SABRE TRAVEL INTERNATIONAL, LTD., PETITIONER, v. DEUTSCHE LUFTHANSA AG, AUSTRIAN AIRLINES AG, BRUSSELS AIRLINES, NV/SA, AND SWISS INTERNATIONAL AIR LINES, LTD., RESPONDENTS
No. 17-0538
IN THE SUPREME COURT OF TEXAS
February 1, 2019
ON PETITION FOR REVIEW FROM THE COURT OF APPEALS FOR THE SECOND DISTRICT OF TEXAS
Argued October 30, 2018
JUSTICE GREEN delivered the opinion
In this case, we consider whether an appellate court‘s denial of a permissive interlocutory appeal prevents this Court from reviewing the merits of the underlying interlocutory order. We hold that it does not under the plain language of former
I. Background
Direct connections in the airline industry refer to methods used to market airfare directly to travel agents. Once travel agents gain access to an airline‘s reservation system through a direct-connect method, they can review the airline‘s inventory, check flight availability, price flight options, and book flights for passengers. Airlines also use indirect methods, such as intermediaries, to market and sell airfare. Sabre Travel International, Ltd., has long served as an intermediary in the travel industry. Through a computerized system known as a Global Distribution System (GDS), Sabre connects airlines with consumers by aggregating travel offerings of multiple airlines for comparison shopping by travel agents. Sabre‘s GDS is one of the largest on the market, aggregating content for over 400 airlines.
Deutsche Lufthansa Airline Group owns multiple subsidiary airlines. Four of those airlines (collectively, Lufthansa) contracted with Sabre to market and sell tickets through Sabre‘s GDS. Under the contracts, Sabre received a booking fee when travel agents booked flights on Lufthansa. The contracts also contained non-discrimination provisions, preventing Lufthansa from disadvantaging travel agents who use Sabre‘s GDS instead of a competing GDS.
Concerned with the expense of GDS services, Lufthansa calculated that it cost the airlines approximately $18 more for every ticket booked through a GDS. To allocate this cost, increase transparency, and offset the high fees of GDS services, Lufthansa introduced an $18 surcharge to airline tickets sold through GDSs. The surcharge does not apply to tickets booked through non-GDS channels, such as direct connections and Lufthansa‘s own websites.
Sabre protested that the surcharge violated the contracts’ non-discrimination provisions because Lufthansa did not impose the same surcharge equally across all GDSs. Lufthansa maintains otherwise, arguing that its surcharge complies with the parties’ contracts. This dispute became the subject of Lufthansa‘s declaratory judgment suit against Sabre, and Sabre‘s corresponding counterclaim for breach of contract.
Sabre, in response to the surcharge, allegedly began encouraging travel agents to breach their contracts with Lufthansa by directing them to book travel through Lufthansa‘s direct connections, where there is no surcharge, and then enter the itineraries into Sabre‘s GDS so that travel agents could avoid the surcharge and Sabre could collect its booking fee. Because of Sabre‘s alleged actions, Lufthansa amended its petition to include a claim for tortious interference with contract between Lufthansa and its travel agents. Lufthansa also added a breach of contract action against Sabre for charging Lufthansa for non-billable administrative bookings—in other words, passive bookings.
Sabre promptly filed a motion to dismiss Lufthansa‘s tortious interference claim under
while persuasive, “is factually different in ways which could be construed to make it distinguishable as controlling authority” regarding whether the ADA preempts tortious interference claims by airlines, and that “an immediate appeal may materially advance the termination of litigation.” See Frequent Flyer Depot, Inc. v. Am. Airlines, Inc., 281 S.W.3d 215, 221-22 (Tex. App.—Fort Worth 2009, pet. denied) (holding that the ADA did not preempt American Airlines’ tortious interference claim brought to protect against a black-market reseller brokering American Airlines’ frequent-flyer miles). The interlocutory order also noted that because holdings from other jurisdictions concluded that ADA preemption applies to claims against GDSs, the question “is ripe for consideration, especially from the Second Court of Appeals which authored the Frequent Flyer Depot opinion and, ultimately, the Texas Supreme Court.”
