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Judge Tosses United Airlines Lawsuit Over 'Hidden City' Tickets

Posted by timothy on from the you-had-to-go-there dept.

An anonymous reader writes: United Airlines lost a legal round in its effort to stop a website that helps people find 'hidden city' ticket pairs. The airline, along with online travel site Orbitz, sued New York-based Skiplagged.com and its founder, Aktarer Zaman, in November seeking an injunction to stop the site from sending users to Orbitz to purchase United tickets. A federal judge ruled Thursday that Illinois isn't the proper venue for the carrier's claims.

34 of 126 comments (clear)

  1. Good by mattventura · · Score: 2

    Nobody should be required to buy into loss leaders or other pricing schemes like this.

    1. Re:Good by dunkindave · · Score: 4, Interesting

      This has similarities to what I saw in inkjet printers many years ago. For a while, they were selling printers at a big discount because they would make their money on the replacement ink cartridges. Problem was the new printers came with a new full color and black cartridge and cost less than it cost to buy the two cartridges individually. It was actually cheaper to buy a new printer, take the cartridges out of the boxes, and throw away the printer, than it was to buy replacement cartridges. Same thing here - it is sometimes cheaper to buy more of a trip than you need then throw away part of it you don't need.

      Regarding the cartridges, due to a couple issues that came up, such as this one, they started including cartridges that were 1/2 to 1/3 full with new printers.

    2. Re:Good by nmb3000 · · Score: 5, Insightful

      Nobody should be required to buy into loss leaders or other pricing schemes like this.

      And now they're taking a page out of the BSA's lawyer playbook with this "lost revenue" crap. Just because someone could have bought a $500 ticket from NY to SLC doesn't mean that $100 was stolen from United because they bought a $400 ticket that was NY to LA with a layover in SLC.

      And then there's airline pricing in general. I always have a hard time feeling sorry for the airlines, but when the price of oil (the biggest expense for them) dropped like a rock end of last year, did the airlines lower ticket prices or remove fuel surcharges? Nope.

      Big companies like airlines have used obscure and convoluted pricing schemes for decades as a way to screw over the average customer. Seeing them get thrown back into their faces isn't illegal -- it's a sweet dose of justice.

      --
      "What do you despise? By this are you truly known." --Princess Irulan, Manual of Muad'Dib
      /)
  2. Minor inconvenience for United by grimmjeeper · · Score: 4, Insightful

    All this ruling does is make them go back and file it in the appropriate venue. And while that's the right thing to do from a legal standpoint, it will have basically no bearing on the case when it is filed again in the appropriate location. This doesn't address the merits of the case (or lack thereof) in any way.

    1. Re:Minor inconvenience for United by rahvin112 · · Score: 4, Insightful

      Other than they were jurisdiction shopping in a venue that would be more likely to win because they are headquartered there and the juror pool would be likely to be influenced by that?

      The judge didn't rule on venue without it being challenged by the defense. United didn't pick this court by accident.

    2. Re:Minor inconvenience for United by Obfuscant · · Score: 2

      The judge didn't rule on venue without it being challenged by the defense. United didn't pick this court by accident.

      Right. They picked it because they are headquartered in Illinois. It's not some evil plot.

    3. Re:Minor inconvenience for United by rahvin112 · · Score: 2

      To assume it's not an evil plot would require the assumption that United had lawyers so inexperienced that they didn't know they were filing in the wrong venue.

      That's a preposterous assumption.

    4. Re:Minor inconvenience for United by dunkindave · · Score: 3, Informative

      It's a standard legal practice by unscrupulous companies, make the small guy spend a lot of money to travel long distances in order to have his day in court.

      That is why under 28 US Code 1391(b) the proper legal venue is where the defendant resides. The reason why you see a lot of patent suits filed in Texas is that for large corporations, where they reside is murky since they do business everywhere and are registered the Secretary of State in most/all of the states, including Texas, so they are considered "local" under these rules. The "small guy" however lives in a specific place, so that is where the proper venue would be.

    5. Re:Minor inconvenience for United by dunkindave · · Score: 4, Informative

      The claim that the defendants don't have significant presence in Illinois for purposes of legal action, in the context of an Internet-based service, is just ridiculous. The judge is applying brick-and-mortar rules to a global network.

