Morales v. Trans World Airlines, Inc.

v. TEXAS OF GENERAL ATTORNEY MORALES, INC., AIRLINES, еt al. WORLD TRANS 1, 1992 June 3, 1992 March Argued 90-1604. No. Decided Scalia, J., opinion Court, delivered the of the White, which O’Con- nor, Kennedy, Thomas, JJ., joined. Stevens, J., and a dissenting filed opinion, Rehnquist, J., post, Blackmun, J., joined, which C. and p. 419. Souter, J., part took no in the consideration or decision of case. Gardner,

Stephen Assistant General Attorney of ar- Texas, gued cause for him petitioner. With on the briefs were Morales, Dan se, of pro Attorney Texas, General Pryor, Will First F. General, Assistant and Mary Keller, Dep- Attorney uty General. Attorney

Keith A. Jones argued cause for respondents. With him on the brief for airlines were David Wilks respondent Corban, Andrew C. Freedman, Ronald D. and Secrest. A brief for 31 State Attorneys General, respondents under this Court’s Rule 12.4, in filed Dan- was support petitioner iel E. Lungren, Attorney General of California, Roderick E. Walston, Chief Assistant Herschel T.Elk- General, Attorney ins, Senior Assistant General, and Albert Norman Attorney Harshbarger, Attorney Deputy At- General, Scott

Sheldon, torney Samson, Jr., Ernest L. Massachusetts, General of Humphrey Attorney III, At- Hubert H. General, Assistant Special torney Woodward, and David Minnesota, General Attorney Attorney Abrams, General, Robert Gen- Assistant Brown and Andrea Le- Ronna D. C. York, eral of New Attorney Attorneys General, Cole, Charles vine, Assistant Attorney Forbes, Assistant Alaska, and James General Attorney Arizona, Woods, General General, Grant Attorney A. General, Assistant Gale Claudio, D. Carmen Attorney Colorado, Lucero, and Garth C. Norton, General Attorney Blumenthal, General, Richard At- Assistant First Langer, torney Connecticut, and Robert M. As- of General Attorney Attorney Butterworth, A. Robert General, sistant Attorney Scott, Richard F. Assistant Florida, of and General Attorney Larry EchoHawk, Idaho, General of and General, Attorney Delange, Deputy Roland General, W Brett T Hagen, Attorney Illinois, and Deborah Burris, General of Attorney Attorney Campbell, General, Bonnie J. Assistant Attorney Assistant Clair, of and Steve St. Iowa, General Attorney Stephan, and Kansas, of General, Robert T. General Attorney Joseph Deputy Curran, J. Kolditz, General, Dan Attorney Maryland, Demarco, and Jr., of Vincent General Kelley, Attorney Attorney General, Frank J. Assistant Michigan, of and Frederick H. Assistant Hoffecker, General Attorney Attorney Webster, General, William L. General Clayton Attorney Friedman, of and S. Assistant Missouri, Stenberg, Attorney General, Nebraska, Don General of Attorney Frankie Potadle, General, and Paul N. Assistant Philip Papa, Attorney Nevada, Del of and R. Sue General Byrnes, Deputy Attorney Lacy Thornburg, H. At- General, torney Sturgis, K. D. Assist- Carolina, General of North and Attorney Spaeth, Attorney General, ant Nicholas J. General Huey, Attorney of and David Assistant Dakota, North W. Attorney Fisher, Ohio, Lee and Mark T. General, General

'377 Attorney Loving, D’Alessandro, General, Assistant Susan B. Attorney General of F Oklahoma, Wheeler, and Jane Assist- Attorney Attorney Crookham, ant General, Charles General Oregon, Virginia Linder, and General, Solicitor Michael Reynolds, Attorney Assistant General, O’Neil, James E. Attorney Island, General Rhode and Terrance Hassett Special Attorneys and Baker, Lee Assistant General, Mark Attorney Jeffrey Barnett, W. Dakota, General of South and Attorney Hallem, P. General, Burson, Assistant Charles W. Attorney Rappuhn, General of Tennessee, and Charlotte H. Attorney Jeffrey Amestoy, Attorney Assistant L. General, Malley, Vermont, General of Jr., J Wallace Assistant Attorney Eikenberry, Attorney General, Kenneth O. General Washington, Attorney and Robert F. Assistant Manifold, Attorney General, Palumbo, Mario J. General West Vir- ginia, Darling, Deputy Attorney Don General, James E. Doyle, Attorney of Wisconsin, General and James D. Jeffries Attorneys Tuerkheimer, and Barbara Assistant General, Joseph Meyer, Attorney Wyoming, B. General of and Mark Attorney Moran, Assistant General.

Stephen Nightingale argued L. the cause for the United urging States as amicus curiae affirmance. With him on Acting the brief were Solicitor Roberts, General Assistant Attorney Gerson, General Robert Zener, V. Robert D. Ka- Rothkopf.* menshine, and Arthur J. amici curiae

* Briefs of urging reversal were filed for the State of III, Warren Price by Hawaii et al. Attorney Hawaii, General of and Girard Michaels, D. Lau and Stеven S. General, Deputy Attorneys by the Attorneys States as follows: James H. Evans respective General for their Alabama, Linley Ieyoub E. Pearson of of Richard P. Indiana, Louisiana, of Mike Moore of Robert J. Del Mississippi, Tom Üdall of Jersey, of New Tufo Preate, Jr., Mexico, Ernest New Paul Van Dam of Pennsylvania, Utah, Mary Terry Virginia; Sue and for the Public Citizen and Aviation Project Consumer Cornish F. Hitchcock and Alan B. Morrison. by Action amici curiae Briefs of urging affirmance were filed for American Air- Allen; Steven C. McCracken and Jane G. lines, Inc., by for the American 378 opinion the Court. delivered alia

Justice & Deregulation the Airline is whether in this case The issue pre-empts § seq., App. 1301 et 49 U. S. C. 1978, Act of deceptive allegedly fare ad- airline prohibiting States from general through consumer of their enforcement vertisements protection statutes.

I (FAA), 1958 72 Act of Federal Aviation 1978,the Prior to § seq., gave App. 1301 et 49 C. amended, U. S. 731, as Stat. (CAB) regulate authority in Board Aeronautics the Civil against action to take administrative airfares and terstate ex practices. not, however, deceptive It did trade certain “saving regulation, a pre-empt and contained pressly state chapter “[n]othing shall providing in this ... clause” existing com way abridge the remedies now or alter chapter provisions this statute, but the or mon law §App. As 49 1506. U. S. C. to such remedies.” in addition regulate airfares intrastate able to were result, States carriers), g., see, e. (including air offered interstate those App. 2d 581 176, 178, F. 189 U. S. D. C. CAB, v. California (1979), (1978), and to 1068 denied, 439 U. S. cert. 954, practices, deceptive against see trade their own laws enforce (1976). Allegheny Inc., 290, 426 S. Airlines, U. Nader v. determining Congress, that “maximum however, 1978, In competitive best further market forces” would reliance on “variety prices” “efficiency, as well as low innovation, transportation services,” enacted quality [and] of air ... (ADA). App. Deregulation 49 U. S. C. Act the Airline 1302(a)(9). 1302(a)(4), §§ the States would To ensure that regulation deregulation own, their with federal not undo prohibiting pre-emption provision, ADA included a “relating enforcing any rates, routes, law from States and Valerie by David S. Inc., Agencies, Advertising Association of Versfelt by Burt Inc., Advertisers, Schulte; of National L. and for the Association and Gilbert H. Weil. Neuborne 1305(a)(1). any §

services” of air carrier. The ADA re- previous tained the authority CAB’s regarding enforcement (which deceptive practices trade was transferred to the De- (DOT) partment Transportation when the CAB was abol- 1985), ished in repeal and it also saving did not or alter the prior clause in the law.

In 1987, the Attorneys National Association of General (NAAG), organization an membership whose includes the at- torneys general of all 50 States, various Territories, and the adopted District of Industry Columbia, Air Travel Enforce- (set ment Appendix opinion) Guidelines forth in an to this containing governing detailed standards the content and for- advertising, mat of airline awarding premiums reg- to (so-called ular “frequent flyers”), customers payment and the compensation passengers voluntarily yield who their flights. seats on guidelines overbooked pur- These do not port any regulations” “create new applying laws or to the industry; airline “explain rather, claim to in detail how existing apply state advertising laws frequent to air fare flyer programs.” (1988). Guidelines, NAAG Introduction

Despite objections guidelines by to the the DOT and the (FTC) Federal pre-emption Trade policy Commission on grounds, attorneys general including of seven States, petitioner’s predecessor attorney general as of Texas, sent a major memorandum to the announcing airlines that “it has come although to our attention making most airlines a bring concerted effort to compli- their advertisements into ance with the guidelines standards delineated the ... advertising, many [not disclosing carriers are still all surcharges]” §2.5 guidelines. in violation of the memorandum signatories’ it “purpose said was the . ... clarify industry for the [this practice] as a whole that is respective violation of deceptive our state laws on аdvertis- ing practices”; and trade “advisory that this warned was an [the] of] memorandum before immediate en- initiation expressed forcement hope actions”; and “protracted 380 necessary and that

litigation not be this issue will over immediately.” practice . . . airlines will discontinue Attorneys Kansas, Colorado, General Memorandum from Texas, Wisconsin, York, Missouri, New Massachusetts, (Exhibit February H to A to Exhibit Motion 3, dated 1988 Order), App. Restraining Temporary 123a, 125a. Sev petitioner’s sent letters to several office later, months eral notice[s] serving respondents of intent to sue.” formal /‘as Attorney Texas, dated November General Letter from Assistant 14, App. 115a. 1988, respondents District Court in Federal then filed suit

Those pre regulation claiming is of fare advertisements state that 1305(a)(1); declaratory judgment § seeking empted by that, a request pre-empted; § guidelines alia, 2.5 of the inter taking any restraining injunction action ing from Texas an guidelines conjunction that would with under its law in regulate respondents’ services, or their ad rates, routes, or marketing vertising The District Court of the same. determining preliminary injunction effect, to that entered likely prevail pre-emption respondents on their were Supp. 712 Airlines, Mattox, Inc. F. v. claim. Trans World 1989). (It (WD subsequently extended that Tex. 99, 101-102 propriety injunction id., 105-106; States, to 33 other us.) Appeals The is not before Court of that extension Airlines, Mattox, Inc. 897 2d Trans v. F. affirmed. World (CA5 1990). Subsequently, Court, the District 773, 783-784 permanently enjoined unreported the States order, in an taking “any action” which would restrict from enforcement advertising operations “any aspect” respondents’ Appeals relating routes, or services. Court rates, (CA5 1991). granted again 2d 141 We once 949F. affirmed. (1991). certiorari. 502 U. S.

