Northwest, Inc. v. Ginsberg

Case Updates

The Supreme Court unanimously reversed the Ninth Circuit's decision and held that 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.

In its brief, the U.S. Chamber urged the Supreme Court to reverse the Ninth Circuit's decision, arguing that the decision creates an end run around preemption that threatens to undermine the efficient operation of the national economy. The Ninth Circuit's ruling allows states to do through claims for breach of implied-by-law covenants what they cannot do through regulation. The Ninth Circuit's opinion has allowed a private plaintiff to enforce state policies that would enlarge or enhance an airline's self-imposed contractual obligations. The Chamber argued that those claims are contrary to Congress's determination in the Airline Deregulation Act that the airline industry functions best when its prices, routes, and services are governed solely by uniform national laws. The Chamber warned that if the decision is not reversed, the decision below would subject airlines to a panoply of claims based on state judges' and juries' views of whether the airlines had acted with sufficient “good faith” and “fair dealing.”