      No, he is apply the law. Where to file is spelled out in 28 US Code 1391, and unless you can't for some reason, like you don't know where the defendant lives, the place to file is "a judicial district in which any defendant resides". The law is clear, and the judge has no choice but to follow it.

  3. I wish it had been dismissed on the merits by hawguy · · Score: 4, Interesting

    Too bad it was just a procedural dismissal due to wrong venue and not due to the merits of the case.

    United said such ticketing schemes violate its fare rules. For one thing, the tickets capture seats that will go unused, and an airline would have no way to sell those unused seats

    Well, actually, they already *have* sold those seats -- to the person that bought the ticket and decided not to use the rest of it. But it's not true that they have no way to sell those seats -- if the flight is overbooked or full, then they'll fill the unused seat with a bumped or standby passenger. But if they want to be able to sell that seat before departure time, all they have to do is give the ticket holder a way to cancel that leg of the bookng, perhaps refunding a small percentage of the purchase price as an incentive to do so.

    So it's not true that they have no way to sell the seats, they just don't want to do it.

    1. Re:I wish it had been dismissed on the merits by bugs2squash · · Score: 3, Informative

      I've never understood why they won't transfer me to an otherwise empty seat on an earlier flight when I happen to be early for a connection. It would seem to be in their best interest to fill up the planes and push the "empty seat" to a later flight when they have a chance of selling it, but they never do offer me a free change, they always want to charge me an extra $50, so I just get a soda and wait it out.

      --
      Nullius in verba
    2. Re:I wish it had been dismissed on the merits by hawguy · · Score: 4, Insightful

      I've never understood why they won't transfer me to an otherwise empty seat on an earlier flight when I happen to be early for a connection. It would seem to be in their best interest to fill up the planes and push the "empty seat" to a later flight when they have a chance of selling it, but they never do offer me a free change, they always want to charge me an extra $50, so I just get a soda and wait it out.

      They used to do that, I used have no problem fly standby on an earlier flight when I got there early. But then I guess they found out that it's convenient for passengers so it's something that they need to charge for because no one should get anything for free when flying.

  4. 'Hidden city' explanation by QuasiSteve · · Score: 5, Informative

    Wouldn't have hurt to put this in the summary - who RTFA?

    Say you want to fly from NY to Chicago, and that'd cost $300. You can also get a ticket from NY to LA, and that'd cost $250. The catch? That flight from NY to LA also lands in Chicago.
    So if you wanted to go from NY to Chicago, you'd be better off buying the NY to LA ticket instead, saving $50.

    The airlines don't like this, because if you book NY to LA, they can no longer sell the Chicago to LA seat (except at last minute rates or more often push standby passengers onto that flight) that might normally be $150. So not only are they out $50 on you, they're potentially out an additional $150 on the unsold seat.
    ( They save a few $ in fuel consumption, food and beverages, etc. )

    Presumably the solution would be to not make part-flights more expensive than full-flights to begin with, but I'm sure the bean counters worked out that this is still the more profitable route for them.

    As for headline - yeah, it's only tossed out because it's the wrong venue.. there's really no winner or loser, other than the courts who wasted time on a case that they apparently shouldn't have spent any time on at all.

    1. Re:'Hidden city' explanation by tnk1 · · Score: 4, Interesting

      How does this work with checked luggage? Presumably your stuff won't be pulled from baggage if you aren't expected to get off in Chicago, but instead in LA.

      Obviously, if you only have carry on luggage, that works fine.

    2. Re:'Hidden city' explanation by bhcompy · · Score: 2

      You can't do it with checked luggage. You fedex your luggage if you have that much.

    3. Re:'Hidden city' explanation by Antique+Geekmeister · · Score: 2

      And the lawyers, who billed for the time filing the case. And the clients who, I suspect, worked with the lawyers to find the friendliest venue to file the case ina: a friendly venue can make an enormous difference in court cases. It's called "forum shopping", and it's a critical tactical factor.

    4. Re:'Hidden city' explanation by OzPeter · · Score: 2

      How does this work with checked luggage?

      It only works with carry on, unless you want you checked luggage to end in LA. But given that people are trying to pass off huge cases as carry ons, it doesn't seem much of an impediment.

