ROBERTO HUNG CAVALIERI, individually and on behalf of all others similarly situated, SERGIO ENRIQUE ISEA v. AVIOR AIRLINES C.A., a Venezuelan company
No. 19-11330
United States Court of Appeals for the Eleventh Circuit
February 3, 2022
[PUBLISH]
In the United States Court of Appeals For the Eleventh Circuit
No. 19-11330
ROBERTO HUNG CAVALIERI, individually and on behalf of all others similarly situated, SERGIO ENRIQUE ISEA, Plaintiffs-Appellants, versus AVIOR AIRLINES C.A., a Venezuelan company, Defendant-Appellee.
Appeal from the United States District Court for the Southern District of Florida D.C. Docket No. 1:17-cv-22010-FAM
Before WILSON, LUCK, and LAGOA, Circuit Judges.
Plaintiffs Roberto Hung Cavalieri and Sergio Enrique Isea were passengers on airline flights operated by Defendant Avior
I. BACKGROUND
As alleged in Plaintiffs’ second amended complaint, Plaintiffs purchased tickets for Defendant‘s commercial flights from Miami International Airport to Venezuela, entering into a contract with Defendant, the terms of which are reflected in Defendant‘s Contract of Carriage and the issued tickets. Plaintiff Hung purchased his ticket through Expedia.com for the “contract price of $775.50.” The itinerary and receipt attached to the second amended complaint indicated that the price “include[d] taxes [and] fees.” Plaintiff Isea purchased his ticket through a travel agent but did not allege the price paid or attach a ticket or receipt to the second amended complaint. Plaintiffs allege that their ticket price reflected the “fully-paid contract” and that Defendant failed to sufficiently disclose any other fees required for passage. However, when checking in for their flights at the airport, Defendant informed Plaintiffs that they had to pay an additional $80 “Exit Fee” before being allowed to board their flights.
Plaintiffs deemed the Exit Fee “extra-contractual” and filed a single-count, breach of contract putative class action against Defendant in the United States District Court for the Southern District of Florida. Plaintiffs contended that by requiring them, and other ticketed passengers, to pay an additional $80 charge in order to board their ticketed flights, Defendant breached its contracts with Plaintiffs and its other passengers-specifically the price terms set forth on their tickets as authorized by Defendant‘s Contract of Carriage.
Defendant filed a motion to dismiss Plaintiffs’ second amended complaint.1 Defendant raised at least five grounds for dismissal, including that Plaintiffs failed to state a plausible breach of contract claim. Defendant argued that Plaintiffs failed to disclose the entire contract, which it maintained included terms on its website that permitted charging of the “Exit Fee.” Defendant
The magistrate judge issued a report and recommendation ruling only on Defendant‘s ADA preemption argument. The magistrate judge found Plaintiffs’ state law breach of contract claim preempted by the ADA and not excepted under the Supreme Court‘s decision in Wolens. Wolens excepted from preemption a breach of contract claim stemming from the terms of a frequent flier program because the allegedly breached terms arose from a self-imposed undertaking, rather than state-imposed obligations. Wolens, 513 U.S. at 228-29. The magistrate judge concluded that Plaintiffs’ claim was related to prices, routes, and services, which is the province of the Act. Relying on the Ninth Circuit‘s decision in Sanchez v. Aerovias De Mexico, S.A. De C.V., 590 F.3d 1027 (9th Cir. 2010), the magistrate judge further found that Wolens did not except Plaintiffs’ claim from preemption because Plaintiffs’ second amended complaint failed to identify a voluntary contractual undertaking that created an obligation to disclose the Exit Fee. Accordingly, the magistrate judge recommended that Plaintiffs’ claim be dismissed with prejudice.
The district court adopted the magistrate judge‘s report and recommendation. The district court found Plaintiffs’ claim alleging breach of contract by Defendant‘s imposition of additional undisclosed fees preempted by the ADA, and not subject to a Wolens exception, “because by its very terms the airline ticket receipt refers to the price of the airline ticket.” The district court concluded, “[u]nlike in Wolens, where the Supreme Court excepted the breach of contract stemming from the frequent flier program, the express terms of the violated provision in this case expressly relate to pricing, and the claim is therefore, preempted.” The district court rejected Plaintiffs’ argument that the preemption doctrine permits breach of contract actions relating to price when there is no attempt to enforce a state law or regulation to alter the agreed-upon price, as “inconsistent with the Act, which was enacted to foster competition among airlines.” The district court dismissed Plaintiffs’ case with prejudice because Plaintiffs were “unable to amend their complaint in a manner that would avoid . . . preemption.”
