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1 SHEPPARD, MULLIN, RICHTER & HAMPTON LLP PHILIP F. ATKINS-PATTENSON, Cal. Bar. No. 94901 2 TED C. LINDQUIST, III, Cal. Bar No. 178523 Four Embarcadero Center, Seventeenth Floor 3 San Francisco, California 94111 Telephone: (415) 434-9100 4 Facsimile: (415) 434-3947 E-mail: [email protected] [email protected] 5 6 Attorneys for Defendant ALASKA AIRLINES, INC. 7 8 9 10 11 12 KENNETH DON NELSON, suing individually and on behalf of 13 all others similarly situated, 14 15 v. Plaintiff, Case No. C 08-03560 EDL CLASS ACTION 1) DEFENDANT ALASKA AIRLINES, INC.'S NOTICE OF MOTION AND MOTION TO DISMISS [FED. R. 12(b) (6)]; UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF CALIFORNIA (SAN FRANCISCO DIVISION)

16 ALASKA AIRLINES, INC., and defendant Does 1 through 100, 17 inclusive. 18 19 20 21 22 23 24 25 26 27 28
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Defendants.

(2) MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT THEREOF; and (3) DECLARATIONS OF KEVIN THIEL, STEVE JARVIS, JEFF BUTLER, AND PHILIP F. ATKINS-PATTENSON IN SUPPORT THEREOF. Date: Time: Courtroom: September 9, 2008 9:00 a.m. E (15th Floor)

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TABLE OF CONTENTS Page

3 I. INTRODUCTION AND SUMMARY OF ARGUMENT ................................................ 2 4 II. STATEMENT OF ISSUES TO BE DECIDED ............................................................... 3 5 III. STATEMENT OF FACTS.............................................................................................. 3 6 A. Plaintiff's Complaint And Removal................................................................ 3 7 B. The Mexican Tourism Tax .............................................................................. 4 8 C. Alaska's Procedures for Collecting the Mexican Tourism Tax ...................... 4 9 D. Plaintiff's Asserted Claims And Requested Relief ......................................... 6 10 11 E. Prior Actions Involving the Mexican Tourism Tax ........................................ 6

12 IV. ARGUMENT .................................................................................................................. 7 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 2. C. D. A. B. The Legal Standard.......................................................................................... 7 The Montreal Convention Preempts And Prohibits Plaintiff's State Law Claims...................................................................................................... 8 1. 2. 3. 4. Federal Preemption............................................................................... 8 The Montreal Convention .................................................................... 8 The Montreal Convention Preempts State Law Claims....................... 9 Plaintiff's Claims are Subject to the MONTREAL CONVENTION ........ 12

The Airline Deregulation Act ALSO Preempts and Prohibits the Plaintiff's State Law Claims.......................................................................... 16 Plaintiff's Claims For Relief Otherwise Fails To State A Claim For Which Relief Can Be Granted....................................................................... 22 1. The COMPLAINT Does Not State a Claim for Breach of Contract .............................................................................................. 22 The COMPLAINT Fails to State a Claim for "Money Had and Received" ........................................................................................... 23

V. CONCLUSION AND REQUESTED RELIEF .............................................................. 24
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1 2 3 Federal Cases

TABLE OF AUTHORITIES

American Airlines, Inc. v. Wolens, 513 U.S. 219, 115 S. Ct. 817 (1995)................................................................ 17, 21, 22 4 5 Balistreri v. Pacifica Police Department, 901 F.2d 696 (9th Cir. 1988).......................................................................................... 7 6 Boehringer-Mannheim Diagnostics, Inc. v. Pan American World Airways, Inc., 737 F.2d 456 (5th Cir. 1984).......................................................................................... 9 7 8 Buck v. American Airlines, Inc., 476 F.3d 29 (1st Cir. 2007) .............................................................................. 19, 20, 22 9 Charas v. Trans World Airlines, Inc., 160 F.3d 1259 (9th Cir. 1998)...................................................................................... 16 10 11 Clegg v. Cult Awareness Network, 18 F.3d 752 (9th Cir. 1994)............................................................................................ 7 12 Donkor v. British Airways, 62 F. Supp. 2d 963 (E.D.N.Y. 1999) ........................................................................... 10 13 14 El Al Israeli Airlines, Ltd. v. Tsui Yuan Tseng, 525 U.S. 155 (1999) ..................................................................................................... 10 15 Hingson v. Pacific Southwest Airlines, 743 F.2d 1408 (9th Cir. 1984)...................................................................................... 17 16 17 Husmann v. TWA, 169 F.3d 1151 (8th Cir. 1999)...................................................................................... 10 18 Knowlton v. American Airlines, 2007 WL. 273794 (D. Md. January 31, 2007)................................................. 10, 11, 13 19 20 Lehman v. USAir Group, Inc., 930 F. Supp. 912 (S.D.N.Y. 1996)............................................................................... 21 21 Maryland v. Louisiana, 451 U.S. 725 (1981) ....................................................................................................... 8 22 23 Mbaba v. Societe Air France, 457 F.3d 496 (5th Cir. 2006).................................................................................. 14, 15 24 In re Mexico City Aircrash, 708 F.2d 400 (9th Cir. 1983)........................................................................................ 10 25 26 Morales v. Trans World Airlines, Inc., 504 U.S. 374 (1992) ......................................................................................... 16, 17, 21 27 Potter v. Delta Air Lines, 98 F.3d 881 (5th Cir. 1996)............................................................................................ 9 28
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1 Rowe v. N.H. Motor Transport Association, 522 U.S. __, 128 S. Ct. 989 (2008).............................................................................. 17 2 Singh v. North American Airlines, 426 F. Supp. 2d 38 (E.D.N.Y. 2006) ............................................................................. 9 3 4 Sobol v. Continental Airlines, 2006 WL. 2742051 (S.D.N.Y. Sept. 26. 2006)............................................................ 12 5 Sprewell v. Golden State Warriors, 266 F.3d 979 (9th Cir. 2001).......................................................................................... 7 6 7 Statland v. American Airlines, Inc., 998 F.2d 539 (7th Cir. 1993)........................................................................................ 20 8 Taj Mahal Travel, Inc. v. Delta Airlines, Inc., 164 F.3d 186 (3rd Cir. 1998) ....................................................................................... 16 9 10 State Cases 11 Acoustics, Inc. v. Trepte Construction Co., 14 Cal. App. 3d 887 (1971).......................................................................................... 23 12 Schultz v. Harney, 27 Cal. App. 4th 1611 (1994) ...................................................................................... 23 13 14 15 Federal Statutes 16 28 U.S.C. § 1367................................................................................................................ 22 17 29 U.S.C. § 1144(a) ........................................................................................................... 17 18 49 U.S.C. § 14501(c)(1) .................................................................................................... 17 19 49 U.S.C. § 40101(a)(6),(A)(9) ......................................................................................... 16 20 49 U.S.C. § 40105................................................................................................................ 8 21 49 U.S.C. § 41713(b)..................................................................................... 1, 2, 16, 17, 19 22 Federal Rule of Civil Procedure 12(b)(6)........................................................................ 1, 7 23 24 25 26 27 28
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NOTICE OF MOTION AND MOTION PLEASE TAKE NOTICE that on September 9, 2008, at 9:00 a.m., or as soon