      --
      I am Slashdot. Are you Slashdot as well?
    5. Re:'Hidden city' explanation by bugs2squash · · Score: 3, Insightful

      or if you set the timer to go off on the leg from ORD to LAX but get off at ORD and don;t mention the baggage. If I were the airline, I'd be using the necessity to resolve that conundrum as the basis for my complaint, not some rubbish about not being able to sell the same seat twice.

      --
      Nullius in verba
    6. Re:'Hidden city' explanation by Weirsbaski · · Score: 5, Insightful

      The airlines don't like this, because if you book NY to LA, they can no longer sell the Chicago to LA seat

      What do you mean? They did sell that seat: to me, as part of a trip I paid for, and at the price they thought was fair. If I choose to not use part of what I paid for, well, I still paid for it.

      The airline's complaint would be like me going to a restaurant, ordering the steak&potatoes but only eating the steak, and the restaurant complaining this should be illegal because they could've made more money selling the (wasted) potatoes to someone else.

      --

      I am not a sig.
    7. Re:'Hidden city' explanation by Obfuscant · · Score: 2

      I thought it was a TSA regulation that it is not permitted for your luggage to travel on a different plane than you.

      I believe that the rules say YOU cannot cause your baggage to go on a flight you aren't on. I.e., you can't check in and then not get on. That's to keep you from planting a bomb in your baggage and then not being on the plane. But if the airline puts your bag on another plane, you can't plan that.

      Airlines do it all the time, too. Weight limits may make your luggage be held for the next flight, or it may not make a connection.

      Thus, yes, they'd have to pull your luggage off the plane if you didn't get on.

      When you're on a stopover with no equipment change, you got on the plane in New York and you might not get off in Chicago. They don't know who got off, the scanners don't keep track of that.

    8. Re:'Hidden city' explanation by bondsbw · · Score: 2

      This seems bit like Coca-Cola selling 20oz bottles for $1.50, 2 liter bottles for $0.99, and then getting mad when the customer pays for a 2 liter, drinks 20 oz, and throws the rest away.

      Boo-freaking-hoo. Somebody is getting paid to set up these pricing schemes, and part of their job is to take into account the consequences of non-obvious cost structures.

      --
      All my liberal friends think I'm a conservative, all my conservative friends think I'm a liberal.
    9. Re:'Hidden city' explanation by Jstlook · · Score: 2

      I can conceive of at least two reasons that the airline might not like this practice:

      First, they get really bad press by leaving people stranded in the middle of no-where. In the case of people intentionally ducking the last leg, that leaves the airline in a quandry - do they blow their ontime percentages by waiting for the person and earn bad press, or do they leave the person in the middle of no-where and risk the bad press?

      Second, moreso than how much they can price gouge the public, flying to hidden cities starts to screw with things such as forecasting, government tracking, and load calculations.

      Would it not be awesome sometime in the next couple years before this practice dies off to hear about an airplane taking off empty because nobody wanted to take the last leg?

      Incidentally, I'd like to ask how many more years we have to be subjected to the lesson on how to buckle our seatbelts. Seatbelts have only been mandatory in ground transport since 1964, y'know. Sure, airline seatbelts operate slightly differently to enable others to extricate people in emergencies, but still.

      --
      ---jstlook ---For that is the way of Elves, for they say both yes AND no, and mean every word of it. --- J.R.R.T.
    10. Re:'Hidden city' explanation by Anonymous Coward · · Score: 2, Informative

      It's true for INTERNATIONAL flights. For DOMESTIC flights your luggage may fly without you.

  5. Fair by anmre · · Score: 5, Insightful

    You're a fucking airline. You're going where I need to go and I bought a ticket. If I'm not on the plane for the second half of the trip, you've saved that much on fuel. Fuck off.

    1. Re:Fair by rahvin112 · · Score: 3, Informative

      Then they shouldn't land the plane and make you switch planes. As soon as they land the plane and make you disembark whether you board the second flight is up to you. Otherwise that other plane better not take off without you, you think they would hold the second plane for you?

      These fairs are cheaper with layovers are games the airlines play with fairs to maximize revenue. No one should be under any obligation to play along if they don't want to. Suing someone that facilitates exploiting this loophole in their system is nothing more than attacking free speech.

