Decision No. 182-C-A-2012

May 16, 2012

COMPLAINT by Gábor Lukács against United Air Lines, Inc.

File No.: 
M4120-3/11-02233

INTRODUCTION

[1] Gábor Lukács filed a complaint with the Canadian Transportation Agency (Agency) alleging that United Air Lines, Inc. (United) damaged his baggage on a flight from Winnipeg, Manitoba, Canada to Savannah, Georgia, United States of America on March 11, 2011, and requests compensation for that damage. Mr. Lukács further alleges that United has been applying a policy concerning its liability for delayed and damaged baggage that is not contained in its tariff and that the policy is misleading as it does not accurately reflect United’s obligations under the Convention for the Unification of Certain Rules for International Carriage by Air – Montreal Convention (Convention).

BACKGROUND

[2] On March 11, 2011, Mr. Lukács travelled by air from Winnipeg to Savannah via Chicago, Illinois, United States of America. Upon arrival at the Savannah airport, on March 11, 2011, Mr. Lukács discovered that the name tag was missing from his suitcase. When Mr. Lukács attempted to complete a damage report, he was referred by a United check-in agent to a sign which stated that United does not assume liability for “Normal Wear and Tear,” which, according to United, includes damage or loss of protruding baggage parts such as straps, pockets, pull handles, hanger hooks, wheels and feet or other items attached to the baggage. Upon Mr. Lukács’ insistence that a damage report be completed, a United supervisor was summoned, who completed a “Damaged Baggage Report.” Mr. Lukács was advised by the supervisor that he would be contacted by United to settle the claim. United did not contact Mr. Lukács in relation to the incident, although, as set out below, it did eventually reimburse Mr. Lukács for his expenses related to the damage.

PRELIMINARY MATTERS

Reimbursement for expenses

[3] In his April 10, 2011 complaint, Mr. Lukács provided the Agency with evidence demonstrating that he incurred expenses as a result of the damage to his baggage. As a result of the Agency facilitating an informal resolution of Mr. Lukács’ complaint, United indicated that it would reimburse Mr. Lukács for his expenses and, on May 16, 2011, Mr. Lukács received a cheque from United. The Agency therefore finds that the issue of compensation for damage is resolved and no longer forms part of this complaint.

Justness and reasonableness of United’s terms and conditions respecting delayed and damaged baggage

[4] In his complaint, Mr. Lukács impugned United’s baggage liability policy, and states that any tariff provision reflecting that policy is unjust and unreasonable, contrary to subsection 111(1) of the Air Transportation Regulations, SOR/88-58, as amended (ATR). However, United has acknowledged that the impugned policy is not contained in its tariff. Accordingly, as United’s baggage liability policy is not contained within its tariff, subsection 111(1) of the ATR does not apply. Following this acknowledgment by United, Mr. Lukács’ arguments have focused on whether United’s policy is contrary to paragraph 18(b) of the ATR as it is misleading and misstates United’s liability under the Convention. Accordingly, within the scope of this Decision, the Agency will consider whether United’s delayed and damaged baggage liability policy is misleading, contrary to paragraph 18(b) of the ATR.

Telephone recordings

[5] Mr. Lukács filed evidence in the form of two recordings of telephone conversations he had with United agents on September 6 and December 20, 2011, respectively, regarding United’s “Delayed and damaged baggage” policy. During the conversations, the United agents state, in part, that United is not liable for such damages as normal wear and tear. Anticipating that there might be a question as to the admissibility of this evidence, Mr. Lukács makes reference to the Canada Evidence Act, R.S.C., 1985, c. C-5, as well as the cases of Sweeten v. Sweeten, 1996 CanLII 2972 (BC SC), R v. McIntee, 2007 O.J. No. 5266, Tanzos v. Az Bus Tours Inc., 2007 CHRT 32, and Lukács v. United Airlines, 2009 MBQB 29. He argues that these authorities support his position that where one party consents to the taping of a conversation, it is admissible. He points out that United has a policy of recording calls made to its call centres and that therefore, his recording of the conversations is based on mutual consent to do so.

