Attention frequent fliers: Beware the fine print.
The U.S. Supreme Court on Tuesday heard the case of a Minneapolis rabbi who was stripped of hundreds of thousands of miles and his frequent flier membership because Northwest Airlines said he complained too much.
Rabbi S. Binyomin Ginsberg said his complaints — 24 times over an eight-month period, according to court records — were polite and infrequent, and he accused Northwest of dumping his pricey account to help its bottom line in a merger with Atlanta-based Delta Air Lines.
The high court Tuesday weighed whether Ginsberg had a right to bring his case under state laws requiring implied “good faith” in contracts, even though his agreement with Northwest stated the airline had the “sole discretion” to boot him from the WorldPerks program.
“If one party can get out willy-nilly, what kind of bargain is it?” Justice Ruth Bader Ginsburg asked, raising the question of whether Northwest’s frequent flier deal was an “illusory contract.”
Justice Antonin Scalia’s skeptical questioning indicated the legal issue rested on Rabbi Ginsberg’s right to sue the airline under state law, not on whether he had unjustly lost his miles.
“This is obviously not an interpretation of a contract; it is the interpretation of a state standard,” Scalia said. “So if he’s really been given a raw deal, that could still be possible depending on what state he’s from.”
A decision is expected by the time the court’s term ends in June.
After the arguments, Ginsberg said his case affects all fliers.
“As an individual citizen dealing with a large corporation, there seems to be some imbalance here,” he said. “We have to look at how we can even the playing field in a way where my fellow citizens are feeling they can be treated fairly.”
Delta declined to comment on the case and would not say how many SkyMiles customers it has kicked out of the program.
In a high-profile case last year, Delta terminated the accounts of musician Lynn Harrell and his cello – stripping Harrell of several hundred thousand miles – because the cello, which flew with its own seat, was not entitled to earn miles as an inanimate object.
Ginsberg, an education and administration expert, and his wife flew about 75 times a year on Northwest, often to speaking engagements. On occasion he would call the company to complain about tarmac delays, for example.
“I wasn’t complaining there was too much salt on the peanuts,” he said.
In June 2008 Northwest called Ginsberg and told him it was revoking his membership in the WorldPerks program and taking away his miles.
“I was sure it was a prank,” he said.
It wasn’t. In a follow-up, Northwest told Ginsberg it was revoking his membership in part because he called to complain 24 times over an eight-month period and asked for compensation, according to court filings, and because he had booked himself on full flights for the purpose of getting “bumped” and earning additional rewards.
Ginsberg filed a class-action suit seeking $5 million for himself and other WorldPerks members who had been terminated, but it was tossed out of court because a judge said the federal Airline Deregulation Act pre-empted such claims. A series of appeals brought the case to the Supreme Court, to decide whether Ginsberg can sue.
The case is as much about states’ rights as reward miles.
Northwest, which was acquired by Delta in 2008, argued state contract law that includes an implied “good faith” expectation should not apply to frequent fliers under the Airline Deregulation Act. The 1978 law prevents state regulation of certain airline practices in order to encourage more free-market competition.
In addition, the federal Department of Transportation investigates claims of impropriety in frequent-flier programs. Attorney Paul Clement, arguing for Northwest, said the department heard 289 such claims last year.
Ginsberg was represented by Public Citizen, a consumer advocacy group. Attorney Adina Rosenbaum argued that the case was a simple contract dispute that was not trumped by the ADA, in part because that law only covers airline prices, routes and service, while frequent-flier miles can be earned and spent in a variety of ways outside of air travel.
As for the Department of Transportation, Rosenbaum said, the agency investigates frequent-flier program abuses, not contract disputes best decided by courts.
The Obama administration sided with Northwest, arguing that it must protect the intent of the ADA and airlines’ ability to enforce contracts.
Ginsberg said he is more interested in “fighting for the rights of fellow citizens” than money. He said he flies even more now but would not reveal which airline he prefers.
