District Splits on Express ADA Preemption in Massachusetts Skycap Cases

This article highlights recent decisions concerning the scope and application of the express preemption provision of the Airline Deregulation Act (ADA) in several closely watched cases in the United States District Court for the District of Massachusetts. In each of these four separate cases, pending before three different federal judges, skycaps have sued major airlines alleging that tips were diminished as a result of the airlines’ collection of curbside check-in fees from passengers. Notably, although the airline defendants in each case moved to dismiss the skycaps’ state law claims on the basis of ADA express preemption, the outcomes of their preemption motions initially varied with only one judge finding preemption. However, the tide seems to be turning, as subsequent motions for reconsideration have resulted in two more rulings that find preemption of the state law claims.

A Brief Primer on ADA Express Preemption

In areas of U.S. federal interest, the federal government may displace, or “preempt,” state law. Federal preemption of state law may arise expressly by federal statute, or, by implication, either via a conflict between federal and state laws or via a scheme of federal regulation so comprehensive it “covers the field.”

In 1978, Congress passed the ADA to replace regulation of the airline industry with reliance upon competitive market forces, perceived as better suited to foster “efficiency, innovation, and low prices” in the industry. To prevent state laws from filling the ensuing regulatory void, the federal statute included an express preemption provision. That provision, Section 105 of the ADA, states that “a State [or] political subdivision of a State ... 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 ... .”

The ADA’s express preemption provision has been held by the U.S. Supreme Court to have broad application. In Morales v. Trans World Airlines, Inc.¹ and American Airlines, Inc. v. Wolens,² the Court held that the provision’s use of the phrase “related to” expressed a broad preemptive purpose and scope, such that it encompassed any state law, or state law claims, having “a connection with, or reference to,” prices, routes or services.³ Only state law claims with a “tenuous, remote, or peripheral” relationship to these aspects of airlines’ businesses escape the ADA’s broad preemptive scope.⁴

More recently, in Rowe v. New Hampshire Motor Trans. Ass’n,⁵ the Supreme Court, construing a broad express preemption provision parallel to the ADA’s, reiterated the broad scope of ADA express preemption. The Rowe Court rejected the argument for an implied “police power” exception to the broad express preemption provision at issue, and reaffirmed its earlier holdings that the ADA’s language compels preemption of any state laws “with a ‘significant impact’ on carrier rates, routes, or services.”⁶ And, most recently, the Supreme Court in Altria Group, Inc. v. Good once again noted the “unusual breadth” of the ADA’s express preemption provision, and reaffirmed its earlier holdings that the ADA’s “relating to” language “indicates Congress’ intent to pre-empt a large area of state law to further its purpose of deregulating the airline industry.”⁷

Recent decisions of federal Circuit Courts of Appeal have fallen into line behind the Supreme Court’s articulation of the ADA’s broad preemptive scope, and have expansively construed the “price” and “service” prongs of the ADA’s express preemption provision. For example, the First Circuit in Buck v. American Airlines, Inc. underscored the “sweeping nature” of the ADA’s preemption, and reaffirmed that state law claims that “explicitly refer to an airline’s prices and those that have a significant effect upon prices” are expressly preempted.⁸ Likewise, in Air Transp. Ass’n of America Inc. v. Cuomo, the Second Circuit noted the “breadth of the ADA’s preemption provision,” and concluded that the “service” prong properly encompasses all aspects of “the provision or anticipated provision of labor from the airline to its passengers [including] matters such as boarding procedures, baggage handling, and food and drink – matters incidental to and distinct from the actual transportation of passengers.”⁹

The Massachusetts Skycap Cases

Against this backdrop, an express preemption storm has been brewing in several cases now pending in the District of Massachusetts, brought by skycaps against four major airlines. These cases, and the divergent ADA preemption decisions therein, are laying the groundwork for what may soon become an important issue before the First Circuit.

In recent years, U.S. airlines have sought to keep airfares affordable by unbundling certain services from the price of transportation – that is, by imposing separate fees for certain services only on passengers who choose to purchase those services. In this vein, over a period beginning in 2005 and continuing through 2008, several major airlines imposed fees on passengers electing to check bags via skycap curbside check-in service. These fees ranged from $2 to $3 per skycap-checked bag, although the specifics of their application, and the period in which they were in effect, varied among the relevant airlines. Skycaps providing services at most airlines’ terminals are not employed by the airlines themselves, but rather by third-party companies with which the airline contracts to provide skycap and other support services.

