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- NOTE: Where it is feasible, a syllabus (headnote) will be released, as is
- being done in connection with this case, at the time the opinion is issued.
- The syllabus constitutes no part of the opinion of the Court but has been
- prepared by the Reporter of Decisions for the convenience of the reader.
- See United States v. Detroit Lumber Co., 200 U. S. 321, 337.
-
- SUPREME COURT OF THE UNITED STATES
-
- Syllabus
-
- AMERICAN AIRLINES, INC. v. WOLENS et al.
- certiorari to the supreme court of illinois
- No. 93-1286. Argued November 1, 1994-Decided January 18, 1995
-
- In consolidated state-court class actions brought in Illinois, plaintiffs
- (respondents here), as participants in American Airlines' frequent
- flyer program, challenged American's retroactive changes in program
- terms and conditions-particularly, American's imposition of capacity
- controls (limits on seats available to passengers obtaining tickets
- with frequent flyer credits) and blackout dates (restrictions on dates
- such credits could be used). Plaintiffs alleged that application of
- these changes to mileage credits they had previously accumulated
- violated the Illinois Consumer Fraud and Deceptive Business Prac-
- tices Act (Consumer Fraud Act) and constituted a breach of contract.
- American answered that the Airline Deregulation Act of 1978
- (ADA), 49 U. S. C. App. 1305(a)(1), preempted plaintiffs' claims.
- The ADA prohibits States from ``enact[ing] or enforc[ing] any law
- . . . or other provision having the force and effect of law relating to
- [air carrier] rates, routes, or services.''
- While the Illinois class-action litigation was sub judice, this Court
- decided Morales v. Trans World Airlines, Inc., 504 U. S. ___.
- Morales defined 1305(a)(1)'s ``relating to'' language to mean ``having
- a connection with or reference to airline `rates, routes, or services,'''
- id., at ___, and held that National Association of Attorneys General
- (NAAG) guidelines on airline fare advertising were preempted under
- that definition. The Illinois Supreme Court, post-Morales, ruled
- that plaintiffs' monetary claims survived for state-court adjudication.
- Those claims related only ``tangential[ly]'' or ``tenuous[ly]'' to ``rates,
- routes, or services,'' the Illinois court reasoned, because frequent
- flyer programs are ``peripheral,'' not ``essential,'' to an airline's
- operation.
- Held: The ADA's preemption prescription bars state-imposed regula-
- tion of air carriers, but allows room for court enforcement of con-
- tract terms set by the parties themselves. Pp. 6-15.
- (a) Morales does not countenance the Illinois Supreme Court's
- separation of ``essential'' operations from unessential programs.
- Plaintiffs' complaints, accordingly, state claims ``relating to'' air
- carrier ``rates'' (i.e., American's charges, in the form of mileage
- credits, for tickets and class-of-service upgrades) and ``services'' (i.e.,
- access to flights and upgrades unlimited by retrospectively applied
- capacity controls and blackout dates). P. 6.
- (b) The full text of the ADA's preemption clause, and the con-
- gressional purpose to leave largely to the airlines themselves, and
- not at all to States, the selection and design of marketing mecha-
- nisms appropriate to the furnishing of air transportation services,
- impel the conclusion that 1305(a)(1) preempts plaintiffs' Consumer
- Fraud Act claims. The Illinois Act is prescriptive, controlling the
- primary conduct of those falling within its governance; the Act,
- indeed, is paradigmatic of the state consumer protection laws that
- underpin the NAAG guidelines. Those guidelines highlight the
- potential for intrusive regulation of airline business practices inher-
- ent in state consumer protection legislation. The guidelines illus-
- trate that the Illinois Act does not simply give effect to bargains
- offered by the airlines and accepted by customers, but serves as a
- means to guide and police airline marketing practices. Pp. 6-8.
- (c) The ADA, however, does not bar court adjudication of routine
- breach of contract claims. The preemption clause leaves room for
- suits alleging no violation of state-imposed obligations, but seeking
- recovery solely for the airline's breach of its own, self-imposed
- undertakings. As persuasively argued by the United States, terms
- and conditions airlines offer and passengers accept are privately
- ordered obligations and thus do not fit within the compass of state
- enactments and directives targeted by 1305(a)(1). A remedy
- confined to a contract's terms simply holds parties to their agree-
- ments-in this instance, to business judgments an airline made
- public about its rates and services. Court enforcement of private
- agreements advances the market efficiency that the ADA was
- designed to promote, and comports with provisions of the Federal
- Aviation Act of 1958 (FAA) and related Department of Transporta-
- tion (DOT) regulations that presuppose the vitality of contracts
- governing air carrier transportation. Such enforcement is responsive
- to the reality that the DOT lacks the apparatus and resources
- required to superintend a contract dispute resolution regime. Court
- adjudication of routine breach of contract claims, furthermore,
- accords due recognition to Congress' retention of the FAA's saving
- clause, which preserves ``the remedies now existing at common law
- or by statute.'' Nor can it be maintained that plaintiffs' breach of
- contract claims are identical to, and therefore should be preempted
- to the same extent as, their Consumer Fraud Act claims. The basis
- for a contract action is the parties' agreement; to succeed under the
- state Act, one need not show an agreement, but must show an
- unfair or deceptive practice. Pp. 8-13.
- (d) American's argument that plaintiffs' claims must fail because
- they depend on state policies independent of the parties' intent
- assumes the answer to the very contract construction issue on which
- plaintiffs' claims turn: Did American, by contract, reserve the right
- to change the value of already accumulated mileage credits, or only
- to change the rules for credits earned from and after the date of the
- change? That pivotal question of contract interpretation has not yet
- had a full airing and remains open for adjudication on remand.
- P. 14.
- 157 Ill. 2d 466, 626 N. E. 2d 205, affirmed in part, reversed in part,
- and remanded.
- Ginsburg, J., delivered the opinion of the Court, in which Rehn-
- quist, C. J., and Kennedy, Souter, and Breyer, JJ., joined, and in
- which Stevens, J., joined as to Parts I (except for the last paragraph)
- and II-B. Stevens, J., filed an opinion concurring in part and
- dissenting in part. O'Connor, J., filed an opinion concurring in the
- judgment in part and dissenting in part, in which Thomas, J., joined
- except for Part I-B. Scalia, J., took no part in the consideration or
- decision of the case.
-