Very rarely do you hear about an airline expelling a member from its loyalty program. But this week, just such a case came to light in the most public of arenas: in arguments before the Supreme Court.
Northwest, Inc. v. Ginsberg, No. 12-462
Rabbi Binyomin Ginsberg qualified for top-tier elite status in Northwest’s WorldPerks program in 2005. But in 2008, Northwest cancelled his WorldPerks membership and withdrew the miles in his account. As justification for the action, Northwest claimed that Ginsberg had abused the airline’s compensation system, logging 24 complaints regarding late baggage arrivals and the like in just eight months.
Ginsberg sued, claiming breach of contract, but a federal judge dismissed the suit, arguing that his claim was preempted by the Airline Deregulation Act (ADA) of 1978. But that ruling was later reversed by a federal appeals court, which held that the ADA was not intended to “immunize the airline industry from liability for common law contract claims.”
And that was the focus of the arguments before the Supreme Court on Tuesday: “the extent to which the ADA preempts a claim that involves an implied covenant of good faith and fair dealing.”
If the Court rules that such claims as Ginsberg’s can proceed, the ADA notwithstanding, we could see a flood of complaints from frustrated frequent flyers.
A ruling on the matter isn’t expected until this spring.
Reader Reality Check
Might the prospect of lawsuits be a positive for consumers? Could it, for example, put a damper on the airlines’ rush to devalue their programs?
This article originally appeared on FrequentFlier.com.
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