The court of appeals denied the permissive appeal in a single-sentence memorandum opinion without explanation but noted in a footnote that “courts strictly construe the interlocutory appeals statute.” 549 S.W.3d 600, 601 n.3 (Tex. App.—Fort Worth 2017, pet. granted) (mem. op.) (citing Blakenergy, Ltd. v. Oncor Elec. Delivery Co., No. 02-14-00241-CV, 2014 WL 4771736, at *1 & n.2 (Tex. App.—Fort Worth Sept. 25, 2014, no pet.) (mem. op.) (per curiam)).
Sabre filed a petition for review in this Court, asserting that the court of appeals abused its discretion in denying the permissive interlocutory appeal and that the ADA preempts Lufthansa‘s tortious interference claim. Lufthansa, on the other hand, argues that there is no preemption under the ADA, and even if there is, this Court has no jurisdiction to hear the case because the court of appeals denied the permissive interlocutory appeal. We granted the petition. 61 Tex. Sup. Ct. J. 1420 (June 15, 2018).
II. Jurisdiction
Our jurisdiction turns on the issue of whether an intermediate appellate court‘s denial of a permissive interlocutory appeal prevents this Court from reaching the merits of the underlying interlocutory order. We hold that it does not under the plain language of former
A. Section 51.014(d) & (f)—Permissive Interlocutory Appeals
As a general rule, appeals may be taken only from final judgments. E.g., Lehmann v. Har-Con Corp., 39 S.W.3d 191, 195 (Tex. 2001). “A judgment is final for purposes of appeal if it disposes of all pending parties and claims in the record, except as necessary to carry out the decree.” Id. Consistency, finality, and judicial economy fix the final judgment rule in our jurisprudence so that appellate courts, including this Court, decide issues on a full record, do not unnecessarily delay the underlying trial, avoid futility, and consider all issues in a single round of review. See, e.g.,
Hernandez v. Ebrom, 289 S.W.3d 316, 322 (Tex. 2009) (Jefferson, C.J., dissenting) (“The purposes of the final judgment rule are to avoid piecemeal litigation, to promote judicial efficiency, and to defer to the decisions of the trial court.” (citation omitted)).
There are, of course, exceptions to the final judgment rule that allow an immediate appeal before final judgment when the issue is so important that an answer should not wait until the case concludes. The Texas Constitution provides such an exception for certain appeals. See
Under
By contrast,
On a party‘s motion or on its own initiative, a trial court in a civil action may, by written order, permit an appeal from an order that is not otherwise appealable if:
(1) the order to be appealed involves a controlling question of law as to which there is a substantial ground for difference of opinion; and
(2) an immediate appeal from the order may materially advance the ultimate termination of the litigation.
An appellate court may accept an appeal permitted by Subsection (d) if the appealing party, not later than the 15th day after the date the trial court signs the order to be appealed, files in the court of appeals having appellate jurisdiction over the action an application for interlocutory appeal explaining why
an appeal is warranted under Subsection (d). If the court of appeals accepts the appeal, the appeal is governed by the procedures in the Texas Rules of Appellate Procedure for pursuing an accelerated appeal. The date the court of appeals enters the order accepting the appeal starts the time applicable to filing the notice of appeal.
Consistent with these statutory provisions, we promulgated procedural rules to reflect a discretionary doctrine. See
the 2011 amendments to section 51.014 “eliminated the prior requirement that the parties agree to the appeal and reinstated a requirement that the court of appeals also permit the appeal.”
