In the

United States Court of Appeals

For the Seventh Circuit

No. 00-1110

United Airlines, Inc.,

Plaintiff, Counterdefendant-Appellee,

v.

Mesa Airlines, Inc., and

WestAir Commuter Airlines, Inc.,

Defendants, Counterplaintiffs-Appellants,

v.

SkyWest Airlines, Inc.,

Third-Party Defendant-Appellee.

Appeal from the United States District Court

for the Northern District of Illinois, Eastern Division.

No. 97 C 4455--Elaine E. Bucklo, Judge.

Argued May 10, 2000--Decided July 5, 2000

 Before Easterbrook, Ripple, and Rovner, Circuit

Judges.

 Easterbrook, Circuit Judge. Like other major air

carriers, United has entered into code-sharing

agreements with regional airlines, which fly

smaller planes for shorter distances to lesspopulated destinations. The major carrier permits

the commuter carrier to use its service marks and

logos for flights to and from its hub airports,

and it lists the connecting flights in its

computer reservation system under its name,

carrier code, and flight numbers, such as "UA

2345" (hence the term "code-share," see 14 C.F.R.

sec.257(c)). The commuter carrier also receives

part of the revenue from through traffic that

uses both carriers’ facilities. In exchange, the

commuter carrier is subject to substantial

direction: it tailors its schedules so that they

mesh with the major carrier’s arrivals and

departures at the hub, provides planes

appropriate to the traffic generated by the major

carrier, and agrees to accept revenue that the

major carrier controls. (Contracts set the

percentage of through rates that the commuter
carrier receives, but the major carrier sets the

total fares, and thus determines the commuter

carriers’ revenues.) Major carriers could use

their discretion to make commuter carriers’

operations unprofitable, but that would hurt the

majors’ business by drying up local service and

driving passengers to other carriers that provide

better connecting flights. Market forces thus

constrain the exercise of contractual powers.

 Mesa Airlines and WestAir Commuter Airlines, two

regional airlines that had code-share

arrangements with United, believe that courts as

well as markets should constrain the major

carriers’ conduct. Mesa conducted regional

operations to and from Denver, and WestAir to and

from Los Angeles, San Francisco, Portland, and

Seattle. Mesa acquired WestAir as a subsidiary in

1992. In 1995 United extended Mesa’s contractual

term for ten years and to additional cities; at

the same time, Mesa purchased a number of planes

from United. Mesa believes that by paying (in its

view, overpaying) for these aircraft it acquired

rights beyond those of other commuter carriers;

it contends that United became its "partner"

rather than simply the opposite party to an

arms’-length contract. Relations soured in June

1997 when United replaced WestAir with SkyWest

Airlines on eight routes out of Los Angeles.

After WestAir protested, United filed this suit

under the diversity jurisdiction seeking a

declaratory judgment that the WestAir-United

contract permitted United to make these changes.

WestAir abandoned its remaining commuter routes

in May 1998. Meanwhile Mesa and United reached

impasse on financial arrangements at Denver. Mesa

contended that United was keeping for itself too

much of the revenues on through routes and

charging excessively for space and baggagehandling services at Denver International

Airport, which opened early in 1995. Mesa

contends that it began to incur losses of $1

million per month, to which it responded by

eliminating service to some local markets. United

insisted that Mesa serve all regional markets to

which it had exclusive rights under the extended

agreement; after Mesa refused, United terminated

the agreement in January 1998 and amended its

suit by seeking a declaratory judgment that this

step, too, was proper, and damages for Mesa’s

breach.

 Mesa and WestAir filed counterclaims against

United and added SkyWest as a third-party

defendant. They seek damages on four theories.

First, Mesa and WestAir contend that United broke

its contracts; these claims are mirror images of

United’s. Second, Mesa and WestAir contend that

SkyWest is liable for tortiously interfering with

the contract between United and WestAir at Los
Angeles. They contend that SkyWest inveigled

United to switch regional carriers by offering

two gates at Los Angeles International Airport--

gates that United coveted, an offer that WestAir

could not match. Third, Mesa and WestAir allege

that United violated the fiduciary duties that it

owed them as their partner. Fourth, Mesa contends

that United fraudulently induced it to purchase

the airplanes and enter into the extension.

