Petition for Writ of Certiorari — West v. Northwest Airlines, Inc.

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IN THE

Supreme Court of the United States

OCTOBER TERM, 1991

WILLIAM D. WEST,

Petitioner,

V.

NORTHWEST AIRLINES, INC.,

Respondent.

PETITION FOR A WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

Cornish F. Hitchcock

(Counsel of record)

Alan B. Morrison

Public Citizen Litigation Group

2000 P Street, N.W., Suite 700

Washington, D.C. 20036

(202) 833-3000

Candace F. West

West Law Firm

P.O. Box 23

Helena, Mont. 59624

(406) 449-8941

Attorneys for Petitioner

September 1991

QUESTION PRESENTED

Did the court of appeals err in holding that federal

regulations governing the overbocking of airline flights preempt

state law claims for punitive damages even though (1) a

federal statute and the regulations in question expressly

preserve state law remedies, and (2) this Court has consis-

tently refused to find preemption of state law punitive dam-

ages claims in similar situations?

il

PARTIES TO THE CASE

Ail parties to the case appear in the caption. American

Airlines and Trans World Airlines sought leave to file briefs

as amici curiae in the court of appeals in support of respon-

dent Northwest Airlines’ petition for rehearing and sugges-

tion for rehearing in banc, but their motions were denied.

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TABLE OF CONTENTS

Page

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PETITION FOR A WRIT OF CERTIORARI ..........000000.. |

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PERTINENT STATUTES AND REGULATIONS ......... 2

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REASONS FOR GRANTING THE WRIT ....0....cccecceee. 5

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Appendix A: Amended opinion and order of the

United States Court of Appeals for the Ninth

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Appendix B: Opinion and order of the United

States Court of Appeals for the Ninth Circuit

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Appendix C: Order of the United States Court of

Appeals for the Ninth Circuit on rehearing (4

Fras YOGA) oscsenenenseesnesncnenssesnasnsesnnenenteenssosenrnnencsnsacscensones 21a

Appendix D: Judgment of the United States Court

of Appeals for the Ninth Circuit (5 July 1991) ........ 22a

Appendix E: Order of the United States Court of

Appeals for the Ninth Circuit on motion to recall

the mandate (10 September 1991) .............eeeeeeees 24a

Appendix F: Memorandum and Order of the United

States District Court for the District of Montana,

Helena Division (28 September 1989) ...............064 25a

Appendix G: Judgment of the United States District

Court for the District of Montana, Helena Division

(2 Semen TST) asa sseccnccentnennensescssrenanesnns SUM

Appendix H: 14 C.F.R. § 250.9 (1991) ....eesesessesesesseseeeees 34a

TABLE OF AUTHORITIES

Cases: Page:

Abou-Jaoude v. British Airways, Inc., 228 Cal. App.

SG 1137, ZB1 Cal, Rete. 1S (1GG1) oonccescscsesssconsecesscseses 6

California v. ARC America Corp., 490 U.S. 93 (1989) ........ 9

English v. General Electric Co., 110 S. Ct. 2270 (1990) ...... 8

Goodyear Atomic Corp. v. Miller, 486 U.S. 174 (1988) ....... 8

Hillsborough County v. Automated Medical

Laboratories, Inc., 471 U.S. 707 (1985) .........c.c00000 9-10

Illinois Brick Co. v. Illinois, 431 U.S. 720 (1977) .........0.00000- 9

Nader v. Allegheny Airlines, 426 U.S. 290 (1976), on

remand, 626 F.2d 1031 (D.C. Cir. 1980) 0.0.0.2... 7

Silkwood v. Kerr-McGee Corp., 464 U.S. 238 (1984) ........ a

Trans World Airlines, Inc. v. Mattox, 897 F.2d 773

(Sth Cir. 1990), subsequent decision, 924 F.2d

1055 (1991)(mem.), petition for cert. pending

sub. nom. Morales v. Trans World Airlines, Inc.,

Federal Aviation Act, 49 U.S.C. § 1301 et seq.

Section 105(a)(1), 49 U.S.C. § 1305(a)(1) «0... 2,4

Section 1106, 49 U.S.C. § 1506. .........cccccccosecccccsss. 2, 4,6

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IN THE

Supreme Court of the United States

OCTOBER TERM, 1991

No. 91-_

WILLIAM D. WEST,

Petitioner,

V.

NORTHWEST AIRLINES, INC.,

Respondent.

PETITION FOR A WRIT OF CERT:ORARI TO

THE UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

OPINIONS BELOW

The unpublished opinion and order of the United States

District Court for the District of Montana appears in the

appendix to this petition (“Pet. App.”) at 25a-3la. The

United States Court of Appeals for the Ninth Circuit issued

two opinions in this case: The first opinion, which was

withheld from publication pending a ruling on Northwest’s

rehearing petition, appears at Pet. App. 12a-2%a. The sec-

ond, which amended the first and is the suvject of this

petition, appears at Pet. App. la-11a and is reported at 923

F.2d 657 (1991). An order denying rehearing of that amended

opinion appears at Pet. App. 21a, and the court of appeals’

judgment appears at Pet. App. 22a.

JURISDICTION

The court of appeals’ judgment was initially entered on

11 September 1990. Respondent's rehearing petition was

granted in part, and an amended judgment was entered on 5

February 1991. Petitioner then filed a timely rehearing

petition with the panel, which was denied on 4 June 1991 (Pet.

App. 21a). By an order dated 21 August 1991 Justice O'Con-

nor extended the time for filing this petition by 30 days to and

including 3 October 1991. This Court has jurisdiction pursu-

ant to 28 U.S.C. § i254(1).

PERTINENT STATUTES AND REGULATIONS

Section 105(a)(1) of the Federal Aviation Act, as amended,

49 U.S.C. § 1305, states:

[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,

regulation, standard or other provision having the

force and effect of law relating to rates, routes, Or

services of any air carrier having authority under

Title IV of this chapter to provide air transporta-

uon.

Section 1106 of the Federal Aviation Act, as amended,

49 U.S.C. § 1506, states:

Nothing contained in this Act shall in any way

abridge or alter the remedies now existing at com-

mon law or by statute, but the provisions of this Act

are in addition to such remedies.

The pertinent part of section 250.9 of Title 14 of the

Code of Federal Regulations (1991), which deals with over-

booking of airline flights, appears below. The full text is set

forth as Appendix H to this petition.

PASSENGER’S OPTIONS

Acceptance [by an involuntarily bumped passen-

ger] of the compensation [specified in this rule] may

relieve (name of air carrier) from any further liabil-

ity to the passenger caused by its failure to honor

the confirmed reservation. However, the passen-

ger may decline the payment and seek to recover

damages in a court of law or in some other manner.

STATEMENT OF THE CASE

In October 1986 petitioner William D. West was invol-

untarily “bumped” from an oversold flight operated by re-

spondent Northwest Airlines. Mr. West was travelling on a

non-refundable fare which did not allow him any flexibility to

change his travel plans. Between the day he made his reser-

vation and the day of the flight, however, Northwest switched

from a 727 to a smaller DC-9 on the route iri question, thus

increasing the odds that he would be bumped, but the airline

did not alert Mr. West to this change. (Pet. App. 4a-Sa).

When Mr. West arrived at the gate, the smaller aircraft

was indeed oversold. Northwest offered him $198 in “denied

boarding compensation,” a form of liquidated damages which

federal rules require an airline to offer involuntarily bumped

passengers. 14 C.F.R. § 250.5. Mr. West rejected the offer,

choosing instead to exercise an option specified in those

regulations, viz., pursuing remedies that are available under

state law (Pet. App. 27a). See 14 C.F.R. § 250.9(b).

In May 1987 Mr. West filed suit against Northwest in

Montana state court, and the case was removed to federal

district court based on diversity of citizenship pursuant to 28

U.S.C. §§ 1332 and 1441. Mr. West alleged that his bumping

was unfair discrimination under federal law and also that

Northwest had breached an implied covenant of good faith

and fair dealing, in violation of Montana law (Pet. App. 5a).

Northwest moved for summary judgment, and the dis-

trict court granted its motion. Ina ruling not challenged on

appeal, the court rejected Mr. West’s federal anti-discrimina-

tion claim. The court expressed no view on the merits of his

state law claim, however, finding that it was expressly preempted

by section 105(a){1) of the Federal Aviation Act, 49 U.S.C. §

1305(a)(1), which preempts state laws “relating to rates.

routes, or services.” The court read this statute broadly,

holding that Congress “intended to preempt all state statutes

and common lawrules which affect rates or services involving

air travel” (Pet. App. 30a).

Mr. West appealed, and the Ninth Circuit reversed on 11

September 1990 (Pet. App. 12a-20a). The court of appeals

rejected Northwest’s express preemption claim. holding that

section 105 “preempts claims only when the underlying stat-

ute or regulation itself relates to airline services” (Pet. App.

18a). Thus, state laws which single out airlines or trans-

portation companies for special treatment are preempted,

but not a generally applicable common law claim such as Mr.

