Southwest Airlines Faces Cancellation Policy Class Action Lawsuit

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Southwest Airlines Co. faces a putative class action lawsuit over claims that the company, which touts a “no fees” policy for ticket changes or cancellations, expired ticket credits less than one year of the expiration date.

Plaintiffs Jean Shrem and Marni Fischer of California filed the Southwest class action lawsuit on Friday stemming from allegations that the airline imposes a “hidden exception” to their ticket cancellation policy.

The Southwest travelers claim they purchased airline tickets with a $16 airline credit and $784 in cash. The plaintiffs believed that based on Southwest cancellation policy, they could use that amount for a full year after the date of purchase. However, because the $16 in airline credits had an earlier expiration date than the $784 in cash, Southwest allegedly informed the plaintiffs that they forfeited the entire $800 when it went unused seven months later.

Plaintiffs Shrem and Fischer allege that Southwest has breached their contract by forfeiting the $784 in cash that they paid on Feb. 21, 2015 because the credits should have expired on Feb. 20, 2016. The Southwest ticket class action lawsuit also accuses the airline of fraud based on the airline failing to “adequately disclose any contractual term(s) that purportedly permitted it to undertake the alleged forfeiture, including because Southwest failed to provide the required ‘conspicuous written notice’ of any such term.”

The Southwest class action lawsuit claims that based on the airline’s policy, the plaintiffs who purchased tickets on Feb. 21, 2015 with cash and a $16 airline credit should have had an expiration that lasted until Feb. 20, 2016 equal to what they paid in cash.

Under federal regulations, the plaintiffs state that Southwest “may not impose any terms
restricting refunds of the ticket price, imposing monetary penalties on passengers, or raising the ticket price … unless the passenger receives conspicuous written notice of the salient features of those terms on or with the ticket.”

The plaintiffs further claim that the company owes much of its success to their reputation of being a “customer friendly” choice because they don’t charge for ticket changes or cancellations. The plaintiffs say they believed that when Southwest customers cancelled non-refundable tickets the full amount paid could be used without restriction to purchase future airline tickets for one year from the date of purchase.

Shrem and Fischer are seeking an undisclosed amount of financial reimbursement for all Class Members.

If approved, the Southwest ticket class action lawsuit would be open to all Class Members in the United States who cancelled domestic tickets more than 10 minutes prior to their flight’s scheduled departure time, but suffered forfeiture of the payments for such tickets less than one year from the date of payment. The Southwest class action lawsuit also seeks to represent all Class Members who reside in California as a sub-class.

Shrem and Fischer are represented by Peter B. Fredman, of the Law Office of Peter Fredman.

The Southwest Airlines Ticket Cancellation Policy Class Action Lawsuit is Shrem v. Southwest Airlines Co., Case No. 4:15-cv-04567, in the U.S. District Court for the Northern District of California.