HHHH 1305(a)(1) § pre-empts discussing state whether Before challenged guidelines, consider we first enforcement of the whether, it assuming does, the District Court could “ properly award respondents injunctive relief. It ais ‘basic doctrine of equity jurisprudence that courts of should equity not when act... the moving an party has adequate remedy at law and will not suffer irreparable if denied injury equita ” ble relief.’ O’Shea v. Littleton, 414 U. S. 488, 499 (1974); Harris, v. Younger (1971). 401 U. 37, S. 43-44 In Ex parte 209 U. Young, 123, S. 156 (1908), we held that this doctrine does not prevent federal courts from enjoining state officers “who threaten about to commence proceedings, either of a civil or criminal nature, to enforce against parties affected an unconstitutional act, the violating Federal Con stitution.” When enforcement actions are imminent —and at least when repetitive penalties attach to or continuing repeated violations and the moving lacks party the real istic option of the violating law once and raising its federal defenses —there is no adequate at remedy law. id., at See 145-147, 163-165.

We think Young establishes injunctive relief was available here. As we have described, the general attorneys of seven States, including petitioner’s predecessor, had made clear that would seek to enforce the challenged portions (those of the guidelines concerning advertising) through suits under their respective state laws. And Texas law, least, at imposes additional liability (by of way civil penal- ties and consumer actions) for treble-damages viola- multiple tions. See Tex. Bus. & Com. (1987 §§ Code Ann. 17.47,17.50 1991-1992). and Supp. Like the plaintiff then, Young, re- spondents were faced with a Hobson’s choice: vio- continually late the Texas law and expose themselves to potentially huge or liability; violate the law once as a test case and suffer the of injury the law obeying the during pendency the proceedings further any review.1

1We do not address the whether District Court should have abstained from entertaining this suit under the line of cases commencing with Younger Harris, v. (1971), 401 U. S. 37 imposes which heightened require-

382 enjoined petitioner however, not Court,

The District guide- advertising enforcing of the sections the fare from “initiating any enforcement action . . . but also from lines, aspect regulate restrict seek to which would operations advertising plaintiff or the airlines’ air fare . . . Supp., involving 712 routes, services.” F. rates, their and/or disregardеd doing, limits on the exercise it at In so 102. injunctive power. one, which the In suits such as this of its prevent plaintiff a State from a “first strike” intends as prospect initiating of state suit must be own, of its a suit supplies prospect which suit imminent, for it is injury. necessary irreparable See Public Serv. Comm’n (1952). Wycoff Ex Co., 237, 240-241 344 U. S. Utah v. enjoining Young speaks parte officers “who state thus proceedings,” S., about to commence U. threaten and are added); (emphasis we have id., 158, also at see conjectural injury recognized that a can- in a related context Any supra, equitable O’Shea, at 502. relief, see not warrant (assuming III it meet Article case-or- rule would other controversy requirements) require federal courts to

would hypothetical constitutionality of state laws the determine clear the itself would it is not even State situations where problem vividly enough applicable. This is consider its law injunction present case, in the blunderbuss illustrated the involving “any pre-empted “any” state suit which declares aspect” As rates, routes, airlines’ and services. of the obligations petitioner has threatened to enforce regarding advertising, guidelines in the described injunction already-pending an or an about-to-be- for an to restrain ments action, involving important or civil action state pending state criminal County v. Garden State generally Middlesex Ethics Comm. interests, see Hernandez, Assn., (1982); Trainor 423, 431-432, v. 431 Bar U. S. 437 457 Younger, supra, (1977); not 434, 43-49. Petitioner has 440-447 at U. S. abstention, comity considerations un- argued for and the federal-state See Brown v. Hotel derlying Younger implicated. accordingly not Employment 500, (1984); Employees, Ohio Bureau 491, U. S. n. 9 468 (1977). Hodory, 471, Services v. 480 431 U. S.

383 injunction must be opera- vacated insofar as it restrains the respect tion of state laws with to other matters.

n —H HHHH question We now turn to the whether enforcement of the guidelines advertising through NAAG on fare gen a State’s protection eral pre-empted consumer laws is the ADA. As we have “[p]re-emption often observed, be either express implied, compellеd or Congress’ is whether com explicitly mand is language stated in implic the statute’s or itly purpose.” contained in its Corp. structure and FMC v. Holliday, (1990) (internal 498 U. S. quotation 52, 56-57 omitted); marks Shaw v. Lines, Delta Air Inc., 463 85, U. S. (1983). question, 95 statutory at is bottom, one of in accordingly “‘begin tent, and we language with the em ployed by Congress assumption and the ordinary that the meaning language accurately expresses of that legisla purpose.’” Holliday, tive supra, ’N Fly, 57; Park Inc. v. Fly, (1985). Dollar Park Inc., & 469 189, U. S.

A 1305(a)(1)expressly Section pre-empts the States from “enact[ing] enforcing] any or regulation, law, rule, standard, provision having or other relating force and effect of law to rates, routes, or services of air carrier . . . .” For purposes present key phrase, of the obviously, case, the “relating ordinary meaning to.” The of these words is a broad one—“to stand in bearing some relation; to have pertain; bring concern; to refer; into association with or (5th connection Dictionary with,” Black’s Law ed. 1979) express pre-emptive words thus pur- a broad —and pose. repeatedly recognized We have addressing that in similarly pre-emption provision worded Employee of the Re- Security (ERISA), tirement Income Act of 1974 29 U. S. C. § 1144(a), pre-empts which all state laws “insofar as ... any employee plan.” relate to benefit said, We have for ex- 384

ample, provision’s] pre-emptive [that the “breadth apparent language,” supra, [its] reach from Shaw, 96; is at scope,” Metropolitan that it has a “broad Ins. Co. v. Life (1985), “expansive Massachusetts, 724, 471 739 and an U. S. sweep,” Dedeaux, 41, Pilot Ins. Co. v. U. S. Life (1987); “broadly Ingersoll-Rand worded,” and that it is Co. (1990),“deliberately expan 133, 138 McClendon, v. 498 U. S. supra, “conspicuous sive,” 46, Pilot at for its Life, Holliday, supra, at True to our breadth,” word, 58. we employee to” have held that a state law “relates an benefit plan, pre-empted by ERISA, and is “if it has a connection plan.” supra, with Shaw, or reference to such a at 97. language Since the relevant of the ADA is identical, we think appropriate adopt it the same standard en here: State having forcement actions connection with, to, reference pre-empted “rates, routes, airline or services” are under 49 1305(a)(1). §App. U. S. C. objections reading,

Petitioner raises a number of to this none of which think is well he claims that First, we taken. interpretation language we not use our of identical guide, sweeping ERISA as a because the nature of ERISA pre-emption language, derives not from the “relates to” but sweep comprehensive from “the wide and inclusive of he scheme,” ERISA which asserts the ADA does not have. argument flatly Brief for Petitioner 33-34. This is contra- clearly unmistakably dicted our which cases, ERISA rely express pre-emption principles on and a construction of phrase g., supra, Shaw, “relates to.” e. See, 96-97, definitions); (citing dictionary Ingersoll-Rand, and n. 16 supra, at 138-139. Petitioner also stresses that the FAA “saving” preserves existing clause, which “the remedies now §App. at common law or statute,” 49 U. S. C. 1506, counterpart. broader than its ERISA But it is a common- place statutory specific governs construction that the general, g., Fitting see, e. Gibbons, Inc., Co.v. J. T. Crawford

386 here, 445 a 437, (1987), 482 U. S. canon particularly pertinent where the clause is a relic of the “saving” pre-ADA/no pre- A “remedies” clause cannot regime. general saving emption be allowed to the substantive supersede pre-emption specific it be that a a statute having State provision thought —unless rates,” “reasonable remedies against requiring providing in In- set ones, “unreasonable” could airfares. As actually Paper Ouellette, ternational Co. v. 481, (1987), 479 U. S. 494 “we do not believe intended to undermine this Congress drawn a statute clause.” carefully through general saving 1305(a)(1) § that the Petitioner contends only pre-empts rates, routes, States from or actually services. prescribing reads the words out of the This to” statute. simply “relating Had the statute been state law in such designed pre-empt “reg- a limited it would have forbidden the States to fashion, supra, ulate See Pilot Life, rates, routes, and services.” at (“A50 common-sense of the would lead view word ‘regulates’ conclusion in matter], the that order to law regulate [a [it]”).2 be Moreover, . . . must directed toward specifically 2 petitioner’s position point supported on be The dissent believes this (sources by history the and structure of the ADA it deems “more illumi language, post, 421), nating” than a “narrow focus” on the ADA’s be regime pre-empt cause the old did not the state laws involved here and legislative history specifically the ADA’s contains no statements addressed Post, regulation advertising. say to state at 421-426. Suffice it to legislative history changes need not the details of law ef confirm statutory language interpret language fected before we will ac cording See, g., Industries, meaning. to its natural e. Harrison v. PPG (1980). Inc., 678, 446 U. S. 691-692 rejected language

It also bears mention that bill did Senate contain produced precisely that would have the result dissent desires: “No routes, schedules, rates, determining State shall enact law . . . or fares, 423(a)(1), § tariffs charges 2493, reprinted . . . .” S. (1978) added). 95-631, Rep. p. (emphasis in S. No. The dissent unperturbed by Congress’ preference “relating the full to” over “deter mining,” Report gave because the “no Conference indication that the con thought ‘relating ferees language House’s to’ would have a broader 1305(a)(1) §by pre-emption were such a lim- effected if the very purpose be served next sub- ited no would one, proprietary preserves certain to the section, which States 1305(b). §App. rights airports. 49 U. S. C. over only petitioner that state laws advances the notion Next, industry pre-empted, specifically to the airline addressed general imposes on laws of ADA no constraints whereas the utterly loophole creating applicability. an irrational Besides (there why impairment of the federal is reason state little long acceptable so as it is effected scheme should be deemed statute), gеneral application particularized this “relating similarly ignores sweep lan- of the to” notion precise argu- guage. consistently rejected this We have “[A] ‘relate state law to’ ment in our ERISA cases: thereby plan, pre-empted, if even the law a benefit be plans, specifically designed or the to affect such not only Ingersoll-Rand, supra, 139; at effect is indirect.” (common-law supra, tort and con- see at 47-48 Life, Pilot pre-empted); Metropolitan at 739 S., 471 U. Life, tract suits (state plans requiring to cover certain health insurance law Raybestos- expenses pre-empted); Alessi v. mental health (1981)(workers’ compen- Inc., 451 525 Manhattan, 504, U. S. pre-empted). sation laws suggests inappropriate pre-emption is

