The Continual Struggle of Federal vs. State Law: Re-examined Through U.S. Airways, Inc. v. O’Donnell


Abby Brown[1]

Throughout our nation’s history and embedded in our Constitution is the notion that the federal government and the states will govern simultaneously albeit independently from one another. Nowhere has that struggle been as apparent as when a traditionally federal-regulated industry collides with a traditionally state-regulated industry. This explosive combination has laid the foundation for many struggles within our judicial system about whether state or federal law should govern. This very problem is present in the context of U.S. Airways, Inc. v. O’Donnell[2] and this case provides fodder for re-examining the policy justifications present when a court is required to decide whether state or federal law governs.

The Tenth Circuit Court of Appeals decided U.S. Airways, Inc. v. O’Donnell on appeal from the State of New Mexico. U.S. Airways is an interstate commercial airline that operates flights to most of the continental states.[3] U.S. Airways serves alcoholic beverages to passengers during its flights.[4] In November 2006, a passenger on a U.S. Airways flight that arrived into Albuquerque, New Mexico bought and drank alcohol during that flight.[5] On his drive home from the Albuquerque airport, the passenger caused a car accident that killed five other people as well as himself.[6] The results of a blood analysis test indicated that his blood alcohol content was approximately 0.329.[7] While the Federal Aviation Administration conducted an investigation into the incident it declined to take any action against U.S. Airways for their involvement in the situation.[8]

In January 2007, the Alcohol and Gaming Division (AGD) of the New Mexico Regulation and Licensing Department issued U.S. Airways a citation and a cease and desist order requiring U.S. Airways to cease selling, serving, dispensing, storing, or possessing alcohol of any kind in New Mexico without first fully complying with New Mexico Liquor Control Act (NMLCA) requirements.[9] In February 2007, U.S. Airways applied for a public service license to serve alcohol to passengers on airplanes within the state of New Mexico and the AGD issued a temporary license.[10] However, the AGD ultimately rejected U.S. Airway’s application for a public service license in late 2007, citing two intoxicated passenger incidents.[11] U.S. Airways filed an action to enjoin the AGD and NMLCA from enforcing laws that govern U.S. Airways’ onboard alcoholic beverage service in federal district court.[12] U.S. Airways contended that the Federal Aviation Act (FAA) impliedly preempted the NMLCA and that the Airline Deregulation Act (ADA) expressly preempted the NMLCA.[13] U.S. Airways also argued that the enforcement of the NMLCA against U.S. Airways as an interstate airline would violate the Supremacy Clause of the United States Constitution and that the Twenty-first Amendment also made authorization of the NMLCA against U.S. Airways unconstitutional.[14]

Ultimately, the district court ruled in favor of New Mexico, concluding that federal law did not preempt, neither implicitly nor expressly, the field of alcohol service on airlines.[15] However, in a unanimous opinion authored by the Chief Judge Hon. Mary Beck Briscoe, the Tenth Circuit reversed the district court’s order granting summary judgment for New Mexico and held that the FAA impliedly preempted the NMLCA under the concept of field preemption.[16] Chief Judge Briscoe briefly explained the balancing of state and federal interests under the Twenty-first amendment and ultimately remanded the case back to the district court, ordering the district court to balance the interests between New Mexico’s core powers and the federal interests at the core of the FAA.[17]

While this case highlights numerous legal considerations, it also highlights the plethora of policy concerns that are illustrative of many preemption cases. The real-world implications of the Tenth Circuit’s opinion are numerous and this case impacts many interstate airlines and states legislators. A few of the policy implications present in this case include: 1) states’ concerns about regulating the distribution of alcohol within their boundaries, 2) the federal government’s interest in creating uniformity in national air transportation, and 3) national airlines’ concerns about potentially being required to be licensed to sell alcohol in as many as fifty separate states and in complying with separate states’ alcohol regulations.

