Court Opinion

ID: 8991487
Source: CourtListenerOpinion
Date Created: 2022-11-27 12:14:51.235632+00
Date Added: 2024-06-11T17:10:56.022531
License: Public Domain

SINGLETON, Jr., District Judge,
dissenting.
Congress has preempted state regulation of certain activities of air carriers. The statute provides in part:
[N]o state or political subdivision thereof [except Alaska] ... 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 having authority under subchapter IV of this chapter to provide air transportation.
49 U.S.C.App. § 1305(a)(1) (1988). In this case we are asked to apply this statute to the operations of Federal Express Corporation (Federal Express), a conceded air carrier. We must determine whether Congress intended to preempt state economic regulation of Federal Express’s transportation of cargo exclusively by truck and exclusively within the borders of California. I am of the view that Congress did not intend to preempt state regulation of Federal Express’s purely intrastate trucking business and therefore dissent from this court’s decision.
This case turns on the meaning of certain phrases in the applicable statute. In order to determine the scope of the statute we must determine whether California’s threatened economic regulations “relat[e] to rates, routes, or services of any air carrier [authorized by federal law] to provide air transportation.” Clearly Congress intended to exempt activities pertaining to setting rates, determining routes, and providing services of an air carrier necessary to provide air transportation.1 It would appear equally clear that Congress did not intend to exempt activities of an air carrier *1080that were not related to the provision of air transportation.2
In determining which activities are exempt and which are not, it is useful to consider an analogy to the insect kingdom. All caterpillars have the potential of becoming butterflies and flying above the earth. However, many caterpillars succumb before metamorphosis and live their entire lives earthbound. If we analogize packages to insects, this case is about caterpillars and not butterflies.3
California’s concessions make this an easy case. The state recognizes that in order to transport goods by air it is necessary to get them from a collection point to an airplane and that state economic regulation of incidental truck traffic is preempted. The state also implicitly concedes that if Federal Express picks up a package in Memphis, flies it to Oakland, and transports it by truck to Los Angeles, the entire trip, including the ground leg, is preempted from state regulation. Thus California makes no claim to regulate commerce carried wholly or partly by airplane. See 49 U.S.C.App. § 1301(10) and (24) (1988).
California seeks to regulate the carriage of only those packages that never see the interior of an airplane. I see nothing in the cited statute that preempts California from doing so. It seems clear to me that transporting packages solely by truck within California is not a service of an air carrier authorized to provide air transportation.
The majority never explains how the carriage of goods by land is somehow transformed into the carriage of goods by air.4 Federal Express has a number of arguments. It contends the statute exempts any service performed by an air carrier, and concludes that it is primarily an air carrier and so any transportation activity it conducts automatically becomes exempt.5 Thus, if Federal Express diversifies into the florist or pizza business in San Francisco and uses its fleet of trucks to deliver flowers or pizza in the Bay Area, presumably the selling of flowers or pizza become activities preempted from state regulation whether airplanes play any part in the delivery or not. I cannot accept this argu*1081ment and I do not believe the majority intends its decision to extend this far.6
Federal Express’s primary argument is that its business is so integrated that it would be inconvenient to segregate land packages from air packages. In fact Federal Express maintains that no one ever knows until the last minute whether a given package will be flown or driven to its intrastate destination. To accept this argument is to confuse Federal Express’s other commerce clause arguments with its preemption arguments. Federal Express’s unilateral decision to mix its intrastate carriage of goods by truck with the carriage of other packages taken from airplanes cannot transform purely ground transportation into air transportation.
The majority may be influenced by the fact that only a small percentage of the packages currently carried by Federal Express trucks really qualify as caterpillars. On this record, the overwhelming majority appear to be butterflies. We must recognize, however, that nothing is static in the highly competitive transportation industry. The majority’s decision will free the trucking business of Federal Express from any state economic regulation. This will open the door for substantial increases in Federal Express’s trucking business and give it a substantial competitive advantage over trucking companies that must comply with state regulation. The majority really does not set out a rationale for determining when an air carrier’s ground transportation loses its quality as air transportation. The majority decision could be read as exempt-mg any transportation services Federal Express wishes to provide. The majority does not tell us how many airplanes Federal Express must fly to Sacramento each month, in order to insulate daily truck traffic between Oakland and Sacramento from state regulation. Will one Cessna 208 carrying three packages between Oakland and Sacramento authorize Federal Express to send a dozen trucks packed with goods between the two cities free of state regulation? The majority does not address packages deposited on the San Francisco peninsula for delivery in the East Bay that never see an airplane. In my view, we should apply the plain language of the statute.7 Federal Express’s air transportation services, including land transportation incidental thereto, are exempt from state regulation while its exclusively intrastate land transportation services are not exempt from state regulation. If the two overlap, we are presented with general commerce clause concerns not preemption concerns.
The majority finds preemption and therefore has no need to address Federal Express’s other commerce clause arguments. The trial court essentially found that the commerce clause challenges were not ripe for resolution until Federal Express sought and was denied state exemptions. In the trial court’s view until we know how California actually applies its regulatory system to Federal Express’s business, it is premature to decide the commerce clause issues. This view seems plausible to me *1082but the state only reluctantly endorsed it after much prodding at oral argument.8
If we were to conclude that all the commerce clause issues were ripe for adjudication and elect to decide those issues now, I would be reluctant to do so on a summary judgment record. I do not believe that all material facts are undisputed. I would much prefer to give the parties their day in court and then have the trial court address each of Federal Express’s contentions in carefully fashioned findings of fact. See Fed.R.Civ.P. 52. I therefore respectfully dissent and favor affirming the trial court’s decision on the preemption issue but remanding on other commerce clause issues for findings of fact and conclusions of law after a full hearing on the merits.

