Court Opinion

ID: 4024731
Source: CourtListenerOpinion
Date Created: 2016-08-15 21:29:30.815162+00
Date Added: 2024-06-11T13:29:32.538568
License: Public Domain

***FOR PUBLICATION IN WEST’S HAWAIʻI REPORTS AND PACIFIC REPORTER***

                                                              Electronically Filed
                                                              Supreme Court
                                                              SCWC-13-0000703
                                                              30-MAR-2016
                                                              08:11 AM

           IN THE SUPREME COURT OF THE STATE OF HAWAIʻI

                                ---o0o---

                            GENE WONG,
         Petitioner/Plaintiff-Appellant, Cross-Appellee,

                                    vs.

                     HAWAIIAN AIRLINES, INC.,
         Respondent/Defendant-Appellee, Cross-Appellant.

                            SCWC-13-0000703

         CERTIORARI TO THE INTERMEDIATE COURT OF APPEALS
               (CAAP-13-0000703; CIV NO. 11-1-2459)

                             MARCH 30, 2016

      RECKTENWALD, C.J., McKENNA, POLLACK, AND WILSON, JJ.,
            AND NAKAYAMA J., CONCURRING AND DISSENTING

                OPINION OF THE COURT BY POLLACK, J.

          This case involves claims brought by a retired

employee against his former employer for allegedly providing

inaccurate information regarding the late enrollment penalty

that applies to Medicare Part B.       The circuit court granted

summary judgment in favor of the employer concluding that the

retiree’s negligent and negligent misrepresentation claims were
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preempted by federal law, and the Intermediate Court of Appeals

affirmed the summary judgment on appeal.          We conclude that the

record in this case does not support federal preemption of the

negligent and negligent misrepresentation claims.1

                              I.    BACKGROUND

            Gene Wong was employed as a pilot by Hawaiian

Airlines, Inc. (HAL) until he retired at the mandatory

retirement age of sixty in 1996.          Upon retiring, Wong became

eligible to receive medical insurance paid for by HAL.             HAL is

obligated to provide retired pilots with medical coverage

pursuant to a collective bargaining agreement between HAL and

the Airline Pilots Association (Pilots Agreement).            The Pilots

Agreement contemplates coordination of the plan benefits

provided by HAL with Medicare benefits:2

            The Company shall continue to provide the medical, dental,
            drug and vision coverage in effect as of . . . the date of
            . . . Normal Retirement under the Retirement Plan for
            Pilots of Hawaiian Airlines, Inc. and such pilot’s spouse
            until age sixty-five (65) at which time the Company shall
            provide coverage, which when coordinated with Medicare
            benefits, shall maintain the benefits to which the pilot
            would have been entitled to had s/he not retired.

      1
            We also consider the circuit court’s granting of summary judgment
on Wong’s unfair or deceptive practice claim on grounds other than preemption
and the circuit court’s award of costs.
      2
            “Medicare is the federal health insurance program for people who
are 65 or older. . . . Part B covers certain doctors’ services, outpatient
care, medical supplies, and preventive services.” Medicare.gov, What is
Medicare?, https://www.medicare.gov/sign-up-change-plans/decide-how-to-get-
medicare/whats-medicare/what-is-medicare.html (last visited Oct. 26, 2015).

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            When Wong became eligible for Medicare Part B in 2001,

he consulted with HAL’s Director of Employee Benefits and

Compensation about whether or not he should enroll in Medicare

Part B.   Wong consulted with the benefits director regarding

Medicare in part because the Medicare documents he received

instructed him to contact his former employer’s human resources

department.3    Wong alleges that the employee benefits director

advised him that he did not need to enroll in Medicare Part B

because HAL would provide him with his primary medical insurance

and “he could switch without penalty later.”

            Wong contacted HAL’s benefits director in 2010 when

his wife became eligible for Medicare Part B coverage; his email

to the director states the following:

            If for some reason; I lose my medical, you mentioned that I
            would be able to enroll into the Medicare program without
            the penalty for both parts A & B since I was previously
            covered under an equal or better program. The Social
            Security is telling me that I should hold a letter that
            states my existing coverage is equal or better than
            Medicare and should I lose it, I can produce, that letter
            to allow myself and spouse to enroll in their program
            without the penalties . . . .

