Justice ALITO delivered the opinion of the Court.
We must decide in this case whether the Airline Deregulation Act pre-empts a state-law claim for breach of the implied covenant of good faith and fair dealing. Following our interpretation of the Act in American Airlines, Inc. v. Wolens, 513 U.S. 219, 115 S.Ct. 817, 130 L.Ed.2d 715 (1995), we hold that such a claim is pre-empted if it seeks to enlarge the contractual obligations that the parties voluntarily adopt. And because the doctrine is invoked in the present case in an attempt to expand those obligations, we reverse the judgment of the Court of Appeals.
Like many airlines, petitioner Northwest, Inc. (Northwest), established a frequent flyer program, its WorldPerks Airline Partners Program, to attract loyal customers. Under this program, members are able to earn "miles" by taking flights operated by Northwest and other "partner" airlines. Members can then redeem these miles for tickets and service upgrades with Northwest or its airline partners.
Respondent became a member of Northwest's WorldPerks program in 1999, and as a result of extensive travel on Northwest flights, he achieved "Platinum Elite" status (the highest level available) in 2005.
In 2008, however, Northwest terminated respondent's membership, apparently in reliance on a provision of the WorldPerks agreement that provided that "[a]buse of the ... program (including ... improper conduct as determined by [Northwest] in its sole judgment[)] ... may result in cancellation of the member's account." App. 64-65. According to respondent, a Northwest representative telephoned him
Respondent requested clarification of his status, but a Northwest representative sent him an e-mail stating that "[a]fter numerous conversations with not only the Legal Department, but with members of the WorldPerks department, I believe your status with the program should be very clear." Id., at 60.
Alleging that Northwest had ended his membership as a cost-cutting measure tied to Northwest's merger with Delta Air Lines, respondent filed a class action in the United States District Court for the Southern District of California on behalf of himself and all other similarly situated WorldPerks members. Respondent's complaint asserted four separate claims.
The District Court held that respondent's claims for breach of the covenant of good faith and fair dealing, negligent misrepresentation, and intentional misrepresentation were pre-empted by the Airline Deregulation Act of 1978 (ADA or Act) as amended, 49 U.S.C. § 41713. These claims, the court concluded, were "relate[d] to" Northwest's rates and services and thus fell within the ADA's express pre-emption clause. App. to Pet. for Cert. 69. Respondent's remaining claim — for breach of contract — was dismissed without prejudice under Federal Rule of Civil Procedure 12(b)(6). The court held that respondent had failed to identify any material breach because the frequent flyer agreement gave Northwest sole discretion to determine whether a participant had abused the program. Respondent appealed the dismissal of his breach of the duty of good faith and fair dealing claim but not the other claims that the court had dismissed.
We granted certiorari. 569 U.S. ___, 133 S.Ct. 2387, 185 L.Ed.2d 1103 (2013).
Before the enactment of the ADA, the Federal Aviation Act of 1958 empowered the Civil Aeronautics Board to regulate the interstate airline industry. Pursuant to this authority, the Board closely regulated air carriers, controlling, among other things, routes, rates, and services. See, e.g., Western Air Lines, Inc. v. CAB, 347 U.S. 67, 74 S.Ct. 347, 98 S.Ct. 508 (1954); Federal Aviation Act of 1958, 72 Stat. 731. And since the Federal Aviation Act contained a saving provision preserving pre-existing statutory and common-law remedies, § 1106, id., at 798, air carriers were also regulated by the States. See Morales v. Trans World Airlines, Inc., 504 U.S. 374, 378, 112 S.Ct. 2031, 119 L.Ed.2d 157 (1992).
In 1978, however, Congress enacted the ADA, which sought to promote "efficiency, innovation, and low prices" in the airline industry through "maximum reliance on competitive market forces and on actual and potential competition." 49 U.S.C. §§ 40101(a)(6), (12)(A). While the ADA did not repeal the predecessor law's saving provision, it included a pre-emption provision in order to "ensure that the States would not undo federal deregulation with regulation of their own." Morales supra, at 378, 112 S.Ct. 2031. In its current form, this provision states that "a State, political subdivision of a State, or political authority of at least 2 States may not enact or enforce a law, regulation, or other provision having the force and effect of law related to a price, route, or service of an air carrier that may provide air transportation under this subpart." § 41713(b)(1).
