Wednesday, April 12, 2017

A Note on a Private Property Society and the United Airlines Passenger Forcibly Removed

By Robert Wenzel

In the comment section to my post, VIDEO United Airlines Solves Overbooking Problem: Has Cops Drag Bloodied Passenger Off Plane, a number of readers suggest that United had the "right" to evict the passenger from the plane because the plane is United's property.

I agree partially with Dr. Walter Block's comment on this:
 Some people think that private property rights give United the right to remove any passenger from any flight for any reason since they owned it. Not so. Of course, they may do so to an unruly or threatening passenger, but that was not true in this case. The passenger in question did not become violent until the authorities tried to remove him forcibly, and improperly. In effect, this passenger “rented” a seat on that plane, and, as long as he abided by the contract (sit quietly, behave, etc.) they had no right at all to expel him from the plane. 
This I agree with (except for the "improperly" part), but Walter also said:
 In my view, United had no right to remove any paying customer to whom they had issued a ticket, merely because they were overbooked. 
This I disagree with.

I take the opposite view and it goes back to Walter's comment about contract.

The ticket purchase contract has a clause which states a person can be removed from a plane because of overbooking. The great Bob Roddis even found the clause online: RULE 25 DENIED BOARDING COMPENSATION.

Now just because a clause says you can do something doesn't necessarily mean you should do it.

Stopping a person at the gate is one thing but after the person is seated it is another to toss him off, It's a terrible thing to do. If you are offering people $800 and a hotel room to get off the plane and no one is budging that tells you all the passengers were very serious about getting to their destinations.

I generally don't pay attention to the announcements when they offer money or vouchers to get off a plane but if I heard $800 and I wasn't in a hurry I would take the $800 and the hotel room.

To actually call the police and muscle a guy off is pretty insane and not good customer relations as United now surely understands. In the wake of the public relations disaster, in trading on Tuesday United stock lost $255 million in market capitalization.

That cell phone cameras have been around for a few years with users very comfortable recording anything that goes on around them, clearly, this was an unusual event. I have never seen it on video before.

In other words, we live in a world of disequilibrium where not all possible outcomes can be considered in advance. This was an outlier event.

That said, I guarantee you that United and every other airline is having meetings right now on how to handle such situations in the future. Airline shareholders are not big on $225 million in market capitalization declines.

In a Private Property Society, such an event would be fixed by the markets. If it was a major problem that was persistent and passengers were concerned, airline(s) would offer "guaranteed seating" where you would never get bumped.

You know, a revenue generator for an airline, sell both non-bumpable and bumpable seats at different prices.

But involuntary bumping really doesn't happen very often.

According to the Bureau of Transportation Statistics, a total of 613 million passengers were carried by the largest U.S. airlines for domestic flights and there were only 46,000 involuntary bumps. That's 0.0075%. Pro tip: Involuntary bumping is a very rare event, don't buy the higher priced non-bumpable ticket of the future unless you absolutely positively have to be somewhere on time.

Taking this discussion a bit further, in a private email, Rick Miller writes:
I have noticed a theme among libertarian commentators that the proper procedure from United should have been to offer more money until someone volunteered to leave the plane.

I wonder why so many are honing in on the airline upping the ante as the Right thing to do?  Though that approach is fine, it is merely one of several possible responses that are available for the property owner to employ from the libertarian perspective- including bumping the passenger involuntarily per United's agreement.  Suggesting that someone other than the customer and the airline should set the terms of the agreement cannot be seen as libertarian. 
At the root of this is a misunderstanding about how the libertarian should feel about coercion- it is only disallowed upon an innocent.  Ejecting a passenger can get ugly, indeed- but the terms were agreed to by the passenger.  United was not in the wrong to deny the flight to the passenger, who should have left at once.  United, having determined to eject the person should be allowed to do so on their own terms.
Miller is technically correct here. But in a PPS you are generally going to see peaceful resolutions to problems. No one is going to want to deal with bullies (except maybe other bullies). So while I don't see government setting any rules for private property (or doing anything) in a PPS, I don't expect the world to turn into a mirror image of San Francisco's Tenderloin district.

The United incident was an oddity and you can be sure at future flight attendant 101 courses a better way to handle such situations will be taught. Businesses don't want problems and escalations (unlike government police) it is not good for business. Hotel employees, for example, are very skilled at defusing situations. They are trained to do so.

If there is a problem with United, it is that since this terrorist scare and the birth of the TSA, United has gotten much too comfortable with the belligerent government backup whenever there is any passenger gripe.

I personally would like to see the TSA gone and flight attendants back to looking young and being pleasant.

And I really would love to see a PPS because that is when businesses will really respond to customer desires.

Robert Wenzel is Editor & Publisher of and Target Liberty. He also writes EPJ Daily Alert and is author of The Fed Flunks: My Speech at the New York Federal Reserve Bank. Follow him on twitter:@wenzeleconomics, on LinkedIn and Facebook. The Robert Wenzel podcast is on  iphone and stitcher.


