WASHINGTON — Airline customers complain about being mistreated daily, but Rabbi S. Binyomin Ginsberg took his grievance all the way to the U.S. Supreme Court.
Unfortunately for Ginsberg, the court sided Wednesday with Northwest Airlines Inc., now merged into Delta Air Lines Inc., in a case that had put carriers on edge.
The ruling strengthens the industry’s hand when fighting litigation filed by disgruntled passengers by bolstering a 36-year-old federal law that limits its exposure to such claims.
Ginsberg was a frequent flier and frequent complainer with Northwest. Accusing Ginsberg in 2008 of abusing his Platinum Elite membership, the airline revoked it. Ginsberg said the airline had broken its contract and was jettisoning him to cut costs.
In a 9-0 ruling, the court held that the Airline Deregulation Act of 1978 protects air carriers against such suits. The law was drafted to make airlines more competitive, and in doing so, it shielded them from state regulations that could affect their pricing and service.
The court reasoned that passengers like Ginsberg can seek relief from the Department of Transportation. Or, according to an opinion written by Justice Samuel A. Alito Jr., passengers “can avoid an airline with a poor reputation.”
Northwest had argued that it did not cavalierly boot Ginsberg from its Platinum Elite program. It noted that he lodged 24 complaints in eight months. Nine of the complaints involved his bag taking too long to get to the luggage carousel. As compensation, the airline had given Ginsberg $1,925 in travel credit, 78,500 bonus miles, a voucher extension for his son and $491 in cash.
The frequent flier contract said the airline could revoke his membership any time, for any reason. But Ginsberg, a Minnesotan, brought suit under a law in his home state that holds that parties involved in a contract must act in “good faith” and engage in “fair dealing.”
He sued in California, where a San Diego federal judge ruled much the same way the Supreme Court ultimately did. But that ruling was reversed in 2012 by the U.S. 9th Circuit Court of Appeals, alarming the industry.
The U.S. Chamber of Commerce warned in a brief filed with the Supreme Court that the 9th Circuit decision threatened to subject airlines to “a panoply of claims based on state judges’ and juries’ views,” forcing the airlines to cut back their offerings and raise fares.
Purchasers of nonrefundable tickets sue when they can’t get refunds, Chamber of Commerce attorneys noted, as do passengers diverted by storms.
Airlines for America, an industry group, argued in its brief that airlines “must be able to address the unusual situation where a customer abuses a program.”
The group welcomed Wednesday’s ruling, as did Delta, which acquired Northwest in 2008.
Consumer advocates warned that the decision is a bad deal for passengers, who have few legal remedies to hold airlines accountable at a time when Americans hold the airline industry in even lower regard than the U.S. Postal Service.
“Today’s decision gives airlines greater freedom to act in bad faith … to the detriment of the millions of consumers,” said Ginsberg’s attorney, Adina Rosenbaum, who works for the nonprofit Public Citizen advocacy group.
Longtime watchers of the industry weren’t surprised by the court’s ruling. The Ginsberg claim was similar to one made against American Airlines in 1995 after the company made it harder for frequent fliers to earn free trips. Citing the Airline Deregulation Act, the court threw out the claim.
Wednesday’s ruling stressed that consumers are welcome to sue airlines that do not uphold the explicit promises made in ticket contracts. But that may be cold comfort to passengers, said John Mulligan, a fellow at the International Aviation Institute at DePaul School of Law.
“The contracts are pretty favorable to the airlines,” he said.