[6] The Agency finds that according to the case law cited by Mr. Lukács, audio recordings of telephone communications have been admitted into evidence before courts and tribunals. The cases cited by Mr. Lukács support the admissibility of such evidence in this case.

[7] Moreover, the Agency notes that United has not objected to the admissibility of these recordings and has in fact made submissions in response, defending the representations made by its agents. Accordingly, the Agency will accept the recordings as part of the pleadings in this matter.

Order from the Department of Transportation of the United States of America

[8] Mr. Lukács also filed Order No. 2011-8-7 dated August 4, 2011 of the Department of Transportation of the United States of America (DoT Order). United submits that the DoT Order is irrelevant to these proceedings.

[9] The Agency notes that Mr. Lukács seeks to introduce the DoT Order for the purpose of demonstrating United’s lack of credibility with respect to its commitment to revise its signage and policies. However, the Agency is of the opinion that the DoT Order is not relevant to the substantive issue before the Agency, which is the language found on United’s Canadian Web site (www.united.ca), on signage at its check-in counter and information provided by its agents. Accordingly, the Agency will not consider the DoT Order in making its determination in this matter.

ISSUES

  1. Has United publicly made any statement regarding its baggage liability policy that is false or misleading with respect to its air service or any service incidental thereto, contrary to paragraph 18(b) of the ATR?
  2. Has United applied a policy governing baggage liability not appearing in its tariff and, if so, does United’s tariff clearly state its policy governing liability for baggage?

RELEVANT TARIFF EXTRACT

[10] The tariff extract relevant to this Decision is set out in the Appendix.

ISSUE 1: HAS UNITED PUBLICLY MADE ANY STATEMENT REGARDING ITS BAGGAGE LIABILITY POLICY THAT IS FALSE OR MISLEADING WITH RESPECT TO ITS AIR SERVICE OR ANY SERVICE INCIDENTAL THERETO, CONTRARY TO PARAGRAPH 18(b) OF THE ATR?

[11] In his submissions, Mr. Lukács addresses United’s baggage liability policy as set out in:

  1. signage at United’s airport check-in counters;
  2. United’s “Delayed and damaged baggage” Web page on its Canadian Web site; and
  3. United’s policy as reflected in Bulletin B11-05 (Bulletin).

[12] Each of these will be addressed in turn.

Submissions regarding signage at United’s airport check-in counters

[13] In his complaint, Mr. Lukács submits that the signs at United’s check-in counters do not accurately reflect United’s obligations pursuant to the Convention and are therefore misleading.

[14] On July 21, 2011, United responds that the language referred to by Mr. Lukács is no longer present at its check-in counters. In response, Mr. Lukács filed with the Agency, on August 3, 2011, photographs of signage at United’s Winnipeg Airport service counter depicting the language to which he refers in his complaint. The signage states, in part:

We regret that we cannot take responsibility for the damage to and/or loss of protruding parts, including hanger hooks, straps, telescoping or pull handles, wheels, feet, pockets, flaps or any other attached items.

[15] Mr. Lukács refers to Decision Nos. 208-C-A-2009, Lukács v. Air Canada, and 477-C-A-2010, Lukács v. WestJet, among others, to demonstrate that there are recent Agency precedents which confirm that policies such as those stated on United’s signage are contrary to the Convention and the ATR. Mr. Lukács further points out that in Decision No. 208-C-A-2009, the Agency ordered Air Canada to remove signage that did not accurately reflect Air Canada’s obligations under the Convention.

[16] United responds that the signage identified by Mr. Lukács at the Winnipeg airport was inadvertently not removed during United’s signage updates and that its airport operations group was, at that time, canvassing United’s stations to remove any outdated signs.

