Q: The U.S. Supreme Court recently ruled that a frequent flyer cannot successfully sue an airline for breach of the "implied covenant of good faith and fair dealing" when the airline arbitrarily kicked him out of its program because he complained too much. It seems to me that, because of the so-called pre-emption doctrine and other legal technicalities such as the contract of carriage and tariffs, airlines are almost completely insulated from lawsuits for mistreating passengers. Would you summarize what passengers can and cannot sue airlines for, so that we can at least offer some basic guidance to our agency's clients who are thinking of suing?
A: Airlines are insulated from liability to a much greater degree than any American business that I know of. The Supreme Court continues to treat them like an infant industry in need of special protection.
In the Ginsberg v. Northwest case decided last month, a Minnesota rabbi who was thrown out of the frequent flyer program sued for breach of the "implied covenant of good faith and fair dealing." This term is a judge-made rule that, in Minnesota and other states, means that "every contract requires that one party not unjustifiably hinder the other party's performance of the contract." In other words, every party to a contract must treat the other party fairly.
The federal law governing airline service states that a state may not "enact or enforce a law, regulation or other provision having the force and effect of law related to price, route or service" of an air carrier. This is the pre-emption doctrine.
In the Ginsberg case, the court expanded the meaning of the phrase "other provision having the force and effect of law" to cover state judge-made rules of contracts, such as the implied covenant, if those rules automatically apply to every contract in the state and cannot be voluntarily waived. In other words, airline contracts with passengers are not subject to state rules regarding how to interpret or apply them. Therefore, the airlines have no implied, state-law legal duty to treat passengers fairly.
To add insult to injury, there is a federal law that prohibits airlines from treating passengers unfairly and deceptively, but it does not allow passengers to file suits if the airlines violate it. Instead, only the U.S. Department of Transportation (DOT) can decide what is unfair, false or deceptive.
As far as fair treatment is concerned, passengers are locked out of both state and federal courts. If they are deceived or taken advantage of, all they can do is to complain to the DOT, which is not equipped to adjudicate contract disputes anyway.
On the other hand, passengers can sue for ordinary breaches of contract, such as when an airline owes them a refund under the fare rules but does not pay. They can also sue airlines for negligence in case of personal injury or death.
So you can offer the following general guidelines to clients: If the complaint is that the airline has treated them unfairly or deceptively and they think that the airline has made them suffer economically, emotionally or psychologically because of such treatment, they cannot successfully sue. On the other hand, if they can cite a specific fare rule or clause in the contract of carriage, they can sue for breach of contract, and they can always sue for negligence.
Mark Pestronk is a Washington-based lawyer specializing in travel law. To submit a question for Legal Briefs, email him at [email protected].