Delta Latest Airline Sued Over COVID-19 Refund Policy

By Craig Clough
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Law360 (April 17, 2020, 10:55 PM EDT) -- Delta Air Lines on Friday was hit with a proposed class action in Georgia federal court, becoming the latest major airline to face legal action from customers seeking refunds for flights canceled due to the outbreak of COVID-19.

The airline is violating consumer protection acts in all 50 states for refusing to issue refunds to passengers after canceling thousands of flights before and during the pandemic, according to a complaint filed by Delta customer Elliot Daniels.

Delta is not offering full refunds, but only rebookings or travel vouchers, even though airline passengers are entitled to a ticket refund if their flight is canceled, Daniels claims.

“Not only is Delta refusing to refund passengers for Delta cancelled flights, Delta is misleading passengers about their rights by making it difficult to locate information about refunds, refusing refunds, unilaterally providing travel vouchers if a passenger is unable to contact a Delta customer service representative, and waiting until the last minute to cancel flights to induce passengers to cancel their flights,” Daniels said.

Daniels is represented by attorneys from Hagens Berman Sobol Shapiro LLP, which also represents a client in another putative class action filed against United Airlines on April 6. The two lawsuits bring similar claims and use identical language throughout significant portions.

Southwest was also hit with a putative class action on Tuesday over similar allegations.

The $2 trillion Coronavirus Aid, Relief and Economic Security, or CARES, Act is set to provide a $58 billion bailout to airline companies, but despite this “faucet of taxpayer money that will flow its way, Delta refuses to comply with the law or operate in the interests of its customers,” Daniels said.

Daniels purchased four round-trip tickets for April 1 for a flight between the Washington Dulles International Airport and Cairo, Egypt, according to the lawsuit. He said Delta twice canceled his flight, which cost him a total of $3,090.22.

After his flight was canceled for a second time, Daniels said he asked Delta’s agent, OneTravel.com, for a full refund but was told he was limited to a voucher for travel to occur within one year of his original booking date. He also said he tried speaking to a Delta agent on March 18 but could not reach anyone due to lengthy wait times.

Daniels said he then requested a refund through Delta’s website and was denied. He also said Delta’s contract of carriage states that if the airline canceled a flight or changed a flight time by over 90 minutes, passengers could receive a full refund.

On April 3, Delta updated its policy to allow travelers to change their flights for up to two years without paying a change fee, and those who opt to cancel will receive a travel credit, Daniels said.

According to the lawsuit, the U.S. Department of Transportation on April 3 reminded airlines, including Delta, of their “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 lawsuit also points out that members of the U.S. Senate wrote a letter to the major airlines on March 31 urging them to give passengers full refunds.

Sens. Edward J. Markey, D-Mass., Elizabeth Warren, D-Mass., Richard Blumenthal, D-Conn. and Kamala Harris, D-Calif., on Friday called out the airlines for "obfuscating" passengers' rights to refunds by offering travel vouchers as the default option and requiring passengers to take burdensome steps to request refunds instead.

According to the senators, every airline is offering cash refunds when the company itself cancels a flight, as required by DOT rules, but only two airlines — Allegiant and Spirit — are offering refunds to passengers who voluntarily and proactively cancel their own tickets amid the crisis.

But Daniels and his attorneys insisted Delta is not offering cash refunds for flights it has canceled. Hagens Berman in a news release said Delta “has refused to give its customers the option of a refund, going as far as automatically issuing a travel voucher if a passenger is travelling soon, and cannot get through to a customer service representative due to high demand.”

Steve Berman, managing partner of Hagens Berman, said in the statement that “we find Delta’s actions in light of the pandemic utterly unacceptable. That Delta is offering time-limited vouchers during an unprecedented time of chaos and uncertainty in our nation’s history only underscores its primary focus of profits over people, and we intend to fight for their right to monetary relief. Americans are losing their sources of income at alarming rates. Vouchers just won’t cut it.”

The lawsuit includes claims for unjust enrichment, conversion, fraudulent misrepresentation and breach of contract. 

Delta did not immediately respond to requests for comment Friday.

Daniels is represented by William S. Stone and James W. Stone of The Stone Law Group and Steve W. Berman, Daniel J. Kurowski and Whitney K. Siehl of Hagens Berman Sobol Shapiro LLP.

Counsel for Delta could not immediately be determined. 

The case is Elliot Daniels v. Delta Air Lines Inc., case number 1:20-mi-99999, in the U.S. District Court for the Northern District of Georgia.

--Editing by Bruce Goldman.

 

For a reprint of this article, please contact reprints@law360.com.

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