Document: 513 U.S. 219115 S.Ct. 817130 L.Ed.2d 715 AMERICAN AIRLINES, INC., Petitioner,v.Myron WOLENS et al. No. 93-1286. Supreme Court of the United States Argued Nov. 1, 1994. Decided Jan. 18, 1995. Syllabus * In consolidated state-court class actions brought in Illinois, plaintiffs (respondents here), as participants American Airlines' frequent flyer program, challenged American's retroactive changes program terms and conditions—particularly, imposition capacity controls (limits on seats available to passengers obtaining tickets with credits) blackout dates (restrictions such credits could be used). Plaintiffs alleged that application these mileage they had previously accumulated violated Illinois Consumer Fraud Deceptive Business Practices Act (Consumer Act) constituted a breach contract. answered Airline Deregulation 1978 (ADA), 49 U.S.C.App. § 1305(a)(1), preempted plaintiffs' claims. The ADA prohibits from "enact[ing] or enforc[ing] any law . other provision having force effect relating [air carrier] rates, routes, services." While class-action litigation was sub judice, this decided Morales v. Trans World Airlines, Inc., 504 ----, 112 2031, 119 157. defined 1305(a)(1)'s "relating to" language mean "having connection reference airline 'rates, services,' " id., at S.Ct., 2037, held National Association Attorneys General (NAAG) guidelines fare advertising were under definition. Court, post-Morales, ruled monetary claims survived for adjudication. Those related only "tangential[ly]" "tenuous[ly]" "rates, services," court reasoned, because programs are "peripheral," not "essential," an airline's operation. Held: ADA's preemption prescription bars state-imposed regulation air carriers, but allows room enforcement contract set by parties themselves. Pp. __. (a) does countenance Court's separation "essential" operations unessential programs. Plaintiffs' complaints, accordingly, state carrier "rates" (i.e., charges, form credits, class-of-service upgrades) "services" access flights upgrades unlimited retrospectively applied dates). P. 6. (b) full text clause, congressional purpose leave largely airlines themselves, all States, selection design marketing mechanisms appropriate furnishing transportation services, impel conclusion 1305(a)(1) preempts is prescriptive, controlling primary conduct those falling within its governance; Act, indeed, paradigmatic consumer protection laws underpin NAAG guidelines. highlight potential intrusive business practices inherent legislation. illustrate simply give bargains offered accepted customers, serves means guide police practices. (c) ADA, however, bar adjudication routine clause leaves suits alleging no violation obligations, seeking recovery solely own, self-imposed undertakings. As persuasively argued conditions offer accept privately ordered obligations thus do fit compass enactments directives targeted 1305(a)(1). A remedy confined contract's holds their agreements—in instance, judgments made public about rates services. private agreements advances market efficiency designed promote, comports provisions Federal Aviation 1958 (FAA) Department Transportation (DOT) regulations presuppose vitality contracts governing transportation. Such responsive reality DOT lacks apparatus resources required superintend dispute resolution regime. claims, furthermore, accords due recognition Congress' retention FAA's saving which preserves "the remedies now existing common statute." Nor can it maintained identical to, therefore should same extent as, basis action parties' agreement; succeed one need show agreement, must unfair deceptive practice. (d) argument fail depend policies independent intent assumes answer very construction issue turn: Did American, contract, reserve right change value already rules earned after date change? That pivotal question interpretation has yet airing remains open remand. ___. 