Supreme Court To Frequent Flyers: 

You Have No Rights - Especially If You Complain

Rabi Ginsberg was a frequent flyer on Northwest Airlines from Minneapolis who traveled frequently since 1999 and had achieved platinum elite status.   

Shortly after a merger with Delta Airlines, Rabi Ginsberg was advised that his membership in the program had been terminated because he had called Customer Care too many times and had been bumped too many times requiring the airline to pay him compensation, claiming this constituted "abuse."

At the time, he had complained about service on 10% of his flights, on Northwest.  According to a JD Power survey of customer satisfaction, Northwest was tied for last place, and achieved the nickname of "Northworst".  

Ginsberg alleged that the airline had terminated him from the program along with others to save money as part of its merger with Delta.

The US Supreme Court last week ruled unanimously that the Airline Deregulation Act of 1978 (ADA) preempts state laws and policies that consumer contracts contain an implied covenant of good faith and fair dealing. 

This decision removes the last shred of a possibility that airline passenger might have any consumer rights based on state laws, as do consumers of every other service or product.  

Unless the ADA is reformed or the US DOT enacts new regulations to regulate frequent flyer programs and prevent airlines from unfairly canceling membership or denying passengers from using their "earned" benefits, airlines now have the unrestricted right to  terminate frequent flyer benefits for any passenger at will.  See Northwest, Inc. v Ginsberg. 

The airline had appealed a US Appeal Court decision holding that "the purpose of the ADA was not to immunize the airline industry from liability for common law contract claims. Congress did not intend to convert airlines into quasi-government agencies, complete with sovereign immunity."

The Supreme Court disagreed.

But don't worry frequent flyers, the Supreme Court says even though airlines can by contract make themselves immune from all state law involving good faith or fair dealing (there are no similar federal regulations which are now the sole regulator for airlines), airline passengers are not without recourse.

They can avoid an airline with a poor reputation and possibly enroll in a more favorable rival program. Moreover, the De�partment of Transportation has the authority to investigate com�plaints about frequent flyer programs.

FlyersRights.org has, as part of its Airline Passenger Bill of Rights 2.0 (APBOR), proposed that Frequent Flyer programs be regulated by the DOT both to provide the public with statistics on the performance of each program, so they can evaluate them and by requiring reasonable notice before making changes that devaluate frequent flyer miles.  

The DOT already has authority to investigate and prohibit "unfair or deceptive" airline practices, but has apparently never used this authority to prevent or prohibit airlines from acting in bad faith in terminating passengers from these programs. 

APBOR would also have Congress amend the ADA to reverse the interpretations of the federal courts which have granted airlines immunity from all state and local consumer protection laws and most torts not resulting in physical injury or death.