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In American Airlines, Inc. v. Wolens, 1 members of American Airline, Inc.'s (American) frequent flyer program brought a class action against the airline for breach of contracts and violations of Illinois' Consumer Fraud and Deceptive Business Practices Act (Consumer Fraud Act). Plaintiffs' action sough damages and injunctive relief against the airline's retroactive modification of its frequent flyer program. 2 The Supreme Court held that the Airline Deregulation Act of 1978 (ADA), 49 U.S.C. app. Section 1301(a)(1), pre-empted claims under the Consumer Fraud Act, but that the ADA did not, conversely, pre-empt stat law breach of contract actions alleging that American had violated an agreement which it had entered into with its passengers.

 The ADA, which regulates domestic air transport, prohibits states from "enact[ing] or enforc[ing] any law, rule, regulation, standard, or other provision having the force and effect of law relating to rates, routes, or services of any air carrier." 49 U.S.C. app. Section 1301(a)(1). This pre-emption provision of the ADA was specifically enacted to ensure that the States would not "undo federal deregulation with regulation of their own." American Airlines, supra, 115 S.Ct. at 821, citing, Morales v. Trans World Airlines, Inc. 112 S. Ct. 2031, 2034 (1992).

 The ADA pre-emption provision had been previously invoked in Morales, supra, and the Supreme Court found it applicable here as well. In Morales, the Supreme Court ruled that the ADA pre-empted the airline fare advertising provisions of the National Association of Attorneys General guidelines. Similarly, in this case, the Supreme Court found that, post-Morales, the Consumer Fraud Act was merely a prescriptive, state-imposed regulation of air carriers and, as such, Plaintiffs' claims under the Consumer Fraud Act were pre-empted by the ADA.

 However, the Supreme Court did not find that the ADA prevented court adjudication of contract terms set by the parties themselves. The ADA was designed to promote "maximum reliance on competitive market forces." 49 U.S.C. app. Section 1302(a)(4). In that regard, "[m]arket efficiency requires an effective means to enforce private agreements." 115 S.Ct. at 824. Court enforcement of private agreements promotes the market efficiency that the ADA contemplates, and also comports with relevant DOT regulations which recognize the "vitality of contracts governing transportation byu air carriers." Id. at 825. Accordingly, the Supreme Court found that the ADA pre-emption clause allows for suits which seek recovery soled for an airline's breach of its own self-imposed contractual obligations.3

 In its defense, American asserted, inter alia, that claims filed under the Consumer Fraud Act were substantively the same as the Plaintiffs breach of contract claims, and if one set claims was pre-empted, the other must also be preempted. The Supreme Court determined, however, that such is not the case - especially since a simple breach contract claim "does no amount to a cause of action cognizable under the [Consumer Fraud] Act and the Act should not apply to simple breach of contract claims." Id., citing, Golembiewski v. Hallberg Ins. Agency, Inc., 635 N.E.2d 452, 460 (Ill. App. 1994). The Supreme Court was accordingly unpersuaded by American's arguments, and the Supreme Court found that the question of whether American, by contract, reserved its right to change the frequent flyer program, was a matter of contract interpretation that was open for adjudication on remand.

In Radio Ass'n on Defending Airwave Rights, Inc. v. U.S. Dep't of Transp., 4 the Sixth Circuit was asked to review, enjoin and set aside a regulation of the Federal Highway Administration (FHWA) which prohibits the use of radar detectors in commercial motor vehicles (CMV). 5 The petition for review was denied.

 Petitioners, the Radio Association of Defending Airwave Rights, Inc. (RADAR) and Frank Figuero, a CMV operator, claimed that FHWA's rulemaking banning the use of radars in CMVs was arbitrary and capricious. Petitioners argued (i) that FHWA did not find that radar detector use causes or contributes to the occurrence of CMV accidents; (ii) that FHWA failed to evaluate the effect of the rule on speed distribution in the overall traffic stream; (iii) that FHWA did not address the efficacy of the rule in light of CMV crash data regarding heavy trucks; (iv) that FHWA failed to show the rule's efficacy in light of evidence that state radar detector bans have not decreased radar detector usage; and finally, (v) that FHWA had reversed its position on the appropriateness of a federal ban on radars in CMVs without explanation.6

 The Court rejected Petitioners' arguments and found that the rulemaking was not arbitrary and capricious.7 The Court's denial of the petition for review was based, in part, upon the fact that there was no support for the Petitioners' assumption that accident causation must be linked to radar detector use before FHWA could promulgate the rulemaking. Indeed, as the Court opined, the Motor Carrier Safety Act of 1984, 49 U.S.C. Section 31,131 et seq., gave FHWA all the necessary authority to regulate truck safety. Furthermore, the administrative record showed that it was reasonable for FHWA to conclude that a ban on radar detectors in CMVs would increase traffic safety.

 The Court further stated that FHWA had also adequately explained that its prior reluctance to issue a rulemaking which banned the use of radar detectors in CMVs was based on federalism concerns. FHWAs federalism concerns were subsequently overcome, however, because the comments FHWA received in response to the Notice of Proposed Rulemaking persuaded FHWA that the safety problem presented by CMVs using radar detectors was national in scope. The Court was satisfied with FHWA's approach. 8

 Petitioners also argued that the rulemaking must be set aside because the agency did not conduct a proper cost assessment of the proposed rule as required by the Motor Carrier Safety Act. 9 Petitioners stated that the assessment was incomplete because it failed to consider the costs that states will incur in enforcing the ban. In addition, Petitioners felt that the cost analysis was flawed because it provided no factual basis for the number of accidents which the radar detector ban would affect, or for its assumption that a radar detector ban would reduce the severity of injuries in accidents.

