Hayley Hickcox-Huffman v. US Airways, Inc. , 855 F.3d 1057 ( 2017 )

FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
HAYLEY HICKCOX-HUFFMAN, No. 11-16305
on behalf of herself and all
others similarly situated, D.C. No.
Plaintiff-Appellant, 5:10-cv-05193-HRL
v.
OPINION
US AIRWAYS, INC.; U.S.
AIRWAYS GROUP, INC.,
Defendants-Appellees.
Appeal from the United States District Court
for the Northern District of California
Howard R. Lloyd, Magistrate Judge, Presiding
Argued and Submitted November 8, 2012
Submission Withdrawn June 6, 2013
Resubmitted April 24, 20171
San Francisco, California
Filed May 3, 2017
1
After oral argument, we vacated submission pending the Supreme
Court’s resolution of Northwest, Inc., v. Ginsberg, 134 S. Ct. 1422 (2014).
Upon resolution of that case, we ordered supplemental briefing. We
subsequently awaited Nat’l Fed’n of the Blind v. United Airlines Inc., 813
F.3d 718 (9th Cir. 2016).
2 HICKCOX-HUFFMAN V. US AIRWAYS
Before: Andrew J. Kleinfeld and Marsha S. Berzon, Circuit
Judges, and Roger T. Benitez, District Judge.*
Opinion by Judge Kleinfeld
SUMMARY**
Airline Deregulation Act / Preemption
The panel reversed the district court’s Fed. R. Civ. P.
12(b)(6) dismissal, based on preemption by the Airline
Deregulation Act, of a putative class action which alleged
claims against US Airways for refunds passengers paid as
baggage fees.
The plaintiff passenger pleaded breach of contract,
alleging that US Airways promised her timely delivery of her
checked bag upon arrival in exchange for a $15 fee, and the
passenger did not get her bag until the day after arrival.
The panel held that plaintiff sufficiently alleged that the
airline promised under the terms of transportation to deliver
her bag when she landed. The panel held that because
plaintiff’s claim was for breach of contract of a voluntarily
assumed contractual undertaking, and she pleaded breach of
contract, the claim was not preempted by the Airline
*
The Honorable Roger T. Benitez, United States District Judge for
the Southern District of California, sitting by designation.
**
This summary constitutes no part of the opinion of the court. It has
been prepared by court staff for the convenience of the reader.
HICKCOX-HUFFMAN V. US AIRWAYS 3
Deregulation Act as construed by American Airlines v.
Wolens, 513 U.S. 219 (1995). The panel remanded for
further proceedings.
COUNSEL
Justin P. Karczag (argued), Roger N. Behle, and Thomas
Foley, Foley Bezek Behle & Curtis LLP, Santa Barbara,
California; William M. Aron, Law Office of William M.
Aron, Santa Barbara, California; for Plaintiff-Appellant.
Michael G. McGuinness (argued), Robert A. Siegel, and
Jillian R. Weinstein, O’Melveny & Myers LLP, Los Angeles,
California, for Defendants-Appellees.
Jeffrey A. Lamken and Michael G. Pattillo, Jr., MoloLamken
LLP, Washington, D.C.; Andrew M. Bernie, MoloLamken
LLP, New York, New York; for Amicus Curiae Air Transport
Association of America, Inc.
4 HICKCOX-HUFFMAN V. US AIRWAYS
OPINION
KLEINFELD, Senior Circuit Judge:
We decide whether the Airline Deregulation Act preempts
state law claims arising out of delayed baggage.
Facts.
The district court dismissed this case at the pleading stage
under Rule 12(b)(6) for failure to state a claim, so we treat the
facts as pleaded in the complaint and attached exhibits as true
for the purposes of this appeal.2
According to the first amended complaint, Hayley
Hickcox-Huffman bought a ticket on US Airways to fly from
Colorado Springs, Colorado, to San Luis Obispo, California.
She checked one bag. Airlines have different policies on
charging for baggage, and the same airline may change its
policy from time to time. Some charge nothing for checking
one bag, some charge fees in varying amounts. US Airways
charged Hickcox-Huffman $15 to check her bag. Her bag did
not show up on the baggage carousel, and US Airways
delivered it to her the next day.
