Thomas v. United Parcel Service

• Citation: 614 N.W.2d 707,241 Mich. App. 171
• Decision Date: 09 August 2000
• Docket Number: Docket No. 209991.,Docket No. 209699
• Parties: Troy THOMAS, Plaintiff-Appellant, v. UNITED PARCEL SERVICE and Paul Maconchi, Defendants-Appellees. Charles Alexander, Marcus Wiseman, Barry McCormick, and Maurice Banks, Plaintiffs-Appellees, v. United Parcel Service and Paul Maconchi, Defendants-Appellants.
• Court: Court of Appeal of Michigan (US)

614 N.W.2d 707

241 Mich. App. 171

Troy THOMAS, Plaintiff-Appellant, v. UNITED PARCEL SERVICE and Paul Maconchi, Defendants-Appellees.

Charles Alexander, Marcus Wiseman, Barry McCormick, and Maurice Banks, Plaintiffs-Appellees, v. United Parcel Service and Paul Maconchi, Defendants-Appellants.

Docket Nos. 209699, 209991.

Court of Appeals of Michigan.

Submitted October 13, 1999, at Detroit.

Decided May 16, 2000, at 9:10 a.m.

Released for Publication August 9, 2000.

O'Neal O. Wright & Assoc, P.C. (by O'Neal O. Wright and Lynette M. Bledsaw), Detroit, for the plaintiffs.

Dykema Gossett PLLC (by Debra M. McCulloch and Deric J. Bomar), Detroit, for the defendants.

Before: JANSEN, P.J., and SAAD and GAGE, JJ.

JANSEN, P.J.

In these consolidated appeals, we are asked to determine if the preemption provision of the Federal Aviation Administration Authorization Act of 1994 (FAAAA), 49 USC 41713, preempts claims of race and gender discrimination brought under the state Civil Rights Act, M.C.L. § 37.2101 et seq.; MSA 3.548(101) et seq. In Docket No. 209699, plaintiff appeals as of right from the trial court's order granting summary disposition in favor of defendants on the basis of preemption. We reverse. In Docket No. 209991, defendants appeal by leave granted from the trial court's order denying their motion for summary disposition. We affirm.

Plaintiffs, all African-American males, worked for defendant United Parcel Service (UPS) as delivery drivers. Contrary to company practice and procedure, the drivers allegedly took an unauthorized meal break while on duty, for which each driver claimed well over two hours of time for the period they were not actually working. Defendant Paul Maconchi, an employee of UPS, allegedly defamed plaintiffs by stating they had falsified their time records. In December 1996, plaintiffs employment was terminated for dishonesty.

In July 1997, plaintiffs brought suit against defendants. The complaints alleged racial and gender discrimination in violation of the state Civil Rights Act, and common-law defamation. Plaintiffs alleged in their complaints that white employees were not disciplined or terminated from employment for the same conduct. In each case, defendants moved for summary disposition under MCR 2.116(C)(4), alleging lack of subject-matter jurisdiction, on the ground that plaintiffs claims were preempted by the FAAAA.

We review de novo a trial court's ruling regarding a motion for summary disposition under MCR 2.116(C)(4). James v. Commercial Carriers, Inc., 230 Mich.App. 533, 536, 583 N.W.2d 913 (1998). Because a preemption determination involves legal questions of statutory interpretation, we likewise review these issues de novo. Saginaw County v. John Sexton Corp. of Michigan, 232 Mich.App. 202, 214, 591 N.W.2d 52 (1998).

Whether a federal statute preempts state law is a question of congressional intent. Hawaiian Airlines, Inc. v. Norris, 512 U.S. 246, 252, 114 S.Ct. 2239, 129 L.Ed.2d 203 (1994); Ryan v. Brunswick Corp., 454 Mich. 20, 27, 557 N.W.2d 541 (1997). Congressional intent is to be gleaned from the text, structure, and purpose of the statute as a whole, including the manner in which Congress intended the statute and its surrounding regulatory scheme to affect business, consumers, and the law. Id., p. 28, 557 N.W.2d 541. The plain meaning of a statute must be given effect unless there is reason to believe that Congress intended a more restrictive reading. Id. "Federal provisions that invalidate state law must be narrowly tailored to support a presumption against preemption of state law." Id., p. 27, 557 N.W.2d 541. State police powers should not be superseded unless that is the clear and unequivocal intent of Congress, especially where state regulation of matters relating to health and safety are concerned. Id.

Additionally, preemption of state law may be either express or implied. If express, the intent of Congress to preempt state law must be clearly stated in the statute's language or impliedly contained in the statute's structure and purpose. Id., p. 28, 557 N.W.2d 541. Implied preemption may exist in the form of conflict or field preemption. Conflict preemption preempts state law that is in direct conflict with federal law or with the purposes and objectives of Congress. Id. Field preemption preempts state law where federal law so thoroughly occupies a legislative field that it is reasonable to infer that Congress did not intend for states to supplement it. Id. A common-law tort claim is a state law action that can be preempted by federal law. Id., pp. 33-34, 557 N.W.2d 541.

