Awards and punishments

By S.M. | NEW YORK

FIRST they cancelled the hot meals. Then they took the blankets and grounded the pillows. Finally, on some airlines, even the iconic bag of peanuts disappeared. But even as the carriers steadily removed the comforts of flying, they continued to offer free flights to loyal customers. At least you could count on saving a few hundred dollars every once in a while if you were a faithful flyer.

Binyomin Ginsberg, a rabbi from Minnesota, was one such customer, racking up hundreds of thousands of miles with Northwest Airlines (which merged with Delta in 2010) on his 75 or so annual lecturing trips. He was also awarded miles as compensation for flight delays and lost luggage after repeatedly complaining to the airline. Indeed he got an extra 78,000 miles in 2007 alone. But Rabbi Ginsberg lost his elite status and more in 2008 after lodging one complaint too many. Northwest informed him he was nowpersona non grata and threw him out of the frequent-flyer programme.

Rabbi Ginsberg responded with a $5m class-action lawsuit claiming misrepresentation, breach of contract and breach of good faith. After the district court ruled against him on all these counts, a federal appeals court ruled that Rabbi Ginsberg could proceed with the "good faith" complaint. Delta, as it was by this point, then petitioned the Supreme Court to reconsider that decision, and the justices heard arguments on Tuesday.

Here, then, is the legal issue. Northwest's WorldPerks literature stated that a member’s account could be cancelled based on the airline’s “sole judgement” that the programme had been abused. If this seems like a disproportionate response to excessive complaints, tough luck: the Airline Deregulation Act (ADA) of 1978 gives carriers wide discretion over everything related to air travel, except safety. While several justices seemed to sympathise with Rabbi Ginsberg, they could not settle upon a legitimate legal mechanism for reinstating his miles. His attorney's stance was this:

Northwest claims that the WorldPerks contract allowed it to terminate Rabbi Ginsberg's membership and take away the miles he had already accrued in reliance on the frequent flyer programme contract; that is, that it allowed it for any reason or on any whim to deprive him of all of the benefits of the frequent flyer programme contract bargain. Our position, in contrast, is that Northwest's actions breached its obligations under the contract, specifically the contractual obligation to perform in good faith.

Because Northwest was based in Minnesota, Rabbi Ginsberg benefits from the state's doctrine that all contracts must be undertaken “in good faith with fair dealing”, so even if the ADA allows the airlines to toss anyone they like out of their programme, Rabbi Ginsberg’s lawyer claimed, Northwest has to play fair at the very least. But the prospect of reinterpreting "sole judgment" as "reasonable judgment" brought scepticism from the justices—and state-level determinations of what constitutes "fair dealing" when it came to air travel worried them. After all, if everything the airlines do is subject to a reasonability requirement, suddenly anyone who thinks $800 for a last-minute ticket from San Francisco to Seattle is insanely expensive will have grounds to sue the carrier. That is a door the Supreme Court seems quite unwilling to open.

The tenor of the argument on Tuesday suggests that Rabbi Ginsberg will not have his miles returned any time soon. But this isn't just about a peeved rabbi. The case has ramifications for anyone who flies. If the airline prevails, as seems likely, its customer-service agents will have further cause to ignore threats from litigious customers. And all carriers will be relieved to know that courts will defer to their determinations, no matter how "willy-nilly", as Justice Ginsburg aptly put it. If the airlines use this as a moment to whittle away a little more at benefits available through their frequent-flyer programmes, the loss of in-flight peanuts may soon look like, well, peanuts.