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Ray v. Spirit Airlines, Inc.

United States Court of Appeals, Eleventh Circuit

September 23, 2014

BRYAN RAY, on behalf of himself and all others similarly situated, GRETEL DORTA, et al., Plaintiffs - Appellants,
v.
SPIRIT AIRLINES, INC., a Delaware corporation, Defendant - Appellee

Appeal from the United States District Court for the Southern District of Florida. D.C. Docket No. 0:12-cv-61528-RNS.

For BRYAN RAY, on behalf of himself and all others similarly situated, Plaintiff - Appellant: Joel D. Eaton, Katherine Warthen Ezell, John Gravante III, Robert C. Josefsberg, Podhurst Orseck, PA, Miami, FL.

For Gretel Dorta, Michael Diorio, Deborah Gibson, Jennifer Sily, Donna Tilton, Josh Rubin, Donald M. Badaczewski, Plaintiffs - Appellants: Joel D. Eaton, Katherine Warthen Ezell, Robert C. Josefsberg, Podhurst Orseck, PA, Miami, FL.

For Spirit Airlines, Inc., Defendant - Appellee: Daniel T. Graham, Leslie A. Gutierrez, Clark Hill, PLC, Chicago, IL; Scott Michael Dimond, Lorenz Michel Pruss, Dimond Kaplan & Rothstein, PA, Miami, FL.

Before HULL, MARCUS and HILL, Circuit Judges.

OPINION

Page 1221

MARCUS, Circuit Judge

Plaintiffs commenced this civil suit against Spirit Airlines, Inc. (" Spirit" ) under the Racketeer Influenced and Corrupt Organizations Act (RICO), 18 U.S.C. § § 1961-68, alleging that Spirit conducted an enterprise by means of racketeering activity -- here, two or more predicate acts of mail and wire fraud involving the concealment and misrepresentation of airfares and user fees. The district court dismissed the action, ruling that comprehensive federal regulation of the airline industry precluded Plaintiffs' civil RICO claims. We disagree. Because federal laws do not preempt other federal laws, subsequent legislation could preclude Plaintiffs' claims only if Congress had repealed the provisions of RICO, at least insofar as they authorized Plaintiffs' actions. Congress did not do so expressly through the Airline Deregulation Act of 1978 (ADA), Pub. L. No. 95-504, 92 Stat. 1705. And we find no " repeal by implication" because Congress has not exhibited the requisite clear and manifest intent. E.g., Posadas v. Nat'l City Bank of N.Y., 296 U.S. 497, 503, 56 S.Ct. 349, 80 L.Ed. 351 (1936). The ADA explicitly preempted state laws but, notably, said nothing about any federal cause of action. Moreover, a saving clause found in the ADA did not disturb any other remedies provided by law. Quite simply, the two laws are not irreconcilably in conflict,

Page 1222

nor was the ADA clearly intended as a substitute for RICO. Applying the strong presumption against implied repeals, we are constrained to conclude that RICO supplements, rather than subverts, federal regulation of air carriers.

Our decision in no way addresses whether Plaintiffs adequately alleged the elements of their civil RICO claim under Ashcroft v. Iqbal, 556 U.S. 662, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009), and Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007). Thus, we have no occasion today to pass any judgment on whether fraud is pled with particularity, or whether Plaintiffs adequately pled the elements of mail and wire fraud, or indeed whether Plaintiffs sufficiently pled a RICO injury. All we hold today is that the federal regulatory scheme governing the airline industry does not preclude a claim founded on the civil provisions of RICO.

I.

Plaintiffs' second amended complaint alleged the following basic facts. Spirit holds itself out as an " Ultra Low Cost Carrier" offering airfares at rates far lower than other providers. These cheap fares disguise the total cost of travel because Spirit forces consumers to pay unbundled charges traditionally included in the price of an airline ticket. Specifically, Spirit charges a Passenger Usage Fee to all consumers who buy tickets through its website or call center. When searching for flights on Spirit's website, a consumer sees only the base fares. Once he has selected a flight, a webpage directs him to " confirm" the flight on a page that displays both the base fare and an undifferentiated amount labeled " Taxes & Fees." For a breakdown of these charges, the consumer then must click on an additional link, " more information," which lists " Passenger Usage Fee" alongside government taxes and fees.

Plaintiffs filed a class action complaint in the United States District Court for the Southern District of Florida, alleging that Spirit concealed the existence and purpose of the Passenger Usage Fee between approximately 2008 and 2011 and used the mails and wires to execute the scheme or artifice to defraud, thereby yielding civil RICO liability. Spirit moved to dismiss the action pursuant to Federal Rule of Civil Procedure 12(b)(6) for failure to state a claim upon which relief could be granted. Spirit argued that permitting Plaintiffs' RICO action would thwart Congress's intent to delegate entirely the regulation of airline ticket prices and price advertising to the Department of Transportation (DOT). Spirit also argued that Plaintiffs' RICO ...


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