Both Sabre and Lufthansa recognize the court of appeals’ discretion to accept or deny a permissive interlocutory appeal under
As Lufthansa correctly observes, the Legislature modeled section 51.014(d) after the federal counterpart to permissive interlocutory appeals. Compare
The United States Supreme
We agree that Texas courts of appeals have discretion to accept or deny permissive interlocutory appeals certified under
construing the interlocutory appeals statute. 549 S.W.3d at 601 n.3 (citing Blakenergy, 2014 WL 4771736, at *1 & n.2). Under the plain language of
We do caution, however, that while courts of appeals have discretion to deny acceptance of permissive interlocutory appeals, the Legislature in its enactment of
instances, courts of appeals should do exactly what the Legislature has authorized them to do—accept permissive interlocutory appeals and address the merits of the legal issues certified.
B. Section 22.225(d)—Interlocutory Appeal to the Supreme Court
While we recognize the discretion courts of appeals have to accept or deny permissive interlocutory appeals, we disagree with the suggestion that how a court exercises its discretion determines whether this Court has jurisdiction to consider the merits of an interlocutory order that meets the Legislature‘s threshold for an exception to the final judgment rule—a controlling question of law on which there is a substantial ground for difference of opinion, where an immediate appeal may materially advance the ultimate termination of the litigation. See
is then proper under
Lufthansa‘s reliance on
No statute or rule says, nor have we ever held, that this Court lacks jurisdiction when a court of appeals declines to accept a permissive interlocutory appeal.
& REM. CODE § 51.014(d); see also
An appellate court may accept an appeal permitted by Subsection (d) if the appealing party . . . [timely files an application for interlocutory appeal in the proper court]. If the court of appeals accepts the appeal, the appeal is governed by [certain] procedures in the Texas Rules of Appellate Procedure for pursuing an accelerated appeal. The date the court of appeals enters the order accepting the appeal starts the time applicable to filing the notice of appeal.
Further, and in opposition to Lufthansa‘s position, is the absence of any reference to
that this Court construes “clear and unambiguous statutes according to the language actually enacted and published as law“).
We addressed a similar question regarding our jurisdiction under
The Texas Civil Practice and Remedies Code permits an appeal from a trial court‘s interlocutory order that “certifies or refuses to certify a class in a suit brought under Rule 42 of the Texas Rules of Civil Procedure.”
TEX. CIV. PRAC. & REM. CODE § 51.014(a)(3) . In turn, we have jurisdiction to consider a petition for review appealing such an order.TEX. GOV‘T CODE § 22.225(d) .
Id. Sabre relies on this language as authority that this Court‘s jurisdiction is proper under
merits of Sabre‘s permissive interlocutory appeal under
Lufthansa next argues that interpreting
Nor does our interpretation of
Finally, Lufthansa complains that interlocutory review is disfavored as a general matter because of the importance of the final judgment rule. As we have discussed, the final judgment rule
ensures issues are decided on a full record, prevents unnecessary delays in the underlying trial, and allows appellate courts to consider all issues in a single round of review. A departure from the final judgment rule in the form of an interlocutory appeal must be strictly construed because it is “a narrow exception to the general rule that interlocutory orders are not immediately appealable.” CMH Homes v. Perez, 340 S.W.3d 444, 447 (Tex. 2011); see also In re McAllen Med. Ctr., Inc., 275 S.W.3d 458, 461 (Tex. 2008) (“Appellate courts cannot afford to grant interlocutory review of every claim that a trial court has made a pre-trial mistake.“). This is all true, but necessity has driven the Legislature to enact a comprehensive interlocutory appeals statute to allow certain appeals before final judgment when public policy dictates. See
To conclude, an appellate court, including this Court, “lacks jurisdiction to review an interlocutory order unless a statute specifically authorizes an exception to the general rule, which is that appeals may only be taken from final judgments.” Quest Commc‘ns Corp. v. AT&T Corp., 24 S.W.3d 334, 336 (Tex. 2000) (per curiam).
authorizes the exception and confers jurisdiction over the interlocutory appeal in this Court. The trial court correctly certified the interlocutory appeal according to section 51.014(d), and our jurisdiction is proper under the plain and express text of section 22.225(d). We now turn to the merits of the underlying interlocutory order and Sabre‘s Rule 91a motion to dismiss.
