632 F. 2d 69 - Wasserman v. Trans World Airlines Inc

Gary Wasserman appeals from a judgment of the district court1 denying both his federal and state claims for damages. Both claims were based on the grounding (or "bumping") of Wasserman from Trans World Airlines, Inc.'s (TWA) flight 247 on August 24, 1976, on which Wasserman held a confirmed reservation. Count I of the complaint alleged that TWA had violated 49 U.S.C. § 1374(b).2 Count II of the complaint sought damages from TWA under a common-law theory of fraudulent misrepresentation based upon the airline's alleged failure to disclose its overbooking practice. The district court found that both claims were barred by Wasserman's acceptance of alternative transportation under 14 C.F.R. § 250.6 (1976) and other applicable regulations.3

Wasserman appeals only that portion of the district court's ruling in favor of TWA on his fraudulent misrepresentation claims. Relying on Christensen v. Northwest Airlines, Inc., 455 F.Supp. 492, 494 (D.Hawaii 1978), the district court found "(w)ith specific reference to the State fraud and misrepresentation claim," that Wasserman's acceptance of alternative transportation was deemed "a binding election" precluding damages based on common-law remedies. Wasserman v. Trans World Airlines, Inc., 486 F.Supp. 194, 198 (W.D.Mo.1980).

As in the instant case, the Christensen case involved the bumped holder of a confirmed airline reservation who had accepted alternative transportation. There, as here, the plaintiff sought damages both under Section 1374(b) and at common law for alleged fraud and misrepresentation by the airlines. The court interpreted the applicable regulations4 as precluding recovery where alternative transportation has been accepted:

14 C.F.R. § 250.7 provides that tender of denied boarding compensation, if accepted by the passenger, shall constitute liquidated damages for all damages incurred by the passenger as a result of his being bumped. There is nothing in Part 250 which provides that acceptance of alternate transportation which is scheduled to arrive within two hours of the originally scheduled arrival time (and therefore render him ineligible for compensation) would also constitute "liquidated damages for all damages incurred by the passenger" for the bumping. It appears, however, that such was the intent of 14 C.F.R. Part 250.

Id. 455 F.Supp. at 494. The court in Christensen then concluded that:

where plaintiff accepts and uses the alternative transportation provided by defendant which is scheduled to arrive not later than two hours of the originally scheduled arrival time, he is entitled to no further compensation for any damages suffered because of the bumping. See Rousseff v. Western Airlines, Inc., D.C., 409 F.Supp. 1262 (1976). Plaintiff must therefore be deemed to have made a binding election so that common-law remedies are no longer available to her for damages resulting from the bump.

Id. at 494 (footnotes omitted). See also Rousseff v. Western Airlines, Inc., 409 F.Supp. 1262, 1263 (C.D.Cal.1976).

The district court noted that Nader v. Allegheny Airlines, Inc., 445 F.Supp. 168 (D.D.C.1978), was inapposite because that case, unlike the instant case, involved the bumped holder of a confirmed reservation who rejected both denied boarding compensation and alternative transportation. In Nader, the court found that the airline had a duty to disclose to the plaintiff the existence of the airline's overbooking practice and that its failure to do so subjected it to liability for the common-law tort of misrepresentation. Because the plaintiff never accepted alternative transportation, the court in Nader had no occasion to decide whether the acceptance of alternative transportation could be considered the equivalent of denied boarding compensation, and hence, a bar to a common-law action through the application of the liquidated damages provision, 14 C.F.R. § 250.7 (1976) (now 14 C.F.R. § 250.4(b) (1978)).

We have carefully examined the briefs and the record in this appeal, and have considered all of the arguments of the parties. We are convinced that the district court's findings with respect to Wasserman's common-law claim for fraudulent misrepresentation are not clearly erroneous, Fed.R.Civ.P. 52(a), that the trial judge correctly applied the relevant law, and accordingly, affirm the judgment of the trial court.