Brown v. United Air Lines, Inc., Civ. Action No. 08cv10689-NG.

• Decision Date: 22 September 2009
• Docket Number: Civ. Action No. 08cv10689-NG.
• Citation: 656 F.Supp.2d 244
• Parties: Joseph BROWN, Vincent McLaren, Philip Fields, Carlos Borges Carreiro, Patricia Shea-Scanlon, Dharam Saihgal, Elvis Butcher, Larry Holt, Scott Gordon, Michael Rashad, Lorenzo Wiley, James Brown, Gerardo Aguirre, Kevin Reaves, Michael Kalinowski, and all others similarly situated, Plaintiffs, v. UNITED AIR LINES, INC., Defendant.
• Court: U.S. District Court — District of Massachusetts

656 F.Supp.2d 244

Joseph BROWN, Vincent McLaren, Philip Fields, Carlos Borges Carreiro, Patricia Shea-Scanlon, Dharam Saihgal, Elvis Butcher, Larry Holt, Scott Gordon, Michael Rashad, Lorenzo Wiley, James Brown, Gerardo Aguirre, Kevin Reaves, Michael Kalinowski, and all others similarly situated, Plaintiffs, v. UNITED AIR LINES, INC., Defendant.

Civ. Action No. 08cv10689-NG.

United States District Court, D. Massachusetts.

September 22, 2009.

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Hillary A. Schwab, Shannon E. Liss-Riordan, Lichten & Liss-Riordan, P.C., Boston, MA, for Plaintiffs.

Brigitte M. Duffy, Carla J. Eaton, Seyfarth Shaw, LLP, Boston, MA, Bruce H. Rabinovitz, Jonathan E. Nuechterlein, Rachel Z. Stutz, Wilmer Cutler Pickering Hale and Dorr, Washington, DC, Defendant.

MEMORANDUM AND ORDER RE: DEFENDANT'S MOTION FOR RECONSIDERATION OF, OR, IN THE ALTERNATIVE, INTERLOCUTORY APPEAL FROM, THE ORDER DENYING DEFENDANT'S MOTION TO DISMISS, AND TO STAY THE PROCEEDINGS

GERTNER, District Judge.

I. INTRODUCTION

In this putative national class action suit against United Air Lines ("United"), Plaintiffs are skycaps, airline employees who help passengers check in luggage at the curbs of airport terminals. The proposed class includes all skycaps who worked at United terminals after February 1, 2006, when United emerged from bankruptcy. The suit arises from the airline's imposition of a $2 fee per bag for curbside check-in, a service that used to be a source of tips for baggage handlers. Plaintiffs present two theories: first, passengers intend the cash payments to be "tips" that belong to the employees; second, the charges interfere with the skycaps' wages because passengers are unlikely to tip in addition to the bag fee. Based on these theories, the skycaps assert claims on behalf of the entire class for tortious interference with advantageous relations and unjust enrichment. With regard to members of the class who work in Massachusetts, Plaintiffs also allege violation of the Massachusetts Tips Law, Mass. Gen. Laws ch. 149, § 152A, which requires payments intended as tips to be remitted to service employees.

On August 13, 2008, United filed a motion to dismiss, arguing that the state claims are all preempted by the Airline Deregulation Act of 1978 ("ADA"), 49 U.S.C. § 41713(b)(1), and by the Federal Aviation Act ("FAA"), 49 U.S.C. §§ 40101 et seq. On March 26, 2009, I denied the motion based on the authority of DiFiore v. American Airlines, 483 F.Supp.2d 121 (D.Mass.2007), which held that an identical set of tips claims was not preempted by the ADA. On April 7, 2009, United filed a motion for reconsideration of the motion to dismiss, arguing that cases that have come down since DiFiore cast doubt on that precedent. In the alternative, they move for interlocutory appeal of the order denying the motion to dismiss. Plaintiffs filed a motion to certify the class on August 11, 2008, which is also pending.

Upon reconsideration, I hold that the Plaintiffs' claims are preempted by the ADA.¹ The Supreme Court has recently explained that the ADA preempts state laws which have a "significant impact" on prices and services, Rowe v. N.H. Motor Transp. Ass'n, 552 U.S. 364, 128 S.Ct. 989, 997, 169 L.Ed.2d 933 (2008) (quoting Morales v. Trans World Airlines, Inc., 504 U.S. 374, 112 S.Ct. 2031, 119 L.Ed.2d 157 (1992)), and has emphasized the "unusual breadth" of ADA preemption. Altria Group, Inc. v. Good, ___ U.S. ___, 129 S.Ct. 538, 547, 172 L.Ed.2d 398 (2008). Based on these precedents, another court in this district ruled earlier this year that the claims asserted by skycaps against JetBlue were expressly preempted because potential liability under state law claims would force airlines to alter the "price for a service," namely curbside check-in. Travers v. JetBlue Airways Corp., 08-10730, 2009 WL 2242391, at *2 (D.Mass. July 23, 2009). I disagree with the court in Travers that the state laws have a significant effect on price, because the Plaintiffs seek only to change the manner in which the fee is collected. I agree, however, that the state laws are preempted because liability under such laws would affect curbside check-in services. I do not reach the question of implied preemption under the FAA, or United's alternative request for interlocutory appeal, because explicit preemption under the ADA is sufficient to dismiss the lawsuit.