III. Preemption Under the ADA
The only issue before us is whether the ADA preempts Lufthansa‘s tortious interference claim against Sabre. The trial court denied Sabre‘s Rule 91a motion to dismiss, concluding that the ADA does not preempt Lufthansa‘s tortious interference claim. We agree. While the record is sparse, there is enough for us to conclude that Lufthansa‘s tortious interference claim does not relate to the airline‘s prices, routes, or services, and even if the claim
A. Two-Part Test
In 1978, Congress enacted the ADA, which deregulated the airline industry in order to encourage market competition, lower prices, advance innovation and efficiency, and increase the variety and quality of air transportation services. See Morales v. Trans World Airlines, Inc., 504 U.S. 374, 378 (1992); see also
Except as provided in this subsection, a State, political subdivision of a State, or political authority of at least 2 States may not enact or enforce a law, regulation, or other provision having the force and effect of law related to a price, route, or service of an air carrier . . .
Following United States Supreme Court holdings, we have applied a two-part test to determine whether common law claims are preempted. See Delta Air Lines, Inc. v. Black, 116 S.W.3d 745, 751 (Tex. 2003) (citing Cont‘l Airlines, Inc. v. Kiefer, 920 S.W.2d 274, 281 (Tex. 1996)). First, we examine whether the claim relates to airline prices, routes, or services. Id. Second, we assess whether the claim constitutes the enactment or enforcement of a state law, rule, regulation, standard, or other provision. Id. With this framework in mind, we consider whether the ADA preempts Lufthansa‘s tortious interference claim against Sabre.
1. Related to an Airline‘s Prices, Routes, or Services
Sabre points to the text of the ADA, which preempts any state “law, regulation, or other provision having the force and effect of law related to a price, route, or service of an air carrier.”
connection with or reference to airline ‘[prices], routes, or services.‘” Morales, 504 U.S. at 383-84. And here, Sabre argues, Lufthansa‘s surcharge relates directly to the price of the airline‘s flights because the surcharge allegedly increases the cost of a ticket by about $18 when travel is booked through Sabre‘s GDS. If this is true, Lufthansa‘s tortious interference claim must fail the first prong because Lufthansa is using Texas tort law to enforce higher airline ticket prices.
During oral argument, Lufthansa clarified its position on Sabre‘s alleged tortious interference. Lufthansa‘s counsel explained
We agree with Lufthansa that price and cost are distinct concepts. Increasing an airline‘s cost does not automatically lead to a corresponding increase in airline ticket prices. The existing record does not demonstrate that, as a matter of law, the circumstances giving rise to the tortious
interference claim had any effect on airline prices. And while the United States Supreme Court did hold that the deliberately expansive phrase “relating to [prices], routes, or services” preempts any “State enforcement actions having a connection with or reference to airline ‘[prices], routes, or services,‘” Morales, 504 U.S. at 383-84, the Supreme Court also noted that “‘[s]ome state action may affect [airline fares] in too tenuous, remote, or peripheral a manner’ to have pre-emptive effect.” Id. at 390 (alterations in original) (quoting Shaw v. Delta Air Lines, Inc., 463 U.S. 85, 100 n.21 (1983)). The tortious interference claim here is based on business dealings between two non-carriers—Sabre and the travel agents. Any connection to Lufthansa‘s ticket prices is likely too peripheral to be preempted under the first prong of the preemption test.