157 Ill.2d 466, 193 Ill.Dec. 172, 626 N.E.2d 205 (1993), affirmed part, reversed remanded. GINSBURG, J., delivered opinion REHNQUIST, C.J., KENNEDY, SOUTER, BREYER, JJ., joined, STEVENS, joined Parts I (except last paragraph) II-B. filed concurring part dissenting part. O'CONNOR, judgment THOMAS, except Part I-B. SCALIA, took consideration decision case. Bruce J. Ennis, Jr., Washington, DC, petitioner. Cornelia T.L. Pillard, New York City, amicus curiae, special Court. Gilbert W. Gordon, Chicago, IL, respondents. Justice GINSBURG 1 (ADA) This case concerns scope preemptive provision, specifically, suit, challenging program. We hold 2 A. 3 Until 1978, (FAA), 72 Stat. 731, amended, 1301 seq. (1988 ed. Supp. V), empowered Civil Aeronautics Board (CAB) regulate interstate industry. Although FAA, pre-1978, authorized both fares take administrative against trade practices, federal legislation originally contained preempting regulation. And start, FAA "saving clause," 1106, 1506, stating: "Nothing chapter shall way abridge alter statute, addition remedies." 4 Congress enacted 92 1705, deregulated domestic transport. "To ensure would undo deregulation own," 2034, (1992), included read relevant part: 5 "[N]o State enact enforce law, rule, regulation, standard, services carrier. ." 1305(a)(1).1 6 our second encounter clause. 1992, Morales, we confronted detailed Travel Industry Enforcement Guidelines, composed (NAAG). purported govern, inter alia, content format advertising. See U.S., ---- - 2041-2054 (appendix setting out travel industry practices). Several endeavored guidelines, States' general laws, stop allegedly advertisements. initiative, determined, 'relat[ed] [airline] 2055 (quoting 1305(a)(1)); consequently, held, ADA. Id., 2040. 7 For aid construing words carrier," referred Employee Retirement Income Security 1974 (ERISA), provides "insofar relate employee benefit plan." 29 U.S.C. 1144(a). Under ERISA, ruled, "relates plan "if Shaw Delta Air Lines, 463 85, 97, 103 2890, 2900, 77 490 (1983). analogously services.' 2037. 8 presented much more, accounting question. pointed concerned agencies—the (DOT)2 Trade Commission (FTC)—objected inconsistent deregulatory purpose; agencies, observed, regarded regulatory measures 2034 (DOT FTC); 2039 (DOT); 2040 (FTC). emphasized "binding requirements how may marketed," "imposed [obligations that] have significant impact upon [airlines] charge." 2039, further noted "carte blanche lie deceive consumers," retains power prohibit advertisements competitive pricing." also left "too tenuous, remote, peripheral pre-emptive effect." Ibid. (internal quotation marks omitted). B 9 before us, two judice when Morales. here) AAdvantage. AAdvantage enrollees earn fly American. They exchange flight upgrades. complained modifications, instituted 1988, devalued members earned. featured Conceding reserved conditions, i.e., cutbacks utility accumulated. These cutbacks, maintained, Act), 815 Ill. Comp.Stat. 505 (1992) (formerly codified Ill.Rev.Stat., ch. 1211/2, ¶ 261 (1991)), currently seek relief.3 10 March several weeks rejected prayer injunction. decree, involve current rendition matter court, allowed relief survive. said, "only specifically more than tangential routes Wolens 147 367, 373, 168 133, 136, 589 533, 536 (1992). After petitioned certiorari. charged sync narrowly construed broadly granted petition, vacated remanded light Inc. Wolens, 506 113 32, 121 11 On remand, dissent, adhered prior judgment. Describing 472, 175, 205, 208 merely "peripheral operation airline," ibid., typed money damages "relat[ed] services" "tenuous[ly]." 12 petition certiorari, 511 114 1396, 128 69 (1994), reverse survival claims; affirm judgment, permits proceed. respects, adopt position DOT, advanced States. II 13 dwell whether complaints satisfied, matters operations. "rates," charges free upgrades, "services," dates. But contains interpretation, "enact law" instruction: Taking into account placed first consider preempted, then turn 14 declares unlawful "[u]nfair methods competition acts including limited use employment deception, fraud, false pretense, promise, misrepresentation concealment, suppression omission material fact, others rely practice described Section 'Uniform Act' commerce person fact been misled, deceived damaged thereby." Ill.Comp.Stat. 505/2 262 (1991)). 