FOR PUBLICATION

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

In re: KOREAN AIR LINES CO., LTD., 

ANTITRUST LITIGATION,

SOON JA CHUN, Individually and

on behalf of all others similarly No. 08-56385

situated; BERNARD JUNG KIM,

D.C. No. Individually and on behalf of all  2:07-cv-06542- others similarly situated; SJO-AGR ELIZABETH BAHN,

Plaintiffs-Appellants, OPINION

v.

KOREAN AIRLINES COMPANY, LTD.;

ASIANA AIRLINES INC.,

Defendants-Appellees. 

Appeal from the United States District Court

for the Central District of California

S. James Otero, District Judge, Presiding

Argued and Submitted

September 2, 2010—Pasadena, California

Filed April 18, 2011

Before: Alex Kozinski, Chief Judge,

Diarmuid F. O’Scannlain and Ronald M. Gould,

Circuit Judges.

Opinion by Judge Gould

5151
COUNSEL

Patrick J. Coughlin, Joseph D. Daley, Frank J. Janecek, Jr.,

and Mary Lynne Calkins of Coughlin Stoia Geller Rudman &

Robbins LLP, and Christopher M. Burke and Kristen M.

Anderson of Scott + Scott LLP, for the plaintiffs-appellants.

Ian Simmons, Sri Srinivasan, Irving L. Gornstein, Alexander

Okuliar, Kathryn E. Tarbert, and Anton Metlitsky of

O’Melveny & Myers LLP, and Willard K. Tom, Peter E.

Halle, J. Clayton Everett, Jr., and Joseph Brooks of Morgan,

Lewis & Bockius LLP, for the defendants-appellees.

OPINION

GOULD, Circuit Judge:

Plaintiffs Soon Ja Chun, Bernard Jung Kim, and Elizabeth

Bahn (“Plaintiffs”), acting individually and on behalf of those

similarly situated, appeal the dismissal of their putative class

action asserting antitrust claims against Defendants Korean

Air Lines Co., Ltd. and Asiana Airlines, Inc. (“Defendants”

or “Korean Air and Asiana”). Before its dismissal, their case

was one of many similar suits pending against Defendants on

the same multidistrict litigation docket. Plaintiffs allege that

the fares they paid for airline tickets were unlawfully excessive, in violation of both state and federal antitrust and consumer protection laws. The district court dismissed Plaintiffs’

state law claims as preempted by federal law and denied

Plaintiffs’ motion to amend their complaint to add federal

5154 IN RE KOREAN AIR LINES CO.
claims, effectively extinguishing Plaintiffs’ case. Thereafter,

Plaintiffs’ complaint was dismissed with prejudice.

We have jurisdiction, pursuant to 8 U.S.C. § 1291, to

review the district court’s dismissal. We hold, as a matter of

first impression, that the Airline Deregulation Act of 1978, 49

U.S.C. § 41713, preempts state regulation of foreign air carriers, and we affirm the district court’s dismissal of Plaintiffs’

state law claims. We conclude that the district court erred in

denying Plaintiffs leave to amend to add federal claims. To

the extent that Plaintiffs seek review of the interlocutory case

management order governing the pretrial coordination of

pending cases in the same multidistrict litigation, however, we

lack jurisdiction to review such non-final decisions. We

affirm in part, vacate in part, and remand for proceedings consistent with this opinion.

I

Plaintiffs allege that Defendants illegally conspired to

impose a surcharge on passenger airfares. Plaintiffs are indirect purchasers of airline tickets; that is, they did not purchase

tickets directly from Korean Air or Asiana but instead bought

them from direct purchasers such as travel agents and consolidators. 

Plaintiffs brought their action for violations of federal antitrust and related state laws in the Central District of California. Their initial complaint sought damages and injunctive

relief under the Sherman Act, and under state antitrust and

unfair competition laws, on behalf of two putative classes.

The case was transferred intradistrict to Judge S. James Otero,

to whom similar actions, alleging virtually identical conduct,

had been sent for pretrial purposes as part of multidistrict litigation (“MDL”). See In re Korean Airlines Co., Ltd. Antitrust

Litig., No. 07-ml-01891 (C.D. Cal. filed Dec. 28, 2007) (hereinafter “MDL No. 1891”).1

 The district court consolidated the

1We grant Plaintiffs’ motion to take judicial notice of documents in

MDL No. 1891. See United States v. Wilson, 631 F.2d 118, 119 (9th Cir.

IN RE KOREAN AIR LINES CO. 5155
case with other pending cases and ordered that all plaintiffs

together file an amended consolidated complaint. 

Shortly thereafter, Plaintiffs filed an amended complaint,

asserting then that their action was “brought only under state

laws and only on behalf of indirect purchasers of Korean Air

and Asiana passenger tickets” (emphasis in original). In a status report tendered to the district court, Plaintiffs urged that

their case differed from the other consolidated MDL cases, in

that it was the only case that involved the indirect purchase

of tickets from travel agents or consolidators rather than direct

purchase from the airlines, and they recommended that the

“direct” and “indirect” cases be placed on coordinated but

separate tracks for pretrial purposes. At the next status conference, the district court accepted this division and set out parallel briefing schedules for Plaintiffs’ indirect purchaser action

and the consolidated direct purchaser actions. Plaintiffs’ counsel, as the only firm to have brought a case with indirect purchaser plaintiffs, was appointed as interim counsel to pursue

indirect purchaser actions. The district court also appointed

different co-lead counsel to pursue claims on behalf of the

direct purchaser plaintiffs.

Pursuant to the court’s briefing schedule, both the direct

and indirect purchaser plaintiffs filed second amended complaints. Plaintiffs’ Second Amended Indirect Purchaser Class

Action Complaint (“Original Second Amended Complaint”)

asserted claims predicated not only on state antitrust and

unfair competition laws, as their first amended complaint had

done, but also on the Sherman Act. The direct purchaser

plaintiffs’ second amended complaint alleged violations of

federal antitrust laws only. As clarified in a subsequent stipulation made to the district court, however, the direct purchaser

plaintiffs’ second amended complaint included within its pro1980) (“[A] court may take judicial notice of its own records in other

cases, as well as the records of an inferior court in other cases.”). 

