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Air Deregulation Act And Injury Claims

FOR PUBLICATION

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

CHERIE CHARAS,
Plaintiff-Appellant,
                                                     No. 96-15490
v.
                                                     D.C. No.
TRANS WORLD AIRLINES, INC., a
                                                     CV-95-00504-TEH
Missouri corporation,
Defendant-Appellee.


Appeal from the United States District Court
for the Northern District of California
Thelton E. Henderson, District Judge, Presiding


MILDRED JACOBY,
Plaintiff-Appellant,


v.
                                                     No. 96-15543
TRANS WORLD AIRLINES, INC.,
Defendant-Appellee,                                   D.C. No.
                                                     CV-94-00963-HG/FIY
and
                                                     ORDER AND
JOHN DOE, 1-10; JANE DOE,
                                                     AMENDED OPINION
1-10; DOE CORPORATIONS, 1-10;
DOE PARTNERS, 1-10; DOE
ENTITIES, 1-10,
Defendants.


Appeal from the United States District Court
for the District of Hawaii
Helen Gillmor, District Judge, Presiding


                               1489


BERNICE GULLEY,
Plaintiff-Appellant,


                                                     No. 96-15791
v.
                                                     D.C. No.
AMERICAN AIRLINES; AMR
                                                     CV-93-04044-DLJ
CORPORATION; AMERICAN EAGLE
AIRLINES,
Defendants-Appellees.


Appeal from the United States District Court
for the Northern District of California
D. Lowell Jensen, District Judge, Presiding


ELIZABETH NEWMAN,
Plaintiff-Appellant,


v.
                                                     No. 97-55115
AMERICAN AIRLINES, INC.,
                                                     D.C. No.
Defendant-Appellee,
                                                     CV-95-02530-NAJ
and


DOES 1THROUGH 50, inclusive,
Defendants.


Appeal from the United States District Court
for the Southern District of California
Napoleon A. Jones, District Judge, Presiding


                               1490


ROBERT A. BEVERAGE,
Plaintiff-Appellant,
                                                     No. 97-15158
v.
                                                     D.C. No.
                                                     CV-96-03253-DLJ
CONTINENTAL AIRLINES, INC.,
Defendant-Appellee.


Appeal from the United States District Court
for the Northern District of California
D. Lowell Jensen, District Judge, Presiding


Argued and Submitted
July 23, 1998--San Francisco, California


Filed November 30, 1998
Amended February 23, 1999


Before: Procter Hug, Jr., Chief Judge, James R. Browning,
Betty Binns Fletcher, Melvin Brunetti, David R. Thompson,
Ferdinand F. Fernandez, Pamela Ann Rymer,
Thomas G. Nelson, Andrew J. Kleinfeld,
A. Wallace Tashima, and Barry G. Silverman,
Circuit Judges.


Opinion by Judge Silverman


_________________________________________________________________

COUNSEL

Gerald A. Clausen and Edward M. Digardi, San Francisco,
California, for appellant Gulley.


Stuart J. Starry, Frank, Woodfill, Lucas & Pressler, LLP,
Houston, Texas, for appellants Charas, Jacoby, Beverage, and
Newman.


Bonnie R. Cohen and Kymberly E. Speer, Nelsen, Greenberg
& Cohen, San Francisco, California, for appellees Trans
World Airlines, Inc., American Airlines, and Continental Air-
lines.


Donna H. Kalama, Goodsill, Anderson, Quinn & Stifel,
Honolulu, Hawaii, on the briefs for appellee Trans World Air-
lines.


Harry Carter, Higgs, Fletcher, and Mack, San Diego, Califor-
nia, arguing for appellee American Airlines.


_________________________________________________________________

                               1493


ORDER

Appellee American Airlines filed a "Petition for Rehearing
and Suggestion for Rehearing En Banc" due to a factual error
in the Opinion. The Opinion filed in this case on November
30, 1998 is amended at Slip op. page 13310, last three lines
through page 13311, line 1, as follows:


      The last sentence on Slip op. page 13310 and carry-
      ing over to the next page should read: "Prior to
      obtaining the required certificate, Newman was not
      permitted to board and was required to stay over-
      night at a motel."


