Thursday, February 25, 2010

Brazil: Distribution of slots from Congonhas airport scheduled for trial this Thursday

The ministers of the Court of the Superior Court of Justice (STJ) are set on Thursday, March 25, the distribution by the National Civil Aviation Agency (ANAC) of the slots (spaces at the airport used by airlines to park / park aircraft) from Congonhas Airport (SP) will or not with the spaces in the Pantanal Linhas Aereas SA

ANAC rescheduled for the 1st of March, at 14h, in Brasilia, the public hearing for the distribution of 355 slots (time of takeoff and landing) that are not being used at the airport. The expectation of the regulatory agency is to include the redistribution of 61 slots that operated on the Pantanal Congonhas, which are of direct interest to TAM, in the process of acquisition of the company, the session was scheduled for February 10, after the postponement of the scheduled distribution, initially, to February 1.

The discussion in the STJ:

Last December, the president of the STJ, Minister Cesar Rocha, guaranteed to make the distribution ANAC, suspending the decision of the 2nd Bankruptcy Court and Judicial Recoveries. That decision permitted the holding of judicial auction sale to the Isolated Productive Unit (IPI) of the Pantanal, whose plan of reorganization provides for the integration of the slots as intangible assets of the company.

Its release was scheduled for 1st of February but was postponed after the minister, based on enterprise resource - a special appeal [kind of action against all appropriate internal decision-person] - have determined that the regulatory agency to refrain from distributing the slots of the Pantanal.

On the other hand, ANAC alleges injury to the public and the public economy, for the sale of UPI interfere with the legal competence of ANAC. In turn, for the Pantanal, is the claim of ANAC that interferes with the legal competence of the court of bankruptcy. According to the company, the right of users from Congonhas Airport will be better preserved with the sale to TAM, and not the opposite. For her, there is underutilization of space for takeoffs and no risk of increased price of tickets.

On appeal by the Pantanal presented new facts, such as selling the entire stake in the Pantanal Linhas Aereas SA to TAM away "once any risk of damage to the organization of the airport and damage to public order and economy, and remain intact the rights of users of air transport, even with the intention as expressed officially to ANAC, that the sub judice slots - designated by the Regulatory Agency as idle - return to be immediately used by the airline.

The Pantanal applied to the court to reform the decision to ANAC refrain from distributing solely the slots in the Pantanal which are housed in the process of reorganization, keeping the planned distribution of the remaining slots.

The president of the STJ grant the request of the airline. Applied to the ANAC to be revealed about the issue and that, refrain from distributing the slots pertaining to the Pantanal Linhas Aereas SA in the event of distribution that was scheduled for February 1, 2010.

The regulatory agency provided the information requested by the court in the last days 8 days. Two days later, the ANAC also brought special appeal, this time challenging the decision beneficial to the Pantanal. Minister Cesar Rocha Asfor will take your vote in both features to trial in the Special Session of the next 25 days.

Pending the decision from the Supreme Court on the right of ANAC include the redistribution of 61 slots that operated on the Pantanal Congonhas, which are of direct interest to TAM, in the process of acquisition of the company, the agency rescheduled for the 1st of March, the 14h, in Brasilia, the public hearing for the distribution of 355 slots (times of takeoff and landing) that are not being used at Congonhas Airport.

Reported to IFTTA by Ronaldo Armond

Wednesday, February 24, 2010

UNWTO: Statement on Madeira

UNWTO Secretary-General Taleb Rifai today issued the following statement on the events of Autonomous Region of Madeira:

“We are deeply saddened by the tragic events that struck Madeira Island last Saturday 20th February and have already expressed our full support ,as well as our commitment to help in any way considered, to the government of Portugal and to the regional government of Madeira.

The quick response action undertaken by the competent authorities at local and national levels, together with the support of the EU, have been instrumental in this catastrophe.
As for the tourism sector, according to the information provided by the regional government, the hotel industry of Madeira was not affected and maintains all operating conditions safely. Hotel establishments, in general, are operational and there were not reported any difficulties or problems. The Madeira International Airport is also operational.
I am confident that Madeira will continue to count on its solid tourism infrastructure and services which have made it the destination of excellence it is today.”

Source: UNWTO press release

Tuesday, February 23, 2010

European Union: Workshop on the revision of the Package Travel Directive in April 2010

The European Commission will hold a full-day stakeholders' workshop on the revision of the Package Travel Directive (90/314/EEC) on 22 April 2010. The workshop will take place at the Albert Borschette Conference Centre in Brussels. It will primarily aim at hearing and collecting stakeholders' views on the impacts of identified policy options for a revision of the Directive.

Interested parties are invited to express their interest in participating at the workshop by 19 March 2010 sending an e-mail to .

For more information click here>>.

UNWTO: International Summit on Tourism, Sport and mega-Events to be held in South Africa

The United Nations World Tourism Organisation (UNWTO) in collaboration with the Ministry of Tourism in South Africa is organizing the International Summit on Tourism, Sport and Mega-events in Johannesburg, South Africa from 24 to 26 February 2010.

The Summit will provide a forum to consider the impact of mega events - particularly sport, culture, exhibitions and entertainment - from a tourism perspective. The Summit will be held parallel to the annual Meetings Africa hosted by South Africa Tourism.

More information available here>>.

Friday, February 19, 2010

Airline Insolvency-Pasenger Rights

On the collapse of the Scottish airline, FlyGlobespan, previously reported, those customers who had booked a package holiday with the company were protected by the Civil Aviation Authority's Air Travel Organiser's Licensing scheme (ATOL). This enabled those abroad to continue with their holiday and arrangements were made to provide them with alternative flights home at the end of it. Those that had yet to travel were entitled to a refund.

