The Right Coast

March 25, 2004
Did Scalia engage in promissory fraud?
By Tom Smith

Brian Leiter has linked to this item, floating around the blogosphere, to the effect that Scalia, J., engaged in promissory fraud by buying a round trip ticket he intended to use only one leg of. The first response is, oh please, give me a break. But actually, there may be a bit of a puzzle here.

Airline pricing is just an exercise in pure price discrimination. The idea in this instance is to sort out those who really are engaging in one way travel and those who are going round trip. Needing to go only one way is a rather odd situation when you think about it. Airlines undoubtedly sell far more round trip than one-way tickets. They sensibly figure they can extract more from one way travelers. Of course, any idiot would buy a round trip ticket instead of one way, for the same reason you would buy a dozen oranges for $2 rather than a half-dozen for $3.

So, apparently, airlines make it a standard term in the form ticket contract nobody has ever read that the buyer of the round-trip ticket really is a round trip flyer and not a one-way flyer. In effect, the buyer is making a representation about his intentions. But it is a queer sort of representation. It is not like "I will make my best efforts to sell your widgets" or the like. It is more like "$100 is really the most I am willing to pay for this widget." This is so because that's all price discrimination is, an effort to sort people out according to what they are willing to pay. But does anybody really think it is fraud to represent to a seller that you are not willing to pay more than $X when in fact you would be willing to pay more? Even if there is an odd term in the contract that says "I really am unwilling to pay more than $X", how could such a term have any effect?

A related reason to think buying a round-trip ticket when you mean to travel only one way is not fraud, is that it is hard to see how the airline could possibly rely on such a representation and undoubtedly they do not. They must realize that lots of people buy round trip tickets and throw away the return. They would like to price discriminate against these people, but are defeated when people respond rationally by buying the round trip. For a passenger not to do so would constitute the ethical lapse of being an idiot.

Further, for there to be fraud, their must be damages. "I wanted to price discriminate, but he wouldn't let me because he misrepresented how much he was willing to pay," would be a pretty strange case for damages. Some sort of lost profits claim, I guess. But the airlines still sold the round trip ticket. They can fill the empty return seat with a stand-by or by over-booking, which they normally do. Even if the seat sits empty, so what? The buyer already paid for it. So the airlines says, you can't do that, you must be there. But the airline cannot compel performance of this sort. So it asks about present intentions, presumably. Then you are back to the supposed ethical obligation to let somebody price discriminate against you by revealing your indifference curve. That's indecent. Nobody has the right to insist you expose your indifference curve.

The only way I can see to argue the seller has suffered any harm is to go back to the price discrimination point, and I doubt any court would call that fraud. (But just wait. Somebody will send me a case in which some benighted federal judge did just that.) But honestly, how could anybody reasonably rely to their detriment on a representation to the effect that "yes, I'm really a round trip flyer" when they are asking you just so they can soak you if possible? No doubt there is some refined moral theory under which you may not misrepresent such intentions in the marketplace, but it would be a rare bird that followed it in practice. The morality of contract law, I would hazard, is much more practical. I would put representations given merely to avoid price discrimination in a category similiar to agreements to agree. You might be able to make sense of them, barely, in theory, but in practice, they're meaningless. That's what I would say if I were a judge anyway. Then I would fly away on a public private jet and kill some ducks.

And one more thing: Scalia was using both legs of the ticket if you consider the strange ethical position he was is. If he is going to accept a ride on somebody's jet, it helps to be able to say "I didn't save any money by doing so; I already had a round-trip ticket." So he needs that empty seat on the plane. It is occupied, if you will, by his conscience or at least by his reputation, or perhaps only by some purely juridical body. Just because his actual bottom, on which we are not going to dwell, is not in the seat, does not mean he's not using it. But I suppose there's some really, really refined view under which it is unethical or illegal to buy an airline seat you want to use (maybe it's a weird hobby you have, or maybe you're fulfilling your late girlfriend's last wish, or whatever) in some way other than just sitting in it. Of course, it's funny that Scalia saved money on his one-way leg by buying a ticket that shows he did not save money by taking a private plane for the other leg of the trip. But it still allows him to say "I already had a round trip ticket," and in this age of soundbites, that's a useful thing to be able to say.