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Adam J. Levitt and Herbert C. Malone, Individually and On Behalf of All Others Similarly Situated v. Southwest Airlines Co

March 5, 2012

ADAM J. LEVITT AND HERBERT C. MALONE, INDIVIDUALLY AND ON BEHALF OF ALL OTHERS SIMILARLY SITUATED, PLAINTIFFS,
v.
SOUTHWEST AIRLINES CO., DEFENDANT.



The opinion of the court was delivered by: Matthew F. Kennelly, District Judge:

MEMORANDUM OPINION AND ORDER

Adam Levitt and Herbert Malone, on behalf of themselves and a putative class of similarly situated individuals, have sued Southwest Airlines for its alleged failure to honor coupons for free drinks that it issued along with plaintiffs' purchase of business class airline tickets. Plaintiffs assert claims under the Illinois Consumer Fraud Act (ICFA), 815 ILCS 505/2, the Pennsylvania Consumer Fraud Act (PCFA), 73 P.S. §201-1, and Illinois common law.

Southwest has moved to dismiss three of the four claims in plaintiffs' complaint on the ground that they are preempted by the Airline Deregulation Act (ADA), 49 U.S.C. § 41713(b)(1). Southwest has also moved the Court to stay this lawsuit pending the resolution of a case in another district concerning similar issues. For the reasons stated below, the Court grants Southwest's partial motion to dismiss but denies its motion to stay.

Background

The Court draws the following facts from the allegations in plaintiff's complaint, which it accepts as true for purposes of the motion to dismiss. Hallinan v. Fraternal Order of Police of Chi. Lodge No. 7, 570 F.3d 811, 820 (7th Cir. 2009).

For a number of years, Southwest has offered drink coupons to travelers, including plaintiffs, who purchased tickets through the "Business Select" travel program. Southwest also offered coupons to travelers through other programs, including its "Rapid Rewards" frequent flyer program. The coupons at issue were redeemable on any Southwest flight for drinks that would otherwise cost five dollars. The coupons did not include expiration dates, but they did include a version of the following statement:

This coupon has no cash value. Drink coupon is void if altered, sold, purchased, brokered, or bartered. Not exchangeable for other goods and services. Southwest Airlines reserves the right to refuse service and/or discontinue the drink coupon program at any time. You must be 21 years of age or older to consume alcoholic beverages.

Am. Compl. ¶ 12.

On August 1, 2010, Southwest announced a change in its drink coupon programs. In a message posted to the company's blog, Southwest CEO Mike Hafner explained,

For years, Southwest Airlines has accepted all types of drink coupons on our planes -- regardless of their expiration dates. Rapid Rewards coupons. Business Select coupons. Old Company Club coupons. Coupons from the 80s, coupons from the 90s. . . . We've reached a point where being so flexible with drink coupons has put us in a position of having far too many in circulation. To help purge the system of these excess coupons, we will start enforcing expiration dates on coupons over the course of the next year.

Beginning today, Southwest Airlines will only accept Business Select drink coupons on the day of travel which allows Customers to use the coupon for the flight it was purchased. This has always been the intent of the coupon, but starting today, August 1, 2010 we'll begin universally enforcing it. Business Select Customers may use their drink coupon on a connecting flight, as long as it is used on the day of travel printed on the coupon.

Also, Rapid Rewards drink coupons earned with an Award will soon have a new look and will include an expiration date that is one year from the date of issue. Rapid Rewards will communicate with Members as the transition approaches. Not to worry, we're giving Customers a full year to use those tan paper drink coupons without expiration dates. We will continue to accept these drink coupons, whether purchased or earned with a Rapid Rewards Award, until August 31, 2011.

Id. ¶ 3 (quoting http://www.blogsouthwest.com/blog/a-message-about-drink-coupons (last visited Feb. 28, 2012)).

On November 16, 2011, Levitt filed a complaint seeking relief on behalf of himself and a putative class defined as "[a]ll persons who reside in the United States and who have been issued unredeemed Southwest Airlines Drink Coupons." Compl. ΒΆ 14. On December 20, 2011, Levitt amended his complaint to add Malone as a plaintiff and narrow the definition of the proposed class. In the amended complaint, plaintiffs assert claims of breach of contract (count one) and, in the alternative, unjust enrichment (count two) on behalf of "[a]ll persons who reside in the United States and who procured unredeemed Southwest Airline Drink Vouchers with the purchase of one or more Business Select tickets from Southwest." Am Compl. ...


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