Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca9-08-55588/USCOURTS-ca9-08-55588-0/pdf.json

Nature of Suit Code: 190
Nature of Suit: Other Contract Actions
Cause of Action: 

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FOR PUBLICATION

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

MARIA SANCHEZ, individually and 

on behalf of all others similarly

situated, No. 08-55588

Plaintiff-Appellant, D.C. No.

v.  2:07-cv-07280-

R-RC AEROVIAS DE MEXICO, S.A. DE

C.V., doing business as OPINION

Aeromexico,

Defendant-Appellee. 

Appeal from the United States District Court

for the Central District of California

Manuel L. Real, District Judge, Presiding

Argued and Submitted

May 5, 2009—Pasadena, California

Filed January 5, 2010

Before: Pamela Ann Rymer, Andrew J. Kleinfeld and

Barry G. Silverman, Circuit Judges.

Opinion by Judge Rymer;

Dissent by Judge Kleinfeld

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COUNSEL

H. Rossbacher, The Rossbacher Firm, Los Angeles, California, for the petitioner-appellant.

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Frank A. Silane, Condon & Forsyth LLP, Los Angeles, California, for the respondent-appellee. 

OPINION

RYMER, Circuit Judge:

When Maria Sanchez bought a ticket to fly from California

to Mexico, the airline collected a tourism tax for the Mexican

government from which she, and the class she would like to

represent, are exempt. She seeks relief for breach of contract

and the implied covenant of good faith and fair dealing, as

well as for unjust enrichment and money had and received

from Aerovias De Mexico S.A. De C.V., better known as

Aeromexico. The district court concluded that these claims

are preempted by the Airline Deregulation Act of 1978

(ADA) because they relate to the airline’s “price[s], route[s],

or service[s],” 49 U.S.C. § 41713(b)(1), and are not excepted

because Aeromexico had no contractual obligation to advise

passengers about the tax or their right to a refund. Accordingly, it granted judgment for Aeromexico. We have jurisdiction under 28 U.S.C. § 1291, and affirm.

I

The government of Mexico levies a tourism tax (sometimes

called the UK Tax, or DNI, after the Spanish-language abbreviation) on airline passengers traveling into Mexico on international flights. Passengers who are Mexican citizens or

residents of Mexico (holding an FM-2 or FM-3 visa), as well

as diplomats, children under the age of two, and those staying

in Mexico for less than twenty-four hours, are exempt. The

tax fluctuates with the rate of exchange, but is approximately

$22 per person.

Aeromexico is an airline operator organized under the laws

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of Mexico that is authorized to collect the tax from its passengers on behalf of Mexico. It includes the tax in the price of

tickets purchased in California for transportation to Mexico.

On July 25, 2006, Sanchez, who is a citizen and resident of

California, bought a roundtrip e-ticket from Aeromexico for

travel between Los Angeles and Guadalajara, Mexico. The

price was $428.43, of which $22.00 was attributable to the

tourism tax. Sanchez also is a Mexican citizen, which makes

her exempt from the tax.1

She filed a complaint in state court on behalf of herself and

a class of other passengers who paid the tourism tax as part

of the price of an Aeromexico ticket but were exempt. In it

she claims that Aeromexico breached contractual obligations

by improperly collecting the tax, and by failing to disclose

that the tourism tax was not due from exempt passengers and

that exempt passengers are entitled to a refund. Sanchez does

not aver that she identified herself as a Mexican citizen, either

when she purchased the ticket or checked in, or that she asked

Aeromexico to refund the tax.

Aeromexico removed the action to federal court pursuant to

the Class Action Fairness Act, 28 U.S.C. § 1332(d), then

moved to dismiss or alternatively, for summary judgment.

Sanchez sought a continuance for discovery pursuant to Federal Rule of Civil Procedure 56(f), but the court granted summary judgment without ruling on the application. 

1Sanchez’s dual-citizenship poses no jurisdictional problem. Generally,

“diversity jurisdiction does not encompass a foreign plaintiff suing foreign

defendants.” Nike, Inc. v. Comercial Iberica de Exclusivas Deportivas,

S.A., 20 F.3d 987, 991 (9th Cir. 1994). However, “[d]ual citizenship (even

when established) does not defeat jurisdiction.” Mutuelles Unies v. Kroll

& Linstrom, 957 F.2d 707, 711 (9th Cir. 1992). “[O]nly the American

nationality of the dual citizen should be recognized under 28 U.S.C.

