The Rabbi and a Frequent Flyer Program go into Supreme Court

Remember the frequent flyer case in December 2013, Rabbi S. Binyomin Ginsberg Vs. Northwest Airlines?

In case you haven’t heard about it, allow me to give you a brief background. 

Ginsberg was a Platinum Elite member with Northwest Airlines (now merged with Delta), but in 2008, the airline shut down his frequent flyer account, revoked his status, and cancelled the frequent flyer miles he accumulated. 

This was because Northwest claimed Rabbi Ginsberg abused the terms of his frequent flyer program by frequently complaining about issues like delayed baggage and deliberately booking himself on full flights with hopes of getting lucrative bump opportunities. 

Note: Ginsberg complained 24 times over the 6-month period from December 2007 to June 2008! 

The Rabbi argued the move was an effort by Northwest to “purge its expensive frequent flyer program before proceeding with its merger with Delta.” 

This case went through state level, federal circuit court, the 9th Circuit Court of Appeals, and the US Supreme Court. The main issue the court addressed was whether or not consumers had the right for their day in court despite the 1978 Airline Deregulation Act, which limits lawsuits flyers may file against airlines. 

The attorney representing the airline, Paul D. Clement, said Ginsberg “seeks to impose a duty of fair dealing and reasonableness” even though “the parties to the contract have essentially given one party absolute discretion.” That duty, Clement contended, is a state policy preempted by the 1978 law.

However, the Justices decided unanimously that Northwest’s action was within the Airline Deregulation Act, meaning frequent flyer programs can remove members “at their sole discretion.” It is important to point out that the court did not rule on whether Northwest’s action was fair or justified.  They simply said the airline has the right to do whatever it sees fit, regardless of merits of the case when it comes to frequent flyer programs.

In April 2014, Brian Kelly, who is also known as The Points Guy, published an article that stated his take on this issue. 

Here’s what Kelly said: 

“Though some frequent flyers are bound to cry foul at this decision and claim that the Supreme Court has sided with the big guy in the fight while stomping on frequent flyers’ rights, having briefly reviewed the case, I can’t help but think that Ginsberg did abuse his elite benefits and that the airline was within its rights to dump him from World Perks. He filed 24 complaints over about 6 months – and nine of those were about baggage that showed up late on airport baggage carousels – not missing, not late as in days, just later than he expected as an elite, it sounds like. Not only that, but the airline awarded him nearly $2,000 in vouchers, gave him nearly 80,000 bonus frequent flyer miles, and almost $500 in cash reimbursements before finally taking action to delete him from its program.” 

The Points Guy also stated that while he thinks the Rabbi’s case would make frequent flyers think twice about complaining, he also doesn’t believe it will have long-term ramifications for the majority of travelers. 

My Thoughts 

I am a big fan of Brian Kelly’s work and tend to share his views on many things. However, I do not agree with his assertion that Rabbi Ginsberg abused the program by complaining every time his luggage did not come out in time or by taking compensation to be bumped off overbooked flights.

For me, this is blaming the victim. Frequent flyers enter into a contract with an airline. For his part, Rabbi Ginsberg flew a lot of miles and paid for a lot of tickets to earn his Platinum Elite status with expectation of certain benefits promised by the airline. So when the airline did not deliver those benefits as promised, by failing to prioritize delivery of his luggage on arrival, the Rabbi had the right to complain. 

As a matter of fact, that was the only recourse given to Ginsberg by Northwest. If his luggage got delayed 8 times over a 6-month period, that makes me think the airline was not holding their end of the bargain. Why not fix the issue rather than get upset about the Rabbi’s complaints and throw him out of the frequent flyer program? 

I am also amused by Northwest's accusation against Ginsberg about “deliberately booking himself on full flights for a lucrative bumping opportunity.” I can’t help but ask, “How about not overbooking the flights they know are ‘busy’?” 

If Northwest thought the Rabbi could figure out which flights would be busy, then airlines sure could too. If the company thought Ginsberg’s complaining was unjustified, the airline could simply refuse to give him those compensation credits.  

Throwing the Rabbi out of the program and confiscating his miles was a power move designed to set an example. Ginsberg’s home airport was MSP (Minneapolis St Paul) where Northwest controlled over 70% of the flights. The terms and conditions that the Rabbi agreed to when signing up for the program was an adhesive, take it or leave it contract, which the Rabbi had no say in. 

The Points Guy did his analysis in 2014, three years before the 2017 United Airlines incident where a passenger with a confirmed ticket, Dr. David Dao, was violently dragged off an express flight because it was overbooked. 

According to a report, United Airlines “didn’t find any volunteers” to give up their confirmed seat (I suspect a USD 50 or USD 200 future flight credit weren’t that appealing, or maybe some “savvier” passengers didn’t want to get kicked out of the frequent flyer program for partaking in those “lucrative bumping opportunities”). David Dao was chosen by a United staff member to be taken off the flight even though he had already boarded and was sitting on his seat.

One of the passengers on board the plane posted a video of that incident and sparked worldwide outrage. When United Airlines’ policy of overbooking all their flights was outed, necessary changes were implemented. However, before this incident, the airlines bumped people off and oftentimes gave them misleading statements that their tickets were “not confirmed,” saying it was the passengers’ or travel agent’s fault. 

So, every time the Rabbi “took advantage” of those “lucrative” bumping opportunities, it saved some passengers from being unceremoniously bumped off a flight. I’m glad all major airlines decided to immediately halt the involuntary bumping of passengers from overbooked flights. All the airlines had to do was make the compensation a bit more “lucrative” to get the volunteers and the problem was fixed overnight. The practice was in place for over 30 years, and it took a major PR catastrophe for the airline industry to end it.

I agree with The Points Guy on the bigger issue. Every consumer or traveler should be protected in their frequent flyer programs. Airlines always counter that one could always go to another airline. However, in captive markets like Minneapolis, where one airline controls the vast majority of the flights, it is easier said than done. 

I would welcome a Frequent Flyer Bill of Rights. The “fair dealing and reasonableness” that the airline's attorney argued against in the Supreme Court sounds pretty fair and reasonable to me. I am not necessarily advocating for legislation―a voluntary set of standards that frequent flyer programs are held to and defined sets of remedies could do the job. The passenger bill of rights made airlines better and passengers happier. We could use the same for frequent flyer programs.