Nelson v.
Filed 6/25/13 Nelson v. Alaska Airlines CA1/2
California
Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or
relying on opinions not certified for publication or ordered published, except
as specified by rule 8.1115(b). This
opinion has not been certified for publication or ordered published for
purposes of rule 8.1115.
IN
THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
FIRST
APPELLATE DISTRICT
DIVISION
TWO
KENNETH DON
NELSON,
Plaintiff and Appellant,
v.
ALASKA
AIRLINES, INC.,
Defendant and Respondent.
A136319
(San
Francisco County
Super. Ct.
No. CGC 08-476321)
Plaintiff
Kenneth Don Nelson sued defendant Alaska Airlines in
Francisco County Superior Court, claiming that defendant was not entitled
to charge him and similarly situated persons an approximately $22 “Mexican
tourism tax†when selling them tickets for travel between California and
Mexico. Defendant asserted by demurrers
that plaintiff’s claims were preempted by the Airline Deregulation Act (49
U.S.C. § 41713) (ADA), and had
other defects.
Plaintiff
appeals after the trial court sustained defendant’s demurrer to plaintiff’s
first amended complaint and, after we dismissed plaintiff’s previous appeal
without prejudice for lack of jurisdiction,
denied his motion for leave to file a second amended complaint, struck the
class allegations in the first amended complaint, and entered judgment in favor
of defendant. Plaintiff argues the trial
court erred in concluding that his claims were preempted by the ADA,
denying his motion for leave to file his second amended complaint, and staying discovery
pending the outcome of defendant’s demurrers.
We find no error and affirm the judgment.
In
his original complaint, filed in June 2008, plaintiff alleged two state law
causes of action, for breach of written contract and a common count for money
had and received, against defendant. His
complaint centered around his assertion that Alaska Airlines was not entitled
to charge him and similarly situated persons the approximately $22 Mexican
tourism tax when selling them tickets for travel between California and Mexico
because their Mexico resident status was such that they were exempt from this
tax.
Defendant
removed the case to federal court, but it was remanded to the Superior Court
for the City and County of San
Francisco in October 2008. In March 2009, plaintiff served
interrogatories and document requests to defendant, who filed a demurrer a few
days later. Although it is unclear from
the court’s case management conference minutes, the parties acknowledge that at
case management conferences later in March 2010, the superior court issued a
stay of discovery pending rulings from the Ninth Circuit in putative class
actions challenging the collection of the Mexican tourist tax, including
Cir. 2009) 590 F.3d 1027 (Sanchez)
and McMullen v. Delta Air Lines, Inc. (9th
Cir. 2010) 361 Fed. Appx. 757 (McMullen
II), which we will discuss.
The
trial court subsequently sustained defendant’s demurrer with leave to
amend. It ruled that plaintiff’s causes
of action were preempted by the ADA
and, further, that plaintiff had failed to plead facts sufficient to constitute
a cause of action. The court denied
plaintiff’s request to lift the stay on discovery.
Plaintiff
subsequently filed his first amended
complaint, which alleged the same two state law causes of action, for
breach of written contract and a common count for money had and received. Plaintiff’s first amended complaint also
centered around his assertion that Alaska Airlines was not entitled to charge
him and similarly situated persons the Mexican tourism tax of around $22 when
selling them tickets for travel between California and Mexico because their
Mexico resident status was such that they were exempt from this tax. His principal amendment was the allegation
that defendant engaged in a course of performance in which it assumed an
obligation not to charge exempt passengers the Mexican tourism tax and voluntarily
acknowledged its contractual obligation not to collect the Mexican tourism tax
from exempt passengers. Defendant
attached to his first amended complaint the contract he was relying on, the
International Contract of Carriage (ICC).
Defendant
demurred to plaintiff’s first amended complaint. The trial court sustained this demurrer with
leave to amend for much the same reasons as those stated in its previous
demurrer ruling. It set a deadline of
October 15, 2010, for the filing of a second amended complaint, and denied
defendant’s request to lift the discovery stay.
As
we discussed in the previous appeal, case No. A130467, defendant’s demurrer
referred to plaintiff Kenneth Don Nelson only.
At the demurrer hearing, plaintiff expressed doubt about filing a second
amended complaint. The court stated it
would enter judgment on its order sustaining defendant’s demurrer in the event
that plaintiff chose not to file a second amended complaint. Its subsequent order sustaining the demurrer
referred to plaintiff Kenneth Don Nelson only.
At
a subsequent case management conference,
the court and the parties discussed that plaintiff had decided not to file a
second amended complaint, and defendant had submitted a proposed judgment to
the court. The court declined to issue
the proposed judgment, stating:
“And
I pointed out to you off the record that the proposed form of judgment that was
sent to me by [defendant’s counsel] does not include consideration of what
happens to the inchoate class. The demurrer
was obviously a demurrer directed to the named plaintiff and the only purported
class representative, and so counsel, I think you have indicated that you want
to get together in the coming days and consider your respective views on where,
if anywhere, we should go from here with respect to the purported class, and to
that end we’ve set another case management conference . . . .â€
Apparently,
the parties could not agree about what to do about the “inchoate class.†Plaintiff filed a notice of appeal based on
the “death knell†doctrine in class action law.
A few days later, defendant moved to dismiss the class allegations. Plaintiff objected to defendant’s proposed
order granting defendant’s motion and defendant’s proposed judgment. He argued the court’s order sustaining the
demurrer had “disposed of all the issues in this case†and had the effect of
dismissing the entire class action suit, and his filing of a notice of appeal
divested the court of jurisdiction to rule on defendant’s motion pursuant to
the “death knell†doctrine.
The
trial court subsequently ruled that, pursuant to Code of Civil Procedure
section 916, subdivision (a), plaintiff’s filing of his notice of appeal
divested the court of jurisdiction to rule on defendant’s motion “whether or
not this court’s order sustaining defendant’s demurrer is appealable.†The court did not rule on defendant’s motion,
the class allegations were not dismissed, the case was put off calendar pending
this appeal, and a final judgment was not entered.
