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Northwest, Inc. v Ginsberg

Case No. 12-462 (Sup. Ct., Apr. 2, 2014)

Petitioner Northwest, Inc., terminated respondent’s membership in its frequent flyer program, apparently based on a provision in the frequent flyer agreement that gave Northwest sole discretion to determine whether a participant had abused the program. Respondent filed suit, asserting, as relevant here, that Northwest had breached its contract by revoking his membership status without valid cause and had violated the duty of good faith and fair dealing because it terminated his membership in a way that contravened his reasonable expectations. The District Court found that the Airline Deregulation Act of 1978 (ADA) pre-empted the breach of the duty of good faith and fair dealing claim and dismissed the breach of contract claim without prejudice. Respondent appealed only the dismissal of his breach of the duty of good faith and fair dealing claim. The Ninth Circuit reversed, finding that claim “ ‘too tenuously connected to airline regulation to trigger’” ADA pre-emption.

Held:

1. The ADA pre-empts a state-law claim for breach of the implied covenant of good faith and fair dealing if it seeks to enlarge the contractual obligations that the parties voluntarily adopt. Pp. 4–10.

(a) Before the ADA was enacted, air carriers’ routes, rates, and services were regulated under the Federal Aviation Act of 1958. And because that Act contained a saving provision preserving pre-existing statutory and common-law remedies, air carriers were also regulated by the States. The ADA did not repeal that saving provision, but it did include a pre-emption provision to prohibit States from “enact[ing] or enforc[ing] a law, regulation, or other provision having the force and effect of law related to [an air carrier’s] price, route, or service,” 49 U. S. C. §41713(b)(1), thus ensuring that “States would not undo federal deregulation with regulation of their own,” Morales v. Trans World Airlines, Inc., 504 U. S. 374, 378. In Morales, the Court recognized that the key phrase “related to” expresses a “broad preemptive purpose,” id., at 383, and held that the ADA pre-empted the use of state consumer protection laws to regulate airline advertising, concluding that “relat[es] to” means “ha[s] a connection with, or reference to, airline ‘rates, routes, or services,’ ” id., at 384. And in American Airlines, Inc. v. Wolens, 513 U. S. 219, the Court found that the ADA pre-empted the use of an Illinois consumer law to challenge an airline’s devaluation of frequent flyer earned miles. But it did not pre-empt breach of contract claims because “terms and conditions airlines offer and passengers accept are privately ordered obligations” not “‘a State’s “enact[ment] or enforce[ment] [of] any law, rule, regulation, standard, or other provision having the force and effect of law” within the [pre-emption provision’s] meaning.’ ” Id., at 228–229. Pp. 4–6.
 

 

Judge(s): Samuel Alito
Jurisdiction: U.S. Supreme Court
Related Categories: Conflict of Laws , Contracts
 
Supreme Court Judge(s)
Samuel Alito
Ruth Bader Ginsburg
Stephen Breyer
Elena Kagan
Anthony Kennedy
John Roberts
Antonin Scalia
Sonia Sotomayor
Clarence Thomas

 
Petitioner Lawyer(s) Petitioner Law Firm(s)
Paul Clement Bancroft PLLC

 
Respondent Lawyer(s) Respondent Law Firm(s)
Adina Rosenbaum Public Citizen Litigation Group

 

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Click the maroon box above for a formatted PDF of the decision.
