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Spirit Airlines Faces RICO Act. After Florida Appeals Court Gives Green Light

September 25, 2014 - Spirit Airlines passengers filed a lawsuit against the carrier under the RICO Act. alleging the carrier was deceptive with its ticket prices, the plaintiffs case was thrown out in Florida's district court. However, on appeal, Florida's District Appeals Court vacated and remanded the case for trial. 

The plaintiffs in this case (D.C. Docket No. 0:12-cv-61528-RNS) alleged Spirit Airlines conducted an enterprise by means of racketeering activity through mail and wire fraud involving the concealment and misrepresentation of airfares and user fees. That the carrier would offer cheap airfares and then tack on high baggage fees and other passenger fees resulting in a much higher ticket price then advertized. 

The plaintiffs in the case believed that the very law that brought down organized crime bosses (Racketeer Influenced and Corrupt Organizations Act. 18 U.S.C.§§ 1961-68) could be used to go after Spirit Airlines and its ticket pricing tactics through "predicate acts of mail and wire fraud involving the concealment and misrepresentation of airfares and user fees." 


The plaintiffs initially brought the case before Florida's Southern District Court in which they stated the carrier holds itself out as an “Ultra Low Cost Carrier” offering airfares at rates far lower than other providers. However, the carrier disguise the real cost of the ticket prices through a scheme in which they would force the ticket buyer to purchase a ticket through unbundled passenger charges which is normally included in the price of an airline ticket with other carriers.

Specifically, plaintiffs alleged Spirit Airlines charged passengers a usage fee when they buy tickets through its website or call center. When searching for flights on the carrier's website, the consumer only sees the base fares. Once the passenger has selected a flight, a webpage directs the passenger to “confirm” the flight on a page that displays both the base fare and an undifferentiated amount labeled “Taxes & Fees.” For a breakdown of these charges, the consumer then must click on an additional link, “more information,” which lists “Passenger Usage Fee” alongside government taxes and fees.

Spirit moved to dismiss the case arguing that permitting the plaintiffs RICO action would prevent Congress’s intent to delegate entirely the regulation of airline ticket prices and price advertising to the Department of Transportation (DOT). The District Court agreed and threw out the case.



However, the plaintiffs appealed their case before the 11th Circuit Court of Appeals and on Tuesday the court said "we disagree" and vacated the lower courts order and remanded the case to be returned back to the lower court for trial. The appeals court went on to say federal laws do not preempt other federal laws, subsequent legislation could preclude the plaintiffs’ claims only if congress had repealed the provisions of RICO, at least insofar as they authorized plaintiffs actions. Congress did not do so expressly through the Airline Deregulation Act of 1978.

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