Based
on these facts and circumstances, we concluded in case No. A130467 that we did
not have jurisdiction to consider plaintiff’s appeal in the absence of a final
judgment, and dismissed the appeal without prejudice.
Subsequently,
plaintiff moved the trial court to grant leave to file a second amended
complaint, and defendant moved to strike the proposed second amended complaint
as improperly offered and, in any event, futile for the same reasons that the
original complaint and first amended complaint failed.
The
trial court denied plaintiff leave to file a second amended complaint, found
defendant’s motion was moot in light of that ruling, and granted a motion by
defendant to strike the class allegations in the first amended complaint. The court found that plaintiff, by not timely
amending the complaint, had “forfeited any right to assert any other
claims.†The court determined that,
without a plaintiff to represent a class, “it’s obvious that the class allegations
ought to be stricken.†The trial court
dismissed the individual claims by plaintiff with prejudice and the claims of
the putative class members without prejudice.
The
trial court subsequently entered judgment in favor of defendant and against
plaintiff, who then filed a timely notice of appeal.
Plaintiff,
at the same time that he filed his opening
brief in this appeal, filed a request for judicial notice, which we denied
by order dated November 28, 2012. In his
reply brief, plaintiff urges this court to reconsider our denial regarding one
document, the “Customer Service Commitment,†which is referred to in the ICC as
incorporated by reference, and which, as stated in the ICC, “ ‘further
explains, augments and expands upon Carrier’s policies, procedures, methods of
operation, obligation and dedication to customer safety, service and
satisfaction.’ †We decline to do so
because, as defendant points out, “ ‘[i]t has long been the general rule and
understanding that “an appeal reviews the correctness of a judgment as of the time of
its rendition, upon a record of matters which were before the trial court for
its consideration.†’ †(
1239; Pulver v. Avco Fin. Servs. (1986)
182 Cal.App.3d 622, 632 [“[a]s a general rule, documents not before the trial
court cannot be included as part of the record on appeal and thus must be
disregarded as beyond the scope of appellate reviewâ€].) By referring to the documents he included in
his request for judicial notice, plaintiff’s appellate papers refer to matters
outside the record of this appeal. We
have disregarded these documents and plaintiff’s related arguments and
contentions.
Plaintiff’s Causes of Action
Plaintiff’s
first argument, although not stated exactly this way, is that the trial court
improperly sustained defendant’s demurrer to his first amended complaint on the
ground that the ADA preempted the causes of action in his first amended
complaint. We disagree.
A.
Relevant Law
“We independently
review the ruling on a demurrer and determine de novo whether the pleading
alleges facts sufficient to state a cause of action. We assume the truth of the properly pleaded
factual allegations, facts that reasonably can be inferred from those expressly
pleaded, and matters of which judicial notice has been taken. We affirm the judgment if it is correct on
any ground stated in the demurrer, regardless of the trial court’s stated
reasons.†(Tanen v. Southwest Airlines Co. (2010) 187 Cal.App.4th 1156,
1162.)
The
ADA provides in relevant part that “a State, political subdivision of a State,
or political authority of at least 2 States may not enact or enforce a law,
regulation, or other provision having the force and effect of law related to a
price, route, or service of an air carrier . . . .†(49 U.S.C. § 41713(b)(1).)
As
the Ninth Circuit pointed out in Sanchez,
supra, 590 F.3d 1027, this preemption
clause has been addressed a number of times by the United States Supreme Court,
most notably in Morales v. Trans World
Airlines, Inc. (1992) 504 U.S. 374 (Morales),
American Airlines, Inc. v. Wolens (1995)
513 U.S. 219 (Wolens), and
552 U.S. 364. (Sanchez, at p. 1030.) The
“From
these cases we know that Congress enacted the ADA to deregulate domestic air
transport, and included the preemption clause ‘to ensure that the States would
not undo federal deregulation with regulation of their own.’ Morales,
504 U.S. at 378. Also, the ADA ‘was
designed to promote maximum reliance on competitive market forces.’ Wolens,
513 U.S. at 230 (quotation marks omitted); 49 U.S.C. § 40101(a)(6).
“In
Morales, the Court construed the text
‘related to’ as plainly meaning ‘to stand in some relation; to have bearing or
concern; to pertain; refer; to bring into association or connection with.â€
’ 504 U.S. at 383 (quoting
1979)). ‘Related to’ therefore
‘express[es] a broad pre-emptive purpose.’
[Citation.] Thus, a state law or
enforcement action is ‘related to’ a ‘price, route, or service’ if it ‘has a
connection with or reference to’ a ‘price, route, or service,’
[citations]. At the same time, even if a
claim does relate to ‘price,’ the ADA preemption clause does not ‘shelter
airlines from suits alleging no violation of state-imposed obligations, but
seeking recovery solely for the airline’s alleged breach of its own,
self-imposed undertakings.’
the text—‘enact or enforce any law’—in the context of a challenge to the
airline’s retroactive changes in the terms and conditions of its frequent flyer
program. Although the plaintiffs’ claims
there did relate to ‘rates’ and ‘services,’ it held that the preemptive scope
of the ADA, as explicated in Morales,
allows for court enforcement of privately-ordered contract terms set by the
parties themselves.†(
to the ADA’s broad preemption of a state law or enforcement action, as
determined in Morales, for
“self-imposed undertakings,†including as alleged in breach of contract
actions. As explained in
Sep. 30, 2008, No. 08-1523 JSW) 2008
U.S. Dist. LEXIS 75720 (McMullen I),
devalued their already-earned mileage credits by altering what kinds of
benefits they could be exchanged for, and sought relief on a breach of contract
theory. [Citation.] In allowing plaintiff’s breach of contract
claims to go forward, the Supreme Court held that it did ‘not read the ADA’s
preemption clause, however, to shelter airlines from suits alleging no
violation of state-imposed obligations, but seeking recovery solely for the
airline’s alleged breach of its own, self-imposed undertakings.’ [Citation.]