[17] Mr. Lukács claims, however, that United is misleading the Agency to believe that the presence of the signage at the Winnipeg airport was due to inadvertent error, and submits that United has not changed its policy regarding its liability for certain damage to baggage. To support his claim, Mr. Lukács provided a transcript and an audio recording of a telephone conversation between himself and a United baggage agent on September 6, 2011, during which the baggage agent stated that United is not responsible for damages to protruding parts.

[18] In response to Mr. Lukács’ allegations, United filed correspondence from its Canadian regional director of airport operations and cargo, who confirms that as of September 9, 2011, all baggage liability signage had been removed from United’s Canadian airport check-in counters. Regarding the telephone conversation between Mr. Lukács and its agent, United points out that information provided by baggage agents is general in nature and applies without regard to passengers’ itinerary. In its submission dated September 12, 2011, United advises that it was evaluating how information is provided by its agents in regard to Canada-specific or international-specific travel (as distinct from domestic US travel) and would inform the Agency as soon as the process was completed.

Analysis and findings regarding signage at United’s airport check-in counters

[19] Article 17(2) of the Convention provides, in part, that a carrier is liable for damage sustained for the loss of checked baggage if the loss took place during any period within which the checked baggage was in the charge of the carrier.

[20] The Agency has previously found, in Decision No. 208-C-A-2009, that if a carrier accepts checked baggage for transportation and the checked baggage is under the care and control of the carrier, the carrier assumes liability for the baggage in the event of loss and damage. The carrier can avoid liability only if the damage resulted from an inherent quality or defect of the baggage.

[21] The photographs submitted by Mr. Lukács, which were taken on July 29, 2011, reveal that the signage at United’s airport check-in counters states, in part, that United cannot take responsibility for damage to or loss of protruding parts on baggage.

[22] On July 26, 2011, United states that the language referred to by Mr. Lukács was not at its check‑in counters. Although Mr. Lukács provided evidence that some signage containing the above-mentioned language was present at United’s check-in counters on July 29, 2011, United submitted evidence demonstrating that as of September 2, 2011, all such signage was removed from its Canadian check-in counters.

[23] The Agency finds that on July 29, 2011, United displayed signage at its airport check-in counter in Winnipeg which contained a broad exclusion of liability for damage to or loss of protruding parts on baggage. This statement was misleading in that it misstates United’s liability for baggage as set out in Article 17(2) of the Convention. Based on the evidence, however, the Agency accepts that such signage has been removed from United’s airport check-in counters. The Agency therefore contemplates no further action respecting the matter of signage at those counters.

Submissions regarding United’s Canadian Web site

[24] In his complaint, Mr. Lukács points out that United’s “Delayed and damaged baggage” Web page on its Canadian Web site states, in part, the following:

Damage claim

Baggage is designed to protect the contents. Scratches, nicks or dirt may appear despite care in handling. United does not assume liability for normal wear and tear to baggage, which includes: damage to or loss of protruding baggage parts such as straps, pockets, pull handles, hanger hooks, wheels and feet or other items attached to the baggage as well as damage to over sized/over packed bags.

[25] In his complaint, Mr. Lukács submits that although he was unable to locate language supporting the above policy in United’s tariff, the facts of this case strongly support the finding that United has been consistently applying the policy to the damage claims of its passengers. Mr. Lukács therefore questions the justness and the reasonableness of the policy, and points out that the Agency has previously found in Decision Nos. 208-C-A-2009, 309-C-A-2010 Kipper v. WestJet, and 477-C-A-2010, that to exempt a carrier from liability to baggage under Article 17(2) of the Convention, there must be a causal relationship between the damage and an inherent defect, quality or vice of the baggage. Mr. Lukács concluded that the terms and conditions concerning a “damage claim” as formulated on United’s Canadian Web site are contrary to Article 17(2) of the Convention and are therefore null and void pursuant to Article 26 of the Convention. Accordingly, Mr. Lukács submits that pursuant to Decision No. 227-C-A-2008, McCabe v. Air Canada, the terms and conditions are unjust and unreasonable.