A. States’ concerns about Regulating and Enforcing the Proper Distribution of Alcoholic Beverages to Consumers Within their Borders

Alcohol abuse is a prevalent issue in our society.  According to the Federal Bureau of Investigations Uniform Crime Reports, in 2007, approximately 10,000 people were arrested for drunk driving in New Mexico.[18] In 2008, New Mexico had ninety-two fatal accidents where at least one driver had a BAC of 0.08% or above.[19] According to the National Highway Traffic Safety Administration, accidents involving drunk driving accounted for 32% of all traffic deaths last year.[20] In 2009, about four people were killed in drunk driving fatalities for every 100,000 Americans.[21]

Since the regulation of alcohol has been traditionally left to the states and in light of high numbers of drunk driving incidents, states have a legitimate concern when they regulate alcohol within their borders. One way that many states have chosen to regulate alcohol is at the point of purchase through the requirement of liquor licenses in order to sell alcohol.[22] Theoretically, licensing is an important way to instill responsibility in the providers of alcoholic beverages and the ability to revoke or suspend that license is an important part of the enforcement process.[23]

Furthermore, the presumption is that when airline passengers arrive at their destination, they will likely drive themselves home. Thus, the interest on the part of the state in regulating airlines may arguably be no different than their interest in regulating a bar or a restaurant where a patron may consume intoxicating beverages and then drive home. Since states are legitimately limited in the ways that they can control the service and sale of alcohol, the interest they have to regulate any commercial business that is selling alcohol cannot be undervalued.

The catalyst that began the conflict between New Mexico and U.S. Airways is the drunk driving of two airline passengers who were served alcohol onboard a U.S. Airways airplane. Henceforth, U.S. Airways only became a distributor-of-interest for New Mexico after a passenger de-boarded one of their airplanes and subsequently caused a car accident on a New Mexico roadway that killed five New Mexico travelers because of the passenger’s consumption of alcohol. For New Mexico, this was likely one drunk driving accident too many stemming from a driver who consumed alcohol provided to him by an airline. The citizens of New Mexico were put at risk by U.S. Airways’ distribution of alcohol to an intoxicated passenger and the citizens of New Mexico were the ones that paid the price for it. However, the Tenth Circuit’s opinion in U.S. Airways effectively abrogates New Mexico’s ability to enforce the sale of alcohol by U.S. Airways on New Mexico soil and leaves states no real remedy when attempting to regulate the distribution of alcohol served by national airlines to passengers within their own borders.

B. Federal Government’s Interest in Uniformity in Regulating National Airlines

Conversely, the federal government has a strong interest in creating a uniform system of regulation that will apply to all interstate airlines in the states they service. For all of the same reasons that Congress espoused when it promulgated the FAA,[24] the federal government also has an interest in regulating interstate airlines. Congress intended to create a single, comprehensive scheme to regulate the friendly skies by ensuring that all airlines, airplanes, and any other civil or military air-born aircrafts are centrally regulated by one entity.

Furthermore, it is more effective to have one comprehensive regulatory scheme that governs all facets of air transportation, including not just the mechanical and safe flight aspects, but also encompassing passenger comfort and convenience such as providing alcohol or allowing passengers to use bathrooms while in flight. Thus, the interest in uniformity and the ease of implementation of a uniform and comprehensive regulation for all aspects of air travel weigh in favor of continuing to allow the federal government to regulate the friendly skies.

C. National Airlines’ Concerns about Complying with Numerous Liquor Laws and Requirements for Licensing in Individual States

A final logical policy implication involves the legitimate concern that national airlines will be forced to comply with up to fifty different regulations if states are allowed to require licensing of each airline in each state. Presumptively, the primary concern of the airline owners and operators would be the impact on economic efficiency if they were required to be licensed in several states. Airlines are likely to argue that this would be time-consuming and costly to their businesses.

Furthermore, owners would also have practical concerns about how to ensure compliance with each state alcohol license based on the state which their airplanes were currently located. For instance, would airlines need to train their flight attendants and crew members to automatically know which state they were flying over and which liquor law applied at any given time while en route? Requiring this extended obligation of flight personnel may arguably distract them from performing their core duties of ensuring safety and security on airplanes and may seem a bit far-fetched.

On the contrary, the airlines’ concerns on this front may ultimately be undermined by the fact that prior to New Mexico requiring U.S. Airways to obtain a license to serve and sell alcohol, U.S. Airways maintained liquor licenses in nineteen other states.[25] Moreover, U.S. Airways never raised an issue with the licensing requirement by these nineteen other states, but curiously only raised the issue of federal preemption with the one state that denied them a liquor license.[26] Regardless of U.S. Airways experience with state liquor licensing, the requirement of licensing with each state may certainly weigh in favor of simply allowing the uniform and comprehensive FAA to exclusively regulate national airlines.

