Northwest, Inc. v. Ginsberg (12-462)

argument 12-462

Northwest, Inc. v. Ginsberg

Supreme Court of the United States 59 min 7 speakers 8 chapters transcribed 5 days ago official recording ↗

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What is the central legal dispute between Northwest Inc. and Rabbi Ginsberg?

John G. Roberts 0:02

We'll hear argument first this morning in case twelve four sixty two, Northwest Incorporated versus Rabbi Ginsburg. Mr. Clement.

Donald B. Verrilli Jr. 0:10

Mr Chief Justice, and may it please the Court. Under this Court's decision in Woolens, there are only two relevant questions here, and the Ninth Circuit got both of them wrong. The first question is whether a claim for additional benefits under a frequent flyer program, like flight upgrades, relate to prices, routes, and services. This Court answered that question in the affirmative in Woolens and indeed underscored that the question was not particularly close. The Ninth Circuit's ability to reach the contrary conclusion in the precise same context underscores how far they have strayed from this Court's precedence. The second question is whether the plaintiff's claim here seek merely to enforce the party's voluntary undertakings or rather seek to enforce state law to enlarge those undertakings and enlarge the party's bargain.

Donald B. Verrilli Jr. 0:57

And as to that question too, we think respondents' own claims here make the case quite clear. Respondent did bring a claim here to enforce the party's voluntary undertakings, a breach of contract claim, and lost on the merits. The implied preemption claim is different. It seeks to impose a duty of fair dealing and reasonableness and superimpose that on the bargain, even where the parties to the contract have essentially given one party absolute discretion.

Unknown 1:27

Argument was made that if If the airline has an unreviewable uh right to terminate this uh agreement for any reason or for no reason, if that is so, then it's an illusory contract. What is what is your answer to that? If one party can get out Willy nilly. Why what kind of bargain is it?

Donald B. Verrilli Jr. 1:55

Well there are a couple of answers to that, Justice Ginsburg. The first is I think although the focus on whether a contract is illusory is sometimes used as part of the analysis under the implied covenant for a bilateral contract, I don't think that same analysis would apply to something like a frequent flyer program, which I think would be properly understood as a unilateral contract, where you don't worry about those sort of illusory promises. The second thing is I think you have to understand in the context.

Elena Kagan 2:20

Unitary contract. I'm not sure I understand that point.

Donald B. Verrilli Jr. 2:27

Between a unilateral contract and a bilateral contract, a unilateral contract is is is a typical sort of outstanding promise. That promise doesn't require an exchange of consideration, and the party who makes the promise has the ability to withdraw the promise until there's there's performance essentially relying on the promise. And that's why I think it's actually a little bit of a mistake to apply that doctrine to something like a frequent flyer program. I

Anthony M. Kennedy 2:50

don't understand that, Mr. Clement, because I always thought that the way these agreements worked were they were agreements that if I flew a s a certain number of miles on your plane, I was going to get a free ticket. And and uh it wasn't a gift that I was getting a free ticket, it was because I did something. I flew a certain number of miles so that there was an exchange with value on both sides.

Donald B. Verrilli Jr. 3:14

Well, I I suppose you could conceive of it that way. You could also conceive of it as basically being a premium that's offered by the company to reward your loyalty, but you've already gotten full performance.

Antonin Scalia 3:28

It's not a promise in exchange for another promise. It's a promise in exchange for the performance of an act. that is flying the airline uh, you know, a certain number of miles. So uh you're correct. It is a a unilateral contract. Now whether that uh that means that uh Uh that there's no is there no such thing as an illusory unilateral contract?

Donald B. Verrilli Jr. 3:51

I I don't think there really is. You know, I looked at the the treatises for that and I just don't think that concept really applies in the unitary unilateral contract. I d I

Anthony M. Kennedy 4:00

just don't see why that would make sense, because if I knew that it was really up to you to give me the free ticket, maybe I was going to get it and maybe I wasn't.