Nader v. Allegheny Airlines, Inc.

426 U.S. 290 (1976)


Nader (P) purchased a ticket for a flight, and it was indicated on the ticket that the reservation had been confirmed. P arrived for boarding and check in five minutes before the flight, only to be informed that all seats on the flight were occupied and that he would not be accommodated. Requests were refused to determine if standby passengers had been allowed to board or to allow a person on board to voluntarily give up their seat. The airline did not deny that it used over bookings based on statistics to ensure full flights and to have a flexible booking system that allowed passengers to cancel and change reservations without penalty. Board regulations required that each airline establish priority rules for boarding passengers and to offer denied boarding compensation to bumped passengers. Passengers are free to reject that compensation offered in favor of a common lawsuit for damages suffered as a result of bumping. P sued for compensatory damages under fraudulent misrepresentation and a statutory action under section 404(b) of the Act. P was awarded $10 in compensatory damages, and $25,000 in punitive and under the section judgment for $51 in compensatory and $25,000 in punitive was awarded. The Court of Appeals reversed; the Board must be allowed to determine in the first instance whether the challenged practice (the failure to disclose the practice of overbooking) falls within the ambit of section 411. Section 1106 of the Act, 49 U.S.C. § 1506, provides that 'nothing contained in this chapter shall in any way abridge or alter the remedies now existing at common law or by statute, but the provisions of this chapter are in addition to such remedies.' The Court of Appeals found that 'although the saving clause of section 1106 purports to speak in absolute terms, it cannot be read so literally.' The Supreme Court granted certiorari.