§ 1332(a).” Sadat v. Mertes, 615 F.2d 1176, 1187 (7th Cir. 1980) (cited

in Mutuelles Unies, 957 F.2d at 711). 

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Sanchez timely appealed.2

II

[1] We first decide whether the summary judgment must be

reversed on account of the district court’s failure to take Sanchez’s Rule 56(f) application, or evidentiary objections, into

account. We agree with Sanchez that neither should have been

left hanging, but we disagree that reversal is required. The

error, if any, is harmless. Sanchez wanted to depose

Aeromexico’s Comptroller, who submitted a declaration

about how the tourism tax is collected, and to gather evidence

about the airline’s collection and remittance practices as well

as the passenger information it obtains. However, the procedures described in the Comptroller’s declaration were undisputed so objections to it are immaterial; and discovery into the

merits was not necessary to oppose Aeromexico’s motion that

it is entitled to judgment as a matter of law.

III

[2] Sanchez’s principal argument is that no federal law preempts her state law claims based on breach of contract. She

posits that by purchasing a ticket, she and Aeromexico

entered into a contract whereby Aeromexico became obliged

not to collect a tax that was not due from exempt passengers.

This is based on language on Aeromexico’s website that

states:

The user hereby accepts to be bound by the terms

and conditions of purchase imposed by AeroMexico

including, but not limited to, the payment of all

amounts when they fall due and the compliance of

all rules regarding the availability of tickets, products and services. The user shall remain fully liable

2Aeromexico’s position on appeal is supported by the brief of amicus

curiae International Air Transport Association. 

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for all evaluations, charges, rights, quotas and taxes

arising from the use of the Site.

Sanchez recognizes that the ADA has a preemption clause,

but maintains that it does not purport to prevent the states

from enforcing contracts between airlines and their passengers. The preemption clause in the Airline Deregulation Act

of 19783 provides that a “State . . . may not enact or enforce

a law, regulation, or other provision having the force and

effect of law related to a price, route, or service of an air carrier . . . .” 49 U.S.C. § 41713(b)(1). In Sanchez’s view, her

claims do not equate to state regulation of the “price, route,

or service of an air carrier” because the tax is a fee separate

and apart from the fare for air transportation that has no economic effect on “price.” 

When interpreting a preemption clause, we “must give

effect to [its] plain language unless there is good reason to

believe Congress intended the language to have some more

restrictive meaning.” Shaw v. Delta Air Lines, Inc., 463 U.S.

85, 97 (1983). Interpretation “does not occur in a contextual

vacuum,” but rather is informed by two presumptions: first,

“because the States are independent sovereigns in our federal

system, we have long presumed that Congress does not cavalierly pre-empt state-law causes of action”; and second “the

purpose of Congress is the ultimate touchstone in every preemption case.” See Medtronic, Inc. v. Lohr, 518 U.S. 470, 485

(1996) (quotation marks omitted); see also Charas v. Trans

World Airlines, Inc., 160 F.3d 1259, 1264-65 (9th Cir. 1998)

(en banc). 

3The ADA, originally located at 49 App. U.S.C. § 1301, et seq. was

recodified in 1994 at 49 U.S.C. § 40120, et seq. and renamed the Federal

Aviation Authority Authorization Act. We continue to refer to it as the

ADA. As originally enacted, the preemption clause applied to an air carrier’s “rates, routes, or services,” but Congress indicated that it intended the

change from “rates” to “prices” to have no substantive impact. See H.R.

Rep. No. 103-677, at 83 (1994) (Conf. Rep.), reprinted in 1994

U.S.C.C.A.N. 1715, 1755. 

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[3] The Supreme Court has addressed ADA preemption a

number of times, most notably in Morales v. Trans World Airlines, Inc., 504 U.S. 374 (1992); Am. Airlines, Inc. v. Wolens,

513 U.S. 219 (1995); and Rowe v. N.H. Motor Transp. Ass’n,

552 U.S. ___, 128 S. Ct. 989 (2008). From these cases we

know that Congress enacted the ADA to deregulate domestic

air transport, and included the preemption clause “[t]o ensure

that the States would not undo federal deregulation with regulation of their own.” Morales, 504 U.S. at 378. Also, the ADA

“was designed to promote maximum reliance on competitive

market forces.” Wolens, 513 U.S. at 230 (quotation marks

omitted); 49 U.S.C. § 40101(a)(6). 

