Transportation — preemption

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United States Court of Appeals For the Seventh Circuit

Civil

Transportation — preemption

State law promissory estoppel claims are not preempted by the federal Airline Deregulation Act.

“Promissory estoppel, as the word ‘promissory’ implies, furnishes a ground for enforcing a promise made by a private party, rather than for implementing a state’s regulatory policies. A garden-variety claim of promissory estoppel—one that differs from a conventional breach of contract claim only in basing the enforceability of the defendant’s promise on reliance rather than on consideration, In re Fort Wayne Telsat, Inc., No. 11-2112, 2011 WL 5924446, at *2 (7th Cir. Nov. 23, 2011); Garwood Packaging, Inc. v. Allen & Co., 378 F.3d 698, 701-02 (7th Cir. 2004)—is therefore not preempted. ‘We do not read the [Act’s] preemption clause . . . to shelter airlines from suits alleging no violation of state-imposed obligations, but seeking recovery solely for the airline’s alleged breach of its own, self-imposed undertakings . . . . A remedy confined to a contract’s terms’ is not preempted. American Airlines, Inc. v. Wolens, supra, 513 U.S. at 228-29. Not so tort claims that override contract claims, see United Airlines, Inc. v. Mesa Airlines, Inc., 219 F.3d 605 (7th Cir. 2000), rather than just seeking a remedy ‘confined to a contract’s terms.’ But ATA is not alleging a tort; it is trying to hold FedEx to a promise that it contends FedEx made to it.”

Reversed.

11-1382 & 11-1492 ATA Airlines, Inc., v. Federal Express Corp.

Appeals from the United States District Court for the Southern District of Indiana, Young, J., Posner, J.