Sanchez v. Aerovias De Mexico, S.A. De C.V.

• Decision Date: 05 January 2010
• Docket Number: No. 08-55588.,08-55588.
• Citation: 590 F.3d 1027
• Parties: Maria SANCHEZ, individually and on behalf of all others similarly situated, Plaintiff-Appellant, v. AEROVIAS DE MEXICO, S.A. DE C.V., doing business as Aeromexico, Defendant-Appellee.
• Court: U.S. Court of Appeals — Ninth Circuit

590 F.3d 1027

Maria SANCHEZ, individually and on behalf of all others similarly situated, Plaintiff-Appellant, v. AEROVIAS DE MEXICO, S.A. DE C.V., doing business as Aeromexico, Defendant-Appellee.

No. 08-55588.

United States Court of Appeals, Ninth Circuit.

Argued and Submitted May 5, 2009.

Filed January 5, 2010.

H. Rossbacher, The Rossbacher Firm, Los Angeles, CA, for the petitioner-appellant.

Frank A. Silane, Condon & Forsyth LLP, Los Angeles, CA, for the respondent-appellee.

Appeal from the United States District Court for the Central District of California, Manuel L. Real, District Judge, Presiding. D.C. No. 2:07-cv-07280-R-RC.

Before: PAMELA ANN RYMER, ANDREW J. KLEINFELD and BARRY G. SILVERMAN, Circuit Judges.

Opinion by Judge RYMER; Dissent by Judge KLEINFELD.

RYMER, Circuit Judge:

When Maria Sanchez bought a ticket to fly from California to Mexico, the airline collected a tourism tax for the Mexican government from which she, and the class she would like to represent, are exempt. She seeks relief for breach of contract and the implied covenant of good faith and fair dealing, as well as for unjust enrichment and money had and received from Aerovias De Mexico S.A. De C.V., better known as Aeromexico. The district court concluded that these claims are preempted by the Airline Deregulation Act of 1978(ADA) because they relate to the airline's "price[s], route[s], or service[s]," 49 U.S.C. § 41713(b)(1), and are not excepted because Aeromexico had no contractual obligation to advise passengers about the tax or their right to a refund. Accordingly, it granted judgment for Aeromexico. We have jurisdiction under 28 U.S.C. § 1291, and affirm.

I

The government of Mexico levies a tourism tax (sometimes called the UK Tax, or DNI, after the Spanish-language abbreviation) on airline passengers traveling into Mexico on international flights. Passengers who are Mexican citizens or residents of Mexico (holding an FM-2 or FM-3 visa), as well as diplomats, children under the age of two, and those staying in Mexico for less than twenty-four hours, are exempt. The tax fluctuates with the rate of exchange, but is approximately $22 per person.

Aeromexico is an airline operator organized under the laws of Mexico that is authorized to collect the tax from its passengers on behalf of Mexico. It includes the tax in the price of tickets purchased in California for transportation to Mexico. On July 25, 2006, Sanchez, who is a citizen and resident of California, bought a roundtrip e-ticket from Aeromexico for travel between Los Angeles and Guadalajara, Mexico. The price was $428.43, of which $22.00 was attributable to the tourism tax. Sanchez also is a Mexican citizen, which makes her exempt from the tax.¹

She filed a complaint in state court on behalf of herself and a class of other passengers who paid the tourism tax as part of the price of an Aeromexico ticket but were exempt. In it she claims that Aeromexico breached contractual obligations by improperly collecting the tax, and by failing to disclose that the tourism tax was not due from exempt passengers and that exempt passengers are entitled to a refund. Sanchez does not aver that she identified herself as a Mexican citizen, either when she purchased the ticket or checked in, or that she asked Aeromexico to refund the tax.

Aeromexico removed the action to federal court pursuant to the Class Action Fairness Act, 28 U.S.C. § 1332(d), then moved to dismiss or alternatively, for summary judgment. Sanchez sought a continuance for discovery pursuant to Federal Rule of Civil Procedure 56(f), but the court granted summary judgment without ruling on the application.

Sanchez timely appealed.²

II

We first decide whether the summary judgment must be reversed on account of the district court's failure to take Sanchez's Rule 56(f) application, or evidentiary objections, into account. We agree with Sanchez that neither should have been left hanging, but we disagree that reversal is required. The error, if any, is harmless. Sanchez wanted to depose Aeromexico's Comptroller, who submitted a declaration about how the tourism tax is collected, and to gather evidence about the airline's collection and remittance practices as well as the passenger information it obtains. However, the procedures described in the Comptroller's declaration were undisputed so objections to it are immaterial; and discovery into the merits was not necessary to oppose Aeromexico's motion that it is entitled to judgment as a matter of law.

