Hayley Hickcox-Huffman, on behalf of herself and all others similarly situated, Plaintiff-Appellant,
US Airways, Inc.; U.S. Airways Group, Inc., Defendants-Appellees.
and Submitted November 8, 2012
Submission Withdrawn June 6, 2013
Resubmitted April 24, 2017  San Francisco, California
from the United States District Court for the Northern
District of California No. 5:10-cv-05193-HRL Howard R. Lloyd,
Magistrate Judge, Presiding
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.
Before: Andrew J. Kleinfeld and Marsha S. Berzon, Circuit
Judges, and Roger T. Benitez, District Judge. [*]
Deregulation Act / Preemption
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
U.S. Airways for refunds passengers paid as baggage fees.
plaintiff passenger pleaded breach of contract, alleging that
U.S. 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.
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 Deregulation Act as construed by American
Airlines v. Wolens, 513 U.S. 219 (1995). The panel
remanded for further proceedings.
KLEINFELD, Senior Circuit Judge
decide whether the Airline Deregulation Act preempts state
law claims arising out of delayed baggage.
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.
to the first amended complaint, Hayley Hickcox-Huffman bought
a ticket on U.S. 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. U.S. Airways charged
Hickcox-Huffman $15 to check her bag. Her bag did not show up
on the baggage carousel, and U.S. Airways delivered it to her
the next day.
filed a putative class action to get her $15
back. Her complaint pleads (1) "breach of
self-imposed 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 U.S. Airways did not do what it
promised to do in exchange for the money.
the terms of the agreement, Hickcox-Huffman attached U.S.
Airways' "Terms of Transportation" to the
complaint. The terms say that "Travel on U.S. Airways
shall be deemed acceptance by the customer of U.S.
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."
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 not returned to the
customer "upon arrival, " then the airlines will
make "every effort" to return it within 24 hours.
district court dismissed the complaint on the grounds that
Hickcox-Huffman's claims were preempted by the Airline
Deregulation Act. 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
review the district court's ruling on preemption de
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).
deregulated the industry and abolished the CAB in 1978. The
Airline Deregulation Act sought to promote "maximum
reliance on competitive market forces . . . to provide the
needed air transportation system . . . [and] to encourage
efficient and well-managed air carriers." 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
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." 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." 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."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 not
effect any 'substantive change.'" 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.
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. An association of state
attorneys general had adopted its own enforcement guidelines
for policing airline advertisements to protect consumers from
deception and nondisclosure. The Court held that injunctive
and declaratory relief were available to the airlines against
the state attorneys general. 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 it harder for consumers to discover
which airline charged the lowest fare.
Court limited the potential breadth of Morales in
American Airlines, Inc. v. Wolens. 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. The Court
held that the consumer fraud act claim was preempted, but not
the breach of contract claim. 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." 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." But common law breach of contract
claims, despite being based on state law, were not preempted,
because they are voluntarily assumed obligations, not state
[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 ...