ATTORNEY GENERAL OF TEXAS GREG ABBOTT

November 20, 2008

David L. Lakey, M.D. Commissioner Texas Department ofState Health Services 11 00 West 49th Street Austin, Texas 78756

Dear Commissioner Lakey: Opinion No. GA-0684 Re: Whether the federal Airline Deregulation Act preemptsthe state statute and regulationauthorizing an EMS subscription program as applied to air ambulances (RQ-0719-GA)

TheDepartmentofStateHealth Services (DSHS orDepartment) licenses emergencymedical service (EMS) providers, including providers operating as an air ambulance service. 1 See TEX. HEALTH & SAFETY CODE ANN. §§ 773.041(a) (Vernon SUppa 2008) (license requirement), .045 (Vernon 2003) (use of aircraft to transport sick or injured). Section 773.011 authorizes a licensedEMS providerto create and operate a subscriptionprogramfor emergencymedical services and directs the DSHS Board to establish minimum standards and rules for the program. See id. § 773.011 (Vernon 2003). Section 157.11(1) ofTitle 25, Texas Administrative Code, states the requirements for participation in the subscription program, such as obtaining written authorization from the highest elected official ofthe political subdivision where subscriptions will be sold. See 25 TEX. ADMIN. CODE § 157.11(1)(1) (DSHS, Requirements for an EMS Provider License) (Westlaw). Residents ofa certain geographical area mayjoin an EMS subscription program for a single annual fee, and the EMS provider will charge them either no fee or a reduced fee for ambulance services. See Request Letter, supra note 1, at 1. The DSHS has approved air ambulance providers as well as ground ambulance providers to create and operate subscription programs. See id. at 2. Questions have arisen as to whether the federal Airline Deregulation Act of 1978 (ADA), in particular section 41713 ofTitle 49 U.S.C.A., preempts state requirements for a subscription program as applied to air carriers. You ask whether the ADA preempts the authority ofDSHS to regulate prepayment for air ambulance transportation

1See Letterfrom DavidL. Lakey, M.D., Texas DepartmentofStateHealth Services, to Honorable GregAbbott, Attorney, General of Texas, at 1 (June 2, 2008) (on file with the Opinion Committee, also available at www.texasattorneygeneral.gov) [hereinafter Request Letter].David L. Lakey,**M~D.** - Page 2 (GA-0684)

by authorizing and regulating a provider's subscription program. Id at 5.2 Your question focuses on the price aspect ofthe subscription program,.and our answer will be limited to this matter. 3 The ADA was designed in part to promote "maximum reliance on competitive market forces." Morales 

### v. Trans WorldAirlines, Inc.,.504 U.S. 374, 378 (1992). To help implementthis purpose, it includes the following express preemption provision: (b) Preemption.-(I) 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**eff~ct** oflaw related to a price, route, or service of an air carrier that may provide air transportation under this subpart. 49 V.S.C.A. § 41713(b)(I) (West 2007) (emphasis added). "Air transportation" means "foreign air transportation, interstate air transportation, or the transportation ofmail by aircraft." Id. 

### § 40102(a)(5) (West 2007). See also ide 

### § 40102(a)(2) (defining "air carrier" as "a citizen of the Vnited States undertaking

. . . to provide air transportation"). Thus, the ADA applies to interstate carriers, including the intrastate operations of an interstate carrier. See HughesAir Corp. 

### v. Pub. Utils. Comm 'n of Cal. , 644 F.2d 1334 (9th eire 1981). It does not, however, apply to purely intrastate transportation, as long as mail is not transported. See SeaAirNY, Inc. 

### v. City of New York, 250 F.3d 183 (2nd eire 2001). The preemptionprovision has been applied to air ambulance companies that are air carriers within the ADA definition. See Hiawatha Aviation of Rochester, Inc. 

### v. Minn. Dep't of Health, 389 N.W.2d 507, 509 (Minn. 1986) (state preempted from controlling entry into field of air ambulance service); Ariz. Ope Att'y Gen. No. 187-164 (1987) at 1 (ADA preempts state from economic regulation ofairambulances undercertificate ofnecessity statutes); cf AirEvacEMS, Inc. 

### v. Robinson, 486 F. Supp. 2d 713, 723 (M. D. Tenn. 2007) (Federal AviationAct of 1958 preempts field ofaviation safety, including state equipmentrequirements for air ambulances). Butsee Eagle Air Med Corp. 

### v. Colo. Bd ofHealth, 570 F. Supp. 2d 1289, 1293 (D. Colo 2008) (federal proceedings stayedunder Younger 

### v. Harris, 401 V. S. 37 (1971) abstention doctrine, becausejudge not persuaded that ADA preempts state regulation ofair ambulance service).
2you also askwhetherthe ADApreempts the Texas Department ofInsurance from regulating an air ambulance subscription program. Health and Safety Code section 773.011 provides that "[t]he Insurance Code does not apply to a subscription program established under this section." TEX. HEALTH & SAFETY CODE ANN. § 773.011(e) (Vernon 2003). The Department ofInsurance has no authority to regulate ambulance subscription programs, and accordingly there is no statute or regulation to which the federal preemption provision might apply. 3We do not address the health care services providedby air carriers operating as air ambulances, exceptto note that to the extent this matter has been addressed, the ADA has been held not to apply to state regulation ofhealth care services provided on air ambulances. See HiawathaAviation of Rochester, Inc. v. Minn. Dep't of Health, 389 N.W.2d 507, 509 (Minn. 1986); Ariz. Ope Att'y Gen. No. 187-164 (1987) at 2.David L. Lakey, M.D.