Hickcox-Huffman filed a putative class action to get her
$15 back.3 Her complaint pleads (1) “breach of self-imposed
2
See Bodine v. Graco, Inc., 533 F.3d 1145, 1148 (9th Cir. 2008).
3
The class she seeks to represent is “[a]ll US Airways passengers
traveling domestic flights who were charged and paid a baggage fee or
fees, and whose bags were delayed or lost, and who upon notifying
HICKCOX-HUFFMAN V. US AIRWAYS 5
undertaking,” (2) “breach of express contract,” (3) “breach of
implied contract,” (4) “breach of contract — federal common
law,” (5) “breach of the covenant of good faith and fair
dealing,” (6) “unjust enrichment,” (7) “intentional
misrepresentation,” and (8) “negligent misrepresentation.”
All the claims are for refunds of what she and other
passengers paid as baggage fees, on the theory that US
Airways did not do what it promised to do in exchange for the
money.
To show the terms of the agreement, Hickcox-Huffman
attached US Airways’ “Terms of Transportation” to the
complaint. The terms say that “Travel on US Airways shall
be deemed acceptance by the customer of US Airways’ terms
of transportation.” In boldface, they explain that “US
AIRWAYS SHALL IN NO EVENT BE LIABLE FOR
ANY INDIRECT, SPECIAL, OR CONSEQUENTIAL
DAMAGES” but makes an exception for baggage:
“EXCEPT BAGGAGE LIABILITY, SECTION 11.” The
publication also says that “US Airways has voluntarily
established a program setting standards for service levels”
regarding baggage, and has “committed to . . . [p]rovide on-
time baggage delivery” and “[m]ake prompt refunds.”
Section 11 addresses baggage, and subsection 11.6
addresses “baggage claim limits and procedures.” That
subsection limits liability for “loss, delay, or damage” to a
dollar ceiling, and requires written notice of a claim for any
“delay of checked baggage” within 45 days of the incident for
domestic travel. And it says that if the checked baggage is
Defendant of the delay or loss did not receive a refund of their baggage
fee(s) from US Airways.”
6 HICKCOX-HUFFMAN V. US AIRWAYS
not returned to the customer “upon arrival,” then the airlines
will make “every effort” to return it within 24 hours.
The district court dismissed the complaint on the grounds
that Hickcox-Huffman’s claims were preempted by the
Airline Deregulation Act.4 The court reasoned that Hickcox-
Huffman’s claims related to an airline “service,” a preempted
category under the Act, and that the contract language was
not specific enough to avoid preemption.
Analysis.
We review the district court’s ruling on preemption de
novo.5
Airlines used to operate like a public utility, with their
rates and terms of service set by the federal government’s
Civil Aeronautics Board (“CAB”). State governments also
imposed requirements, such as particular routes. Service was
lavish, and fares were much higher than they are now
(corrected for inflation).6
Congress deregulated the industry and abolished the CAB
in 1978. The Airline Deregulation Act sought to promote
“maximum reliance on competitive market forces . . . to
4
49 U.S.C. § 1301 et seq.
5
Inland Empire Chapter of Associated Gen. Contractors of Am. v.
Dear, 77 F.3d 296, 299 (9th Cir. 1996).
6
It is claimed that in the years after deregulation, passengers saved
approximately $19.4 billion per year in lower fares. See Robert W. Poole
Jr. & Viggo Butler, Airline Deregulation: The Unfinished Revolution,
Regulation, Spring 1999, at 44.
HICKCOX-HUFFMAN V. US AIRWAYS 7
provide the needed air transportation system . . . [and] to
encourage efficient and well-managed air carriers.”7 The Act
said that it was intended “to encourage, develop, and attain an
air transportation system which relies on competitive market
forces to determine the quality, variety, and price of air
services.”8
To prevent the states from undermining this new free
market approach, Congress prohibited them from enacting or
enforcing any law “related to a price, route, or service of an
air carrier.”9 But Congress expressly did not abolish
remedies other than those provided in the Airline
Deregulation Act. To the contrary, the Act specifies that
remedies it provides are “in addition to any other remedies
provided by law.”10 This savings clause language used to say
more—that nothing in the chapter shall “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.”11
While that change might give rise to an inference that the
savings clause was narrowed, “[t]hose additional terms were
deleted as part of a wholesale recodification of Title 49 in
1994, [and] Congress made it clear that this recodification did
7
49 U.S.C. § 40101(a)(6).
8
Airline Deregulation Act of 1978, Pub. L. No. 95-504, 92 Stat. 1705(1978).
