Overka v. American Airlines, Inc.

United States Court of Appeals
For the First Circuit
No. 14-1869
DARYL OVERKA, ET AL.,
Plaintiffs, Appellants,
v.
AMERICAN AIRLINES, INC.,
Defendant, Appellee.
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MASSACHUSETTS
[Hon. William G. Young, U.S. District Judge]
Before
Lynch, Chief Judge,
Kayatta and Barron, Circuit Judges.
Shannon Liss-Riordan, with whom Lichten & Liss-Riordan, P.C.
was on brief, for appellants.
Michael Vance Powell, with whom Amy C. Mariani, David J.
Volkin, and Fitzhugh & Mariani LLP were on brief, for appellee.
June 12, 2015
BARRON, Circuit Judge. For the third time in recent
years, "skycaps" -- airport porters who, among other things, assist
passengers with curbside check-in -- ask us to decide whether they
may sue an airline for alleged violations of state law arising out
of the imposition at airports of a $2.00 per-bag, curbside check-
in fee. As in those previous cases, and on the basis of those
prior precedents and intervening precedent, we hold that federal
law preempts these skycaps' state statutory and common law claims.
I.
The suit before us began on April 24, 2008, when a class
of skycaps working at Logan Airport in Boston, Massachusetts, and
at other airports throughout the country, brought suit against
American Airlines. The suit arose after American began charging
passengers $2.00 per bag to use curbside check-in services at
airports across the country. According to the plaintiffs, American
failed to adequately notify customers that skycaps would not
receive the proceeds from the new charge. The plaintiffs further
claimed that their compensation "decreased dramatically" following
the introduction of the new charge, as fewer passengers tipped
skycaps on top of paying the per-bag charge.
The plaintiffs thus sued American, on behalf of the
Massachusetts skycaps, for violations of the Massachusetts Tips
Law, Mass. Gen. Laws. ch. 149 § 152A. The plaintiffs also sued
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American on behalf of both those skycaps and the others in the
class for tortious interference with the "implied contractual
and/or advantageous relationship that exists between skycaps and
[American's] customers" and unjust enrichment or quantum meruit.1
American filed a motion to dismiss in May of 2014 after
the case was reopened following two stays. American argued that
two recent circuit precedents, DiFiore v. American Airlines, Inc.,
646 F.3d 81 (1st Cir. 2011), and Brown v. United Airlines, Inc.,
720 F.3d 60 (1st Cir. 2013), cert. denied, 134 S. Ct. 1787 (2014),
compelled the conclusion that the Airline Deregulation Act, 49
U.S.C. § 41713(b)(1), preempted each of the skycaps' claims. The
District Court agreed. Following a short hearing on American's
motion, the District Court issued an order of dismissal in August
of 2014. The plaintiffs now appeal that decision.
II.
In 1978, "as part of a wave of deregulatory measures,"
DiFiore, 646 F.3d at 85, Congress enacted the Airline Deregulation
1 The plaintiffs also brought a retaliation claim under state
law, see Mass. Gen. Laws ch. 149 § 148A, alleging that American
had implemented a "no-tipping" policy in response to skycaps'
pursuing such claims. The plaintiffs later agreed to waive this
claim, however, in light of American's decision to rescind the
"no-tipping" policy. In addition, the plaintiffs -- who seek
restitution and statutory damages -- initially sought injunctive
relief as well, but they voluntarily withdrew all of their claims
for injunctive relief after American agreed to stop charging the
per-bag curbside check-in fee.
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Act (ADA), "which largely deregulated domestic air transport," Am.
Airlines, Inc. v. Wolens, 513 U.S. 219, 222 (1995). The ADA sought
to promote "efficiency, innovation, and low prices" in the airline
industry through "maximum reliance on competitive market forces
and on actual and potential competition." 49 U.S.C.
§§ 40101(a)(6), (12)(A). "To ensure that the States would not
undo federal deregulation with regulation of their own," Morales
v. Trans World Airlines, Inc., 504 U.S. 374, 378 (1992), Congress
included an express preemption clause in the ADA, which provides
that
a State, political subdivision of a State, or
political authority of at least 2 States 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).2
Our Circuit has in recent years twice applied that
provision to preempt claims brought by skycaps arising out of
2The original version of the ADA contained a preemption
clause that used slightly differently wording. See Pub. L. No.
95-504, § 4(a), 92 Stat. 1705, 1707-08 (1978) (codified at 49
U.S.C. app. § 1305(a)(1) (1982)) (preempting state laws "relating
to rates, routes, or services"). The changes in wording -- which
were made when Title 49 was recodified -- were merely stylistic
and were "not intend[ed] to impair the applicability of prior
judicial case law interpreting these provisions." H.R. Rep. No.
103-677, at 83 (1994) (Conf. Rep.), reprinted in 1994 U.S.C.C.A.N.
1715, 1755.
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airlines' introduction of fees for curbside check-in services.
