IN THE SUPREME COURT OF OHIO

Transcription

1 OR1011V44 IN THE SUPREME COURT OF OHIO Peter Restivo, et al., Plaintiffs-Appellants, V. Continental Airlines, Inc., Defendant-Appellee. Case No On Appeal from 8th District Court of Appeals Case No. 10 CA (An Appeal From The Cuyahoga County Common Pleas Court Case No. 09-CV ) DEFENDANT-APPELLEE CONTINENTAL AIRLINES, INC.'S MEMORANDUM IN RESPONSE TO APPELLANTS' MEMORANDUM IN SUPPORT OF JURISDICTION Gerald W. Philips (Ohio Bar No ) (Counsel of Record) Sam P. Cannata (Ohio Bar No ) CANNATA PHILLIPS LPA, LLC 9555 Vista Way Suite 200 Garfield Heights, Ohio Telephone: (216) Facsimile: (216) Counsel for Plaintiffs-Appellants PETER RESTIVO and CAROL HAGEMAN Hugh R. Whiting (Ohio Bar No ) Jeffrey Saks (Ohio Bar No ) (Counsel of Record) Tracy A. Stitt (Ohio Bar No ) JONES DAY North Point 901 Lakeside Avenue Cleveland, Ohio Telephone: (21-6) Facsimile: (216) Counsel for Defendant-Appellee CONTINENTAL AIRLINES, INC. CLI v1

2 TABLE OF CONTENTS Page... Table of Authorities... lu 1. Introduction... 1 II. Explanation Of Why There Is No Question Of Public Or Great General Interest... I III. Statement Of The Case And Facts... 2 IV. Argument... 3 A. This Is A Straightforward Preemption Case That Needs No Clarification Settled Supreme Court Precedent Mandates Dismissal Of Restivo's Claims Following Supreme Court Precedent, Courts Uniformly Have Held That Consumer Protection Claims Against Airlines Are Preempted By The ADA No Clarification Of The Statutory Language Is Necessary To Hold Restivo's Claims Preempted By The ADA... 8 B. Restivo's Propositions Of Law Do Not Warrant This Court's Review Proposition of Law No. 1: The Ohio Gift Card Statute ORC governing the issuance and use of a gift card as defined by statute is not a law related to a price, route or service of an air carrier providing air transportation but is a law related to financial transactions which are subject to and governed by the Electronic Funds Transfer Act, and is not pre-empted by Federal Law, the Airline Deregulation Act, Credit Card Act of Neither The Credit Card Act Of 2009, Nor The Electronic Fund Transfer Act Apply To This Case...: Proposition of Law No. 2: The legislative history of the Airline Deregulation Act, clearly indicates that the term "service" refers to the frequency and scheduling of transportation, and the selection of markets to and from which transportation is provided, Charas v. Trans WorldAirlines, Inc. (9th Cir. 1998) 160 F.3d 1259, Proposition of Law No. 3: The common and technical meaning of the term "service" in the airline industry, clearly refers to the frequency and scheduling of transportation, and the selection of markets to and from which transportation is provided, Charas v. Trans World Airlines, Inc. (9th Cir. 1998) 160 F.3d 1259, Proposition of Law No. 4: The legislative history of the Airline Deregulation Act, clearly indicates that the express purpose to eliminate the existing federal economic regulation of the airlines, and to prevent the states from replacing such existing economic regulation of the airlines, Charas v. Trans World Airlines, Inc. (9th Cir. 1998) 160 F.3d 1259, CLI v1-1-

3 TABLE OF CONTENTS (continued) Page 1. Charas Is Inapposite The Principles Of Statutory Construction Cited By Restivo Are Consistent With A Finding Of Preemption V. Conclusion CLId v 1 -ii-