9
49 U.S.C. § 41713(b)(1).
10
Id. § 40120(c).
11
49 U.S.C. app. § 1506 (1988) (amended at 49 U.S.C. § 4120(c)).
The original savings clause was from the Federal Aviation Act, Pub. L.
No. 85-726, § 1106, 72 Stat. 798 (1958).
8 HICKCOX-HUFFMAN V. US AIRWAYS
not effect any ‘substantive change.’”12 The tension between
the preemption clause and the savings clause has generated a
series of decisions addressing where the boundary lies
between preempted claims and preserved claims.
The Supreme Court read the preemption clause broadly in
Morales v. Trans World Airlines, Inc., reading its words
“related to” in the same fairly broad sense as the same phrase
in ERISA.13 An association of state attorneys general had
adopted its own enforcement guidelines for policing airline
advertisements to protect consumers from deception and
nondisclosure.14 The Court held that injunctive and
declaratory relief were available to the airlines against the
state attorneys general.15 Even though the attorneys general
did not propose to tell the airlines whom they must serve for
how much and in what way, restrictions on advertising of
fares and services would “relate to” fares, such as by making
12
Northwest, Inc. v. Ginsberg, 134 S. Ct. 1422, 1429 (2014) (quoting
Revision of Title 49 United States Code Annotated “Transportation,” Pub.
L. No. 103-272, § 1(a), 108 Stat. 745 (1994)).
13
504 U.S. 374, 383–84 (1992). The Court has since Morales
clarified its interpretation of the ERISA “related to” language,
“recogniz[ing] that the term ‘relate to’ cannot be taken ‘to extend to the
furthest stretch of its indeterminacy,’ or else ‘for all practical purposes
pre-emption would never run its course.’” Egelhoff v. Egelhoff, 532 U.S.
141, 146 (2001) (quoting New York State Conference of Blue Cross &
Blue Shield Plans v. Travelers Ins. Co., 514 U.S. 645, 655 (1995)).
14
Morales, 504 U.S. at 379.
15
Id. at 389–90.
HICKCOX-HUFFMAN V. US AIRWAYS 9
it harder for consumers to discover which airline charged the
lowest fare.16
The Court limited the potential breadth of Morales in
American Airlines, Inc. v. Wolens.17 Passengers claimed
breach of contract and violation of an Illinois consumer fraud
act because American Airlines had cut back on mileage
credits in its frequent flyer program.18 The Court held that the
consumer fraud act claim was preempted, but not the breach
of contract claim.19 Explaining the distinction, the Court said
the state consumer fraud act “does not simply give effect to
bargains offered by the airlines and accepted by airline
customers,” but also “serves as a means to guide and police
the marketing practices of the airlines.”20 Based on that latter
function, enforcement of the state law in Wolens was
preempted by the Airline Deregulation Act’s of “leav[ing]
largely to the airlines themselves, and not at all to States, the
selection and design of marketing mechanisms.”21 But
common law breach of contract claims, despite being based
on state law, were not preempted, because they are
voluntarily assumed obligations, not state impositions:
16
Id.17
513 U.S. 219 (1995).
18
Id. at 224–25.
19
Id. at 228–33.
20
Id. at 228.
