Frequent flyer faces turbulence in U.S. Supreme Court

WASHINGTON Tue Dec 3, 2013 1:28pm EST

WASHINGTON Dec 3 (Reuters) - U.S. Supreme Court justices voiced skepticism on Tuesday about whether an airline customer could sue after being thrown out of a frequent flyer program.

Some of the nine justices expressed sympathy for consumers potentially being unfairly treated by airlines but, during an hourlong oral argument, the majority appeared concerned that a ruling for the flyer, Rabbi Binyomin Ginsberg, could upset the federal system for regulating airlines.

The federal Airline Deregulation Act says states have no say in regulating the price, route or service of an air carrier.

The law is relevant to the case because when Ginsberg sued Northwest Airlines Corp, which ceased operations in 2010 after merging with Delta Air Lines Inc, he claimed breach of contract under Minnesota state law, which includes good faith and fair dealing requirements.

Ginsberg, an educator from Minnesota who travels widely and leads tours as part of his work, sued in 2009, saying he and his wife were thrown out of the program a year earlier for filing too many service complaints.

He said the airline told him it took action in part because he allegedly sought compensation after booking reservations on full flights, knowing he would be bumped to another flight.

Ginsberg said his complaints involved only a small proportion of the flights he took on Northwest and were limited to such issues as long waits for luggage and not being notified about flight cancellations. Northwest said he filed 24 complaints and that the contract allowed it to terminate membership for abuse of the program at its sole discretion.

A federal judge in California dismissed Ginsberg's lawsuit, which he filed as a possible class action on behalf of others who might have been treated the same way. The judge said Ginsberg's claims were barred by the federal aviation law.

The San Francisco-based 9th U.S. Circuit Court of Appeals disagreed with the judge, reviving the lawsuit in a July 2012 ruling on the basis that Ginsberg's contractual claim was unrelated to the price, route or service.

FEDERAL AIRLINE ACT

Based on Tuesday's argument, the Supreme Court is likely to find that the lawsuit cannot proceed because of the federal law, known as the ADA.

"The whole purpose of the ADA was to pre-empt state laws ... to deregulate airlines," Justice Antonin Scalia said.

Justice Stephen Breyer raised similar concerns about the 50 states using contract law to regulate airline prices.

"If you allow that, you're going to have worse than we ever had. It'll be 50 different system," he said.

Justice Elena Kagan appeared most sympathetic to Ginsberg's plight, noting that most frequent flyer program members expect the airline to provide discounted fares in return for a customer's participation.

Without the promise from the airline, "I don't think I would be spending all this time up in the air on your planes," she told the airline's lawyer, Paul Clement.

Based on questions raised by Breyer and Justice Samuel Alito, the court is unlikely to decide whether a similar type of claim that involved air miles that were earned and spent on other services, such as hotels of car rentals, would be barred as a result of the aviation law.

Business groups, including the U.S. Chamber of Commerce, and the administration of President Barack Obama sided with the airline in the case.

A ruling is expected by the end of June.

The case is Northwest v. Ginsberg, U.S. Supreme Court, No. 12-462.

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