Milestones: In re Korean Air Lines Co., 642 F.3d 685 (9th Cir. 2011)

Summary:

(The case is also captioned as Bahn v. Korean Air Lines Co.)

Defendants are two Korea-based airlines, Korean Air Lines and Asiana Air Lines. Plaintiffs are individuals who purchased air line tickets. Plaintiffs claim, on behalf of those similarly situation, that the defendants engaged in price-fixing and assessed illegal surcharges in violation of federal and state antitrust laws.

The court first found that the California state law claims are pre-empted by federal law, pursuant to Airline Deregulation Act of 1978 ("ADA"). It was not entirely clear if ADA applied to the defendant air lines, as ADA had separate definitions for "air carrier" and "foreign air carrier"--opening the possibility that ADA did not pre-empt claims against foreign air carriers such as the defendants. The court, however, rejected this interpretation: "the context in which the term appears in the preemption provision indicates that Congress intended that it apply to all air carriers and not only to domestic carriers."

Takeaway:

Korean Air Lines has been one of the most frequently cited cases for antitrust cases, as it sets forth an important principle: that state law claims against air carriers are pre-empted.