Neft v. United Continental Holdings, Inc. et al
Filing
62
MEMORANDUM OPINION AND ORDER Signed by the Honorable Robert M. Dow, Jr. on 3/5/2018. Civil case terminated. Mailed notice(cdh, )
IN THE UNITED STATES DISTRICT COURT FOR THE
NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION
HOWARD S. NEFT, on behalf of himself
and all others similarly situated,
Plaintiffs,
v.
UNITED CONTINENTAL HOLDINGS,
INC., and UNITED AIRLINES, INC.,
Defendants.
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No. 16-cv-765
Judge Robert M. Dow, Jr.
MEMORANDUM OPINION AND ORDER
Plaintiff Howard Neft (“Plaintiff”) brings this proposed class action on behalf of himself
and similarly situated plaintiffs against Defendants United Continental Holdings, Inc. (“UCH”)
and United Airlines, Inc. (“United”) (together, “Defendants”) for Defendants’ alleged breach of
contract arising out of their failure to provide bargained-for benefits to their “Silver Wings”
discount program lifelong members. Currently before the Court is Defendants’ motion for
summary judgment [49]. For the reasons explained below, Defendants’ motion [49] is granted.
Judgment will be entered in favor of Defendants and against Plaintiff.
I.
Background
The Court takes the relevant facts from the parties’ Local Rule 56.1 statements and
exhibits thereto, [51], [59], and [61]. The following facts are undisputed unless otherwise noted.
Plaintiff resides in Scottsdale, Arizona. He purports to bring this case on behalf of a
putative class defined as follows: All consumers who purchased a lifetime membership in United
Airlines, Inc.’s Silver Wings Plus Program. Defendant UHC is a Delaware corporation with its
principal place of business in Chicago, Illinois.1 Defendant United, a wholly-owned subsidiary
of UCH, is a corporation with its principal place of business in Chicago, Illinois.
This Court has subject matter jurisdiction over this action pursuant to 28 U.S.C. §
1332(d)(2) because (a) Plaintiff is a citizen of Arizona and Defendants are citizens of Illinois and
Delaware, (b) the number of members of the putative class exceeds 100, and (c) the aggregate
amount in controversy, per Plaintiff’s allegations, exceeds $5,000,000. Venue is proper in this
Court pursuant to 28 U.S.C. § 1391 because Defendants have their principal places of business in
this district.
In 1986, United made an offer to customers aged 55 and older to join a travel program
called Silver Wings Plus (“Silver Wings”). Silver Wings offered benefits through several of
United’s travel partners, including cruises, hotels, and car rentals, and also offered benefits
through United, including flight discounts, bonus miles, and mileage-based and “zone”-based
airfares. Generally speaking, “zoned” fares are divided into geographic destination zones, shown
in a grid that lists the flat fare for each zone, which allow travel at a fixed fare. Silver Wings
offered customers a choice of annual or lifetime memberships. Members joined Silver Wings by
paying a membership fee, which varied depending on the type of membership and the date
purchased.
From at least November 1995 through December 2002, Silver Wings was administered
by Relationship Management Partners, Inc. (“RMP”). During that period, RMP was responsible
for member acquisition, member retention, and member communications for the Silver Wings
program. RMP’s member acquisition activities included the creation and mailing of marketing
materials, referred to as acquisition mailings or packets, to potential Silver Wings members.
1
Plaintiff does not claim that anybody from UCH made any promises to him at the time he purchased his
Silver Wings membership. Plaintiff has never had any conversations with anybody from UCH about his
Silver Wings membership.
2
After individuals purchased a Silver Wings membership, they would be sent a packet of
membership materials, referred to as a fulfillment package, by RMP. Throughout the period that
RMP administered the Silver Wings program, the fulfillment packages included, among other
things, a membership card and a brochure that set forth the program’s membership policies (the
“Terms and Conditions”). In addition, RMP created and sent to members periodic newsletters
(“Member Reports”) highlighting the travel offers available to them.
