UNITE D STATE S O FAMERIC A DEPARTMEN T O FTRANSPORTATIO N OFFIC E O FTH E SECRETAR Y WASHINGTON , D.C . Issue db y th e Departmen t of Transportatio n o n th e 23" " day of

January , 201 2 Orde r 2012-1-1 8 Served : January24 , 201 2

HAWAI I INSPECTIO N FE E PROCEEDIN G Docke t DOT-OST-2010-024 3

DECLARATOR Y ORDE R Th e Stat e of

Hawai i (Hawaii ) inspect s incomin g freight , fro mboth foreig n an ddomesti c sources , i n orde r t o protec t

it s natura l environmen t

fro minvasiv e plan t

an danima l species . Unti l recently , Hawai i itsel f

absorbe dth e cos t

o f thi s program . In 2008 , Hawai i enacte dastatut e imposin g afe e o n ai r

an dmaritim e shipper s i n orde r t o fundthes e inspections . Unde r th e statute , ai r an docea n carrier s ar e responsibl e for billin g shipper s for

th e fee , collectin g payment , an d remittin g th e fund s t o Hawaii . I n 2010 , Hawai i amende dth e statut e t o impos e fine s o n carrier s that fai l t o compl y wit

h thes e obligations . O n Jul y 28 , 2010 , th e Ai r Transport

Association , no w know n a s Airline s for Americ a(Petitioner ) petitione dth e Departmen t for adeclaratory rulin g that

th e amende dHawaiia n statut e a s applie d t o ai r carrier s i s preempte db y th e Airlin e Deregulatio n Ac t (ADA) , 4 9 U.S.C . § 41713 , an dth e Anti-Hea dTax Ac t

(AHTA) , 4 9 U.S.C . § 40116 . O n Septembe r

29 , 2010 , w e issue da

n orde r institutin g aproceedin g t o determin e th e lawfulnes s o f th e Hawaiian statut e a s applie dt o ai r carriers . W e deferre darulin g o n th e petitio n for a declaratory orde r

pendin g ou r

receip t an dconsideratio n of

comment s t o th e institutin g order , repl y comments , an dsupplementa l comments . Orde r 2010-9-2 9 (serve dSeptembe r 30 , 2010) . Ou r Institutin g Orde r

state dtha t

w e planne dt o rul e o n th e followin g issues : 1 . Whethe r

th e Hawai i Plan t

Quarantin e La w a s amended , Hawaiia n Revise dStatute s § 150A (Ac t

173) , an daccompanyin g progra mrequirement s are preempte db y th e AD A preemptio n provision , 4 9 U.S.C . § 41713 ; and , 2 . Whethe r

th e Hawai i Plan t

Quarantin e La w a s amended , Hawaiia n Revise dStatute s § 150A (Ac t

173) , an daccompanyin g progra mrequirement s are preempte db y th e AHTA , 4 9 U.S.C . §40116 .Th e partie s submitte dopenin g comments , repl y comments , an dsupplementa l submissions .

Othe r intereste dpartie s submitte dcomment s a s well . In total , excludin g th e petitio n an dou r institutm g order , w e receive d2 6 submission s t o th e docke t (DOT-OST-2010-0243) , al l o f whic h ar e publicl y availabl e a t

www.regulations.gov . SUMMAR Y O FDECISIO N W e hav e carefull y considere dth e argument s o f th e partie s a s t o whethe r

o r not th e Hawai i Plan t Quarantin e La w a s amended , Hawaiia n Revise dStatute s §150 A (Ac t 173) , an daccompanyin g progra mrequkement s (hereinafte r th e "Inspectio n Fe e Statute" ) a s applie dt o ai r carrier s i s preempte db y th e AD A an dAHTA . W e fin dthat

th e Inspectio n Fe e Statut e a s applie dt o ai r carrier s (includin g a s t o th e inspectio n fe e an dpotentia l fines ) i s preempte db y th e AD A imde r 4 9 U.S.C . § 41713 . Unde r applicabl e law , th e Inspectio n Fe e Statut e i s relate dt o ai r carrie r services , an dthu s preempte db y th e ADA , becaus e i t directl y regulate s ai r

carrier s b y commandin g ai r carrier s t o conformthei r servic e o f shippin g freight

b y an - transportatio n i n way s not dictate db y th e marke t

t o bill , collect , an dremi t fee s o n behal f

o f it s shippe r

customers . W e als o fin dtha t th e Inspectio n Fe e Statut e i s preempte d b y th e AD A becaus e i t

i s relate dt o ai r

carrie r prices . Th e Inspectio n Fe e Statut e indkectl y (i f not directly ) regulate s ho w ai r carrier s ar e likel y t o pric e th e shipmen t o f freight t o Hawai i b y ai r transportation , a s wel l a s ho w ai r carrier s collec t

thos e prices . Th e Inspectio n Fe e Statut e impose s cost s o n ai r

carrier s tha t

ar e likel y t o b e recovere db y increase dpricin g for ai r transportation . W e als o fin dtha t

that th e Inspectio n Fe e Statut e a s applie dt o ai r carrier s (includin g a s t o th e inspectio n fe e an dpotential fines ) i s preempte db y th e AHTA , 4 9 U.S.C . § 40116 , becaus e Hawai i may not

lev y o r collec t afe e o r othe r charge , directl y o r

indirectly , o n th e sal e o f

"ai r transportation, " ater mwhic h Congres s define di n th e statut e a s includin g th e transportatio n o f "property, " atermwhic h include s th e ai r transportatio n o f

freight here . W e ar e very sensitiv e t o Hawaii' s effort s t o comba t invasiv e specie s an drecogniz e Hawaii' s nee dt o protec t

it s ecosystem . Ou r

decisio n i s basedo n th e recor dbefor e us . W e tak e n o positio n o n othe r

way s Hawai i may structur e it s inspectio n progra mthat may not b e preempte d unde r th e AD A o r

AHTA . Bu t

w e are responsibl e fo r

administerin g th e federal statute s applicabl e t o th e airlin e industry , includin g th e AD A preemptio n provisio n an dth e AHTA . An d w e hav e conclude dtha t

th e way Hawai i ha s structure dit s progra mher e a s t o ai r carrier s i s preempte dunde r

both statutes .

### BACKGROUN D Factua l Introductio n Hawai i ha s lon g engage di n inspectio n an dquarantin e program s t o fen dof f th e introductio n o f invasiv e specie s o f

man y varieties . See , e.g. , Willia mC . Look , Hawaii' s Plan t Quarantin e Servic e - Past , Present , an dFuture , Proceedings , Hawaiia n Entomologica l Society , Vol . XVIII , No. l (Augus t

1962) . Hawai i i s vulnerabl e t o invasiv e specie s not onl y fro mforeig n countrie s but fro mth e mainlan dUnite dStates . Fo r that reason , Hawai i maintain s it s ow n inspectio n progra mindependen t

o f th e Federa l government , whic h scrutinize s freight fro mforeig n source s throug h th e U.S . Departmen t o f Agricultur e Anima l Plan t an dHealth Inspectio n Servic e (APHIS). ' Hawaii' s inspectio n progra mi s administere db y th e Hawai i Departmen t o f Agricultur e (HDOA). ^ A s note dabove , imti l recentl y Hawai i fimde dthes e service s fro mgenera l revenues . I n 2008 , th e Hawai i Stat e Legislatur e enacte dH.B . 2843 , no w codifie dat Hawai i Revise dStatute s Chapte r 150 A (effectiv e Augus t 1 , 2008) . I n tha t

legislation , Hawai i impose dafe e o f 5 0 cents (no w 7 5 cents)' ' pe r

thousan dpound s o f

freight (ne t weight ) o n "th e perso n responsibl e for payin g th e freight charges " (i.e. , th e shippe r i n mos t instances ) t o th e "transportatio n company " (i.e. , th e carrie r b y ai r an dwater) . "Freight " i s define di n th e Inspectio n Fe e Statut e a s "nonpassenge r goods , cargo , o r

lading , transporte dfor

pay. " Haw . Rev . Stat . § 150A-2.' ^

' Th

e recor ddemonstrate s tha

t APHIS doe s not

presentl y inspect fo r the sam e inboun dpests a s Hawaii , an

d Hawaii an dAPHIS presend

y have differen

t areas o f inspection responsibility . Th e Federa l governmen

t als o inspects domestic freigh

t outboun dfro mHawai i t o th e continenta

l UnitedStates . ^ Stat

e inspectors identif

y shipments whic

h shouldb e inspectedfo

r possibl e invasive specie s basedupo n a revie w o f ai r waybills . See Hawai

i Openin g Comments , Exhibit

1 , Decl . o f Domingo Cravalho , Complianc e Section Chief , Plan t Quarantine Branc

h (State) , HDOA , a

t f 6 . Ai r waybill s ar

e the contracts o

f carriag e an

dcontain the essentia l terms betwee

n the shippe

r an dth e ai r carrie r i n connection wit

h shippin g freight b y ai r transportation . The

y ar e widel y use di n the industry . "If

ashippe r send s the Stat

e amanifest

of the shipment , Stat

e staff.. . ar

e abl e t o predetermine , subjec

t t o an y change s promptedb

y avisua l inspection o

f the carg o a

t unloading , whic

h containers wil l b e inspected . Id . f

9 . Hawai i doe s no t inspect al l containers fo

r inspection . Id . f

10 . Stat e inspectors prioritiz e whic h waybill s an

dshipments t

o inspect , an

dcarrie r carg o unloading personne

l "ofte n assis t the Stat e inspectors wit h identifyin

g hig h ris k o r suspect containers tha

t shoul db e inspected. " Id . f

H 11 , 12 . ^ Durin

g th e pendency o

f thi s proceeding , o

n Januar y 26 , 2011 , the Hawai

i Hous e o f Representative s introducedH.B . 865 , proposing t o amen dth e Inspection Fee Statut

e t o increas e the fe

e from5 0 cent s fo

r ever y 1,00 0 pound s o

f freight t o 7 5 cent s fo

r ever y 1,00 0 pound s o

f freight. O n Ma y 5 , 2011 , th

e Governo r o f Hawaii signedH.B . 865 int

o law . H.B . 86

5 too k effec t upo n approval , an

dth e remainde r o f thi s orde r wil l refe r t o th e no w curren t 7 5 cen t pe r 1,00 0 pound s o

f freight fe e se t fort h i n the statute .