Last, the State that and fed- when state and federal law are consistent. State opposes eral law are in fact inconsistent here—the DOT obligations guidelines, im- contained in the and Texas law poses liability point. greater that is beside the Noth- —but 1305(a)(1) § ing suggests “relating language in the that its language,” post, pre-emptive scope than the Senate’s at 426—which is ... say Report specify completely because the Conference failed to obvious, “determining.” The dissent “relating that to” is broader than evidently plain statutory language cannot be cred- believes not history, specifically explained legislative ited but also that unless apparent import legislative history specifically credited cannot be unless explained legislative history. pre-emption regulation;

to” is limited to inconsistent state again and once our ERISA cases have settled the matter: pre-emption provision displace^] “‘The all state laws . . . sphere, including that fall within its even state laws that requirements.’” are consistent with substantive ERISA’s Mackey Agency v. Lanier Service, Inc., Collection & (1988);Metropolitan supra, 825, 829 U. S. Life, 739.

B hardly surprising petitioner It is rests most of his §1305(a)(1), readings case on such strained rather than contesting guidelines really “relat[e] whether the NAAG to” They quite obviously Taking fares. do. them seriatim: governing print 2.1, Section advertisements of re- fares, quires conspicuous [defined “clear and disclosure as the largest typeface lesser of one-third the size of the in the ad ten-point type] or of restrictions such as” limited time avail- ability, exchange rights, time-of-day limitations on refund or day-of-week length-of-stay requirements, restrictions, advance-purchase round-trip-purchase requirements, and airports variations in fares from or to different in the same metropolitan changes area, limitations on breaks or in itiner- ary, availability, “[a]ny limits on fare and other material re- imposes though striction on the fare.” Section 2.2 similar, somewhat less on onerous, restrictions broadcast advertise- § requires ments fares; and 2.3 billboard fare ads to state clearly conspicuously apply’” and “‘Substantial restrictions any if there are material restrictions on the fares’ availabil- ity. guidelines further mandate that an advertised fare quantities reasonably be available in sufficient to “meet fore- every flight every day every seeable demand” on on mar- ket which the fare is if advertised; the fare will not be available on this basis, the ad must contain a “clear and con- spicuous §2.4. unavailability.” statement of the extent of requires Section 2.5 that the advertised fare include all taxes surcharges; round-trip and under fares, §2.6, must be dis- one-way prominently as the fare when the closed at least as §2.7 prohibits trips; available on round use “ ”(cid:127) [or] ‘reduced’ unless the ad- of the words ‘discount/ ‘sale/ only for limited time and is vertised fare is available a “sub- stantially price below the usual for the same fare with the same restrictions.” aspects the conclusion that these of the

One cannot avoid guidelines every terms, “relate airline rates. In its one to” guidelines bears a of the enumerated above “reference to” collectively, Shaw, S., And, at airfares. 463 U. 97. guidelines binding requirements as to how establish tickets given prices. be marketed if are to be sold at many requirements Texas violations of these law, Under (for give a cause of at would consumers action least actual (1987 § damages, see Ann. Tex. Bus. & Com. Code 17.50 1991-1992)) Supp. provide particu- for an failure to airline’s effectively creating right lar an enforceable advertised fare — fare when fails to include the man- to that the advertisement explanations ap- dated This case therefore disclaimers. pears to us much ‍‌​‌​‌​‌‌​​‌​​​​‌‌​​​‌​‌​​‌‌‌​​‌‌​‌‌​​‌​‌​‌‌​​‌​​‍like Pilot in which we held that a Life, seeking damages tort and common-law contract action employee plan pay the failure of an benefit benefits “re- employee plans pre-empted by lated] to” benefit and was S., 43-44, 481 U. 47-48. ERISA. beyond guidelines’ express

In reference event, it is clear as an economicmatter that state restrictions fares, advertising significant upon on fare have effect the forbidden Advertising public fares. “serves to inform the of the . . . prices products performs services, and thus an indis- pensable role in the allocation of Bates resources.” v. State (1977). Arizona, Bar 433 364 Restrictions on 350, U. S. difficulty advertising discovering “serv[e] to increase the price [reduce] the the incentive lowest cost seller . . . and to Accordingly, competitively.” Id., at 377. “where consum- prices price advertising, ers have the benefit of retail often dramatically are lower than would be without advertís- Ibid. As ing.” Easterbrook Judge it, succinctly put com pelling restricting “[p]rice advertising surely ‘relates to’ Corporate Illinois Travel v. American Airlines, price.” Inc., (CA7 889 F. 2d 751, 754 1989), denied, cert. 495 U. S. (1990). the State

Although insists that it is not or re- compelling stricting but is advertising, instead merely the preventing market distortion caused by “false” in fact advertising, of the dynamics air transportation cause the industry guide- lines to curtail the airlines’ ability communicate fares to their customers. The involved in expenses an air- operating line are flight almost fixed entirely costs; they increase very with each little additional passenger. The market for these is divided flights between consumers whose volume of pur- chases is insensitive relatively to price (primarily business travelers) and consumers whose demand is sensi- very price tive indeed travelers). pleasure (primarily air- Accordingly, lines to sell try as seats many per flight as at possible higher to the prices first and then to group, fill up flight by seats at much selling (since lower to the prices second group almost all the costs fixed, even a passenger paying far below seat). cost is average to an In preferable empty order for this marketing process work, and for it ultimately redound to the benefit of price-conscious travelers, the air- lines must be able to substantial place restrictions on the (so of the availability priced lower seats as to sell as many as seats possible rate), higher and must be able to advertise the lower fares. The guidelines severely burden their to do ability both at the same time: The sections requir- “clear and ing conspicuous disclosure” of each restriction it make to take impossible (to out small or ads, short as does extent) a lesser the provision itemization of requiring both one-way and round-trip fares. Since taxes and sur- charges vary from State to State, requirement ad- vertised fares include those forces the charges airlines to create different ads in each market. The section restricting

390 effectively pre- “discount,” or “reduced” “sale,”

the use of using terms to call attention the from those vents airlines price-conscious normally As offered to travelers. the fares “[Requiring information in ad- too much observed, the FTC stifling paradoxical the the effect can have vertisements Letter from receive.” FTC information that consumers Attorney Christopher Deputy California, General Ames, Respondent App. Airlines to Brief for 11, 1988, dated Mar. by allowing fares to be advertised Further, §2.4, 23a. or if ex- to meet demand the if seats are available sufficient may impossible unavailability it disclosed, make tent of obligations marketing process the all, at All use this imposed by all. impact significant guidelines would have a the ability product, upon and hence airlines’ to market their the charge.3 impact upon significant the fares a advertising guidelines concluding the In NAAG pre-empted, set out on a not, contends, do as Texas we against gambling pre-emption of state laws road that leads to applied prostitution need we address as to airlines. Nor nonprice aspects regulation of fare ad- whether state (for depic- vertising example, preventing state laws obscene tions) similarly “relat[e] rates; to” connection would adapt obviously To to this case be far more tenuous. would [air- “[s]ome language Shaw, state actions affect our peripheral fares] manner” tenuous, remote, in too line pre-emptive In S., 100, 463 n. 21. this to have effect. U. present litigation plainly “[t]he does not Shaw, as in case, express present question, and we no views a borderline appropriate to draw the line.” about where it would be Finally, give our decision does not Ibid. we note that consumers; airlines blanche to lie to and deceive carte not, out, it because it dis disagrees The dissent with as turns this — industry, but putes description pricing process of the in the airline our guidelines “significant” would have a because it does not think that Post, unexplained, and seems effect on rates. at 427. That conclusion is inexplicable. to us power prohibit

DOT retains the to advertisements which in opinion competitive its pricing, do not further see 49 U. S. C. §App. 1381.

[*] ^{[*] [*]} advertising provisions We hold of the NAAG guidelines pre-empted by judg- the ADA, and affirm the Appeals ment of the Court of injunctive insofar as it awarded declaratory respect and provisions. relief with to those Inso- judgment injunctive far as that awarded relief directed at other injunction matters, it is reversed and vacated.

It is so ordered. Justice Souter took no in the part consideration or decision of this case.

