Casas v. American Airlines, I

Court of Appeals for the Fifth Circuit·Decided September 17, 2002·No. 00-41270·Published

Opinion

UNITED STATES COURT OF APPEALS FOR THE FIFTH CIRCUIT

No. 00-41137

No. 00-41270

HECTOR A. CASAS,

Plaintiff-Appellee-Cross-Appellant,

versus

AMERICAN AIRLINES, INC.,

Defendant-Appellant-Cross-Appellee.

Appeals from the United States District Court for the Southern District of Texas

September 17, 2002

Before JOLLY, JONES and BARKSDALE, Circuit Judges. EDITH H. JONES, Circuit Judge:

In 1996, Hector Casas lost a video camera worth over $1000 after he entrusted it to American Airlines as checked baggage on a flight from Texas to Florida. Casas sued American under state and federal law for the loss of the camera and sought certification of a class of similarly situated plaintiffs under Fed. R. Civ. Proc. 23. The district court granted class certification after holding that Casas could bring a private cause of action against American based on a federal regulation governing airline carriers. See 14 C.F.R. § 254.4. The court also held that federal law

rendered void certain provisions of American’s contract of carriage that held American harmless from liability for loss to valuable items such as cameras.1 In its order, the district court enjoined American from enforcing these provisions. Both parties appealed.

The main issues presented in this appeal are (1) whether Casas has a cause of action for the loss of his camera under the Air Deregulation Act (ADA) of 1978, 92 Stat. 1705, Pub. L. No. 95- 504; under 14 C.F.R. § 254.4, a regulation that was adopted pursuant to the ADA; or under federal common law; (2) if so, whether the provisions of American’s contract of carriage excluding liability for cameras and other valuable goods prevent Casas from recovering on his claim; (3) whether Casas’s state-law claims for the loss of his camera are pre-empted; and (4) whether the district court properly certified a class of plaintiffs under Rule 23. We hold as follows. Casas has no private right of action under the ADA or § 254.4, and the ADA preempts his state law claims. Casas has a claim against American under federal common law, but he cannot prevail on this claim because it is barred by American’s liability exclusion provisions. Because Casas is not entitled to relief, the class certification order must be vacated.

1 American’s exclusion-of-liability provisions appear to be typical of those used in the commercial airline industry. See Martin E. Rose & Beth E. McAllister, The Effect of Post-Deregulation Court Decisions on Air Carriers’ Liability for Lost, Delayed or Damaged Baggage, 55 J. Air L. & Com. 653, 660 (1990). “[A]ir carriers typically exclude all liability for lost money, jewelry, cameras, and electronic equipment.” Id. at 678-79.

BACKGROUND

At the time Casas allegedly lost his camera, 14 C.F.R.

§ 254.4 provided, in relevant part, that “an air carrier shall not limit its liability for provable direct or consequential damages resulting from the disappearance of, damage to, or delay in delivery of a passenger’s personal property, including baggage, in its custody to an amount less than $1250 for each passenger.”2 In February 1998, after both parties moved for summary judgment, a magistrate judge issued a report and recommendation concluding that (1) Casas’s state law claims were pre-empted by federal law; (2) 14 C.F.R. § 254 rendered American’s exclusion-of- liability provisions unenforceable; and (3) pursuant to 14 C.F.R. § 254, American’s liability for Casas’s loss of his camera was limited to $1,250. The district court adopted the report and recommendation and entered judgment in favor of Casas for $1,029, exclusive of costs, on his individual claim. In September 2000, the district court issued an order granting class certification under Fed. R. Civ. Proc. 23 and reaffirming its earlier conclusions. The order also enjoined American from relying on the liability exclusion provisions to deny compensation to passengers for their losses.

2 Domestic Baggage Liability, 49 Fed. Reg. 5065, 5071 (Feb. 10, 1984).

The current version of § 254.4, as amended in late 1999, puts the limit at $2500 for each passenger. Domestic Baggage Liability, 64 Fed. Reg. 70,573, 70,575 (Dec. 17, 1999).

American appealed; the injunction may be appealed pursuant to 28 U.S.C. § 1292(a)(1), as may Casas’s cross-appeal of the district court’s pre-emption ruling.3 This court granted American’s petition for permission to appeal the class certification decision. Fed. R. Civ. Proc. 23(f); Fed. R. App. P. 5.

DISCUSSION

I.

The district court predicated American’s liability on the conclusion that 14 C.F.R. § 254.4 creates a private right of action. The proper inquiry, however, is whether the ADA created a private cause of action or authorized the FAA to do so. Alexander v. Sandoval, 532 U.S. 275, 121 S.Ct. 1511 (2001). “Language in a regulation may invoke a private right of action that Congress through statutory text created, but it may not create a right that Congress has not. . . . [I]t is most certainly incorrect to say that language in a regulation can conjure up a private cause of action that has not been authorized by Congress.” Sandoval, 532 U.S. at 291, 121 S.Ct. at 1522. See Stewart v. Bernstein, 769 F.2d 1088, 1092 n.6 (5th Cir. 1985); Angelastro v. Prudential-Bache Securities, Inc., 764 F.2d 939, 947 (3d Cir. 1985). We review this

3 See In re Seabulk Offshore, Ltd., 158 F.3d 897, 899 n.2 (5th Cir.

1998) (once an order has been deemed appealable under § 1292(a)(1), the entire order, not merely the propriety of injunctive relief, comes within this court’s scope of review); In re Lease Oil Antitrust Litigation (No. II), 200 F.3d 317, 319-20 (5th Cir. 2000).

issue of law de novo and conclude that neither the ADA nor 14 C.F.R. § 254.4 creates a private cause of action.

In Sam L. Majors Jewelers v. ABX, Inc., 117 F.3d 922 (5th Cir. 1997), this court held, inter alia, that while the ADA did not create a private right of action “to recover the value of damaged or lost cargo,” id. at 925, a cause of action for such a loss exists under federal common law.4 The ADA’s savings clause, which preserves “other remedies provided by law,” 49 U.S.C. § 40120(c), “had the effect of preserving the clearly established federal common law cause of action against air carriers for lost shipments.” 117 F.3d at 928. See id. & n.13 (citing § 40120(c)).

Casas would distinguish the Sam L. Majors Jewelers decision because the plaintiff in that case engaged in a commercial air freight transaction. We reject this suggestion. The Sam L. Majors Jewelers opinion does not indicate that the availability of a private right of action for lost or damaged goods under the ADA depends on whether the shipper is a merchant or a leisure traveler -- or on whether the carrier is an air freight company or a commercial airline. Instead, the opinion relies on numerous cases involving both private passenger and commercial air freight claims

4 Id. at 929 n.16 (“we . . . hold that a cause of action against an interstate air carrier for [a] claim for property lost or damaged in shipping arises under federal common law”). Cf. id. n.15 (“narrow holding” of case is that “a federal cause of action exists against an interstate air carrier that negligently loses a shipment”); id. at 926 (describing question to be decided as “whether a cause of action against air carriers for lost or damaged goods arises under federal common law”).

for lost baggage. See, e.g., id. at 927-28 & 928 nn.11,12. The opinion repeatedly uses the generic term “air carrier,” a term that is broadly defined in the statute as “a citizen of the United States undertaking by any means, directly or indirectly, to provide air transportation.” See 49 U.S.C. § 40102(a)(2). This language strongly suggests that no distinction is intended to be made between passenger airlines and air freight enterprises.5 Assuming, however, for purposes of discussion that Sam L.

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