Antitrust Law Daily Wrap Up, STATE UNFAIR TRADE PRACTICES—NJSuperCtAppDiv: Airline Deregulation Act Preempted Customer Claims Concerning Headsets and Beverages, (Feb 26, 2013)

By Jody Coultas, J.D.

A trial court did not err in dismissing an airline customer’s New Jersey Consumer Fraud Act (CFA) claim against Continental Airlines, Inc. because the claim was preempted by the Airline Deregulation Act, according to a New Jersey appellate court (Rosen v. Continental Airlines, Inc., February 25, 2013, Kennedy, J.).

Continental established a policy of refusing cash during a flight. The customer claimed that the airline violated the CFA by falsely advertising that a headset could be used on future Continental flights and by refusing to accept cash for another headset and/or alcoholic beverages.

The customer’s CFA claim was preempted by the Airline Deregulation Act, according to the court. The broad preemption principles of the federal law precluded any state cause of action relating to a service provided by an air carrier. States may not impose their own standards with respect to rates, routes, or services.

While there were directly conflicting positions regarding the definition of “services” among the U.S. Courts of Appeals, the majority view is broad and includes ticketing, boarding procedures, provision of food and drink, and baggage handling. Therefore, the headsets and beverages were services that could not be regulated by state laws, and the CFA claim was preempted.

The case is No. A-0705-11T1.

Attorneys: Nathan Kittner (Office of Nathan Kittner) for Michael Rosen. Peter B. Van Deventer, Jr. (LeClairRyan) for Continental Airlines, Inc.

Companies: Continental Airlines, Inc.

Cases: StateUnfairTradePractices NewJerseyNews