No QL; it just would not constitute deceptive advertising just as it could not constitute fraud [inasmuch as "reliance" is one of the essential elements of a fraud action].

An earlier post indicated the sale of bartered airline tickets secured by means of redemption of frequent flyer miles in violation of an airline's T&Cs was unlawful in California.

Similarly an agreement between 2 or more persons to commit an unlawful act which is part of a series of other acts ultimately leading to the unlawful selling of airline tickets secured with frequent flyer miles might also be unlawful [as a conspiracy] even though the sale of frequent flyer mileage per se might not technically have occurred.

The point here is that at least in California the sale or barter of frequent flyer mileage that violates the rules of the issuing airline may very well be unlawful under several different theories.


[This message has been edited by smarten (edited Dec 08, 2003).]

California also requires that anybody who sells a travel ticket to someone in California needs to register (and pay) to their travel fund--even if they are located out of the State. I doubt most most located outside of California are aware of this and are breaking the law when they sell a ticket to somebody living in California.

California can write that statute, but what bearing can it possibly have on, say, a transaction a California resident enters into in Texas, under Texas law???? California does NOT have the right to attach legal restrictions like that to its citzens elsewhere in the United States. If the transaction is conducted in Texas and is legal under Texas law there is nothing to adjudicate in California.

Originally posted by blueeyes_austin:
I suggest you consult a lawyer or do some research, to allay your mis-impressions. "Minimum contacts" jurisprudence is well settled, and choice of law analysis is almost as straight-forward.

Originally posted by Tango:
Do you have a citation to this? Is it a penal (criminal) statute that could result in jail? My suspicion is that it is a civil statute or regulation, the contravention of which, at most, would require that you wouldn’t have access to courts if the other party defaults.

Originally posted by SPN Lifer (15 Apr 03, page 3 of this thread):
Calif. Penal Code § 483 is a misdemeanor.

Originally posted by smarten:
No problem whatsoever about the delay. It seems you’re a busy lawyer, as am I.

The title of a statute may not be dispositive in many jurisdictions, but out of curiosity, what is the title of Calif. B & P Code § 17500? “Deceptive advertising” perchance? [I didn’t look it up because I thought you’d know off-hand.] After all, the gravamen of this misdemeanor is likewise to make a statement “which is untrue or misleading, and which is known, or which by the exercise of reasonable care should be known, to be untrue or misleading.”

Originally posted by smarten:
While somewhat helpful, your analysis focuses on civil liability.

Some posters on this thread were more worried about criminal liability. Another poster made a very good point, which also immediately occurred to me when reading your post:

Originally posted by QuietLion:
Precisely.

All one would have to do would be include a disclaimer, such as the following. (Feel free to improve on it.)

I am posting the foregoing language solely for illustrative, scholarly, and debate purposes, and not to “tortiously interfere with the prospective economic advantage” of any airline or its program. Nor have I ever bought or sold a ticket, nor do I advocate doing so.

In my view, the biggest risk by far is civil, not criminal liability. As demonstrated by smarten, however, and further suggested by my disclaimer to my disclaimer, those risks are not insignificant if one doesn’t handle the “illegal” transaction carefully.



[UBB edit.]

[This message has been edited by SPN Lifer (edited Dec 11, 2003).]

For SPN Lifer's and others' perusal,

B&P 17500, et seq. is the portion of the code which deals with deceptive advertising. It is part of the same chapter that starts at B&P 17200 and which reads as follows:

"As used in this chapter, unfair competition shall mean and include any unlawful, unfair or fraudulent business act or practice AND unfair, deceptive, untrue or misleading advertising and any act
prohibited by Chapter 1 (commencing with Section 17500) of Part 3 of Division 7 of the Business and Professions Code."

The other question you raised about the sale of air transportation by someone who is not licensed is addressed by another part of the Business and Professions Code; 17550.

A "seller of travel" is defined by section 17550.1 to "mean a person who sells, provides, furnishes, contracts for, arranges, or advertises that he or she can
or may arrange, or has arranged, wholesale or retail air or sea transportation either separately or in conjunction with other travel services." There are some exemptions to this definition [primarily ocean and air carriers themselves] but for our purposes, let's ignore them for the moment.