4 TABLE OF AUTHORITIES Page CASES Air Transp. Ass'n ofamerica, Inc. v. Cuomo (2d Cir. 2008), 520 F.3d Butler v. United Airlines, Inc. (N.D. Cal. May 5, 2008), No. C , 2008 U.S. Dist. LEXIS American Airlines, Inc. v. Wolens (1995), 513 U.S. 219, 115 S.Ct. 817, 130 L.Ed.2d :... passim Charas v. Trans World Airlines, Inc. (9th Cir. 1998), 160 F.3d ,12 City of Cleveland v. Cuyahoga Lorain Corp. Cuyahoga App. No , 2004-Ohio Copeland v. Northwest Airlines Corp. (W.D. Tenn. Feb. 28, 2005), No MI/V, 2005 U.S. Dist. LEXIS Federal Express Corp. v. U.S. Postal Service (W.D. Tenn. 1999), 55 F. Supp. 2d Fortner v. Thomas (1970), 22 Ohio St. 2d 13, d 35, 257 N.E.2d Freeman v. Jetblue Airways, Corp. (Ca. Sup. Ct. San Bernardino Cty., Jan. 20, 2004), No. BCV07114, Order Granting Motion for Judgment on the Pleadings...7 Kagy v. Toledo-Lucas Cty. Port Authority (Fulton Cty. 1998), 126 Ohio App. 3d 675, 711 N.E.2d Kahn v. Delta Air Lines, Inc. (Ca. Sup. Ct. Orange Cty., Aug. 28, 2003), No. 03CC00162, Minute Order Sustaining Demurrer...7 Lehman v. USAir Group, Inc. (S.D.-N.Y. 1996), 930 F. Su-pp. 912 :...:..., Mark v. Mellott Mfg. Co. (Ross Cty. 1995), 106 Ohio App. 3d 571, 666 N.E.2d Morales v. Trans World Airlines, Inc. (1992), 504 U.S. 374, 112 S.Ct. 2031, 119 L,Ed.2d passim CLI v1 -iii-

5 Northwest Airlines v. Duncan (2000), 531 U.S :...8 Rowe v. New Hampshire Motor Transp. Ass'n (2008), 552 U.S. 364, 128 S.Ct. 989, 169 L.Ed.2d , 13 Talik v. Fed Marine Terminals, Inc., 117 Ohio St. 3d 496, 2008-Ohio-937, 885 N.E.2d Tanen v. Southwest Airlines Co. (2010), 187 Cal. App. 4th 1156, 114 Cal. Rptr. 3d Weaver v. UnitedAir Lines, Inc. (Ca. Sup. Ct. San Francisco Cty., July 31, 2001), No , Order Sustaining Demurrer...7 STATUTES Airline Deregulation Act, 41713(b)(1), Title passim Ohio Consumer Sales Practices Act, R.C and Ohio Gift Card Statue, R.C RULES S.Ct. Prac. R S.Ct. Prac. R CLI v1 -lv-

6 I. INTRODUCTION The motion of appellants Peter Restivo and Carol Hageman ("Restivo") to exercise discretionary jurisdiction should be denied. Contrary to Restivo's contention, this case does not present "novel issues of first impression." (Restivo Memo at 4.) Rather, this is a straightforward case in which settled law demonstrates that both courts below followed precedent and correctly held that Restivo's state consumer protection claims are preempted by the Airline Deregulation Act ("ADA"). Section 41713(b)(1), Title 49, U.S.Code. Restivo relies upon inapplicable statutes, a distinguishable case involving personal injury claims that have not been pleaded in this case, and strained and irrelevant concepts of statutory construction. Indeed, the decision to dismiss Restivo's claims is an "easy one" because Congress has made its preemptive intent known through explicit statutory language. Talik v. Fed. Marine Terminals, Inc., 117 Ohio St. 3d 496, 2008-Ohio-937, 885 N.E.2d 204, 21. These settled issues of law do not warrant discretionary review by this Court. II. EXPLANATION OF WHY THERE IS NO QUESTION OF PUBLIC OR GREAT GENERAL INTEREST Discretionary review requires "a question of public or great general interest." S.Ct. Prac. R. 2.1(A)(3). Restivo pays lip service to the requisite presence of "substantial legal issues" that are "of great public general interest" (Restivo Memo at 1), but fails to identify those alleged issues. At no point does Restivo state what claims he has brought in this case, let alone explain why his claims are "of great public general interest." (Id.) Instead, Restivo declares without any support that millions of people allegedly will be affected by his claims. His unsupported statement that this case "will affect the over 13 million Ohioans and the over 300 million Americans who use gift cards and travel the friendly skies in the United States" is based only on his say-so. (Id.) That is insufficient to carry his burden. S.Ct. Prac. R. 3.1(B)(2). CLI v I

