On appeal from the Superior Court, Law Division, Middlesex County.
Gaulkin, Havey and Stern. The opinion of the court was delivered by Havey, J.A.D.
[260 NJSuper Page 294] The issue raised by this case is whether § 1305(a)(1) of the Airline Deregulation Act of 1978 (ADA), 49 U.S.C.A.App. §§ 1301 to 1557, which prohibits the states from enacting or enforcing any law "relating to rates, routes, or services" preempts plaintiffs' fraud, consumer fraud and breach of contract claims against an air carrier and its agents, servants and employees. The trial court granted defendants' motion for summary judgment, finding preemption. We agree. Plaintiffs' claims relate to an air carrier's rates and services and thus are expressly preempted by § 1305(a)(1). We therefore affirm the summary judgment order.
The gravamen of plaintiffs' complaint is that from 1986 through 1989, defendants Pan Am Corporation and Pan Am World Airways falsely advertised they were initiating an enhanced security program, and fraudulently charged $5 per airline ticket to defray the cost of the program. Plaintiffs, who had purchased tickets during that period, claim that in fact the airline did not provide such a program. They charge that defendants' advertising constituted willful misrepresentation, consumer fraud, and deceptive business practice, and seek compensatory, treble and punitive damages against defendants.*fn1
Since 1938, when Congress enacted the Civil Aeronautics Act, ch. 601, 52 Stat. 973 (1938), the federal government has imposed a pervasive regulatory scheme over civil aviation. Under that act, Congress created the Civil Aeronautics Authority (later changed to the Civil Aeronautics Board (CAB)) and vested it with broad powers to regulate commercial aviation, including the power to determine if air carriers were engaging in deceptive trade practices or unfair methods of competition. See Transworld Airlines, Inc. v. Mattox, 897 F. 2d 773, 776-77 (5th Cir.), cert. denied, U.S. , 111 S. Ct. 307, 112 L. Ed. 2d 261 (1990), aff'd on subsequent appeal, 924 F. 2d 1055 (5th Cir.1991), aff'd in part and rev'd in part on other grounds sub. nom. Morales v. Trans World Airlines, Inc., 504 U.S. , 112 S. Ct. 2031, 119 L. Ed. 2d 157 (1992). The Act also contained a "saving clause" stating that nothing contained in the Act would "abridge or alter the remedies now existing at common law or by statute, but the provisions of this chapter are in addition to such remedies." 52 Stat. at 1027 (codified at 49 U.S.C.A.App. § 1506).
The Federal Aviation Act of 1958 (FAA), Pub.L. No. 85-726, 72 Stat. 731 (codified as amended at 49 U.S.C.A.App. §§ 1301
to 1557), gave the CAB authority to regulate interstate airfares and to take administrative action against deceptive trade practices. It also preserved the "saving clause." See Morales, 504 U.S. at , 112 S. Ct. at 2034, 119 L. Ed. 2d at 163-64. When the FAA was first enacted, the Supreme Court interpreted the law as enabling the states to regulate intrastate airfares and to enforce their own laws against deceptive trade practices. Id. at , 112 S. Ct. at 2034, 119 L. Ed. 2d at 164; Nader v. Allegheny Airlines, Inc., 426 U.S. 290, 300, 96 S. Ct. 1978, 1985, 48 L. Ed. 2d 643, 652 (1976).
However, in 1978, Congress enacted the Airlines Deregulation Act (ADA), Pub.L. No. 95-504, 92 Stat. 1705 (1978) (codified at 49 U.S.C.A.App. §§ 1301 to 1557) to maximize reliance on "competitive market forces." Morales, 504 U.S. at , 112 S. Ct. at 2034, 119 L. Ed. 2d at 164. To ensure that the states would not undermine the federal deregulation scheme with regulations of their own, the ADA included a specific preemption provision which prohibits the states from enacting or enforcing any law "relating to rates, routes, or services" of any air carrier. 49 U.S.C.A.App. § 1305(a)(1). Morales, 504 U.S. at , 112 S. Ct. at 2034, 119 L. Ed. 2d at 164. The ADA also retained the CAB's existing enforcement authority over deceptive trade practices, but preserved the saving clause in the prior laws. Ibid.*fn2
Plaintiffs contend that their claims are not preempted by § 1305(a)(1) because they do not seek to regulate rates or to "usurp the industry's authority to regulate security measures." Rather, their claims are "nothing more than traditional actions for fraud and breach of contract" and thus any effect on rates, routes, or services would be remote. In support of their argument, plaintiffs point to the "saving clause" of the FAA which, they argue, contemplates that unless the common law
claim and the federal Act are "absolutely inconsistent," they may coexist. See Nader, 426 U.S. at 300, 96 S. Ct. at 1985, 48 L. Ed. 2d at 652.
Under the Supremacy Clause, U.S. Const. art VI, cl. 2, state laws that "'interfere with, or are contrary to the laws of congress, made in pursuance of the constitution' are invalid." Wisconsin Pub. Intervenor v. Mortier, 501 U.S. , , 111 S. Ct. 2476, 2481, 115 L. Ed. 2d 532, 542 (1991) (quoting Gibbons v. Ogden, 22 U.S. (9 Wheat) 1, 211, 6 L. Ed. 23 (1824)). Thus, "when the mandates of federal law and state law are not consistent, the state law must yield." Feldman v. Lederle Lab., 125 N.J. 117, 133, 592 A.2d 1176 (1991), cert. denied, U.S. , 112 S. Ct. 3027, 120 L. Ed. 2d 898 (1992). The preemption doctrine applies equally to common law and state statutory law. Id. at 134, 592 A.2d 1176. Preemption may occur where Congress's intent to supplant state authority is clear from ...