Often1

Others have used some of the terminology in a sloppy manner and that leads to confusion.

1. As a starting point, the FTC, DOT, all 50 states (and some other agencies, but those don't matter here), have statutory authority to enforce against at least "unfair or deceptive acts or practices." The exact language varies a bit, but the underlying authority is the same.
2. The ADA preempts the state laws.
3. The ADA does not (could not) preempt other federal laws. Rather, it simply assigns the authority over allegations of those acts to DOT alone. Thus, FTC has not enforcement authority.

If an air carrier were to engage in an unfair or deceptive act of practice, DOT could bring an enforcement action if it chose to. The potential penalties for violation include a restitution order.

Bottom line for Ginsberg is that he himself could not bring a civil lawsuit against NW (DL). He could have complained to DOT and it is possible that DOT would act (although it tends not to act in individual cases).

None of this is to suggest that DOT will act. In fact, I don't believe that it will. But, hopefully this clears up the issue.

VegasGambler

I don't think that any of this was clear when Ginsberg sued but the supreme court ruling clarified it.

The ADA prevents 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,”. Miles earned through flying constitute a rebate of the fare (price) and thus fall under this umbrella.

Miles earned through signing up for a partner's credit card do not relate to any air carrier's price, route, or service.

mia

To my limited knowledge this is an untested distinction. Any cases?

richarddd

Sloppy language is a widespread problem. When dealing with technical issues it's important to be precise.

2. Yes, the ADA explicitly says this.

3. Aha. It wasn't clear that the DOT had exclusive jurisdiction. Implicitly there's no private right of action, which would explain by Ginsberg (the plaintiff) did not try claiming an unfair or deceptive act. (Minor quibble - the government could provide that the ADA preempts other federal law.)

[4] I believe you mean Ginsberg could not bring a suit claiming unfair or deceptive acts under the ADA, FTC Act or state law. He clearly could bring a civil alleging breach of contract, although current T&Cs make it exceedingly difficult to win.

wiivile

It is untested. But the important thing is that miles not earned through flying (or miles redeemed for non-flight awards) are specifically referenced in Alito's opinion as potentially being exempt from (unaffected by) the ADA- that alone should prevent AA from successfully moving to dismiss cases based on state or local law because of Northwest v Ginsberg.



I don't think the DOT can award relief or compensation based on my reading of the law and my conversations with them. 49 U.S.C. 41712 only permits them to stop AA and/or promulgate regulations. I think the individual would have to sue for restitution after the DOT hypothetically finds AA in violation.

richarddd

The Supreme Court explicitly left it as an open issue in Ginsberg. From what I can tell, including seeing the issue raised in various forums, there are no cases helpful to FF program participants.

wiivile

Indeed, the IRS considers the miles from a credit card to be a rebate on the credit card spend. That IRS regulation/memo/ruling would actually be good evidence to use against AA if they tried to rely on the ADA.

Some miles, like Citi checking bonuses and new Bask Bank accounts, are actual taxable interest.

Miles earned through these methods do not constitute an air carrier's price, route, or service, especially since they can then be redeemed for non-flight awards.

bobert24

Slight change of topic (but also possibly slightly more on topic). Does anyone know of any reason to keep any AA cards open if you get shutdown? Obviously the miles would do you no good. The free checked bag, priority boarding, and other benefits are tied to your FF #, which would no longer exist. Any reason at all to keep them open? Otherwise they'll sit in the sock drawer until the AF comes due or Citi/Barclays closes them for inactivity.

wiivile

Keep them open for a year so you can then PC to another worthwhile Citi card that isn't worth opening on its own, i.e., the Double Cash, the AT&T Access, or the Rewards+?

Often1

Comments which don't relate to the case before the court are called dictum. A Latin term for "don't ready anything into this."

wiivile

Yes, you wouldn't be able to say, based on Alito's comment, that the ADA explicitly doesn't apply to credit card miles, but it is sufficient to show that the facts of this case are different from NW v Ginsberg, which would allow a hypothetical case to survive AA's attempts to dismiss the case based on NW v Ginsberg.

VegasGambler

It's literally in the text of the supreme court ruling. Does it need to be tested?

respondent did not assert that he earned miles from any activity but taking flights. That's a direct quote from the ruling.

This is all about people who earned miles from activity other than taking flights.

VegasGambler

But that's not what this is. This is a legal explanation of why the ruling was made. That certainly relates to the case at hand.

ReinaDeLaSelva

Senor thank you. It is interesting to hear the view of a professional litigation associate. It is how I see things play out also. BA for example with the Fischer discrimination case. There are lots of airlines with their systematic attempts to obfuscate and deny EU261 claims not only BA. Or universities whose officers commit illegal harassment into women's homes and whose abusive actions are sanctioned by their superiors as their "work." There are so many examples where even limited legal diligence is not performed before malfeasant idiocy happens.

But in the case of AA, I can see why they are not so concerned because of the universalism of their AAdvantage account control per T&C even if they are compelled to disclose some commercially sensitive infomations important to FT...like how especifically they identify the churners to be shut down, lol!

flyer4512

I closed all of our AA cards in the days after we were locked. IMO people with locked/term accts should close all AA cards.

I have no idea if Citi packages debt and thus our ~800 credit scores help them but since I'm never using the cards again I have no need keep them open.