Capua v. Air Europa Lineas Aereas S.A. Inc.

PETER CAPUA, Plaintiff, v. AIR EUROPA LINEAS AEREAS S.A. INC., Defendant.

CASE NO. 20-CV-61438-RAR

UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF FLORIDA

March 15, 2021

ORDER GRANTING MOTION TO COMPEL ARBITRATION

Before the Court is Defendant Air Europa Lineas Aereas S.A. Inc.'s Motion to Dismiss Plaintiff's First Amended Complaint and Compel Arbitration [ECF No. 13] ("Motion"). Having considered the Motion, Plaintiff's Response [ECF No. 21],¹ Defendant's Reply [ECF No. 25], the record, and applicable law, it is hereby

ORDERED AND ADJUDGED that Defendant's Motion [ECF No. 13] is GRANTED IN PART and DENIED IN PART as set forth herein.

BACKGROUND

Plaintiff Peter Capua ("Capua") commenced this putative class action against Defendant Air Europa Lineas Aereas S.A. Inc. ("Air Europa") in July 2020. See Compl. [ECF No. 1]; First Amended Complaint [ECF No. 5] ("Am. Compl."). Capua alleges that Air Europa "cancelled"²his flights in the wake of the COVID-19 pandemic and then refused to refund his travel fares—which he contends is a violation of Air Europa's Conditions of Carriage providing that passengers have contractual rights to refunds when "an airline either cancels a flight or a flight is significantly delayed, regardless of the reason the airline cancels the flight or the reason for the significant delay." Am. Compl. ¶¶ 4, 6, 40.

A. Capua Purchases Air Travel Tickets on Expedia.Com

Capua purchased three non-refundable tickets to travel from Miami, Florida to Porto, Portugal, departing on August 4, 2020 and returning on August 11, 2020.³ Am. Compl. ¶¶ 6, 34. He purchased the tickets through the online travel agency Expedia.com. Id. ¶ 28. The Terms of Use ("Expedia's TOU"),⁴ which Capua agreed to in order to purchase the airline tickets on Expedia.com, state in relevant part:

DISPUTES

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Any and all Claims will be resolved by binding arbitration, rather than in court, except you may assert Claims on an individual basis in small claims court if they qualify. This includes any Claims you assert against us, our subsidiaries, travel suppliers or any companies offering products or services through us (which are beneficiaries of this arbitration agreement). This also includes any Claims that arose before you accepted these Terms of Use, regardless of whether prior versions of the Terms of Use required arbitration.

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Any and all proceedings to resolve Claims will be conducted only on an individual basis and not in a class, consolidated or representative action. If for any reason a Claim proceeds in court rather than in arbitration we each waive any right to a jury trial. The Federal Arbitration Act and federal arbitration law apply to this agreement.

Reply, Ex. 1 at 2-3 (emphasis added). Additionally, Expedia's TOU also states:

SUPPLIER RULES AND RESTRICTIONS

Additional terms and conditions will apply to your reservation and purchase of travel—related goods and services that you select. Please read these additional terms and conditions carefully. In particular, if you have purchased an airfare, please ensure you read the full terms and conditions of carriage issued by the travel supplier, which can be found on the supplier's website. You agree to abide by the terms and conditions of purchase imposed by any supplier with whom you elect to deal, including, but not limited to, payment of all amounts when due and compliance with the supplier's rules and restrictions regarding availability and use of fares, products, or services. Airfare is only guaranteed once the purchase has been completed and the tickets have been issued. Airlines and other travel suppliers may change their prices without notice. We reserve the right to cancel your booking if full payment is not received in a timely fashion.

Id. at 5 (emphasis added and in original).

B. Air Europa's Conditions of Carriage

When a passenger purchases a ticket for an Air Europa flight, he enters into a contract of carriage with Air Europa which is governed by the airline's Conditions of Carriage ("COC"). Air Europa's COC provides, in relevant part:⁵

1. DEFINITIONS

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CONDITIONS OF CONTRACT

Mean those statements contained in, or delivered with, the Ticket or Itinerary receipt (Printed Itinerary), identified as such and which incorporates, by reference, these Conditions of Carriage.

Conditions of Carriage, Art. 1. Air Europa's COC explains that "[s]ome Tickets are sold at discounted fares, which may be partially or completely non-refundable." Id., Art. 3 Sec. 1. With respect to passengers seeking refunds, the COC groups passengers into two categories: (1) those affected by "involuntary" cancellations, which occur when Air Europa cancels a flight; and (2) "voluntary" cancellations, which occur when a passenger cancels their flight. Id., Art. 10, Sec. 2-3.