Claims 2, 3, and 4 seek punitive as well as

compensatory damages. United and SkyWest

prevailed on the pleadings after the district

court concluded that these three claims are

preempted by sec.105(a)(1) of the Airline

Deregulation Act of 1978. As recodified in 1994,

this statute reads:

Except as provided in this subsection, a State,

political subdivision of a State, or political

authority of at least 2 States 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 that

may provide air transportation under this

subpart.

49 U.S.C. sec.41713(b)(1). State common law

counts as an "other provision having the force

and effect of law" for purposes of this statute.

See American Airlines, Inc. v. Wolens, 513 U.S.

219, 233 n.8 (1995); Morales v. Trans World

Airlines, Inc., 504 U.S. 374, 388 (1992). See

also Medtronic, Inc. v. Lohr, 518 U.S. 470, 502-

03 (1996) (plurality opinion), id. at 503-05

(Breyer, J., concurring), id., at 509-12

(O’Connor, J., concurring in part and dissenting

in part) (characterizing tort remedies as

regulatory provisions for purposes of preemption

clauses in another statute). A broad clause

saving common-law remedies might overcome the

understanding that judgments in tort suits should

be treated like state laws and regulations to the

extent they have the same practical effect as

laws and regulations, see Geier v. American Honda

Motor Co., 120 S. Ct. 1913, 1918 (2000); cf.

Silkwood v. Kerr-McGee Corp., 464 U.S. 238, 249-

56 (1984); but the savings clause in the Airline

Deregulation Act says only that "[a] remedy under

this part is in addition to any other remedies

provided by law." 49 U.S.C. sec.40120(c). This

does not carve any domain from the scope of

sec.105(a)(1). The district court concluded that

all three tort claims relate to an air carrier’s

routes--they concern which carriers fly to which

destinations from which airports, and which

carriers provide service (and at what rates) on

through or joint routes--and therefore are

preempted. See Travel All Over the World, Inc. v.

Saudi Arabia, 73 F.3d 1423, 1430-35 (7th Cir.

1996). The district judge certified the order for
interlocutory appeal under 28 U.S.C. sec.1292(b).

We agreed to hear the appeal; proceedings on both

sides’ contract claims (which under Wolens are

not preempted) have stalled pending its

resolution.

 One line of argument might have been that

although the claims at issue may be "related to

a . . . route . . . of an air carrier" in

interstate commerce, Mesa and WestAir do not rely

on any "law, regulation, or other provision

having the force and effect of law related to a

. . . route . . . of an air carrier" (emphasis

added). Section 105(a)(1) might have been read to

limit preemption to a law, regulation, or commonlaw doctrine directed to the air transportation

industry, as in Morales, which held that

sec.105(a)(1) precludes efforts by state

attorneys general to promulgate a special code of

conduct for advertisements by air carriers. On

this understanding, laws of general applicability

would not be preempted just because the subject

of a particular case was air transportation. Tort

law is not industry-specific; Mesa and WestAir

want to use the same principles that apply to

disputes about computer software, see J.D.

Edwards & Co. v. Podany, 168 F.3d 1020 (7th Cir.

1999) (Illinois law), and employment, see Farr v.

Gruber, 950 F.2d 399 (7th Cir. 1991) (Wisconsin

law). Wolens read sec.105(a)(1) more broadly,

however. Participants in a carrier’s frequent

flyer program filed suit when the carrier changed

the program’s rules. One claim arose under a

state’s consumer fraud act, a statute of general

applicability. Nonetheless, the Court held,

sec.105(a)(1) preempts application of that law to

frequent flyer programs, which affect rates

because they are discounts. 513 U.S. at 226-28.

 Because Wolens held general consumer-fraud law

preempted, Mesa and WestAir have a big problem.