APPENDIX TO COURT, OPINION OF THE National Attorneys Association of Gеneral Task Force on the Industry Air Travel

Revised Guidelinés

INTRODUCTION In June, 1987,- Attorneys National Association of Gen- (“NAAG”) eral appointment directed the of a Task Force of study advertising states to marketing practices industry the airline in the United States. In addition to the study, the Task Force was directed to determine the nature existing and extent of deceptive unfair airline advertis- ing practices report to a recommended course of action meeting to at NAAG its in December 1987. Report

The Task Force and Recommendations were adopted by meeting NAAG at its winter on December 12, continuing (1) 1987, with a to the direction Task Force to any receive and industry, examine comments from consumer groups, agencies, (2) federal parties; and other interested (3) evaluate these report comments; and NAAG its advisability meeting Spring modifications on the of the Guidelines. the Air written comments from

The Task Force received Transport of Adver- the American Association Association, tising Agencies, the Association of Na- Airlines, American Bureaus, of Better Business Advertisers, the Council tional Commission, the Association the Federal Trade National Airlines, Airlines, USAir, United Broadcasters, Southwest Department Transportation. Assistant at- and the S. U. torneys general Force states evaluated these Task reported their recommendations NAAG. comments, and adopted the recommended 15, 1988, On March NAAG flyer changes frequent and directed that to the Guidelines frequent flyer advertising and the comments to both the fare changed respond to valid concerns raised be Guidelines filing by and comments those comments. Guidelines by changes directed herein reflect the NAAG. Pro- also directed the chair NAAG’s Consumer

NAAG attorneys general appoint four to serve tection Committee continuing the effectiveness of on a task force to evaluate with members of and to continue discussions Guidelines industry parties. attorneys These and other interested (California), general Kamp Hartigan F. аre: John Van de Neil (Illinois), (Texas), Eikenberry and Kenneth Jim Mattox O. (Washington). important to that these do not create

It is note Guidelines advertising prac- any regulations regarding laws or new industry. practices or other business of the airline tices They merely explain existing apply how state laws detail flyer advertising frequent programs. to air fare Each is followed a comment which Guideline summarizes: (cid:127) respect intent with to that NAAG’s Guideline. (cid:127) Any by the Task relevant comments received Force. (cid:127) significant Any changes that were made to the

Guidelines. 1—Definitions

Section any graphic Advertisement or oral, written, 1.0 means pictorial statement made in the course solicitation of any limitation, Advertisement without includes, business. representation newspaper, magazine statement or made in a public publication, sign, or other notice, or contained (collec- poster, display, pamphlet, or billboard, circular, letter advertisements”), tively “print called or on radio or televi- (“broadcast commercials”). sion encompasses This

Comment: those materials definition advertising and media covered most statutes. states’false “Print advertisements” and “broadcast commercial” are separated categories into because different afforded slightly treatment under these Guidelines. This different represents change an earlier the Guidelines from draft attempt and is an to address some the airlines’ concerns regarding lengthy disclosures in broad- difficulties of cast commercials. any coupon, certificate,

1.1 Award means voucher, benefit tangible thing promised, given, which is sold or otherwise by program partner program transferred an airline or to a exchange mileage, segments member in for credits, bonuses, or other units of value credited to a consumer as an incentive fly any any program on airline or to do business with partner. 1.2,

Comment: This as well as 1.3, definition, definitions self-explanatory. 14,1.6,1.9, 1.10, and is specified mileage 1.2 Award level means a amount of or segments bonuses, number of or other units which a credits, program member must accumulate in order to receive an award. any Blackout

1.3 date means date on which travel or use program permitted program of other benefits is not mem- seeking bers to redeem their award levels. This is a form capacity control. practice Capacity which an air- control means the

1.4 op- program partner limits the line or restricts or otherwise portunity program to redeem their award levels members program. offered in the for travel or other benefits rep- conspicuous statement, that the and means 1.5 Clear (“statement”) being disclosed is of such resentation or term audibility presented and is so as size, contrast, color and readily person to whom it be noticed and understood being language and terms should be used is disclosed. All ordinary usage in accordance with their common meaning. “companion” example, should be used For (i. any person traveling any companion e., when it means member), family program solely With- with the not members. limiting requirements preceding of the sentences: out

(a) print is considered A statement in a advertisement type conspicuous if a is used which is

clear and size largest type size at least one-third the size of advertising. it However, used in the need not be larger than:

(cid:127) type 10-point that are 200 in advertisements

square smaller, inches or (cid:127) larger 12-point type in advertisements that are square

than 200 inches. body copy If the is in the of the advertise- statement type largest as the ment, it be in the same size type body copy, in the and does not have to used type-size requirements. meet these (b) A statement in a broadcast commercial is considered orally conspicuous if it is made and is as

clear and pace and volume as the clear understandable fare information.

(c) clear and A statement on billboard considered

conspicuous type which is at least one- if a is used largest used on the one size third the size of billboard.

(d) required by A statement relating 3, Section to

frequent flyer programs, is clear considered conspicuous prominently if directly it is adja- located cent to applies. Type to materials it which size should be no commonly-used smaller than the most print size in the document, but in no event smaller 10-point type. Any than any right reservation of changes make program future in the or award levels should prominently be located beginning at the of printed materials. Comment: deceptive aspects One the most current air of of completely advertisements is inadequate manner

fare in which those advertisements disclose the restrictions and apply limitations which to the advertised The re- fares. print strictions disclosed in rarely advertisements are lo- cated near the appear only advertised and in often extremely type small at the bottom the advertisement. In broadcast commercials, such generally disclosures are absent radio advertisements, and at included all from if appear in television commercials as written disclosures on the quickly screen average much too per- flashed for son to read. On billboards mention restrictions on advertised is unusual. fares background, Given this NAAG believes that it is neces- sary clearly the airlines what constitutes clear define for adequate advertising disclosure in all media. The type-size print minima advertisements are aimed at making easy the disclosures both to read and noticeable. Consequently, slightly larger print suggested size in larger size advertisements. type-size These minima are not print is, absolute. That every do disclosures not in- have 10-point stance type, be long least as as conspicuous regardless are clear and type. the size type suggestions size merely examples advertis- ing practices give which expectation an airline a reasonable that will it not be sued it the Guidelines. In the if follows meetings summer, Force’s with the airlines last one

Task expressed was that the airlines could abide common note guidelines, long they disclosure as as were clear and en- uniformly. an airline does not choose this forced If safe may waters, harbor and instead ventures into untested it aground it do run not. But it is so. free largely be- comments to this Guideline were critical singled cause out airline this NAAG advertisements for However, whole, on indicated treatment. the airlines relatively easily type meet the could size standard print advertisements. encourage

NAAG elected to oral in broadcast disclosures media, because written not im- disclosures are difficult if possible many people to, to read and because listen rather than watch television commercials. continue to believe We conveying that oral disclosure is the best method of infor- mation in a However, television commercial. the converse this Guideline is not true —a in a disclosure television necessarily deceptive commercial is not it is instead made if super long crawl, in a video as as it is still clear and conspicuous. safety very large type provided reasons,

For billboards. Frequent flyer program any program

1.6 means offered program partner an airline or in which awards are offered program members. availability only Limited-time 1.7 means that the fare is specific period available for a of time or not fare is during periods. available certain blackout applies This Comment: to air that are definition fares (e. only year g., available certain times available De- 15), through April cember 15 are not available at certain (not 5), through January times all available December 23 (available only only or are available until a date certain 15). January apply It until does not that are un- fares available days on certain the week or times day.

1.8 Material restriction means a restriction, limitation, or requirement other which affects refundability the use or a ticket, and which is generally applicable not to all classes (such of fares or tickets as standard carriage). conditions of Comment: Due to the numerous standard ap- conditions plicable to most airlinе tickets, NAAG has confined “material to those definition of restrictions restrictions” specific limitations that are unique to certain fare (i. categories e., those that are the restrictions different from and limitations apply that ticket). to a standard coach Program 1.9 member any means consumer ap- who has plied accepted and been membership for in an airline’s frequent flyer program, regardless of whether he or she has mileage, accrued segments credits, bonuses, or other units of on value an any airline or program with partner. Program 1.10 partner any means entity business which

provides part awards as of an frequent flyer airline’s program.

1.11 Vested member a means frequent member of flyer a program who is existing enrolled in program an pro- and has vided consideration to the partners, airline or its and who has not adequate received program of changes notice such as set forth in Sections 3.2 and example, 3.9. For consideration purchasing includes tickets on an renting airline, a car using specific a credit card. Comment: separates This out those consumers definition joined

who frequent flyer program receiving without ade- quate notice program how change prospec- could of tively. special Guidelines protections some afford vested members and vested miles. There is sound reason this. for reviewing promotional the travel reward

After materials major most airlines, NAAG for concluded that cur- of rently vested members have not adequate received disclo- significant potential in award lev- increases sure imposition which result in restrictions other els or awards. Therefore, devaluation the airlines’ unilateral miles which and the vested members treat Guidelines adequate pro- ‍‌​‌​‌​‌‌​​‌​​​​‌‌​​​‌​‌​​‌‌‌​​‌‌​‌‌​​‌​‌​‌‌​​‌​​‍receiving notice accrued members before changes differently. spective (or credits) mileage program other mile means 1.12 Vested person receives member before accumulated a vested changes, adequate program as forth in set Sections notice of 3.2 3.9. mileage or credit This Comment: identifies definition or she received ade- he a vested member

accrued before regarding possibility quate detrimental notice offuture changes program. to the the comments in the See definition vested member. 2—Fare Advertisements

Section guideline 2.0 General price provides

Any fares other air or advertisement which conspicuous, plain language, clear and information must be non-deceptive. Deception from result not and and from reasonable statement in the advertisement direct obscuring omitting or a mate- but also therefrom, inferences rial restriction. following Guidelines This Guideline and

Comment: advertising deceptive individual states’ restate false price apply practices air as statutes advertising. print Disclosure in advertisements

2.1 make clear and con- Print advertisements for fares must spicuous such disclosure of restrictions as:

(cid:127) availability. Limited-time (cid:127) right exchange or of ticket. Limitations on to refund (cid:127) day day restrictions. Time of or of week (cid:127) Length stay requirements.

(cid:127) purchase requirements. Advance

(cid:127) trip purchase Round requirements. (cid:127) Variations in fares to airports or from two or more serving metropolitan the same area. (cid:127) charges Limitations on, or extra changes for, breaks or itinerary, such every as failure leg to travel on as

scheduled.

