Trans World Airlines, Inc. v. Mattox

Decision Date03 April 1990
Docket Number89-1509 and 89-1610,Nos. 89-1142,s. 89-1142
Citation897 F.2d 773
Parties, 1990-1 Trade Cases 68,983, 16 Fed.R.Serv.3d 122 TRANS WORLD AIRLINES, INC., et al., Plaintiffs-Appellees, v. Jim MATTOX, Attorney General of the State of Texas, Defendant-Appellant. TRANS WORLD AIRLINES, INC., et al., Plaintiffs-Appellees, v. Jim MATTOX, Attorney General of the State of Texas, et al., Defendants-Appellants. TRANS WORLD AIRLINES, INC., et al., Plaintiffs-Appellees, Pan American World Airways, Intervening-Plaintiff-Appellee, v. Jim MATTOX, Attorney General of the State of Texas, et al., Defendants-Appellants.
CourtU.S. Court of Appeals — Fifth Circuit

Stephen Henry Gardner and Craig Jordan, Asst. Attys. Gen., Dallas, Tex., Albert Norman Shelden, Deputy Atty. Gen., San Diego, Cal., for defendants-appellants.

Ronald D. Secrest, David Wilks Corban, Richard J. Wilson, Rene P. Lavenant, Jr., Fulbright & Jaworski, Houston, Tex., Andrew C. Freedman, Fulbright Jaworski & Reavis, Mc Grath, New York City, Gregory W. Buhler, New York City, Frederick D. Bostwick, III, Waco, Tex., for plaintiff-appellees. Mary MaGuire Voog and Mark Asron Buckstein, Mt. Kisco, N.Y., for Trans World Airlines, Inc., et al.

Mark McCall, John W. Dickey and David Feher, Sullivan & Cromwell, New York City, Karen K. Crider, British Airways Legal Dept., Jackson Heights, New York City, for British Airways.

John Williams, Houston, Tex., for Continental Airlines.

Melvin L. Goldberg, Andrea C. Levine and Ronna D. Brown, N.Y. Dept. of Law, New York City, amicus curiae for 38 States.

Gregory W. Buhler, New York City, for Pan American World Airways.

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

Before LIVELY, * JOLLY and HIGGINBOTHAM, Circuit Judges.

LIVELY, Circuit Judge.

The dispositive question in these consolidated appeals is whether state laws proscribing deceptive advertising are preempted by federal law when the state attempts to enforce such laws against the advertising of fares by interstate and international airlines. Three separate appeals were consolidated for oral argument. We refer to the cases by their Court of Appeals numbers.

In number 89-1142, the Defendant-Appellant is Jim Mattox, the Attorney General of Texas. The Plaintiffs-Appellees are Trans World Airlines, Inc. (TWA), Continental Airlines, Inc. (Continental) and British Airways, PLC (British Air).

In numbers 89-1509 and 89-1610, the Defendants-Appellants are the attorneys general of Texas and thirty-three other states. The Plaintiffs-Appellees are TWA, Continental, British Air, Pan American World Airways, Inc. (Pan Am) and ten other airlines.

We affirm the orders appealed from in each of the three appeals.

I. Background
A. History of Proceedings

Number 89-1142:

In December 1987, the National Association of Attorneys General (NAAG) adopted guidelines related to airline advertising. The guidelines provide that any fuel, tax or other surcharge to air fare must be included in the total advertised price of the fare. The guidelines are not law.

On November 14, 1988, the attorneys general of Texas and four other states sent letters to TWA, Continental and British Air, notifying them that some of their advertisements violated the NAAG guidelines and these states' false advertising and deceptive practices laws. The letters charged that the airlines had attempted to make their fares appear lower than those of their competitors by prominently advertising the ticket price, while less prominently disclosing taxes, surcharges and fees.

In particular the Attorney General of Texas stated that the airlines had violated the Texas Deceptive Trade Practices Act. The Attorney General advised the airlines that advertising a specific amount for a fare was deceptive if the advertised amount did not reflect the true cost of travel because certain surcharges had not been included in the advertised fare. The letter threatened prosecution.