One solution, as they see it, lies in recent

decisions under ERISA, which preempts state laws

that "relate to" its subject. Both Morales and

Wolens relied on doctrine developed under ERISA,

and at the time the Court’s opinions tended to

read the ERISA language broadly. E.g., Morales, 504

U.S. at 383-84, relying on Shaw v. Delta Air

Lines, Inc., 463 U.S. 85 (1983). Times have

changed for pension and welfare plans. More

recent decisions hold that state laws of general

applicability are not preempted just because they

have economic effects on pension or welfare

plans. See, e.g., New York State Conference of

Blue Cross & Blue Shield Plans v. Travelers

Insurance Co., 514 U.S. 645 (1995); California

Division of Labor Standards Enforcement v.

Dillingham Construction, N.A., Inc., 519 U.S. 316

(1997); De Buono v. NYSA-ILA Medical and Clinical

Services Fund, 520 U.S. 806 (1997). Mesa and
WestAir ask us to follow this approach and

curtail the preemptive effect of sec.105(a)(1)

accordingly. But if developments in pension law

have undercut holdings in air-transportation law,

it is for the Supreme Court itself to make the

adjustment. Our marching orders are clear: follow

decisions until the Supreme Court overrules them.

State Oil Co. v. Khan, 522 U.S. 3, 20 (1997);

Rodriguez de Quijas v. Shearson/American Express,

Inc., 490 U.S. 477, 484 (1989).

 Opinions such as Taj Mahal Travel, Inc. v.

Delta Airlines Inc., 164 F.3d 186, 195 (3d Cir.

1998), which say that state law is preempted by

sec.105(a)(1) only if it "frustrate[s]

Congressional intent [or] impose[s] a state

utility-like regulation on the airlines", cannot

be reconciled with Wolens (the general anti-fraud

statute held preempted there was a long distance

from "utility-like regulation"), and we doubt

that this position could be justified by the

latest ERISA cases, even if we were free (which we

are not) to prefer decisions such as De Buono and

Dillingham over Wolens and Morales. One subject

of UNUM Life Insurance Co. v. Ward, 526 U.S. 358

(1999), the Court’s most recent encounter with

preemption under ERISA, was whether a general

doctrine of state agency law could be used to

override the express terms of a welfare-benefit

plan. The Court answered "no," see 526 U.S. at

377-79, and this conclusion, like Wolens,

necessarily means that a claim under, or

application of, state law may be preempted as

related to the federal topic, even though the

rule in question does not single out pension or

welfare plans--or air carriers’ rates, routes, or

services. Our opinion in Travel All Over the

World used the approach established by Wolens and

Morales, concluding that a claim is preempted if

either the state rule expressly refers to air

carriers’ rates, routes, or services, or

application of the state’s rule would have "a

significant economic effect upon them" (73 F.3d

at 1432); nothing any other circuit has said

about the subject persuades us to alter course.

 The possibility that recent ERISA decisions would

lead us to abandon Travel All Over the World and

follow Taj Mahal Travel (which declined to follow

this circuit’s position, see 164 F.3d at 193-95)

is what induced the district court to certify its

order for interlocutory appeal. But an appeal

under sec.1292(b) brings up the whole certified

order, Yamaha Motor Corp. v. Calhoun, 516 U.S.

199, 204-05 (1996); Edwardsville National Bank &

Trust Co. v. Marion Laboratories, Inc., 808 F.2d

648, 650-51 (7th Cir. 1987), rather than just the

legal issue that led to certification. Thus we

must tackle the regional carriers’ contention

that their claims are sound, despite Travel All
Over the World, for the same reason the Supreme

Court held in Wolens that contract claims are not

preempted: sec.105(a)(1) is designed to replace

regulation with voluntary agreements, see 513

U.S. at 228-35, and the fact that states

sometimes apply the label "tort" to common-law

doctrines that implement private agreements

cannot doom their claims, the carriers insist.

This is unimpeachable as a principle, but does it

save these carriers’ claims? Wolens tells us to

distinguish

between what the State dictates and what the

airline itself undertakes[, which] confines

courts . . . to the parties’ bargain, with no

enlargement or enhancement based on state laws or

policies external to the agreement.

513 U.S. at 233 (footnote omitted). It is awfully

hard to understand the regional carriers’ claims

as efforts to enforce "the parties’ bargain, with

no enlargement or enhancement based on state laws

or policies external to the agreement."