Brad Harraman (“Harraman”) was the Vice President of Marketing Communications for
RMP from June 1999 through February 2002 and was responsible for the Silver Wings program
from November 1995 through December 2002. Harraman testified that when someone bought a
lifetime membership, “[t]hey would receive . . . welcome gifts, [and a] newsletters,” which
contained “a lot more travel offers that they could take advantage of.” [51-2] at 30. Harraman
agreed that “it would be fair to say a lifetime membership essentially was the opportunity to have
access to whatever benefits RMP was able to negotiate for its members,” which “[v]aried all the
time.” Id. Harraman also testified that no “zoned fares” were ever promised as a lifetime benefit
of Silver Wings, and more broadly that “[t]here were no lifetime benefits of Silver Wings,
entitlements that lasted forever”; “[e]verything has expiration.” Id. at 39-40. Further, Harraman
testified, the only thing that people were guaranteed to get in exchange for their $225
membership fee was “[w]hat was in the welcome—what was in the acquisition package.” [59-2]
at 12. According to Harraman, the “lifetime benefit would be getting—getting the monthly
communications and the other direct mails as long as the program—as long as the travel offers
were being procured.” Id. at 12-13.
At the end of 2002, United terminated its agreement with RMP and took back
administration of the Silver Wings program.
3
In 2005, United ceased selling lifetime
memberships in the Silver Wings program. In 2007, United discontinued offering Silver Wings
to non-lifetime members, and as of July 1, 2007, it no longer offered, activated, renewed or
extended annual Silver Wings memberships.
Plaintiff purchased a lifetime membership in Silver Wings on or about April 27, 2000 for
a fee of $225. Plaintiff testified that he joined Silver Wings after receiving a mailing via U.S.
mail, which contained “something that I had put my name on, signed it, and sent it back in.”
[59] at 6. Plaintiff believes he received the mailing “no more than two weeks” before he joined.
Id. Plaintiff testified that a contract was formed between him and United based on the mailing
that he received advertising Silver Wings. According to Plaintiff’s deposition testimony, the
contract included zoned airfares, which he believed would remain in effect (albeit at different
prices) for life. There is no longer any record of the specific acquisition mailing that was sent to
Plaintiff. However, Plaintiff admits that he has no basis to dispute that the mailing he received
inviting him to join the Silver Wings program was substantially similar to the standard
acquisition packet that RMP sent during 2000.
Harraman testified that RMP used a standard acquisition packet that changed very little
over the course of a year.
He further testified that an acquisition packet received by a
prospective member in March or April 2000 would have been “very similar” to acquisition
packets dating from February 2000 (when Plaintiff joined Silver Wings). [59] at 6. Harraman
produced the acquisition packets used in March and April 2000. See [51-4], [51-5]. However,
Harraman did not know specifically what Plaintiff received or have any first-hand knowledge of
the transaction involving Plaintiff.
The standard acquisition mailing sent by RMP in 2000 included a letter that highlighted
certain travel offers and benefits that were offered as enrollment bonuses or welcome gifts, and
4
also described the ongoing program benefits members could expect to receive. One of the
welcome gifts described was certificates to access “USA Collection” mileage-based fares for
free. [51-2] at 20.2 The standard acquisition mailing included an insert that described the USA
Collection as a “mileage-based fare structure,” where the fare for a flight was determined by the
number of miles being flown and the day of the week. For example, if a customer was flying
fewer than 500 miles on a Tuesday, the fare would be the same regardless of the starting or
ending cities; what mattered was the total number of miles traveled. The insert advised that the
fares were valid “between September 1, 1999, and August 31, 2000.” [59] at 10. The 2000
RMP acquisition mailings did not use the term “zone” airfares or include a map dividing the
United States into “zones.”
The standard acquisition packets that RMP sent out during 2000 included a brochure
inviting the recipient to “sign up . . . using the enclosed Membership Application.” [59] at 12.
That brochure also contained, under the heading “Terms and Conditions,” the following standard
language: “Silver Wings Plus and its partners reserve the right to withdraw any offer without
prior notice.” Id. The offer letter that was included in the acquisition packets further informed
prospective members that “[a]dditional details, including any restrictions, will be included with
your membership materials” and that new members who were not “completely satisfied” could
return the membership materials within 90 days of enrollment for a full refund. Id.
Once someone purchased a Silver Wings membership, RMP would send him or her a
“fulfillment package.” During the entire period when Harraman was supervising the Silver
Wings program—November 1995 through the end of 2002—the components of the fulfillment
package were essentially the same, although specific offers from travel partners could vary. The
2
For existing Silver Wings members, the USA Collection benefit allowed them to purchase certificates
that then gave them the ability to book USA Collection fares. See [51-2] at 20-21.