Instead, the ADA preempts state actions that ‘refer to binding standards
of conduct that operate irrespective of any private agreement.’ [Citation.]
In sum, the ‘distinction between what the State dictates and what the
airline itself undertakes confines courts, in breach-of-contract actions, to
the parties’ bargain, with no enlargement or enhancement based on state laws or
policies external to the agreement.’ †(
The
Morales court also recognized that
some state actions may affect airline fares in “ ‘too tenuous, remote, or
peripheral a manner’ to have a pre-emptive effect.†(Morales,
supra, 504 U.S. at p. 390.) Thus, “[t]aken together, Morales, Wolens, and
a claim to be preempted by the ADA, ‘ “two things must be true[:] (1) the claim must derive from the enactment
or enforcement of state law, and (2) the claim must relate to airline rates,
routes, or services, either by expressly referring to them or by having a
significant economic effect upon them.†’ †(Tanen
v. Southwest Airlines Co., supra,
187 Cal.App.4th at pp. 1166-1167.)
B. Relevant Proceedings Below
Complaint
In his first amended complaint,
plaintiff alleged that defendant collected “a tourism tax imposed by the
Mexican government . . . from all non-exempt passengers traveling on defendant
airline on flights between California and Mexico. Defendant airline, in turn, is supposed to
remit the tourism tax receipts to the Mexican government. Defendant airline also has been collecting
from some of its exempt passengers who purchase an airline ticket from
defendant in California sums in addition to the applicable fares and taxes
under the guise of collecting the Mexican tourism tax. Passengers who are residents (holding FM-2 or
FM-3 Visas) or citizens of Mexico, as well as diplomats, children under two
years of age and persons staying in Mexico less than 24 hours are exempt from
the Mexican tourism tax.â€
Plaintiff
further alleged that between June 2006 and May 2008, he purchased approximately
20 round-trip airline tickets from defendant for travel between San Francisco,
California and San Jose Cabo, Mexico, and was charged the Mexican tourism tax
each time. However, because he held
either an FM2 or FM3 visa, he was exempt from paying the tax.
Plaintiff
also made class allegations on behalf of “[a]ll persons who purchased airline
tickets in California from defendant airline for travel on defendant airline on
flights between California and Mexico and who were charged by defendant the
Mexican tourism tax but who were exempt from paying that tourism tax.â€
Plaintiff
further alleged on information and belief that defendant “created a process
that assessed and collected the Mexican tourism tax from some but not all
exempt passengers flying between California and Mexico,†and collected the tax
from “most but not all exempt passengers flying between California and
Mexico. Based upon this course of
performance, defendant assumed an obligation not to charge exempt passengers
the Mexican tourism tax.†Furthermore,
plaintiff alleged, defendant “voluntarily acknowledged its contractual
obligation not to collect the Mexican tourism tax from exempt passengers
through its course of performance in complying with the [ICC]. In breach of this obligation, defendant has
collected the Mexican tourism tax from some but not all exempt passengers in
the past and continues to collect the Mexican tourism tax from some but not all
exempt passengers at the present time.â€
In
his breach of written contract cause of action, plaintiff alleged that defendant
entered into written contracts in California with plaintiff and other class
members for air travel between California and Mexico, the terms of which are
contained in the respective airline tickets and the ICC found at defendant’s
web site.
ICC provision: “ ‘Any tax or other
charge imposed by government authority and collectable from a passenger will be
in addition to the published fares and charges.’ †This provision is contained in the ICC attached
to the first amended complaint, under the heading, “Rule 40AS - Taxes.†He alleged that he and the class purchased
the tickets that included charges for the Mexican tourism tax, although
defendant “promised plaintiff and other class members that defendant only
charges applicable taxes imposed by government authorities it is required to
charge from passengers who owe the taxes.â€
Thus, plaintiff contended, defendant breached its written contracts with
plaintiff and class members “by improperly charging them the amount of the
Mexican tourism tax . . . for each airline ticket which was not applicable to
plaintiff and class members due to their exempt status,†causing damages in the
amount charged on each ticket for the Mexican tourism tax plus interest.
In
his other cause of action, for money had and received, plaintiff alleged that
defendant became indebted to plaintiff and class members for money had and
received by defendant for the use and benefit of plaintiff and other class
members. Defendant having made no
payment, plaintiff alleged that he and class members were owed the amount
improperly charged and retained by defendant for the Mexican tourism tax, plus
interest.
Demurrer
In
its demurrer to plaintiff’s first amended complaint, defendant argued that the
ADA preempted plaintiff’s causes of action and that plaintiff’s allegations,
including his course of performance allegations, did not establish a
self-imposed undertaking under the Wolens
exception. Defendant also argued that
the first amended complaint failed to allege all of the elements of each cause
of action. Plaintiff opposed each of
defendant’s grounds for demurrer.
The
trial court sustained the demurrer.
Regarding defendant’s claim of ADA preemption, the court concluded that
plaintiff’s causes of action were “related to price, route, or service of an
air carrier†within the meaning of the ADA preemption provision (49 U.S.C. §
41713(b)(1)), based on, among other cases, Morales,
supra, 504 U.S. at pages 383-384 and
The
court concluded that plaintiff’s claims did not fall within the
reasons. First, the court determined,
although plaintiff alleged a breach of a written contract, his first amended
complaint referenced only one ICC provision, Rule 40AS, which stated (as we
have already discussed), “ ‘Any tax or other charge imposed by government
authority and collectible from a passenger will be in addition to the published
fares and charges.’ †The court found
this “allegation describes a mere notice that the published fares and charges
do not include taxes that are imposed by governmental authorities and
collectible from passengers. It says
nothing more. For example, it says
nothing about what will be charged to the passengers; indeed, it says nothing
about [defendant’s] obligations at all.