5156 IN RE KOREAN AIR LINES CO.
posed class “persons who qualify as direct purchasers under

Illinois Brick [Co. v. Illinois, 431 U.S. 720 (1977)] or who

would be deemed to be falling within an exception under Illinois Brick so that they have a claim as a direct purchaser

under the Sherman Act.” Stated another way, the direct purchasers’ consolidated complaint sought to pursue federal

claims for direct purchasers as well as for indirect purchasers

who had standing under an Illinois Brick exception. 

Three days after Plaintiffs filed their Original Second

Amended Complaint, the direct purchaser plaintiffs submitted

a proposed case management order (“CMO”) intended to

encompass all actions asserting Sherman Act claims. The

CMO asserted that it would apply to: 

all pending actions and all actions later instituted in,

removed to, or transferred to this Court as part of

MDL No. 1891 or [that] are otherwise related to

these actions (collectively, “the Consolidated

Actions”) including, but not limited to, actions

asserting claims under Section 1 of the Sherman Act,

15 U.S.C. § 1, or foreign law for alleged fixing of

prices for passenger air transportation to or from the

Republic of Korea, except for actions brought on

behalf of indirect purchasers of passenger air transportation under the laws of the several states of the

United States, such as Soon Ja Chun, et. al v. Korean

Air Lines Co., Ltd., et al., Case No. CV 07-06542

SJO (AGRx). All such indirect purchaser actions

shall be coordinated for pretrial purposes with the

Consolidated Actions and subject to a separate case

management order. 

Plaintiffs objected to the CMO on procedural and substantive

grounds, contending that they had not been consulted before

its filing and that, in light of their Original Second Amended

Complaint’s reassertion of federal claims, it “potentially

IN RE KOREAN AIR LINES CO. 5157
usurp[ed] the role of interim class counsel for indirect purchasers.” Plaintiffs filed their own proposed case management

order (“proposed CMO”) to govern actions of indirect purchaser plaintiffs. 

Through a minute order, the district court approved the

direct purchaser plaintiffs’ CMO, rejected Plaintiffs’ proposed

CMO, and clarified its intentions regarding the appointment

of interim lead counsel, explaining that it “intended that the

Indirect Purchaser Plaintiffs would only represent those

claims arising under state law.” The district court struck

Plaintiffs’ Original Second Amended Complaint and directed

Plaintiffs to file an amended complaint consistent with its

order. 

Plaintiffs thereafter filed a revised complaint (“Second

Amended Complaint”) asserting only state law claims, based

on California unfair competition and unfair business practices

laws, as well as on similar laws of nineteen other states and

the District of Columbia. Defendants moved to dismiss the

complaint, arguing, among other things, that Plaintiffs’ claims

for relief arising under state law are preempted by the express

preemption provision of the Airline Deregulation Act of 1978

(“ADA”), 49 U.S.C. § 41713. Plaintiffs opposed the motion

and later requested leave to reinstate their Sherman Act

Claims. 

The district court denied Plaintiffs’ request to add Sherman

Act claims, reaffirming its previous order “that the Indirect

Purchaser Plaintiffs may only represent those claims arising

under state law.” The next day, the district court granted

Defendants’ motion to dismiss on preemption grounds. In a

footnote, the court reiterated that it had denied Plaintiffs’

request for leave to add claims under the Sherman Act on the

basis of its “conclu[sion] that Plaintiffs may only assert state

law claims.” 

5158 IN RE KOREAN AIR LINES CO.
Plaintiffs timely appeal the dismissal of their California

state law claims, arguing that they are not preempted by federal law.2

 Plaintiffs also argue that denial of leave to amend

was error and that they should be allowed to reinstate their

federal antitrust claims on behalf of indirect ticket purchasers.

II

We first address Plaintiffs’ argument that their California

state law claims are not preempted by federal law. The district

court held that Plaintiffs’ state law claims were preempted by

the ADA, which provides that a “[s]tate . . . may not enact or

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

and effect of law related to a price, route, or service of an air

carrier that may provide air transportation under this subpart.”

3

49 U.S.C. § 41713(b)(1). Plaintiffs contend that Congress statutorily defined “air carrier” and “foreign air carrier” as mutually exclusive terms and, therefore, that Congress’s use of the

term “air carrier” in the preemption provision means that foreign air carriers are excluded from its reach. See id.

§§ 40102(a)(2), (21). They also contend that their state law

claims are not “related” to the price of an air carrier and therefore are not preempted. We disagree.

A

[1] Defendants argue that, for the purposes of the ADA

preemption provision, Congress intended the term “air carrier” to encompass all air carriers, whether domestic or foreign,

2Plaintiffs do not mention on appeal the other nineteen state and District

of Columbia laws listed in their Second Amended Complaint and have

therefore waived any argument related to state laws other than those of

California. See Dream Games of Ariz., Inc. v. PC Onsite, 561 F.3d 983,

994-95 (9th Cir. 2009) (stating that matters not raised in appellant’s opening brief are waived). 

3We review de novo both a district court’s dismissal of a case on federal

preemption grounds and a district court’s interpretation of federal statutes.

Peck v. Cingular Wireless, LLC, 535 F.3d 1053, 1055 (9th Cir. 2008). 

IN RE KOREAN AIR LINES CO. 5159
consistent with the term’s ordinary meaning. In arguing that

the provision has a more limited scope, Plaintiffs stress that

Congress has defined the term “air carrier” as “a citizen of the

United States undertaking by any means, directly or indirectly, to provide air transportation,” 49 U.S.C. § 40102(a)(2),

and the term “foreign air carrier” as “a person, not a citizen

of the United States, undertaking by any means, directly or

indirectly, to provide foreign air transportation,” id.

§ 40102(a)(21).4 Plaintiffs contend that Congress intended the

terms “air carrier” and “foreign air carrier” to refer to different entities and that it consistently employed those terms for

distinct uses. In this regard, they note that, in fifty-one separate provisions of law, Congress used both terms to make

clear that a provision applies to both types of carriers. See,

e.g., id. § 40101(a)(10) (using the phrase “air carrier or foreign air carrier”); id. § 40109(a) (using the phrase “air carriers

and foreign air carriers”). Plaintiffs assert that, because Congress used only the term “air carrier” in the preemption provision, it did not intend to preempt state regulation of “foreign

air carrier[s].”