5
standard fulfillment package included a welcome letter, a “travel wallet” with the new member’s
membership card, the welcome gifts, and the Silver Wings Terms and Conditions. If a member
received his or her card, it would have come in a package that included the Terms and
Conditions. The Terms and Conditions were also posted on the Silver Wings website during
2000.
The Terms and Conditions contained in the standard fulfillment package at the time
Plaintiff enrolled included the following provisions: “Silver Wings Plus and its partners reserve
the right to substitute or withdraw any offers or to limit their availability at any time. Terms,
policies, and conditions of Silver Wings Plus services are subject to change at any time. United
Airlines reserves the right to terminate the Silver Wings Plus Program with 12 months’ notice.”
[59] at 13. The Terms and Conditions also included the following refund provision: “The
membership fee is refundable during the first 90 days of membership only, upon return of
complete membership kit including membership card, United Airlines Travel Certificates and
Partner Welcome Gift Certificates. Any Mileage Plus bonus miles resulting from Silver Wings
Plus enrollment will be forfeited.” Id.
Plaintiff admits receiving his Silver Wings’ membership card by U.S. mail. Plaintiff also
admits that he has no basis to dispute that after joining Silver Wings he received membership
materials that were substantially similar to the standard RMP fulfillment package, including the
Terms and Conditions. Nonetheless, Plaintiff also denies that he was provided the Terms and
Conditions at the time he joined Silver Wings and denies that the Terms and Conditions formed
part of the contractual relationship between him and United. [59] at 16.
Plaintiff did not seek a refund within the first 90 days of his Silver Wings membership
and did not return the membership kit.
Plaintiff received 5,000 MileagePlus miles as an
6
enrollment bonus and more than 12,000 additional MileagePlus bonus miles since 2005 due to
his status as a Silver Wings member. Plaintiff admits that he “got some value out of the [Silver
Wings] program in the beginning” of his membership and recollected that he was “successful” in
booking zoned fares shortly after he joined Silver Wings in the early 2000’s. [59] at 15.
From the time Plaintiff enrolled until September 2005, the Terms and Conditions always
included all three of the following provisions:
Silver Wings Plus and its partners reserve the right to substitute or withdraw any
offers or to limit their availability at any time.
Terms, policies, and conditions of Silver Wings Plus services are subject to
change at any time. United Airlines reserves the right to terminate the Silver
Wings Plus Program with 12 months’ notice.
The membership fee is refundable during the first 90 days of membership only,
upon return of complete membership kit including membership card, United
Airlines Travel Certificates and Partner Welcome Gift Certificates. Any Mileage
Plus bonus miles resulting from Silver Wings Plus enrollment will be forfeited.
The USA Collection changed from a mileage-based structure to a zone-based structure
sometime in 2001.
In September 2005, United revised the Terms and Conditions. The revised Terms and
Conditions included the following statement concerning their applicability: “Effective Date—
these Terms and Conditions shall be effective September 6, 2005 and shall apply to all
memberships in the Silver Wings Plus Program issued on or after that date. The terms and
conditions applicable to memberships issued prior to September 6, 2005 shall be those displayed
on the Program web site when the respective member logs-in.” [59] at 16-17.
Plaintiff disputes that the revised Terms and Conditions apply to him. Plaintiff testified
at his deposition that his contract with United provided in part that “when you reached the age of
55, you would be offered these zoned airfares that United would have on their Silver Wings
Program” and that he “would be able to use the zoned airfares for the rest of [his] life or
7
United’s, whichever came first.” [59] at 17. He further testified that United promised that zoned
fares for “certain flights between certain zones, cities” would be “readily available” for the rest
of his life, although he “assume[d]” the prices would rise over time. Id. at 18. Plaintiff
understood “zoned fares” to mean “[t]hat you would get a special fare if you traveled within one
zone or another airfare, if you traveled two zones, and I believe there was three zones across the
country,” and “[i]t would be it a different fare for one to three, whatever zones you traveled
through or to.” Id. When he was asked “when you say ‘zones across the country,’ are you
referring to the country sort of being divided up,” Plaintiff responded: “Into the three zones. I
think I do have a picture in mind of a map, almost like time zones.” Id. Plaintiff testified that he
did not understand the “USA Collection” described in the 2000 RMP acquisition mailings to
refer to what he described as zoned airfare. [51-7] at 14. When asked whether United promised
him that “in September/October 2011 you would be able to fly roundtrip between Chicago and
Phoenix for less than $133.90,” Plaintiff responded that United “never made a price promise of
anything,” and never promised that zoned fares would be cheaper than other available fares. [59]
at 27. Plaintiff also admitted that during the limited period of time that Harraman’s testimony
covered, there was no express promise that zoned airfares would be available for every flight,
would be presented in a specific zoned grid, or would always be the cheapest fare.
