Shaw v. Delta Airlines

United States District Court for the District of Nevada · Federal Courts

Federal CourtsSummary JudgmentAgencyApparent AuthorityVicarious Liabilitydiversity jurisdictionNevada lawsummary judgment

Facts

Samuel Shaw was injured when SkyWest flight 5855 crashed near Elko, Nevada. Plaintiffs conceded that SkyWest was not a subsidiary or division of Delta, but argued that Delta publicly presented SkyWest as part of Delta or as Delta's agent on commuter routes. Plaintiffs offered evidence that SkyWest used Delta trademarks and insignia, appeared with Delta in advertising and schedules, and operated under arrangements in which Delta controlled items such as published timetables and flight numbers. The Delta-SkyWest agreement also contained a clause disclaiming any agency relationship.

Issue

Whether Delta was entitled to summary judgment because no reasonable jury could find that Delta and SkyWest were partners, joint venturers, or in an agency relationship under which SkyWest had apparent authority to carry passengers for Delta.

Rule

On summary judgment, the evidence must be viewed in the light most favorable to the nonmoving party, and summary judgment is improper if a reasonable jury could return a verdict for that party. Under Nevada law, apparent authority exists when a principal holds another out as possessing authority, or permits that person to represent such authority, under circumstances that estop the principal from denying it; the existence of an agency relationship is a question of fact for the jury. A contractual clause disclaiming agency is not controlling, and partnership or joint venture generally require more than mutual profit expectations, including loss sharing and meaningful control.

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One of 10 multiple-choice questions for this case. Pick an answer to see why.

Lakeview Air, based in Chicago, contracts with Mesa Crest Commuter to serve smaller Wisconsin cities. Their contract says each company is an independent contractor, but Lakeview assigns the commuter flights Lakeview flight numbers, prints them in Lakeview timetables, sells tickets on Lakeview ticket stock, and advertises the service nationwide as "Lakeview Link" using Lakeview's logo next to Mesa Crest's name. A passenger injured on a Mesa Crest flight sues Lakeview for vicarious liability.

Lakeview moves for summary judgment, arguing the contract's no-agency clause defeats the claim. How should the court rule?

Explanation. Under the majority opinion, a contractual clause negating agency is not controlling. The court must examine the surrounding facts, and apparent authority exists when the principal holds another out as possessing authority or permits that representation under circumstances estopping denial. Branding, timetables, ticket stock, and assigned flight numbers are the kind of manifestations that can create a triable issue, so summary judgment should be denied. (Derived from Shaw v. Delta Airlines (n.d.).)