In December 2006, a putative class action was commenced in Massachusetts state court by several skycaps serving the American Airlines terminal at Boston’s Logan Airport. The plaintiffs in that case, DiFiore v. American Airlines,¹⁰ alleged that as a result of American’s imposition of a $2 per bag curbside check-in charge, skycaps’ tip income was impermissibly diminished. The skycaps asserted two basic theories of liability: (1) that the airline created, or failed to remedy, passenger confusion regarding the nature of the curbside charge in its communications with its passengers, with the effect that passengers thought the $2 airline fee was the skycaps’ tip; and (2) that, regardless of what passengers understood about the nature or recipients of the fee, the fee unlawfully diminished skycap income because skycaps traditionally received most of their compensation from tips and, after the imposition of the fee, fewer passengers gave tips. The plaintiffs alleged violations of several state statutes, including the Massachusetts Tips Law and the Massachusetts Minimum Wage Law, as well as several state common law theories, including breach of implied contract, tortious interference with contract and/or contractual advantage, and quantum meruit.

The DiFiore case was removed to federal court in early 2007. Over the course of the next year, the judge denied American’s ADA express preemption motion (discussed below), declined to certify nationwide or Massachusetts skycap classes, and granted summary judgment against all of plaintiffs’ claims with the exception of their Massachusetts Tips Law and tortious interference claims. These claims were tried in the spring of 2008. In April 2008, the jury returned a verdict on both state law theories in favor of the Massachusetts skycaps, and judgment was entered against American in the amount of approximately $325,000. Although the federal court suspended its judgment to allow Massachusetts’ highest state court to determine the propriety of its jury instructions, it reinstated the judgment in August 2009 after the state’s Supreme Judicial Court affirmed that the instruction had properly articulated state law.¹¹ The plaintiffs are now seeking recovery of their counsel’s fees, additional damages, prejudgment interest and imposition of what the skycaps contend are “mandatory treble damages” under the Tips Law. The court is now considering these issues, as well as the retroactivity of the statutory trebling provisions.¹²

In the immediate aftermath of the DiFiore verdict, the same plaintiffs’ counsel who had pursued the case against American Airlines initiated similar putative nationwide class actions against United Airlines, US Airways, and JetBlue Airways.¹³ Each case was separately filed, and none was designated as “related” to others, leading to four separate skycap cases now pending before three different federal judges sitting in Boston. Each case raised slightly different theories of recovery, but the plaintiffs in every case made similar allegations, namely, that the airlines’ curbside check-in charge had unlawfully reduced skycaps’ tips. Further, while each case asserted a slightly different battery of state and/or federal law claims, all asserted a common core of state law claims: tortious interference, quantum meruit, and violation of the Massachusetts Tips Law.

Each of the airline defendants in these skycap cases brought motions to dismiss the state law claims on ADA express preemption grounds. Results have varied, however.

DiFiore v. American Airlines

In its motion to dismiss in the DiFiore case, American Airlines argued that the skycaps’ state law claims were barred by the ADA’s express preemption because they threatened “significant economic impact” on the airline’s “curbside baggage check-in service and the price American charges for this convenience.” The plaintiffs opposed by characterizing their claims against the airline as mere “wage claims,” and by arguing that ADA preemption applied only to “the relationship between the airline industry and consumers” and therefore had no bearing on claims they brought in their capacities as “airline workers.” Alternatively, the plaintiffs argued that their state law claims had only a “tenuous, remote, or peripheral” effect on the airline’s prices and services. Because the curbside fees collected by American were tantamount to their “wages,” which American had impermissibly diverted to itself, plaintiffs asserted that their claims had no more effect on American’s prices and services than any other state wage laws.

The DiFiore court credited the skycaps’ wage-related arguments and denied American’s motion.¹⁴ The court acknowledged the ADA’s broad preemptive scope, but observed that the scope of this preemption is “not unlimited” and that state law claims with only an attenuated connection with airline prices, routes or services properly escape preemption. The court perceived a “heightened presumption against preemption in areas of traditional state regulation such as employment law,” and held that “claims brought by airline employees generally escape preemption ... [because] while state employment laws may relate to airline prices, routes, or services, such a relationship is too tenuous to support preemption.” It credited the skycaps’ construction of their state law claims against American as mere “wage claims,” and held that because such claims have “only a very attenuated relationship, if at all, to airline prices, routes, or services,” they were not preempted. As detailed above, these state law claims in DiFiore survived through trial to become the basis for a verdict and judgment against the airline.

Travers v. JetBlue Airways

Unlike the DiFiore case, JetBlue’s motion to dismiss the skycaps’ state statutory and common law claims on ADA express preemption grounds was successful.¹⁵

In arguing for the viability of their state law claims, the Travers plaintiffs posited that the ADA does not preempt certain broad classes of state law claims, including “wage” claims, claims brought by “airline workers,” or claims involving traditional state “police powers.” Moreover, the plaintiffs here argued that their claims challenged only the “manner” in which JetBlue imposed the curbside charge, not the charge itself; therefore, they contended that the charges bore only a “tenuous, remote, or peripheral” relationship with JetBlue’s prices and services. Indeed, the Travers skycaps went so far as to proffer several methods by which they claimed JetBlue could have, and should have, implemented its skycap check-in charge so as to maximize skycap tip income.

