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Recently, our travel law group successfully defended a Massachusetts tour operator in a class action brought by 168 passengers in federal court in Boston. A Massachusetts Lawyers’ Weekly article discussing the case can be found here.
The litigation however raises grave issues as to the scope of regulations promulgated by the Massachusetts Attorney General and their impact on the travel industry.
The case concerned a malfunctioning engine on a cruise vessel in the middle of a European river boat tour. As a result of the malfunction, the passengers were required to travel to their scheduled itinerary destinations via motorcoach for a portion of their trip. Passengers returned to the ship each night, until they eventually travelled via motorcoach to Vienna where they stayed for four nights until the repaired vessel met them for the conclusion of their tour.
Almost all of the originally-scheduled events on the itinerary were seen, and additional points of interest were added by the tour operator. But, the passengers missed out on several days of river cruising and were obviously disappointed. After the conclusion of the trip, all passengers were offered a complimentary off-season cruise, as well as a future trip credit.
A class action was instituted against the tour operator, alleging a plethora of claims and a violation of the Massachusetts Consumer Protection Statute, M.G.L. ch. 93A. The court granted the tour operator summary judgment on all of the common law claims. The only surviving claim was a portion of the Chapter 93A claim that pertained to a rarely-used Massachusetts Attorney General Seller of Travel regulation, 940 CMR § 15.06.
By its terms, the regulation requires tour operators (and some tour arrangers) operating in or selling to Massachusetts residents to provide consumers three options when the tour operator is not able to provide purchased “travel services”: (1) a cash refund; (2) a substitution of services of equal or greater fair market value; or, (3) a substitution of services of lesser fair market value plus a cash refund of the difference, with the consumer electing which option to pursue.
The case recently went to a bench trial before Federal District Court Judge Denise Casper on the sole remaining count – whether the tour operator violated this regulation, whether the class suffered “injury” as a result of this violation and, thus, whether the tour operator had violated Massachusetts General Laws Chapter 93A (subjecting the defendant potentially to double or treble damages and attorneys’ fees).
There was extensive testimony concerning the efforts undertaken by the tour operator, not only in making sure the vast majority of the original tour itinerary was kept, but also as to the additional services and attractions provided to the passengers after the breakdown. The court then determined that the class suffered no cognizable economic injury arising from the violation of the Attorney General regulation, and thus did not violate Chapter 93A.
While obviously we are pleased with the result of this case, this Massachusetts regulation should trouble any tour operator or travel agency which operates in Massachusetts or does business with Massachusetts residents. While we were successful in showing the court that the value the class actually received after the vessel broke down was in excess of any value they lost from their missed river cruising days, the court held that this regulation applied in all circumstances. Indeed, the court specifically determined that once the vessel broke down in the middle of the tour, the tour operator violated the regulation by not immediately providing the three options enumerated in the regulation. As any seller of travel would realize, immediately to provide these three options to 168 passengers (all at the tour operator’s expense) in the middle of an ongoing tour would be nothing short of a logistical and financial impossibility.
Fortunately, in our case we were able to show that the tour operator’s Herculean efforts in salvaging the remaining scheduled itinerary, adding value where it could, and offering future trip credits and complimentary trips meant that the injury to the passengers as a whole was non-existent.
How this will play out in future cases – or in cases involving individual passengers invoking this particular regulation – remains to be seen. As always, we would be happy to discuss these issues with you at your convenience.
The Travel Group:
Rodney Gould
(617) 228-4443
Robert Mueller
(617) 228-4453
Disclaimer: The information contained in this document is not intended as legal advice. Readers should consult a qualified attorney before acting on any of the information contained in this document. The information contained in this document is provided for informational purposes only and may be considered advertising under the rules of the Supreme Judicial Court of Massachusetts.