Since 2007, United has represented that it continues to offer zoned fares to Silver Wings
lifetime members; however, Plaintiff denies that United has actually continued to make such
fares available. Between January 1, 2007 and January 30, 2016, there were 5,048 Silver Wings
zoned fare bookings, with zoned fare bookings taking place every year. Defendant did not make
any of these bookings.
8
Between the early 2000s and 2012 or 2013, Plaintiff “basically forgot about” the Silver
Wings program and made no attempt to use it. [59] at 22. Between January 1, 2006 and 2012 or
2013, Plaintiff did not try to book any zoned airfares and did not take any actions to determine
whether they were available. But at some point in 2013, Plaintiff tried to book zoned airfare and
to determine if zoned airfare was still available. Plaintiff’s interrogatory response about these
attempts states:
[S]ince January 1, 2006, [Plaintiff] made at least two or three attempts to book a
flight using zoned airfares but was unable to. Plaintiff does not recall the exact
dates, but does recall making such an attempt in 2013. In 2013 Plaintiff attempted
to book a flight, he believes between Phoenix and Chicago, both online and
through an ‘800’ number. The first couple of agents he spoke with had no
knowledge of the Silver Wings Program or ‘zoned airfares.’ Eventually,
[Plaintiff] spoke with an agent who was familiar with the Silver Wings program.
She told Mr. Neft the program had been discontinued and there were no zoned
airfares available.
At about the same time in 2013, [Plaintiff] tried to book on United’s website
through a Silver Wings Plus page, which displayed no available fares and a
message saying he should call the ‘800’ number he had previously called, for the
availability of zoned airfares and to book the reservation. Plaintiff also went to
the United ticket counter in the Phoenix airport, and the agent behind the counter
told him he could call the ‘800’ number for Silver Wings Plus to see [i]f zoned
airfares were still being offered to Silver Wings Plus members.
[59-4] at 8-9.3
3
Defendants argue that the statements allegedly made by its agents to Plaintiff are hearsay “to the extent
[Plaintiff] seeks to introduce [them] for their truth—i.e., that the Silver Wings program had been
discontinued.” [61] at 3. As discussed below, however, Plaintiff is opposing summary judgment on the
basis that United breached its contract by failing to provide him with the zoned fares that United contends
it continues to make available to Silver Wings members. Thus, the statements of United’s agents are
offered as evidence of the breach, not as evidence that Silver Wings has in fact been discontinued, and are
not hearsay. See La Playita Cicero, Inc. v. Town of Cicero, Illinois, 175 F. Supp. 3d 953, 962 n.6 (N.D.
Ill. 2016) (statement was not hearsay where “statement [was] not being offered for the truth of the matter
asserted,” and “[r]ather, Plaintiffs [we]re implying that the statement was untrue”). In addition, a
statement made by United’s agent about the availability of zoned fares would not be hearsay to the extent
that “[t]he statement is offered against an opposing party and . . . was made by the party’s agent or
employee on a matter within the scope of that relationship while it existed.” Fed. R. Evid. 801(d)(2).
9
Between January 1, 2007 and January 19, 2016, United issued 43 tickets to Plaintiff;
none were purchased using zoned airfare.
There were seven flights that Plaintiff booked
between January 1, 2007 and 2012 where a zoned fare was available, the zoned fare was cheaper
than the fare that Plaintiff paid, and the booking met zoned fare requirements. However, all of
those flights were booked during the time when Plaintiff had “forgotten” about the program, and
Plaintiff concedes that he did not try to book a zoned fare for any of those flights. From
September 2010 to January 19, 2016, Plaintiff booked five flights on United. Three of those
flights were purchased using mileage redemptions, such that zoned fares would not be available.