3 thereafter as counsel may be heard, in Courtroom E of the above-entitled court located at 4 450 Golden Gate Avenue, 15th Floor, San Francisco, California, the Honorable Magistrate 5 Judge Elizabeth LaPorte presiding, defendant Alaska Airlines, Inc. ("Alaska") will bring 6 on for hearing a motion for an order pursuant to Federal Rule of Civil Procedure 12(b)(6) 7 dismissing each of the claims for relief in plaintiff Don Nelson ("Plaintiff" or "Nelson") 8 for failure to state a claim upon which relief can be granted. 9 This motion is made on the grounds that Plaintiff's claims for relief are preempted

10 by the Airline Deregulation Act (currently codified at 49 U.S.C. § 41713(b), and even if 11 they were not, Plaintiff has failed to allege adequate facts to state a claim upon which relief 12 can be granted against Alaska. 13 This motion is based on this Notice of Motion, Memorandum of Points and

14 Authorities, Declarations of Kevin Thiel, Steve Jarvis, Jeff Butler, and Philip F. Atkins15 Pattenson, all other pleadings and papers on file or deemed to be on file, and any argument 16 that may be presented to the Court in connection with this motion. 17 /// 18 /// 19 //// 20 21 22 23 24 25 26 27 28
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MEMORANDUM OF POINTS AND AUTHORITIES I. INTRODUCTION AND SUMMARY OF ARGUMENT Plaintiff Kenneth Don Nelson ("Plaintiff" or "Nelson") alleges that he was damaged

5 by improperly having to pay a $22 tax in connection with his transportation onboard 6 aircraft operated by defendant Alaska Airlines, Inc. ("Defendant" or "Alaska") between 7 San Francisco and San Jose del Cabo, Mexico, on several occasions "[d]uring, at least, the 8 last four years." (See COMPLAINT ¶¶ 7-8.) Although Plaintiff acknowledges that the 9 Mexican government imposes the $22 tax on certain airline passengers traveling into 10 Mexico (the "Mexican Tourism Tax"), Plaintiff claims that when he traveled onboard the 11 Alaska flights he was "exempt" from the Mexican Tourism Tax because he possessed a 12 "Mexican FM2 or FM3 Visa." (Id.) The COMPLAINT lists two claims for relief: 13 (1) "breach of written contracts"; and (2) "money had and received." The COMPLAINT 14 broadly asserts that Alaska has breached "written contracts" by its purported collection of 15 the Mexican Tourism Tax from exempt passengers (¶¶ 26-30), but does not identify, much 16 less attach, any such written contract.1 17 Because the damage experienced by Plaintiff, if any, occurred "on board the aircraft

18 or in the course of any of the operations of embarking or disembarking" flights, both of 19 Plaintiff's claims for relief are preempted and prohibited by Articles 17(1) and 29 of the 20 "Convention for the Unification of Certain Rules for International Carriage by Air" (the 21 "MONTREAL CONVENTION").2 The claims are also preempted by the AIRLINE 22 DEREGULATION ACT (currently codified at 49 U.S.C. § 41713(b) ("ADA")), because they 23 "related to" a "price, route or service" of an airline. In addition, Plaintiff's COMPLAINT 24 fails to allege sufficient facts to state a claim for relief against Alaska. Thus, for the 25 26 27 28
1 2

The COMPLAINT's reference to Alaska's website does not include any contractual undertaking by Alaska relating to the Mexican Tourism Tax. A copy of the MONTREAL CONVENTION is attached as Exhibit A hereto. -2ALASKA AIRLINES' MOTION TO DISMISS

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1 reasons more fully explained below, Alaska respectfully requests that its motion be granted 2 and this matter be dismissed with prejudice. 3 4 5 II. STATEMENT OF ISSUES TO BE DECIDED Pursuant to Local rule 7-4, Alaska submits that the issues to be decided on this

6 motion are: 7 1. Whether Plaintiff's claims for relief are preempted by the Montreal

8 Convention and/or the ADA. 9 2. Whether, even if not preempted by the Montreal Convention and/or the

10 ADA, Plaintiff's claims for relief nevertheless should be dismissed for failure to state a 11 claim upon which relief can be granted. 12 13 14 15 A. III. STATEMENT OF FACTS Plaintiff's Complaint And Removal

On June 13, 2008, Plaintiff, on behalf of himself and "all others similarly situated,"

16 filed a complaint against Alaska in the San Francisco County Superior Court. Alaska 17 timely removed the case to this Court on July 24, 2008. The COMPLAINT alleges that 18 Alaska is "engaged in the business of common carrier by air of passengers for transport 19 between California and Mexico." (COMPLAINT ¶ 21.) It further alleges that "when 20 passengers purchase their tickets in California for air travel on [Alaska] between California 21 and Mexico, Defendant routinely collects from its passengers the Mexican tourism tax." 22 (Id. ¶ 22.) The Plaintiff alleges that "[d]uring, at least, the last four years" he was damaged 23 by having to pay $22 for the Mexican Tourism Tax in connection with transportation on 24 board Alaska Flight Numbers 224, 225, 235 and 236, "and other flights" from San 25 Francisco to San Jose del Cabo, Mexico, despite being "exempt" from such Tax because of 26 his possession of a "Mexican FM2 or FM3 Visa." (See COMPLAINT ¶¶ 7-8.) An FM2 visa 27 is for a person seeking Mexican citizenship or permanent residency status in Mexico; and 28 an FM3 visa is a renewable long-term (more than six months) permit which gives the
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1 holder non-immigrant temporary residence status. (See DECLARATION OF KEVIN THIEL 2 ("THIEL DECL.") ¶ 7.)3 The Plaintiff seeks to represent a "class" consisting of "[a]ll 3 exempt persons who purchased airline tickets in California from Defendant." (COMPLAINT 4 ¶ 12.) 5 6 B. The Mexican Tourism Tax

In or about July 1999, the Mexican government started to impose the

7 Mexican Tourism Tax (also known as an "immigration tax" or "visitors tax") on airline 8 passengers that fly to Mexico to visit that country. (THIEL DECL. ¶ 4.) This tax is also 9 referred to as "DNI" (which are the initials for "Derechos de No Immigrante") or by the 10 code "UK" assigned by the International Air Transport Association. (Id.) The tax was 11 created to compensate the Mexican government for the cost of processing non-Mexican 12 citizens and residents through the immigration control operations at Mexican airports. 13 (Id.) 14 15 C. Alaska's Procedures for Collecting the Mexican Tourism Tax