(cid:127) any, required by statement, if Guideline 2.4. (cid:127) Any other material restriction on the fare. This Guideline would disclosing be met material re- strictions either:

(cid:127) body copy in the of the advertisement, (cid:127) adjacent price, to the fare (cid:127) in a box heading with a such as “Restrictions.” (in Examples 10-point type) of disclosures of material re- they apply if strictions being to fares advertised are: body copy: In the

RESTRICTIONS. gen- “Weekend traveler” are fares erally day Saturday available all Sunday p.m. until 6 However, these fares flights not available on some days. on some

In the box:

Restrictions

These apply restrictions to one or more of these fares: (сid:127) day purchases required advance (cid:127) Not available November 20-December 1 (cid:127) only New York fares Airport to Newark

or Restrictions. Advertised fares are Tuesday, available Wednesday, Thursday Three-day afternoons. advance purchases required. penalty applies. 50% cancellation advantage print

Comment: The to consumers adver- of over or tisements television radio advertisements is that they give something tangible consumers to use as a refer- shopping ence when low cost air Because con- for fares. carefully print sumers can take their time and read a ad- especially important type vertisement it is this of complete advertisement contain the most accurate and in- regarding any possible advertised The formation airfares. singled restrictions out in this NAAG Guideline dis- for significant closure are those NAAG believes are the most contemplating purchasing a An consumer a ticket. adver- complies give tisement that with this Guideline will a con- pieces sumer three crucial of information: Eligibility they eligible 1. will know —consumers if (i. purchase e., can a consumer meet advance requirements affecting or other restrictions time or date of travel?); Availability accurately gauge 2. can —consumers

likelihood that will be able to obtain a ticket at the price; advertised

3. Risk—consumers will know the risks associated with (i. purchasing price e., a ticket at the advertised is the ticket penalties apply upon or do other cancella- non-refundable changes itinerary?). tion or particular great nega-

This Guideline received deal of government agencies tive comment because the airlines and required misunderstood it to mean that it disclosure full of apply flight. specific all the restrictions to each This of only requires any is not correct. Guideline that if apply the restrictions listed in the Guideline air advertised then the advertisement must disclose fares the existence that restriction and the that the restric- fact applies tion to one more advertised. To airfares up misunderstanding, specific clear this included NAAG ex- amples required the disclosures the revised Guidelines. misunderstanding There also some was that disclosure in required. a box was As the just states, Guideline this is option. one

The comments made to the December Guidelines evi- denced misconception another the wording about the dis- closures on provides restrictions. This Guideline sug- gested wording, again to assist the airlines in determining how to meet the disclosures, language but the no means sacrosanct. The best creative minds in the advertising business are available through to the airlines their advertis- ing agencies. The airlines are to avail themselves free these talents, certainly who are adept phrasing message get advertiser wants to across to the consumer. The essence the Guidelines is that consumers be must advised the limits which the [sic] airlines has impose of on chosen to ability buy

consumers’ tickets at price. the advertised 2.2 Disclosure in broadcast commercials

Broadcast commercials for fares must make clear and con- spicuous disclosure of: (cid:127) availability. Limited-time (cid:127) right Limitations on exchange refund or of ticket.

(cid:127) any, required statement, if Guideline 2.4. In following addition, if the seven disclosures are not made conspicuous a clear and manner in the commercial, applicable that are must be orally passenger disclosed to the before actually reservations are made: (cid:127) day day Time of of week restrictions. (cid:127) Length stay requirements.

(cid:127) purchase requirements. Advance (cid:127) purchase trip Round requirements. (cid:127) Variations in fares to or from two or airports more serving metropolitan the same area. (cid:127) Limitations charges on, or extra changes for, breaks or itinerary, such as failure every leg on travel as

scheduled.

(cid:127) restriction in the fare. other material Any the airline in- disclosure, As to these of may seven types or choose to defer may clude or all in the commercial any disclosure until the time reservations made. actually If to the fare adver- applies of these seven disclosures any to defer disclosure until the time tised and the airline chooses made, the commercial must the reservations are actually that substantial clear and disclosure “Other give conspicuous The statement restrictions or similar language. apply,” “Restrictions is not sufficient. apply” required the Guidelines

Comment: In an earlier draft, that radio and television advertisements include all the print required The same disclosures advertisements. industry unanimously responded such airline detailed impossible include in the 15 disclosures would be and 30 advertising spots generally purchased radio second and for argued time ads, that, television and even allowed this if resulting pro- disclosure, commercial much oral would vide too much a consumer absorb use- information for fully. They requirement that such a would elim- concluded advertising price and inate airline on television radio. provision stating without information, of fare significant apply to the most restrictions that adver- fare deceptive ultimately tised, is to consumers and harmful industry the airline alike. provides compromise. sug- a It The Guideline as revised gests disclosure the three most serious restrictions that apply availability, time can to an airline ticket—limited nonrefundability exchangeability and limitations on or availability. all these restrictions can Disclosure fare something simple following accomplished by be as as the statement: “Tickets are are not available on nonrefundable, flights, purchased be December 15. Other all must easily significant apply.” These 20 words can restrictions or addition, read commercial. In some be 30 second conspicuously clearly be all this information super disclosed in a video or crawl in television commer- option course, cials. this is not availаble radio com- Of commenting mercials. However, airlines confirmed typical spot radio making seconds, the concern about time less crucial. option

Airlines then have the disclosing additional material restrictions in the advertisement itself defer- ring such disclosure until a consumer makes a reservation. course, an airline does choose not to restrict its Of if (and severely, time) words less thus, air is needed. fewer compromise position This recognizes print also that ad- vertising lends readily more to detailed itself information in a which the consumer can retain and to at his form refer pace. own For reason, this require NAAG has chosen to less disclosure in allowing print broadcast, to be the me- dium disclosure. for full

2.3 Disclosure on billboards

Any provides billboard which price air fare or other infor- mation a on fare to which apply material restrictions must conspicuous have clear language such as “Substan- tial apply.” restrictions The statement apply” “Restrictions is not sufficient. safety

Comment: For reasons, NAAG concluded that lengthy written disclosures on inappropriate billboards are potentially disagree hazardous to drivers. We with the special DOT that price this advertising treatment on bill- boards proliferation will result in a billboards on our highways. nation’s availability 2.4 Fare

Any advertised fare must be quan- available in sufficient tity so reasonably as to meet every foreseeable demand on flight day each for the market which the advertisement appears, beginning day on the on which the advertisement the ad- three after days for at least continuing

appears terminates. vertisement available, thus fare is not if the advertised

However, state- conspicuous a clear and must contain advertisement of the advertised fare. of unavailability to the extent ment limited” and “Restrictions such as “Seats Statements do meet These examples meet this Guideline. do not apply” this Guideline:

(cid:127) when call. you not be available This fare may (cid:127) on all flights. is nоt available This fare (cid:127) and Sun- Saturday available on some This fare is only

day flights. greatest amount elicited the This Guideline Comment: industry, ATA, negative FTC the airline comments from impossible They argue this Guideline and the DOT. pric- complexity implement airline to the because, due particular ing systems, at a seats available the number of flight particular number. It is is not a low on a fixed departure. They up point continuously to the modified suggest acceptable airlines to communicate it is public buy general seats, low but to the invitation fare to available to zero or close the number seats then reduce of flights, possibility popular because zero the most for price purchase at the advertised ex- can a seat a consumer placed. the advertisement is ists at the time justify system complexity cannot the airlines’ The of approach. other retailer would such an No unfairness of justify item to stock an advertised be allowed to a failure grounds last minute the retailer decided that, on at the just costly it had advertised. not to stock the item it was less price availability advertised, item at the adver- The anof advertising. very goes an tised, to the heart If of truthful on each that is not available airline advertises an air fare every flight advertised, and this to the destination fact is not disclosed, then the deceptive advertisement is on its face. appreciates While NAAG difficulty disclosing the of

specific each, number flight seats available on advertised, of a disclosure that “This is flights” not available on all fare or “This you not be available when call” is not fare particularly onerous. Absent such disclosure, airlines, as all other retailers, required should be to have sufficient stock available to meet reasonable demand for fare advertised. 2.5 Surcharges

Any fuel, tax, or other surcharge a fare must be in- cluded in the total advertised price of the fare. Recently,

Comment: several airlines possi- considered the bility рassing along an increase in the cost of fuel by imposing consumers surcharge” rather than sim- “fuel ply raising air their increased costs. The air fares reflect advertised was to the same, remain but a fare footnote would be added to the advertisement in type” the “mice dis- closing that, instance, surcharge a $16 would be for fuel tacked on to the potential advertised abuse, fare. type price this advertising permitted, is obvious. It if would be a matter time air $19 before fares from New York to could be advertised with meal, $300 California baggage fuel, labor, surcharges added in a footnote. price The total advertised must include all such charges in order potential to avoid these abuses. However, this Guideline should require not be construed to an airline impossible. to do the We do not believe that such minimal charges tour-related meaning within the fall of “fare” do not charges believe that unknown must be dis- therefore closed as a surcharge (if known). the amounts are not in fact This course charges does not mean that which are known—either as an percentage exact amount as a —do not have to be disclosed in advertisements. fare advertising

2.6 Round trip of a advertise the one-way portion If an airline elects to as a this re- round-trip purchase, that is available only fare must be ad- fare, full striction, round-trip ‍‌​‌​‌​‌‌​​‌​​​​‌‌​​​‌​‌​​‌‌‌​​‌‌​‌‌​​‌​‌​‌‌​​‌​​‍with the together manner, at least as promi- in a clear and conspicuous vertised as the fare. one-way nently routinely advertise Comment: Airlines one-half of (i. “one-way” price)

price alleged tickets that are e., the for round-trip purchase. only makes a a consumer available if continue this Guideline, an airline elects to this Under if advertising practice, that the it must also disclose fare trip purchases only a round ticket available a consumer if trip price The dis- round ticket. and the actual full promi- type size and location as must be made in a closure advertised. nent as the fare part, willingness stated a have, the most The airlines trip all the airlines

to advertise the round airfare if full encourage is intended to all do the same. This Guideline adopt practice. airlines to this or simi- “discount,” “reduced,” “sale,” use of

2.7 Deceptive lar terms “sale,” the words “dis- be advertised use of

A fare may such words that that the count,” “reduced,” suggest or other reduced fare and is not a advertised is a temporarily fare if that fare is: fare only regularly-available (cid:127) time, limited for a specified, period available (cid:127) for the same fare below the usual substantially price restrictions.

with the same year majority each tickets sold airline Comment: significantly “Y” or prices than the stand- lower sell at full year regular coach These lower ard offered fare. fares theory a certain amount allocate round and airlines regular result, the coach “bucket.” As a to each seats has to have as a ceased any meaning starting point for whether or not a ticket a determining being offered for “sale” as consumers come to have understand that price term.