for these reasons, the breach of implied covenant claim ed, that does not matter here where respondent did not assert that he this opinion. supreme court of the united states act[ing] or enforc[ing] a law, regulation, or other provision having the phoned him in june 2008 and informed him that his sue. common-law rules are routinely called “provisions,” see, e.g., nection with, or reference to, airline” prices, routes, or of the implied covenant of good faith and fair dealing. http://www.dot.gov/sites/dot.dev/files/docs/2014_february_atcr.pdf (as ings) of its own.’” tymshare, inc. v. covell, 727 f. 2d for tickets and service upgrades with northwest or its relying on pre-wolens circuit precedent, the ninth cir­ illinois consumer fraud and deceptive business practices 10 northwest, inc. v. ginsberg carousel. . . . flyer programs without protection. the ada is based on asserted a claim for negligent misrepresentation, and other provision having the force and effect of law’ within no less than state regulatory law to the same effect”). as iii opinion of the court with the provision’s terms. opinion of the court 14 northwest, inc. v. ginsberg central issue in this case, i.e., whether respondent’s im­ before the enactment of the ada, the federal aviation act respondent argues that his claim differs from the opinion of the court of the ada pre-emption provision, respondent relies on erwood, 507 u. s. 658, 664 (1993), that virtually identical vices.” brief for state of california et al. 18 (emphasis taking, as falling outside that provision’s coverage. other things, routes, rates, and services. see, e.g., western place of business is minnesota.” app. to pet. for cert. 70. that deter­ the program, an airline can decide whether the benefits of certain requirements would “disrup[t] the federal scheme _________________ law.” in wolens, we noted that this phrase is most natu­ price, route, or service of an air carrier that may provide air transportation under this subpart.” §41713(b)(1). regulation of rates, routes, and services in order to allow —————— sede the specific substantive pre-emption provision,” ibid. act of 1958, 72 stat. 731. and since the federal aviation act [april 2, 2014] of 1958 empowered the civil aeronautics board to regulate the force and effect of law,” 49 u. s. c. §41713(b)(1). it is provision’s meaning. those additional terms were deleted 3cite as: 572 u. s. ____ (2014) was dismissed without prejudice under federal rule of worldperks agreement that provided that “[a]buse of the . . . al, independent basis for our conclusion. minnesota law claims in wolens because he “does not challenge access to redeemable for tickets and upgrades, thus eliminating or reducing wolens neither dooms nor spares all such claims. 15cite as: 572 u. s. ____ (2014) was ended for an ulterior reason, such as an effort to cut 1971 did not pre-empt a common-law tort claim, but there (o’connor, j., concurring in judgment in part and dissent­ pre-empted if it seeks to enlarge the contractual obliga­ only to legislation enacted by a state legislature and regu­ pose.” 504 u. s., at 383. noting our interpretation of by the states. the ada did not repeal that saving provision, but it the ninth circuit reversed. 695 f. 3d 873 (2012). petitioners urge us to hold that implied covenant claims “[y]ou have contacted our office 24 times since de­ howard univ., 890 a. 2d 194, 201–202 (d. c. 2006); u. s. c. §1144(a), we held that a claim “relat[es] to rates, corp., 927 so. 2d 810, 813, n. 5 (ala. 2005); smith v. anchorage school competitive market forces and on actual and potential we granted certiorari. 569 u. s. ___ (2013). 7cite as: 572 u. s. ____ (2014) 1(slip opinion) october term, 2013 being done in connection with this case, at the time the opinion is issued. sonable expectations,” ibid., other states clearly em- 770, 776, 674 a. 2d 962, 965–966 (1996); borys v. josada claim “ha[s] a connection with, or reference to, airline a claim, the ninth circuit wrote, “does not interfere with our decision in sprietsma v. mercury marine, 537 u. s. 51 the contract. credit servs. of am. v. dougan, 2005 sd 94, ¶10, 704 n. w. 2d 24, 28. did include a pre-emption provision to prohibit states from “en- mine whether a participant had abused the program. respondent 12, but this argument ignores respondent’s reason for saving provision, we concluded, did not undermine this terminated his membership in a way that contravened his reasonable miles are used in this way, the rate that a customer pays, they clearly have “the force and effect of law.” the pre-emption pro- finally, if all state common-law rules fell outside the acts and conduct which would otherwise have been forbidden by an sion having the force and effect of law” includes common­ his contractual agreement with petitioners, it is pre-empted by 12 northwest, inc. v. ginsberg §654a, p. 88 (l. cunningham & a. jacobsen eds. supp. effected no “substantive change.” §1(a), 108 stat. 745. claim is pre-empted under the reasoning of wolens. are present that directly nullify the implied covenants of good faith and argument, namely, that even if the agreement gave 314, 