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InMorales 

### v. Trans WorldAirlines, Inc., the United States Supreme Courtheldthatthe ADA expressly preempts state restrictions on the content and format of airline fare advertising. See Morales, 504 U.S. at 391. The court, giving abroad constructionto the term" relatedto" in section §41713(b)(1), determinedthattheADApreempted "[s]tate enforcementactions having aconnection with orreference to airline 'rates, routes, or services. ,,, Id at 384. Itfound thatthe state restrictions would have a significant impact upon airline fares. See id at 391. Section41 713(b)(1) willpreemptthe DSHS regulationauthorizingthe subscriptionprogram as applied to air ambulances ifthe regulation is "related to a price" ofan air carrier. 49 U.S.C.A. § 41713(b)(1) (West 2007). "'Price' means a rate, fare, or charge." Id. § 40102(a)(39). According to your description, a subscription program involves an annual fee and a reduced charge· for air ambulance services. See Request Letter, supra note 1, at 1. The regulation ofthe subscription program is related to the price ofair ambulances services. We conclude that section 41713(b)(I) preempts section 773.011 and the subscriptionprogramrequirements in rule 157.11(l) to the extent these provisions relate to rates charged by air carriers providing air ambulance services. You also ask whether the ADA preempts DSHS from regulating any aspect of an EMS subscriptionprogramusingbothgroundvehicles andairambulances. See RequestLetter, supranote 1, at 5. InFederalExpress Corp. v. California Public Utilities Commission, the courtfound thatthe predecessor ofsection 41 713(b)(1) applied to trucks operated by Federal Express, which operated numerous aircraft as an "all-cargo" air carrier, carrying no passengers. See Fed. Express Corp. v. Cal. Pub. Util. Comm 'n, 936 F.2d 1075,1076 (9th Cir. 1991). Trucks were an essential component of the system, routinely transporting packages that did not fit on the plane and providing an alternative mode oftransportation ifweather or mechanical problems delayed the aircraft. See id. at 1076-77. The court also relied onthe ADAprovision stating thatthe Secretary ofTransportation should consider "encouraging and developing an expedited all-cargo air transportation system." 49 U.S.C.A. § 40101(b)(I) (West 2007) (formerly 49 V.S.C.A. § 1302(b)(2)); see Fed Express Corp., 936 F.2d at 1079. The court stated that Federal Express was exactly the kind ofexpedited all-cargo service that Congress specified. See Fed Express Corp., 936 F2d at 1079. The Federal Express trucks were an essential part ofthe all-cargo air service, and state regulation oftrucking operations was preempted. See id.; see alsoChouest v. Am. Airlines, Inc., 839 F. Supp. 412,417 (E.D. La. 1993) (distinguishing Federal Express case in several ways from action concerning state law tort and contract remedies for personal injury sustained during ground transportation provided as part ofairline vacation package). FederalExpress indicates thatADApreemption should apply to ground ambulances owned and operated by an air carrier to transport subscription program members if ground ambulance transportation is an integral part ofthe air transportation service. See Fed Express, 936 F.2d at 1077; but see Chouest, 839 F. Supp. at 416-17 (ground transportation not shown to be integral to air transportation services), In re RochesterAmbulance Serv., 500 N.W.2d 495, 500 (Minn. App. 1993) (no preemption of state regulation of ground ambulances operated by an air ambulance companybecause air service and ground service were notanintegratedwhole, inthatneither service was necessary to the continued operation ofthe other). We cannot determine as a matter oflaw whethertransportationby ground ambulance is an integral partofan airtransportation service, suchDavid L. Lakey, M.D.

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that the subscription program is preempted for the ground transportation. See Tex. Att'y Gen. Ope No. GA-0459 (2006) at 3-4 (fact questions cannot be investigated and resolved in an attorney general opinion). Accordingly, DSHS must determine whetherthe ADA preempts its regulation of an EMS subscriptionprogram applicable to ground ambulancetransportationprovidedby a specific company that also operates air ambulances.David L. Lakey, M.D.

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### SUMMARY Pursuant to section 157.11(1) of Title 25, Texas Administrative Code, emergency medical service providers may establisha subscriptionprogramallowingmembers areducedrate for air ambulance services. Because section 157.11 (1) relates to charges for air ambulance services, the federal Airline Deregulation Act of 1978 (ADA) preempts it as to air carriers providing interstate air ambulance services. The ADA preempts the state regulation as applied to a ground ambulance operated as an integral part ofan air ambulance service.

KENT C. SULLIVAN First Assistant Attorney General ANDREW WEBER Deputy Attorney General for Legal Counsel NANCY S. FULLER Chair, Opinion Committee Susan L. Garrison Assistant Attorney General, Opinion Committee