II. DISCUSSION
Plaintiffs appeal the district court‘s dismissal of their second amended complaint, arguing that Wolens protects their breach of contract claim from preemption by the Airline Deregulation Act. Defendant maintains that dismissal should be affirmed on preemption grounds, or alternatively, on the ground that Plaintiffs failed to state a plausible breach of contract claim. First, we discuss whether the parties are diverse citizens sufficient for the purpose of establishing jurisdiction. Next, we turn to the issue of preemption. Lastly, we address Defendant‘s argument that Plaintiffs’ cause of action was not sufficiently pled.
A. Standard of Review
“We review preemption determinations de novo.” Bailey v. Rocky Mountain Holdings, LLC, 889 F.3d 1259, 1266 (11th Cir. 2018). We review the district court‘s ruling on Defendant‘s motion to dismiss de novo, accepting the allegations in Plaintiffs’ second amended complaint as true and construing them in the light most favorable to Plaintiffs. Isaiah v. JPMorgan Chase Bank, 960 F.3d 1296, 1301-02 (11th Cir. 2020). “To survive a Rule 12(b)(6) motion to dismiss, a complaint
B. Plaintiffs Have Sufficiently Alleged Diversity Between the Unnamed Putative Class Members and the Defendants
The parties were asked to discuss whether the Plaintiffs sufficiently alleged minimal diversity for the purpose of establishing jurisdiction. “A federal court not only has the power but also the obligation at any time to inquire into jurisdiction whenever the possibility that jurisdiction does not exist arises.” Johansen v. Combustion Eng‘g, Inc., 170 F.3d 1320, 1328 n.4 (11th Cir. 1999). And we review jurisdictional issues de novo. In re Walker, 515 F.3d 1204, 1210 (11th Cir. 2008).
Plaintiffs alleged in their second amended complaint that “as a national class at least one class member (as well as the Plaintiffs) belong to a different state than that of the Airline[.]” Plaintiffs defined their national class as “all persons that Avior charged an Exit Fee, from five years prior to the filing of the initial complaint through the earlier of: (i) the date, if any, Avior changes its contract to expressly include Exit Fees; and (ii) the date of class certification.” Both Plaintiffs Cavalieri and Isea are citizens of Venezuela but Isea is additionally a legal permanent resident of the United States domiciled in Florida. Defendant Avior is a Venezuelan airline with its principal place of business in Venezuela.
Plaintiffs alleged that the parties are minimally diverse under the Class Action Fairness Act (CAFA), codified as
Plaintiffs argued that they meet diversity jurisdiction under
Although Plaintiffs also alleged that “at least one class member . . . belong[ed] to a different state than that of the airline,” the second amended complaint was defective in that it still alleged that the named Plaintiffs belong to a state for diversity purposes—which they do not because of the removal of the “deemed a citizen” language from
The Plaintiffs’ motion to amend explained that its second amended complaint had made the alternative argument that they establish minimal diversity under CAFA. The third amended complaint, which Plaintiffs will file in the district court on remand, will amend paragraph 18 of Plaintiffs’ second amended complaint to now read: “as a national class at least one unnamed class member is a U.S. citizen and resident and, thus, is diverse from Avior, a Venezuelan airline[.]” This amended language removes any allegation that the named Plaintiffs are diverse from the Defendants, as they are not, instead relying solely on the unnamed class members to establish jurisdiction under CAFA. Defendant‘s response to
Plaintiffs’ renewed motion to amend3 raised the question of whether the new allegations are sufficient to establish minimal diversity under CAFA. We find that they are.
We have previously demonstrated that, at the motion to dismiss stage, the Plaintiff need only establish that the face of his complaint meets the jurisdictional requirements of CAFA to invoke the court‘s jurisdiction. Fox v. Ritz-Carlton Hotel Co., LLC, 977 F.3d 1039, 1045 (11th Cir. 2020). After all, Plaintiffs have not yet had occasion to file any jurisdictional evidence in the record aside from the allegations contained in its complaint. At this point, the jurisdictional burden of the party seeking a federal forum through CAFA is to show that the case stated in the complaint meets federal jurisdictional requirements. Roe v. Michelin N. Am., Inc., 613 F.3d 1058, 1061-62 (11th Cir. 2010). In so doing, courts may use their judicial experience and common sense to determine if the case meets the federal jurisdictional requirements from the pleadings alone. Id.
