Morales v. Trans World Airlines, Inc.

Syllabus

No. 90-1604. Argued March 3, 1992-Decided June 1, 1992

In order to ensure that the States would not undo the anticipated benefits of federal deregulation of the airline industry, the pre-emption provision of the Airline Deregulation Act of 1978 (ADA) prohibits them from en- forcing any law "relating to [air carriers'] rates, routes, or services." 49

U. S. C. App. § 1305(a)(1). After the National Association of Attorneys

General (NAAG) adopted guidelines that contain detailed standards governing, inter alia, the content and format of airline fare advertising, and that purport to be enforceable through the States' general consumer protection statutes, petitioner's predecessor as Attorney General of Texas sent notices of intent to sue to enforce the guidelines against the allegedly deceptive fare advertisements of several of the respondent airlines. Those respondents filed suit in the District Court for injunc- tive and other relief, claiming that state regulation of fare advertise- ments is pre-empted by § 1305(a)(1). The court ultimately issued an order permanently enjoining any state enforcement action that would regulate or restrict "any aspect" of respondents' fare advertising or other operations involving rates, routes, or services. The Court of Appeals affirmed.

1. Assuming that § 1305(a)(1) pre-empts state enforcement of the fare

advertising portions of the NAAG guidelines, the District Court could properly award respondents injunctive relief restraining such enforce- ment. The basic doctrine that equity courts should not act when the moving party has an adequate remedy at law does not prevent federal courts from enjoining state officers from acting to enforce an unconstitu- tional state law where, as here, such action is imminent, repetitive pen- alties attach to continuing or repeated violations of the law, and the moving party lacks the realistic option of violating the law once and raising its federal defenses. Ex parte Young, 209 U. S. 123, 145-147, 156, 163-165. As petitioner has threatened to enforce only the obliga- tions described in the fare advertising portions of the guidelines, how- ever, the injunction must be vacated insofar as it restrains the operation of state laws with respect to other matters. See, e. g., Public Serv.

Comm'n of Utah v. Wycoff Co., 344 U. S. 237, 240-241. Pp. 380-383.

Cite as: 504 U. S. 374 (1992) Syllabus

2. Enforcement of the NAAG fare advertising guidelines through a

State's general consumer protection laws is pre-empted by the ADA.

Pp. 383-391.

(a) In light of the breadth of § 1305(a)(1)'s "relating to" phrase, a state enforcement action is pre-empted if it has a connection with, or reference to, airline "rates, routes, or services." Cf. Shaw v. Delta Air Lines, Inc., 463 U. S. 85, 95-96. Petitioner's various objections to this reading are strained and not well taken. Pp. 383-387.

(b) The challenged NAAG guidelines-which require, inter alia, that advertisements contain certain disclosures as to fare terms, restric- tions, and availability-obviously "relat[e] to rates" within the meaning of § 1305(a)(1) and are therefore pre-empted. Each guideline bears an express reference to airfares, and, collectively, they establish binding requirements as to how tickets may be marketed if they are to be sold at given prices.

In any event, beyond the guidelines' express reference to fares, it is clear as an economic matter that they would have the forbidden effect upon fares: Their compelled disclosures and advertising restrictions would have a significant impact on the airlines' ability to market their product, and hence a significant impact upon the fares they charge. Pp. 387-391.

949 F. 2d 141, affirmed in part and reversed in part.

SCALIA, J., delivered the opinion of the Court, in which WHrrE, O'CON- NOR, KENNEDY, and THOMAS, JJ., joined. STEVENS, J., filed a dissenting opinion, in which REHNQUIST, C. J., and BLACKMUN, J., joined, post, p. 419.

SOUTER, J., took no part in the consideration or decision of the case.

Stephen Gardner, Assistant Attorney General of Texas, ar- gued the cause for petitioner. With him on the briefs were Dan Morales, Attorney General of Texas, pro se, Will Pryor, First Assistant Attorney General, and Mary F. Keller, Dep- uty Attorney General.

Keith A. Jones argued the cause for respondents. With him on the brief for respondent airlines were David Wilks Corban, Andrew C. Freedman, and Ronald D. Secrest. A brief for 31 State Attorneys General, respondents under this Court's Rule 12.4, in support of petitioner was filed by Dan- iel E. Lungren, Attorney General of California, Roderick E.

Walston, Chief Assistant Attorney General, Herschel T Elk- ins, Senior Assistant Attorney General, and Albert Norman

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Counsel

Sheldon, Deputy Attorney General, Scott Harshbarger, At- torney General of Massachusetts, and Ernest L. Sarason, Jr., Assistant Attorney General, Hubert H. Humphrey III, At- torney General of Minnesota, and David Woodward, Special Assistant Attorney General, Robert Abrams, Attorney Gen- eral of New York, and Ronna D. Brown and Andrea C. Le- vine, Assistant Attorneys General, Charles Cole, Attorney General of Alaska, and James Forbes, Assistant Attorney General, Grant Woods, Attorney General of Arizona, and Carmen D. Claudio, Assistant Attorney General, Gale A.

Norton, Attorney General of Colorado, and Garth C. Lucero, First Assistant Attorney General, Richard Blumenthal, At- torney General of Connecticut, and Robert M. Langer, As- sistant Attorney General, Robert A. Butterworth, Attorney General of Florida, and Richard F. Scott, Assistant Attorney General, Larry EchoHawk, Attorney General of Idaho, and Brett T Delange, Deputy Attorney General, Roland W.

Burris, Attorney General of Illinois, and Deborah Hagen, Assistant Attorney General, Bonnie J. Campbell, Attorney General of Iowa, and Steve St. Clair, Assistant Attorney General, Robert T Stephan, Attorney General of Kansas, and Dan Kolditz, Deputy Attorney General, J. Joseph Curran, Jr., Attorney General of Maryland, and Vincent Demarco, Assistant Attorney General, Frank J Kelley, Attorney General of Michigan, and Frederick H. Hoffecker, Assistant Attorney General, William L. Webster, Attorney General of Missouri, and Clayton S. Friedman, Assistant Attorney General, Don Stenberg, Attorney General of Nebraska, and Paul N. Potadle, Assistant Attorney General, Frankie Sue Del Papa, Attorney General of Nevada, and Philip R.

Byrnes, Deputy Attorney General, Lacy H. Thornburg, At- torney General of North Carolina, and K. D. Sturgis, Assist- ant Attorney General, Nicholas J. Spaeth, Attorney General of North Dakota, and David W. Huey, Assistant Attorney General, Lee Fisher, Attorney General of Ohio, and Mark T

Cite as: 504 U. S. 374 (1992) Counsel

D'Alessandro, Assistant Attorney General, Susan B. Loving, Attorney General of Oklahoma, and Jane F. Wheeler, Assist- ant Attorney General, Charles Crookham, Attorney General of Oregon, Virginia Linder, Solicitor General, and Michael Reynolds, Assistant Attorney General, James E. O'Neil, Attorney General of Rhode Island, and Terrance Hassett and Lee Baker, Special Assistant Attorneys General, Mark W Barnett, Attorney General of South Dakota, and Jeffrey

P. Hallem, Assistant Attorney General, Charles W. Burson,

Attorney General of Tennessee, and Charlotte H. Rappuhn, Assistant Attorney General, Jeffrey L. Amestoy, Attorney General of Vermont, and J. Wallace Malley, Jr., Assistant Attorney General, Kenneth 0. Eikenberry, Attorney General of Washington, and Robert F. Manifold, Assistant Attorney General, Mario J. Palumbo, Attorney General of West Vir- ginia, and Don Darling, Deputy Attorney General, James E.

Doyle, Attorney General of Wisconsin, and James D. Jeffries and Barbara Tuerkheimer, Assistant Attorneys General, and Joseph B. Meyer, Attorney General of Wyoming, and Mark Moran, Assistant Attorney General.

Stephen L. Nightingale argued the cause for the United States as amicus curiae urging affirmance. With him on the brief were Acting Solicitor General Roberts, Assistant Attorney General Gerson, Robert V Zener, Robert D. Ka- menshine, and Arthur J Rothkopf.*

*Briefs of amici curiae urging reversal were filed for the State of Hawaii et al. by Warren Price III, Attorney General of Hawaii, and Girard D Lau and Steven S. Michaels, Deputy Attorneys General, and by the Attorneys General for their respective States as follows: James H. Evans of Alabama, Linley E. Pearson of Indiana, Richard R Ieyoub of Louisiana, Mike Moore of Mississippi, Robert J Del Tufo of New Jersey, Tom Udall of New Mexico, Ernest Preate, Jr., of Pennsylvania, Paul Van Dam of Utah, and Mary Sue Terry of Virginia; and for the Public Citizen and Aviation Consumer Action Project by Cornish F Hitchcock and Alan B. Morrison.

Briefs of amici curiae urging affirmance were filed for American Air- lines, Inc., by Steven C. McCracken and Jane G. Allen; for the American

MORALES v. TRANS WORLD AIRLINES, INC.

Opinion of the Court JUSTICE SCALIA delivered the opinion of the Court.

The issue in this case is whether the Airline Deregulation Act of 1978, 49 U. S. C. App. § 1301 et seq., pre-empts the States from prohibiting allegedly deceptive airline fare ad- vertisements through enforcement of their general consumer protection statutes.

Prior to 1978, the Federal Aviation Act of 1958 (FAA), 72 Stat. 731, as amended, 49 U. S. C. App. § 1301 et seq., gave the Civil Aeronautics Board (CAB) authority to regulate in- terstate airfares and to take administrative action against certain deceptive trade practices.

It did not, however, ex- pressly pre-empt state regulation, and contained a "saving clause" providing that "[n]othing ... in this chapter shall in any way abridge or alter the remedies now existing at com- mon law or by statute, but the provisions of this chapter are in addition to such remedies." 49 U. S. C. App. § 1506. As a result, the States were able to regulate intrastate airfares (including those offered by interstate air carriers), see, e. g., California v. CAB, 189 U. S. App. D. C. 176, 178, 581 F. 2d 954, 956 (1978), cert. denied, 439 U. S. 1068 (1979), and to enforce their own laws against deceptive trade practices, see Nader v. Allegheny Airlines, Inc., 426 U. S. 290, 300 (1976).

In 1978, however, Congress, determining that "maximum reliance on competitive market forces" would best further "efficiency, innovation, and low prices" as well as "variety [and] quality . . . of air transportation services," enacted the Airline Deregulation Act (ADA). 49 U. S. C. App. §§ 1302(a)(4), 1302(a)(9). To ensure that the States would not undo federal deregulation with regulation of their own, the ADA included a pre-emption provision, prohibiting the States from enforcing any law "relating to rates, routes, or

Association of Advertising Agencies, Inc., by David S. Versfelt and Valerie

Neuborne and Gilbert H. Weil.

Cite as: 504 U. S. 374 (1992) Opinion of the Court

services" of any air carrier. § 1305(a)(1). The ADA re- tained the CAB's previous enforcement authority regarding deceptive trade practices (which was transferred to the De- partment of Transportation (DOT) when the CAB was abol- ished in 1985), and it also did not repeal or alter the saving clause in the prior law.