15 prescriptive; governance. underpinning Task Force Industry, California, Texas, Washington served, see reported created 16 "new regarding explain detail apply programs." 17 typified Act. example, enforcing instruct rights programs, include transition fair institution controls. Brief Amicus Curiae 13-14, n. 7. 18 illustrate, airlines; customers. services,4 conclude 19 maintains, agree, "Congress hardly intended allow hobble [competition passengers] through restrictive laws." Petitioner 27. shelter "and amount State's 'enact[ment] enforce[ment] [of] law' meaning [§] 1305(a)(1)."5 9. Cf. Cipollone Liggett Group, 2608, 2612, 120 407 (plurality opinion) ("[A] contractual commitment voluntarily undertaken 'requirement imposed [Federal Cigarette Labeling Advertising Act] 5(b)."). services.6 20 recognized promote "maximum reliance forces." 1302(a)(4). Market requires effective agreements. Farber, Contract Law Modern Economic Theory, 78 Nw.U.L.Rev. 303, 315 (1983) (remedy "is necessary order economic efficiency"); R. Posner, Analysis 90-91 (4th 1992) (legal efficient purely voluntary system). stated States: "The stability fundamentally freely made, based needs perceived contracting time." 23. key sensible 21 text, note, presupposes carriers. 411(b), 1381(b), authorizes "incorporate ticket written instrument carriage" DOT. DOT's contemplate that, January 1983, termination tariffs, "ticket contracts" ordinarily enforceable States." 47 Fed.Reg. 52129 (1982). Correspondingly, carriers notice time period "bring acts." CFR 253.5(b)(2) (1994). 22 suggest lack legal force. sees exclusively competent monitor points Department's authority require airline, conjunction certification, file performance bond conditioned "making compensation ., prescribed [Department], failure perform accordance therefor." 401(q)(2), 1371(q)(2).7 neither nor predecessor, CAB, ever displace courts adjudicators disputes. Instead, agencies charge them less taxing task: passing fitness 401(d), 1371(d)(1), CAB used carrier's financial marginal, funds will compensate customers if goes providing already-paid-for See, e.g., Bahamas Service Investigation, Order 79-11-116, p. 3, 84 Reports 73, 75 (1979) ("We find Southeast [Airlines] provide scheduled foreign However, Southeast's condition present unacceptable risk loss consumers. Therefore, procure maintain who paid performed."). 23 maintains 22. Prior deregulation, cumbersome process applications approvals. 731. When dismantled regime, emphasizes, lawmakers indicated intention establish, simultaneously, new agree. 24 plausible meant channel resolving, pursuant judicially fashioned range hint role courts. regard, contrasts markedly civil courts, ERISA §§ 502(a), (e), 1132(a), comprehensive scheme, legislation, "prompt settlement." Pilot Life Ins. Co. Dedeaux, 481 41, 54, 107 1549, 1556, 95 39 (1987); Ingersoll-Rand McClendon, 498 143-145, 111 478, 485-86, 474 (1990) (finding ERISA's scheme "special feature" supporting common-law wrongful discharge claims). 25 state-law-based makes sense 1506 (preserving statute"). together stops imposing own substantive standards respect affording party proves dishonored term itself stipulated. distinction between what dictates undertakes confines actions, bargain, enlargement enhancement external agreement.8 26 suggests differ labels, so well. Reply without "does cause cognizable [Consumer Fraud] simple claims." Golembiewski Hallberg Agency, Ill.App.3d 1082, 1093, 200 113, 121, 635 452, 460 (1st Dist.1994). necessarily cases, III 27 ultimately argues even States—the "inescapably parties." 3. cannot reach merits," contends, "unless invalidates limits [American's] express reservation Program contracts." 