US Aviation And Aerospace Newsletter

Ninth Circuit holds that Airline Deregulation Act preempts passenger's class action claims based on airline's collection of Mexican tourism tax

Sanchez v. Aerovias de Mexico, S.A. de C.V., 590 F.3d 1027 (9th Cir. 2010); 2010 WL 10981

The United States Court of Appeals for the Ninth Circuit recently issued a decision relating to taxes and fees collected by airlines from their passengers. The Sanchez case was a proposed class action lawsuit, which arose when Ms. Sanchez purchased a ticket for air transportation from California to Mexico on Aeromexico. At the time she purchased her ticket, Aeromexico collected a tourism tax in the sum of US$22 on behalf of the Mexican government. Passengers who were Mexican citizens were legally exempt from paying the tax under Mexican law; however, Aeromexico collected the tax from every passenger flying from the United States to Mexico, regardless of his or her citizenship.

Ms. Sanchez, who is a Mexican citizen and, therefore, exempt from paying the tourist tax, brought an action in the US against Aeromexico, alleging that Aeromexico breached its contractual obligations by improperly collecting the tax and failing to disclose that the tourism tax was not due from exempt passengers.

Aeromexico moved for summary judgment on the grounds that the Airline Deregulation Act of 1978 ("ADA") preempted Sanchez's claims, since her claims relate to an airline's "price, route or service." The preemption clause of the ADA provides that a "State...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...." 49 U.S.C. § 41713(b)(1). Sanchez argued that her claims were not subject to the preemption clause of the ADA, because the tourism tax is "a fee separate from the fare for air transportation that had no economic effect on "price."

The district court held that the ADA preempted Sanchez's claims and the Ninth Circuit Court of Appeals affirmed, holding that there was no evidence that Aeromexico had a contractual obligation to Sanchez to advise her of her rights with respect to the tourism tax or her rights to a refund of the tax. The Court specifically found that Aeromexico's website, which stated that the passenger "shall remain fully liable for all...taxes arising from the use of this Site," did not create any obligations on the part of Aeromexico with respect to the tourism tax. The Court noted that, if Sanchez had been able to demonstrate that Aeromexico breached its own, self-imposed undertakings, Sanchez's claims would have fallen outside the ADA preemption clause and Sanchez's claims would have survived dismissal based on the decision in American Airlines, Inc. v. Wolens, 513 U.S. 219 (1995). Since Sanchez could not show that Aeromexico had a contractual obligation to advise her of her rights with respect to the tourism tax, the ADA preempted Sanchez's claims, and the Court of Appeals affirmed the district court's ruling granting summary judgment in favor of Aeromexico.

Two federal district courts hold that Montreal Convention preempts state law claims

Nobre v. American Airlines, 2009 WL 5125976 (S.D. Fla. 2009)

Schaefer-Condulmari v. US Airways Group, Inc., 2009 WL 4729882 (E.D. Pa. 2009)

The United States District Court for the Southern District of Florida recently held that the Montreal Convention preempts federal racial discrimination claims. In Nobre v. American Airlines, plaintiffs were passengers on board an American Airlines flight from New York to Sao Paulo, Brazil. Plaintiffs claimed that during the flight, the flight attendants subjected them to racially charged and discriminatory comments. Plaintiffs filed an action against the airline alleging violations of federal racial discrimination laws.

American Airlines moved to dismiss the complaint on the grounds that plaintiffs' claims were preempted by the Montreal Convention...