Alaska Airlines Class Action Alleges Insurance Kickback Scheme

Alaska Airlines has been hit with a class action lawsuit by a customer claiming that she was “encouraged” to sign up for travel insurance with “preferred provider” Allianz Global Assistance, which was in essence a kickback scheme perpetrated by the airline.

Plaintiff Andrea Durkee claims in her class action lawsuit that when she purchased a ticket directly from the Alaska Airlines website, she could not complete the transaction unless she chose to buy (or decline to do so) travel insurance through AGA.

Durkee bought the travel insurance for $17 and was able to complete her purchase of the airline tickets, believing that she bought the insurance through AGA.

However, “Unbeknownst to the purchaser, the price of the travel insurance product is materially increased to fund the payment of an undisclosed commission, or kickback, to Alaska,” alleges the Alaska Airlines class action lawsuit.

The Alaska Airlines class action lawsuit states that, upon checkout, if one purchased the travel insurance, it would be presented as a separate line item, which led Durkee to believe that the two companies were separate.

According to the Alaska Airlines class action lawsuit, the consumer winds up paying more for their insurance when they purchase it through the Alaska Airlines website than they should, as AGA then pays a kickback to Alaska Airlines.

Durkee also states in her class action lawsuit that Alaska Airlines misrepresents to the consumer its relationship with AGA.

“In connection with such offer and sale of such third-party travel insurance products by AGA, Alaska simultaneously represents itself a) to be acting as the Alaska passenger’s agent, and b) to be serving no role beyond communicating AGA’s separate offer of the travel insurance products,” the Alaska Airlines class action lawsuit asserts.

Durkee claims that Alaska Airlines particularly states on its website that the travel insurance is “being recommended, offered, and sold” by AGA, and not Alaska.

The Alaska Airlines class action lawsuit alleges that the airline is in violation of California’s Unfair Competition Law. Also, Durkee claims that putative Class Members should be paid restitution “in the amount of such undisclosed kickbacks.”

In the Contract for Carriage, Alaska Airlines states that it will serve as the customer’s agent if it “makes any arrangements on behalf of its passengers for third-party services, such as AGA’s travel products.”

“In voluntarily assuming agency duties owed to passengers limited to the context of procuring third-party insurance products, Alaska owed a fiduciary duty to disclose to Alaska passengers, including Plaintiff, any arrangement it has with AGA that materially affected the price of the travel insurance product purchased through AGA,” the Alaska Airlines class action lawsuit continues.

Durkee says that because Alaska Airlines acted as the passengers’ agency, the airline had a duty to disclose to the customers that it was being paid by AGA from the sale of the travel insurance.

The plaintiff is represented by Manfred P. Muecke, Patricia Syverson, Andrew S. Friedman, and Francis J. Balint, Jr. of Bonnett Fairbourn Friedman & Balint PC and Adam M. Moskowitz, Howard M. Bushman, and Joseph M. Kaye of The Moskowitz Law Firm PLLC.

The Alaska Airlines Travel Insurance Class Action Lawsuit is Durkee v. Alaska Airlines Inc., Case No. 3:19-cv-01071, in the U.S. District Court for the Southern District of California.

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