The Mexican government mandates that carriers such as Alaska collect the

16 Mexican Tourism Tax from passengers flying from outside Mexico into that country. 17 (THIEL DECL. ¶ 5.) In compliance with Mexican law, Alaska includes the Mexican 18 Tourism Tax in the price of tickets that are sold for transportation from the United States to 19 Mexico. (Id.) 20 The Mexican law that requires Alaska to collect the Mexican Tourism Tax contains

21 certain exemptions, including for Mexican citizens, Mexican legal residents, holders of 22 FM-2 and FM-3 visas, infants, diplomats, on-duty airline crew members, and customers 23 that will not remain in Mexico for more than 24 hours (the "Tourism Tax Exemptions"). 24 (THIEL DECL. ¶ 6.) 25 26 27 28
3

The Declarations submitted in support of Alaska's motion to dismiss were originally filed in support of its notice of removal on July 24, 2008. For the Court's convenience, they are replicated here. -4ALASKA AIRLINES' MOTION TO DISMISS

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In order for a passenger to be entitled to a Tourism Tax Exemption, the passenger

2 must provide proof of his or her exempt status, including a passport, birth certificate, or, in 3 Plaintiff's case, his FM-2 or FM-3 visa. (THIEL DECL. ¶ 8.) However, since the vast 4 majority of passengers purchase their tickets from Alaska through the internet or over the 5 telephone, it is not possible for Alaska to determine whether a customer qualifies for a 6 Tourism Tax Exemption at the time that the ticket is purchased. (Id.) 7 Payment of the Mexican Tourism Tax is made to the Mexican government on a

8 quarterly basis by Alaska's office in Mexico City, Mexico. (THIEL DECL. ¶ 9.) That office 9 determines the amount that is owed to the Mexican government for the Tourism Tax by 10 reviewing the Departure Manifest (in Spanish, the "Manifesto Salida") forms that Alaska's 11 customer service agents complete and provide to the Mexican government for each aircraft 12 that departs Mexico for the United States. A sample Departure Manifest form is provided 13 as Exhibit A to the THIEL DECL. (Id.) The agents obtain the information as to whether a 14 particular departing passenger qualifies for a Tourism Tax Exemption by reviewing the 15 passenger's passport or other documentation which is presented when that passenger 16 checks in for the flight from Mexico to the United States. However, there is no obligation 17 for Alaska agents to determine whether a U.S. citizen possesses an FM-2 or FM-3 visa. 18 In the form provided as Exhibit A to the THIEL DECL., the entry "DNI: 85" near the

19 bottom left-hand corner indicates that 139 passengers onboard Alaska Airlines Flight 235 20 from San Jose del Cabo, Mexico to San Francisco were subject to the Mexican Tourism 21 Tax, and eight passengers were exempt from the Tax. A similar form is completed for 22 each Alaska flight that departs Mexico for the United States. (Id.) 23 If an Alaska Airlines passenger who qualifies for a Tourism Tax Exemption paid

24 cash for his or her ticket and requests a refund at the airport in Mexico, the Alaska staff 25 may provide a cash refund to that passenger. (THIEL DECL. ¶ 10.) However, the large 26 majority of Alaska customers use credit cards to purchase their tickets. (Id.) In those 27 instances where a passenger who qualifies for a Tourism Tax Exemption bought the ticket 28 with a credit card, he or she can request and receive a refund of the Mexican Tourism Tax
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1 by contacting Alaska's Revenue Accounting Department and providing the necessary 2 proof of exemption. (Id.) 3 If a passenger cancels his or her ticket prior to a flight and is entitled to a refund of

4 the ticket price, Alaska also will refund the Mexican Tourism Tax that was collected at the 5 time that the ticket was purchased. (THIEL DECL. ¶ 12.) 6 7 D. Plaintiff's Asserted Claims And Requested Relief

The COMPLAINT lists two claims for relief: (1) breach of written contract; and

8 (2) "money had and received." Although the Plaintiff asserts that Alaska has breached a 9 "written contract" and a "promise" by its purported collection of the Mexican Tourism Tax 10 from exempt passengers which it allegedly fails to remit to the Mexican government or 11 refund to the passengers (¶¶ 26-30), the COMPLAINT does not identify, much less attach, 12 any such written agreement. The COMPLAINT seeks: (1) certification of a class; 13 (2) compensatory damages; (3) restitution; and (4) attorneys fees, costs and prejudgment 14 interest. 15 16 E. Prior Actions Involving the Mexican Tourism Tax

On September 28, 2007, Plaintiff's counsel filed a virtually-identical class action

17 complaint against Alaska in the Los Angeles County Superior Court, which also alleged 18 that Alaska was liable for allegedly collecting the Mexican Tourism Tax from exempt 19 passengers traveling from California to Mexico. (Sanchez v. Alaska Airlines, Inc., Case 20 No. BC378233 (the "Sanchez Case").)4 Alaska timely removed the Sanchez Case to the 21 U.S. District Court of the Central District of California (Case No. CV07-7224 R (RCx)) on 22 the ground that the claims were completely preempted by the Montreal Convention. 23 Nelson's counsel did not challenge removal and voluntarily dismissed the complaint and 24 action in lieu of opposing Alaska's motion to dismiss Sanchez's First Amended Complaint 25 on the grounds, inter alia, that Sanchez's claims were preempted by the Montreal 26 27 28
4

A true and correct copy of the Complaint in the Sanchez Case is attached as Exhibit C hereto. -6ALASKA AIRLINES' MOTION TO DISMISS

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1 Convention and the Airline Deregulation Act. Nelson's counsel also sued Mexicana 2 Airlines and Aeromexico in the Superior Court for the County of Los Angeles, and those 3 cases also were removed to the U.S. District Court for the Central District of California 4 without objection from Nelson's counsel. (Sanchez v. Compania Mexicana de Aviacion 5 S.A., Case No. CV 07-7196 (RCx) and Sanchez v. Aerovias de Mexico, S.A., Case 6 No. 07-7280 (RCx).) In those cases, the court dismissed all of the plaintiff's claims, 7 holding that they were preempted by the ADA. (See, e.g., Sanchez v. Compania Mexicana 8 de Aviacion, supra, (C.D. Cal. March 23, 2008)).5 Both cases are currently on appeal to 9 the U.S. Court of Appeals for the Ninth Circuit (Cons. Case No. 08-55554). 10 11 12 13 A. The Legal Standard IV. ARGUMENT

A motion to dismiss pursuant to Rule 12(b)(6) tests the legal sufficiency of the

14 claims asserted in the complaint. (FED. R. CIV. P. 12(b)(6).) A complaint should be 15 dismissed under Rule 12(b)(6) as a matter of law where there is either a "lack of a 16 cognizable legal theory" or "the absence of sufficient facts alleged under a cognizable 17 legal theory." (Balistreri v. Pacifica Police Dep't, 901 F.2d 696, 699 (9th Cir. 1988).) 18 Although allegations of material fact must be accepted as true, "the court is not required to 19 accept legal conclusions cast in the form of factual allegations if those conclusions cannot 20 reasonably be drawn from the facts alleged." (Clegg v. Cult Awareness Network, 18 F.3d 21 752, 754-55 (9th Cir. 1994); Sprewell v. Golden State Warriors, 266 F.3d 979, 988 (9th 22 Cir. 2001).) 23 /// 24 /// 25 /// 26 27 28
5

A true and correct copy of the Court's Findings Of Fact and Conclusions of Law are attached as Exhibit B to the DECLARATION OF PHILIP F. ATKINS-PATTENSON ("ATKINS-PATTENSON DECL.") -7ALASKA AIRLINES' MOTION TO DISMISS

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B.