For a "voluntary" cancellation of a refundable ticket, the COC allows for a refund, provided that certain conditions are met. Id. But for a "voluntary" cancellation of a non-refundable ticket, the COC does not. Id. Specifically, the COC provides that a refund is not applicable "when the fare conditions state that cancellation or refund is not allowed, or Tickets are bearing a 'NON-REFUNDABLE' or 'NO REEMBOLSABLE' remark." Id., Art. 10, Sec.3(b); see also Art. 10, Sec. 5(f).

C. Procedural History

Capua filed this action on behalf of a putative class consisting of all persons who purchased tickets for travel with Air Europa in the United States from March 1, 2020, onward, and who were not issued a refund for a "cancelled flight," or for those flights that were significantly delayed. Am. Compl. ¶ 42. Air Europa, relying on the arbitration clause in Expedia's TOU, moves to compel arbitration of Capua's claims against it. In support, Air Europa notes that Capua's claims directly relate to the tickets he purchased through Expedia.com. In other words, according to Air Europa, "in purchasing his tickets through Expedia, Plaintiff agreed to resolve any claims against Expedia's travel suppliers (such as Air Europa) through binding, individual arbitration - and further agreed that the arbitration agreement could be enforced by travel suppliers, such as Air Europa." Mot. at 8. In the alternative, Air Europa moves to dismiss Capua's claims pursuant to Federal Rules of Civil Procedure 8(a), 10(b), 12(b)(1) and 12(b)(6).⁶

LEGAL STANDARD

A. Federal Arbitration Act

The Federal Arbitration Act ("FAA"), 9 U.S.C. § 1 et seq., governs the enforceability of an arbitration agreement. Under the FAA, arbitration agreements are "valid, irrevocable, and enforceable." 9 U.S.C. § 2. The FAA "leaves no room for the exercise of discretion by a district court, but instead mandates that district courts shall direct the parties to proceed to arbitration on issues as to which an arbitration agreement has been signed." Dean Witter Reynolds, Inc. v. Byrd, 470 U.S. 213, 218 (1985) (emphasis in original) (citing 9 U.S.C. §§ 3-4).

Whether an arbitration agreement exists at all is "simply a matter of contract." Burch v. P.J. Cheese, Inc., 861 F.3d 1338, 1346 (11th Cir. 2017). Here, although the parties do not offer any meaningful choice-of-law analysis, for the reasons stated below (see infra B), the Court finds that Florida law governing "the validity, revocability, and enforceability of contracts generally" controls this dispute. See Arthur Andersen LLP v. Carlisle, 556 U.S. 624, 631 (2009). Although federal courts apply state contract law in determining the existence of an agreement to arbitrate, "federal policy favoring arbitration is taken into consideration even in applying ordinary state law." Caley v. Gulfstream Aerospace Corp., 428 F. 3d 1359, 1368 (11th Cir. 2005).

Under Florida law, courts must consider three factors when ruling on a motion to compel arbitration: "(1) whether a valid written agreement to arbitrate exists; (2) whether an arbitrable issue exists; and (3) whether the right to arbitration was waived." Seifert v. U.S. Home Corp., 750 So. 2d 633, 636 (Fla. 1999). "[D]oubts about the scope of an arbitration agreement, as well as any questions about waivers thereof, are in favor of arbitration, rather than against it." Breckenridge v. Farber, 640 So. 2d 208, 210 (Fla. 4th DCA 1994). However, "[t]he party seeking enforcement of an agreement has the burden of establishing that an enforceable agreement exists." CEFCO v. Odom, 278 So. 3d 347, 352 (Fla. 1st DCA 2019). And, "no party may be forced to submit a dispute to arbitration that the party did not intend and agree to arbitrate." Seifert, 750 So. 2d at 636.

B. State Contract Law

In this case, the parties have not provided a meaningful choice of law analysis. Instead, they assume Florida law applies. Air Europa relies primarily on Eleventh Circuit authority applying Florida law, and Capua does not contend otherwise. Expedia's TOU provides that the applicable law is the FAA, federal arbitration law, and for reservations made by U.S. residents, the laws of the state in which the purchaser's billing address is located. Reply, Ex. 1 at 23. Capua is a resident of the State of Florida. See Am. Compl. ¶ 9. Thus, assuming his billing address is inFlorida, Florida law and federal arbitration law govern here in accordance with Expedia's TOU. Therefore, the Court applies Florida law, as well as federal arbitration law, in its analysis of the arbitration clause under Expedia's TOU.

ANALYSIS

As explained above, Air Europa maintains that Capua agreed to arbitrate any claim relating to his ticket purchase when he agreed to Expedia's TOU. Air Europa contends that, although it is a non-signatory to Expedia's TOU, it may nevertheless invoke arbitration and bind Capua to his agreement to arbitrate under the express terms of the arbitration clause in the TOU. In the alternative, Air Europa argues that Capua should be required to arbitrate his claims because, while it is not a signatory, it is a third-party beneficiary of Expedia's TOU.

In opposition, Capua contends the arbitration clause he agreed to when he purchased his...