ATTORNEY GENERAL OF TEXAS

GREG ABBOTT

November 20, 2008

David L. Lakey, M.D.

Commissioner

Texas Department of State 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 regulation authorizing

an EMS subscription program as applied to air

ambulances (RQ-0719-GA)

The Department ofState Health 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

licensed EMS providerto create and operate a subscription program for 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) of Title 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 of a certain geographical area may join 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 Letter from David L. Lakey, M.D., Texas Department ofState Health Services, to Honorable Greg Abbott,

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 implement this

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 of mail 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 Hughes Air Corp. v. Pub. Utils. Comm 'n ofCal. , 644 F.2d 1334 (9th eire

1981). It does not, however, apply to purely intrastate transportation, as long as mail is not

transported. See SeaAir NY, Inc. v. City ofNew York, 250 F.3d 183 (2nd eire 2001).

The preemption provision has been applied to air ambulance companies that are air carriers

within the ADA definition. See Hiawatha Aviation ofRochester, Inc. v. Minn. Dep't ofHealth,

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 ofair ambulances under certificate ofnecessity statutes); cfAirEvac EMS, Inc.

v. Robinson, 486 F. Supp. 2d 713, 723 (M. D. Tenn. 2007) (Federal Aviation Act of 1958 preempts

field ofaviation safety, including state equipment requirements for air ambulances). Butsee Eagle

Air Med Corp. v. Colo. Bd of Health, 570 F. Supp. 2d 1289, 1293 (D. Colo 2008) (federal

proceedings stayed under Younger v. Harris, 401 V.S. 37 (1971) abstention doctrine, because judge

not persuaded that ADA preempts state regulation of air ambulance service).

2you also ask whether the ADA preemptsthe 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 provided by air carriers operating as air ambulances, except to 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 Hiawatha Aviation ofRochester, Inc. v. Minn. Dep't ofHealth, 389 N.W.2d

507, 509 (Minn. 1986); Ariz. Ope Att'y Gen. No. 187-164 (1987) at 2.
David L. Lakey, M.D. - Page 3 (GA-0684)

In Morales v. Trans WorldAirlines, Inc., the United States Supreme Court held that the ADA

expressly preempts state restrictions on the content and format of airline fare advertising. See

Morales, 504 U.S. at 391. The court, giving a broad construction to the term" related to" in section

§41713(b)(1), determined that the ADApreempted "[s]tate enforcement actions having a connection

with or reference to airline 'rates, routes, or services.,,, Id at 384. It found that the state restrictions

would have a significant impact upon airline fares. See id at 391.

Section 41 713(b)(1) will preemptthe DSHS regulation authorizing the subscription program

as applied to air ambulances ifthe regulation is "related to a price" of an 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 of the subscription

program is related to the price of air ambulances services. We conclude that section 41713(b)(I)

preempts section 773.011 and the subscription program requirements 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

subscription programusing both ground vehicles and air ambulances. See RequestLetter,supra note

1, at 5. In Federal Express Corp. v. California Public Utilities Commission, the court found that the

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 if weather or mechanical problems delayed the aircraft. See id.

at 1076-77. The court also relied on the ADA provision stating that the 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 of expedited

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 of airline vacation package).

Federal Express indicates that ADA preemption 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 Rochester Ambulance Serv., 500 N.W.2d 495, 500 (Minn. App.

1993) (no preemption of state regulation of ground ambulances operated by an air ambulance

company because air service and ground service were not an integrated whole, in that neitherservice

was necessary to the continued operation ofthe other). We cannot determine as a matter of law

whether transportation by ground ambulance is an integral part ofan air transportation service, such
David L. Lakey, M.D. - Page 4 (GA-0684)

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 whether the ADA preempts its regulation of

an EMS subscription program applicable to ground ambulance transportation provided by a specific

company that also operates air ambulances.
David L. Lakey, M.D. - Page 5 (GA-0684)

SUMMARY

Pursuant to section 157.11(1) of Title 25, Texas

Administrative Code, emergency medical service providers may

establish a subscription program allowing members a reduced rate 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 of an 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