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Southwest Airlines Co. v. BoardFirst, L.L.C., 2007 WL 4823761 (N.D. Tex. Sept. 12, 2007).
Factual Background Edit
Plaintiff, Southwest Airlines Co., is a Dallas-based domestic airline carrier. Southwest maintains an “open seating” arrangement whereby passengers are not assigned specific seats, but rather are divided into three distinct (“A”, “B” and “C”) boarding zones. Those with and “A” boarding zone are given preferential seating to those in both the “B” and “C” boarding zones, making Zone “A” the most desirable. Boarding zones are assigned during the 24-hour period proceeding departure and are awarded on a “first come, first served” basis. The earlier a customer checks in during the 24-hour period, the more likely it is that the customer will be awarded an “A” boarding pass. Defendant, BoardFirst, L.L.C., is a corporation whose sole reason for being is to assist Southwest Airline passengers secure “coveted” Zone “A” boarding passes. On an average day, BoardFirst assists Southwest customers in obtaining around 100 boarding passes.
BoardFirst’s business model works as follows: After booking their ticket, Southwest customers must navigate away from the southwest.com website and onto BoardFirst’s site. The customer then must provide their name, confirmation number, and credit card information to allow BoardFirst to act as their agent. With this information, the agent logs onto Southwest’s website when the customer’s 24-hour “Check-In” window opens. The agent then uses the customer's name, confirmation number, and credit card to check-in with the hope of securing a Zone “A” boarding pass. If all goes according to plan, a Zone “A” boarding pass should appear on the screen in the customers name.
After completing the check-in process, BoardFirst does not print the pass, but it does charge the customer’s credit card $5.00 per pass. BoardFirst, then sends out an e-mail to the customer informing them that they may print their ticket through southwest.com or at a Southwest Airlines kiosk.
Trial Court Proceedings Edit
Southwest Airlines filed a complaint against BoardFirst for breach of contract on the ground that the company violated the terms and conditions of use (the “Terms”). Southwest's home page informs customers via small, black print at the bottom of the page that “[u]se of the Southwest websites . . . constitutes acceptance of our Terms and Conditions.” Southwest alleges that their Terms clearly state that use of the site was restricted to personal use unless the individual was an approved Southwest travel agent. In 2006, the Terms were further amended as follows to provide additional clarity: “third parties may not use Southwest websites for the purposes of checking Customer's in online or attempting to obtain for them a boarding pass in any certain group.”
Southwest sent out two cease-and-desist letters between December 2005 and February 2006 to BoardFirst, but to no avail.
As a result of the injuries it allegedly suffered, Southwest sought to permanently enjoin BoardFirst from using the Southwest Airlines website and sought to recover damages for BoardFirst’s past use of the site. The district court focused primarily on whether a contract was formed between BoardFirst and Southwest Airlines and, if so, whether the terms of the contract were breached. The court determined that a valid contract existed between Southwest Airlines and BoardFirst under a “browsewrap agreement” (an agreement where a notice on a website conditions use of the site upon compliance with certain terms or conditions.) In arriving at this conclusion, the court reasoned that BoardFirst had actual knowledge of Southwest’s Terms since BoardFirst’s CEO, Kate Bell, had received several cease-and-desist letters informing her that BoardFirst was in violation of the Terms for using Southwest’s website for “commercial purposes.” Despite having actual knowledge of the Terms, BoardFirst continued to use Southwest’s website in such a manner as to violate the Terms. In so doing, the court determined that BoardFirst bound itself to the contractual obligations imposed by the Terms.
In addition, the court also found that BoardFirst’s activities amounted to a breach of contract of the Terms of Southwest’s site. Although BoardFirst pleaded with the court to find the Terms “ambiguous and unenforceable,” the court rejected the argument due to BoardFirst’s inability to point to specific provisions the company believed were ambiguous. Therefore, the court found that BoardFirst’s actions were a clear violation of Southwest’s policy of using the site only for “personal, non-commercial” purposes.
In fashioning a remedy, the court found that the monetary damages suffered by Southwest were “difficult/impossible to ascertain” and that “the very nature of BoardFirst’s activity precludes certainty in fixing the amount of damages[.]” The court then looked at whether Southwest’s request to issue a permanent injunction against BoardFirst would meet the following four requirements set forth in VRC LLC v. City of Dallas: 1) strong probability of success on the merits; 2) that a failure to grant the injunction will result in irreparable injury; 3) they injury outweighs any damage that the injunction will cause the opposing party; and 4) the injunction will not disserve the public interest.
The court concluded that Southwest already established its entitlement to summary judgment on its breach of contract claim. Thus, the first element was satisfied. Next, because Southwest was not able to calculate the amount of economic harm it suffered by reason of BoardFirst’s activities, the court also found that failing to enter a permanent injunction would lead to irreparable harm. Third, the court reasoned that BoardFirst’s interest in using Southwest’s website in breach of the Terms cannot outweigh Southwest’s legitimate interest in maximizing sales. Finally, Southwest pointed out that the public has an interest in seeing contractual agreements enforced. Therefore, the court reasoned that the public interest would not be done a disservice and entered a permanent injunction against BoardFirst from using southwest.com in a way that breaches the Terms of the site.
- ↑ 460 F.3d 607, 611 (5th Cir. 2006).