Before 1978, interstate airline travel was heavily regulated by the federal government. Federal Aviation Act of 1958, PL 85-726 (codified at 49 USC 1301 et seq., but now repealed). In 1978, Congress decided that open competition among airlines, especially in the area of rates and services, would benefit consumers and the economy. See 49 USC 1302 (recodified as 49 USC 40101). Thus, in 1978, Congress enacted the Airline Deregulation Act (ADA), 49 USC 41713(b)(1), formerly codified at 49 USC 1305, "[t]o ensure that the States would not undo federal deregulation with regulation of their own...." Morales v. Trans World Airlines, Inc., 504 U.S. 374, 378, 112 S.Ct. 2031, 119 L.Ed.2d 157 (1992).

In 1994, Congress amended the ADA and added subsection 41713(b)(4)(A),¹ which states as follows:

General rule.—Except as provided in subparagraph (B), a State, political subdivision of a State, or political authority of 2 or more 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 or carrier affiliated with a direct air carrier through common controlling ownership when such carrier is transporting property by aircraft or by motor vehicle (whether or not such property has had or will have a prior or subsequent air movement).

This subsection's language and purpose are essentially the same as the general preemption clause of the ADA, 49 USC 41713(b)(1),² but applies to all cargo air transportation carriers. Thus, cases interpreting the general preemption clause of the ADA may be applied by this Court in conducting our analysis under subsection 41713(b)(4)(A). LaRosa v. United Parcel Service, Inc., 23 F.Supp.2d 136 (D.Mass., 1998).

The United States Supreme Court has considered ADA preemption in two cases. In Morales, supra, the United States Supreme Court considered whether subsection 41713(b)(1) preempted state attorneys general from enforcing state consumer protection laws regarding airline fares advertising. The United States Supreme Court held that the plain meaning of the term "relating to" in the preemption provision indicated a congressional intent to broaden the scope of preemption. Morales, supra, p. 384, 112 S.Ct. 2031. In other words, state statutes or actions having some "`connection with or reference to'" airline rates, routes, or services are preempted under the ADA. Id., quoting Shaw v. Delta Air Lines, Inc., 463 U.S. 85, 97, 103 S.Ct. 2890, 77 L.Ed.2d 490 (1983). The United States Supreme Court concluded that "the obligations imposed by the [advertising] guidelines would have a significant impact upon the airlines' ability to market their product, and hence a significant impact upon the fares they charge." Morales, supra, p. 390, 112 S.Ct. 2031. Thus, the fares advertising guidelines were preempted. Id. However, the United States Supreme Court cautioned against preempting claims where the state statute's effect on an airline's rates, routes, or services was "`tenuous, remote, or peripheral....'" Id., p. 390, 112 S.Ct. 2031, quoting Shaw, supra, p. 100, n. 21, 103 S.Ct. 2890.

The United States Supreme Court later addressed the ADA's preemption provision in American Airlines, Inc. v. Wolens, 513 U.S. 219, 115 S.Ct. 817, 130 L.Ed.2d 715 (1995). In Wolens, participants in American Airlines' frequent flyer program challenged modifications to the program that devalued credits already earned by program participants. Id., pp. 224-225, 115 S.Ct. 817. The frequent flyer participants argued that the modifications violated the Illinois Consumer Fraud Act and also constituted a breach of contract. Interpreting the Morales decision, the Supreme Court concluded that American Airlines' frequent flyer program related to "rates, routes, or services." Id., p. 226, 115 S.Ct. 817. However, the Supreme Court emphasized that a state must also "enact or enforce" a law affecting rates, routes, or services before such law is preempted by the ADA. Id. The Supreme Court distinguished the consumer fraud claim from the breach of contract claim and held that the consumer fraud claim involved the enactment or enforcement of state law and, therefore, was preempted. The state's enforcement of private contractual rights did not involve the enactment or enforcement of state law and, consequently, the Supreme Court held that the breach of contract claim was not preempted by the ADA. Id., p. 228, 115 S.Ct. 817.

Accordingly, for a claim to be preempted by the ADA, the following must be shown: (1) the claim must derive from the enactment or enforcement of state law, and (2) the claim must relate to airline rates, routes, or services, either by expressly referring to them or by having a significant economic effect on them. Travel All Over the World, Inc. v. Kingdom of Saudi Arabia, 73 F.3d 1423, 1432 (C.A.7, 1996). There is no dispute that plaintiffs claims derive from the enactment or enforcement of state law. Thus, the question before this Court is whether the state Civil Rights Act's prohibition against racial and gender discrimination in employment "relates to" rates, routes, or services of an air carrier.

This Court addressed the issue of preemption by the ADA of claims brought under the state Civil Rights Act in Gilman v. Northwest Airlines, Inc., 230 Mich.App. 293, 583 N.W.2d 536 (1998). In Gilman, the...