333 (d. c. 2007); chase manhattan bank, n. a. v. keystone dis- cludes “[l]egal duties imposed . . . by the common law.” aviation act, and not just to the ada, and as we held in and the deregulatory aim of the ada will be frustrated. good faith . . . shows that the obligation cannot be implied, law rules. indeed, we held in csx transp., inc. v. east- “[a]fter numerous conversations with not only the legal “unwillingness to allow people to disclaim the obligation of accept,” we wrote, “are privately ordered obligations and ing in part). for these reasons, respondent’s interpreta­ airline partners. provision having the force and effect of law related to a exempting common-law claims would also disserve the ada’s cen- of implied covenant claim cannot be viewed as simply an routes, or services,” within the meaning of the ada, if the id., at 858, and therefore the decision not to exempt other opinion of the court situated worldperks members. respondent’s complaint airline’s frequent flyer program: first, claims under the and held that this provision barred the claims based on and presumably would not enhance the attractiveness of not “ ‘a state’s “enact[ment] or enforce[ment] [of] any law, rule, regu- competition.” 49 u. s. c. §§40101(a)(6), (12)(a). while the higher service categories. respondent’s counterarguments are un- 2 like minnesota, some other states preclude a party from waiving builders, inc., 110 ill. app. 3d 29, 32–33, 441 n. e. 2d we must next determine whether respondent’s breach of services, inc. v. indian river school dist., 2010 wl and other advantages.” app. 49–50. and had violated the duty of good faith and fair dealing because it membership, apparently in reliance on a provision of the obtain air tickets” but instead contests “the termination of the district court held that respondent’s claims for “partner” airlines. members can then redeem these miles that congress would disregard real-world consequences and the interstate airline industry. pursuant to this authority, cess to flights or upgrades, ignores his reason for seeking reinstate- airlines will be faced with a baffling patchwork of rules, petitioners claim that the refusal to pre-empt all implied covenant arguments to the court of appeals, but he chose not to (2005); harper v. healthsource new hampshire, 140 n. h. claims, the court concluded, were “relate[d] to” north­ opinion of the court when a state’s law does not authorize parties to free themselves from llc, 2012 wy 31, 37, 271 p. 3d 987, 999; ddp roofing be very clear.” id., at 60. effect any “substantive change.” §1(a), 108 stat. 745. (2002), which held that the federal boat safety act of in addition, the relationship between the ada’s pre­ such a provision are worth the potential costs. and fair dealing does not fall within the terms of the act’s by northwest might have been vindicated if he had pur­ west’s rates and services and thus fell within the ada’s 695 f. 3d 873, reversed and remanded. whether the ada pre-empts respondent’s claim for breach if pre-emption depends on state law, petitioners warn, u. s. c. §41712(a), and congress has specifically author­ but congress made it clear that this recodification did not be no doubt that this formulation encompassed common­ breach-of-contract claim, he could have presented these accomplish. morales, supra, at 378. what is important, in this case cannot stand, but petitioners exhort us to go advise that we will no longer be awarding you com­ claims are generally not pre-empted, but the reasoning of had failed to identify any material breach because the (chiefly as the result of the imposition of “blackout dates” implied covenant of good faith and fair dealing. following “[t]erms and conditions airlines offer and passengers opinion of the court plaints about frequent flyer programs. finally, respondent might and the common law duty to perform in good faith, 94 reform act of 2012, §408(6), 126 stat. 87. pursuant to second, the complaint claimed that northwest violated the ii ment of transportation (dot) the general authority to contracts ‘is a phrase without general meaning (or mean­ argument. vices.” a claim satisfies this requirement if it has “a con­ the class members’ worldperks status and prohibiting of good faith] is plainly subject to the exception that the parties may, by pre-empted the use of state consumer protection laws to cancellation of the member’s account.” app. 64–65. ac­ federal law also provides protection for frequent flyer services” and are “spent without consuming airline ser­ rule for employment contracts do not apply (at least with implied covenant claim “relates to” “rates, routes, or ser­ our interpretation of the act in american airlines, inc. v. the implied covenant depends on state policy, a breach opposed to the common law. lines offer and passengers accept are privately ordered obligations” olis, appears to fly in and out of minnesota, and northwest’s principal _________________ contract rule does not apply in other contexts. “‘abused’” the program. id., at 35. in a letter sent about cuit first held that a breach of implied covenant claim is i.e., the price of a particular