May 2008

Second Circuit Declares New York’s Passenger Bill of Rights Unconstitutional

Holland & Knight Newsletter
Steven Raffaele

In an important decision for airlines and airline passengers alike, on March 25, 2008, the United States Court of Appeals for the Second Circuit reversed the United States District Court for the Northern District of New York in the case of Air Transport Association of America v. Cuomo,1 in which the ATA challenged the constitutionality of New York’s Passenger Bill of Rights. On appeal, the Second Circuit agreed with the ATA and held that New York’s Passenger Bill of Rights is preempted by the express preemption provision of the Airline Deregulation Act of 1978 (ADA) because it is “related to a price, route, or service of an air carrier.”2
This finding by the Second Circuit certainly will have wide-reaching effects. Today, no fewer than nine other states have followed New York’s lead and have proposed legislation regarding lengthy ground delays. These states include Arizona, California, Florida, Indiana, Michigan, New Jersey, Pennsylvania, Rhode Island and Washington. The proposed laws by these states assuredly will face similar challenges by the ATA and also will most likely suffer similar fates. Only time will tell if the federal government will intercede by passing uniform federal legislation (which is pending in both House and Senate bills) to address this hot-button issue of aviation law.

Background – New York’s Passenger Bill of Rights

On June 21, 2007, New York became the first state in the nation to enact a passenger bill of rights requiring airlines to provide basic consumer protections to the flying public who are stranded on aircraft on severely delayed flights operating out of New York.3 The New York State Legislature proposed the bill in response to a series of high-profile incidents – including the ice storm that hit the Northeast during Valentine’s Day 2007, which resulted in many airline passengers being grounded on the runway at New York’s area airports for over 3 hours (and in some cases almost 10 hours) without water, food and other basic comforts.

New York’s Passenger Bill of Rights took effect in January 2008. It required all airlines (both U.S. and foreign) that provide scheduled air service to and/or from New York to provide their passengers with basic necessities once they have boarded and are delayed for more than three hours on the aircraft before takeoff. These necessities include adequate food, drinking water and other refreshments; electric-generation service for fresh air and lights; and working restrooms, including the removal of waste from holding tanks.4 New York’s Passenger Bill of Rights also provided for the creation of the Office of Airline Consumer Advocate (OACA) to oversee compliance, investigate passenger complaints, and refer violations to the New York state attorney general’s office.5

ATA v. Cuomo – ATA Challenges, and District Court Upholds, New York Legislation

Not long after its enactment, the ATA challenged the constitutionality of the new law in the case of ATA v. Cuomo.6 The ATA argued that the legislation regulates a “service” provided by air carriers and, thus, is explicitly preempted by the ADA, and that it also violates the commerce clause of the U.S. Constitution. The case was decided on December 20, 2007, and the District Court upheld this new law, granting summary judgment sua sponte to the state of New York.

In reaching its holding, the District Court considered the New York legislation against the backdrop of the ADA to determine whether the state law should be preempted – either explicitly or implicitly. The Court evaluated the following:

  • whether the area of legislation (health and safety) is within the state’s historic police power
  • whether Congress intended that state laws such as the Passenger Bill of Rights be preempted by the ADA
  • whether the ADA explicitly preempts the provisions of the Passenger Bill of Rights
  • whether Congress intended to implicitly preempt the entire field of aviation health and safety
  • whether there was a real danger of diverse regulation in aviation health and safety regulation

The District Court held that the field of health and safety is one of the most established areas of state police power, but also recognized that the ADA explicitly asserts that states “may not enact or enforce a law, regulation, or other provision ... related to a price, route, or service of an air carrier.”7 The District Court, although ultimately reversed by the Second Circuit, characterized the provisions of the New York Passenger Bill of Rights as a health and safety issue and not a “service” within the meaning of the ADA. The Court noted that “[m]uch as passengers do not specifically contract for the right to be free of tortious behavior, they do not contract for access to bathrooms, air and water: the provision of these necessities is presumed.” The District Court also found that because Congress did not intend to preempt the entire field of aviation health and safety, state actions outside the explicit preemption provisions of the ADA are not preempted. In dicta, the District Court finally noted that there is limited danger of diverse regulation and concluded that any potential hardship to the airlines is outweighed by the state’s interest in exercising its power to protect the health, safety and welfare of its citizens.