7 Instead of providing an explanation supporting this Court's exercise of jurisdiction, Restivo makes sweeping generalizations about inapplicable statutes, gift certificates in general, and the airline industry as a whole. (Restivo Memo at 2-3.) These statements do not support jurisdiction in this case. First, the Credit Card Act of 2009 and its predecessor, the Electronic Fund Transfer Act, do not apply because Restivo has not brought a claim under either statute. Second, Restivo cites no authority for any of the statistics relating to the "multi-billion dollar gift card industry" or the "trillion dollar airline industry" (Restivo Memo at 3), nor are these numbers anywhere in the record. Moreover, Home Depot's alleged income from gift certificates has no bearing on whether Restivo's state law consumer protection claims relating to a gift certificate purchased from Continental are preempted by the ADA. These statements are a sideshow intended to distract this Court from the straightforward preemption analysis applicable to this case. This is not a case of great general interest or public concern. A review of binding precedent from the Supreme Court and other federal and state courts demonstrates that state law consumer protection claims brought against airlines are preempted by the ADA. The courts below correctly followed this precedent. There is no need for this Court to exercise discretionary jurisdiction. III. STATEMENT OF THE CASE AND FACTS Restivo deliberately avoids any reference to the allegations in his Complaint. Indeed, Restivo's statement of the case and facts consists of a single sentence and omits any discussion whatsoever of his allegations or the proceedings below. (Restivo Memo at 10.) The facts of this case are simple. Restivo alleges that he purchased a gift certificate in December of 2007 for travel on Continental Airlines from the company's website and gave it to his attorney of record in this case, Gerald Phillips. (Trial Ct. Order at 1.) The Continental gift CLI v1-2'

8 certificate was, by its express terms and conditions, valid for up to one year from the date of issuance and only could be used to purchase air travel services, including tickets, taxes and surcharges. (Id.; Court App. Opinion at 4-5.) Mr. Phillips did not use the gift certificate within one year. Restivo complains that, more than one year after the gift certificate issued, but before two years had passed, Mr. Phillips attempted, but was unable, to redeem it. (Trial Ct. Order at 2.) Restivo brought no claim for breach of contract. Restivo claimed that Continental's alleged refusal to honor a gift certificate that had expired by its express terms constituted a violation of Ohio's gift card statute R.C (Trial Ct. Order at 1.) Restivo also contended that the violation of the gift card act constituted a deceptive and unconscionable sales practice in violation of the Ohio Consumer Sales Practices Act, R.C and , and unjust enrichment. (Id.) Following long-settled precedent from the United States Supreme Court and various other courts, the Trial Court granted Continental's motion to dismiss all of Restivo's claims, holding that they were preempted by federal law and otherwise failed to state a claim upon which relief could be granted. The Court of Appeals affinned the decision of the Trial Court. This was a straightforward case for both courts, and Continental's motion to dismiss was properly granted. IV. ARGUMENT Restivo does not address the binding precedent supporting the decisions of the Trial Court and the Court of Appeals. Instead, Restivo presents various general arguments characterized as "issues for review" that he claims support the exercise of jurisdiction in this case. (Restivo Memo at 4-10.) These so-called issues, which to a degree duplicate Restivo's four propositions of law, seek "clarification" of various terms and tests relating to the scope of ADA preemption. (Restivo Memo at 4-10.) In making this request for an improper advisory CLI v1-3

9 opinion, Restivo purposefully ignores the straightforward preemption analysis applicable to this case. In light of the voluminous precedent supporting this analysis, no clarification is necessary. In addition, Restivo presents four propositions of law, all of which argue that the courts below should have adopted a particularly narrow definition of "service." (Restivo Memo at ) None of these arguments, however, warrant this Court's review. The Court of Appeals correctly held that Charas v. Trans World Airlines, Inc. (9th Cir. 1998), 160 F.3d 1259, the case on which Restivo relies almost exclusively, does not save Restivo's claims from preemption. (Ct. App. Opinion at 4-5.) All of the other authorities on which Restivo relies are also consistent with a finding that Restivo's claims are preempted. A. THIS IS A STRAIGHTFORWARD PREEMPTION CASE THAT 1vEEDS No CLARIFICATION. All of the "issues for review" raised in Restivo's memorandum already have been settled. (Restivo Memo at 4-10.) Binding precedent from the Supreme Court and other federal and state courts holds that state law consumer protection claims against airlines are preempted by the ADA. The application of this express and settled law to this case requires no clarification. 1. Settled Supreme Court Precedent Mandates Dismissal Of Restivo's Claims. The Supreme Court of the United States twice has reviewed the express language of the preemption provision of the ADA in the context of state consumer protection claims just like those alleged in this case. Both times, the Supreme Court has held that such claims are preempted because they relate to a price, route or service of an air carrier. American Airlines, Inc. v. Wolens (1995), 513 U.S. 219, 228, 115 S:Ct, 817, 130 L.Ed.2d 715; Morales v. Trans World Airlines, Inc. In Morales, (1992), 504 U.S. 374, 378, 112 S.Ct. 2031, 119 L.Ed.2d 157. several airline carriers brought a declaratory judgment action to prevent state attorneys general from enforcing airline fare advertising guidelines through state consumer CLI v1-4-

