Perhaps you’ve read about the 24-year-old Harvard dropout who sued Equifax in small claims court over last year’s mammoth data breach–and won–and whose company started funding other people’s cases against the credit reporting giant.
Now, a Southwest Airlines passenger is suing Southwest for landing at the wrong airport. (Contrats this to what happened when an airline in Sweden accidentally put 34 people on the wrong plane and flew them 600 miles away from their intended destination.)
This is the kind of case we talked about back in law school, and I was intrigued enough to dig up the Missouri-based court complaint in this case to learn more. I’ve included it at the bottom of this story.
But I think the most important line in the entire filing is one some people have missed. And buried in the reasoning behind it, is an important lesson for business leaders and entrepreneurs. Here’s the line:
Plaintiff is requesting damages in the amount of $74,999.99 and nothing more.
It’s an odd number, right? It turns out there’s a smart reason behind the decision to use it. Below, we’ll go through this strange case, why the plaintiff is suing for exactly one penny under $75 grand, and what all of this means for you as a business leader.
Bottom line upfront, it’s about understanding the rules of any contest or negotiation, and identifying weaknesses that can enable a small player to take on an exponentially larger entity. It’s about how if you plan things right, David can always beat Goliath.
(I asked both the plaintiff’s lawyer and Southwest Airlines for comment. Neither responded.)
The wrong airport.
Quick, important fact: There are two airports servicing tiny Branson, Missouri: Branson Airport, which at the time had regular Southwest Airlines service, and the smaller Taney County airport, with a runway barely half the length of Branson’s.
Somehow, the captain and first officer of Southwest Flight 4013 from Chicago mixed up the airports–which are only seven miles apart–and landed at the wrong one.
Nobody was physically injured–but at least one career was ended and things could have been much worse. Passengers allegedly had to wait for two hours after landing before being allowed off, while the plane was filled with smoke.
“We landed very abruptly, with the pilot applying the brakes very hard. We smelled burnt rubber from the stop,” another passenger (not the plaintiff in this lawsuit, as far as I know) told Forbes at the time, adding: “The mood is somber now that we realized we were 40 feet from the edge of a cliff.”
The passenger who sued Southwest, Troy Haines, lived in the area and had flown into Branson Airport many times, and says he realized well before the plane landed–even if the pilots didn’t–they were at the wrong airport, “with a much smaller runway.”
He was “immediately struck with fear and anxiety over potentially crashing,” according to his lawsuit, and he later “suffered severe mental anguish, fear and anxiety, including a panic attack which caused him to be removed from another airline prior to takeoff.”
That in turn led him to stop flying, which meant taking a job that didn’t require travel–“at a substantially diminished salary.”
Whether you think the lawsuit sounds reasonable or not, the obvious question is simply: Why not just round things up a penny and ask for $75,000?
The reason stems from the fact that there are two U.S. court systems: federal and state. And even if a plaintiff files a suit in state court, the defendant can sometimes move it (“remove it” in the legal language) to federal court.
Most often, the defendant does this by showing the plaintiff and defendants are from different states–but also that the amount at stake is more than $75,000. Suing for exactly one penny less than that blocks Southwest from removing the case to federal court.
“It’s clear [the plaintiff in this case] wants to be in state court and is therefore staying under the monetary threshold for removal to federal court,” said Paul Geller, an experienced civil litigator and a partner at New York-based Robbins Geller Rudman & Dowd, who is not involved in this case.
“While I don’t necessarily ascribe to it, there is a general overlay in litigation that plaintiffs want to be in state court, and defendants try to find any way to get to federal court (through removal, where permissible),” Geller continued.
“Flight options plummet at Branson Airport.”
It’s not that suing for one penny under the cutoff is a rare strategy. And Geller went on to call the idea that state courts are always more plaintiff-friendly “an urban myth.”
In many cases, he might be right. But here, several things make filing (and staying) in state court utterly brilliant, in my opinion. If you’re a business owner, or you can ever imagine being a party to a civil lawsuit, you’ll want to pay attention.
First, there’s the fact that five months after this incident–June 4, 2014–Southwest stopped flying into Branson.
You can imagine why this might make sense, business-wise: Taney County, where Branson is located, has only about 51,000 year-round residents, although it is a tourist destination. Still, when Southwest left (along with Frontier soon after, the only other big airline that had served the area), the airport was hit hard.
In fact, the last time news broke that Branson might be attracting a major carrier, it was all part of an elaborate April Fool’s joke on the part of Sir Richard Branson (same last name as the city), the CEO and founder of now-defunct Virgin America.
I don’t know the exact economic impact of the airport’s demise. But I’m sure it caused damage, as outlined in one newspaper article, “Flight options plummet at Missouri’s new Branson Airport.” I’m also confident that seeing your hometown dismissed as too insignificant for commercial flights has to sting.
All of which might make the plaintiff want more Branson-area jurors, while Southwest might want to do everything it can to try this case as far away as possible.
Again, trying to stay in state court isn’t a rare strategy. But the extra reasons for that in this case are instructive–especially for business leaders.
It’s about seeing things from an adversary’s perspective, and understanding how small things that you take for granted can turn out to be big advantages in negotiations, or even litigation.
Fifty miles–and a world away.
The closest federal court to Branson is 50 miles north, in Springfield.
That means, if Southwest Airlines could remove the case to federal court, they’d be able to take it out of the county where this all happened, a community Southwest deemed not significant enough for its business.
And this isn’t just about the location of the courtroom; to my mind it’s about the makeup of the jury pool.
Jurors closer to Springfield, Missouri, might not feel one way or another about Southwest. But pull together a jury in Branson, and a reasonable lawyer might imagine you’d wind up with someone who knew someone who lost a job after Southwest and Frontier pulled out, or who is now inconvenienced by the lack of air service, or who doesn’t like that the big airlines think their hometown is just a punch line.
In other words, maybe you could assume a Branson jury would be predisposed to find for a plaintiff who lived in its town and isn’t asking for all the money in the world–and find against the giant corporation with the out-of-state headquarters that allegedly did him wrong.
So you’d want to keep things in state court, in Branson. And because the plaintiff asked for one penny less than is required for a removal to federal court, Southwest seems stuck.
Or else maybe this is all just about making it harder for Southwest’s lawyers and witnesses to travel to the trial in Branson.
Because as we’ve seen, Southwest doesn’t fly there anymore.
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Categories: Money Matters