Q: How bad is the Dallas federal court decision in the case
of Lyn-Lea Travel Corp. d/b/a First Class International Travel
Management vs. American Airlines, which was decided in early
December and which ASTA has denounced as ruling that "wipes out any
practical remedy for travel agents"?
A: The First Class International Travel case stands for the
proposition that no travel agency can sue any airline for anything
except breach of contract and violation of a federal law. Thus, for
example, an agency cannot sue an airline if the airline interferes
with its business, disparages or defames the agency, commits fraud
on the agency, conspires against the agency or breaches the duty of
good faith and fair dealing.
The decision's implications are even worse than what has been
reported. Because the court held that the so-called federal
preemption doctrine does not require an airline to be a party to
the suit, the ruling would also apply to suits against computerized
reservations system vendor corporations, ARC and even SatoTravel.
For example, if SatoTravel were to lure away the corporate clients
that you have under contract by promising higher revenue-sharing
payments, you could not successfully sue SatoTravel for
interference with the contract, even though you could sue another
agency that did exactly the same thing.
Finally, the decision also would make unenforceable the kinds of
agency protection laws that ASTA will be trying to have state
governments enact. For example, any law that required airlines to
provide good cause before they lift agency plates would be
unenforceable in any court.
Obviously, the court's reasoning is very flawed, as such a broad
interpretation of the federal preemption rule in the Airline
Deregulation Act never was intended. Although other courts need not
follow the decision, it will serve as a guideline for them, at
least until it is overturned on appeal.
Mark Pestronk is a Fairfax, Va.-based attorney specializing
in travel law.