Delta Air Lines, Inc. v. Black, 02-0255.

• Decision Date: 11 September 2003
• Docket Number: No. 02-0255.,02-0255.
• Parties: DELTA AIR LINES, INC. and Al Perez, Petitioners, v. Robert C. BLACK, Respondent.
• Court: Texas Supreme Court

116 S.W.3d 745

DELTA AIR LINES, INC. and Al Perez, Petitioners, v. Robert C. BLACK, Respondent.

No. 02-0255.

Supreme Court of Texas.

Argued January 15, 2003.

Decided September 11, 2003.

Dan K. Horn, John G. Sams, Don Rynn Freiling, John M. Weaver, Maloney Bean Horn & Hull, P.C., Irving, for Petitioner.

Ronald E. Harden, Dorothy J. Harden, Law Offices of Ronald E. Harden, Kaufman, for Respondent.

Justice JEFFERSON delivered the opinion of the Court.

We grant Robert C. Black's motion for rehearing in part. We withdraw our opinion of June 26, 2003 and substitute the following in its place.

The Airline Deregulation Act of 1978(ADA) provides that states "may not enact or enforce a law ... related to a price, route, or service of an air carrier...." 49 U.S.C. § 41713(b)(1). This case concerns the scope of this preemption provision, specifically, its application to state breach of contract and misrepresentation claims challenging an airline's ticketing and boarding procedures. The trial court rendered summary judgment in favor of Delta Airlines, Inc. and its gate supervisor, Al Perez, without specifying the grounds. The court of appeals reversed, holding that the ADA did not preempt Black's claims, and remanded the case for trial. ___ S.W.3d ____, ____. We granted Perez and Delta's petition for review to decide whether the ADA preempts a passenger's state law claims for an airline's alleged failure to honor a confirmed first-class seat. 46 Tex. Sup.Ct. J. 14 (Oct. 10, 2002). We hold that it does and accordingly reverse the court of appeals' judgment in part and render judgment that Black take nothing on his claims against Delta and Perez.

I BACKGROUND

On June 23, 1995, Robert Black purchased two Delta airline tickets for travel from Dallas/Fort Worth to Las Vegas leaving that afternoon and returning on June 25. The invoice from Black's travel agent showed two first-class reservations for Black and his wife. Although the invoice assigned Black first-class seats for both directions, his wife had an assigned seat only for the return flight. Black's travel agent and manager of Smith Travel & Limousine, Melissa Shinn, suggested that Black ask the Delta gate agent if he and his wife could sit together in first class for the Dallas to Las Vegas flight.

Upon arrival at the departure gate, Black requested adjacent seats in first class. The gate agent said that he would "see what [he] could do." As other passengers boarded the plane, a Delta gate supervisor, Al Perez, appeared and informed Black that he and his wife did not have two confirmed first-class seats for the flight. While Delta had a confirmed firstclass seat for Mr. Black, it only had a confirmed coach seat for his wife, whom Delta placed on a priority waiting list for first class. Perez told Black that, unless a first-class passenger relinquished a seat, Black's wife would be seated in coach for the three-hour flight from Dallas to Las Vegas. This would not, however, affect her first-class seat for the return flight. At Black's request, Perez spoke by telephone with Shinn. Shinn told Perez that her computer showed two confirmed firstclass seats from Dallas to Las Vegas. Delta's computers, however, did not show a confirmed first-class seat for Black's wife.

Unable to provide Black's wife with first-class accommodations, Delta offered several alternatives: (1) the Blacks could sit in coach on their scheduled flight, (2) they could fly separately on the scheduled flight, one in coach and one in first class, (3) they could fly first class on a later flight to Los Angeles and then connect to Las Vegas, or (4) they could take a direct flight later that day to Las Vegas with confirmed first-class seats. Each of these alternatives included free travel vouchers, which Black asserts could be used only for coach seats. Black declined Delta's offers. Instead, the Blacks drove to Love Field airport and chartered a private jet to and from Las Vegas at a cost of $13,150, which included the aircrew's expenses in Las Vegas for two days.

Black sued Delta for breach of contract and intentional and negligent misrepresentation, and sued Perez for misrepresentation only.¹ Delta and Perez moved for summary judgment on four grounds: (1) preemption under the ADA, (2) Black's failure to mitigate damages, (3) lack of causation, and (4) lack of an agency relationship between Smith Travel and Delta. The trial court granted summary judgment for Delta and Perez, without specifying the grounds. Black appealed the judgment.

