Airline Industry Alert: Court Finds Airline Deregulation Act Does Not Preempt Miami-Dade County's Living Wage Ordinance

Executive Summary: On September 21, 2015, the U.S. Court of Appeals for the Eleventh Circuit held that the Airline Deregulation Act (ADA) does not preempt Miami-Dade County's Living Wage Ordinance (LWO). Amerijet Int'l, Inc. v. Miami-Dade Cnty., No. 14-11401 (11th Cir. Sept. 21, 2015). This means that airlines that use the facilities of the Miami International Airport will have to comply with the LWO with regard to those employees who perform "covered services" for other airlines. The LWO remains inapplicable to airlines providing such services on their own behalf, however. The Eleventh Circuit joins the Ninth Circuit in interpreting the ADA's definition of "services" narrowly, perhaps setting the stage for Supreme Court review.

Background

In 1999, Miami-Dade County enacted the LWO, which requires certain entities that conduct business with the county or use the facilities of Miami International Airport to pay wages higher than the federally mandated minimum wage to all employees providing "covered services," defined to include typical airline ground handling services, aircraft fueling and cleaning, catering, and cargo services. The county initiated an investigation into Amerijet's alleged violations of the LWO, asserting that the LWO covered employees performing the cargo handling services Amerijet provided to another airline. Amerijet challenged the LWO in federal court. The district court ruled that federal law did not preclude the county from applying the LWO to Amerijet. Amerijet appealed, and the Eleventh Circuit affirmed in an unpublished per curiam decision.

The Eleventh Circuit's Decision

The court rejected Amerijet's primary argument, that the ADA preempts the LWO. It first noted that the LWO does not single out or target airlines, and thus resembles a law of "general application" rather than one that was designed to regulate the airline industry. The court then stated that the "service" at issue - providing cargo services to other airlines - was not the type that implicates ADA preemption under Eleventh Circuit precedent that the "bargained-for exchange must be between an air carrier and its consumers." (Emphasis added.) The court held that "cargo handling, when performed by one airline for another" fails to satisfy that requirement. Negotiations over such cargo handling occurred between Amerijet and other airlines, the court concluded, and thus did not implicate the airline-customer...

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