With this amendment, the en banc panel votes to deny the
petition for rehearing and rejects the suggestion for rehearing
en banc.


_________________________________________________________________

OPINION

SILVERMAN, Circuit Judge:

These consolidated cases cause us to consider once again
the circumstances under which the Airline Deregulation Act
of 1978, 49 U.S.C. app. S 1305(a)(1) ("ADA"), preempts cer-
tain state law claims. Although we have addressed the scope
of this statutory preemption before, we have taken these cases
en banc sua sponte to rethink our previous decisions.1 We
now hold that in enacting the ADA, Congress intended to pre-
empt only state laws and lawsuits that would adversely affect
the economic deregulation of the airlines and the forces of
competition within the airline industry. Congress did not
intend to preempt passengers' run-of-the-mill personal injury
_________________________________________________________________
1 Because of the need to clarify the law in this area, these cases were
taken en banc after they were assigned to a three-judge panel, but prior to
the panel's rendering a decision.


                               1494


claims. Accordingly, we hold that Congress used the word
"service" in the phrase "rates, routes, or service" in the
ADA's preemption clause to refer to the prices, schedules,
origins and destinations of the point-to-point transportation of
passengers, cargo, or mail. In the context in which it was used
in the Act, "service" was not intended to include an airline's
provision of in-flight beverages, personal assistance to pas-
sengers, the handling of luggage, and similar amenities. We
expressly overrule our decisions in Harris v. American Air-
lines, Inc., 55 F.3d 1472 (9th Cir. 1995), and Gee v. Southwest
Airlines, 110 F.3d 1400 (9th Cir. 1997), to the extent that they
are inconsistent with this interpretation.


FACTUAL AND PROCEDURAL BACKGROUND

I. Beverage v. Continental Airlines

Robert A. Beverage was a passenger on a Continental Air-
lines flight. He claims that a flight attendant hit his shoulder
with a service cart and caused him serious injuries, including
a dislocated shoulder and a cracked and detached scapular
prosthesis. Beverage filed a state tort claim against Continen-
tal for negligence and breach of contract. The district court
concluded that the ADA preempted Beverage's claims and
granted Continental's motion to dismiss. Beverage timely
appealed the district court's ruling.


II. Jacoby v. Trans World Airlines

Mildred Jacoby was a passenger on Trans World Airlines.
After the plane landed, another passenger opened an overhead
bin and a large piece of luggage fell on Jacoby's head, caus-
ing her injuries. Jacoby filed suit in state court against TWA;
the airline removed the case and filed a motion to dismiss.
Finding that the ADA preempted Jacoby's claims against
TWA, the district court granted the motion to dismiss. Jacoby
appealed.


                               1495


III. Charas v. Trans World Airlines

Cherie Charas, a passenger on a TWA flight, tripped over
a piece of luggage allegedly left in the aisle by a flight atten-
dant. Due to the fall, Charas claims that she suffered a frac-
tured humerus and required a shoulder joint replacement.
Charas sued TWA for negligence. In granting TWA's motion
for summary judgment, the district court concluded that
Charas's claims were preempted by the ADA. Charas timely
appealed the district court's ruling.


IV. Gulley v. American Airlines

Bernice Gulley was a passenger aboard a small commuter
airplane operated by American Airlines. Gulley has a bone
condition that makes her susceptible to bone fractures. She
claims that she advised American of her condition and
informed the airline that she needed assistance in disembark-
ing, but that American employees provided no help. Gulley
exited the plane, unassisted, on a stairway with only a single,
movable chain handhold. She alleges that she fell and sus-
tained injuries.


Gulley brought a state negligence action against American.
The district court held that although Gulley's claim for
negligent failure to provide safe equipment involved the
"maintenance and operation" of the aircraft and was not pre-
empted, Gulley's claim for negligent failure to assist her
down the stairs involved the rendering of "service" and was
preempted by the ADA. Gulley appealed the district court's
order granting American's motion for summary judgment.