Lastly, while Sabre does not argue that the claim relates to routes, we address Sabre‘s contention that the tortious interference claim relates to Lufthansa‘s services. The essence of Lufthansa‘s claim, Sabre argues, is that Sabre obstructed Lufthansa‘s attempt to distribute its services through direct connections. Whatever truth this may have, we conclude it is likewise “too tenuous, remote, or peripheral” to have a preemptive effect. To hold otherwise would essentially eliminate any limitation on the ADA‘s preemptive reach because all claims brought by or against an airline will relate to the airline‘s services in some distant sense.
2. State Enactment or Enforcement
Under the second prong of the test, the ADA preempts the claim if the action amounts to enforcement of a state law, rule, regulation, standard, or other provision having the force and effect of law. Kiefer, 920 S.W.2d at 281. Sabre argues that state common law claims (other than for breach of contract) generally constitute “provision[s] having the force and effect of law” and thus
fail under the ADA preemption test. See Nw., Inc., 572 U.S. at 281, 289-90 (preempting a state common law claim for breach of the implied covenant of good faith and fair dealing); Delta, 116 S.W.3d at 756 (holding that “state tort actions can be state enforcement [of law] under” the ADA). Lufthansa maintains that the ADA preempts claims that have an impermissible regulatory
We begin our analysis with American Airlines, Inc. v. Wolens, 513 U.S. 219 (1995). In Wolens, the United States Supreme Court addressed whether the ADA preempted state law claims for consumer fraud and breach of contract. Id. at 224-25. The plaintiffs complained that American Airlines violated the state consumer-fraud act and, separately, breached contracts with the plaintiffs because the airline retroactively changed terms and conditions of its frequent-flyer program. Id. The Supreme Court explained that although the plaintiffs’ claims were related to the prices, routes, or services of an air carrier, the ADA preempted those claims only if they sought to enforce any state law. See id. at 226. The consumer fraud claim did seek to enforce a state law within the meaning of the preemption provision because of “the potential for intrusive regulation of airline business practices inherent in state consumer protection legislation.” Id. at 227-28. The breach of contract claim, by contrast, did not violate the ADA‘s preemption provision because it did not involve the same potential for intrusive state regulation. See id. at 228-33. The Supreme Court explained that
the breach of contract claim “allege[ed] no violation of state-imposed obligations, but [sought] recovery solely for the airline‘s alleged breach of its own, self-imposed undertakings.” Id. at 228.
This Court built on Wolens in Continental Airlines, Inc. v. Kiefer, our first opportunity to analyze the scope of the ADA‘s preemption as it relates to personal injury actions. 920 S.W.2d at 275. The two cases consolidated in Kiefer dealt with a passenger hit on the head by a briefcase falling from an overhead bin, and an impaired passenger who got into a fight with police. Id. We went to great lengths to interpret and apply Wolens, drawing a fundamental distinction between what the State dictates and what the airline itself undertakes. See id. at 279-82. We explained:
As Wolens recognizes, suits on private contracts involve some enforcement of state law—the law of contracts. Wolens’ emphasis on the voluntariness of contractual undertakings is important, not because states have no role in enforcing contracts—they do—but because contract law does not effectuate purposes that could have a prohibited regulatory effect on airlines. If contract law were less uniform among the states, varying according to differing States’ interests, it might, as the DOT argued in Wolens, “effectuate the State‘s public policies, rather than the intent of the parties” and thus be preempted. It cannot be said that enforcement of contracts involves none of “what the State dictates,” but only that contract enforcement involves so little state policy that it cannot be considered regulation of airlines preempted by the ADA.
The duty to exercise ordinary care is different. Unlike a contractual obligation, it is imposed by law, not voluntarily assumed. Enforcement of the duty through a common-law negligence action does not merely give effect to “privately ordered obligations,” as a breach of contract suit does. On the other hand, like contract actions, a negligence action does not carry the same “potential for intrusive regulation of airline business
practices inherent in state consumer protection legislation.” Simple negligence law is not as uniform as contract law, but it is far more policy-neutral than specific-purpose legislation, like consumer protection laws. If states “impose their own public policies . . . on the operations of an air carrier” by allowing enforcement of consumer protection laws but not by allowing suits for breach of the carrier‘s contracts, allowing negligence actions falls somewhere in between.