. Congress defines an “air carrier" as a citizen of the United States engaging in “air transportation." 49 U.S.C.App. § 1301(3) (1988). Congress defines "air transportation" in part as “interstate" transportation by aircraft. 49 U.S.C. App. § 1301(10). "Interstate air commerce” means "the carriage by aircraft of ... property for compensation ... whether such commerce moves wholly by aircraft or partly by aircraft and partly by other forms of transportation.” 49 U.S.C.App. § 1301(23).
California apparently does not contend that these definitions restrict the exemption in section 1305 to state regulation of interstate transportation of goods by aircraft, nor does it contend that the statute permits state regulation of intrastate carriage of goods by air. It does argue, however, that by defining "air transportation" to include goods carried in part by aircraft and in part by trucks, Congress did intend to permit state regulation of goods carried exclusively by truck.

. For purposes of analysis it is useful to refer to those activities which Congress chose not to regulate and which it preempted the states from regulating as exempt activities. Those activities which the states are free to regulate will be called nonexempt activities.

. Parcels which are carried at some point in an airplane for brevity will be called air packages. Those parcels that never see the inside of an airplane will be called land packages. By analogy air packages would be butterflies and land packages caterpillars. It might be more apt to call them dead caterpillars because if they reach their destination without ever entering an airplane they never will become butterflies.

. The majority never expressly discloses its reasoning. The majority opinion describes Federal Express’s air transportation activities. It argues a point that California concedes, that Congress would frown on attempts to regulate air transportation. It finesses the question presented here whether transportation of land packages is exempt from regulation. It distinguishes certain cases. It pursues another point conceded by California, that transportation of air packages in Federal Express trucks is exempt and it concludes with a paean to deregulation of air carriers. Implicit in the opinion is the assumption that Federal Express has so integrated its business by including both air packages and land packages in each truck, that California’s attempts to regulate the latter necessarily regulates the former. If this is the rationale, then the holding would be that anytime an industry intermixes exempt and nonexempt activities neither can be regulated by the state. If the United States Supreme Court or this court had ever previously so held, those decisions should be cited rendering the majority's opinion unassailable. The majority cites no cases for this proposition, however. Rather, it seeks to distinguish prior decisions of this court which held that state regulation of activities which were clearly "services of an air carrier” were not preempted. Even if we accept the distinction the majority draws between "economic” and "non-economic” regulation, a troublesome distinction in context, the distinction does not advance the majority’s decision. The fact that regulation of some "air services” is not preempted does not support a holding that services that have no connection with "air transportation" are preempted.

.Federal Express errs in my view by focusing on the term “services” in the statute and ignoring the context "of an air carrier authorized to provide air transportation.” In context, it is clear that only "air services”, by which I mean services constituting air transportation, are exempt.

. The majority might respond to the “pizza” example by echoing Justice Holmes famous riposte "not ... while this court sits.” Panhandle Oil Co. v. Mississippi ex rel. Knox, 277 U.S. 218, 223, 48 S.Ct. 451, 453, 72 L.F.d. 857 (1928) (Holmes, J., dissenting). While unwilling to formulate a principle that would distinguish "air services” from other potential services of an air carrier, the majority might recognize a point at which ground services were so divorced from air services that economic regulation of the former would not impede performance of the latter. Compare Justice Stewart’s test for obscenity "I know it when I see it.” Jacobellis v. Ohio, 378 U.S. 184, 197, 84 S.Ct. 1676, 1683, 12 L.Ed.2d 793 (1964) (Stewart, J., concurring).
This approach is flawed in my view because it does not guide the trial bench and the bar in deciding other cases. My proposed resolution has the advantage of providing a bright line rule.

. Miners search for gold in creek beds and frequently are mislead by pyrites. Judges search for plain meanings in statutes and are frequently mislead by a mirage. A claim that any statute has a “plain meaning” is at the very best an overstatement. More often it begs the question to be answered. My view of the statute at least finds support in its context and if we look beyond immediate context my reading of the statute finds support in Congresses purpose as disclosed in the language used in the statutes governing air carriers as a whole.

. The state prefers to argue that even if all of Federal Express’s factual assertions are accepted as true, Federal Express has not sustained its burden under the standards articulated in Pike v. Bruce Church, Inc., 397 U.S. 137, 90 S.Ct. 844, 25 L.Ed.2d 174 (1970). I am unpersuaded that Federal Express's other commerce clause arguments can be resolved as a matter of law.