[2] An examination of the FAA shows that Congress’s use

of the term “air carrier” throughout the Act does not always

correspond with that term’s statutory definition and that “air

carrier” is sometimes used to refer generally to both domestic

and foreign airlines. For example, 49 U.S.C. § 44901(i) refers

to “an air carrier providing air transportation under a certificate . . . or a permit.” Only a domestic “air carrier” provides

air transportation under a certificate, and only a “foreign air

carrier” provides air transportation under a permit. See id.

§§ 41102, 41302. Thus, the term “air carrier” in this context

4A domestic “air carrier” may also provide foreign air transportation

services. For example, American Airlines, a domestic “air carrier,” may

fly routes both within the United States and between the United States and

a foreign country. A “foreign air carrier” is restricted, however, to flying

routes between the United States and a foreign destination; it is not

allowed to fly routes between U.S. destinations. 

5160 IN RE KOREAN AIR LINES CO.
refers to both a domestic “air carrier” and a “foreign air carrier.” Also, 49 U.S.C. § 44940(a)(2)(B)(ii) refers to “an air carrier described in subparagraph (A),” which in turn covers both

“air carriers and foreign air carriers,” see id.

§ 44940(a)(2)(A). Likewise, many of the FAA’s subsections

contain only the term “air carrier” in their titles even though

their content plainly regulates both domestic and foreign operators. See id. § 40129(f) (subsection entitled “Eligibility of air

carriers” refers to “air carrier[s]” and “foreign air carrier[s]”

participating in collaborative decisionmaking pilot programs);

id. § 44940(a)(2) (subsection entitled “Air carrier fees” authorizes the Secretary of Transportation to impose certain fees on

“air carriers and foreign air carriers”); see also Carter v.

United States, 530 U.S. 255, 267 (2000) (noting that title of

statute may be of use when it sheds light on an ambiguous

phrase). Congress’s occasional use of the term “air carrier” to

include “foreign air carrier” counsels strongly that the meaning of “air carrier” is ambiguous in the ADA’s statutory preemption provision.

(i)

[3] “Once it is established that [a statutorily defined term

has different meanings in different sections], the term standing alone is necessarily ambiguous and each section must be

analyzed to determine whether the context gives the term a

further meaning that would resolve the issue in dispute.” Robinson v. Shell Oil Co., 519 U.S. 337, 343-44 (1997).5

 Here,

5Such a section-by-section analysis is appropriate in light of the drafting

history of the FAA. Section 101 of the Federal Aviation Act of 1958

defined “air carrier” as being a U.S. citizen “unless the context otherwise

requires.” Pub. L. No. 85-726, 72 Stat. 731 (1958). The 1994 re-enactment

of Title 49 and its slight amendment, which removed this “context” proviso, was not to be construed as making a substantive change in the law,

see S. Rep. No. 103-265, at 5 (1994) (“[T]his bill makes no substantive

change in the law.”), so considering context in construing the meaning of

“air carrier” is consistent with Congress’s intent in drafting the statute. See

Port Auth. of N.Y. & N.J. v. Dep’t of Transp., 479 F.3d 21, 32 (D.C. Cir.

2007). 

IN RE KOREAN AIR LINES CO. 5161
the context in which the term appears in the preemption provision indicates that Congress intended that it apply to all air

carriers and not only to domestic carriers.6 The preemption

provision prohibits state regulation of “an air carrier that may

provide air transportation under this subpart.” 49 U.S.C.

§ 41713(b)(1). The use of the modifying phrase “that may

provide air transportation under this subpart” indicates that

the term “air carrier” is defined in a particular way in this provision. See, e.g., Nw. Forest Res. Council v. Glickman, 82

F.3d 825, 834 (9th Cir. 1996) (“We have long followed the

principle that [s]tatutes should not be construed to make surplusage of any provision.” (internal quotation marks omitted)

(alteration in original)). Because the subpart to which the

phrase refers, entitled “Economic Regulation,” has provisions

regulating both domestic and foreign air carriers, a sensible

reading of the preemption provision implies that “air carrier”

was intended to have its broader and ordinary meaning in this

section of the statute. See 49 U.S.C. § 41101 et seq., Subtitle

VII, Part A, Subpart II. 

Plaintiffs argue, however, that the modifying phrase is consistent with their reading of “air carrier” and that the provision

prohibits state regulation of a domestic “air carrier” that has

permission to provide air transportation. Under Plaintiffs’

interpretation, states could regulate a domestic “air carrier”

that does not have permission to provide air transportation—

that is, a carrier flying illegally without a certificate from the

Department of Transportation. Plaintiffs’ interpretation is neither reasonable nor convincing. If accepted, it would mean

that Congress wanted states to be able to regulate the prices

and services of domestic air carriers that were not at all autho6We decline to apply a general presumption against preemption here

because the ADA preemption provision involves preclusion of state regulation in “an area where there has been a history of significant federal

presence,” namely navigable airspace. United States v. Locke, 529 U.S.

89, 108 (2000); see Skysign Int’l, Inc. v. City & Cnty. of Honolulu, 276

F.3d 1109, 1115-16 (9th Cir. 2002). 

5162 IN RE KOREAN AIR LINES CO.
rized to provide air transportation. It is unlikely that Congress

would have created an explicit exception to allow state regulation of the prices and services of domestic air carriers that

are not authorized to provide air transportation. See Armstrong Paint & Varnish Works v. Nu-Enamel Corp., 305 U.S.

315, 333 (1938) (“[T]o construe statutes so as to avoid results

glaringly absurd, has long been a judicial function.”).

(ii)

A review of the ADA preemption provision’s purpose and

legislative history similarly indicates that Congress intended

to prevent states from regulating foreign air carriers. See Cosmetic Ideas, Inc. v. IAC/InteractiveCorp., 606 F.3d 612, 618

(9th Cir. 2010) (“When statutory language proves unclear, we

work to discern its meaning by looking to the broader context

of the statute as a whole and the purpose of the statute.”