The Montreal Convention Preempts And Prohibits Plaintiff's State Law Claims

Plaintiff's claims for relief should be dismissed as preempted by the Montreal

4 Convention. 5 6 1. Federal Preemption

Federal preemption of state law is grounded in the Supremacy Clause of the U.S.

7 Constitution, which provides that "the Laws of the United States . . . shall be the supreme 8 Law of the Land; and the Judges in every State shall be bound thereby, any Thing in the 9 Constitution or Laws of any State to the Contrary notwithstanding." (U.S. Const. art. VI, 10 cl. 2.) Under the Supremacy Clause, if a state law conflicts with federal law, the state law 11 is preempted and "without effect." (Maryland v. Louisiana, 451 U.S. 725, 746, (1981).) 12 Preemption can take one of several forms. A federal law may preempt a state law

13 expressly. It may also preempt a state law by implication, either (i) when the scheme of 14 federal regulation is sufficiently comprehensive to support a reasonable inference that 15 Congress left no room for supplementary state regulation, or (ii) if the state law actually 16 conflicts with federal regulations. A state law presents an actual conflict when the state 17 law would obstruct Congress' purposes and objectives. 18 19 2. The Montreal Convention

The Montreal Convention was signed on May 28, 1999, and entered into force on

20 November 4, 2003.6 Both the United States and Mexico are parties to the Montreal 21 Convention.7 Article 1 of the Montreal Convention, entitled "Scope of Application," 22 declares that the "Convention applies to all international carriage of persons, baggage, or 23 cargo performed by aircraft for reward." (Article 1(1) (Emphasis added).) "International 24 25 26 27 28
7 6

The MONTREAL CONVENTION supersedes the much older "convention for the Unification of Certain Rules Relating to International Transportation by Air" (the "Warsaw Convention"), Oct. 12, 1929, 49 Stat. 3000, 3014, T.S. No. 876 (1934), note following 49 U.S.C. § 40105. (MONTREAL CONVENTION Art. 55.) See U.S. Department of State, Treaties in Force: A List of Treaties and Other International Agreements of the United States in Force on January 1, 2006, a true and correct copy of which is attached hereto as Exhibit B. -8ALASKA AIRLINES' MOTION TO DISMISS

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1 carriage" is defined to mean "any carriage in which, according to the agreement between 2 the parties, the place of departure and the place of destination . . . are situated . . . within 3 the territories of two States Parties . . . ." (Article 1(2).) 4 Chapter III of the Montreal Convention, entitled "Liability of the Carrier and Extent

5 of Compensation for Damage," defines in Articles 17, 18 and 19 the three kinds of liability 6 for which the Convention provides the potential recovery of damages. Article 17(1) 7 establishes the conditions of liability for personal injury to passengers: 8 9 10 The carrier is liable for damage sustained in case of death or bodily injury of a passenger upon condition only that the accident which caused the death or injury took place on board the aircraft or in the course of any of the operations of embarking or disembarking. (Emphasis added.)

11 Article 18 establishes the conditions of liability for damage to cargo. Article 19 provides 12 the conditions of liability for damage caused by delay. 13 Article 29 ­ entitled "Basis of claims" ­ states: 14 15 16 17 In the carriage of passengers, baggage and cargo, any action for damages, however founded, whether under this Convention or in contract or in tort or otherwise, can only be brought subject to the conditions and such limits of liability as are set out in this Convention without prejudice to the question as to who are the persons who have the right to bring suit and what are their respective rights. . . . (Emphasis added.)

18 Thus, under Articles 17(1) and 29, "any action for damages, however founded" wherein 19 the plaintiff alleges damages arising out of the international "carriage of passengers" ­ 20 whether "in contract or in tort" ­ may "only be brought" subject to the terms and 21 limitations of the MONTREAL CONVENTION, where, as here, the alleged damage occurred 22 "on board the [internationally bound] aircraft or in the course of any of the operations of 23 embarking [on] or disembarking [from]" the aircraft. 24 25 3. The Montreal Convention Preempts State Law Claims

Several federal courts "have held that the Warsaw Convention [the predecessor to

26 the Montreal Convention] does completely preempt those claims that fall within its 27 scope." (Singh v. North American Airlines, 426 F. Supp. 2d 38, 45 (E.D.N.Y. 2006) 28 (citing Potter v. Delta Air Lines, 98 F.3d 881, 883 (5th Cir. 1996); Boehringer-Mannheim
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1 Diagnostics, Inc. v. Pan American World Airways, Inc., 737 F.2d 456, 458 (5th Cir. 1984); 2 Husmann v. TWA, 169 F.3d 1151, 1153 (8th Cir. 1999); In re Mexico City Aircrash, 3 708 F.2d 400, 415 (9th Cir. 1983); Donkor v. British Airways, 62 F. Supp. 2d 963, 967 4 (E.D.N.Y. 1999).) 5 In El Al Israeli Airlines, Ltd. v. Tsui Yuan Tseng, 525 U.S. 155 (1999), the Supreme

6 Court construed Article 24 of the Warsaw Convention (the predecessor to the MONTREAL 7 CONVENTION) that contained language nearly identical to the language in Article 29 of the 8 MONTREAL CONVENTION,8 and held that a passenger could not pursue state law claims for 9 alleged emotional injury from an intrusive pre-boarding security search at John F. 10 Kennedy International Airport in New York. The Court stated that "a passenger whose 11 injury is not compensable under the Convention (because it entails no `bodily injury' or 12 was not the result of an `accident') will have no recourse to an alternate remedy." 13 (525 U.S. at 160-61) (Emphasis added).) The Court explained that "Recourse to local law 14 . . . would undermine the uniform regulation of international air carrier liability that the 15 Warsaw Convention was designed to foster." (Id. at 161.) The Court added: 16 17 18 19 20 (Id.) 21 Additionally, the U.S. District Court for the District of Maryland last year held that The Convention signatories, in the treaty's preamble, specifically "recognized the advantage of regulating in a uniform manner the conditions of . . . the liability of the carrier." 49 Stat. 3014. . . . . Given the Convention's comprehensive scheme of liability rules and its textual emphasis on uniformity, we would be hard put to conclude that the delegates at Warsaw meant to subject air carriers to the distinct, nonuniform liability rules of the individual signatory nations.