  1. Rule 25 is about those denied boarding. It doesn't apply to this case since he wasn't denied boarding, he was being kicked off after boarding. What applies here is rule 21, Rule 21 Refusal of Transport. Trouble is, making space for standby UA employees is not listed as a reason to deny transport. So they have to make whatever responses he made to the demands as belligerent in order to get him under 21.H.2. or another subsection.

    That said, these contracts are the result of the corporate-state partnership that is the airline industry. There is no reason to believe they would be as they are in a PPS. As stated above, the market would have some other solution.

    1. You are right. I think the airline loses the argument that they had a right to remove a disruptive passenger. If the passenger caused a disturbance under 21.H.2, it was only because the airline was threatening him physically based upon a total breach of the parties' contract.

  2. Boarding has a specific legal meaning which even Wikipedia gets: "Boarding is the entry of passengers onto a vehicle, usually in public transportation. Boarding starts with entering the vehicle and ends with the seating of each passenger and closure of the doors."

    Since the doors were presumably not closed Rule 25 applies.

    1. I'll raise the wikipedia cite with website specializing on news concerning the law: It has to do with the wording of rule 21 which covers the removal of passengers from the aircraft at any point. Not after the doors close but at any point. He's physically on aircraft so rule 21 is applicable. Furthermore even with the door open definition boarding was in process for the passenger and wasn't denied, but revoked after it began. Revocation, removal from the aircraft is rule 21.

      Meanwhile elsewhere in the media and comment sections I've seen this incident is being blamed on libertarian ideas of private property and the free market. Not that they care to understand why they are wrong but because every failure of the state is to be blamed on its intellectual opposition. As a result I think it better to point out that the nature of these contracts and enforcement is dictated from the position of a government-corporate partnership and not markets or private property.

    2. Well, United didn't cite rule 21 precisely because it is not what is applicable---and they might have a lawyer or two that understand airline law. Boarding is used by airlines as " a boarding period" not the physical act of boarding, as in "the plane is boarding" which technically means until the doors are closed. Citing a blog that doesn't understand this does not advance your case.

    3. United's lawyers are concerned with defending United and make arguments based on that. They will start with rule 25 and then go to rule 21 claiming the passenger was belligerent. That is a logical course for defending their employer. That does not mean rule 25 is applicable, but simply the best defense they can construct after the fact.

      As to cites, wikipedia advances your case? Wikipedia is not an authoritative source. It's crowd sourced definitions with the dominate voices of the crowd deciding. It has no legal cites listed for this definition. At least the author of the lawnewz article I cited is a professor of law, not a blog written by some random person.

      I attempted to find a legal definition of boarding. I did not find one. Here's the relevant CFR behind rule 25: If you can find a definition of boarding in the CFR please share it.

      And again, logically you can't deny a process that has begun. You can terminate it, pause it, stop it, reverse it, revoke it, and so on but you can't deny it. The window for denial is over once it begins. It began the moment his boarding pass was scanned and accepted.

    4. I'm a lawyer but not knowledgeable on the applicable rules. I did see that United failed to provide, in writing, the terms they are required to offer by statute as compensation for missing a flight. These terms are superior to the BS airlines try to offer at first, and would have avoided the conflict almost certainly.

      I will also say, to RW's comment, that United having lawyers that "understand airline law" really means very little. Airline employees regularly take steps outside authorized legal procedures. They are byzantine. That United has lawyers (not very good ones mind you, I have some personal knowledge) that may try to twist the facts to suit their argument is true. But that is as far as it goes.

  3. Airlines just need to print more seats. Fractional reserve seating is the problem unless the airlines are granted the right to print more seats in the event of an airplane run.

  4. I generally agree that United is entitled to act in accordance with the contract with the passenger, whatever that says, but that the way United acted was just commercially foolish. What I haven't seen discussed is who were the men who used force to eject this passenger? Were they state officials (TSA, local cops, etc.), private contractors or United employees? I think this is where things may differ in a PPS, if it is the case that they used excessive force.

    If they were state officials -- who wouldn't exist in a PPS -- then they would have immunity from suit or, if sued, would have to be sued in a friendly state-run court. Moreover, if compensation were awarded against them, the state would pay, meaning all taxpayers (potentially even the aggrieved passenger) would have to foot the bill.

    On the other hand, if they were private contractors or United employees then, both now and in a PPS, they could be sued for compensation.

    As someone also noted, in a PPS the airport would be privately owned, and thus there may be a contract between United and the airport which could well specify how passengers are to be treated while the aircraft is on airport property.

  5. This writer's analysis also coincides with what we've said here:

  6. “The end cannot justify the means, for the simple and obvious reason that the means employed determine the nature of the ends produced.” ― Aldous Huxley

  7. United covers themselves in the court of law but have lost the case in the court of public opinion.