(internal quotation marks omitted)); Merkel v. Comm’r of

Internal Revenue, 192 F.3d 844, 848 (9th Cir. 1999) (“[I]f the

statute is ambiguous, we consult the legislative history, to the

extent that it is of value, to aid in our interpretation.” (internal

quotation mark omitted)). 

[4] The purpose of the ADA’s preemption provision is

“[t]o ensure that the [s]tates would not undo federal deregulation with regulation of their own.” Morales v. Trans World

Airlines, Inc., 504 U.S. 374, 378 (1992). “In addition to protecting consumers, federal regulation insures a uniform system of regulation and preempts regulation by the states” in a

field where state-based variations “would be confusing and

burdensome to airline passengers, as well as to the airlines.”

H.R. Rep. 98-793, at 4 (1984). This purpose would be undermined if states could regulate foreign air carriers. Reading the

statutory scheme to preempt state regulation of domestic air

carriers while permitting such regulation of foreign air carriers would create a confusing patchwork of regulations for airline passengers to navigate, as their decision to purchase

tickets for international flights would carry different conseIN RE KOREAN AIR LINES CO. 5163
quences depending on whether they bought tickets from a

U.S.-based carrier or an airline headquartered in a foreign

country. Such a result would not be consonant with Congress’s express purpose in enacting the statute.

The legislative history behind the ADA also demonstrates

that Congress intended to preserve its authority to regulate the

airline industry by prohibiting states from regulating all air

carriers, both domestic and foreign. As originally enacted in

the context of the deregulation of domestic air transportation,

see Sanchez v. Aerovias De Mexico, S.A. de C.V., 590 F.3d

1027, 1030 (9th Cir. 2010), the ADA’s preemption provision

prohibited state regulation of carriers with authority “to provide interstate air transportation,” 49 U.S.C. App.

§ 1305(a)(1) (1978).7 Then, as now, only domestic air carriers

could provide “interstate air transportation.” Following on the

heels of the ADA, Congress extended deregulation to foreign

air transportation through the International Air Transportation

Competition Act of 1979 (“IATCA”), Pub. L. No. 96-192, 94

Stat. 35 (1980). With almost identical language to that used

in the domestic deregulation context, the IATCA sought to

promote competition in international air transportation

through “[t]he placement of maximum reliance on competitive market forces and on actual and potential competition.”

Id. § 102(a)(4).

[5] The Civil Aeronautics Board Sunset Act of 1984

(“Sunset Act”), Pub. L. No. 98-443, 98 Stat. 1703 (1984),

amended the ADA’s preemption provision by deleting the

term “interstate,” so that preemption extended to “any air carrier having authority . . . to provide air transportation.” Id. The

7As enacted in 1978, the preemption provision of the ADA read: “[N]o

State . . . shall enact or enforce any law, rule, regulation, standard, or other

provision having the force and effect of law relating to the rates, routes,

or services of any air carrier having authority under subchapter IV of this

chapter to provide interstate air transportation.” 49 U.S.C. App.

§ 1305(a)(1) (1978). 

5164 IN RE KOREAN AIR LINES CO.
Sunset Act was born out of a belief that, as the Congressional

deregulatory effort was coming to a close, “legislation [was]

needed to clarify the ADA and to ensure that some limited but

highly important [Civil Aeronautics Board (“CAB”)] functions, such as consumer protection, [would] continue to be

carried out by other agencies after CAB sunset.” H.R. Rep.

98-793, at 2. It conferred upon the Department of Transportation (“DOT”) the CAB’s authority “to prevent unfair or

deceptive practices or unfair methods of competition in air

transportation . . . [and] to ensure that carriers providing interstate or overseas air transportation [were] fit, willing, and able

to perform.” Id. at 13. “[I]n administering these responsibilities DOT [was to] preserve the competitive direction adopted

in the [ADA] and the [IATCA].” Id. at 8. As it is clear that

the ramifications of the IATCA were in the minds of the Sunset Act’s drafters, the Sunset Act’s deletion of the limiting

term “interstate” from the ADA preemption provision leads us

to conclude that Congress intended to expand the ADA’s preemptive scope to cover state regulation of “foreign air carrier-

[s].”8

(iii)

The applicable case law supports our determination that

state law claims are preempted. Although few courts have

explicitly discussed the issue raised by Plaintiffs, numerous

courts—including the Supreme Court—have applied the provision to foreign carriers without reservation. See, e.g., Morales, 504 U.S. at 383-85 (concluding that state law claims were

preempted with respect to all respondents, including foreign

air carriers); Buck v. Am. Airlines, Inc., 476 F.3d 29, 36 (1st

Cir. 2007) (concluding that preemption prevented state law

8Subsequent modification of the preemption provision’s language does

not cast doubt on this conclusion because, when Congress revised the preemption provision in 1994 to its current form, it “intended the revision to

make no substantive change.” Am. Airlines, Inc. v. Wolens, 513 U.S. 219,

223 n.1 (1995); see also S. Rep. No. 103-265, at 5 (1994). 

IN RE KOREAN AIR LINES CO. 5165
claims against six foreign air carriers); Read-Rite Corp. v.

Burlington Air Express, Ltd., 186 F.3d 1190, 1197 (9th Cir.

1999) (concluding state law claim for cargo damage preempted against foreign air carrier). 

The few courts that have squarely considered the issue have

determined that the preemption provision applies equally to

domestic and foreign air carriers. In addition to the district

court’s persuasive reasoning in this case,9 we find instructive

the reasoning of the district court in Lawal v. British Airways,

PLC, 812 F. Supp. 713 (S.D. Tex. 1992). There, the district

court analyzed the pre-1994 language of the preemption provision, which provided for preemption of state laws applied

to “any air carrier having authority . . . to provide air transportation.” Id. at 717 (emphasis omitted). The court concluded

that “the prefatory use of the word ‘any’ would be mere surplusage” if the provision were read to apply to only a domestic “air carrier” and that the modifying language extended to

“various types of carriers, including foreign air carriers.” Id.

at 717-18. Because the 1994 revision to the preemption provision was intended to effect no substantive change, see supra

note 8, such reasoning strengthens our decision that the preemption provision is not limited to domestic air carriers.

