17 F. Supp. 3d 743
N.D. Ill.2014Background
- Four plaintiffs bought tickets for transatlantic travel that included segments operated by Iberia and experienced delays; they brought a putative class action alleging breach of contract (Count I) and violation of EU Regulation 261/2004 (EU 261) (Count II).
- Iberia moved under Fed. R. Civ. P. 12(c) for judgment on the pleadings as to Count II (enforcement of EU 261 in U.S. courts).
- EU 261 provides passenger compensation rules for delays/cancellations and directs each EU Member State to designate enforcement bodies and permits passengers to seek legal redress “under procedures of national law.” The regulation does not mention the United States.
- Plaintiffs contend EU 261 allows enforcement in U.S. courts because it permits legal redress before courts under national law; Iberia contends the regulation limits enforcement to bodies/courts designated by EU Member States.
- The court considered (1) whether EU 261 creates a private right enforceable in U.S. courts and (2) whether the Airline Deregulation Act (ADA), 49 U.S.C. § 41713, preempts enforcement of EU 261 in the U.S.
- The court concluded EU 261 does not provide a private right of action in U.S. courts and, alternatively, that applying EU 261 here would be impliedly preempted by the ADA; Count II was dismissed for all plaintiffs.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether EU 261 creates a private right of action enforceable in U.S. courts | EU 261 permits passengers to seek legal redress “before the competent courts or bodies” and does not expressly limit forum to EU courts | EU 261 confines enforcement to bodies designated by EU Member States; “national” in the regulation means EU Member States’ courts/bodies only | Court: EU 261 does not create a U.S. federal-court private right of action; references to “national” and Article 16 show intent to confine enforcement to Member States’ designated bodies |
| Whether EU 261 is preempted by the ADA (express preemption) | ADA’s text preempts only State law, not foreign law; thus EU 261 not expressly preempted | ADA’s preemption bars state enforcement that would affect price/route/service; Iberia argues broad reading might block foreign-law enforcement too | Court: Express language of §41713(b) does not clearly preempt foreign law enforcement; court follows cases rejecting broad reading |
| Whether application of EU 261 is impliedly preempted by ADA (field/conflict) | Plaintiffs: not raised in primary detail; contend EU 261 could coexist | Iberia: application to U.S.-related itineraries would conflict with federal regulatory scheme governing air carrier services | Court: Implied preemption applies — ADA occupies the field of airline service regulation and EU 261’s compensation scheme (and its selective application to Community carriers) would conflict with ADA’s objectives; dismissal would follow on preemption grounds if U.S. enforcement were permitted |
| Whether plaintiffs’ breach-of-contract claim (Count I) is affected by dismissal of Count II | Plaintiffs’ breach claim is based on contractual promises to comply with EU 261; that claim stands separately | Iberia argued class-procedure and EU procedural limits might bar class relief under EU law | Court: Breach-of-contract claim is not resolved by this motion; Rule 23 class relief would not automatically be barred by EU procedures if a cognizable claim existed |
Key Cases Cited
- Buchanan-Moore v. County of Milwaukee, 570 F.3d 824 (7th Cir.) (standard for Rule 12(c) same as Rule 12(b)(6))
- Ashcroft v. Iqbal, 556 U.S. 662 (Supreme Court) (plausibility pleading standard)
- Bell Atlantic v. Twombly, 550 U.S. 544 (Supreme Court) (pleading must state plausible claim)
- Palmore v. United States, 411 U.S. 389 (Supreme Court) (legislature may limit which courts may enforce its laws)
- LaSala v. Bordier et Cie, 519 F.3d 121 (3d Cir.) (federal court may apply foreign public law; discussion of extraterritorial/preemption issues)
- American Airlines, Inc. v. Wolens, 513 U.S. 219 (Supreme Court) (broad view of ADA preemption over state consumer regulation)