If the T&C argument is going to hold water - it needs to be plain vanilla for everyone ... not chocolate for some of us. BTW, I didn't mention names on purpose .... I'm sure 90% of posters in this thread wouldn't have had a clue what I was posting about!
the terms and conditions are clear, and they apply, per DOT regulations, equally to everyone. No one can be involuntarily denied boarding unless volunteers have first been solicited.
the rules however do not apply to downgrades, and the airline appears free, under regulation, to choose who it wants to downgrade and how. They are required to refund the fare difference, but without some effort, that is generally going to work in the airline's favour.
consumer regulation is good because it generally cuts through legal process. The EU compensation scheme is an excellent example.
unfortunately we are not protected by something similar in australia. however, while overbooking is not illegal (and it's possible an australian court would find along similar lines as the US), overbooking is most probably a breach of contract.
consumers can pursue their claims through the small claims court, and consumer affairs is there to offer free advice on how to achieve that.
was the customer service as good as it might have been at LAX? maybe not by the sounds of it. But were they obligated to do anything other than they already had? under DOT regulations it seems not.
Has qantas responded as well as it might have now the passenger is home? it doesn't appear so, although we have to wait for the final refund calculation to come through. although you'd have thought QF would have been keen to calculate that amount sooner rather than later, so this case could be closed.
If the refund is per the agents' table, I would suggest going to consumer affairs. If the passengers have the time, and the will, it would be an excellent test case which could start the ball rolling, one way or another, to passengers getting a better deal in the future.