West’s, which “simply imposes a duty on all persons entering

into contracts to act with good faith and fair dealing” (Pet.

App. 19a).

The Ninth Circuit also rejected Northwest’s implied

preemption claim, noting that section 105 co-exists with

section 1106 of the Federal Aviation Act, 49 U.S.C. § 1506,

which has been in effect since 1938 and which expressly

preserves state common law and statutory remedies (Pet.

App. 19a). The court also found no conflict preemption,

noting that federal overbooking rules “specifically contem-

plate customers choosing between liquidated damages or

state common law remedies” (Pet. App. 20a).

Northwest filed a rehearing petition, which the panel

granted in part on 5 February 1991 in an amended opinion

which affirmed in part and reversed in part (Pet. App. la-

lla). The amended opinion was identical to the earlier

opinion insofar as it allowed Mr. West’s claim for com-

pensatory damages to proceed (Pet. App. 4a-10a). The court

reversed itself, however, on an issue which had not been

briefed or argued (even on rehearing). In a brief paragraph

added at the end of the opinion, the court held that Mr. West’s

punitive damages claim was preempted because it conflicted

with federal overbooking rules. The court stated that a

punitive damages award would punish Northwest for engag-

ing in overbooking, which the federal rules expressly allow

(Pet. App. 10a).!

Mr. West filed a timely petition for panel rehearing of

the amended opinion, noting that his punitive damages claim

focused on Northwest’s failure to provide adequate notice,

not the act of overbooking. The panel denied his petition by

an order dated 4 June 1991 (Pet. App. 21a).?

REASONS FOR GRANTING THE WRIT

THE DECISION BELOW CONFLICTS WITH

DECISIONS OF THIS COURT AND RAISES

IMPORTANT ISSUES FOR REVIEW.

In holding that Mr. West could pursue his common law

claim for compensatory damages, the Ninth Circuit read

section 105 of the Federal Aviation Act as having a narrower

| The opinion also noted that no judge had requested a vote on

Northwest’s suggestion of rehearing in banc (Pet. App. 3a).

2 That order was ambiguously worded in that it also reversed the

eartier decision to grant Northwest’s rehearing petition, but

failed to specify whether that meant that the punitive damages

discussion was being vacated. A subsequent order made it clear

that the punitive damages holding was not vacated (Pet. App.

23a).

preemptive effect than did the Fifth Circuit in Trans World

Airlines, Inc. v. Mattox, 897 F.2d 773 (1990), which held that

section 105 preempts state laws seeking to regulate unfair

competitive practices insofar as they apply to airlines. A

certiorari petition seeking review in the Fifth Circuit case,

based in part on these conflicting readings of section 105, is

currently pending sub nom. Morales v. Trans World Airlines,

Inc., No. 90-1604.3

Because the Ninth Circuit’s reading of section 105 favors

Mr. West, he does not seek review of that ruling. Instead, this

petition addresses only the ruling that Mr. West’s claim for

punitive damages is preempted, which should be reviewed

because, as we now show, it conflicts with applicable deci-

sions of this Court and raises important questions about the

availability of federal and state remedies to airline passen-

gers.

The Ninth Circuit’s reasoning on punitive damages was

as follows: “[F]ederal regulations contemplate overbooking

as an acceptable practice so long as passengers receive

compensation. Accordingly, any scheme that punishes the

practice would be inconsistent with applicable federal law.

West’s claim for punitive damages is therefore preempted”

by federal law. Pet. App. 10a (emphasis in original). This

3 Although the Ninth Circuit read section 105 more narrowly

than did the Fifth Circuit, the decision below may still have a

broader preemptive effect than Congress intended. The decision

fails to recognize that many state law remedies treat airlines and

other transportation companies differently than other industries

because of their status as common carriers, and at least one court

has read the express preemption analysis in the decision below

as preempting such remedies. Abou-Jaoude v. British Airways,

Inc., 228 Cal. App. 3d 1137, 281 Cal. Rptr. 150 (1991). That

result appears to conflict with Congress’s decision to preserve

common law remedies for airline passengers, see 49 U.S.C. §

1506, reprinted at p. 2, supra, but it is not an issue presented by

this petition because it does not affect Mr. West.

holding should be reviewed because it misreads federal law

and conflicts with applicable decisions of this Court.

At the outset, the Ninth Circuit’s reading of the over-

booking rules is wrong because those rules do not guarantee

that bumped passengers will “receive compensation” under

state law. The rules merely gives them the option of pursuing

any state law claims with no assurance of success on the

merits. 14 C.F.R. § 250.9(b). Indeed, in the leading case of

Nader v. Allegheny Airlines, 426 U.S. 290 (1976), the bumped

passenger ended up recovering nothing on his common law

claim. See 626 F.2d 1031 (D.C. Cir. 1980).4

The Ninth Circuit’s preemption analysis is at odds with

Nader, which drew a crucial distinction that was overlooked

here. In Nader, the passenger sought to litigate a common law

claim of fraudulent misrepresentation, which rested not on

the theory that overbooking was unlawful per se, but on the

tact that Allegheny failed to disclose its practice adequately.

426 US. at 295-96, 305-06. Had the plaintiff in Nader pre-

vailed on a claim for compensatory or punitive damages,

Allegheny would have been free to continue overbooking,

but its method of disclosing that practice would be affected.

So too here, the focus of Mr. West’s claim is not over-

booking, but a lack of adequate notice and fair dealing by

Northwest, when it shifted to a smaller aircraft on the affected

route after Mr. West bought a non-refundable ticket and

failed to advise him of this change, which significantly raised

the odds that he would be bumped. Here, as in Nader, federal

overbooking rules say nothing about an airline’s obligations

4 Indeed, if federal overbooking rules really did impose a Strict

liability regime under which passengers must “receive compen-

sation,” regardless of whether they pursue a state or federal

remedy, then the Ninth Circuit should have remanded this case

with instructions to enter summary judgment against Northwest

with respect to liability, leaving only the amount of Mr. West’s

actual damages to be determined.

in this situation, and so an award of punitive damages would

not “punish” Northwest’s decision to oversell its flights, but

its failure to pick up the telephone and tell Mr. West of a

material change affecting his reservation.

The decision below also conflicts with this Court’s cases

holding that punitive damages are not preempted under

other, similar laws. The case which best illustrates this point

is Silkwood v. Kerr-McGee Corp., 464 U.S. 238 (1984), where

a worker at a federally-reguiated nuclear facility was con-

taminated by radiation exposure. Her estate sought compen-

satory and punitive damages under state tort law and was met

with arguments that punitive damages were preempted by

federal laws that regulated nuciear safety and imposed civil

penalties on companies which violate them.

This Court rejected these preemption claims while ac-

knowledging a “tension between the conclusion that safety

regulation is the exclusive concern of the federal law and the

conclusion that a State may nevertheless award damages

based on its own law of liability.” /d. at 256. The Court was

not persuaded to find preemption based on the fact that a

nuclear facility would have to pay civil penalties for violating

federal standards as well as state-imposed punitive damages

based on the same incident. Such a result “would not appear

to be physically impossible. Nor does exposure to punitive

damages frustrate any purpose of the federal remedial scheme.”

Id. at 257. Since Silkwood, this Court has rejected similar

claims that federal laws preempt state remedies governing

the same conduct. English v. General Electric Co., 110 S. Ct.

2270, 2279 (1990); Goodyear Atomic Corp. v. Miller, 486 U.S.

174, 186 (1988).

If anything, the tension between state and federal law

was much greater in Silkwood than it is here. The federal

overbooking rule creates a federal remedy in the form of

liquidated damages and gives bumped passengers a choice

between that remedy and any state remedies. Thus here,

unlike the situation in Silkwood, an airline cannot be liable

under both schemes for the same incident. Nor, as we

explained above, would an airline’s exposure to punitive

damages in the current situation frustrate the policy decision

embodied in the federal rule, namely, that overbooking is “an

acceptable practice” (Pet. App. 10a). An award of punitive

damages would punish not overbooking, but Northwest’s fail-

ure to disclose changed circumstances to its customers who

hold confirmed reservations and a non-refundable ticket on

a flight.

The decision below also conflicts with California v. ARC

Amentca Corp., 490 U.S. 93 (1989), where four states sued

cement producers for pricefixing in violation of federal and

State antitrust laws. The federal claim was barred under JIli-

nots Brick Co. v. Illinois, 431 U.S. 720 (1977), which denied re-

covery to indirect purchasers such as the four states. This

Court held, however, that federal law did not preempt state

antitrust laws which allow indirect purchasers to recover

treble or punitive damages if they prevail. ARC America thus

allows state law claimants to obtain punitive damages under

state law even if the conduct they challenge is sanctioned by

federal law, and the Court rejected arguments that this result

conflicts with the federal goals identified in J/linois Brick. Id.

at 102-06. So too here, allowing Mr. West to pursue a state

law claim for punitive damages does not interfere with North-

west’s ability to oversell its flights or the operation of federal

overbooking rules.

