Casas v. American Airlines, Inc.

• Decision Date: 17 September 2002
• Docket Number: No. 00-41270.,No. 00-41137.,00-41137.,00-41270.
• Citation: 304 F.3d 517
• Parties: Hector A. CASAS, Plaintiff-Appellee-Cross-Appellant, v. AMERICAN AIRLINES, INC., Defendant-Appellant-Cross-Appellee.
• Court: U.S. Court of Appeals — Fifth Circuit

Page 517

304 F.3d 517

Hector A. CASAS, Plaintiff-Appellee-Cross-Appellant, v. AMERICAN AIRLINES, INC., Defendant-Appellant-Cross-Appellee.

No. 00-41137.

No. 00-41270.

United States Court of Appeals, Fifth Circuit.

September 17, 2002.

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Heriberto M. Medrana (argued), Law Offices of Heriberto Medrano, Harlingen, TX, Demetrio Kyle Duarte, Jr., Duarte & Pedraza, San Antonio, TX, for Casas.

David T. Moran, Jackson Walker, Michael Vance Powell (argued), Locke Liddell & Sapp, Dallas, TX, Jorge C. Rangel, Law Offices of Jorge C. Rangel, Corpus Christi, TX, for American Airlines, Inc.

Wayne A. Schrader, Gibson, Dunn & Crutcher, Washington, DC, for Air Transport Ass'n of America, Inc., Amicus Curiae.

Appeals from the United States District Court for the Southern District of Texas.

Before JOLLY, JONES and BARKSDALE, Circuit Judges.

EDITH H. JONES, Circuit Judge:

In 1996, Hector Casas lost a video camera worth over $1000 after he entrusted it to American Airlines as checked baggage on a flight from Texas to Florida. Casas sued American under state and federal law for the loss of the camera and sought certification of a class of similarly situated plaintiffs under Fed. R. Civ. Proc. 23. The district court granted class certification after holding that Casas could bring a private cause of action against American based on a federal regulation governing airline carriers. See 14 C.F.R. § 254.4. The court also held that federal law rendered void certain provisions of American's contract of carriage that held American harmless from liability for loss to valuable items such as cameras.¹ In its order, the district court enjoined American from enforcing these provisions. Both parties appealed.

The main issues presented in this appeal are (1) whether Casas has a cause of action for the loss of his camera under the Air Deregulation Act (ADA) of 1978, 92 Stat. 1705, Pub.L. No. 95-504; under 14 C.F.R. § 254.4, a regulation that was adopted pursuant to the ADA; or under federal common law; (2) if so, whether the provisions of American's contract of carriage excluding liability for cameras and other valuable goods prevent Casas from recovering on his claim; (3) whether Casas's state-law claims for the loss of his camera are pre-empted; and (4) whether the district court properly certified a class of plaintiffs under Rule 23. We hold as follows. Casas has no private right of action under the ADA or § 254.4, and the ADA preempts his state law claims. Casas has a claim against American under federal common law, but he cannot prevail on this claim because it is barred by American's liability exclusion provisions. Because Casas is not entitled to relief, the class certification order must be vacated.

BACKGROUND

At the time Casas allegedly lost his camera, 14 C.F.R. § 254.4 provided, in relevant part, that "an air carrier shall not limit its liability for provable direct or consequential damages resulting from the disappearance of, damage to, or delay in delivery of a passenger's personal property, including baggage, in its custody to an amount less than $1250 for each passenger."²

In February 1998, after both parties moved for summary judgment, a magistrate judge issued a report and recommendation concluding that (1) Casas's state law claims were pre-empted by federal law; (2) 14 C.F.R. § 254 rendered American's exclusion-of-liability provisions unenforceable; and (3) pursuant to 14 C.F.R. § 254, American's liability for Casas's loss of his camera was limited to $1,250. The district court adopted the report and recommendation and entered judgment in favor of Casas for $1,029, exclusive of costs, on his individual claim. In September 2000, the district court issued an order granting class certification under Fed. R. Civ. Proc. 23 and reaffirming its earlier conclusions. The order also enjoined American from relying on the liability exclusion provisions to deny compensation to passengers for their losses.

American appealed; the injunction may be appealed pursuant to 28 U.S.C. § 1292(a)(1), as may Casas's cross-appeal of the district court's pre-emption ruling.³ This court granted American's petition for permission to appeal the class certification decision. Fed. R. Civ. Proc. 23(f); Fed. R.App. P. 5.

DISCUSSION

I.

The district court predicated American's liability on the conclusion that 14 C.F.R. § 254.4 creates a private right of action. The proper inquiry, however, is whether the ADA created a private cause of action or authorized the FAA to do so. Alexander v. Sandoval, 532 U.S. 275, 121 S.Ct. 1511, 149 L.Ed.2d 517 (2001). "Language in a regulation may invoke a private right of action that Congress through statutory text created, but it may not create a right that Congress has not.... [I]t is most certainly incorrect to say that language in a regulation can conjure up a private cause of action that has not been authorized by Congress." Sandoval, 532 U.S. at 291, 121 S.Ct. at 1522. See Stewart v. Bernstein, 769 F.2d 1088, 1092 n. 6 (5th Cir.1985); Angelastro v. Prudential-Bache Securities, Inc., 764 F.2d 939, 947 (3d Cir.1985). We review this issue of law de novo and conclude that neither the ADA nor 14 C.F.R. § 254.4 creates a private cause of action.