In this Guideline NAAG has to con- attempted prevent sumer use such by “sale,” words as limiting confusion of “discount,” “reduced,” or to describe those only fares a true over available represent savings regularly airfares— those that are available short time periods of are substantially below any regularly offered fare for ticket identical restrictions. carrying

Section Flyer Frequent Programs 3—

General Comments Section 3 been Frequent flyer have programs widely acknowledged as the most marketing airline indus- programs successful The struck between customers try history. bargain and the has airlines to be proven very costly the airlines. many of have Customers who accrued the are ex- necessary mileage to collect the awards which led them to pecting join fly in the in the programs Some airlines are non place. first disturbed the cost their side keeping bargain of of and the real lose revenue possibility because on passengers flying awards dis- frequent flyer may begin customers. The solution placing paying contemplated some carriers has been to award thresholds raise and imple- ment restrictions to decrease the cost to them the aware actual these and/or program. potential effect of is to devalue vested members’ accruec changes significantly other credits in the variom mileage program. Although awards materials have containec frequent flyer program some obscure mention the possibility progran future these disclosures have been tt changes, wholly inadequate members the potentially major negativi program inform which are airlines. changes by many contemplated including flyer programs frequent cover These Guidelines goods providers or services any partner or other airlines They intended hotel rooms. cars and such as rental participated in these have protect who those consumers adequate good notice that programs without faith, change, the airlines how programs to advise could of by adequately pro- right they the in reserve this can future nondeceptive viding members in a to all this information law. with state consistent manner Capacity controls

3.0 employ capacity program partners its If an airline or 1. clearly conspicuously disclose must airline controls, the flyer program rules frequent solicitations, newsletters, in its techniques specific the airline used the bulletins and other any capacity partner solicitation program to control or dates, specific This includes blackout award. a which states (for example, “the number of percentage of seats limits oh limited”), recipients any flight to award allocated seats on or other or rooms allocated of seats maximum number partner program whereby limits airline or the mechanism frequent redeeming program oppоrtunities members of the blackout flyer Guideline, all To meet this award levels. specifically disclosed. be dates must program or miles, the airline for vested As to awards 2. member with- partner provide to the vested the award must capacity provide con- capacity award with or the controls out pe- period A reasonable of time. a reasonable trols within days date or after the before be within 15 riod would 31-day period requested. this originally If all seats within requested reser- a member time the vested at the were sold with- not be accommodated member could that the vation, so sold, passenger a seat has been displacing to whom a out period first period to the be the would then a reasonable re- every sold to the was not seat on which available date quested destination at the time the program member re- a quests reservation.

Comment: the All airlines that met with the Task Force they stated that right impose intended to retain capac- ity controls, in the future, limit number seats available to purchasing consumers frequent tickets with flyer imposition award capacity con- certificates. including trols, potential blackout dates, has the unrea- sonably restricting supply seats other benefits way significantly such as to devalue awards due vested program potential members. NAAG this limi- found adequately has tation not been program disclosed to mem- frequent flyer promotional bers in the materials we re- puts viewed. This Guideline the airlines on notice as to they what provide should consumers information if impose capacity want to frequent flyer controls on use awards at some date. future

In earlier the Guidelines Task Force took the drafts of position capacity that controls applied could not be to any mileage awards based on by or credits accrued vested members adequate received notice capacity that before imposed. controls could comрromise, be However, as a and permit flexibility airlines reasonable holiday around peak or other travel times, the provides revised Guideline a reasonable passengers time to accommodate with for SI-day award tickets: days a “time window”—15 and before days requested ticketing. the date This “time after window” capacity allows airlines allocate to meet de- mand over a yet period reasonable, time. In the defined of flights event all to a certain destination are during sold out 31-day the entire ticketing time window, on the next avail- able seat approach would be reasonable. This has the ad- being simple ditional straightforward to im- benefit of plement possibility with less customer confusion frustration. affecting changes Program members vested

3.1 partner program has not reserved Any that airline or 1. required changes right in the manner to make future changes any of these Guidelines Sections 3.2 and 3.9 (for imposition capacity example, program aspect of its any mechanism or other levels, increases in award controls, any ability whereby award will to redeem vested member’s affected) program protect adversely mem- must vested be Examples are: this meet Guideline which bers.

(a) adversely may affected not be All vested members period. change A reason- for a reasonable following mailing year period be one

able would change. notice of that

(b) may program partner allow vested The airline or any is in effect level which to lock in award

members change program. any immediately preceding in the period guaranteed for a be That award level would any year mailing increase in notice one after per- would also be A member award levels. vested change to lock in a his or her selection mitted to prior any to an at time in existence different award in award levels. increase

(c) partner program credit vested The airline

program or other units sufficient with miles members change pro- in the the time of that, assume gram, the same will be able to claim the member the old have claimed under he or she could awards program. measures corrective This institutes Guideline

Comment: mileage be- protect accrued and the vested members change program receiving adequate could a notice that fore point The Guide- in the at some their detriment future. approaches to acceptable alternative sets three line forth existing programs change without unrea- airlines to allow rights expectations vested mem- sonably altering and the bers. example, For an airline wish to create a new program higher with persons award levels join who in for 3.1.1(a) the grandfathers Guideline in future. vested mem- one-year bers period a 3.1.1(b) notice. Guideline for after grandfathers only specified a locked-in one-year award a period the change date the thereby and after effective gives the year member an additional mileage to accrue units specific toward a 3.1.1(c) award. Guideline allows program to avoid the problems administrative distin- guishing between old and new members and old and new award equitably levels adjusting the award levels vested members. examples

These ways not the in which airlines reasonably can protect vested changing members when ex- isting programs. They are intended to delineate minimum acceptable standards.

3.2 Changes Notice of Adequate

1. changes notice of frequent in flyer current program award levels provided must be program to vested members program partner airline or to allow a rea- sonable time for the vested member to obtain and use an example, award. For year notice no prior less than one to the effective change date of such would be reasonable. Reduction in award require levels would not such notice. Any

2. airline policy which has a deleting program members from mailing its list for notices and statements clearly must conspicuously policy pláin disclose in language regulations. its rules and

3. To right reserve the changes make future in аward program levels conditions or restrictions in a man- providing ner reasonable notice consistent with state law, which notice is less than notice set forth in Guideline 3.2.1, an airline clearly must first conspicuously disclose that reservation and the nature of changes, such future plain language. This disclosure examples should include program within which limits make clear the outer

which following example, may changed. is not the For be awards adequate disclosure: mileage regulations sub-

“Program levels are and rules, ject change notice.” without to example adequate disclosure:

This “(Airline) program right to terminate the reserves regardless of that This means with six months notice. your right program, you participate in this the amount mileage can be termi- claim awards to accumulate give you notice.” we six months after nated Or:

“(Airline) program change right reserves the mileage regulations, level. This means rules, (Airline) mileage may unlimited levels, add an raise days, of seats limit the number or number of blackout any Pro- with notice. destinations or all available may certain gram to use awards to not be able members types to obtain certain not be able destinations, awards such as cruises.” say: might also disclosure intends, if the airline so Or, (Airline) any available make award travel will case, “In requested within_days program date, member’s of a except dates listed here.” for blackout changes, right other in a manner future to make The airline’s apply to mile- provided shall 3.1, in Guideline than required age the notice receive accrued after members this Guideline. attempted to reserve past, airlines have In the

Comment: programs changes right in their to make radical future language as using vague blanket uncertain such time.” “Subject deletions, or revisions additions, outrage when several that ensued The consumer major attempted airlines unilaterally change pro- to their grams in the winter 1986-87 makes it clear that consum- of adequately ers were not they joined partici- told, when and patеd frequent flyer programs, they taking that were gamble they striving that the award were would still be for mileage available, at originally the level advertised the they time necessary accrued the miles. To avoid a recur- problem rence this same in the future, this Guideline provides potential the program such extensive changes clearly be conspicuously must and disclosed to the public by specific example. puts It also the airlines on no- (1) previous tice that attempts their to disclose this critical (2) inadequate, have they been intend to re- information serve if right the_ changes to make such they in the future, give must (3) members new and notice, and as to different vested members, implement any airlines cannot adverse changes year one given. until year notice is One after deemed many reasonable because only consumers can during particular travel periods year the due to work or family constraints, and year notice less than a therefore may impact unduly harshly particular on a pro- class of gram members. an rights airline wants to change reserve the

If program terms its giving without year’s its members one (1) notice it can do so adequate clear and notice after given (2) has been program to members and this reduced apply only mileage standard can accrued clear after adequate given. notice has been many NAAG discovered that program airlines delete mailing members their lists are determined to from if be “inactive.” differently by Inactive is air- each defined generally line, but requiring includes some active formula participation program in the pe- within sixa to ten month prior any given riod mailing. Because crucial informa- regarding changes tion program mailings, is included in require Guidelines policy deleting airline with a clearly conspic- mailing program its list members from regulations uously policy in the rules and dis- disclose that they join. program members when tributed to all class limitations 3.3 Fare or passenger or class of fare with which an limitation upon type Any or free certificate, discount flight coupon, companion upgrade must be dis- clearly conspicuously be used coupon Disclo- closed before the member claims award. program (for “Y airline sure of the terminology example, Class”) is not deemed sufficient. Many encouraging consumers to

Comment: airlines are mileage upgrade or cer- use their accrued credits to obtain campaign coupons, or rather than tickets free tificates free Many more because this is cost the airlines. of effectivefor only conjunc- coupons and be used these can certificates regular high with a coach ticket. Because the tion of Class”) (often “Y a coach ticket disclosed as cost of full coupons represent many these and no real certificates of savings This and are useless to consumers. therefore requires clearly Guideline such restriction be dis- closed to consumers the award is claimed. before for 3.4 Certificates issued vested miles issued an air- Certificates, vouchers, or tickets coupons, line for awards redeemed for vested miles must be valid for a of is deemed to be rea- reasonable time. One period year extension, restrictions on use, sonable. Any redeposit, certificates must be clearly conspicuously re-issuance of rules, the certificate and in any regulations, disclosed on or other materials. newsletter program may only Again, many consumers because Comment: requires during periods year, travel certain fairness of cycle. twelve month be valid at least a that awards for full 3.5 Fees

Any charges airline which a fee for enrollment in its frequent flyer program fully must disclose at airline ticket counters and in all advertisements, solicitations or other ma- terials prospective to distributed prior members to enroll- ment all terms and frequent flyer conditions of program. Such prior disclosure must be accepting made payment for enrollment program. in the airline’s

Comment: Some required airlines have that consumers out membership application a pay membership a fill obtaining copy program a regula- rules and fee before of tions. Because the serious restrictions apply that can a program, travel reward it is essential that all consumers opportunity have an program review all rules and regulations paying an enrollment before fee. Redemption 3.6 time

All clearly airlines must disclose conspicuously the ac- necessary tual time processing redemption award re- quests requests where such normally processed are not promptly. example An prompt processing would be days within processing request. example An “processing disclosure would be up of awards take days.” to 30 Comment: The airlines indicated that disclosure full

redemption time problem. will not be a program 3.7 Termination of affecting vested members frequent In flyer program event a is terminated, ade- quate notice of termination must be sent to all vested mem- bers so that vested members have a reasonable time to ob- tain Adequate awards and use them. notice would be notice year prior at least one to the program. termination of the prior Award levels existence to such notice should remain year. in effect for one Program members should then have year one to use coupons, certificates, vouchers or tickets. controls should be modified

Any as neces- applicable capacity to meet the demand for all award benefits due sary pro- members. gram uniformly position

Comment: airlines take participation programs because in travel reward is “free,” pro- an airline should be able to terminate a travel reward gram any strenuously time without notice. NAAG dis- agrees. pay significant Consumers consideration for promise airlines’ to award them tickets” and other “free Program fly particular awards. members on a airline tо mileage program foregoing accrue in a travel reward often departure flight, time, more convenient a more direct expensive kept even a less ticket. consumers Those who part bargain right expect their have a to the airlines keep regardless theirs, to the cost. This Guideline af- against protection consumers reasonable unilateral fords changes. gives year mileage It consumers one accrue the year to reach a desired award level and one to use the award. apply programs This Guideline is intended to mergers any are terminated due to other It reason. permit airlines, be would unconscionable to which have reaped programs, the rewards these travel incentive away obligations walk their to consumers under from circumstances.