Wong also met with the director to discuss Medicare, at which

time he asked for her assistance in enrolling in Medicare Part

B.   Wong requested that the benefits director write a letter for

him to assist him in signing up for Medicare Part B.            Wong

      3
            Upon retiring, Wong received a summary of his retiree benefits
from HAL that provided a telephone number that retirees could call should
they have any questions regarding their benefits.

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received a letter from the director confirming that she provided

Wong with inaccurate information regarding Medicare:

           This is to confirm that we provided you with some incorrect
           information regarding Medicare when you turned 65. I’ve
           completed forms for Medicare in the past that requested
           cancelation data so that people could apply for Medicare at
           a delayed point in time when their group coverage was
           canceled. Since you will remain qualified for full
           coverage under our HMSA plan for your lifetime, we told you
           that if at some point in time your plan was canceled, we
           would be able to provide you with the necessary information
           in order to avoid the late enrollment penalty. I now know
           that this was incorrect.

           Please see if Social Security is able to waive the late
           enrollment penalty because of the misinformation that you
           were provided.

The employee benefits director wrote the letter with the

understanding that the letter would serve as proof for Wong to

avoid the late enrollment penalty in enrolling in Medicare.

           Wong claims that, as a result of the misinformation he

received from the benefits director, he did not complete the

necessary forms to enroll in Medicare Part B coverage in 2001

through March of 2010.4      Wong brought claims of negligence,

negligent misrepresentation, and unfair or deceptive practice

(UDAP) against HAL in the Circuit Court of the First Circuit

(circuit court).     Wong’s complaint alleged that HAL “had a

fiduciary, statutory, and common law duty” to provide Wong “with

reasonably accurate Medicare retirement information.”             Wong also

     4
            Wong was not enrolled in Medicare Part B when he filed his
complaint on October 18, 2011. He later enrolled in Medicare on January 31,
2012. Wong indicated that beginning on July 1, 2012, his monthly Medicare
premium of $239.80 would be deducted from his Social Security check; this
premium included $99.90 for late filing surcharges for Medicare Part B.

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alleged that HAL had a duty to supply Wong with correct

information regarding whether he should choose to have HAL’s

medical plan or Medicare Part B as his primary health care

insurer.      Wong contended that HAL’s conduct in providing him

incorrect information regarding Medicare Part B constituted an

unfair or deceptive trade practice pursuant to Chapter 480 of

the Hawaiʻi Revised Statutes (HRS), which financially injured

him.       Wong asserted that he suffered over $286,846.72 in damages

as a result of the inaccurate information provided by HAL.5

               HAL moved for summary judgment arguing, inter alia,

that Wong’s claims for negligence and negligent

misrepresentation failed because HAL did not owe Wong a duty of

care relating to information regarding Medicare.6             The circuit

court denied HAL’s motion for summary judgment in part because

the court found that there were genuine issues of material fact

as to whether HAL owed Wong a duty.7

               HAL later filed a second motion for summary judgment

arguing that Wong’s negligence claims were preempted by federal

       5
            Wong specifically asserted the following: “(a) $286,846.72 based
on calculated incremental increases each year for Medicare Part B coverage;
(b) an additional adjustment for inflation and increases in the cost of
Medicare in an amount to be computed and proven at trial; and (c) interest at
the rate of ten percent (10%) from March 1, 2010.”
       6
            In arguing that HAL owed him a duty of care, Wong cited to an
HMSA brochure instructing that more information regarding the Medicare
coordination rules could be obtained by “contact[ing] your employer or the
Centers for Medicare & Medicaid Services.”
       7
               The Honorable Karl K. Sakamoto presided.

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law.    HAL argued that Wong’s negligence claims were preempted by

the Railroad Labor Act (RLA) because any duty HAL owed to Wong

would be derived from HAL’s obligations to retired pilots under

the Pilots Agreement.        In support of its motion, HAL maintained

that it was obligated to provide Wong with medical benefits to

be coordinated with Medicare under the Pilots Agreement.               HAL

also maintained that any obligation to provide information about

health benefits would flow from its duty to provide such

benefits under the Pilots Agreement.           With regard to Wong’s UDAP

claim, HAL argued that the claim failed because the alleged

conduct did not occur “in the conduct of any trade or commerce”

as required by HRS Chapter 480.