In 1987, the National Association of Attorneys General (NAAG), an organization whose membership includes the at- torneys general of all 50 States, various Territories, and the District of Columbia, adopted Air Travel Industry Enforce- ment Guidelines (set forth in an Appendix to this opinion) containing detailed standards governing the content and for- mat of airline advertising, the awarding of premiums to reg- ular customers (so-called "frequent flyers"), and the payment of compensation to passengers who voluntarily yield their seats on overbooked flights. These guidelines do not pur- port to "create any new laws or regulations" applying to the airline industry; rather, they claim to "explain in detail how existing state laws apply to air fare advertising and frequent flyer programs." NAAG Guidelines, Introduction (1988).

Despite objections to the guidelines by the DOT and the Federal Trade Commission (FTC) on pre-emption and policy grounds, the attorneys general of seven States, including petitioner's predecessor as attorney general of Texas, sent a memorandum to the major airlines announcing that "it has come to our attention that although most airlines are making a concerted effort to bring their advertisements into compli- ance with the standards delineated in the ... guidelines for fare advertising, many carriers are still [not disclosing all in violation of §2.5 of the guidelines. The surcharges]" memorandum said it was the signatories' "purpose . . to clarify for the industry as a whole that [this practice] is a violation of our respective state laws on deceptive advertis- ing and trade practices"; warned that this was an "advisory memorandum before [the] initiati[on of] any immediate en- forcement actions"; and expressed the hope that "protracted

MORALES v. TRANS WORLD AIRLINES, INC.

Opinion of the Court

litigation over this issue will not be necessary and that airlines will discontinue the practice ... immediately."

Memorandum from Attorneys General of Colorado, Kansas, Massachusetts, Missouri, New York, Texas, and Wisconsin, dated February 3, 1988 (Exhibit A to Exhibit H to Motion for Temporary Restraining Order), App. 123a, 125a. Sev- eral months later, petitioner's office sent letters to several respondents serving "as formal notice[s] of intent to sue."

Letter from Assistant Attorney General of Texas, dated No- vember 14, 1988, App. l15a.

Those respondents then filed suit in Federal District Court claiming that state regulation of fare advertisements is pre- empted by § 1305(a)(1); seeking a declaratory judgment that, inter alia, § 2.5 of the guidelines is pre-empted; and request- ing an injunction restraining Texas from taking any action under its law in conjunction with the guidelines that would regulate respondents' rates, routes, or services, or their ad- vertising and marketing of the same. The District Court entered a preliminary injunction to that effect, determining that respondents were likely to prevail on their pre-emption claim. Trans World Airlines, Inc. v. Mattox, 712 F. Supp.

(It subsequently extended that 99, 101-102 (WD Tex. 1989). injunction to 33 other States, id., at 105-106; the propriety of that extension is not before us.) The Court of Appeals affirmed. Trans World Airlines, Inc. v. Mattox, 897 F. 2d 773, 783-784 (CA5 1990). Subsequently, the District Court, in an unreported order, permanently enjoined the States from taking "any enforcement action" which would restrict ''any aspect" of respondents' fare advertising or operations relating to rates, routes, or services. The Court of Appeals once again affirmed. 949 F. 2d 141 (CA5 1991). We granted certiorari. 502 U. S. 976 (1991).

Before discussing whether § 1305(a)(1) pre-empts state enforcement of the challenged guidelines, we first consider

Cite as: 504 U. S. 374 (1992) Opinion of the Court

whether, assuming that it does, the District Court could properly award respondents injunctive relief.

It is a "'basic doctrine of equity jurisprudence that courts of equity should not act.., when the moving party has an adequate remedy at law and will not suffer irreparable injury if denied equita- ble relief."' O'Shea v. Littleton, 414 U. S. 488, 499 (1974); Younger v. Harris, 401 U. S. 37, 43-44 (1971).

In Ex parte Young, 209 U. S. 123, 156 (1908), we held that this doctrine does not prevent federal courts from enjoining state officers "who threaten and are about to commence proceedings, either of a civil or criminal nature, to enforce against parties affected an unconstitutional act, violating the Federal Con- stitution." When enforcement actions are imminent-and at least when repetitive penalties attach to continuing or repeated violations and the moving party lacks th real- istic option of violating the law once and raising its federal defenses-there is no adequate remedy at law. See id., at 145-147, 163-165.

We think Young establishes that injunctive relief was available here. As we have described, the attorneys general of seven States, including petitioner's predecessor, had made clear that they would seek to enforce the challenged portions of the guidelines (those concerning fare advertising) through suits under their respective state laws. And Texas law, at least, imposes additional liability (by way of civil penal- ties and consumer treble-damages actions) for multiple viola- tions. See Tex. Bus. & Com. Code Ann. §§ 17.47, 17.50 (1987 and Supp. 1991-1992). Like the plaintiff in Young, then, re- spondents were faced with a Hobson's choice: continually vio- late the Texas law and expose themselves to potentially huge liability; or violate the law once as a test case and suffer the injury of obeying the law during the pendency of the proceedings and any further review.'

'We do not address whether the District Court should have abstained from entertaining this suit under the line of cases commencing with Younger v. Harris, 401 U. S. 37 (1971), which imposes heightened require-

MORALES v. TRANS WORLD AIRLINES, INC.

Opinion of the Court

The District Court, however, enjoined petitioner not only from enforcing the fare advertising sections of the guide- lines, but also from "initiating any enforcement action... which would seek to regulate or restrict any aspect of the * . . plaintiff airlines' air fare advertising or the operations involving their rates, routes, and/or services."

712 F. Supp., In so doing, it disregarded the limits on the exercise at 102. of its injunctive power.

In suits such as this one, which the plaintiff intends as a "first strike" to prevent a State from initiating a suit of its own, the prospect of state suit must be imminent, for it is the prospect of that suit which supplies the necessary irreparable injury. See Public Serv. Comm'n of Utah v. Wycoff Co., 344 U. S. 237, 240-241 (1952). Ex parte Young thus speaks of enjoining state officers "who threaten and are about to commence proceedings," 209 U. S., at 156 (emphasis added); see also id., at 158, and we have recognized in a related context that a conjectural injury can- not warrant equitable relief, see O'Shea, supra, at 502. Any other rule (assuming it would meet Article III case-or- controversy requirements) would require federal courts to determine the constitutionality of state laws in hypothetical situations where it is not even clear the State itself would consider its law applicable. This problem is vividly enough illustrated by the blunderbuss injunction in the present case, which declares pre-empted "any" state suit involving "any aspect" of the airlines' rates, routes, and services. As petitioner has threatened to enforce only the obligations described in the guidelines regarding fare advertising, the

ments for an injunction to restrain an already-pending or an about-to-be- pending state criminal action, or civil action involving important state interests, see generally Middlesex County Ethics Comm. v. Garden State Bar Assn., 457 U. S. 423, 431-432, 437 (1982); Trainor v. Hernandez, 431

U. S. 434, 440-447 (1977); Younger, supra, at 43-49. Petitioner has not

argued for abstention, and the federal-state comity considerations un- derlying Younger are accordingly not implicated. See Brown v. Hotel Employees, 468 U. S. 491, 500, n. 9 (1984); Ohio Bureau of Employment Services v. Hodory, 431 U. S. 471, 480 (1977).

Cite as: 504 U. S. 374 (1992) Opinion of the Court

injunction must be vacated insofar as it restrains the opera- tion of state laws with respect to other matters.

We now turn to the question whether enforcement of the NAAG guidelines on fare advertising through a State's gen- eral consumer protection laws is pre-empted by the ADA.

As we have often observed, "[p]re-emption may be either express or implied, and is compelled whether Congress' com- mand is explicitly stated in the statute's language or implic- itly contained in its structure and purpose." FMC Corp. v.

Holliday, 498 U. S. 52, 56-57 (1990) (internal quotation marks omitted); Shaw v. Delta Air Lines, Inc., 463 U. S. 85, 95 (1983). The question, at bottom, is one of statutory in- tent, and we accordingly "'begin with the language em- ployed by Congress and the assumption that the ordinary meaning of that language accurately expresses the legisla- tive purpose."' Holliday, supra, at 57; Park 'N Fly, Inc. v.

Dollar Park & Fly, Inc., 469 U. S. 189, 194 (1985).

Section 1305(a)(1) expressly pre-empts the States from "enact[ing] or enforc[ing] any law, rule, regulation, standard, or other provision having the force and effect of law relating to rates, routes, or services of any air carrier . . . ." For purposes of the present case, the key phrase, obviously, is "relating to." The ordinary meaning of these words is a broad one--"to stand in some relation; to have bearing or concern; to pertain; refer; to bring into association with or connection with," Black's Law Dictionary 1158 (5th ed.

1979)-and the words thus express a broad pre-emptive pur- pose. We have repeatedly recognized that in addressing the similarly worded pre-emption provision of the Employee Re- tirement Income Security Act of 1974 (ERISA), 29 U. S. C. § 1144(a), which pre-empts all state laws "insofar as they... relate to any employee benefit plan." We have said, for ex-

MORALES v. TRANS WORLD AIRLINES, INC.

Opinion of the Court

ample, that the "breadth of [that provision's] pre-emptive reach is apparent from [its] language," Shaw, supra, at 96; that it has a "broad scope," Metropolitan Life Ins. Co. v.

Massachusetts, 471 U. S. 724, 739 (1985), and an "expansive sweep," Pilot Life Ins. Co. v. Dedeaux, 481 U. S. 41, 47 (1987); and that it is "broadly worded," Ingersoll-Rand Co.

v. McClendon, 498 U. S. 133, 138 (1990), "deliberately expan-

sive," Pilot Life, supra, at 46, and "conspicuous for its breadth," Holliday, supra, at 58. True to our word, we have held that a state law "relates to" an employee benefit plan, and is pre-empted by ERISA, "if it has a connection with or reference to such a plan." Shaw, supra, at 97.

Since the relevant language of the ADA is identical, we think it appropriate to adopt the same standard here: State en- forcement actions having a connection with, or reference to, airline "rates, routes, or services" are pre-empted under 49

U. S. C. App. § 1305(a)(1).

Petitioner raises a number of objections to this reading, none of which we think is well taken. First, he claims that we may not use our interpretation of identical language in ERISA as a guide, because the sweeping nature of ERISA pre-emption derives not from the "relates to" language, but from "the wide and inclusive sweep of the comprehensive ERISA scheme," which he asserts the ADA does not have.

Brief for Petitioner 33-34. This argument is flatly contra- dicted by our ERISA cases, which clearly and unmistakably rely on express pre-emption principles and a construction of the phrase "relates to." See, e. g., Shaw, supra, at 96-97, and n. 16 (citing dictionary definitions); Ingersoll-Rand, supra, at 138-139. Petitioner also stresses that the FAA "saving" clause, which preserves "the remedies now existing at common law or by statute," 49 U. S. C. App. § 1506, is broader than its ERISA counterpart. But it is a common- place of statutory construction that the specific governs the general, see, e. g., Crawford Fitting Co. v. J T Gibbons, Inc.,

Cite as: 504 U. S. 374 (1992) Opinion of the Court

482 U. S. 437, 445 (1987), a canon particularly pertinent here, where the "saving" clause is a relic of the pre-ADA/no pre- emption regime. A general "remedies" saving clause cannot be allowed to supersede the specific substantive pre-emption provision-unless it be thought that a State having a statute requiring "reasonable rates," and providing remedies against "unreasonable" ones, could actually set airfares. As in In- ternational Paper Co. v. Ouellette, 479 U. S. 481, 494 (1987), "we do not believe Congress intended to undermine this carefully drawn statute through a general saving clause."

