Since the enactment of the Airline Deregulation Act of 1978 (ADA), an issue that continues to receive close legal scrutiny is the extent to which states may regulate the activities of air ambulance services. This issue has been the subject of numerous federal and state court decisions, U.S. DOT legal opinions, state attorneys general opinions, and was also addressed in a broader U.S. Government Accountability Office report (Air Ambulance: Effects of Industry Changes on Services are Unclear, (September 2010)). Recently, this issue was also ruled upon in federal district court and state appeals court opinions.
Although the precise contours and scope of federal preemption of state(and local) laws, regulations, or other standards have been the subject of a vast amount of judicial analysis and legal commentary, its origins are straightforward; under the Supremacy Clause of the U.S. Constitution, Article VI, Clause 2, under federal law is deemed “the supreme law of the land … anything in the Constitution or laws of any State notwithstanding.” Given this provision, federal statutes and regulations can preempt state or local actions. The ADA is one such enactment where the Congress has expressly stated its intent to preempt state law.
The specific ADA preemption provision (49 U.S.C. § 41713(b)) states:
Except as provided in this subsection, 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 that may provide air transportation under this subpart. (emphasis supplied)
(Note: “[T]his subpart” in the statute refers to title 49 of the United States Code, subtitle VII (Aviation Programs), Part A (Air Commerce and Safety), subpart II (Economic Regulation)).
In numerous U.S. Supreme Court decisions and other cases, courts have pointed to the “broad preemptive purpose” of the ADA. See, e.g., Morales v. Trans World Airlines, Inc., 504 U.S. 374 (1992) (preempting states from regulating deceptive airline fare advertisements); Northwest, Inc. v. Ginsberg, 134 S. Ct. 1422 (2014) (preempting a frequent flyer member’s state law claim for breach of an implied covenant of good faith and fair dealing for the carrier’s termination of his membership).
Preemption cases involving air ambulances have addressed challenges to states’ efforts to regulate reimbursement rates for transporting employee patients covered by state workers’ compensation insurance or public employee insurance programs. Courts that have addressed the issue have overwhelmingly determined that air ambulances are air carriers under the ADA and that state attempts to regulate air ambulance companies’ rates are preempted. Two recent cases provide similar rulings.
- In a January 2018, Texas Court of Appeals decision, PHI Air Medical v. Texas Mutual Insurance Co., et al., the court reversed the trial court’s judgment in favor of eight insurance companies and the Texas Department of Insurance. The appellate court held that the Texas statutes and regulations attempting to regulate the reimbursements obtained by the air ambulance operator are preempted by the ADA.
- In an October 2017, decision of the U.S. District Court for the Southern District of West Virginia, Air Evac EMS v. Cheatham, et al., the court granted the air ambulance operator’s motion for summary judgment on its claim that the state’s statute setting reimbursement caps on payments to air ambulance providers for patients covered by the state’s public employees insurance and workers’ compensation insurance programs is preempted by the ADA.
In November 2017, the State of West Virginia filed a notice of appeal of the district court’s decision and submitted its brief in January 2018. Plaintiff’s/appellee’s reply brief is due in early March. No date has been set for oral argument.
Plane-ly Spoken readers who are interested in reading further on the scope and limitations of state regulatory authority and oversight of air ambulance service providers should review the US DOT’s April 2015 Guidelines for the Use and Availability of Helicopter Emergency Medical Transport (HEMS). Also, US DOT Office of General Counsel opinion letters on ADA preemption of state and local aviation requirements are available at https://www.transportation.gov/mission/administrations/general-counsel/elibrary