             Wong maintained that his negligence and negligent

misrepresentation claims had no relation to the Pilots Agreement

and that “torts like this are independent of the contract.”                   In

response to HAL’s arguments regarding the UDAP claim, Wong

argued that HAL “was engaged in transportation business, and

part of that business was providing information to its

retirees.”

             The court granted HAL’s second motion for summary

judgment, concluding that Wong’s negligence and negligent

misrepresentation claims were preempted by the RLA.              The court

also ruled in favor of HAL on the UDAP claim because the alleged

unfair or deceptive act did not occur in “the conduct of any

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trade or commerce.”     The circuit court’s June 6, 2013 Final

Judgment included an award of costs in the amount of $11,855.30

in favor of HAL.

          Wong appealed the circuit court’s order granting HAL’s

second motion for summary judgment and the court’s Final

Judgment to the Intermediate Court of Appeals (ICA), Wong argued

that his negligence claims are independent of the Pilots

Agreement and “there is no need to interpret the contract in

this case” with regard to his claims.        HAL responded that

“[w]hen negligence claims are premised on actions taken by an

employer pursuant to CBA[8]-imposed duties, resolution of

negligence claims often requires interpretation of the CBA to

evaluate the reasonableness of the employers actions.”            HAL

asserted that “Wong cannot avoid the RLA’s mandatory arbitral

mechanism by omitting references to the Pilots Agreement in his

Complaint and by characterizing HAL’s actions solely by

reference to state-law torts.”

          The ICA affirmed the circuit court’s granting of HAL’s

second motion for summary judgment.        The ICA concluded that

Wong’s negligence claims were preempted by the RLA because HAL’s

duty to Wong arose from its duties under the Pilots Agreement.

In reaching this conclusion, the ICA’s analysis seems to assume

that HAL’s duty to Wong under the Pilots Agreement was to act
     8
          “CBA” refers to a collective bargaining agreement.

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with reasonable care to ensure that its representatives did not

provide him with misinformation about retirement benefits.             The

ICA also concluded that it was not error for the circuit court

to dismiss Wong’s UDAP claim because HAL’s provision of medical

coverage information to Wong did not occur in a “business

context.”   Additionally, the ICA affirmed the circuit court’s

grant of costs to HAL.

            Wong filed an Application for Writ of Certiorari

requesting that this court review the ICA Judgment on Appeal.

Wong contends that the ICA erred in holding that his negligence

and negligent misrepresentation claims were preempted by the

RLA, in holding that his UDAP claim failed because the claim did

not occur in the conduct of trade or commerce, and in affirming

taxation of costs.

            With regard to the RLA preemption determination,

Wong argues that he “alleged and proved facts supporting

his negligence and negligent misrepresentation claims

against” HAL.    Wong maintains that these state law claims

are independent of the Pilots Agreement, do not involve

interpretation of the agreement, and therefore they are not

preempted by the RLA.     Wong contends that HAL owed him a

“duty to act reasonably under the facts and circumstances

of this case.”    He asserts that Hawaiʻi courts recognize the

tort of negligent misrepresentation as set forth in the

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Restatement Second of Torts “particularly where [the

defendant] undertook to misinform Plaintiff.”

           Wong also contends that the ICA’s holding that

the alleged conduct did not occur in trade or commerce is

flawed and that the Court was clearly in error in granting

summary judgment upon his UDAP claim.

           HAL maintains that the ICA did not err in affirming

the circuit court’s granting of summary judgment in favor of HAL

on Wong’s negligence claims.      HAL argues that “any duty owed by

HAL to provide information to Wong about Medicare Part B

penalties and its interaction with the medical coverage provided

by HAL arose from and was intertwined with HAL’s CBA-obligation

to provide medical coverage to retired pilots.”          HAL also argues

that “the ICA correctly recognized that Wong’s negligence-based

claims were not independent of the CBA, but rather, they did

arise from CBA-imposed duties to provide benefits to retired

pilots.”