Specifically, it is not a promise not to charge or collect the Mexican
[t]ourism [t]ax from exempt passengers, like the plaintiff, and it is not a
promise not to charge more than the published fares and charges.â€
The
court also found that the complaint did not include “any factual allegations
that would support the conclusion that the [defendant] ever made any promise to
the plaintiff to evaluate whether he might not owe the Mexican [t]ourism
tax.†Also, there was “no factual
allegation that at any relevant time plaintiff actually understood, or that he
could reasonably have understood, that [defendant] was making or had made any
promise to him in any way predicated on his tax status,†including any course
of conduct between plaintiff and defendant.
The
court also addressed plaintiff’s allegation in the first amended complaint that
defendant “promised plaintiff and other class members that defendant only
charges applicable taxes imposed by government authorities it is required to
charge from passengers who owe the taxes.â€
After a review of legal authorities, the court concluded this was
“insufficient as a pleading because it neither quotes from, attaches, or pleads
the legal effect of the contract, and is conclusory. To say that somebody ‘promised’ something, as
opposed to saying at least in substance what they said, is a conclusion. . . . [P]laintiff has not pled the legal effect of
the contract because he has not alleged the substance of any term of the
contract that would give rise to the alleged obligation. Therefore, the sentence just quoted and
similar allegations are nullities on this demurrer.â€
The
court also found the deficiencies in plaintiff’s pleadings were not overcome by
plaintiff’s allegations that defendant, by engaging in a course of performance
in collecting the Mexican tourism tax from most but not all exempt passengers,
assumed an obligation to not charge exempt passengers the tax. Noting that plaintiff argued this course of
performance not to introduce extrinsic evidence of an additional term of the
contract, but in order to show the contract had another meaning to which it was
susceptible, the court concluded that “[t]he fallacy of plaintiff’s position .
. . is that plaintiff has failed to allege the existence of any contractual
agreement or provision that is reasonably susceptible to the interpretation
that [defendant] agreed with plaintiff not to charge him the Mexican tourism
tax. In other words, by its alleged
course of conduct, [defendant] could not have, in plaintiff’s conclusory words,
‘acknowledge its contractual obligation’ not to collect the tax from plaintiff
because [defendant] had no such contractual obligation.â€
“In
short,†the court stated, “nothing in the alleged writings and nothing in the
alleged course of conduct, whether the writings and course of conduct are
considered separately, or together, supports the conclusion that there was
contractual agreement not to charge plaintiff the tax.†The court sustained the demurrer on the first
cause of action, both because it was preempted by the ADA and, “alternatively
. . . because the complaint does not allege facts sufficient to
support the conclusion that [defendant] agreed not to collect the Mexican
tourism tax from the plaintiff.â€
As
for plaintiff’s second cause of action, for money had and received, the court
sustained the demurrer as well because, as stated by this court in
Cal.App.4th 379, “[w]hen a common count is used as an alternative way of
seeking the same recovery demanded in a specific cause of action, and is based
on the same facts, the common count is demurrable if the cause of action is
demurrable.†(Id. at p. 394.)
C. Analysis
Plaintiff
makes a number of arguments, none of which establish that the trial court erred
in its rulings.
First,
plaintiff argues that the Mexican tourism tax has too remote an impact on the
price of defendant’s airline ticket to be “related to†“price†under
by the ADA.
preempted states from prohibiting allegedly deceptive airline fare
advertisements through enforcement of their general consumer protection
statutes. (Morales, supra, 504 U.S.
at p. 378.) While plaintiff acknowledges
the broad scope of ADA preemption for those matters “related to†“priceâ€
established in Morales
(id. at pp. 383-384), he emphasizes
the Morales court’s conclusion that
the obligations imposed by the state fare advertising guidelines in question
“would have a significant impact upon
the airlines’ ability to market their product, and hence a significant impact upon the fares they charge.†(Id.
at p. 390, italics added.) He argues
that these references indicate “it is still necessary to prove that the state
law sought to be preempted has a significant impact on price, routes, or
service.â€
As
plaintiff also points out, the Morales court
stated that its preemption ruling did not “set out on a road that leads to
pre-emption of state laws against gambling and prostitution as applied to
airlines,†acknowledged, after referring to “nonprice aspects of fare
advertising,†that “ ‘[s]ome state actions may affect [airline fares] in too
tenuous, remote, or peripheral a manner’ to have a pre-emptive effect,†and
stated that its decision did not give airlines “carte blanche to lie to and deceive consumers†because of certain
federal protections. (
Thus, the Morales court
recognized, without precisely defining, a “border†to preemption.
Plaintiff
insists that his claims are beyond that border.
He asserts that defendant is “taking ‘tax’ money from exempt passengers
without a legal justification to do so†and keeps the money, and plaintiff
further asserts that, “[w]hile maybe not prostitution or gambling, this type of
lying or deceit is quasi-, or perhaps actually, criminal, patently immoral, and
definitely unethical.â€
Defendant’s
argument is unpersuasive because it ignores a number of things. First, regardless of his contentions of the
morality of defendant’s conduct, his first amended complaint causes of actions
are simply for breach of contract and money had and received. He fails to establish that his contentions in
his appellate briefing about deceit and the like have any relevance to these
causes of action.
Second,
and most importantly, his essential contention is that defendant charges exempt
passengers an approximately $22 Mexican tourism tax in breach of contract. As defendant points out, federal courts have
held that such a charge is directly “related to†the “price†of the ticket and,
therefore, a state law claim based on such a charge is preempted by the ADA.
Specifically,
as defendant points out, in Buck v.
