900 F.3d 602
8th Cir.2018Background
- Plaintiff James Ferrell received emergency helicopter transport from Air EVAC and was later billed $30,083.26; insurer paid $1,000 and Ferrell faced a $29,083.26 balance.
- Ferrell filed a putative class action in Arkansas state court asserting: (1) declaratory relief that any contract is unenforceable for lack of an essential price term; (2) Arkansas Deceptive Trade Practices Act (ADTPA) damages for failing to disclose price before transport; and (3) declaratory relief that Air EVAC lacks clean hands and cannot seek restitution.
- Air EVAC removed to federal court and moved to dismiss under the Airline Deregulation Act (ADA) preemption provision, 49 U.S.C. § 41713(b)(1).
- The district court dismissed all claims as preempted; the Eighth Circuit affirmed, analyzing each claim under Supreme Court ADA-preemption precedents.
- The court treated an Ambulance Billing Authorization Form (signed the day of transport) as embraced by the complaint but did not decide whether it formed an enforceable contract.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held | |
|---|---|---|---|---|
| Whether ADTPA fraud/disclosure claim is preempted as relating to air carrier price/service | Ferrell: ADTPA applies because Air EVAC concealed price until after transport; air-ambulance market is unique and lacks competition, so ADA should not preempt | Air EVAC: ADA preempts state consumer-protection rules that relate to prices/services of air carriers | Preempted — state-law consumer-protection claim would impose a price-disclosure rule related to price/service and is barred by ADA (Morales/Wolens) | |
| Whether ‘‘clean hands’’/equitable defense to restitution is preempted when used to deny recovery for charges | Ferrell: Air EVAC’s conduct bars equitable relief; courts should apply state equitable standards | Air EVAC: Such state-imposed standards relate to pricing and are preempted | Preempted — using state equitable standards to police prices/services is a state-imposed obligation barred by ADA (Ginsberg) | |
| Whether a declaratory-judgment claim that no contract exists for want of a price term is saved from preemption under Wolens (i.e., core contract question) | Ferrell: Void-for-indefiniteness is a core contract doctrine examining mutual assent and thus falls within Wolens exception | Air EVAC: Wolens exception only saves ordinary contract-law rules that enforce parties’ bargain; Ferrell’s claim seeks a state-wide price-disclosure rule | Preempted — as pleaded, claim seeks an across-the-board price-disclosure rule (state-imposed), not a case-specific contract-defense; therefore preempted | |
| If preempted, what remedies remain for patients and what law governs private disputes over payment | Ferrell: Preemption would allow carriers to set prices unilaterally with no remedy | Air EVAC: Enforcing its billing term is appropriate | Court: Wolens allows private breach-of-contract and contract-defenses (e.g., no mutual assent) and restitution/quantum meruit claims; courts will look to state law principles to resolve private disputes even if ADA preempts state-imposed rules | Not precluded — private, contract-based defenses and restitution claims remain viable and will generally be resolved under state law; ADA does not authorize DOT to adjudicate private contract disputes |
Key Cases Cited
- Morales v. Trans World Airlines, 504 U.S. 374 (1992) (state laws related to airline rates/routes/services are preempted)
- American Airlines, Inc. v. Wolens, 513 U.S. 219 (1995) (ADA preempts state-imposed substantive standards but does not bar ordinary contract claims enforcing parties’ bargains)
- Nw., Inc. v. Ginsberg, 572 U.S. 273 (2014) (common-law rules that impose binding standards independent of private agreements are preempted)
- Data Mfg., Inc. v. United Parcel Serv., 557 F.3d 849 (8th Cir. 2009) (distinguishing preemption where plaintiff denies assent to a charge)
- Lyn-Lea Travel Corp. v. American Airlines, 283 F.3d 282 (5th Cir. 2002) (fraudulent-inducement defense to contract enforcement is not ADA-preempted)
- United Airlines v. Mesa Airlines, 219 F.3d 605 (7th Cir. 2000) (state rules against force/fraud may be applied to determine whether parties agreed without transgressing federal law)