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Back in December, the Supreme Court of the US finally heard the arguments in the case of Rabbi S. Binyomin Ginsberg versus Northwest Airlines (now Delta), and today the Court finally released its decision.
To give you a bit of background, the rabbi was a Platinum elite with Northwest, but back in 2008, the airline shut down his frequent flyer account, revoked his status and canceled hundreds of thousands of frequent flyer miles he had accumulated, claiming Ginsberg abused the terms of its frequent flyer program by complaining too much about issues like delayed baggage (24 over the 6-month period from December 2007-June 2008), and intentionally booking himself on full flights in the hopes of getting lucrative bump opportunities. Ginsberg argued that the move was an effort by Northwest to purge its expensive frequent flyer program before proceeding with its merger with Delta.
The case was fought at the state level, in federal circuit court, at the 9th Circuit Court of Appeals, and finally at the Supreme Court. The central issue was whether Ginsberg had standing under the 1978 Airline Deregulation Act, which limits the types of lawsuits flyers may file against airlines as well as the laws states may pass relating to airlines’ operations. Ginsberg argued that the airline did not act in good faith in its contract with frequent flyers and thus preempts the Airline Deregulation Act and is subject to Minnesota state contract law.
That’s the high-level view – if you’re a lawyer, feel free to share your analysis – and the Supreme Court has come back with its interpretation of the case, and it does not look good for Ginsberg. The Justices decided unanimously that the action fell under the Airline Deregulation Act, which says States cannot regulate the price, route or service of an air carrier, and thus was thus not subject to Minnesota state contract law. More broadly, the ruling means that frequent flyer programs can remove members “at their sole discretion” – a clause that is in many programs’ terms and conditions – and could have ramifications for a lot more frequent flyers.
Though some frequent flyers are bound to cry foul at this decision and claim that the Supreme Court has sided with the big guy in the fight while stomping on frequent flyers’ rights, having briefly reviewed the case, I can’t help but think that Ginsberg did abuse his elite benefits and that the airline was within its rights to dump him from World Perks. He filed 24 complaints over about 6 months – and nine of those were about baggage that showed up late on airport baggage carousels – not missing, not late as in days, just later than he expected as an elite, it sounds like. Not only that, but the airline awarded him nearly $2,000 in vouchers, gave him nearly 80,000 bonus frequent flyer miles, and almost $500 in cash reimbursements before finally taking action to delete him from its program.
To me it sounds like Ginsberg was abusing the system and his elite benefits and that he took it too far too often. While I firmly believe in passengers’ rights to compensation when things go wrong, there are right ways and wrong ways to go about complaining and asking for compensation, and there are appropriate requests and inappropriate ones. If something goes wrong, by all means, complain, talk to customer service and ask for some form of compensation – but do not abuse your rights or you might end up like Ginsberg.
Though I do think this will make frequent flyers think twice about complaining – what they complain about and how often they file complaints – I do not think this will have long-term ramifications for the vast majority of us. Though service and compensation can vary, most airlines are pretty good about listening to customers and offering something in return when the flight experience is disrupted in a major way. You might not feel it’s enough when it happens to you, but it is something.
That said, I hope we get tougher, more consumer protections like the EU has enacted, that entitle passengers to codified, substantial reimbursements when airlines disrupt their plans. That way passengers have real recourse when an airline throws them a curve ball, and hopefully it would discourage people like Ginsberg from asking for the moon for minor complaints and bringing up more cases like this in the future.
Airlines have a lot invested in their frequent flyer programs – despite some major negative developments like Delta’s forthcoming 2015 SkyMiles program and United’s massive devaluation in February – and they don’t just kick people out willy nilly, so cases like Ginsberg’s are, and will remain, extremely rare.
But what do you think? If you’re interested in learning more about the case or commenting on it, you can find the full transcript here. If you’ve been following the case, share your comments below.
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