Justia Transportation Law Opinion Summaries

MileagePlus, United’s frequent flyer program, rewards customers with free flights and seat upgrades. Its Rules have always allowed United to change the terms of the program unilaterally, without notice. In 1997 United announced a new Million-Mile Flyer status: Lifetime Premier Executive status. “Mileage Plus members who have earned a total of one million paid flight miles on United will retain the benefits and privileges of Premier Executive status for life.” After merging with Continental, United changed the status levels and moved the Million-Mile Flyers from Premier Executive status to the new system. United decided that the Premier Gold level was equivalent, but Gold customers receive only a 50% bonus on miles flown, not 100%, and do not have regional and system-wide upgrades that Million-Mile Flyers previously received. Lagen enrolled in MileagePlus in 1993 and became a Million-Mile Flyer in 2006 after switching his airline loyalty from British Airways. He sued for breach of contract under the Class Action Fairness Act, 28 U.S.C. 1332(d)(2)(A). The district court granted United summary judgment, finding that no rational trier of fact could conclude that United had a distinct Million-Mile Flyer program that was not part of MileagePlus, subject to unilateral change. The Seventh Circuit affirmed. View "Lagen v. United Cont'l Holdings, Inc." on Justia Law

This case arose from a dispute between Franks and Union Pacific over whether Franks has the right to cross Union Pacific's train tracks on certain property in Caddo Parish originally owned by the Levy family at the turn of the 20th Century. On appeal, Franks challenged the district court's final judgment granting summary judgment for defendant and dismissing Franks's claims with prejudice. Franks argued that the district court erred in denying the existence of a predial servitude in the three crossings at issue. The court concluded that, under the law applicable to the interpretation of the 1923 deed, the contract is unambiguous; it does not establish a predial servitude with respect to Texas and Pacific Railway Company's obligation to provide three crossings across what was then its property; but, rather, it is merely a personal obligation which does not bind the railway's successors-in-interest. View "Franks Investment Co, L.L.C. v. Union Pacific Railroad Co." on Justia Law

Plaintiffs Sompo and Nipponkoa, subrogees of the cargo owners/shippers, filed suit against Defendants Norfolk Southern and KCSR to recover for the damages sustained to cargo by a train derailment. At issue in these appeals was the meaning and enforceability of provisions found in the bills of lading that purport to designate the ocean carrier as the sole entity responsible to the cargo owners for damage to the cargo. Further, Docket No. 13-3501 challenged Nipponkoa's ability to maintain its claim for contractual indemnification, a claim assigned to it by the upstream ocean carrier, against defendants. The court affirmed the judgment in Docket No. 13-3416 and concluded that summary judgment for defendants was proper where defendants are entitled to enforce the liability-limiting provision in the upstream carrier's bill of lading against plaintiffs. The court affirmed the judgment in Docket No. 13-3501 because defendants' arguments for reversal of Nipponkoa's judgment against them are all either waived or without merit. View "Sompo Japan Ins., Inc. v. Norfolk Southern Railway Co." on Justia Law

Corning hired Hyundai, an ocean shipper, to transport thin glass sheets for use in televisions and computer monitors from the U.S. to Asia. Although it is not clear when the damage occurred, damage was noted when Hyundai unloaded the containers from flatcars operated by its subcontractors (Norfolk Southern Railway and BNSF, another rail carrier). Corning had no role in selecting and no relationship with the subcontractors. There were opinions that the damage was caused by movement of the railcars, not by packing, but the actual cause was not established. Corning’s insurer paid Corning $664,679.88 and filed suit. The district court held that the case would proceed solely under the Carmack Amendment to the Interstate Commerce Act, 49 U.S.C. 11706, apparently reasoning that the damage undisputedly occurred while the cargo was in the possession of a rail carrier. The court found that a Subcontracting Clause did not immunize the rail carriers from suit, but obligated Corning to indemnify Hyundai for any resultant claims by a subcontractor against Hyundai arising out of the same facts. The court held that a $500-per-package limit of liability did not apply to the rail carriers or Hyundai. After a jury trial, the court found Hyundai and the railroads liable, but denied prejudgment interest. The Sixth Circuit affirmed the judgment against Hyundai, reversed and vacated judgments against the railroads, and remanded for reconsideration of prejudgment interest.View "CNA Ins. Co. v. Hyundai Merch. Marine Co., Ltd." on Justia Law

