Monday, August 29, 2011
On August 5th, the Ninth Circuit issued its opinion, reinstating plaintiff's claim for breach of the covenant of good faith and fair dealing in Ginsberg v. Northwest, Inc.
Plaintiff, Rabbi, S. Binyomin Ginsberg had been a member of Northwest's frequent flyer program, WorldPerks, since 1999. By 2005, he was such a macher, Northwest granted him Platinum Elite Status (oy, what nachas!). In 2008, Northwest revoked his membership. Ginsberg claims that Northwest took this action because he was a kvetch. We weren't there, of course, but we can imagine that Ginsberg was vocal about the inadequacies of modern air travel. Northwest's customer service department no doubt took the usual approach of such departments, wondering why anyone would complain about the quality of service provided by U.S. domestic airlines. When Ginsberg persisted, the corporation threw up its hands, said "Hock mir nisht kein chainek," or words to that effect, and terminated his membership.
The official reason provided for the termination was that Northwest had discretion "in its sole judgment," to cancel a member's account due to abuse of the program. Apparently, such judgment includes the ability terminate a membership if complaints persist after the "Enough with the complaining already!" warning. Ginsberg sued, asserting four causes of action, but Northwest moved for dismissal, arguing that the Airline Deregulation Act (ADA) preempted all of Ginsberg's claims. The nichtgutkeit District Court dismissed all of Ginsberg's claims, which was a real shonda. The only issue on appeal was whether the ADA preempted Ginsberg's claim for breach of the implied covenant of good faith and fair dealing.
The Ninth Circuit reviewed the purposes behind the ADA's preemption clause and determined that prior precedents had given that clause a narrow reading. Claims for breach of contract do not seem to be preempted. More specifically, the Ninth Circuit found that Ginsberg's "claim for breach of the implied covenant of good faith and fair dealing does not interfere with the [ADA's] deregulatory mandate." Moreover, the Ninth Circuit rejected the Distrct Court's finding that Ginsberg's claim related to prices and services. The Ninth Circuit found the link to prices too tenuous and found that the preemption clause was only intended to prevent states from dirctly "regulating rates, routes or services." Ginsberg claim was not within the narrow scope of the preemption clause and thus was reinstated. Such a mechaya!
Fuhr gesunderheit, Rabbi Ginsberg!