(iv)

Our conclusion that the ADA precludes state regulation of

both domestic and foreign air carriers is reinforced by an

important pragmatic concern: If the preemption provision

only sheltered domestic air carriers, it would be more difficult

for foreign carriers to enter the U.S. market for international

9The district court reasoned that “air carrier,” as modified by the phrase

“that may provide transportation under this subpart” was “not immune to

a construction that would include ‘foreign air carriers,’ ” and it noted the

uniformity of opinion applying the ADA preemption provision against foreign air carriers. Stating that there were no compelling policy reasons for

limiting preemption only to claims against domestic air carriers, the district court held that the provision extended to foreign carriers. 

5166 IN RE KOREAN AIR LINES CO.
flights. This added burden would be to the detriment of U.S.

consumers, who benefit from price competition between as

many carriers as possible. Moreover, discriminating against

foreign carriers would be contrary to our country’s general

preference for free trade. See U.S. Dep’t of Commerce,

Strategic Plan: FY 2007-FY 2012, 7-8, available

at http://www.osec.doc.gov/bmi/Budget/07strplan/DOC07

strplan.pdf (“The [U.S.] Department [of Commerce] is committed to free trade by opening and expanding foreign markets for U.S. goods and services and improving U.S. export

performance. . . . Unfair trade negatively affects the ability of

U.S. firms to sell overseas and impacts the U.S. jobs that

depend on the Nation’s international trade.”). If state regulation makes it harder for foreign air carriers to compete with

domestic carriers, U.S.-based airlines might soon encounter

additional, retaliatory barriers when they try to sell tickets

abroad.

(v)

Finally, the approach championed by Plaintiffs would discriminate against foreign air carriers in favor of domestic

ones, contrary to U.S. treaty obligations mandating nondiscrimination. See, e.g., Convention on International Civil Aviation, art. 11, Dec. 7, 1944, 61 Stat. 1180, 15 U.N.T.S. 295

(providing for application of laws and regulation “without distinction as to nationality” of airlines of signatory states); U.S.-

Korea Air Transport Agreement, art. 11, June 9, 1998, State

Dept. No. 98-111, 1998 WL 468488 (“Each Party shall allow

a fair and equal opportunity for the designated airlines of both

Parties to compete in providing the international air transportation governed by this Agreement.”); Treaty of Friendship,

Commerce and Navigation, U.S.-Korea, art. 1, Nov. 28, 1956,

8 U.S.T. 2217 (“Each Party shall at all times accord equitable

treatment to the persons, property, enterprises and other interests of nationals and companies of the other Party.”). This

result would offend the longstanding principle that statutes

should be construed in accordance with international law. See

IN RE KOREAN AIR LINES CO. 5167
Murray v. The Schooner Charming Betsy, 6 U.S. (2 Cranch)

64, 118 (1804) (“[A]n act of Congress ought never to be construed to violate the law of nations if any other possible construction remains . . . .”). 

[6] For these reasons, we hold that the ADA’s preemption

of state regulation covers regulation of all air carriers, whether

domestic or foreign.

B

[7] We further conclude that Plaintiffs’ state law claims,

alleging that Defendants engaged in price-fixing in violation

of the California Business and Professions Code and unfair

competition laws, are “related to a price” of an air carrier for

purposes of preemption under the ADA. 49 U.S.C.

§ 41713(b)(1). The words of the ADA preemption provision

“express a broad pre-emptive purpose,” such that “[s]tate

enforcement actions having a connection with, or reference to,

airline ‘rates, routes, or services’ are pre-empted.” Morales,

504 U.S. at 383-84. The district court accurately concluded

that Plaintiffs seek “to regulate the manner by which Defendants set fares, or components of fares, for air transportation

services.” Because Plaintiffs allege a price-fixing conspiracy,

their claims are plainly related to a price of an air carrier and

consequently are preempted.

Contrary to Plaintiffs’ assertion, it is immaterial that the

state laws do not interfere with the purposes of the federal

statute or that they might be consistent with promoting competition and deregulation. The Supreme Court has rejected

this argument. Id. at 386-87 (stating that, for the purpose of

the ADA preemption analysis, the consistency of state and

federal laws is “beside the point”). Recently, in Rowe v. New

Hampshire Motor Transportation Ass’n, 552 U.S. 364 (2008),

the Supreme Court reiterated that a state law “having a connection with, or reference to” rates, routes, or services is preempted and that “it makes no difference whether a state law

5168 IN RE KOREAN AIR LINES CO.
is consistent or inconsistent with federal regulation.” Id. at

370-71 (internal quotation marks omitted). 

Plaintiffs unsuccessfully argue that the Supreme Court’s

decision to limit the scope of the term “relate to” in the

ERISA preemption provision, see De Buono v. NYSA-ILA

Med. & Clinical Servs. Fund, 520 U.S. 806, 812-13 (1997),

shows that it also intended to limit the ADA preemption provision. The Supreme Court’s 2008 Rowe decision held that “it

makes no difference whether a state law is ‘consistent’ or

‘inconsistent’ with federal regulation.” 552 U.S. at 371.

Although the Court was interpreting the Federal Aviation

Administration Act, it looked to the ADA’s “identical” preemption provision for guidance. Id. at 370. If the Supreme

Court intended to narrow the scope of these preemption provisions because of its ERISA decisions, it could have done so

in Rowe, but it did not. See Agostini v. Felton, 521 U.S. 203,

237 (1997) (“ ‘If a precedent of [the Supreme] Court has

direct application in a case, yet appears to rest on reasons

rejected in some other line of decisions, the Court of Appeals

should follow the case which directly controls, leaving to [the

Supreme] Court the prerogative of overruling its own decisions.’ ” (quoting Rodriguez de Quijas v. Shearson/Am.