[4] In Morales, the Court construed the text “related to” as

plainly meaning “ ‘to stand in some relation; to have bearing

or concern; to pertain; refer; to bring into association or connection with.’ ” 504 U.S. at 383 (quoting Black’s Law Dictionary 1158 (5th ed.1979)). “Related to” therefore “express[es]

a broad pre-emptive purpose.” Id. Thus, a state law or

enforcement action is “related to” a “price, route, or service”

if it “has a connection with or reference to” a “price, route, or

service,” see id. at 384-88 (citing Shaw, 463 U.S. at 97). At

the same time, even if a claim does relate to “price,” the ADA

preemption clause does not “shelter airlines from suits alleging no violation of state-imposed obligations, but seeking

recovery solely for the airline’s alleged breach of its own,

self-imposed undertakings.” Wolens, 513 U.S. at 228. In

Wolens, the Court focused on the rest of the text — “enact or

enforce any law” — in the context of a challenge to the airline’s retroactive changes in the terms and conditions of its

frequent flyer program. Although the plaintiffs’ claims there

did relate to “rates” and “services,” it held that the preemptive

scope of the ADA, as explicated in Morales, allows for court

enforcement of privately-ordered contract terms set by the

parties themselves. Id. at 226-33. 

[5] As in Wolens, we see no need to dwell on whether Sanchez’s claims relate to the air carrier’s “price.” The ticketed

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price included the tourism tax and other fees and surcharges.

As the First Circuit reasoned in a case raising similar issues,

“[i]t is freshman-year economics that higher prices mean

lower demand, and that consumers are sensitive to the full

price that they must pay, not just the portion of the price that

will stay in the seller’s coffers.” Buck v. Am. Airlines, Inc.,

476 F.3d 29, 36 (1st Cir. 2007). 

[6] The real question here is whether Aeromexico made a

contractual commitment to advise passengers about the Mexico tourism tax, not to collect it from exempt passengers, and

to refund that portion of the price attributable to the tax. If it

did, Sanchez’s claim could proceed under Wolens. To show

that Areomexico undertook to do these things, Sanchez points

only to the language on Aeromexico’s website. That language

cannot reasonably be read as imposing any such obligation on

Aeromexico, for it has to do with the user’s obligation to pay

all amounts when they fall due; it says nothing about

Aeromexico’s obligations. In particular, the website creates no

duty on the part of Aeromexico to advise Sanchez of her

rights with respect to the payment or non-payment of the

Mexican tourism tax under Mexican law or her rights to a

refund of the tax, or to collect the tax only from non-exempt

passengers. 

[7] There being no contractual obligation to advise passengers about Mexico’s tourism tax, or not to collect it from

those who are exempt, or to refund it to exempt passengers

from whom it was nevertheless collected, Sanchez’s claims

against Aeromexico may not proceed. Sanchez makes no discrete argument with respect to her claims for breach of the

implied covenant, unjust enrichment, or money had and

received, treating them all as stemming from her claim for

breach of contract. As no viable claim is stated on this theory,

the action was properly dismissed.

AFFIRMED. 

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KLEINFELD, Circuit Judge, dissenting:

I respectfully dissent. In my view, Sanchez’s claim is not

preempted, so we should reverse.

The error in the majority’s result derives from its error in

concluding that “the ticketed price included the tourism tax.”

It did not. As the majority apparently concedes, Sanchez’s

contract included the website language, “the user shall remain

fully liable for all . . . taxes . . . .”

1

 That means taxes attributable to her flight. 

The airline collected a $22 tax from every passenger bound

for Mexico, but it is undisputed that Mexico imposes this tax

only on non-Mexicans, not Mexicans. Sanchez is a Mexican

citizen, so Mexico does not impose the $22 tax on her trips

to Mexico. The entire class she wishes to represent is exempt

from the tax, so significant money is at stake. The airline collected the $22 as part of the $428.43 it charged to her credit

card. It did not refund it to her and has no system for doing

so. The record does not reveal whether the airline gave the

$22 to the Mexican government, which was not entitled to it,

or kept it for itself despite taking it under the premise of a tax

collected on behalf of the Mexican government. The implication of the airline’s argument appears to be that it gave the

$22 to the Mexican government. Sanchez sued for breach of

contract and restitution.