In the end, the District Court dismissed the ATA’s preemption challenge and held that:

  • New York was acting within its police powers in enacting the statute, which covers legitimate health and safety issues and does not affect an airline’s rates, routes, or service
  • the ADA did not explicitly preempt New York’s Passenger Bill of Rights based on health concerns
  • Congress did not intend to preempt the entire field of airline health and safety, precluding an implied preemption claim

The Second Circuit Reverses and Declares New York’s Passenger Bill of Rights Unconstitutional

Following the decision of the District Court, the ATA moved for an expedited appeal to the United States Court of Appeals for the Second Circuit. The appeal was argued on March 5, 2008, and decided on March 25, 2008. The Second Circuit reviewed the final judgment of the District Court de novo, and ultimately reversed and remanded to the District Court so that it may enter summary judgment in favor of the ATA.8

In Cuomo, the Second Circuit analyzed the legislative intent for the ADA and noted the breadth of the Supreme Court decisions emphasizing the reach of ADA’s preemption provision. The Court further recognized that the Second Circuit has not yet defined “service” as it is used in the ADA and that there also is a split in the circuits in arriving at a uniform definition. Notwithstanding, the Court recognized that a majority of the circuits have construed “service” broadly to include matters “incidental to and distinct from actual transportation of passengers,” including boarding procedures, baggage handling, and food and drink.9
The Second Circuit chose to follow the broad definition of “service” espoused by the majority of circuit courts in concluding that legislation requiring airlines to provide food and drink during lengthy ground delays relates to the “service” of an air carrier. Specifically, the Second Circuit drew considerable support from the U.S. Supreme Court’s recent unanimous decision in Rowe v. New Hampshire Transport Association, in which the Supreme Court construed an identically worded preemption provision in the context of Maine law imposing shipping obligations on tobacco retailers – a law that the state of Maine enacted to protect the health and safety of its minors.10 In its holding in Cuomo, the Second Circuit recognized that the Court in Rowe necessarily had to define “service” broadly, because to construe it more restrictively would lead to a “patchwork of state service-determining laws, rules, and regulations,” which would be inconsistent with Congress’ major legislative intent to leave such decisions to the competitive forces of the marketplace.11 The Second Circuit viewed the Maine law in Rowe as indistinguishable and, as a result, held that New York’s Passenger Bill of Rights falls within the express terms of the ADA’s preemption provision.12

Importantly, the Second Circuit also followed Rowe and declined to read a public health and safety exception into the ADA. The Court stated that “[o]nboard amenities, regardless of whether they are luxuries or necessities, still relate to an airline service and fall within the express terms of the preemption provision ... .”13 Interestingly, in an express acknowledgement of the DVT decisions of the Fifth and Ninth Circuits, the Second Circuit recognized that if it allowed states to enact specific and differing public health and safety legislation, it would amount to “unraveling the centralized federal framework for air travel.”14

Although the Second Circuit viewed the New York legislature’s goals as “laudable” and the circumstances motivating the law’s enactment as “deplorable,” it concluded that New York’s Passenger Bill of Rights is unconstitutional because it is explicitly preempted by the ADA. Significantly, the Second Circuit also noted that the Department of Transportation has proposed similar passenger protection measures and implicitly recognized the need for “uniform standards” for airlines to deal with lengthy ground delays.

1 Air Transp. Ass’n v. Cuomo, ---F.3d---, No. 07-5771-cv, 2008 WL 763163 (2d Cir. March 25, 2008), rev’g 528 F. Supp. 2d 62 (N.D.N.Y. 2007) (Kahn, J.). 

2 Airline Deregulation Act of 1978, 49 U.S.C. § 41713. 

3 N.Y. Executive Law § 553(2)(d) (2007) and N.Y. Gen. Bus. Law § 251(f)-(j) (2007). 

4 N.Y. Gen. Bus. Law § 251(g)(1). The law did not apply to situations where passengers are delayed at the airport before boarding, and unlike the pending federal legislation, did not grant passengers the right to disembark the aircraft in the event of a long delay after boarding. 

5 Id. § 251(h). The attorney general then was authorized to recover a civil penalty against the airline(s) of up to $1,000 per passenger per violation by way of a civil action. 

6 Air Transp. Ass’n v. Cuomo, 528 F. Supp. 2d 62 (N.D.N.Y. 2007), rev’d, ---F.3d---, No. 07-5771-cv, 2008 WL 763163 (2d Cir. March 25, 2008).

7 49 U.S.C. § 41713 (b)(1). 

8 The Court noted that even though the ADA does not create a private right of action, the ATA was permitted to pursue its preemption challenge through its supremacy clause claim. 

9 These include the First, Fourth, Fifth, Seventh and Eleventh Circuits; whereas, the Third and Ninth Circuits have construed ADA preemption narrowly to exclude such provisions. 

10 Rowe v. New Hampshire Motor Transport Ass’n, ---U.S.---, 128 S. Ct. 989 (2008) (unanimous). 

11 Id. at 996. 

12 The Court also noted that it was not addressing whether New York’s Passenger Bill of Rights is impliedly preempted by the FAA, but noted that whereas other circuits (and courts within the Second Circuit) have concluded that Congress intended to preempt the entire field of aviation safety, the FAA does not preempt all state law tort claims. 

13 Air Transp. Ass’n, 2008 WL 763163, *5. 

14 Id. at *6.

Related Insights