USA: Court of Appeals overturns jury verdict in favour of skycaps

In 2005, American Ailrines started to charge passengers who checked their luggage at curbside stations using skycaps a USD 2 fee per bag. Some skycaps filed a law suit against AA’s retention of the fee, alleging that it was a “service charge” under the Massachusetts Tips Statute – and thus had to be distributed to them because customers reasonably expected that. AA argued that the Tip Statute impacted both its prices and services. However, the District Court denied American’s motion, and a jury verdict obliged AA to pay more than $325,000 to the skycaps.Relying on a broad interpretation of the phrase “related to a price, route, or service” by the U.S. Supreme Court, the First Circuit overturned the jury verdict and held that the Airline Deregulation Act of 1978 (ADA) preempts claims brought under the Massachusetts Tip Statute.U.S court of appeals for the First Circuit judgement in DiFiore v. American Airlines available here>>.

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