22 the Montreal Convention completely preempted a plaintiff's claim that an airline 23 improperly failed to provide her a promised breakfast on board an international flight. 24 (Knowlton v. American Airlines, Civil Action No. RDB-06-854, 2007 WL 273794 (D. Md. 25 January 31, 2007).) The plaintiff in that case booked a round-trip ticket on American 26 27 28
8

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1 Airlines to fly from Baltimore to the Dominican Republic, connecting through Puerto Rico 2 on route to the Dominican Republic. The plaintiff received an electronic confirmation of 3 her travel itinerary from American which included the notation "breakfast" on the flight 4 from Baltimore to Puerto Rico. According to the plaintiff, this notation created a 5 contractual obligation between herself and American for the airline to provide her with a 6 complimentary breakfast. However, the plaintiff did not receive a free breakfast; rather 7 she was told that American no longer provided complimentary meals and that she could 8 purchase breakfast for three dollars. 9 The plaintiff filed a purported class action complaint against American in Maryland

10 state court, on behalf of herself and others similarly situated, alleging breach of contract. 11 The airline asserted that "even though the Montreal Convention did not specifically discuss 12 carrier liability for the alleged breach of contract at issue in [the] case, the treaty 13 nonetheless completely preempt[ed] Plaintiff's claim." (Id.) The court agreed with 14 American, holding: 15 16 17 18 19 20 21 The Montreal Convention imposes three categories of strict liability on air carriers. Article 17 provides for carrier liability in the event of accidental death or bodily injury of a passenger while on board, embarking or disembarking the plane. Montreal Convention at art. 17. Article 17 also includes liability for damage to or loss of baggage. Id. Article 18 of the Montreal Convention addresses liability for damage to cargo, and Article 19 imposes liability for damages resulting from delay of passengers, baggage, or cargo. Id. at arts. 18-19. These categories are meant to be exclusive and encompass the scope of international airline liability. Article 29 of the treaty contains an express statement of exclusivity: "any action for damages, however founded, whether under this Convention or in contract or in tort or otherwise, can only be brought subject to the conditions and such limits of liability as are set out in this Convention."

22 (Id. at *2) (Emphasis added).) 23 The court further held that the Warsaw and Montreal Conventions "were designed to 24 create a uniform system of liability among airlines for claims arising from international 25 flights," and that "[a]s a matter of public policy, airlines should not be subject to contract 26 claims in state courts involving a three-dollar breakfast." (Id. at *5.) 27 /// 28 ///
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1 2

4.

Plaintiff's Claims are Subject to the MONTREAL CONVENTION

Plaintiff's allegation that he was damaged as a result of having to pay the Mexican

3 Tourism Tax ­ despite being exempt from the Tax as the holder of a FM-2 or FM-3 visa ­ 4 clearly falls within the ambit of the Montreal Convention. As set forth above, the 5 "Convention applies to all international carriage of persons, baggage, or cargo performed 6 by aircraft for reward." (Article 1(1).) Plaintiff's alleged payment of the $22 Mexican 7 Tourism Tax was, without question, in connection with the "international carriage" of his 8 person "by aircraft for reward." 9 Moreover, it is clear that the damage allegedly suffered by the Plaintiff, if any,

10 occurred "on board the aircraft or in the course of any of the operations of embarking or 11 disembarking" (Article 17(1)), and is therefore subject to the language in Article 29 that 12 "in the carriage of passengers . . . any action for damages, however founded, whether 13 under this Convention or in contract or in tort or otherwise, can only be brought subject 14 to the conditions and such limits of liability as are set out in this Convention . . . ." 15 (Emphasis added.) The primary injury to the Plaintiff occurred, if at all, while he was on 16 board the Alaska flights. It was during the flights that the Plaintiff was allegedly being 17 charged for international air transportation at a rate that was $22 higher than he 18 purportedly should have been charged. 19 The Plaintiff's situation is similar to that of a passenger who paid for a first class

20 ticket but was required to be seated in the economy section of the flight. Any resulting 21 injury would have occurred during the flight because that was when the passenger was 22 required to sit in the economy section despite having paid for a first class ticket. (See 23 Sobol v. Continental Airlines, 2006 WL 2742051, *1, 5 (S.D.N.Y. Sept. 26. 2006) 24 (Montreal Convention (and its predecessor, the Warsaw Convention) preempted and 25 barred claim against airline for "downgrading of a first class ticket to coach on an 26 international flight from Newark, New Jersey to Mazatlan, Mexico, and the later 27 downgrading of two first class tickets"). Similarly, Plaintiff here is complaining because 28
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1 he was charged more for his transportation on board the Alaska flights than he claims he 2 should have paid. 3 Notably, if the Plaintiff had decided not to board the Alaska flights and was eligible

4 for a refund of his ticket, he also would have been refunded the $22 Mexican Tourism Tax 5 (assuming he had paid it). (THIEL DECL. ¶ 11 ("If a passenger cancels his or her ticket 6 prior to a flight and is entitled to a refund of the ticket price, Alaska also refunds the 7 Mexican Tourism Tax that was collected at the time that the ticket was purchased").) 8 Thus, Plaintiff's damage, if any, occurred by reason of the fact that he took the Alaska 9 flights and he was injured because he allegedly paid more for the flights than was 10 necessary. 11 Plaintiff's situation also shares much in common with the litigant-passenger in

12 Knowlton v. American Airlines, supra, 2007 WL 273794, who claimed that she was 13 injured because she did not receive a breakfast during the flight in question which had 14 been promised to her when she booked her ticket. In Knowlton, the court determined that 15 the MONTREAL CONVENTION completely preempted the plaintiff's state law claims 16 because, inter alia, "[a]s a matter of public policy, airlines should not be subject to contract 17 claims in state courts involving a three-dollar breakfast." (Id. at *5.) Here, the Plaintiff is 18 complaining of injury which he experienced during his international flight (namely, having 19 to allegedly pay $22 more for air transportation than he believed was required). As in 20 Knowlton, airlines engaged in international transportation should not be subject to contract 21 claims in state courts involving a $22 foreign tax. 22 Plaintiff conceivably may argue that his injury would have occurred when he