Those who had booked a flight-only deal were not covered by the ATOL system, however. If they paid for the flight by credit card they could obtain a refund from the credit card company under Section 75 of the Consumer Credit Act 1974. This does not apply to charge cards (e.g. American Express, Diners etc.) or to debit cards but some of the companies that issue these do provide protection under their terms and conditions of issue. It did not matter whether the customer paid for the flight in total with a credit card: provided that even part of the payment was by credit card and that this amount was £100 or more then they were covered for a full refund.

There was some confusion in this case, however, as FlyGlobespan used the ATOL logo on their website leading to some travel agents and customers to think that all bookings, including flight-only were covered. The CAA stated that they were entitled to do this and that it was for the customer to read the terms and conditions to see which travel arrangements were and which were not included.


Collapse of Scottish Airline

As previously reported, FlyGlobespan, Scotland's largest independent airline, based in Edinburgh, went into administration in December. Initially, it was thought that it had fallen victim to the economic downturn. However, despite the recession, airport passenger traffic has continued to grow at Edinburgh; the only major UK airport where this has been the case. Furthermore, air freight traffic grew by 135% in 2008. Edinburgh hotels have also had a good winter season.

It now appears that the collapse of the airline was due to cash flow problems created by the failure of E-Clear, the company that handled FlyGlobespan's credit card bookings, to hand over £35m (€40.23m/$54.75m) collected from the airline's customers. In my previous report I pointed out that E-Clear and similar companies delayed payments to airlines unril the passengers had taken their flights as an insurance against the airline's collapse. It now traspires that this was not the reason for E-Clear's failure to hand the money over. It appears that the money was being used to to meet financial obligations arising from the previous collapse of two other airlines.

E-Clear itself, has now gone into administration, after it failed to produce evidence that it still had the funds collected from FlyGlobespan's customers at a High Court hearing in England (where the company is based). A BBC investigation revealed that the company owes creditors approximately £100m (€114.94m/ $156.43m) but had only approximately £100,000 (€114,940/ $156,430) in its cash accounts. The BBC also reported that E-Clear had used £1.5m (€1.7235m/ $2.3465m) of its cash to prop up a tour operations business owned by E-Clear's CEO. That business has also gone into administration. The Independent newspaper has reported that the Serious Fraud Office is considering starting a formal investigation.

This whole debacle has raised the question of why the financial regulators had failed to prevent this. The Scottish Government are pressing the UK Government to investigate this.


Sturgeon v. Condor: German Supreme Court grants compensation to plaintiffs

Following the preliminary ruling of the ECJ in Case C-402/07 - Sturgeon v. Condor, German Supreme Court (BGH) in judgement Xa ZR 95/06 delivered Feb. 18. 2010, granted plaintiffs' claim for compensation. BGH saw no reason for another reference for preliminary ruling as requested by Condor: there were no doubts that Reg. (EC) 261/2004 was valid and compatible with the Montreal Convention. ECJ had made clear that the Regulation provides for compensation in cases of inordinate delay if interpreted according to the principle of equal treatment.

As Condor had failed to prove extraordinary circumstances decision had to made in favour of plaintiffs.

Source: BGH press release 40/2010 of Feb 19, 2010. Find full text in German here>>.

Thursday, February 18, 2010

Germany: Lufthansa facing a four-day strike of its pilots

German pilots’ union Vereinigung Cockpit has called on Lufthansa pilots to participate in a four-day strike from Feb. 22 to 25. Lufthansa said the decision was made despite willingness shown by the airline to reach a negotiated settlement. Vereingung Cockpit tries to explain their reasons in a passenger information sheet.

Lufthansa's German website provides a link to their passenger information ("Informationen zum angekündigten Pilotenstreik"); however there is no such link or information in the English version. The information provided in German claims that in case of a strike and resulting irregularities passenger care will rank first for Lufthansa. At the current stage they grant free re-booking to other Lufthansa flights subject to certain conditions and restrictions. In case of a strike they announce to allow free cancellation or re-routing.

There is no mentioning of compensation for cancelled flights according to Reg. 261/2004, though. Media report that Lufthansa intends to rely on "extraordinary circumstances". However, in C-549/07 - Wallentin-Hermann ECJ has taught us that the term "extraordinary circumstances" requires a narrow interpretation an that recital 14 of the Regulation did not mean that the events listed there themselves constitute extraordinary circumstances, but only that they may produce such circumstances. Even though "strike" is mentioned as a potential reason for extraordinary circumstances in recital 14 of the Regulation, thus there remains doubt whether a strike of the operating carrier's own staff can amount to this exoneration.

A new reference for preliminary ruling seems a likely consequence ...

Wednesday, February 17, 2010

European Court of Justice has no jurisdiction to interpret Warsaw Convention

Reference to ECJ was made in the course of proceedings brought by Ms Bogiatzi against Société Luxair, société luxembourgeoise de navigation aérienne SA (‘Luxair’), and Deutscher Luftpool, an association under German law, concerning joint and several liability to compensate her for the injury she suffered as a result of an accident which occurred while boarding a Luxair aeroplaneon 21 Dec. 1998.

On 22 December 2003, Ms Bogiatzi brought proceedings for damages against Deutscher Luftpool – an association of aviation insurers which is governed by German civil law – and Luxair before the tribunal d’arrondissement de Luxembourg (District Court, Luxembourg), relying on Regulation No 2027/97 and the Warsaw Convention. Ms Bogiatzi’s claim, brought five years after the events at issue took place, was held inadmissible. The court held that the two-year limitation period provided for in Article 29 of the Warsaw Convention for bringing actions for damages is predetermined and may not be suspended or interrupted. The inadmissibility of the claim was confirmed on appeal. Ms Bogiatzi then appealed on a point of law to the Cour de cassation (Court of Cassation) which decided to stay proceedings and file a reference for preliminary ruling to the ECJ.

