US Supreme Court Decides Rabbi Frequent Flyer Case – Airlines Can Cut Off Frequent Flyers

by on April 3, 2014 · 43 comments

in Airline Industry

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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.

Rabbi Ginsberg outside the SCOTUS after the hearing. Photo by Jonathan Ernst for Reuters.

Rabbi Ginsberg outside the SCOTUS after the hearing. Photo by Jonathan Ernst for Reuters.

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.

My Thoughts

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.

Disclaimer: The responses below are not provided or commissioned by the bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by the bank advertiser. It is not the bank advertiser's responsibility to ensure all posts and/or questions are answered.

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  • Goat Rodeo

    As a disgruntled customer, I’m glad the airlines kicked him to the curb. He was just complaining for free miles. I see this no different than someone being banned from Citi or Chase for churning credit cards or buying too many CVS Vanilla reloads.

  • Cayman

    The guy is a “taker”. Got what he deserved. Hopefully, lots of legal fees.

  • Daryl-Atlanta

    Agree all the away around. It sure seems that the good Rabbi was truly “over-working” the system. I wonder if he ever wrote letter to NWA to compliment or praise any individuals that he found to have given him, above-and-beyond…more than he expected as an elite FF flyer? As for him loosing his elite status, miles and pride…. Oy Vey!

  • bobbyb

    No one is going to be buying vanilla reloads anymore. Still makes me sad

  • Anthony Thomas

    Perhaps I don’t understand the full case details – but surely the airline didn’t have to give him any miles following complaints.

    They should have just copied and pasted the same response letter about their inability to 100% control baggage delivery times and as such there is nothing further they can/are willing to go about it.

    The airline was far too lenient in giving him miles/cash in the first place for very minor complaints. At that point, there’s an incentive to complain so the airline appears to have brought it on themselves.

    I have in the past stopped myself making formal complaints for customer service (not airline related) on the basis that it’s not worth my time as I’m unlikely to get much out of it, that would be different if I knew I’d get a few hundred dollars, but the airline started that!

  • superfly

    I may have missed this but–couldn’t the airline just said “no” to his complaints for more miles? Plus, the airline booked him on those overbooked flights when they knew they were overbooked.

  • Gordon

    I don’t feel bad for the guy, but I do see some potential issues with the airlines being free to just dump you any time they want.

    For instance, various airlines periodically try to get some extra cash-flow by selling you airmiles, and my wife and I often stock up on these if we feel the price is right.

    If we cummulatively just spent $3k on buying 100k miles each and them immediately thereafter they can cut us from their program … not good.

    IMO, that should make us all a bit more leery about buying miles.

  • Pia

    Once they side with the Airline, when will a consumer ever be in the right! Maybe there was another way to handle this. If he purchased items to gain most of those miles, he should have been allowed to keep them – minus the 80K he obtained free! What it indicates to me is that we should never complain as the airlines can use the threat of complaints to dump the consumer!

  • Ben L

    I’m glad the courts ruled against him in this case, because he was abusing it, but I’m also annoyed this guy’s abuse forced this issue to the court and they ruled in the airline’s favor, setting a precedent in the future when someone may actually get screwed by the airlines but a precedent is already set.

    All around, this guy is an asshole on both fronts. He screwed Northwest over AND he screwed any potential future victims over.

  • Alex Z.

    I’ve almost done the same……I have filed about 10 complaint cases to AMEX within 6 months, but I do think for most cases the fault is on AMEX. Then I transferred all of my points acquired via complaint and closed my account before AMEX could do something similar to me.

  • Icheckthingsout

    Why do you list the man’s occupation RABBI in you thitle? If he was an accountant would you have done the same. No, I don’t think so. It’s just an anti-semitic way of getting more attention. You should be ashamed of yourself. I know your excuse will be that other news stories also say ‘rabbi’. No at valid excuse – your biases show.

  • Johnintokyo

    Sigh. Another over-reacting, overly sensitive American… Get a grip bud. It’s the easiest way to help people remember the case. Nothing personal or “anti-Semitic”. You, and the majority of our fellow Americans need to relax when it comes to name calling.

  • Jerry

    I really love this website, but some much of your article seems to be taken word for word from the New York Times, including the photo from Reuters. I think it would be fair to do a little more attribution in the future, if you’re lifting from another source.

  • J

    Are you serious? So its ok for the company to take advantage of you but you cant complain if you do you lost everything. Your comment on taken advantage of the system is rather crazy when the blog relies on taken advantage of deals of credit cards to take advantage of the airlines, if this was about credit cards oh boy would this blog including myself be up in arms

  • ohio

    Northwest accepted his reservations on overbooked flights and then accuses him of gaming the system by reserving seats on overbooked flights?!? The rabbi didn’t hack into their computers, he made legitimate reservations; it’s the airline’s responsibility to stop selling seats on overbooked flights, not the customer’s. And not every airline engages in this fraudulent practice; for example, in the first 3 quarters of 2013, JetBlue carried 21 million passengers and only 18 JetBlue passengers were involuntarily bumped. (In that same period, Southwest bumped 1,800 passengers involuntarily.) If Northwest didn’t want to sell the Rabbi tickets on overbooked flights, Northwest should have stopped selling tickets on overbooked flights. Blaming the Rabbi is pure chutzpah.

