Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: FRIDAY, December 17, 1993 TAG: 9312170103
SECTION: BUSINESS PAGE: A-18 EDITION: METRO
SOURCE: Associated Press
DATELINE: SPRINGFIELD, ILL. LENGTH: Medium
The court ruled that American had entered a contractual relationship with its frequent fliers and could not unilaterally change the rules.
"This action constituted a breach of contract, which entitled plaintiffs to pursue an available remedy," said the opinion written by Justice Michael Bilandic.
It held that federal aviation law, which prevents states from separately regulating airline fares, does not supersede state consumer law when it comes to frequent-flier clubs.
The ruling could clear the way for a trial to establish damages, but American can appeal the ruling. The U.S. Supreme Court vacated a similar 1992 ruling by the state high court, which reasserted its position Thursday.
Hundreds of millions of dollars could be at stake in the class-action lawsuit. The frequent flier program has about 9 million members worldwide, and the lawsuit is not limited to Illinois residents.
In 1988, American Airlines altered its AAdvantage frequent-flier program by reducing the number of seats available to frequent-flier award users and blacking out certain dates for free travel, many during holiday seasons.
The airline, based in Fort Worth, Texas, contended that federal law and the U.S. Constitution preempted any state regulation of fares, service or routes.
Last year, the state high court ruled that the federal rule prohibits granting the injunction but said the plaintiffs could collect monetary and punitive damages because frequent-flier clubs are only indirectly related to fares.
Last October, the U.S. Supreme Court vacated that ruling and sent the case back to the Illinois court for reconsideration. The nation's highest court held in a separate case that the federal law preempted all state laws that relate to airline rates and services.
by CNB