Apart from this line of cases, the Ninth Circuit’s preemp-

tion analysis conflicts with Hillsborough County v. Automated

Medical Laboratories, Inc., 471 U.S. 707 (1985), which re-

fused to give preemptive effect to federal rules when no such

intent was expressed by the agency, even though the rules

were comprehensive in scope. Noting that agencies can deal

with issues in a more detailed way than Congress, the Court

stated: “[W]e can expect that they will make their intentions

clear if they intend for their regulations to be exclusive. Thus,

if an agency does not speak to the question of pre-emption,

10

we will pause before saving that the mere volume and com-

plexity of its regulations indicate that the agency did in fact

intend to pre-empt.” /d. at 718.

Here, the Ninth Circuit did not pause, but proceeded to

leap (without briefing or argument) to a conclusion that

federal overbooking rules preempt punitive damages claims.

Its opinion cited no evidence that federal regulators ever

intended these rules to have a preemptive intent, and we have

uncovered none in the nearly 30 years that the Civil Aeronau-

tics Board and Department of Transportation (which suc-

ceeded the Board in 1985) have been regulating this practice.

Finally, the question presented here is important enough

to warrant review because it implicates not only the right of

the states to provide remedies for their citizens, but also the

policy choice made by the federal government to give bumped

passengers full disclosure of their rights and their options in

that situation.

Federal overbooking rules place a premium on disclo-

sure. Airlines are required to tell passengers that they must

solicit volunteers before anyone is involuntarily bumped,

they must inform potential volunteers about their options,

and they must advise involuntarily bumped passengers of

their choice between accepting the liquidated damages speci-

fied in these rules or taking their chances by pursuing any

available state law claim. See 14 C.F.R. § 250.9(b) (Pet. App.

34a-36a). The limitation on punitive damages which the

Ninth Circuit discovered in this case is not mentioned in any

of the disclosures which airlines must make to their passen-

gers, a result which conflicts with the “full disclosure” policy

embodied in these rules.°

5 Thus, passengers who rely on the federally mandated disclo-

sures which must appear on every ticket and at every airline

ticket counter (see 14 C.F.R. § 250.11) may be misled into fore-

going a liquidated damages award which is offered on the spot

because they think that they can pursue state law claims for

punitive damages which the decision beluw has foreclosed.

11

CONCLUSION

For these reasons the petition should be granted.

September 199]

Respectfully submitted,

Cornish F. Hitchcock

(Counsel of record)

Alan B. Morrison

Public Citizen Litigation Group

2000 P Street, N.W., Suite 700

Washington, D.C. 20036

(202) 833-3000

Candace F. West

West Law Firm

P.O. Box 23

Helena, MT 59624

(406) 449-894]

Attorneys for Petitioner

la

APPENDIX A

FOR PUBLICATION

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

WILLIAM D. West, No. 89-35820

Plaintiff-Appellant, D.C No.

v. : CV 87-63-CCL

NORTHWEST AIRLINES, INC., ORDER AND

Defendant-Appellee. AMENDED

OPINION

Appeal from the United States District Court

for the District of Montana

Charles C. Lovell, District Judge, Presiding

Argued and Submitted

July 13, 1990—Seattle, Washington

Filed September 11, 1990

Amended February 5, 1991

Before: Procter Hug, Jr., Dorothy W. Nelson and

Melvin Brunetti, Circuit Judges.

Opinion by Judge Nelson

SUMMARY

Torts

In an amended opinion affirming in part, reversing in part

and remanding a district court grant of summary judgment,

the court of appeals held that while an airline passenger’s

state claim against an airline for punitive damages was pre-

1317

2a

1318 WeEST V. NORTHWEST AIRLINES

empted by the FAA, his claim for compensatory damages for

the alleged breach of the covenant of good faith and fair deal-

ing under state law was not.

Appellant William D. West purchased a ticket to travel on

Northwest Airlines, Inc. (Northwest). Northwest overbooked

West's flight and refused to allow West to board the plane.

West brought an action against Northwest for breach of the

covenant of good faith and fair dealing under state law and

for unjust discrimination under section 404(b) of the FAA,

seeking both compensatory and punitive damages. The dis-

trict court granted Northwest’s motion for summary judg-

ment on both ciaims.

{1] The court disagreed that in section 1305(a)(1) of the

FAA, Congress expressly preempted all state statutes and

common law rules that affect rates or services involving air

travel. [2] That section only provides that no state shall enact

or enforce any law, rule, regulation, standard, or other provi-

sion having the force and effect of law relating to rates, routes.

or services of any air carrier. [3] The plain meaning of

“services” clearly included services provided to customers

such as the boarding services at issue here. [4] In addition, the

Ninth Circuit has previously held that regulation of air carrier

seating policies involved regulation of services within the

meaning of that section. Thus, Northwest's passenger ser-

vices, including boarding, are airline services within the

meaning of section 1305. [5] However, the court found that

section 1305(a)(1) preempts claims only when the underlying

statute or regulation itself relates to airline services, regard-

less of whether the claim arises from a factual setting involv-

ing airline services. Thus, state laws that merely have an

effect on airline services were not preempted. [6] In this case

state law simply imposed a duty on all persons entering into

contracts to act with good faith and fair dealing. The fact that

this duty was applicable to airlines as well as the general pub-

lic did not invoke federal preemption. [7] Section 1506 of the

FAA demonstrates Congress’ intent not to preempt all com-

3a

WEST Vv. NORTHWEST AIRLINES 1319

mon law remedies. Accordingly, the court found that Con-

gress did not impliedly preempt West’s state law claim for

compensatory damages under the FAA. [8] The court dis-

agreed with Northwest’s assertion that West’s claim was pre-

empted due to a conflict with federal !aw. [9] Federal airline

overbooking regulations specifically contemplated customers

choosing between liquidated damages or state common law

remedies. [10] However, any scheme that punishes the prac-

tice of airline overbooking was inconsistent with federal law.

Accordingly, West’s state claim for punitive damages was

preempted by the FAA.

COUNSEL

Cornish F. Hitchcock, Public Citizen Litigation Group,

Washington, D.C., for the plaintiff-appellant.

Jon Metropoulos, Browning, Kaleczyc, Berry & Hoven,

Helena, Montana, for the defendant-appellee.

ORDER

After review of appellee's petition for rehearing and sugges-

tion for rehearing en banc, the petition for rehearing is

granted for the purpose of amending the opinion as attached

hereto.

The members of the panel that decided this case voted to

otherwise deny the petition for rehearing and to reject the

suggestion for rehearing en banc.

The full court has been advised of the suggestion for en

banc rehearing and no judge of the court has requested a vote

on the suggestion for rehearing en banc. Fed. R. App. P.

35(b).

4a

1320 WEST Vv. NORTHWEST AIRLINES

The petition for rehearing is otherwise DENIED and the

suggestion for rehearing en banc is REJECTED.

OPINION

NELSON, Circuit Judge:

Plaintiff-appellant, William D. West (West) purchased a

ticket to travel on Northwest Airlines, Inc., (Northwest) from

Great Falls, Montana to Arlington, Virginia. Northwest over-

booked West’s flight and refused to allow West to board the

plane. West brought this action against Northwest for breach

of the covenant of good faith and fair dealing under Montana

law. The district court granted summary judgment for Norih-

west on the ground that West's claim was preempted by the

Federal Aviation Act. We affirm in part and reverse and

remand in part to the district court to determine if West has

a meritorious claim for compensatory damages under Mon-

tana law.

FACTUAL AND PROCEDURAL BACKGROUND

On September 3, 1986, William D. West purchased a ron-

refundable, non-changeable ticket to travel on Northwest

from Great Falls, Montana to Arlington, Virginia. His flight

was scheduled to depart Great Falls at 1:30 p.m. and to arrive

in Arlington at 9:00 p.m. on October 7, 1986. West confirmed

his scheduled departure with his travel agent on October 6,

1986.

Between the date of purchase and the scheduled departure

date, Northwest decided to reduce the size of its aircraft from

a Boeing 727, which carries 146 passengers, to a DC 9 air-

craft, which carries 78 passengers. Northwest did not inform

West or any of Northwest’s sales agents of its decision.

West Vv. NORTHWEST AIRLINES 1321

When West arrived at the check-in gate, a Northwest

employee informed him the flight was overbooked. North-

west attempted to make room for West and other passengers

by requesting volunteers to deplane in exchange for certain

payments. However, only three people accepted, and West

could not obtain a seat on this flight.

Northwest then offered West an alternative flight that

would arrive at Dulles Airport, which is near West's destina-

tion, at 3:00 a.m. the next morning. West declined this alter-

native flight because of its inconvenience and rescheduled his

flight to Arlington for approximately two weeks later.

West subsequently filed claims in state court for breach of

the covenant of good faith and fair dealing under Montana

law and for unjust discrimination under section 404(b) of the

Federal Aviation Act (FAA), seeking both compensatory and

punitive damages. Northwest successfully petitioned the

United States District Court to remove the case to the federal

court on the basis of diversity of citizenship.