Thus, it is enough that the Plaintiffs here have plausibly alleged that an unnamed plaintiff in the class is a citizen of the United States, while Defendant Avior
principal place of business in Venezuela. See Lowery v. Ala. Power Co., 483 F.3d 1184, 1193 n.24 (11th Cir. 2007) (“The new
It is for a later stage in the litigation for the district court to make the factual determination on whether there is indeed jurisdiction in this case. See Cappuccitti v. DirecTV, Inc., 623 F.3d 1118, 1122 n.8 (11th Cir. 2010) (per curiam) (“[D]iscovery may uncover certain facts . . . that would destroy the district court‘s jurisdiction over the case and require the district court to dismiss the case under
C. The Airline Deregulation Act Does Not Preempt Plaintiffs’ Breach of Contract Claim
“In 1978, Congress eliminated the regulation of air carrier prices through the Airline Deregulation Act.” Bailey, 889 F.3d at 1267. “To ensure that the States would not undo federal deregulation with regulation of their own, the ADA included a pre-emption provision.” Morales v. Trans World Airlines, Inc., 504 U.S. 374, 378 (1992). The preemption provision of the ADA states that “a State, political subdivision of a State, or political authority of at least 2 States 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.”
Though broad, the ADA preemption provision is not without limits. “The ADA does not . . . preempt a state-law-based court adjudication’ . . . concerning a contractual obligation ‘voluntarily’ undertaken by an air carrier.” Bailey, 889 F.3d at 1268 (internal citations omitted). “Therefore, an air carrier may bring a state action to enforce the terms of a contract, whether express or implied, or the person with whom an air carrier has contracted may bring a breach-of-contract action . . . so long as the action concerns voluntary commitments and not state-imposed obligations.” Id. (citing Wolens, 513 U.S. at 232-33, 237).
Plaintiffs concede, as they must, that their breach of contract action due to Defendant charging fees for passage beyond
Plaintiffs pled a breach of contract claim that seeks to enforce the voluntary agreement of the parties. Plaintiffs allege that Defendant agreed to transport them from Miami to Venezuela for the ticketed price, inclusive of all fees and taxes, and breached that agreement by charging an additional $80 Exit Fee. Accordingly, Plaintiffs’ claim seeks recovery solely for the alleged breach of Defendant‘s own, self-imposed undertaking regarding the price charged for transport. “[T]erms and conditions airlines offer and passengers accept are privately ordered obligations and thus do not amount to a State‘s ‘enactment or enforcement of any law, rule, regulation, standard, or other provision having the force and effect of law’ within the meaning of
We are not persuaded by Defendant‘s argument that the contract term upon which Plaintiffs stake their claim “was not a voluntary undertaking by [Defendant]” because it “clearly related to pricing.” First, Defendant‘s argument misconstrues the scope of self-imposed undertakings, the breach of which may be adjudicated in state court as held in Wolens. That an undertaking relates to price does not necessarily make it subject to preemption. “The ADA contains no hint” that “Congress meant to channel into federal courts the business of resolving . . . the range of contract claims relating to airline rates, routes, or services.” Wolens, 513 U.S. at 232. Indeed, the undertakings allegedly breached in Wolens also related to price. Id. at 226 (“Plaintiffs’ claims relate to ‘rates,’ i.e., [Defendant‘s] charges in the form of mileage credits for free tickets and upgrades.“).
Second, Plaintiffs have not invoked a state law or regulation that seeks to alter the voluntary agreement of the parties embodied in the alleged contract. This case stands in contrast to Bailey, where we found the plaintiff‘s claim preempted because plaintiff “invoke[d] the balance billing provision [of Florida‘s personal injury protection statute] as a ‘means to guide and police’ [defendant‘s] rates.” Bailey, 889 F.3d at 1272 (quoting Wolens, 513 U.S. at 228). The issue here is not whether the charged fare should be modified by state law or regulation, but whether that voluntarily agreed-upon charged fare contemplated an Exit Fee in addition to the ticket price, despite the lack of disclosure of such a fee and, at least in some instances, express representation that the ticket price included all taxes and fees.5 As we noted in Bailey, “[i]f [the
Defendant misapplies the Ninth Circuit‘s decision affirming summary judgment due to ADA preemption in Sanchez to argue that Plaintiffs’ pleading must identify a separate contractual provision obligating Defendant to disclose the Exit Fee for there to be a self-imposed undertaking that avoids preemption under Wolens. The reasoning of Sanchez does not apply here because Plaintiffs’ breach of contract action merely seeks to give effect to the bargain allegedly offered by Defendant and accepted by Plaintiffs, and not to expand Defendant‘s obligations beyond those expressed, and voluntarily agreed to, in the contract.
