezuela. Plaintiffs allege that their ticket prices reflected the “fully-paid contract” and that Defendant failed to sufficiently disclose any other fees required for passage. When checking in for their flights at the airport, however, Defendant informed Plaintiffs that they had to pay an additional $80 “Exit Fee” before being allowed to board their flights. Plaintiffs filed a breach of contract putative class action.The district court dismissed the suit, concluding that the Airline Deregulation Act preempted Plaintiffs’ breach of contract claim because it related to the price of the airline ticket and the Act’s preemption provision identifies actions relating to price as preempted. The Eleventh Circuit reversed, first holding that the Plaintiffs plausibly alleged facts that would establish diversity jurisdiction. Plaintiffs’ breach of contract claim seeks merely to enforce the parties’ private agreements regarding the cost of passage and does not invoke state laws or regulations to alter the agreed-upon price. The statute, 49 U.S.C. 41713(b)(1), provides: “[A] State . . . may not enact or enforce a law, regulation, or other provision having the force and effect of law related to a price, route, or service of an air carrier..” The suit falls within the category of cases protected from preemption by Supreme Court precedent. View "Cavalieri v. Avior Airlines C.A." on Justia Law

Williams International Company LLC designed, manufactured, and serviced small jet engines. Dodson International Parts, Inc., sold new and used aircraft and aircraft parts. After purchasing two used jet engines that had been manufactured by Williams, Dodson contracted with Williams to inspect the engines and prepare an estimate of repair costs, intending to resell the repaired engines. Williams determined that the engines were so badly damaged that they could not be rendered fit for flying, but it refused to return one of the engines because Dodson had not paid its bill in full. Dodson sued Williams in federal court alleging federal antitrust and state-law tort claims. Williams moved to compel arbitration under the Federal Arbitration Act (FAA), relying on an arbitration clause on the original invoices. The district court granted the motion, and the arbitrator resolved all of Dodson’s claims in favor of Williams. Dodson then moved to reconsider the order compelling arbitration and to vacate the arbitrator’s award. The court denied both motions and, construing Williams’s opposition to the motion for vacatur as a request to confirm the award, confirmed the award. Dodson appealed, challenging the district court’s order compelling arbitration and its order confirming the award and denying the motions for reconsideration and vacatur. After review, the Tenth Circuit affirmed, holding: (1) the claims in Dodson’s federal-court complaint were encompassed by the arbitration clause; (2) the district court did not abuse its discretion in denying Dodson’s untimely motion to reconsider; and (3) that Dodson failed to establish any grounds for vacatur of the arbitrator’s award or for denial of confirmation of the award. View "Dodson International Parts v. Williams International Company" on Justia Law

The Supreme Court affirmed in part and reversed in part the decision of the administrative hearing commission (AHC) finding no use tax liability for APLUX LLC and Paul and Ann Lux Associates L.P. on the out-of-state purchase of two aircraft, holding that APLUX was not entitled to resale exemption on the purchase of either aircraft.After purchase, both aircraft - referred to as "the TBM" and "the Excel" - were brought to Missouri. APLUX asserted that it leased, on a non-exclusive basis, the TBM to its parent company, Luxco, Inc., and the Excel concurrently to both Luxco and Aero Charter, Inc. The AHC held that each lease agreement constituted a "sale" for purposes of the tax resale exemption set out in Mo. Rev. Stat. 144.018. The Supreme Court reversed in part, holding that a "sale" to Luxco did not occur, and therefore, APLUX was not entitled to a resale exemption based on the Luxco agreement. View "APLUX, LLC v. Director of Revenue" on Justia Law

Hughes bought a ticket from Southwest to fly to Chicago. Just before the flight was to board, Southwest canceled it. Hughes, who chose an alternate flight through Omaha, claims that the cancellation was because Southwest ran out of de-icer and that no other airlines had a similar problem. He claims he incurred additional costs for lodging and similar expenses. The Seventh Circuit affirmed the dismissal of his breach of contract claim. There was no breach; the contract allows the airline to cancel and either reschedule the passenger or refund the fare. There is no implied duty to avoid cancellation. View "Brian Hughes v. Southwest Airlines Co." on Justia Law