           HAL asserts that the ICA did not err in granting the

motion for summary judgment on Wong’s UDAP claim because “the

transaction upon which this claim is based did not occur ‘in the

conduct of any trade or commerce.’”        HAL asserts that the ICA’s

ruling “is consistent with the decisions of many other courts

examining statutes similar to HRS § 480-2, which have held that

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‘[d]isputes arising out of the employer-employee relationship do

not meet the trade or commerce requirement.’”

                          II.     STANDARD OF REVIEW

             “An award of summary judgment is reviewed de novo

under the same standard applied by the circuit court.”               Omerod

v. Heirs of Kaheananui, 116 Hawaiʻi 239, 254, 172 P.3d 983, 998

(2007) (quoting Taniguchi v. Ass’n of Apartment Owners of King

Manor, Inc., 114 Hawaiʻi 37, 46, 155 P.3d 1138, 1147 (2007)).                 In

considering a motion for summary judgment, the court “must view

all of the evidence and the inferences drawn therefrom in the

light most favorable to the party opposing the motion.”               Id.

(quoting Taniguchi, 114 Hawaiʻi at 46, 155 P.3d at 1147).

             Summary judgment is appropriate if the pleadings,
             depositions, answers to interrogatories, and admissions on
             file, together with the affidavits, if any, show that there
             is no genuine issue as to any material fact and that the
             moving party is entitled to judgment as a matter of law. A
             fact is material if proof of that fact would have the
             effect of establishing or refuting one of the essential
             elements of a cause of action or defense asserted by the
             parties.

Id. (alteration omitted) (quoting Taniguchi, 114 Hawaiʻi at 46,
155 P.3d at 1147).

                                III.   DISCUSSION

                                         A.

             Wong contends that his negligence and negligent

misrepresentation claims against HAL are not preempted by the

RLA.    “The RLA . . . sets up a mandatory arbitral mechanism to

handle disputes ‘growing out of grievances or out of the

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interpretation or application of agreements concerning rates of

pay, rules, or working conditions.’”           Hawaiian Airlines, Inc. v.

Norris, 512 U.S. 246 (1994) (quoting 45 U.S.C. § 153), aff’g

Norris v. Hawaiian Airlines, Inc., 74 Haw. 648, 847 P.2d 263

(1993), pursuant to 74 Haw. 235, 842 P.2d 634; see also 45

U.S.C. § 153(i) (2006).        The United States Supreme Court

articulated the preemption standard that applies under the RLA

in Hawaiian Airlines, Inc. v. Norris: “that a state-law cause of

action is not pre-empted by the RLA if it involves rights and

obligations that exist independent of the [collective bargaining

agreement].” 512 U.S. at 260.      Thus, “where the resolution of a

state-law claim depends on an interpretation of the [collective

bargaining agreement], the claim is pre-empted.”              Id. at 261.

The Court observed, “however, that ‘purely factual questions’

about an employee’s conduct or an employer’s conduct and motives

do not ‘requir[e] a court to interpret any term of a collective-

bargaining agreement.’”        Id. (quoting Lingle v. Norge Div. of

Magic Chef, Inc., 486 U.S. 399, 407 (1988)).

             The issue in Norris was whether an aircraft mechanic

who claimed that he was discharged for refusing to certify the

safety of a plane that he considered unsafe could pursue

available state law remedies for wrongful discharge.              Id. at

248.    The aircraft mechanic in Norris initially challenged his

discharge under a collective bargaining agreement governing his

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employment; the agreement guaranteed that an employee may only

be discharged for just cause and may not be disciplined for

refusing to perform work in violation of safety laws.               Id. at

250.    After appealing his grievance to a step three grievance

hearing, the employer offered to reduce the mechanic’s

punishment to suspension without pay.           Id.   The mechanic did not

respond to the offer or further pursue his claim through the

grievance procedures, and he later filed suit against his

employer in Hawaiʻi state court alleging wrongful discharge under

Hawaiʻi law.      Id.

             The Norris Court held that the RLA did not preempt the

wrongful discharge claim. 512 U.S. at 248.      Norris adopted the

preemption framework applied to the Labor Management Relations

Act (LMRA) in Lingle v. Norge Division of Magic Chef, Inc., 486
U.S. 399 (1988).        The relevant question under Lingle, the Court

explained, is whether the state law claims are independent of

the collective bargaining agreement.           Norris, 512 U.S. at 266.