Petitioner contends that § 1305(a)(1) only pre-empts the States from actually prescribing rates, routes, or services.

This simply reads the words "relating to" out of the statute.

Had the statute been designed to pre-empt state law in such a limited fashion, it would have forbidden the States to "reg- ulate rates, routes, and services." See Pilot Life, supra, at 50 ("A common-sense view of the word 'regulates' would lead to the conclusion that in order to regulate [a matter], a law ... must be specifically directed toward [it]"). 2 Moreover,

2 The dissent believes petitioner's position on this point to be supported by the history and structure of the ADA (sources it deems "more illumi- nating" than a "narrow focus" on the ADA's language, post, at 421), be- cause the old regime did not pre-empt the state laws involved here and the ADA's legislative history contains no statements specifically addressed to state regulation of advertising. Post, at 421-426. Suffice it to say that legislative history need not confirm the details of changes in the law ef- fected by statutory language before we will interpret that language ac- cording to its natural meaning. See, e. g., Harrison v. PPG Industries, Inc., 446 U. S. 578, 591-592 (1980).

It also bears mention that the rejected Senate bill did contain language that would have produced precisely the result the dissent desires: "No State shall enact any law ... determining routes, schedules, or rates, fares, or charges in tariffs of . ." S. 2493, §423(a)(1), reprinted . . in S. Rep. No. 95-631, p. 39 (1978) (emphasis added). The dissent is unperturbed by the full Congress' preference for "relating to" over "deter- mining," because the Conference Report gave "no indication that the con- ferees thought the House's 'relating to' language would have a broader

386 MORALES v. TRANS WORLD AIRLINES, INC.

Opinion of the Court

if the pre-emption effected by § 1305(a)(1) were such a lim- ited one, no purpose would be served by the very next sub- section, which preserves to the States certain proprietary rights over airports. 49 U. S. C. App. § 1305(b).

Next, petitioner advances the notion that only state laws specifically addressed to the airline industry are pre-empted, whereas 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" lan- guage. We have consistently rejected this precise argu- ment in our ERISA cases: "[A] state law may 'relate to' a benefit plan, and thereby be pre-empted, even if the law is not specifically designed to affect such plans, or the Ingersoll-Rand, supra, at 139; effect is only indirect." see Pilot Life, supra, at 47-48 (common-law tort and con- tract suits pre-empted); Metropolitan Life, 471 U. S., at 739 (state law requiring health insurance plans to cover certain mental health expenses pre-empted); Alessi v. Raybestos- Manhattan, Inc., 451 U. S. 504, 525 (1981) (workers' compen- sation laws pre-empted).

Last, the State suggests that pre-emption is inappropriate when state and federal law are consistent. State and fed- eral law are in fact inconsistent here-the DOT opposes the obligations contained in the guidelines, and Texas law im- poses greater liability-but that is beside the point. Noth- ing in the language of § 1305(a)(1) suggests that its "relating

pre-emptive scope than the Senate's ... language," post, at 426-which is to say because the Conference Report failed to specify the completely obvious, that "relating to" is broader than "determining." The dissent evidently believes not only that plain statutory language cannot be cred- ited unless specifically explained in legislative history, but also that the apparent import of legislative history cannot be credited unless specifically explained in legislative history.

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to" pre-emption is limited to inconsistent state regulation; and once again our ERISA cases have settled the matter: "'The pre-emption provision . . . displace[s] all state laws that fall within its sphere, even including state laws that are consistent with ERISA's substantive requirements."' Mackey v. Lanier Collection Agency & Service, Inc., 486

U. S. 825, 829 (1988); Metropolitan Life, supra, at 739.

It is hardly surprising that petitioner rests most of his case on such strained readings of § 1305(a)(1), rather than contesting whether the NAAG guidelines really "relate] to"

Section 2.1, governing print advertisements of fares, re- quires "clear and conspicuous disclosure [defined as the lesser of one-third the size of the largest typeface in the ad or ten-point type] of restrictions such as" limited time avail- ability, limitations on refund or exchange rights, time-of-day or day-of-week restrictions, length-of-stay requirements, advance-purchase and round-trip-purchase requirements, variations in fares from or to different airports in the same metropolitan area, limitations on breaks or changes in itiner- ary, limits on fare availability, and "[a]ny other material re- striction on the fare." Section 2.2 imposes similar, though somewhat less onerous, restrictions on broadcast advertise- ments of fares; and § 2.3 requires billboard fare ads to state clearly and conspicuously "'Substantial restrictions apply"' if there are any material restrictions on the fares' availabil- ity. The guidelines further mandate that an advertised fare be available in sufficient quantities to "meet reasonably fore- seeable demand" on every flight on every day in every mar- ket in which the fare is advertised; if the fare will not be available on this basis, the ad must contain a "clear and con- spicuous statement of the extent of unavailability." §2.4.

Section 2.5 requires that the advertised fare include all taxes and surcharges; round-trip fares, under §2.6, must be dis-

MORALES v. TRANS WORLD AIRLINES, INC.

Opinion of the Court

closed at least as prominently as the one-way fare when the fare is only available on round trips; and § 2.7 prohibits use of the words "'sale,' 'discount,' [or] 'reduced'" unless the ad- vertised fare is available only for a limited time and is "sub- stantially below the usual price for the same fare with the same restrictions."

One cannot avoid the conclusion that these aspects of the guidelines "relate to" airline rates.

In its terms, every one of the guidelines enumerated above bears a "reference to" airfares. Shaw, 463 U. S., at 97. And, collectively, the guidelines establish binding requirements as to how tickets may be marketed if they are to be sold at given prices.

Under Texas law, many violations of these requirements would give consumers a cause of action (for at least actual damages, see Tex. Bus. & Com. Code Ann. § 17.50 (1987 and Supp. 1991-1992)) for an airline's failure to provide a particu- lar advertised fare-effectively creating an enforceable right to that fare when the advertisement fails to include the man- dated explanations and disclaimers. This case therefore ap- pears to us much like Pilot Life, in which we held that a common-law tort and contract action seeking damages for the failure of an employee benefit plan to pay benefits "re- late[d] to" employee benefit plans and was pre-empted by ERISA. 481 U. S., at 43-44, 47-48.

In any event, beyond the guidelines' express reference to fares, it is clear as an economic matter that state restrictions on fare advertising have the forbidden significant effect upon fares. Advertising "serves to inform the public of the ... prices of products and services, and thus performs an indis- pensable role in the allocation of resources." Bates v. State Bar of Arizona, 433 U. S. 350, 364 (1977). Restrictions on advertising "serv[e] to increase the difficulty of discovering the lowest cost seller ... and [reduce] the incentive to price competitively."

Id., at 377. Accordingly, "where consum- ers have the benefit of price advertising, retail prices often are dramatically lower than they would be without advertis-

Cite as: 504 U. S. 374 (1992) Opinion of the Court ing."

Ibid. As Judge Easterbrook succinctly put it, com- pelling or restricting "[p]rice advertising surely 'relates to' price."

Illinois Corporate Travel v. American Airlines, Inc., 889 F. 2d 751, 754 (CA7 1989), cert. denied, 495 U. S. 919 (1990).

Although the State insists that it is not compelling or re- stricting advertising, but is instead merely preventing the market distortion caused by "false" advertising, in fact the dynamics of the air transportation industry cause the guide- lines to curtail the airlines' ability to communicate fares to their customers. The expenses involved in operating an air- line flight are almost entirely fixed costs; they increase very little with each additional passenger. The market for these flights is divided between consumers whose volume of pur- chases is relatively insensitive to price (primarily business travelers) and consumers whose demand is very price sensi- tive indeed (primarily pleasure travelers). Accordingly, air- lines try to sell as many seats per flight as possible at higher prices to the first group, and then to fill up the flight by selling seats at much lower prices to the second group (since almost all the costs are fixed, even a passenger paying far below average cost is preferable to an empty seat).

In order for this marketing process to work, and for it ultimately to redound to the benefit of price-conscious travelers, the air- lines must be able to place substantial restrictions on the availability of the lower priced seats (so as to sell as many seats as possible at the higher rate), and must be able to advertise the lower fares. The guidelines severely burden their ability to do both at the same time: The sections requir- ing "clear and conspicuous disclosure" of each restriction make it impossible to take out small or short ads, as does (to a lesser extent) the provision requiring itemization of both the one-way and round-trip fares. Since taxes and sur- charges vary from State to State, the requirement that ad- vertised fares include those charges forces the airlines to create different ads in each market. The section restricting

390 MORALES v. TRANS WORLD AIRLINES, INC.

Opinion of the Court

the use of "sale," "discount," or "reduced" effectively pre- vents the airlines from using those terms to call attention to the fares normally offered to price-conscious travelers. As the FTC observed, "[requiring too much information in ad- vertisements can have the paradoxical effect of stifling the information that consumers receive." Letter from FTC to Christopher Ames, Deputy Attorney General of California, dated Mar. 11, 1988, App. to Brief for Respondent Airlines 23a. Further, § 2.4, by allowing fares to be advertised only if sufficient seats are available to meet demand or if the ex- tent of unavailability is disclosed, may make it impossible to use this marketing process at all. All in all, the obligations imposed by the guidelines would have a significant impact upon the airlines' ability to market their product, and hence a significant impact upon the fares they charge.3

In concluding that the NAAG fare advertising guidelines are pre-empted, we do not, as Texas contends, set out on a road that leads to pre-emption of state laws against gambling and prostitution as applied to airlines. Nor need we address whether state regulation of the nonprice aspects of fare ad- vertising (for example, state laws preventing obscene depic- tions) would similarly "relat[e] to" rates; the connection would obviously be far more tenuous. To adapt to this case our language in Shaw, "[s]ome state actions may affect [air- line fares] in too tenuous, remote, or peripheral a manner" In this to have pre-emptive effect. 463 U. S., at 100, n. 21. case, as in Shaw, "[t]he present litigation plainly does not present a borderline question, and we express no views about where it would be appropriate to draw the line."

Ibid. Finally, we note that our decision does not give the airlines carte blanche to lie to and deceive consumers; the

3 The dissent disagrees with this-not, as it turns out, because it dis- putes our description of the pricing process in the airline industry, but because it does not think that the guidelines would have a "significant" effect on rates. Post, at 427. That conclusion is unexplained, and seems to us inexplicable.

Cite as: 504 U. S. 374 (1992) Appendix to opinion of the Court

DOT retains the power to prohibit advertisements which in its opinion do not further competitive pricing, see 49 U. S. C.

App. § 1381.

We hold that the fare advertising provisions of the NAAG guidelines are pre-empted by the ADA, and affirm the judg- ment of the Court of Appeals insofar as it awarded injunctive Inso- and declaratory relief with respect to those provisions. far as that judgment awarded injunctive relief directed at other matters, it is reversed and the injunction vacated.

