In Re Air Cargo Shipping Services Antitrust Litigation
697 F.3d 154
2d Cir.2012Background
- Plaintiffs, indirect purchasers of air freight, allege price-fixing by numerous foreign airlines in a global conspiracy.
- The district court dismissed the state-law claims as expressly preempted by the Federal Aviation Act (FAA) § 41713(b)(1).
- The FAA preempts state-law claims related to price, route, or service of an air carrier; the dispositive issue is whether foreign air carriers are air carriers under § 41713(b)(1).
- The action involves surcharges (fuel, war-risk-insurance, security, U.S. customs) alleged to be part of the price-fixing scheme commencing in 2000.
- Bipartisan legislative history shows the preemption was designed to preclude state regulation of both domestic and foreign air carriers post-deregulation.
- Direct-purchaser claims remain in district court; only indirect-purchaser claims are before the court on appeal.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether 'air carrier' in § 41713(b)(1) includes foreign air carriers. | Plaintiffs contended 'air carrier' means only domestic carriers. | Defendants argued the term covers both domestic and foreign carriers under context and history. | Yes, 'air carrier' includes foreign air carriers. |
| Whether removal of 'interstate' from the preemption clause expands preemption to foreign carriers. | Sunset Act expansion preempts state regulation of foreign carriers. | Expansion to foreign carriers is intended to preserve deregulation and uniform regulation. | Preemption extends to foreign air carriers. |
| Scope of preemption under the Airline Deregulation Act and IATCA/Sunset Act history. | Preemption should be limited to domestic carriers. | Legislative history shows expansion to foreign carriers to preserve uniform regulation. | Legislation expands preemption to foreign air carriers. |
| Whether the federal preemption displaces state-law claims entirely or also any implied preemption. | States could regulate foreign carriers; implied preemption not necessary. | Explicit preemption governs; implied preemption unnecessary. | Plaintiffs’ state-law claims expressly preempted; implied preemption not reached. |
Key Cases Cited
- United States v. Aleynikov, 676 F.3d 71 (2d Cir. 2012) (statutory interpretation and legislative purpose discussed)
- United States v. Keuylian, 602 F.2d 1033 (2d Cir. 1979) (statutory definitions; mutual exclusivity of air carrier and foreign air carrier)
- In re Korean Air Lines Co. Ltd., Anti-Trust Litig., 642 F.3d 685 (9th Cir. 2011) (statutory definitions; preemption scope includes foreign carriers)
- Morales v. Trans World Airlines, Inc., 504 U.S. 374 (1982) (deregulation and preemption policy; uniform regulation)
- Korean Air Lines Co. Ltd., 642 F.3d 693 (2d Cir. 2011) (explains expansion of preemption to foreign carriers; Sunset Act interpretation)
- Philko Aviation, Inc. v. Shacket, 462 U.S. 406 (1983) (contextual statutory interpretation in aviation law)
- Lawson v. Suwannee Fruit & S.S. Co., 336 U.S. 198 (1949) (statutory construction can rely on broader Congressional purpose)
- Murray v. Schooner Charming Betsy, 6 U.S. (2 Cranch) 64 (1804) (international-law considerations in statutory interpretation)
- Japan Line, Ltd. v. County of Los Angeles, 441 U.S. 434 (1979) (foreign-air-carrier preemption and international-law considerations)