Defendant maintains that zoned fares were available for the other two flights, but were more
expensive than the non-zoned fares that Plaintiff paid; Plaintiff disputes that the fares were
actually available to him.
In this lawsuit, Plaintiff, on behalf of himself and other lifetime members of Silver
Wings, seeks to recover the one-time $225 fee that he paid to join Silver Wings, plus attorneys’
fees and costs. His complaint contains one count, for breach of contract. The complaint alleges
that he and other members of the class entered into a contractual relationship with Defendants
when they signed up to become Silver Wings lifetime members. The complaint further alleges
that while Plaintiff no longer has copies of the documents from United which describe Silver
Wings and its benefits, these documents are (on information and belief) in Defendants’ exclusive
custody and control. According to Plaintiff, Defendants breached their obligations to lifetime
members of Silver Wings and failed to honor their obligation of good faith and fair dealing, by:
(1) failing to provide zones air fares, either over the phone or online; (2) representing in bad faith
that Silver Wings members have access to zoned fares, when in fact that is not the case; and (3)
failing to refund membership fees when United ceased offering zoned fares.
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II.
Summary Judgment Standard
Summary judgment is proper where “the movant shows that there is no genuine dispute
as to any material fact and the movant is entitled to judgment as a matter of law.” Fed. R. Civ. P.
56(a). “A party asserting that a fact cannot be or is genuinely disputed must support the assertion
by … citing to particular parts of materials in the record” or “showing that the materials cited do
not establish the absence or presence of a genuine dispute, or that an adverse party cannot
produce admissible evidence to support the fact.” Fed. R. Civ. P. 56(c)(1). A genuine issue of
material fact exists if “the evidence is such that a reasonable jury could return a verdict for the
nonmoving party.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). The party
seeking summary judgment has the burden of establishing the lack of any genuine issue of
material fact. See Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). The Court “must construe
all facts and draw all reasonable inferences in the light most favorable to the nonmoving party.”
Majors v. Gen. Elec. Co., 714 F.3d 527, 532-33 (7th Cir. 2013) (citation omitted).
To avoid summary judgment, the nonmoving party must go beyond the pleadings and
“set forth specific facts showing that there is a genuine issue for trial.” Liberty Lobby, 477 U.S.
at 250. Summary judgment is proper if the nonmoving party “fails to make a showing sufficient
to establish the existence of an element essential to that party’s case, and on which that party will
bear the burden of proof at trial.” Ellis v. CCA of Tennessee LLC, 650 F.3d 640, 646 (7th Cir.
2011) (quoting Celotex, 477 U.S. at 322). The non-moving party “must do more than simply
show that there is some metaphysical doubt as to the material facts.” Matsushita Elec. Indus.
Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 586 (1986). In other words, the “mere existence
of a scintilla of evidence in support of the [non-movant’s] position will be insufficient; there
11
must be evidence on which the jury could reasonably find for the [non-movant].” Anderson, 477
U.S. at 252.
III.
Analysis
A.
UCH
Plaintiff concedes that UCH is entitled to summary judgment based on the undisputed
fact that it was not a party to any contract with Plaintiff. See [58] at 1 n.1 Therefore, UCH is
entitled to summary judgment in its favor and against Plaintiff on all claims.
B.
United
Under Illinois law, which the parties agree governs here, “[t]he elements of a claim for
breach of contract are (1) the existence of a valid and enforceable contract; (2) substantial
performance by the plaintiff; (3) breach of contract by the defendant; and (4) resultant injury to
the plaintiff.” Avila v. CitiMortgage, Inc., 801 F.3d 777, 786 (7th Cir. 2015) (citing W.W.
Vincent & Co. v. First Colony Life Ins. Co., 814 N.E.2d 960, 967 (2004)). In its motion for
summary judgment, United argues that Plaintiff cannot establish the first, third, or fourth
elements of breach of contract.
