Today’s decision by the United States Supreme Court in Northwest Airlines v. Ginsburg, http://www.supremecourt.gov/opinions/13pdf/12-462_p8k0.pdf, shines a spotlight on the need for a strong federal presence in all aspects of aircraft operations. There cannot be a true “Federal Airspace” if standards of conduct come from a patchwork of state regulations and common law. Even in the presence of a strong federal mandate such as the Airline Deregulation Act, litigants and courts continue to try to chip away at national standards and import state law duties. Unless decisive action is taken quickly to establish a similar, cohesive regulatory context for Unmanned Aircraft Systems, state law will continue pour into the vacuum, creating uncertainty and confusion.
It has been nearly 20 years since the United States Supreme Court last issued an opinion addressing the scope and effect of the Airline Deregulation Act (ADA). During that time, there has been an unfortunate tendency for some courts, such as the Ninth Circuit, to gradually chip away at the scope of federal preemption. Today, the United States Supreme Court reversed that trend, and again reaffirmed the broad scope of ADA preemption.
Today’s decision in involved an airline’s termination of a customer’s membership in a frequent flyer program for allegedly abusing the system. The customer sued, claiming, among other things, that the airline had violated its duty of good faith and fair dealing, and had engaged in negligent and intentional misrepresentation. The United States District Court for the Southern District of California dismissed the claims, finding that they were preempted by the Airline Deregulation Act, as they all related to the airline’s rates and services. On appeal, the Ninth Circuit disagreed, holding that claims for violation of the covenant of good faith and fair dealing were too tenuously connected to airline regulation to warrant preemption. Northwest Airline appealed the ruling.
In reversing the Ninth Circuit, the Supreme Court took a thorough look at the history of airline regulation and Congress’s clear intent of preventing the states from undoing the effects of deregulation. The Supreme Court rejected the plaintiff’s claim that only state statutes and the actions of state regulators were preempted. The Court found that the ADA applies equally to all state common laws and standards. The Court found that penalties imposed on an airline by state common law tort claims have just as great an impact on how the airline conducts its business as a penalty from a regulator. In addition, the Court reaffirmed its earlier holding that frequent flyer programs go to the heart of both the airlines’ rate and service structures. Finally, the court held that because the covenant of good faith and fair dealing is implied in all under Minnesota contracts and cannot be waived by the parties, it is clearly a standard imposed by law and constitutes a state regulation.
With today’s decision, broad Federal preemption will remain the law of the land for the next 20 years. State legislators, believing they can legislate UASs within the boundaries of their states, had better recognize that state boundaries do not extend up!
(Originally posted April 2, 2014)