USA: no unjust enrichment through limited validity of airline gift cards

Michael Wukoschitz's picture

Plaintiffs purchased gift cards for air travel and services on Continental’s airline. The gift card had a one year expiration date and when the donee attempted to utilize the gift card after its expiration date, Continental refused to honor it. Plaintiffs filed a class action lawsuit against Continental asserting claims that allege violations of Ohio’s Gift Card Statute and the Ohio  Consumer Sales Practices Acts and also containing a claim for unjust enrichment.

Continental responded that the claims based upon alleged violations of state law were preempted by the Airline Deregulation Act of 1978 (ADA) and that the unjust enrichment claim fails due to the existence of an express contract.

The Cuyahoga County Court granted the motion to dismiss the claim. Upon appeal of the plaintiffs, an Ohio Court of Appeals upheld this decision. The court referred to the ADA which explicitly provides that “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 that may provide air  transportation under this subpart.” As the gift card accodring to the terms of contract was “only valid for air travel purchases, including tickets, taxes and  surcharges” it was related to the provision of airline service in the “public utility sense,” i.e., purchasing a ticket for the provision of air transportation to and from a market at certain times. The fact that the gift card postponed the eventual purchase of an airline ticket did not alter that the gift card was still related to the provision of air transportation.

As to the cardholders’ unjust enrichment claim, the court held that the existence of valid contracts between the parties prevented any recovery: where a valid contract existed between the parties, there could be no recovery under a theory of quantum meruit in the absence of fraud, bad faith, or illegality.

Case: Restivo v. Continental Airlines, Inc., 2011-Ohio-219

Full judgement available here>>.

 

X