ticket, is either eliminated or to begin, state common-law rules fall comfortably with­ covenant of good faith and fair dealing if it seeks to enlarge the con- while most states recognize some form of the good faith from the prior law is also quite different. the sprietsma a cost-cutting measure tied to northwest’s merger with those aspects of air transportation to be set by market binyomin ginsberg his membership in a way that contravened his reasonable but the airlines have means to avoid such a result. a and as a leading commentator has explained, a state’s phrase “related to” expresses a “broad pre-emptive pur­ west), established a frequent flyer program, its world- the pre-emption provision, but we have described the changed since the time of that decision. we are told that miles from any activity other than taking flights or that he not necessarily bar a claim asserting that membership line regulation to trigger’ ” ada pre-emption. controlling here, see n. 1, supra, the implied covenant recognized that the key phrase “related to” expresses a “broad pre- at 229, n. 5, and we see no basis for holding that such plied covenant claim is based on a state-imposed obliga­ but is law imposed.” 3a a. corbin, corbin on contracts emption provision and the saving provision carried over quent flyer programs. see faa modernization and services—the prerequisite for . . . preemption.’” id., at 880. in the language of the ada pre-emption provision. as deleted). but whether or not this alleged change might tral purpose, which was to eliminate federal regulation of rates, brunswick hills racquet club, inc. v. route 18 shopping pre-emption provision is more narrowly worded than the ada provi- effect” on either “prices” or “services.” id., at 877, 881. no. 12–462. argued december 3, 2013—decided april 2, 2014 §41713(b)(1). under minnesota law, which controls here, the implied able customers), customers can avoid that program and northwest complete discretion with respect to a determi­ b gillette v. hladky constr., inc., 2008 wy 134, ¶31, 196 p. 3d 184, 196. morales, this “general ‘remedies’ saving clause cannot be accordingly, we conclude that the phrase “other provi­ have some impact in a future case, it is not implicated here. northwest, inc., et al., petitioners v. rabbi s. sought to promote “efficiency, innovation, and low prices” routes, and services so they could be set by market forces. finally, if age, loyalty program status or benefits on other airlines, asserted four separate claims.1 first, his complaint al­ with this background in mind, we turn to the question [the state’s] common-law duties”). language in the federal railroad safety act of 1970 in­ sion, not its form, and the ada’s deregulatory aim can be alleging that northwest had ended his membership as were also regulated by the states. see morales v. trans 3cite as: 572 u. s. ____ (2014) tent of the law of the relevant jurisdiction, are pre-empted. the meaning of [the ada pre-emption provision].” 513 33–34; see also in re hennepin cty. 1986 recycling bond syllabus our holding also does not leave participants in frequent dictions, it seems clear that under minnesota law, which is respondent and amici suggest that wolens is not control­ free market to operate. if an airline acquires a reputation the ninth circuit ed to redeem miles for anything but tickets and upgrades. pp. 9–10. claims that the court had dismissed. gram (who are generally the airline’s most loyal and valu­ respondent 20–21, and the united states makes a related “ since december 3, 2007, you have continually asked visited mar. 31, 2014, and available in clerk of court’s case file). ada/no pre-emption regime.” morales, 504 u. s., at 385. services were regulated under the federal aviation act of 1958. and routine to call common-law rules “provisions.” see, e.g., have awarded you $1,925.00 in travel credit vouchers, case is remanded for further proceedings consistent with expand those obligations, we reverse the judgment of the and fair dealing claim seeks to enlarge his contractual ployee retirement and income security act of 1974, 29 easterwood, 507 u. s. 658, 664. and congress made clear that the provision.” ibid. see also wolens, supra, at 245 give dispositive effect to the form of a clear intrusion into a 4 northwest, inc. v. ginsberg and fair dealing. we have little difficulty rejecting this it is so ordered. respondent’s reinstatement in northwest’s frequent flyer undermined just as surely by a state common-law rule as it determination, namely, that the policy reason for the employment the board closely regulated air carriers, controlling, among “ due to our past generosity, we must respectfully note: where it is feasible, a syllabus (headnote) will be released, as is by the implied covenant. steiner v. thexton, 48 cal. 4th 411, 419–420, without prejudice. respondent appealed only the dismissal of his the airlines to adopt or change their prices, routes or use of state consumer protection laws to regulate airline advertising, provisions of the uniform commercial code, 54 va. l. the obligations of good faith and fair dealing. hunter v. wilshire credit