' ^ Hawai

i state s tha t "U.S . mai l i s generall

y not subject t o inspection unde

r federa l la w an di s no t subject t o stat e agricultura

l inspection an

dth e ne w fee. " See Pet . Openin

g Comments , Attachmen

t D , Sept . 12,200 8 Lette

r o f Sandr aKunimoto , Chairperson , Boar do f Agriculture , Stat

e o f Hawaii , t o th e Airline Committee o

f Hawaii , a t 2 .A s structured , th e Inspectio n Fe e Statut e provide s tha t ai r an docea n carrier s ar e themselve s not liabl e for an y fees . However , paragrap h (a ) o f th e statut e specificall y provide s tha t th e carrier s ar e require dt o bill , collec t an dremi t

th e fe e withi n specifi c tim e periods: ^ (a ) Ther e i s impose dafe e for th e inspection , quarantine , an deradicatio n of invasiv e specie s containe di n an y freight , includin g marin e commercia l containe r shipment , ai r

freight, o r

an y othe r mean s o f transportin g freight , foreig n o r domestic , bu t

not includin g aggregat e bul k freight, cemen t

bul k freight , coa l bul k freight , o r liqui dbul k

freight , tha t

i s brough t

int o th e State . The transportatio n compan y shal l bil l th e fe e t o th e perso n responsibl e for payin g th e freight

charge s t o th e transportatio n company withi n fifteen day s o f th e delivery o f

th e freight . Th e fe e shal l b e pai db y th e perso n responsibl e for payin g th e freight

charge s t o th e transportatio n compan y withi n forty-fiv e day s o f receip t o f th e bill . Th e transportatio n compan y shal l collec t th e fe e fromth e perso n responsibl e an d forwar dth e paymen t

t o th e departmen t

a t th e por t o f disembarkatio n withi n forty

fiv e day s o f

receip t o f th e fee ; provide dtha t

th e transportatio n compan y shal l not b e liabl e for

an y fe e tha t

i s not pai db y th e perso n responsibl e for payin g th e freight charge s t o th e transportatio n company . Th e departmen t shal l deposi t

th e fe e int o th e pes t

inspection , quarantine , an deradicatio n fundunde r sectio n 150A

4.5. ^ (b ) Th e fe e shal l b e assesse dan dcollecte do n th e ne t weigh t o f th e importe d freight compute do n th e basi s o f 7 5 cent s for

every on e thousan dpoimd s o f freight brough t int o th e State , o r

part thereof. Haw . Rev . Stat . § 150A-5. 3 (Emphasi s added). ^ Hawai i state s tha t "the entit y responsible fo

r collecting th

e fe e i s th e entit y tha t bring s th e freight int o Hawaii . Ai

r freight consolidator s an

dtransportation companie s ar e free t o wor k out thei r ow n financia l arrangements i

f the y fee l the nee dt o mak e adjustments becaus e o

f the fee . Thes e ar

e matters outsid

e the HDOA. " See Pet . Openin

g Comments , Attachmen

t D , Sept . 12 , 200 8 Lette

r o f Sandr aKunimoto , Chairperson , Boar do f Agriculture , Stat

e o f Hawaii , t o th e Airline Committee o

f Hawaii , a t 2 . I n Jul y 7 , 201 0 guidanc e fromHDOA , Hawaii als o advise s tha

t "[ajlong wit

h the fe e payments , awritte

n statemen t shoul db e providedt

o HDOA-PQ tha

t reflects the collection perio ddates ; por t o f entt y fo r th e freight fo r whic h the fee s wer

e collected ; ne

t weigh t o f the freight fo r whic h eac h fe e wa s collected , b

y flight/voyage ; tota

l ne t weigh t o f al l freight reportedfo r the collectio n period ; an ddie tota l fe e amoun t paid. " See Pet . Fo

r Decl . Orde

r a t Exhibit . 2 , Jul

y 7 , 201 0 Lette

r o f Sandr a Kunimoto , Chairperson , Boar dof Agriculture , Stat

e o f Hawaii , to Transportation Companies , "Requirements o f Ac t 173 , SL H 201 0 - Relating t

o Agricultura

l Inspections, " a

t 3 . Hawai i has established"in the stat e freasury the pes t

inspection , quarantine , an

deradication fund. " Haw . Rev . Stat . § 150A-4.5 . Th

e monie s depositedint

o thi s fun dinclude , amon

g others , "[s]ervic e fees , charges , an d penaltie s collectedunde

r section 150A-5.3. " Id . a

t § 150A-4.5(a)(2) . Thes e monie s fund, amon g othe r things , "the operation o

f biosecurit y an dpes t inspection , quarantine , eradication , an dmonitorin

g programs. " Id . a

t § 150A

4.5(b) . "Ne

t weight " i s define

das "th e gros s weigh

t o f th e freight minu s the containe

r weight, i f any. " Haw . Rev . Stat . § 150A-2 . * Ther

e d o not appea r t o b e an y accompanyin

g Hawaiia n regulation s furthe

r implementin

g the statute , an

d non e wer e identifie dto u s during thi s proceeding .I n additio n t o bein g responsibl e unde r th e Inspectio n Fe e Statut e fo r billing , collectin g an d remittin g fees , ai r

carrier s are subjec t

t o specifie dmonetary penalties for failur e t o d o s o an d withi n th e statute' s require dtim e periods . Effectiv e Jul y 1 , 2010 , Hawai i amende dth e Inspectio n Fe e Statut e t o penaliz e carrier s tha t fai l t o compl y an dwithi n th e specifie dperiod s o f tim e b y imposin g afin e equa l t o th e highe r o f twic e th e inspectio n fe e o r $50 : (a ) Th e followin g fine s shal l b e impose dfor failur e t o pay , bill , o r

remi t th e inspection , quarantine , an deradicatio n servic e fe e a s provide dfo r i n sectio n 150A-5.3 : (1 ) A perso n responsibl e for payin g th e freight

charge s t o th e transportatio n company wh o fail s t o pay th e fee ; o r (2 ) A transportatio n compan y tha t fail s to : (A ) Bil l th e fee , withi n fiftee n day s o f th e delivery of

th e freight, t o th e perso n responsibl e fo r payin g th e freight

charge s t o th e transportatio n company ; o r (B ) Remi t th e fe e t o th e departmen t withi n forty-fiv e day s o f collectin g th e fe e fro mth e perso n responsibl e for payin g th e freight charge s t o th e transportatio n company, shal l pay afine o f

tw o time s th e amoun t

o f th e inspection , quarantine , an d eradicatio n servic e fe e o r $50 , whicheve r

i s higher . (b ) Al l fine s shal l b e pai dt o th e departmen t an ddeposite dint o th e pes t inspection , quarantine , an deradicatio n fun dimde r sectio n 150A-4.5 . Haw . Rev . Stat . § 150A-5.4 . Pendin g Litigatio n i n Federa l Cour t i n Hawai i O n Jul y 29 , 2010 , on e da y after submittin g it s petitio n t o th e Department , Petitione r file dsui t agains t Hawai i i n th e Unite dState s Distric t Court fo r th e Distric t

o f Hawaii , i n an actio n style d Ai r Transpor t

Associatio n v . Abercrombie , Cas e No . lO-CV-00444 . Th e complain t state s tha t th e fee s an dfine s impose db y th e Inspectio n Fe e Statut e ar e preempte db y th e AHT A an dth e ADA , raise s othe r

Federa l constitutiona l an dstatutory cause s o f action , an dseek s both declaratory an dinjunctiv e relief. Th e complain t als o assert s tha t

th e Departmen t

ha s primary jurisdictio n ove r

thi s matter . O n Augus t

26 , 2010 , Hawai i file dit s answer . Hawai i denies th e allegation s o f

th e complaint , offer s variou s constitutiona l an dstatutory defenses , an ddenie s that th e Departmen t

ha s primary jurisdiction . A s o f th e dat e o f

thi s order , b y stipulatio n o f th e parties , th e distric t

court actio n i s staye dpendin g ou r decisio n i n thi s proceeding .OU RPROCEEDIN G Summar y o f

Petitioner' s Comment s Petitione r contend s tha t

th e Inspectio n Fe e Statut e a s applie dt o ai r cartier s i s preempte db y th e ADA , whic h prohibit s politica l subdivision s an dState s fromenactin g o r enforcin g an y la w tha t ha s th e forc e an deffec t

o f bein g "relate dt o aprice , route , o r servic e of

an ai r carrier. " 4 9 U.S.C . § 41713(b)(1) . Relyin g o n Morale s v . Tran s Worl dAirlines , Inc. , 50 4 U.S . 37 4 (1992 ) an dit s progeny . Petitione r

claim s th e mspectio n fe e i s relate dt o airlin e prices , route s an dservices . Petitione r argue s that

th e Inspectio n Fe e Statut e a s applie dt o ai r cartier s are relate dto : (1 ) "prices " becaus e th e fee s mus t b e born e b y th e ai r

cartier s o r

passe do n t o thei r

shippin g customers ; (2 ) "routes " becaus e th e fee s may influenc e an ai r carrier' s decisio n whethe r an dho w t o serv e Hawaii ; an d(3 ) "services " becaus e th e fee s woul drequir e ai r carrier s t o adop t burdensom e billing , collection , an dremittin g service s that the y d o no t

no w provide . Petitione r claim s tha t

th e Inspectio n Fe e Statut e wil l impos e onerou s fiscal an dadministrativ e burden s o n ai r carrier s i n orde r

t o compl y wit

h it s requirements . Petitione r als o maintain s tha t

acceptanc e o f th e Inspectio n Fe e Statut e woul dlea dt o apatchwork o f similar regime s b y othe r

State s at odd s with th e overal l objectiv e o f th e ADA . Th e AHT A doe s not

permi t Stat e an dloca l government s t o "lev y o r collec t atax , fee , hea d charge , o r othe r charge " on , amon g othe r things , "th e sal e o f

ai r transportation. " 4 9 U.S.C . § 40116(b)(3) . Petitione r

contends that

th e Inspectio n Fe e Statut e a s applie dt o an : carrier s violate s th e AHT A becaus e th e fee s an dfme s ar e prohibite d"charges " o n "th e sal e o f ai r transportation " withi n th e plai n languag e o f th e statute. Petitione r

contend s that

th e AHT A wa s adopte db y Congres s t o preven t

th e proliferatio n o f

financial charge s fromburdenin g interstat e ai r transportation . See , e.g. . Aloh aAirline s v . Directo r o f Taxatio n o f

Hawaii , 46 4 U.S . 7 (1983) . Petitione r als o contend s tha t

Hawaii' s inspectio n fe e somewhat duplicate s fee s ai r

cartier s alread y pa y APHI S (althoug h i t doe s no t explai n how , eve n if

true , thi s bear s o n AD A o r AHT A preemption) . Petitione r

further contend s tha t

th e Inspectio n Fe e Statut e i s no t save db y 4 9 U.S.C . § 40116(e)(1) , whic h nevertheles s allow s State s t o lev y o r collec t certai n taxes , "includin g propert y taxes , ne t incom e taxes , franchis e taxes , an dsale s an dus e taxes o n th e sal e o f good s o r services. " Summar y o f

