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OST-2012-0040 - Gurevich v. Alitalia - General Conditions of Carriage Complaint


Michael & Elena Gurevich v Compagnia Aereas Italiana S.p.A.

OST-2012-0040

March 15, 2012

Third Party Complaint - Request for Formal Determination on Rule 55 of Alitalia Airlines Tariff and Order to Cease and Desist Disavowal of General Conditions of Carriage - Bookmarked

Aereas Italiana, SPA doing business as Alitalia consistently and unequivocally provides public notice to its passengers that its General Conditions of Carriage apply to travel to and from the United States. Indeed, before passengers can purchase electronic tickets, they must agree that the GCC apply to their flights.

Petitioners Michael Gurevich and Elena Gurevich were ticketed passengers on a cancelled Alitalia flight scheduled to depart from Rome, Italy to Chicago, IL on April 26, 2009. On March 18, 2011, Petitioners filed a putative class action in federal court seeking to enforce provisions in Alitalia's GCC regarding compensation for delayed and cancelled flights. Alitalia took the position in federal court that, contrary to its repeated public assurances, the GCC did not apply to travel to and from the United States. Alitalia based its disavowal of the GCC on an unreasonable construction of a provision in an unapproved and unnoticed tariff rule on file with the Department of Transportation.

The federal court construed the parties' dispute as a challenge to the validity of the tariff and opined that the DOT has primary jurisdiction over such challenges. Accordingly, the court stayed the civil action until Petitioners sought a ruling from DOT on the validity of the tariff and/or amended their complaint.

Consistent with the federal court's ruling, Petitioners present four issues in this Third Party Complaint. First, as a preliminary matter, Petitioners seek a ruling that the "Liability of Carriers" provisions in Rule 55 of Alitalia's tariff is not applicable to Petitioners' travel because it has not been approved by the DOT and had not been approved at the time of Petitioners' travel. Second, Petitioners seek a ruling that Alitalia' s tariff provisions are not applicable to Petitioners' travel because Alitalia chose not to provide public notice of the tariff provisions as required by 14 CFR §221.100, et seq. Third, Petitioners request that DOT determine that Alitalia has engaged in a deceptive practice under 49 USC §41712 by repeatedly and unequivocally informing its US customers that the GCC apply to their travel but then disavowing the GCC when passengers attempt to enforce GCC provisions unfavorable to Alitalia, that DOT order Alitalia to cease and desist from disavowing the application of its GCC, and that DOT assess an appropriate fine. Finally, and alternatively, if despite never being approved or noticed and despite Alitalia's deceptive misrepresentations, Alitalia's tariff is still deemed applicable to Petitioners' travel, it must be construed to be consistent with the GCC and other express representations. In short, Petitioners request that DOT clarify that the tariff provision must be construed so that the GCC apply to travel to and from the United States, just as Alitalia has consistently and repeatedly represented to its customers.

Counsel: Carney Williams, Hank Bates, 501-212-8500


 

March 27, 2012

Uncontested Motion of Compagnia Aerea Italiana for Extension of Time to File its Answer to Third Party Complaint

Pursuant to 14 CFR § 302.405, Compagnia Aerea Italiana S.p.A., through undersigned counsel, respectfully moves for an extension of time, from March 30, 2012 until April 16, 2012, to answer the third party complaint filed in the above-captioned docket. Alitalia discussed this motion with Counsel for Complainants on March 26, 2012, and Counsel for Complainants advised that Complainants would have no objection to the extension sought by Alitalia.

Alitalia submits that good cause exists to grant this uncontested motion. Given the nature of the legal issues raised in the third party complaint now before the Department, Alitalia requires additional time to prepare its responses to the complainants’ claims. Alitalia’s request is in the public interest, as the extension sought herein will allow Alitalia to adequately develop its answer, thereby assisting the Department in its review of this matter, and would not otherwise unduly delay this proceeding.