are critical differences between the pre-emption provisions did not actually give northwest unfettered discretion to in 1978, however, congress enacted the ada, which supreme court of the united states northwest from future revocations of membership. opinion of the court northwest representative sent him an e-mail stating that rev. 195, 201 (1968)); see also burton, breach of contract a 1. the ada pre-empts a state-law claim for breach of the implied are always pre-empted, and respondent suggests that such types of contracts must be based on a policy determina­ claims, regardless of state law, will lead to a patchwork of rules that ployment contracts for “policy reasons,” then the decision not to ex- implied covenant of good faith and fair dealing”’ ”); shawver v. huckle- voking his “platinum elite” status without valid cause. access to flights and to higher service categories. ibid. a common-law rule like the implied covenant of good faith court of appeals for the ninth circuit is reversed, and the perks airline partners program, to attract loyal cus­ ing. “[t]he concept of good faith in the performance of partment of transportation has the authority to investigate com- partment, i believe your status with the program should . . . . . because that act contained a saving provision preserving pre-existing american airlines, inc. v. wolens, 513 u. s. 219, the court found that attempted to redeem miles for anything other than tickets rally read to “‘refe[r] to binding standards of conduct that world airlines, inc., 504 u. s. 374, 378 (1992). “‘too tenuously connected to airline regulation to trigger clearly has “a connection with or reference to airline” prices, routes, express provisions of the contract grant the right to engage in the very exempting common-law claims would also disserve the we have had two occasions to consider the ada’s pre­ c ling because frequent flyer programs have fundamentally opinion of the court 9 incidents of your bag arriving late at the luggage madsen v. women’s health center, inc., 512 u. s. 753, 765, n. 3, and respondent requested clarification of his status, but a 1145, 1152 (cadc 1984) (scalia, j.) (quoting summers, as part of a wholesale recodification of title 49 in 1994, for mistreating the participants in its frequent flyer pro­ tributers, inc., 873 f. supp. 808, 815 (sdny 1994); magruder quarry & appropriately be construed to include common law”). and the first question we address is whether, as respondent state’s implied covenant rules will escape pre-emption states may not enact or enforce a law, regulation, or other ington, d. c. 20543, of any typographical or other formal errors, in order 1263, 1265–1266 (1982); restatement (second) of con­ emptive reach. in morales, we held that the ada capital advisors, inc. v. herzog, 575 n. w. 2d 121, 125 respondent and amici claim there have been fundamental changes in 2 northwest, inc. v. ginsberg terminate his membership in the program, see brief for reasonable efforts, . . . the contract is void for lack of mutuality”); §41713(b)(1) pre-empts the claim. the judgment of the applied to “rule[s]” and “standard[s],” and there surely can account. when first enacted in 1978, this provision also expectations. the district court found that the airline deregulation vision’s original language confirms this understanding. as first en- 60, 68 (ca1 2013) (“[w]hen read in context, the word prohibit and punish unfair and deceptive practices in air had he appealed his breach of contract claim. pp. 10–14. on writ of certiorari to the united states court of the view that the best interests of airline passengers are and fair dealing claim and dismissed the breach of contract claim thus do not amount to a state’s ‘enact[ment] or en­ properties llc, 689 n. w. 2d 295, 303 (minn. app. 2004). outside that provision’s coverage. pp. 6–9. press that claim. he voluntarily dismissed the breach-of­ northwest, inc., et al. v. ginsberg law claims, i.e., those based on the parties’ voluntary under­ pre-empt breach of contract claims because “terms and conditions air- conclusion. id., at 384–385. 2 northwest, inc. v. ginsberg status (the highest level available) in 2005. notice: this opinion is subject to formal revision before publication in the this understanding becomes even clearer when the that corrections may be made before the preliminary print goes to press. district court. respondent argues that, contrary to the most effectively promoted, in the main, by allowing the alito, j., delivered the opinion for a unanimous court. pre-emption provision to two types of claims concerning an regime,” morales, 504 u. s., at 385, that “cannot be allowed to super- leged that northwest had breached its contract by re­ breach of the duty of good faith and fair dealing claim. the ninth ambit, wolens would not have singled out a subcategory, for common- whatever may be the case under the law of other juris­ because respondent’s implied covenant of good faith program participants. congress has given the depart­ with these preliminary issues behind us, we turn to the america employees fed. credit union, 384 n. w. 2d 853, regulate airline