Justices Rule States Can’t Regulate Airline Ads

In a setback for travelers confused by airline advertisements of enticing low fares, the Supreme Court ruled Monday that states may not regulate the ads, even to protect customers from being misled.

Only the U.S. Department of Transportation has that authority, the justices ruled, 5 to 3.

In the Airline Deregulation Act of 1978, Congress not only ended federal regulation of air fares but prohibited the states from enforcing laws “relating to rates, routes or services.” The court majority interpreted that wording as shielding airlines from the states’ traditional laws against deceptive advertising.

Consumer advocates and states’ attorneys have derided the Bush Administration for what they see as a lax enforcement policy giving airlines wide leeway to promote their fares.

“This is a disappointing decision, because the Administration has shown little interest in protecting consumers from deceptive advertising, and now the states are frozen out,” said Cornish F. Hitchcock, a lawyer with the Aviation Consumer Action Project.

“Our hope is that, now that they have the power alone, DOT will do a more thorough job than they have in the past,” said Albert N. Shelden, California deputy attorney general.

In response to the ruling, newly appointed Transportation Secretary Andrew H. Card promised a “consistent and vigorous enforcement policy to protect the rights of consumers.” Transportation Department officials said that they have taken action against airlines whose ads do not disclose in fine print the full cost of a ticket.

By coincidence, the high court handed down its decision during a coast-to-coast air fare war. Phone lines to the airlines have been jammed as callers try to take advantage of widely advertised, half-price fares for summer travel.

Five years ago, during a similar competition in air fares, states’ attorneys were deluged with complaints about deceptive advertising. Some people said they were surprised to find out that advertised fares--”Los Angeles to New York: $99,” for example--did not include taxes or surcharges. Nor were they made aware of other restrictions, such as a requirement to stay over a Saturday night or to buy the ticket well in advance.

Others complained that the advertised low fares were never available when they called.

In response, state attorneys general, including California’s John Van DeKamp, put the airlines on notice that they would be charged with fraudulent advertising if their promotion policies were not corrected. State officials insisted, for example, that an advertised fare include the full cost of a ticket.

Rather than do battle with the state officials, lawyers for TWA and Continental went to federal court and won an order preempting legal action by Van DeKamp and his colleagues.

Texas Atty. Gen. Dan Morales appealed that order to the Supreme Court, arguing that Congress never intended to strip the states of their standard laws against false advertising.

Justice Antonin Scalia, writing for the court, disagreed. He focused his attention on one word: “relating.” Congress did not merely forbid states to regulate rates, it prohibited any action “relating” to fares, he noted. This suggests a sweeping ban on state-level enforcement, he said.

The dissenters were Chief Justice William H. Rehnquist and Justices John Paul Stevens and Harry Blackmun. Justice David H. Souter, a former New Hampshire attorney general, took no part in the decision (Morales vs. TWA, 90-1604).