In January 1989, TWA, Continental and British Air filed suit in the United States District Court for the Western District of Texas to enjoin the Attorney General of Texas from enforcing the Texas Deceptive Trade Practices Act against their advertising. Following a hearing, the district court granted a preliminary injunction. 712 F.Supp. 99. The court found it probable that the plaintiffs would prevail in establishing their claims that any state regulation of advertising related to the airlines' rates, routes and services had been preempted by federal law. The injunction forbade the Attorney General of Texas and all other persons acting in concert with him from initiating any enforcement action under state law, "which would seek to regulate or restrict any aspect of the individually named plaintiff airlines' air fare advertising or the operations involving their rates, routes and/or services." The district court later clarified its injunction by stating that it applied only to the Attorney General of Texas and to the laws of Texas. In number 89-1142, the Attorney General of Texas appeals from the order granting the preliminary injunction.

Number 89-1509:

On March 16, 1989, the plaintiffs TWA, Continental and British Air filed a motion to broaden the preliminary injunction to include the attorneys general of thirty-three other states who had adopted the NAAG guidelines on airline advertising and who had appeared in a hearing in number 89-1142.

On April 27, 1989, the district court issued an order granting the motions of ten other airlines to intervene as plaintiffs. The court also granted the plaintiffs permission to amend their complaint to add as defendants the attorneys general of the thirty-three other states who had appeared in the action. The court then broadened the preliminary injunction to include the attorneys general of the other thirty-three states.

The district court noted that since the injunction had been issued on January 30, 1989, against the Attorney General of Texas, suits had been filed by the Attorneys General of California, Kansas and New York against TWA seeking to force the airline to comply with state laws concerning advertising. Also, the Attorney General of Texas had filed a similar suit against Pan Am. The broadened injunction acted prospectively and did not affect these pending state court cases against TWA and Pan Am. The thirty-four attorneys general appeal this broadening order in number 89-1509.

Number 89-1610:

After the Attorney General of Texas sued Pan Am in state court, charging deceptive practices, Pan Am removed the case to the United States District Court for the Northern District of Texas. Attorney General Mattox objected to removal to federal court and moved to remand the case to state court. His motion was denied. This case was then transferred to the United States District Court for the Western District of Texas. On May 30, 1989, the District Court for the Western District consolidated this removed case with number 89-1509. The court issued an order granting Pan Am's motion to intervene in number 89-1142 and broadening the preliminary injunction to include Pan Am among the airlines against whom the enjoined states could take no new action. The thirty-four state attorneys general appeal this order of the district court in number 89-1610.

B. Brief Overview of Federal Regulation (and Deregulation)

The framework for federal regulation of civil aviation was set forth in the Civil Aeronautics Act of 1938, Ch. 601, 52 Stat. 973 (1938). This statute created the Civil Aeronautics Authority, whose name was changed to the Civil Aeronautics Board (CAB) in 1940, and vested it with broad powers to regulate commercial aviation. Included in that portion of the statute dealing with economic regulation was section 411, which gave the Authority the power to determine if any carrier engaged in unfair or deceptive practices or unfair methods of competition. Id. at 1003. The statute also contained a savings clause in section 1106, which stated that nothing contained in the Act would "abridge or alter the remedies now existing at common law or by statute, but the provisions of this Act are in addition to such remedies." Id. at 1027.

The Federal Aviation Act of 1958, Pub.L. No. 85-726, 72 Stat. 731 (1958) (the Act), continued the CAB and created the Federal Aviation Agency (FAA). The Act reenacted section 411 as it appeared in the Civil Aeronautics Act of 1938, except for substitution of "Board" for "Authority." It also reenacted section 1106, which provided that other common law and statutory remedies remained viable.

Congress enacted the Airline Deregulation Act in 1978. Pub.L. No. 95-504, 92 Stat. 1705 (1978) (Deregulation Act). The purpose of this statute was to encourage and develop an air transportation system that "relies on competitive market forces to determine the quality, variety, and price of air services." Id. The Deregulation Act directed the CAB to consider a number of factors to be in the public interest, including "[t]he prevention of unfair, deceptive, predatory, or anti-competitive practices in air transportation." Id. at 1706. The Deregulation Act did not change sections 411 or 1106 of the existing statute, but did add a federal preemption provision. Section 105 stated that "no State or political subdivision thereof and no interstate agency or other political agency of two or more States shall enact or enforce any law, rule, regulation, standard, or other provision having the force and effect of law relating to rates, routes, or services of any air carrier." Id. at 1707-08.

