In re Air Cargo Shipping Servs. Antitrust Litig.

• Decision Date: 11 October 2012
• Docket Number: Docket No. 11–5464–cv.
• Parties: In re AIR CARGO SHIPPING SERVICES ANTITRUST LITIGATION.
• Court: U.S. Court of Appeals — Second Circuit

697 F.3d 154

In re AIR CARGO SHIPPING SERVICES ANTITRUST LITIGATION.

Docket No. 11–5464–cv.

United States Court of Appeals, Second Circuit.

Argued: April 19, 2012.

Decided: Oct. 11, 2012.

Christopher Lovell, Lovell Stewart Halebian Jacobson LLP (Steven N. Williams, Cotchett, Pitre & McCarthy; W. Joseph Bruckner, Lockridge Grindal Nauen P.L.L.P.; Craig C. Corbitt, Zelle, Hofmann, Voelbel, & Mason; Daniel E. Gustafson, Gustafson Gluek PLLC, on the brief), for Plaintiffs–Appellants.

Ian Simmons (Jonathan D. Hacker, Angela Thaler Wilks, Joshua Deahl, Anton Metlitsky, on the brief), O'Melveny & Myers LLP, for Defendants–Appellees Asiana Airlines, Inc.

Sanford M. Litvack, Eric J. Stock, Hogan Lovells US LLP, for Defendants–Appellees Air Canada and AC Cargo.

George N. Tompkins Jr., Wilson Elser Moskowitz Edelman & Dicker LLP, for Defendants–Appellees Air China Ltd. and Air China Cargo Co. Ltd.

Michael J. Holland, Roderick D. Margo, Condon & Forsyth LLP, for Defendants–Appellees Air New Zealand Ltd.

Patrick J. Bonner, Freehill, Hogan & Mahar, LLP and Charles J. Simpson, Jr., James A. Calderwood, Jol A. Silversmith, Zuckert, Scoutt & Rasenberger, L.L.P., for Defendants–Appellees All Nippon Airways Co., Ltd.

Harvey J. Wolkoff, Ropes & Gray LLP, for Defendants–Appellees Atlas Air Worldwide Holdings, Inc., Polar Air Cargo, LLC, and Polar Air Cargo Worldwide, Inc.

Daryl A. Libow, Sullivan & Cromwell LLP, for Defendants–Appellees British Airways PLC.

Stephen Fishbein, Heather Kafele, Shearman & Sterling LLP, for Defendants–Appellees Cargolux Airlines International S.A.

David H. Bamberger, DLA Piper LLP (US), for Defendants–Appellees Cathay Pacific Airways Ltd.

John F. Savarese, David B. Anders, Wachtell, Lipton, Rosen & Katz, for Defendants–Appellees El Al Israel Airlines Ltd.

Terry Calvani, Freshfields Bruckhaus Deringer US LLP, for Defendants–Appellees Emirates.

Gary A. MacDonald, John M. Nannes, Skadden, Arps, Slate, Meagher & Flom LLP, for Defendants–Appellees Koninklijke Luchtvaart Maatschappij N.V. (KLM Royal Dutch Airlines).

Barry G. Sher, Paul Hastings LLP, for Defendants–Appellees Korean Air Lines Co., Ltd.

James V. Dick, Squire Sanders (US) LLP, for Defendants–Appellees Lan Airlines, S.A., Lan Cargo, S.A. and Aerolinhas Brasileiras, S.A.

Daniel G. Swanson, D. Jarrett Arp, Gibson, Dunn & Crutcher LLP, for Defendants–Appellees Martinair Holland N.V.

John R. Fornaciari, Baker & Hostetler LLP, for Defendants–Appellees Nippon Cargo Airlines Co., Ltd.

Peter J. Kadzik, Dickstein Shapiro LLP, for Defendants–Appellees Saudi Arabian Airlines Ltd.

George D. Ruttinger, Crowell & Moring LLP, for Defendants–Appellees Scandinavian Airlines System.

Margaret M. Zwisler, William R. Sherman, Ashley M. Bauer, Latham & Watkins LLP, for Defendants–Appellees Singapore Airlines Cargo PTE LTD and Singapore Airlines Ltd.

James R. Warnot Jr., Linklaters LLP, for Defendants–Appellees Société Air France.

Sara E. Kropf, John M. Taladay, Steve Weissman, Andreas Stargard, Kimberly A. Murphy, Baker Botts LLP, for Defendants–Appellees

South African Airways Ltd.

Rowan D. Wilson, Cravath, Swaine & Moore LLP, for Defendants–Appellees Thai Airways International Public Co. Ltd.

W. Todd Miller, Baker & Miller PLLC, for Defendants–Appellees Qantas Airways Ltd.

Before: JACOBS, Chief Judge, KEARSE and HALL, Circuit Judges.

DENNIS JACOBS, Chief Judge:

Plaintiffs (indirect purchasers of air freight shipping services) brought suit against numerous foreign airlines (“Defendants”), alleging a conspiracy to fix prices in violation of state antitrust, consumer protection, and unfair competition laws. The United States District Court for the Eastern District of New York (Gleeson, J.) dismissed those claims as expressly preempted by federal law. The Federal Aviation Act preempts state-law claims “related to a price, route, or service of an air carrier.” 49 U.S.C. § 41713(b)(1). The question is whether “air carrier” in that provision applies to foreign air carriers. We conclude that it does, and affirm.