American Airlines, Inc. (1st Cir. 2007) 476 F.3d 29 (Buck), purchasers of nonrefundable airline tickets that they
ultimately were unable to use sued certain airlines, not for refund of the base
fares, but for “unlawfully failing to refund various fees and taxes that had
been collected as part of the original ticket prices.†(Id.
at p. 31.) These included passenger
facility charges, customs, immigration, agricultural quarantine, and security
fees, and charges on behalf of foreign sovereigns. (Id.
at pp. 31-32.) The plaintiffs alleged
the airlines violated numerous federal regulations and brought numerous causes
of action, including for breach of
contract, unjust enrichment, and breach of the implied covenant of good faith
and fair dealing. (
The
Buck court rejected the plaintiffs’
argument that their suit did not actually affect “prices†because “
Government or other fee-levying authorities†were a separate component from the
fare price of the ticket. (
supra, 476 F.3d at p. 35.)
name="_ftnref5" title="">[5]
stated:
“This
dichotomy blurs when contextualized within the contours of the ‘significant
effect’ doctrine. Although the fees are
in one sense separate from the base fare, the two are inextricably
intertwined. In all events, an air
traveler’s concern is with the overall cost of his or her ticket. Thus, when an airline establishes the base
fare, it must take cognizance of any surcharges that will be imposed by
operation of law.
“It
is freshman-year economics that higher prices mean lower demand, and that
consumers are sensitive to the full price that they must pay, not just the
portion of the price that will stay in the seller’s coffers. For that reason, an airline must account for
the fees when setting its own rates. It
follows that a finding for the plaintiffs in this case would impact base
fares[.]†(Buck, supra, 476 F.3d at
pp. 35-36.)
This
reasoning was adopted by the Ninth Circuit in Sanchez, supra, 590 F.3d
1027. Sanchez, having purchased a ticket
to fly on Aeromexico from California to Mexico that included a Mexican tourism
tax of $22, filed a class action complaint (represented by the same law firm
that represents plaintiff in the present case) against Aeromexico. (Id.
at p. 1028.) As a Mexican citizen,
Sanchez was exempt from the tax. (
She alleged breach of contract and the implied covenant of good faith
and fair dealing, unjust enrichment, and money had and received. (Ibid.) After removal to federal court, Aeromexico
moved for summary judgment, which was granted, and Sanchez appealed. (Id.
at pp. 1028-1029.)
Sanchez
argued, based on language on Aeromexico’s website, that she and Aeromexico
entered into a contract whereby Aeromexico became obliged not to collect a tax
that was not due from exempt passengers.
(Sanchez, supra, 590 F.3d at p. 1029.)
Sanchez argued that the ADA preemption clause did not purport to prevent
the states from enforcing contracts between airlines and their passengers, and
asserted, similar to the plaintiffs in Buck,
that the Mexican tourism tax was “a fee separate and apart from the fare for
air transportation that has no economic effect on ‘price.’ †(Sanchez,
at p. 1029.) The appellate court
rejected this “separate fee†argument, stating “we see no need to dwell on
whether Sanchez’s claims relate to the air carrier’s ‘price.’ The ticketed price included the tourism tax
and other fees and surcharges. As the
First Circuit reasoned in a case raising similar issues, ‘[i]t is freshman-year
economics that higher prices mean lower demand, and that consumers are
sensitive to the full price that they must pay, not just the portion of the
price that will stay in the seller’s coffers.’ †(Id.
at p. 1030, quoting Buck,
In
his reply brief, plaintiff attempts to distinguish his case from the reasoning
in Buck by arguing that the $22 tax
collected from exempt passengers was not a tax because Mexico does not charge
it to those classes of passengers who are not deemed tourists under the law
and, he contends, Mexico does not receive any of this money. Plaintiff concludes, “[t]he money collected
is neither seen as a tax by Mexico nor treated as a tax collection by
[defendant].†Some of plaintiff’s contentions, such as whether Mexico receives
any of the money or how the money collected is viewed by Mexico and defendant, go
beyond the allegations of his first amended complaint and should be
disregarded. (City of Atascadero v. Merrill Lynch, Pierce, Fenner & Smith, Inc. (1998)
68 Cal.App.4th 445, 459 (City of
Atascadero) [“[a] demurrer tests the pleading alone, and not the evidence
or the facts allegedâ€].)
name="_ftnref6" title="">[6] In any event, he grossly oversimplifies the circumstances that are apparent from
his first amended complaint allegations.
That is, according to plaintiff’s allegations, defendant collects a
tourism tax imposed by the Mexican government from passengers, including from
those who may or may not be exempt from this tax, although in some cases it
does not collect the tax from exempt passengers. Defendant does not allege that defendant has a duty to determine a passenger’s Mexico
resident status in the course of the sales transaction, other than by a
purportedly self-imposed contractual obligation. Plaintiff’s arguments do not establish why as
a matter of law this transaction is or should be exempted from ADA preemption
analysis.
We
agree with the reasoning of Buck and
tourism tax directly “relates to†“price,†and therefore is subject to federal
ADA preemption unless plaintiff can establish that his claims survive under a
2. Plaintiff’s
“Wolens Exception†Claim
Plaintiff
next claims that defendant’s ICC “is exactly the type of self-imposed
obligation mentioned in Wolens that
should be subject to state contract law
and not preempted by the ADA.†He asks
this court to conduct a “de novo review of the contract’s terms and conditions
as well as the reasonable interpretations set forth in the complaint: that [defendant] promised to charge a
reasonable ticket price and any added taxes must be legally ‘collectible.’
†We have conducted this review, and
conclude that defendant did not assume any contractual
obligation regarding the Mexican tourism tax. Therefore, plaintiff has not established that
his first amended complaint claims qualify for a Wolens exception to ADA preemption.
At
the heart of plaintiff’s Wolens exception
argument is his reliance on Rule 40AS of the ICC.
“
‘Any tax or other charge imposed by government authority and collectable from a
passenger will be in addition to the published fares and charges.’ â€
According
to plaintiff, it is reasonable to interpret this provision as pled in his first
amended complaint, that being: “Defendant
airlines promised plaintiff and other class members that defendant only charges
applicable taxes imposed by governmental authorities it is required to charge
from passengers who owe the taxes.â€
Therefore, he argues, we should reverse the trial court’s ruling.
