Posted on: April 21, 2014
Shame on the airlines
The airlines should be ashamed of themselves. The same goes for the U.S. Department of Justice and all nine justices of the U.S. Supreme Court. Together they have perpetrated a great injustice.
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We refer to the Supreme Court’s recent decision holding that an airline involved in a contractual dispute with a customer is not bound by any common-law obligation of “good faith and fair dealing,” unless that obligation is written into the contract.
The court held that any implied obligation of good faith that stems from state law does not apply unless the airline writes it into the contract. In other words, airlines only have to act in good faith if they want to.
The reason? Because the Airline Deregulation Act prohibits states from enacting or enforcing any law “related to” airline rates, routes or services.
The preemption provision was enacted to prevent states from reregulating airlines, and over the years the Supreme Court has reviewed this provision three times. In each case, airlines have urged the court to read the language as broadly as possible, and in each case the court has tilted toward the airlines.
In the latest case, Binyomin Ginsberg, a rabbi in Minnesota, tried to sue Northwest after it ejected him from its frequent flyer program, alleging that he was abusing the system.
He based his breach-of-contract claim, in part, on an implied covenant of good faith and fair dealing that exists under Minnesota state law.
A lower court had ruled that an implied covenant claim concerning the frequent flyer program was too tenuously related to airline operations to come under the preemption doctrine, and would not “interfere” with deregulation.
Delta, which inherited the case in the Northwest merger, took it to the Supreme Court. Along the way, it gathered support in the form of friend-of-the-court briefs from Airlines for America, IATA and the U.S. Justice Department.
What does it say about a company and an industry that would fight all the way to the U.S. Supreme Court to escape a common-law obligation of good faith and fair dealing that applies to all the rest of us?