It is so ordered.

JUSTICE SOUTER took no part in the consideration or decision of this case.

National Association of Attorneys General Task Force on the Air Travel Industry Revised Guidelines

In June, 1987, the National Association of Attorneys Gen- eral ("NAAG") directed the appointment of a Task Force of states to study the advertising and marketing practices of the airline industry in the United States.

In addition to the study, the Task Force was directed to determine the nature and extent of existing unfair and deceptive airline advertis- ing practices and to report a recommended course of action to NAAG at its meeting in December 1987.

The Task Force Report and Recommendations were adopted by NAAG at its winter meeting on December 12, 1987, with a continuing direction to the Task Force (1) to receive and examine any comments from industry, consumer groups, federal agencies, and other interested parties; (2) to evaluate these comments; and (3) to report to NAAG at its

MORALES v. TRANS WORLD AIRLINES, INC.

Appendix to opinion of the Court

Spring 1988 meeting on the advisability of any modifications of the Guidelines.

The Task Force received written comments from the Air Transport Association, the American Association of Adver- tising Agencies, American Airlines, the Association of Na- tional Advertisers, the Council of Better Business Bureaus, the Federal Trade Commission, the National Association of Broadcasters, Southwest Airlines, United Airlines, USAir, and the U. S. Department of Transportation. Assistant at- torneys general of the Task Force states evaluated these comments, and reported their recommendations to NAAG.

On March 15, 1988, NAAG adopted the recommended changes to the frequent flyer Guidelines and directed that the comments to both the fare advertising and frequent flyer Guidelines be changed to respond to valid concerns raised by those filing comments. The Guidelines and comments herein reflect the changes directed by NAAG.

NAAG also directed the chair of NAAG's Consumer Pro- tection Committee to appoint four attorneys general to serve on a continuing task force to evaluate the effectiveness of the Guidelines and to continue discussions with members of the industry and other interested parties. These attorneys general are: John Van de Kamp (California), Neil F. Hartigan (Illinois), Jim Mattox (Texas), and Kenneth 0. Eikenberry (Washington).

It is important to note that these Guidelines do not create any new laws or regulations regarding the advertising prac- tices or other business practices of the airline industry.

They merely explain in detail how existing state laws apply to air fare advertising and frequent flyer programs. Each Guideline is followed by a comment which summarizes:

" NAAG's intent with respect to that Guideline. " Any relevant comments received by the Task Force. " Any significant changes the

that were made to Guidelines.

Cite as: 504 U. S. 374 (1992) Appendix to opinion of the Court Section 1-Definitions

1.0 Advertisement means any oral, written, graphic or pictorial statement made in the course of solicitation of business. Advertisement includes, without limitation, any statement or representation made in a newspaper, magazine or other public publication, or contained in any notice, sign, billboard, poster, display, circular, pamphlet, or letter (collec- tively called "print advertisements"), or on radio or televi- sion ("broadcast commercials").

Comment: This definition encompasses those materials and media covered by most states'false advertising statutes.

"Print advertisements" and "broadcast commercial" are separated into different categories because they are afforded slightly different treatment under these Guidelines. This represents a change from an earlier draft of the Guidelines and is an attempt to address some of the airlines' concerns regarding the difficulties of lengthy disclosures in broad- cast commercials.

1.1 Award means any coupon, certificate, voucher, benefit or tangible thing which is promised, given, sold or otherwise transferred by an airline or program partner to a program member in exchange for mileage, credits, bonuses, segments or other units of value credited to a consumer as an incentive to fly on any airline or to do business with any program partner.

Comment: This definition, as well as definitions 1.2, 1.3, 1.4, 1.6, 1.9, and 1.10, is self-explanatory.

1.2 Award level means a specified amount of mileage or number of credits, bonuses, segments or other units which a program member must accumulate in order to receive an award.

1.3 Blackout date means any date on which travel or use of other program benefits is not permitted for program mem- bers seeking to redeem their award levels. This is a form of capacity control.

394 MORALES v. TRANS WORLD AIRLINES, INC.

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1.4 Capacity control means the practice by which an air- line or program partner restricts or otherwise limits the op- portunity of program members to redeem their award levels for travel or other benefits offered in the program.

1.5 Clear and conspicuous means that the statement, rep- resentation or term ("statement") being disclosed is of such size, color contrast, and audibility and is so presented as to be readily noticed and understood by the person to whom it is being disclosed. All language and terms should be used in accordance with their common or ordinary usage and meaning. For example, "companion" should be used only when it means any companion (i. e., any person traveling with the program member), not solely family members. With-

(a) A statement in a print advertisement is considered clear and conspicuous if a type size is used which is at least one-third the size of the largest type size used in the advertising. However, it need not be

" 10-point type in advertisements that are 200 square inches or smaller, and

* 12-point type in advertisements that are larger than 200 square inches.

If the statement is in the body copy of the advertise- ment, it may be in the same size type as the largest type used in the body copy, and does not have to meet these type-size requirements.

(b) A statement in a broadcast commercial is considered clear and conspicuous if it is made orally and is as clear and understandable in pace and volume as the fare information.

(c) A statement on any billboard is considered clear and conspicuous if a type is used which is at least one- third the size of the largest one size used on the billboard.

Cite as: 504 U. S. 374 (1992) Appendix to opinion of the Court

(d) A statement required by Section 3, relating to frequent flyer programs, is considered clear and conspicuous if it is prominently located directly adja- cent to the materials to which it applies. Type size should be no smaller than the most commonly-used print size in the document, but in no event smaller than 10-point type. Any reservation of any right to make future changes in the program or award levels should be located prominently at the beginning of printed materials.

Comment: One of the most deceptive aspects of current air fare advertisements is the completely inadequate manner in which those advertisements disclose the restrictions and limitations which apply to the advertised fares. The re- strictions disclosed in print advertisements are rarely lo- cated near the fare advertised and often appear only in extremely small type at the bottom of the advertisement.

In broadcast commercials, such disclosures are generally absent from radio advertisements, and if included at all in television commercials appear as written disclosures flashed on the screen much too quickly for the average per- son to read. On billboards any mention of restrictions on advertised fares is unusual.

Given this background, NAAG believes that it is neces- sary to define clearly for the airlines what constitutes clear and adequate disclosure in all advertising media. The type-size minima for print advertisements are aimed at making the disclosures both easy to read and noticeable.

Consequently, a slightly larger size print is suggested in larger size advertisements. These type-size minima are not absolute. That is, print disclosures do not in every in- stance have to be in at least 10-point type, as long as they are clear and conspicuous regardless of the size of the type.

The type size suggestions are merely examples of advertis- ing practices which give an airline a reasonable expectation that it will not be sued if it follows the Guidelines. In the

MORALES v. TRANS WORLD AIRLINES, INC.

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Task Force's meetings with the airlines last summer, one common note expressed was that the airlines could abide by disclosure guidelines, as long as they were clear and en- forced uniformly. If an airline does not choose this safe harbor and instead ventures into untested waters, it may run aground and it may not. But it is free to do so.

The comments to this Guideline were critical largely be- cause NAAG singled out airline advertisements for this treatment. However, on the whole, the airlines indicated they could meet the type size standard relatively easily in print advertisements.

NAAG elected to encourage oral disclosures in broadcast media, because written disclosures are difficult if not im- possible to read and because many people listen to, rather than watch television commercials. We continue to believe that oral disclosure is the best method of conveying infor- mation in a television commercial. However, the converse of this Guideline is not true--a disclosure in a television commercial is not necessarily deceptive if it is instead made in a video super or crawl, as long as it is still clear and conspicuous.

For safety reasons, very large type is provided for billboards.

1.6 Frequent flyer program means any program offered by an airline or program partner in which awards are offered to program members.

1.7 Limited-time availability means that the fare is only available for a specific period of time or that the fare is not available during certain blackout periods.

Comment: This definition applies to air fares that are only available certain times of the year (e. g., available De- cember 15 through April 15), are not available at certain times at all (not available December 23 through January 5), or are only available until a date certain (available only until January 15). It does not apply to fares that are un-

Cite as: 504 U. S. 374 (1992) Appendix to opinion of the Court available only on certain days of the week or times of the day.

1.8 Material restriction means a restriction, limitation, or other requirement which affects the use or refundability of a ticket, and which is not generally applicable to all classes of fares or tickets (such as standard conditions of carriage).

Comment: Due to the numerous standard conditions ap- plicable to most airline tickets, NAAG has confined the definition of "material restrictions" to those restrictions and limitations that are specific and unique to certain fare categories i. e., those that are different from the restrictions and limitations that apply to a standard coach ticket).

1.9 Program member means any consumer who has ap- plied and been accepted for membership in an airline's frequent flyer program, regardless of whether he or she has accrued mileage, credits, bonuses, segments or other units of value on an airline or with any program partner.

1.10 Program partner means any business entity which provides awards as part of an airline's frequent flyer program.

1.11 Vested member means a member of a frequent flyer program who is enrolled in an existing program and has pro- vided consideration to the airline or its partners, and who has not received adequate notice of program changes such as set forth in Sections 3.2 and 3.9. For example, consideration includes purchasing tickets on an airline, renting a car or using a specific credit card.

Comment: This definition separates out those consumers who joined a frequent flyer program without receiving ade- quate notice of how that program could change prospec- tively. The Guidelines afford some special protections to vested members and vested miles. There is sound reason for this.

After reviewing the travel reward promotional materials for most of the major airlines, NAAG concluded that cur- rently vested members have not received adequate disclo-

MORALES v. TRANS WORLD AIRLINES, INC.

Appendix to opinion of the Court

sure of the potential for significant increases in award lev- els or imposition of other restrictions which may result in the airlines' unilateral devaluation of awards. Therefore, the Guidelines treat vested members and the miles which members accrued before receiving adequate notice of pro- spective changes differently.

1.12 Vested mile means program mileage (or other credits) accumulated by a vested member before that person receives adequate notice of program changes, as set forth in Sections 3.2 and 3.9.

Comment: This definition identifies any mileage or credit accrued by a vested member before he or she received ade- quate notice regarding the possibility of future detrimental changes in the program. See the comments to the definition of vested member.

Section 2-Fare Advertisements 2.0 General guideline

Any advertisement which provides air fares or other price information must be in plain language, clear and conspicuous, and non-deceptive. Deception may result not only from a direct statement in the advertisement and from reasonable inferences therefrom, but also omitting or obscuring a mate- rial restriction.

Comment: This Guideline and the following Guidelines restate individual states' false advertising and deceptive practices statutes as they apply to air fare and price advertising.

2.1 Disclosure in print advertisements Print advertisements for fares must make clear and con-

* Limited-time availability. " Limitations on right to refund or exchange of ticket. " Time of day or day of week restrictions. " Length of stay requirements.

Cite as: 504 U. S. 374 (1992) Appendix to opinion of the Court

• Advance purchase requirements. " Round trip purchase requirements. • Variations in fares to or from two or more airports

serving the same metropolitan area.

• Limitations on, or extra charges for, breaks or changes in itinerary, such as failure to travel on every leg as scheduled.