    2. Re:Fair by CanEHdian · · Score: 2

      If you buy a dozen apples from a farmer, (...)?

      Here's the right analogy. You want 8 apples. The farmer will sell you 8 apples at dollar each, or you can have a bag of 10 apples for 5 dollars. You buy the bag. Then you throw 2 apples away (for the birds), ending up with 8 apples for 5 dollars. The farmer will then sue you since you didn't pay 8 dollars for your 8 apples, and they can't sell the 2 apples you discarded to another customer.

      --
      When the copyright term is "forever minus a day", live every day like it's the last.
  6. hmm by alzoron · · Score: 4, Insightful

    For one thing, the tickets capture seats that will go unused, and an airline would have no way to sell those unused seats.

    So they're arguing that because the customer doesn't use a seat they paid for thus preventing them from reselling it to someone else that they can't resell it to someone else.

    What?

    1. Re: hmm by Solandri · · Score: 2

      Yeah, it's nonsensical because they're assuming the higher price to Chicago is correct, and you're doing something "wrong" by paying less. It's actually the higher price to Chicago which is wrong.

      The root of the problem lies in lack of competition. Chicago is a United hub. So they control a plurality if not a majority of the flights to and from Chicago. That gives them quasi-monopoly powers when it comes to pricing. They've bought landing/takeoff rights for all those flights and control most of the gates. So even if a competitor underprices United, they can't increase their capacity to handle the extra tickets they'd sell. Their lower price just means they sell out their seats quicker, rather than sell more seats. Faced with selling x tickets for the same price as United, or only a few more than x tickets for a lot cheaper than United, most competitors just match United's pricing.

      Consequently the price of flights to/from Chicago are higher than the market would dictate with adequate competition. And you get the perverse situation where a flight form L.A. to Chicago is more expensive than L.A. to N.Y. even though the latter flight stops in Chicago. In other words, you're not saving money by using this trick to fly to Chicago. You're just not paying the extra money United would've made because of their quais-monopoly control of Chicago. (They're still making more money than they should because you're still paying for the Chicago to N.Y. leg.)

      Skiplagged.com exploits a leak in the airline's quasi-monopoly control of fares at their hub airports. The airlines can't plug that leak logistically (since their connection flights have to go through their hubs), so they're trying to get the courts to plug it for them.

  7. Re:Contract of Carriage by Jumunquo · · Score: 2

    Just claim you're feeling sick, and you'll re-book for later after a rest. They don't let people who are feeling really sick get on even if they want to. Truth is, they can't do much to the passenger, and that's why they are trying to bully the messenger. I say bully because they don't have much of a case given that connecting info is all public info.

  8. Legal Fees by luckymutt · · Score: 2

    They have a gofundme to help cover their legal fees.

    1. Re:Legal Fees by luckymutt · · Score: 4, Insightful

      So they don't want to fund a project that benefits bigotry. Thanks. I like them more now.

  9. But this is not a free market by tomhath · · Score: 2

    Chicago and LA are bad examples because those are popular destinations.

    An regional airport about an hour from where I live only gets four flights in and out a day, and the planes are usually 3/4 empty. The only reason the airport is open is because the government requires the airlines provide service to it; tickets on those flights are heavily subsidized - I read an estimate that each ticket sold represents a loss of about $600. I can get a ticket to fly into a major hub airport about 2 hours away or a ticket to the regional airport for a bit less because of that subsidy. The airline doesn't want to sell you or me the cheaper ticket, but they're required to offer them.

    I don't blame the airline for trying to stop people from using that subsidy to get a cheaper flight into the hub.

  10. Re:Contract of Carriage by Anonymous Coward · · Score: 3, Interesting

    I've done that to United, even got in an argument with the CS person on the phone. UA tried to charge me a $200 fee to change my return flight home on a round trip ticket that only cost me $227 total. I simply bought another one way ticket home for $125 and told CS I am not cancelling my original ticket out of spite. He said I had to if I did not intend to use it because it was a violation of the sale terms. Oh well. I even checked in for that flight just to screw them more. I paid for it so why not.

  11. Fuck 'em. If I've got to abide by the "fare" they by mpercy · · Score: 2

    Need to get me to my destination on time and not bump me off the plane because they *OVERSOLD* it!