In its judgement of 22 October 2009 ECJ rejected jurisdiction for the following reasons:

Pursuant to Article 234 EC, the Court has jurisdiction to give preliminary rulings concerning the interpretation of the EC Treaty and on the validity and interpretation of acts of the institutions of the Community. According to settled case-law, an agreement concluded by the Council, in accordance with Articles 300 EC and 310 EC, is, as far as the Community is concerned, an act of one of the institutions of the Community, within the meaning of subparagraph (b) of the first paragraph of Article 234 EC. The provisions of such an agreement form an integral part of the Community legal order as from its entry into force and, within the framework of that order, the Court has jurisdiction to give preliminary rulings concerning the interpretation of such an agreement. However, as the Community is not a contracting party to the Warsaw Convention the Court does not, in principle, have jurisdiction to interpret the provisions of that convention in preliminary ruling proceedings.

Even though the Court has jurisdiction to interpret an international convention which has not been ratified by the Community where and in so far as, pursuant to the Treaty, the Community has assumed the powers previously exercised by the Member States in the field to which such convention applies, in absence of a full transfer of the powers previously exercised by the Member States to the Community, the latter cannot, simply because at the material time all those States were parties to the Warsaw Convention, be bound by the rules set out therein, which it has not itself approved.

The Warsaw Convention therefore does not form part of the rules of the Community legal order which the Court of Justice has jurisdiction to interpret under Article 234 EC.

Regulation No 2027/97 must be interpreted as not precluding the application of Article 29 of the Warsaw Convention to a situation in which a passenger seeks to establish the liability of the air carrier on account of harm suffered by him when flying between Member States of the Community.

Full text of judgement C‑301/08 of Oct. 22, 2009 available here>>.

Tuesday, February 16, 2010

ECJ Advocate General Mazák: liability limits of Montreal Convention cover both, non-material and material damage

Mr. Walz' checked suitcase was lost on 4 June 2007 during a flight from Barcelona to Porto operated by Clickair. Mr Walz claimed damages of EUR 3 200: EUR 2 700 for the value of the lost baggage and EUR 500 for non-material damage resulting from that loss. Clickair challenged the amount of the damages claimed because it exceeded the limit for liability for lost baggage laid down by Article 22.2 Montreal Convention.

The referring court (Juzgado de lo Mercantil No 4 de Barcelona) observed that the Montreal Convention did not draw any distinction according to the type of damage to which the carrier’s liability relates, and took the view that the limitation on the carrier’s liability should cover both non-material and material damage. However, it indicated that a number of interpretations of Article 22.2 of the Montreal Convention were possible.

In his opinion delivered on 26 January 2010, Advocate General Mazák proposed that the Court should answer the question referred as follows:

  • Article 22(2) of the Convention for the Unification of Certain Rules for International Carriage, signed in Montreal on 28 May 1999, must be interpreted as meaning that, in the transport of baggage, the liability of the carrier in the case of destruction, loss, damage or delay is limited to 1 000 Special Drawing Rights per passenger in total, whatever the type of damage and the method of providing compensation.
Case C-63/09 - Axel Walz v. Clickair S.A; full text of opinion available here>>.

Monday, February 15, 2010

USA: 2009 showed improved airline on-time performance and decreased rate of mishandled baggage

The nation’s largest airlines had an on-time performance rate in 2009 that was their best since 2003, according to the Air Travel Consumer Report released today by the U.S. Department of Transportation (DOT). In addition, the report shows that the carriers’ rate of mishandled baggage last year was the lowest recorded since 2004.

According to information filed with the Bureau of Transportation Statistics (BTS), a part of DOT’s Research and Innovative Technology Administration (RITA), the 19 carriers reporting on-time performance recorded an overall on-time arrival rate of 79.5 percent in 2009, an improvement over 2008’s rate of 76.0 and the best annual record since the 82.0 percent on-time rate of 2003. In addition, the carriers recorded a mishandled baggage rate of 3.91 per 1,000 passengers in 2009, an improvement over 2008's 5.26 and the best mark for a calendar year since the rate of 3.84 recorded in 2002.

Source: RITA press release of Feb 12, 2010; find full text here>>.

German Supreme Court: statutory period of limitation of Montreal Convention not applying to claims under Reg. (EC) 261/2004

On April 2, 2008, plaintiff had filed a claim for compensation under Reg. (EC) 261/2004 because of cancellation of his scheduled flight from FRA to PMI on Nov. 19, 2005. The statement of claim had been delivered to defendant on May 5, 2008.

Both, first instance court (AG Rüsselsheim) and court of appeal (LG Darmstadt) dismissed the claim. Court of appeal argued that Reg. 261/2004 did not contain any statute of limitation. This loophole had to be filled by applying the limitation period of Art. 35 Montreal Convention as Reg. 261/2004 was supplementing the Convention with regard to passenger rights. As plaintiff's law suit had missed this limitation period, the claim had to be dismissed.

In judgement Xa ZR 61/09 of Dec. 10, 2009 German Supreme Court rejected application of the limitation period under the Montreal Convention: Montreal did not cover cancellation and the compensation under Reg. 261/2004 was not a claim for damages in the meaning of Art. 19 and 29 Montreal Convention. Though Reg. 261/2004 was supplementing the Convention, the two legal acts did not constitute a consistent legal system. Therefore not Montreal but the limitation period under national law was applicable.

Supreme Court thus repealed the judgement remanding the case to the court of appeal.

Judgement Xa ZR 61/09 of Dec. 10, 2009 available in German here>>.

