February 11, 2013 Million Miller Lawsuit against United Airlines Allowed to Proceed
Ok Ok I know this is old news but I thought I would go over it anyways. Back in July George Lagen on behalf of a class filed suit against United Airlines alleging devaluation and removal of lifetime benefits for flying one million miles.
Before we get into the lawsuit where it stands, allow me to summarize the US Legal system for those of you who do not know. The US legal system works on the basis of notice and response. One party notices the other party and they have the opportunity to respond. Lagen notified United that he sued United by serving the complaint.
At the point where the complaint is served a respondent (a person is only a defendant in a criminal trial) under the Federal Rules of Civil Procedure (FRCP) has two options respond to the complaint and or file a motion to dismiss within 30 days. United filled a motion under FRCP 12(b)1 and 12(b).
A 12(b)1 motion alleges that the Plaintiff lacked standing to sue United; IE the plaintiff can not show an “injury” therefore he could not sue. The court rejected this argument.
12(b)6 states that a suit can be dismissed for “failing to show a claim upon which relief can be granted.” This motion to dismiss address claims that fall outside of the ability of a court to grant relief. A good example of this is suing the government. Generally but not always, the government is immune from suit. So a court would use 12(b)6 to dismiss a claim against the government if it is immune from suit.
Just as important as what 12(b)6 is, is what it isn’t. 12(b)6 is not a merits inquiry. The court when ruling on a 12(b)6 motion does not look at the merits of the claim the Plaintiff has stated. The judge only asks one question, if everything the Plaintiff said is true can relief be granted? Here the answer was yes. Mr. Lagen has a claim that he can pursue against United Airlines.
What happens now. Well the court has ordered a status conference which means the parties show up to court to see what the parties want to do. Assuming there is no settlement before then the judge will set a date by which United has to provide an answer to the complaint, and the suit will move forward.
United has the option of asking for an interlocutory appeal of the judges ruling. The judges ruling wasn’t that controversial to justify an immediate appeal, so I don’t think that is going to happen. I suspect that assertions to the contrary, after class certification the case will settle. The Judge implied in his ruling there was little merit to the Plaintiff’s claim so a settlement seems in order.
Whatever happens with the glacial pace of lawsuits, this one will be kicking around for sometime to come.
I have included the relevant text of the ruling below the cut.
MEMORANDUM OPINION AND ORDER B. Motion to Dismiss Based Upon 12(b)(6) Defendants argue in the alternative that dismissal is warranted because Plaintiff’s Complaint fails to state a claim. Defendants argue that the Court should dismiss Plaintiff’s breach of contract, breach of covenant of good faith and fair dealing and unjust enrichment claims. 1.
Count I: Breach of Contract Attached to their Motion to Dismiss, Defendants provide what they contend is the contract Plaintiff claims Defendants breached. Defendants assert that the Court is permitted to consider this contract without transforming their motion to one for summary judgment since the alleged contract is mentioned in Plaintiff’s complaint and central to Plaintiff’s claims. Defendants also state that a plain reading of the contract illustrates that Defendants are not in breach. Plaintiff disputes these contentions, arguing that the Court should exclude from its consideration the aforementioned documents, and that those documents are not the contract pertinent to Plaintiff’s claims.
As a preliminary matter, the Court agrees with Defendants with respect to its ability to consider the document which Defendants argue is the contract which Plaintiff claimed they breached. The Court recognizes that as a general rule, when reviewing a motion to dismiss pursuant to Rule 12(b)(6), the Court should only consider the pleadings. However, Rule 10(c) instructs, “[a] copy of any written instrument which is an exhibit to a pleading is a part thereof for all purposes.” FED. R. CIV. P. 10(c). Moreover, the Seventh Circuit has held that “[d]ocuments attached to a motion to dismiss are considered part of the pleadings if they are referred to in the plaintiff’s complaint and are central to his claim.” Wright v. Assoc. Ins. Cos. Inc., 29 F.3d 1244, 1248 (7th Cir. 1994). Indeed, the Seventh Circuit has reasoned such a rule is intended to apply for cases like this which involve the interpretation of a contract. Levenstein v. Salafsky, 164 F.3d 345, 347 (7th Cir. 1998). The Court’s consideration of such documents (ECF 10-1, Ex. 1 & Ex. 2), does not however, mean that the Court is required to adopt Defendant’s allegations regarding the effect of such documents – namely, that exhibits 1 and 2 are the contract which Plaintiff claims Defendants breached. See Rosenblum v. Travelbyus.com Ltd., 299 F.3d 657, 661 (7th Cir. 2002) (stating that a court can “form its own conclusion as to the proper construction and meaning to be given” to such documents).
In fact, the Court disagrees with Defendants’ contentions. The Court does not deny that exhibits 1 and 2 appear to be the terms and conditions of the Mileage Plus program United had in effect at the time Plaintiff was a member. However, after examining the exhibits, the Court does not find any mention of Million Miler membership or the benefits a member receives after flying 1,000,000 miles. ECF No. 10-1, Ex. 1 & Ex. 2. While Plaintiff’s Complaint states explicitly that the Million Miler Program was part of the Mileage Plus Program, Plaintiff and his proposed class are not mere Mileage Plus members. Instead, the Complaint is clear that Plaintiff and his proposed class are Million Miler Program members. Therefore, at this stage of the litigation, the Court finds it plausible that Defendants had a contract with Million Miler members which differed from the contract they had with other Mileage Plus members.
In his response opposing Defendant’s Motion, Plaintiff argues that exhibits 1 and 2 are not the contract Plaintiff seeks to enforce and points out that these documents do not contain the terms Plaintiff alleges Defendants breached. Plaintiff lists the denial of lifetime benefits which Defendants allegedly promised him in exchange for his purchase of airline tickets as the breach. Again, these benefits do not appear in exhibits 1 and 2. Thus, the Court rejects Defendants’ argument that exhibit 1 and 2 illustrate that Plaintiff cannot establish breach. In addition to finding that Plaintiff has alleged a breach, the Court also finds Plaintiff has pled sufficiently the other elements required for a breach of contract claim – namely, the existence of a valid contract, substantial performance by the plaintiff and resulting damages. See Reger Development LLC v. National City Bank, 592 F.3d 759, 764 (7th Cir. 2010); see also Petri v. Gatlin, 997 F.Supp. 956, 965 (N.D. Ill. 1997) (denying a motion to dismiss a breach of contract claim because the plaintiff generally alleged the existence of a contract, a defendant’s breach, and resulting damages).
Of course, as this case proceeds, it will be Plaintiff’s burden to prove (not plead) that a contract exists between Plaintiff’s proposed Million Miler class and United that differs from the Mileage Plus contract United argues is the contract Plaintiff seeks to enforce. In order to make this showing, Plaintiff will need to provide the Court more than mere allegations. However, given this is only the pleading stage, the Court finds Plaintiff’s allegations sufficient to survive dismissal. See Tibor Mach. Products, Inc. v. Freudenberg-NOK General Partnership, 976 F.Supp. 1006, 1011 (N.D. Ill. 1997) (“. . . at the pleading stage, Tibor [the plaintiff] need only allege rather than prove – the existence of a valid contract.”). Accordingly, the Court denies Defendants’ Motion to Dismiss Plaintiff’s breach of contract claim. IV.
CONCLUSION For the reasons stated herein the Court denies Defendants’ Motion to Dismiss Count I; and grants Defendants’ Motion to Dismiss Counts II and III. IT IS SO ORDERED.