Bennett was walking her dog in Garfield Heights, Ohio when she was struck on the left knee by a vehicle driven by Pastel. The accident threw Bennett onto the car’s hood. Bennett sued Pastel’s insurer, State Farm, which characterized as “ridiculous” her assertion that she was an “occupant” of the car, as that term is defined by State Farm’s policy, at the time she was on the vehicle’s hood. The district court granted summary judgment to State Farm. The Sixth Circuit reversed. The policy defines “occupying” as “in, on, entering or alighting from.” The court stated that “we have no reason to explore Bennett’s relationship with the car… the policy marks out its zone of coverage in primary colors.” View "Bennett v. State Farm Mut. Auto. Ins." on Justia Law

Shipper engaged Common Carrier to transport computer equipment belonging to Company. Company claimed the shipment was damaged on arrival, and Common Carrier refused to pay the amount that Company claimed Common Carrier had agreed to settle the claim for. Company asserted a claim against Shipper, whose Insurer paid Company. As subrogee, Insurer sued Common Carrier for breach of the settlement agreement. Insurer avoided removal to federal court by not asserting a cargo-damage claim, but, on remand, amended its petition to assert one. Common Carrier contended the cargo-damage claim was barred by limitations because Insurer filed it more than four years after Common Carrier rejected Company's claim. Insurer argued the cargo-damage claim related back to its original action for breach of the settlement agreement and thus was timely filed. The trial court agreed and rendered judgment against Common Carrier. The court of appeals held the cargo-damage claim did not relate back and was therefore barred by limitations. The Supreme Court reversed and rendered judgment for Insurer, holding that Insurer's cargo-damage claim was not barred by limitations, as the cargo-damage claim and breach-of-settlement claim both arose out of the same occurrence and, therefore, the relation-back doctrine applied.View "Lexington Ins. Co. v. Daybreak Express, Inc." on Justia Law

ABB filed a complaint against CSX alleging that the electrical transformer that CSX transported was damaged in transit and that CSX was liable for the full amount of the damage. CSX denied full liability, alternatively contending that the parties had agreed in the bill of lading to limit CSX's liability. The court vacated the portion of the district court's judgment limiting any liability on the part of CSX because it concluded that the Carmack Amendment to the Interstate Commerce Act, 49 U.S.C. 11706, subjected CSX to full liability for the shipment and that the parties did not modify CSX's level of liability by written agreement as permitted in that statute. View "ABB, Inc. v. CSX Transportation, Inc." on Justia Law

Oliver Arlington was employed by Miller's Trucking as a log truck driver and loader operator pursuant to an oral employment agreement. For his work, Miller's paid Arlington twenty-five percent of the "load rate" as calculated by Miller's. Arlington, however, asserted that according to the parties' oral agreement, he should have been paid a salary in the form of annual wages. Arlington filed a wage claim, seeking the pay he alleged he was owed in regular and overtime wages. The Department of Labor and Industry's bureau dismissed Arlington's claim for lack of merit and lack of sufficient evidence. On appeal, a bureau hearing officer dismissed Arlington's claim. The district court affirmed. The Supreme Court reversed, holding (1) the hearing officer acted arbitrarily and capriciously in failing to require Miller's to produce material requested by Arlington and in refusing to admit tendered evidence, prejudicing the substantial rights of Arlington, and the district court erred in affirming the hearing officer's judgment; and (2) the hearing officer and district court incorrectly determined that Arlington engaged in activities of a character directly affecting the safety of the operation of motor vehicles in interstate commerce and thus was exempt from overtime requirements. Remanded.View "Arlington v. Miller's Trucking, Inc." on Justia Law