In Sam L. Majors Jewelers v. ABX, Inc., 117 F.3d 922 (5th Cir.1997), this court held, inter alia, that while the ADA did not create a private right of action "to recover the value of damaged or lost cargo," id. at 925, a cause of action for such a loss exists under federal common law.⁴ The ADA's savings clause, which preserves "other remedies provided by law," 49 U.S.C. § 40120(c), "had the effect of preserving the clearly established federal common law cause of action against air carriers for lost shipments." 117 F.3d at 928. See id. & n. 13 (citing § 40120(c)).

Casas would distinguish the Sam L. Majors Jewelers decision because the plaintiff in that case engaged in a commercial air freight transaction. We reject this suggestion. The Sam L. Majors Jewelers opinion does not indicate that the availability of a private right of action for lost or damaged goods under the ADA depends on whether the shipper is a merchant or a leisure traveler — or on whether the carrier is an air freight company or a commercial airline. Instead, the opinion relies on numerous cases involving both private passenger and commercial air freight claims for lost baggage. See, e.g., id. at 927-28 & 928 nn. 11, 12. The opinion repeatedly uses the generic term "air carrier," a term that is broadly defined in the statute as "a citizen of the United States undertaking by any means, directly or indirectly, to provide air transportation." See 49 U.S.C. § 40102(a)(2). This language strongly suggests that no distinction is intended to be made between passenger airlines and air freight enterprises.⁵

Assuming, however, for purposes of discussion that Sam L. Majors Jewelers does not control the issue, it nevertheless appears that the ADA grants Casas no right of action for his loss. Whether a federal statute gives rise to an implied private right of action is determined by the four-factor test set forth in Cort v. Ash, 422 U.S. 66, 78, 95 S.Ct. 2080, 2088, 45 L.Ed.2d 26 (1975).⁶ A plaintiff asserting an implied right of action under a federal statute bears the relatively heavy burden of demonstrating that Congress affirmatively contemplated private enforcement when it passed the statute. In other words, he must overcome the familiar presumption that Congress did not intend to create a private right of action. Louisiana Landmarks Soc'y, Inc. v. City of New Orleans, 85 F.3d 1119, 1123 (5th Cir.1996). See Sam L. Majors Jewelers, 117 F.3d at 925 n. 3. Casas has not met this burden.⁷

Considering the first Cort factor, "we ask whether the plaintiff belongs to an identifiable class of persons upon whom the statute has conferred a substantive right." Louisiana Landmarks Soc'y, 85 F.3d at 1123. Even if Casas can demonstrate membership in such a class, the crucial inquiry remains whether Congress actually intended to create a private remedy. Id. 14 C.F.R. § 254 was adopted pursuant to regulatory authority granted by the ADA. Domestic Baggage Liability, 47 Fed. Reg. 52,987, 52,990 (Nov. 24, 1982). In particular, it was adopted pursuant to what are now sections 40113, 41501, 41504, 41510, 41702, and 41707 of the ADA. 14 C.F.R. § 254; Domestic Baggage Liability, 64 Fed.Reg. 70,573, 70,575 (Dec. 17, 1999). None of these provisions confers a substantive right on interstate air passengers such as Casas.⁸

The touchstone of the Cort analysis is its second factor: Congressional intent. Louisiana Landmarks Soc'y, 85 F.3d at 1123. Alexander v. Sandoval makes clear that "`affirmative' evidence of congressional intent must be provided for an implied remedy, not against it," 532 U.S. at 293 n. 8, 121 S.Ct. at 1523 n. 8 (emphasis in original), but Casas has provided no evidence that Congress intended to create a private remedy for the harm of which he complains.⁹ Moreover, the ADA contains at least three remedial provisions that suggest that Congress intended to deny private individuals the right to enforce the specific provisions that give rise to 14 C.F.R. § 254. "The express provision of one method of enforcing a substantive rule suggests that Congress intended to preclude others." Sandoval, 532 U.S. at 290, 121 S.Ct. at 1521-22.

First, 49 U.S.C. § 41712 provides that the Secretary of Transportation "may investigate and decide whether an air carrier... has been or is engaged in an unfair or deceptive practice or an unfair method of competition in air transportation or the sale of air transportation," and that if the Secretary makes the requisite findings, "the Secretary shall order the air carrier... to stop the practice or method." 49 U.S.C. § 41712(a). See American Airlines, Inc. v. Wolens, 513 U.S. 219, 228 n. 4, 115 S.Ct. 817, 823 n. 4, 130 L.Ed.2d 715 (1995) (citing precursor to current § 41712 for...