For the reasons described below, Defendant's motions to reconsider (Document # 44) and dismiss (Document # 12) are GRANTED. Since Plaintiffs' claims are preempted, Plaintiffs' motion to certify the class (Document # 9) is MOOT.

II. STANDARD OF REVIEW

District courts have "substantial discretion" in ruling on motions for reconsideration. Serrano-Perez v. FMC Corp., 985 F.2d 625, 628 (1st Cir.1993). To prevail, the moving party must either present previously unavailable evidence or show that a manifest error of law was committed. Palmer v. Champion Mortgage., 465 F.3d 24, 30 (1st Cir.2006).

When reviewing a motion to dismiss under Fed R. Civ. P. 12(b)(6), the court must decide whether the Plaintiffs have stated a claim upon which relief can be granted. Swierkiewicz v. Sorema N.A., 534 U.S. 506, 513, 122 S.Ct. 992, 152 L.Ed.2d 1 (2002) (citing Conley v. Gibson, 355 U.S. 41, 47, 78 S.Ct. 99, 2 L.Ed.2d 80 (1957)). The court will accept all allegations of fact in the complaint, with all reasonable inferences drawn in favor of the Plaintiffs. Watterson v. Page, 987 F.2d 1, 3 (1st Cir.1993). A complaint will be dismissed for failure to state a claim only if it appears beyond a doubt that the plaintiff can prove no set of facts in support of its claim. Miranda v. Ponce Fed'l Bank, 948 F.2d 41, 44 (1st Cir.1991) (citing Conley, 355 U.S. at 45, 78 S.Ct. 99). Nevertheless, the plaintiffs' factual allegations must be more than speculative, and "require[ ] more than labels and conclusions." Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007).

III. FACTS

According to the Plaintiffs, skycaps historically received the majority of their compensation from passengers' tips. Am. Compl. ¶ 1. In 2005, United began to charge $2 for each bag received by skycaps in most U.S. airports. Id. ¶ 1.² United has not remitted any of the fees to the baggage handlers and has not adequately notified passengers of this fact. Id. ¶¶ 26, 30. Many passengers thus believe this fee is a gratuity, and few voluntarily tip in addition to the fee.³ Id. ¶¶ 28-29. Consequently skycaps receive significantly lower compensation now than they did before United assessed the fee. Id. ¶ 28. Plaintiffs also report that it would be possible for United to charge bag fees at the time of ticket purchase, or with a credit card at the time of check in. See Sections IV.A and IV.B, infra.

IV. ADA PREEMPTION

United moves to dismiss based on express ADA preemption. The ADA's preemption provision forbids states from enacting or enforcing "a law, regulation, or other provision having the force or effect of law related to a price, route, or service of an air carrier." 49 U.S.C. § 41713(b)(1).⁴ In interpreting this provision, the Supreme Court has repeatedly stressed the "broad pre-emptive purpose" of the ADA. Morales, 504 U.S. at 383, 112 S.Ct. 2031; see also Altria Group, 129 S.Ct. at 547; Rowe, 128 S.Ct. at 996.

Accordingly, the Court has interpreted the statute to mean "[s]tate enforcement actions having a connection with, or reference to, airline `rates, routes, or services' are preempted." Morales, 504 U.S. at 383-84, 112 S.Ct. 2031 (1992). The First Circuit has further explained that a connection exists where the state law "has a forbidden significant effect upon" rates, routes, or services. United Parcel Serv., Inc. v. Flores-Galarza, 318 F.3d 323, 335 (1st Cir.2003); see also Rowe, 128 S.Ct. at 997. Although the ADA's preemption provision is broad, the Supreme Court has also held that state laws are not preempted where they would "affect airline fares in too tenuous, remote, or peripheral a manner." Morales, 504 U.S. at 390, 112 S.Ct. 2031.

A. Price Preemption

United's first argument relates to the effect of Plaintiffs' state law claims on prices. The ADA preempts laws that "explicitly refer to an airline's prices and those that have a significant effect upon prices." Buck v. American Airlines, Inc., 476 F.3d 29, 34-35 (1st Cir.2007). United argues that the claims "explicitly refer to" the airline's prices "because they would predicate liability on an airline's decision to impose a $2 fee for the service of curbside baggage check-in." Def.'s Mem. in Supp. of Mot. for Recons. at 7. The claims allegedly would have a "significant effect" on prices because they would "forc[e] carriers to rebundle the price of such services into the airfares charged to all passengers." Def.'s Mem. in Supp. of Mot. to Dismiss at 7.

With regard to the first type of price preemption, United misstates Plaintiffs' claims. The Massachusetts Tips Law and the common law claims involved in the instant case and in DiFiore do not explicitly refer to airline prices. Plaintiffs do not challenge the airline's right to charge a fee for curbside baggage services in the first place, nor do they challenge the amount of the fee. Pls.' Opp'n to Def.'s Mot. for Recons. at 7. Instead, their theory of liability is that "United cannot benefit by imposing and retaining an intentionally-misleading fee that deceives customers into believing they are paying a tip or gratuity to the skycaps." Id. at 8 n. 1. That is, they challenge only the deceptive manner in which the fee is charged.

The second type of price preemption, based on a "significant effect," presents a harder issue, and requires attention to the alternative methods for charging the fee. Plaintiffs argue that in light of the history of tipping at curbside check-in, passengers will not understand that airlines now charge for the service so long as it continues to be...