The statute preempts state law claims “related to a price,

1Here is the contractual language from AeroMexico’s website that we

construe: 

The user hereby accepts to be bound by the terms and conditions

of purchase imposed by AeroMexico including, but not limited

to, the payment of all amounts when they fall due and the compliance of all rules regarding the availability of tickets, products and

services. The user shall remain fully liable for all evaluations,

charges, rights, quotas, and taxes arising from the use of the Site.

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route, or service.”

2

 The Supreme Court held in American Airlines v. Wolens3

 that this preemption clause barred a state law

claim under a state consumer fraud statute challenging retroactive changes in a frequent flyer program, but that a state law

claim for breach of contract would not be preempted. In so

doing, it applied its earlier holding in Morales v. Trans World

Airlines4 that a comprehensive state scheme for regulating airline advertising of fares was preempted. The Court emphasized in both cases that its holding was consistent with the

position that the federal agencies charged with enforcing airline deregulation had taken. In our case, unlike those, the federal agencies have expressed no position. 

The state Consumer Fraud Act, preempted in Wolens,

addressed “unfair methods of competition.”

5

 Deregulation of

restraints on competition lies at the heart of the Airline

Deregulation Act. The Court pointed out in Wolens that the

same sort of state regulation of competitive practices was preempted in Morales. The Court explained that the reason why

the breach of contract claim was not preempted but the state

statutory claim was, was that the state statute “serves as a

means to guide and police the marketing practices of the airlines; [it] does not simply give effect to bargains offered by

the airlines and accepted by airline customers.”

6

 The federal

statute “could hardly have [been] intended to allow the States

to hobble competition.”

7

“We do not read the ADA’s preemption clause, however, to shelter airlines from suits alleging no

violation of state-imposed obligations, but seeking recovery

2

49 U.S.C. § 41713(b)(1). 

3

513 U.S. 219, 228 (1995). 

4

504 U.S. 374, 391 (1992). 

5Wolens, 513 U.S. at 227. 

6

Id. at 228. 

7

Id. (quoting the petitioner’s brief). 

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solely for the airline’s alleged breach of its own self-imposed

undertakings.”

8

Applying the Wolens language, our task is to distinguish

between a state-imposed obligation and one that the airline

imposed on itself by making an offer that a customer

accepted. Sanchez’s case is the latter sort. The airline offered

to fly her to Mexico and back for a stated fare plus taxes. She

agreed. Yet the airline charged her more than that. Though it

called the $22 a charge for taxes, it was not. She did not owe

the tax, and the airline did not owe the tax. This was no more

a legitimate charge for taxes than it would be for a store in

Fairbanks, Alaska (where there is no sales tax) to charge a

tourist the price of her souvenir plus 8.5% sales tax. 

The airline’s answer to this is not that Sanchez owed the

tax, or that it owed the tax for flying Sanchez. Instead, it

argues that it did not inquire so did not know which of its passengers were Mexican citizens, so it charged everybody tax

whether they owed it or not. That argument does not address

whether it breached its contract. If the deal is “the price is

$9.95,” and the shop does not give the customers a nickel

change from a ten dollar bill, the breach of contract does not

somehow disappear because the shopkeeper contends that it

would cost him more than a nickel to maintain a cash register,

staff, and supply of nickels, to pay customers their change.

In its discussion of economic theory, Wolens explains that

“maximum reliance of competitive market forces,” the point

of airline deregulation, “requires effective means to enforce

private agreements.”

9

 The traditional American method for

enforcing private agreements that are not kept is to sue the

parties that do not keep them. Sanchez is entitled to do that.

8

Id.

9

513 U.S. at 230. 

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It will not do to claim that anything affecting how much

money airlines make affects how much they have to charge to

stay in business, so any claim against them is a claim “related

to a price.” A First Circuit case in a different context suggests

that customers care about the bottom line, not the components, so an airline must reduce its fare if governments require

it to collect taxes, so refunding the tax portions of nonrefundable tickets would affect fares, so state law breach of contract

claims are preempted.10 That argument, at least as applied to

Sanchez’s claim, would go too far. In Wolens all the justices,

including the dissenters, agreed that state law personal injury

and wrongful death claims are not preempted,11 yet airline

costs and fares may well be affected by whether state law is

restrictive or expansive on tort damages. Ticket prices are

undoubtedly affected by whether passengers can sue airlines

for breach of contract, yet Wolens holds that they can. That

implies that a theoretical effect on price does not determine

whether a state law claim is preempted. We know from

Wolens that if the basis of the claim is breach of an undertaking the airline assumed for itself, the claim is not preempted.