The Court concluded that the aircraft mechanic’s state law

claims were not preempted by the RLA because “whether the

employer’s actions make out the elements of discharge under

Hawaii law--is a ‘purely factual question[n].’”             Id. (alteration

in original) (quoting Lingle, 486 U.S. at 407).

             Accordingly, under Norris, a state law claim is

preempted by the RLA if the resolution of the claim requires

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interpretation or application of a collective bargaining

agreement.    This same standard was applied in United

Steelworkers of America v. Rawson, 495 U.S. 362 (1990).

Although the Rawson decision was not cited by the Court’s later

decision in Norris, it provides a useful illustration of the

application of LMRA preemption of a state claim that is simply

seeking to enforce a collective bargaining agreement.            Rawson

involved wrongful death actions brought against a union by the

survivors of four miners who were killed in an underground fire.
495 U.S. at 364.    The complaint included a negligence claim that

the miners’ deaths were caused by their union’s negligence.

             The plaintiffs in Rawson specifically relied on the

collective bargaining agreement in setting forth their

negligence allegations.     The complaint stated that the union

“undertook to act as accident prevention representative and

enforcer of an agreement negotiated between [sic] [the Union] on

behalf of the deceased minors” and “undertook to provide

representatives who inspected [the Sunshine Mine] and pretended

to enforce the contractual accident prevention clauses.”            Id. at

364-65 (alterations in original).        The United States Supreme

Court concluded that the negligence claim could not be described

as independent of the collective bargaining agreement because

the “only possible interpretation” of the pleadings was that the

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union assumed the relevant duty under a collective bargaining

agreement.     Id. at 370-71.

             The Rawson Court noted that a party may not evade the

requirements of the LMRA “by relabeling their contract claims as

claims for tortious breach of contract.” 495 U.S. at 369

(quoting Allis-Chalmers Corp. v. Lueck, 471 U.S. 202, 211

(1985)).   Thus, the plaintiffs in Rawson could not bring state

negligence claims for the union’s actions that were undertaken

pursuant to the provisions of a collective bargaining agreement

where “the agreement determined the nature and scope of the
                  9
Union’s duty.”        Id. at 371.    The Court explained that the Union

      9
            HAL quotes from the following passage from the Rawson opinion in
which the Court contrasts the situation in Rawson with other possible
circumstances:

             This is not a situation where the Union’s delegates are
             accused of acting in a way that might violate the duty of
             reasonable care owed to every person in society. There is
             no allegation, for example, that members of the safety
             committee negligently caused damage to the structure of the
             mine, an act that could be unreasonable irrespective of who
             committed it and could foreseeably cause injury to any
             person who might possibly be in the vicinity.

Rawson, 495 U.S. at 371. The Rawson court determined that a duty
created by a collective bargaining agreement cannot exist “independent
of the collective bargaining agreement.” See Rawson, 495 U.S. at 369;
see also Stringer v. Nat’l Football League, 474 F. Supp. 2d 894, 908
(S.D. Ohio 2007) (“[T]he holding in Rawson was not dependent on a
finding that the duty allegedly violated was owed only to the miners as
opposed to ‘every person in society.’ Instead, the Court found that the
wrongful death claim was preempted because ‘[i]f the Union failed to
perform a duty in connection with inspection, it was a duty arising out
of the collective-bargaining agreement signed by the Union as the
bargaining agent for the miners.’” (second alteration in original)
(quoting Rawson, 495 U.S. at 371)); Betty v. Brooks & Perkins, 521
N.W.2d 518, 525 (Mich. 1994) (explaining that the duty in Rawson “was
owed only to union members by virtue of the terms of a collective
bargaining agreement” rather than to “every current and prospective
employee, regardless of union status”).

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assumed the duty in accordance to a collective bargaining

agreement and, thus, the miners could not enforce the collective

bargaining agreement through a state negligence claim:

            If the Union failed to perform a duty in connection with
            inspection, it was a duty arising out of the collective-
            bargaining agreement signed by the Union as the bargaining
            agent for the miners. Clearly, the enforcement of that
            agreement and the remedies for its breach are matters
            governed by federal law.

