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Law360 (October 19, 2020, 4:30 PM EDT) -- A Texas federal judge has asked American Airlines Inc. for more evidence that it can compel arbitration under a third-party travel agency's terms of use with passengers seeking refunds for flights canceled due to COVID-19, saying search results pulled from an internet archive website won't suffice.
U.S. District Judge Reed O'Connor ordered the airline on Friday to submit either a declaration or deposition supporting its argument by Oct. 30, ruling he will not accept as evidence a copy of Expedia Group's and Hotwire's terms of use pulled from nonprofit library Internet Archive's Wayback Machine, which allows users to retroactively view websites and pages on certain dates.
American had submitted the Wayback Machine's search results to support its Aug. 13 motion to compel arbitration against two of the three named plaintiffs in the proposed class action, arguing other courts had taken notice of search results from the same archive. But Judge O'Connor declined to follow those courts' lead.
"Although American is correct that numerous district courts have taken judicial notice of documents on Wayback Machine pursuant to Federal Rule of Evidence 201, none of the cases upon which American relies is a decision from the Fifth Circuit or a district court within the Fifth Circuit," the judge said. "Further research also reveals that the organization that maintains waybackmachine.org itself disclaims any guarantee that the results it produces are accurate."
American is attempting to compel arbitration against James Saunders of Pennsylvania and William Holloway of Texas, who bought tickets for the airline through Hotwire and Expedia, respectively. The airline, the largest in the nation by fleet size, claims the travel agencies' terms of use state the purchaser "must bring claims against travel suppliers (like American) in individual arbitration or small claims court."
The passengers have hit back against American, saying it can't compel arbitration under those agreements because it wasn't a party to them.
Judge O'Connor has requested the additional information in order to rule on American's motion to compel arbitration. In an additional motion, American has asked the judge to dismiss Arizona resident Lee Ward's claims against the airline because he purchased his tickets through American's then-partner airline LATAM Airlines.
The proposed class argued Aug. 21 that the airline giant doesn't identify any language in Hotwire or Expedia's terms of use that allow for its interpretation of their arbitration clauses. And the definitions used in the terms of service are defined to include only the travel agency and its customers, they said.
In its motion to compel, American said if the court doesn't send the proposed class claims to arbitration, it must dismiss them as barred by the Airline Deregulation Act of 1978, which preempts state law claims having a connection with or reference to airline prices, routes or services.
Ward first hit American with the proposed class action in April, accusing the company of propping up its revenue shortfalls by hanging on to money that should be paid back to customers for canceled flights. He claims the airline makes customers jump through hoops to get refunds, outright refusing or forcing customers to rebook flights or accept travel vouchers in place of refunds.
Saunders and Holloway joined the lawsuit in July, seeking refunds for trips involving flights that American canceled as the coronavirus pandemic spread throughout the country.
Counsel for both parties didn't immediately respond to requests for comment Monday.
Ward, Saunders and Holloway are represented by Allen Ryan Vaught of Vaught Firm LLC, Daniel J. Kurowski, Steve W. Berman and Whitney K. Siehl of Hagens Berman Sobol Shapiro LLP, and E. Adam Webb and G. Franklin Lemond Jr. of Webb Klase & Lemond LLC.
American is represented by Dee J. Kelly Jr. and Lars L. Berg of Kelly Hart & Hallman LLP, and Michael E. Bern, James E. Brandt and Tyce R. Walters of Latham & Watkins LLP.
The case is Ward v. American Airlines Inc., case number 4:20-cv-00371, in the U.S. District Court for the Northern District of Texas.
--Editing by Marygrace Murphy.
For a reprint of this article, please contact reprints@law360.com.