10 protection laws, claiming that such enforcement was preempted by the ADA. 504 U.S. at 383. Based on the ADA's "broad preemptive" purpose, the Supreme Court interpreted "related to" broadly to mean "having a connection with or reference to airline rates, routes or services." Id. at 384. Thus, a state law may be preempted even if it is not designed specifically to affect airline carriers, or the effect is only indirect. Id. at 386. Using that definition, the Morales Court held that the ADA preempted enforcement of the fare advertising guidelines because they referenced, and were thus related to, airline rates. Id. at 388. In Wolens, the Supreme Court held that parties may bring contract claims to enforce obligations undertaken by airlines, but other claims based upon the enactment or enforcement of state law constitute an improper "enlargement or enhancement based on state laws or policies external to the agreement." 513 U.S. at 233. Wolens involved claims brought under state consumer protection laws challenging the terms and conditions of American Airlines' frequent flyer program, including changes that plaintiffs argued resulted in miles being devalued. Id. at 224. Because the frequent flyer program and mileage credits were used as a method of purchasing tickets, the Supreme Court held that plaintiffs' claims "relate[d] to `rates,' i.e., American's charges in the form of mileage credits for free tickets and upgrades, and to `services,' i.e., access to flights and class-of-service upgrades unlimited by retrospectively applied capacity controls and blackout dates." Id. at 226. The requirements of the preemption provision of the ADA, as interpreted by the Supreme Court in Morales and Wolens, are easily met in this case. Restivo's claims arise under state statute and common law. They relate to an airline price, route or service. Indeed, Continental's gift certificates only can be used to pay for air travel services. (Ct. App. Opinion at 5.) The Trial Court correctly characterized it as "a marketing mechanism used to appeal to consumers in a CLI v1-5-

11 competitive market," and found Ohio's gift card statute to be "a means to guide and police the marketing practices of airlines." (Trial Ct. Order at 2-3 (internal quotation omitted).) Thus, like the guidelines regulating advertising and marketing practices in Morales, gift certificates relate to airline prices. Morales, 504 U.S. at 388. Moreover, like the mileage credits in Wolens, gift certificates that are only used to purchase airline services "relate to" airline prices and services. Wolens, 513 U.S. at Following Supreme Court Precedent, Courts Uniformly Have Held That Consumer Protection Claims Azainst Airlines Are Preempted By The ADA. The Trial Court and the Court of Appeals also correctly followed other federal and state court decisions holding that consumer protection claims like those brought by Restivo are preempted by the ADA. For example, an Ohio court previously held that the ADA preempts state law claims brought against airline carriers, such as nuisance claims concerning the noise and nighttime hours of airline operations. Kagy v. Toledo-Lucas Cty. Port Authority (Fulton Cty. 1998), 126 Ohio App. 3d 675, , 711 N.E.2d 256. Likewise, numerous federal courts have held that consumer protection claims like those pleaded by Restivo are preempted. Federal Express Corp. v. U.S. Postal Service (W.D. Tenn. 1999), 55 F. Supp. 2d 813, (dismissing state consumer act claim and identifying "intrusive regulation of airline business practices as the primary evil targeted by the ADA's preemption clause"), citing American Airlines, Inc. v. Wolens (1995), 513 U.S. 219, , 115 S.Ct. 817, 130 L.Ed.2d 715; Copeland v. Northwest Airlines Corp. (W.D. Tenn. Feb. 28, 2005), No MI/V, 2005 U.S. Dist. LEXIS 35139, *9-10 (dismissing claims under the Tennessee Consumer Protection Act because they related to airline services); Lehman v. USAir Group, Inc. (S.D.N.Y. 1996), 930 F. Supp. 912, 915 (dismissing claim of unjust enrichment because it related to airline prices). CLI v1-6-

