Gordon v. United Continental Holding, Inc.

73 F. Supp. 3d 472, 2014 U.S. Dist. LEXIS 122480, 2014 WL 4354067
CourtDistrict Court, D. New Jersey
DecidedSeptember 3, 2014
DocketCivil Action No. 2:13-cv-05967-SDW-MCA
StatusPublished
Cited by12 cases

This text of 73 F. Supp. 3d 472 (Gordon v. United Continental Holding, Inc.) is published on Counsel Stack Legal Research, covering District Court, D. New Jersey primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Gordon v. United Continental Holding, Inc., 73 F. Supp. 3d 472, 2014 U.S. Dist. LEXIS 122480, 2014 WL 4354067 (D.N.J. 2014).

Opinion

OPINION

WIGENTON, District Judge.

Before the Court are Defendants United Continental Holding, Inc., Mileage Plus Holdings, LLC, and United Airlines, Inc. (collectively “United” or “Defendants”), Motion to. Dismiss Plaintiffs Robert Gordon and Melissa Chan’s (collectively “Plaintiffs”) Class Action Complaint for failure to state a claim upon which relief may be granted pursuant to Federal Rule of Civil Procedure 12(b)(6) (“Rule 12(b)(6)”) and Motion for Sanctions against Plaintiffs’ attorneys pursuant to Federal Rule of Civil Procedure 11 (“Rule 11”). Jurisdiction is proper pursuant to 28 U.S.C. § 1332. Venue is proper pursuant to 28 U.S.C. § 1391. This opinion is issued without oral argument pursuant to Federal Rule of Civil Procedure 78. For the reasons expressed below, this Court GRANTS Defendants’ Motion to Dismiss and DENIES their Motion for Rule 11 sanctions.

[475]*475I. BACKGROUND

A. The Parties

Plaintiffs Robert Gordon and Melissa Chan are citizens of the state of New Jersey who bring this lawsuit on behalf of a putative nationwide class of members of United’s MileagePlus Program who have been injured by United’s alleged deceptive corporate practice. (Compl. ¶¶ 15-17.) Defendant United Continental Holding, Inc. is a Delaware corporation formed by a merger between United Airlines and Continental Airlines in 2010. (Id. ¶ 18.) Defendants United Airlines, Inc. and Mileage Plus Holdings, LLC are wholly owned subsidiaries of United Continental Holding, Inc. and are incorporated under Delaware law. (Id. ¶¶ 19-20.) Defendánts “offer, operate, control and administer” the frequent flyer program at issue. (Id. ¶ 21.)

B. Factual Allegations 1

Plaintiffs are members of United’s Mi-leagePlus frequent flyer program, which provides enrollees with the opportunity to earn miles by flying on United and affiliated airlines and by using co-branded credit and debit cards. (Compl. ¶¶ 28, 30.) MileagePlus frequent flyer miles may be exchanged for goods and services that include “free air travel ... travel class upgrades, airport lounge access, or priority bookings.” (Id. ¶ 21.) Enrollees who do not have sufficient miles to redeem a desired good or service may purchase additional miles for “$0.035 per mile ... plus a 7.5% Federal Excise Tax.” (Id. ¶ 5.) Purchased miles can be combined with accumulated miles and exchanged for a frequent flyer award. (Id.)

On August 26, 2012, Mr. Gordon attempted to use his MileagePlus miles to book a hotel room for a trip he and Ms. Chan were taking to Japan. (Id. ¶ 8.) Gordon, who had 38,183 miles in his Milea-gePlus account, was quoted 40,750 miles for the desired room. (Id.) Knowing Chan had more miles, Gordon did not book the room. (Id.) Minutes later, Chan, who had 41,773 miles on her MileagePlus account, tried to book the same room for the same dates and received a quote of 44,550 miles — 3,750 more miles than Gordon’s quote. ■ (Id. ¶ 9.) Because Chan had not accumulated sufficient miles to redeem the hotel award, she purchased additional miles for $26.10. (Id. ¶ 13.) Gordon called United to complain about the inconsistent pricing and was allegedly informed that Defendants used “an algorithm [to] mod-iffy] the number of miles needed for an award depending on the customer’s number of miles.” (Id. ¶ 11.) In their complaint, Plaintiffs assert that United has an undisclosed policy of charging MileagePlus members who have “more available miles, additional miles for the same service.” (Id. ¶¶ 7, 53.)