Express, Inc., 490 U.S. 477, 484 (1989) (alteration omitted));

Musladin v. Lamarque, 555 F.3d 830, 837 (9th Cir. 2009)

(“The Supreme Court has made clear that the circuit courts

must follow Supreme Court precedent until the Supreme

Court itself declares it no longer binding.”); United Airlines,

Inc. v. Mesa Airlines, Inc., 219 F.3d 605, 608 (7th Cir. 2000)

(“[I]f developments in pension law have undercut holdings in

air-transportation law, it is for the Supreme Court itself to

make the adjustment. Our marching orders are clear: follow

decisions until the Supreme Court overrules them.”).

We conclude that Plaintiffs’ state law claims are preempted, and we affirm the district court’s order dismissing

them.

IN RE KOREAN AIR LINES CO. 5169
III

We next address Plaintiffs’ challenge to the district court’s

denial of leave to amend their complaint to assert previously

abandoned federal claims.10 In arguing that the district court

erred in refusing to let them add federal antitrust claims,

Plaintiffs challenge two separate decisions of that court: (1)

its adoption of the direct purchaser plaintiffs’ CMO in its

March 14, 2008 order, and (2) its refusal to allow Plaintiffs

to add federal antitrust claims via amendment.11 Plaintiffs

contend that the district court erred in assigning responsibility

for litigating purported indirect purchaser claims to direct purchaser plaintiffs’ counsel because such counsel are incapable

of adequately pursuing the interests of both direct and indirect

purchasers, given an inherent conflict of interest between the

two groups. Plaintiffs argue that they instead should have

been allowed to bring federal antitrust claims on behalf of

indirect purchaser plaintiffs. Defendants, for their part, portray both of the district court’s decisions as unreviewable

interlocutory case management orders whose sole effect is to

permit different counsel to pursue Plaintiffs’ claims. They

argue that Plaintiffs’ federal claims are still alive—even

though their case has been dismissed—and that the district

court may revisit and reassess problems associated with

10Plaintiffs characterize their claim in this regard as a claim that the district court should have allowed them to “reinstate” their federal claims.

However, as there is no indication that Plaintiffs’ initial abandonment of

their federal claims was not done voluntarily, we consider the issue as a

denial of a proposed amendment of Plaintiffs’ complaint. 

11We review a denial of leave to amend for abuse of discretion. Kaplan

v. Rose, 49 F.3d 1363, 1370 (9th Cir. 1994). “A district court abuses its

discretion if it does not apply the correct law or if it rests its decision on

a clearly erroneous finding of a material fact.” Casey v. Albertson’s Inc.,

362 F.3d 1254, 1257 (9th Cir. 2004). A review for abuse of discretion

requires looking at both whether the trial court applied the correct legal

rule, and, if so, whether application of the rule was illogical, implausible,

or without support in the record. See United States v. Hinkson, 585 F.3d

1247, 1251 (9th Cir. 2009) (en banc). 

5170 IN RE KOREAN AIR LINES CO.
potential conflicts of interest, if necessary, as the litigation

progresses. 

We have jurisdiction to review the district court’s denial of

leave to amend pursuant to 28 U.S.C. § 1291. Although such

orders are usually not immediately appealable, see, e.g.,

Skoog v. Cnty. of Clackamas, 469 F.3d 1221, 1228-29 (9th

Cir. 2006), the district court’s denial of leave to amend to add

federal claims, in conjunction with its dismissal of Plaintiffs’

state law claims, effectively extinguished Plaintiffs’ entire

case, see, e.g., Watson v. Weeks, 436 F.3d 1152, 1155 (9th

Cir. 2006) (finding jurisdiction to review denial of leave to

amend where entire complaint was dismissed). The district

court’s denial of leave to add Sherman Act claims thus “end-

[ed] the litigation on the merits and [left] nothing for the court

to do but execute judgment,” rendering the decision final and

reviewable. Coopers & Lybrand v. Livesay, 437 U.S. 463, 467

(1978). We conclude that the district court erred in denying

Plaintiffs leave to amend based on its determination that other

counsel would pursue the federal antitrust claims. However,

we lack jurisdiction at this juncture to assess the wisdom of

the district court’s decision to place pretrial responsibility for

both direct and indirect purchaser claims in the hands of counsel for direct purchaser plaintiffs only.

A

Defendants contend that Plaintiffs’ claims survive and are

simply being pursued by different counsel. They therefore

argue that Plaintiffs’ appeal of the district court’s denial of

leave to amend is premature. But Defendants misapprehend

the nature of multidistrict litigation. 

The MDL process seeks to “promote the just and efficient

conduct” of “civil actions involving one or more common

questions of fact [that] are pending in different districts” by

permitting their transfer to a single district for “coordinated or

consolidated pretrial proceedings.” 28 U.S.C. § 1407(a). To

IN RE KOREAN AIR LINES CO. 5171
promote efficiency in a context involving the juggling of dozens or thousands of independent cases, a “district court needs

to have broad discretion to administer the proceeding as a

whole.” In re Phenylpropanolamine (PPA) Prods. Liab.

Litig., 460 F.3d 1217, 1232 (9th Cir. 2006) (hereinafter “In re

PPA”). A district judge exercising authority over cases transferred for pretrial proceedings “inherits the entire pretrial

jurisdiction that the transferor district judge would have exercised if the transfer had not occurred.” 15 Charles Alan

Wright, Arthur R. Miller & Edward H. Cooper, Federal Practice & Procedure § 3886 (3d ed. 2010). Such authority is

broad and encompasses the power to decide dispositive pretrial motions. In re PPA, 460 F.3d at 1231 (stating that a

transferee judge’s power “includes authority to decide all pretrial motions such as motions to dismiss, motions for summary judgment, motions for involuntary dismissal under Rule

41(b), motions to strike an affirmative defense, and motions

for judgment pursuant to a settlement”); see In re Patenaude,

210 F.3d 135, 144 (3d Cir. 2000). 

Transferee courts have handled such procedural matters as

dismissal of original complaints, filing of amended omnibus

complaints, and resolution of motions. Minisan v. Danek

Med., Inc., 79 F. Supp. 2d 970, 971 (N.D. Ind. 1999). A transferee court may require parties to file consolidated amended

complaints superseding original ones. Armstrong v. LaSalle

Bank Nat’l Ass’n, 552 F.3d 613, 614 (7th Cir. 2009). A transferee court may rule on pretrial motions. In re Eli Lilly & Co.,

Prozac Prods. Liab. Litig., 789 F. Supp. 1448, 1450 (S.D.