• The statement, if any, required by Guideline 2.4. • Any other material restriction on the fare.

This Guideline would be met by disclosing material re-

" in the body copy of the advertisement, * adjacent to the fare price, or • in a box with a heading such as "Restrictions."

Examples (in 10-point type) of disclosures of material re- strictions if they apply to fares being advertised are:

RESTRICTIONS. "Weekend traveler" fares are gen- erally available all day Saturday and Sunday until 6 p.m.

However, these fares are not available on some flights on some days.

Restrictions

* 30 day advance purchases required * Not available November 20-December 1 * New York fares only to Newark Airport

or

Restrictions. Advertised fares are only available Tuesday, Wednesday, and Thursday afternoons. Three-day advance purchases required. 50% cancellation penalty applies.

MORALES v. TRANS WORLD AIRLINES, INC.

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Comment: The advantage to consumers of print adver- tisements over television or radio advertisements is that they give consumers something tangible to use as a refer- ence when shopping for low cost air fares. Because con- sumers can take their time and carefully read a print ad- vertisement it is especially important that this type of advertisement contain the most accurate and complete in- formation possible regarding any advertised air fares. The restrictions singled out by NAAG in this Guideline for dis- closure are those NAAG believes are the most significant to a consumer contemplating purchasing a ticket. An adver- tisement that complies with this Guideline will give a con-

for the fare (i. e., can a consumer meet advance purchase requirements or other restrictions affecting time or date of travel?);

likelihood that they will be able to obtain a ticket at the advertised price; and

purchasing a ticket at the advertised price (i. e., is the ticket non-refundable or do other penalties apply upon cancella- tion or changes in itinerary?).

This particular Guideline received a great deal of nega- tive comment because the airlines and government agencies misunderstood it to mean that it required full disclosure of all of the restrictions that apply to each specific flight. This is not correct. The Guideline only requires that if any of the restrictions listed in the Guideline apply to any of the air fares advertised then the advertisement must disclose the existence of that restriction and the fact that the restric- tion applies to one or more of the air fares advertised. To clear up this misunderstanding, NAAG included specific ex- amples of the disclosures required by the revised Guidelines.

There was also some misunderstanding that disclosure in Cite as: 504 U. S. 374 (1992)

Appendix to opinion of the Court a box was required. As the Guideline states, this is just one option.

The comments made to the December Guidelines evi- denced another misconception about the wording of the dis- closures on fare restrictions. This Guideline provides sug- gested wording, again to assist the airlines in determining how to meet the disclosures, but the language is by no means sacrosanct. The best creative minds in the advertising business are available to the airlines through their advertis- ing agencies. The airlines are free to avail themselves of these talents, who are certainly adept at phrasing a message the advertiser wants to get across to the consumer. The essence of the Guidelines is that consumers must be advised of the limits which the airlines has [sic] chosen to impose on consumers' ability to buy tickets at the advertised price.

2.2 Disclosure in broadcast commercials Broadcast commercials for fares must make clear and con-

* Limited-time availability. * Limitations on right to refund or exchange of ticket. * The statement, if any, required by Guideline 2.4.

In addition, if the following seven disclosures are not made in a clear and conspicuous manner in the commercial, any that are applicable must be disclosed orally to the passenger before reservations are actually made:

* Time of day or day of week restrictions. " Length of stay requirements. * Advance purchase requirements. " Round trip purchase requirements. " Variations in fares to or from two or more airports

serving the same metropolitan area.

" Limitations on, or extra charges for, breaks or changes in itinerary, such as failure to travel on every leg as scheduled.

402 MORALES v. TRANS WORLD AIRLINES, INC.

Appendix to opinion of the Court Any other material restriction in the fare.

As to these seven types of disclosure, the airline may in- clude any or all in the commercial or may choose to defer disclosure until the time reservations are actually made.

If any of these seven disclosures applies to the fare adver- tised and the airline chooses to defer disclosure until the time the reservations are actually made, the commercial must give clear and conspicuous disclosure that "Other substantial restrictions apply," or similar language. The statement "Restrictions apply" is not sufficient.

Comment: In an earlier draft, the Guidelines required that radio and television advertisements include all the same disclosures required in print advertisements. The airline industry unanimously responded that such detailed disclosures would be impossible to include in the 15 and 30 second advertising spots generally purchased for radio and television ads, and argued that, even if time allowed this much oral disclosure, the resulting commercial would pro- vide too much information for a consumer to absorb use- fully. They concluded that such a requirement would elim- inate airline price advertising on television and radio.

The provision of fare information, without stating the most significant restrictions that apply to the fare adver- tised, is deceptive and ultimately harmful to consumers and the airline industry alike.

The Guideline as revised provides a compromise. It sug- gests disclosure of the three most serious restrictions that can apply to an airline ticket-limited time availability, nonrefundability or exchangeability and limitations on fare availability. Disclosure of all of these restrictions can be accomplished by something as simple as the following statement: "Tickets are nonrefundable, are not available on all flights, and must be purchased by December 15. Other significant restrictions apply." These 20 words can easily be read in a 30 second commercial. In addition, some or all of this information may be clearly and conspicuously

Cite as: 504 U. S. 374 (1992) Appendix to opinion of the Court

disclosed in a video super or crawl in television commer- cials. Of course, this option is not available for radio com- mercials. However, commenting airlines confirmed that the typical radio spot is 60 seconds, making the concern about time less crucial.

Airlines then have the option of disclosing any additional material restrictions in the advertisement itself or defer- ring such disclosure until a consumer makes a reservation.

Of course, if an airline does not choose to restrict its fare severely, fewer words (and thus, less air time) is needed.

This compromise position also recognizes that print ad- vertising lends itself more readily to detailed information in a form which the consumer can retain and refer to at his own pace. For this reason, NAAG has chosen to require less disclosure in broadcast, allowing print to be the me- dium for full disclosure.

2.3 Disclosure on billboards

Any billboard which provides air fare or other price infor- mation on a fare to which any material restrictions apply must have clear and conspicuous language such as "Substan- tial restrictions apply." The statement "Restrictions apply" is not sufficient.

Comment: For safety reasons, NAAG concluded that lengthy written disclosures on billboards are inappropriate and potentially hazardous to drivers. We disagree with the DOT that this special treatment of price advertising on bill- boards will result in a proliferation of billboards on our nation's highways.

2.4 Fare availability

Any advertised fare must be available in sufficient quan- tity so as to meet reasonably foreseeable demand on every flight each day for the market in which the advertisement appears, beginning on the day on which the advertisement

404 MORALES v. TRANS WORLD AIRLINES, INC.

Appendix to opinion of the Court

appears and continuing for at least three days after the ad- vertisement terminates.

However, if the advertised fare is not thus available, the advertisement must contain a clear and conspicuous state- ment to the extent of unavailability of the advertised fare.

Statements such as "Seats limited" and "Restrictions apply" do not meet this Guideline. These examples do meet

• This fare may not be available when you call. • This fare is not available on all flights. • This fare is only available on some Saturday and Sun-

day flights.

Comment: This Guideline elicited the greatest amount of negative comments from the airline industry, the ATA, FTC and the DOT They argue that this Guideline is impossible to implement because, due to the complexity of airline pric- ing systems, the number of seats available at a particular low fare on a particular flight is not a fixed number. It is continuously modified up to the point of departure. They suggest that it is acceptable for the airlines to communicate a general invitation to the public to buy low fare seats, but then reduce the number of seats available to zero or close to zero for the most popular flights, because the possibility that a consumer can purchase a seat at the advertised price ex- ists at the time the advertisement is placed.

The complexity of the airlines' system cannot justify the unfairness of such an approach. No other retailer would be allowed to justify a failure to stock an advertised item on the grounds that, at the last minute the retailer decided it was less costly not to stock the item it had just advertised.

The availability of an item advertised, at the price adver- tised, goes to the very heart of truthful advertising. If an airline advertises an air fare that is not available on each and every flight to the destination advertised, and this fact

Cite as: 504 U. S. 374 (1992) Appendix to opinion of the Court is not disclosed, then the advertisement is deceptive on its face.

While NAAG appreciates the difficulty of disclosing the specific number of seats available on each flight advertised, a disclosure that "This fare is not available on all flights" or "This fare may not be available when you call" is not particularly onerous. Absent such disclosure, airlines, as all other retailers, should be required to have sufficient stock available to meet reasonable demand for any fare advertised.

2.5 Surcharges Any fuel, tax, or other surcharge to a fare must be in-

cluded in the total advertised price of the fare.

Comment: Recently, several airlines considered the possi- bility of passing along an increase in the cost of fuel to consumers by imposing a "fuel surcharge" rather than sim- ply raising air fares to reflect their increased costs. The air fare advertised was to remain the same, but a footnote would be added to the advertisement in the "mice type" dis- closing that, for instance, a $16 fuel surcharge would be tacked on to the advertised fare. The potential for abuse, if this type of price advertising is permitted, is obvious. It would only be a matter of time before $19 air fares from New York to California could be advertised with $300 meal, fuel, labor, and baggage surcharges added in a footnote.

The total advertised price of the fare must include all such charges in order to avoid these potential abuses. However, this Guideline should not be construed to require an airline to do the impossible. We do not believe that such minimal tour-related charges fall within the meaning of "fare" and therefore do not believe that unknown charges must be dis- closed as a surcharge (if the amounts are not in fact known).

This of course does not mean that charges which are known-either as an exact amount or as a percentage-do not have to be disclosed in advertisements.

MORALES v. TRANS WORLD AIRLINES, INC.

Appendix to opinion of the Court 2.6 Round trip fare advertising

If an airline elects to advertise the one-way portion of a fare that is only available as a round-trip purchase, this re- striction, together with the full round-trip fare, must be ad- vertised in a clear and conspicuous manner, at least as promi- nently as the one-way fare.

Comment: Airlines routinely advertise one-half of the price (i. e., the alleged "one-way" price) for tickets that are only available if a consumer makes a round-trip purchase.

Under this Guideline, if an airline elects to continue this advertising practice, it must also disclose that the fare is only available if a consumer purchases a round trip ticket and the actual price of the full round trip ticket. The dis- closure must be made in a type size and location as promi- nent as the fare advertised.

The airlines have, for the most part, stated a willingness to advertise the full round trip air fare if all of the airlines do the same. This Guideline is intended to encourage all airlines to adopt this practice.

2.7 Deceptive use of "sale," "discount," "reduced," or simi- lar terms

A fare may be advertised by use of the words "sale," "dis- count," "reduced," or other such words that suggest that the fare advertised is a temporarily reduced fare and is not a regularly-available fare only if that fare is:

* available only for a specified, limited period of time, and " substantially below the usual price for the same fare

with the same restrictions.

Comment: The majority of airline tickets sold each year sell at prices significantly lower than the full "Y" or stand- ard regular coach fare. These lower fares are offered year round and airlines in theory allocate a certain amount of seats to each fare "bucket." As a result, the regular coach

Cite as: 504 U. S. 374 (1992) Appendix to opinion of the Court

fare has ceased to have any meaning as a starting point for determining whether or not a ticket is being offered for a "sale" price as consumers have come to understand that term.