23 purchased his ticket for air transportation from California to Mexico. This argument fails 24 if for no other reason than that Alaska was not then in any position to determine whether or 25 not the Plaintiff was exempt from the Mexican Tourism Tax at that time. (THIEL DECL. 26 ¶ 8.) In order for a passenger to be entitled to a Tourism Tax Exemption, the passenger 27 must provide proof of his or her exempt status, including a passport, birth certificate, or, in 28 Plaintiff's case, his FM-2 or FM-3 visa. (Id.) Since the vast majority of passengers
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1 purchase their tickets for Alaska through the internet or over the telephone, it is not 2 feasible for Alaska to determine whether most passengers (including Plaintiff) qualify for a 3 Tourism Tax Exemption at the time that the ticket is purchased. (Id.; JARVIS DECL. ¶¶ 5-6; 4 Butler Decl. ¶ 3.) In short, there simply was no feasible opportunity for Alaska to be able 5 to inspect the Plaintiff's FM-2 or FM-3 Visa prior to requiring Plaintiff to pay for his 6 ticket and the Mexican Tourism Tax. 7 Even assuming, arguendo, that Plaintiff's injury did not occur while he was on

8 board Alaska flights (which in fact it did), the alleged damage to the Plaintiff would have 9 then occurred during the process of embarkation, either for his flight from San Francisco to 10 San Jose del Cabo, or when he returned from Mexico to the United States (assuming it was 11 onboard an Alaska Airlines flight), and therefore would still be covered under Articles 12 17(1) and 29 of the Montreal Convention. The Alaska customer service agents that 13 process passengers checking in for flights from the United States to Mexico generally do 14 not make a determination whether or not the passenger is exempt from the Mexican 15 Tourism Tax. (JARVIS DECL. ¶¶ 3-5.) Given the more than 1.4 million passengers on 16 Alaska Airlines traveling between the United States and Mexico each year, it "would be 17 impractical and unduly burdensome and costly for [Alaska Airlines] to require [its] 18 customer service agents to ask each passenger to prove whether or not he or she is exempt 19 from the Mexican Tourism Tax during the check-in process for the United States to 20 Mexico leg of that passenger's journey." (Id. ¶ 5.) 21 Alaska maintains that its customer service agents at the Mexican and United States

22 airports are not required to affirmatively ask a passenger if he or she is entitled to a refund 23 of the Tax. However, even assuming, arguendo, that Alaska owed such a duty, it is clear 24 that its failure to make such inquiry during the check-in process (in either Mexico or the 25 United States) is covered under the Montreal Convention. In Mbaba v. Societe Air France, 26 457 F.3d 496 (5th Cir. 2006), cert. denied, 127 S. Ct. 959 (2007), the plaintiff purchased a 27 ticket on Air France from Houston, Texas to Lagos, Nigeria, with a layover in Paris, 28 France. When the plaintiff checked in for the flight in Houston, he paid a $520 excess
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1 baggage fee ­ $130 for each of his four extra bags. In Paris, Air France unloaded the 2 plaintiff's baggage and he missed is connecting flight to Lagos. He reclaimed the baggage 3 and spent a night in the airport terminal. The next day, when plaintiff checked in for the 4 new Lagos flight, an agent told him he would have to pay $4,048.66 for the extra bags 5 (based on the weight of the bags). Plaintiff paid the fee with his credit card, and then sued 6 Air France in state court in Texas, alleging breach of contract, violation of the Texas 7 Deceptive Trade Practices Act, and common law fraud. Air France removed the case to 8 federal court, and the court ultimately entered summary judgment to Air France, holding 9 that the Warsaw Convention preempted plaintiff's state law claims. 10 The Fifth Circuit affirmed on appeal. The plaintiff argued that his claims could not

11 be preempted because his injuries were not contemplated by the Convention. The plaintiff 12 focused on the fact that his injury as not even within the broad categories of the 13 Convention: personal injury [Article 17], lost or damaged baggage [Article 18] or delay 14 [Article 19]. The plaintiff asserted that if the district court's judgment was affirmed, that 15 meant that unless an injury is specified in the Warsaw Convention, there can be no remedy 16 for it. (Id. at 499.) Plaintiff further contended that "`An airline could, if it chose, even line 17 up passengers on an international flight and rob them at gunpoint without fear of any civil 18 liability to the victims whatsoever.' Robbery is not prohibited by the Convention.'" (Id.) 19 (Emphasis in original).) In rejecting this argument, the Fifth Circuit stated that plaintiff's 20 "argument fails to overcome the text of the Convention and Tseng." (Id. at 500.) 21 Similarly here, just as the Warsaw Convention applied to the plaintiff's state law

22 claims in Mbaba arising of Air France's charging him additional baggage fees when he 23 checked in for his international flight, the Montreal Convention applies to any claim by 24 Nelson that he was not refunded the Mexican Tourism Tax when he checked in for his 25 flights from the United States to Mexico. 26 /// 27 /// 28 ///
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1 2 3

C.

The Airline Deregulation Act ALSO Preempts and Prohibits the Plaintiff's State Law Claims

In addition to being preempted and barred by the MONTREAL CONVENTION,

4 Plaintiff's claims are also preempted and barred by the Airline Deregulation Act ("ADA"), 5 currently codified at 49 U.S.C. § 41713(b). Congress enacted the ADA in 1978 to 6 deregulate the airline industry. (See 49 U.S.C. § 40101(a)(6), (a)(12)(A) (formerly 7 codified at 49 U.S.C. § 1302(a)(4), (a)(9)); Charas v. Trans World Airlines, Inc., 160 F.3d 8 1259, 1265 (9th Cir. 1998).) In enacting the ADA, Congress determined that "maximum 9 reliance on competitive market forces would best further efficiency, innovation, and low 10 prices as well as variety [and] quality . . . of air transportation services." (Morales v. Trans 11 World Airlines, Inc., 504 U.S. 374, 378, (1992) (citation and internal quotation marks 12 omitted).) Congress included an express preemption provision in the ADA "[t]o ensure 13 that the States would not undo federal deregulation with regulation of their own." (Id.; see 14 also Taj Mahal Travel, Inc. v. Delta Airlines, Inc., 164 F.3d 186, 194 (3rd Cir. 1998) 15 (Congress enacted the ADA to "prevent the states from re-regulating airline operations so 16 that competitive market forces could function"); Charas, 160 F.3d, at 1265 ("The purpose 17 of preemption is to avoid state interference with federal deregulation").) 18 The ADA provides, in relevant part that "[e]xcept as provided in this subsection, a

19 State, political subdivision of a State, or political authority of at least 2 States may not 20 enact or enforce a law, regulation, or other provision having the force and effect of law 21 related to a price, route, or service of an air carrier...." (49 U.S.C. § 41713(b)(1) 22 (Emphasis added).) 23 The phrase "related to a price, route, or service of an air carrier" is to be broadly