28 unpersuasive, Respondents (plaintiffs recognize "reserved restrict, suspend, otherwise aspects prospectively," "never retroactively diminish members"). airing, intimate view resolution. Responding colleagues' diverse opinions add final note. presents issues run law. First, decides (here, latter lacking task)? question, agree extent: None foist work instructed funded do. Second, where proper draw line preempts, ordering, backed judicial enforcement)? Stevens reads demand minimal preemption; contrast, O'Connor mandate total preemption.9 middle course seems us best calculated carry design; bears approval statute's experienced administrator, while adhere holding overlook system adjudication, principles seldom settled "on closer working out." Pound, Survey Conference Problems, U.Cin.L.Rev. 324, 339 (1940) (Conference Status Rule Judicial Precedent). 30 reasons stated, proceedings opinion. 31 It ordered. 32 SCALIA 33 34 majority pre-empt respondents' breach-of-contract disposition consumer-fraud my opinion, tort negligence statutory prohibition pre-empted. broad (and incorrect1 ) "law adopted direct pre-empted; extend embrace respondents assert 35 Unlike reviewed commercial enterprises—airlines included—to refrain defrauding said nothing pre-empting prohibiting fraud. majority's extension airline-specific background rule represents alarming Morales' holding. 36 reason why requiring honor commitments "duty make statements conceal facts." 2623, similar claim pre-empted Act). case, grounded exact presumably correctly finds did intend breached agreement. defrauded making 37 analogize codification rules. ordinary principles, every duty exercise reasonable care toward persons whom he comes contact. Presumably, negligent somehow affected services,2 victim sue ante, __, Like standard individuals affairs. Surely rein commit subject supervision Transportation, impunity. And, judge-made duties pre-empted, little pre-emption legislature. committing fraud dealings—it deceive." Cipollone, 2624. novel controversial proscription. falls heavily business. "public policy" rule. sum, difference deception care, meaningful either 38 particularly untenable interpretive presumption pre-emption. believe there insufficient evidence supersede applicability justify finding pre-empts claim. 2622-2625; 2034-2035 (Stevens, dissenting) (discussing incident federalism). Indeed, especially retained clause" preserving "remedies 1506. Accordingly, join entire Illinois. 40 THOMAS joins I-B, 41 permitting go forward, arrives might policy legislate it. not, consistent precedents, some questionable assumptions nature none 42 43 says "no carrier." considered similarity 1305's 1144(a), like 1144, "express purpose." concluded "State services' pre-empted." 44 Applying "related "services." says, terms, law," 1305, instead "hold[ing] agreemen[t]." 5. concludes 1305 actions. conclusion. 45 understand say "enforces" "law" (e.g., attorney general, judge) orders someone something. If "enforce" context, diversity never preemption, involved, whereas court. sense, routinely determining particular preempted. E.g., Statland 998 F.2d 539, 541-542 (CA7 1993) (contract preempted), cert. denied, 510 603, 126 568 (1993); West Northwest 995 148, 151 (CA9 (tort punitive 1053, 127 374 (1994); Cannava USAir, 91-30003-F, 1993 WL 565341, (D.Mass., 7, preempted). Consequently, "enforcement actio[n] ha[s] supra, explains conclusion, petitioner whose relates Ante, 46 recognizes, "guidelines" 'create regulations' applying industry; rather, claim[ed] 'explain programs.' 2034. Nonetheless, quite clearly: "We [§ 1305]." 2041. How themselves constitute "law," nonetheless statute coverage "laws" "provision[s] law"? invoke coercive generally applicable enforce[ment]" action. urges, "airline-specific standards." examined standards—which binding own—only ascertain thought "quite obviously" did). 