In this Guideline NAAG has attempted to prevent con- sumer confusion by limiting the use of such words as "sale," "discount," or "reduced," to describe only those fares that represent a true savings over regularly available air fares- those that are available only for short periods of time and are substantially below any regularly offered fare for a ticket carrying identical restrictions.

Section 3-Frequent Flyer Programs General Comments to Section 3 Frequent flyer programs have been widely acknowledged as the most successful marketing programs in airline indus- try history. The bargain struck between customers and the airlines has proven to be very costly to many of the airlines.

Customers who have accrued the necessary mileage are ex- pecting to collect the awards which led them to join and fly in the programs in the first place. Some airlines are now disturbed by the cost of keeping their side of the bargain and the real possibility that they may lose revenue because passengers flying on frequent flyer awards may begin dis- placing paying customers. The solution contemplated by some carriers has been to raise award thresholds and imple- ment restrictions to decrease the cost to them of the award program. The effect of these actual and/or potential changes is to significantly devalue vested members' accrued mileage or other credits in the program. Although various frequent flyer program awards materials have contained some obscure mention of the possibility of future program changes, these disclosures have been wholly inadequate to inform program members of the potentially major negative changes which are contemplated by many airlines.

MORALES v. TRANS WORLD AIRLINES, INC.

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These Guidelines cover frequent flyer programs including any partner airlines or other providers of goods or services such as rental cars and hotel rooms. They are intended to protect those consumers who have participated in these programs in good faith, without adequate notice that the programs could change, and to advise the airlines of how they can reserve this right in the future by adequately pro- viding this information to all members in a nondeceptive manner consistent with state law.

3.0 Capacity controls

1. If an airline or its program partners employ capacity

controls, the airline must clearly and conspicuously disclose in its frequent flyer program solicitations, newsletters, rules and other bulletins the specific techniques used by the airline or program partner to control capacity in any solicitation which states a specific award. This includes blackout dates, limits on percentage of seats (for example, "the number of seats on any flight allocated to award recipients is limited"), maximum number of seats or rooms allocated or any other mechanism whereby the airline or program partner limits the opportunities of program members redeeming frequent flyer award levels. To meet this Guideline, all blackout dates must be specifically disclosed.

2. As to awards for vested miles, the airline or program

partner must provide the award to the vested member with- out capacity controls or provide the award with capacity con- trols within a reasonable period of time. A reasonable pe- riod would be within 15 days before or after the date originally requested.

If all seats within this 31-day period were sold at the time the vested member requested a reser- vation, so that the member could not be accommodated with- out displacing a passenger to whom a seat has been sold, then a reasonable period would be the period to the first available date on which every seat was not sold to the re-

Cite as: 504 U. S. 374 (1992) Appendix to opinion of the Court

quested destination at the time the program member re- quests a reservation.

Comment: All of the airlines that met with the Task Force stated that they intended to retain the right to impose capac- ity controls, in the future, to limit the number of seats available to consumers purchasing tickets with frequent flyer award certificates. The imposition of capacity con- trols, including blackout dates, has the potential for unrea- sonably restricting the supply of seats or other benefits in such a way as to significantly devalue the awards due vested program members. NAAG found that this potential limi- tation has not been adequately disclosed to program mem- bers in the frequent flyer promotional materials we re- viewed. This Guideline puts the airlines on notice as to what information they should provide to consumers if they want to impose capacity controls on the use offrequent flyer awards at some future date.

In earlier drafts of the Guidelines the Task Force took the position that capacity controls could not be applied to awards based on any mileage or credits accrued by vested members before they received adequate notice that capacity controls could be imposed. However, as a compromise, and to permit the airlines reasonable flexibility around holiday or other peak travel times, the revised Guideline provides for a reasonable time to accommodate passengers with award tickets: a 31-day "time window"--15 days before and 15 days after the date requested for ticketing. This "time window" allows the airlines to allocate capacity to meet de- mand over a reasonable, yet defined period of time. In the event allflights to a certain destination are sold out during the entire 31-day time window, ticketing on the next avail- able seat would be reasonable. This approach has the ad- ditional benefit of being simple and straightforward to im- plement with less possibility of customer confusion and frustration.

410 MORALES v. TRANS WORLD AIRLINES, INC.

Appendix to opinion of the Court 3.1 Program changes affecting vested members

1. Any airline or program partner that has not reserved

the right to make future changes in the manner required by Sections 3.2 and 3.9 of these Guidelines and that changes any aspect of its program (for example, imposition of capacity controls, increases in award levels, or any other mechanism whereby a vested member's ability to redeem any award will be adversely affected) must protect vested program mem- bers. Examples which meet this Guideline are:

(a) All vested members may not be adversely affected by that change for a reasonable period. A reason- able period would be one year following mailing of notice of that change.

(b) The airline or program partner may allow vested members to lock in any award level which is in effect immediately preceding any change in the program.

That award level would be guaranteed for a period of one year after mailing notice of any increase in award levels. A vested member would also be per- mitted to change his or her selection to lock in a different award in existence at any time prior to an increase in award levels.

(c) The airline or program partner may credit vested program members with miles or other units sufficient to assume that, at the time of any change in the pro- gram, the member will be able to claim the same awards he or she could have claimed under the old program.

Comment: This Guideline institutes corrective measures to protect vested members and the mileage they accrued be- fore receiving adequate notice that a program could change to their detriment at some point in the future. The Guide- line sets forth three acceptable alternative approaches to allow airlines to change existing programs without unrea- sonably altering the rights and expectations of vested mem-

Cite as: 504 U. S. 374 (1992) Appendix to opinion of the Court

bers. For example, an airline may wish to create a new program with higher award levels for persons who join in the future. Guideline 3.1.1(a) grandfathers in vested mem- bers for a one-year period after notice. Guideline 3.1.1(b) grandfathers only a specified locked-in award for a one-year period after the effective date of the change and thereby gives the member an additional year to accrue mileage or units toward a specific award. Guideline 3.1.1(c) allows the program to avoid the administrative problems of distin- guishing between old and new members and old and new award levels by equitably adjusting the award levels of the vested members.

These examples are not the only ways in which airlines can reasonably protect vested members when changing ex- isting programs. They are intended to delineate minimum acceptable standards.

3.2 Notice of Changes

1. Adequate notice of changes in current frequent flyer

program award levels must be provided to vested program members by the airline or program partner to allow a rea- sonable time for the vested member to obtain and use an award. For example, a notice no less than one year prior to the effective date of such change would be reasonable.

Reduction in award levels would not require such notice.

2. Any airline which has a policy of deleting program

members from its mailing list for notices and statements must clearly and conspicuously disclose that policy in plain language in its rules and regulations.

3. To reserve the right to make future changes in the

award levels and program conditions or restrictions in a man- ner providing reasonable notice consistent with state law, which notice is less than the notice set forth in Guideline 3.2.1, an airline must first clearly and conspicuously disclose that reservation and the nature of such future changes, in plain language. This disclosure should include examples

MORALES v. TRANS WORLD AIRLINES, INC.

Appendix to opinion of the Court

which make clear the outer limits within which program awards may be changed. For example, the following is not

"Program rules, regulations and mileage levels are sub- ject to change without notice."

This example is adequate disclosure:

"(Airline) reserves the right to terminate the program with six months notice. This means that regardless of the amount you participate in this program, your right to accumulate mileage and claim awards can be termi- nated six months after we give you notice."

"(Airline) reserves the right to change the program rules, regulations, and mileage level. This means that (Airline) may raise mileage levels, add an unlimited number of blackout days, or limit the number of seats available to any or all destinations with notice. Pro- gram members may not be able to use awards to certain destinations, or may not be able to obtain certain types of awards such as cruises."

"In any case, (Airline) will make award travel available within - days of a program member's requested date, except for blackout dates listed here."

The airline's right to make future changes, in a manner other than that provided in Guideline 3.1, shall apply only to mile- age accrued after members receive the notice required by this Guideline.

Comment: In the past, airlines have attempted to reserve the right to make radical future changes in their programs by using such vague and uncertain blanket language as "Subject to additions, deletions, or revisions at any time."

The consumer outrage that ensued when several of the Cite as: 504 U. S. 374 (1992)

Appendix to opinion of the Court

major airlines attempted unilaterally to change their pro- grams in the winter of 1986-87 makes it clear that consum- ers were not adequately told, when they joined and partici- pated in frequent flyer programs, that they were taking a gamble that the award they were striving for would still be available, at the mileage level originally advertised by the time they accrued the necessary miles. To avoid a recur- rence of this same problem in the future, this Guideline provides that the potential for such extensive program changes must be clearly and conspicuously disclosed to the public by specific example. It also puts the airlines on no- tice that (1) their previous attempts to disclose this critical information have been inadequate, (2) if they intend to re- serve the right to make such changes in the future, they must give members new and different notice, and (3) as to vested members, airlines cannot implement any adverse changes until one year after notice is given. One year is deemed reasonable because many consumers can only travel during particular periods of the year due to work or family constraints, and therefore notice of less than a year may impact unduly harshly on a particular class of pro- gram members.

If an airline wants to reserve the rights to change the terms of its program without giving its members one year's notice (1) it can do so only after clear and adequate notice has been given to the program members and (2) this reduced standard can apply only to mileage accrued after clear and adequate notice has been given.

NAAG discovered that many airlines delete program members from their mailing lists if they are determined to be "inactive." Inactive is defined differently by each air- line, but generally includes some formula requiring active participation in the program within a six to ten month pe- riod prior to any given mailing. Because crucial informa- tion regarding changes is included in program mailings, the Guidelines require that any airline with a policy of deleting

414 MORALES v. TRANS WORLD AIRLINES, INC.

Appendix to opinion of the Court

program members from its mailing list clearly and conspic- uously disclose that policy in the rules and regulations dis- tributed to all program members when they join.

3.3 Fare or passenger class limitations

Any limitation upon the type or class of fare with which an upgrade certificate, discount flight coupon, or free companion coupon may be used must be clearly and conspicuously dis- closed before the program member claims the award. Disclo- sure of the fare by airline terminology (for example, "Y Class") is not deemed sufficient.

Comment: Many airlines are encouraging consumers to use their accrued mileage or credits to obtain upgrade cer- tificates or free campaign coupons, rather than free tickets because this is more cost effective for the airlines. Many of these coupons and certificates can be used only in conjunc- tion with a regular coach fare ticket. Because of the high cost of a full coach ticket (often disclosed only as "Y Class") many of these coupons and certificates represent no real savings and therefore are useless to consumers. This Guideline requires that any such restriction be clearly dis- closed to consumers before the award is claimed.

3.4 Certificates issued for vested miles

Certificates, coupons, vouchers, or tickets issued by an air- line for awards redeemed for vested miles must be valid for a reasonable period of time. One year is deemed to be rea- sonable. Any restrictions on use, redeposit, extension, or re-issuance of certificates must be clearly and conspicuously disclosed on the certificate and in any rules, regulations, newsletter or other program materials.

Comment: Again, because many consumers may only travel during certain periods of the year, fairness requires that awards be valid for at least a full twelve month cycle.