[26] In its July 26, 2011 answer, United acknowledges that its policy is not contained in its tariff, and proposes to revise the language on its Canadian Web site, to read as follows:

Damage claim

Baggage is designed to protect the contents. Normal wear and tear such as scratches, nicks or dirt may appear despite care in handling, especially if your bag is over-sized or over-packed.

[27] A second paragraph, under the subheading “Damage claim” appearing on United’s Canadian Web site, reads as follows:

Damages should be reported to and resolved by the individual United Baggage Services Office at the airport location where the damage was discovered. If this is not possible, please direct your report and claim to our airport staff at the location nearest you within 24 hours. We will need a copy of your ticket and claim check and will make a visual inspection of the damage.

[28] With respect to the first paragraph, Mr. Lukács argues that the proposed language is misleading and misstates the law concerning the liability of carriers for damage to checked baggage, contrary to paragraph 18(b) of the ATR. He states that Article 17 of the Convention makes no distinction between a suitcase and its contents, as long as it is checked baggage. Indeed, he argues that damage to a suitcase may cause as much out-of-pocket expense as damage to its contents.

[29] Mr. Lukács also submits that the revised statement as proposed by United is still misleading in that it suggests that damage to baggage is a normal and acceptable phenomenon. Mr. Lukács further points out that the policy continues to use the impugned terminology of “Normal Wear and Tear,” which is associated with the denial of claims.

[30] Mr. Lukács submits that the second paragraph is also misleading as it misstates the statutory time limit for making a complaint in relation to checked baggage, pursuant to the Convention.

[31] In reply, United contends that its Canadian Web site does not state that claims for “Normal Wear and Tear” will be denied and, as such, the language is consistent with United’s obligations pursuant to the Convention. United further points out that its Canadian Web site does not state that claims must be reported in 24 hours; rather, it requests passengers to “direct your report and claim [...] within 24 hours.”

Analysis and findings regarding United’s Canadian Web site

[32] While the revised first paragraph of United’s Canadian Web site statement no longer states that United is not liable for damage caused by “Normal Wear and Tear,” the Agency is of the opinion that a continued reference to the term “Normal Wear and Tear,” may imply that despite care in handling, such damage may occur, and that United is not liable for this type of damage.

[33] The Agency reiterates its finding in Decision No. 208-C-A-2009 that a carrier can avoid liability only if the damage resulted from an inherent quality or defect of the baggage. The Agency is of the opinion that the revised statement is therefore misleading as it relates to United’s liability for damage to baggage caused by “Normal Wear and Tear”.

[34] With respect to the revised second paragraph of United’s proposed Canadian Web site language, the Agency notes that pursuant to Article 31 of the Convention, passengers must complain to the carrier forthwith after the discovery of damage to checked baggage, and, at the latest, within seven days from the date of receipt of the baggage. The Agency is of the opinion that the second paragraph of the revised statement does not clearly reflect this time limit, as the policy asks that the passenger direct their report and claim to airport staff within 24 hours.

[35] Accordingly, the Agency finds that the revised statement posted on United’s Canadian Web site which includes references to “Normal Wear and Tear” and requesting the submitting of claims to United staff within 24 hours, misstates United’s obligations under the Convention and, as such, that United has publicly made a misleading statement, contrary to paragraph 18(b) of the ATR.

Submissions regarding United’s new policy: the Bulletin

[36] On September 28, 2011, United provided the Agency with its revised, international-specific baggage liability policy effective as of September 26, 2011. The revised policy, which is set out in the Bulletin, states, in part, that stations can no longer deny a claim for damaged baggage based on the concept of “Normal Wear and Tear” for customers whose travel is subject to the Convention. United submits that the new policy is consistent with the Convention.