advertising. we recognized that the key vides, the implied covenant applies to “every contract” except em- cember 3, 2007 regarding travel problems, including appeals for the ninth circuit co., llc v. briscoe, 83 s. w. 3d 647, 652 (mo. app. 2002) (“when terms 1cite as: 572 u. s. ____ (2014) tion, namely, that the “policy reasons” that support the 2. because respondent’s implied covenant claim seeks to enlarge west program is connected to the airline’s “rates” because deletion of those terms as part of title 49’s wholesale recodification now maintains, the ada’s pre-emption provision applies contract around those rules in its frequent flyer program concluding that “relat[es] to” means “ha[s] a connection with, or ref- berry estates, llc, 140 idaho 354, 362, 93 p. 3d 685, 693 (2004); farm program so that he can access the program’s “valuable . . . mination was not challenged on appeal. certiorari to the united states court of appeals for no. 12–462 sion. the boat safety act’s saving and pre-emption provisions were supra, at 325 (recognizing that state tort law that imposes subsequently, in american airlines, inc. v. wolens, 513 another feature of minnesota law provides an addition­ the [act’s] deregulatory mandate” and does not “‘force community standards of decency, fairness, or reasonable­ act of 1971 did not pre-empt a common-law tort claim, but that act’s spondent concedes that under minnesota law parties circuit reversed, finding that claim “ ‘too tenuously connected to air- general duty of good faith—its recognition and concep­ the first circuit has recognized, “[i]t defies logic to think pensation each time you contact us.” id., at 58–59. tracts §205, comment a (1979). see also summers, the for compensation over and above our guidelines. we ambit of the ada’s pre-emption provision, we would have as well as injunctive relief requiring northwest to restore 1 applying california choice-of-law rules, the district court held that result of a recodification that was not meant to affect the tory and common-law remedies, §1106, id., at 798, air carriers perks program in 1999, and as a result of extensive and limits on the number of seats available for customers regulation of their own.” morales supra, at 378. in its u. s. 219 (1995), we considered the application of the ada civil procedure 12(b)(6). the court held that respondent opinion of the court tion. respondent sought damages in excess of $5 million, tractual obligations that the parties voluntarily adopt. pp. 4–10. a common-law rule clearly has “the force and effect of cording to respondent, a northwest representative tele­ 491, 38 p. 3d 12, 29 (2002); habetz v. condon, 224 conn. 231, 238, 618 respondent appealed the dismissal of his breach of the (c) respondent’s claim “relates to” “rates, routes, or services.” it law” includes state common-law rules like the implied covenant at is- act challenging an airline’s devaluation of earned miles 689–700 (1964); brown v. united airlines, inc., 720 f. 3d 1978 (ada or act) as amended, 49 u. s. c. §41713. these federally regulated industry.” brown, 720 f. 3d, at 66–67. agreement does not incorporate the covenant. while the duty of good faith and fair dealing claim but not the other in addition, the court held that the covenant of good faith (2008) (holding that a state’s “‘requirements’” “includ[e] exception of employment contracts. hunt v. ibm mid lation act pre-empts a state-law claim for breach of the opinion of the court decision placed substantial weight on the boat safety act’s agreement with petitioners, we hold that 49 u. s. c. laborers, teamsters & cement masons local no. 395, 201 ariz. 474, 51, is misplaced. there, the court held that the federal boat safety “good faith” in general contract law and the sales law claims. similar language in the pre-emption provision of the em­ all state common-law rules fell outside the pre-emption provision’s tract,” in re hennepin cty., supra, at 502, with the notable the way that frequent flyer miles are earned since wolens was decid- negligent misrepresentation, and intentional misrepresen­ and upgrades. see tr. of oral arg. 47–48. emptive purpose,” id., at 383, and held that the ada pre-empted the while “rule[s]” and “standard[s]” are not mentioned in such a result if they contract out of covenants where permitted by earned miles from any activity but taking flights or that he attempt- an airline’s devaluation of frequent flyer earned miles. but it did not tualization, 67 cornell l. rev. 810, 812 (1982). sued his breach-of-contract claim after its dismissal by the in the airline industry through “maximum reliance on to state “law[s], regulation[s], or other provision[s] having forces, and the pre-emption provision was included to pre­ benefits,” including “flight upgrades, accumulated mile­ two weeks later, northwest wrote: (a) before the ada was enacted, air carriers’ routes, rates, and tation were pre-empted by the airline deregulation act of holding of the district court, the frequent flyer agreement reduced. the program is also connected to “services,” i.e., syllabus undo federal deregulation with regulation of their own,” morales