Ind. 1992). It may enforce venue requirements. In re Tax

Refund Litig., 723 F. Supp. 922, 924 (E.D.N.Y. 1989). It may

require individuals to attend settlement conferences. In re Air

Crash Disaster at Stapleton Int’l Airport, Denver, Colo., on

Nov. 15, 1987, 720 F. Supp. 1433, 1436 (D. Colo. 1988). It

may permit amendment or adjustment of pleadings. Sentner v.

Amtrak, 540 F. Supp. 557, 558 (D.N.J. 1982). It may handle

and resolve discovery motions, including those involving

scope of discovery, appropriateness of protective orders or

5172 IN RE KOREAN AIR LINES CO.
sanctions, and regulation of depositions. See generally In re

Flat Glass Antitrust Litig., 288 F.3d 83 (3d Cir. 2002); In re

Burlington N., Inc., 679 F.2d 762 (8th Cir. 1982); In re Vioxx

Prods. Liab. Litig., 501 F. Supp. 2d 789 (E.D. La. 2007); In

re Air Crash at Charlotte, N.C. on July 2, 1994, 982 F. Supp.

1052 (D.S.C. 1995); Meeder v. Superior Tube Co., 72 F.R.D.

633 (W.D. Pa. 1976).

We confirm the general rule that, in multidistrict litigation,

a transferee judge can handle all types of pretrial matters that

otherwise would have been handled by the transferor court. A

corollary to this principle is that the MDL transferee court is

generally bound by the same substantive legal standards, if

not always the same interpretation of them, as would have

applied in the transferor court.12 However, the district court’s

jurisdiction as an MDL transferee court is generally coextensive with pretrial proceedings. As a result, a district court does

not have authority to transfer a case to itself for trial, Lexecon

Inc. v. Milberg Weiss Bershad Hynes & Lerach, 523 U.S. 26,

28 (1998), nor may it consolidate actions for all purposes, as

might be proper in other circumstances pursuant to Federal

Rule of Civil Procedure 42, see Wright et al., Federal Practice & Procedure § 3866. Within the context of MDL proceedings, individual cases that are consolidated or coordinated

for pretrial purposes remain fundamentally separate actions,

12See, e.g., Toll Bros. v. Dryvit Sys., Inc., 432 F.3d 564, 568 n.4 (4th

Cir. 2005) (“When considering questions of state law, . . . the transferee

court must apply the state law that would have applied to the individual

cases had they not been transferred for consolidation.” (internal quotation

marks omitted) (omission in original)); Menowitz v. Brown, 991 F.2d 36,

40 (2d Cir. 1993) (“[A] transferee federal court should apply its interpretations of federal law, . . . . [but] applies the substantive state law, including

choice-of-law rules, of the jurisdiction in which the action was filed.”); In

re Korean Air Lines Disaster of Sept. 1, 1983, 829 F.2d 1171, 1176 (D.C.

Cir. 1987) (“[T]he law of a transferor forum [on a federal question] . . .

merits close consideration, but does not have stare decisis effect in a transferee forum situated in another circuit.”). 

IN RE KOREAN AIR LINES CO. 5173
intended to resume their independent status once the pretrial

stage of litigation is over.13

In addressing motions to amend brought in the context of

multidistrict litigation, courts have proceeded in a manner that

respects these principles. The substantive rules governing a

district court’s consideration of a motion to amend are the

same as those for ordinary litigation on an ordinary docket.

See, e.g., Khulumani v. Barclay Nat’l Bank Ltd., 504 F.3d

254, 260 (2d Cir. 2007) (vacating denial of motion to amend

where district court’s decision was predicated on legal error);

In re Ford Motor Co. Ignition Switch Prods. Liab. Litig., 39

F. Supp. 2d 458, 467 (D.N.J., 1999) (assessing MDL plaintiffs’ motion for leave to file an amended complaint under

standard discretionary considerations); In re Brand Name

Prescription Drugs Antitrust Litig., 177 F.R.D. 414, 419

(N.D. Ill. 1997) (same). There might be room for some slight

variations in approach to applying the standards for amendment, as we have noted in the context of motions to dismiss.

See In re PPA, 460 F.3d at 1222 (“[C]onsiderations that

inform the exercise of discretion in multidistrict litigation may

be somewhat different, and may tip the balance somewhat differently, from ordinary litigation on an ordinary docket.”).

Still, the basic ground rules for assessing motions for leave to

amend, including the instruction of Federal Rule of Civil Pro13Where, as here, the particular case at issue is initiated in the transferee

court’s district, the district court’s jurisdiction is not always similarly circumscribed to purely pretrial proceedings. See In re Bridgestone/Firestone, Inc., Tires Prods. Liab. Litig., 333 F.3d 763, 767 (7th Cir.

2003) (“Because the decision stemmed from a complaint filed in the

Southern District of Indiana, . . . the district court had original jurisdiction

and was not acting as a transferee court under 28 U.S.C. § 1407 with

respect to this complaint.”). In such a case, the district court’s jurisdiction

beyond pretrial matters is part of its original jurisdiction, not the MDL

jurisdiction. But considerations that animate the restrictions placed on a

transferee court’s exercise of jurisdiction over its MDL docket—including

the principle that individual cases remain separate actions despite being

coordinated or consolidated for pretrial purposes—do not dissipate

because a particular case was filed in the MDL’s home district. 

5174 IN RE KOREAN AIR LINES CO.
cedure 15 (“Rule 15”) that amendments should be freely

given, may not be tossed out the window in an MDL case. 