[37] In response, Mr. Lukács provided a transcript and audio recording of a December 20, 2011 telephone conversation between himself and a United baggage agent, during which the baggage agent stated that United is not liable for “Normal Wear and Tear,” and that this policy applies to international flights. Mr. Lukács submits that this conversation proves that United has not distributed the Bulletin to its agents and, as such, is continuing to deny passenger claims based on the concept of “Normal Wear and Tear.”

[38] United, however, provided a copy of the e-mail correspondence by which the Bulletin was communicated to United’s baggage agents, and United submits that the specific person with whom Mr. Lukács spoke was not familiar with the contents of the Bulletin. United also provided evidence that on January 10, 2012 it sent a further Advisory to United’s agents, which reiterates that claims for damaged baggage cannot be denied based on the concept of “Normal Wear and Tear.” United submits that the Advisory demonstrates that United is taking the matter seriously and is making all efforts to communicate the new policy.

Analysis and findings regarding United’s new policy: the Bulletin

[39] United has provided evidence to demonstrate that effective September 26, 2011, it has revised its baggage liability policy, and United claims that its revised policy is consistent with the Convention. United also provided evidence that it has made efforts to communicate this new policy to its employees.

[40] The revised policy informs United’s agents that claims for damaged baggage based on the concept of “Normal Wear and Tear” can no longer be denied for customers whose travel is subject to the Convention. The Agency further notes that the Bulletin not only states United’s revised policy, but it also specifies that claims can only be denied in instances where the damage is pre-existing, the damage results from a defect in the bag, or the quality of the baggage is inappropriate for travel as checked baggage.

[41] The Agency is satisfied that United’s revised baggage liability policy, as indicated in the Bulletin, is an accurate reflection of United’s obligations regarding liability for damage pursuant to Article 17(2) of the Convention and is consistent with Agency case law in this matter.

[42] The Agency notes, however, that the Bulletin is silent with respect to time limits in which a passenger must complain to the carrier concerning damaged baggage. As set out above at paragraph 34, Article 31 of the Convention requires a passenger to complain forthwith after the discovery of the damage, or at the latest within seven days.

ISSUE 2: HAS UNITED APPLIED A POLICY GOVERNING BAGGAGE LIABILITY NOT APPEARING IN ITS TARIFF AND, IF SO, DOES UNITED’S TARIFF CLEARLY STATE ITS POLICY GOVERNING LIABILITY FOR BAGGAGE?

Submissions on whether United’s tariff clearly states its policy governing liability for baggage

[43] In his complaint, Mr. Lukács submits that the Agency should disallow any provision in United’s tariff that gives effect to the limitation of liability for damage to baggage caused by “Normal Wear and Tear.” In its response, United states that the terms and conditions referenced in Mr. Lukács’ complaint do not appear in its tariff.

Analysis and finding regarding whether United’s tariff clearly states its policy governing liability for baggage

[44] Based on United’s submission, the Agency finds that United has applied, and continues to apply, a policy concerning baggage liability that is not contained in its tariff.

[45] Subparagraphs 122(c)(x) and (xi) of the ATR require that a tariff clearly state the carrier’s policy with respect to limitations and exclusions from liability for goods. Furthermore, subparagraph 122(c)(xii) of the ATR requires that a tariff clearly state the carrier's policy with respect to procedures and time limitations for making claims

[46] While Rule 230UA(A) of United's tariff incorporates the Convention by reference, it does not explicitly state what the limitations and exclusions of liability for baggage are, nor does it state the time limits for making claims under the Convention. Rule 230UA(B) of United’s tariff sets out certain exclusions from liability, for example, damage resulting from spoilage caused by delay. However, the tariff is silent regarding the specific issues raised by Mr. Lukács concerning United’s limitations and exclusions from liability for damage to baggage.

[47] Instead, United’s policy is set out on its Canadian Web site and in the Bulletin.

[48] Accordingly, the Agency finds that, in applying a policy that is not clearly set out in its tariff, United contravened subparagraphs 122(c)(x) and (xi) of the ATR.

