A material fact is one to which a reasonable person might attach importance in choosing his course of action; in other words, it is a fact that could reasonably be expected to influence the conduct of a person with respect to the transaction in question.
Plaintiff passenger had a confirmed reservation with defendant airline. The reservation was not honored by the airline because the flight was overbooked. The court of appeals held that the passenger established a prima facie statutory violation under Section 404(b), the nondiscrimination provision of the Federal Aviation Act in 49 U.S.C.S. § 1374(b) (1970). The trial court was directed by the court of appeals to reconsider the issue of fraudulent misrepresentation. On appeal, the court reaffirmed its earlier decision that the airline's failure to disclose its overbooking policies to the passenger was a fraudulent misrepresentation. The passenger was awarded compensatory and punitive damages on his statutory discrimination claim and his common law misrepresentation claims.
Was the existence of defendant's overbooking practice a material fact that it fraudelently misrepresented?
The passenger proved all of the elements of fraudulent misrepresentation by a preponderance of the evidence. There was no doubt that the nondisclosure of the existence of defendant's overbooking practice was the result of a conscious and deliberate policy implemented by the airline. The court also reaffirmed its conclusion that punitive damages were appropriately assessed against the airline because proof of fraudulent misrepresentation was itself sufficient to support an award of punitive damages because of the state of mind that rendered it fraudulent.