Hawaii' s Comment s Hawai i argue s tha t

th e Inspectio n Fe e Statut e a s applie dt o ai r cartier s i s no t

preempte db y th e AD A becaus e i t

i s no t relate dt o aprice , route , o r servic e o f

an ai r carrier . Hawai i contend s tha t th e Inspectio n Fe e Statut e doe s not substitut e for

marke t force s i n ai r

carrier' s determination s o f ho w t o bill , collec t

o r remi t fees . Accordingly , Hawai i argue s that th e Inspectio n Fe e Statut e a s applie dt o ai r

carrier s i s not

relate dto : (1 ) "prices " becaus e Petitione r ha s mad e n o showm g tha t ai r carriers , a s amatte r

o f industry practice , curtentl y pric e (o r woul dpric e i n th e future ) th e shipmen t of freight b y ai r transportatio n i n suc h away that cost s o r logistic s unde r

th e Inspectio n Fe e Statut e wil l increas e th e overal l cos t o f freight shipmen t rate s t o Hawai i pai db y shippers ; (2 ) "routes " becaus e th e fee s wil l no t influenc e a k

carrie r rout e plaiming ; an d(3 ) "services " because , unde r

applicabl e law , th e collectio n o f fee s an dfines unde r

th e Inspectio n Fe e Statut e wer e not th e kin do f

activity Congres s sough t t o preemp t

i n th e ADA .Hawai i als o argue s that th e AHT A doe s not

prohibi t agricultura l inspectio n fees , eve n i f suc h fee s ma y resul t

i n increase dpricin g o f

ai r transportation . Hawai i further suggest s tha t

4 9 U.S.C . § 40116(b)(3) , whic h prohibit s acharg e o n "th e sal e o f ai r transportation, " doe s no t includ e freight . Alternatively , Hawai i argue s that th e Inspectio n Fe e Statut e i s an allowable "tax " pursuan t t o th e saving s claus e o f

4 9 U.S.C . § 40116(e)(1) , whic h allow s State s t o lev y o r collec t certai n taxes , "includin g propert y taxes , ne t incom e taxes , franchis e taxes , an dsale s an dus e taxe s o n th e sal e o f

good s o r services. " DECISIO N Pursuan t t o 4 9 U.S.C . § 40113(a ) an d4 9 U.S.C . § 46101(a) , th e Departmen t ha s jurisdictio n t o determin e violation s o f

both th e AD A an dth e AHTA . I n cartyin g ou t tha t function , i t

ha s th e powe r t o "issu e adeclaratory rulin g t o terminat e acontrovers y o r remov e uncertainty. " 5 U.S.C . § 554(e) ; se e als o America n Airlines , Inc . v . Dep' t o f Transportation , 20 2 F.3 d788 , 796-79 7 (5th Cir . 2000) ; Unite dTrans . Union-Illinoi s Legislativ e Bd . v . ICC , 5 2 F.3 d1074,108 0 n . 1 0 (D.C . Cir . 1995) ; Texa s v . Unite dStates , 86 6 F.2 d1546 , 155 4 (5th Cir . 1989) . Th e Departmen t

ha s consistentl y exercise dthi s authority whe n appropriat e t o ensur e th e prope r applicatio n o f

th e ADA , th e AHTA , an dothe r federal aviatio n statutes . Se e TinicumTownshi p Privileg e Fe e Proceeding , Orde r 2008-3-18 , Docke t

OST-2007-29341 , affd . Townshi p o f Tinicumv . Unite dStates , 58 2 F.3 d48 2 (3 dCir . 2009 ) (declaratory orde r holdin g tha t

afe e o n ai r carrier s for

landin g at

aupor t withi n boundarie s o f

township , anon-aupor t

proprietor , violate d AHTA) ; Hawaiia n Airline s Declarator y Orde r Proceeding , Orde r

2007-4-4 , Docke t

OST-2006

- 261 2 (declaratory orde r

holdin g tha t

AD A preempte dan executiv e orde r issue db y th e Governo r of America n Samo apurportin g t o regulat e Hawaiia n Airlines ' servic e at Pag o Pago) ; Lov e Fiel d Servic e Interpretatio n Proceeding , Order s 98-12-2 7 (Decembe r 12 , 1998 ) an d99-4-1 3 (Apri l 13 , 1999) , ajfd , America n Airline s v . DOT , 20 2 F.3 d78 8 (5 * Cir . 2000) , cert , denied , 53 0 U.S . 127 4 an d53 0 U.S . 128 4 (declaratory proceeding ; City o f Dalla s coul dnot

bloc k airlines ' operation s authorize db y afederal statute , th e Shelb y Amendment , ou t o f Dallas Lov e Field) . Th e Secretary of

Transportatio n i s responsibl e fo r administerin g th e aviatio n laws , includin g th e ADA . Th e Suprem e Court ha s recognize dthat

th e Departmen t

of Transportatio n i s th e "superintendin g agency " o f th e AD A an dit s "experience dadministrator. " Wolen s v . America n Airlines , 51 3 U.S . 219 , 229 , n . 6 an d23 4 (1995) . Se e als o Ne w Englan dLega l Foundatio n v . Massachusett s Por t

Authority , 88 3 F.2 d157 , 171-7 3 (1s t Cir . 1989 ) (acknowledgin g th e Department' s primar y jurisdiction) . Th e Departmen t

o f Transportatio n i s als o responsibl e fo r administerin g th e AHTA . Northwes t Airline s v . Count

y o f Kent , 51 0 U.S . 355 , 366-36 7 (1994 ) ("Th e Secretary o f Transportatio n i s charge dwith administerin g th e federal aviatio n laws , includin g th e AHT A .. . [an dthe ] Departmen t

i s equipped , a s court s ar e not , t o surve y th e fiel dnationwide , an dt o regulat e based o n afull vie w o f

th e relevan t

fact s an dcircumstances."). ^

' Se

e also , e.g. . Townshi

p o f Tinicu mv . Unite dStates , 58 2 F.3 d482,48 4 (3 dCir . 2009) ; Por t Authorit y o f Ne w Yor k an dNe w Jersey v. U.S . Departmen t of Transportation , 47 9 F.3 d21 , 27 (D.C . Cir. , 2007) ; Southwest Ai r Ambulance , Inc . v. Cit

y o f La s Cruces , 26 8 F.3 d1162 , 1170 (10 * Cir . 2001) ; Cit y o f Lo s Angele s v. U.S . Dept . ofW e may , therefore , resolv e thi s controvers y with respec t t o th e Inspectio n Fe e Statut e a s applie d t o ai r cartier s unde r

both statutes . Ou r

exercis e o f

primary jurisdictio n i n thi s controvers y i s informe db y ou r

expertis e an dentitle dt o deferenc e b y th e courts . Chevro n U.S.A. , Inc . v . Natura l Resource s Defens e Council , Inc. , 46 7 U.S . 837 , 842-84 5 (1984) . A s w e note di n th e institutm g order , thi s i s a n issu e o f firs t impressio n for

th e Department . Fo r th e reason s se t

fort h below , w e fin dthat

th e Inspectio n Fe e Statut e a s applie dt o ai r carrier s i s preempte db y th e AD A an dth e AHTA . Th e Inspectio n Fe e Statut e A s Applie dt o Ai r Carrier s I s Preempte db y th e ADA . Petitione r contends tha t

th e Inspectio n Fe e Statut e i s relate dt o ai r carrie r service s becaus e i t require s "th e ai r

carrie r - unde r threa t o f significan t

monetary fine s - t o provid e th e 'service ' o f billing , collectin g an dremittin g fee s o n behal f o f it s shippe r

customers. " Pet . Openin g Comment s at

36 ; se e als o Pet . Repl y Conmient s at 23 . Unde r

th e Inspectio n Fe e Statute , ai r carrier s "mus t

conformthei r

billin g infrastructur e t o accommodat e th e obligatio n t o bil l freight customers " th e inspectio n fe e an dremi t thos e monie s t o Hawaii , suc h tha t th e Inspectio n Fe e Statut e wil l "'creat e asubstantia l burden ' o n th e ai r cartier s i n th e for

mo f labo r an dcosts. " Id . at 3 7 (quotin g Unite dParce l Serv. , Inc . v . Flores-Galarza , 31 8 F.3 d323 , 33 6 (1s t Cir . 2003)) . Petitione r principall y relie s o n th e Suprem e Court' s decisio n i n Row e an dth e Firs t Circuit' s decisio n i n Flores-Galarz ai n support of it s argument . Petitione r submitte dthre e declaration s attache dt o it s Openin g Comment s an don e declaratio n attache dt o it s Repl y Comment s settin g fort h th e logistica l an dfinancial impac t of th e Inspectio n Fe e Statut e o n operation s that tw o ai r cartiers . Unite dAi r

Lines , Inc . an dFedera l Expres s Corporation , expec t

t o encounte r

imde r th e Inspectio n Fe e Statute . Se e Pet . Openin g Comments , Exhibi t A , Decl . o f

Jess e Cohen , Managin g Directo r for Carg o Plaimin g an dRevenu e Management , Unite dAn : Lines , Inc. ; Exhibi t B , Decl . o f

Aashis h Gahlaut , Directo r o f Marketing , FedE x Corporate Services , Inc. , Federa l Expres s Corporation ; Exhibi t C , Decl . o f Thoma s Parker , Managin g Directo r for Expres s Busines s Solutions , Globa l Ai r Ops , Manifestin g an dMovemen t

Applications , Federa l Expres s Corporation ; Pet . Repl y Comments , Exhibi t A . Supp . Decl . o f

Jess e Cohen , Unite dAi r

Lines , Inc . Th e declarant s stat e that

ther e wil l b e substantia l increase dfinancial an dadministrativ e requirement s impose do n ai r carrier s t o compl y wit h th e Inspectio n Fe e Statute . Petitione r contends , a s se t

fort h i n th e Unite dAi r

Line s an dFedera l Expres s declarations , tha t sinc e it s member s "wil l hav e t o mak e tremendousl y costl y system-wid e programmin g an dpersonne l change s i n orde r

t o attemp t

complianc e with [th e law] , i t i s inevitabl e tha t

thes e cartier s wil l hav e t o rais e th e 'price ' the y charg e i n orde r t o financ e thes e changes. " Pet . Openin g Comment s at 35-36 .