To enroll in the MileagePlus program, members must acknowledge and agree to the MileagePlus Program Rules (“Program Rules”). (Id. ¶ 5.) The parties do not dispute that the Program Rules constitute a contract.2 (Id. ¶¶ 5, 31; Defs.’ Br. 3, 30.) [476]*476According to Plaintiffs, United’s preferential pricing scheme is a breach of its contractual obligation to offer awards at a “set published amount.” (Id. ¶ 38.) In support, Plaintiffs cite the following portion of the Program Rules:

The awards available to be redeemed and the amount of mileage necessary to redeem each award will be set by United and published to the members. United shall establish the process for award redemption, but redemption shall basically mean the exchange of mileage in a member’s account for a specified award.

(Id. ¶ 39.) (emphasis added).

Defendants deny having an undisclosed practice of overcharging MileagePlus members who have higher mileage balances. Rather, they explain that Mileage-Plus members may receive preferential pricing discounts that are based on “members’ attributes indicative of brand loyalty and future likelihood of choosing United Airlines.” (Defs. Rule 11 Br. p. 3.) In this particular case, Defendants aver that Gordon received a more discounted, preferential price than was quoted to Chan because Gordon held a MileagePlus credit card for a longer period of time than Chan. (Id.) Defendants claim that this preferential pricing scheme is patently sanctioned by the Program Rules, which clearly informs enrollees that: “Certain members may receive preferential pricing.” (Id.) Notwithstanding this, Defendants argue, the Program Rules guarantee United’s unreserved right to modify, cancel, or limit the Milea-gePlus award structure at its sole discretion, with or without notice to members. (Id. at p. 6.)

On October 8, 2013, Plaintiffs filed a seven count Class Action Complaint against United alleging (1) violation of the New Jersey Consumer Fraud Act (“NJCFA”), N.J.S.A, 56:8-1 et seq.; (2) breach of the covenant of good faith and fair dealing; (3) breach of contract; (4) violation of Truth-in-Consumer Contract, Warranty and Notice Act (“TCCWNA”), N.J.S.A. 56:12 et seq.; (5) declaratory relief; (6) unjust enrichment; and (7) injunc-tive relief. (/¿¶¶ 95-131.) On December 12, 2013, Defendant filed a Motion for Rule 11 Sanctions on Plaintiffs’ counsel. On February 4, 2014, Defendant filed a Motion to Dismiss all counts of Plaintiffs’ complaint pursuant to Rule 12(b)(6). Both motions are addressed in this Opinion and the accompanying Order.

II. LEGAL STANDARD

a. Motion to Dismiss

In deciding a motion under Rule 12(b)(6), a district court is “required to accept as true all factual allegations in the complaint and draw all inferences in the facts alleged in the light most favorable to the [plaintiff].” Phillips v. Cnty. of Allegheny, 515 F.3d 224, 228 (3d Cir.2008). “[A] complaint attacked by a ... motion to dismiss does not need detailed factual allegations.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555, 127 S.Ct.

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Phi Air Medical, LLC v. Corizon, Inc.
Court of Appeals of Tennessee, 2021
RYU v. BANK OF HOPE
D. New Jersey, 2021
JODI SHAW VS. BRIAN SHAND (L-0408-16, SUSSEX COUNTY AND STATEWIDE)
New Jersey Superior Court App Division, 2019
Cox v. Spirit Airlines, Inc.
340 F. Supp. 3d 154 (E.D. New York, 2018)
Zamber v. Am. Airlines, Inc.
282 F. Supp. 3d 1289 (S.D. Florida, 2017)

Cite This Page — Counsel Stack

Bluebook (online)
73 F. Supp. 3d 472, 2014 U.S. Dist. LEXIS 122480, 2014 WL 4354067, Counsel Stack Legal Research, https://law.counselstack.com/opinion/gordon-v-united-continental-holding-inc-njd-2014.