Sholopa v. Turk Hava Yollari A.O., Inc.

595 F.Supp.3d 257

Svetlana SHOLOPA and Milica Milosevic, on behalf of themselves and all others similarly situated, Plaintiffs,

v.TURK HAVA YOLLARI A.O., INC., (d/b/a Turkish Airlines, a foreign corporation), and Turkish Airlines, Inc., a New York Corporation, Defendants.

20-CV-3294 (ALC)

United States District Court, S.D. New York.

Signed March 31, 2022

David Dubin, Liddle & Dubin, P.C., Detroit, MI, Nicholas Alexander Coulson, Liddle Sheets Coulson P.C., Detroit, MI, for Plaintiffs.

Stephen Mark Dollar, Norton Rose Fulbright US LLP, New York, NY, for Defendants.

ORDER DENYING MOTION TO DISMISS

ANDREW L. CARTER, JR., United States District Judge:

Plaintiffs purchased tickets for flights on Turkish Airlines that were canceled due to the COVID-19 pandemic. Sholopa purchased her ticket through a third-party travel website; Milosevic purchased her tickets directly from Turkish Airlines. Both Plaintiffs allege that the airline's refusal to issue refunds constitutes a breach of the General Conditions of Carriage, a contract between the parties. Defendants move to dismiss on several grounds: a) Plaintiff Sholopa lacks standing, or her claim is moot because she received a refund after she brought the lawsuit; b) a forum selection clause on the airline's website mandates that Milosevic's claim be brought in the Istanbul/ Bakirkoy Courts; c) the Airline Deregulation Act preempts the claims; d) the complaint fails to state claim for breach of contract.

Since Sholopa had standing at the time her original complaint was filed, her standing endures. Sholopa could still receive an award for being a lead plaintiff; therefore, the defendants’ post-lawsuit issuance of a refund has not mooted her claim. Milosevic's claim for breach of the conditions of carriage is not subject to the forum selection clause. The Airline Deregulation Act does not preempt breach of contract claims, and Plaintiffs have sufficiently pleaded a claim for breach of contract.

The motion is denied.

PROCEDURAL HISTORY

Plaintiff Sholopa filed the original complaint on April 27, 2020; she filed an amended complaint on June 11, 2020. Plaintiff Milosevic, in 20-cv-3328, filed a complaint on April 28, 2020. On October 13, 2020, I granted a motion to consolidate these cases. The Consolidated, Second Amended Complaint was filed on October 23, 2020; Defendants moved to dismiss on November 13, 2020. Plaintiffs opposed the motion on December 18, 2020; Defendants filed a reply on January 8, 2021. On February 11, 17, and March 31, 2021, Plaintiffs filed notices of supplemental authority. Defendants filed responses on February 17, 25, and April 6, 2021.

LEGAL STANDARDS

"To defeat a 12(b)(1) motion, a plaintiff must establish subject matter jurisdiction by a preponderance of the evidence." Vullo v. Office of the Comptroller of the Currency , 17 Civ. 3574, 2017 WL 6512245, at *5 (S.D.N.Y. Dec. 12, 2017) (citing Makarova v. United States , 201 F.3d 110, 113 (2d Cir. 2000) ). "When considering a Rule 12(b)(1) motion, the court " "must take all uncontroverted facts in the complaint ... as true, and draw all reasonable inferences in favor of the party asserting jurisdiction." " Batalla Vidal v. Duke , 295 F. Supp. 3d 127, 146 (E.D.N.Y. 2017) (quoting Tandon v. Captain's Cove Marina of Bridgeport, Inc. , 752 F.3d 239, 243 (2d Cir. 2014) ).

To survive a Rule 12(b)(6) motion to dismiss, a complaint must "provide the grounds upon which [the] claim rests." ATSI Commc'ns. Inc. v. Shaar Fund Ltd. , 493 F.3d 87, 98 (2d Cir. 2007) ; see also Fed. R. Civ. P. 8(a)(2) ("A pleading that states a claim for relief must contain ... a short and plain statement of the claim showing that the pleader is entitled to relief...."). To meet this standard, plaintiff must allege "enough facts to state a claim to relief that is plausible on its face." Bell Atl. Corp. v. Twombly , 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007). "A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Ashcroft v. Iqbal , 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009). The court accepts as true all factual allegations in the complaint and draws all reasonable inferences in plaintiff's favor. ATSI Commc'ns, 493 F.3d at 98. However, that tenet "is inapplicable to legal conclusions." Iqbal , 556 U.S. at 678, 129 S.Ct. 1937. Thus, a pleading that offers only "labels and conclusions" or "a formulaic recitation of the elements of a cause of action will not do." Twombly , 550 U.S. at 555, 127 S.Ct. 1955. If the plaintiff "ha[s] not nudged [its] claims across the line from conceivable to plausible, [its] complaint must be dismissed." Id. at 570, 127 S.Ct. 1955.

