New York Federal Court Declines to Find Class Claims Waived at Pleadings Stage

In certain circumstances and states, class action waivers may mitigate the exposure risks inherent in class action lawsuits. A decision from the Eastern District of New York illustrates some of the procedural challenges defendants may face in seeking to enforce a waiver at the outset of a case in some circumstances. See Berger v. JetBlue Airways Corp., 2024 WL 4107243, at *4 (E.D.N.Y. Sept. 6, 2024).

Berger involved antitrust claims stemming from the Northeast Alliance ("NEA")-a joint venture between JetBlue and American Airlines. Under the NEA, JetBlue and American agreed to work together for flights between Boston and the New York City area. The plaintiffs in the case-customers who purchased tickets from JetBlue and American to fly on an NEA route-filed a class action lawsuit claiming that the NEA violated Section 1 of the Sherman Act and that class members were owed damages from having to pay allegedly "artificially inflated" prices.

The airlines moved to dismiss the case, arguing primarily that plaintiffs were bound by class action waivers that were included in the contracts of carriage they agreed to when they bought their tickets. To support their claim, the airlines submitted the contracts of carriage alongside screenshots of undated screens that appeared during the ticket purchase process. Each screen provided a link to the airline's contract of carriage and notified the customer that clicking to make a purchase meant agreeing to its terms. Although this information did not appear in the complaint, the airlines asserted that the court should still consider it because it was incorporated by reference in the complaint or, alternatively, was subject to judicial notice.

The court denied the airlines' motion. Notably, the court did not decide whether the waivers applied to the plaintiffs' claims. Instead, the court reasoned that the contracts of carriage were not incorporated by reference in the complaint and thus could not be considered at the pleadings stage. In the court's view, the contracts of carriage were not relevant to the plaintiffs' claim that the NEA violated the Sherman Act.

The court also declined to take judicial notice of the documents. The court explained that the airlines' screenshots were undated and unaccompanied by an affidavit attesting to their origin. Without that verification, the court concluded that the airlines' evidence could not demonstrate whether the plaintiffs had notice of the contracts of carriage when they purchased their tickets. The court's decision left open the possibility that the airlines could argue waiver at a later stage in the case.