AVIATION / Passenger claims against airline for negligence and breach of covenant of good faith and fair dealing preempted by Airline Deregulation Act of 1978; contract claim not preempted.

Airline passenger plaintiff unsuccessfully seeks recovery against airline for negligence and breach of covenant of good faith and fair dealing because federal preemption bars those claims in these circumstances.

Benedetto v. Delta Air Lines, Inc., Slip copy, 2013 WL 100055 (U.S. District Court for the District of South Dakota, January 7, 2013). Free copy available here.

On federal preemption of negligence and breach of covenant of good faith and fair dealing, two key points in the court’s holdings:

1. Negligence and breach of covenant of good faith, etc. claim related to the defendant airline’s “prices, routes or service”. 

2. Both claims depend upon and are associated with state law. 

The Airline Deregulation Act of 1978 does not preempt contract claims by passenger against airline. 

Facts:

“Benedetto and his wife, Gail Benedetto, purchased round trip tickets from Delta to travel from Sioux Falls Regional Airport in Sioux Falls, South Dakota to LaGuardia Airport in New York City, New York and then back to Sioux Falls. Benedetto’s initial flight to New York from Sioux Falls took off on September 28, 2011. As required by Delta and the Transportation Security Administration (TSA), Benedetto declared to a Delta ticket agent during his check-in process that he was transporting a pistol in his checked luggage. Following the ticket agent’s instructions, Benedetto placed a red tag into his luggage and was allowed to check in his pistol with his luggage. Delta offered no warning to Benedetto regarding New York’s gun laws. Similarly, Delta did not disclose to Benedetto its policy that required ticket agents at LaGuardia Airport to report anyone with a firearm to the Port Authority of New York–New Jersey. Benedetto then boarded his plane and flew to New York.

On October 2, 2011, Benedetto arrived at LaGuardia Airport to catch his return flight to Sioux Falls. Benedetto again notified a Delta ticket agent that he was traveling with a pistol in his checked luggage. He was again given a red tag to place in his luggage, which he did. The Delta ticket agent then notified the Port Authority Police that there was a passenger who had declared a firearm. Benedetto was arrested by the Port Authority Police for illegal possession of a firearm.After this arrest, Benedetto was turned over to the New York City Police, transported to the Queens Boulevard Precinct, and jailed overnight. Benedetto was charged with a handgun violation and was required to return to New York for legal proceedings after his release.”

8th Circuit Test for Airline Deregulation Act of 1978 Preemption:

“The Eighth Circuit applied a two-part test in determining that the FAAAA preempted the plaintiff’s claims. The court specified that the claims were preempted if they (1) related to a price, route, or service of a carrier, and (2) derived from the enactment or enforcement of state law. Id. at 852. After noting that the Supreme Court has “broadly interpreted the phrase ‘relating to’ as encompassing all state laws having any connection with or reference to the carrier’s rates, routes, or services,” the court concluded that a carrier’s $10 billing charge was part of the carrier’s “operations” and thus related to the carrier’s prices and services. Id. (“While the work to re-bill may have been de minimus, it was still part of the UPS accounting department’s operations to do so.”). Turning to the second part of the test, the court concluded that all of the plaintiff’s claims, with the exception of the contract claim, derived from the enforcement of state law. Id. at 853. The plaintiff’s claims for fraudulent misrepresentation, negligent misrepresentation, and money had and received “all depended upon and are associated with the state of Missouri, through its common law, guiding and policing UPS’s economic policies.” Id. The court noted that the claims “arise outside of the four corners of the contract between UPS and DMI, and are claims that are enlarged or enhanced, and indeed, are dependent upon, Missouri state laws and polices. Accordingly, these claims are preempted.” Id.

The Eighth Circuit next analyzed the plaintiff’s contract claim to determine if it was preempted. The contract claim alleged that the plaintiff “did not agree to pay the fee, and it was a penalty, unlawful, and void as against public policy.” Id. at 854. The court asserted that the “determination of whether such a fee is a penalty, unlawful and against Missouri’s public policy, by definition, requires the court to apply Missouri law.” Id. Therefore, the part of the contract claim that alleged that the fee was a penalty, unlawful, and void as against public policy was preempted. Id. The only claim that was not preempted was the plaintiff’s contract claim, which alleged that the plaintiff did not agree to pay the fee. Id.”