Northwest then moved for summary judgment on the

grounds that the period for bringing a claim under Section

404(b), upon which West based his federal claim, had expired

and that West’s state claim was preempted by the FAA. On

September 28, 1989, the district court granted Northwest's

motion for summary judgment on both of the above grounds.

West timely appealed only the issue of whether the district

court erred in dismissing West’s state law claim on the ground

that it was preempted by the FAA.

DISCUSSION

I. Standard of Review

A grant of summary judgment is reviewed de novo to deter-

mine, viewing the evidence in the light most favorable to the

nonmoving party, whether there existed any genuine issue of

1322 WEST Vv. NORTHWEST AIRLINES

material fact and whether the district court correctly applied

the relevani substantive law. Tzung v. State Farm Fire &

Casualty Co.. 873 F.2d 1338, 1339-40 (9th Cir. 1989).

I]. Federal Preemption

Northwest argues that the federal government's role 1n reg-

ulating the air transportation industry under the FAA pre-

empts Montana’s common law duty to deal fairly and in good

faith. In examining this issue, we note that when Congress

legislates in a field traditionally occupied by the states, such

as common law tort and contract remedies in business rela-

tionships, there is a presumption against finding pre-emption

of state law. See California v. ARC America Corp, 109 S. Ct.

1661. 1665 (1989).

There are three ways in which preemption may occur.

“Congress may preempt state law expressly by se stating in

explicit terms on the face of the statute.” Motor Vehicle Mfrs.

Ass'n v. Abrams, 899 F.2d 1315, 1318 (2nd Cir. 1990) (inter-

nal quotations omitted). Second, “when Congress intends

that federal law occupy a given field. state law in that field is

pre-empted.” ARC America Corp, 109 S. Ct. at 1665. Finally.

even if Congress has not occupied the field, “state law is nev-

ertheless pre-empted to the extent it actually conflicts with

federal law, that is, when compliance with both state and fed-

eral law is impossible.” Jd.

A. Explicit Preemption

{1] The district court found that Congress in the FAA

expressly preempted West's state law claims. Specifically the

court held that in section 1305(a)(1), “Congress intended to

preempt all state statutes and common law rules which affect

rates or services involving air travel.” We disagree, finding

that Congress did not expressly preempt West's state law

claim.

7a

WEST Vv. NORTHWEST AIRLINES 1323

j2] Section 1305(a)(1) of the FAA provides that no state

“shall enact or enforce any law, rule, regulation, standard, or

other provision having the force and effect of law relating to

rates, routes, or services of any air carrier.” 49 U.S.C.

§ 1305(a)(1) (App. Supp. V 1987) (emphasis added).

Appellant asserts first that section 1305 does not apply

because “services” does not include airline boarding practices

but is limited in meaning to a description of the types of oper-

ations which airlines offer, such as scheduled passenger ser-

vice, scheduled cargo service, mail service and other

specialized services. Thus, under West’s reading, section

1305 would preempt state law only when the state law

affected the types of services offered. We reject this interpre-

tation.

[3] “The primary rule of statutory construction is to ascer-

tain and give effect to the plain meaning of the language

used.” Hughes Air Corp. v. Public Utilities Com’n, 644 F.2d

1334, 1337 (9th Cir. 1981); Watt v. Alaska, 451 U.S. 259, 265

(1981). In this case, we believe that the plain meaning of

“services” clearly includes services provided to customers

such as the boarding services at issue here. If Congress had

intended to limit the word “services” to something other than

its common usage, it could easily have used the words “types

of services” rather than “services”.

{4] Moreover, the Ninth Circuit has already rejected West’s

definition of services in Hingson v. Pacific Southwest Airlines,

743 F.2d 1408, 1415 (9th Cir. 1984). In Hingson the court

held that regulation of air carrier seating policies involved

regulation of services within the meaning of section 1305(a)

(1). Id. Thus, the court did not define “services” as merely

types of services such as cargo or air ambulance but defined

it to include services to customers. Following Hingson, we

find that Northwest’s passenger services, including boarding,

are airline services within the meaning of section 1305.

1324 WEST V. NORTHWEST AIRLINES

[5] However, while we agree with Northwest that “services”

include boarding policies, we disagree with Northwest and

the district court that “law[s] ... relating to airline services”

encompasses all state laws that affect airline services, how-

ever tangentially. This interpretation of § 1305(a)(1) would

unduly expand preemption and ignore our presumption

against federal preemption in this traditional state law area.

instead. we find that Section | 305(a)(1) preempts claims only

when the underlying statute or regulation itself reiates to air-

line services, regardiess of whether the claim arises from a

factual setting involving airline services. Thus, state laws that

merely have an effect on airline services are not preempted.

See People of State of N.Y. ex rel. Abrams v. Trans World Air-

lines, Inc., 728 F. Supp. 162 (S.D.N.Y. 1989).

Our analysis is consistent with Ninth Circuit case law. In

Hingson, a blind person who was not permitted to sit in cer-

tain seats during a Pacific Southwest Airlines (PSA) flight

brought suit against PSA. Hingson alleged intentional inflic-

tion of emotional distress and a claim arising under Califor-

nia Civil Code Section 54.1, which required that

handicapped person be given “full and equal access” to

accommodations of all airplanes. Hingson, 743 F.2d at 1411,

1415. The Ninth Circuit held that Hingson’s claims under

California Civil code Section 54.1 were preempted by section

1 305(a)(1). The court reasoned that Section 54.1 was a regula-

tion directly relating to services within the meaning of Sec-

tion 1305(a)(1). Jd. at 1415. The court, however, held that

Hingson’s claim for intentional infliction of emotional dis-

tress was not preempted. /d. This decision is consistent with

our reading of section 1305(a)(1). Hingson’s emotional dis-

tress claim did involve the airline’s passenger services, how-

ever, the underlying law, the tort of intentional infliction of

emotional distress, was not addressed exclusively to airline

service. Thus, § 1305(a)(1) did not preempt.

Likewise, the court in Air Transport Ass'n v. P.U.C., 833

F.2d 200 (9th Cir. 1987), cert. denied, 487 U.S. 1236 (1988),

9a

WEST Vv. NORTHWEST AIRLINES 1325

found that preemption of 1305(a)(1) did not extend to laws

that only affected airlines without being direct!y related to

their services. In Air Transport Ass'n, airlines and airline

trade associations challenged a California regulatio’ prohib-

iting telephone customers from surreptitiously 0° -rhearing

or recording conversations. The airlines wished to monitor

conversations between their reservation agents and the pub-

lic. Air Transport Ass'n, 833 F.2d at 201-02. The court stated

that the California regulation was not preempted because

“[t]he type of telephone operation utilized by the airlines is

not peculiar to airlines,” and the court could find no evidence

that Congress intended to preempt state regulation of utilities

when they affected airlines. Jd. at 207.

{6} Similarly, in the instant case state law simply imposes a

duty on all persons entering into contracts to act with good

faith and fair dealing. The fact that this duty is applicable to

airlines as well as the general public does not invoke federal

preemption. We find, therefore, that West’s siate law claims

are not expressly preempted by the FAA.

B. Implied Preemption

[7] In order to show that the FAA impliedly preempts

West's claim, Northwest must show that Congress intended

that federal law occupy the specific field covered by state law.

ARC America Corp., 109 S. Ct. at 1665. Section 1506 of the

FAA, however, clearly indicates that Congress had no such

intention. Section 1506 reads: “Nothing contained in this Act

shall in any way abridge or alter the remedies now existing at

common law or by statute, but the provisions of this Act are

in addition to such remedies.” 49 U.S.C. § 1506 (App. 1982).

In force since 1938, this section was specifically retained

when Congress enacted the Airline Deregulation Act of 1978

which included the preemption section 1305(a)(1). Section

1506 demonstrates Congress’ intent not to preempt all com-

mon law remedies.’ Accordingly, we find that Congress did

‘Additionally, federal regulations specifically permit a passenger to pur-

sue damages under available state law if they are bumped, 14 C.F.R.

10a

1326 WesT Vv. NORTHWEST AIRLINES

not impliedly preempt West’s state law claims under the

FAA.

C. Conflict Preemption

{8] Finally. Northwest asserts that West's claim is pre-

empted due to a conflict with federal law. Specifically, North-

west argues that it could not comply both with the federal

regulations governing boarding and state common law. We

disagree.

[9] Federal airline overbooking regulations specifically con-

template customers choosing between liquidated damages or

state common law remedies. 14 C.F.R. § 250.9(b) (1990).

Moreover, the Supreme Court has held that common law

remedies in overbooking situations do not conflict with ted-

eral priority rules for boarding passengers and providing

compensation to bumped passengers. See Nader v. Allegheny

Airlines, 426 U.S. 290 (1976). Permitting a bumped customer

to forgo liquidated damages 1n order to pursue a common law

remedy might result in different damage awards, but it would

not expose Northwest to liability more than once nor would

it prevent Northwest from overbooking. Northwest has

offered us no reason to believe that requiring it to conform to

Montana’s duty of good faith and fair dealing would prevent

it from following federal regulations.

