United States District Court, N.D. California
ORDER GRANTING IN PART AND DENYING IN PART MOTION TO
DISMISS; ORDER DENYING MOTION FOR LEAVE TO FILE RE: DKT. NO.
HAYWOOD S. GILLIAM, JR. United States District Judge
before the Court is Defendant Southwest Airlines Co.’s
motion to dismiss the complaint. Dkt. No. 14. For the reasons
articulated below, the Court GRANTS IN PART and DENIES IN
PART Defendant’s motion to dismiss with leave to amend.
Jean Shrem and Marni Fischer allege that Southwest’s
policy provides “that, when customers cancel
non-refundable tickets, [ ] the full amount paid may be used
without restriction as credits to purchase future travel on
Southwest for 1 year from the original date of
purchase.” Dkt. No. 1 (“Compl.”) ¶ 3.
They further allege that Southwest has a “hidden
exception” to that policy whereby customers lose the
“money paid for a ticket in less than 1 year from the
date of purchase in situations where customers purchase
future travel by combining cash with credit from a previously
cancelled ticket. If the future travel is cancelled,
Southwest forfeits both credits 1 year from the date of the
earliest purchase.” Id. at ¶ 4.
August 24, 2014, Plaintiffs purchased Southwest tickets,
which they then cancelled in exchanged for credit for future
travel to be used by August 23, 2015. Id. at ¶
10. On February 21, 2015, Plaintiffs purchased two new
roundtrip tickets using $784 in cash and $16 in Southwest
credit from the earlier cancelled tickets. Id. at
¶ 11. About four months later, Plaintiffs cancelled
their trip, id. at ¶ 13. On September 15, 2015,
Plaintiffs tried to use the credits from the cancelled
tickets and learned that they had forfeited the value of
their credit ($800.40) based on the expiration date of the
earlier cancelled flight (the $16 credit). Id. at
Plaintiffs filed the lawsuit, Defendant delivered travel
vouchers to Plaintiffs covering the disputed amount. Dkt. No.
15, ¶¶ 5, 7 & Ex. 1; Dkt. No. 16, ¶ 3.
Plaintiffs did not accept the travel vouchers, and instead
filed a class action complaint alleging four causes of
action: (1) breach of contract, (2) fraud, (3) negligence,
and (4) unjust enrichment. Relying on the Airline
Deregulation Act, 49 U.S.C. § 41701, et seq.
(“ADA”), Plaintiffs contend that Southwest
violated the ADA by failing to provide “conspicuous
written notice of any purported term that would permit
Southwest to forfeit their travel credits in this
manner.” Id. at ¶¶ 15-16 (citing 14
C.F.R. § 253.7).
REQUEST FOR JUDICIAL NOTICE
preliminary matter, the Court addresses Defendant’s
request for judicial notice, seeking notice of
Defendant’s Contract of Carriage. See Dkt. No.
Rule of Evidence 201 allows a court to take judicial notice
of a fact that is “not subject to reasonable dispute
because it: (1) is generally known within the trial
court’s jurisdiction; or (2) can be accurately and
readily determined from sources whose accuracy cannot
reasonably be questioned.” Additionally, under the
“incorporation by reference” doctrine, the Court
can “take into account documents ‘whose contents
are alleged in a complaint and whose authenticity no party
questions, but which are not physically attached to the
[plaintiff’s] pleading.’” Knievel v.
ESPN, 393 F.3d 1068, 1076 (9th Cir. 2005). The Ninth
Circuit has extended the doctrine to “situations in
which the plaintiff’s claim depends on the contents of
a document, the defendant attaches the document to its motion
to dismiss, and the parties do not dispute the authenticity
of the document, even though the plaintiff does not
explicitly allege the contents of that document in the
the complaint references Defendant’s policies and terms
that apply to the purchase of an airline ticket and attaches
a copy of the e-ticket as an exhibit to the complaint. The
attached ticket further references Defendant’s terms
and policies through hyperlinks on the page, Dkt. No. 1, Ex.
A. Finally, Plaintiffs have not raised any dispute regarding
the authenticity of the Contract of Carriage. Accordingly,
the Court GRANTS the request and takes judicial notice of the
Contract of Carriage under the incorporation by reference
doctrine, see Dkt. No. 15, Ex. 2. See also In re
Gilead Scis. Sec. Litig., No. C03-4999 MJJ, 2005 WL
181885, at *4 (N.D. Cal. Jan. 26, 2005) (holding that the
court may “take judicial notice of documents on which
allegations in the [complaint] necessarily rely”).
argues several bases for dismissal, which the Court considers
threshold issue, Defendant contends that Plaintiffs’
claims are moot. Defendant argues that because Defendant
fully refunded Plaintiffs the disputed ...