it seems to me that loosest state from the point of view of the preemption is going to set the standard. >> i don't think that the rule itself is varying from state to state. i think the rule would be the same across states. >> yeah, it's a general rule but it depends upon the particular circumstances. that's the same rule but in application it varies from state to state. >> i don't think it necessarily would because in all the states a claim seeking to get at the expectations and intents of the parties would not be preempted whereas one imposing external notions of fairness -- >> that isn't what your complaint, but i think the paragraph 56, which i think is the key paragraph, says, that the -- under the law is the contract law that you want to enforce is even where a party to a contract is given absolute discretion, it must exercise that discretion in good faith in a manner consistent with the reasonable expectations of the

other party, or parties. that's, i think, what they're objecting to because there is, it sounds to me like if i get a ticket, my reasonable expectation is they're not going to charge me what they're going to charge, it's unbelievable. that's my reasonable expectation and i'm the other party and so that clause sounds as if you could -- under state contract law, govern the price according to my reasonable expectation, namely, the consumer. that might be a great idea but i don't think that's the idea behind this act. that's what -- that's what i just read you. what do you say about that? >> there's a difference between subjective expectations and reasonable expectations and the concept of reasonable expectations in the complaint is an objective standard of what based on this contract and based on the context, what -- how the contract should be interpreted

and what implicit terms there are in the contract that need to be interpreted and then enforced and that can, in fact, be breached by the other party. >> ms. rosenbaum, in our decision in this case, do you think we should apply the presumption against preemption of state law? >> i think you should apply the presumption against preemption of state law. >> the whole purpose of the a.d.a. was to preempt state law. i can understand applying that presumption to other statutes. the whole purpose of the a.d.a. was to deregulate airlines, was to say there will be no federal regulation, let the free market handle it and there will be no state regulation and you want us to apply a presumption against preemption is to that statue? >> i do think the presumption applies, i don't think it's necessary to any outcome in this case. in rollins, this court tells

that claims are about holding airlines to the terms of their agreement are not preempted and that's what the covenant of good faith -- >> the terms in the agreement, it's another thing to say, it's an underlying premise, good faith and fair dealing will control. are you taking issue with the good faith and fair dealing standard being amorphous, being susceptible to different interpretations, different judges, by different juries? >> i think there is a fair amount of uniformity across the states in how they actually apply the covenant of good faith and in terms of applying it as an interpretation of the contract and then especially in cases where one party is claiming that all of their performance under the contract is in their sole discretion and

that they're free not to perform under the contract at all, you know, essentially the contract would be illusory in applying the covenant specifically under those circumstances to ensure there is meaningful performance that's required under the contract. >> is an employment at-will contract illusory? >> i don't believe that's an illusory contract but i think rather than it being in print, whether there are specifically whether specifically this contract is illusory, i think the fact that one party is claiming that it had no duty to perform under the contract shows that the contract had reasonable implicit limitations in it, that the parties reasonably expected they were contracted to there being some sort of performance under the contract and in fact the principles at issue here are remarkably similar to the principles at issue in rollins itself and this court there recognized that those were

contract construction issues. >> that's because the contract was silent. here it isn't. here, the contract says "sole discretion." in rollins, the question was retroactivity and the contract said nothing one way or the other about it. >> in rollins, the question was an express reservation of rights and the contract didn't say whether or not it applied retroactively so the question was whether there were applied limitations on the express reservation. >> would this contract produce a different result if it did not contain the words "in its sole discretion"? >> the interpretation of the contract might be different but >> you still apply the very same doctrine of reasonableness, right? so the words, "in its sole discretion" become superfluous. >> there may be a larger amount

of deference given to the airline and a party would reasonably expect would be given to the airline because of the sole discretion language and that's obviously a question for the merits, what exactly is the meaning of the sole discretion. >> i guess different states will treat that differently, as well, right? >> i think the question is less state by state and really more case by case and context by context of what does sole discretion language means when used -- >> i find it hard to believe that you're doing nothing but interpreting a contract when you give it the same outcome whether it says "in its sole discretion" or does not say "in its sole discretion," i find it hard to grasp how what you're doing in that case is simply interpreting the contract. >> i don't think there would necessarily be the same outcome in every single situation, whether or not the contract