v. syllabus 765, n. 3 (1994); united states v. barnett, 376 u. s. 681, trans world airlines, inc., 504 u. s. 374, 378. in morales, the court 9cite as: 572 u. s. ____ (2014) respondent’s remaining claim—for breach of contract— his worldperks elite membership,” brief for respondent that the states would not undo federal deregulation with expectations with respect to the manner in which north­ force[ment] [of] any law, rule, regulation, standard, or had no need in wolens to single out a subcategory of common­ lation, standard, or other provision having the force and effect of law” to free themselves from the covenant, a breach of covenant law does not permit parties to contract out of the covenant. and 434, 442 (del. 2005); hill v. medlantic health care group, 933 a. 2d noted above, the current version of this provision applies department, but with members of the worldperks de­ * * * the law of such a state, the airline can specify that the here, while some states are said to use the doctrine “to frequent flyer agreement gave northwest sole discretion to ond, breach of contract claims. we reaffirmed morales’ program (including . . . improper conduct as determined tion of the ada pre-emption provision cannot be squared —————— mulation encompassing common-law rules. see csx transp., inc. v. erence to, airline ‘rates, routes, or services,’ ” id., at 384. and in tions that the parties voluntarily adopt. and because the law claims based on the parties’ voluntary undertaking, as falling tion or simply one that the parties voluntarily undertook. breach of the covenant of good faith and fair dealing, center assocs., 182 n. j. 210, 224, 864 a. 2d 387, 395-396 the ada pre-empted the use of an illinois consumer law to challenge have been able to vindicate his claim of ill treatment by northwest acted, the provision also applied to “rule[s]” and “standard[s],” a for- doctrine is invoked in the present case in an attempt to 13cite as: 572 u. s. ____ (2014) 226 p. 3d 359, 365 (2010) (“ ‘ “the general rule [regarding the covenant operate irrespective of any private agreement,’” 513 u. s., in 2008, however, northwest terminated respondent’s 4657161, *3 (del. super. ct., nov. 16, 2010); allworth v. madsen v. women’s health center, inc., 512 u. s. 753, state law. nor are participants in frequent flyer programs left with- 11cite as: 572 u. s. ____ (2014) therefore, is the effect of a state law, regulation, or provi­ held: covenant must be regarded as a state-imposed obligation. minnesota like many airlines, petitioner northwest, inc. (north­ travel on northwest flights, he achieved “platinum elite” here clearly has such a connection. that claim seeks 8 northwest, inc. v. ginsberg these provisions, the dot regularly entertains and acts on ticket prices. it also connects to “services,” i.e., access to flights and contracts is based, in significant part, on “policy reasons,” only if the law of the relevant state permits an airline to —————— ness.’” universal drilling co., llc v. r & r rig service, respondent’s reliance on sprietsma v. mercury marine, 537 u. s. the program awards mileage credits that can be redeemed but other states permit a party to contract out of the duties imposed flights and upgrades or the number of miles needed to ized the dot to investigate complaints relating to fre­ seeking reinstatement of his membership, i.e., to obtain opinion of the court empt other types of contracts must likewise be based on a policy for tickets and upgrades. see 513 u. s., at 226. when wishing to obtain tickets by using those miles) and, sec­ the current version of the statute, this omission is the court of appeals. 857–858 (minn. 1986). the exception for employment within the [pre-emption provision’s] meaning.’ ” id., at 228–229. nation regarding abuse of the program, the agreement did “most miles [are now] earned without consuming airline ment: to obtain reduced rates and enhanced services. although can by a state statute or regulation. see medtronic, inc., contained a saving provision preserving pre-existing statu­ 3 see dot, air travel consumer report 44 (feb. 2014), online at for your son, and $491.00 in cash reimbursements. . . . ‘rates, routes, or services.’” 504 u. s., at 384. the older standards must be based on a statute or regulation as see also riegel v. medtronic, inc., 552 u. s. 312, 324 subdivision of a state, or political authority of at least 2 must be regarded as a state-imposed obligation.2 re­ the syllabus constitutes no part of the opinion of the court but has been we note, finally, that respondent’s claim of ill treatment u. s., at 228–229. contract claim and instead appealed only the breach of services, morales, supra, at 384, and the claim at issue —————— original wording of the pre-emption provision is taken into respondent became a member of northwest’s world- statutory and common-law remedies, air carriers were also regulated holds that the implied covenant applies to “every con­ frequent flyer program, apparently based on a provision in the fre- will frustrate the ada’s deregulatory aim. but airlines can avoid further and hold that all such claims, no matter the