Friday, February 12, 2010

ECJ Joined Cases C‑402/07 and C‑432/07 (Sturgeon ea)

Defendant (Condor Flugdienst GmbH) is of the opinion that ECJ exceeded it's competence when deciding indemnities to be paid in case of a delay of 3 or more hours under Air Passengers' Rights Regulation 261/2004/EC (judgement as of November 19, 2009). German's Highest Court BGH reopened the proceedings (Case 2 BvE 2 / 08) to debate a new preliminary ruling before the ECJ in the light of the Lisbon Judgment of German's Federal Constitutional Court (BVerfG) as of June 30, 2009 (Cases 2 BvE 2/08, 2 BvE 5/08, 2 BvR 1010/08, 2 BvR 1022/08, 2 BvR 1259/08, 2 BvR 182/09).

Austria: city trips offered in conncetion with a student exchange programme do not constitute a "package"

Defandant, an Austrian association organising international student exchanges including free accomodation with host families, was offering a 6 day city trip to New York for students participating in the exchange programme in the U.S. and a 3 day city trip to London for students participating in the exchange programme in U.K. The trips included accomodation, sightseeing and recreational activities as well as workshops to prepare the students for their stay in the respective country. The trips were offered at fair market value. Defandant also offered flight tickets in connection with said trips.

Plaintiff, an Austrian association to combat unfair competition, filed a law suit requiring defendant to cease and desist from
  • pursuing travel business in connection with international student exchanges by offering city trips of several days duration, including transportation, accomodation and other tourist services (sightseeing) beyond the period of school attendance or stay with host families at an inclusive price and thus organising packages without tour organiser licence and/or insolvency coverage and/or
  • pursuing travel business in connection with international student exchanges without travel agency licence by providing flight tickets from/to Austria and/or within country of destination.
Court of first instance (Handelsgericht Wien) and court of appeal (Oberlandesgericht Wien) both granted the claim.

Upon further appeal by defendant, Austrian Supreme Court (OGH)
  • revised the judgements and dismissed the claim in regard to package tours
  • repealed the judgements remanding the case to the court of first instance in regard to flight tickets.
Supreme court referred to ECJ judgement C-237/97 - AFS in which ECJ had held that Council Directive 90/314/EEC of 13 June 1990 on package travel, package holidays and package tours did not apply to travel
  • comprising student exchanges of about six months' or a year's duration;
  • the purpose of which is attendance by the student at an educational establishment in the host country in order to familiarise himself with its people and culture; and
  • during which the student stays with a host family as if he were a member thereof free of charge.
The city trips offered could not be regarded in isolation from the exchange programmes as they were not offered separately but only in connection with same. As the trips also served the purpose to prepare the students for their stay in the host country and the style of living there, neither the exchange programmes themselves nor the city trips as parts of these programmes could be regarded "packages" in the meaning of Dir. 90/314/EEC.

Concerning the flight tickets, Supreme Court considered defendants objection that the tickets were organised and issued by a licenced travel agent. As there were no findings on who really organised and issued the tickets, in further proceedings court of first instance will have to take evidence in this regard. If it turned out that they were indeed organised and issued by a licenced travel agent, defendant could have a strong argument to have acted based on a justifyable legal opinion.

Full text of judgement 4 Ob 70/09m of Nov. 19, 2009 available in German here>>.

Germany: new Supreme Court decision on liability under Reg. 261/2004

Plaintiff had booked a round trip flight FMO-FRA-GRU-FLN-GRU-MUC-FMO with defendant air carrier (LH). The section GRU-MUC was a codesharing flight with RG, recognizable by indication of both flight numbers (LH/RG) and the note "operated by RG". The flight GRU-MUC was cancelled and plaintiff rerouted to a later LH flight to FRA. Due to delayed departure of the latter flight of more than 4 hrs, plaintiff missed her connecting flight to FMO. As the next available flight FRA-FMO was also cancelled she was rerouted once more to CGN.

Plaintiff sued LH for compensation of EUR 600 under Reg. (EC) 261/2004. First instance court granted the claim, court of appeal dismissed same. Upon further appeal of plaintiff, German Supreme Court (BGH) repealed the judgement remanding the case to the court of appeal:

"Operating carrier" in art. 5 par. 1 lit c of Reg. 261/2004 had to be interpreted the same way as "actual carrier" in art. 39 Montreal Convention, thus meaning the carrier which actually operated the flight regardless of an exclusive contractual relationship with another carrier. The purpose of a high level of consumer protection would not require a different interpretation. In case of code sharing only the carrier actually operating the flight was able to influence its performance. The purpose of the provision would not allow to regard the other cooperation partner of the code share flight as being "operating" same as well.

Operating carrier of the flight GRU-MUC had therefore only been RG resulting into no liabilty of LH under Reg. 261/2004 for the cancellation of the original flight GRU-MUC.

Anyway, this was not sufficient to dismiss the claim as the LH flight GRU-MUC which plaintiff was rerouted to was delayed for more than 4 hrs resulting into a delayed arrival of considerably more than 3 hrs. Given ECJ decision C-402, 432/7 (Sturgeon/Condor and Böck/Air France), passengers suffering such delay had a similar claim for compensation like passengers of cancelled flights. The claim for compensation could therefore be based on the delay of the substitue flight.

Court of appeal will therefore have to render a new judgement which will have to consider whether the technical problems - which due to its conclusions had caused the delay - had been of a nature that would constitute "extraordinary circumstances" under art. 5 par. 3 of Reg. 261/2004.

Full text of BGH judgement Xa ZR 132/08 of Nov. 26, 2009 available in German here>>.

Thursday, February 11, 2010

Main St / FFD

: FYI -- Main St / FFD

2010 WL 265805 (Kan.Dist.Ct.) (Trial Order) District Court of Kansas.
Johnson County

Zachary FEE, Plaintiff,
EXPEDIA, INC., d/b/a, Defendant.

No. 09-CV-8466.

January 25, 2010.

