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Chapman v. Priceline Group, Inc.

United States District Court, D. Connecticut

September 30, 2017

AUSTIN CHAPMAN, Plaintiff,
v.
PRICELINE GROUP, INC., Defendant.

          RULING AND ORDER

          Robert N. Chatigny United States District Judge

         Austin Chapman, on behalf of himself and others similarly situated, brings this action against Priceline Group, Inc. (“Priceline”), alleging that Priceline has breached its “Best Price Guaranteed” promise with regard to purchases of tickets for travel on Spirit Airlines. The amended complaint alleges that Priceline's practices violate Connecticut statutory and common law. Priceline has moved to dismiss the amended complaint and strike the class allegations from count one, which is brought under the Connecticut Unfair Trade Practices Act (“CUTPA”). For reasons stated below, the motion to dismiss is denied and the motion to strike is granted.

         I. Background

         The amended complaint alleges that Priceline has “prominently represented and continues to represent a ‘Best Price Guaranteed' promise for airfare purchased through its website” that guarantees to consumers the “lowest price on everything [they] book[].” (ECF No. 11) ¶ 2. With regard to travel on Spirit Airlines, however, Priceline secretly adds its own markup.Id. ¶¶ 3, 6. As a result, “Spirit Airlines flights are always cheaper when purchased through Spirit Airlines' website than when purchased through Priceline.com.” Id. ¶ 4.

         These allegations are premised on a “Best Price Guaranteed” representation contained in the “Priceline Terms and Conditions” located on the Priceline website, Priceline.com. Clicking on the words "Best Price Guaranteed" results in the appearance of a statement in bold letters that Priceline “guarantee[s] the lowest price on everything you book.” Id. ¶ 33. The website goes on to state: “Find a lower price, we'll refund you 100% of the difference. Book an Express Deal, we'll refund you 200% of the difference. Guaranteed. The Priceline.com Best Price Guarantee applies to every Air, Hotel, Rental Car, Cruise and Vacation Package reservation sold on priceline.com!” Id. ¶ 34.

         Plaintiff alleges that reasonable consumers who take advantage of Priceline's best price guarantee “do not think they are merely getting the right to invoke a price-matching scheme.” Id. ¶ 38. Rather, they “understand the Guarantee and corresponding price-match policy . . . to indicate that Priceline actually is selling the fares at the lowest available price - or, at the very least, that Priceline is not knowingly marking up those prices.” Id. ¶ 35. Plaintiff alleges that Priceline was aware of this understanding, id. ¶ 37, but failed to disclaim its “Best Price Guaranteed” policy with respect to Spirit Airlines even though it knew Spirit Airlines flights were available for a lower fare on Spirit Airlines' website, id. ¶¶ 40-41.

         The amended complaint alleges that plaintiff purchased Spirit Airlines tickets through Priceline in April 2014, April 2015, and July 2015.[1] Though he “believed he was truly getting the best price for the air travel on Spirit Airlines, ” id. ¶ 43, “[t]hose same tickets . . . were at that very moment offered for sale for significantly less on Spirit.com.” Id. ¶ 45. Plaintiff alleges that he was “aware” of the “Best Price Guaranteed” promise and “would not have purchased his tickets on Priceline.com had he known they had been marked up over the price for which they were being sold at the same time on Spirit Airlines' website.” Id. ¶ 47.

         Plaintiff seeks to bring this action on behalf of a class of “[a]ll natural persons in the United States of America who, within the applicable statute of limitations preceding the filing of this action to the date of class certification, purchased a ticket for a flight on Spirit Airlines, Inc. through Priceline.” Id. ¶ 14. The amended complaint contains five causes of action, all on behalf of the class: violation of CUTPA, breach of contract, breach of the covenant of good faith and fair dealing, breach of express warranty and unjust enrichment. Plaintiff seeks restitution of fares paid to Priceline in excess of the lowest price available at the time of purchase, disgorgement of profits, actual and punitive damages, prejudgment interest, costs and fees.

         II. Discussion

         A. Motion to Dismiss

         1. Airline Deregulation Act Preemption

         Priceline argues that the CUTPA, breach of duty of good faith and fair dealing and unjust enrichment claims in counts one, three, and five of the complaint are preempted by the Airline Deregulation Act (“ADA”). Plaintiff responds that Priceline is not the type of entity the ADA was intended to protect and, even if it were, the claims do not fall within the scope of the ADA's preemption provision. I conclude that even if Priceline may rely on the ADA, it has not shown a sufficient connection between its Best Price Guaranteed promise and the conduct of Spirit Airlines or any other air carrier to support preemption of the state law claims.

         Under the Supremacy Clause, U.S. Const. Art. VI, cl. 2, “state law that conflicts with federal law is ‘without effect.'” Cipollone v. Liggett Grp., Inc., 505 U.S. 504, 516 (1992) (quoting Maryland v. Louisiana, 451 U.S. 725, 746 (1981)). “In light of principles of federalism, there is . . . a presumption against preemption, ” In re Jetblue Airways Corp. Privacy Litig., 379 F.Supp.2d 299, 312 (E.D.N.Y. 2005), and the party arguing in favor of preemption bears a heavy burden. See Abdu-Brisson v. Delta Airlines, Inc., 128 F.3d 77, 83 (2d Cir. 1997). “In deciding whether a federal law pre-empts a state statute, ” the court must “ascertain Congress' intent in enacting the federal statute at issue.” Morales v. Trans World Airlines, Inc., 504 U.S. 374, 419 (1992) (quoting Metro. Life Ins. Co. v. Massachusetts, 471 U.S. 724, 738 (1985)).

         The ADA's preemption provision reads as follows: “[A] State, political subdivision of a State, or political authority of two or more 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.” 49 U.S.C. § 41713(b)(4)(A). The term “related to” means “having a connection with or reference to.” Morales, 504 U.S. at 384. Though this construction suggests that the statute has a broad reach, state law is not preempted unless it has “a significant impact” on airlines' behavior with respect to prices, routes, or services. Id. at 390.

         Broadly speaking, plaintiff's state law claims do involve prices at which Spirit Airlines tickets are sold. But this does not, by itself, support ADA preemption. Priceline must show that enforcing the state laws on which plaintiff relies would have a significant effect on the “price, route or service of an air carrier.” 49 U.S.C. § 41713(b)(1) (emphasis added); see also Goodspeed Airport, LLC v. E. Haddam Inland Wetlands & Watercourses Comm'n, 681 F.Supp.2d 182, 209 (D. Conn. 2010), aff'd, 634 F.3d 206 (2d Cir. 2011).

         Plaintiff alleges that “Priceline adds its own markup” on tickets for travel on Spirit Airlines. Am. Compl. (ECF No. 11) ¶ 3 (emphasis added). If the disputed markup violates state law, as plaintiff claims, it is not apparent that enforcing the law against Priceline would cause Spirit Airlines to change its pricing practices. Thus, the claims are not preempted.[2]

         2. Failure to State a Claim

         Priceline argues that the complaint must be dismissed because it fails to state a ...


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