Northwest, Inc. v. Ginsberg

572 U.S. 273 (2014)

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Nature of the Case

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Facts

D established a frequent flyer program. Members are able to earn “miles” by taking flights operated by D and other “partner” airlines. Members can then redeem these miles for tickets and service upgrades with D or its airline partners. P became a member and achieved “Platinum Elite” status in 2005. D terminated P’s membership, relying on a provision of the agreement that provided that “abuse of the . . . program (including . . . improper conduct as determined by D in its sole judgment[ ) ] . . . may result in cancellation of the member’s account.” D wrote a letter about to P detailing the 24 complaints since December 3, 2007, which included the 9 about his baggage arriving late at the carousel and the awards of $1,925.00 in travel credit vouchers, 78,500 WorldPerks bonus miles, a voucher extension for D's son, and $491.00 in cash reimbursements. P filed a class action alleging in part a breach of contract by revoking his “Platinum Elite” status without valid cause, and a violation of the duty of good faith and fair dealing because it terminated his membership in a way that contravened his reasonable expectations with respect to the manner in which D would exercise its discretion. The District Court held that the claim for breach of the covenant of good faith and fair dealing was pre-empted by the Airline Deregulation Act of 1978 (ADA or Act), as amended, 49 U. S. C. §41713. P appealed the dismissal of his breach of the duty of good faith and fair dealing claim but not the other claims that the court had dismissed. The Ninth Circuit reversed: A breach of implied covenant claim is too tenuously connected to airline regulation to trigger preemption under the ADA. D appealed.