                               ATTORNEY GENERAL OF TEXAS
                                            GREG        ABBOTT




                                             November 20, 2008



David L. Lakey, M.D.                                   Opinion No. GA-0684
Commissioner
Texas Department of State Health Services              Re: Whether the federal Airline Deregulation Act
11 00 West 49th Street                                 preempts the state statute and regulation authorizing
Austin, Texas 78756                                    an EMS subscription program as applied to air
                                                       ambulances (RQ-0719-GA)

Dear Commissioner Lakey:

        The Department ofState Health Services (DSHS or Department) licenses emergency medical
service (EMS) providers, including providers operating as an air ambulance service. 1 See TEX.
HEALTH & SAFETY CODE ANN. §§ 773.041(a) (Vernon SUppa 2008) (license requirement),
.045 (Vernon 2003) (use of aircraft to transport sick or injured). Section 773.011 authorizes a
licensed EMS provider to create and operate a subscription program for emergency medical services
and directs the DSHS Board to establish minimum standards and rules for the program. See id.
§ 773.011 (Vernon 2003). Section 157.11(1) of Title 25, Texas Administrative Code, states the
requirements for participation in the subscription program, such as obtaining written authorization
from the highest elected official of the political subdivision where subscriptions will be sold. See
25 TEX. ADMIN. CODE § 157.11(1)(1) (DSHS, Requirements for an EMS Provider License)
(Westlaw). Residents of a certain geographical area may join an EMS subscription program for a
single annual fee, and the EMS provider will charge them either no fee or a reduced fee for
ambulance services. See Request Letter, supra note 1, at 1.

        The DSHS has approved air ambulance providers as well as ground ambulance providers to
create and operate subscription programs. See id. at 2. Questions have arisen as to whether the
federal Airline Deregulation Act of 1978 (ADA), in particular section 41713 of Title 49 U.S.C.A.,
preempts state requirements for a subscription program as applied to air carriers. You ask whether
the ADA preempts the authority ofDSHS to regulate prepayment for air ambulance transportation




         1See Letter from David L. Lakey, M.D., Texas Department ofState Health Services, to Honorable Greg Abbott,
Attorney, General of Texas, at 1 (June 2, 2008) (on file with the Opinion Committee, also available at
www.texasattorneygeneral.gov) [hereinafter Request Letter].
David L. Lakey,      M~D.    - Page 2                   (GA-0684)



by authorizing and regulating a provider's subscription program. Id at 5. 2 Your question focuses
on the price aspect of the subscription program,.and our answer will be limited to this matter. 3

        The ADA was designed in part to promote "maximum reliance on competitive market
forces." Morales v. Trans World Airlines, Inc.,.504 U.S. 374, 378 (1992). To help implement this
purpose, it includes the following express preemption provision:

                   (b) Preemption.-(I) 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 eff~ct of law related to a price, route, or service
                   of an air carrier that may provide air transportation under this
                   subpart.

49 V.S.C.A. § 41713(b)(I) (West 2007) (emphasis added).

        "Air transportation" means "foreign air transportation, interstate air transportation, or the
transportation of mail by aircraft." Id. § 40102(a)(5) (West 2007). See also ide § 40102(a)(2)
(defining "air carrier" as "a citizen of the Vnited States undertaking . . . to provide air
transportation"). Thus, the ADA applies to interstate carriers, including the intrastate operations of
an interstate carrier. See Hughes Air Corp. v. Pub. Utils. Comm 'n ofCal. , 644 F.2d 1334 (9th eire
1981). It does not, however, apply to purely intrastate transportation, as long as mail is not
transported. See SeaAir NY, Inc. v. City ofNew York, 250 F.3d 183 (2nd eire 2001).

        The preemption provision has been applied to air ambulance companies that are air carriers
within the ADA definition. See Hiawatha Aviation ofRochester, Inc. v. Minn. Dep't ofHealth,
389 N.W.2d 507, 509 (Minn. 1986) (state preempted from controlling entry into field of air
ambulance service); Ariz. Ope Att'y Gen. No. 187-164 (1987) at 1 (ADA preempts state from
economic regulation ofair ambulances under certificate ofnecessity statutes); cf Air Evac EMS, Inc.
v. Robinson, 486 F. Supp. 2d 713, 723 (M. D. Tenn. 2007) (Federal Aviation Act of 1958 preempts
field of aviation safety, including state equipment requirements for air ambulances). But see Eagle
Air Med Corp. v. Colo. Bd of Health, 570 F. Supp. 2d 1289, 1293 (D. Colo 2008) (federal
proceedings stayed under Younger v. Harris, 401 V. S. 37 (1971) abstention doctrine, because judge
not persuaded that ADA preempts state regulation of air ambulance service).


          2you also ask whether the ADA preempts the Texas Department ofInsurance from regulating an air ambulance
subscription program. Health and Safety Code section 773.011 provides that "[t]he Insurance Code does not apply to
a subscription program established under this section." TEX. HEALTH & SAFETY CODE ANN. § 773.011(e) (Vernon
2003). The Department of Insurance has no authority to regulate ambulance subscription programs, and accordingly
there is no statute or regulation to which the federal preemption provision might apply.

