S.C. Johnson & Son, Inc. v. Transport Corp. of America , 697 F.3d 544 ( 2012 )

In the
United States Court of Appeals
For the Seventh Circuit
No. 11-3577
S.C. JOHNSON & S ON, INC.,
Plaintiff-Appellant,
v.
T RANSPORT C ORPORATION OF A MERICA, INC., et al.,
Defendants-Appellees.
Appeal from the United States District Court
for the Eastern District of Wisconsin.
No. 10-CV-00681—C. N. Clevert, Jr., Chief Judge.
A RGUED M AY 29, 2012—D ECIDED S EPTEMBER 21, 2012
Before W OOD , S YKES, and T INDER, Circuit Judges.
W OOD , Circuit Judge. Injured by a bribery and kickback
scheme hatched by a dishonest employee and some
transportation companies, S.C. Johnson & Son, Inc.,
fought back with two lawsuits. The first was a civil
lawsuit in Wisconsin state court, in which it raised
several tort claims against a number of transportation
companies. This is the second one, filed against different
defendants in federal court. Relying on the court’s diver-
2 No. 11-3577
sity jurisdiction, S.C. Johnson raised a number of state-
law claims, including one based on the state law prohib-
iting bribery and another under Wisconsin’s counter-
part to the federal Racketeer Influenced and Corrupt
Organizations Act, commonly known as RICO. See 18
U.S.C. §§ 1961 et seq. The district court dismissed the
action, believing that federal law preempts the company’s
state tort claims because they could have “the force and
effect of a law related to a price, route, or service of any
motor carrier . . . with respect to the transportation of
property.” 49 U.S.C. § 14501(c)(1). We reverse. We con-
clude that S.C. Johnson’s claim for fraudulent misrep-
resentation was properly dismissed, but that its theories
based on bribery and kickbacks fall outside the scope
of the preemption provision. We find it unnecessary
to discuss its theory based on aiding and abetting breach
of a fiduciary duty, because (as it admits) this is time-
barred. S.C. Johnson is therefore entitled to move
forward with these aspects of its case.
I
S.C. Johnson is a manufacturer of domestic and
personal care products; it sells these products both
within the United States and internationally in over 100
countries. It handles distribution internally, through its
Transportation Department. From 1988 through October
2004, Milton Morris was the director of that department.
It was his job to select carriers to transport goods for
the company, to negotiate contracts with them, and to
authorize payments. The annual budget of the Transporta-
tion Department was roughly $90 million.
No. 11-3577 3
In early 2004, S.C. Johnson became aware that there
were problems in its transportation operations. It investi-
gated and learned to its dismay that Morris was
dishonest to the core. He had received hundreds of thou-
sands of dollars in cash, goods, travel, and services (licit
and illicit, it seems—including prostitutes) from various
carriers. In exchange, Morris provided favorable treat-
ment to the donor-carriers; for example, he awarded to
some carriers business that they would not otherwise
have received and for others he caused S.C. Johnson to
pay above-market rates. Johnson terminated Morris’s
employment on October 18, 2004. Morris was later crimi-
nally prosecuted and convicted for these actions.
S.C. Johnson filed suit against Morris in the Circuit
Court of Racine County, Wisconsin, on the day that it
fired him. Over time, it added as defendants four
trucking companies and their owners, all of whom alleg-
edly conspired with Morris, and then later added
another two companies and three of their employees, as
well as another former S.C. Johnson employee, Katherine
Scheller. In that civil case, S.C. Johnson asserted five tort
claims: (1) fraudulent misrepresentation by omission;
(2) civil conspiracy to violate the Wisconsin bribery
statute, W IS. S TAT. § 134.05; (3) civil conspiracy to
commit fraud; (4) violation of the Wisconsin Organized
Crime Control Act (WOCCA), W IS. S TAT. § 946.80; and
(5) aiding and abetting a breach of fiduciary duty. Some
of the carrier-defendants moved to dismiss the case on
the ground that S.C. Johnson’s claims were preempted
by the Federal Aviation Administration Authoriza-
tion Act of 1994 (FAAAA), which (despite the name)
4 No. 11-3577
includes a section providing that 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 any motor carrier . . . with respect to the transporta-
tion of property.” 49 U.S.C. § 14501(c)(1). The state
court rejected that defense, ruling that Johnson’s
claims were based not on the amount that was charged,
but on the tortious nature of the defendants’ alleged
bribery, conspiracy, fraud, and racketeering activities.
S.C. Johnson ultimately prevailed in the Racine County
case against eight of the defendants and was awarded a
judgment of $203.8 million. It settled with two other
defendants. The defendants in the present case, how-
ever, were not among those named in the state court suit.
S.C. Johnson explains that it was only after it initiated
the state suit that it learned that Morris’s scheme had
reached even more entities. This discovery led to the
case that is now before us.
On August 10, 2010, S.C. Johnson filed its complaint
against Transport Corporation of America, Inc. (Trans-
port), Stevens Transport, Inc., Far Side Trucking, Inc., and
Graham Kent Pharr (collectively, the Carriers) in the
U.S. District Court for the Eastern District of Wisconsin,
relying as we said on the court’s diversity jurisdiction.
Although the defendants were different from those in
the Racine County case, the allegations were essentially
the same. The complaint asserted that the Carriers had
conspired with Morris to exchange bribes for favorable
treatment, such as awarding them business they would
not otherwise have received and causing S.C. Johnson to
No. 11-3577 5
pay above-market rates. For example, the Carriers alleg-
edly picked up Morris’s tab for extravagant business
travel on many occasions. Perks included meals, golf,
stays at luxury hotels, and the provision of prostitutes.
S.C. Johnson also alleged that Morris received sub-
stantial cash bribes from the Carriers during his tenure
in the Transportation Department. In all (including pay-
ments from companies involved in the state case),
Morris deposited over $1.2 million in addition to his
legitimate compensation from S.C. Johnson into
various accounts.
Without reviewing every detail, we can say that S.C.
Johnson’s complaint alleged numerous ways in which
the alleged tortious conduct of Morris and the Carriers
harmed it. Because of the bribes and kickbacks, S.C.
Johnson paid more for transportation services than it
would have done in a market untainted by these acts. In
addition, the tortious conduct distorted its choice of
transportation providers. Its theories of liability focus on
“unnecessary awards of business” to the Carriers, non-
competitive terms, conspiracy to commit bribery in viola-
tion of state law, fraud for failing to disclose the
true (unlawful) basis of the transactions, violations of
Wisconsin’s state-law equivalent to RICO, and the Carri-
ers’ aiding and abetting Morris’s breach of an
alleged fiduciary duty owed to S.C. Johnson as its
Director of the Transportation Department.
As their counterparts had done in state court, the Carri-
ers moved under Federal Rule of Civil Procedure 12(b)(6)
to dismiss the complaint on the ground that every count
6 No. 11-3577
was preempted by federal law, pursuant to the FAAAA,
42 U.S.C. § 14501(c)(1). (Preemption is an affirma-
tive defense, we note, and thus the more appropriate
motion would have been one under Rule 12(c); plaintiffs
have no duty to anticipate affirmative defenses, and we
cannot say in this case that S.C. Johnson pleaded itself
out of court. But no one has made anything of this
point, and so we will let it pass.) This time, the effort
succeeded. The district court was persuaded that the
state laws on which S.C. Johnson wished to rely were
all provisions “having the force and effect of law related
to a price, route, or service of any motor carrier.” It
phrased the question before it as “whether enforcement
of the state laws underlying a claim asserted in the com-
plaint in this case relates to plaintiff’s prices, routes, or
services by either expressly referring to them or having a
significant economic effect upon them.” Finding that the
answer was yes, the court concluded that preemption
necessarily followed. It also ruled in the alternative that
the claim for aiding and abetting a breach of fiduciary
duty was time-barred. It thus granted the Carriers’ motion
to dismiss, and this appeal followed.
II
A
The United States began its great experiment in the
regulation of the transportation industry (and eventually
others) with the passage in 1887 of the Interstate Com-
merce Act, ch. 104, 24 Stat. 379 (1887). Under that author-
ity, the Interstate Commerce Commission first regulated
No. 11-3577 7
the nation’s railroads; the Motor Carrier Act of 1935, 49
Stat. 543, added the trucking business to the ICC’s respon-
sibilities. Three years later Congress provided for the
regulation of the airline business in the Civil Aeronautics
Act of 1938, 52 Stat. 973. This regime lasted approxi-
mately four decades, but by the time President Carter
took office, the movement to deregulate these and other
sectors was picking up steam. See, e.g., Andrew Downer
Crain, Ford, Carter, and Deregulation in the 1970s, 5 J.
T ELECOMM. & H IGH T ECH. L. 413 (2007). Advocates
of deregulation had become convinced that industry
control of the regulatory apparatus had led to protec-
tion of industry incumbents and higher prices, and that
deregulation would bring with it a healthy competitive
process that would better advance consumer welfare
and lead to re-invigorated innovation. See, e.g., Stephen
Breyer, Afterword, Symposium: The Legacy of the New
Deal: Problems and Possibilities in the Administrative State
(Part 2), 92 Y ALE L.J. 1614, 1616 (1983).
Efforts to deregulate the airline industry found a warm
welcome in the Carter White House. President Carter
appointed Alfred Kahn, a well-known supporter of dereg-
ulation, to head the Civil Aeronautics Board (CAB) in
1977, and Kahn went right to work. Both regulatory
reform and legislative reform came along in quick order.
Under Kahn, the CAB lifted restrictions on charter compa-
nies, allowed airlines much greater flexibility in setting
fares, and eliminated rules requiring that first-class fares
be 50% higher than coach fares. See, e.g., Sharp Relaxing
of Air-Fare Regulations Planned by CAB in Drive to Cut
Controls, W ALL S T. J., Apr. 4, 1978, at 8. Congress took a
8 No. 11-3577
more comprehensive approach in legislation beginning
with the Air Cargo Deregulation Act, Pub. L. No. 95-163, 91
Stat. 1278. It followed up with the Airline Deregulation
Act of 1978, Pub. L. No. 95-504, 92 Stat. 1705. In time,
the CAB was dissolved and the skies were open for
competition.
Trucking deregulation followed in 1980, launched by
the Motor Carrier Act of 1980, Pub. L. No. 96-296, 94
Stat. 793. That statute lifted most restrictions on entry, on
the goods that truckers could carry, and on routes. It
did not, however, eliminate the requirement to file
tariffs, nor did it end the power of state regulatory com-
missions to limit entry and regulate prices. Fourteen
years later, Congress decided to finish the job by first
passing the Federal Aviation Administration Authoriza-
tion Act of 1994, Pub. L. No. 103-305, 108 Stat. 1569 (Title
VI of which addressed “Intrastate Transportation of
Property” by both air and motor carriers), and then the
Trucking Industry Regulatory Reform Act of 1994, Pub. L.
No. 103-311, 108 Stat. 1673. In 1995, Congress dissolved
the Interstate Commerce Commission. ICC Termination
Act of 1995, Pub. L. No. 104-88, 109 Stat. 803.
As we will see in a moment, the Supreme Court has
generally taken the position that the statutes deregulating
the airline industry and those deregulating the trucking
industry should be construed consistently with one
another. It is therefore not surprising that the statute of
greatest concern to us in this case, section 601 of the
FAAAA, addresses both air and motor carriers. That
section opens with the following findings:
No. 11-3577 9
(a) FINDINGS.—Congress finds and declares
that—
(1) the regulation of intrastate transportation of prop-
erty by the States has—
(A) imposed an unreasonable burden on interstate
commerce;
(B) impeded the free flow of trade, traffic, and
transportation of interstate commerce; and
(C) placed an unreasonable cost on the American
consumers; and
(2) certain aspects of the State regulatory process
should be preempted.
FAAAA § 601(a), 49 U.S.C. § 11501 note. Congress decided
to address these concerns through the device of preemp-
tion; section 601(c)(1) sets out the operative language
for the trucking industry:
(c) TRANSPORTATION BY MOTOR CAR-
RIER.—Section 11501 is amended by adding at the
end the following new subsection:
“(h) PREEMPTION OF STATE ECONOMIC REGU-
LATION OF MOTOR CARRIERS.—
“(1) GENERAL RULE.—Except as provided in
paragraphs (2) and (3), a State, political subdivision
of a State, or political authority of 2 or more 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 any motor carrier
(other than a carrier affiliated with a direct air
10 No. 11-3577
carrier covered by section 41713(b)(4) of this title)
or any motor private carrier with respect to
the transportation of property.
FAAAA § 601(c), codified at 49 U.S.C. § 11501. The statute
lists some exceptions to this rule, but none is pertinent
to our case.
We can now refine the question before us as follows:
which, if any, of the state-law theories set forth in S.C.
Johnson’s complaint qualifies as “a law, regulation, or
other provision having the force and effect of law
related to a price, route, or service” of a motor carrier?
S.C. Johnson relies on five different Wisconsin laws
(some statutory and some common-law): (1) fraudulent
misrepresentation by omission; (2) criminal conspiracy
to violate Wisconsin’s bribery statute, W IS. S TAT. § 134.05;
(3) conspiracy to commit fraud; (4) the Wisconsin Orga-
nized Crime Control Act (WOCCA), W IS. S TAT. § 946.80
through racketeering activity and mail and wire fraud;
and (5) aiding and abetting a breach of fiduciary duty
by providing bribes and kickbacks. Before essaying a
definitive answer to those questions, we turn first to
a review of the decisions of the Supreme Court, this
court, and our sister circuits on these points.
B
1
Three decisions of the Supreme Court are of particular
relevance to our inquiry, and so we begin with them:
Morales v. Trans World Airlines, Inc., 504 U.S. 374 (1992);
No. 11-3577 11
American Airlines, Inc. v. Wolens, 513 U.S. 219 (1995); and
Rowe v. New Hampshire Motor Transport Ass’n, 552 U.S.
364 (2008). Taken together, these cases provide an
outline of the approach to preemption that should
govern this case.
Morales addressed the question whether the Air
Travel Industry Enforcement Guidelines adopted by the
National Association of Attorneys General (NAAG)
were preempted by the Airline Deregulation Act of 1978
(ADA), 49 U.S.C. App. § 1304(a)(1). The Guidelines con-
tained “detailed standards governing the content and
format of airline advertising, the awarding of premiums
to regular customers (so-called ‘frequent fliers’), and
the payment of compensation to passengers who volun-
tarily yield their seats on overbooked flights.” 504
U.S. at 379. Acting pursuant to their powers under
their respective state consumer protection statutes, the
NAAG members issued and proposed to enforce the
Guidelines as a way of eliminating allegedly deceptive
practices from airline fare advertisements.
The Supreme Court held that the ADA preempted
all state enforcement actions that have “a connection
with or reference to airline ‘rates, routes, or services.’ ” Id.
at 384, citing 49 U.S.C. App. § 1305(a)(1). It rejected a
reading of the statute that would preempt only the
direct setting of rates, routes, or services, on the
ground that such an approach would read the words
“relating to” out of the statute. It also held that the pre-
emption clause was not limited to state laws
specifically addressed to the airline industry; laws of
12 No. 11-3577
general applicability with a significant effect on rates,
routes, or services are also covered. Finally, the Court
found that the NAAG Guidelines “quite obvi-
ously” related to fares. 504 U.S. at 387. “[C]ollectively, the
guidelines establish binding requirements as to how
tickets may be marketed if they are to be sold at given
prices.” Id. at 388. Citing the antitrust case of Bates v.
State Bar of Arizona, 433 U.S. 350 (1977), the Court noted
that “as an economic matter” restrictions on fare adver-
tising have “the forbidden significant effect upon fares.”
504 U.S. at 388; see also California Dental Ass’n v. FTC, 526
U.S. 756, 777-78 (1999).
The Court went out of its way, however, to disclaim
any intent to read the statute as preempting any and
all state laws that might indirectly affect fares, routes, or
services. State laws against gambling and prostitution,
as applied to airlines, would not be preempted, it indi-
cated, and it specifically reserved the question “whether
state regulation of the nonprice aspects of fare ad-
vertising (for example, state laws preventing obscene
depictions) would similarly ‘relat[e] to’ rates; the con-
nection would obviously be far more tenuous.” Id. at
390. It reaffirmed what it had said in Shaw v. Delta Air
Lines, Inc., 463 U.S. 85, 100 n.21 (1983): “Some state
actions may affect [airline fares] in too tenuous, remote,
or peripheral a manner’ to have pre-emptive effect.”
504 U.S. at 390. Morales thus demonstrates that we are
not looking at a simple all-or-nothing question; instead,
the court must decide whether the state law at issue
falls on the affirmative or negative side of the preemp-
tion line.
No. 11-3577 13
Wolens was another case in which the immediate ques-
tion before the Court had to do with preemption under
the ADA. The focus there was squarely on the airline’s
frequent flier program: Participants had sued on the
theory that some retroactive changes in the program
violated Illinois’s Consumer Fraud and Deceptive
Business Practices Act, 815 ILCS § 505, and constituted
a breach of contract. These changes, plaintiffs alleged,
devalued the credits that they had earned; they sought
monetary relief. The Supreme Court of Illinois held,
favorably to the plaintiffs, that the ADA’s preemption
clause applied only to state laws that “specifically
relate to” and “have more than a tangential connection
with” the airline’s rates, routes, or services. In a decision
written after a remand for reconsideration in light of
Morales, the state supreme court adhered to that judg-
ment and held that the suit was not pre-empted.
Frequent flier programs, it wrote, are peripheral to the
operations of an airline and thus outside the scope of
the ADA’s preemption for purposes of both the con-
sumer fraud theory and the contract theory.
The Supreme Court reversed to the extent that the
state court had allowed the consumer fraud theory to
go forward; it affirmed to the extent that the court held
that the breach-of-contract claim was not preempted.
513 U.S. at 226. It rejected the Illinois court’s distinction
between matters that are “essential” to airline operations
and those that are not, writing that
Plaintiffs’ claims relate to “rates,” i.e., American’s
charges in the form of mileage credits for free
14 No. 11-3577
tickets and upgrades, and to “services,” i.e., access to
flights and class-of-service upgrades unlimited by
retrospectively applied capacity controls and black-
out dates.
Id. But, the Court continued, the ADA’s preemption
clause contains another limitation: it applies only to the
enactment or enforcement of any “law” relating to rates,
routes, or services. With that in mind, it turned to
the two theories presented by the Wolens plaintiffs.
Looking first at the consumer fraud statutory theory,
the Court reiterated its holding in Morales that there is
an inherent potential in state consumer protection laws
for intrusive regulation of airline marketing practices.
Id. at 227. The ADA was designed “to leave largely to
the airlines themselves, and not at all to the States, the
selection and design of marketing mechanisms appro-
priate to the furnishing of air transportation services.” Id.
at 228. To the extent problems arise, the Court finished,
the federal Department of Transportation has the
authority to address them. Id. at n.4. The breach of
contract claim was another matter. The recovery sought
there was “solely for the airline’s alleged breach of its
own, self-imposed undertakings.” Id. at 228. Private
ordering of this type falls outside the scope of the ADA’s
preemption provision. Instead, it furthers the statutory
goal of “maximum reliance on competitive market
forces.” Id. at 230, quoting from 49 U.S.C. App. § 1302(a)(4).
Preserving state contract-law theories is also consistent
with Congress’s retention of the savings clause in the
Federal Aviation Act of 1958, 49 U.S.C. App. § 1506,
No. 11-3577 15
which preserves “the remedies now existing at common
law or by statute.” 513 U.S. at 232. Finally, the Court
concluded with an explicit recognition of the line-
drawing task presented in Wolens: what does the ADA
preempt, and what is left for private ordering? Id. at 234.
By answering that preemption has its limits, the Court
demonstrated that a similar problem might arise in
other settings.
The third leg in this legal tripod is Rowe, which unlike
Morales and Wolens dealt with the FAAAA. At the
outset, the Court confirmed that Congress drew from
the ADA when it wrote the FAAAA’s preemption
section, 49 U.S.C. § 14501(c)(1). 552 U.S. at 368, 370.
Throughout the Rowe opinion, the Court drew liberally
from Morales, and so we are confident that we too
should rely as need be on the ADA decisions. The
question before the Court in Rowe was whether to find
preemption of a Maine statute regulating tobacco ship-
ments. The state law begins by forbidding anyone
other than a Maine-licensed tobacco retailer to accept
an order for delivery of tobacco. It then requires retail
recipients of tobacco shipments to use an elaborate
recipient-verification service. Finally, it forbids any
person knowingly to transport a tobacco product to
someone in Maine unless either the sender or the
receiver has a Maine license, and it adds that a person
is deemed to know that the package contains a tobacco
product if it is marked in a certain way or if the sender’s
name appears on a list compiled by Maine’s Attorney
General of un-licensed tobacco retailers. A group of
carrier associations challenged the “recipient-verification”
16 No. 11-3577
and “deemed-to-know” provisions of the law as pre-
empted by the FAAAA.
The Supreme Court derived several general principles
from Morales:
(1) that “[s]tate enforcement actions having a con-
nection with, or reference to” carrier “ ‘rates, routes, or
services’ are pre-empted,” (2) that such pre-emption
may occur even if a state law’s effect on rates, routes
or services “is only indirect”; (3) that, in respect to
pre-emption, it makes no difference whether a state
law is “consistent” or “inconsistent” with federal
regulation; and (4) that pre-emption occurs at least
where state laws have a “significant impact” related
to Congress’ deregulatory and pre-emption-related
objectives.
552 U.S. at 370-71 (internal citations omitted). It again
acknowledged, however, that “federal law might not
preempt state laws that affect fares in only a ‘tenuous,
remote, or peripheral . . . manner,” id. at 371, and gave the
example of state laws forbidding gambling. It confirmed
that the Court has not yet said where or how it would
draw this line, because the cases thus far have not
been close ones. Id.
Applying those principles, the Court unanimously
concluded that the challenged provisions of the Maine
law were preempted. It is hard to say that a law
expressly directed at the method of delivery—arguably the
critical moment in a shipment—does not affect “rates,
routes, or services.” (Emphasis added.) Such a prescrip-
No. 11-3577 17
tion for the method of delivery is inconsistent with the
statute’s deregulatory purpose, since it imposes one
system for those that the market might develop. The
“deemed-to-know” provision, the Court concluded, also
conflicted with the FAAAA’s preference for deregulated,
competitive markets because it dictated the way in
which carriers had to inspect every shipment. The Court
was not impressed with the state’s argument that the
rules were not likely to impose significant additional
costs, finding this irrelevant to the issue at hand, nor
was it prepared to create a public-health exception to
the FAAAA that Congress did not authorize. At the
same time, the Court disclaimed any intention to hold
that the statute “generally preempts state public health
regulation.” State laws that are general and that affect
truck drivers solely in their capacity as members of
the public would not be preempted. Id. at 375-76.
2
We also find it useful to review the way in which the
courts of appeals have applied the principles in the
Morales-Wolens-Rowe line of cases. (This is not a compre-
hensive list of every case that has ever touched on
these statutes; we have chosen illustrative examples
for present purposes, and we refer to other relevant
decisions later in our opinion.) We discuss first several
cases that have found preemption, and then we look
at those that have not.
18 No. 11-3577
a
In United Airlines, Inc. v. Mesa Airlines, Inc., 219 F.3d
605 (7th Cir. 2000), United Airlines sought a declaratory
judgment confirming that it had the right to replace one
regional airline (Mesa) with another on eight routes out
of Los Angeles. Eventually, the case also involved
Mesa’s and WestAir’s claims that United was retaining
too much revenue for itself on certain Denver routes.
With respect to the latter claims, Mesa and WestAir
sought damages on four theories: breach of contract;
tortious interference with contract; breach of fiduciary
duty; and (for Mesa only) fraudulent inducement to
purchase certain airplanes and to extend its contract
with United. The district court concluded that all but
the first was preempted, and we affirmed. Even though
the theories presented in the last three counts relied
on laws that are not targeted at air transportation,
more is needed to avoid preemption.
On appeal, we considered and rejected an analogy to
the preemption rules that apply for the Employment
Retirement Income Security Act (“ERISA”), under which
only state laws that “relate to” the statutory subject
matter are preempted. Thus, the Supreme Court has
held, in ERISA cases “state laws of general applicability
are not preempted just because they have economic
effects on pension or welfare plans.” 219 F.3d at 608.
Even if this line of reasoning might seem sensible for
the ADA (and the FAAAA), we said, the Supreme
Court has not extended its ERISA rulings to the trans-
portation statutes. Unless and until it does, we are
bound to follow the existing decisions.
No. 11-3577 19
In that spirit, we followed our earlier decision in
Travel All Over the World, Inc. v. Saudi Arabia, 73 F.3d 1423(7th Cir. 1996), which held that “Morales and Wolens
allow us to discern two distinct requirements for a law
to be expressly preempted by the ADA: (1) A state
must “enact or enforce” a law that (2) “relates to” airline
rates, routes, or services, either [a] by expressly referring
to them or [b] by having a significant economic effect
upon them.” Id. at 1432 (emphasis and subheadings
added). Only the first claim for breach of contract
was limited to an effort to enforce the parties’ bargain;
each of the other three represented an effort to change
the parties’ financial arrangements with respect to the
provision of air services, including route assignments
and flight frequency. Even if the laws the plaintiffs cited
do not relate directly to airlines, as applied in the case
they had a significant economic effect on the very areas
protected by the ADA. Preemption therefore followed.
Data Manufacturing, Inc. v. United Parcel Service, Inc., 557
F.3d 849 (8th Cir. 2009), concerned a suit brought by
Data Manufacturing (DMI) against United Parcel
Service; DMI alleged that certain billing practices of UPS
amounted to a breach of contract, fraudulent and negligent
misrepresentation, and a type of tortious conversion.
Once the case was removed to federal court, UPS
argued that DMI’s claims were all preempted by the
FAAAA. Following a theme that is becoming familiar, the
Eighth Circuit ruled that DMI could proceed with its
contract claim, but that all the rest fell as a result of the
FAAAA’s preemption rule. The underlying dispute was
fairly straightforward. For some time DMI had been
20 No. 11-3577
required by its customer, First Data, to use UPS as the
shipper for gift cards that DMI manufactured for First
Data. Typically UPS would bill DMI for the shipments,
and First Data would reimburse DMI for those charges.
At some point, however, DMI itself began to ship the
cards using First Data’s account to pay UPS. First Data
rejected some of those billings. This meant that UPS had
to charge DMI for the rejected billing; for its trouble,
UPS added a $10 charge to DMI’s account for each re-
billing. The re-billing charges were substantial: they
actually exceeded the total cost of the shipments for a 17-
month period.
The Eighth Circuit had no trouble concluding that the
contested $10 re-billing charge related to both price
and services. DMI tried to argue that there was no
real service provided, but as the court said, “[c]ertainly
shipping is the main component of UPS’s business
and service, but it is disingenuous to suggest that UPS’s
billing procedures are not a necessary component of its
business operations.” 557 F.3d at 852. Furthermore, the
claims (other than the contract claim) depended on Mis-
souri state law. Preemption followed directly from the
holdings of Wolens and Morales.
In Onoh v. Northwest Airlines, Inc., 613 F.3d 596 (5th
Cir. 2010), the Fifth Circuit took matters one step further
by finding preemption of both a claim for intentional
infliction of emotional distress and a claim for breach
of contract. Onoh, a Nigerian national and diplomat,
had purchased an airline ticket to travel from Nigeria
to Dallas by way of Amsterdam. The Netherlands
No. 11-3577 21
requires certain air passengers to obtain an airport
transit visa, and it holds carriers responsible for verifying
that passengers have the correct travel documents.
When Onoh tried to check in at the Dallas-Fort Worth
International Airport, the gate agent informed her that
her visa was expiring too soon and that she needed a
new transit visa in order to pass through Amsterdam.
Northwest Airlines refused to allow her to board, even
when she displayed her diplomatic passport, and she
was delayed for several days until she secured a proper
transit visa. She sued Northwest for discrimination
in violation of federal law and for breach of contract
and IIED under state law.
The court quickly affirmed the dismissal of the
emotional distress claim, holding that the airline’s
decision whether to permit a passenger to board the
plane falls squarely within the ambit of “services.” It
rejected Onoh’s effort to distinguish between the provi-
sion of the service and the manner in which she was
refused service. Turning to the contract claim, the court
conceded that these are normally outside the ADA’s
preemption section. But, it reasoned, the rationale of
Morales and Wolens rests on the distinction between self-
imposed undertakings and those imposed by law (other
than federal law). In this case, it found that the airport
transit visa requirement, while reflected in the contract
of carriage, was not Northwest’s self-imposed restriction.
It derived instead from international travel regula-
tions imposed by the Netherlands, which is a party to
the Schengen Agreements. Her claim thus fell outside
the contract rule recognized in Morales and Wolens and
was preempted.
22 No. 11-3577
Finally, there is the interesting matter of state antitrust
law. In In re Korean Air Lines Co., Ltd. Antitrust Litiga-
tion, 642 F.3d 685 (9th Cir. 2011), the Ninth Circuit had
before it a case in which a plaintiff class wanted to
assert antitrust claims against Korean Air Lines and
Asiana Air Lines. Specifically, the plaintiffs alleged that
the fares they paid for tickets were too high, as a
result of a conspiracy between competitors, and that this
violated both state antitrust and consumer protection
laws. The district court carved off the direct purchaser
plaintiffs for separate treatment. Thus the case before
the Ninth Circuit involved only the indirect purchasers,
who could not bring a federal antitrust claim because of
the rule of Illinois Brick Co. v. Illinois, 431 U.S. 720 (1977).
For this group of plaintiffs, the court of appeals con-
cluded that the ADA preemption clause operated to bar
all of the state claims. The allegations that the defendant
airlines engaged in price-fixing in violation of California
law were “related to a price” of an air carrier: both the
state antitrust law and the consumer protection law seek
to regulate the manner by which the defendants set fares
for air transportation services. And it is not too much of
a stretch to conclude that “price-fixing” relates to price.
The court found it “immaterial that the state laws do
not interfere with the purposes of the federal statute or
that they might be consistent with promoting competi-
tion and deregulation.” 642 F.3d at 697. Morales, rein-
forced by Rowe, forecloses that argument. As this court
had done earlier, the Ninth Circuit also refused to
follow the ERISA cases’ treatment of preemption—
an argument that Rowe should have put to rest in any
event. Id.
No. 11-3577 23
b
As we already have noted, and as the Supreme Court
has foreseen, not every case involving either the ADA
or the FAAAA has concluded with a finding of preemp-
tion. Once again, we look at a number of illustrative
examples for the purpose of shedding light on the type
of claim that belongs on the “no preemption” side of
the line.
In 1995, the en banc Fifth Circuit decided a pair of such
cases: Hodges v. Delta Airlines, Inc., 44 F.3d 334 (5th
Cir. 1995), and Smith v. America West Airlines, Inc., 44 F.3d
344 (5th Cir. 1995). In Hodges, the plaintiff was injured
during a flight from the Caribbean to Miami when a
fellow passenger opened an overhead compartment
and dislodged a box containing several bottles of rum.
The box tumbled down and cut her arm and wrist. The
court concluded that the plaintiff’s state-law tort claim
against the airline for alleged negligent operation was
not preempted by the ADA. In so doing, it relied on
Morales’s reservation of state actions that affect airline
services in “too tenuous, remote or peripheral a man-
ner.” 44 F.3d at 336. Looking at the definition of “services”
in both Morales and Wolens, the court drew a line between
matters such as access to flights, class-of-service
upgrades, and rates, on the one hand, and personal
physical injuries or property damage caused by the
operation and maintenance of aircraft, on the other. Id.
The court also found it telling that the airline deregula-
tion legislation actually requires airlines to maintain
either insurance or self-insurance as prescribed by the
24 No. 11-3577
Federal Aviation Administration that covers liability
for bodily injuries or property damage. Id. at 338. As the
court said, “neither the ADA nor its legislative
history indicates that Congress intended to displace
the application of state tort law to personal physical
injury inflicted by airline operations, or that Congress
even considered such preemption.” Id. Finally, the
court acknowledged that the general survival of state
tort claims does not extend to every conceivable tort; it
gave as examples of claims that are preempted one for
wrongful eviction from a flight, and one for wrongful
bumping from an overbooked flight.
Smith, decided on the same day, applied these principles
to a claim brought by passengers on an America West
flight from Houston to Las Vegas against the airline for
negligence and gross negligence relating to its alleged
failure to prevent a would-be hijacker from boarding
the airplane as a passenger. (The hijacker was eventually
thwarted in his effort to compel the pilot to fly the plane
to Cuba.) The court concluded that the plaintiffs’
claims, which generally accused the airline of failure to
warn or protect the ticketed passengers against known
hazards, did not relate to “services” as that term is used
in the ADA. It commented that the Supreme Court has
counseled courts not to find preemption lightly, 44 F.3d
at 346, and with that in mind, it interpreted “service” to
be “limited to economic decisions concerning boarding,
e.g., overbooking or charter arrangements, and con-
tractual decisions whether to board particular ticketed
passengers.” Id. It concluded with this statement:
No. 11-3577 25
If appellants ultimately recover damages, the judgment
could affect the airline’s ticket selling, training or
security practices, but it would not regulate the eco-
nomic or contractual aspects of boarding. Any such
effect would be “too tenuous, remote or peripheral”
to be preempted by § 1305(a)(1).
44 F.3d at 347.
Travel All Over the World, supra, is particularly helpful,
since it involved both claims that were preempted (as
we noted earlier, those for tortious interference with
contract, intentional infliction of emotional distress, and
fraud) and claims that were not. In addition to breach of
contract claims that were plainly available under Morales
and Wolens, the plaintiffs in Travel All Over the World
presented claims alleging that the defendants had
defamed them by telling their clients that Travel was not
a reputable travel agency and that it had lied to its
clients in a number of respects. We concluded that al-
though the slander and defamation claims referred to
Travel’s services, they did not relate at all to the services
of the defendant airline. 73 F.3d at 433. Indeed, we said,
the statements themselves were not “services” at all, in
the sense of a bargained-for or anticipated provision
of labor from one party to another. Id. Nor did these
claims have the forbidden effect on rates, routes, or
services. We therefore held that these claims were not
preempted.
Last, we note that in ATA Airlines, Inc. v. Federal Express
Corp., 665 F.3d 882 (7th Cir. 2011), we held that a promis-
sory estoppel claim is sufficiently like a contract claim
26 No. 11-3577
to escape preemption under the ADA. We explained
that ruling as follows:
Promissory estoppel, as the word “promissory” im-
plies, furnishes a ground for enforcing a promise
made by a private party, rather than for imple-
menting a state’s regulatory policies. A garden-variety
claim of promissory estoppel—one that differs from
a conventional breach of contract claim only in basing
the enforceability of the defendant’s promise on
reliance rather than on consideration, In re Fort
Wayne Telsat, Inc., 665 F.3d 816, 819 (7th Cir. 2011);
Garwood Packaging, Inc. v. Allen & Co., 378 F.3d 698, 701-
02 (7th Cir. 2004)—is therefore not preempted.
665 F.3d at 884.
C
1
With this background in place, we can be brief in our
summary of the arguments the parties have presented.
S.C. Johnson urges that its tort claims seek civil damages
for the Carriers’ alleged criminal conduct: bribery, con-
spiracy, fraud, and racketeering. Although this criminal
scheme naturally affected the rates that S.C. Johnson
paid for transportation services, the underlying laws
prohibiting bribery and racketeering have only a
tangential effect on prevailing rates. Indeed, S.C. Johnson
says, from an economic point of view the laws pro-
hibiting bribery and other forms of corruption actually
foster the free market that the FAAAA was intended
No. 11-3577 27
to create; they do not hinder it. Upping the ante, S.C.
Johnson suggests that if its effort to recover for bribery
and racketeering in this case is found to be preempted,
then the State of Wisconsin by the same logic would be
unable to bring criminal prosecutions for the same
bribery and racketeering if it occurs in the transportation
sector.
For their part, the Carriers argue that preemption is
“clear.” All of S.C. Johnson’s allegations, they claim, boil
down to complaints that S.C. Johnson paid too much for
its transportation services. That is a classic argument
about rates and service, and they see no reason why
it should not be preempted. With embellishments that
we do not need to rehearse, the Carriers attribute to S.C.
Johnson the argument that “ordinary” torts will be pre-
empted but that really bad (“Machiavellian”) claims
related to criminal statutes are not. Having set up that
construct, the Carriers dismiss it as both waived and
meritless. They also argue that FAAAA preemption
must be decided on a claim by claim basis.
2
We see no need to discuss the more extreme arguments
that either side has made here. Instead, we confine our-
selves to the straightforward job at hand: deciding on
which side of the line established in Morales, Wolens, and
Rowe we should place each of S.C. Johnson’s theories.
As the Carriers correctly note, this is a task that requires
us to focus on each individual claim. We discuss every-
thing but count 5 below. Because S.C. Johnson has not
28 No. 11-3577
challenged the district court’s alternate holding that
count 5 was time-barred, we save for another day the
question whether the theory of aiding and abetting a
breach of fiduciary duty by providing bribes and kick-
backs is preempted.
a
Two of S.C. Johnson’s theories, in our view, relate
sufficiently to rates, routes, or services, that they must
be rejected as a matter of law under the FAAAA preemp-
tion rule. These are count 1, for fraudulent misrepre-
sentation by omission, and count 3, for conspiracy to
commit fraud. Each of these claims seeks to substitute
a state policy (embodied in law) for the agreements
that the parties had reached. Over strong arguments
questioning why a free market would ever need to
tolerate deceptive, fraudulent, or other offensive agree-
ments, the Supreme Court in Morales held that the
NAAG Air Travel Guidelines were nonetheless pre-
empted. 504 U.S. at 388-90; see also Mesa Airlines, 219
F.3d at 610. In the air sector, the Department of Trans-
portation remains available to address any problems of
this ilk that may exist. And one state’s deceptive practice
might be another state’s hard bargain. See Chad DeVeaux,
Lost in the Dismal Swamp: Interstate Class Actions, False
Federalism, and the Dormant Commerce Clause, 79 G EO.
W ASH . L.R. 995, 1021 (2011) (state consumer protection
laws “vary substantially, imposing myriad ‘different . . .
substantive elements, including differing requirements
of privity, demand, scienter and reliance’ ” (quoting
No. 11-3577 29
Kaczmarek v. IBM Corp., 186 F.R.D. 307, 312 (S.D.N.Y.
1999))); Edward M. Crane, et al., U.S. Consumer Protection
Law: A Federalist Patchwork, 78 D EF. C OUNS. J. 305, 305-06
(2011) (“While every state has enacted laws prohibiting
unfair or deceptive business practices, the scope, evolution,
and enforcement of those laws vary considerably from
state to state.”). State consumer protection laws often
contain well-meaning but widely varying paternalistic
provisions designed to protect consumers from the
rigors of the market. Congress decided, however, in
both the ADA and the FAAAA that it did not want (nor
did it want the states) to displace the market in this
way. Cf. Statland v. American Airlines, 998 F.2d 539, 542
(7th Cir. 1993).
b
S.C. Johnson’s remaining two theories assert that the
Carriers engaged in a criminal conspiracy to violate Wis-
consin’s bribery statute, W IS. S TAT. § 134.05, and that
they violated Wisconsin’s state equivalent to the
federal racketeering statute, W IS. S TAT. § 946.80. These
require a closer look.
We can begin by ruling out some possibilities that have
led to a finding of preemption in other cases. Neither
the bribery statute underlying the conspiracy theory
nor the racketeering statute provides non-bargained
alternatives to the contractual terms that the parties
selected. These theories are thus not like the ones we
rejected in Mesa Airlines, where we recognized that the
plaintiffs’ theories of tortious interference with contract,
30 No. 11-3577
breach of fiduciary duty, and fraudulent inducement
to enter a contract were, in the final analysis, simply
efforts to change the bargain that the parties had
reached. We have here state laws of general application
that provide the backdrop for private ordering; it is not
necessary or even helpful to lard a contract with clause
after clause promising not to violate such laws, whether
those laws are the anti-gambling laws to which the Su-
preme Court referred in Morales or they are minimum
wage laws, safety regulations (as recognized in Rowe),
zoning laws, laws prohibiting theft and embezzlement,
or laws prohibiting bribery or racketeering. As Rowe put
it, these are state regulations “that broadly prohibit[]
certain forms of conduct” and that affect transportation
companies (whether air or surface carriers) only in their
capacity as members of the public. 552 U.S. at 375.
Another way to look at this problem is to consider
the production function that drives market transactions
in the transportation industry. This function, which de-
scribes “the technical relationship between product output
and the input of factors of production,” see Production
Function, M ERRIAM W EBSTER O NLINE, http://www.merriam-
webster.com /diction ary/p rod uction% 20function,
typically includes inputs such as labor, capital, and tech-
nology. These inputs are often the subject of a particular
body of law. For example, labor inputs are affected by a
network of labor laws, including minimum wage laws,
worker-safety laws, anti-discrimination laws, and pension
regulations. Capital is regulated by banking laws, securi-
ties rules, and tax laws, among others. Technology is
heavily influenced by intellectual property laws. Changes
No. 11-3577 31
to these background laws will ultimately affect the costs
of these inputs, and thus, in turn, the “price . . . or service”
of the outputs. Yet no one thinks that the ADA or the
FAAAA preempts these and the many comparable state
laws, see, e.g., Californians For Safe & Competitive Dump
Truck Transp. v. Mendonca, 152 F.3d 1184, 1189 (9th Cir.
1998) (minimum wage laws not preempted), because their
effect on price is too “remote.” Morales, 504 U.S. at 390.
Instead, laws that regulate these inputs operate one or
more steps away from the moment at which the firm
offers its customer a service for a particular price. The
laws prohibiting bribery, racketeering, embezzlement, in-
dustrial espionage, and gambling similarly set basic
rules for a civil society, rather than particular terms of
trade between parties to a transaction.
But, one might think, the particular bribery and racke-
teering violations that S.C. Johnson has alleged here
come much closer to the point of contact between the
carrier and the customer. S.C. Johnson says that the
bribes had the effect of increasing the prices that it paid
for transportation under some contracts and that the
illegal activity affected its choice of contracting partners.
That may be true, but as we have just said, an effect on
price may be necessary for preemption, but it is not
sufficient. In our view, the enforcement of anti-bribery
(and more generally anti-corruption) laws is too
tenuously related to the regulation of the rates, routes,
and services in the trucking industry to fall within the
FAAAA’s preemption rule. It is important in this con-
nection to consider whether enforcement of a state law
has a generalized effect on transactions in the economy
32 No. 11-3577
as a whole, or if it affects only particular arrangements
(just as a firm with an embezzling employee might
have higher costs for a time while it recovered from the
thefts). Morales and especially Wolens took this perspective
insofar as they stressed that the broad applicability of
the preemption statutes should be understood in light
of their deregulatory purpose. Wolens, 513 U.S. at 230;
Morales, 504 U.S. at 390; cf. Stephen Breyer, Reforming
Regulation, 59 T UL. L. R EV. 4, 14-16 (1984) (discussing
airline deregulation and emphasizing market-wide
benefits over individual losses).
Consumer fraud laws, which are preempted, necessarily
have an industry-wide effect on prices and services, since
they dictate the rules for price advertising and other
marketing practices. Morales, 504 U.S. at 389-90. The
amount (if any) of necessary regulation is hotly debated
(thus, the wide variance in these laws from state to state).
Compare id. with California Dental Ass’n, 526 U.S. at 777-
78 and Morales, 504 U.S. at 423-24 (Stevens, J., dissenting).
Bribery laws are different: When they are enforced,
market pricing mechanisms work more efficiently—not
less. Susan Rose-Ackerman, The Political Economy of
Corruption, in C ORRUPTION AND THE G LOBAL
E CONOMY (Kimberly Ann Elliott, ed. 1997) 31, 42; see also
Timothy L. Fort & James J. Noone, Gifts, Bribes, and Ex-
change: Relationships in Non-Market Economies and Lessons
for Pax E-Commercia, 33 C ORNELL INT’L L. J. 515, 518 (2000).
The proper operation of private law preventing such
corruption is especially important in deregulated spaces.
Fort & Noone, supra, at 518. From an economic stand-
point, bribery operates as a privately-imposed transaction
No. 11-3577 33
cost on the affected sale—similar, in many ways, to a
“swipe fee” for credit card transactions or even a sales tax,
both of which are susceptible to regulation by state govern-
ments. See, e.g., N.H. H.B. 1319, 2012 Sess. (“An Act
Limiting Credit Card Interchange Fees Charged to Mer-
chants.”). State regulation of bribery is an attempt to lift
this “tax” from the shoulders of its consumers: Just as these
laws are not preempted by the ADA or the FAAAA; see
DiFiore v. American Airlines, Inc., 646 F.3d 81, 87 (1st
Cir. 2011) (stating “view that the Supreme Court would
be unlikely—with some possible qualifications—to free
airlines from most conventional common law claims for
tort, from prevailing wage laws, and ordinary taxes
applicable to other businesses” while holding a service
charge law related to the price of curbside baggage service
preempted), anti-bribery laws that have a similar effect
should also be able to operate.
Last, we address the fact that the injury that S.C. Johnson
alleges that it suffered as a result of the alleged
conspiracy to bribe its dishonest employee and as a
result of the racketeering activity bears some relation to
the price that it paid for transportation services and
the companies with which it contracted for those ser-
vices. The Carriers argue that this is the smoking gun that
proves that S.C. Johnson’s claims are “really” just about
rates and services. We see things differently.
We address the bribery count first. As we already
have discussed, Wisconsin’s law forbidding bribery (and
related offenses such as conspiracy or attempt to bribe)
should not be characterized for FAAAA purposes in
34 No. 11-3577
the same way as a consumer fraud and deceptive prac-
tices law (which imposes non-waivable state-ordered
provisions in contracts that displace private arrange-
ments) or an antitrust law (which forbids price-fixing or
its equivalents). It is not at all inevitable that the
damages that S.C. Johnson suffered as a result of Morris’s
dishonesty will move in lockstep with the amount of the
bribes that he took. The precise value of the travel ex-
penses, illicit excursions, and the cash bribes that Morris
pocketed, for instance, need not have had any effect on
the actual prices S.C. Johnson paid to its carriers. Cf.
U.S.S.G. § 2C1.1, app. note 3 (treating the “value of the
benefit received [as] the same regardless of the value of
the bribe”). Had Morris stolen from S.C. Johnson, or had
he surreptitiously used part of the chosen carrier’s
capacity to transport illegal drugs, or had he committed
any number of other crimes, S.C. Johnson would also
have been injured, and its injuries would ultimately
have had a tangential effect on its costs. These, however,
are the kinds of offenses that the Supreme Court has
already said fall on the “non-preemption” side of the line.
We thus conclude that S.C. Johnson’s second claim,
charging a conspiracy to violate the bribery statute,
is not preempted by the FAAAA.
Although the racketeering claim presents a closer
case, we conclude that it too may go forward. This
count asserts that each bribe paid by the Carriers and
received by Morris constituted “racketeering activity”
within the meaning of WOCCA, W IS. S TAT. § 946.80, and
each fraudulent invoice submitted by the Carriers consti-
tuted either mail fraud under W IS. S TAT. § 943.89 or
No. 11-3577 35
wire fraud under W IS. S TAT. § 943.90, and thus also
amounted to “racketeering activity” under WOCCA. To
the extent the racketeering charge relies on a bribery
theory, what we already have said about bribery is
enough to show why any relation to rates, routes, or
services is tangential enough to survive preemption. A
closer look at the mail and wire fraud offenses in Wis-
consin is helpful for the analysis of the additional
predicate offenses S.C. Johnson has alleged.
Wisconsin’s mail fraud statute provides that “[w]ho-
ever does any of the following [acts of using the mail] to
further commission of a financial crime or to sell, dispose
of, loan, exchange, alter, give away, distribute, supply,
furnish, or procure for an unlawful purpose any counter-
feit currency, obligation, or security is guilty of a Class H
felony.” The term “financial crime” is defined as “a
crime under §§ 943.81 to 943.90 or any other felony com-
mitted against a financial institution or an attempt or
conspiracy to commit one of those crimes.” W IS. S TAT.
§ 943.80(1). Many of the crimes in the sections
mentioned are specific to financial institutions (see
§§ 943.81 to 943.83, 943.85 to 943.87). The focus of § 943.89
and § 943.90, respectively the mail and wire fraud
statutes, appears to be the harm done to the intermediary
financial institution. Interestingly, the wire fraud statute
is entitled “Wire fraud against a financial institution,” but
it provides that “[w]hoever transmits or causes to be
transmitted electrically, electromagnetically, or by light
any signal, writing, image, sound, or data for the pur-
pose of committing a financial crime is guilty of a
Class H felony.” W IS. S TAT. § 943.90. If that is the case,
36 No. 11-3577
then whatever other problems S.C. Johnson may have
with this part of its racketeering theory, preemption is
not one of them. Once we take into account the conduct
targeted by the wire and mail fraud predicate offenses,
it becomes clear that they too relate at most tangentially
to rates, routes, and services. (It may be that the mail
and wire fraud predicate offenses that S.C. Johnson
has asserted are a poor fit for the underlying facts, but
we hasten to say that we are not making any such
holding, because this is an early stage of the case and
there is no telling what it may be able to develop
during discovery.) If S.C. Johnson prevails on these
claims, there will be time then for the district court to
consider whether the proper measure of damages
should be tied in any way to alleged overpayments, how
to evaluate allegations that Company A received a
contract that Company B otherwise would have been
awarded, or any other issues related to remedy.
III
We conclude that although the district court correctly
found that S.C. Johnson’s claims asserting fraudulent
misrepresentation by omission and conspiracy to commit
fraud were preempted by the FAAAA, it erred with respect
to the bribery and racketeering claims. We therefore
R EVERSE the judgment and R EMAND for further proceedings
consistent with this opinion.
9-21-12