AGENCY FINDINGS

[49] As noted above, the Agency finds that:

  1. The information found on signage at United’s airport check-in counters, on which this complaint is based, was false or misleading with respect to United’s liability for baggage, contrary to paragraph 18(b) of the ATR. However, as the evidence shows that this signage has been removed, the Agency contemplates no further action regarding this matter;
  2. The information posted on United’s Canadian Web site and United’s proposed revisions are misleading, contrary to paragraph 18(b) of the ATR;
  3. The information contained in the Bulletin accurately reflects United’s obligations regarding liability for baggage pursuant to Article 17(2) of the Convention and is also consistent with Agency case law in this matter. However, the Bulletin is silent as to time limits in which to file a complaint, as set out in the Convention;
  4. United has applied a policy, namely that set out on its Canadian Web site and in the Bulletin, not appearing in its tariff; and
  5. United’s tariff does not clearly state United’s policy governing liability for baggage and it therefore contravened subparagraphs 122(c)(x) and (xi) of the ATR.

CONCLUSION

[50] In light of the foregoing, the Agency orders United, within 30 days from the date of this Decision, to:

  • file amendments to its tariff that clearly reflect its policy respecting limits to and exclusions from liability relating to baggage, as set out in the Bulletin and that also reflect the time limits in which to file a complaint pursuant to Article 31 of the Convention; and
  • ensure that the Bulletin and United’s Canadian Web site reflect the findings made by the Agency in this Decision and remove any language that is contrary to these findings.

APPENDIX TO DECISION NO. 182-C-A-2012

RELEVANT TARIFF EXTRACT

Rule 230 UA LIABILTY – BAGGAGE

(A) Passengers on a journey involving an ultimate destination or a stop in a country other than the country of departure are advised that international treaties known as the Montreal Convention, or its predecessor, the Warsaw Convention, including its amendments, may apply to the entire journey, including any portion thereof within a country. For such passengers, the treaty, including special contract of carriage embodied in the applicable tariffs, governs and may limit the liability of the Carrier for destruction or loss of, or damage to, baggage, and for delay of baggage to [N]1,131 Special Drawing Rights per passenger for checked or unchecked baggage.

For the purpose of international carriage governed by the Montreal Convention, the liability rules set out in the Montreal Convention are fully incorporated herein and shall supersede and prevail over any provisions of this tariff which may be inconsistent with those rules.

(B)  EXCLUSIONS FROM LIABILTIY

  1.  The owner of the pet shall be responsible for compliance with all governmental regulations and restrictions, including furnishing valid health and rabies vaccination certificates when required. Carrier will not be liable for loss or expense due to the passenger’s failure to comply with this provision, and carrier will not be responsible if any pet is refused passage into or through any country, state or territory.
  2. When the carrier has exercised the ordinary standard of care it shall not be liable for spoilage resulting for delay in delivery of any perishables described in Rule 195(L), nor for damage to or damage caused by, fragile articles described in Rule 195(L) that are unsuitably packed and that are included in the passenger’s checked baggage without carrier’s knowledge. Carrier shall not be liable for the damage or delay in delivery of a passenger’s checked baggage and property accepted pursuant to the execution of a release as set forth in Rule 195(L), to the extent that such release relieves carrier of liability.
  3. When UA has exercised the ordinary standard of care, it shall not be liable for damage to vaulting poles, which are not presented in a case container.
  4. For travel wholly between points in the U.S., UA will not be liable for loss of money, jewelry, cameras, negotiable papers/securities, electronic/video/photographic equipment, heirlooms, antiques, artifacts works of art, silverware, irreplaceable books/publications/manuscripts/business documents, precious metals and similar valuable and commercial effects. UA prohibits the foregoing items being placed in checked baggage for travel wholly between points in the U.S. as well as for international transportation.

Member(s)

John Scott
Geoffrey C. Hare
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