572 U.S. 273
In 1999 Rabbi S. Binyomin Ginsberg became a member of Northwest, Inc.'s WorldPerks Airline Partners Program.1 Through extensive travel on Northwest flights he achieved Platinum Elite status, the highest level available, in 2005.2
In June 2008 a Northwest representative telephoned Ginsberg and informed him that his Platinum Elite status was being revoked because he had abused the program.3 Approximately two weeks later Northwest sent Ginsberg a letter stating that he had contacted the office 24 times since December 3, 2007, including nine incidents of late-arriving bags.4 The letter noted that the airline had already awarded him $1,925 in travel credit vouchers, 78,500 WorldPerks bonus miles, a voucher extension for his son, and $491 in cash reimbursements.5 It advised that Northwest would no longer award compensation for each contact.6
Ginsberg filed a class action on behalf of himself and similarly situated WorldPerks members in the United States District Court for the Southern District of California.7 His complaint asserted four claims. It alleged breach of contract by revoking Platinum Elite status without valid cause. It claimed that Northwest violated the duty of good faith and fair dealing because it terminated his membership in a way that contravened his reasonable expectations. It also asserted claims for negligent misrepresentation and intentional misrepresentation.8 He sought damages in excess of $5 million as well as injunctive relief requiring restoration of class members' status and prohibiting future revocations.9
The District Court held that the Airline Deregulation Act pre-empted the claims for breach of the covenant of good faith and fair dealing, negligent misrepresentation, and intentional misrepresentation.10 It dismissed the remaining breach-of-contract claim without prejudice under Federal Rule of Civil Procedure 12(b)(6), concluding that the frequent-flyer agreement gave Northwest sole discretion to determine whether a participant had abused the program.11 Ginsberg appealed only the dismissal of his breach-of-the-duty-of-good-faith-and-fair-dealing claim.12
The Ninth Circuit reversed, holding that a breach-of-implied-covenant claim is too tenuously connected to airline regulation to trigger pre-emption under the Act.13 The Supreme Court granted certiorari.14
Whether the Airline Deregulation Act of 1978 pre-empts a state-law claim for breach of the implied covenant of good faith and fair dealing?15
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.16 The phrase 'other provision having the force and effect of law' includes state common-law rules like the implied covenant at issue.17 Common-law rules are routinely called 'provisions' and they clearly have 'the force and effect of law.'18
Yes. The pre-emption provision applies to common-law claims because the original language of the statute encompassed 'rule[s]' and 'standard[s],' a formulation that includes common-law rules, and the recodification effected no substantive change.19 Respondent's claim is pre-empted because it invokes Minnesota law, under which the implied covenant is a state-imposed obligation that parties cannot contract out of.20 Minnesota law applies the covenant to every contract except employment contracts for policy reasons.21 Ginsberg became a member of the WorldPerks program in 1999, achieved Platinum Elite status in 2005 through extensive Northwest flights, and had his membership terminated in 2008 after contacting the airline 24 times since December 2007 and receiving $1,925 in vouchers plus other compensation.22
The District Court dismissed the good-faith claim as pre-empted while dismissing the contract claim without prejudice.23 Ginsberg appealed only the good-faith dismissal.24 The Ninth Circuit reversed on the ground that the claim was too tenuously connected to airline regulation. That holding conflicts with the ADA's text and purpose of preventing states from undermining federal deregulation through common-law rules that impose obligations beyond the parties' voluntary agreement.25
The Airline Deregulation Act of 1978 pre-empts respondent's state-law claim for breach of the implied covenant of good faith and fair dealing.26
Whether respondent's claim for breach of the implied covenant of good faith and fair dealing relates to airline rates, routes, or services?27
A claim satisfies the 'relates to' requirement if it has 'a connection with, or reference to, airline' prices, routes, or services.28 The Northwest frequent-flyer program connects to 'rates' because it awards mileage credits redeemable for tickets and upgrades that eliminate or reduce ticket prices. It also connects to 'services' because it provides access to flights and higher service categories.29
Yes. Ginsberg's claim has a direct connection to rates and services because he seeks reinstatement in the WorldPerks program specifically to obtain reduced rates through mileage redemptions and enhanced services such as flight upgrades and Platinum Elite status.30 The complaint alleged that Northwest terminated membership as a cost-cutting measure tied to its merger with Delta.31 Ginsberg requested injunctive relief restoring class members' status so they could access the program's benefits including accumulated mileage and loyalty status on partner airlines.32 Although Ginsberg argued that he contested only the termination itself rather than access to flights, his reason for seeking reinstatement was to regain the ability to earn and redeem miles for tickets and upgrades.33
The claim therefore falls within the broad pre-emptive scope recognized in Morales and Wolens.34
Respondent's claim for breach of the implied covenant of good faith and fair dealing relates to airline rates, routes, or services within the meaning of the Airline Deregulation Act pre-emption provision.35
Whether the implied covenant of good faith and fair dealing under Minnesota law constitutes a state-imposed obligation that parties cannot contract out of?
Under Minnesota law the implied covenant must be regarded as a state-imposed obligation because Minnesota law does not permit parties to contract out of the covenant.36 When a State's law does not authorize parties to free themselves from the covenant, a breach of covenant claim is pre-empted under Wolens.37 Minnesota law holds that the implied covenant applies to every contract except employment contracts, and the exception for employment contracts rests on policy reasons.38
Yes. Minnesota law controls because Ginsberg was a resident of Minneapolis, flew in and out of Minnesota, and Northwest's principal place of business is Minnesota.39 Respondent conceded at oral argument that under Minnesota law parties cannot contract out of the covenant.40 Minnesota decisions confirm that the obligation is imposed by law rather than by implication from the parties' agreement.41 Because the covenant applies to every contract except employment contracts for policy reasons, the decision not to exempt frequent-flyer agreements reflects a state policy determination that the policy reasons supporting the employment-contract exception do not apply with equal force to other contracts.42
The claim therefore seeks to enforce a state-imposed obligation rather than a privately ordered one.43
The implied covenant of good faith and fair dealing under Minnesota law constitutes a state-imposed obligation that parties cannot contract out of.
Whether respondent's implied covenant claim seeks to enlarge the contractual obligations that the parties voluntarily adopted?44
A breach of implied covenant claim is pre-empted if it seeks to enlarge the contractual obligations that the parties voluntarily adopt.45 Breach of contract claims survive pre-emption because terms and conditions airlines offer and passengers accept are privately ordered obligations, but claims that impose state policy judgments beyond those voluntary undertakings do not.46
Yes. The frequent-flyer agreement gave Northwest sole discretion to determine whether a participant had abused the program.47 The District Court dismissed the breach-of-contract claim on that ground.48 Ginsberg's good-faith claim, by contrast, asserted that Northwest violated the covenant by terminating membership in a manner that contravened his reasonable expectations, thereby attempting to impose an obligation that the contract itself did not contain.49 Because Minnesota law treats the covenant as non-waivable and policy-based, the claim enlarges the parties' voluntary agreement rather than enforcing it.50
Ginsberg did not appeal the contract dismissal and instead pursued only the pre-empted implied-covenant theory.51
Respondent's implied covenant claim seeks to enlarge the contractual obligations that the parties voluntarily adopted.52