In a recent U.S. Supreme Court case, the majority decided that airlines ultimately have the sole discretion to oust individual members from frequent flyer programs with or without cause.
The case, Northwest, et al. v. Ginsberg, involved a Rabbi, Ginsberg, who allegedly filed over twenty complaints with Northwest Airlines for being bumped from several flights. On several occasions, Ginsberg's complaints and insistence on being reimbursed for his inconvenience led to him being compensated by the airline. In response to his complaints, Northwest provided Ginsberg with almost $2,000 in travel vouchers, about $500 in cash, and nearly 80,000 bonus miles. Eventually, the airline found that Ginsberg was abusing the program by complaining too often and it dropped him.
Ginsberg subsequently brought a breach of contract lawsuit against Northwest based on state contract law. The District Court found however that Ginsberg's claims were preempted by the federal Airline Deregulation Act (hereinafter "ADA"). According to the District Court, the ADA barred Ginsberg's claims because the Act prohibits state's from regulating airline practices and policies. The Court accordingly found for Northwest.
In a 9-0 unanimous decision, the U.S. Supreme Court affirmed the decision. As a result, air carriers have the sole discretion to manage and, therefore, honor or withdraw an individual's membership in its frequent flyer program.
This decision may lead to stricter rules for frequent flyer programs and tougher policing of those rules. Moreover, given their broad discretion, air carriers may more readily conduct cost benefit analyses to determine whether individual members deserve continued inclusion in its program.
ABOUT THE AUTHOR:
Dave Dambreville is an Associate Attorney with Kimmel & Silverman, P.C. and focuses his practice on consumer protection litigation. He serves as the Publisher and regular contributor to the FPT Law Blog.