Transp. . 16 5 F.3 d972,97 8 (D . C . Cir. \999) ; Ai r Canad av . U.S.Dept.ofTransp. , 148F.3 d1142 , 1150-115 1 (D.C . Cir . 1998) ; an dNew Englan dLega l Foundatio n v . Massachusett s Por t Authority , 88 3 F.2 d157 , 17 2 (l " Cir . 1989) .Petitione r als o contends tha t

th e impositio n o f

th e fe e o n freigh t

i n thi s matte r

wil l requir e extensiv e administrativ e an dlogistica l requirement s an dsystem s an dwil l "impac t th e 'overal l cost ' o f th e ai r transportatio n bein g provided. " Pet . Openm g Comment s at 35 . Th e declarant s stat e that ther e wil l b e substantia l increase dfinancia l an dadministrativ e requirement s impose d o n ai r carrier s t o compl y wit

h th e Inspectio n Fe e Statute . Petitione r contends , a s se t

fort h i n th e Unite dAi r

Line s an dFedera l Expres s declarations , that sinc e it s member s "wil l hav e t o mak e tremendousl y costl y system-wid e programmin g an dpersoime l change s i n orde r t o attemp t complianc e with [th e law] , i t i s inevitabl e tha t

thes e carrier s wil l hav e t o rais e th e 'price ' the y charg e i n orde r

t o financ e thes e changes. " Id . at 35-36 . Hawai i di dnot

contes t th e informatio n se t

fort h i n thes e declarations , an dstate dthat i t deferte d t o th e Departmen t

"t o scrutiniz e [Petitioner's ] representation s a s t o th e actua l unavoidabl e burden s [ai r

carriers ] wil l incu r

t o implemen t

thei r responsibilities " unde r

th e Inspectio n Fe e Statute . Hawai i Repl y at

10 . After "determinin g tha t

'maximu mrelianc e o n competitiv e marke t forces ' woul dbes t

further 'efficiency , innovation , an dlo w prices, ' a s wel l a s 'variet y [and ] quality.. . o f ai r transportatio n services, ' " Congres s enacte dth e ADA . Morale s v . Tran s Worl dAirlines , Inc. , 50 4 U.S . 374 , 37 8 (1992 ) (alteratio n an domissio n i n original ; citation s omitted) . T o ensur e tha t th e State s woul dnot defea t th e ADA' s goal s b y fillin g th e voi dwith regulation s o f thei r own . Congres s include da

n expres s preemptio n provisio n i n th e ADA . I t provides : Excep t a s provide di n thi s subsectio n [relate dt o ai r transportatio n i n Alaska ] a State , politica l subdivisio n of aState , o r

politica l authorit y o f

a t leas t 2 State s ma y not enac t o r enforc e alaw , regulation , o r othe r provisio n havin g th e forc e an d effec t o f law relate dt o aprice , route , o r servic e o f

an ai r cartie r tha t ma y provid e ai r transportatio n unde r

thi s subpart . 4 9 U.S.C . § 41713(b)(1) . Th e word s "relatin g to " expres s " abroadpre-emptiv e purpose. " Morales , 50 4 U.S . a t 383 . "[P]re-emptio n may occu r eve n if astat e law' s effec t

o n rates , routes , o r

service s i s onl y indirect. " Row e v . Ne w Hampshir e Moto r Transpor t

Ass'n , 55 2 U.S . 364 , 37 0 (2008 ) (quotin g Morales , 50 4 U.S . a

t 386) . Th e AD A preemptio n provisio n thu s "stop s State s frommiposin g thei r ow n substantiv e standard s with respec t t o rates , routes , o r

services. " America n Airlines , Inc . V . Wolens , 51 3 U.S . 219 , 23 2 (1995) . An dSectio n 41713(b)(1 ) preempt s no t onl y Stat e law s directl y addressin g aviation , bu t al l "Stat e enforcemen t

action s havin g aconnectio n with o r referenc e t o airlin e 'rates , routes , o r services.' " Morales , 50 4 U.S . a t 384 . Th e Court

ha s considere dth e AD A preemptio n provisio n severa l times .Morale s

I n Morales , th e Court

reviewe d"Ai r

Trave l Industry Enforcemen t Guidelines " prepare db y th e Nationa l Associatio n o f

Attorney s Genera l (NAAG) , whic h containe ddetaile dstandard s aime d at allegedl y deceptiv e airlin e advertisements . Th e guideline s governe dairlin e advertising , frequen t flyer awards , an dconsume r

compensatio n fo r

overbooke dflights, an dNAA G sough t t o enforc e th e guideline s throug h it s respectiv e Stat e members . Th e Court determine dtha t

th e NAA G guideline s impermissibl y relate dt o aklin e pricing . 50 4 U.S . a t 387-88 . Th e Cour t

i n Morale s rejecte dth e argumen t tha t onl y Stat e law s tha t

actuall y prescrib e prices , routes , o r service s ar e AD A preempted . It construe dth e AD A t o preemp t not onl y Stat e law s tha t "actuall y prescrib[e ] rates , routes , o r services, " bu t

als o law s tha t

hav e a"significan t

effec t upo n fares. " 50 4 U.S . at

385 , 388 . Specifically , th e Cour t

i n Morale s hel dtha t

Stat e law s regulatin g airlin e pric e advertisin g wer e preempted , fmdin g i t

"clear a s an economi c matter " tha t suc h law s woul daffec t

fare s i n way s incompatibl e with th e ADA' s deregulatory , market-oriente dgoals

—that is , tha t the y "woul dhav e asignifican t

impac t upo n th e airlines ' ability t o marke t thei r product. " Id . at

389 , 390 . A t

th e sam e time . Morale s recognize dtha t not al l law s tha t

migh t hav e som e effec t

upo n airlin e prices , route s o r servic e ar e preempted : "'[s]om e stat e action s may affec t [airlin e fares ] i n to o tenuous , remote , o r

periphera l amaimer ' t o hav e pre-emptiv e effect. " Id . at 39 0 (bracket s i n th e original) . Th e Court

"express[ed ] n o view s abou t wher e i t woul db e appropriat e t o dra w th e line " betwee n law s that significantl y affecte dth e preempte dsubject-matte r an dlaw s tha t

ha donl y atenuous , remot e o r periphera l effect . Id . a

t 39 0 (quotatio n omitted) . Nonetheless , th e Court hel dtha t th e NAA G guidelines , a s applie dthroug h variou s Stat e laws , directl y substitute dStates ' ow n governmen t

command s for

competitiv e marke t

force s i n determining , t o asignifican t degree , ai r carrie r prices . Id . at

388-89 . Wolen s I n Wolens , th e Court

considere dwhethe r

claim s base do n th e Illinoi s Consume r Frau dan d Deceptiv e Busines s Practice s Ac t an dStat e contrac t

law challengin g aspect s o f America n Airlines ' frequent

flyer progra mha dbee n preempte db y th e ADA . Th e Court hel dtha t asui t unde r th e Illinoi s consume r

frau dstatut e was preempte dbecaus e i t relate dt o airlin e pricin g i n term s o f frequent flyer mileag e credit s for

fre e ticket s an dupgrades . 51 3 U.S . at 226.' ° Th e Court hel dthat th e States ' us e o f

thos e statute s "t o guid e an dpolic e th e marketin g practice s o f th e airlines " conflicte dwit h "th e ADA' s purpos e t o leav e largel y t o th e airline s themselves , an d no t at al l t o States , th e selectio n an ddesig n o f marketin g mechanism s appropriat e t o th e furnishin g o f

ai r transportatio n services. " Id . at 228 . Lik e th e NAA G guideline s i n Morales , th e Illinoi s consume r

frau dstatute , if

applie dt o America n Airlines , "woul dcontro l th e primary conduc t o f thos e fallin g withi n it s governance. " Id . at 227 . I n othe r

words , i t woul ddirectl y substitut e Illinois ' ow n governmen t command s fo r

competitiv e marke t

force s i n determining , t o asignifican t

degree , ai r

cartie r price s (an dservices) . Id .

The Cour t als o foun dUia t asui t unde r th e Illinoi s consume

r frau dstatut e wa s preemptedbecaus e i

t related t o airline service s i

n the for mo f fligh t access , clas s upgrade s an

davoidanc e o

f blackou t dates . 51 3 U.S . a

t 226 . 1 0However , th e Cour t hel dtha t th e AD A preemptio n provisio n allowe denforcemen t o f Stat e common-la w principle s enforcm g contrac t term s se t b y th e partie s themselves , notwithstandin g tha t suc h enforcemen t

obviousl y ha s som e effec t o n airlin e prices , route s an dservice. I n s o holding , th e Court

recognize dth e nee dfor

a"sensibl e constructio n of th e ADA, " on e "calculate d t o cart y ou t

th e congressiona l design. " Id . at 230 , 234 . Th e Court

conclude dtha t

"th e ba n o n enactin g o r

enforcin g an y law 'relatin g t o rates , routes , o r services, ' i s mos t

sensibl y read , i n ligh t o f th e ADA' S overarchin g deregulatory purpose , t o mea n 'State s may not see k t o impose thei r ow n publi c policie s o r

theorie s of

competitio n o r

regulatio n o n th e operation s o f an ai r carrier.' " Id . at

22 9 n . 5 (interna l citatio n omitted) . Row e I n Rowe , th e Cour t

unanimousl y hel dtha t

th e phras e "relate dto " i n th e preemptio n provisio n i n th e Federa l Aviatio n Administratio n Authorizatio n Ac t (FAAAA) , modele dafter th e AD A preemptio n provision , expresse s abroadpreemptiv e purpose . Th e Court reiterate dit s centra l holdin g i n Morale s regardin g th e reac h o f preemptio n i n federal preemptio n statutes . 55 2 U.S . at 371-73 . In Rowe , th e Court reviewe daMain e law tha t mandate dState-license dshipper s o f tobacc o product s t o utiliz e adeliver y company tha t provide s arecipient-verificatio n servic e confirmin g tha t

th e buye r wa s o f lega l age . Th e shipper s wer e allowe dn o choic e but t o us e a recipien t verificatio n servic e b y th e Main e law . I n holdin g tha t th e Main e statut e wa s preempted , th e Court state dtha t

th e Stat e law "produce s th e very effec t tha t th e [ADA ] sough t

t o avoid , namely , aState' s direc t

substitutio n of

it s ow n governmenta l command s fo r 'competitiv e marke t forces ' i n determinin g (t o asignifican t degree ) th e service s tha t moto r cartie r wil l provide. " Id . at 37 2 (quotin g Morales , 50 4 U.S . at 378) . Th e Court

emphasize dtha t

"th e stat e law s whos e 'effect ' i s 'forbidden ' unde r federal la w ar e thos e with a'significan t impact ' o n carrie r

rates , routes , o r services. " Id . at

37 5 (quotin g Morales , 50 4 U.S . at 390 ) (Emphasi s i n th e original) . An dth e Court' s consideratio n o f Maine' s law a s t o moto r

carrier s di dnot

requir e i t t o explor e th e oute r limit s o f preemptio n becaus e "[g]ive n th e circumstances , fro mth e perspectiv e o f preemption , thi s cas e i s n o mor e 'borderlme ' tha n wa s Morales' ' Id . at 37 6 (quotin g Morales , 50 4 U.S . a

t 390) . Additionally , th e Court

observe dtha t

th e Main e statut e woul dfrustrat e Congress' s preemptiv e inten t becaus e i t

"coul deasil y lea dt o apatchwork o f stat e service-determinin g laws , rules , an d regulations, " notin g tha t

a"stat e regulator y patchwork i s inconsisten t

with Congress ' majo r legislativ e effor

t t o leav e suc h decisions , wher e federall y unregulated , t o th e competitiv e marketplace. " Id . a t