Id.   Hence, the Rawson decision demonstrates that RLA preemption

applies where a plaintiff seeks to enforce a duty arising from a

collective bargaining agreement through a state law claim.

            Under the Court’s preemption analysis, a state law

claim is preempted by the RLA if the resolution of the claim

requires interpretation or application of a collective

bargaining agreement.       Norris, 512 U.S. at 260; Rawson, 495 U.S.

at 369.    “The plaintiff’s claim is the touchstone for this

analysis; the need to interpret the [agreement] must inhere in

the nature of the plaintiff’s claim.”          Ward v. Circus Circus

Casinos, Inc., 473 F.3d 994, 998 (9th Cir. 2007) (quoting Cramer

v. Consol. Freightways, Inc., 255 F.3d 683, 691 (9th Cir.

2001)).    Accordingly, “[w]hen liability is governed by

independent state law, the mere fact that a collective

bargaining agreement will be consulted or referred in the course

of state-law litigation does not require the claim to be

extinguished.”      E.g., Casumpang v. ILWU, 94 Hawaiʻi 330, 343,

n.14, 13 P.3d 1235, 1248, n.14 (2000) (citing Livadas v.

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Bradshaw, 512 U.S. 107, 122-26 (1994)).         .Additionally,   a defense

based on an agreement “is alone insufficient to require

preemption.” Ward, 473 F.3d at 998 (citing Caterpillar Inc. v.

Williams, 482 U.S. 386, 398-99 (1987)).

           In this case, Wong has not relied on the Pilots

Agreement in making out his claims for negligence and negligent

misrepresentation.    Wong’s complaint alleged that HAL “had a

fiduciary, statutory, and common law duty” to provide Wong “with

reasonably accurate Medicare retirement information.”            Wong also

alleged that HAL had a duty to supply Wong with correct

information regarding whether he should choose to have HAL’s

medical plan or Medicare Part B as his primary health care

insurer.   Wong did not rely on the Pilots Agreement when

discussing HAL’s duty in his submissions to the circuit court or

during the hearings on HAL’s motions for summary judgment.

Instead, in his memorandum in opposition to the first motion for

summary judgment, Wong cited to an HMSA brochure instructing

that more information regarding the Medicare coordination rules

could be obtained by “contact[ing] your employer or the Centers

for Medicare & Medicaid Services.”        Wong also referenced the

Restatement, Second of Torts § 552, which imposes a duty on an

employer in the course of business for negligent

misrepresentation.    Thus, there is nothing in the record to

indicate that Wong’s state law claims of negligence and

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negligent misrepresentation are dependent on the Pilots

Agreement.

             In its analysis, the ICA assumed that “Hawaiian’s duty

to act with reasonable care to ensure that its representatives

do not provide misinformation about retirement benefits arose

from its duties” under the Pilots Agreement.             The ICA does not

explain the origin for this conclusion, which is not found in

the circuit court’s findings.          To the contrary, the circuit

court specifically found that there were genuine issues of

material fact as to whether HAL owed Wong a duty.              Given that

there are questions of material fact as to whether HAL owed Wong

a duty, the record is insufficient for a reviewing court to make

a determination regarding the question of duty as a matter of

law.

             More importantly, even assuming that HAL owed Wong a

duty of care under the Pilots Agreement, it would not foreclose

Wong from bringing his state law claims for negligence and

negligent misrepresentation that are independent of the

agreement.      The United States Supreme Court has already rejected

the proposition that the RLA and LMRA enable private parties to

evade state law:

             Of course, not every dispute concerning employment, or
             tangentially involving a provision of a collective
             bargaining agreement, is preempted by § 301 or other
             provisions of the federal labor law . . . . Nor is there
             any suggestion that Congress, in adopting § 301, wished to
             give the substantive provisions of private agreements the

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          force of federal law, ousting any inconsistent state
          regulation . . . .

Norris, 512 U.S. at 260 (alterations in original) (quoting

Lueck, 471 U.S. 202, 211 (1985)).        Indeed, the Court in Norris

did not accord any weight to the fact that the plaintiff in that

case had the option to seek redress for his discharge through

either the grievance procedures of a collective bargaining

agreement or in state court under state law claims.           Norris, 512
U.S. at 250; see also Ward, 473 F.3d at 999 (“A state law claim

is not preempted simply because it may require consideration of

the same factual issues as a federal labor law.” (citing Lingle,
486 U.S. at 410)).