JetBlue’s motion emphatically rejected the skycaps’ portrayal of their claims against the airline as run-of-the-mill “wage” claims, arguing that, in fact, the skycaps sought to interpose themselves into the very relationship made sacrosanct by the ADA: the economic relationship between an airline and its passengers. JetBlue observed that the plaintiffs’ arguments regarding broad implied exemptions from the scope of ADA preemption had been foreclosed by the Supreme Court’s decision in Rowe, which rejected such purpose-based “police power” exceptions. JetBlue also argued that there was nothing remote or tenuous about the relationship between the skycaps’ claims and JetBlue’s prices and services; indeed, the airline asserted, by raising state law challenges to the curbside charge and the “manner” of its implementation, the skycaps claimed for themselves a controlling vote in JetBlue’s decisions regarding the services it would offer its passengers, and the prices it would charge for them.

The Travers court, unlike DiFiore, held that the Travers plaintiffs’ state law claims against JetBlue are expressly preempted by the “price” and “service” prongs of the ADA. The court rejected the plaintiffs’ arguments based upon their alleged status as “airline employees,” or upon the alleged nature of their claims as “wage claims” arising under state police powers, determining that such matters are beside the point in considering ADA preemption. Rather, the court held that ADA preemption turns solely “on the effect that the state law has on airline operations, not on the state’s purpose for exacting the law.” Indeed, on this point, the Travers court explicitly rejected the analysis and decision in DiFiore, finding that the decision “focused inappropriately on the purpose, not the effect, of the Tips Law.”

Turning to the relationship between the skycaps’ claims and airline prices and/or services, the Travers court agreed with JetBlue that the connection was direct, not attenuated:

The question here, therefore, boils down to this: Are the plaintiffs’ state law claims “related to” JetBlue’s prices, routes, or services? The answer seems obvious. The plaintiffs seek to impose liability under the Massachusetts statutory and common law claims for JetBlue’s action in setting (and collecting) a price for a service provided to its customers. To avoid liability under the state claims, JetBlue would have to alter its decisions about its price and services. Potential liability under the state claims, therefore, is a means by which the State effectively regulates JetBlue’s price and service with respect to curbside check-in.

The court discounted the plaintiffs’ argument that they challenged only the “manner” of implementation of the fee and cited the skycaps’ suggestion of several tip-maximizing alternatives as an acknowledgment that their “state law claims are a vehicle for regulating JetBlue’s assessment and collection of a fee for the curbside check-in service.”

Finally, the Travers court credited JetBlue’s argument that, notwithstanding the skycaps’ facile labeling of their state law claims as “wage” or “employee” claims, their “broader goal is to compel JetBlue to change its practices with respect to imposition and collection of the curbside check-in fee.” The court held that this goal, and the state law claims by which it was pursued, violated the ADA’s preemption provision. As a result, it dismissed all four of the skycaps’ state law claims.

The Travers plaintiffs’ sole federal claim – filed under the Fair Labor Standards Act – was not subject to JetBlue’s successful preemption motion, and is now the target of JetBlue’s pending summary judgment motion. However, the plaintiffs’ state law claims in Travers – and the putative nationwide skycap class founded upon those claims – are no longer extant, as against JetBlue.

Brown v. United Airlines

The Travers decision may well have marked a turning point in all of the skycap cases. Prior to JetBlue’s successful motion to dismiss in Travers, another district judge had summarily denied United Airlines’ ADA preemption motion in the Brown case, wholly incorporating, without discussion or explanation, “the authority of DiFiore.” United Airlines sought reconsideration and/or interlocutory appeal of that order, highlighting the reasoning of the intervening Travers decision.

On September 22, 2009, the Brown court reversed its earlier course and dismissed the Brown plaintiffs’ state law claims on ADA express preemption grounds, citing the recent Travers decision in support of its analysis. The Brown decision, however, disagreed with Travers that the skycaps’ claims had a significant effect on JetBlue’s “prices,” crediting plaintiffs’ arguments that they challenged only the “manner” in which the curbside fee was imposed, not the fee itself. However, the Brown court agreed with Travers that plaintiffs’ state law claims, if they succeeded, would “dramatically alter the nature of the curbside check-in service,” and accordingly dismissed the claims pursuant to the ADA’s “service” prong. Notably, the Brown court’s reconsidered decision echoed the Travers court’s focus on the effects of the state law upon airline services, rather than the DiFiore court’s focus on the purpose of the state laws and the identities of the plaintiffs asserting them.