said, "sole discretion" or not, there may be more deference given to the airline because of the discretionary term but in both situations, the question would be what does this contract mean and contracts include both express terms and implied terms and the covenant of good faith is going to interpreting those implied terms, to identifying them within the contract and enforcing them within the contract. if an airline were able to just insert "sole discretion" or "sole judgment" within its contract, it would be able to entirely circumvent the rule the court set forth in rollins by adding "sole discretion" to its contract, it would never be held to any contractual duties or requirements. >> ask you a question about something slightly different. an amicus brief submitted in support of your position by california and other states points out at some length that there are now a lot of frequent flyer programs in which a lot of

miles are earned by making purchases other than for flights and in which miles can also be spent for things other than flights. do we have to worry about that in this case? >> we think that's another reason why this claim is not preempted, is because it has to do with membership in a frequent flyer program rather than being rather than like in rollins having to do specifically with access to flights or -- >> what are the facts relating to this particular plan? can you earn miles by doing things other than flying? can you spend miles on things other than flying? >> there are not very many facts in the record about the plan but the contract does refer to airline miles -- sorry -- to airline partners, from whom one could earn miles and spend miles, also. >> the plaintiffs used the frequent flyer program, whatever

it else it might be used for, used it to get lower prices on flights, right? >> he did, yes, and that is something in the record but -- >> why does it relate to prices? even if you get credit for miles, from staying at certain hotels, it still has the effect of lowering the price for your airline ticket and likewise if you can use your frequent flyer miles to get cheaper hotel rooms, that effectively lowers the price of your airline ticket, doesn't it? it doesn't seem to me to make any difference whether the only thing you get from the frequent flyer mileage is, you know, airfares or other goodies. they're all price. >> this is a claim just about his membership in the program overall and that's a membership

where people who have the same claim as him could be earning miles on their credit card, spending miles on hotel rooms and once there's a claim where someone can bring it who has no relationship with air travel whatsoever where they can bring the exact same claim, it's hard to see how that claim is related to prices and services of air travel and there's certainly been no showing here. >> you're talking about a situation where you can assign your mileage to somebody else who can get the hotel room? >> no, i was saying that -- >> the question, who gets the discount for the hotel room is the person who bought the airline ticket, right? >> or the person who used their credit card to receive frequent flyer miles. >> your point is that you can get frequent flyer miles by purchasing other than airplane transportation. >> yes and then also use them for purposes other than airline transportation. reportedly more miles are earned now on the ground than on flight through means other than travel, than actually through -- >> didn't see anything in the

complaint about anything other than airline. >> he, himself -- >> is there anything in your complaint that talks about anything other than airlines? >> no, there isn't. rabbi ginsberg himself earned and used his miles -- >> well, i know, but what we're talking about is what count two of the complaint says, i think that's their objection as far as count two of the complaint says it's about airline miles, i take it, and airline miles are used on airlines and et cetera. >> his claim -- >> if there is something else in this complaint, tell me, and i'll have to figure out whether we go beyond the complaint. >> his claim is about his membership in the program itself and the program itself can be used, including the accrued miles earned under the program, can be used for purposes besides airline flight. >> does it say that in the complaint? >> it does not specifically say but the contract does refer to the airline partners and this

was decided -- >> airline partner, i take it, is another airline? >> no, i think airline partners can be the people with whom they partner with to -- to whom they sell their miles. >> so if i want to find out where that is in the record, where do i look? >> this was decided on a motion to dismiss so all there is the complaint but -- >> all there is the complaint and it doesn't talk about it in the complaint. what i'm thinking about it obviously is we might reserve that question for another day. >> the complaint does include the contract that does refer to the partners but does not, i don't think, define exactly who the partners are. but this court doesn't have to reach the question of whether or not the claim relates to prices, routes and services because it can decide this case based on the lines on in rollins on whether or not this claim enforces the terms of the contract which under minnesota law the covenant of good faith does. cases in minnesota have referred

to this as the breach of contract claim and i want to respond to justice -- >> what you say would apply to other contractual obligations of the airline, right? if the airline says you have to get off the plane, if the flight attendant tells you to do so, there's going to be a good faith obligation attached to that so you can challenge those decisions in court? >> there are separate regulations that apply to safety under the a.d.a. so -- and separate preemption doctrines that apply to safety under the a.d.a. but besides that, this would apply to matters besides to matters besides frequent flyer miles and other sole discretion -- issues in which the contract leaves an issue to the sole discretion of the airline. i do want to respond to justice kennedy's question about whether someone can go to the department of transportation.