2039. statutes, facially airlines, here. concludes, preempt enforcement, agreement distinguish both, (the force, insofar (a here2) aggrieved refusing comply matter's here). invocation dispositive here, lower seem agree; far know, since suggested fall relation exists. F.2d, preempted); 151-152 tenuously connected" services); Cannava, Schaefer 92-1170-E(LSP), 1992 558954, (SD Cal., Sept. (same); Vail Pan Am Corp., 260 N.J.Super. 292, 299-300, 616 A.2d 523, 526-527 (App.Div.1992) El-Menshawy Egypt Air, 276 126, 647 491, 493 (Law Div.1994) (same). 48 "law, provision" refer 'official, government-imposed policies, contract.' 17). To sure, "laws," "laws." prevents "any [state] "relates" Thus, enforced indistinguishable. argues, 'duty facts,' 9, personal injury always Many cases proceed, though "enforcing" imposes liability airline. found "relate" gambling prostitution too Hodges F.3d 350, 353-356 (CA5 (arguing 'services' coextensive 'safety,' safety-related preempted; urging en banc review bring circuit precedent conformity view), rehearing granted, 426 Public Health Trust Lake Aircraft, 992 291, 294-295 (CA11 defective aircraft Cleveland Piper Aircraft 985 1438, 1443, 11, 1444, (CA10) (same), --- 240 Stagl 849 F.Supp. 179, 182 (EDNY 1994) 1305); Curley 846 280, 284 (SDNY Bayne Adventure Tours USA, 841 206 (ND Tex.1994) Fenn 839 1218, 1222-1223 Miss.1993) Chouest 412, 416-417 (ED La.1993) O'Hern 838 1264, 1267 Ill.1993) re Disaster, 819 1352, 1363 Mich.1993) Butcher City Houston, 813 515, 518 Tex.1993) 50 Our recent Norfolk & Western Train Dispatchers, 499 117, 1156, (1991), relevant. rail exemption "all ICC- approved transaction," 129, 1164, exempted contractually-imposed obligations. did. "[a] depends regime effectiveness enforcement," 129-130, apart acknowledges character," 130, '[l]aws subsist place performed, enter it, fully expressly incorporated terms,' ibid. Farmers Merchants Bank Monroe Reserve Richmond, 649, 660, 651, 655, 67 L.Ed. 1157 (1923)). 'all effects override suspending binding." concluding, Appeals' views "[n]owhere sa[id] ICC contracts," exempt obstacles.' Brotherhood Carmen ICC, 880 562, 567 (CADC 1989); Western, 133-134, 1165-1166. 51 reading clear brings bear obligation. reiterated "[t]he obligation binds agreement." 1164 omitted); Sturges Crowninshield, Wheat. 122, 197, 529 (1819) (Marshall, C.J.) ("A do, thing. him his undertaking, is, course, contract"). enough "suspen[d] 1164. reading. 52 support theory, cites statement plurality (1992); "a ' 5(b)." 2622. elaborated point footnote. rejecting specific warranty agreed 'liability .; law." 24, 2622, 24. 'imposed' itself." distinguished situation requirements, kind Here, enforceable. circumstances, unlike Cipollone. different statutes. 53 "stops rewritten "No 2037-2038. There "regulating "imposing rejection former latter. relies 'remedies' provision," where, 'saving' relic pre-ADA/no regime." 54 Without gave sweep. dissent went areas traditional expression so. 2054-2056 dissenting); ___ part). dissent's reading, demonstrated "statutory intent" long "particularized application" 2, 2036, 2038, 2. 55 recently revisited "d[id] Morales," H.R.Conf.Rep. 103-677, 83 believes misread overrule despite apparent view, 'closer out' __; approach square decisions Western. 56 Stare decisis force" area Allied-Bruce Terminix Cos. Dobson, (1995) (slip op., 3) (O'Connor, concurring) sometimes adherence wrongly-decided precedent. apparently think wrong, I. absence 'special justification,' Arizona Rumsey, 467 203, 212, 104 2305, 2310, 81 164 (1984)), departing import render compels. If, end day, erred interpreting correct mistake. 57 suffice decide along lines described. addition, disagree realistically confined, "in "simply hold[ing] agreements," 8-9. '[s]ome state-law well effectuate rather parties.' 28). 58 doctrinal underpinnings notion "intent parties" divorced serious many years. author wrote ago: 59 "A therefore, devoid interest. interest, it? note contracts, government pleasant eyes. Enforcement, puts machinery service other. worthwhile done important questions policy. [T]he giving rests theory involves." Cohen, Basis Contract, Harv.L.Rev. 553, 562 (1933). 