21
Id.10 HICKCOX-HUFFMAN V. US AIRWAYS
[T]erms and conditions airlines offer and
passengers accept are privately ordered
obligations and thus do not amount to a
State’s “enact[ment] or enforce[ment] [of] any
law, rule, regulation, standard, or other
provision having the force and effect of law”
within the meaning of [the Airline
Deregulation Act]. . . . A remedy confined to
a contract’s terms simply holds parties to their
agreements—in this instance, to business
judgments an airline made public about its
rates and services. The [Airline Deregulation
Act], as we recognized in Morales, was
designed to promote “maximum reliance on
competitive market forces.” Market
efficiency requires effective means to enforce
private agreements.22
In this way, Wolens reconciled the savings clause (which
must save something) with the preemption clause. The States
may not impose their own rules regarding fares, routes, or
services, but may afford relief for breaches of obligations the
airlines voluntarily undertook themselves, even when the
obligations directly relate to fares, routes, and services.23
Justices O’Connor and Thomas would have treated the
contract claims as preempted under a broad reading in
Morales of “relates to,”24 and Justice Stevens would have
22
Id. at 228–30 (footnotes and citations omitted).
23
Id. at 232–33.
24
Id. at 238–45 (O’Connor, J., concurring in the judgment in part and
dissenting in part).
HICKCOX-HUFFMAN V. US AIRWAYS 11
excepted the consumer fraud act claim as well from
preemption.25 The majority retained Morales but expressed
the common law view of precedent, that “principles seldom
can be settled ‘on the basis of one or two cases, but require a
closer working out.’”26
Wolens controls as to Hickcox-Huffman’s breach of
contract claim. If she adequately pleaded breach of contract,
then her claim is not preempted. The Supreme Court’s
subsequent Northwest, Inc. v. Ginsberg27 decision did not
change the Wolens rule that state law breach of contract
claims are not preempted. The distinction that Ginsberg
made was between voluntarily assumed contractual
obligations and obligations imposed on contracting parties by
state law.28 The Court characterized the central issue in the
case as “whether respondent’s implied covenant claim is
based on a state-imposed obligation or simply one that the
parties voluntarily undertook.”29 Some states used the
“covenant of good faith and fair dealing” doctrine to
effectuate the parties’ intentions and reasonable expectations,
but others used it to ensure that a party did not violate
community standards regardless of what the parties agreed
25
Id. at 235–37 (Stevens, J., concurring in part and dissenting in part).
26
Id. at 234–35 (quoting Pound, Survey of the Conference Problems,
14 U. Cin. L. Rev. 324, 339 (1940)).
27
134 S. Ct. 1422 (2014).
28
Id. at 1430–33.
29
Id. at 1431.
12 HICKCOX-HUFFMAN V. US AIRWAYS
to.30 Since the covenant at issue in that case was of the latter
sort, imposing a state obligation that could not be avoided by
contract, it was preempted.31 The Court went out of its way
to note that “respondent’s claim of ill treatment by Northwest
might have been vindicated if he had pursued his breach-of-
contract claim after its dismissal by the District Court,” but he
had not appealed that dismissal.32
Thus, even after Ginsberg, if Hickcox-Huffman has
adequately pleaded breach of a contract provision that US
Airways voluntarily entered into, her claim is not preempted.
The essential elements of a breach of contract claim are the
existence of an enforceable contract, the defendant’s breach,
and damages to the plaintiff caused by the breach.33 Hickcox-
Huffman pleaded the terms stated by US Airways in its terms
of transportation, supported her averment that she checked
one bag, and paid US Airways’ $15 charge with documentary
evidence, and additionally alleged that the bag was not
delivered to her until the day after her arrival. She requested
restitution damages of $15 that she paid for timely delivery of
30
Id. at 1431–32.
31
Id.32
Id. at 1432–33.
33
Filak v. George, 594 S.E.2d 610, 614 (Va. 2004); see also Reichert
v. Gen. Ins. Co. of Am., 69 Cal. Rptr. 321, 325 (1968) (in bank) (adding
a fourth element, the plaintiff’s performance or excuse for
nonperformance under the contract). The terms of transportation say that
Virginia law governs but plaintiff argues that California law governs this
contract. The relevant aspects of California and Virginia contract law are
so substantially similar, that we need not decide which state’s contract law
governs.
HICKCOX-HUFFMAN V. US AIRWAYS 13
her checked bag.34 We look to the terms of transportation to
see whether it may be read as a contract to deliver the bag
when she landed, rather than the next day.