In sum, the drafters of the Constitution intentionally created this interplay between the powers of the states with the federal government. In light of this, there has been continual turmoil regarding who gets to regulate a variety of industries. While each case presents its own issues, they must not be considered in a vacuum and rather should be decided in light of the significant policy implications that flow directly from the decision in each instance.


[1] J.D. Candidate, 2013, University of Denver Sturm College of Law.

[2] 627 F.3d 1318 (2010).

[3] Id. at 1322.

[4] Id.

[5] Id.

[6] Id.

[7] Id.

[8] Id.

[9] Id. at 1323. New Mexico regulates the alcohol industry including the sales, services, and consumption of alcohol within its state under the New Mexico Liquor Control Act (NMLCA). The NMLCA requires in part that “[e]very person selling alcoholic beverages to travelers on trains or airplanes within the state shall secure a public service license.” N.M. Stat. Ann. § 60-3A-1 et seq. (1978).  

[10] U.S. Airways, 627 F.3d at 1323.

[11] Id. In addition to the incident described above, New Mexico also cited another incident involving a U.S. Airways passenger who had been served alcoholic beverages while on board and then was later apprehended for driving while under the influence shortly after deplaning in Albuquerque.

[12] Id.

[13] Id. The Tenth Circuit Court of Appeals gave the ADA argument no treatment in its opinion despite both parties vigorously contesting the issue at the district court level. See also 49 U.S.C. § 40101(a)(1)(2000).

[14] U.S. Airways, 627 F.3d at 1323.

[15] Id. at 1323-24.

[16]  The Chief Judge defined field preemption as preemption “which occurs when the federal scheme of regulation is so pervasive that Congress must have intended to leave no room for a State to supplement it.” Id. at 1324.

[17] Id. at 1327-28.

[18] New Mexico DUI Statistics, WWW.DUIUSA.DRINKDRIVING.ORG, available at (citing the Federal Bureau of Investigations Uniform Crime reports) (last visited Dec. 19, 2011).

[19] Id.

[20] Drunk Driving Fatalities-National Statistics, The Century Council, available at (last visited Dec. 19, 2011).

[21] Id.

[22] Shelley Ross Saxer, License to Sell: Constitutional Protection Against State or Local Government Regulation of Liquor Licensing, 22 Hastings Const. L.Q. 441 passim (1995) (providing numerous states that require liquor licenses, including Pennsylvania, New York, Illinois, New Mexico, Georgia, Colorado, Rhode Island, California, Alabama, New Jersey, Michigan, Wisconsin and many other states.)

[23] Brief for Kelly O’Donnell et al. as Amici Curiae Supporting Defendants-Appellees at 5, U.S. Airways, Inc. v. O’Donnell, 627 F.3d 1318 (2010) (No. 09-2271), 2010 WL 1705637.

[24]The FAA was promulgated by Congress to streamline the regulation of airline safety and specifically was legislated as a response to a succession of disastrous air crashes between civil and military aircrafts that previously operated under separate flight procedures. H.R. Rep. No. 85-2360, at 2 (1958), reprinted in 1958 U.S.C.C.A.N. 3741, 3742. See 49 U.S.C.A. § 40101(a)(1)(2000).  Congress created the FAA and gave it the power to regulate “virtually all areas of air safety” and, since that time, it has maintained the power to do so. See Air Transp. Ass’n of Am., Inc. v. Cuomo, 520 F.3d 218, 224 (2d Cir. 2008). Explicit language in the statute governing the FAA indicates that the Federal Aviation Administration “shall promote safe flight of civil aircraft in air commerce.” 49 U.S.C. § 44701(a). Additionally, it has been recognized that “[t]he FAA was enacted to create a ‘uniform and exclusive system of federal regulation’ in the field of air safety.” City of Burbank v. Lockheed Air Terminal, Inc., 411 U.S. 624, 639 (1973).

[25] Brief for Kelly O’Donnell et al. as Amici Curiae Supporting Defendants-Appellees at 3-4, U.S. Airways, Inc. v. O’Donnell, 627 F.3d 1318 (2010) (No. 09-2271), 2010 WL 1705640.

[26] Id.