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Cases & Deals

March 6, 2020

Delta Defeats Class Certification and Wins Complete Dismissal of Deceptive Trade Practices Claims Related to Trip Insurance

On March 6, 2020, King & Spalding obtained summary judgment on behalf of Delta Air Lines, Inc. in the Southern District of Florida, resulting in a complete dismissal of consumer deception claims asserted against the airline in connection with its marketing of third-party travel insurance on its website.  See Donoff v. Delta Air Lines, Inc., Case No. 9:18-cv-81258 (S.D. Fla.) (“Donoff”).

The case was originally filed in September 2018 as a putative class action and included claims under Florida’s Deceptive and Unfair Trade Practices Act (“FDUTPA”), for unjust enrichment, and for violation of the federal Racketeer Influenced and Corrupt Organizations Act (“RICO”) based on the allegation that Delta deceives customers into believing it receives no compensation from the third-party insurance provider related to the travel insurance marketed on Delta’s website.  In July 2019, King & Spalding obtained dismissal of the plaintiff’s RICO claims based on pleading deficiencies. Then, on January 24, 2020, the Court denied the plaintiff’s motion for class certification of the remaining FDUTPA and unjust enrichment claims.  In denying class certification, the court held that the plaintiff, by relying on nationwide sales of travel insurance, failed to present evidence of a sufficiently numerous Florida class. The Court also held that the plaintiff was not an adequate class representative based on the deposition of the plaintiff indicating, among other things, that he was not deceived by Delta’s alleged conduct and would not have believed he had a claim until speaking with his attorneys. Finally, the court held that individual issues predominate because Delta’s website displayed travel insurance in different ways over the class period and each purported class member would be required to demonstrate that he or she would have been able to secure insurance at a lower rate but for Delta’s conduct, which is a highly individualized inquiry.

After denying class certification, on March 6, 2020, the Court granted Delta’s motion for summary judgment on the remaining claims. The Court held that Delta was entitled to summary judgment for several reasons.  First, the Court held that both of the remaining claims were barred by the filed rate doctrine because the damages the plaintiff seeks relate to the premium charged for the travel insurance.  Second, the Court held that the FDUTPA claim was also barred by FDUTPA’s insurance exemption—which precludes a FDUTPA claim based on activity regulated by Florida’s insurance code. The Court also held that the plaintiff failed to show a deceptive act or unfair practice or any actual damages for his FDUTPA claim.  Specifically, the Court explained that retailers are under no obligation to disclose their pricing structure to consumers and also noted that it “seems self-evident that Delta would be compensated” for allowing a third party to offer travel insurance through its website.  The Court also rejected the plaintiff’s attempt to characterize Delta’s compensation as an improper “kickback,” and concluded that the plaintiff failed to provide any evidence of actual damages.  Finally, the Court held that the unjust enrichment claim failed because the plaintiff did not confer a direct benefit on Delta and because he received the benefit of his bargain.

The King & Spalding team is led by David Balser and includes Julia Barrett and Paige Nobles.