Preemption

As part of a larger case, Soon Ja Chun, Bernard Jung Kim, and Elizabeth Bahn (Plaintiffs) filed an amended complaint on behalf of indirect purchasers of Korean Air and Asiana airline tickets alleging the prices they paid were unlawfully excessive in violation of both state and federal antitrust and consumer protection laws. Defendants moved to dismiss the complaint, arguing, among other things, that the Airline Deregulation Act of 1978 (ADA), 49 U.S.C. § 41713, preempted Plaintiffs’ state law claims. The district court granted the motion and dismissed.

Plaintiffs appealed to the U.S. Court of Appeals for the Ninth Circuit, arguing that federal law did not preempt state regulation of foreign air carriers.

In a matter of first impression, the Court rejects their argument, drawing on the language, purpose, and legislative history of the statute’s preemption provision; case and treaty law; and public policy.

The ADA 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.” 49 U.S.C. § 41713(b)(1). Plaintiffs contended the terms “air carrier” and “foreign air carrier” referred to different entities, and that Congress consistently employed those terms for distinct uses. Because 51 separate legal provisions employed both terms, they argued, Congress’s use of only the term “air carrier” in the preemption provision meant that it did not intend to preempt state regulation of foreign air carriers.

The Court notes that in the ADA, however, “‘[A]ir carrier’ is sometimes used to refer generally to both domestic and foreign airlines.

For example, 49 U.S.C. Sec. 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….Thus, the term ‘air carrier’ in this context refers to both a domestic ‘air carrier’ and a ‘foreign air carrier’” (citations omitted). [692]

To aid in construing the admittedly ambiguous term, the Court also looks to its context, concluding that Congress intended that the term apply to all carriers, not just domestic ones. Where the preemption provision prohibits state regulation of “an air carrier that may provide air transportation under this subpart, 49 U.S.C. Sec...