Court Opinion

ID: 9743961
Source: CourtListenerOpinion
Date Created: 2023-08-26 21:51:11.355581+00
Date Added: 2024-06-11T07:24:45.965699
License: Public Domain

JUSTICE HEIPLE delivered the opinion of the court: This issue presented by this appeal stems from an action by plaintiffs against defendant American Airlines concerning benefits accumulated through defendant’s frequent flyer program. Following denial of defendant’s motion to dismiss, the trial court granted defendant’s motion for certification for interlocutory appeal. The appellate court affirmed the order denying the dismissal. 207 Ill. App. 3d 35. Plaintiffs are participants in defendant’s American Airlines AAdvantage (AAdvantage) frequent flyer program. In 1988 they filed a class action against defendant, alleging that they enrolled in the AAdvantage program pursuant to a national membership campaign by defendant. Once enrolled, plaintiffs received various communications from defendant setting forth the benefits of the program and the mileage credits necessary for receipt of those benefits. Plaintiffs used defendant’s airline, and used the facilities of other organizations that participated in the AAdvantage program, including other airlines, hotels, and car rental companies, in order to accumulate mileage credits for use in the program. According to plaintiffs’ complaint, the value of those credits was substantially and adversely affected by defendant, who retroactively reduced and restricted the benefits available, effective May 18, 1988. Plaintiffs charged that defendant’s action in retroactively modifying the rules of the AAdvantage program constituted a breach of defendant’s contracts with plaintiffs and all others who joined the program prior to May 1988. The complaint also charged that the defendant’s action was in violation of the Illinois Consumer Fraud and Deceptive Business Practices Act (Consumer Fraud Act) (Ill. Rev. Stat. 1987, ch. 121½, par. 261 et seq.). Plaintiffs sought money damages and an injunction preventing retroactive application of any changes in the program to mileage credits earned prior to the changes. Defendant initially removed the action to the United States District Court for the Northern District of Illinois, arguing that the suit raised a Federal question exclusively committed to the adjudication of the Federal courts pursuant to section 1305(a)(1) of the Federal Aviation Act (49 U.S.C. § 1305(a)(1) (1988)). The district court remanded the action to the circuit court, concluding that the complaint raised State law contract and fraud claims, and that such claims are not converted into Federal actions by section 1305 or its legislative history. Wolens v. American Airlines, Inc. (N.D. Ill., Oct. 25, 1988), No. 88 — C—8158. On remand, defendant moved to dismiss plaintiffs’ action and a second similar class action complaint which was filed following the district court decision and consolidated with the original- action. Defendant moved to dismiss on the ground that plaintiffs’ claims relate to defendant’s rates and services and therefore are expressly preempted by section 1305 of the Federal Aviation Act. Defendant moved to dismiss plaintiffs’ Consumer Fraud Act claims on the ground that they are implicitly preempted by Federal regulation. Finally, defendant moved to dismiss plaintiffs’ claims in their entirety on the ground that they are barred by the commerce clause because subjecting airlines to State consumer fraud and common law contract claims would impose a burden on interstate commerce. The circuit court denied defendant’s motion to dismiss on March 20, 1989, finding that section 1305 did not preempt plaintiffs’ claims. On March 23, 1989, the circuit court granted defendant’s motion for certification of the following question for interlocutory review pursuant to Supreme Court Rule 308 (134 Ill. 2d R. 308): “Whether plaintiffs’ claims are preempted by the Federal Aviation Act of 1958, as amended, 49 U.S.C. §§1301 — 1557, and by the federal regulations promulgated thereunder, and precluded under the Commerce Clause of the United States Constitution?” The appellate court answered the question in the negative, and affirmed the decision of the trial court with respect to plaintiffs’ breach of contract and Consumer Fraud Act claims, holding that their damage claims are not preempted by section 1305. The court concluded, however, that the attempt to enjoin defendant’s application of its new AAdvantage program rules would be an attempt to regulate the services of an airline and thus a violation of section 1305. The appellate court issued a certificate of importance to permit immediate review by this court, and this court assumes jurisdiction pursuant to article VI, section 4(c), of the Illinois Constitution of 1970 (Ill. Const. 