24 construed. In Morales, the Supreme Court examined whether the ADA preempted 25 enforcement of state guidelines concerning regulation of air fare advertising. The Court 26 27 28
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1 focused on the preemption clause's "relating to"9 language. (Morales, 540 U.S. at 3832 86.) Relying on its ERISA line of cases and the ordinary meaning of the statutory 3 language, the Court construed the phrase "relating to" broadly to preempt "State 4 enforcement actions having a connection with, or reference to, airline `rates, routes, or 5 services.'" (Id. at 384.) The Court held: 6 7 8 9 10 11 12 13 For purposes of the present case, the key phrase, obviously, is "relating to". The ordinary meaning of these words is a broad one ­ "to stand in some relation; to have bearing or concern; to pertain; refer; to bring into association with or connection with," Black's Law Dictionary 1158 (5th ed. 1979) ­ and the words thus express a broad pre-emptive purpose. We have repeatedly recognized that in addressing the similarly worded pre-emption provision of [ERISA], 29 U.S.C. § 1144(a), which pre-empts all state laws "insofar as they . . . relate to any employee benefit plan." We have said, for example, that the "breadth of [that provision's] preemptive reach is apparent from [its] language," . . . that it has a "broad scope," . . . and an "expansive sweep," . . . and that it is "broadly worded," . . . "deliberately expansive," . . . and "conspicuous for its breadth." . . . Since the relevant language of the ADA is identical, we think it appropriate to adopt the same standard here: State enforcement actions having a connection with or reference to airline "rates, routes, or services" are pre-empted under [the ADA].

14 (Id. at 383-84) (Emphasis added.) 15 Based on this "broad preemptive purpose," the Court rejected contentions that the

16 ADA only preempted states from actually prescribing rates, routes, or services, and that 17 only state laws specifically aimed at the airline industry were preempted. (Id. at 384-86.) 18 The Court held that the state law guidelines had the "forbidden significant effect" on the 19 airlines' rates, routes and services, primarily because they restricted fare advertising, which 20 "relates to" price. (Id. at 388-89; see also Rowe v. N.H. Motor Transp. Ass'n, 522 U.S. __, 21 128 S. Ct. 989, 998 (2008) (Ginsburg, J., concurring) (noting the "breadth of [the] 22 preemption language" in the Federal Aviation Administration Authorization Act of 1994, 23 whose preemption provision (49 U.S.C. § 14501(c)(1)) is in pari material with that of the 24 ADA); Hingson v. Pacific Southwest Airlines, 743 F.2d 1408, 1415 (9th Cir. 1984) 25 26 27 28
9

The prior version of what is now 49 U.S.C. § 41713(b)(1) ­ 49 U.S.C. § 1305(a)(1) ­ preempted States from enacting or enforcing laws "relating to rates, routes, or services of any air carrier . . . ." (Emphasis added).) Congress intended the revision to make no substantive change. (See American Airlines, Inc. v. Wolens, 513 U.S. 219, 221 n.1, 115 S.Ct. 817 (1995) (citing Pub. L. 103-272, § 1(a), 108 Stat. 745).) -17ALASKA AIRLINES' MOTION TO DISMISS

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1 ("[ADA] preemption is not limited to those state laws or regulations that conflict with 2 federal law. It preempts state laws and regulations `relating to rates, routes, or services.'") 3 (Emphasis in original).) 4 Plaintiff's claims for breach of contract and "money had and received" challenging

5 Alaska's conduct in allegedly collecting but failing to remit the Mexican Tourism Tax are 6 clearly preempted by the ADA because they have an undeniable "connection with" the 7 "price, route or service of an air carrier . . . ." (49 U.S.C. § 41713(b)(1).) Earlier this year, 8 U.S. District Court for the Central District of California held that claims which were nearly 9 identical to those asserted by the Plaintiff here were preempted by the ADA. (Sanchez v. 10 Compania Mexicana de Aviacion, supra (ATKINS-PATTENSON DECL.")., Exh. B).) In 11 Sanchez, the plaintiff (like Nelson here) alleged that she, and the class of persons she 12 sought to represent, were improperly charged "a certain Mexican tourism tax imposed by 13 the government of Mexico and collected by airlines on behalf of the government of 14 Mexico in connection with the sale of passenger tickets for flights to Mexico." (Id. at 2.) 15 The plaintiff there (like Nelson here) claimed that "she was exempt under Mexican law 16 from payment of the Mexican tourism tax" and that Mexicana Airlines "breached [its] 17 contracts of carriage by collecting the tourism tax from her and other passengers who were 18 purportedly exempt." (Id. at 4.) 19 In granting summary judgment for the airline based on ADA preemption, the court

20 emphasized that "all of the claims asserted" by the plaintiff "concerning the Mexican 21 tourism tax relate to Mexicana's prices, routes and services . . . ." (Id. at 4-5.) The court 22 held: 23 24 25 The claims . . . concerning the collection of the Mexican tourism tax relate to Mexicana's prices because the Mexican tourism tax is collected together with the purchase price of the passenger ticket and is related to and intertwined with the sale, price, and issuance of the passenger tickets.

26 (Id. at 5.) 27 The Court added that such claims "also relate to Mexicana's routes and services because 28 the Mexican tourism tax is collected only on routes between Mexico and other countries
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1 and it is part of the services provided by Mexicana to its customers to facilitate the flow of 2 passengers through Mexican airports by eliminating the need for passengers to stand in 3 line at Mexican airports to pay the tourism tax prior to entering the country." (Id.) The 4 court further stated: 5 6 7 8 9 Claims seeking reimbursement of government fees and taxes, including charges on behalf of foreign sovereigns such as the Mexican government, which are collected by Mexicana with the purchase price of a passenger ticket are preempted by the Airline Deregulation Act, because they are related to the prices charged by airlines. Since the tourism tax which plaintiffs here seek to recover is collected by Mexicana as part of the price of the passenger ticket, the tourism tax is related to pricing, and all claims asserted by plaintiff . . . are preempted by the Airline Deregulation Act, as a matter of law.

10 (Id. at 6-7.) 11 The court also held: 12 13 14 15 16 The preemptive coverage of the Airline Deregulation Act also applies to routes and services which are provided by the airline. See 49 U.S.C. § 41713. As the tourism tax is charged only on routes between Mexico and other countries and as the collection of the tourism tax at the time of ticketing is a service facilitating the flow of passengers through the airports in Mexico, . . . Sanchez's claims . . . are preempted by the Airline Deregulation Act on the grounds that the claims are related to Mexicana's routes and services.

17 (Id. at 7.) 18 As in Sanchez, Nelson is attempting to impose obligations on Alaska which "relate to" and 19 thereby affect Alaska's prices, routes and services. Accordingly, the claims are preempted 20 by the ADA. (Id. at 5-8.) 21 Several other cases also demonstrate why Plaintiff's claims here are preempted by

22 the ADA. In Buck v. American Airlines, Inc., 476 F.3d 29 (1st Cir. 2007), purchasers of 23 nonrefundable airline tickets that were never used sued American Airlines to recover 24 various fees and taxes that had been collected as part of the original ticket prices. The fees 25 that allegedly were wrongfully withheld from the nonrefundable tickets included passenger 26 facility charges, customs fees, immigration fees, agricultural quarantine fees, security fees, 27 and charges on behalf of foreign governments. In addition to claiming that the airline's 28 actions violated federal regulations, the plaintiffs asserted claims for breach of contract,
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1 rescission, unjust enrichment, breach of the implied covenant of good faith and fair 2 dealing, breach of fiduciary duty, and civil conspiracy. (Id. at 32.) 3 The court held that the ADA preempted the plaintiffs' claims against the airline.