First, in DiFiore v. American Airlines, Inc., which was decided in
2011, we held that the ADA preempted skycaps' claims that
American's per-bag fees violated the Massachusetts Tips Law.3 646
F.3d at 87-90. In so holding, we explained that the airline's
"conduct in arranging for transportation of bags at curbside into
the airline terminal en route to the loading facilities is itself
a part of the 'service' referred to in the federal statute, and
the airline's 'price' includes charges for such ancillary services
as well as the flight itself." Id. at 87. We thus concluded that,
as applied in the case, the Tips Law "directly regulates how an
airline service is performed and how its price is displayed to
customers," which was precisely what the ADA sought to avoid. Id.
at 88.
Two years later, we resolved the further question of
whether the same result follows for certain common law claims that
targeted the same $2.00 charge. In that case, Brown v. United
Airlines, Inc., a separate set of skycaps had brought common law
claims for unjust enrichment and tortious interference arising out
3
The DiFiore plaintiffs, in addition to their claims under
the Tips Law, initially brought common law claims identical to the
ones now before us. By the time their case reached this Court,
however, only their Tips Law claims remained. See 646 F.3d at 84,
89.
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of two airlines' imposition of $2.00 baggage fees for curbside
service. 720 F.3d at 62. We held that the ADA preempted these
common law claims.
We explained in Brown that DiFiore "conclusively
resolves" in the airlines' favor the "linkage" issue -- i.e., the
issue of whether laws regulating the imposition of baggage-
handling fees "relate[] to a price, route, or service of an air
carrier" within the meaning of the ADA preemption clause. Id. at
64. We further concluded that the common law, "no less than
positive law," constitutes a "provision having the force and effect
of law" within the meaning of that same clause. Id. at 64-65; see
49 U.S.C. § 41713(b)(1) ("Except as provided in this subsection,
a State, political subdivision of a State, or political authority
of at least 2 States 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." (emphasis added)). And,
finally, we held that the skycaps' claims did not fit within the
so-called "Wolens exception" to preemption under the ADA. Brown,
720 F.3d at 70-71.
That exception comes from the Supreme Court's decision
in American Airlines, Inc. v. Wolens. There, the Supreme Court
held that the ADA did not preempt breach of contract claims arising
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out of an airline's frequent flyer program because those claims
had sought remedies for violations of self-imposed, not state-
imposed, obligations. See 513 U.S. at 228-33.
The plaintiffs in the present case argue that,
notwithstanding DiFiore and Brown, their claims -- which are for
violations of the Massachusetts Tips Law (like in DiFiore) and
tortious interference and unjust enrichment (like in Brown) -- are
not preempted. They rely on intervening precedents to explain why
neither DiFiore nor Brown controls, despite their seeming
applicability. But the plaintiffs' arguments are unconvincing.
A.
With respect to the common law unjust enrichment and
tortious inference claims, the plaintiffs argue that the Supreme
Court's recent decision in Northwest, Inc. v. Ginsberg, 134 S. Ct.
1422 (2014), undermines Brown's holding that skycaps' "unjust
enrichment and tortious interference claims fall outside [the
Wolens exception's] confines," Brown, 720 F.3d at 70.
The Supreme Court in Ginsberg held that the ADA preempted
a customer's claim alleging that an airline had breached the
implied covenant of good faith and fair dealing. The claim
asserted that the airline had committed the breach by terminating
the customer's membership in the airline's frequent flyer program
on what the customer deemed to have been arbitrary or unlawful
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grounds. 134 S. Ct. at 1430-32. In finding that claim preempted,
the Court held that the Wolens exception did not apply to the
customer's claim. The Court explained that Minnesota law -- the
relevant law in the case, see id. at 1427 n.1 -- disabled parties
from contracting out of the implied covenant of good faith and
fair dealing, and thus that the covenant was a "state-imposed
obligation" rather than a self-imposed one under Wolens. Id. at
1432. Consistent with that characterization, the Court also noted
that Minnesota imposed the implied covenant on all contracts except
employment contracts, which illustrated that "the application of
the implied covenant depends on state policy choices." Id.
The plaintiffs, in arguing that Ginsberg undermines
Brown, rely on the fact that Ginsberg characterized the Wolens
exception as turning on whether a common law claim "is based on a
state-imposed obligation or simply one that the parties
voluntarily undertook," id. at 1431, and as extending to common
law claims "based on the parties' voluntary undertaking," id. at
1430, rather than to only "routine breach-of-contract claims,"
Wolens, 513 U.S. at 232. According to the plaintiffs, this
description of the Wolens exception undermines Brown's holding
that deemed preempted skycaps' unjust enrichment and tortious
interference claims arising out of airport baggage fees identical
to those currently at issue. But we do not agree.
