Statland v. American Airlines Inc‪.‬

CUMMINGS, Circuit Judge. In this appeal we consider two issues important to federal regulation of the airline industry: whether Section 411(b) of the Federal Aviation Act, 49 U.S.C.App. § 1381(b), creates a private right of action for airline ticket purchasers, and whether federal law preempts state actions that challenge an airline's ticket refund policies. The underlying facts are simple: Iris Statland bought an American Airlines ticket with a 10 percent cancellation penalty. When she canceled it American kept 10 percent of the federal tax she paid, or $1.25, in addition to 10 percent of the ticket price. Statland claims that the ticket she bought violated Department of Transportation (DOT) regulations because it did not incorporate any contract provision that allowed American to keep 10 percent of the tax once she canceled her ticket. She sued American in district court to recover her $1.25--as well as similar refunds on behalf of thousands of consumers. Statland brought one claim under Section 411(b) of the Federal Aviation Act and four supplemental state law claims. 28 U.S.C. § 1367. To proceed in a federal court, Statland must show that Section 411(b) creates a private right of action for consumers, since that is the sole basis for federal jurisdiction in her suit. She also must show that her state law claims are not preempted by federal law under Morales v. Trans World Airlines, Inc., 119 L. Ed. 2d 157, 112 S. Ct. 2031. We hold that Section 411(b) does not create a private right of action and that federal law preempts Statland's state law claims.