12 Moreover, other courts have dismissed claims identical to those brought by Restivo challenging the expiration date of an airline gift certificate based on a state statute as preempted. See, e.g., Tanen v. SouthwestAirlines Co. (2010), 187 Cal. App. 4th 1156, 114 Cal. Rptr. 3d 743 (affirming trial court's holding that claims under California's gift card statute were preempted by the ADA); Kahn v. Delta Air Lines, Inc. (Ca. Sup. Ct. Orange Cty., Aug. 28, 2003), No. 03CC00162, Minute Order Sustaining Demurrer (sustaining demurrer and dismissing claims without leave to amend because claims based on California's gift card statute were preempted by the ADA); Weaver v. UnitedAir Lines, Inc. (Ca. Sup. Ct. San Francisco Cty., July 31, 2001), No , Order Sustaining Demurrer (sustaining demurrer and dismissing claims without leave to amend claims that United's sale of gift cards with expiration dates violated Califomia law on the basis of preemption by the ADA); Freeman v. Jetblue Airways Corp. (Ca. Sup. Ct. San Bernardino Cty., Jan. 20, 2004), No. BCV07114, Order Granting Motion for Judgment on the Pleadings (entering judgment in Jetblue's favor and dismissing claims that Jetblue's sale of gift cards with expiration dates violated California law on the basis of preemption by the ADA). Restivo asks this Court to exercise jurisdiction over this unremarkable case, but can point to no authority supporting a departure from the settled body of law supporting dismissal of his claims. Indeed, Restivo has yet to cite a single case in which state consumer protection claims against an airline, such as those brought by Restivo, have been held not to be preempted by the ADA. No such case exists. Both the Trial Court and the Court of Appeals correctly followed binding precedent in holding that Restivo's claims were preempted by the ADA. CLI v1-7-

13 3. No Clarification Of The Statutory Language Is Necessary To Hold Restivo's Claims Preempted By The ADA. Despite this mountain of settled precedent, Restivo wrongly argues that it is "essential" that this Court clarify the following terms and tests applicable to ADA preemption: (1) "service"; (2) "related to"; (3) "tenuous, remote or peripheral manner"; (4) "significant impact test" and "competitive market forces"; and (5) "the scope of the pre-emption doctrine." (Restivo Memo at 4-10.) Restivo creates a straw man and claims that the precise boundaries of these definitions and tests must be established before the Court can determine whether his claims are preempted. This argument is patently incorrect. As the Court of Appeals correctly held, the facts of this case are similar to numerous other decisions that have found identical or near identical consumer claims to be preempted under the ADA.' (Ct. App. Opinion at 6-7.) Consequently, even if there is a theoretical question of whether some other conduct constitutes "service" of an airline, as Restivo now argues (Restivo Memo at 4, 11-14), or the breadth of the term "relates to" (id. at 5-7), there is no question under settled case law that the issuance of a gift certificate for airline travel "relates to" the "service" of an airline.2 1 Restivo cites an alleged split in the U.S. Circuit Courts of Appeals in an attempt to justify his request that this Court define the term "service." (Restivo Memo at 4.) However, the United States Supreme Court has already denied a request for certiorari on that exact issue. Northwest Airlines, Inc. v. Duncan (2000), 531 U.S Moreover, the alleged split is only in the context of personal injury claims. As set forth below, the source of the definition of "service" advocated by Restivo, Charas v. Trans WorldAirlines, Inc. (9th Cir. 1998), 160 F.3d 1259, is not applicable to consumer protection claims like those in this case. 2 Restivo concedes that the Supreme Court has settled the definition of "related to," but argues that it has "adopted a narrowing view" of that phrase since Morales and Wolens were decided. (Restivo Memo at 5.) Restivo is incorrect. Restivo's only support for thls staternent consists of two ERISA cases from the late 1990s that held that the scope of preemption should be guided by the purpose of the federal statute at issue. (Id.) These cases do not narrow the definition in the case of the ADA, because Congress intended it to have a broad preemptive purpose. Morales, 504 U.S. at 384. Moreover, Restivo's argument ignores Rowe v. New Hampshire Motor Transp. Ass'n (2008), 552 U.S. 364, 128 S.Ct. 989, 169 L.Ed.2d 933, a more recent decision in which the Supreme Court explicitly followed Morales in interpreting a nearly CLI v1-8-

