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Transportation — preemption

U.S. Supreme Court


Transportation — preemption

The Airline Deregulation Act of 1978 (ADA) pre-empts a state-law claim for breach of the implied covenant of good faith and fair dealing if it seeks to enlarge the contractual obligations that the parties voluntarily adopt.

Because respondent’s implied covenant claim seeks to enlarge his contractual agreement with petitioners, it is pre-empted by §41713(b)(1). Under Minnesota law, which controls here, the implied covenant must be regarded as a state-imposed obligation. Minnesota law does not permit parties to contract out of the covenant. And when a State’s law does not authorize parties to free themselves from the covenant, a breach of covenant claim is pre-empted under Wolens. As an independent basis for this conclusion, if, as Minnesota law provides, the implied covenant applies to “every contract” except employment contracts for “policy reasons,” then the decision not to exempt other types of contracts must likewise be based on a policy determination, namely, that the policy reason for the employment contract rule does not apply in other contexts.

695 F. 3d 873, reversed and remanded.

12-462 Northwest, Inc., v. Ginsberg

Alito, J.

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