Supreme Court Rules For Northwest Airlines Over Complaining Frequent Flier

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Supreme Court Rules For Northwest Airlines Over Complaining Frequent Flier

April 3, 2014 - On Wednesday the U.S. Supreme Court ruled in the case of Northwest Airlines v. Ginsberg, a case which centered around Rabbi S. Binyomin Ginsberg, of Minneapolis who was removed from the carriers frequent flier program for complaining to many times about the carrier’s service.

The U.S. Supreme Court ruled in favor of Northwest Airlines, now owned by Atlanta based Delta Air Lines. The court said in this case, state law did not override the Airline Deregulation Act 1978.

Rabbi Ginsberg a professor at a university travels extensively throughout the United States and abroad to giving lectures, conduct seminars and workshops. Ginsberg and his wife had traveled almost exclusively on Northwest, logging approximately 75 flights with the airline each year.

Ginsberg who was an active member of “WorldPerks,” a frequent flier program offered by Northwest Airlines. Ginsberg began his WorldPerks membership in 1999, and by 2005 he had obtained Platinum Elite Status. Northwest revoked Ginsberg’s WorldPerks membership on June 27, 2008.

Ginsberg attempted several times to clarify the reasons behind Northwest’s decision to revoke his membership. Ginsberg alleged Northwest revoked his membership arbitrarily because he complained too frequently about the carriers services.

Northwest sent Ginsberg an email on November 20, 2008, detailing the basis for Northwest’s decision to revoke Ginsberg’s membership. In that email the Northwest representative quotes from Paragraph 7 of the General Terms and Conditions of the World-Perks Program, which provides that Northwest may determine “in its sole judgment” whether a passenger has abused the program, and that abuse “may result in cancellation of the member’s account and future disqualification from program participation, forfeiture of all mileage accrued and cancellation of previously issued but unused awards.”

Ginsberg initially filed suit in district court on January 8, 2009, he asserted four causes of action: (1) breach of contract; (2) breach of the implied covenant of good faith and fair dealing; (3) negligent misrepresentation; and (4) intentional misrepresentation.

Northwest moved to dismiss the complaint pursuant to Federal Rules of Civil Procedure (FRCP) 12(b) (6), (rule 12(b) (6) motion, which replaced the common law demurrer, (its how lawsuits with insufficient legal theories underlying their cause of action are dismissed from court) arguing that the Airline Deregulation Act (ADA) preempted the claims.

The Airline Deregulation Act is a 1978 United States federal law intended to remove government control over fares, routes and market entry (of new airlines) from commercial aviation. The Civil Aeronautics Board's powers of regulation were phased out, eventually allowing passengers to be exposed to market forces in the airline industry. The Act, however, did not remove or diminish the regulatory powers of the Federal Aviation Administration (FAA) over all aspects of air safety.

The district court dismissed Ginsberg’s claims for breach of the implied covenant of good faith and fair dealing, negligent misrepresentation, and intentional misrepresentation, concluding that the ADA preempted them because they relate to airline prices and services.

The district court also dismissed the general breach of contract claim, finding that the claim was not preempted, but that Ginsberg had failed to allege facts sufficient to show a material breach. On June 9, 2011, Ginsberg filed an appeal with Court Of Appeals for the Ninth Circuit. On August 5, 2011, the court ruled in favor of Ginsberg.

Northwest stated Ginsberg had complained 24 times in eight months about the carrier’s service. “You have continually asked for compensation over and above our guidelines... We have awarded you $1,925 in travel credit vouchers, 78,500 WorldPerks bonus miles, a voucher extension for your son, and $491 in cash reimbursements. Due to our past generosity, we must respectfully advise that we will no longer be awarding you compensation each time you contact us.”

Northwest Airlines believed as of a result of Airline Deregulation Act 1978, airlines have a right to set their own policies under these matters. Northwest and its parent corporation, Delta Air Lines, sought review, contending the lower court’s decision is in conflict with the decisions of other Circuit Court rulings and that the Supreme Court should reverse the appeals court decision. On May 20, 2013, the U.S. Supreme Court agreed to hear the case.

In Wednesday’s ruling Justice Samuel Alito wrote the unanimous opinion of the Court, (NORTHWEST, INC., ET AL., PETITIONERS v. RABBI S. BINYOMIN GINSBERG) he wrote “We must decide in this case whether the Airline Deregulation Act pre-empts a state-law claim for breach of the implied covenant of good faith and fair dealing. Following our interpretation of the Act in American Airlines, Inc. v. Wolens, 513 U. S. 219 (1995), we hold that such a claim is pre-empted if it seeks to enlarge the contractual obligations that the parties voluntarily adopt. And because the doctrine is invoked in the present case in an attempt to expand those obligations, we reverse the judgment of the Court of Appeals.”