14 Likewise, it is irrelevant to this case that the Supreme Court in Morales noted that there might be a case in which it would have to determine whether a relationship to airlines prices, routes and services was "tenuous, remote or peripheral." (Restivo Memo at 5-7.) Morales, 504 U.S. at 390. The Supreme Court in Morales held that it did not need to articulate the precise definition, because the consumer protection claim in Morales clearly "related to" a price, route or service of an airline. Id. So, too, in this case, the gift certificates for airline travel clearly "relate to" a price, route or service of Continental. For that same reason, the Court need not dictate precisely what constitutes a "significant impact" on "competitive market forces." (Restivo Memo at 6-7.) As Restivo acknowledges, that test simply provides one way to determine whether the relationship is "tenuous, remote or peripheral." (Id. at 7.) Moreover, the Court of Appeals concluded that allowing individuals to maintain state gift card law claims "would result in substituting state governmental commands for `competitive market forces' in determining the kinds of travel certificates airlines provide their customers." (Ct. App. Opinion at 6-7 (internal citations omitted).) Accordingly, the Court of Appeals held that because airlines compete with regard to the services they provide, including gift certificates, the effect of a state law restricting gift certificate expiration dates on airline competition was not tenuous, remote or peripheral. (Id.) The cases supporting the dismissal of Restivo's claims are legion. (See supra at 4-7.) Accordingly, the current facts do not present the "borderline question" mentioned in Morales requiring the Court to draw a line in the sand. Restivo is trying to salvage his claims by asking the Court to engage in an intellectual exercise of whether some other theoretical claim would be (continued...) identical preemption provision in the Federal Aviation Administration Authorization Act. 552 U.S. at 370. CLI v1-9-

15 preempted, and go beyond the facts at issue. That is not this Court's role. The Court may not opine on hypothetical situations.3 Rather, the Court's role would be to decide only the issue before it - whether the test for preemption is met under the facts as alleged in Restivo's Complaint. As both the Trial Court and the Court of Appeals correctly held, a gift certificate for airline travel relates to a price, route or service of Continental, and thus Restivo's claims are preempted. (Ct. App. Opinion at 5-7.) B. RESTIVO'S PROPOSITIONS OF LAW Do NOT WARRANT THIS COURT'S REVIEW. The arguments raised in Restivo's four propositions of law steadfastly ignore the Supreme Court precedent and numerous other authorities holding that state consumer protection claims are preempted by the express language of the ADA. Instead, Restivo relies on irrelevant statutes, an inapposite case and a strained application of the principles of statutory construction, all of which actually are consistent with a finding of preemption. Proposition of Law No. 1: The Ohio Gift Card Statute ORC governing the issuance and use of a gift card as defined by statute is not a law related to a price, route or service of an air carrier providing air transportation but is a law related to financial transactions which are subject to and governed by the Electronic Funds Transfer Act, and is not pre-empted by Federal Law, the Airline Deregulation Act, Credit CardAct of Neither The Credit Card Act Of 2009, Nor The Electronic Fund Transfer Act Apply To This Case. Restivo relies on the Credit Card Act of 2009 and the Electronic Fund Transfer Act, but neither are at all relevant to this case. As Restivo admitted to both the Trial Court and the Court of Appeals, the Credit Card Act of 2009 did not go into effect until August 22, months after he filed the current lawsuit and over two years after he purchased the gift certificate at 3"It has become settled judicial responsibility for courts to refrain from giving opinions on abstract propositions and to avoid the imposition by judgment of premature declarations or advice upon potential controversies." Fortner v. Thomas (1970), 22 Ohio St. 2d 13, 14, d 35, 257 N.E.2d 371. CLI v1-10-

16 issue. Restivo's memorandum omits this key fact because it devastates all of his arguments under the Credit Card Act of Of equal importance, Restivo did not bring a claim for violation of, nor make any allegations relating to, either the Credit Card Act of 2009, or its predecessor, the Electronic Fund Transfer Act. Inexplicably, Restivo continues to insist that these statutes somehow mandate a finding that his claims are not preempted by the ADA. (Restivo Memo at 4-5, ) Restivo is flatly wrong. As the Court of Appeals correctly held, these statutes are not relevant. (Ct. App. Opinion at 2.) Moreover, even if the Credit Card Act of 2009 and the Electronic Fund Transfer Act were relevant, they would not help Restivo's argument. He creates a false dichotomy that a gift certificate must be either a financial transaction, or must relate to an airline service, but somehow cannot be both. (Restivo Memo at 6, ) Not surprisingly, Restivo cites no authority for this proposition. The Court of Appeals correctly rejected this argument, holding that a gift certificate "is not simply a financial transaction as appellants argue because its value derives from the intended purpose of securing goods or services from Continental in the future." (Ct. App. Opinion at 5.) Accordingly, Restivo's first proposition of law has no bearing on the preemption analysis in this case.4 4 Restivo makes a passing argument that the Credit Card Act of 2009 "waive[s] any possible pre-emption under the ADA over the issuance and use of gift cards by an air carrier and permit the state regulation of the issuance and use of gift cards by an air carrier." (Restivo Memo at 6.) This waiver argument was not, however, included in Restivo's Appellate Brief, nor was it raised at the trial court level. It was improperly raised for the first time in Restivo's motion for reconsideration and cannot be used to support the exercise of jurisdiction in this case. Czty nf Cleveland v. Cuyahoga Lorain Corp.,Gu-yahoga App. No , 20_04-Ohio-2563, at 12 ("It is axiomatic that a party cannot raise new issues for the first time on appeal. Issues are to be raised at the trial court level or they will be considered to be waived on appeal.") (citing Mark v. Mellott Mfg. Co. (Ross Cty. 1995), 106 Ohio App. 3d 571, 666 N.E.2d 631). Moreover, the Court of Appeals expressly held that the Credit Card Act of 2009 has no relevance to Restivo's claims, and no violation of that Act was alleged by Restivo. Thus, there is no possible merit to Restivo's belated argument. CLI v1-1 1-