con­ 6 northwest, inc. v. ginsberg the illinois statute but not the breach-of-contract claims. lations issued by a state administrative agency but not to wolens, 513 u. s. 219 (1995), we hold that such a claim is program connects to the airline’s “rates” by awarding mileage credits dist., 240 p. 3d 834, 844 (alaska 2010); wells fargo bank v. arizona we must decide in this case whether the airline deregu­ california on behalf of himself and all other similarly pre-emption provision because it does not have a “direct opinion of the court litigation, 540 n. w. 2d 292, 502 (minn. 1995); sterling vice,” 49 u. s. c. §41713(b)(1), thus ensuring that “states would not opinion of the court its contract by revoking his membership status without valid cause central purpose of the ada. the act eliminated federal provision applies only to “a law or regulation,” 46 u. s. c. i delta air lines, respondent filed a class action in the allowed to supersede the specific substantive pre-emption air lines, inc. v. cab, 347 u. s. 67 (1954); federal aviation 78,500 worldperks bonus miles, a voucher extension much more broadly worded. current form, this provision states that “a state, political out protection. they can avoid an airline with a poor reputation and in the boat safety act and the ada. the boat safety act “miles” by taking flights operated by northwest and other ploy the doctrine to ensure that a party does not “‘violate it included a pre-emption provision in order to “ensure 5cite as: 572 u. s. ____ (2014) in arguing that common-law rules fall outside the scope (minn. app. 1998); minnwest bank central v. flagship by [northwest] in its sole judgment[ )] . . . may result in determine whether a participant had abused the program. federal aviation act saving clause as “a relic of the pre­ prepared by the reporter of decisions for the convenience of the reader. in this case, respondent did not assert that he earned his ada did not repeal the predecessor law’s saving provision, effectuate the intentions of parties or to protect their rea­ preemption under the ada.’” 695 f. 3d, at 879. such express pre-emption clause. app. to pet. for cert. 69. like the frequent flyer program in wolens, the north­ 1994). when the law of a state does not authorize parties fourth, the complaint alleged intentional misrepresenta­ opinion of the court fered distinction has no substance. duty of good faith and fair dealing because it terminated agreement, and if an airline’s agreement is governed by any uniform understanding of the doctrine’s precise mean­ filed suit, asserting, as relevant here, that northwest had breached quent flyer agreement that gave northwest sole discretion to deter- inclusion of such a provision may impose transaction costs eral remedies saving clause is “a relic of the pre-ada/no pre-emption costs. if respondent had appealed the dismissal of his notify the reporter of decisions, supreme court of the united states, wash­ west would exercise its discretion. third, the complaint such complaints.3 opinion of the court preliminary print of the united states reports. readers are requested to ‘provision’ in the ada preemption provision can most the covenant, a breach of covenant claim is pre-empted under wolens. justice alito delivered the opinion of the court. “platinum elite” status was being revoked because he had §4306, whereas the ada provision, as just explained, is possibly enroll in a more favorable rival program. moreover, the de- as an independent basis for this conclusion, if, as minnesota law pro- minnesota law applies because respondent “was a resident of minneap­ pp. 4–6. (b) the phrase “other provision having the force and effect of broad interpretation of the ada pre-emption provision petitioner northwest, inc., terminated respondent’s membership in its reduced rates and enhanced services. respondent’s prof­ persuasive. his claim that he is contesting his termination, not ac- see united states v. detroit timber & lumber co., 200 u. s. 321, 337. act of 1978 (ada) pre-empted the breach of the duty of good faith transportation and in the sale of air transportation, 49 united states district court for the southern district of may be able to enroll in a more favorable rival program. a. 2d 501, 505 (1992); dunlap v. state farm fire & cas. co., 878 a. 2d attempt to vindicate the parties’ implicit understanding of syllabus and fair dealing doctrine, it does not appear that there is harv. l. rev. 369, 371 (1980). of particular importance cannot contract out of the covenant. see tr. of oral arg. a or services, morales, 504 u. s., at 384. as in wolens, northwest’s saving provision, which was enacted at the same time as vent the states from undoing what the act was meant to implied covenant claim, which we hold to be pre-empted. b the same force) in other contexts. when the application of that provision applies to the entire, sprawling federal force and effect of law related to [an air carrier’s] price, route, or ser- also enacted at the same time, while the federal aviation act’s gen- tomers. under this program, members are able to earn


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