Id. at 282 (citations omitted). We concluded that, with certain reservations for mental anguish and punitive damages, “negligence law is not so policy-laden in imposing liability for personal injuries that suits for damages like those before us are preempted by the ADA.” Id. We did not, however, categorically rule that personal injury actions are never preempted. See id. Preemption questions depend on the nature of the particular claim, and whether other state law claims are preempted requires a “closer working out.” Id. at 281; see also Black, 116 S.W.3d at 756-57 (holding that claims for misrepresentation and fraud are preempted under the ADA).
In light of Wolens and Kiefer, Lufthansa presents its tortious interference claim as a way to enforce its contracts with various travel agents. That is, according to Lufthansa, a suit by an airline to protect its contracts is like a suit against an airline for breach, which is not preempted. See Wolens, 513 U.S. at 228 (holding that a suit for “recovery solely for the airline‘s alleged breach of its own, self-imposed undertakings” is not preempted by the ADA). Sabre, on the other hand, argues that Lufthansa‘s characterization of the tortious interference claim as merely a way to protect the vitality of its travel agent contracts is misplaced. According to Sabre, the central question is whether the claim seeks to enforce a state-imposed obligation or is simply an obligation that the parties voluntarily undertook. See Nw., Inc., 572 U.S. at 285-90 (holding that the ADA preempted the plaintiff‘s effort to supplement its contractual rights with an implied covenant of good faith and fair dealing because the implied covenant was not an obligation the parties voluntarily undertook but was instead imposed by the state). Here, Sabre notes, Lufthansa‘s tortious interference claim invokes state tort law against Sabre to impose an obligation that Sabre did not voluntarily
undertake—a duty to refrain from interfering with contracts between Lufthansa and third-party travel agents.
Northwest, Inc. v. Ginsberg, while instructive in other aspects, is not controlling here. Northwest stands for the proposition that “[t]he ADA pre-empts a state-law claim for breach of the implied covenant of good faith and fair dealing if it seeks to enlarge the contractual obligations that the parties voluntarily adopt.” Id. at 273. Although Lufthansa did contract with its travel agents and did contract with Sabre, Sabre did not contract with the travel agents whose contracts Sabre is alleged to have interfered with. And it is these contracts that Lufthansa is seeking to use Texas tort law to protect. Lufthansa is not attempting to enlarge any contractual obligation that it voluntarily adopted with its respective travel agents or with Sabre.
Furthermore, we observe that the case law referred to in the trial court‘s interlocutory order, Frequent Flyer Depot, Inc. v. American Airlines, Inc., is in line with what we have said here. See 281 S.W.3d at 220-22. In that case, the court of appeals analyzed ADA preemption as it applied to a tortious interference claim against a black-market reseller brokering American
asking the court to recognize its contractual relationship with its travel agents. It is highly unlikely that jurisdiction-dependent or policy-intensive state regulations would be implicated by disposition of the claims at issue here. As the record presently stands, we hold that the tortious interference claim is not preempted under the ADA.
IV. Conclusion
Under former
Paul W. Green
Justice
OPINION DELIVERED: February 1, 2019
Notes
When a district judge, in making in a civil action an order not otherwise appealable under this section, shall be of the opinion that such order involves a controlling question of law as to which there is a substantial ground for difference of opinion and that an immediate appeal from the order may materially advance the ultimate termination of the litigation, he shall so state in writing in such order. The Court of Appeals which would have jurisdiction of an appeal of such action may thereupon, in its discretion, permit an appeal to be taken from such order, if application is made to it within ten days after the entry of the order: Provided, however, that application for an appeal hereunder shall not stay proceedings in the district court unless the district judge or the Court of Appeals or a judge thereof shall so order.