Defendant
argues that we must accept his interpretation of Rule 40AS if that provision is
“reasonably susceptible†to it, citing Aragon-Haas
v. Family Security Ins. Services, Inc. (1991) 231 Cal.App.3d 232. Defendant is correct that
is based on a contract which is set out in full in the complaint, a general
demurrer must admit the contents of the instrument and any pleaded meaning to
which it is “reasonably susceptible.†(
as plaintiff acknowledges, involved an ambiguous
employment contract. The court
stated, “ ‘[W]here an ambiguous contract is the basis of an action, it is
proper . . . for a plaintiff to allege its own construction of the agreement. So long as the pleading does not place a
clearly erroneous construction upon the provisions of the contract, in passing
upon the sufficiency of the complaint, we must accept as correct plaintiff’s
allegations as to the meaning of the agreement.’ †(Id.
at p. 239.) “Whether a contract is
ambiguous is a question of law.†(
We
conclude that Rule 40AS is not ambiguous.
It contains no language that is reasonably susceptible to the meaning
that plaintiff has ascribed to it. We
agree with the trial court’s determination that it “describes a mere notice
that the published fares and charges do not include taxes that are imposed by
governmental authorities and collectible from passengers. It says nothing more. For example, it says nothing about what will
be charged to the passengers; indeed it says nothing about [defendant’s]
obligations at all.â€
Our
conclusion is consistent with the conclusions reached by the
contention that Sanchez’s claims did not qualify under the Wolens exception. The court
concluded that the contractual language relied on by Sanchez
contractual commitment to advise passengers about the Mexican tourism tax, not
to collect it from exempt passengers, and to refund that portion of the price
attributable to the tax. (
Instead, the court found that the website “creates no duty on the party
of Aeromexico to advise Sanchez of her rights†regarding any of these
matters. (Ibid.)
Similarly,
in McMullen I, supra, U.S. Dist. LEXIS 75720, the court granted Delta Airlines’
motion to dismiss against a similar claim by McMullen that he and others were
exempt from the Mexican tourism tax.
other things, the court rejected the argument that Delta had taken on a
self-imposed undertaking based on certain contractual provisions in Delta’s ICC.
at p. *9.) The McMullen I court concluded, after reviewing these provisions, that
“Delta did not undertake to only charge non-exempt passengers, but merely
promised to comply with applicable laws, regulations, and orders that are in
conflict with the [ICC].†(
Plaintiff
argues that Sanchez does not provide
support for sustaining his demurrer because the airline contract examined in
40AS. He argues that the
question there “only spoke to the passenger’s obligation and said nothing about
the airline’s obligation under the contract.â€
He contends that Rule 40AS, on the other hand, “relates specifically to
taxes and speaks about their governmental imposition and collectability. Here, as contemplated by the contract
language there is a government (Mexico) that imposes a tax and also a standard
by which the tax might be collectible or not (tax-exempt status). It goes too far to expect that such a
contract would ever list every possible tax.
And the need for such specificity would, if it led to federal
preemption, in fact give airlines complete immunity from charging fraudulent or
even made-up taxes. Such a result could
not have been intended by Congress, as it would certainly not lead toward
market efficiency and thus lower prices for passengers.†In his reply brief, plaintiff further
contends that “[a]pplying simple logic,†the terms of Rule 40AS “may fairly be
interpreted to prohibit the airline from collecting sums that are neither
governmentally imposed nor collectible.â€
Plaintiff
provides no legal authority in support of his contentions, other than the
dissent in Sanchez. (Sanchez,
supra, 590 F.3d at p. 1032.) The dissent, and plaintiff’s argument, is
unpersuasive in light of the express, unambiguous language of Rule 40AS, which
simply does not state that defendant is obligated to plaintiff as plaintiff
alleges.
title="">[12]
Plaintiff
also summarily repeats his course of performance argument made below, based on
the allegation in his first amended complaint that defendant “voluntarily
acknowledged its contractual obligation not to collect the Mexican tourism tax
from exempt passengers through its course of performance in complying with the
[ICC].â€
reasoning was incorrect. We agree with
the trial court’s reasoning. That is,
given that plaintiff did not establish that defendant had a contractual
obligation to begin with, he did not establish that defendant’s course of
performance somehow acknowledged such an obligation.
Finally,
plaintiff asks that we also consider certain portions of Rule 45AS of the ICC,
as attached to his first amended complaint, regarding, among other things,
administrative requirements regarding passports, visas, and tourist cards,
including that passengers obtain and present the appropriate documentation
necessary for their travels. He contends
that defendant is able to learn from these documents which passengers are and
are not exempt from the Mexican tourism tax.
We do not see the relevance of the provision, however, in the absence of
plaintiff establishing that defendant has any contractual obligation to do so.
Also,
as defendant points out, plaintiff does not in his opening brief challenge the
trial court’s determination that the demurrer should be sustained to his second
cause of action, for money had and received.
As we have discussed, the court did so based on this court’s ruling in
a common count is used as an alternative way of seeking the same recovery
demanded in a specific cause of action, and is based on the same facts, the
common count is demurrable if the cause of action is demurrable.†(Id.
at p. 394.) We agree with defendant that
plaintiff’s failure to contest this ruling is a waiver of any appellate claim
regarding this cause of action. “
‘[E]very brief should contain a legal argument with citation of authorities on
the points made. If none is furnished on
a particular point, the court may treat it as waived, and pass it without
consideration.’ †(People v. Stanley (1995) 10 Cal.4th 764, 793.)
In
short, we conclude that the trial court properly sustained defendant’s demurrer
to plaintiff’s first amended complaint because his causes of action are
preempted by the ADA. Given our
conclusion, we need not, and do not, address defendant’s further argument that
plaintiff waived any appellate claim regarding the trial court’s “alternativeâ€
ground for sustaining the demurrer to plaintiff’s breach of contract cause of
action by failing to address it; that is, the court also ruled that he did not
allege facts sufficient to support the conclusion that defendant agreed not to
collect the Mexican tourism tax.
