American Airlines must face revived lawsuit over delayed baggage

By Jonathan Stempel

(Reuters) - A federal appeals court on Wednesday revived a lawsuit accusing US Airways, now part of American Airlines Group Inc, of refusing to refund a passenger's checked baggage fee even though it delivered her bag a day late.

The 9th U.S. Circuit Court of Appeals in San Francisco said Hayley Hickcox-Huffman could pursue her proposed class action on behalf of other travelers, because federal law did not pre-empt her state law-based breach-of-contract claim.

American spokesman Matt Miller said the Fort Worth, Texas-based carrier, which merged with US Airways in 2013, is reviewing its legal options. The plaintiff's lawyers did not immediately respond to requests for comment.

Carriers say baggage fees, typically $25 for the first bag, help keep base fares low and let passengers decide which add-ons to buy. Critics say the fees disguise the true cost of flying.

American collected $1.12 billion in baggage fees last year, more than any other U.S. carrier, and more than one-quarter of the $4.18 billion collected by all U.S. carriers, the Department of Transportation said on Tuesday.

Hickcox-Huffman sued US Airways to recover a $15 fee, after her bag did not show up following a May 2009 flight to San Luis Obispo, California, from Colorado Springs, Colorado.

A lower court judge dismissed her claim in April 2011, saying it was pre-empted by the federal Airline Deregulation Act.

But the appeals court, which delayed its decision because of rulings in other cases, said US Airways had committed to offer "on-time baggage delivery," not merely use its best efforts.

Circuit Judge Andrew Kleinfeld rejected the carrier's arguments that it owed nothing because it never promised a refund, and that a victory for Hickcox-Huffman would require all carriers to deliver checked bags on time, or else for free.

"No state law made US Airways promise timely delivery of the first bag for $15," Kleinfeld wrote.

"Enforcing its voluntarily undertaken obligation comports with the purpose of the Airline Deregulation Act, which simply holds parties to their agreements," he added.

The case was sent back to the lower court for further proceedings.

The case is Hickcox-Huffman v US Airways Inc et al, 9th U.S. Circuit Court of Appeals, No. 11-16305.

(Reporting by Jonathan Stempel in New York; Editing by Jonathan Oatis and Tom Brown)

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