1970, art. VI, §4(c)), and Supreme Court Rule 316 (134 Ill. 2d R. 316). We affirm. Section 1305(a) provides in part: “[N]o State or political subdivision thereof and no interstate agency or other political agency of two or more States shall enact or enforce any law, rule, regulation, standard, or other provision having the force and effect of law relating to rates, routes, or services of any air carrier ***.” (49 U.S.C. § 1305(a)(1) (1988).) Plaintiffs request injunctive relief to halt application of defendant’s new AAdvantage program rules. As the appellate court correctly concluded, injunctive relief would involve the regulation of defendant’s services and therefore violate section 1305. See Hingson v. Pacific Southwest Airlines (9th Cir. 1984), 743 F.2d 1408. Plaintiffs’ claims for damages for breach of contract and violation of the Consumer Fraud Act, however, survive. We adopt the prevailing view, set forth in West v. Northwest Airlines, Inc. (9th Cir. 1990), 923 F.2d 657, that “section 1305(a)(1) preempts claims only when the underlying statute or regulation itself relates to airline services, regardless of whether the claim arises from a factual setting involving airline services.” (923 F.2d at 660. See also Bieneman v. City of Chicago (7th Cir. 1988), 864 F.2d 463.) The instant claims bear only a tangential relation to defendant’s rates and services and are not expressly preempted. Defendant also contends that plaintiffs’ claims are im-‘ plicitly preempted under section 1302(a)(7) of the Federal Aviation Act, which states that the prevention of unfair, deceptive, predatory, or anticompetitive practices in air transportation shall be considered in the public interest and in accordance with the public convenience. Proof of implied preemption requires defendant to demonstrate that Congress intended to occupy the field and give Federal law exclusive authority. (West v. Northwest Airlines, Inc., 923 F.2d at 661.) Nothing in the language of section 1302(a)(7) indicates an intent to foreclose State damage claims against an airline for engaging in deceptive practices. New York v. Trans World Airlines (S.D.N.Y. 1989), 738 F. Supp. 162. Additionally, section 1506 of the Federal Aviation Act provides: “Nothing contained in this chapter shall in any way abridge or alter the remedies now existing at common law or by statute, but the provisions of this chapter are in addition to such remedies.” (49 U.S.C. app. §1506 (1988).) This language indicates that Congress did not intend to occupy the field, but rather that common law remedies were intended to survive. (Bieneman v. City of Chicago, 864 F.2d at 471; West v. Northwest Airlines, Inc., 923 F.2d at 661.) Plaintiffs’ claims are not implicitly preempted. Finally, defendant argues that plaintiffs’ claims are barred by the commerce clause. Injunctive relief, defendant contends, will result in State regulation of interstate commerce. In light of our conclusion that an attempt to enjoin defendant’s actions regarding the AAdvantage program would constitute improper State regulation preempted by section 1305, further discussion of defendant’s commerce clause argument is unnecessary. Federal and State courts have repeatedly refused to interpret the Federal Aviation Act so as to preempt all State laws. Courts have carefully and narrowly construed the applicable law so as to preempt only those State laws and regulations that specifically relate to and have more than a tangential connection with an airline’s rates, routes or services. These courts have recognized that Congress did not intend section 1305 to be construed as a blanket preemption provision, and we join in this conclusion. While plaintiffs’ claims for injunctive relief are expressly preempted by the language of section 1305, their damage claims for breach of contract and violation of the Consumer Fraud Act survive. Accordingly, the circuit and appellate court decisions are affirmed. Judgments affirmed. JUSTICES CLARK and FREEMAN took no part in the consideration or decision of this case.