the department of transportation does have authority over unfair and deceptive practices by airlines but that's very different than the claim that we're pursuing here. that's a claim by an airline -- sorry, by the government, that doesn't give remedies to the specific consumer who was hurt and that also looks at whether the practice is unfair or deceptive and our claim here isn't that this was an unfair practice. the claim here is that this is a practice or these were actions that violated the contract and was being applied here are contract law principles about interpreting the covenant of good faith and the same thing was true also in rollins. at the time of rollins, the department of transportation had the same ability to pursue claims for unfair and deceptive practices but the court

recognized that that did not override the need for there to be a contract dispute resolution regime by the state courts and that's the same -- the same is true here whether or not the contract term at issue is express or implied and overall, like in rollins, this is a claim where, if these sorts of claims were preempted, it would undercut the efficiency of contracts and the competitive marketplace that overall the a.d.a. meant to pursue. people need to be able to rely on their contracts. they need to be able to rely on the fact that the other party to their contract will interpret that contract in good faith according to the reasonable expectations of the parties, where they will give them the performance they reasonably thought they were securing when they entered into the contract. under northwest's position here, though, that it has the discretion not to perform at all, people won't be able to rely on the security of their contracts and it's hard to imagine that when congress

enacted the airline deregulation act it meant to undercut the efficiency of contracts in that way. >> i don't think it helps your argument to say in a your position promotes the purposes of the a.d.a. because the whole purpose of the preemption provision is that that's for the federal government to determine, not state laws, what promotes the purpose of the a.d.a. >> one thing the court said in rollins is for people to be able to trust their contract was something that promoted the purpose of the a.d.a. and we think that's true whether the terms that are being relied on are express terms of contracts or like here, the implicit, understood terms of the contract that the contract is going to be performed in the states.

>> i think this court has already crossed that bridge. >> i don't take up your rebuttal time. miles were a purchasing things other than flying. 90% worth things other than flying. >> i'm not sure he would be different in the claim brought against the airlines. maybe if you want to sue the credit card partner. i would say that if you are suing the airline, it speaks to it. make the implied covenant doctrine is very different from other interpretive tools. it is non-label. in a world where you're trying to determine the difference

between undertakings imposed by state law, it is a huge strike against it. you can bring separate claims. no one is every heard of a preferential claim. can enlarge the bargain in real ways. states make policy decisions about whether to have that. texas doesn't have it is a general mile -- and are matter at all. we have different views about at will employment contracts. it is statutory policy ari oriented. i just agree with your premises. if i had to state a standard, the standard is that the implied covenant is only not preempted when it does no more than provide a role of instructions

for the express terms of the contract. if that is all it does, there is nothing to be gained by saying those claims are not preempted. you can still get the same place cardoza. the claims that are brought in the world world are claims that i get a refund even though the ticket is nonrefundable. i get $1000 even though the loss was $500. i get to sue you even though it was in your sole discretion. claims are covenant .lastic the last question is, why is it airlines to put these covenants in as express covenants. .hy does it say sole discretion the reason is, you cannot run international airline if everyone of your judgments of taking a passenger off or an

abuse is going to be setting .uest by a jury for that reason we think the judgment should be reversed. we would urge you to file a more -- rule. >> the case is submitted. [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2013] advocacy at what groups have planned for 2014. war onlook at the poverty. 50 years after president lyndon johnson first announce the initiative. your phone calls, e-mails and tweets. >> president obama urged

congress to extend unemployment coverage for those without jobs. >> hi, everybody, and happy new year. this is a time when we look ahead to all the possibilities and opportunities of the year to come -- when we resolve to better ourselves, and to better our relationships with one another. and today, i want to talk about one place that washington should start -- a place where we can make a real and powerful difference in the lives of many of our fellow americans right now. just a few days after christmas, more than one million of our fellow americans lost a vital economic lifeline -- the temporary insurance that helps folks make ends meet while they look for a job. republicans in congress went home for the holidays and let that lifeline expire. and for many of their constituents who are unemployed through no fault of their own, that decision will leave them with no income at all. we make this promise to one

another because it makes a difference to a mother who needs help feeding her kids while she's looking for work, to a father who needs help paying the rent while learning the skills to get a new and better job. and denying families that security is just plain cruel. we're a better country than that. we don't abandon our fellow americans when times get tough we keep the faith with them until they start that new job. what's more, it actually slows down the economy for all of us. if folks can't pay their bills or buy the basics, like food and clothes, local businesses take a hit and hire fewer workers. that's why the independent congressional budget office says that unless congress restores this insurance, we'll feel a drag on our economic growth this year. and after our businesses created more than two million new jobs last year, that's a self- inflicted wound we don't need. so when congress comes back to work this week, their first order of business should be making this right.