60 More authors expressed views. Braucher, Versus Contractarianism: Regulatory Role Law, Wash. Lee L.Rev. 697, 699 ("Mediating ordering social concerns, socioeconomic array normative choices. addressed concern norms all"). concerning agreements, legally enforceable, afford breach. fails satisfied policy, decision. 61 allowance parties,' 28), threatens swallow observes retroactively, prospectively. looking usual "rules" means. ambiguous, familiar drafter, receive doubt. E.A. Farnsworth, Farnsworth Contracts 7.11, 265-268 (1990). essential functional system. choice made. Other choices unsupported consideration, 2.5; cf. Barton, Gibbs, V. Li, Merryman, Radically Different Cultures 579 (other systems certain supported consideration); supply "reasonable" fill "gaps" incomplete 7.15-7.17; method supply, C. Fried, Promise 60, 69-73 (1981); Charny, Hypothetical Bargains: Normative Structure Interpretation, 89 Mich.L.Rev. 1815, 1816, 1820-1823 (1991); Ayres Gertner, Filling Gaps Incomplete Contracts: An Theory Default Rules, 99 Yale L.J. 87, 91 (1989) (all suggesting considerations inform gaps); entitles expectation most time, rarely, 12; David Brierley, Major Legal Systems Today 302 (1985) (former Soviet Union awarded performance). permitted look airline-related difficult decide. 62 Even doctrine unconscionability, aspect "might preempted" "seek[s] parties," 28, neatly categorized. hand, "unfair" quintessentially policy-oriented. other, "[p]rocedural unconscionability conceived encompass sharp fine print convoluted language, understanding inequality bargaining power." 4.28, 506-507 (footnotes words, determination "unconscionable" doctrine, being "policy-oriented" impose over parties, demonstrates easily separated "intended." 63 "[T]he complex moral, political, judgments." 69. laid down mean, receive, result judgments. effort those) conform known collectively "contract Courts define deciding disputes 64 reasons, syllabus constitutes prepared Reporter Decisions convenience reader. Detroit Lumber Co., 321, 337, 282, 287, 499. Reenacting Title U.S.Code 1994, revised read: "[A] price, route, U.S.C.A. 41713(b)(1). revision change. Pub.L. 103-272, 1(a), 108 745. formerly residing transferred abolished 1985. Sunset 1984, 98-443, 98 1703; 1551. longer pursue requests injunctive relief, Respondent here contest 6, "concede traditionally recoverable again, investigate cease desist competition. 411, 1381(a); 2040; (reporting 1993, issued assessed $1.8 million penalties aviation proceedings). recognizes word "enact," "could perhaps 17. series suggests, "connotes official, contract." 16. Similarly, phrase naturally "refe[r] operate irrespective Finally, ban enacting sensibly read, overarching purpose, "States theories notes 1163, exemption, 11341(a), "laws govern comparable us. Interstate Commerce (ICC) approve consolidations. participating ICC-approved consolidation "from antitrust let [the participant] transaction." 11341(a). empower override, individually, collective-bargaining accorded ICC's "ma[de] provisions," 132, 1165: "If 11341(a) consolidations difficult, impossible, achieve." 1165. Similarly formulation superintending agency, whole. preceding subsection, 401(q)(1), 1371(q)(1), insurance, cover injuries property losses "resulting maintenance aircraft." 19-20, 12. urge Tr. Oral Arg. (acknowledgment counsel "safety claims," arising plane crash, "would preempted"); 20, ("It unlikely personal-injury operations."). regard "[s]ome 28. Because core "diverse, nonuniform, confusing," 2619 opinion), large nonuniform "[s]tate-court uniform entered nationwide." O'Connor's classifying post, 2054-2059, (dissenting opinion). least margin. response adverse judgments, raise curtail up lost income. amended amendment "without change." (1991) character"), discussed infra,

Category: 9