 Let us start with Mesa’s contention that its

purchase of aircraft, and the extension of its

code-sharing agreement with United at Denver, are

the result of fraudulent inducement. This is not

by any stretch of the imagination a request to

enforce the parties’ bargains; it is a plea for

the court to replace those bargains with

something else. Doubtless the institution of

contract depends on truthfulness; the staunchest

defenders of private institutions and limited

government believe that public bodies must

enforce rules against force and fraud. E.g.,

Richard A. Epstein, Principles for a Free Society

82-85 (1998). When all a state does is use these

rules to determine whether agreement was reached,

or whether instead one party acted under duress,

it transgresses no federal rule. But when the

state begins to change the parties’ financial

arrangements, as Mesa demands, it is supplying

external norms, a process that the national

government has reserved to itself in the air

transportation business. Mesa does not want to

cancel the agreement and restore the status quo

as of 1994. It wants damages. Wolens held that

sec.105(a)(1) preempts state anti-fraud statutes

as applied to air carriers’ rates, routes, and

services, 513 U.S. at 227-28; just so with

common-law rules against fraudulent inducement,

which differs from a contention that one party

knuckled under to a show of force by the other.

And as in Wolens this conclusion does not leave

regional air carriers at the mercy of

unscrupulous major carriers (or the reverse); the

Secretary of Transportation has been charged with

investigating claims of deceit in the air

transportation business and has the power to
issue remedial orders (including monetary

penalties) against air carriers that resort to

fraudulent practices. 49 U.S.C. sec.sec. 41712,

46301; Wolens, 513 U.S. at 228 n.4; Morales, 504

U.S. at 379, 390-91.

 Next consider the contention of both Mesa and

WestAir that fiduciary principles drawn from

partnership law should be applied. Partnership is

contractual; partners can and do specify their

relations in detail, and the norms of partnership

law are just background rules that cover a

subject when contracts do not. In this sense

partnership and fiduciary rules are a part of

contract law, cf. John H. Langbein, The

Contractarian Basis of the Law of Trusts, 105

Yale L.J. 625 (1995). But Mesa and WestAir assert

that the law of partnerships imposes on United

duties that override the contract. For example,

United contends that its contracts permit it to

regulate the destinations and flight frequency of

the code-share regional carriers; Mesa and

WestAir deny this, and if they are right then

they will prevail under their contracts. But they

contend (under their partnership theory) that

they prevail even if United had the contractual

power to do what it did. According to Mesa and

WestAir, United had a fiduciary obligation to use

its contractual powers for their economic

benefit, rather than for its own, and that they

are entitled to punitive damages because (in the

language of their brief) United attempted "to

terminate Mesa’s rights and interests in the

Partner Agreement for its own benefit and to

Mesa’s detriment". Illinois permits one party to

a contract to use for its own benefit the rights

and powers it has negotiated. See L.A.P.D., Inc.

v. General Electric Corp., 132 F.3d 402 (7th Cir.

1997); Echo, Inc. v. Whitson Co., 121 F.3d 1099

(7th Cir. 1997); Digital Equipment Corp. v. Uniq

Digital Technologies, Inc., 73 F.3d 756 (7th Cir.

1996); Industrial Representatives, Inc. v. CP

Clare Corp., 74 F.3d 128 (7th Cir. 1996);

Continental Bank, N.A. v. Everett, 964 F.2d 701

(7th Cir. 1992); Jespersen v. Minnesota Mining &

Mfg. Co., 183 Ill. 2d 290, 700 N.E.2d 1014

(1998); Hentze v. Unverfehrt, 237 Ill. App. 3d

606, 610-11, 604 N.E.2d 536, 539 (5th Dist.

1992). Only rules external to the parties’

bargain could defeat this, but sec.105(a)(1) in

turn defeats external rules. (We are skeptical

that the word "partner" on the cover sheet of a

complex contract that characterizes the regional

carriers as "independent contractors" would bring

the law of partnership into play in the first

place. Businesses often refer to suppliers,

customers, and producers of complementary

products coloquially as "our partners" without

summoning up fiduciary duties. See Vaughn v.

General Foods Corp., 797 F.2d 1403 (7th Cir.
1986). A consumer who sees the advertising slogan

"Partners in Progress" would not assume that he

had become a "partner" of the producer, which

then must set prices for the consumer’s benefit.