Order on Motion to Dismiss for Improper Venue

David W. Hauber, District Court Judge.

The Court has before it defendant Expedia, Inc.'s ("Expedia") motion to dismiss plaintiff Zachary Fee's ("Fee") petition, filed pursuant to K.S.A. 60-212(b) ,
which asserts that plaintiff's claims, including those under the Kansas Consumer Protection Act ("KCPA"), K.S.A. 50-623 /et seq./ /,/ should be dismissed in favor of venue in Dallas County Texas, where defendant is based, because of a "clickwrap" agreement that is embedded with a forum selection clause when a consumer uses defendant's website,

/Factual Basis for the Motion/

Plaintiff Zachary Fee asserts that he was damaged in connection with a hotel room reservation he made through Hotels.corm's website in that he was wrongfully relocated from a four-star hotel to a three-and-a-half star hotel when the original hotel could not accept his reservation.
Plaintiff contends that this relocation constitutes, among other things, "bait and switch selling" in violation of the KCPA. Defendant contends that this case should be dismissed for improper venue and that the Court should enforce the forum selection clause and dismiss this matter. Oral argument was held on this matter and the parties have fully briefed the issues. No supplemental authority has been provided to the Court.

Plaintiff is a resident of Johnson County, Kansas. Petition ("Pet.") at ¶ 1. He filed this lawsuit September 16, 2009. (Pet.). He alleges that, on June 25, 2009, he used to reserve "hotel accommodations at the '4 Star' Hotel Phillips in Kansas City, Missouri" for the night of July 31, 2009. Pet. at ¶ 5. Plaintiff alleges that, on July 27, 2009, he received an e-mail from advising him that the Hotel Phillips was unable to accept his reservation. Pet. at ¶ 7. At that time, requested that Plaintiff contact its Hotel Partner Support Department, so it might assist him in finding alternate accommodations. Pet. at ¶ 7. Plaintiff further alleges that, on July 27, 2009, he obtained an alternative reservation from "at the
'3.5 Star' Westin Crown Center in Kansas City, Missouri." Pet. at ¶ 8. is a Texas limited partnership, with its principal place of business in the State of Texas. Affidavit of Greg Lambert, at ¶ 2.^[FN1] The company operates the website, which offers hotel reservation services to its customers. Ex. A at ¶ 2. To make a hotel reservation using, a customer first chooses a hotel, and then inputs guest information, room preferences, and payment information.
/Id./ at 4. Before the reservation can be completed, however, a customer must agree to the User Agreement by means of a "clickwrap"
agreement. /Id./

FN1. As outlined in Greg Lambert's Affidavit,, L.P. is a
wholly-owned subsidiary of Expedia, Inc. not, as alleged in the
Petition, a d/b/a of Expedia, Inc. Accordingly, this motion is made
on behalf of only.

A clickwrap agreement "appears on an internet webpage, and requires that a user consent to any terms or conditions by clicking on a dialog box on the screen in order to proceed with the internet transaction." /Feldman v. Google, Inc.,/ 513 F. Supp.2d 229, 236 (E.D. Pa. 2007) .
On, the clickwrap agreement appears immediately above the words "Book Reservation." /Id../ The customer must check a click-box
stating: "I agree to the Terms & Conditions." /Id../ The "Terms & Conditions" text is a hyperlink that will take the customer directly to the User Agreement. /Id../ Only after accepting the terms and conditions of the User Agreement by selecting the click-box, will the customer be able to complete the transaction. In other words, use of the website is conditioned upon the customer's acceptance of the User Agreement.

The User Agreement contains a mandatory forum selection clause which states that "this Agreement is governed by the laws of the State of Texas, U.S.A. You hereby consent to the exclusive jurisdiction and venue of the courts in Dallas County, Texas, U.S.A., in all disputes arising out of or relating to the use of this Website." The User Agreement further provides that "[b]y accessing or using this Website in any manner, you agree to be bound by the Agreement." Thus, the User Agreement offers customers use of the website conditioned only upon their "acceptance without modification of the terms, conditions, and notices," set forth in that agreement.

While plaintiff attacks, factually, the affidavit of defendant's corporate representative about his personal knowledge as to the Fee transaction, the affidavit establishes the agreement itself and that the user must agree to its terms - particularly the venue selection clause, before he can book a reservation. The affiant, Greg Lambert, is the director of customer care at, and has knowledge of this website requirement. There is no doubt that plaintiff used the website, see Ex. A to Petition, and his counsel admitted the same at oral argument.

Accordingly, what is pertinent to the Court, factually, is whether the agreement is enforceable and broad enough to cover the claims asserted under the KCPA. For reasons that will be discussed below, the Court concludes that the venue selection clause is enforceable.

/The Standard for a Motion to Dismiss/

On a motion to dismiss, the Court must presume the well-pleaded facts of the petition. However, when deciding a dismissal for improper venue, the standard is the same as for deciding a motion to dismiss for lack of personal jurisdiction. /Financial Sys. & Equip., Inc. v. Easy Sys., Inc.,/ 2000 WL 714331, at *1 (D. Kan. May 17, 2000) .^[FN2]
That standard is well-established:

FN2. Because Fed. R. Civ. Pro. § 12(b) is essentially identical to
K.S.A. 60-212(b)(3)
the court finds federal decisions to be persuasive.

The plaintiff bears the burden of establishing personal jurisdiction over the defendant. Prior to trial, however, when a motion to dismiss for lack of jurisdiction is decided on the basis of affidavits and other written materials, the plaintiff need only make a prima facie showing.
The allegations in the complaint must be taken as true to the extent that they are uncontroverted by the defendant's affidavits. If the parties present conflicting affidavits, all factual disputes are resolved in the plaintiffs favor, and the plaintiff's prima facie showing is sufficient notwithstanding the contrary presentation by the moving party.