          By extension, HAL’s argument that any duty HAL owed to

Wong would be “intertwined with Hawaiian’s duty to provide

medical coverage to its retired pilots” is not demonstrated in

the record before this court.       HAL’s emphasis on the Pilots

Agreement’s contemplation that HAL’s medical coverage would be

“coordinated with Medicare benefits” is not dispositive of the

RLA preemption determination because, even if HAL owed Wong a

duty under the Pilots Agreement, Wong is not foreclosed from

bringing state law claims that are independent of the agreement.

Additionally, HAL suggests that, because it is obligated to

provide medical coverage under the Pilots Agreement, “any

information supplied by Hawaiian would be provided in connection

with its duty.”    Thus, HAL seems to suggest that, by virtue of

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its contractual obligation to provide medical coverage, it is

insulated from all state law claims with regard to their

providing of “information” to retired pilots.           However, such an

understanding of RLA preemption would give “private agreements

the force of federal law,”       Norris, 512 U.S. at 260 (quoting

Lueck, 471 U.S. at 211), allowing circumvention of state law

through the collective bargaining process.

            In summary, there is nothing in the record to

demonstrate that Wong’s negligence and negligent

misrepresentation claims are not independent of the Pilots

Agreement, and, thus, HAL has not sustained its burden to

establish that Wong’s negligence and negligent misrepresentation

claims are preempted by the RLA.          See Casumpang, 94 Hawaiʻi at

340, 13 P.3d at 1245 (describing the defense’s burden to

establish preemption).      Thus, the ICA and the circuit court

erred in finding that Wong’s negligence and negligent

misrepresentation claims are preempted by the RLA.10            In light of

      10
            The minority suggests that it is necessary for the court to first
determine Wong has a “viable” state claim before determining whether Wong’s
claim is preempted by the RLA. See minority at 5-6. Instead, under the
preemption analysis of the Supreme Court, a state law claim is preempted by
the RLA if the resolution of the claim requires interpretation or application
of a collective bargaining agreement. Norris, 512 U.S. at 260; Rawson, 495
U.S. at 369 (articulating the federal preemption analysis). As the minority
acknowledges, “Wong asserts only a common law right not to receive false
information negligently, which he claims is not based on the CBA . . . .”
Minority at 3. Therefore, the minority’s conclusion that “Wong’s claim is
preempted,” minority at 2, is erroneous.

            The minority also concludes “as a matter of law that, state law
does not impose the duty of care on HAL that Wong asserts in this case.”
Minority at 6. As previously stated, the circuit court found genuine issues
                                                             (continued . . .)

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our ruling, we also vacate the circuit court’s award of costs in

favor of HAL and the ICA affirmance of the award.

                                     B.

            HRS § 480-2 (2008) declares that “[u]nfair methods of

competition and unfair or deceptive acts or practices in the

conduct of any trade or commerce are unlawful.”           The purpose of

the prohibition on unfair methods of competition and unfair or

deceptive acts or practices is to “enjoin unfair and deceptive

practices by which consumers are defrauded and the economy of

the state are harmed.”      H. Stand. Comm. Rep. No. 55, in 1965

House Journal, at 538; see also Cieri v. Leticia Query Realty,

Inc., 80 Hawaiʻi 54, 65, 905 P.2d 29, 40 (1995) (“[T]he

legislative history to §§ 480-2 and 480-13 makes clear that the

paramount purpose of both statutes is to prevent deceptive

practices by businesses that are injurious to other businesses

and consumers.” (emphasis omitted) (quoting Beerman v. Toro Mfg.

Corp., 1 Haw. App. 111, 118, 615 P.2d 749, 754 (1980)).

            This court has held that “in order to fall within the

purview of HRS Chapter 480, a claim for alleged unfair and

deceptive acts or practices . . . must stem from a transaction

(continued . . .)
of material fact as to whether HAL owed Wong a duty. While the minority
references the Restatement (Second) of Torts § 552, the comments to this
section provides a possibly relevant explanation of this section.
Restatement (Second) of Torts § 552 cmt. d. (1977) (recognizing that a
defendant’s pecuniary interest normally lies in a consideration paid for the
transaction and that “[i]t may, however, be of a more indirect character”).
However, we do not address whether HAL owed a duty to Wong under state law.