But we need not pursue this point, given

sec.105(a)(1).)

 Finally, consider the claim that SkyWest

tortiously interfered with the contract WestAir

had with United. Here, too, Mesa and WestAir rely

on principles outside the parties’ agreements--

for they have reached no agreement at all with

SkyWest. Why can’t SkyWest offer United gates at

Los Angeles International Airport in exchange for

some code-share business at LAX? That question

can’t be answered by reference to a contract

between SkyWest and any other party to the case.

Even the appearance of a link between the claim

against SkyWest and the contract claim against

United may be illusory, because most states

(including Illinois) treat as tortious some

interferences with prospective economic

advantage, even if the interference does not

cause anyone to break a promise. Suppose, for

example, that United’s contract with WestAir

contained a clause entitling United to end the

business relation for any or no reason. Then

WestAir could not sue United--but it still could

prevail in tort against SkyWest, if the sort of

inducement SkyWest offered, or the motive for

SkyWest’s action, ran afoul of a state’s public

policy. See, e.g., J.D. Edwards, supra; Jeppesen

v. Rust, 8 F.3d 1235 (7th Cir. 1993); Poulos v.

Lutheran Social Services of Illinois, Inc., 728

N.E.2d 547 (Ill. App. 1st Dist. 2000); Strosberg

v. Brauvin Realty Services, Inc., 295 Ill. App.

3d 17, 33, 691 N.E.2d 834, 845 (1st Dist. 1998);

Reuben H. Donnelley Corp. v. Brauer, 275 Ill.

App. 3d 300, 312-13, 655 N.E.2d 1162, 1172 (1st

Dist. 1995). No surprise, then, that courts

regularly treat claims of tortious interference

with contract (or interference with economic

advantage) as preempted in labor law, given how

readily these claims may be used to get around

contracts (or limits on the means of enforcing

contracts). See, e.g., Lingle v. Norge Division

of Magic Chef, Inc., 823 F.2d 1031, 1047, 1049

(7th Cir. 1987) (en banc), reversed on other

grounds, 486 U.S. 399 (1988); Kimbro v. Pepsico,

Inc., No. 99-2823 (7th Cir. June 2, 2000).

Likewise they are preempted when they would have

a significant effect on air carriers’ rates,

routes, or services--as these claims, which are

all about WestAir’s (and SkyWest’s) routes and

divisions of revenues, assuredly do whether or

not they would lead to punitive damages. Cf.

Speakers of Sport, Inc. v. ProServ, Inc., 178

F.3d 862 (7th Cir. 1999) (illustrating how the

tort of interference with economic advantage may

be used to suppress competition, which would
undercut the Airline Deregulation Act of 1978).

 Mesa and WestAir protest that none of their

claims offends the goals and policies that

Congress likely aimed at in 1978. One could have

said the same (indeed, Justice Stevens did say

the same) about the regulations and statutes held

preempted in Morales and Wolens. But Justice

Stevens was in dissent; the majority concluded

that the statute applies according to its text,

rather than according to goals and motives

imputed to legislators. For what it may be worth,

however, we are inclined to think that allowing

these claims to proceed could gum up the works.

Mesa offered service to multiple states from

Denver, service United used to construct through

rates and routes for travel across many

jurisdictions. So too for regional service out of

Los Angeles, which reached Oregon and Washington,

and affected through travel to and from other

states and nations. Yet Mesa and WestAir want us

to hold that the tort law of Illinois determines

(for example) what inducements SkyWest may offer

United to reassign routes among regional carriers

in the southwest, and how much Mesa should

receive for its portion of through rates on

service from Miami through Denver to Jackson,

Wyoming. Illinois is United’s headquarters, and

the parties agreed that their contracts would be

interpreted under Illinois law, but as a source

of tort law Illinois has no plausible claim--and

for that matter no other state has much of a

claim either. Basic rules for inter-carrier

transactions may come from voluntary agreements

or from the Department of Transportation;

applying the conflicting tort principles of 50

different states to these interstate and

international transactions would make a mess of

things. Preemption under sec.105(a)(1) enables a

system of private law, with nationally uniform

overrides, to flourish.

Affirmed