Morales v. Trans World Airlines, Inc., 504 U.S. 374 (1992)

CERTIORARI TO THE UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

Syllabus

In order to ensure that the States would not undo the anticipated benefits of federal deregulation of the airline industry, the preemption provision of the Airline Deregulation Act of 1978 (ADA) prohibits them from enforcing any law "relating to [air carriers’] rates, routes, or services." 49 U.S.C. App. § 1305(a)(1). After the National Association of Attorneys General (NAAG) adopted guidelines that contain detailed standards governing, inter alia, the content and format of airline fare advertising, and that purport to be enforceable through the States’ general consumer protection statutes, petitioner’s predecessor as Attorney General of Texas sent notices of intent to sue to enforce the guidelines against the allegedly deceptive fare advertisements of several of the respondent airlines. Those respondents filed suit in the District Court for injunctive and other relief, claiming that state regulation of fare advertisements is preempted by § 1305(a)(1). The court ultimately issued an order permanently enjoining any state enforcement action that would regulate or restrict "any aspect" of respondents’ fare advertising or other operations involving rates, routes, or services. The Court of Appeals affirmed.

Held:

1. Assuming that § 1305(a)(1) preempts state enforcement of the fare advertising portions of the NAAG guidelines, the District Court could properly award respondents injunctive relief restraining such enforcement. The basic doctrine that equity courts should not act when the moving party has an adequate remedy at law does not prevent federal courts from enjoining state officers from acting to enforce an unconstitutional state law where, as here, such action is imminent, repetitive penalties attach to continuing or repeated violations of the law, and the moving party lacks the realistic option of violating the law once and raising its federal defenses. Ex parte Young, 209 U.S. 123, 145-147, 156, 163-165. As petitioner has threatened to enforce only the obligations described in the fare advertising portions of the guidelines, however, the injunction must be vacated insofar as it restrains the operation of state laws with respect to other matters. See, e.g., Public Serv. Comm’n of Utah v. Wycoff Co., 344 U.S. 237, 240-241. Pp. 380-383.

2. Enforcement of the NAAG fare advertising guidelines through a State’s general consumer protection laws is preempted by the ADA. Pp. 383-391.

(a) In light of the breadth of § 1305(a)(1)’s "relating to" phrase, a state enforcement action is preempted if it has a connection with or reference to airline "rates, routes, or services." Cf. Shaw v. Delta Air Line, Inc., 463 U.S. 85, 95-96. Petitioner’s various objections to this reading are strained, and not well taken. Pp. 383-387.

(b) The challenged NAAG guidelines -- which require, inter alia, that advertisements contain certain disclosures as to fare terms, restrictions, and availability -- obviously "relat[e] to rates" within the meaning of § 1305(a)(1), and are therefore preempted. Each guideline bears an express reference to airfares, and, collectively, they establish binding requirements as to how tickets may be marketed if they are to be sold at given prices. In any event, beyond the guidelines’ express reference to fares, it is clear as an economic matter that they would have the forbidden effect upon fares: their compelled disclosures and advertising restrictions would have a significant impact on the airlines’ ability to market their product, and hence a significant impact upon the fares they charge. Pp. 387-391.

949 F.2d 141 (CA5 1991), affirmed in part and reversed in part.

SCALIA, J., delivered the opinion of the Court, in which WHITE, O’CONNOR, KENNEDY, and THOMAS, JJ., joined. STEVENS, J., filed a dissenting opinion, in which REHNQUIST, C.J., and BLACKMUN, J., joined. SOUTER, J., took no part in the consideration or decision of the case.