3.8 Restrictions

All material restrictions on frequent flyer programs must be disclosed to current clearly conspicuously pro- members and to members at the gram prospective time of enrollment.

Comment: This Guideline is intended as a corrective Any clearly conspicu- measure. airline that has not n ously program disclosed material restrictions to vested members should do so now. New members are entitled to disclosure at the time enrollment. full of 3.9 Method of disclosure

Disclosures referred to in these Guidelines should be made frequent flyer program solicitations, newsletters, rules, and other conspicuous bulletins in a clear and manner ‍‌​‌​‌​‌‌​​‌​​​​‌‌​​​‌​‌​​‌‌‌​​‌‌​‌‌​​‌​‌​‌‌​​‌​​‍so as program to assure that all adequate members receive notice. As used these Guidelines, disclosure also refers to infor- program partners. mation on containing

Comment: The regula- brochures the rules airlines’frequent flyer tions programs long have been as pages. as Extremely important restrictions are often inappropriate buried topic headings under or hidden on the back pages the last inside the brochure. This Guide- of of requires line that restrictions be disclosed in reasonable print in a helpful size location that will be most and infor- mative to consumers.

Any right reservation changes the to make ain of future program significant is so to consumers it be should prominently disclosed to insure that the maximum number people see and read this per- restriction. The Guideline of mits flexibility the airlines to determine when and how long disclosure must be made so as the airline dis- often closes the gives in a meaningful manner which information notice to all members. affected complained

One airline that Guideline 3.9 unreason- proposes able because it that all the restrictions be disclosed beginning at program the the brochure. In fact, the of suggested the listing disclosure Guidelines beginning at a brochure is right change the reservation of program prospectively. significance such a restric- tion—that program terms and conditions can change potential moment —is so critical that mem- bers should be immediately. made aware it All other disclosures can be made in the text the brochure. for Voluntary Compensation

Section 4— Boarding Denied of policies 4.0 Disclosure incentives ticketed passengers to offer

If an airline chooses the airline overbooked flights, on their tickets to surrender condi- terms and disclose all and conspicuously must clearly on offers of restrictions any of the tions proposal including — made, is the offer to whom the person future air travel —to made, before the offer in which manner and in the same the offer. accepts the person protections specific regulations Federal

Comment: offer involuntarily who are to individuals rights and certain however, to Airlines, a flight bumped offer free from voluntarily who to people want they whatever compensation overbooking. because airplane seat on an their give up vouchers good reasons, airlines prefer For economic offer compensa- instead cash on flights, tickets future for free these tion to passengers. to a con- attractive seem very vouсhers

While these many a later flight, to wait sumer who has flexibility for or are subject their use restrictions on serious carry used. cannot be black out when periods lengthy disclose any airlines fully This requires Guideline travel, air on all restrictions before for future offers not, as It does his or her seat. consumer agrees give up in their argued agencies and government several airlines com- type standards comments, set responsive to these passengers. that airlines must pensation offer

CONCLUSION has industry the airline with dissatisfaction Consumer focused have Federal agencies reached crisis proportions. per- on-time scheduling problems, on airline their attention not ad- have issues, but and other related formance, safety, Un- flyer programs. and frequent dressed advertising airline checked, the engaged airlines practices have in these areas deceptive that are unfair and under state law. The individ- through ual play states important NAAG can an role in elim- inating practices through such these Guidelines.

Justice Stevens, with whom The Chief Justice Justice Blackmun join, dissenting.

In construing cases “virtually unique the pre-emption pro- Employee in vision” Security Retirement Income Act of (ERISA), 1974 see Franchise Tax Bd. Cal. v. Construction of Laborers Vacation Trust Cal., Southern 463 U. S. 1, 24, for (1983), given n. 26 we have the words “relate to” a broad reading. The unique provision construction sup- was ported by a consideration relationship of the between differ- ent subsections of parallel ERISA that have no in other fed- eral statutes, see Shaw v. Delta Air Lines, Inc., 463 U. S. 85, (1983), 98 legislative history provision, of the id., Today at 98-99. we pre-emption provision construe a in the Deregulation (ADA), Airline Act of 1978 App. 49 S.U. C. § seq., 1301 et containing a statute similar, but no means language. identical, guage, carefully examining Instead of the lan- history structure, and of the ADA, the Court decides “appropriate,” given that it is similarity language, in to give pre-emption provision the ADA similarly a broad read- ing. Ante, doing, In 384. so disregards the Court estab- statutory lished canons of gives construction, the ADA pre-emption provision a construction that is neither com- pelled by supported by its legislative text nor history. its

H deciding “In whether a pre-empts federal law a state stat- ute, Congress’ our task is to ascertain enacting intent in federal Metropolitan statute at issue.” Ins. Co. v. Life (1985) (internal Massachusetts, 471 U. quotation 724, S. omitted). marks At the pre-emption analysis time, same our guided by respect “must be separate spheres gov- system.” authority preserved our federalist in ernmental Raybestos-Manhattan, 504, 522 Inc., 451 U. S. Alessi v. (1981). questions approach pre-emption with therefore We pre-empt Congress “presum[ption] not intend did Metropolitan regulation.” Life, areas of traditional state S., 471 U. at 740. 105(a) part, provides, “no relevant the ADA

Section enact or en- political shall thereof. . . State or subdivision any relating services of routes, or rates, force law . . . subchapter authority having IV of this under air carrier App. transportation.” provide C. chapter 49 U. S. air 1305(a). deceptive § prohibiting or By a state law definition, “pertains,” advertising product misleading “relates,” of a (and, advertising particu- to the first and foremost “refers” advertising) misleading aspect deceptive of the or product lar, to the say, is not to That than to the itself. rather advertising prohibition deceptive not does that a course, being particular product indirectly adver- to the also relate clearly whether ad- for one cannot determine does, It tised. knowing misleading vertising characteristics the is without being product does not alter the But that of the advertised. designed prohibition the nature of is to affect fact that the product.1 advertising, not the nature of 1 explained this distinc arising in New York The court in a similar case tion well: against of its laws “[A]ny relationship between New York’s enforcement rates, routes, remote advertising Pan and services is deceptive and Am’s advertising, York does not challenging In Pan Am’s New and indirect. flies, it сharges, it or what amenities about how much Pan Am where care the manner in which provides passengers. Its sole concern is with its Thus, as far those matters to New York consumers. Pan Am advertises $2,000 concerned, charge or for a $200 Pan Am is free to as New York is London, full-page but cannot take out a news- flight from LaGuardia to it if in fact it is telling $200 the fare is paper advertisement consumers Ithaca to $2,000. Similarly, plane free to route a from Pan Am remains chooses, but it cannot market many stops in between as it Istanbul with as v. Trans New York flight.” as a ‘direct’ flight that to New York consumers (SDNY 1989); Airlines, Inc., People 162, Supp. see also World 728 F. 176

421 although agree 105(a) plain Thus, § I language that the pre-empts any state directly law that relates to rates, routes, or presumption against services, pre-emption of tradi- regulation tional 105(a) state § interpret counsels we that not pre-empt every to regulation traditional might state have some indirect relationship with, connection to, airline rates, routes, or services unless there is some indication that Congress intended that result. To determine whether Con- gress had such an I intent, that a believe consideration of the history and structure of the ADA is illuminating more than “relating narrow focus on the words to.”

I policy The basiceconomic of the favoring Nation is one competitive markets in entrepreneurs which individual free to make their own concerning price decisions and out put. Since 1890 prohibition the Sherman Act’s of collusive production restrictions on pricing have been the central legislative expression policy. of that National Soc. Pro Engineers v. States, United 435 U. 679, S. 695 fessional (1978). Congress sought In 1914 promote policy by to enacting the Federal (FTCA), Trade Commission Act which created the Federal gave Trade Commission power it the prohibit “[u]nfair competition methods of in commerce.” 45(a)(1). 38 § Stat. 719, codifiedas amended, U. S. C. That type prohibition entirely consistent with a free market prices in whiсh production regulated by are not Govern ment decree. Congress

In enacted two statutes that are relevant today’s inquiry. § In March it broadened 5 of the FTCA by giving power prohibit Commission “unfair or deceptive practices “[ujnfair acts or in commerce” well as as Airlines, Inc., Western v. 597, 165 Cal. App. 600, 202 3d Rptr. 237, 238 Cal. (1984), denied, cert. (1985); Note, 469 S.U. 1132 To Form a-More Perfect Union?: Federalism and Informal Cooperation, Interstate 102 Harv. L. 842, (1989). Rev. 857

422 competition Ill, 52 codified in commerce.” Stat. methods 45(a)(1). § it enacted the Three months later at 15 U. S. C. That §411, 52 Stat. 1003. Aeronautics Act of 1938. Civil and mandated Aeronautics Board statute created the Civil industry, entry regulate airline the interstate that it into fly, could the fares that could routes that airlines charge Moreover, the stat- 987-994. consumers.2 52 Stat. § provision, patterned FTCA, after 5 of the ute contained a prohibit power giving Aeronautics Board the Civil competi- practices deceptive unfair methods of “unfair or transportation.” Ameri- 1003; see also 52 Stat. tion in air Inc., Airlines, 351 U. S. Airlines, Inc. North American can v. (1956). regard power in was not this But the Board’s 79, 82 “saving clause” also contained exclusive, for the statute statutory preserved existing remedies common-law practices.3 deceptive 1027; Nader v. Alle- 52 Stat. See (1976). gheny Inc., 290, 298-300 Airlines, 426 U. S. regula- replaced