Hickcox-Huffman pleaded breach of contract with three
verbal formulas, but all amount to the same thing, that the
airline made an enforceable promise to her that it did not
keep. Her first formulation, “breach of self-imposed
undertaking,” appears to be an allusion to the Wolens
language excluding self-imposed undertakings from
preemption, the second, “breach of express contract” says
basically the same thing, as does the third, “breach of implied
contract.”
US Airways terms of transportation are a routine offer of
a unilateral contract subject to being accepted by flying on
US Airways. The airline has contracted to carry the
passenger’s baggage at a rate of $15 for the first bag and $25
for the second. The theory of her claim, as variously stated,
is that US Airways promised her timely delivery, that is,
delivery of her bag upon arrival, in exchange for $15. US
Airways does not dispute that she flew on their airline, paid
the $15, and did not get her bag until the day after her arrival.
It also does not dispute that its terms of transportation govern.
US Airways uses the word “timely” to mean upon arrival.
It expressly commits itself to “on-time baggage delivery.” In
its subsection addressing baggage claims for “loss, damage,
34
Hickcox-Huffman, on behalf of the putative class, also requested
that US Airways be enjoined from retaining baggage service fees when
bags are lost or delivered late.
14 HICKCOX-HUFFMAN V. US AIRWAYS
or delay,”35 it refers the passenger to its policy on “delayed”
baggage. And it commits itself to applying this “delayed
baggage” policy if it “fails to return checked baggage upon
arrival at the destination.”36 These terms establish that US
Airways treats timeliness of baggage delivery as delivery
when the passenger arrives at the destination, and treats
delivery after that time as delivery of “delayed” baggage.
Thus, under the terms of transportation, she properly pleaded
breach of the promise that delivery of her bag would be
“timely.”
As for the $15, US Airways’ terms say that the airline
“will assess a $15.00 fee for the first checked bag and a
$25.00 fee for the second checked bag” as “baggage fees.”
Putting these terms together, the $15 Hickcox-Huffman paid
was consideration for delivery upon her arrival at her
destination of her checked bag.
The terms of transportation say that if the airline “fails to
return baggage upon arrival at the destination, every effort
will be made to return the baggage within 24 hours.” The
“every effort” phrase means that the airline does not promise
to return “delayed” baggage within 24 hours, just to make
“every effort” to do so. That might have a bearing on a case
where the airline took more than 24 hours to return a delayed
bag, causing increased consequential damages (e.g., buying
one new shirt might cover a 24 hour delay, but two new shirts
might be needed for a 48 hour delay). Hickcox-Huffman
alleged her bag was returned “the following day,” without
stating that the delivery occurred more than 24 hours after her
35
(Emphasis added).
36
(Emphasis added).
HICKCOX-HUFFMAN V. US AIRWAYS 15
arrival, so the “every effort” language does not bear on her
case. What matters at this stage of her case is whether she
has sufficiently alleged that the airline promised under the
terms of transportation to deliver her bag when she landed.
She has. In its terms of transportation, the airline says
“US Airways has committed to . . . [p]rovide on-time
baggage delivery.” Unlike the “best efforts” language for
finding and delivering delayed baggage, the commitment has
no “every effort” or other language limiting the commitment
in some way that might arguably make it a mere promise of
best efforts or mere aspirations. US Airways assented to be
bound to deliver checked baggage on a passenger’s arrival.
It is hard to see what “committed” might mean other than a
promise, a contractual obligation.
The terms of transportation use the contract term of art
“acceptance,” and say that “[t]ravel on US Airways shall be
deemed acceptance by the customer of US Airways’ terms of
transportation.” If the terms of transportation were merely
aspirational, it would make no sense to “deem” travel as
“acceptance.” The terms of transportation are worded as an
offer of a contract that can be accepted by traveling on the
airline.37 Hickcox-Huffman avers that she paid her fare, paid
the $15 baggage fee, and flew on US Airways, so she
accepted US Airways’ offer. She now wants her $15 back, as
restitution damages, because US Airways did not do what it
promised to do and yet has kept her money. Thus she has
37
See Restatement (Second) of Contracts § 45(1) (Am. Law Inst.
1981) (“Where an offer invites an offeree to accept by rendering a
performance and does not invite a promissory acceptance, an option
contract is created when the offeree tenders . . . .”).