V. Newman v. American Airlines, Inc.

Elizabeth Newman's complaint stems from her attempt to
fly from San Diego to Long Island on an American Airlines
flight. Newman claims that in making her reservations, she
informed American that she was blind, suffered from a heart


                               1496


condition, and required assistance in boarding the plane. She
flew from Long Island to San Diego without incident. How-
ever, it is alleged that on her return flight to Long Island, a
flight attendant attempted to check Newman's carry-on bags
due to space constraints. At that time, the flight attendant
learned that the bags contained Newman's medications. The
flight attendant then informed the captain that Newman might
have a disability that would preclude her from flying. The
captain asked the flight attendant to ask Newman about her
medication and to ascertain the phone number of Newman's
doctor to verify whether or not Newman was at risk for a
heart attack during flight. When Newman could not remember
her doctor's number, American denied her passage until she
could provide a letter from her doctor certifying that it was
safe for her to fly.


Prior to obtaining the required certificate, Newman was not
permitted to board and was required to stay overnight at a
motel. She filed various claims, including state tort claims and
federal statutory claims, against American. The district court
granted American's motion for summary judgment, conclud-
ing that Newman's state law claims were preempted by the
ADA and that American had "permissibly refused " boarding
to Newman for the purposes of her federal claims. Newman
timely appealed.


DISCUSSION

I. Background

Section 1305(a)(1) of the ADA provides:

      [N]o 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, reg-
      ulation, standard, or other provision having the force
      and effect of law relating to the rates, routes, or ser-
      vice of any air carrier . . . .


                               1497


49 U.S.C. app. S 1305(a)(1).2

Prior to 1978, the Civil Aeronautics Board had economic
regulatory authority over interstate air transportation pursuant
to the Federal Aviation Act of 1958, 72 Stat. 731, as
amended, 49 U.S.C. app. S 1301 et seq . However, the Act did
not expressly preempt state regulation, and further, it con-
tained a "savings clause" providing that "[n]othing . . . 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. app.
S 1506 (recodified at 49 U.S.C. S 40120(c)); see American
Airlines, Inc. v. Wolens, 513 U.S. 219, 222 (1995). As a
result, states were not prevented from enforcing their own
laws, despite the economic effect on the airlines. See
California v. CAB, 581 F.2d 954, 956 (D.C. Cir. 1978) (hold-
ing that states were permitted to regulate intrastate airfares);
Nader v. Allegheny Airlines, Inc., 426 U.S. 290, 300-01
(1976) (allowing states to enforce their own laws barring
deceptive trade practices).


In 1978, Congress determined that efficiency, low prices,
variety, and quality would be furthered by reliance on com-
petitive market forces rather than pervasive federal regulation.
See H.R. Conf. Rep. No. 95-1779, 95th Cong., 2d Sess. 53
(1978). To prevent states from "undo[ing] federal deregula-
tion with regulation of their own," Morales v. Trans World
Airlines, 504 U.S. 374, 378 (1992), Congress enacted
S 1305(a)(1) which preempts state laws "relating to the rates,
routes, or service of any air carrier . . . ."


However, the scope of this preemption has been a source
of considerable dispute since its enactment. In our own cir-
_________________________________________________________________
2 In 1994, section 1305(a)(1) was amended and incorporated into the
Federal Aviation Administration Authorization Act of 1994 ("FAAAA"),
49 U.S.C. S 41713(b), to prohibit the enforcement of any state law "related
to price, route, or service of an air carrier."


                               1498


cuit, we have addressed the issue on several occasions. Prior
to Harris, we held that the ADA did not preempt state law tort
claims that were only "tenuously connected" with airline
deregulation. See Lathigra v. British Airways PLC, 41 F.3d
535, 540 (9th Cir. 1994) (looking to congressional intent, the
panel concluded that the ADA did not preempt state tort
actions for negligent reconfirmation because they did not
undermine the goals of airline deregulation.); West v. North-
west Airlines, Inc., 995 F.2d 148, 151 (9th Cir. 1993) (holding
that state law tort claim for compensatory damages was "too
tenuously connected to airline regulation to trigger preemp-
tion under the ADA").


However, in 1995, we took a different approach. Harris
brought a tort suit against American Airlines for continuing to
serve alcohol to an intoxicated passenger who was harassing
her. In declining to look beyond the bare preemption language
to congressional intent, the majority, over Judge Norris's dis-
sent, concluded that the ADA preempted Harris's claim
because it "relate[d] to [a] service " that the airline rendered,
namely the provision of a drink. Harris, 55 F.3d at 1476. The
panel did not discuss or distinguish West or Lathigra.