right now, a bipartisan group in congress is working on a three- month extension of unemployment insurance -- and if they pass it, i will sign it. for decades, republicans and democrats put partisanship and ideology aside to offer some security for job-seekers, even when the unemployment rate was lower than it is today. instead of punishing families who can least afford it, republicans should make it their new year's resolution to do the right thing, and restore this vital economic security for their constituents right now. after all, our focus as a country this year shouldn't be shrinking our economy, but growing it. not narrowing opportunity, but expanding it. not fewer jobs, but doing everything we can to help our businesses create more of the good jobs that a growing middle class requires. that's my new year's resolution to do everything i can, every single day, to help make 2014 a year in which more of our citizens can earn their own piece of the american dream. after five years of working and sacrificing to recover and

rebuild from crisis, we have it within our power, right now, to move this country forward. it's entirely up to us. and i'm optimistic for the year that lies ahead. thank you, and have a great weekend. >> good morning and happy new year from the capitol. kids are always saying something isn't fair, but sometimes they've got a point. did you know that today in america, only 4% of all federal funding for cancer research goes to childhood cancer? that's right, 4% for all pediatric cancers combined. this doesn't just set us back in the race for cutting-edge cures and treatments. it places a ceiling on a child's ability to overcome obstacles and do great things. i'm sure this issue hits home for many of you. it certainly does for our family. livingston, our oldest, was four when he was diagnosed with fragile x syndrome, a disorder that is often misdiagnosed as autism. today, he's making his way through college in a program for students with intellectual

disabilities. many families, of course, are not as fortunate. they're out there waiting for hope and answers that often never come. no, we can't fix everything. but that doesn't mean we should accept things as they are. after all, don't we teach our kids never to settle for less? that's why i was proud to introduce h.r. 2019, the gabriella miller kids first research act. this bipartisan legislation directs much-needed resources to pediatric research at the national institutes of health. we do this using taxpayer dollars currently set aside for political party conventions. instead of funding these conventions once every four years, we'll make it a daily priority to explore the full potential of clinical trials and advancements. not only for childhood cancer, but for all pediatric conditions even the most rare genetic diseases. last month, the house passed

h.r. 2019 with strong support from both sides of the aisle. now it's the senate's turn to step up so we can send this bill to the president's desk. the good news is these same senate leaders have already voted to end the taxpayer subsidy for party conventions. here's a way to cut this unnecessary spending and put it towards building a better future for our kids. peter welch, my democratic co- sponsor for this bill, had it right when he asked: "can we just put the battle axes down for a while and take a step forward?" i know we can. and if we do, it just might inspire us to come together and do what the american people sent us here to do. jobs, health care, energy, education, and innovation are all areas in which the house has started work that washington needs to finish this year. but first, we need your help to get this done. don't take it from me. gabriella miller, this bill's namesake, was -- well, she was something special.

she was nine when she found out that she had a brain tumor the size of a walnut. and she was 10 when brain cancer took her life. in that time, gabriella -- never at a loss for words or wisdom -- became the leader of this movement. and she was awfully good at it. "if i go," gabriella said, "if i lose my battle i'm going to want all the people to carry on with the war, and we're going to win this war." let's go out and prove her right. join us in urging our senators to put kids first and pass this bill. in this season of sweeping resolutions, here's a chance to show how one small change can make a big difference. thank you for listening. >> on the next washington journal, what advocate group

have planned for 2014. a look at the war on poverty after lyndon johnson announce the initiative. james joins us. -- james jones joins us. answering the question, what is the most important issue congress should address this year. $100,000 in total prizes. the grand prize of $5,000. -- januaryue by 12 20. obama cares about health insurance. nail in thethe

coffin of the constitutional system. it is an attack on the commerce clause. the purpose was to promote commerce between the states. not to kill commerce. not to go competition. that is the commerce clause. to promote private property rights. other on blocking each the rivers. the commerce clause was pro- trade, pro-commerce. the notion that the commerce clause can be used congress to compel individuals to do something against their will, in particular to force people to enter into a private contract with a private company, forced offers a policy doesn't want to offer, and the individual is forced pay for it, and the

companies perforce provided. that is absurd. as all of you know, that will be the end. then the government can force us to do all kinds of things we don't want to do. mark levin will take your calls and questions in depth 5'3" our starting at 3:00 eastern. read the book and join the conversation. created by america's cable companies in 1979. brought to as a public service by your television provider.