{10} However, our holding is limited to West's claim for

compensatory damages and does not embrace its punitive

counterpart. As stated above, federal regulations contemplate

overbooking as an acceptable practice so long as passengers

receive compensation. Accordingly, any scheme that punishes

the practice would be inconsistent with applicable federal

law. West’s claim for punitive damages is therefore pre-

empted by the FAA.

§ 250.9(b) (1990); this further suggests that Congress had no intention of

preempting state common law remedies.

lla

WEsT Vv. NORTHWEST AIRLINES 1327

CONCLUSION

For the foregoing reasons, we find that while West’s state

claim for punitive damages is preempted by the FAA, his

claim for compensatory damages is not. In holding that this

portion of West’s state claim for breach of the covenant of

good faith and fair dealing is not preempted, we are not

deciding whether West has a valid claim. We simply hold that

the FAA does not entirely preempt West's state claim. We

leave it to the district court to resolve all remaining issues on

remand.

AFFIRMED IN PART AND REVERSED AND

REMANDED IN PART.

12a

APPENDIX B

FOR PUBLICATION

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

WILLIAM D. West,

Plaintiff-Appellant, No. 89-35820

Vv D.C. No.

| F CV 87-63-CCL

NORTHWEST AIRLINES, INC.,

Defendant-Appellee. OPINION

Appeal from the United States District Court

for the District of Montana

Charles C. Lovell, District Judge, Presiding

Argued and Submitted

July 13, 1990—Seattle, Washington

Filed September 11, 1990

Before: Procter Hug, Jr., Dorothy W. Nelson and

Melvin Brunetti, Circuit Judges.

Opinion by Judge Nelson

SUMMARY

Aviation/ Jurisdiction

Reversing a judgment, the court held that a state law claim

against an airline for overbooking on a theory of breach of

covenant of good faith and fair dealing was not preempted by

the Federal Aviation Act.

Appellant William West purchased a ticket to travel on a

Northwest Airlines flight. The airline, without informing him

10989

13a

10990 WEST Vv. NORTHWEST AIRLINES

or its sales agents in advance, reduced the size of the aircraft

used for the flight. When West arrived at the check-in gate, he

was told the flight was overbooked. West was not able to

obtain a seat and later filed a state court action for breach of

the covenant of good faith and fair dealing under state law.

The case was removed to federal court, and the court granted

summary judgment for Northwest. West appealed on the

issue of whether the state law claim was preempted by the

FAA.

{1] The district court held that Congress intended to pre-

empt ali state statutes and common law rules affecting rates

Or services involving air travel, under the FAA (49

§ 1305(aX{1)). [2] Section 1305(aX1) preempts claims only

when the underlying statute or regulation itself relates to air-

line services; state laws that merely have an effect on airline

services are not preempted. [3] In this case, the state law sim-

ply imposed a duty on all persons entering into contracts to

act with good faith and fair dealing. Therefore, West’s state

law claims were not preempted by FAA.

[4] The FAA clearly states that Congress did not intend to

alter or abridge common law remedies and therefore it cannot

be said that West’s state law claims were impliedly pre-

empted.

[5] Northwest also asserted that West’s claim was pre-

empted because of a conflict with federal law but [6] made no

showing that conforming to the state law duty of good faith

and fair dealing would prevent it from following federal regu-

lations.

COUNSEL

Cornish F. Hitchcock, Public Citizen Litigation Group,

Washington, D.C., for the plaintiff-appellant.

l4a

WeEsT Vv. NORTHWEST AIRLINES 10991

Jon Metropoulos, Browning, Kaleczyc, Berry & Hoven,

Helena, Montana, for the defendant-appellee.

OPINION

NELSON, Circuit Judge:

Plaintiff-appellant, William D. West (West) purchased a

ticket to travel on Northwest Airlines, (nc., (Northwest) from

Great Falls, Montana to Arlington, Virginia. Northwest over-

booked West’s flight and refused to allow West to board the

plane. West brought this action against Northwest for breach

of the covenant of good faith and fair dealing under Montana

law. The district court granted summary judgment for North-

west on the ground that West’s claim was preempted by the

Federal Aviation Act. We reverse and remand to the district

court to determine if West has a meritorious claim under

Montana law.

FACTUAL AND PROCEDURAL BACKGROUND

On September 3, 1986, William D. West purchased a non-

refundable, non-changeable ticket to travel on Northwest

from Great Falls, Montana to Arlington, Virginia. His flight

was scheduled to depart Great Falls at 1:30 p.m. and to arrive

in Arlington at 9:00 p.m. on October 7, 1986. West confirmed

his scheduled departure with his travel agent on October 6,

1986.

Between the date of purchase and the scheduled departure

date, Northwest decided to reduce the size of its aircraft from

a Boeing 727, which carries 146 passengers, to a DC 9 air-

craft, which carries 78 passengers. Northwest did not inform

West or any of Northwest’s sales agents of its decision.

When West arrived at the check-in gate, a Northwest

employee informed him the flight was overbooked. North-

15a

10992 WEsT Vv. NORTHWEST AIRLINES

west attempted to make room for West and other passengers

by requesting volunteers to deplane in exchange for certain

payments. However, only three people accepted, and West

could not obtain a seat on this flight.

Northwest then offered West an alternative flight that

would arrive at Dulles Airport, which is near West’s destina-

tion, at 3:00 a.m. the next morning. West declined this alter-

native flight because of its inconvenience and rescheduled his

flight to Arlington for approximately two weeks later.

West subsequently filed claims in state court for breach of

the covenant of good faith and fair dealing under Montana

law and for unjust discrimination under section 404(b) of the

Federal Aviation Act. (FAA). Northwest successfully peti-

tioned the United States District Court to remove the case to

the federal court on the basis of diversity of citizenship.

Northwest then moved for summary judgment on the

grounds that Section 404(b), upon which West based his fed-

eral claim, had expired and that West’s state claim was pre-

empted by the FAA. On September 28, 1989, the district

court granted Northwest’s motion for summary judgment on

both of the above grounds. West timely appealed only the

issue of whether the district court erred in dismissing West’s

state law claim on the ground that it was preempted by the

FAA.

DISCUSSION

I. Standard of Review

A grant of summary judgment is reviewed de novo to deter-

mine, viewing the evidence in the light most favorable to the

nonmoving party, whether there existed any genuine issue of

material fact and whether the district court correctly applied

the relevant substantive law. Tzung v. State Farm Fire &

Casualty Co., 873 F.2d 1338, 1339-40 (9th Cir. 1989).

16a

WeEsT Vv. NORTHWEST AIRLINES 10993

II. Federal Preemption

Northwest argues that the federal government's role in reg-

ulating the air transportation industry under the FAA pre-

empts Montana’s common law duty to dea! fairly and in good

faith. In examining this issue, we note that when Congress

legislates in a field traditionally occupied by the states, such

as common law tort and contract remedies in business rela-

tionships, there is a presumption against finding pre-emption

of state law. See California v. ARC America Corp, 109 S. Ct.

1661, 1665 (1989) (internal quotations omitted).

There are three ways in which preemption may occur.

“Congress may preempt state law expressly by so stating in

explicit terms on the face of the statute.” Motor Vehicle Mfrs.

Ass'n v. Abrams, 899 F.2d 1315, 1318 (2nd Cir. 1990) (inter-

nal quotations omitted). Second, “when Congress intends

that federal law occupy a given field, state law in that field is

pre-empted.” ARC America Corp, 109 S. Ct. at 1665. Finally,

even if Congress has not occupied the field, “state law is nev-

ertheless pre-empted to the extent it actually conflicts with

federal law, that is, when compliance with both state and fed-

eral law is impossible.” Jd.

A. Explicit Preemption

[1] The district court found that Congress in the FAA

expressly preempted West’s state law claims. Specifically the

court held that in section 1305(a)(1), “Congress intended to

preempt all state statutes and common law rules which affect

rates or services involving air travel.” We disagree, finding

that Congress did not expressly preempt West’s state law

claim.

Section 1305(a)(1) of the FAA provides that no state “shall

enact or enforce any law, rule, regulation, standard, or other

provision having the force and effect of law re/ating to rates,

17a

10994 WEsT Vv. NORTHWEST AIRLINES

routes, or services of any air carrier.” 49 U.S.C. § 1305(a)(1)

(App. Supp. V 1987) (emphasis added).

Appellant asserts first that section 1305 does not apply

because “services” does not include airline boarding practices

but is limited in meaning to a description of the types of oper-

ations which airlines offer, such as scheduled passenger ser-

vice, scheduled cargo service, mail service and other

specialized services. Thus, under West’s reading, section

1305 would preempt state law only when the state law

affected the types of services offered. We reject this interpre-

tation.