In particular, United argues (among other things) that it is entitled to summary judgment
on Plaintiff’s breach of contract claim because the Terms and Conditions, which are part of
Plaintiff’s contract, provide that “Silver Wings and its partners reserve the right to substitute or
withdraw any offers, or to limit their availability, at any time”; that the “[t]erms, policies, and
conditions of Silver Wings Plus services are subject to change at any time”; and that United
“reserves the right to terminate the Silver Wings Plus Program with 12 months’ notice.” [50] at
13. According to United, these provisions give it an absolute right to cease offering zoned
12
airfare, and therefore Plaintiff cannot demonstrate that United breached its contract with Plaintiff
by allegedly failing to make available zoned airfares.
In response, Plaintiff essentially concedes that the Terms and Conditions are applicable to
him4 and makes no attempt to argue, as he did in his deposition, that his contract with United
required United to make zoned fares available to Silver Wings members for their lifetime. See
[58] at 4. Plaintiff argues, however, that since the undisputed evidence is that United does still
offer zoned airfares to Silver Wings members, United breached its contract with him by denying
him access to those zoned airfares when he attempted to buy them. See id. at 4, 6 (arguing that
“Defendants have admitted that United has continued to offer zone fares to Silver Wings lifetime
members to this day,” which is “an undertaking by United which permits Plaintiff to assert his
common law rights”; and that United’s contractual right to modify the Silver Wings program is
“irrelevant to Plaintiff’s claim … based upon United’s continued policy of offering zone fares to
Silver Wings lifetime members”).
4
Although there is no existing record of the particular fulfillment packet that Plaintiff was sent when he
joined Silver Wings, it is undisputed that Plaintiff received his Silver Wings membership card by U.S.
mail and that, at the time Plaintiff joined, membership cards were sent to new members as part of a
standard fulfillment packet that also included the Terms and Conditions. Plaintiff admitted in his
deposition that he has no basis to dispute that he received the standard Silver Wings fulfillment packet
after he joined and no basis to dispute that he received the Terms and Conditions. Plaintiff also
admittedly understood that Silver Wings had membership policies that applied to him. And Plaintiff
chose not to return the membership materials for a full refund within ninety days, as the Terms and
Conditions informed him he could. Therefore, to the extent that Plaintiff contests the issue at all, the
Court concludes that Plaintiff is bound by the Terms and Conditions. Cf. Hill v. Gateway 2000, Inc., 105
F.3d 1147, 1149-50 (7th Cir. 1997) (buyer of computer was bound by terms of contract that was shipped
to buyer with the computer, where buyer did not return computer within 30 days as required by the
contract); ProCD, Inc. v. Zeidenberg, 86 F.3d 1447, 1450-52 (7th Cir. 1996) (buyer of computer software
was bound by terms of license enclosed with the software); Spivey v. Adaptive Marketing, LLC, 660 F.
Supp. 2d 940, 943-49 (S.D. Ill. 2009) (plaintiff who purchased membership in discount club through
telemarketer was bound by written membership agreement sent after the transaction).
13
The Court concludes that United is entitled to summary judgment on Plaintiff’s breach of
contract claim because Plaintiff has not presented any evidence that he was denied the right to
purchase any zoned airfares that United made available to Silver Wings customers or that he
suffered any injury. The only zoned fare that Plaintiff allegedly attempted to purchase was (he
believes) for a flight between Phoenix and Chicago on an unspecified date in 2013. According
to Plaintiff, United’s agents either had no knowledge of the Silver Wings Program or zoned
airfares or told him that the program had been discontinued and that no zoned fares were
available. However, Plaintiff presents no evidence that United did, in fact, offer zoned airfare
between Phoenix and Chicago for the date he wished to travel (a date that he did not specifically
recall). Such evidence would be essential to his claim that he was not allowed to access a zoned
fare that United purported to make available to Silver Wings customers, given his concession
that United has a right to withdraw and limit any offers and therefore does not have a contractual
obligation to offer zoned airfare generally or on any particular routes.
Plaintiff alleges more generally that United agents told him, wrongly, that the Silver
Wings program had been discontinued and that no zoned airfares were available. But Plaintiff
has no evidence that those alleged misrepresentations caused him any injury. That is, Plaintiff
does not identify any benefits that he could and would have obtained if he had been correctly
informed that the Silver Wings program was still operating and offering some zoned fares.