The issue presented to the Supreme Court in this case was whether under the Unfair Trade Practices and Consumer Protection Act a misrepresentation by a seller of a used motor home is subject to a defense that the misrepresentation was made in good faith. Plaintiff Robert Borgen bought a used Travelaire motor home from A&M Motors, Inc. in 2004. The motor home had previously been owned by Thom and Linda Janidlo; the Janidlos traded in the vehicle to A&M Motors about two weeks before Borgen bought it. When the Janidlos traded in the motor home, they indicated that it was a 2002 model. At some point, someone changed the model year to 2003 on the documents at A&M Motors. The title from the State of Alaska showed that the motor home was a 2003 model, but the vehicle identification number (VIN) indicated that the motor home was a 2002 model. Both trial experts testified that the tenth digit of a VIN of a chassis indicates the model year of the chassis, but their testimony as to whether the same holds true for the VIN of a coach was unclear. The VIN on the chassis is the VIN on the vehicle’s title, but a motor home’s model year is determined by the model year of the coach. A&M Motors sold the Travelaire to Borgen as a 2003 model. In August 2005 Borgen discovered documents in the motor home indicating the motor home was actually a 2002 model. He contacted A&M Motors to complain; the only compensation they offered him was a $1,000 service contract. Borgen sued A&M Motors, pleading three causes of action: (1) misrepresentation, (2) violation of the Unfair Trade Practices and Consumer Protection Act (UTPA), and (3) breach of contract. Borgen moved for summary judgment on his UTPA claim in February 2008. The trial court denied that motion, and a jury ultimately decided that A&M Motors had not engaged in an unfair or deceptive act in its dealings with Borgen. Finding that the trial court did not err by finding the UTPA implied an unknowing affirmative misrepresentation of material fact would not give rise to liability, the Supreme Court affirmed the trial court's judgment with respect to Borgen's UTPA claims, but remanded for further proceedings on treble damages. View "Borgen v. A&M Motors, Inc." on Justia Law

Northwest terminated plaintiff’s membership in its frequent flyer program. A provision in the frequent flyer agreement gave Northwest sole discretion to determine whether a participant had abused the program. Plaintiff claimed that Northwest breached its contract by revoking his membership without valid cause and violated the duty of good faith and fair dealing because it terminated his membership in a way that contravened his reasonable expectations. The district court dismissed, holding that the Airline Deregulation Act of 1978 pre-empted the breach of the duty of good faith and fair dealing claim. The Ninth Circuit reversed, finding that claim “too tenuously connected to airline regulation to trigger” ADA pre-emption. A unanimous Supreme Court reversed. The Act pre-empts a state-law claim for breach of the implied covenant of good faith and fair dealing if it seeks to enlarge contractual obligations that the parties voluntarily adopted. The Act prohibits states from “enact[ing] or enforc[ing] a law, regulation, or other provision having the force and effect of law related to [an air carrier’s] price, route, or service,” 49 U.S.C. 41713(b)(1). The phrase “other provision having the force and effect of law” includes state common-law rules like the claimed implied covenant. Exempting common-law claims would disserve the Act’s central purpose: to eliminate federal regulation of rates, routes, and services so they could be set by market forces. Northwest’s program connects to “rates” by awarding credits redeemable for tickets and upgrades, thus eliminating or reducing ticket prices. It also connects to “services,” i.e., access to flights and higher service categories. Because the implied covenant claim sought to enlarge contractual agreement, it is pre-empted. Under controlling Minnesota law, parties may not contract out of the implied covenant; when state law does not authorize parties to free themselves from the covenant, a breach of covenant claim is pre-empted. Participants in frequent flyer programs can protect themselves by avoiding airlines with poor reputations and enrolling in more favorable rival programs; the Department of Transportation has authority to investigate complaints about frequent flyer programs. The Court also noted that the plaintiff did not appeal his breach of contract claim. View "Northwest, Inc. v. Ginsberg" on Justia Law