Two years later, we wrestled with this problem again in
Gee. There, we expressed doubts about Harris  and the valid-
ity of its analysis. See Gee, 110 F.3d at 1404-05. However, in
an attempt to mitigate the impact of Harris, we expressly
adopted the Fifth Circuit's approach in Hodges v. Delta Air-
lines, Inc., 44 F.3d 334 (5th Cir. 1995) (en banc). See Gee,
110 F.3d at 1407. Under Hodges, claims related to an airline's
"operations and maintenance" are not preempted by the ADA
while claims related to a "service" provided by the airline are
preempted. Hodges, 44 F.3d at 336-37. As Judges
O'Scannlain and Jolly predicted in their respective concur-
rences in Gee and Hodges, the distinction between an airline's


                               1499


operations and its service turned out to be as elusive as it is
unworkable.3


[1] Judge O'Scannlain noted that the operations-versus-
service dichotomy invites nonsensical, inequitable, and incon-
sistent results, and in any event has nothing to do with the
purpose of airline deregulation. See Gee, 110 F.3d at 1410.
For example, under the rule announced in Gee, a plaintiff
injured when struck by a beverage cart door would be able to
bring a tort action if the door swung open because a bolt was
missing (because the injury arises out of the "operations and
maintenance" of the aircraft), but not if the flight attendant
negligently failed to latch the door properly (because the
flight attendant's conduct relates to "service"). Judge
O'Scannlain demonstrated the folly of the distinction between
"operations and maintenance" and "service, " and suggested
instead that the court examine whether the state laws underly-
ing the claims frustrate the goal of economic deregulation by
interfering with the forces of competition. See id.
(O'Scannlain, J., concurring). If they do, the claims would be
preempted; otherwise, they would not.


In reconsidering our view of the scope of the ADA's pre-
emption, we conclude that Judge Norris and Judge
O'Scannlain got it right and that Harris is contrary to con-
gressional intent. Further, although we recognize that we were
bound by Harris when we decided Gee, we now believe that
the rule we adopted in Gee was imprecise, difficult to apply,
and inadequately reflective of the ADA's goal of economic
deregulation. Accordingly, in defining the "service" that the
_________________________________________________________________
3 In his concurrence, Judge Jolly opined that:


      The fact that the majority and the dissent disagree only on the
      application of this principle reveals that it promises uncertainty
      and inconsistent results . . . . I would prefer, instead of erecting
      these tenuous and uncertain judge-made distinctions, to rely upon
      the plain language of the provision . . . .


Hodges, 44 F.3d at 340, 342.

                               1500


ADA preempts, we adopt Judge O'Scannlain's approach, an
approach consistent with Supreme Court precedent and the
ADA's plain language and legislative history.


II. Supreme Court Precedent

The Supreme Court twice has addressed the scope of
S 1305(a)(1). In both decisions, the Supreme Court took great
pains to articulate the boundaries of the preemption, indicat-
ing that the ADA would not preempt most state law tort
claims. See Wolens, 513 U.S. at 230-33; Morales, 504 U.S. at
390. In Morales, the Court faced the question of whether air-
lines were subject to states' laws banning deceptive advertis-
ing. The Court concluded that state restrictions on advertising
were precisely the type of economic regulation that Congress
intended to preempt in deregulating the airline industry:


      Restrictions on advertising serv[e] to increase the
      difficulty of discovering the lowest cost seller . ..
      and [reduce] the incentive to price competitively
      . . . . [p]rice advertising surely `relates to' price.


Morales, 504 U.S. at 388-89 (internal citations and quotations
omitted). As such, the Court held that state actions based upon
these laws had the "forbidden significant effect " on rates,
routes, or service, and thus were preempted. Id.  at 388. How-
ever, the Court explicitly limited its holding:


      [W]e do not . . . set out on a road that leads to pre-
      emption of state laws against gambling and prostitu-
      tion as applied to airlines . . . [s]ome state actions
      may affect [airline fares] in too tenuous, remote, or
      peripheral a manner to have pre-emptive effect.