          3We do not address the health care services provided by air carriers operating as air ambulances, except to note
that to the extent this matter has been addressed, the ADA has been held not to apply to state regulation of health care
services provided on air ambulances. See Hiawatha Aviation ofRochester, Inc. v. Minn. Dep't ofHealth, 389 N.W.2d
507, 509 (Minn. 1986); Ariz. Ope Att'y Gen. No. 187-164 (1987) at 2.
David L. Lakey, M.D. - Page 3                     (GA-0684)



        In Morales v. Trans WorldAirlines, Inc., the United States Supreme Court held that the ADA
expressly preempts state restrictions on the content and format of airline fare advertising. See
Morales, 504 U.S. at 391. The court, giving a broad construction to the term" related to" in section
§ 41713(b)(1), determined that the ADA preempted "[s]tate enforcement actions having a connection
with or reference to airline 'rates, routes, or services. ,,, Id at 384. It found that the state restrictions
would have a significant impact upon airline fares. See id at 391.

        Section 41 713(b)(1) will preempt the DSHS regulation authorizing the subscription program
as applied to air ambulances if the regulation is "related to a price" of an air carrier. 49 U.S.C.A.
§ 41713(b)(1) (West 2007). "'Price' means a rate, fare, or charge." Id. § 40102(a)(39). According
to your description, a subscription program involves an annual fee and a reduced charge· for air
ambulance services. See Request Letter, supra note 1, at 1. The regulation of the subscription
program is related to the price of air ambulances services. We conclude that section 41713(b)(I)
preempts section 773.011 and the subscription program requirements in rule 157.11(l) to the extent
these provisions relate to rates charged by air carriers providing air ambulance services.

         You also ask whether the ADA preempts DSHS from regulating any aspect of an EMS
subscription program using both ground vehicles and air ambulances. See Request Letter, supra note
1, at 5. In Federal Express Corp. v. California Public Utilities Commission, the court found that the
predecessor of section 41 713(b)(1) applied to trucks operated by Federal Express, which operated
numerous aircraft as an "all-cargo" air carrier, carrying no passengers. See Fed. Express Corp. v.
Cal. Pub. Util. Comm 'n, 936 F.2d 1075,1076 (9th Cir. 1991). Trucks were an essential component
of the system, routinely transporting packages that did not fit on the plane and providing an
alternative mode of transportation if weather or mechanical problems delayed the aircraft. See id.
at 1076-77. The court also relied on the ADA provision stating that the Secretary ofTransportation
should consider "encouraging and developing an expedited all-cargo air transportation system."
49 U.S.C.A. § 40101(b)(I) (West 2007) (formerly 49 V.S.C.A. § 1302(b)(2)); see Fed Express
Corp., 936 F.2d at 1079. The court stated that Federal Express was exactly the kind of expedited
all-cargo service that Congress specified. See Fed Express Corp., 936 F2d at 1079. The Federal
Express trucks were an essential part of the all-cargo air service, and state regulation of trucking
operations was preempted. See id.; see alsoChouest v. Am. Airlines, Inc., 839 F. Supp. 412,417
(E.D. La. 1993) (distinguishing Federal Express case in several ways from action concerning state
law tort and contract remedies for personal injury sustained during ground transportation provided
as part of airline vacation package).

        Federal Express indicates that ADA preemption should apply to ground ambulances owned
and operated by an air carrier to transport subscription program members if ground ambulance
transportation is an integral part of the air transportation service. See Fed Express, 936 F.2d at
1077; but see Chouest, 839 F. Supp. at 416-17 (ground transportation not shown to be integral to
air transportation services), In re Rochester Ambulance Serv., 500 N.W.2d 495, 500 (Minn. App.
1993) (no preemption of state regulation of ground ambulances operated by an air ambulance
company because air service and ground service were not an integrated whole, in that neither service
was necessary to the continued operation of the other). We cannot determine as a matter of law
whether transportation by ground ambulance is an integral part ofan air transportation service, such
David L. Lakey, M.D. - Page 4               (GA-0684)




that the subscription program is preempted for the ground transportation. See Tex. Att'y Gen. Ope
No. GA-0459 (2006) at 3-4 (fact questions cannot be investigated and resolved in an attorney
general opinion). Accordingly, DSHS must determine whether the ADA preempts its regulation of
an EMS subscription program applicable to ground ambulance transportation provided by a specific
company that also operates air ambulances.
David L. Lakey, M.D. - Page 5                (GA-0684)



                                      SUMMARY

                       Pursuant to section 157.11(1) of Title 25, Texas
               Administrative Code, emergency medical service providers may
               establish a subscription program allowing members a reduced rate for
               air ambulance services. Because section 157.11 (1) relates to charges
               for air ambulance services, the federal Airline Deregulation Act of
               1978 (ADA) preempts it as to air carriers providing interstate air
               ambulance services. The ADA preempts the state regulation as
               applied to a ground ambulance operated as an integral part of an air
               ambulance service.




KENT C. SULLIVAN
First Assistant Attorney General

ANDREW WEBER
Deputy Attorney General for Legal Counsel

NANCY S. FULLER
Chair, Opinion Committee

Susan L. Garrison
Assistant Attorney General, Opinion Committee
