Airlines won a stronger shield from passenger lawsuits as the U.S. Supreme Court threw out claims filed by a man kicked out of Northwest Airlines’s frequent-flier program for complaining too much.
The justices unanimously said the man’s lawsuit under Minnesota state law was barred by a 1978 federal statute that deregulated the airline industry. The ruling reversed a federal appeals court.
Writing for the court, Justice Samuel Alito said the ruling wouldn’t necessarily preclude suits in all 50 states. He said Minnesota law would have improperly imposed obligations on airlines no matter what was in their frequent-flier contracts with passengers. Alito said frequent fliers wouldn’t be left “without protection,” even in Minnesota.
“If an airline acquires a reputation for mistreating the participants in its frequent-flier program (who are generally the airline’s most loyal and valuable customers), customers can avoid that program and may be able to enroll in a more favorable rival program,” Alito wrote.
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The passenger, S. Binyomin Ginsberg, contacted Northwest’s offices 24 times over seven-and-a-half months, according to a 2008 letter sent to him by the company, which is now part of Delta Air Lines Inc. The letter said that nine of the complaints concerned delayed luggage and that Ginsberg repeatedly asked for compensation above the airline’s guidelines.
Ginsberg, a rabbi who says he flies 75 times a year because of his work as an education and administration expert, had achieved the highest level in Northwest’s WorldPerks frequent-flier program.
The WorldPerks membership agreement gave the airline the right, in its “sole judgment,” to revoke the membership of passengers who abuse the program.
The case turned on the 1978 Airline Deregulation Act, which bars lawsuits or state regulations that are “related to a price, route or service of an air carrier.”
In 1995 the Supreme Court said that law barred state-imposed regulations while letting passengers sue over contractual commitments made by airlines.
Ginsberg’s lawyers argued that he was simply trying to enforce his contract with the airline. He was seeking to press a class-action suit against Northwest under Minnesota law, accusing the airline of breaching what lawyers call the implied covenant of good faith.
“Today’s decision gives airlines greater freedom to act in bad faith in performing their contracts with consumers, to the detriment of the millions of consumers,” said Ginsberg’s lawyer, Adina Rosenbaum of the Washington-based advocacy group Public Citizen.
Rosenbaum said the court left open important legal avenues for passengers by letting them sue airlines for breaching the frequent-flier contracts.
“The Supreme Court affirmed that airlines may control the terms and conditions of their frequent-flier programs, including the conditions for maintaining membership in a program,” said Victoria Day, a spokeswoman for Airlines for America, the trade group for U.S. carriers.
The Obama administration largely backed Atlanta-based Delta.
The case is Northwest v. Ginsberg, 12-462.