Second Amended Complaint
Plaintiff
also argues the trial court erred when it denied his motion for leave to file a
second amended complaint with a new cause of action for breach of the implied
promise to act in good faith and deal fairly with passengers. Plaintiff contends that this cause of action
should have been allowed pursuant to a Ninth Circuit case issued after this
matter was remanded to the trial court, Ginsberg
v. Northwest, Inc. (9th Cir. 2012) 695 F.3d 873, regarding which the
Supreme Court has recently granted a writ of certiorari in Northwest, Inc. v. Ginsberg
(May 20, 2013) ___U.S.___ [185 L.Ed.2d 1103].
Defendant
argues that plaintiff has waived his appellate claim to two of the three
grounds relied on by the trial court to deny plaintiff’s motion, and is also
incorrect on the merits. We agree with
defendant that plaintiff has waived two of these grounds. Therefore, we affirm the trial court’s
ruling.
As
we have discussed, after our dismissal without prejudice of plaintiff’s first
appeal in case No. 130467, plaintiff moved the trial court to grant leave to
file a second amended complaint. The
trial court denied plaintiff leave to do so on three grounds. Specifically, it ruled that plaintiff did not
have standing to bring his motion because all of his individual causes of
action had previously been dismissed as the result of the court’s granting of
defendant’s demurrer to plaintiff’s first amended complaint. Second, plaintiff had failed to amend that
complaint within the deadline given to him by the court and, therefore, had
“forfeited any right to take advantage of further leave to amend which was
circumscribed by this court,†based on Leader
vs. Health Industries of America, Inc. (2001) 89 Cal.App.4th 603 (
Third, plaintiff’s amendment would be futile because his proposed new
cause of action, for breach of the covenant of good faith and fair dealing,
“would be preempted by the ADA for the same reasons this court previously ruled
that its breach of contract and money had in receipt [sic] claims were preempted.â€
In
his opening brief, plaintiff does not address at all the trial court’s
determination that he lacked standing to move for leave to file a second
amended complaint. We agree with
defendant that plaintiff has waived this claim as a result. People
v. Stanley, supra, 10 Cal.4th at
p. 793.) For this reason alone, we must
reject plaintiff’s appellate claim.
Furthermore,
plaintiff does not address the trial court’s determination that he had
forfeited his right to further amend by not seeking to do so within the time
allowed by the court based on Leader,
supra, 89 Cal.App.4th 603, in which
the court stated that the plaintiffs’ “failure to file an amended complaint
within the time specified subjected their entire action to dismissal in the
court’s discretion under [Code of Civil Procedure] section 581, subdivision
(f)(2).†(Leader, at p. 613.) This is
a separate, independent ground for rejecting plaintiff’s appellate claim.
Instead,
almost all of plaintiff’s argument in his opening brief relates to the trial
court’s determination that the proposed amendment was futile. In a footnote (which defendant does not
address), plaintiff states that the trial court “also ruled that the [second
amended complaint] could not be filed because [plaintiff] had not timely
amended the [first amended complaint].â€
However, rather than address the two independent reasons for the court’s
ruling, plaintiff asserts that, “[i]n light of the trial court’s earlier
holding that the case was preempted by the ADA, there was no way to amend the
complaint successfully,†and that to allow the trial court’s “reasoning on
remand . . . to stand†“would absolutely deny [plaintiff] his right to
challenge the underlying preemption ruling.â€
Plaintiff also cites three cases (see Budget Finance Plan v. Superior Court (1973) 34 Cal.App.3d 794,
797-798, Desny v. Wilder (1956) 46
Cal.2d 715, 751, and Redevelopment Agency
v. Herrold (1978) 86 Cal.App.3d 1024, 1032), as well as Code of Civil
Procedure section 426.50, to argue that courts generally should be liberal in
allowing amendments to pleadings for a plaintiff who remains a party to an
action. Plaintiff makes a few other
contentions in his reply brief, but not legal arguments regarding the trial
court’s rulings.
None
of plaintiff’s legal arguments address the court’s specific rulings regarding
plaintiff’s standing and the untimely nature of his motion as considered
pursuant to Code of Civil Procedure section 581, subdivision (f)(2), nor are
any of them more than summary in nature.
Such conclusory arguments are not sufficient to avoid waiver. “An appellate court is not required to
consider alleged errors where the appellant merely complains of them without
pertinent argument†(Strutt v. Ontario
Sav. & Loan Assn. (1972) 28 Cal.App.3d 866, 873), including when “the
relevance of the cited authority is not discussed or points are argued in
conclusionary form.†(
Cal.App.4th 974, 979.)
Accordingly,
we find plaintiff has waived his appellate claim that the trial court erred in
not allowing him leave to file his second amended complaint. In light of our ruling, we do not address
plaintiff’s argument that the court was wrong to find his amendment would be
futile.
Plaintiff’s Claim Regarding the
Trial Court’s Stay of Discovery
Finally,
plaintiff argues the trial court erred when it twice denied plaintiff’s request
to lift the court’s stay of discovery.
We find no error by the trial court.
A. Relevant Proceedings Below
As we have discussed, in March
2009, plaintiff served defendant with interrogatories and document requests. Later that same month, the superior court
stayed all discovery pending the outcome of certain Ninth Circuit cases,
including Sanchez and
1. Plaintiff’s
April 2010 Request
In
April 2010, after defendant demurred to his original complaint, plaintiff
requested that the discovery stay be lifted regarding three special
interrogatories and eleven requests for production of documents from the larger
sets of discovery originally served on defendant in March 2009. According to plaintiff, his discovery sought
additional facts allowing him to allege his breach of contract action with
greater specificity against defendant.
He further contended that the information requested was “crucial and
necessary because it goes directly to defendant’s making and performing its
self-imposed contractual undertaking as to plaintiff and the other passengers
in this case.â€
Defendant
argued that the stay should not be lifted until the court ruled regarding
defendant’s ADA preemption argument on the basis of the pleadings. The requested discovery was not relevant to
the demurrer issues because it would “not enable [plaintiff] to allege the
terms and conditions of a contract that is not subject to [defendant’s]
preemption defense,†since the discovery focused instead on allegations of
breach, and was not intended to ascertain the terms and conditions of the
contract itself.
