[Note: This item was posted a few minutes after the another posting on the case. It contains some additional information on the case. HT on the overlap to Andrew Kaufman.]
The Supreme Court yesterday granted cert in Northwest, Inc. v. Ginsberg, a case about whether the Airline Deregulation Act's preemption provision, 49 U.S.C. 41713(b), preempts a consumer's state-law damages claim — a claim alleging a breach of the implied covenant of good faith and fair dealing — regarding his removal from an airline's frequent-flyer program. The Supreme Court has addressed the ADA's preemption provision in two cases. (It has also twice addressed a related preemption provision in a trucking deregulation statute, including this Term in the Dan's City case. The petition in Northwest v. Ginsberg had been held pending the decision in Dan's City, which came down on May 13, 2013.)
The Supreme Court generally grants a case on the petitioner's question presented, as it did in Northwest v. Ginsberg. But the parties' different views about the legal question often come through in their questions presented. Below, I have set out the airline's question presented first, followed by the consumer's question presented.
Northwest's question presented
The Airline Deregulation Act of 1978 (“ADA”) includes a preemption provision providing that States “may not enact or enforce a law, regulation or other provision having the force and effect of law related to a price, route, or service of an air carrier.” 49 U.S.C. § 41713(b). Respondent was a participant in Northwest Airlines’ frequent flyer program, which by its terms permitted Northwest to remove participants from the program in Northwest’s “sole judgment.” After respondent was removed from the frequent flyer program, he filed suit against Northwest alleging, inter alia, that Northwest breached both its contractual obligations and an implied covenant of good faith and fair dealing under Minnesota law when it exercised its discretion to terminate respondent’s membership in the program. Although the district court dismissed the contract claim for failure to state a claim and the implied covenant of good faith claim as preempted by the ADA, the Ninth Circuit reversed as to the implied covenant claim, finding such claims categorically unrelated to a price, route or service under a line of Ninth Circuit cases that have been recognized by other Circuits as inconsistent with this Court’s precedents, especially American Airlines, Inc. v. Wolens, 513 U.S. 219 (1995).
The question presented is:
Did the court of appeals err by holding, in conflict with the decisions of other Circuits, that respondent’s implied covenant of good faith and fair dealing claim was not preempted under the ADA because such claims are categorically unrelated to a price, route, or service, notwithstanding that respondent’s claim arises out of a frequent flyer program (the precise context of Wolens) and manifestly enlarged the terms of the parties’ voluntary undertakings, which allowed termination in Northwest’s sole discretion.
Ginsburg's question presented
Rabbi S. Binyomin Ginsberg is a long-standing and frequent Northwest passenger who, in 2005, earned the highest level of membership benefits in Northwest’s “WorldPerks” customer loyalty program. In 2008, Northwest abruptly revoked his status in the program. Rabbi Ginsberg filed suit alleging, as relevant here, that Northwest breached the implied covenant of good faith and fair dealing in terminating his WorldPerks membership status. The question presented is:
Did the court of appeals correctly hold that Rabbi Ginsberg’s contract claim based on the implied covenant of good faith and fair dealing is not preempted by the Airline Deregulation Act’s preemption provision, 49 U.S.C. § 41713(b), which provides that States “may not enact or enforce a law, regulation, or other provision having the force and effect of law related to a price, route, or service of an air carrier”?