NORTHWEST, INC. v. GINSBERG

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Case Basics
Docket No. 
12-462
Petitioner 
Northwest, Inc., et al.
Respondent 
S. Binyomin Ginsberg
Decided By 
Advocates
(for the petitioners)
(Assistant to the Solicitor General, Department of Justice, for the United States, as amicus curiae, supporting the petitioners)
(for the respondent)
Term:
Facts of the Case 

S. Binyomin Ginsberg became a member of the Northwest Airlines frequent flyer program in 1999 and obtained Premium Elite Status in 2005. In 2008, his membership was terminated, as per the terms of the program that allow Northwest Airlines discretion over the removal of participants. In January 2009, Ginsberg sued Northwest Airlines and argued that, by terminating his membership in the frequent flyer program, the company breached both the contractual agreement and the implied doctrine of good faith and fair dealing under Minnesota law.

At trial in district court, the defense argued that Ginsberg’s claims were preempted by the Airline Deregulation Act of 1978 (ADA), which prohibits states from enacting or enforcing regulation over the price, route, or service of an air carrier. The district court found in favor of Northwest Airlines. The U.S. Court of Appeals for the Ninth Circuit reversed and held that the ADA did not preempt the claims because the claims were unrelated to the price, route, or services of the air carrier.

Question 

Are claims arising from a frequent flyer program contract preempted by the Airline Deregulation Act as dealing with the price, route, or service of an air carrier?

Conclusion 
Decision: 9 votes for Northwest, Inc., 0 vote(s) against
Legal provision: Airline Deregulation Act of 1978

Yes, the Airline Deregulation Act pre-empts state law claims when such claims seek to enlarge the contractual obligations that the parties voluntarily adopted. Justice Samuel A. Alito, Jr. delivered the opinion for the unanimous Court. The Court held that exempting such claims from pre-emption would negate the ADA’s goal of allowing market forces to establish aspects of air transportation without the interference of state laws. Additionally, since Minnesota state law does not allow parties to contract out of the covenant into which they voluntarily entered, a claim of a breach of covenant is pre-empted unless otherwise specified.

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NORTHWEST, INC. v. GINSBERG. The Oyez Project at IIT Chicago-Kent College of Law. 22 October 2014. <http://www.oyez.org/cases/2010-2019/2013/2013_12_462>.
NORTHWEST, INC. v. GINSBERG, The Oyez Project at IIT Chicago-Kent College of Law, http://www.oyez.org/cases/2010-2019/2013/2013_12_462 (last visited October 22, 2014).
"NORTHWEST, INC. v. GINSBERG," The Oyez Project at IIT Chicago-Kent College of Law, accessed October 22, 2014, http://www.oyez.org/cases/2010-2019/2013/2013_12_462.