In Nader v. Allegheny Airlines, Inc., consumer advocate Ralph Nader sued the airline for fraudulent misrepresentation after he was bumped from a flight despite having a confirmed reservation. The Supreme Court ruled in favor of Nader, stating that federal law did not preempt his claim under state common law. This case set an important precedent because it established that airlines could be held liable for deceptive practices such as overbooking flights and failing to inform passengers about their likelihood of being denied boarding due to these practices. It also affirmed the right of consumers to seek damages in court when they are victims of such deception.

In the dissenting opinion for Nader v. Allegheny Airlines, Inc., it was argued that the majority's decision to allow a cause of action under common law fraud and deceit in this case would undermine the comprehensive regulatory scheme established by Congress through Federal Aviation Act. The dissenting justices believed that allowing such claims could potentially lead to inconsistent state regulation of air carriers, which is precisely what Congress sought to avoid when it enacted federal legislation governing aviation. They also expressed concern about potential negative impacts on airline operations due to increased litigation and uncertainty resulting from different standards being applied in different states. Furthermore, they disagreed with the majority's interpretation of legislative intent behind certain provisions of the Federal Aviation Act.