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The plaintiffs are of course correct that an
intervening, on-point Supreme Court opinion can erode the
precedential value of a prior panel opinion. See, e.g., United
States v. Rodriguez, 311 F.3d 435, 438-39 (1st Cir. 2002). And
the Supreme Court's decision in Ginsberg does postdate Brown. But,
contrary to the plaintiffs' contentions, Ginsberg did not cast
doubt on Brown. If anything, Ginsberg supports Brown's reasoning.
See Ginsberg, 134 S. Ct. at 1429 (approvingly citing Brown, 720
F.3d at 68, for the proposition that the ADA preemption provision
extends to common law claims).
Ginsberg concluded in no uncertain terms that the
implied covenant of good faith and fair dealing was not an
obligation to which the parties had agreed, that the covenant
instead constituted a "state-imposed obligation" under the
applicable law, and thus that "the reasoning of Wolens" meant that
the ADA preempted the customer's implied covenant claim. Id. at
1432. Nothing in Ginsberg, therefore, undermines our reasoning in
Brown about the application of the Wolens exception to the common
law claims the plaintiffs press here, as those claims, too, seek
to enforce a similarly "state-imposed" obligation. In that regard,
Brown held first that the unjust enrichment claims fell outside
the Wolens exception because they were "predicated on the lack of
any agreement" between the parties and instead turned on external
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considerations by which the parties had not agreed to be bound.
720 F.3d at 71. And Brown held second that the tortious
interference claims likewise fell outside the Wolens exception
because they "sound[ed] in tort, not contract," and "[t]ort law is
not a privately ordered obligation," but rather is imposed by the
state. Id. The District Court was thus correct to conclude that
the plaintiffs' common law claims, which the plaintiffs concede
are the same claims brought in Brown, are preempted under the ADA.
B.
That leaves the plaintiffs' claims under the
Massachusetts Tips Law. See Mass. Gen. Laws. ch. 149 § 152A. The
plaintiffs contend that, notwithstanding DiFiore v. American
Airlines, Inc., we must reverse and remand the District Court's
decision with respect to their Tips Law claims in light of this
Court's recent decision in Massachusetts Delivery Association v.
Coakley, 769 F.3d 11 (1st Cir. 2014).
In Massachusetts Delivery Association, we summarized the
Supreme Court's holding in Ginsberg and explained that the Court's
preemption analysis in that case "focused not on the claim in the
abstract, but on the underlying facts." 769 F.3d at 18. We
likewise concluded that, in answering the preemption question
under the Federal Aviation Administration Authorization Act
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(FAAAA) -- which contains a preemption provision4 "generally
construed in pari materia" with the ADA's nearly identical
provision, Tobin v. Fed. Express Corp., 775 F.3d 448, 454 n.4
(2014) -- a "court must engage with the real and logical effects
of the state statute, rather than simply assigning it a label."
Mass. Delivery Ass'n, 769 F.3d at 20.
The plaintiffs take from these passages that
Massachusetts Delivery Association "held" that analysis of
preemption under the FAAAA or ADA "requir[es] an evidentiary
record." Appellant Br. 24. DiFiore, the plaintiffs contend,
decided the "linkage" question -- i.e., that the skycaps' Tips Law
claims "related to a price, route, or service of an air carrier"
-- without the benefit of an evidentiary record "regarding what
actual effect it had, or would have, on the airlines to
discontinue" the baggage fee. Appellant Br. 24. And thus, the
plaintiffs argue, DiFiore is no longer binding in a case like this
where there is also no factual record of the impact that applying
4 See 49 U.S.C. § 14501(c)(1) ("[A] State, political
subdivision of a State, or political authority of 2 or more States
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 any motor carrier (other than a carrier affiliated with
a direct air carrier covered by section 41713(b)(4)) or any motor
private carrier, broker, or freight forwarder with respect to the
transportation of property.").
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the remedies afforded by the state tipping law would have on the
airline's prices or services.
But Massachusetts Delivery Association did not announce
a categorical rule that an airline always needs a record on the
effect of the plaintiffs' claim on its prices or services in order
to defeat preemption under the FAAAA, let alone the ADA. Rather,
in deciding the preemption question, Massachusetts Delivery
Association explicitly reaffirmed our previous holding "allow[ing]
courts to 'look[] to the logical effect that a particular scheme
has on the delivery of services or the setting of rates.'" 769
F.3d at 21 (second alteration in original) (quoting N.H. Motor
Transp. Ass'n v. Rowe, 448 F.3d 66, 82 n.14 (1st Cir. 2006), aff'd,
552 U.S. 364 (2008)). Massachusetts Delivery Association
therefore supplies no basis for declining to follow DiFiore, which
relied on just that logical effect in finding preemption of
identical claims under the Massachusetts Tips Law. And so DiFiore
controls here and requires that we affirm the District Court's
ruling that the plaintiffs' claims under the Massachusetts Tips
Law are preempted.
III.
Contrary to the plaintiffs' contentions, both DiFiore
and Brown -- which together hold that the Airline Deregulation Act
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preempts the claims before us -- remain good law. We thus affirm
the District Court's decision to dismiss the plaintiffs' claims.
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