4 The court stated that the plaintiffs were "attempting to invoke state remedies to further a 5 state policy: that those who are wronged should have individualized access to the courts in 6 order to remediate that wrong. . . . It is the imposition of this state policy that would 7 constitute forbidden state enforcement, in violation of the ADA's preemption provision, 8 because the ADA itself provides no private right of action." (Id. at 35.) 9 The plaintiffs in Buck argued that their suit did not affect prices (or rates), routes or

10 services of airlines because the lawsuit was filed after the prices (or rates), routes, and 11 services had been determined for the flights in question. (Id.) In their view, airline ticket 12 prices (or rates) are composed of two separate components: (1) the fare prices (or rates) 13 set by the airlines, which comprise the base cost of a ticket, and (2) the taxes, fees, and 14 charges imposed by the government or other fee-levying authorities. In rejecting this 15 argument, the First Circuit held: 16 17 18 19 20 21 22 23 24 This dichotomy blurs when contextualized within the contours of the "significant effect" doctrine. Although the fees are in one sense separate from the base fare, the two are inextricably intertwined. In all events, an air traveler's concern is with the overall cost of his or her ticket. Thus, when an airline establishes the base fare, it must take cognizance of any surcharges that will be imposed by operation of law. It is freshman-year economics that higher prices mean lower demand, and that customers are sensitive to the full price that they must pay, not just the portion of the price that will stay in the seller's coffers. For that reason, an airline must account for the fees when setting its own rates. It follows that a finding for the plaintiffs in this case would impact base fares ­ and since past judgments affect future behavior, this is as true of the retroactive relief requested by the plaintiffs as it is of the prospective relief that they request. In view of these practical realities, it is not surprising that most of the courts to have considered suits for refunds of government fees associated with air travel have found those suits preempted.

25 (Id. at 35-36.) 26 In Statland v. American Airlines, Inc., 998 F.2d 539 (7th Cir. 1993), the court held

27 that a passenger's claim against American for allegedly withholding the 10% federal 28 excise tax on cancelled airline tickets was preempted by the ADA. The court reasoned:
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1 2 3 4 5

[Plaintiff's] state law claims are for breach of fiduciary duty, violation of the Illinois Consumer Fraud and Deceptive Practices Act, conversion and breach of contract. The conduct she complains of is the same for each claim, however: she protests American's practice of withholding 10 percent of the federal tax on canceled tickets. We think it obvious that canceled ticket refunds relate to rates. Under Morales and [the ADA], states cannot regulate American's ticket refund practices either by common law or by statute. This sweeps aside [plaintiff's] state law claims.

6 Id. at 541-42 (Emphasis added).) 7 Similarly here, whether or not Alaska refunds the Mexican Tourism Tax paid by a 8 passenger exempt from such tax "relate[s] to rates" and is therefore preempted by the 9 ADA. 10 In Lehman v. USAir Group, Inc. 930 F. Supp. 912 (S.D.N.Y. 1996), airline

11 passengers alleged that airlines improperly subjected them to the federal 10% excise tax 12 after the tax expired. The court held that the passengers' state-law claims for conversion 13 and unjust enrichment were preempted. The court explained that "The conversion and 14 unjust enrichment claims relate to the defendants' ticket prices within the meaning of" the 15 ADA. (Id. at 915.) "Both claims expressly refer to the collection of the air transportation 16 excise tax. The excise tax `relates to price' because the ten per cent excise tax directly 17 impacts the ticket price." (Id.) Similarly here, Alaska's purported collection of the 18 Mexican Tourism Tax "relates to price" because the Mexican Tourism Tax "directly 19 impacts the ticket price." 20 The fact that Plaintiff purports to allege a claim for breach of contract does not

21 defeat Alaska's motion to dismiss his claims. In Wolens v. American Airlines, 513 U.S. at 22 228, the Supreme Court stated that ADA preemption does not "shelter airlines from suits 23 alleging no violation of state-imposed obligations, but seeking recovery solely for the 24 airline's alleged breach of its own, self-imposed undertakings." The Wolens exception for 25 contract claims cannot apply here. The only purported written promise that Alaska made, 26 according to Plaintiff, is the language on Alaska's website setting forth Rule 40AS of the 27 Alaska "International Contract of Carriage." That Rule states: "Any tax or other charge 28
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W02-EAST:9RGG1\200109018.2

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ALASKA AIRLINES' MOTION TO DISMISS

Case 3:08-cv-03560-JSW

Document 5

Filed 07/29/2008

Page 74 of 76

1 imposed by government authority and collectable from a passenger will be in addition to 2 the published fares and charges." (See COMPLAINT ¶ 26.) 3 This language does not create any contractual obligation on the part of Alaska

4 toward its passengers. Rather, it merely notifies the passenger that in addition to the 5 published fare and charge, the passenger can expect to have to pay government-imposed 6 taxes and charges. This language also does not contain a promise that Alaska will refund 7 to the passenger any tax or fee for which the passenger ultimately turns out to be exempt. 8 The plaintiffs in Buck also argued that their claim for breach of contract was not

9 preempted because it fit within the Wolens exception for contract-based claims. (Buck, 10 476 F.3d at 36.) The court rejected this argument, stating that "the plaintiff's amended 11 complaint identifies only a single word ­ `nonrefundable' ­ as common to their contracts 12 of carriage with a multitude of airlines. It seems fanciful to suggest, in the circumstances 13 of this case, that the word `nonrefundable' alone can anchor a breach of contract claim." 14 (Id.) 15 16 17 D. Plaintiff's Claims For Relief Otherwise Fails To State A Claim For Which Relief Can Be Granted If for any reason the Court determines that either or both of the Plaintiff's claims for

18 relief are not preempted and prohibited by the Montreal Convention or the Airline 19 Deregulation Act, the Court should exercise supplemental jurisdiction under 28 U.S.C. § 20 136710 and dismiss the state law claims for failure to state a claim for which relief can be 21 granted. 22 23 1. The COMPLAINT Does Not State a Claim for Breach of Contract

To establish a claim for breach of contract under California law, Plaintiff must

24 prove each of the following elements: (1) that a contract existed; (2) that she performed, 25 26 27 28
10

28 U.S.C.A. § 1367(a) provides: "Except as provided in subsections (b) and (c) or as expressly provided otherwise by Federal statute, in any civil action of which the dist