The seller of travel law mandates registration; compliance with certain disclosures to purchasers of travel; and, joining and contributing to a restitution fund.

Secon 17550.19 provides criminal penalties [as a misdemeanor] and $10,000 fine in addition to civil penalties for "violation of this article."

So you see that in California, it very well may be unlawful to sell, offer to sell, conspire with others to sell or offer to sell air travel, frequent flyer mileage, air tickets secured with frequent flyer mileage; whether or not registered as a seller of travel; or whether or not full disclosure is made that the sale of air travel procured in this manner violates the airlines' terms and conditions.

Hope this helps.

I fear you misunderstand the case law, SPN. The situation I describe above (a California resident, in Texas, engaging in a transaction legal under Texas law with a Texas resident) creates no avenue for jurisdiction for a California court. Indeed, Shoe makes clear that a "one-off" transaction (such as an individual-to-individual sale) would clearly fail the "minimum contact" standard in the case and would be a violation of the 14th Amendment. (Specifically on Internet cases, Weber says: "the likelihood that personal jurisdiction can be constitutionally exercised is directly proportionate to the nature and quality of commercial activity that an entity conducts over the Internet"). In addition, in Aschi, the plurality opinion holds that "merely placing goods in the "stream of commerce" [is] not enough to establish personal jurisdiction over the party responsible for placing the goods."

smarten, are you sure that regulation applies to a casual seller who is not in the "business or profession" of selling travel?

QL

Originally posted by blueeyes_austin:
By your citation to International Shoe and the other two cases, you must be aware that the "location" of the frequent flyer mileage sale (including mail and internet transactions) is but one of the factors to be taken into consideration.

Your hypothetical was too short on facts to determine "purposeful availment" of the forum. Is the buyer or seller the California citizen? Who initiated the transaction? What is the frequent flyer program's forum? Etc., etc. My point is that a blanket statement about California having no interest is overbroad. You need to consider all the facts for any particular contemplated transaction.

On the other hand, likewise, no one has convinced me that all such frequent flyer mileage sale transactions are inherently subject to or amenable to criminal prosecution, even if California does have jurisdiction.

Either hire a lawyer, figure out by yourself how to do it legally, or don't get caught. Given that the former may be cost-prohibitive, you are left with the latter alternatives. Or don't do it.

Originally posted by smarten:
Could you explain why registration and disclosure wouldn't cure the "violations?"

Also, mightn't the "travel seller" registration have at least an implicit exemption for non-commercial transactions, or people selling their own miles (non-brokers), at least to the effect that an absolute prohibition might constitute an unconstitutional "taking" by the State? People who sell their own homes needn't be registered, though they must comply with disclosure laws, building code provisions, etc. Is the FSBO exemption statutory, too?

I'm not asking you do the research. (Unless you want to. http://www.flyertalk.com/forum/smile.gif I wouldn't expect any case law, that's for sure.) I'm merely suggesting that criminal liability is by no means certain for an individual who does not sell miles more than once.

Yes.

For those of you who want to access California's laws on this subject why not go to http://www.leginfo.ca.gov/calaw.html .

The seller of travel law was intended to STOP essentially anyone who has a physical "presence" in California from offering for sale or representing he/she can assist in the sale of air or sea transportation, whether on its own or bundled with other "travel" unless registered and a part of the consumer restitution travel fund.

There used to be an exemption in the law to sellers of travel physically located outside of the State of California, but I couldn't find that exemption quickly in recently searching Business and Professions Code, 17550, et seq. However, I encourage any of you so interested to do so.

But here's the point; let's assume you were a registered seller of travel. If you sold air transportation secured directly or indirectly via frequent flyer mileage procured in violation of an airline's T&Cs, first of all the airline would come after you [or at least cut you off from legally selling its air transportation] for circumventing its rules. Second of all, you would still run afoul of California's unfair business practice [B&P 17200, et seq.] and deceptive advertising [B&P 17500, et seq.] laws unless you made full advance disclosure the sale was in violation of the airline's T&Cs [which would undoubtedly kill the sale and probably by definition, constitute an unfair business practice which itself is impermissible (as well as criminal)]. And third of all, if you were selling air tickets themselves versus the frequent flyer mileage which could be used to secure those tickets, you would be violating California's ticket scalping and unfair business practice laws.