That, not a consequential impact on what airlines charge, is

the test.

In our en banc decision in Charas v Trans World Airlines,

12

we held that the Airline Deregulation Act did not preempt

personal injury claims, even though the claims related in various ways to the extent and nature of the services provided by

flight attendants as adverse judgments might well affect the

sort of in-flight services airlines provided. We so held even

though the act preempts claims “relating to rates, routes or

service,”

13 explaining that the purpose of the preemption

10Buck v. American Airlines, Inc., 476 F.3d 29, 35-36 (1st Cir. 2007).

11Wolens, 513 U.S. at 234-35 (majority opinion); id. at 235 (Stevens, J.,

concurring in part and dissenting in part); id. at 242-43 (O’Connor, J., concurring in the judgment in part and dissenting in part). 

12160 F.3d 1259 (9th Cir. 1998) (en banc). 

1349 U.S.C. app. § 1305(a)(1) (1994) (emphasis added). The preemption

clause has since been amended to change “related to rates, routes, or serSANCHEZ v. AEROVIAS DE MEXICO 351

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clause was “to preempt only state laws and lawsuits that

would adversely affect the economic deregulation of the airlines and the forces of competition within the airline industry.”

14

State economic regulation was preempted, but not state law

personal injury and breach of contract claims. Charas requires

us to abjure the more expansive interpretation of the preemption clause that the majority applies. And certainly the recent

trend of Supreme Court decisions on federal preemption does

not bode well for needlessly expansive interpretations.15

About all there is to decide is whether Sanchez’s deal was

to pay the Mexican tax whether any tax was imposed by Mexico on her trip or not, or to pay whatever tax was owed. To

ask the question is to answer it. Her deal was to pay the fare

and to “remain liable for all . . . taxes.” Were we recklessly

indulgent, we might say this is ambiguous, maybe she means

to contract to pay whatever taxes there may be on anyone, not

just her. And maybe the tourist in Fairbanks wishes to pay the

sales taxes that would be due were she buying her souvenir

in San Francisco instead of Fairbanks. But probably not. We

need not even reach application of the doctrine of construing

the contract contra proferentem to resolve ambiguity in Sanchez’s favor, because the only sensible construction is that

Sanchez agreed to remain liable only for taxes attributable to

her. The tourist who hands the $9.95 objet d’art to the cashier

doubtless assumes, if she is from San Francisco, that it will

cost her around $10.80, and may well hand the cashier a $20

bill instead of a $10. But her acceptance of an obligation to

pay all taxes in addition to the marked price does not mean

that she agrees to pay taxes that the city and state do not

vice” to the current “related to a price, route, or service” and moved to 49

U.S.C. § 41713(b). This amendment does not change the meaning of the

statute. 

14Charas, 160 F.3d at 1261. 

15See, e.g., Wyeth v. Levine, 129 S.Ct. 1187 (March 4, 2009); Altria

Group v. Good, 129 S.Ct. 538 (Dec. 15, 2008). 

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charge and that she does not owe, so long as the shopkeeper

calls the extra money “tax.” She explicitly agrees to pay $9.95

plus whatever tax is due, and since none is due, she (and Sanchez) is entitled to all her change.

Sanchez was not liable for the Mexican tax, never was, and

could not “remain liable” for a tax she never owed. This was

a tax on non-Mexicans, she is Mexican, and whether the airline kept her money or made gift of it to the Mexican government (a gift, since the Mexican government did not impose

the $22 tax on Sanchez or on the airline for transporting Sanchez), Sanchez’s contract was not to pay this tax on people

other than herself. Nor does it matter whether the airline provides a procedure for customers to seek refunds of improperly

collected taxes. An airline is not like a government agency

enjoying a narrowly construed waiver of sovereign immunity.

An airline is like the Fairbanks shopkeeper, bound by contract

law to charge the customer the marked price plus any tax, and

not a higher price in the guise of a tax not due. Sanchez is

entitled to sue for breach of contract and restitution of her

money under Morales, Wolens, and Charas. 

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