17 Proposition of Law No. 2: The legislative history of the Airline Deregulation Act, clearly indicates that the term "service" refers to the frequency and scheduling of transportation, and the selection of markets to and from which transportation is provided, Charas v. Trans WorldAirlines, Inc. (9th Cir. 1998) 160 F.3d 1259,1265. Proposition of Law No. 3: The common and technical meaning of the term "service" in the airline industry, clearly refers to the frequency and scheduling of transportation, and the selection of markets to and from which transportation is provided, Charas v. Trans World Airlines, Inc. (9th Cir. 1998) 160 F.3d 1259, Proposition of Law No. 4: The legislative history of the Airline Deregulation Act, clearly indicates that the express purpose to eliminate the existing federal economic regulation of the airlines, and to prevent the states from replacing such existing economic regulation of the airlines, Charas v. Trans World Airlines, Inc. (9th Cir. 1998) 160 F.3d 1259, Charas Is Inapposite. Despite the mountain of precedent interpreting the ADA in the context of consumer protection claims, Restivo's three remaining propositions of law inexplicably rely almost exclusively on a personal injury case from the Ninth Circuit, Charas v. Trans World Airlines, Inc. (9th Cir. 1998), 160 F.3d (Restivo Memo at ) However, Charas does not save Restivo's claims from preemption. Morales and Wolens involved state consumer protection claims brought against an airline carrier just like the claims advanced by Restivo. Those cases explicitly hold that such claims are preempted. Charas, by contrast, involved five consolidated cases alleging "run-of-the-mill personal injury claims" against an airline, including injuries resulting from a service cart and falling luggage. 160 F.3d at The Ninth Circuit held that these claims were not preempted by the ADA because they did not relate to an airline "service," which the court defined in the personal injury context as "the provision of air transportation to and from various markets at various times, " as compared to "the dispensing of food and drinks, flight attendant assistance, or the like." Id. at CLI v1-12-

18 Restivo's claims have nothing to do with personal injury. Rather, his claims relate to the purchase of a gift certificate for the provision of air travel, which - as other courts have held - relates to the service of an airline. Charas has no applicability to Restivo's claims.5 In addition to being limited to personal injury claims, the holding of Charas has been criticized as conflicting with the Supreme Court's recent broad interpretation of the term "service" in an identical preemption provision of the Federal Aviation Administration Authorization Act ("FAAA"). Air Transp. Ass'n ofamerica, Inc. v. Cuomo (2d Cir. 2008), 520 F.3d 218, 223, citing Rowe v. New Hampshire Motor Transp. Ass'n (2008), 552 U.S. 364, 128 S.Ct. 989, 169 L.Ed.2d 933. The definition of "service" adopted by the Supreme Court in Rowe, which Restivo cites as one of the "leading cases" in his memorandum (Restivo Memo. at 4), encompassed more than the provision of motor carrier services to and from various markets at various times.6 Even if the strict definition of "service" set forth in Charas were applied, however, the test for preemption is still met in this case. As the Court of Appeals correctly held, "the gift card is related to the provision of airline service in the `public utility sense,' i.e., purchasing a ticket for the provision of air transportation to and from a market at certain times." (Ct, App. Opinion at 5.) Accordingly, Restivo's reliance on Charas is misplaced. Following Morales and Wolens, 5 Indeed, a federal court has rejected an attempt to extend the holding of Charas to a consumer protection claim because "[t]his is not a personal injury tort action and thus Charas is inapplicable." Butler v. United Airlines, Inc. (N.D. Cal. May 5, 2008) No. C , 2008 U.S. Dist. LEXIS_ 36646, at * 15. Instead, the court applied the reasoning of Morales and Wolens and held that plaintiffs' claims fell "squarely within the purposes of the enactment of the Airline Deregulation Act" because they sought to regulate competition and marketing practices. Id. 6 Restivo touts the Supreme Court's decision in Rowe when he thinks it helps him (Restivo Memo at 6-7, discussing Rowe's "significant impact" test), but completely ignores the aspects of it that undermine his arguments, including the expansive definition of "service" and "related to." See Rowe (2008), 552 U.S. 364, at 370. CLI v1-13-