16 HICKCOX-HUFFMAN V. US AIRWAYS
pleaded offer, acceptance, consideration, breach, and
damages.
Because Hickcox-Huffman’s claim is for breach of
contract of a voluntarily assumed contractual undertaking,
and she pleads breach of contract, the claim is not preempted
by the Airline Deregulation Act as construed by Wolens.38
US Airways raises several different arguments for why it
is not obligated to refund Hickcox-Huffman’s $15 despite not
having delivered her bag on time. The airline says that its
contractual cap on consequential damages in the terms of
transportation somehow should be read to exclude whatever
damages Hickcox-Huffman may claim. The terms of
transportation provide that the airline’s liability for “direct or
consequential damages resulting from the loss, delay or
damage to baggage” is limited to $3,300 per passenger for
domestic travel. The $3,330 limit is of no consequence here,
because all Hickcox-Huffman claims is the $15 that she paid.
US Airways argues that because the airline does not expressly
promise a refund if baggage is delayed, there is no breach of
contract and no obligation to refund Hickcox-Huffman. But
38
That Hickcox-Huffman’s pleadings allege that US Airways
breached “privately ordered obligations” contained within the terms of
transportation and, on her contract claims, “seek[] recovery solely for the
airline’s alleged breach of its own, self-imposed undertakings,” Wolens,
513 U.S. at 228, may well be enough to hold that there was no preemption
as to those claims. Any further consideration regarding whether those
claims are viable can be seen as directed at determining whether she
plausibly alleged that there was a contract and that it was breached. We
have no need in this case to clarify the distinction further. Either way, the
ultimate question here is whether, on the pleadings, Hickcox-Huffman
stated a claim upon which relief can be granted, which we conclude she
did.
HICKCOX-HUFFMAN V. US AIRWAYS 17
a contract may be enforceable even if it does not specify a
remedy for a breach. Ordinarily common law provides a
range of remedies for breach, except where some remedies
are contractually limited or excluded. Refunds are among the
remedies traditionally recognized as among those which may
be granted “as justice requires.”39 “The final interest capable
of being protected following a breach of contract, the
restitution interest, seeks to compensate the plaintiff for the
reasonable value of any benefit it conferred on the defendant
pursuant to the parties’ contract.”40 Here, this remedy
requires disgorging the benefit to US Airways of the $15 that
it received in exchange for its promise of timely delivery.
Though restitution may be sought as an equitable remedy
where there is no enforceable contract, it is also an available
remedy where there is an enforceable contract that has been
breached by non-performance.41
US Airways alternatively would have us read this
limitation regarding consequential damages as implying a
negative pregnant so that only consequential damages may be
sought. The language of the terms of transportation suggests
no negative pregnant, just a limit on a specific type of
damages that can become very large. As a limit on
consequential damages, it appears to be just that and no more.
To the extent that the clause bears on Hickcox-Huffman’s
claim for restitution of the $15 paid, the implication of the
39
See Restatement (Second) of Contracts § 344 cmt. a (Am. Law Inst.
1981).
40
Williston on Contracts § 64:2 (4th ed. 2010).
41
Restatement (Second) of Contracts § 373(1); see also id. at § 373(1)
cmt. a, illus. 1–4; Restatement (Third) of Restitution and Unjust
Enrichment pt. II, ch. 4:2 (Intro. Note) (Am. Law Inst. 2011).
18 HICKCOX-HUFFMAN V. US AIRWAYS
limit on consequential damages for “delay” of baggage
implies that delayed baggage is subject to a contractual
remedy.
The airline also argues that our decision in Sanchez v.
Aerovias de Mexico, S.A. de C.V.,42 bars recovery. US
Airways would read Sanchez to hold that if the airline does
not promise a particular remedy, then it is not bound to
provide that remedy, even if it has breached the terms of
transportation. That is an incorrect reading of Sanchez.
Sanchez held that if the airline had made a contractual
commitment to collect the disputed portion of the ticket price
due only for those passengers subject to a tourism tax, then
the contractual commitment would be enforceable under
Wolens.43 But the airline in Sanchez, we held, made no such
commitment. It only contracted to fly the passenger for the
full ticket price, including what was labeled “tax.”44 We did
not hold in Sanchez that absence of a contract for a particular
remedy prevented contract formation.