“The primary rule of statutory construction is to ascertain

and give effect to the plain meaning of the language used.”

Hughes Air Corp. v. Public Utilities Com’n, 644 F.2d 1334,

1337 (9th Cir. 1981); Watt v. Alaska, 451 U.S. 259, 265

(1981). In this case, we believe that the plain meaning of

“services” clearly includes services provided to customers

such as the boarding services at issue here. If Congress had

intended to limit the word “services” to something other than

its common usage, it could easily have used the words “types

of services” rather than “services”.

Moreover, the Ninth Circuit has already rejected West’s

definition of services in Hingson v. Pacific Southwest Airlines,

743 F.2d 1408, 1415 (9th Cir. 1984). In Hingson the court

held that regulation of air carrier seating policies involved

regulation of services within the meaning of section 1305(a)

(1). Id. Thus, the court did not define “services” as merely

types of services such as cargo or air ambulance but defined

it to include services to customers. Following Hingson, we

find that Northwest’s passenger services, including boarding,

are airline services within the meaning of section 1305.

[2] However, while we agree with Northwest that “services”

include boarding policies, we disagree with Northwest and

the district court that “law[s] . . . relating to airline services”

18a

WeEST V. NORTHWEST AIRLINES 10995

encompasses all state laws that affect airline services, how-

ever tangentially. This interpretation of § 1305(a)(1) would

unduly expand preemption and ignore our presumption

against federal preemption in this traditional state law area.

Instead, we find that Section 1305(a)(1) preempts claims only

when the underlying statute or regulation itself relates to air-

line services, regardless of whether the claim arises from a

factual setting invelving airline services. Thus, state laws that

merely have an effect on airline services are not preempted.

See People of State of N.Y. ex rel. Abrams v. Trans World Air-

lines, Inc., 728 F. Supp. 162 (S.D.N.Y. 1989).

Our analysis is consistent with Ninth Circuit case law. In

Hingson, a blind person who was not permitted to sit in cer-

tain seats during a Pacific Southwest Airlines (PSA) flight

brought suit against PSA. Hingson alleged intentional inflic-

uon of emotional distress and a claim arising under Califor-

nia Civil Code Section 54.1, which required that

handicapped person be given “full and equal access” to

accommodations of all airplanes. Hingson, 743 F.2d at 1411,

1415. The Ninth Circuit held that Hingson’s claims under

California Civil code Section 54.1 were preempted by section

1305(aX1} The court reasoned that Section 54.1 was a regula-

tion directly relating to services within the meaning of Sec-

tion 1305(a)(1). Jd. at 1415. The court, however, held that

Hingson’s claim for intentional infliction of emotional dis-

tress was not preempted. Jd. This decision is consistent with

our reading of section 1305(a)(1). Hingson’s emotional dis-

tress claim did involve the airline’s passenger services; how-

ever, the underlying law, the tort of intentional infliction of

emotional distress, was not addressed exclusively to airline

service. Thus, § 1305(a)(1) did not preempt. |

Likewise, the court in Air Transport Ass'n v. P.U.C., 833

F.2d 200 (9th Cir. 1987), cert. denied, 487 U.S. 1236 1988

found that preemption of 1305(a)(1) did not extend to laws

that only affected airlines without being directly related to

their services. In Air Transport Ass'n, airlines and airline

19a

10996 WEST Vv. NORTHWEST AIRLINES

trade associations challenged a California regulation prohib-

iting telephone customers from surreptitiously overhearing

or recording conversations. The airlines wished to monitor

conversations between their reservation agents and the pub-

lic. Air Transport Ass'n, 833 F.2d at 201-02. The court stated

that the California regulation was not preempted because

“(t]he type of telephone operation utilized by the airlines is

not peculiar to airlines.” and the court could find no evidence

that Congress intended to preempt state regulation of utilities

when they affected airlines. Jd. at 207.

{3} Similarly, in the instant case state law simply imposes a

duty on all persons entering into contracts to act with good

faith and fair dealing. The fact that this duty is applicable to

airlines as well as the general public does not invoke federal

preemption. We find, therefore, that West’s state law claims

are not expressly preempted by the FAA.

B. Implied Preemption

[4] In order to show that the FAA impliedly preempts

West’s claim, Northwest must show that Congress intended

that federal law occupy the specific field covered by state law.

ARC America Corp., 109 S. Ct. at 1665. Section 1506 of the

FAA, however, clearly indicates that Congress had no such

intention. Section 1506 reads: “Nothing contained in this Act

shall in any way abridge or alter the remedies now existing at

common law or by statute, but the provisions of this Act are

in addition to such remedies.” 49 U.S.C. § 1506 (App. 1982).

In force since 1938, this section was specifically retained

when Congress enacted the Airline Deregulation Act of 1978

which included the preemption section 1305(a)(1). Section

1506 demonstrates Congress’ intent not to preempt all com-

mon law remedies.’ Accordingly, we find that Congress did

‘Additionally, federal regulations specifically permit a passenger to pur-

sue damages under available state law if they are bumped, 14 C.F.R.

§ 250.9(b) (1990); this further suggestes that Congress had no intention of

preempting state common law remedies.

ee

20a

WEST Vv. NORTHWEST AIRLINES 10997

not impliedly preempt West’s state law claims under the

FAA.

C. Conflict Preemption

[5] Finally, Northwest asserts that West’s claim is pre-

empted due to a conflict with federal law. Specifically, North-

west argues that it could not comply both with the federal

regulations governing boarding and state common law. We

disagree.

[6] Federal airline overbooking regulations specifically con-

template customers choosing between liquidated damages or

state common law remedies. 14 C.F.R. § 250.9(b) (1990).

Moreover, the Supreme Court has held that common law

remedies in overbooking situations do not conflict with fed-

eral priority rules for boarding passengers and providing

compensation to bumped passengers. See Nader v. Allegheny

Airlines, 426 U.S. 290 (1976). Permitting a bumped customer

to forgo liquidated damages in order to pursue a common law

remedy might result in different damage awards, but it would

not expose Northwest to liability more than once nor would

it prevent Northwest from overbooking. Northwest has

offered us no reason to believe that requiring it to conform to

Montana’s duty of good faith and fair dealing would prevent

it from following federal regulations.

CONCLUSION

For the foregoing reasons, we find that West’s state claim is

not preempted by the FAA. In holding that West’s state claim

for breach of the covenant of good faith and fair dealing is not

preempted, we are not deciding whether West has a valid

claim. We simply hold that the FAA does not preempt West’s

state claim. We leave it to the district court to resolve all other

issues On remand.

REVERSED.

21a

APPENDIX C

NOT FOR PUBLICATION

UNITED STATES COURT OF APPEALS

FOR THE NINTH circhrtL ED

JUN - 4 1991

CATHY A. CATTERSON, CLERK

WILLIAM D. WEST, )

Plaintiff-Appellant, )

)

)

)

) No. 89-35820

v. ) USDC No. CV 87-63-CCL

)

JORDER

NORTHWEST AIRLINES, INC., )

Detendant-Appellee. )

)

Before: HUG, NELSON AND BRUNETTI.

Upon consideration of Appellant West’s petition for rehear-

ing, the court vacates the portion of our February 5, 1991 order

; and amended opinion which granted the appellee’s petition for

rehearing. The decision, as amended, stands. The petitions for

rehearing are DENIED.

22a

APPENDIX D

JUDGMENT

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

NO. 89-35820

CT/AG#: CV-87-63-CCL

MANDATE ISSUED

WILLIAM D. WEST JUL - 5 1991

Plaintiff - Appellant

si FILED

NORTHWEST AIRLINES, INC. JUL 10 1991

; LOU ALEKSIC

Defendant - Appellee By DIANNE E. MANTZ

Deputy Clerk

TRANS WORLD AIRLINES, INC.; AMERICAN

AIRLINES, INC.

Amici Curiae

APPEAL FROM the United States District Court for the

USDC - Helena, Montana.

THIS CAUSE came on to be heard on the Transcript of the

Record from the United States District Court for the USDC -

Helena, Montana and was duly submitted.

ON CONSIDERATION WHEREOF, It is now here or-

23a

dered and adjudged by this Court, that the judgment of the said

District Court in this cause be, and hereby is AFFIRMED IN

PART and REVERSED AND REMANDED IN PART.

Filed and entered September 11, 1990, amended February 5,

1991, and amended further by Order filed June 4, 1991.

24a

APPENDIX E

NOT FOR PUBLICATION

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

WILLIAM D. WEST ser 10 190%

oe ee’ CATHY CATTERSON, CLERK

Plaintiff-Appellant, U.S. COURT OF APPEALS

No. 89-35820

USDC No. CV 87-63-CCL

ee eee Oe ee

JORDER

NORTHWEST AIRLINES, INC., )

Defendant-Appellee. )

)

Before: HUG, D.W. NELSON and BRUNETTI, Circuit

Judges.

The motion to recall the mandate is DENIED.

