227 F. Supp. 3d 1255
D. Wyo.2016Background
- Plaintiffs are air-ambulance operators certified by the FAA that provide interstate emergency air transport and seek full payment for services rendered to Wyoming workers covered by the State’s workers’ compensation system.
- Wyoming’s Workers’ Compensation Division enforces a fee schedule (Wyo. Admin. Code Ch. 9 § 8) that caps reimbursements for air ambulance services (fixed-wing and rotary-wing flat fees and per-mile rates); Division pays only the capped amounts and denies higher billed amounts.
- Plaintiffs sued state officials and the State seeking declaratory and injunctive relief that Wyoming Stat. § 27-14-401(e) and the Division’s fee schedule are preempted by the Airline Deregulation Act (ADA), and asked to enjoin enforcement; they sought no retrospective money relief from state officials under Ex parte Young.
- Defendants asserted Eleventh Amendment sovereign immunity, political-question, laches/estoppel, McCarran-Ferguson reverse-preemption, and other defenses, and argued the fee schedule is not preempted.
- The court held it has federal-question jurisdiction, Ex parte Young permits prospective injunctive/declaratory relief against state officials, rejected the defendants’ procedural and statutory defenses, and found the Wyoming fee cap constitutes regulation “related to” air carrier prices and is preempted by the ADA.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Subject-matter jurisdiction / Ex parte Young | Federal question exists; may seek prospective relief against state officials to enjoin enforcement of state law preempted by federal ADA | Eleventh Amendment bars suit; plaintiffs seek relief against the state | Court: §1331 jurisdiction exists; Ex parte Young allows prospective injunctive/declaratory relief against officials (retrospective monetary relief denied) |
| ADA preemption of fee schedule | Wyoming cap on ambulance reimbursement directly relates to air carrier prices and thus is preempted under 49 U.S.C. §41713 | Fee schedule regulates only workers’ compensation payments, not airline prices; Wolens/private-contract reasoning applies | Court: Fee schedule limits carriers’ recoverable price and is therefore preempted as to air ambulances |
| McCarran-Ferguson reverse preemption | Not applicable because the WY workers’ compensation system is not the "business of insurance" under Pireno factors | Workers’ compensation is insurance-like and should be protected from federal preemption | Court: System is statutory/Trust-like, not the business of insurance; McCarran-Ferguson does not save the state rule |
| Other procedural defenses (political question, laches, estoppel) | Plaintiffs: defenses fail; case is justiciable and not prejudiced by delay | Defendants: political question, delay and prejudice, estoppel bar the suit | Court: Rejected these defenses; case is justiciable, delay not unreasonable, no demonstrated prejudice |
Key Cases Cited
- Ex parte Young, 209 U.S. 123 (1908) (permits prospective injunctive/declaratory suits against state officials to enjoin enforcement of laws violating federal law)
- Morales v. Trans World Airlines, Inc., 504 U.S. 374 (1992) (ADA preemption clause has broad scope; courts may enjoin state regulation that "relates to" airline prices, routes, or services)
- American Airlines, Inc. v. Wolens, 513 U.S. 219 (1995) (distinguishes state-law enforcement from private-contract claims in ADA preemption context)
- Verizon Md., Inc. v. Public Serv. Comm’n, 535 U.S. 635 (2002) (Ex parte Young extends to prospective declaratory relief and sets the straightforward inquiry for Young cases)
- Northwest, Inc. v. Ginsberg, 134 S. Ct. 1422 (2014) (reiterates ADA preemption of state regulation related to prices, routes, or services)
- Anderson v. Liberty Lobby, Inc., 477 U.S. 242 (1986) (summary judgment standard cited for factual sufficiency)