373 . Moreover , th e Court rejecte dth e contentio n tha t ther e shoul db e a publi c health exceptio n unde r th e FAAA A preemptio n provision , holdin g tha t th e statut e doe s not allo w exception s basedupo n th e typ e o r objective s o f

Stat e law . Id . a

t 373-75 . Morales , Wolens , an dRow e d o no t stat e at what poin t "i t woul db e appropriat e t o dra w th e line " betwee n law s tha t

significantl y affec t

ai r carrie r prices , route s o r

services , an dlaw s tha t

onl y hav e a"tenuous , remot e o r peripheral " effect . Morales , 50 4 U.S . a t 390 . Bu t at bottom , Morales , Wolens , an dRow e al l teac h tha t th e AD A preemptio n provisio n "relate dto " languag e i s t o b e rea dbroadly . Indeed , th e languag e o f thi s "broadl y worded " provisio n "displace s al l stat e law s tha t fal l withi n it s sphere , eve n includin g stat e law s tha t ar e consisten t

with [th e federal Act's ] substantiv e requirements.' " Morales , 50 4 U.S . at 386 . Moreover , i n 1994 , Congres s 1 1expressl y endorse dth e holdin g i n Morale s whe n i t enacte dth e recodifie dTitl e 4 9 int o positiv e law , notin g tha t

i t "di dno t inten dt o alte r

th e broadpreemptio n mterpretatio n adopte db y th e Unite dState s Suprem e Court i n Morale s ... " H.R . Conf . Rep . No . 103-677 , a

t 8 3 (1994) . Th e Inspectio n Fe e Statut e I s Preempte db y th e AD A Becaus e I t I s Relate dt o Ai r Carrie r Services . Th e Inspectio n Fe e Statut e a s applie dt o au r carrier s (includin g a s t o th e inspectio n fe e an d potential fines ) i s "relate dto " ai r carrie r services , an dthu s preempte db y th e ADA , becaus e i t directl y regulate s ai r

carrier s b y commandin g ai r cartier s t o conformthei r

servic e o f

shippin g freight b y ai r transportatio n i n way s not dictate db y th e marke t

t o bill , collect , an dremi t fee s o n behal f o f it s shippe r

customers . First , th e Inspectio n Fe e Statut e canno t b e square dwith Row e an dFlores-Galarza , a s i t impose s obligation s o n ai r

carrier s tha t

ar e analogou s t o th e requirement s tha t wer e impose do n th e moto r carrier s i n thos e cases . A s th e Unite dState s ha s explained , i n Rowe , Maine' s recipient

verificatio n servic e was preempte dunde r th e AD A becaus e i t

directl y an dimpermissibl y substitute dth e State' s command s for ho w moto r

carrier s woul dprovid e thei r delivery services : Applyin g th e Morale s analysis , th e Court i n Row e foun dtha t

a n identicall y worde dpreemptio n provisio n governin g th e truckin g industry preempte dMaine' s Tobacc o Deliver y Law , whic h require dtha t tobacc o retailer s us e delivery service s tha t followe dcertai n specifi c procedure s i n verifyin g th e ag e o f recipient s o f tobacc o products . Althoug h th e Main e law o n it s fac e applie dt o tobacc o retailers , rathe r tha n t o moto r

carrier s directly , th e statut e wa s preempte dbecaus e i t "require[d ] cartier s t o offe r asyste mo f

service s tha t

th e marke t

doe s not no w provide. " Rowe , 12 8 S . Ct . at 995 . A s th e Court

explamed , "[t]h e Main e law thereb y produce s th e ver y effec t tha t th e federal law sough t

t o avoid , namely , a State' s durect

substitutio n o f

it s ow n governmenta l command s fo r 'competitiv e marke t forces ' i n determinin g . . .th e service s tha t moto r carrier s wil l provide. " Ibid , (emphase s added) . U.S . Amicu s Br . at

11-12 , US Airways , Inc . v . O'Donnell , 62 7 F.3 d131 8 (10th Cir . 2010). " Similarly , i n Flores-Galarza , th e court considere dwhethe r

aPuert o Rican statutory schem e that prohibite dinterstat e ai r

carrier s fromdeliverin g package s unles s th e carrie r provide dproo f

tha t excis e taxes ha dbee n pai dwa s preempte dunde r th e FAAAA . Th e court

hel dtha t th e FAAA A preempte daPuert o Rica n law tha t directl y regulate dth e provisio n o f ai r an dmoto r

cartie r servic e b y forbiddin g deliverie s unles s th e cartier s complie dwith th e loca l law' s requiremen t o f I n O'Donnell , th

e distric t cour t ha dheldtha t Ne w Mexic o couldsubjec

t U S Airway s t

o stat e alcoholi c beverag e regulation s i

f the airline serve s alcoholic beverage s on flights int o an dou t o f Ne w Mexico . The Tent

h Circuit reversedon th

e ground s tha

t the FA A aviation safet

y regulation s impliedl

y preemptedthe Ne

w Mexic o law , an dremande dfo r die distric t

cour t t o conduct abalancing o

f stat e an dfedera l interests . While the cour

t di dnot decide die issue o

f expres s preemption unde

r th e ADA , US Airway s an

dthe UnitedState s arguedtha t Ne w Mexico' s alcoholic beverag e regulation s as appliedt o a n airline wer

e preemptedb

y the AD A becaus e the

y relatedt o airline "services. " 1 2proo f

o f an excis e tax payment . 31 8 F.3 dat 335-36 . Moreover , th e court rejecte dth e vie w tha t tha t ther e shoul db e apresumptio n agains t AD A preemption . "Thi s presumptio n onl y arises , however , if

Congres s legislate s i n afiel dtraditionall y occupie db y th e state s .. . N o presumptio n agams t preemptio n i s appropriat e i n thi s cas e becaus e o f Congress' s significan t

~ an dundispute d

~ presenc e i n th e fiel do f ai r transportation. " Id . at

336 . Here , lik e th e statute s a

t issu e i n both Row e an dFlores-Galarza , th e Inspectio n Fe e Statut e directl y regulate s ai r

cartier s b y commandin g ai r carrier s t o conformthei r

servic e o f

shippin g freight b y an : transportatio n i n way s not dictate db y th e marke t

t o bill , collect , an dremi t fee s o n behal f o f it s shippe r

customers . Ai r

cartier s wil l b e requne dt o provisio n labo r t o bill , collec t an dremi t th e inspectio n fe e i n connectio n with th e ai r transportatio n of

freight . W e fin do n th e recor dbefor e u s tha t

"[a]i r carrier s servin g Hawai i mus t offe r billing , collectio n an dremittanc e service s tha t

differ significantl y fro mtha t

which , i n th e absenc e o f

regulation , th e marke t

migh t dictate. " Pet . Repl y Conmient s at 25 . Moreover , th e Inspectio n Fe e Statut e "aim[s ] directl y a t th e carriag e o f

goods , acommercia l fiel dwher e carriag e b y [ai r carriers ] play s amajo r

role, " Rowe , 55 2 U.S . at

376 , b y requirin g ai r

carrier s t o bill , collect , an dremi t fee s t o fundHawaii' s invasiv e specie s inspectio n program . "Give n thes e circumstances , fromth e perspectiv e o f pre emption , thi s cas e i s n o mor e 'borderline ' tha n was Morales. " Id . Second , w e rejec t

Hawaii' s contentio n that th e ter m"service " i n th e AD A preemptio n provisio n shoul db e construe dnarrowl y unde r Ninth Circui t

case s suc h a s Chara s v . Tran s Worl dAirlines , Inc. , 16 0 F.3 d125 9 (9th Cir . 1998 ) zco A Dunca n v . Northwes t

Airlines , Inc. , 20 8 F.3 d111 2 (9th Cir . 2000) . "Charas' s approac h .. . i s inconsisten t with th e Suprem e Court' s recen t decisio n i n Rowe. " Ai r

Transp. Ass' n o f

Am. , Inc . v . Cuomo , 52 0 F.3 d218 , 22 3 (2 dCir . 2008) . Th e Unite d State s ha s explaine dtha t

"service " i s t o b e interprete dbroadly . U.S . Amicu s Br . a t 5,9-13 , US Airways , Inc . v . O'Donnell , 62 7 F.3 d131 8 (10th Cir . 2010) . An da s note db y th e Secon d Circuit, that

i s th e vie w adopte db y amajority o f th e circuit s whic h hav e construe dth e ter m "service " i n th e AD A preemptio n clause . Ai r Transp . Ass' n o f

Am. , 52 0 F.3 dat

223.' ^ Th e Unite dState s recentl y explaine dtha t ""Charas' s limite ddefinitio n o f 'services " i s .. . o n unstabl e groun di n th e wak e o f Rowe , apoin t

tha t ha s bee n recognize db y judge s both withi n thi s distric t an delsewhere. " U.S . Statemen t o f Interes t a t 13 , Nationa l Federatio n o f th e Blin dv . Unite dAirlines , Inc. , No . lO-CV-04816 , 201 1 W L 154452 4 (N.D . Cal . Apri l 25 , 2011) . "Overall , Charas' s limite dreadin g o f th e Deregulatio n Ac t

i s n o longe r

valid. " Id . at

14.' ^

' ^ Se e als o Hodge s v . Delt aAirlines , 4 4 F.3 d334 , 33 6 (5th Cir . 1995 ) (e n banc ) ('"Services ' generall y represen t abargained-fo r

o r anticipate dprovisio n o f

labo r fromon e party t o another, " includin g "item s suc h a s ticketing , boardin g procedures , provisio n o f foo dan ddrink , an dbaggag e handling , i n additio n t o th e transportatio n itself.") . Se e also , e.g. . Ai r Transp . Ass' n o f

Am. , 52 0 F.3 dat

22 3 (adoptin g th e Fifdi Circuit' s interpretation) ; Branch e v . Airtra n Airways , Inc. , 34 2 F.3 d1248 , 1256-5 9 (lld i Cir. 2003 ) (same) ; Smit h v . Comair , 134F.3 d254 , 25 9 (4d i Cir. 1998 ) (same) ; Trave l Al l Ove r th e World , Inc . v . Kingdo mo f Saud i Arabia , 7 3 F.3 d1423 , 143 4 (7d i Cir. 1996 ) (same).