The June 4, 1991 order merely vacated that portion of the

February 5, 1991 opinion which granted the petition for rehear-

ing. The rest of the February 5, 1991 opinion stands, including the

discussion on punitive damages.

25a

APPENDIX F

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF MONTANA

ILED

SEP 28 1989

LOU ALEKSICH, JR. CLERK

By _Dianne M. Spooner

HELENA DIVISION

KEE KKKK

WILLIAM D. WEST,

De Clerk

Plaintiff, puy

-V- CV 87-63-H-CCL

MEMORANDUM

NORTHWEST AIRLINES, INC., AND

a corporation, ORDER

Defendant.

EEEEKEESE

This acticn arises out of a claim by plaintiff West that

defendant Northwest Airlines allegedly subjected West to unjust

discrimination, undue or unreasonable preference or disadvan-

tage when it denied West a boarding pass on flight number 1150

in Great Falls, Montana, on October 7, 1986.

West relies upon § 404(b) of the Federal Aviation Act (here-

inafter FAA) 49 U.S.C. 1374(b) to provide a federal private cause

of action for unjust discrimination. Additionally, West alleges

that a private state cause of action for breach is available under

state law because defendant unduly or unreasonably gave prefer-

ence or disadvantage in denying West a boarding pass for flight

number 1150 and because the defendant did not follow its own

policy in offering compensation to West when he was denied a

boarding pass.

Before the court is the defendant’s motion for summary

judgment. The motion has been fully briefed and the parties were

heard in open court September 15, 1989, at which time plaintiff

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West and defendant Northwest appeared and argued through

their respective counsel. The court now rules on the motion.

Summary judgment is properly granted under Rule 56(c) if

the “pleadings and supporting materials show that there is no

genuine issue as to any material fact and that the moving party is

entitled to a judgment as a matter of law.” California Architec-

tural Building Products, Inc. v. Franciscan Ceramics, 818 F.2d

1466, 1468 (9th Cir. 1987) (quoting Rule 56(c), Fed. R. Civ. P.),

cert. denied, 108 S.Ct. 698 (1988). The initial burden is upon the

party seeking summary judgment to inform the court of the basis

for its motion and identify those portions of the record which

demonstrate the absence of a genuine issue of material fact.

Celotex Corp. v. Catrett, 477 U.S. 317 (1986). Once this is

accomplished, the non-moving party is invested with the obliga-

tion to go beyond the pleadings and show that there is a genuine

issue for trial. Id. Only disputes over facts that might affect the

outcome of the suit under the governing law will properly preclude

the entry of summary judgment. Anderson v. Liberty Lobby, Inc.,

477 US. 242, 106 S.Ct. 2505, 2510 (1986). “[T]o withstand a

motion for summary judgment, the non-moving party must show

that there are ‘genuine factual issues that can only be resolved by

a finder of fact because they may reasonably be resolved in favor

of either party.” Id., 106 S.Ct. at 2511.

Defendant’s motion to dismiss raises two issues of law; first,

that plaintiff West’s denial of a boarding pass occurred on Octo-

ber 7, 1986, and the federal statute on which West bases his federal

claim, 49 U.S.C. 1374(b), had expired January 1, 1983, making the

plaintiffs federal claim non-existent, and, second, that West’s

state claims are preempted by 49 U.S.C. 1305(a).

In this case, the court concludes that the plaintiff cannot

withstand defendant’s motion for summary judgment because the

plaintiff fails to establish a private cause of action under the

Federal Aviation Act. The court also concludes that the plaintiff's

state law claims are precluded by the preemption section of the

FAA. Furthermore, there is no dispute over facts that would

afiect the outcome of the suit under the governing law.

FACTS

The facts considered in a light most favorable to the plaintift

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show that on September 3, 1986, West purchased a non-refund-

able, non-changeable ticket to travel on Northwest Airlines from

Great Falls, Montana, to Washington National Airport in Arling-

ton, Virginia, on October 7, 1986. The flight was to depart Great

Falls at 1:30 p.m., and arrive Washington National at 9:00 p.m. on

October 7, 1986. Between the date of purchase and the date of Mr.

West’s planned travel, Northwest Airlines decided to reduce the

size of its aircraft from a Boeing 727-200 which carries 146

passengers to a DC 9 aircraft which carries 78 passengers. North-

west did not inform West or any of Northwest’s sales agents of its

decision. When West arrived at the check-in gate, a Northwest

Airlines employee informed him the flight was overbooked.

Subsequently, Northwest made attempts to make room for West

and other passengers by requesting volunteers to deplane in

exchange for certain payments. Although three people accepted,

there remained no room for Mr. West on flight number 1150.

Northwest Airlines then offered West an alternate flight which

would arrive at Dulles Airport at 3:00 a.m. West declined to

accept the alternate flight because of its inconvenience and

rescheduled his flight to Washington National for sometime later.

Northwest Airlines gave West a copy of its “Denied Boarding

Regulations” and gave him a check for $198.00, twice the pur-

chase price of his one-way ticket. West subsequently filed his

claims in state court and the defendant retitioned the United

States District Court to remove the case to the federal court

pursuant to 28 U.S.C. § 1332 and § 1441.

Private Right of Action under 404(b) of the Federal Aviation Act,

49 U.S.C. 1374(b).

Plaintiff West argues that the Federal Aviation Act (FAA)

grants private citizens such as himself the right to enforce per-

ceived violations by air carriers through private causes of actions.”

“At oral argument, plaintiff West seemed to circumvent the

issue of a private cause of action and argued instead that his claim

was actually a state claim. According to West, it was the defendant

who maintained there was a federal cause of action by forcing

removal of the case to federal district court. Nevertheless, the

court is compelled to respond to the claims which the plaintiff has

set forth in his brief in opposition to defendant’s motion for

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According to West, this right is provided by 404(b) of the FAA, 49

U.S.C. 1374(b), and subsequent case law interpreting that federal

statute. See Mahoney v. Air France, 474 F. Supp. 531 (S.D.N.Y.,

1979), Nader v. Allegheny Airlines, Inc., 512 F.2d 527 (D.C.C.A.,

1975), Fitzgerald v. Pan American World Airways, 229 F.2d 449,

(2d Cir. 1956), Mortimer v. Delta Airlines, 302 F. Supp. 276, (N.D.

III. 1969), and Hingson v. Pacific Southern Airlines, 743 F.2d 1408

(9th Cir. 1984).

Although the court understands some of the plaintiff's

frustration with Northwest’s treatment of him, the plaintiff fails to

establish a federal cause of action on which the court can decide

a claim. Effective January 1, 1983, the Airline Deregulation Act

of 1978, Public Law 95-504, 92 Stat. 1705, repealed all of Section

404(b). West does not provide any legal authority or theory on

how to establish his private claim when the statute on which he

relies has expired. Every case to which the plaintiff points for au-

thority was decided prior to the expiration of 404(b) except for

Hingson, supra. However, in Hingson, the plaintiff's cause of

action accrued in September, 1980, nearly three years before

404(b) ceased to be effective. Furthermore, the Hingson court

was careful to point out that although the statute on which the

plaintiff relied was in effect at the time of his claim, it had expired

January 1, 1983, as a result of the Airline Deregulation Act of

1978. Id., fn. 1 at 1411. The likely purpose of footnote 1 is to

prevent the use of the case as authority for claims which arise after

January 1, 1983. See also, Ramirez de Arellano v. Eastern

Airlines, Inc., 629 F. Supp. 189 (D. Puerto Rico 1985) (“Since the

incident which gives rise to the alleged federal discrimination

claim occurred on May 23, 1983, plaintiff's federal statutory

action is allegedly nonexistent as a matter of law. We agree.

Section 1374(b) has definitely been eliminated as of January 1,

summary judgment. Moreover, plaintiffs amended complaint

alleges that Northwest’s willful overbooking violates Department

of Transportation regulations and constitutes oppressive bad

faith. The court construes this to mean that the plaintiff is

attempting to enforce by private action regulations which have

been enacted pursuant to the Federal Aviation Act.

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1983.”) and see Diefenthalv. C.A.B., 681 F.2d 103, (Sth Cir. 1982).

Since 404(b) has expired, the court can only hypothesize how

the plaintiff's claim might be reconstituted under the FAA to

determine if a private cause of action can be found. One possible

theory would be that since the expiration of 404(b), there may be

an implied private right under the remaining § 404(a) which

requires air carriers to provide “safe and adequate service.”

At least one appellate court has considered this question and

found that following the expiration of 404(b), 404(a) cannot be

given a new interpretation to provide a private cause of action.

