The U.S. Court of Appeals yesterday reversed a lower-court decision that awarded $15,010 in damages to consumer advocate Ralph Nader, who was bumped from an overbooked Allegheny Airlines flight eight years ago.
It was the second time that the appeals court has overturned a damage award to Nader for the bumping incident.
The appeals court accepted Allegheny's "good faith" argument that it wasn't required to notify passengers that a flight was overbooked, since the Civil Aeronautics Board hadn't required such disclosure when Nader made his reservation in 1972.
Under those circumstances, the appeals court said, U.S. District Court Judge Charles R. Richey was wrong when he awarded Nader $15,000 in punitive damages after finding that Allegheny's policy of nondisclosure showed a "conscious, deliberate and callous disregard" for its passengers. Nader also had been awarded $10 in costs.
"An airline may not be condemned as a wanton wrongdoer for conforming to the standards set and the practices approved by the agency charged with the duty of regulating it," Judge Roger Robb wrote for a unanimous three-judge panel.
At the time, Robb noted, the CAB decided to continue its policy of nondisclosure of overbooking, because otherwise anxious passengers would make double reservations and thus increase the number of no-show passengers.
The appeals court decision yesterday has no effect on CAB regulations, passed six years after the Nader incident, which require airlines to notify passengers of overbooking practices. The decision also doesn't affect airline reimbursement policies for passengers who are bumped.
Yesterday's decision was the second time that the appeals court has reversed Richey in the Nader case. Originally, Richey awarded Nader $10 in compensatory and $25,000 in punitive damages for the bumping incident.In that same earlier decision, Richey also awarded $25,061 to the Connecticut citizens group which had scheduled Nader for a speech on the day he was bumped from the Allegheny flight.
The appeals court, when it overturned that first decision, said the airlines were allowed to overbook and deny seats to passengers with "confirmed reservations." The U.S. Supreme Court, however, sent the case back to Richey for examination of the "good faith" defense.
After the second trial, Richey awarded Nader $10 in damages, because the airline failed to warn him that he might be bumped, and $15,000 in punitive damages for Allegheny's deliberate nondisclosure policy and to deter any similar conduct in the future. No damage award was made to the Connecticut citizens group.
Yesterday, in addition to rejecting the award of punitive damages, the appeals court also set aside Richey's ruling that Allegheny was liable to Nader for false representation for not disclosing that his "confirmed reservation" might be denied because the flight was overbooked.