2015 IL App (1st) 150458
Ill. App. Ct.2015Background
- Plaintiff Gina Spadoni paid a checked-baggage fee on a United domestic flight; her bag was not flown on the same aircraft and arrived on a later passenger flight.
- United's Contract of Carriage (attached to the complaint) states: "Checked Baggage will generally be carried on the same aircraft as the Passenger unless such carriage is deemed impractical by carrier," giving the carrier discretion.
- Plaintiff alleged United routinely prioritizes revenue-generating cargo over passenger baggage, breaching the Contract of Carriage and the implied covenant of good faith and fair dealing; she sought class relief and refund of fees and other economic damages.
- United moved to dismiss under section 2-615 and 2-619.1, arguing (a) the contract expressly permits its conduct and (b) the implied-covenant claim is preempted by the Airline Deregulation Act (ADA).
- The circuit court dismissed with prejudice: it held plaintiff failed to state a breach of the contract's express terms and concluded the implied-covenant claim is preempted by the ADA.
- On appeal the appellate majority affirmed dismissal, holding Illinois law implies the covenant into every contract (not waivable) and thus the implied-covenant claim is preempted under Supreme Court precedent.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether a breach claim based on the implied covenant of good faith and fair dealing is preempted by the Airline Deregulation Act | The implied covenant is a default interpretive rule that does not enlarge contract duties and can be disavowed; thus it is not preempted | The covenant (as applied) would impose state-law obligations related to air carrier services and is preempted by the ADA | Held preempted: Illinois law implies the covenant into every contract (not effectively waivable), so the claim imposes state-imposed obligations and is preempted under Ginsberg/Wolens framework |
| Whether United breached the express terms of its Contract of Carriage by not carrying plaintiff's bag on the same flight | Spadoni alleges United abused its discretion (prioritized cargo for revenue) so carriage was practicable and the contract was breached | United points to the contract language granting discretion to deem carriage "impractical," so no express-term breach was pleaded | Court found plaintiff could not show breach of express terms because the contract vests sole discretion in carrier; claim based on express terms fails |
| Whether dismissal may be affirmed on alternative pleading or remedy grounds (e.g., damages not recoverable under contract) | Plaintiff argued she could recover baggage fees, costs, and other economic losses; she also argued nonrefundable-fee provision was void due to concealment | United raised alternative defects and damages limitations in briefing | Court declined to decide alternative grounds; affirmed on preemption and express-term dismissal, so alternative grounds were not addressed on the merits |
Key Cases Cited
- American Airlines, Inc. v. Wolens, 513 U.S. 219 (1995) (state law may not impose substantive obligations that alter airlines' voluntarily assumed contractual terms, but courts may enforce the parties' bargain)
- Northwest, Inc. v. Ginsberg, 134 S. Ct. 1422 (2014) (ADA preemption of implied-covenant claims depends on state law; covenant claims preempted where the state does not permit parties to contract around the covenant or the covenant is based on state policy)
- Martindell v. Lake Shore Nat. Bank, 15 Ill. 2d 272 (1958) (Illinois recognizes an implied covenant of good faith and fair dealing in every contract)
- Foster Enterprises, Inc. v. Germania Fed. Savings & Loan Ass'n, 97 Ill. App. 3d 22 (1981) (articulates language that the covenant is implied absent express disavowal; discussed in the court's analysis regarding waivability)