California has long been a leader in privacy legislation. In 2004, California enacted CalOPPA, the first U.S. state law to require commercial operators of websites and online services that collect consumers’ personally identifiable information (PII) to conspicuously post detailed privacy policies disclosing what information is being collected and the categories of third parties with whom PII will be shared. The California Attorney General interpreted the term “online service” broadly to include any service available over the internet or that connects to the internet, including mobile apps, and demonstrated an unequivocal willingness to enforce CalOPPA in the mobile sphere.
Delta and United Airlines were among the recipients. Delta acknowledged receipt and stated that it would comply but did not do so within the 30-day statutory window.
People ex rel. Harris v. Delta Airlines, Inc.
Court of Appeals Affirms Dismissal
The Court of Appeals began its analysis with a restatement of the two “cornerstones” of federal preemption analysis identified by the U.S. Supreme Court in Wyeth v. Levine, 555 U.S 555 (2009). Namely, that: (1) the question of preemption is fundamentally a question of Congressional intent and (2) the historic police powers of the States are not to be superseded by federal legislation unless that was Congress’ clear and manifest purpose. On the question of Congressional intent, the appellate court explained that Congress determined that “maximum reliance on market forces” would best further efficiency, innovation, variety, quality and cost of air transportation services2 and enacted a preemption provision to ensure that the states would not undo federal deregulation. Congress’ intent to preempt state law relating to rates, routes, or services of an air carrier was made clear by the ADA’s explicit statutory language.3 The court further explained that Congress’ manifest purpose to preempt was apparent in matters of air transportation where “the federal presence is both longstanding and pervasive.”4
The Court of Appeals continued its analysis by discussing the Supreme Court and federal courts’ historically broad interpretation of the ADA preemption provision. The Supreme Court considered the reach of the ADA preemption provision in three cases: American Airlines, Inc. v. Wolens, 513 U.S. 219 (1995); Morales v. Trans World Airlines, Inc., 504 U.S. 374 (1992); and Northwest, Inc. v. Ginsberg, 572 U.S. __ , 134 S.Ct. 1422 (2014). In those cases, each of which involved attempts to use state consumer protection laws to regulate airlines’ fare advertising and enforce violations of airline frequent flyer rules, the Supreme Court adopted an expansive view of preemption because of the inevitable impact on airline prices and services. A number of federal courts have reached similar conclusions in the context of lawsuits seeking to enforce air carrier privacy policies through state consumer protection laws. See In re JetBlue Airways Corp. Privacy Litigation 379 F. Supp. 2d 299 (E.D.N.Y. 2005); In re American Airlines, Inc., Privacy Litigation 370 F. Supp. 2d 552 (N.D. Tex. 2005); Copeland v. Northwest Airlines Corp. 2005 U.S. Dist. Lexis 35139 (W.D. Tenn. 2005); and In re Northwest Airlines Privacy Litigation 2004 U.S. Dist. Lexis 10580 (D. Minn. 2004).
Notably, the appellate court rejected the State’s argument that the ADA should not preempt because CalOPPA is a law of general applicability – that is, it is not related specifically to the airline industry. The court reasoned that the Supreme Court twice rejected the notion that only state laws specifically addressed to the airline industry are preempted. As per Judge Scalia in Morales, “the ADA imposes no constraints on laws of general applicability. Besides creating an utterly irrational loophole (there is little reason why state impairment of the federal scheme should be deemed acceptable so long as it is effected by the particularized application of a general statute), this notion similarly ignores the sweep of the ‘relating to’ language.”8
In light of the above, Court of Appeals agreed that the State’s claims against Delta were expressly preempted by the ADA, affirmed the dismissal and refused to permit an amendment of the complaint finding “no reasonable possibility that the complaint can be amended to avoid the preclusive effect of federal preemption.”9
The Delta ruling reinforces the broad scope of the ADA’s preemption provision and its limitation on state consumer protection laws including those of general applicability. However, despite the outcome, the Delta litigation and the California AG’s intent to vigorously enforce CalOPPA has had a far reaching impact on the mobile marketplace. The Joint Statement of Principles raised the bar in terms of the disclosures consumers expect from mobile app providers as has voluntary compliance by the many website and online service providers which cannot rely on federal preemption principles. Privacy policies are now standard fare for airline mobile apps including Fly Delta.
1 People ex rel. Harris v. Delta Air Lines, Inc. Case No. A139238, 2016 WL 3001805 (Cal. Ct. App. May 25, 2016).
2 See 49 U.S.C. §§ 40101(a)(6) and (12)(A) .
3 49 U.S.C.App. § 1305(a)(1) now 49 U.S.C. § 41713(b)(1)( Except as provided in this subsection, a State, political subdivision of a State, or political authority of at least 2 States may not enact or enforce a law, regulation, or other provision having the force and effect of law related to a price, route, or service of an air carrier that may provide air transportation under this subpart.)
4 2016 WL 3001805 at *8.
6 Id. at *9.
8 Id. at *9.
9 Id. at *12.