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Nader v. Allegheny Airlines, Inc.

    Brief Fact Summary.

    Nader filed a suit for fraudulent misrepresentation after being removed from his flight with Allegheny Airlines, Inc. in accordance with the airline’s overbooking policy.

    Synopsis of Rule of Law.

    A statement in a business transaction constitutes fraudulent misrepresentation if the information is materially misleading due to the lack of a qualifier.

    Facts.

    Nader bought a ticket with Allegheny Airlines, Inc. (Allegheny) and received a flight confirmation. Nader filed a suit for fraudulent misrepresentation after being removed from his flight with Allegheny Airlines, Inc. in accordance with the airline’s overbooking policy.

    Issue.

    Whether a statement in a business transaction constitutes fraudulent misrepresentation if the information is materially misleading due to the lack of a qualifier.

    Held.

    Yes. Alleghany is liable to Nader for fraudulent misrepresentation. Without information indicating that a passenger is subject to removal due to an overbooking policy, a passenger has reason to believe that a ticket confirmation will ensure their seat on a flight.

    Discussion.

    A statement in a business transaction constitutes fraudulent misrepresentation if the information is materially misleading due to the lack of a qualifier. A defendant is guilty of fraudulent misrepresentation if the plaintiff can prove that the defendant made a false representation regarding a material fact, the defendant knew that the statement was false, made the statement in order to deceive the plaintiff, and the plaintiff relied on the false representation.


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