Because the plaintiffs in the Brown case against United asserted only state law claims – unlike in the cases against JetBlue and US Airways, where the skycaps also asserted federal claims not subject to the airlines’ preemption motions – the Brown court’s dismissal of the state law claims ended the case in its entirety. The plaintiffs have moved for reconsideration of the court’s recent preemption decision.

Mitchell v. US Airways

Also on September 22, 2009, the same judge summarily granted, via electronic order, US Airways’ ADA preemption motion in Mitchell v. US Airways, directing the parties to the court’s reasoning in the Brown case. At present, one state law claim under the Massachusetts Minimum Wage Law (which was not subject to US Airways’ motion), and two federal claims under the Fair Labor Standards Act, remain pending against the airline.

Going Forward

Most recently, American Airlines moved for reconsideration of the 2007 preemption decision based on the Travers decision, and to vacate the judgment that ensued after the court denied American’s motion to dismiss and allowed the state law claims to proceed to verdict. If the Difiore court were to grant American’s motion, the rift that had existed initially within the District of Massachusetts on the scope and application of express ADA preemption essentially would be mended, and the skycaps’ state law claims against American would – after years of litigation before numerous Massachusetts courts – be dismissed as a matter of law.

These evolving decisions within the District of Massachusetts presage eventual federal appellate court consideration of this important ADA preemption issue. The skycap plaintiffs in the Travers case against JetBlue, or in the Mitchell case against US Airways, have not sought interlocutory appeal to the First Circuit of the dismissal of their state law claims. However, with the recent reinstatement of the judgment against American Airlines in the DiFiore case, and the even more recent judgment against the skycaps in the Brown case, several avenues have now opened for non-interlocutory appellate review of this issue.

In upcoming issues of Centerline, we will provide updates on any key developments in these cases of significance to airlines, aviation contractors and members of the aviation bar.

¹ 504 U.S. 374 (1992). Morales held that the ADA expressly preempted state law that set content and format standards for airline advertising, billboard fare ads, the award of frequent flyer miles, the payment of compensation to passengers who voluntarily yielded their seat in the event of overbooked flights, and other matters.

² 513 U.S. 219 (1995). Wolens determined that the ADA expressly preempted claim for violation of Illinois’ Consumer Fraud Act by American Airlines in connection with its retroactive changes to the terms and conditions of its frequent flyer program. Wolens also made clear that state common laws of general applicability are “other provisions having the force and effect of law” for purpose of ADA express preemption. Id. at 228.

³ Morales, 504 U.S. at 384.

⁴ Id. at 390.

⁵ 128 S. Ct. 989 (2008).

⁶ Id. at 997 (quoting Morales, 504 U.S. at 390).

⁷ 129 S. Ct. 538, 548 (2008).

⁸ 476 F.3d 29, 34 (1st Cir. 2007) (ADA preempts state-law claims brought on behalf of plaintiffs seeking recovery of taxes and other government fees collected during nonrefundable ticket purchases because, as a matter of “freshman-year economics,” such claims would affect, and thus relate to, the airline’s “prices” for its overall fares).

⁹ Air Transport Ass’n of Am., Inc. v. Cuomo, 520 F.3d 218, 223 (2d Cir. 2008); see also, e.g., Smith v. Comair, Inc., 134 F.3d 254, 259 (4th Cir. 1998); Travel All Over the World, Inc. v. Kingdom of Saudi Arabia, 73 F.3d 1423, 1433 (7th Cir. 1996); Hodges v. Delta Airlines, Inc., 44 F.3d 334, 336 (5th Cir. 1995) (en banc).

¹⁰ 1:07-cv-10070-WGY (D. Mass.). The outside contracting company to which American Airlines had outsourced some of its skycap services was also named as a defendant in the case, but the plaintiff skycaps soon withdrew their claims against the contracting company, submitting them to arbitration.

¹¹ 454 Mass. 486, 497 (Mass. 2009).

¹² 2008 Mass. Acts c.80 (effective April 14, 2008). On the issue of the skycaps’ attorneys’ fees, the court has allowed supplemental submissions to bring the total fees claimed up-to-date. As of April 2008, before commencement of proceedings before the Supreme Judicial Court, claimed fees of plaintiffs’ counsel exceeded $300,000.

¹³ Mitchell v. US Airways, Inc., 1:08-cv-10629-NG (D. Mass.); Brown v. United Airlines, 1:08-cv-10689-NG (D. Mass.); Travers v. JetBlue Airways Corporation, 1:08-cv-10730-GAO (D. Mass.). In the cases against JetBlue and US Airways, the plaintiffs named as additional defendants the airlines’ skycap contracting companies serving passengers at Boston’s Logan Airport.

¹⁴ 483 F. Supp. 2d 121 (D. Mass. 2007).

¹⁵ 2009 WL 2242391 (D. Mass. July 23, 2009). Members of Holland & Knight’s aviation team, including the authors of this article, represent JetBlue in Travers.