Finally, US Airways warns, “If Hickcox-Huffman were
to prevail on her claims, airlines would be required to deliver
checked baggage on-time or to provide that service for free.”
We do not see why that argument undermines the contract
claim. One airline may offer “first bag free,” another may
offer “bag delivery within 20 minutes or we will give you a
mileage award,” another may charge $50 for the first bag and
expressly exclude any responsibility if the bag does not arrive
42
590 F.3d 1027 (9th Cir. 2010).
43
Id. at 1030–31.
44
Id. at 1028.
HICKCOX-HUFFMAN V. US AIRWAYS 19
on the carousel when the passenger lands. And another may
offer timely delivery of the first bag for $15, which would
mean if the bag is not timely delivered, the passenger has not
gotten what she paid for and is entitled to a contract remedy,
the smallest of which is probably just getting her $15 back.
If promises such as the alternative possible baggage deals
hypothesized are not enforced, then the competitive market
forces sought by Congress cannot operate, because a
passenger with any experience or knowledge will know better
than to make choices based on the unenforceable competing
offers.45 Passengers would not respond to competitive and
differing offers, if passengers knew that the offerors could
break their promises without impunity.
Hickcox-Huffman’s claim falls on the side of the
distinction that Ginsberg and Wolens protect from
preemption. No state law made US Airways promise timely
delivery of the first bag for $15. The airline could have made
any of the promises hypothesized above or none of them.
Enforcing its voluntarily undertaken contractual obligation
comports with the purpose of the Airline Deregulation Act,
which “simply holds parties to their agreements—in this
instance, to business judgments an airline made public about
its rates and services.”46
45
After Hickcox-Huffman started this litigation, the Department of
Transportation issued a set of regulations governing domestic baggage
liability. See 14 C.F.R. §§ 254–59 (2014). We leave to another case
whether those regulations would result in a different preemption
conclusion regarding contract claims arising out of baggage lost after their
issuance. See Nat’l Fed’n of the Blind v. United Airlines Inc., 813 F.3d
718 (9th Cir. 2016).
46
Am. Airlines, Inc. v. Wolens, 513 U.S. 219, 229 (1995).
20 HICKCOX-HUFFMAN V. US AIRWAYS
Hickcox-Huffman’s first amended complaint also
included a number of alternative claims, but we need not
reach any of them because we have determined that she has
pleaded an express breach of contract. These alternative
claims are all reformulations in the event that her breach of
contract claim was deemed preempted. She has alleged a
breach of the implied covenant of good faith and fair dealing,
but this covenant is merely an aid to interpreting the terms of
a contract.47 She has sufficiently alleged that US Airways
breached an express provision of terms of transportation and
thus need not rely on this interpretive doctrine.48 For her
unjust enrichment and misrepresentation claims, she explains
in her first amended complaint that she “will not seek to
recover upon” these theories if she succeeds on her breach of
contract claim.
Hickcox-Huffman has pleaded breach of contract. Her
breach of contract claim is not preempted, and her pleading,
if true, establishes a breach of contract. We therefore must
reverse and vacate the dismissal of her complaint for failure
to state a claim upon which relief can be granted. As for
whether some genuine issue of material fact may undermine
47
See Restatement (Second) of Contracts § 205 (Am. Law Inst. 1981).
48
Under Virginia law, “when parties to a contract create valid and
binding rights, an implied covenant of good faith and fair dealing is
inapplicable to those rights.” Ward’s Equip., Inc. v. New Holland N. Am.,
Inc., 493 S.E.2d 516, 520 (Va. 1997). The same is true in California. See
Steiner v. Thexton, 106 Cal. Rptr.3d 252, 259 (2010) (“[T]he implied
covenant does not trump an agreement’s express language.”).
HICKCOX-HUFFMAN V. US AIRWAYS 21
the truth of her averments, or whether a class should be
certified, these questions were not reached in district court, so
we leave them for determination on remand.
REVERSED. The judgement below is VACATED,
and the case is REMANDED for further proceedings
consistent with this opinion. Costs are to be taxed against
the appellees.