The court of appeals reversed the trial court's judgment and remanded the case for trial. The court of appeals held that fact issues precluded judgment as a matter of law on the causation, mitigation, and agency issues. ___ S.W.3d at ____. As to the key issue before this Court, the court of appeals held that Black's claims were not preempted by the ADA because "federal airline regulations allow passengers whose reservations are not honored due to overbooking to seek recovery for damages `in a court of law or in some other manner.'" Id. at ___. We granted Perez and Delta's petition for review to decide the single issue Perez and Delta (collectively, Delta) presented—preemption.

II APPLICABLE LAW—PREEMPTION

Federal preemption of state law is grounded in the Supremacy Clause of the United States Constitution, which provides that "the Laws of the United States... shall be the supreme Law of the Land; and the Judges in every State shall be bound thereby, any Thing in the Constitution or Laws of any State to the Contrary notwithstanding." U.S. Const., art. VI, cl. 2. Under the Supremacy Clause, if a state law conflicts with federal law, the state law is preempted and "without effect." Maryland v. Louisiana, 451 U.S. 725, 746, 101 S.Ct. 2114, 68 L.Ed.2d 576 (1981). Preemption can take one of several forms. A federal law may preempt a state law expressly. Great Dane Trailers, Inc. v. Estate of Wells, 52 S.W.3d 737, 743 (Tex. 2001). It may also preempt a state law impliedly, either (i) when the scheme of federal regulation is sufficiently comprehensive to support a reasonable inference that Congress left no room for supplementary state regulation or (ii) if the state law actually conflicts with federal regulations. Id. A state law presents an actual conflict when a party cannot comply with both state and federal regulations or when the state law would obstruct Congress' purposes and objectives. Id.

"The purpose of Congress is the ultimate touchstone" in every preemption case. Retail Clerks Int'l Ass'n. v. Schermerhorn, 375 U.S. 96, 103, 84 S.Ct. 219, 11 L.Ed.2d 179 (1963). Congressional intent is discerned primarily from the statute's language and structure. Medtronic, Inc. v. Lohr, 518 U.S. 470, 486, 116 S.Ct. 2240, 135 L.Ed.2d 700 (1996). Also relevant is the purpose of the statute as a whole, which is revealed through "the reviewing court's reasoned understanding of the way in which Congress intended the statute and its surrounding regulatory scheme to affect business, consumers, and the law." Id.

We begin our analysis with a discussion of the relevant federal statute and the United States Supreme Court cases that control this area.

A Statutory Framework

Before 1978, the Federal Aviation Act of 1958(FAA) authorized the Civil Aeronautics Board (CAB) to regulate the interstate airline industry. 49 U.S.C. § 1301 (current version at 49 U.S.C. § 40101); Am. Airlines, Inc. v. Wolens, 513 U.S. 219, 222, 115 S.Ct. 817, 130 L.Ed.2d 715 (1995). The Act provided that "nothing ... in this chapter shall in any way 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." 49 U.S.C. § 1506. Thus, before 1978, states were allowed to regulate intrastate airfare. Morales v. Trans World Airlines, Inc., 504 U.S. 374, 378, 112 S.Ct. 2031, 119 L.Ed.2d 157 (1992).

In 1978, Congress amended the FAA by enacting the Airline Deregulation Act (ADA), which deregulated the industry. 49 U.S.C. § 40101(a)(6), (a)(12)(A) (formerly codified at 49 U.S.C. § 1302(a)(4), (a)(9)). In enacting the ADA, Congress determined that "`maximum reliance on competitive market forces' would best further `efficiency, innovation, and low prices' as well as `variety [and] quality ... of air transportation services.'" Morales, 504 U.S. at 378, 112 S.Ct. 2031 (quoting 49 U.S.C. § 1302(a)(4), (a)(9)). Congress included an express preemption provision in the ADA "[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. The preemption clause states:

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 ....

49 U.S.C. § 41713(b)(1)(emphasis added).² Thus, to determine the propriety of the court of appeals' judgment, we must ascertain whether Black's state law claims fall within the ADA's express preemption provision. If they do, Black's claims fail.

B Morales and Wolens

The Supreme Court has discussed the scope of the ADA's express preemption clause on two occasions. It first considered the ADA's preemptive scope in Morales, 504 U.S. at 374, 112 S.Ct. 2031. There, the Court examined whether the ADA preempted enforcement of guidelines concerning regulation of airline fare advertising through Texas's consumer protection statutes. Id. at 378, 112 S.Ct. 2031. The Court focused on the preemption clause's "relating to" language. Id. at 383-86, 112 S.Ct. 2031. Relying on its ERISA line of cases and the ordinary meaning of the statute's words, the Court construed the phrase "relating to" broadly to preempt "State enforcement actions having a connection with, or reference to, airline `rates, routes, or services.'" Id. at 384, 112 S.Ct. 2031....