'^ Se e als o Quinte n Fernal dv . Southwes t Airline s Co. , Cas e No . 3: 1 l-cv-000453 , sli p op . at 5 (S.D . Cal . Sept . 28,2011 ) ("A s Row e an dit s progen y demonstrate , Charas " mor e limite ddefinitio n i s n o longe r goo dlaw." ) (citin g Ai r Transp . Ass' n o f

Am. , 52 0 F.3 dat

22 3 an dNationa l Federatio n o f th e Blin dv . Unite dAirlines , Inc. , 201 1 W L 154452 4 (N.D . Cal . Apri l 25 , 2011)) . 1 3Th e court i n Nationa l Federatio n o f th e Blin dagreed , an dhel dtha t plaintiffs ' claim s agains t Unite dfor

allegedl y violatin g Californi adisabilit y law for failin g t o mak e automati c airlin e ticketin g kiosk s accessibl e t o th e blin dwer e preempte db y th e ADA . Th e court agree dwith th e positio n o f

th e Unite dStates , submitte da t th e court' s request : "[w]hil e Chara s define d'service " narrowly , Row e put

fort h amor e expansiv e view. " 201 1 W L 1544524 , at *5 . Th e court

wa s therefor e "dut y boun dt o follo w Row e an dt o rejec t th e Chara s definitio n o f

'service,' " holdin g that th e kiosk s provid e a"service " withi n th e meanin g o f th e ADA . Id . O n Octobe r

18,2011 , th e Unite dState s onc e agai n reiterate dit s positio n tha t th e term"service " i n th e AD A preemptio n claus e i s t o b e interprete dbroadly . U.S . Amicu s Br . at 25-27 , Nationa l Federatio n o f

th e Blin dv . Unite dAirlines , Inc. , Cas e No . 11-1624 0 (9t h Cir.) . Th e Unite dState s further explaine dthat

i f plaintiff s wer e t o succee d"o n [their ] state-la w discriminatio n claims , th e court woul dsubstitut e stat e la w fo r competitiv e marke t

forces , b y requirin g Unite dt o offer a kios k servic e i n Californi atha t i t doe s not no w provide , contrary t o Congress' s inten t i n th e Deregulatio n Act. " Id . at 27 . Thes e principle s appl y with equa l forc e here . W e d o no t questio n th e importan t

objective s o f Hawai i t o protec t

it s ecosyste mfromth e threat o f invasiv e species . Bu t

th e Inspectio n Fe e Statut e her e canno t

surviv e AD A preemption . Unde r th e broa dinterpretatio n o f "service, " th e Inspectio n Fe e Statut e i s relate dt o ai r carrie r service s becaus e i t

directl y regulate s ai r

carrier s b y commandin g ai r

carrier s t o conformthei r

servic e o f

shippin g freight

b y ai r transportatio n i n ways not dictate db y th e marke t

t o bill , collect , an dremi t fee s o n behal f

o f it s shippe r

customers . Moreover , requirin g ai r

carrier s t o bill , collec t

an dremi t

fee s unde r

th e Inspectio n Fe e statut e i s preempte dunde r

th e AD A becaus e Hawai i effectivel y seek s t o requir e ai r cartier s "t o offer

a syste mo f service s tha t

th e marke t

doe s not no w provid e (an dwhic h th e cartier s woul dprefe r no t t o offer). " U.S . Statemen t of Interes t at 14 , Nationa l Federatio n o f th e Blin dv . Unite dAirlines , Inc. , No . lO-CV-04816 , 201 1 W L 154452 4 (N.D . Cal . Apri l 25 , 2011 ) (quotm g Rowe , 55 2 U.S . at 372) . Th e Inspectio n Fe e Statut e i s similarl y preempte db y th e AD A becaus e i t require s ai r cartier s t o performaservic e - billing , collectin g an dremittin g fee s fromeac h o f thei r shippe r customers (o r

fac e applicabl e fines ) - that th e marke t

otherwis e woul dno t

provide , an dwhic h ai r carrier s woul dprefer

no t t o offer , an dindeed , fines ai r carrier s if

the y d o not

d o so . Finally , eve n if

Chara s someho w survive dRowe , ai r cartie r billing , collecting , an dremittin g fee s ar e closel y relate dt o ai r

carrie r service s i n connectio n with th e ai r shipmen t o f freight fo r th e purpose s o f

AD A preemption , consisten t with tha t case . Ai r

carriers ' billing , collectio n an d remittanc e system s ar e utilize dt o performfunction s tha t ar e directl y connecte dt o th e ai r shipmen t o f freight . Therefore , thos e system s ar e "closel y relate dt o 'th e provisio n o f ai r transportatio n t o an dfromvariou s market s at variou s times, ' unlik e 'th e dispensin g o f foo dan d drinks ' an d'fligh t

attendan t assistance ' onc e onboardth e aircraft . Charas , 16 0 F.3 dat 1266. " U.S . Amicu s Br . at

28-29 , Nationa l Federatio n o f th e Blin dv . Unite dAirlines , Inc. , Cas e No . 11

- 1624 0 (9th Cir.) .

1 4Th e Inspectio n Fe e Statut e I s Als o Preempte db y th e AD A Becaus e I t I s Relate dt o Ai r Carrie r Prices . Unde r Morale s an dit s progeny , w e hav e conclude dthat th e Inspectio n Fe e Statut e i s relate dt o ai r cartie r price s and , therefore , i s preempte db y th e AD A o n that basi s a s well . Unlik e th e stat e law s at issu e i n eithe r

Morale s o r

Wolens , th e Inspectio n Fe e Statut e doe s not referenc e an ai r cartier' s pricin g o f

shippin g freight

b y ai r transportation , an dcommand s n o particular ai r carrie r conduct . Bu t

th e Suprem e Court

i s clear tha t "pre-emptio n may occu r eve n i f astat e law' s effec t o n rates , route s o r

service s 'i s onl y indirect.' " Rowe , 55 2 U.S . at 37 0 (quotin g Morales , 50 4 U.S . at 386) . Hawai i contend s tha t

ai r carrier s us e "yield-management " system s o f pricin g (see , e.g. , Hawai i Openin g Comment s at

9-10) , an dargue s tha t

suc h pricin g system s fo r

freigh t woul dnot

b e affecte db y th e fe e assesse do n th e ne t weigh t o f freight pai db y shippers . Bu t

a s se t fort h b y Petitione r i n it s declaration s - whic h Hawai i di dnot contes t - ai r cartier s ar e likel y t o rais e th e price s themselve s t o recove r th e cost s o f

complyin g with th e Inspectio n Fe e Statute . Thus , th e Inspectio n Fe e Statut e indkectl y (i f not directly ) regulate s ho w ai r cartier s are likel y t o pric e th e shipmen t o f freight t o Hawai i b y ai r

transportation , a s wel l a s ho w ai r cartier s collec t

thos e prices . Here , Hawai i ha s impose dacos t o n ai r carrier s that

i s likel y t o b e recovere db y increase d pricin g for

ai r transportation . A s aresult , th e requirement s impose do n ai r cartier s unde r

th e Inspectio n Fe e Statut e ar e analogou s t o th e Ai r Trave l Industry Enforcemen t Guideline s tha t NAA G sough t

t o impose o n ai r

carrie r advertisin g i n Morales , whic h wer e preempte dunde r th e AD A becaus e th e NAA G guideline s affecte dai r carrie r prices . 50 4 U.S . at

387-88 . Whethe r th e Inspectio n Fe e Statute s i s Relate dt o Ai r Carrie r Routes . W e hav e sufficient

authority unde r

th e AD A t o preven t

Hawai i fromenforcin g th e Inspectio n Fe e Statut e agains t

ai r cartier s if

i t i s relate dt o an y on e o f

th e thre e categorie s se t

fort h i n 4 9 U.S.C . § 41713(b)(1) . However , w e d o not believ e Petitione r

ha s establishe di n thi s proceedin g tha t th e Inspectio n Fe e Statut e i s preempte db y th e AD A becaus e i t i s relate dt o ai r

cartie r routes . A s structured , th e Inspectio n Fe e Statut e doe s not comman dan y particular

ai r carrie r conduc t a s t o it s routes , int o Hawai i o r otherwise . Petitione r

di dno t argu e that

an y ai r carrie r woul dalte r

it s route s int o Hawaii , o r

alte r it s route s i n th e continenta l Unite dState s o r othe r location s off

island , an dth e recor ddoe s no t sugges t that ai r carrier s ar e eve n considerin g changin g route s int o Hawai i i n ligh t

o f th e Inspectio n Fe e Statute . O n thi s record , th e Inspectio n Fe e Statut e ma y hav e atenuou s impact , at best , o n ai r

carrie r "routes. "

1 5Th e Inspectio n Fe e Doe s No t Fal l Withi n th e Scop e o f th e AD A Proprietor' s Exception , 4 9 U.S.C . § 41713(b)(3) . Whil e i t i s no t clear , Hawaii' s comment s see mt o impl y that , i n enactin g an denforcin g th e Inspectio n Fe e Statute , Hawai i i s actin g a s a n airport proprieto r

whic h migh t

brin g th e statut e withi n th e ambi t

o f th e so-calle d"proprietor' s exception " o f th e AD A preemptio n provision , 4 9 U.S.C . § 41713(b)(3) . Hawai i Openin g Comment s a t 9 . That provisio n "doe s not

limi t aState , politica l subdivisio n o f

aState , o r

politica l authority o f

a t leas t 2 State s tha t

own s o r operate s a n aupor t serve db y an ai r

carrie r holdin g acertificat e issue db y th e Secretary o f Transportatio n fro mcartyin g out

it s proprietary power s an drights. " Th e inspectio n fe e an dfine s ar e impose do n al l shipper s an dboth ai r cartier s an dmarin e carrier s t o fun dan invasiv e specie s inspectio n progra madministere db y HDOA . I n doin g so , Hawai i i s exercisin g it s polic e power s throug h th e invasiv e specie s inspectio n progra man dth e Inspectio n Fe e Statute . Hawaii , throug h th e HDOA , i s no t carryin g ou t

it s proprietary power s i n connectio n with bem g th e owne r

o r operato r of a n airport . 4 9 U.S.C . § 41713(b)(3 ) doe s not appl y t o non airport-relate dfees , suc h a s thos e impose dunde r th e Inspectio n Fe e Statute . Therefore , t o th e exten t Hawai i ha s raise dthi s argumen t (an di t i s not clear tha t i t has ) th e Inspectio n Fe e Statut e doe s not fal l withi n th e AD A proprietor' s exception . Fo r al l th e foregoin g reasons , w e conclud e tha t th e Inspectio n Fe e Statut e a s applie dt o ai r cartier s i s preempte db y th e ADA . Th e Inspectio n Fe e Statut e A s Applie dt o Ai r Carrier s I s Preempte db y th e AHTA . Th e Inspectio n Fe e Statut e a s applie dt o ai r carrier s (includin g a s t o th e inspectio n fe e an d potentia l fines ) i s als o preempte db y th e AHTA , 4 9 U.S.C . § 40116(b)(3) , becaus e Hawai i may not lev y o r collec t afe e o r othe r charge , directl y o r

indirectly , o n th e sal e o f

"ai r transportation, " ater mwhic h Congres s define di n th e statut e a s includin g th e transportatio n o f ai r freight withi n th e term"property. " Th e plai n languag e o f th e statutory tex t

resolve s thi s question . Th e AHT A wa s adirec t

respons e t o th e 197 2 Suprem e Court decisio n upholdin g airport per passenge r charges . Se e Evansville-Vanderburg h Airpor t Authority Dist . v . Delt aAirlines , Inc. , 40 5 U.S . 70 7 (1972) . I n tha t case , th e Court

foun dtha t

th e charge s wer e basedo n afan

approximatio n o f

us e o f th e airport

facilitie s an dno t

excessiv e i n relatio n t o th e cost s inciure db y airport authorities , an drule dagains t airlin e claim s that

th e charge s constitute dan unreasonabl e burde n o n interstat e commerc e i n violatio n o f th e U.S . Constitution . Th e AHTA' s purpos e was t o limi t Stat e an dlocal taxatio n o f aviation . See , e.g. . Northwes t Airlines , Inc . v . Count

y o f Kent , 51 0 U.S . 355 , 36 3 (1994 ) ("Concerne dtha t ou r decisio n i n Evansvill e migh t

promp t aproliferatio n of

local taxe s burdensom e t o interstat e ai r transportation . Congres s enacte dth e AHTA") ; Wester n Ai r Lines , Inc . v . Boar do f

Equalizatio n o f

Stat e o f Sout h Dakota , 48 0 U.S . 123,12 6 (1987 ) ( " Congres s acte d[i n th e AHTA ] t o limi t stat e taxatio n o f

ai r transportation") .