The
trial court denied plaintiff’s request, ruling that “there has been a failure
by him to show a single particularized need for any of the information being
sought. Plaintiff Nelson has failed to
allege that [defendant] breached any contract that it made with him, and the
proposed discovery is not reasonably designed to show that [defendant] made any
other or different contract with him than that alleged in the complaint. Thus, the requested discovery would only be
an unnecessary and unduly burdensome additional expense to [defendant]. Even if one could fathom that any of
plaintiff’s proposed discovery requests conceivably could include some bit of
information relevant to the contract between plaintiff Nelson and [defendant],
there has been no particularized showing of what that information would be or
that any of the discovery requests is tailored in any reasonably narrow or
circumscribed manner to obtain that bit of information.†The court ruled, based on
of San Francisco (1990) 221 Cal.App.3d 234, 246-248 (Terminals Equipment Co.), that it had the discretion to deny the
requested discovery, and did so.
In
August 2010, after defendant demurred to his first amended complaint, plaintiff
again requested that the discovery stay be lifted regarding the same three
special interrogatories and 11 requests for production of documents. Plaintiff’s moving papers stated that he
sought “additional facts allowing plaintiff to allege his breach of contract
action in connection with [defendant’s] course of performance in collecting the
Mexican tourism tax with greater specificity against [defendant].†Specifically, the discovery concentrated on
“[defendant’s] process of assessing and collecting the Mexican tourism tax from
its passengers.â€
Once
more, defendant argued that the stay should not be lifted until the court ruled
regarding defendant’s ADA preemption argument on the basis of the pleadings,
because “plaintiff’s requested discovery will not enable him to allege the
terms and conditions of a contract that is not subject to [defendant’s]
preemption defense,†since the discovery was focused on allegations of breach,
and not to ascertain the terms and conditions of the contract itself.
The
trial court once more denied plaintiff’s request, for much the same reasons and
based on the same legal authority as that stated in its previous denial.
B. Analysis
Generally,
“ ‘[m]anagement of discovery lies within the sound discretion of the trial
court. Consequently, appellate review of
discovery rulings is governed by the abuse of discretion standard. [Citation.]
Where there is a basis for the trial court’s ruling and the evidence
supports it, a reviewing court will not substitute its opinion for that of the
trial court. [Citation.]’ [Citation.]
The trial court’s determination will be set aside only when it has been
established that there was no legal justification for the order granting or
denying the discovery in question.†(
Superior Court (2000) 84 Cal.App.4th 235, 245-246.)
According
to plaintiff, the trial court erred in requiring that he make a “particularized
showing†of what information he needed that was relevant to the claim he was
asserting because the court “wanted plaintiffs to show what they had found
before they had a chance to look.†He
asserts the information was relevant to discover if defendant had breached its
contract, and it was outside the bounds of reason for the court to deny the
discovery requested.
Plaintiff
further asserts that the facts and documents that were sought “may have been
necessary . . . to overcome the demurrer.â€
He cites four appellate court opinions and a treatise to argue in effect
that the trial court was required to lift discovery if the information sought
was material to any issue raised by his allegations, regardless of any purported
pleading deficits.
However,
as defendant points out, the four cases cited by plaintiff are inapposite in
light of the fact that plaintiff’s discovery requests did not relate to the
issue of defendant’s demurrers, i.e., whether the language of the contract
itself as pled in the complaint was sufficient to survive demurrer (whether
because of ADA preemption or failure to allege a breach of contract claim), a
question of law for the court to determine.
None of the cases cited by plaintiff involved circumstances where the
sought-after discovery was not related to the issue of pending demurrers. In Credit
Managers Assn. v. Superior Court (1975) 51 Cal.App.3d 352, the first case
cited by plaintiff, the appellate court ruled that the trial court had abused
its discretion in denying discovery because it was relevant to the grounds of
the demurrer just sustained, and the facts sought were within the defendant’s,
and not the plaintiff’s knowledge. (
In
Mattco Forge, Inc. v. Arthur Young &
Co. (1990) 223 Cal.App.3d 1429, the court, in determining that a party was
not justified in refusing to comply with a court order to produce documents
during a pending demurrer, remarked that the trial court properly rejected the
argument that discovery was premature because “[p]leading deficiencies
generally do not affect either party’s right to conduct discovery, [citation]
and this right . . . is particularly important to a plaintiff in need of
discovery to amend its complaint.†(
In
Budget Finance Plan v. Superior Court,
after granting a demurrer with leave to amend in a putative class action,
allowed interrogatories where the plaintiffs sought to find additional
plaintiffs who had been defrauded by certain parties, since the named
plaintiffs were not injured by those parties.
(Id. at pp. 796, 799.)
80 Cal.App.3d 1 involved whether or not, after the defendant had answered, the
plaintiff was entitled to discovery regarding facts that could lead to
amendment of the complaint to allege a class action. (Id.
at pp. 10-12.) The case did not involve
whether or not a court could stay discovery pending any demurrer.
Thus, none of these cases establish that the
trial court abused its discretion in the present case when it denied
plaintiff’s requests to lift the stay of discovery. On the other hand, the case cited by the
trial court and relied on by defendant in this appeal, Terminals Equipment Co., supra,
221 Cal.App.3d 234, provides legal support for the trial court’s decision. There, the trial court, upon sustaining
| Description | Plaintiff Kenneth Don Nelson sued defendant Alaska Airlines in San Francisco County Superior Court, claiming that defendant was not entitled to charge him and similarly situated persons an approximately $22 “Mexican tourism tax†when selling them tickets for travel between California and Mexico. Defendant asserted by demurrers that plaintiff’s claims were preempted by the Airline Deregulation Act (49 U.S.C. § 41713) (ADA), and had other defects. |
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