A federal judge in the Eastern District of New York ruled on Monday, July 6, 2026, that two customers can proceed with their lawsuit against JetBlue Airways (B6) over unrefunded Transportation Security Administration (TSA) fees. The case, filed in Brooklyn, centers on JetBlue’s practice of issuing an expiring travel credit, instead of a cash refund, when a customer cancels a nonrefundable or award ticket. The judge rejected JetBlue’s argument that federal aviation law bars the suit, allowing the breach-of-contract claim to move forward.
The dispute goes back to December 2021, when passenger Spencer Hahn sued JetBlue in Hahn v. JetBlue Airways Corporation after the airline denied his request for a cash refund of the $5.60 September 11th Security Fee, CourtListener reported. A second plaintiff, James Crist, later joined the case. The lawsuit argues JetBlue’s own contract of carriage, combined with a federal regulation, requires the airline to hand back the fee in cash once a ticket is canceled and never used.
Why JetBlue Keeps The $5.60 TSA Fee After a Cancellation
When a passenger buys a ticket, the airline collects several government-mandated charges up front, and it must remit most of them regardless of whether the trip happens. According to View from the Wing, these include the 7.5% federal excise tax on domestic fares, a $5.20 segment tax, a $22.90 international arrival and departure tax, and airport Passenger Facility Charges of up to $4.50 per segment.
The September 11th Security Fee works differently. Federal rules entitle passengers to a cash refund of this specific charge if they cancel a nonrefundable ticket and never fly. Most large U.S. carriers process this automatically. JetBlue does not. Instead, the airline places the $5.60 into a JetBlue travel credit that expires if unused, and it will only apply that credit toward a future booking’s taxes if the new charge matches the credit amount exactly, according to the same report.
What The Contract of Carriage Actually Promises
JetBlue’s contract of carriage states that taxes and fees “will not be refunded except when required by applicable law“. The plaintiffs argue that applicable law does require a refund here. Federal regulation 49 C.F.R. ยง 1510.9(b) obligates carriers to refund the security fee once a ticket purchaser’s itinerary is fully canceled and no travel occurs.
That reading is not new. A 2002 guidance letter from the TSA‘s then-Acting Director of Revenue told airline trade groups that when a ticket expires unused, the carrier must provide the requester with a full refund of the fee. A 2006 Department of Homeland Security audit reached a similar conclusion, finding that airlines have no basis to retain fees owed to either the ticket purchaser or the TSA itself, according to the same court filing. Screenshots included in earlier versions of the complaint show JetBlue agents telling customers the tax is simply part of the fare and cannot be refunded, a position the plaintiffs say conflicts with both the regulation and JetBlue’s own contract language.
Judge Rejects JetBlue’s Airline Deregulation Act Defense
JetBlue’s central defense was preemption. The airline argued that the Airline Deregulation Act bars state-law claims tied to an air carrier’s prices, routes, or services, and that a refund dispute counts as a claim about price. JetBlue also argued that ruling on the claim would force the court to interpret federal TSA rules that sit outside the four corners of the contract itself.
The court disagreed. Under the Supreme Court’s 1995 decision in American Airlines v. Wolens, the Airline Deregulation Act does not preempt ordinary breach-of-contract suits that merely enforce an airline’s own self-imposed promises.
Because JetBlue’s contract already commits to refunding taxes “when required by applicable law,” the lawsuit only asks the airline to keep a promise it made itself. The judge also noted that a TSA security fee is a uniform federal charge, not a fare, so ordering its refund does not regulate JetBlue’s prices, routes, or services in the way the statute was designed to prevent.
Why Passengers Are Suing Individually For $5.60
The ruling keeps the case alive, but only as an individual claim. JetBlue’s contract of carriage includes a class-action waiver, and the court has enforced it, meaning the plaintiffs cannot represent a broader group of affected passengers, even though the underlying practice may have touched millions of tickets.
That waiver creates a practical problem. A federal court filing fee alone runs several hundred dollars, far more than the $5.60 at stake in a single ticket. Aviation analyst Gary Leff argues this is precisely the kind of harm class actions exist to address: individually small enough that no rational customer sues alone, but large enough in aggregate to matter (View from the Wing).
The 2013 Supreme Court decision in American Express v. Italian Colors previously held that high litigation costs alone do not automatically void a class-action waiver, which is part of why the waiver has survived so far even as the underlying refund claim advances.