Counsel: Kaplan, Massamillo & Andrews, Lawrence Mentz, 212-991-5919 / Zuckert Scoutt, Richard Mathias, 202-298-8660


 

Issued March 30, 2012

Notice Granting Extension

By a motion dated March 27, 2012, Counsel for Compagnia Aereas Italiana, S.p.A. requested an extension of time in which to prepare an answer in the above-referenced third-party complaint. The motion seeks an extension from March 30 to April 16, 2012, citing the complexity of the issues raised in the complaint. The Respondent’s motion advises that Counsel for the Complainant was contacted and has no objection to grant of the request.

Accordingly, I have decided to grant for good cause the requested extension for the filing of an answer in this docket to April 16.

By: Samuel Podberesky


 

April 20, 2012

Answer of Alitalia - Compagnia Aerea Italiana

The Notice of Exemption requires that Alitalia and other carriers file a rules tariff dealing with "Liability of Carriers." Alitalia complied with its obligation to do so using language in use for decades and which, upon information and belief, is still used by numerous air carriers and foreign air carriers. Alitalia has begun taking the steps necessary to avoid any confusion on the part of passengers as to whether or not Alitalia's conditions of carriage apply, as a matter of contract, to their transportation to or from the United States or Canada. Petitioners' Formal Complaint should be dismissed.

Counsel: Zuckert Scoutt, Richard Mathias, 202-298-8660


 

April 30, 2012

Petitioners' Motion to File a Reply and Reply to Answer of Alitalia

Although replies are normally not authorized, leave should be granted in this instance for the following reasons. One, Alitalia’s Answer raises numerous factual and legal issues that require response and clarification as to the underlying law, the controlling regulations, the related civil action, the applicability of EU 261 and the construction of Alitalia’s tariff provisions. Two, although Alitalia admits to the alleged deception and to failing to comply with the relevant regulations, Alitalia attempts to excuse its violations as “technicalities.” This “technicality” argument requires a reply. Three, Alitalia has revised its General Conditions of Carriage since the filing of the Complaint.

In what it calls a “stopgap” measure, Alitalia attempts to retroactively alter passenger contracts entered into over the last three years by adding new language to its GCC shortly before it filed its Answer. Alitalia cannot retroactively alter the terms of transportation contracts for completed flights. Regardless, moving forward, Alitalia’s “stopgap” measure highlights how Alitalia is seeking to benefit from the confusion by picking and choosing when to adhere to its passenger contract. Alitalia’s “stopgap” language also highlights that the only reasonable interpretation of its tariff Rule 55 is that the passenger ticket (and the GCC incorporated by reference) sets forth the transportation contract.

Counsel: Carney Williams, Hank Bates, 501-312-8500


 

Order 2013-3-12
OST-2012-0040

Issued and Served March 28, 2013

Consent Order and Order of Dismissal

On March 15, 2012, Michael Gurevich and Elena Gurevich filed a third-party complaint under 14 CFR 302.401 against Compagnia Aerea Italiana, S.p.A. alleging that the carrier violated its contract of carriage when it denied compensation to the petitioners in a putative class action for two cancelled flights in 2009. The complaint states that the contract of carriage is embodied in the carrier’s General Conditions of Carriage, which are displayed on the carrier’s website, and specifically adopt the compensation policy required under European Union rules. In denying liability under that compensation policy, the carrier, according to the complaint, violated its contract of carriage and engaged in unfair and deceptive business practices in violation of 49 USC § 41712.

This order finds that Alitalia’s failure to provide clear and accurate disclosure of its policy regarding compensation for delayed and cancelled flights and of the existence of differences between the carrier’s General Conditions of Carriage as displayed on its website and its tariffs filed with the Department, specifically Rule 55, constituted unfair and deceptive trade practices. In addition, the order directs the carrier to cease and desist from further similar violations of the cited statute, assesses a compromise civil penalty of $125,000, and dismisses the complaint filed in this docket.

By: Samuel Podberesky


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