/Behagen v. Amateur Basketball Ass'n,/ 744 F.2d 731, 733 (10^th
/cert. denied,/ 471 U.S. 1010 (1985)

(citations omitted).


Plaintiff contests the motion to dismiss, principally, on two grounds.
The first is the venue provision of the KCPA, K.S.A. 50-638(b) ,
which provides:

Every action pursuant to this act shall be brought in the district court of any county in which there occurred an act or practice declared to be a violation of this act, or in which the defendant resides or the defendant's principal place of business is located. If the defendant is a non-resident and has no principal place of business in this state, then the non-resident can be sued either in the district court of Shawnee County or in the district court of any county in which there occurred an act or practice declared to be a violation of this act.

The second is that plaintiff contends his claims originate subsequently and independently from usage of the website and its User Agreement because his reservation was cancelled after confirmation at one hotel, but placed at another. In this regard, he points to the failure of defendant to supply the's referenced "Supplier Rules and Restrictions." In the User Agreement is a provision which
states: "Separate terms and conditions will apply to your reservation and purchase of travel related goods and services that you select.
Please read these separate terms and conditions carefully." This pertains to the rules of any participating hotel. In this regard, plaintiff contends that he became "aggrieved," pursuant to K.S.A. 50-634 ,
as a consumer, on July 27, 2009, when he received a notice for cancellation of his reservation, for which he had paid $94.06. This occurred a month after his website use, which did not provide him additional separate terms.

From the foregoing, plaintiff argues that the KCPA governs conduct before, during and after a consumer transaction and that the forum selection clause only covers "disputes arising out of or relating to the use of the Website." Plaintiff does not dispute, however, his assent to the website agreement or the terms referenced.


Defendant urges that numerous courts, including regional federal district court decisions, have found clickwrap agreements to be valid, enforceable agreements when the customer chooses to use the website.
/Burcham v., Inc.,/ No.4:07CV1963CDP, 2009 WL 586513 at * 2 (E.D. Mo. March 6, 2009) (citing
cases)(enforcing clickwrap agreement and noting "such agreements have been routinely upheld by circuit and district courts"); /see also / /Mortgage Plus, Inc. v. Docmagic, Inc.,/ No. 03-2582-GTV-DJW, 2004 WL 2331918, at *5 (D. Kan. Aug. 23, 2004)
(holding that clickwrap agreement is a valid contract); /see e.g., / /Seibert v. Amateur Athletic Union of U.S., Inc.,/ 422 F.Supp.2d 1033,
1040 (D. Minn. 2006)
courts which have considered the issue have upheld arbitration and forum selection clauses in so-called "clickwrap" or "shrinkwrap" form contracts."); /DeJohn v. The TV Corp. Int'l,/ 245 F. Supp.2d 913, 921 (N.D. III. 2003) (enforcing
click-wrap forum selection clause).

In /Docmagic,/ the agreement is identical to the one at bar and was held to be valid and enforceable. /See/ 2004 WL 2331918 at *5 .
The /Docmagic/ plaintiff was required to click on a box indicating his agreement to the terms of use before he could complete his transaction.
/Id./ That clickwrap agreement contained a forum selection clause that required any suit arising from the agreement to be brought in a court in Los Angeles, California. /Id./ at *7. Plaintiff also argued that the clickwrap agreement did not create an enforceable contract. /Id./ at *2.
The court rejected this argument, holding that the plaintiff "had a choice as to whether to download the software and utilize the related services..." /Id./ at *5.

An identical user agreement was held valid and enforceable in /Burcham v. Expedia, Inc.,/ 2009 WL 586513 at *3 (E.D.Mo. 2009) .
In /Burcham/ the plaintiff was required to accept Expedia's user agreement before completing the hotel reservation. /Id./ at *2. The agreement was identical to the agreement, except that it required actions to be brought in King County, Washington. The court enforced the agreement. /Id./ at *4.

/A. The Reasonable Relationship Caveat to Forum Selection Clauses./

Kansas has followed the enforcement of contractual forum-selection clauses and the rationale of /The / /Bremen v. Zapata Off-Shore Co.,/
407 U.S. 1(1972)
/See / /Vanier v. Ponsoldt,/ 251 Kan. 88, 99, 833 P.2d 949, 958 (1992)
(enforcing installment purchase and security agreement forum selection clause). The only /caveat/ to enforcement of such provisions is that they must be fair and reasonable, they must bear a reasonable relationship to the transaction and they must not be the result of fraud, duress or overreaching. /Id./ at 101.

Likewise, arbitration clauses with KCPA claims are enforced. /Packard v.
Credit Solutions of America, Inc.,/ 42 Kan. App. 2d 382, 213 P.3d 437

(reversing district court on failure to grant motion to compel arbitration). In /Packard,/ the plaintiffs claimed violations of the KCPA against the defendant, a credit debt reduction company, which allegedly engaged in deceptive practices by taking debit transaction amounts from plaintiffs' bank accounts. It was not authorized to do business in Kansas. The agreement contained the following provisions:

/Arbitration of Dispute.-If/ there is /any dispute between the parties arising out of this agreement,/ the parties agree to submit that dispute to binding arbitration under the auspices of the American Arbitration Association (AAA).

/Choice of Law and Jurisdiction.-In/ the event of any dispute regarding this AGREEMENT including but not limited to service fees and costs, CLIENT and CSA agree that venue of resolution shall be in the county and city of Dallas, Texas. Both CSA and CLIENT agree that the laws of the State of Texas /shall govern any disputes arising from this AGREEMENT./

42 Kan. App. 2d at 383-84

(emphasis added).