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involving ‘conduct in any trade or commerce.’”           Cieri, 80 Hawaiʻi

at 65, 905 P.2d at 40; see Haw. Cmty. Fed. Credit Union v. Keka,

94 Hawaiʻi 213, 227, 11 P.3d 1, 15 (2000) (construing Cieri).

Whether an act or practice occurs in the “conduct of any trade

or commerce” depends on whether or not the act or practice is

perpetrated in a “business context.”         Cieri, 80 Hawaiʻi at 63,
905 P.2d at 40.     The question of whether a transaction occurs

within a “business context” is determined “on a case-by-case

basis by an analysis of the transaction.”11          See Cieri, 80 Hawaiʻi

at 65, 905 P.2d at 40.

            The Cieri court cited approvingly of Massachusetts

case law identifying six factors to aid courts in determining

whether a transaction took place in a “business context”:

            (1) the nature of the transaction; (2) the character of the
            parties involved; (3) the activities engaged in by the
            parties; (4) whether similar transactions had been
            undertaken in the past; (5) whether the transaction was
            motivated by business or for personal reasons . . . ; and
            (6) whether the participant played an active part in the
            transaction.

Id. at 63, 905 P.2d at 38 (citing Begelfer v. Najarian, 409
N.E.2d 167, 176 (Mass. 1980)).        It is noted that the Cieri

      11
            Evaluating the transaction on a case-by-case basis is consistent
with the broad language of HRS § 480-2. In adopting such a broad prohibition
on unfair and deceptive acts, the legislature recognized that it would be
impractical to enact laws fully defining the various practices it sought to
prohibit. H. Stand. Comm. Rep. No. 55, supra. “It is also practically
impossible to define unfair practices so that the definition will fit
business of every sort . . . . Whether competition is unfair or not
generally depends upon the surrounding circumstances of the particular case.
What is harmful under certain circumstances may be beneficial under different
circumstances.” Id. (quoting House Report No. 1142, 63d Congress, 2d Sess.,
September 4, 1914, at page 19).

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decision does not require consideration of any or all of these

factors, and it does not limit the court to a consideration of

only these six factors.

          Wong alleged in his complaint that HAL’s conduct in

providing him incorrect information regarding Medicare Part B

constituted a deceptive trade practice.         Wong further contended

that he “is a consumer within the meaning of HRS § 480-1, in

that he committed money in a personal investment.”           He also

maintained, “The misrepresentation by Defendant was material to

Plaintiff’s decision to not choose Medicare Part B as opposed to

remaining with the Defendant’s current and existing Pilots’

group insurance plan with HMSA.”         In light of the summary

judgment evidentiary record, and applying the criteria listed

above, the circuit court and the ICA did not err in concluding

that the alleged conduct did not occur in “the conduct of any

trade or commerce.”

                                IV. CONCLUSION

          Accordingly, the ICA’s June 25, 2014 Judgment on

Appeal is vacated to the extent that it affirms the circuit

court’s granting of summary judgment in favor of HAL on Wong’s

negligence and negligent misrepresentation claims and the

granting of HAL’s motion for taxation of costs.          The ICA’s

Judgment on Appeal is affirmed to the extent that it affirms the

circuit court’s granting of summary judgment in favor of HAL on

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Wong’s UDAP claim.    Additionally, the circuit court’s April 10,

2013 “Order Granting Defendant Hawaiian Airlines, Inc.’s Motion

for Summary Judgment, Filed January 29, 2013” and the June 6,

2013 Final Judgment are vacated except with regard to the

granting of summary judgment in favor of HAL on Wong’s UDAP

claim.   The case is remanded to the circuit court for further

proceedings consistent with this opinion.

R. Steven Geshell                        /s/ Mark E. Recktenwald
for petitioner
                                         /s/ Sabrina S. McKenna
C. Michael Heihre and
Allison Mizuo Lee                        /s/ Richard W. Pollack
for respondent
                                         /s/ Michael D. Wilson

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