Andersonv. US. Air, Inc., 818 F.2d 49 (D.C. Cir., 1987). Although

Anderson involved a blind person whom the airline had denied

transportation after he refused to vacate the seat next to an

emergency exit, the issue presented by the claim was whether

Congress intended that violations of § 404(a) could be remedied

by aggrieved individuals or solely by the administrative agencies

charged with enforcement of the statute. To discern whether

Congress intended private citizens to enforce the FAA, the court

applied the “intent test” of Cort v. Ash, 422 U.S. 66, 95 S. Ct. 2080,

45 L. Ed. 2d 26 (1975). The court found the required intent was

absent from the remaining section of 404 and noted in particular

that phrasing a statute in general terms rather than specifically

identifying the benefitted class indicates a lack of intent. Ander-

son at 54. (Citing one of the factors the Supreme Court has

recognized when determining intent). Comparing the remaining

404(a) to the expired 404(b), the court stated: “section 404(b)

which prior to its repeal in 1983 had been interpreted to provide

a private right of action, see e.g. Nader v. Allegheny Airlines, Inc.,

(citations omitted; emphasis added), specifically names the enti-

ties protected from ‘unjust discrimination’ .... Given the marked

difference in phrasing between section 404(a) and 404(b), it is

evident Congress was as fully capable of specifying ‘especial’

beneficiaries in the former as it did in the latter.” Id. at 54.

Moreover, the Anderson court found the existence of an

extensive and detailed scheme of administrative enforcement as

evidence that Congress intended the administrative agencies, not

private citizens, to enforce violations of the FAA. Id., citing In re

Mexico City Air Crash of October 31, 1979, 708 F.2d 400 (9th Cir.

1983). This court agrees with the court’s analysis in Anderson.

Plaintiff West’s appropriate remedy then is to pursue his

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claim through the Department of Transportation and the Federal

Aviation Administration, who are the enforcers of the FAA. The

absence of private remedy does not mean the airlines have a

license to mistreat or to inadequately serve passengers, it only

means an agency, rather than an individual, isempowered to bring

suit directly against an airline. Id. at 5S.

Il. West’s State Ciaims

Plaintiff West argues that even if his federal cause of action

fails, the Federal Aviation Act does not preempt his state claim

based upon unjust discrimination or undue or unreasonable

prejudice or disadvantage. The plaintiff argues that this discrimi-

nation, prejudice, or disadvantage resulted in a breach of the

defendant’s duty to deal fairly and in good faith which is acommon

law claim under Montana law. Section 105(a)(1) of the FAA

provides:

[N]o state or political subdivision thereof and no inter-

state agency or other political agency of two or more

states shall enact or enforce any law, rule, regulation,

standard or other provision having the force and effect

of law relating to rates, routes, or services of any air

carrier having authority under Title [V of this chapter

to provide air transportation. 49 U.S.C. § 1305(a).

The Ninth Circuit has held that by this section of the

FAA, Congress intended to preempt all state statutes and com-

mon law rules which affect rates or services involving air travel.

Hingson, supra, see also Air Transport Ass'n v. P.U.C. of the State

of Cal., 833 F.2d 200 (9th Cir. 1987); Montauk-Caribbean Air-

ways, Inc. v. Hope, 784 F.2d 91, 97 (2d Cir. 1986). Andersonv. U.S.

Air, 818 F.2d 49 (D.C. Cir. 1987).

In addition, the Supreme Court has found that the Congress

has “through the [FAA], regulated aviation extensively.” Wardair

Canada, Inc. v. Florida Dept. of Revenue, 477 U.S. 1, 106 S.Ct.

2369, 2372, 91 L.Ed. 2d 1 (1986). Finally, where the claim is based

on an implied duty of good faith and fair dealing which requires

an examination of the expectations of the parties and the state

imposed duties, the claim is preempted by federal law. See Allis-

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Chalmers Corp. v. Lueck, 471 U.S. 202, 105 S.Ct. 1904, 85 L.Ed.

2d 206 (1982).

Therefore, for the reasons set forth herein, Defendant

Northwest Airlines’ motion for summary judgment is GRANTED.

IT IS FURTHER ORDERED that the Final Pretrial Con-

_ ference scheduled for September 29, 1989, and the trial setting for

October 2, 1989, are hereby vacated.

The clerk is directed forthwith to notify counsel of entry of

this order.

Done and dated this _28_ day of September, 1989.

[s/

CHARLES C. LOVELL

United States District Judge

32a

APPENDIX G

AO 450 (Rev. 5/85) Judgment in a Civil Case iNHEMIL DOCKET

SEP 28 1989

LOU ALEKSICH, JR., CLERK

United States District CourBY —L/

Deputy

HELENA DIVISION — DISTRICT OF__ MONTANA

WILLIAM D. WEST,

JUDGMENT IN A CIVIL CASE

V.

NORTHWEST AIRLINES, INC.

a corporation CASE NUMBER:

CV-87-63-H-CCL

(] Jury Verdict. This action came before the Court for a

trial by jury. The issues have been tried and the jury

has rendered its verdict. ,

[X] Decision by Court. This action came to trial or hearing

before the Court. The issues have been tried or heard

and a decision has been rendered.

IT IS ORDERED AND ADJUDGED that defendant

Norwest Airlines’ motion for summary judgment is

GRANTED, and that plaintiff take nothing, that the

action be dismissed on the merits.

33a

September 28, 1989 LOU ALEKSICH, JR.

Date Clerk

/s/

(By) Deputy Clerk

34a

APPENDIX H

14 C.F.R. § 250.9 (1991) reads:

(a) Every carrier shall furnish passengers who are de-

nied boarding involuntarily from flights on which they hold

confirmed reserved space immediately after the boarding oc-

curs, a written statement explaining the terms, conditions,

and limitations of denied boarding compensation, and de-

scribing the carriers’ boarding priority rules and criteria. The

carriers shall also furnish the statement to any person upon

request at all airport ticket selling positions which are in the

charge of a person employed exclusively by the carrier, or by

it jointly with another person or persons, and at all boarding

locations being used by the carrier.

(b) The statement shall read as follows:

COMPENSATION FOR DENIED BOARDING

If you have been denied a reserved seat on (name of air

carner) you are probably entitled to monetary compensa-

tion. This notice explains the airline’s obligation and the

passenger's rights in the case of an oversold flight, in accor-

dance with regulations of the U.S. Civil Aeronautics Board.

VOLUNTEERS AND BOARDING

PRIORITIES

If a flight is oversold (more passengers hold confirmed

reservations than there are seats available), no one may be

denied boarding against his or her will until airline personnel

first ask for volunteers who will give up their reservation

willingly, in exchange for a payment of the airline’s choosing.

If there are not enough volunteers, other passengers may be

denied boarding involuntarily in accordance with the follow-

ing boarding priority of (name of air carrier): (In this space

carrier inserts its boarding priority rules or a summary thereof,

eS

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in a manner to be understandable to the average passenger.)

COMPENSATION OF INVOLUNTARY

DENIED BOARDING

If you are denied boarding involuntarily, you are entitled

to a payment of “denied boarding compensation” from the

airline unless:

(1) You have not fully complied with the airline’s ticket-

ing, check-in, and reconfirmation requirements, or you are

not acceptable for transportation under the airline’s usual

rules and practices, or (2) you are denied boarding because

the flight is canceled; or (3) you are denied boarding because

a smaller capacity aircraft was substituted for safety or opera-

tional reasons; or (4) you are offered accommodations in a

section of the aircraft other than specified in your ticket, at no

extra charge, (a passenger seated in a section for which a

lower fare is charged must be given an appropriate refund);

or (5) the airline is able to place you on another flight or flights

that are planned to reach your final destination within one

hour of the scheduled arrival of your original flight.

AMOUNT OF DENIED BOARDING

COMPENSATION

Passengers who are eligible for denied boarding com-

pensation must be offered a payment equal to the sum of the

tace values of their ticket coupons, with a $200 maximum.

However, if the airline cannot arrange “alternate transporta-

tion” (see below) for the passenger, the compensation is

doubled ($400 maximum). The “value” of a ticket coupon is

the one-way fare for the flight shown on the coupon including

any surcharge and air transportation tax, minus any appli-

cable discount. All flight coupons, including connecting

flights, to the passenger’s final destination or first 4-hour

stopover are used to compute the transportation.

“Alternate transportation” is air transportation (by an

airline licensed by the CAB) or other transportation used by

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the passenger which, at the time the arrangement is made, is

planned to arrive at the passenger’s next scheduled stopover

(of 4 hours or longer) or final destination no later than 2 hours

(for flights within U.S. points, including territories and pos-

sessions) or 4 hours (for international flights) after the pas-

senger’s originally scheduled arrival time.

METHOD OF PAYMENT

The airline must give each passenger who qualifies for

denied boarding compensation a payment by cash or check

for the amount specified above, on the day and place the

involuntary denied boarding occurs. However, if the airline

arranges alternate transportation for the passenger’s con-

venience that departs before the payment can be made, the

payment shall be sent to the passenger within 24 hours. The

air carrier may Offer free tickets in place of the cash payment.

The passenger may, however, insist on the cash payment, or

refuse all compensation and bring private legal action.

PASSENGER’S OPTIONS

Acceptance of the compensation may relieve (name of

air carrier) from any further liability to the passenger caused

by its failure to honor the confirmed reservation. However,

the passenger may decline the payment and seek to recover

damages in a court of law or in some other manner.