The Packards argued that the conduct at issue did not "arise out this agreement" but the court noted that the plaintiffs did not "satisfactorily explain how their statutory claims do not arise out of the agreement, when, for example, in order to establish violations of the KCPA, they must show CSA's [defendant's] performance /under and pursuant to the agreement/ constituted material misrepresentations or deceptive acts and practices." 42 Kan. App. 2d at 441.

The Court did not address the forum selection clause directly, because its ruling on the arbitration clause was dispostive, /id./ at 387, except for the fact that it significantly noted that such clauses may be enforced if they bear a reasonable relationship to the transaction. /Id.
(citing / /Aylward v. Dar Ran Furniture Industries, Inc.,/ 32 Kan. App.
2d 697,700, 87 P.3d 341 (2004)
Presumably the /Packard/ court was fully cognizant of the KCPA's venue provision, even though it was decided under federal preemption.^[FN3]

FN3. /Packard/ does not suggest that absent the federal preemption
which existed there, pursuant to the Federal Arbitration Act, 9
U.S.C. §§ 1
the result would be any different. On the contrary, its specific
reference to the forum selection clause suggests its intent to
demonstrate both clauses would be enforceable.

/1. Whether the KCPA venue provision trumps the forum selection clause./

The KCPA venue clause, K.S.A. 50-638(b) ,
uses "shall," and not "may," to direct the filing of KCPA actions. The Court believes this is intended to contrast the word "may" which otherwise appears in ordinary venue provisions for civil actions against corporations, non-residents or non-qualified corporations, as referenced in K.S.A. 60-604
and 60-605
This limits where KCPA actions may be brought within the state, but does not otherwise speak to the enforceability of contract provisions. On the contrary, while the KCPA directs that a consumer "may not waive or agree to forego rights or benefits under this act," K.S.A. 50-625(a) ,
the act allows the enforcement of contractual settlements that are not unconscionable. K.S.A. 50-625(c) .
The mere fact that a consumer may waive a right is not, in itself, unconscionable. /Farrell v. General Motors Corp.,/ 249 Kan. 231, 242,
815 P.2d 538 (1991)
Our courts, by definition, have precluded the concept of unconscionability by requiring forum selection clauses to be reasonably related to the transaction.

Similarly, the court in /Billings, M.D. v. Clinitec Intern., Inc.,/ 2000 WL 1072167, *3 (D. Kan., July 25, 2000) ,
considering K.S.A. 50-638(a)
construed that plaintiff, by signing an agreement containing a forum selection clause, did not waive or agree to forego any rights or benefits under the act, rather, he agreed to litigate them in Pennsylvania.

Plaintiff argues that it is unreasonable to force him to travel to Texas to litigate his KCPA claims because of the policy to liberally construe and protect Kansas consumers. K.S.A. 50-623(b) ;
/Ray v. Ponca/Universal Holdings, Inc.,/ 22 Kan. App. 2d 47, 49, 913P .2d
209 (1995). /Vanier,/ however, held that a forum selection clause was reasonable if the forum selected was the home of one of the parties.
/Vanier,/ 251 Kan. at 101, 833 P.2d at 959
("We find the forum - selection clause fair and reasonable. The forum selected is the home of one of the parties to the contract and, thus, has a reasonable relationship to the transaction."). Moreover, the Court would note that plaintiff already has traveled to Texas to depose defendant's corporate representative, which, no doubt, would have been required if the case remained here. This is a consequence of longstanding rules enforced in this and federal courts, under the interpretation of FED. R. Civ. PRO. § 30(b)(6) [which is identical to K.S.A. 60-230(b)(5) ]
that requires corporate representatives to be deposed at defendant's corporate headquarters.^[FN4] This, essentially, is a fairness rule to a compelled litigant.

FN4. As a general rule, the court has "substantial discretion to
specify the place of the deposition."^FN23 The Tenth Circuit has
stated that the "deposition of a corporation by its agents and
officers should ordinarily be taken at its principal place of
business." ^FN24 For a corporation, this rule "translates to a
presumption that officers, directors and managing agents should be
available for deposition at the company's headquarters." ^FN25

FN23. /Stone v. Morton Int'l,/ 170 F.R.D. 498, 504 (D.Utah 1997)

(citing /In re Standard Metals Corp.,/ 817 F.2d 625 (10th Cir .1987)
/Thomas v. IBM,/ 48 F.3d 478, 483 (10th Cir.1995)

(citing 8A Charles Alan Wright, Arthur R. Miller & Richard L.
Marcus, Federal Practice and Procedure: Civil 2112 at 81 (1994)
/Payne v. McKune,/ No. 06-3010, 2007 U.S. Dist. LEXIS 77553, at *7,
2007 WL 3036190 (D.Kan. Oct. 16, 2007)

However, "[u]nderlying this rule appears to be the concept that it
is the plaintiff who brings the lawsuit and who exercises the first
choice as to the forum. The defendant, on the other hand, is not
before the court by choice." ^FN26 Indeed, in discussing the rules
surrounding the designation of place for a deposition, Moore's
Federal Practice states: "[t]here is a general presumption that a
defendant's deposition will be held in the /district/ of the
defendant's residence" and places the burden of deviating from this
presumption on the noticing plaintiff.^FN27 Depositions of a
corporate defendants' representatives presumptively take place at
the corporation's headquarters not, as plaintiff advocates, to allow
plaintiff ready access to documents located at a corporation's
facility, but rather to afford the corporate defendant and its
representatives, who did not have the first choice as to forum, a
measure of convenience.

FN26. /Payne,/ 2007 U.S. Dist. LEXIS 77553 at *6-7, 2007 WL 3036190

(citing /Farquhar v. Shelden,/ 116 F.R.D. 70, 72 (E.D. Mich.1987)
FN27.6-2 Moore's Federal Practice-Civil § 26.105 (emphasis added).