Id. at 390 (internal citations and quotations omitted).

Likewise, in Wolens, the Court recognized the boundaries
of S 1305(a)(1). In Wolens, the Court concluded that plain-


                               1501


tiffs' claims for breach of contract, stemming from the air-
line's unilateral decision to devalue plaintiffs' frequent flier
miles were not preempted. See Wolens, 513 U.S. at 222. In so
doing, the Court held that Congress did not intend to preempt
common law contract claims. And, although the majority did
not specifically address whether personal injury claims would
be preempted, both concurring opinions did. Justice
O'Connor opined:


      Many cases decided since Morales have allowed
      personal injury claims to proceed, even though none
      has said that a State is not "enforcing" its "law"
      when it imposes tort liability on an airline. In those
      cases, courts have found the particular tort claims at
      issue not to "relate" to airline "services, " much as we
      suggested in Morales that state laws against gam-
      bling and prostitution would be too tenuously related
      to airline services to be preempted.


Id. at 242 (O'Connor, J., concurring in part and dissenting in
part) (internal citations omitted).4 Further, Justice Stevens
noted:


      In my opinion, private tort actions based on
      common-law negligence or fraud . . . are not pre-
      empted . . . . Presumably, if an airline were negligent
      in a way that somehow affected its rates, routes, or
      services . . . the majority would not hold all
      common-law negligence rules to be pre-empted by
      the ADA.


Id. at 235-36 (Stevens, J., concurring in part and dissenting in
part).


Although Morales and Wolens do not directly resolve
whether the S 1305(a)(1) preemption encompasses state law
_________________________________________________________________
4 In their criticism of her "total preemption" approach, the majority
implicitly agreed with Justice O'Connor's conclusion that personal injury
claims are not preempted by the ADA. See Wolens , 513 U.S. at 234, n.9.


                               1502


tort claims, they certainly suggest that such claims are not
within the intended reach of the preemption.


III. Plain Language and Congressional Intent

Of course, in attempting to decipher the dimensions of the
ADA's preemption clause, we must look first to the statute
itself. We must attempt to "ascertain and give effect to the
plain meaning of the language used," Hughes Air Corp. v.
Public Utils. Comm'n, 644 F.2d 1334, 1337 (9th Cir. 1981),
but must be careful not to read the preemption clause's lan-
guage in such a way as to render another provision superflu-
ous. Furthermore, the Supreme Court has cautioned us that
preemption provisions are narrowly and strictly construed,
and has directed us to "look to the provisions of the whole
law, and to its object and policy." Kelly v. Robinson, 479 U.S.
36, 43 (1986); see also Medtronic, Inc. v. Lohr , 518 U.S. 470,
485 (1996). We must consider


      two presumptions about the nature of preemption.
      First, because the States are independent sovereigns
      in our federal system, [the Supreme Court has ] long
      presumed that Congress does not cavalierly pre-empt
      state-law causes of action . . . . Second, [the ] analysis
      of the scope of the statute's pre-emption is guided by
      [the Court's] oft-repeated comment . . . that the pur-
      pose of Congress is the ultimate touchstone in every
      pre-emption case.


Medtronic, 518 U.S. at 485 (internal citations and quotations
omitted). Moreover,


      [I]n all pre-emption cases, and particularly in those
      in which Congress has legislated . . . in a field which
      the States have traditionally occupied, . . . [the court
      must] start with the assumption that the historic
      police powers of the States were not to be super-
      seded by the Federal Act unless that was the clear
      and manifest purpose of Congress.


                               1503


Id. (internal citations and quotations omitted).