In Sanchez, the airline charged the plaintiff the contracted rate for a flight to Mexico. As a Mexican citizen, the plaintiff claimed the airline breached a contractual obligation to issue her a refund of the portion of the fare attributable to a tourism tax imposed by the Mexican government on noncitizens that the airline charged all passengers, regardless of citizenship. Sanchez, 590 F.3d at 1028. The Sanchez court found that, if the airline “made a contractual commitment to advise passengers about the Mexico tourism tax, not to collect it from exempt passengers, and to refund that portion of the price attributable to the tax,” then the contractual commitment would be enforceable under Wolens. Id. at 1030. But the court concluded that the airline made no such commitment-therefore, the airline had “no contractual obligation” to advise passengers or to take any action with respect to the “tourism tax.” Id.
at 1031. Consequently, the court affirmed the district court‘s dismissal of the plaintiff‘s claims as preempted by the ADA. Id. But unlike the instant case, the airline in Sanchez transported plaintiff at the agreed-upon rate and did not breach a self-imposed obligation. Here, Plaintiffs allege that the Defendant committed to transport them at the ticketed price yet breached that obligation by charging an additional fee not included in the ticketed price or disclosed in the Contract of Carriage.
The alleged obligation to provide transport at the ticketed price free from additional charges is a self-imposed undertaking, the alleged breach of which gives rise to a cause of action that Wolens protects from preemption. Wolens, 513 U.S. at 232-33. Accordingly, we reverse the district court‘s holding that the ADA preempts Plaintiffs’ breach of contract claim.
D. Plaintiffs Pled a Plausible Cause of Action for Breach of Contract
Defendant contends that if Plaintiffs’ claim is not preempted, the dismissal order could still be affirmed for the alternative reason that Plaintiffs failed to plead a term or terms of the contract that were allegedly breached. The district court declined to rule on this ground for dismissal, which appears to rely on the erroneous notion that Plaintiffs’ claim fails absent citation to an express term obligating Defendant to disclose the Exit Fee. While we may affirm dismissal on any ground supported by the record, Statton v. Fla. Fed. Jud. Nominating Comm‘n, 959 F.3d 1061, 1065 (11th Cir. 2020), the record here does not support dismissal for failure to state a claim.
(whether issued directly by Defendant or through an agent or other airline). Finally, the second amended complaint alleges that the contract provides that passengers pay a contractually-defined amount for transportation by Defendant, as reflected on the reservation ticket at the time of purchase, that Defendant failed to sufficiently disclose the requirement to pay additional fees, and that Defendant breached the contract by requiring Plaintiffs to pay the Exit Fee not disclosed in the contract. Plaintiffs’ plausible allegations, if true, establish breach of a valid contract by Defendant.7
That is not to say that Defendant does not have potentially viable defenses. For instance, Defendant notes that its Contract of Carriage identifies certain web pages as being “of interest” and that one of those web pages (“Fares and Other Charges for USA“) discloses that there may be charges for taxes and duties in addition to the fare. Defendant also references other web pages that it contends undermines Plaintiffs’ allegations. Defendant argued below in its motion to dismiss Plaintiffs’ second amended complaint that “[t]he operative Contract incorporate[d] by reference the unambiguous terms contained on [Defendant‘s] website” while Plaintiffs countered that the description of web pages as being “of interest”
did not provide direct and conspicuous notice that those web pages were incorporated by reference into the contract.
The district court did not address whether Defendant‘s Contract of Carriage incorporates those web pages by reference, or, if it does, how that disclosure should be interpreted in view of representations at ticketing that the charged fare includes all taxes and fees. Moreover, while describing its website disclosures in its responsive brief, Defendant did not develop an incorporation by reference argument on appeal with any citation to the applicable law, much less explain how those website disclosures should be interpreted in view of the alleged representation at ticketing that the charged fare included taxes and fees. We decline to consider these issues in the first instance,
III. CONCLUSION
For the reasons explained above, we REVERSE the decision of the district court and REMAND this case for further proceedings consistent with this opinion.
REVERSED AND REMANDED.