[8] There is much, of course, that an MDL court can do in

its sound discretion in order to manage multidistict litigation

effectively. It can designate a lead counsel. It can hold some

cases in abeyance while proceeding with others. In discretionary matters going to the phasing, timing, and coordination of

the cases, the power of the MDL court is at its peak. But when

it comes to motions that can spell the life or death of a case,

such as motions for summary judgment, motions to dismiss

claims, or, as here, a motion to amend pleadings, it is important for the district court to articulate and apply the traditional

standards governing such motions. A total disregard for the

normal standards of assessing these critical motions would

improperly subject MDL cases to different and ad hoc substantive rules. 

Federal Rule of Civil Procedure 15(a)(2) provides that

when a party moves to amend before trial, “[t]he court should

freely give leave when justice so requires.” District courts

generally consider four factors in determining whether to

deny a motion to amend: “bad faith, undue delay, prejudice to

the opposing party, and the futility of amendment.” Kaplan v.

Rose, 49 F.3d 1363, 1370 (9th Cir. 1994); see also Foman v.

Davis, 371 U.S. 178, 182 (1962) (stating that Rule 15(a)’s

“mandate is to be heeded,” and that “[i]n the absence of any

apparent or declared reason . . . the leave sought should, as the

rules require, be ‘freely given.’ ”). 

In this case, instead of considering the usual factors, the

district court denied Plaintiffs leave to amend solely on the

basis of an improper consideration, namely the court’s intention “that the Indirect Purchaser Plaintiffs would only represent those claims arising under state law.” The court

essentially concluded that allowing Plaintiffs to add federal

claims would be inconsistent with its prior CMO. But the district court’s decision to allow Plaintiffs to bring only state law

IN RE KOREAN AIR LINES CO. 5175
claims misapprehends the separate and independent nature of

Plaintiffs’ case. Although a district court overseeing MDL

proceedings has the authority to decide which law firm should

serve as lead counsel for the purposes of pretrial proceedings,

MDL proceedings do not expand the grounds for disposing of

individual cases. 

[9] By denying leave to amend on the basis of the court’s

prior CMO, the court applied an incorrect legal standard to

Plaintiffs’ motion. Such an error constitutes an abuse of discretion. Casey v. Albertson’s Inc., 362 F.3d 1254, 1257 (9th

Cir. 2004) (“A district court abuses its discretion if it does not

apply the correct law . . . .”). We therefore vacate the district

court’s denial of leave to amend and remand for an analysis

of Plaintiffs’ request for leave to add federal antitrust claims

under the proper standard. See Khulumani, 504 F.3d at 260

(vacating denial of leave to amend and remanding, in MDL

context).

B

In seeking review of the district court’s denial of leave to

amend their complaint, Plaintiffs also implicitly request that

we review the district court’s adoption of the direct purchaser

plaintiffs’ CMO and its rejection of Plaintiffs’ proposed CMO.14

Because these decisions governing case management do not

represent final judgments on the merits, we lack jurisdiction

to review them. 28 U.S.C. § 1291. 

14Plaintiffs argue that the district court abused its discretion in denying

leave to amend because it did not act to protect indirect purchaser absentee

plaintiffs by allowing direct purchaser plaintiffs alone to maintain federal

antitrust claims. It is not clear if Plaintiffs independently attack the district

court’s adoption of the CMO, as they seem to assume that the reinstatement of their federal claims would make them lead counsel for indirect

purchaser plaintiffs during the pretrial stage of litigation. But because

these decisions are procedurally and analytically distinct, we treat Plaintiffs’ objections as posing a challenge to the district court’s adoption of the

CMO. 

5176 IN RE KOREAN AIR LINES CO.
A district court’s case management orders are generally not

appealable on an interlocutory basis. See Moglia v. Pac.

Emp’rs Ins. Co. of N. Am., 547 F.3d 835, 838 (7th Cir. 2008)

(“Treating case-management orders as injunctions would permit not one appeal per suit, but dozens, and make a mockery

of the final-decision requirement.”). The CMO at issue here

is interlocutory because the district court retains the ability to

modify it at any time. See Z-Seven Fund, Inc. v. Motorcar

Parts & Accessories, 231 F.3d 1215, 1218-19 (9th Cir. 2000)

(holding that an order designating a lead plaintiff is unappealable and interlocutory because it is “not a conclusive, immutable determination of the issue” since the district court might

later change the lead plaintiff “consistent with [its] continuing

duty to see that a class is adequately represented by counsel”

(emphasis in original)). If permitted upon remand to reinstate

their federal claims, Plaintiffs will be able to reassert their

conflict of interest concerns at later stages of litigation, and

the district court will be able to reassess its decisions in this

regard.

There is another reason for declining to view the CMO as

subject to interlocutory consideration. We have held that

“only after assessing . . . the final judgment could an appellate

court decide whether the client’s rights had been prejudiced

[by the appointment of certain counsel].” In re Westwood

Shake & Shingle, Inc., 971 F.2d 387, 390 (9th Cir. 1992)

(internal quotation marks omitted) (alterations and omission

in original)). If Plaintiffs’ conflict of interest concerns have

merit, an “ ‘opportunity for meaningful review will [not] perish’ because [the] circuit court can conclude after trial that

continued representation was prejudicial and can vacate judgment.” Id. (quoting Firestone Tire & Rubber Co. v. Risjord,

449 U.S. 368, 377-78 (1981) (first alteration in original)). 

We hold that decisions regarding the CMOs involved in

this case are interlocutory. That the district court improperly

based its denial of leave to amend on its decision that direct

purchaser plaintiffs’ counsel would represent indirect purIN RE KOREAN AIR LINES CO. 5177
chaser plaintiffs suing under Illinois Brick exceptions does not

render the CMOs themselves reviewable. Given our determination that the district court improperly denied leave to

amend, no causal nexus remains between the challenged

CMO and the dismissal of Plaintiffs’ claims. We therefore

decline to review the district court’s adoption of the direct

purchaser plaintiffs’ CMO, and the court’s rejection of Plaintiffs’s proposed CMO, at this time.

IV

For the foregoing reasons, the district court’s order is

AFFIRMED IN PART, VACATED IN PART, and

REMANDED for further proceedings consistent with this

opinion. 

The parties shall bear their own costs on appeal.

5178 IN RE KOREAN AIR LINES CO.