[2] It is evident that Congress's "clear and manifest
purpose" in enacting the ADA was to achieve just that -- the
economic deregulation of the airline industry. Specifically,
"the ADA . . . was designed to promote `maximum reliance
on competitive market forces.' " Wolens , 513 U.S. at 230
(citing 49 U.S.C. app. S 1302(a)(4)). The purpose of preemp-
tion is to avoid state interference with federal deregulation.
See id. Nothing in the Act itself, or its legislative history, indi-
cates that Congress had a "clear and manifest purpose" to dis-
place state tort law in actions that do not affect deregulation
in more than a "peripheral manner." See Morales, 504 U.S. at
390. Further, that Congress did not intend S 1305(a)(1) to pre-
empt all state tort claims is evident from at least two other
provisions of the airline regulatory statutes. First, airlines are
still required to maintain insurance that covers "amounts for
which . . . air carriers may become liable for bodily injuries
to or the death of any person . . . ." 49 U.S.C. app. S 1371(q)

(recodified as 49 U.S.C. S 41112(a)). Complete preemption of
state law in this arena would have rendered pointless this
requirement for insurance coverage. Second, the savings
clause, S 1506, which provides that "[n]othing . . . in this
chapter shall in any way abridge or alter the remedies now
existing at common law . . . ," read together with the preemp-
tion clause, evidences congressional intent to prohibit states
from regulating the airlines while preserving state tort reme-
dies that already existed at common law, providing that such
remedies do not significantly impact federal deregulation. 49
U.S.C. app. S 1506 (recodified as 49 U.S.C.S 40120); see
also Morales, 504 U.S. at 378.


Understanding the objective of this legislation is critical to
interpreting the extent of its preemption. In a recent case
involving the interpretation and preemptive reach of the
phrase "relates to" under ERISA, the Supreme Court
explained that courts must examine " `the objectives of the
ERISA statute as a guide to the scope of the state law that
Congress understood would survive,' as well as to the nature


                               1504


of the effect of the state law on ERISA plans." California Div.
of Labor Standards Enforcement v. Dillingham Constr., N.A.,
Inc., 117 S. Ct. 832 (1997) (quoting and citing New York State
Conference of Blue Cross & Blue Shield Plans v. Travelers
Ins. Co., 514 U.S. 645, 656 (1995)). The Supreme Court has
twice looked to its interpretation of ERISA as an aid in inter-
preting the preemptive language of the ADA. Wolens, 513
U.S. at 223; Morales, 504 U.S. at 383-84.


[3] In its decisions interpretingS 1305(a)(1), the Supreme
Court has not had occasion to define the term "service." In
attempting to deduce its meaning, we are mindful that princi-
ples of statutory construction require us to consider the term
within its context. See Pension Benefit Guar. Corp. v. Carter
& Tillery Enters., 133 F.3d 1183, 1186 (9th Cir. 1998). Air-
lines' "rates" and "routes" generally refer to the point-to-point
transport of passengers. "Rates" indicates price; "routes"
refers to courses of travel. It therefore follows that "service,"
when juxtaposed to "rates" and "routes, " refers to such things
as the frequency and scheduling of transportation, and to the
selection of markets to or from which transportation is pro-
vided (as in, "This airline provides service from Tucson to
New York twice a day.") To interpret "service " more broadly
is to ignore the context of its use; and, it effectively would
result in the preemption of virtually everything an airline
does. It seems clear to us that that is not what Congress

intended.

[4] Nowhere in the legislative history, or in what remains
of the federal airline regulatory statutes, does Congress inti-
mate that "service," in the context of deregulation, includes
the dispensing of food and drinks, flight attendant assistance,
or the like.


IV. Conclusion

[5] We conclude that when Congress enacted federal eco-
nomic deregulation of the airlines, it intended to insulate the
industry from possible state economic regulation as well. It


                               1505


intended to encourage the forces of competition. It did not
intend to immunize the airlines from liability for personal
injuries caused by their tortious conduct. Like "rates" and
"routes," Congress used "service" inS 1305(a)(1) in the pub-
lic utility sense -- i.e., the provision of air transportation to
and from various markets at various times. In that context,
"service" does not refer to the pushing of beverage carts,
keeping the aisles clear of stumbling blocks, the safe handling
and storage of luggage, assistance to passengers in need, or
like functions. We expressly overrule our decisions in Harris
and Gee to the extent that they are inconsistent with this inter-
pretation. Accordingly, we remand these cases to the panel for
resolution consistent with this decision.5


REMANDED TO THE PANEL.

_________________________________________________________________
5 Our analysis of the preemption question does not touch any federal
claims brought by plaintiff-appellants in these cases. The merits of all the
claims in issue, federal and state, are left to the panel.
                               1506

*** Any law, statute, regulation or other precedent is subject to change at any time ***

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