1 6Congres s originall y enacte dth e AHT A a s th e Airport an dAirwa y Developmen t Acceleratio n (AADA ) Ac t

of 1973 , Pub . L . No . 93-44 , 8 7 Stat . 8 8 (1973) , originall y codifie da s amende da t 49U.S.C. § 1513(a) : N o Stat e (o r

politica l subdivisio n thereof , includin g th e Commonwealth of Puert o Rico , th e Virgi n Islands , Guam , th e Distric t of Columbia , th e territorie s o r possession s o f

th e Unite dState s o r

politica l agencie s o f

tw o o r mor e States ) shal l lev y o r collec t atax , fee , hea dcharge , o r othe r charge , directl y o r

indirectly , o n persons travelin g i n ai r

commerc e o r

o n th e cartiag e o f

person s travelin g i n ai r commerc e o r

o n th e sal e o f

ai r transportatio n o r

o n th e gros s receipt s derive d therefro m* * * I n 1994 , th e AHT A wa s reenacte dan drecodifie da t 4 9 U.S.C . § 40116(a) , (b) , an d(e ) withou t substantiv e change . Th e AHT A no w appear s i n Chapte r 40 1 o f Titl e 4 9 o f

th e U.S . Cod e at

4 9 U.S.C . §40116(b):'' ^ Prohibitions.—Excep t

a s provide di n subsectio n (c ) o f thi s sectio n an dsectio n 4011 7 o f thi s titl e [provision s whic h are not applicabl e t o thi s proceeding] , a State , apolitica l sub-divisio n o f aState , an dan y perso n that ha s purchase do r lease dan airport

unde r sectio n 4713 4 o f

thi s title , may not

lev y o r collec t atax , fee , hea dcharge , o r

othe r charg e on ~ (1 ) a n individua l travelin g i n ai r commerce ; (2 ) th e transportatio n o f

an individua l travelin g i n ai r commerce ; (3 ) th e sal e o f

ai r transportation ; o r (4 ) th e gros s receipt s fro mthat ai r commerc e o r

transportation . Th e term"ai r

transportation " include s "property."' ^ Ai r transportatio n "mean s foreig n ai r transportation , interstat e ai r transportation , o r

th e transportatio n o f

mai l b y aircraft. " 4 9 U.S.C . § 40102(a)(5) . "Interstate ai r transportation, " i n turn , i s define da s "th e transportatio n o f passenger s o r

propert y b y aircraf

t a s acommo n carrie r

for compensation , o r

th e transportatio n o f mai l b y aircraft " betwee n tw o States . 4 9 U.S.C . § 40102(a)(25 ) (Emphasi s added) . "Foreig n ai r

'• * The prohibition agains t charge s o n th e sale o f ai r transportation continue s t

o embrac e bot

h direc t an d indirect charges . The words "directly or indirectly " wer

e "omitteda s surplus. " Historica l an dStatutor y Notes , 4 9 U.S.C . 40116(b) . Section 1(a ) o f the codification ac

t declare s tha

t i t i s acodification "withou

t substantive change, " P.L . 103-272 , 10

8 Stat . 74 5 (Jul

y 5 , 1994) , an

dsection 6(a) , entided"Legislativ e Purpos e an dConstruction, " explicitl y provide s tha

t i t "ma y not b e construedas makin

g asubstantive chang e i

n th e law s replaced. " 108 Stat . 1378 .

' ^ Hawaii' s contention tha t "property " mean s onl

y "thos e tangible thing s owne do r possessedb

y ai r passengers , suc

h a s luggage o

r baggage t o b e transportedwit

h apassenger " lacks merit . Hawai i Openin g Comments a t 19-20 . The ter

m"property " i s no

t define di n th e statute , bu

t othe r definition s i

n bot h in 4 9 U.S.C . Chapte

r 401 , th e chapte r including th

e AHTA , an

di n Titl e 1 4 o

f th e Cod e o f Federa l Regulations , Aeronautic s an dSpace , suppor t th e conmion-sens e conclusion tha t the ter m"property " include s ai

r freight . Fo

r example , "all-carg o ai

r transportation " mean s "the transportation b y aircraf t i n interstat e ai r transportation o

f onl y propert y or onl y mail , o r bodi. " 4 9 U.S.C . § 40102(10) . "[C]argo " means "property , mail , o r both. " Id . a

t § 40102(12) . "Cargo . Al

l traffi c othe r tha n passengers. " 14C.F.R . Part241,Sec . 03 . "Freight . Property , othe r tha n mail , transportedb

y air. " Id . Therefore , th

e ter m"property " as use

di n th e AHT A include s ai

r freight . 1 7transportation " i s similarl y define da s "th e transportatio n o f passenger s o

x propert y b y aircraf

t a s acommo n carrie r

for compensation , o r

th e transportatio n of

mai l b y aircraft , betwee n aplac e i n th e Unite dState s an daplac e outside th e Unite dState s whe n an y part o f th e transportatio n i s b y aircraft. " 4 9 U.S.C . § 40102(a)(23 ) (Emphasi s added).' ^ Wit h thi s understanding , th e inspectio n fe e an dassociate dfine s impose dimde r th e Inspectio n Fe e Statut e ar e direc t

charge s o n th e sal e o f

ai r transportatio n prohibite db y th e AHTA . Here , whil e th e ne t

weigh t o f th e freight

i s th e measuremen t

use dt o calculat e th e inspectio n fee , i t i s directl y impose di n connectio n with th e sal e o f ai r transportatio n becaus e th e fe e i s charge dt o th e shippe r

inciden t t o th e "sale " itself

, i.e. , an ai r

carrie r transferrin g ai r

freight int o Hawai i for ashippe r for aprice . Indeed , th e languag e o f

th e Inspectio n Fe e Statut e itsel f make s clear

tha t th e fe e i s adirec t

charg e o n asale . "Freight " i s define da s "nonpassenge r goods , cargo , o r

lading , transporte dfo r

pay. " Haw . Rev . Stat . § 150A- 2 (Emphasi s added) . "Ther e i s impose da/e e for th e inspection , quarantine , an deradicatio n of invasiv e specie s containe di n an y freight , includin g .. . airfreigh t [ ]. " Haw . Rev . Stat . § 150A-5.3(a ) (Emphasi s added) . "Th e transportatio n company shal l bil l th e fe e t o th e perso n responsibl e fo r payin g th e freigh t

charge s t o th e transportatio n compan y withi n fifteen day s o f

th e delivery of

th e freight. " Id . (Emphasi s added) . "Th e fe e shal l b e pai d b y th e perso n responsibl e fo r payin g th e freigh t

charge s t o th e transportatio n compan y withi n forty-fiv e day s o f

receip t o f th e bill. " Id . (Emphasi s added) . Th e Inspectio n Fe e Statut e als o make s clear

that fine s for whic h shipper s ar e potentiall y liabl e ar e direc t charge s o n asale : "Th e followin g fine s shal l b e impose dfor failur e t o pay , bill , o r

remi t th e inspection , quarantme , an d eradicatio n servic e fe e a s provide dfor i n sectio n 150A-5.3 : " A perso n responsibl e fo r payin g th e freigh t charge s t o th e transportatio n compan y wh o fail s t o pa y th e fe e .. . shal l pay afin e o f tw o time s th e amoun t

of th e inspection , quarantine , an deradicatio n servic e fe e o r $50 , whicheve r

i s higher . Haw . Rev . Stat . § 150A-5.4(a)(1 ) (Emphasi s added) . Accordingly , th e inspectio n fe e i s acharg e pai db y th e shippe r a s apart o f th e sal e o f

ai r transportation , fallin g squarel y withi n th e plai n languag e o f

4 9 U.S.C . § 40116(b)(3).' ^ Hawai i argue s tha t

w e shoul dloo k

t o th e purpos e o f

th e Inspectio n Fe e Statut e t o protec t agains t invasiv e species . Hawai i Openin g Comment s at 16-17 . Hawai i als o urge s tha t w e shoul dloo k

t o

' * I n ArizonaDe

p ' t o f Revenu e v . Cochis e Airlines , 128 Ariz . 432 , 62 6 P.2d59 6 (Ariz . Ct . App . 1980) , a n olde r stat e cas e involvin

g intrastat e ai r transportation , the cour

t correctiy concludeddia

t "the relevan

t prohibition i

n 4 9 U.S.C . § 1513(a

) [no w 4 9 U.S.C . 40116(b) ] refers onl y to the carriag e o

f person s in ai

r commerce, " suc

h tha t the AHT A doe s not appl y t o astat e fe e impose don the transpor

t o f freigh t carrie din intrastat

e ai r transportation . 128 Ariz , a t 437 . Th e court' s determination doe s not affec t ou r decision tha

t the AHT A prohibit s astat

e fe e impose do n the sale o f freight carriedi n "ai r transportation. "

" I n Tinicu mTownshi

p Privileg e Fe e Proceeding , Orde r 2008-3-1 8 (Docke

t OST-2007-29341) , available a t 200 8 W L 555045 8 (Marc

h 24 , 2008) , afTd

, Townshi p of Tinicu mv. Unite dStates , 58 2 F.3 d48 2 (3 dCir . 2009) , w e heldtha t Tinicu mTownship' s "privileg e fee " wa s prohibitedbecause , amon

g othe r reasons , i t constituteda

n impermissible landing fe

e that , unde

r th e AHTA, ma

y onl y b e impose

db y a n airpor t owne r o r operator . However , while finding tha

t Tinicu mTownship' s privileg e fe

e wa s not aprohibitedcharg e o

n the sale o

f ai r transportation , consisten t wit h ou r decision here , w

e recognizedtha

t the ai r transportation o

f propert y fel l nonetheles s within the scop e o f 4 9 U.S.C . § 40116(b)(3) . Id . a t *3 . 1 8Congress' s purpos e i n enactin g tha t AHTA , an dargue s tha t