We have had two occasions to consider the ADA's pre-emptive reach. In Morales, we held that the ADA pre-empted the use of state consumer protection laws to regulate airline advertising. We recognized that the key phrase "related to" expresses a "broad pre-emptive purpose." 504 U.S., at 383, 112 S.Ct. 2031. Noting our interpretation of similar language in the pre-emption provision of the Employee Retirement and Income Security Act of 1974, 29 U.S.C. § 1144(a), we held that a claim "relat[es] to rates, routes, or services," within the meaning of the ADA, if the claim "ha[s] a connection with, or reference to, airline `rates, routes, or services.'" 504 U.S., at 384, 112 S.Ct. 2031. The older saving provision, we concluded, did not undermine this conclusion. Id., at 384-385, 112 S.Ct. 2031.
Subsequently, in American Airlines, Inc. v. Wolens, 513 U.S. 219, 115 S.Ct. 817, 130 L.Ed.2d 715 (1995), we considered the application of the ADA pre-emption provision to two types of claims concerning an airline's frequent flyer program: first, claims under the Illinois Consumer Fraud and Deceptive Business Practices Act challenging an airline's devaluation of earned
With this background in mind, we turn to the question whether the ADA pre-empts respondent's claim for breach of the implied covenant of good faith and fair dealing.
The first question we address is whether, as respondent now maintains, the ADA's pre-emption provision applies only to legislation enacted by a state legislature and regulations issued by a state administrative agency but not to a common-law rule like the implied covenant of good faith and fair dealing. We have little difficulty rejecting this argument.
To begin, state common-law rules fall comfortably within the language of the ADA pre-emption provision. As noted above, the current version of this provision applies to state "law[s], regulation[s], or other provision[s] having the force and effect of law," 49 U.S.C. § 41713(b)(1). It is routine to call common-law rules "provisions." See, e.g., Madsen v. Women's Health Center, Inc., 512 U.S. 753, 765, n. 3, 114 S.Ct. 2516, 129 L.Ed.2d 593 (1994); United States v. Barnett, 376 U.S. 681, 689-700, 84 S.Ct. 984, 12 L.Ed.2d 23 (1964); Brown v. United Airlines, Inc., 720 F.3d 60, 68 (C.A.1 2013) ("[W]hen read in context, the word `provision' in the ADA preemption provision can most appropriately be construed to include common law"). And a common-law rule clearly has "the force and effect of law." In Wolens, we noted that this phrase is most naturally read to "`refe[r] to binding standards of conduct that operate irrespective of any private agreement,'" 513 U.S., at 229, n. 5, 115 S.Ct. 817, and we see no basis for holding that such standards must be based on a statute or regulation as opposed to the common law.
This understanding becomes even clearer when the original wording of the pre-emption provision is taken into account. When first enacted in 1978, this provision also applied to "rule[s]" and "standard[s]," and there surely can be no doubt that this formulation encompassed common-law rules. Indeed, we held in CSX Transp., Inc. v. Easterwood, 507 U.S. 658, 664, 113 S.Ct. 1732, 123 L.Ed.2d 387 (1993), that virtually identical language in the Federal Railroad Safety Act of 1970 includes "[l]egal duties imposed ... by the common law." See also Riegel v. Medtronic, Inc., 552 U.S. 312, 324, 128 S.Ct. 999, 169 L.Ed.2d 892 (2008) (holding that a State's "`requirements'" "includ[e] [the state's] common-law duties").
While "rule[s]" and "standard[s]" are not mentioned in the current version of the statute, this omission is the result of a recodification that was not meant to affect the provision's meaning. Those additional terms were deleted as part of a wholesale recodification of Title 49 in 1994, but Congress made it clear that this recodification did not effect any "substantive change." § 1(a), 108 Stat. 745.
In addition, the relationship between the ADA's pre-emption provision and the saving provision carried over from the prior law is also quite different. The Sprietsma decision placed substantial weight on the Boat Safety Act's saving provision, which was enacted at the same time as the pre-emption provision, but we have described the Federal Aviation Act saving clause as "a relic of the pre-ADA/no pre-emption regime." Morales, 504 U.S., at 385, 112 S.Ct. 2031. That provision applies to the entire, sprawling Federal Aviation Act, and not just to the ADA, and as we held in Morales, this "general `remedies' saving clause cannot be allowed to supersede the specific substantive pre-emption provision." Ibid. See also Wolens, supra, at 245, 115 S.Ct. 817 (O'Connor, J., concurring in judgment in part and dissenting in part). For these reasons, respondent's interpretation of the ADA pre-emption provision cannot be squared with the provision's terms.