ANALYSIS

1) Plaintiff Sholopa Has Standing, And Her Claim Is Not Moot.

After the original complaint was filed, but before the filing of the consolidated complaint, Plaintiff Sholopa received a refund. As a result, Defendants move to dismiss for lack of subject matter jurisdiction, claiming that Sholopa lacks standing or her claim is moot.

To establish standing, "[t]he plaintiff must have 1) suffered an injury in fact, 2) that is fairly traceable to the challenged conduct of the defendant, and 3) that is likely to be redressed by a favorable judicial decision." Spokeo, Inc. v. Robins , 578 U.S. 330, 136 S. Ct. 1540, 1547, 194 L.Ed.2d 635 (2016). If someone has been fully compensated for an injury, they may lack standing, or the claim may be moot; for courts in this circuit, the difference is a matter of timing. "Standing and mootness are interrelated concepts, but are not to be confused. Standing relates to whether a litigant has a stake at the commencement of an action, while mootness ensures the litigant's interest exists " "throughout the life of the lawsuit" " Samele v. Zucker , 324 F. Supp. 3d 313, 326 (E.D.N.Y. 2018), citing Comer v. Cisneros , 37 F. 3d 775, 797-798 (2d Cir. 1994) (internal citations and quotation marks omitted). If the party receives full compensation before bringing suit, that party lacks standing. If the party receives full compensation after the suit is commenced, the claim is moot.

Sholopa received a refund after the lawsuit started, but before the consolidated complaint was filed. The defendants claim that the amended complaint renders the original complaint nugatory; therefore, the case began anew when the consolidated complaint was filed, depriving Sholopa of standing. This argument fails.

Although an amended complaint renders the original complaint void in many aspects, it does not supplant the original complaint as the document that initiated the lawsuit. See Edelhertz v. City of Middletown , No. 12-cv-1800 VB, 2013 WL 4038605, at *3 (S.D.N.Y. May 6, 2013) ("Because plaintiff had standing to challenge the law at the time his original complaint was filed, plaintiff has standing to assert the claims set forth in the amended complaint."). At the time the original complaint was filed, establishing the onset of the case, Sholopa had standing: she had 1) suffered an injury in fact, 2) that is fairly traceable to the challenged conduct of the defendant, and 3) that is likely to be redressed by a favorable judicial decision. Therefore, she still has standing.

The next question is whether her case is mooted by the payment of the expenses for her ticket. An unaccepted settlement offer does not moot a plaintiff's claim. Geismann v. ZocDoc, Inc. , 909 F. 3d. 534, 541 (2d Cir. 2018). However, if a defendant surrenders to "complete relief," fully satisfying plaintiff's claims, a district court may enter a default judgment against the defendant, over the plaintiff's objection. Only after the judgment is entered would the plaintiff's claims become moot. Geismann v. ZocDoc, Inc. , 909 F. 3d 534, 542 (2d Cir. 2018).

Defendants have not claimed that a Rule 68 offer was made, accepted, or rejected, and no judgment has been entered against the defendants. In any event, Sholopa's claim is not mooted since the refund of her ticket price does not provide complete relief. If a class is certified and the plaintiffs win, Sholopa would be entitled to an additional award as a class representative. The prospect of an additional award keeps her claim from being moot. See Tomassini v. FCA US LLC , No. 14-CV-1226 MAD/ML, 2020 WL 6115009 footnote 3, 2020 Dist. LEXIS 194764 footnote 3 (N.D.N.Y. July 28, 2020), citing Geismann v. ZocDoc, Inc. , 909 F. 3d 534, 543 (2d Cir. 2018).

2) The Forum Selection Clause Regarding the Use of the Airline's Website Does Not Encompass Milosevic's Claim for a Breach of a Separate Contract—the Conditions Of Carriage.

Defendants also claim that Milosevic's breach of contract claim must be dismissed because the website has a forum selection clause, requiring this claim to be brought in the Istanbul/Bakirkoy courts. In order for a forum selection clause to be enforceable, "[t]he moving party must show 1) the clause was reasonably communicated to the party resisting enforcement; 2) the clause is mandatory and not permissive; and 3) the claims and parties in the suit are subject to the clause." Lipson v. Birch, 46 F. Supp. 3d 206, 214 (E.D.N.Y. 2014).

The forum selection clause states, "This Agreement and Your use of Online Channels or any Material contained in or accessed or downloaded from it and any dispute or claim arising out of or in connection with such, shall be governed by, construed and interpreted in accordance with the laws of Turkey and You agree to submit to the exclusive jurisdiction of the Istanbul/ Bakirkoy Courts. We reserve the right to bring proceedings before the courts of the country You reside or where Your use of the Online Channels has taken place." (ECF 39, Ex. 1) (emphasis in original.).

The forum selection clause was adequately communicated to the plaintiff. Milosevic checked the box indicating that she had read and accepted the terms and conditions on the website. The forum...