Cite as: 504 U. S. 374 (1992) Appendix to opinion of the Court 3.5 Fees

Any airline which charges a fee for enrollment in its frequent flyer program must fully disclose at airline ticket counters and in all advertisements, solicitations or other ma- terials distributed to prospective members prior to enroll- ment all terms and conditions of the frequent flyer program.

Such disclosure must be made prior to accepting payment for enrollment in the airline's program.

Comment: Some airlines have required that consumers fill out a membership application and pay a membership fee before obtaining a copy of the program rules and regula- tions. Because of the serious restrictions that can apply to a travel reward program, it is essential that all consumers have an opportunity to review all of the program rules and regulations before paying an enrollment fee.

3.6 Redemption time

All airlines must disclose clearly and conspicuously the ac- tual time necessary for processing award redemption re- quests where such requests are not normally processed promptly. An example of prompt processing would be within 14 days of processing the request. An example of a disclosure would be "processing of awards may take up to 30 days."

Comment: The airlines indicated that full disclosure of redemption time will not be a problem.

3.7 Termination of program affecting vested members

In the event a frequent flyer program is terminated, ade- quate notice of termination must be sent to all vested mem- bers so that vested members have a reasonable time to ob- tain awards and use them. Adequate notice would be notice at least one year prior to the termination of the program.

Award levels in existence prior to such notice should remain in effect for one year. Program members should then have one year to use certificates, coupons, vouchers or tickets.

MORALES v. TRANS WORLD AIRLINES, INC.

Appendix to opinion of the Court

Any applicable capacity controls should be modified as neces- sary to meet the demand for all award benefits due pro- gram members.

Comment: The airlines uniformly take the position that because participation in travel reward programs is "free," an airline should be able to terminate a travel reward pro- gram at any time without notice. NAAG strenuously dis- agrees. Consumers pay significant consideration for the airlines' promise to award them "free tickets" and other awards. Program members fly on a particular airline to accrue mileage in a travel reward program often foregoing a more convenient departure time, a more directflight, and even a less expensive ticket. Those consumers who kept their part of the bargain have a right to expect the airlines to keep theirs, regardless of the cost. This Guideline af- fords consumers reasonable protection against unilateral changes. It gives consumers one year to accrue the mileage to reach a desired award level and one year to use the award.

This Guideline is intended to apply to programs that are terminated due to mergers or for any other reason. It would be unconscionable to permit airlines, which have reaped the rewards of these travel incentive programs, to walk away from their obligations to consumers under any circumstances.

3.8 Restrictions

All material restrictions on frequent flyer programs must be clearly and conspicuously disclosed to current pro- gram members and to prospective members at the time of enrollment.

Comment: This Guideline is intended as a corrective measure. Any airline that has not clearly and conspicu- ously disclosed material program restrictions to vested members should do so now. New members are entitled to full disclosure at the time of enrollment.

Cite as: 504 U. S. 374 (1992) Appendix to opinion of the Court 3.9 Method of disclosure

Disclosures referred to in these Guidelines should be made in frequent flyer program solicitations, newsletters, rules, and other bulletins in a clear and conspicuous manner so as to assure that all program members receive adequate notice.

As used in these Guidelines, disclosure also refers to infor- mation on program partners.

Comment: The brochures containing the rules and regula- tions for airlines'frequent flyer programs have been as long as 52 pages. Extremely important restrictions are often buried under inappropriate topic headings or hidden on the back of the last inside pages of the brochure. This Guide- line requires that restrictions be disclosed in reasonable print size in a location that will be most helpful and infor- mative to consumers.

Any reservation of the right to make future changes in a program is so significant to consumers that it should be disclosed prominently to insure that the maximum number of people see and read this restriction. The Guideline per- mits the airlines flexibility to determine when and how often a disclosure must be made so long as the airline dis- closes the information in a manner which gives meaningful notice to all affected members.

One airline complained that Guideline 3.9 is unreason- able because it proposes that all the restrictions be disclosed at the beginning of the program brochure. In fact, the only disclosure the Guidelines suggested listing at the beginning of a brochure is the reservation of the right to change the program prospectively. The significance of such a restric- tion-that the terms and conditions of the program can change at any moment-is so critical that potential mem- bers should be made aware of it immediately. All other disclosures can be made in the text of the brochure.

418 MORALES v. TRANS WORLD AIRLINES, INC.

Appendix to opinion of the Court Section 4-Compensation for Voluntary Denied Boarding

4.0 Disclosure of policies

If an airline chooses to offer ticketed passengers incentives to surrender their tickets on overbooked flights, the airline must clearly and conspicuously disclose all terms and condi- tions of the proposal-including any restrictions on offers of future air travel-to the person to whom the offer is made, and in the same manner in which the offer is made, before the person accepts the offer.

Comment: Federal regulations offer specific protections and certain rights to individuals who are involuntarily bumped from a flight. Airlines, however, are free to offer whatever compensation they want to people who voluntarily give up their seat on an airplane because of overbooking.

For economic reasons, airlines prefer to offer vouchers good for free tickets on future flights, instead of cash compensa- tion to these passengers.

While these vouchers may seem very attractive to a con- sumer who has the flexibility to wait for a later flight, many carry serious restrictions on their use or are subject to lengthy black out periods when they cannot be used.

This Guideline requires that airlines fully disclose any and all restrictions on offers for future air travel, before a consumer agrees to give up his or her seat. It does not, as several airlines and government agencies argued in their responsive comments, set any standards for the type of com- pensation that airlines must offer to these passengers.

Consumer dissatisfaction with the airline industry has reached crisis proportions. Federal agencies have focused their attention on airline scheduling problems, on-time per- formance, safety, and other related issues, but have not ad- dressed airline advertising and frequent flyer programs. Un-

Cite as: 504 U. S. 374 (1992) STEVENS, J., dissenting

checked, the airlines have engaged in practices in these areas that are unfair and deceptive under state law. The individ- ual states through NAAG can play an important role in elim- inating such practices through these Guidelines.

JUSTICE STEVENS, with whom THE CHIEF JUSTICE and JUSTICE BLACKMUN join, dissenting.

In cases construing the "virtually unique pre-emption pro- vision" in the Employee Retirement Income Security Act of 1974 (ERISA), see Franchise Tax Bd. of Cal. v. Construction Laborers Vacation Trust for Southern Cal., 463 U. S. 1, 24,

n. 26 (1983), we have given the words "relate to" a broad

reading. The construction of that unique provision was sup- ported by a consideration of the relationship between differ- ent subsections of ERISA that have no parallel in other fed- eral statutes, see Shaw v. Delta Air Lines, Inc., 463 U. S. 85,

98 (1983), and by the legislative history of the provision, id.,

at 98-99. Today we construe a pre-emption provision in the Airline Deregulation Act of 1978 (ADA), 49 U. S. C. App. § 1301 et seq., a statute containing similar, but by no means identical, language.

Instead of carefully examining the lan- guage, structure, and history of the ADA, the Court decides that it is "appropriate," given the similarity in language, to give the ADA pre-emption provision a similarly broad read- ing. Ante, at 384.

In so doing, the Court disregards estab- lished canons of statutory construction, and gives the ADA pre-emption provision a construction that is neither com- pelled by its text nor supported by its legislative history.

"In deciding whether a federal law pre-empts a state stat- ute, our task is to ascertain Congress' intent in enacting the federal statute at issue." Metropolitan Life Ins. Co. v.

Massachusetts, 471 U. S. 724, 738 (1985) (internal quotation marks omitted). At the same time, our pre-emption analysis "must be guided by respect for the separate spheres of gov-

MORALES v. TRANS WORLD AIRLINES, INC.

STEVENS, J., dissenting ernmental authority preserved in our federalist system."

Alessi v. Raybestos-Manhattan, Inc., 451 U. S. 504, 522 (1981). We therefore approach pre-emption questions with a "presum[ption] that Congress did not intend to pre-empt areas of traditional state regulation." Metropolitan Life, 471 U. S., at 740.

.

Section 105(a) of the ADA provides, in relevant part, "no State or political subdivision thereof ... shall enact or en- force any law . . relating to rates, routes, or services of any air carrier having authority under subchapter IV of this chapter to provide air transportation." 49 U. S. C. App. § 1305(a). By definition, a state law prohibiting deceptive or misleading advertising of a product "relates," "pertains," or "refers" first and foremost to the advertising (and, in particu- lar, to the deceptive or misleading aspect of the advertising) rather than to the product itself. That is not to say, of course, that a prohibition of deceptive advertising does not also relate indirectly to the particular product being adver- tised.

It clearly does, for one cannot determine whether ad- vertising is misleading without knowing the characteristics of the product being advertised. But that does not alter the fact that the prohibition is designed to affect the nature of the advertising, not the nature of the product.'

' The court in a similar case arising in New York explained this distinc-

"[A]ny relationship between New York's enforcement of its laws against deceptive advertising and Pan Am's rates, routes, and services is remote and indirect.

In challenging Pan Am's advertising, New York does not care about how much Pan Am charges, where it flies, or what amenities it provides its passengers.

Its sole concern is with the manner in which Pan Am advertises those matters to New York consumers. Thus, as far as New York is concerned, Pan Am is free to charge $200 or $2,000 for a flight from LaGuardia to London, but it cannot take out a full-page news- paper advertisement telling consumers the fare is $200 if in fact it is $2,000. Similarly, Pan Am remains free to route a plane from Ithaca to Istanbul with as many stops in between as it chooses, but it cannot market that flight to New York consumers as a 'direct' flight." New York v. Trans World Airlines, Inc., 728 F. Supp. 162, 176 (SDNY 1989); see also People

Cite as: 504 U. S. 374 (1992) STEVENS, J., dissenting

Thus, although I agree that the plain language of § 105(a) pre-empts any state law that relates directly to rates, routes, or services, the presumption against pre-emption of tradi- tional state regulation counsels that we not interpret § 105(a) to pre-empt every traditional state regulation that might have some indirect connection with, or relationship to, airline rates, routes, or services unless there is some indication that Congress intended that result. To determine whether Con- gress had such an intent, I believe that a consideration of the history and structure of the ADA is more illuminating than a narrow focus on the words "relating to."

The basic economic policy of the Nation is one favoring competitive markets in which individual entrepreneurs are free to make their own decisions concerning price and out- put. Since 1890 the Sherman Act's prohibition of collusive restrictions on production and pricing have been the central legislative expression of that policy. National Soc. of Pro- fessional Engineers v. United States, 435 U. S. 679, 695 In 1914 Congress sought to promote that policy by (1978). enacting the Federal Trade Commission Act (FTCA), which created the Federal Trade Commission and gave it the power to prohibit "[u]nfair methods of competition in commerce."

38 Stat. 719, codified as amended, 15 U. S. C. § 45(a)(1). That

type of prohibition is entirely consistent with a free market in which prices and production are not regulated by Govern- ment decree.

In 1938 Congress enacted two statutes that are relevant to today's inquiry. In March it broadened § 5 of the FTCA by giving the Commission the power to prohibit "unfair or deceptive acts or practices in commerce" as well as "[u]nfair

v. Western Airlines, Inc., 155 Cal. App. 3d 597, 600, 202 Cal. Rptr. 237, 238

(1984), cert. denied, 469 U. S. 1132 (1985); Note, To Form a More Perfect Union?: Federalism and Informal Interstate Cooperation, 102 Harv. L.