Exempting common-law claims would also disserve the central purpose of the ADA. The Act eliminated federal regulation of rates, routes, and services in order to allow those aspects of air transportation to be set by market forces, and the pre-emption provision was included to prevent the States from undoing what the Act was meant to accomplish. Morales, supra, at 378, 112 S.Ct. 2031. What is important, therefore, is the effect of a state law, regulation, or provision, not its form, and the ADA's deregulatory aim can be undermined just as surely by a state common-law rule as it can by a state statute or regulation. See Medtronic, Inc., supra, at 325, 128 S.Ct. 999 (recognizing that state tort law that imposes certain requirements would "disrup[t] the federal scheme no less than state regulatory law to the same effect"). As the First Circuit has recognized, "[i]t defies logic to think that Congress would disregard real-world consequences and give dispositive effect to the form of a clear intrusion into a federally regulated industry." Brown, 720 F.3d, at 66-67.
Finally, if all state common-law rules fell outside the ambit of the ADA's pre-emption provision, we would have had no need in Wolens to single out a subcategory of common-law claims, i.e., those based on the parties' voluntary undertaking, as falling outside that provision's coverage.
Accordingly, we conclude that the phrase "other provision having the force and effect of law" includes common-law claims.
We must next determine whether respondent's breach of implied covenant claim "relates to" "rates, routes, or services." A claim satisfies this requirement if it has "a connection with, or reference to, airline" prices, routes, or services, Morales, supra, at 384, 112 S.Ct. 2031, and the claim at issue here clearly has such a connection. That claim seeks respondent's reinstatement in Northwest's frequent flyer program so that he can access the program's "valuable ... benefits," including "flight upgrades, accumulated mileage,
Like the frequent flyer program in Wolens, the Northwest program is connected to the airline's "rates" because the program awards mileage credits that can be redeemed for tickets and upgrades. See 513 U.S., at 226, 115 S.Ct. 817. When miles are used in this way, the rate that a customer pays, i.e., the price of a particular ticket, is either eliminated or reduced. The program is also connected to "services," i.e., access to flights and to higher service categories. Ibid.
Respondent argues that his claim differs from the claims in Wolens because he "does not challenge access to flights and upgrades or the number of miles needed to obtain air tickets" but instead contests "the termination of his WorldPerks elite membership," Brief for Respondent 12, but this argument ignores respondent's reason for seeking reinstatement of his membership, i.e., to obtain reduced rates and enhanced services. Respondent's proffered distinction has no substance.
Respondent and amici suggest that Wolens is not controlling because frequent flyer programs have fundamentally changed since the time of that decision. We are told that "most miles [are now] earned without consuming airline services" and are "spent without consuming airline services." Brief for State of California et al. 18 (emphasis deleted). But whether or not this alleged change might have some impact in a future case, it is not implicated here. In this case, respondent did not assert that he earned his miles from any activity other than taking flights or that he attempted to redeem miles for anything other than tickets and upgrades. See Tr. of Oral Arg. 47-48.
With these preliminary issues behind us, we turn to the central issue in this case, i.e., whether respondent's implied covenant claim is based on a state-imposed obligation or simply one that the parties voluntarily undertook. Petitioners urge us to hold that implied covenant claims are always pre-empted, and respondent suggests that such claims are generally not pre-empted, but the reasoning of Wolens neither dooms nor spares all such claims.