  • Eric

    As a Jewish person I agree with Johnintokyo….. if a Priest raised this case to the Supreme Court, the word “Priest” would be in the title.

  • raj

    Can you please stop playing this anti-semitic card and move on?

  • Icheckthingsout

    You are just too sensitive about being sensitive. Including RABBI is highlighting the oft-held bias of Jews as money-grubbers. I’m sure that you have had snide remarks made behind your back and if not, you live in never, never land. The title has nothing to do with identifying the person’s occupation. To say so is naivete.

  • Icheckthingsout

    If the title said an IMAM, the liberal press would be ranting and raving. I have made a valid point – just acknowledge it and relax yourself.

  • Martin

    So stupid to sue and lose. I agree with the nine justices.

  • Martin

    You are just another Jew. NW did not do what your first sentence stated. The Rabbi admitted to gaming the reservation system! Big difference here.

  • raj

    If it was IMAM, the conservative media would be all over it, would you agree? Same thing happens with people of color- they say, Oh, this is happening just because of the color of my skin! People just want a reason to complain, that they are being singled out. Just relax.

  • Martin

    And to appear before the press outside of the Supreme Court makes him look even worse!!!

  • Icheckthingsout

    You don’t.need to call the blogger names if you don’t agree with him. Deep down you are just an anti-semitic bigot..

  • ohio

    It’s the airline’s responsibility to stop selling seats on overbooked flights, it makes no sense to punish passengers for the airline’s own reckless policy. But if you really want to blame the passenger for tricking Northwest into selling seats that don’t exist, just keep in mind that JetBlue doesn’t rig the game: you buy a ticket on JetBlue, you get a seat on JetBlue. No bumping = no compensation. Isn’t that a smarter business model? As for my personal religious background, I’m Presbyterian.

  • jp30308

    As far as the law goes, it is scary that airlines can sell you miles then turn around and tell you they’re worthless. Plus, I don’t see how the Airline Deregulation Act applies when you can earn points for not flying and use them for non flight redemption.

  • Mammal

    Even though airline stipulates they own the miles, they can’t just zero them out without compensation. Ideally they should have closed his account after issuing him a check for the retail (or at least wholesale) cost of the miles.

    I’ve heard Amazon will cancel accounts of people who return too often taking their digital purchase and gift card balances with them.

    I believe a business can terminate a relationship with a customer but not take the assets that morally (if not legally) belong to that customer without a proper compensation

  • Icheckthingsout

    Yes I agree in that the proactive Conservative media would highlight the connection. Therefore you have made my point for me – in this article the quasi-PC Washington Post shows their real anti-Jewish bias in the way they headline this article.

    Interesting fact – most newspapers that have carried this AP story have changed the headline to remove the reference to the Rabbi. Your Washington Post – bastion of the Liberal Intelligencia felt that this was not necessary.

  • Brian C. Lee

    No, you haven’t made a valid point. Members of the clergy (of whatever faith) are frequently referred to by their tile of Rabbi, Father, Pastor, etc. To refer to him in this manner implies no religious bias whatsoever. You’re just looking for a reason to complain. And I’m a Jew and the grandson of a holocaust survivor. Relax.

  • shay peleg

    Just another jew wow

  • shay peleg

    Overselling makes money for the airline actually

  • shay peleg

    Actually it’s ok i am israeli and i would not see that as something anti semitic

  • wwittman

    FORMERLY liberal Wash Post.
    back when they actually WERE liberal, they probably wouldn’t have said it like that.

  • jammer9050

    post can be construed as anti semitic. Brian, I know you have a zero tolerance policy on that.

  • thepointsguy

    This article is in no way taken from there – it’s original work and my original thoughts – and if you look at the photo you mention, it is attributed to the original source, which was a Reuters photographer.

  • Martin

    No one, especially Brian, is going to waste his time on here. If you have a problem ready other people’s comments, don’t visit here or move on to the next comment! You are just another sour grape!!!

  • Martin

    He’s a Jew. Calling him a Jew is fine…if you are not a bigot yourself…

  • Pointing out the obvious….

    Perhaps you did not notice, but the Rabbi brought the case against Northwest, Inc. as Rabbi S. Binyomin Ginsberg. It is the Rabbi himself that injected the title into the dispute and it is normal that any report would refer to him as Rabbi.

  • ohio

    Martin- I keep telling you, I’m a Presbyterian. But seriously, why should it matter whether I’m a Presbyterian?

  • bostener

    You are correct but the author of this article gets compensated from the airlines.

  • Naoma Foreman

    Bigoted comments should not be allowed. It somehow sounds offensive to me. Jew is not a bad word but it sounds like you meant it to be. “just another…”

  • Naoma Foreman

    Anti-semitic is the correct word. Glad I do not live near this person.

  • BMG4ME

    I’m an orthodox Jew and I didn’t see anything anti-Semitic in the title, it’s giving a Rabbi the due respect for what he is. I actually thought it was disrespectful for the article to refer to him as “Ginsberg” throughout the article instead of “Rabbi Ginsberg” or “The Rabbi”. I also don’t think that booking full flights in the hope of getting bumped is any worse than selling seats on a full or oversold flight hoping that people won’t show up. It’s simply a customer gaming the gaming that the airlines themselves are doing.

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