/ICE Corp. v. Hamilton Sundstrand Corp./ WL 4334918, 5 -6 (D.
Kan.,Dec. 6, 2007)

Thus, in terms of whether plaintiff will expend large sums of money to travel long distances, it is apparent that the rules anticipate that the mere fact that travel may be anticipated is not inherently unfair, particularly when it is the plaintiff who has chosen to litigate, such as in this case, over whether he received a four-star or a three-and-a-half star hotel room.

Here, is headquartered in Dallas County, Texas. Ex.. A at ¶ 2. Further, many (if not all) of its witnesses and relevant documents are likely located there. Accordingly, the forum selection clause at issue is reasonable.


Next, the Court must consider plaintiff's argument that the cancellation of his reservation and decision to book an alternate hotel, was, somehow, a different transaction that is not governed by the User Agreement. There is little doubt that but for his reservation on the website, Fee would not have engaged in the transaction for which he now claims a violation of the KCPA. Indeed, one hinges on the other. The language of the User Agreement, however, uses broad language the is typical of an arbitration agreement, requiring the forum selected to address matters "arising out of or relating to" use of the website.

The parties agreed to arbitrate "[a]ny controversy or claim /arising out of or relating to/ payments to [Chelsea] by Medco." (Emphasis added).
The ordinary meaning of the phrase "relating to" is broad.^FN9 /Morales v. Trans World Airlines, Inc.,/ 504 U.S. 374, 383-84, 112 S.Ct. 2031,
119 L.Ed.2d 157 (1992)
/Coregis Ins. Co. v. Am. Health Found., Inc.,/ 241 F.3d 123, 128-29 (2d
/see also / /Prima Paint Corp. v. Flood & Conklin Mfg. Co.,/ 388 U.S.
395, 398, 87 S.Ct. 1801, 18 L.Ed.2d 1270 (1967)
(construing an arbitration clause with the language "[a]ny controversy or claim arising out of or relating to this Agreement" as a broad one).

FN9. Because "relating to" is broader than "arising out of," we need not consider the scope of the phrase "arising out of" in isolation. /See / /Coregis Ins. Co. v. Am. Health Found., Inc.,/ 241 F.3d 123, 128 (2^nd

("[T]he ordinary meaning of the term 'related to' ... is broader than the term 'arising out of'...."); /Mediterranean Enters., Inc. v.
Ssangyong Corp.,/ 708 F.2d 1458, 1464 (9th Cir.1983)
(explaining that inclusion of the term "relating to" makes an arbitration clause broader than one including only the term "arising under").

/Chelsea Family Pharmacy, PLLC v. Medco Health Solutions, Inc.,/ 567 F.3d 1191, 1199 (10th Cir. 2009) .

Because the language of the forum selection clause sweeps broadly, it encompasses subsequent transactions that might involve a cancellation or modification of prior arrangements. There is little doubt that the subsequent, and alternate reservation, is a transaction "relating to"
the earlier transaction. Accordingly, the Court rejects plaintiff's argument that an independent and subsequent cancellation negates the User Agreement and its forum selection clause.

For the foregoing reasons, the Court will grant the defendant's motion to dismiss.






District Court Judge, Div. 7

Fee v. Expedia, Inc.
2010 WL 265805 (Kan.Dist.Ct.) (Trial Order)


David J. Moraine, J.D., LL.M.
Texas State Bar Number 00795830
New York Bar Number 763095

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Thursday, February 04, 2010

Taiwan: Travel restrictions on Chinese tourists to be eased

Travel agents on Taiwan's outlying islands of Kinmen and Matsu will be allowed from May to apply online for travel permits on behalf of Chinese tour groups who want to visit the two islands via direct ferry services across the Taiwan Strait, the National Immigration Agency (NIA) said yesterday.

Chinese tourists who have already visited Taiwan over the past five years and who want to visit Kinmen and Matsu as part of a tour group of between five and 40 members can apply online for travel permits through Tourism Bureau-sanctioned travel agencies on the two islands.

Source: Taiwan News; find article here>>.

Wednesday, February 03, 2010

ICAO: revision of Limits of Liability under the Montreal Convention

Article 24 of the Montreal convention provides that the limits of liability are to be reviewed by the International Civil Aviation Organisation (ICAO) at five-year intervals by reference to an inflation factor which corresponds to the accumulated rate of inflation since the date of entry into force of the Convention. In the absence of disapproval by a majority of State Parties the revised limits become effective six months after their notification to State Parties by ICAO. The limits are expressed in Special Drawing Rights (SDR), a unit of account established by the International Monetary Fund. The SDR is defined as a basket of currencies, today consisting of the Euro, Japanese Yen, Pound Sterling and U.S. Dollar.

The following revised limits of liability established under Articles 21 and 22 of the Montreal Convention came into force on 30th December 2009:
Montreal Convention Old limit (Special Drawing Rights) Revised limit (Special Drawing Rights)
Article 21, paragraph 1 100,000 113,100
Article 22, paragraph 1 4,150 4,694
Article 22, paragraph 2 1,000 1,131
Article 22, paragraph 3 17 19

California: Ruling on Online Booking Tax overturned

A Los Angeles Superior Court judge has overturned an earlier ruling that would have given the city of Anaheim $21.3 million in back taxes and penalties from online travel companies such as Expedia and Travelocity. (See posting of Feb. 20, 2009)

The city in 2007 had sued the online travel companies for a larger share of hotel-bed fees – so-called transient occupancy taxes – collected through online booking. The law suit was based on the argument that he online companies were collecting taxes from customers on the retail price of hotel rooms, but only paying the city the tax on the wholesale price. However, superior court agreed with the defendants that the plain meaning of this type of occupancy tax stature simply did not cover online-travel companies.

The ruling in the Anaheim case is likely to set a precedent for several similar cases.

Source: The Orange County Register; find article here>>.