BACKGROUND

At least 22 foreign air carriers have been subject to federal criminal charges in the United States in connection with a global price-fixing conspiracy. Some have settled, agreeing to pay fines and penalties totaling almost $2 billion.

Plaintiffs bring this civil suit alleging that they paid excessive prices when Defendants entered into that conspiracy, beginning in 2000, and began levying a number of surcharges, including a fuel surcharge, a war-risk-insurance surcharge, a security surcharge, and a United States customs surcharge. Plaintiffs, as indirect purchasers of air freight shipping, dealt with the defendant airlines through intermediaries, such as freight forwarders. They bring their claims under state law because indirect purchasers are unable to obtain money damages under federal antitrust law. See Ill. Brick Co. v. Illinois, 431 U.S. 720, 729, 97 S.Ct. 2061, 52 L.Ed.2d 707 (1977). Additional claims were brought by other plaintiffs who were direct purchasers. The claims of those direct-purchaser plaintiffs remain in district court and are not before us.

Below, the district court accepted, in relevant part, Magistrate Judge Pohorelsky's recommendation to dismiss Plaintiffs' state claims on the ground that it was expressly preempted by federal law. The district court then entered partial final judgment under Rule 54(b) of the Federal Rules of Civil Procedure, so Plaintiffs could immediately appeal the dismissal decision. This appeal followed.

DISCUSSION

We review de novo a dismissal for failure to state a claim upon which relief can be granted. Harris v. Mills, 572 F.3d 66, 71 (2d Cir.2009). We also review de novo questions of statutory interpretation, Bodansky v. Fifth on the Park Condo, LLC, 635 F.3d 75, 82 (2d Cir.2011), and questions of preemption, New York SMSA Ltd. Partnership v. Town of Clarkstown, 612 F.3d 97, 103 (2d Cir.2010).

The relevant provision of the Federal Aviation Act is as follows:

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.49 U.S.C. § 41713(b)(1). Plaintiffs' claims undoubtedly arise under state law and are related to “price.” Id. The dispositive question, then, is whether foreign air carriers (such as Defendants) are “air carrier[s]” under § 41713(b)(1) (the “preemption provision”).

I

We begin “ ‘with the language employed by Congress and the assumption that the ordinary meaning of that language accurately expresses the legislative purpose.’ ” United States v. Aleynikov, 676 F.3d 71, 76 (2d Cir.2012) (quoting United States v. Albertini, 472 U.S. 675, 680, 105 S.Ct. 2897, 86 L.Ed.2d 536 (1985)). The ordinary, everyday meaning of “air carrier” includes both domestic and foreign air carriers.

That would usually end the analysis, but “[w]hen a statute includes an explicit definition,” we generally follow that definition, “even if it varies from that term's ordinary meaning.” Stenberg v. Carhart, 530 U.S. 914, 942, 120 S.Ct. 2597, 147 L.Ed.2d 743 (2000). “ ‘Statutory definitions control the meaning of statutory words, of course, in the usual case.’ ” Nw. Austin Mun. Util. Dist. No. One v. Holder, 557 U.S. 193, 206, 129 S.Ct. 2504, 174 L.Ed.2d 140 (2009) (quoting Lawson v. Suwannee Fruit & S.S. Co., 336 U.S. 198, 201, 69 S.Ct. 503, 93 L.Ed. 611 (1949)). The Federal Aviation Act defines an “air carrier” as “a citizen of the United States undertaking by any means, directly or indirectly, to provide air transportation.” 49 U.S.C. § 40102(a)(2). A “foreign air carrier” is separately defined as “a person, not a citizen of the United States, undertaking by any means, directly or indirectly, to provide foreign air transportation.” Id. § 40102(a)(21).

Plaintiffs contend that this is the “usual case” where the statutory definitions should control. The statutory definitions are consistent with this Court's authority that the terms “air carrier” and “foreign air carrier” are “mutually exclusive” because an entity cannot be both a citizen and not a citizen of the United States. United States v. Keuylian, 602 F.2d 1033, 1040 (2d Cir.1979). That observation is sound as far as it goes; but there are occasions when statutory definitions yield to context and the development of the statutory wording over time. In any event, while an entity cannot be both an air carrier and a foreign air carrier ( i.e., the terms are mutually exclusive), nothing in the statutory definitions prevents the statutory preemption provision from applying to both domestic air carriers and foreign air carriers, which is the matter at issue here.

To demonstrate that Congress has been careful to distinguish between the two terms, Plaintiffs cite 51 places in the Federal Aviation Act where Congress distinguished between an “air carrier” and a “foreign air carrier” by using both terms. At the same time, Plaintiffs concede that there are numerous provisions in the Federal Aviation Act where Congress was not so careful and used the term “air carrier” generically to reference air carriers, both domestic and foreign.¹See In re Korean Air Lines Co. Ltd., Antitrust Litig., 642 F.3d 685, 692 (9th Cir.2011); Port Auth. of N.Y. & N.J. v. Dep't of Transp., 479 F.3d 21, 32 (D.C.Cir.2007).

Since the Federal Aviation Act used the statutory definition in some places, and in other places used the normal, everyday meaning, this is the “unusual case” in which the statutory definitions do not have compulsory application. Nw. Austin Mun. Util. Dist. No. One, 557 U.S. at 206–07, 129 S.Ct. 2504 (internal quotation marks omitted). Because it has been “ ‘established that a statutorily defined term has different meanings in different sections, the term standing alone is necessarily ambiguous and each section must be...