Congres s wa s concerne dabou t th e impositio n o f

loca l an dStat e hea dtaxe s o n passengers , not charge s o n property . Id . a t 17 . Becaus e th e inspectio n fe e i s impose do n shipper s an dnot ai r cartiers , Hawai i essentiall y argue s that th e Inspectio n Fe e Statut e fall s outside th e scop e o f th e AHTA . Again , w e recogniz e th e importan t objective s of

Hawai i t o protec t

it s ecosystemfro mth e threa t o f invasiv e species . Bu t

Hawaii' s argument , an dth e Inspectio n Fe e Statut e a s applie dt o ai r carriers , canno t

b e square dwith th e plai n languag e o f th e AHTA . Thi s i s th e approac h se t fort h b y th e Suprem e Court

mAloh aAirlines , Inc . v . Directo r o f Taxatio n o f

Hawaii , 46 4 U.S . 7 (1983) . I n that

case , Aloh aAirline s an dHawaiia n Airline s sough t refund s o f

publi c servic e company taxe s o f

four percen t o f it s yearl y gros s incom e impose do n airline s b y th e Hawai i Stat e Legislature . Th e Hawai i Suprem e Court hel dthat th e legislativ e histor y of

th e AHT A supporte d tha t th e statut e i s directe dt o charge s o n passengers . Becaus e th e publi c servic e compan y ta x was directe dat

ai r carrier s an dno t

passengers , th e Hawai i Suprem e Court reasone dtha t

th e tax "di d not com e withi n th e ambit " o f th e AHTA . Id . at

12 . Th e Suprem e Court

unanimousl y rejecte dth e Hawai i Suprem e Court' s approac h an dse t fort h thre e reason s wh y th e plai n languag e o f th e AHT A controlled . "First , whe n afederal statut e imambiguousl y forbid s th e State s t o impose aparticular kin do f ta x o n an industry affectin g interstat e conmierce , coiut s nee dnot loo k beyon dth e pla mlanguag e o f th e federal statut e t o determin e whethe r

astat e statut e tha t

impose s suc h ata x i s preempted. " Id . A s aresult , "th e Hawai i Suprem e Court

erre di n failin g t o giv e effec t t o th e plai n meanin g o f

§ 1513(a ) [no w 4 9 U.S.C . 40116(b)]. " Id . "Second , eve n if di e absenc e o f

an expres s proscriptio n mad e i t necessar y t o g o beyon dth e plai n languag e o f § 1513(a) , nothin g i n th e legislativ e histor y o f th e [Airport Developmen t

Acceleratio n Act ] suggest s tha t Congres s intende dt o limi t § 1513(a)' s preemptiv e effec t

t o taxe s o n airlin e passenger s o r t o sav e gros s receipt s taxes. " Id . at 13 . Third , "th e manne r

i n whic h th e stat e legislatur e ha s describe dan dcategorize d[ astatute ] canno t mas k th e fac t that th e purpos e an deffec t

o f th e provisio n i s t o impose " aprohibite dcharg e o n ancarriers . Id . at

13-14 . Here , Hawaii' s argumen t

i s aki n t o th e on e th e Suprem e Court rejecte di n Aloh aAirlines . Th e purpose , descriptio n an dcategory o f th e Inspectio n Fe e Statut e ar e no t relevan t i n analyzin g whethe r o r no t i t i s prohibite dunde r

th e AHTA . Rather , th e plai n languag e o f th e statut e establishe s that

th e AHT A prohibit s charge s o n th e sal e o f "ai r transportation, " atermwhic h plainl y include s th e transportatio n of ai r freight (i.e. , property) b y aircraft . Th e Inspectio n Fe e i s No t Permitte db y 4 9 U.S.C . § 40116(e)(1) . Contrary t o Hawaii' s contention , th e Inspectio n Fe e Statut e als o doe s no t fal l withi n th e scop e o f th e AHT A "saving s clause " se t fort h at 4 9 U.S.C . § 40116(e)(1) : Excep t a s provide di n subsectio n (d ) o f thi s section , aStat e o r

politica l subdivisio n o f

aStat e may lev y o r

collect.. . taxes (excep t

thos e taxes enumerate di n subsectio n (b ) o f thi s section) , includin g propert y taxes , ne t incom e taxes , franchis e taxes , an dsale s o r us e taxes o n th e sal e o f

good s o r services .

1 9Th e inspectio n fe e an dassociate dfine s impose db y th e Inspectio n Fe e Statut e ar e not withi n th e category o f

th e usua l an dunobjectionabl e "propert y taxes , ne t incom e taxes , franchise taxes , o r sale s o r us e taxe s o n th e sal e o f

good s an dservices " se t

fort h i n th e "savings " claus e o f 4 9 U.S.C . § 40116(e)(1) . I n Tinicu mTownshi p Privileg e Fe e Proceeding , Orde r 2008-3-18 , Docke t

OST

2007-29341 , affd . Township o f Tinicumv . Unite dStates , 58 2 F.3 d48 2 (3 dCir . 2009) . There , w e rejecte dTinicu mTownship' s contentio n tha t th e privileg e fe e a

t issu e i n tha t

proceedin g was permissibl e unde r

Subsectio n 40116(e)(1) . Id . a t 2 5 (citin g Wardai r

Canada , Inc . v . Florid a Departmen t

o f Revenue , Al l U.S . 1,15-1 6 (1986) ; Continenta l Airlines , Inc . v . Departmen t o f Revenue , 1 2 Or . Tax 349 , 35 1 (Or . Tax Ct . 1992) . Lik e th e prohibite dprivileg e fe e i n Tinicu m Townshi p Privileg e Fe e Proceeding , th e inspectio n fee s an dfines ar e not withi n th e category o f th e usua l an dunobjectionabl e taxes se t fort h i n 4 9 U.S.C . § 40116(e)(1) . Hawaii' s relianc e o n Alask aAirlines , Inc . v . Dep' t o f Foo dan dAgriculture , 3 3 Cal.App . 4 506 , 3 9 Cal.Rptr.2 d42 6 (1995) , cert , denied , 51 6 U.S . 100 9 (1995 ) i s similarl y misplaced . There , i n th e fac e o f

a n AHT A challenge , th e Californi aCourt o f Appea l uphel da"servic e charge " assesse do n aircraf

t arrivin g fro mforeig n coimtrie s upo n artiva l i n Californi at o fun dastat e agricultura l pes t

mspectio n program . Bu t th e Court o f Appea l erroneousl y conclude dtha t th e servic e charg e fel l outside th e scop e o f th e enumerate dprohibite dAHT A charges . I n reachin g that conclusion , th e court

erroneousl y reliedo n Unite dAi r Lines , Inc . v . Count

y o f Sa n Diego , 1 Cal.App.4th 418,429-31 , 2 Cal.Rptr.2 d21 2 (1991) , acas e involvin g apropert y ta x expressl y permitte db y 4 9 U.S.C . 40116(e ) (formerl y 4 9 U.S.C . 1513(b)) . In an y event , Californi asubsequentl y disbande dth e program . Late r tha t sam e year , th e Californi aSuprem e Coiu t struc k dow n th e Californi aagricultura l pes t inspectio n progra mo n th e ground s that

th e $20 0 pe r

shi p servic e charg e assesse do n foreig n marin e carrier s violate dth e Commerc e Claus e o f

th e U.S . Constitution . Se e Pacifi c Merchan t Shippin g Ass' n v . Voss , 1 2 Cal. 4 50 3 (1995) , cert , denie dsu b nom . Venema n v . Pacifi c Merchan t

Shippin g Ass'n , 51 7 U.S . 122 1 (1996) . Californi arefunde d$22. 5 millio n collecte dunde r th e progra mt o both maritim e an dairlm e carriers . Se e Protectin g Californi afro mBiologica l Pollution , at p . 19 , availabl e at http://www.cdfa.ca.gov/files/pdf/ProtectCalLegisReport.pdf . Thes e decision s further underscor e th e infirmitie s o f

th e Inspectio n Fe e Statut e a s presently structured . An di n th e 1 5 year s sinc e thes e tw o court

decisions , ther e appear s t o hav e bee n n o further effort s b y Californi at o establis h aprogra mfunde db y suc h aservic e charge . Fo r al l th e foregoin g reasons , w e conclud e tha t th e Inspectio n Fe e Statut e a s applie dt o ai r cartier s i s prohibite db y th e AHTA .

2 0FINA L ORDE R

Th e partie s hav e ha dampl e opportunit y t o presen t argument s an devidenc e t o u s i n thi s proceeding . The y submitte dcomments , declarations , repl y comments , an dsupplementa l comments . W e hav e thoroughl y considere dth e entir e record . Therefore , w e declar e thi s orde r t o b e afinal orde r

o f th e Department , an dwil l prohibi t th e filin g o f

petition s for

reconsideration o r any othe r pleading s o n thi s docket . Pursuan t t o 4 9 U.S.C . § 46110 , aperso n disclosin g substantia l interes t

i n thi s orde r

ma y appl y fo r

revie w o f

th e orde r b y film g apetitio n fo r

revie w i n th e Unite dState s Court o f Appeal s for

th e Distric t

o f Columbi aCircui t

o r i n th e court

of appeal s o f th e Unite dState s for

th e circui t

i n whic h th e perso n reside s o r ha s it s principa l plac e o f business . ACCORDINGLY : 1 . Th e Departmen t

hold s that

th e Hawai i Plan t

Quarantin e La w a s amended , Hawaiia n Revise dStatute s §150 A (Ac t 173) , an daccompanyin g progra mrequirement s ar e preempte db y th e ADA , 4 9 U.S.C . § 41713 . 2 . Th e Departmen t

hold s that

th e Hawai i Plan t

Quarantm e Law a s amended , Hawaiia n Revise dStatute s § 150A (Ac t 173) , an daccompanyin g progra mrequirement s ar e preempte db y th e AHTA , 4 9 U.S.C . § 40116 . 3 . Th e Departmen t

hold s that

Hawai i ma y no t

enforc e th e Hawai i Plan t Quarantin e La w a s amended , Hawaiia n Revise dStatute s §150 A (Ac t 173) , an daccompanyin g progra m requirement s agains t

ai r carriers . 4 . N o petition s for

reconsideration o r

an y othe r pleading s wil l b e accepte do n thi s docket . 5 . W e wil l serv e thi s orde r o n th e partie s t o thi s docket . By :

SUSA N L . KURLAN D Assistan t Secretary for

Aviatio n an dInternationa l Affair s (SEAL ) A n electroni c versio n o f

thi s documen t

i s availabl e at : http://www . regulations , gov .

2 1