I remind all of you that if a person attempted to accomplish any of the foregoing on eBay; whether inside or outside of California; or whether a registered seller of travel or not; in my opinion that person would be violating California law. EBay's principal place of business is Campbell, California and ALL auctions are explicitly governed by California law. These facts summarily resolve questions of "minimum contacts;" they're present.

Even if a sale were conducted by some other means, if payment were to be made via PayPal I would come to the same conclusion inasmuch as ALL PayPal transactions explicitly incorporate California law.

Now, will California come after anyone criminally for committing any of the foregoing? Probably not unless you're unfortunate enough to piss someone off in government and come within his/her radar. That said, all of those FTers who assert there's nothing "illegal" in selling or bartering airline frequent flyer mileage or tickets secured therewith are wrong in California.

Hope this helps.

Am I the only one here who got completely lost in this thread about 2 pages ago? What the heck are you guys saying? I think I'm in way over me head!!!

smarten, SPN Lifer, and blueeyes_austin: Do all of you find that your non-lawyer aquaintences look at you with completely dumbfounded expressions when you are talking to them? http://www.flyertalk.com/forum/smile.gif

Greg -

Let me try to make it easy to understand.

The question is whether it is "illegal" to sell or barter frequent flyer mileage or the air transportation secured with frequent flyer mileage?

Although a number of posters feel there is nothing "illegal," some of us have tried to demonstrate that in California it may very well be.

When people dispute this assertion, you get all the legalese you're reading as justification.

Sorry. http://www.flyertalk.com/forum/smile.gif

In addition, I have been told by lawyers (I'm not one, but have had some education and experience in the area) that it is illegal in California, perhaps elsewhere as well, to use a ticket for passage in violation of its terms and conditions. This would be another way the user of a purchased award ticket could get into legal trouble, though it would not affect the seller of the ticket and/or miles unless fraud (e.g., representation that the ticket could be used legally) came into play.

I generally don't talk like this, except to other lawyers. In particular, I try to use plain English to clients who are paying the bills.

I am still not sure that someone who refers to "Shoe" is necessarily a lawyer, either, though he may have taken a business law course in college, or a first year civil procedure course at law school.

Be that as it may, sometimes jargon is an efficient way of discussing concepts well-known to those familiar with the terminology, which can often include non-lawyers, particularly business people.

From nine years in the Navy, and a life membership in the U.S. Naval Institute -- to go with my same-length memberships in the Continental Presidents Club and U.S. Airways Club as assets I could retain even after a malpractice-induced bankruptcy (!) -- I would venture to say that military jargon is equally obtuse.

Or for that matter, in the OMNI forum try to follow ScottC in a computer technical discussion, the literary references of pynchonesque, the mathematical terminology of Cozumel Jen, or the frequent flyer program arcana on a board you seldom visit.

But that does not excuse us for not being more clear, on a board intended for frequent flyers, not lawyers, and I apologize, too.

By the way, smarten, in the interest of full disclosure, do you now or have you ever represented an airline, travel agent, or other client adversely affected by private "sale" of frequent flyer miles, or do you just enjoy lawyerly debate?

My background includes time as an assistant public defender and prosecutor, but in the California State Bar I am currently only an inactive member. Active elsewhere, though!

You should know SPN Lifer that these boards are NOT to be used to disparage the messenger. In that regard, what possibly does "full disclosure" have to do with what the law is or is not in a jurisdiction like California?

Be that as it may, I have never represented such a person [not that it should make any difference, one way or the other]. I have represented a person who had a successful unfair competition/deceptive advertising action maintained against him/her/it for his/her/its sale of "travel."

I trust you would agree [wouldn't you?] frequent flyer miles or the air transporation they purchase would fall under the broad definition of "travel."