Instead, Defendant has come forward with undisputed evidence that between 2013 (when
Plaintiff remembered he was a Silver Wings member and attempted to access the program’s
benefits) and January 19, 2016, Plaintiff booked five flights on United. Three of those flights
were purchased using mileage redemptions, such that zoned fares would not be available. Zoned
fares were available for the other two flights (according to Defendant), but were more expensive
14
than the non-zoned fares that Plaintiff paid. In short, Plaintiff has come forward with no
evidence that he was harmed in any way by the United agents’ alleged misrepresentations, and
United is entitled to summary judgment on the breach of contract claim. See In re Illinois Bell
Telephone Link-Up II, 994 N.E.2d 553, 558 (Ill. App. 2013) (“Damages are an essential element
of a breach of contract action and a claimant’s failure to prove damages entitles the defendant to
judgment as a matter of law.”); Walker v. Ridgeview Const. Co., Inc., 736 N.E.2d 1184, 1187
(Ill. App. 2000) (where plaintiff failed to prove that it suffered damages, an essential element of
a breach of contract action, defendant was entitled to a directed finding as a matter of law).
Finally, the Court agrees with United that Plaintiff’s damages demand is preempted by
the Airline Deregulation Act (“ADA”).
The ADA prohibits states from “enact[ing] or
enforc[ing] a law, regulation, or other provision having the force and effect of law related to a
price, route, or service of an air carrier[.]” 49 U.S.C. § 41713(b)(1). This preemption clause
“stops States from imposing their own substantive standards with respect to rates, routes, or
services, but not from affording relief to a party who claims and proves that an airline dishonored
a term the airline itself stipulated.” Am. Airlines, Inc. v. Wolens, 513 U.S. 219, 232-33 (1995).
“This distinction between what the State dictates and what the airline itself undertakes confines
courts, in breach-of-contract actions, to the parties' bargain, with no enlargement or enhancement
based on state laws or policies external to the agreement.” Id. at 233.
In this case, the only remedy that Plaintiff requests is “restitution” in the form of a refund
of the $225 members fee. This remedy is outside the terms of United’s contract with Plaintiff. It
is undisputed that under the Terms and Conditions, “[t]he membership fee is refundable during
the first 90 days of membership only” and that Plaintiff did not seek a refund within 90 days.
[59] at 12, 14. Plaintiff argues that the ADA and Wolens do not bar his demand for a refund
15
because United dishonored a term that it stipulated, namely its self-imposed undertaking to
continue making zoned airfares available to lifetime Silver Wings members. Plaintiff argues that
this “creates an obligation which is enforceable in a breach of contract action.” [58] at 7. Be
that as it may, there is no evidence that United ever undertook an obligation to provide a refund
of the membership fee if its agents wrongly informed a Silver Wings member that zoned fares
were unavailable (or for any other reason). Instead, that remedy is foreclosed by the plain
language of the Terms and Conditions. Cf. Schultz v. United Airlines, Inc., 797 F. Supp. 2d
1103, 1106 (W.D. Wash. 2011) (“Plaintiff’s claims for a refund of the baggage fee as a result of
the alleged breach of contract employ external state law to enlarge an existing agreement
regarding baggage transport.”). This does not mean that the refund provision of the Terms and
Condition would bar any damages claim. For instance, Plaintiff might have calculated damages
as the difference between a fare he ended up paying and the (presumably lower) zoned fare that
United contends was available for the same route. But Plaintiff seeks only the return of his
membership fee, and this remedy is contrary to the Terms and Conditions’ limitation on refunds
and thus is barred by the ADA.5
5
Plaintiff’s complaint also alleges that United violated its duty of good faith and fair dealing; however,
Plaintiff clarifies in his response to summary judgment that his claims “are based upon United failure to
comply with its own … express undertaking to offer zoned fares to lifetime Silver Wings members by
denying such fares to [P]laintiff.” [58] at 8. Therefore, according to Plaintiff, the “Court does not really
have to address” United’s argument that the ADA preempts any state-law claim that is based on an
alleged breach of the implied covenant of good faith and fair dealing.
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IV.
Conclusion
For the foregoing reasons, Defendants’ motion for summary judgment [49] is granted.
Judgment will be entered in favor of Defendants and against Plaintiff.
Dated: March 5, 2018
____________________________
Robert M. Dow, Jr.
United States District Judge
17
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