JetBlue Joins a Pattern of TSA Fee Fights Against Southwest, Frontier and Spirit
JetBlue is not the only carrier that has faced scrutiny over held-back security fees. The TSA has separately pursued Southwest Airlines, Frontier Airlines, and Spirit Airlines over similar practices, with mixed results across the industry:
- The TSA fined Southwest Airlines roughly $48 million over its handling of expired travel credits tied to security fees; Southwest is contesting that penalty before the Fifth Circuit.
- A court ruled that Frontier Airlines had kept roughly $5.4 million in TSA security taxes that should have gone back to passengers or the government.
- An appeals court found that Spirit Airlines cannot keep security taxes collected from travelers who never flew.
Because individual passengers cannot band together against JetBlue in court, the TSA’s own enforcement actions against these other carriers may end up being the more effective check on the industry-wide practice, even though none of those cases directly bind JetBlue’s litigation.
A Parallel Fight: United’s Windowless Window Seat Case Survives Dismissal the Same Week
JetBlue’s ruling landed one day after a similar consumer-contract defeat for United Airlines in the same New York court system, illustrating a broader trend of airlines losing early dismissal bids in ancillary-fee disputes. United had argued that a “window seat” is simply industry terminology for a seat located next to the fuselage, not a guarantee of an actual window, and that the Airline Deregulation Act preempted the claim regardless.
The judge in that case was unpersuaded, finding United’s reservation screens, seat maps, and boarding passes all labeled the product as a “window” seat, so passengers could plausibly have expected a view. The court’s assessment of United’s argument was blunt: the points are not well taken. Both rulings rely on the same Wolens principle that lets passengers enforce an airline’s self-imposed promises, even when the Airline Deregulation Act would otherwise block a broader claim about prices or service.
.jpg){kind=link}
JetBlue’s Broader Legal Landscape In 2026
The TSA fee case is only one item on JetBlue’s current legal docket. A federal judge in Massachusetts blocked JetBlue’s proposed $3.8 billion merger with Spirit Airlines in January 2024 on antitrust grounds, a ruling the airline chose not to pursue further after a brief challenge at the First Circuit. Spirit Airlines itself ceased operations entirely on May 2, 2026, after two bankruptcy filings, and JetBlue has since moved to absorb much of the capacity Spirit left behind at hubs such as Fort Lauderdale-Hollywood International Airport.
The airline is also facing a separate wrongful death lawsuit tied to a passenger who allegedly suffered a stroke after landing on a JetBlue flight from Boston to West Palm Beach, and it recently answered a pilot union lawsuit filed in the same Brooklyn federal court that is now hearing the TSA fee case.
Taken together, these cases show a carrier navigating consumer-contract disputes, labor friction, and the operational fallout of a failed merger at the same time it is trying to expand into markets Spirit vacated. None of the other cases affect the outcome of the TSA fee dispute directly, but they illustrate that JetBlue’s overall exposure to litigation has broadened even as its network keeps growing.
.jpg){kind=link}
What The Ruling Means for JetBlue Customers Now
For now, JetBlue customers who cancel nonrefundable or award tickets should expect the $5.60 fee to land as an expiring travel credit rather than cash, unless they successfully press an individual refund request or a future ruling forces a policy change. JetBlue’s own refund help page confirms that nonrefundable fares generally convert to travel credit upon cancellation, with credits valid for 12 months from the original ticketing date.
The case now moves toward further proceedings in the Eastern District of New York, with JetBlue facing the underlying question of whether its practice violates its own contract language, even as the class-action door stays closed. The plaintiffs are seeking damages equal to the fees JetBlue has not refunded, along with an injunction that would force the airline to change how it processes these cancellations going forward, according to the original complaint.
Passengers who believe they are owed a refund can still request one directly from JetBlue, though the airline’s history of denying such requests is part of what triggered the litigation in the first place.
The bigger stakes may sit with the travel credit itself rather than the $5.60 headline figure. On international award tickets, government taxes and carrier-imposed fees can run into the hundreds of dollars, so a canceled long-haul booking can leave a much larger sum trapped in an expiring credit than a short domestic hop would. Frequent flyers who redeem miles for premium international itineraries are the customers most exposed to that risk, since JetBlue applies the same expiring-credit, exact-match policy regardless of how large the underlying tax bill was.