19 the Trial Court and the Court of Appeals correctly held that all of Restivo's claims are preempted by the ADA. 2. The Principles Of Statutory Construction Cited By Restivo Are Consistent With A Finding Of Preemption. Restivo also wrongly relies on a strained application of the principles of statutory construction in his last three propositions of law. Restivo argues that the legislative history of the ADA, the "common technical meaning" of "service", and Congressional intent in enacting the ADA allegedly support the use of the term "service" to refer to "the provision of air transportation to and from various markets at various times." (Restivo Memo at ) These arguments are not relevant because, as explained previously, the language of the ADA's preemption provision is clear, and it already has been interpreted by numerous courts since its enactment. There is no need to resort to legislative history. Moreover, Restivo fails to articulate how his proposed definition saves his claims from dismissal. It does not. Even if the Court were to adopt the definition advanced by Restivo, his claims still would be preempted. Continental does not dispute that "service" can be used in context to mean "the frequency and scheduling of transportation, and the selection of markets to and from which transportation is provided." (Restivo Memo at 12.) This is but one use of the term "service," however, and Restivo cites to nothing in the legislative history that forecloses other, more expansive definitions. Restivo argues without any support that a governmental report and isolated excerpts from Continental's website create a "common and technical meaning of the term `service' in the airline industry." (Restivo Memo at ) As evidenced by the abundant case law interpreting the ADA preemption provision, however, the established statutory construction of the language in that provision is that it encompasses consumer protection claims, including claims challenging CLI v1-14-

20 the expiration date of gift certificates that are for air travel. The Trial Court and the Court of Appeals properly followed that construction in holding that Restivo's claims are preempted. Similarly, Restivo argues that "service" does not include "the pushing of beverage carts, keeping the aisles clear of stumbling blocks, the safe handling and storage of luggage, assistance of passengers in need or like functions." (Restivo Memo at ) Again, this point is not disputed, and is wholly irrelevant to whether state consumer protection claims challenging the expiration date of a gift certificate are preempted. Restivo has not brought a personal injury claim related to a beverage cart like in Charas. He has brought state consumer protection claims, which court after court has held are preempted. E.g., Wolens, 513 U.S. at 228; Morales, 504 U.S. at 378. Finally, contrary to Restivo's assertion (Restivo Memo. at 13), the express purpose of the ADA does not support a narrow view of preemption. Indeed, the broad preemptive purpose of the ADA is evident from the expansive language in the preemption provision. Morales, 504 U.S. at 383. As Restivo admits, and the Supreme Court has conclusively held, "[t]he ADA... was designed to promote `maximum reliance on competitive market forces."' Wolens 513 U.S. at 230. As is the case with all of the other authorities cited by Restivo, the Congressional objective of deregulation of airline marketing practices actually supports the preemption of Restivo's state consumer protection claims. V. CONCLUSION For the foregoing reasons, the jurisdictional statement should be denied. Dated: May 4, 2011 Respectfully submitted, Jef esa^s(ohio Bar No ) Co s l ofrecord for Defendant-Appellee Continental Airlines, Inc. CLI v1-15-

21 CERTIFICATE OF SERVICE I hereby certify that a copy of the foregoing Defendant Continental Airlines, Inc.'s Memorandum in Response was served by first-class U.S. mail, postage prepaid, this 4 th day of May, 2011, on: Gerald W. Phillips, Esq., Sam P. Cannata, Esq. Cannata Phillips LPA, LLC 9555 Vista Way Suite 200 Garfield Heights, Ohio Attorneys for Plaintiffs-Appellants Att^i^k foi\defendant-appellee CO Tj'INEN AL AIRLINES, INC. CLI v1