III

Sanchez's principal argument is that no federal law preempts her state law claims based on breach of contract. She posits that by purchasing a ticket, she and Aeromexico entered into a contract whereby Aeromexico became obliged not to collect a tax that was not due from exempt passengers. This is based on language on Aeromexico's website that states:

The user hereby accepts to be bound by the terms and conditions of purchase imposed by Aeromexico including, but not limited to, the payment of all amounts when they fall due and the compliance of all rules regarding the availability of tickets, products and services. The user shall remain fully liable for all evaluations, charges, rights, quotas and taxes arising from the use of the Site.

Sanchez recognizes that the ADA has a preemption clause, but maintains that it does not purport to prevent the states from enforcing contracts between airlines and their passengers. The preemption clause in the Airline Deregulation Act of 1978³ provides that a "State ... 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...." 49 U.S.C. § 41713(b)(1). In Sanchez's view, her claims do not equate to state regulation of the "price, route, or service of an air carrier" because the tax is a fee separate and apart from the fare for air transportation that has no economic effect on "price."

When interpreting a preemption clause, we "must give effect to [its] plain language unless there is good reason to believe Congress intended the language to have some more restrictive meaning." Shaw v. Delta Air Lines, Inc., 463 U.S. 85, 97, 103 S.Ct. 2890, 77 L.Ed.2d 490 (1983). Interpretation "does not occur in a contextual vacuum," but rather is informed by two presumptions: first, "because the States are independent sovereigns in our federal system, we have long presumed that Congress does not cavalierly preempt statelaw causes of action"; and second "the purpose of Congress is the ultimate touchstone in every preemption case." See Medtronic, Inc. v. Lohr, 518 U.S. 470, 485, 116 S.Ct. 2240, 135 L.Ed.2d 700 (1996) (quotation marks omitted); see also Charas v. Trans World Airlines, Inc., 160 F.3d 1259, 1264-65 (9th Cir.1998) (en banc).

The Supreme Court has addressed ADA preemption a number of times, most notably in Morales v. Trans World Airlines, Inc., 504 U.S. 374, 112 S.Ct. 2031, 119 L.Ed.2d 157 (1992); Am. Airlines, Inc. v. Wolens, 513 U.S. 219, 115 S.Ct. 817, 130 L.Ed.2d 715 (1995); and Rowe v. N.H. Motor Transp. Ass'n, 552 U.S. 364, 128 S.Ct. 989, 169 L.Ed.2d 933 (2008). From these cases we know that Congress enacted the ADA to deregulate domestic air transport, and included the preemption clause "[t]o ensure that the States would not undo federal deregulation with regulation of their own." Morales, 504 U.S. at 378, 112 S.Ct. 2031. Also, the ADA "was designed to promote maximum reliance on competitive market forces." Wolens, 513 U.S. at 230, 115 S.Ct. 817 (quotation marks omitted); 49 U.S.C. § 40101(a)(6).

In Morales, the Court construed the text "related to" as plainly meaning "`to stand in some relation; to have bearing or concern; to pertain; refer; to bring into association or connection with.'" 504 U.S. at 383, 112 S.Ct. 2031 (quoting Black's Law Dictionary 1158 (5th ed. 1979)). "Related to" therefore "express[es] a broad preemptive purpose." Id. Thus, a state law or enforcement action is "related to" a "price, route, or service" if it "has a connection with or reference to" a "price, route, or service," see id. at 384-88, 112 S.Ct. 2031 (citing Shaw, 463 U.S. at 97, 103 S.Ct. 2890). At the same time, even if a claim does relate to "price," the ADA preemption clause does not "shelter airlines from suits alleging no violation of state-imposed obligations, but seeking recovery solely for the airline's alleged breach of its own, self-imposed undertakings." Wolens, 513 U.S. at 228, 115 S.Ct. 817. In Wolens, the Court focused on the rest of the text—"enact or enforce any law"—in the context of a challenge to the airline's retroactive changes in the terms and conditions of its frequent flyer program. Although the plaintiffs' claims there did relate to "rates" and "services," it held that the preemptive scope of the ADA, as explicated in Morales, allows for court enforcement of privately-ordered contract terms set by the parties themselves. Id. at 226-33, 115 S.Ct. 817.

As in Wolens, we see no need to dwell on whether Sanchez's claims relate to the air carrier's "price." The ticketed price included the tourism tax and other fees and surcharges. As the First Circuit reasoned in a case raising similar issues, "[i]t is freshman-year economics that higher prices mean lower demand, and that consumers are sensitive to the full price that they must pay, not just the portion of the price that will stay in the seller's coffers." Buck v. Am. Airlines, Inc., 476 F.3d 29, 36 (1st Cir.2007).

The real question here is whether Aeromexico made a contractual commitment to advise passengers about the Mexico tourism tax, not to collect it from exempt passengers, and to refund that portion of the price attributable to the tax. If it did, Sanchez's claim could proceed under Wolens. To show that Areomexico undertook to do these things, Sanchez points only to the language on Aeromexico's website. That language cannot reasonably be read as imposing any such...