High Court Limits Suits Over Frequent Flier Miles
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WASHINGTON (AP) — The Supreme Court ruled Wednesday that a Minnesota rabbi who complained about an airline’s frequent flier program is out of luck.
The justices unanimously sided with Northwest Airlines and dismissed a lawsuit from Rabbi S. Binyomin Ginsberg that alleged he was stripped of his top-level frequent flier status because he complained too much.
Ginsberg said Northwest, since absorbed by Delta Air Lines Inc., did not act in good faith when it cut him off. But the justices ruled that the federal deregulation of the airline industry in 1978 prohibits most lawsuits like the one filed by Ginsberg.
Writing for the court, Justice Samuel Alito said the frequent flier program is clearly connected to the airline’s prices, routes or services, which are covered under the Airline Deregulation Act.
Ginsberg and his wife flew almost exclusively on Northwest, logging roughly 75 flights a year to travel across the U.S. and abroad to give lectures and take part in conferences on education and administration.
He said he flew on Northwest even when other airlines offered comparable or better flights and in 2005, reached the highest level of the WorldPerks program.
Northwest cut him off in 2008, shortly after Northwest and Delta agreed to merge. Ginsberg said the move was a cost-cutting measure designed to get rid of the high-mileage customers.
Northwest says Ginsberg complained 24 times in a 7-month period, including nine instances of luggage that turned up late on airport baggage carousels. Northwest said that before it took action, it awarded Ginsberg $1,925 in travel credit vouchers, 78,500 bonus miles, a voucher for his son and $491 in cash reimbursements.
The airline pointed to a provision of the mileage program’s terms that gives Northwest the right to cancel members’ accounts for abuse.
The court said its decision does not leave airline customers without recourse. The Department of Transportation has authority to punish unfair and deceptive practices in air transport and can investigate complaints about frequent flier programs. Customers also have the option of enrolling in a rival airline’s program, the court said.
In a statement, Delta Air Lines said it was pleased with the decision and would continue “to provide customers with a loyalty program that offers valuable benefits and rewards our members’ travel.”
Ginsberg’s attorney, Adina Rosenbaum of the consumer advocacy group Public Citizen, said she was disappointed in the ruling.
“We think it’s one that harms consumers by giving airlines greater freedom to act in bad faith in performing their contracts with consumers,” she said.
A federal trial judge cited earlier Supreme Court cases involving claims against frequent flier programs in dismissing Ginsberg’s lawsuit, including his claim that Northwest did not live up to the terms of the contract. The judge said the contract gives the airlines the right to kick someone out of the mileage program at its “sole judgment.”
But the 9th U.S. Circuit Court of Appeals in San Francisco said part of the suit could go forward involving whether Ginsberg and others can sue under state laws that require parties to a contract to act in good faith.
The case is Northwest vs. Ginsberg, 12-462.
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