Although Act was a similar the 1938 principal provisions tory of the statute 1958,4 scheme year, Congress de- In that in effect until 1978. remained regulation airline of interstate cided to withdraw economic Congress enacted the therefore and services. rates, routes, transportation develop, encourage, air and attain ADA “to an. competitive system market forces to deter- relies on which variety, price quality, of air services.” H. R. mine the (1978). goal p. Rep. 95-1779, 53 Because that No. Conf. regulations obviously have been frustrated if state would 2 under the Board was created and established The Civil Aeronautics Authority,” redesignated as the “Civil name “Civil Aeronautics but was 49 by Reorganization Plan No. IV of 1940. See Aeronautics Board” 1321(a)(1) (1982 ed.), January 1, 1986, by repealed § effective App. U. S. C. 1661(a)(3). § App. C. 49 U. S. 3 provided: Act of 1938 Section 1106 of the Civil Aeronautics any way abridge or alter the “Nothing contained in this Act shall by statute, provisions of existing at common law or but the remedies now Act are in addition to such remedies.” 62 Stat. 1027. this 1958, 85-726, Stat. 731. Aviation Act of Pub. L. Federal

423 were recently substituted for the regula removed federal Congress thought tions, necessary pre-empt it to such state regulation. Consequently, 105(a) § Congress enacted of pre-empts any Act, which regulation state “relating to rates, routes, or services of having air authority carrier under subchapter chapter provide of this IV transportation.” air 1305(a)(1). §App. 49 U.S. C.

At Congress the same time, gave retained §411, which Civil power Aeronautics prohibit Board the “unfair or deceptive practices or competition unfair methods of in air transportation.” 1381(a). §App. 49 U. S. C. Congress also saving retained the preserved clause that common-law and statutory deceptive remedies for practices. fraudulent and § See 1506; Nader, 426 S.,U. at 298-300. Moreover, the prohibitions against state deceptive practices that had coex- regulation isted with federal industry the airline for 40 years, and had regulation coexisted with federal of unfair practices trade economy other areas of the since 1914,5 not were mentioned in legislative either the ADA its history.

In short, there is Congress no indication that intended to exempt prohibitions airlines from state deceptive adver- tising. history Instead, suggests this scope that the of the 5The FTCA not, by does force, its own pre-empt prohibitions state deceptive unfair and practices. trade Thus, prohibition unless a state con flicts with a Federal Trade rule, Commission regulations state laws and g., are not pre-empted. See, e. American Financial Services Assn. v. FTC, App. U. S. 167, D. C. 199-200, 967, 767 F. 2d (1985); 989-991 Verkuil, Preemption of State Law the Federal Trade Commission, 1976 Duke L. J. 226. Because Department of Transportation authority has prohibit unfair or deceptive practices and unfair methods of competition in air transportation, § 49 U. S. C. App. 1381, it, too, could promulgate regula- tions that would pre-empt inconsistent state laws regulations. But the Court does not rest holding its on the fact that the prohibitions state of unfair deceptive advertising conflict with federal regulations; in- stead, it relies on the much holding broader that the ADA pre-empts itself state prohibitions deceptive advertising. regulation be measured

prohibition should of state being regulation withdrawn. was scope the federal adopted essentially position Aero- the Civil This is § light scope in interpreted of 105 Board, which nautics prevent underlying policies economic state of its two —to deregula- frustrating federal regulation the benefits of from prior clarify law which under the the confusion and to tion, regulation of the rates permitted and federal some dual state Reg. 9949 9948, 44 Fed. the same carrier. and routes of (1979). explained: Board thus federally regulation of a state 105 forbids

“Section Clearly, services. routes, rates, or carrier’s authorized may decision federal carrier’s with a not interfere states charge to serve. . . . markets or which on how much to Similarly, the services interfere with a state not exchange rates. ... for their that carriers offer preemption “Accordingly, extends to that we conclude provision go into the factors all of the economic including passenger’s quid pro quo fare, for of the liability timing, flight frequency reservation limits, smoking boarding practices, rules, meal insurance, bonding corporate financ- entertainment, service, _” ing Id., at 9950-9951. Regulation the Air- of Airlines and Freeman,

See also State Deregulation 747, 766- 1978, 44 Air L. & Com. line Act J. (1979). regulation Congress not eliminate federal Because did practices, deceptive and federal and because state unfair or practices deceptive prohibitions had coexisted of unfair or regulation, during period there is no rеason of federal 105(a) § Congress immunize the believe that intended deceptive liability engaging airlines from state misleading advertising.

HHI—1I—I The Court finds in Congress’ choice of the words “relating to” an intent a broad adopt pre-emption provision, analo- gous to the broad ERISA pre-emption provision. ante, See at 383-384. The legislative history not does support assumption, however. The bill proposed Civil Aero- nautics Board provided that State . . “[n]o . shall enact any law... relating to rates, routes, or services in air transporta- tion.” on Hearings H. R. 8813 before the Subcommittee on Aviation of the House Committee on Public Works and Transportation, 95th 1st Cong., Sess., 1, (1977). pt. p. 200 Yet the Board’s accompanying prepared neither testimony focused on the to” “relating nor language suggested that those words were intended to effect a broad of scope pre- emption; instead, the testimony explained that the pre- section emption was “added to make clear that no state or political subdivision may defeat the purposes the bill by regulating interstate air transportation. This provision represents simply a codification of existing law and leaves unimpaired the states’ over authority intrastate matters.” Id., at 243.

The to” “relating in the language bill that was en- finally acted by Congress came from the House bill. But the House Committee Report the Civil Aeronautics Board —did —like not describe the pre-emption provision in the broad terms the adopted by Court today; instead, the Report described scope the pre-emption provision more narrowly, saying that it “provided] that when a carrier under operates au- thority granted pursuant title IV the Federal Aviation Act, no State may regulate that carrier’s routes, rates or services.” H. R. Rep. (1978). No. 95-1211, 16p.

The pre-emption section in the Senate bill, on the other hand, did not contain the to” “relating language. That bill provided, State “[n]o shall enact any establish stand- any law> ard determining routes, schedules, or rates, fares, or charges in tariffs of, or otherwise promulgate economic regulations 423(a)(1), § any reprinted

for, 2493, air carrier . . . S. (1978). Rep. p. Report 95-631, The S. No. Senate ex- plained “prohibits exercising that this section States from regulatory interstate Id., economic control over airlines.” at 98. Report explained Conference Conference (with here), exception

adopted not the House bill an relevant which it described in the more narrow terms used in the Report. Rep. pp. 95-1779, 94-95 House H. R. Conf. No. (1978). There no indication that the is, therefore, conferees thought “relating language would a the House’s to” have pre-emptive scope “determining broader than the Senate’s promulgate regulation” language.6 ... or otherwise economic Nor is there indication that the House and conferees thought “relating pre-emption rates, that the of state laws substantially pre-empted routes, services” more than “regulating routes, state laws rates, or services.”

ÍV agree regula- Even if I were to with Court state deceptive advertising “relat[e] tion of could to rates” within 105(a) § meaning “significant impact” upon if it had ante, at rates, 390,1 would still dissent. The airlines’ theo- arguments persuaded retical have not me that the NAAG guidelines significant impact upon price will have a (which argument airline tickets. The airlines’ the Court 388-390) (1) adopts, essentially ante, at is that airlines must engage price compete oper- in discrimination in order to (2) efficiently; misleading price ate a modest amount of ad- (3) vertising may practice; compliance facilitate that thus guidelines might price with the NAAG increase the cost of advertising generated by or reduce the sales the advertise- 6Because the Court phrase promulgate overlooks the “or otherwise eco ante, regulations” 385-386, 2, nomic in bill, the Senate see n. it incor rectly pre-emptive that scope assumes the Senate bill had a narrower than the House bill. (4) costs revenues

ments; decrease, as the increase and (5) a re- airlines less purchase advertising; might price a reduction in duction in cause price price advertising might in which, in result airline turn, higher competition, might This is not by any legislative rates. argument supported judicial findings. on the that the economic reason-

Even Court’s assumption and restrictions on could affect advertising is sound ing price not sustained their manner, rates in this the airlines have burden of that with NAAG proving compliance guide- their to mar- ability lines would have a effect on “significant” and, therefore, ‍‌​‌​‌​‌‌​​‌​​​​‌‌​​​‌​‌​​‌‌‌​​‌‌​‌‌​​‌​‌​‌‌​​‌​​‍ket their on their rates.7 Surely product could not have intended to state every Congress pre-empt and local law and increases the air- regulation similarly and, lines’ costs of business has a similar doing consequently, their rates. “significant impact” upon I reasons,

For these dissent. respectfully 7They demonstrated, purchasing example, have not that the costs §2.1, space required by for the “Restrictions or the broadcast box” §2.2, required by will time to state the two-sentence disclosure have a realistically significant on be maintained that effect rates. Nor can it §2.7’s “sale,” “discount,” may requirement that words such as or “reduced” (i. e., only is, fact, if in available for be used the fare on sale a limited substantially price) time will hinder the airlines’ and is below the usual ability Finally, they low-priced surely to market and sell their fares. have §2.4’s proved requirement not if that fares be advertised suffi unavailability cient seats are available to meet demand or the extent of differ impossible disclosed will make it for the airlines market sell permits prices. expressly ent seats at different That section the airlines low-priced quantities; to advertise fares that are available limited it disclaimer, simply “This fare requires that include a such as Attorneys you not be available when call.” See National Association of (1988), §2.4 General, re Industry, Task Force on Air Travel Guidelines printed App. Amicus Curiae 24a-25a. to Brief for United States as

Case Details

Case Name: Morales v. Trans World Airlines, Inc.

Court Name: Supreme Court of the United States

Date Published: Jun 1, 1992

Citation: 504 U.S. 374

Docket Number: 90-1604

Court Abbreviation: SCOTUS