Rev. 842, 857 (1989).

MORALES v. TRANS WORLD AIRLINES, INC.

STEVENS, J., dissenting methods of competition in commerce."

52 Stat. 111, codified

at 15 U. S. C. § 45(a)(1). Three months later it enacted the Civil Aeronautics Act of 1938. § 411, 52 Stat. 1003. That statute created the Civil Aeronautics Board and mandated that it regulate entry into the interstate airline industry, the routes that airlines could fly, and the fares that they could charge consumers. 2 52 Stat. 987-994. Moreover, the stat- ute contained a provision, patterned after § 5 of the FTCA, giving the Civil Aeronautics Board the power to prohibit "unfair or deceptive practices or unfair methods of competi- tion in air transportation."

52 Stat. 1003; see also Ameri-

can Airlines, Inc. v. North American Airlines, Inc., 351 U. S.

79, 82 (1956). But the Board's power in this regard was not exclusive, for the statute also contained a "saving clause" that preserved existing common-law and statutory remedies for deceptive practices.3 See 52 Stat. 1027; Nader v. Alle- gheny Airlines, Inc., 426 U. S. 290, 298-300 (1976).

Although the 1938 Act was replaced by a similar regula- tory scheme in 1958, 4 the principal provisions of the statute remained in effect until 1978.

In that year, Congress de- cided to withdraw economic regulation of interstate airline rates, routes, and services. Congress therefore enacted the ADA "to encourage, develop, and attain an air transportation system which relies on competitive market forces to deter- mine the quality, variety, and price of air services." H. R.

Conf. Rep. No. 95-1779, p. 53 (1978). Because that goal would obviously have been frustrated if state regulations

'The Civil Aeronautics Board was created and established under the name "Civil Aeronautics Authority," but was redesignated as the "Civil Aeronautics Board" by Reorganization Plan No. IV of 1940. See 49

U. S. C. App. § 1321(a)(1) (1982 ed.), repealed effective January 1, 1985, by

49 U. S. C. App. § 1551(a)(3).

"Nothing contained in this Act shall in any way abridge or alter the remedies now existing at common law or by statute, but the provisions of this Act are in addition to such remedies."

52 Stat. 1027.

4 Federal Aviation Act of 1958, Pub. L. 85-726, 72 Stat. 731.

Cite as: 504 U. S. 374 (1992) STEVENS, J., dissenting

were substituted for the recently removed federal regula- tions, Congress thought it necessary to pre-empt such state regulation. Consequently, Congress enacted § 105(a) of the Act, which pre-empts any state regulation "relating to rates, routes, or services of any air carrier having authority under subchapter IV of this chapter to provide air transportation."

49 U. S. C. App. § 1305(a)(1).

At the same time, Congress retained § 411, which gave the Civil Aeronautics Board the power to prohibit "unfair or deceptive practices or unfair methods of competition in air transportation." 49 U. S. C. App. § 1381(a). Congress also retained the saving clause that preserved common-law and statutory remedies for fraudulent and deceptive practices.

See § 1506; Nader, 426 U.S., at 298-300. Moreover, the state prohibitions against deceptive practices that had coex- isted with federal regulation in the airline industry for 40 years, and had coexisted with federal regulation of unfair trade practices in other areas of the economy since 1914,6 were not mentioned in either the ADA or its legislative history.

In short, there is no indication that Congress intended to exempt airlines from state prohibitions of deceptive adver- Instead, this history suggests that the scope of the tising.

5 The FTCA does not, by its own force, pre-empt state prohibitions of

unfair and deceptive trade practices. Thus, unless a state prohibition con- flicts with a Federal Trade Commission rule, state laws and regulations are not pre-empted. See, e. g., American Financial Services Assn. v.

FTC, 247 U. S. App. D. C. 167, 199-200, 767 F. 2d 957, 989-991 (1985); Verkuil, Preemption of State Law by the Federal Trade Commission, 1976 Duke L. J. 225.

Because the Department of Transportation has authority to prohibit unfair or deceptive practices and unfair methods of competition in air transportation, 49 U. S. C. App. § 1381, it, too, could promulgate regula- tions that would pre-empt inconsistent state laws and regulations. But the Court does not rest its holding on the fact that the state prohibitions of unfair and deceptive advertising conflict with federal regulations; in- stead, it relies on the much broader holding that the ADA itself pre-empts state prohibitions of deceptive advertising.

424 MORALES v. TRANS WORLD AIRLINES, INC.

STEVENS, J., dissenting

prohibition of state regulation should be measured by the scope of the federal regulation that was being withdrawn.

This is essentially the position adopted by the Civil Aero- nautics Board, which interpreted the scope of § 105 in light of its two underlying policies-to prevent state economic regulation from frustrating the benefits of federal deregula- tion, and to clarify the confusion under the prior law which permitted some dual state and federal regulation of the rates and routes of the same carrier. 44 Fed. Reg. 9948, 9949

"Section 105 forbids state regulation of a federally authorized carrier's routes, rates, or services. Clearly, states may not interfere with a federal carrier's decision on how much to charge or which markets to serve....

Similarly, a state may not interfere with the services that carriers offer in exchange for their rates....

"Accordingly, we conclude that preemption extends to all of the economic factors that go into the provision of the quid pro quo for passenger's fare, including flight frequency and timing, liability limits, reservation and boarding practices, insurance, smoking rules, meal service, entertainment, bonding and corporate financ- ing .... " Id., at 9950-9951.

See also Freeman, State Regulation of Airlines and the Air- line Deregulation Act of 1978, 44 J. Air L. & Com. 747, 766- 767 (1979).

Because Congress did not eliminate federal regulation of unfair or deceptive practices, and because state and federal prohibitions of unfair or deceptive practices had coexisted during the period of federal regulation, there is no reason to believe that Congress intended § 105(a) to immunize the airlines from state liability for engaging in deceptive or misleading advertising.

Cite as: 504 U. S. 374 (1992) STEVENS, J., dissenting

The Court finds in Congress' choice of the words "relating to" an intent to adopt a broad pre-emption provision, analo- gous to the broad ERISA pre-emption provision. See ante, at 383-384. The legislative history does not support that assumption, however. The bill proposed by the Civil Aero- nautics Board provided that "[n]o State ... shall enact any law.., relating to rates, routes, or services in air transporta- tion." Hearings on H. R. 8813 before the Subcommittee on Aviation of the House Committee on Public Works and Transportation, 95th Cong., 1st Sess., pt. 1, p. 200 (1977).

Yet the Board's accompanying prepared testimony neither focused on the "relating to" language nor suggested that those words were intended to effect a broad scope of pre- emption; instead, the testimony explained that the pre- emption section was "added to make clear that no state or political subdivision may defeat the purposes of the bill by regulating interstate air transportation. This provision represents simply a codification of existing law and leaves unimpaired the states' authority over intrastate matters."

Id., at 243.

The "relating to" language in the bill that was finally en- acted by Congress came from the House bill. But the House Committee Report-like the Civil Aeronautics Board-did not describe the pre-emption provision in the broad terms adopted by the Court today; instead, the Report described the scope of the pre-emption provision more narrowly, saying that it "provid[ed] that when a carrier operates under au- thority granted pursuant to title IV of the Federal Aviation Act, no State may regulate that carrier's routes, rates or services." H. R. Rep. No. 95-1211, p. 16 (1978).

The pre-emption section in the Senate bill, on the other hand, did not contain the "relating to" language. That bill provided, "[n]o State shall enact any law, establish any stand- ard determining routes, schedules, or rates, fares, or charges in tariffs of, or otherwise promulgate economic regulations

MORALES v. TRANS WORLD AIRLINES, INC.

STEVENS, J., dissenting . ." S. 2493, §423(a)(1), reprinted in for, any air carrier . .

S. Rep. No. 95-631, p. 39 (1978). The Senate Report ex-

plained that this section "prohibits States from exercising economic regulatory control over interstate airlines."

Id., at 98.

The Conference Report explained that the Conference adopted the House bill (with an exception not relevant here), which it described in the more narrow terms used in the House Report. H. R. Conf. Rep. No. 95-1779, pp. 94-95 (1978). There is, therefore, no indication that the conferees thought the House's "relating to" language would have a broader pre-emptive scope than the Senate's "determining ... or otherwise promulgate economic regulation" language.6 Nor is there any indication that the House and conferees thought that the pre-emption of state laws "relating to rates, routes, or services" pre-empted substantially more than state laws "regulating rates, routes, or services."

Even if I were to agree with the Court that state regula- tion of deceptive advertising could "relat[e] to rates" within the meaning of § 105(a) if it had a "significant impact" upon rates, ante, at 390, I would still dissent. The airlines' theo- retical arguments have not persuaded me that the NAAG guidelines will have a significant impact upon the price of airline tickets. The airlines' argument (which the Court adopts, ante, at 388-390) is essentially that (1) airlines must engage in price discrimination in order to compete and oper- ate efficiently; (2) a modest amount of misleading price ad- vertising may facilitate that practice; (3) thus compliance with the NAAG guidelines might increase the cost of price advertising or reduce the sales generated by the advertise-

6 Because the Court overlooks the phrase "or otherwise promulgate eco- nomic regulations" in the Senate bill, see ante, at 385-386, n. 2, it incor- rectly assumes that the Senate bill had a narrower pre-emptive scope than the House bill.

Cite as: 504 U. S. 374 (1992) STEVENS, J., dissenting

ments; (4) as the costs increase and revenues decrease, the airlines might purchase less price advertising; and (5) a re- duction in price advertising might cause a reduction in price competition, which, in turn, might result in higher airline rates. This argument is not supported by any legislative or judicial findings.

Even on the assumption that the Court's economic reason- ing is sound and restrictions on price advertising could affect rates in this manner, the airlines have not sustained their burden of proving that compliance with the NAAG guide- lines would have a "significant" effect on their ability to mar- ket their product and, therefore, on their rates. 7 Surely Congress could not have intended to pre-empt every state and local law and regulation that similarly increases the air- lines' costs of doing business and, consequently, has a similar "significant impact" upon their rates.

For these reasons, I respectfully dissent.

7 They have not demonstrated, for example, that the costs of purchasing the space for the "Restrictions box" required by §2.1, or the broadcast time to state the two-sentence disclosure required by § 2.2, will have a significant effect on rates. Nor can it realistically be maintained that § 2.7's requirement that words such as "sale," "discount," or "reduced" may only be used if the fare is, in fact, on sale (i. e., is available for a limited time and is substantially below the usual price) will hinder the airlines' ability to market and sell their low-priced fares. Finally, they surely have not proved that § 2.4's requirement that fares be advertised only if suffi- cient seats are available to meet demand or the extent of unavailability disclosed will make it impossible for the airlines to market and sell differ- ent seats at different prices. That section expressly permits the airlines to advertise low-priced fares that are available in limited quantities; it simply requires that they include a disclaimer, such as "This fare may not be available when you call." See National Association of Attorneys General, Task Force on Air Travel Industry, Guidelines §2.4 (1988), re- printed in App. to Brief for United States as Amicus Curiae 24a-25a.