The House Committee on Public Works and Transportation noted that "[e]xisting law contains no specific provision on the jurisdiction of the States and the Federal Government over airlines which provide both intrastate and interstate service. The lack of specific provisions has created uncertainties and conflicts...." H.R.Rep. No. 1211, 95th Cong., 2d Sess. 15-16 (1978), reprinted in 1978 U.S.Code...

To continue reading

Request your trial
60 cases
  • Greyhound Lines v. City of New Orleans
    • United States
    • U.S. District Court — Eastern District of Louisiana
    • 3 Diciembre 1998
    ... 29 F.Supp.2d 339 ... GREYHOUND LINES, INC ... The CITY OF NEW ORLEANS, THROUGH THE DEPARTMENT OF ... Trans World Airlines, 504 U.S. 374, 381, 112 S.Ct. 2031, 119 ... See Trans World Airlines, Inc. v. Mattox, 897 F.2d 773, 783 (5th Cir.1990). Indeed, when ... ...
  • Philip Morris Inc. v. Harshbarger
    • United States
    • U.S. District Court — District of Massachusetts
    • 22 Noviembre 1996
    ... ... Morales v. Trans World Airlines, Inc., 504 U.S. 374, 112 S.Ct. 2031, 119 L.Ed.2d 157 ... Neither the district court opinion, Trans World Airlines, Inc. v. Mattox, 712 F.Supp. 99 (W.D.Tex. 1989), nor the two related appellate court ... ...
  • Brown v. Crop Hail Management, Inc.
    • United States
    • U.S. District Court — Southern District of Texas
    • 3 Febrero 1993
    ... ... opinion that concerns complete preemption and removal jurisdiction, Trans World Airlines, Inc. v. Mattox, 897 F.2d 773 (5th Cir.), cert. denied, ... ...
  • Kiefer v. Continental Airlines, Inc., 01-91-01286-CV
    • United States
    • Texas Court of Appeals
    • 11 Agosto 1994
    ... ... denied, 490 U.S. 1106, 109 S.Ct. 3158, 104 L.Ed.2d 1021 (1989), and Baugh v. Trans World Airlines, No. 90-2074, slip op. (5th Cir.1990) (unpublished). 5 ...         In ... 12 776 F.Supp. at 1195. The Stewart court distinguished Trans World Airlines, Inc. v. Mattox, 897 F.2d 773 (5th Cir.1990), cert. denied, 498 U.S. 926, 111 S.Ct. 307, 112 L.Ed.2d 261 (1990), ... ...
  • Request a trial to view additional results
3 books & journal articles
  • Legal enforcement and limitations
    • United States
    • ABA Antitrust Library State Antitrust Enforcement Handbook. Third Edition
    • 9 Diciembre 2018
    ...151 . Edgar v. MITE, 457 U.S. at 631 (quoting Hines v. Davidowitz, 312 U.S. 52, 67 (1941)); see Trans World Airlines v. Mattox, 897 F.2d 773 (5th Cir. 1990) (finding that state deceptive advertising laws as applied to airline’s price advertising were preempted by Federal Aviation Act, which......
  • Table of cases
    • United States
    • ABA Antitrust Library State Antitrust Enforcement Handbook. Third Edition
    • 9 Diciembre 2018
    ...Free Ams., Inc., 628 N.W.2d 707 (N.D. 2001) .......................................................... 272 Trans World Airlines v. Mattox, 897 F.2d 773 (5th Cir. 1990) .............................................................. 41 Transamerican Ref. Corp. v. Dravo Corp., 952 F.2d 898 (5t......
  • The Politics of Consumer Protection: Explaining State Attorney General Participation in Multi-State Lawsuits
    • United States
    • Political Research Quarterly No. 59-4, December 2006
    • 1 Diciembre 2006
    ...November. Trans World Airlines vs. Mattox. 1989. 712 F. Supp. 99 (U.S. DistrictCourt for the Western District of Texas). _____. 1990. 897 F.2d 773 (U.S. 5th Circuit Court of Appeals). Walker, Jack. 1969. “The Diffusion of Innovation Among theAmerican States.” American Political Science Revi......

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT