R C^ VEDD -1-JAMES J. SWEENEY, P.J.: Plaintiffs-appellants, Peter Restivo, et al., appeal from the trial court's order that dismissed their claims against defendant-appellee, Continental

IN THE SUPREME COURT OF OHIO

Peter Restivo, et al

Appellants

vs.

Continental Airlines, Inc.

Appellee

Case No.: 11-0542(On Appeal from the 8a' DistrictCourt of Appeals Case No.10 CA 94926)

(An Appeal from the CuyahogaCounty Common Pleas CourtCase No. 09 CV 713869)

APPELLANTS' NOTICE OF APPEAL

R

Gerald W. Phillips (0024804) (Counsel of Record)Sam P. Cannata (0078621)CANNATA PHILLIPS LPA, LLC9555 Vista Way Suite 200Garfield Heights, Ohio 44125(216) 438-5091(Fax) (216) 587-0999Attorneys for Appellants

C VEDD^APR 0 4 2011

CLERK OF COURTSUPREME COURT OF OHIO

Jeffrey Saks (0071571)Jones DayNorth Point 901 Lakeside AvenueCleveland, Ohio 44114(216) 586-3939(Fax) 216-579-0212Attomey for Appellee

a

APR i) 4 2011

CLERK OF COURT$OPREME COURT OF OHIO

APPELLANTS' NOTICE OF APPEAL

Now comes the Appellants Peter Restivo and Carol Hageman who does hereby appeals

the decision from the Eighth District Court of Appeals, Case No. 10 CA 94926 filed with the

Court of Appeals on January 20, 2011 (Exhibit A) affirming the decision of the trial court

granting the Appellee's Motion to Dismiss based the doctrine of federal pre-emption under the

Airline Deregulation Act ("ADA") (Exhibit C), and which Court of Appeals denied the

Appellants' Motion for Reconsideration on February 17, 2011 (Exhibit B), Exhibits A, B and C

are attached hereto, to the Ohio Supreme Court upon grounds that said Court has jurisdiction

over the herein appeal upon grounds that substantial legal issues are contained herein this appeal

and issues of great public general issues are contained herein this appeal.

This Case involves Substantial Legal Issues and is a Case of Great Public General

Interest. This is a once in live time case destined to be heard by the U.S. Supreme Court upon

conflicting circuit court decisions, and important issues regarding credit cards affecting the over

13 million Ohioans and the over 300 million Americans who use gift cards and travel the

friendly skies in the United States. This case involves the multi-billion dollar gift card industry.

Consumers have been buying gift cards at astounding rates. In 2007, consumer spent more than

$97 billion on gift cards, an increase of 17 percent over the previous year. An estimated 61% of

Americans purchased at least one gift card in 2007. This appeal will involve a number of issues

of first impression, a number of novel issues, a number of legal issues requiring clarification and

application, and the application of principles of statutory construction. Basic principles of

statutory construction are involved in order to define and to determine the definition scope of the

following under the ADA: 1) definition of "service", 2) the scope of the "related to" phrase, 3)

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the Test- "tenuous, remote or peripheral manner", 4) the Test- "significant impact test" and

"competitive market forces", and 5) the scope of the Pre-emption doctrine.

Gerald W. Phillips (0024804)CANNATA PHILLIPS LPA, LLC9555 Vista Way Suite 200Garfield Heights, Ohio 44125(216) 438-5091Attorneys for Appellants

Proof of Service

A copy of said Notice of Appeal has been served upon Jeffrey Saks, Jones Day, North

Point, 901 Lakeside Ave., Cleveland, Ohio 44114, Attorney for Appellee, by ordinary mail this

4`h day of Apri12011.

Gerald W. Phillips (0024804)Attorneys for Appellants

2

Court of ZtppeaYg; of QDbioEIGHTH APPELLATE DISTRICT

COUNTY OF CUYAHOGA

JOURNAL ENTRY AND OPINIONNo. 94926

PETER RESTIVO, ET AL.

PLAINTIFFS-APPELLANTS

vs.

CONTINENTAL AIRLINES, INC.

DEFENDANT-APPELLEE

UDGMENT:AFFIRMED

`CiviTAppeal from theCuyahoga County Court of Common Pleas

Case No. CV-713869

BEFORE: Sweeney, P.J., Jones, J., and Rocco, J.

RELEASED AND JOURNALIZED: January 20, 2011

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ATTORNEYS FOR APPELLANTS

Gerald W. Phillips, Esq.Phillips & Company, L.P.A.P.O. Box 269Avon Lake, Ohio 44012

Sam P. Cannata, Esq.Cannata Phillips, L.P.A., L.L.C.9555 Vista Way, Suite 200Garfield Hts., Ohio 44125

ATTORNEYS FOR API'ELLEE

Jeffrey Saks, Esq.Tracy A. Stitt, Esq.Hugh R. Whiting, Esq.Jones DayNorth Point901 Lakeside AvenueCleveland, Ohio 44114-1190

FILED AND JOURNALI2ED06R APP,R. 22(C)

,`AN 2 0 2011

^. FUERSTAPPEILS

EP,

-1-

JAMES J. SWEENEY, P.J.:

Plaintiffs-appellants, Peter Restivo, et al., appeal from the trial court's

order that dismissed their claims against defendant-appellee, Continental

Airlines, Inc. ("Continental"), finding they are preempted by federal law and

otherwise fail to state a claim upon which relief couldbe granted. For the

reasons that follow, we affirm.

Plaintiffs' complaint alleges they purchased a gift card in the amount of

one thousand dollars ($1,000.00) for air travel and services on`Continental's

airline. The gift card had a one year, expiration date and when the d'onee

attempted to utilize the gift card after its expiration date,Continental refused

to honor it. Thereafter, plaintiffs pursued the subject class action lawsuit

against Continental,asserting claims that allege violations of Ohio's Gift Card

Statute and the Ohio Consumer Sales Practices Acts ("OCSPA") andalso

containing a claim for unjust enrichment. Continental responded to the

complaint with a motion to dismiss, asserting that the claims based upon alleged

violations of state law were preempted by the Airline Deregulation Act of 1978,

49 U.S.C. §41713 ("ADA") and that the unjust enrichment claim fails due to the

existence of an express contract.

The first six assignments of error all challenge the propriety of the trial

court's finding that the ADA preempted their state law claims.

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We review a court's granting a motion to dismiss de novo. Tisdale v.

Javitch, Block & Rathbone, Cuyahoga App. No. 83119, 2003-Ohio-6883. When

ruling on a motion to dismiss for failure to state a claim, the court must assume

that all factual allegations in the complaint are true, and it must appear beyond

a reasonable doubt that the plaintiff can prove no set of facts waxiranting

recovery. Tulloh u.GoodyearAtomic Corp. (1992), 62 Ohio-St.3d 541; 584NI":2d'

729.

We note that appellants' arguments incorporate x'evisiorrs to the C'redit`

Card Act of 2009 that took effect in August of 2010 and that add provr'sions f

regulate the,use and.issuance of gift cards, includiiig that'allgift cards'

after August.22, 2010 mayrlot carry an expiration period ol'Iess'than five yea r̀`s:

See 15 U.S.G. 1693. However, appellants did not assert a claim ixrider the `

Electronic Funds Transfer Act orany provision of that law becausethe ^gift'card

issued in this case pre-dates the effective date of the subject federal legislatiion:

Consequently, we are not.in a,position to determine how the recently enacted

legislation will impact gift cards issued by an airline.

Appellants asserted claims pursuant to Ohio's gift card statute and

OCSPA. However, the ADA explicitly provides: "a State;* * *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

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transportation under this subpart." 49-U.S.C. 41713(b)(1). The prior version of

this law provided that "no State * * * shall enact or enforce any law; rule;

regulation, standard or other provision having the force and effect of law relating

to rates, routes or services [plural] of any air carrier ***." Am. Airlines v.

Wolens (1995), 513 U.S. 219, 222-223, 115 S.Ct. 817, 130 L.E.2d 715 (noting that

Congress intended the revision to make no substantive °change.)

In arguing that the. ADA does not preempt their ' state law claims,

appellants rely on Charas;v. Trans`Wor,ld Airlines, Inc. (C:'A.'9,1998), 160 F.3d

1259. In Charas, the Ninth Circuit examined the scope of the ADA's preeiription

with regard tojstate law-tort-claims. The Court in Charas focused upon'the

tenuous connection between a state law tort claim against an airlirie and ai'rline

deregulation, i:e., whether "the state laws underlying claims fru§trate the goal

of economic deregulation by interfering with the forces of competition."Id. at

1263. The.Court noted the United States Supreme Court's indication that ADA

would not preempt most state law tort claims, citing` Morales v. Trans World

Airlines, Inc. (1992),504 U.S. 374, 390, 112 S.Ct. 2031,119 L.E.2d 157 ("some

state action may affect [airline fares] in too tenuous, remote, or peripheral a

manner to have pre-emptive effect.") and Wolens, 513 U.S. -at 230-33 (breach of

contract claim for airline's decision to devalue frequent flyer miles not

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preempted).' The Court then concludedthat Congress,•by enacting the'ADA,

"did not intend to immunizethe airlines from liability for personal injuries

caused by their tortious conduct." Charas, 160 F.3d at 1266. The Court further

interpreted that "Congress used `service' in § 1305(a)(1) in the public utility sense

- i:e., the provision of air transportation to and from various markets at

various times. * *`[S]erviee'- dfles not refer to tlie push7ng of bevera4e=t ai^ts,

keeping the aisles elear of stumbliug blocks, the saf'e handliiig'and-Atorage ofthe

luggage, assistance to.passen,gersrin x"reed, :orflike functions." Id.2 `

Contineutal doelp.not dispute; the, ixa;terpretatiorL-.of "service" set

Charas but contends , that it does:. not . bar. the ADA's ^preemptive

appel,lants' claims. Appellants acknowledgetheirclnims stem frcam:a cointraottial

relationship;and attached a copy of.the terms ther'eof to the complain't:,

terms include that the gift card is ";[o]nly valid fox airtravel purchasps, incluilrn'g

tickets, taxes and surcharges" and;that;it is "[v]alid for one year from the date'

certificate is originally issued." Theelaims involved in Charas related to injuries

sustained by passengers due to tortious conduct while appellants in this matter

are attempting to have provisions of the gift card declared invalid and in

'Appellants did not assert a breach of contract claim and,are not seeking to have.the contract enforced according to its terms.

ZFor this reason, appellant's argument set forth in the fifth assignment of erroris unavailing.

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violation of Ohio's consumer protection laws. Unlike the facts at issue in Charas;

the gift card is related to theprovision of airline service in the "public utility

sense," i.e., purchasing a ticket for the provision of air transportation to and

from a market at certain times.

The purpose of the ADA is "[t]o ensure that the States would not undo

federal deregulation with regulations of their own." Morales, 504 U:S. `at 378.'

In Morales, the United States Supreme Court interpreted the "relating to"

language of the ADA broadly. Id. at 386-387. Preemption may occur even if a

state law's effect on rates, routes, or services "is only indirect."

Although appellants argue that the gift card is not a servicebut rather the

equivalent of money, they recognize its purpose and use is for thepurchase of`

"air travel or services" from the airline. As such,the gift card is "related to" a

price, route, or service of an air carrier: It is not sim,ply a financial transaction

as appellants argue because its value derives from the intended purpose of

securing goods or services from Continental in the future. Stated differently, the

gift cards were purchased in lieu of an immediate, direct purchase of airline

tickets. If appellants had directly purchased airline tickets there would be no

dispute that the tickets related to the airline's service. The fact that the gift

card postpones the eventual purchase of an airline ticket does not alter that the

gift card is still related to the provision of air transportation. Appellants do not

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suggest or contend that the gift cards would or could be used to purchase

anything but flight tickets. Therefore, the gift cards at issue do not involve the

provision of amenities that could be considered only tangentially related to

services as was the determinative factor in Charas.

At least one other state appellate court has addressed the same issue

presented here and also -concluded that the ADApreenipts state' law claims

challenging the expirationdates of airline:gift cards that are redeemabl'efor'

tickets. E.g., Tanen, u. S,W.flirlines:Co. (2010), 1$7 Cal.App.4th 1166;''1I4

Cal.Rptr.3d 743. In Tanen, the;plaintiff, maintained-that Bouthwestviolaiteci

state: law, by. selling : gift., certifaeates, `edeeznable #'or ' aiiline ti.eket*s; " that

contained expiration dates.: Th.e Court held that allowing'Tanen^to inaintain

state )aw claims, including"aileged violations of consumer and gift cardfl'aws,

would result in substituting state, ,governmental com-mands for "competitive

market forces" in determining the kinds of travel certificates airlines provide

their customers. The court further reasoned that "to interpret the ADA to

permit states to impose their own requirements on the services Southwest offers

nationally `could easily lead to a patchwork of state service-determining law,

rules and regulations."' And, "[t]hat `state regulatory patchwork is inconsistent

with Congress' majorlegislative effort to leave such decisions, where federally

unregulated, to the competitive marketplace."' Tanen, 187 Ca1.App.4th at 1170,

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quoting, Rowe v. New Hampshire Motor Transport Assn. (2008), 552 U.S. 364,

373, 128 S.Ct. 989, 169 L.Ed.2d 933. Ultimately, the court in Tanen concluded

that airlines "do compete with one another with regard to the various services

they provide * * * passengers may well choose to purchase a travel certificate on

one airline rather than another based on the certificate's expiration date or lack

thereof. Accordingly [the state law restriction on gift card expiration dates] is

not `peripheral' to airline competition and deregulation within the meaningof

Charas and related cases." Id. at 1171. That same logicaud conclusion apply

equally here.

Assignments of error one through six are overruled. The final assignment

of error contests the trial court's order that disjnissed appellants' claini for

unjust enrichment. The face of the complaint clearly recognizes the existence of

an express contract, which was attached to it. Appellants did not"cliallenge the

validity of the contract but sought to have the contract declared unlawful

through the application of state laws and policies external to the parties'

agreement, which claims were preempted. Where a valid contract exists

between the parties, there can be no recovery under a theory of quantum meruit

in the absence of fraud, bad faith, or illegality. Aultman Hosp. Assn. v.

Community Mut. Ins. Co. (1989), 46 Ohio St.3d 51, 55, 544 N.E.2d 920, citing

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Ullmann v. May (1947), 147 Ohio St. 468;'72 N.E.2d 63, paragraph three of the

syllabus. The seventh assignment of error is overruled.

Judgment affirmed.

It is ordered that appellee recover from appellants costs herein taxed.

The court finds there, were reasonable grounds for this appeal.

It is ordered that a special mandate be sent to eaid c'ourt to carrythis^'

j udgment into execution.

A certified copy of this entry shall constitute the rnandate'purstiaYit'to

Rule 27 of the Rules of Appellate Procedure.

LARRY A. JONES, J., andKENNETH A. ROCCO, J., CONCUR

Court of Appeals of Ohio, Eighth District

County of CuyahogaGerald E. Fuerst, Clerk of Courts

PETER RESTIVO, ET AL.

Appellant COA NO. LOWER COURT NO.94926 CP CV-713869

COMMON PLEAS COURT-vs-

CONTINENTALAIRLINES, INC

Appellee MOTION NO. 441474

Date 02/17/11

Journal Entry

z-;

MOTION BY APPELLANT FOR RECONSIDERATION AND CLARIFICATION IS DENIED.

Judge LARRY A. JONES, Concurs

Judge KENNETH A. ROCCO, Concurs

W-0723 P60868

RECEIVED FOR FILING

1 7 2011

Presiding Judgi,J'AMES J. SWEENEY

PETER RESTIVO ET ALPlaintiff

CONTINIENTAL AIRLINES INCDefendant

96 DISP.OTHER - FINAL

DEFENDANTS MOTION TO DISMISS IS GRANTED. O.S.J.COURT COST ASSESSED TO THE PLAINTIFF(S).

-9603/01/2010

IIIIIIIIIIIIIIIlIIIIIIIIIIIIIINIIIIIIIIIIIIIIIII IIIII61933273

IN THE COURT OF COMMON PLEASCUYAHOGA COUNTY, OHIO

i Case No: CV-09-713869

Judge: RICHARD J MCMONAGLE

Judge Signature Date

RECEIVED FOR FILING

MAR022010C^ O FUE T^ CLERK

6YDEA

JOURNAL ENTRY

/

i

Pagelofl

STATE OF OHIO )) SS:

CUYAHOGA COUNTY

PETER RESTIVO, et aL,

Plaintiffs,

V.

CONTINENTAL AIRLINES, INC.,

Defendant.

IN THE COURT OF COMMON PLEAS

CASE NO. CV-713 869

ORDER

Richard J. McMonaele, J:

After full consideration of Defendant Continental Airlines, Inc.'s Motion to Dismiss

and Plaintiff Peter Restivo's Brief in Opposition, the Court hereby GRANTS Defendant's

Motion to Dismiss for the following reasons.

Motions to dismiss for failure to state a claim upon which relief can be granted test the

sufficiency of the complaint. To survive a motion to dismiss, the complaint need only contain a

short and plain statement showing the plaintiff is entitled to relief. Civ.R. 8(A). Making all

inferences in favor of the non-movant, and accepting all allegations in the complaint as true, the

court must determine whether the plaintiff ha's stated a plausible claim for relief. See Iqbal v.

Ashcrojt, 129 S.Ct. 1937,1949 (2009). Plaintiff's three claims for relief-violation of Ohio's

"gift card" statute, Ohio Rev. Code § 1349.61 (2010); violation of the Ohio Consumer Sales

Practices Act, Ohio Rev. Code § 1345.01 etseq. (2010); and unjust enrichment-fail to meet

this standard.

The facts of this case are brief and simple. Plaintiff purchased a$1,000.00 gift card

from Defendant's website on or about December 25, 2007. The gift card had a one-year

expiration date. In 2006, the Ohio legislahueenacted a statute imposing a two-year minimum

expiration date for gift cards, with certain exceptions that are irrelevant to this case. Plaintiff

attempted to redeem the purchased gift card after the one-year expiration date. Defendant did

not honor the attempt.

The issue raised by the above facts is whether the federal Airline Deregulation Act, 49

U.S.C. § 41713 (2010), preempts the applicability to Defendant, an air carrier, of a two-year

minimum exp,iration date imposed by Ohio's gift card statute. The Airline Deregulation Act

(ADA) prohibits a state from enacting or enforcing any law "related to a price, route, or service

of an air carrier that may provide air transportation ...."

The ADA preempts state-imposed regulation of air carriers. The United States Supreme

Court has twice addressed questions sirrilac to the instant issue. In a challenge to American

Airlines' retrospective changes to customer frequent flyer programs, the Court denied claims

made under the Illinois Consumer Fraud and Deceptive Business Practices Act as preempted by

the ADA because the claims related to services. American Airlines, Inc. v. Wolens, 513 U.S.

219, 222, 226 (1995). The ADA left to the airlines themselves "the selection and design of

marketing mechanisms appropriate to the furnishing of air transportation services...." Id. at

228. In Morales v. Trans World Airlines, Inc., 503 U.S. 374, 378-79, 384 (1992), guidelines

for preventing deceptive advertising practices in, among other areas, the air travel industry,

enacted in state general consumei protection laws were deemed preempted by the ADA

because they had "a connection with, or reference to, airline rates, routes, or services."

Gift cards are, at least in part, tti marketing mechanism used to appeal to consumers in a

competitive market. Ohio's gift card statate mandates a two-year expiration date for all issued

gift cards. This "intrusive regulation of airline business practices"-a means to "guide and

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police the marketing practices of the airlines"---affects competition in the airline industry.

Wolens, 513 U.S. at 228. Under the broad view of preemption adopted by the Supreme Court,

while Ohio's gift card statute might not be intentionally aimed at regulating air carriers, the

ADA preempts a two-year mandatory eXpitation date on gift cards issued by Defendant.

Furthermore, Plaintiff's unjust enrichment claim must fail because an express contract

exists. Plaintiff's Complaint makes no allegation of an ambiguous or non-existent contract.

Instead, Plaintiff asserts the existence and performance of a contract (Compl, at ¶¶ 6-9),

causing the unjust enrichment claim to fail as a matter of law.

Based on the above, Plaintiff has failed to present any plausible claim for relief and the

Court therefore GRANTS Defendant's Motion to Dismiss.

IT IS SO ORDERED.

March ^ 2010

Copies to:

Gerald W. Phillips, Esq.Sam P. Cannata, Esq.Cannata Phillips LPA, LLC9555 Vista Way Suite 200Garfield Heights, Ohio 44125Attorneys for Plaint^s

Hugh R. Whiting, Esq.Jeffrey Saks, Esq.Tracy A. Stitt, Esq.Jones DayNorth Point901 Lakeside AvenueCleveland, Ohio 44114Attorneysfor Defendant

RECEIVED FOR FILING

MAR022D10GE FUERST CLERK

gy DEP.