While most States recognize some form of the good faith and fair dealing doctrine, it does not appear that there is any uniform understanding of the doctrine's precise meaning. "[T]he concept of good faith in the performance of contracts `is a phrase without general meaning (or meanings) of its own.'" Tymshare, Inc. v. Covell, 727 F.2d 1145, 1152 (C.A.D.C.1984) (Scalia, J.) (quoting Summers, "Good Faith" in General Contract Law and the Sales Provisions of the Uniform Commercial Code, 54 Va. L.Rev. 195, 201 (1968)); see also Burton, Breach of Contract and the Common Law Duty to Perform in Good Faith, 94 Harv. L.Rev. 369, 371 (1980). Of particular importance here, while some States are said to use the doctrine "to effectuate the intentions of parties or to protect their reasonable expectations," ibid., other States clearly employ the doctrine to ensure that a party does not "`violate community standards of decency, fairness, or reasonableness.'" Universal Drilling Co., LLC v. R & R Rig Service, LLC, 2012 WY 31, 37, 271 P.3d 987, 999; DDP Roofing Services, Inc. v. Indian River School Dist., 2010 WL 4657161, *3 (Del.Super.Ct., Nov. 16, 2010); Allworth v. Howard Univ., 890 A.2d 194, 201-202 (D.C.2006); Brunswick Hills Racquet Club, Inc. v. Route 18 Shopping Center Assocs., 182 N.J. 210, 224, 864 A.2d 387, 395-396 (2005); Harper v. Healthsource
Whatever may be the case under the law of other jurisdictions, it seems clear that under Minnesota law, which is controlling here, see n. 1, supra, the implied covenant must be regarded as a state-imposed obligation.
Another feature of Minnesota law provides an additional, independent basis for our conclusion. Minnesota law holds that the implied covenant applies to "every contract," In re Hennepin Cty., supra, at 502, with the notable exception of employment contracts. Hunt v. IBM Mid America Employees Fed. Credit Union, 384 N.W.2d 853, 857-858 (Minn.1986). The exception for employment contracts is based, in significant part, on "policy reasons," id., at 858, and therefore the decision not to exempt other types of contracts must be based on a policy determination, namely, that the "policy reasons" that support the rule for employment contracts do not apply (at least with the same force) in other contexts. When the application of the implied covenant depends on state policy, a breach of implied covenant claim cannot be viewed as simply an attempt to vindicate the parties' implicit understanding of the contract.
Our holding also does not leave participants in frequent flyer programs without protection. The ADA is based on the view that the best interests of airline passengers are most effectively promoted, in the main, by allowing the free market to operate. If an airline acquires a reputation for mistreating the participants in its frequent flyer program (who are generally the airline's most loyal and valuable customers), customers can avoid that program and may be able to enroll in a more favorable rival program.
Federal law also provides protection for frequent flyer program participants. Congress has given the Department of Transportation (DOT) the general authority to prohibit and punish unfair and deceptive practices in air transportation and in the sale of air transportation, 49 U.S.C. § 41712(a), and Congress has specifically authorized the DOT to investigate complaints relating to frequent flyer programs. See FAA Modernization and Reform Act of 2012, § 408(6), 126 Stat. 87. Pursuant to these provisions, the DOT regularly entertains and acts on such complaints.
We note, finally, that respondent's claim of ill treatment by Northwest might have been vindicated if he had pursued his breach-of-contract claim after its dismissal by the District Court. Respondent argues that, contrary to the holding of the District Court, the frequent flyer agreement did not actually give Northwest unfettered discretion to terminate his membership in the program, see Brief for Respondent 20-21, and the United States makes a related argument, namely, that even if the agreement gave Northwest complete discretion with respect to a determination regarding abuse of the program, the agreement did not necessarily bar a claim asserting that membership was ended for an ulterior reason, such as an effort to cut costs. If respondent had appealed the dismissal of his breach-of-contract claim, he could have presented these arguments to the Court of Appeals, but he chose not to press that claim. He voluntarily dismissed the breach-of-contract claim and instead appealed only the breach of implied covenant claim, which we hold to be pre-empted.
Because respondent's implied covenant of good faith and fair dealing claim seeks to enlarge his contractual agreement with petitioners, we hold that 49 U.S.C. § 41713(b)(1) pre-empts the claim. The judgment of the Court of Appeals for the
It is so ordered.
But other States permit a party to contract out of the duties imposed by the implied covenant. Steiner v. Thexton, 48 Cal.4th 411, 419-420, 106 Cal.Rptr.3d 252, 226 P.3d 359, 365 (2010) ("`"The general rule [regarding the covenant of good faith] is plainly subject to the exception that the parties may, by express provisions of the contract grant the right to engage in the very acts and conduct which would otherwise have been forbidden by an implied covenant of good faith and fair dealing"'"); Shawver v. Huckleberry Estates, LLC, 140 Idaho 354, 362, 93 P.3d 685, 693 (2004); Farm Credit Servs. of Am. v. Dougan, 2005 S.D. 94, ¶ 10, 704 N.W.2d 24, 28.