 The Court determined that the cost-assessment was not arbitrary and capricious 10 because FHWA had no obligation to include the cost of enforcement in its cost-analysis. In addition, FHWA's cost- assessment was not flawed because it had explained how the relevant number of accidents was calculated, and any "difficulty in establishing specific quantified cost or benefit data would no render the rulemaking arbitrary and capricious." Radio Ass'n, supra, citing, S.Rep. No. 98-554, 98th Cong., 2d Sess. 8 (1984).

 DOT's request for $36.9 billion in fiscal year 1996 finding was met with disapproval throughout the transportation industry since the budget request failed to reflect DOT reorganization plans. The DOT proposal contemplated that almost eighty percent of the requested funds be withdrawn from the Highway Trust Fund and the Airport and Airways fund, rather that from the general fund. The House Transportation and Infrastructure Committee rejected this notion, and instead, supported a bill which would remove from the budget all four transportation trust funds administrated by DOT.

 DOT has firmed-up plans to reorganize the agency into three departments (down from ten). The new departments would be organized along modal lines. The Intermodal Transportation Administration will combine the functions on several modal agencies into a singe, streamlined and integrated facility. The Federal Aviation Administration (FAA) will retain jurisdiction over aviation safety, regulation and certification, while its air traffic control operations will become an independent governmental corporation. Finally, the Coast Guard will maintain authority over maritime navigation, communications and safety standards.

 Secretary Pena recently announced a new DOT program - the "Partnership for Transportation Investment" (PTI). PTI has a $2 billion budget and will fund thirty-five transportation projects in twenty-one states. The program is designed to cut red tape and give states more flexibility in using outside financing for all modes of transportation construction. Pena hopes that the program will bridge the $12 billion per year "infrastructure gap" - i.e., the money needed to support growth despite governmental budget constraints.

 The U.S. government has begun talks on an "open skies" aviation agreement with nine European governments. DOT Secretary Pena called the talks the most significant effort to deregulate airline service since the U.S. industry was deregulated fifteen years ago. The talks are part of the initiate to open the aviation markets in Europe, which was announced by Pena last November.

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 Footnotes:

 1 115 S.Ct. 817 (1995). The case was on appeal from the Illinois Supreme Court. Return

 2 Plaintiffs challenged such retroactive changes in the frequent flyer program as capacity controls (limited seat availability for passengers obtaining seats with frequent flyer credits) and blackout dates. 115 S.Ct. at 822. Return

 3 American argued that its contracts should be monitored exclusively by DOT rather than by the courts. 115 S.Ct. at 825. American asserted that DOT requires all airlines to file a performance bond conditioned on the airline's "making appropriate compensation . . ., as prescribed by [DOT], for failure . . . to perform air transportation in accordance with agreements therefor." Id., citing, 49 U.S.C. App. Section 1371(q)(2)(setting-forth FAA regulations). Return

 The Supreme Court rejected American's argument and stated that DOT only uses these performance bonds to ensure that, "when a carrier's financial fitness is marginal, funds will be available to compensate customers if the carrier goes under before providing already-paid-for services." Id. The Supreme Court felt that this provision was not intended to usurp the court adjudication of air carrier contract disputes. Accordingly, the Justices rending the decision all agreed that the courts, and not DOT, should resolve the types of issues raised here.

 4 No. 94-3140, 1995 U.S. App. LEXIS 3032 (6th Cir. February 17, 1995). The final order under review was DOT Order No. MC-90-14, which was issued on December 14, 1993. Return

 5 The FHWA's final order amended the regulations set forth at 49 C.F.R. Parts 390 and 392. Return

 6 The Owner-Operator Independent Drivers Association, Inc. (OOIDA) supplemented Petitioners' arguments, and stated in its amicus curiae brief in support of Petitioners that the rulemaking denied CMV operators equal protection of the laws. OOIDA claimed that the conclusion that radar detectors cause speeding, and the speeding causes accidents, applies equally to all vehicles and the FHWA improperly limited the ban to CMV's because of " 'a . . .congressional desire to harm a politically unpopular group.' " OOIDA's Brief, at 3 (quoting, concluded that CMV's are not similarly circumstanced for purposes of an equal protection claim as CMV's are much larger and heavier than other vehicles, and the damage CMV's cause when involved in accidents at excessive speeds is much greater. Return

 7 The Court applied the Administrative Procedure Act's (APA) standard of review and stated that "[w]e must uphold a rule unless it exceeds the authority vested in the agency by Congress or is 'arbitrary, capricious, an abuse of discretion, other otherwise not in accordance with the law. . ." Radio Ass'n, supra, at *18-19, citing, National Truck Equip. Ass'n v. National Highway Traffic Safely Admin., 919 F.2d 1148, 1152-53 (6th Cir. 1990). Return

 8 In 1988, FHWA did not under take a rulemaking because it lacked scientific evidence which established a correlation between radar detector use and traffic safety. Petitioners accused FHWA of changing its position on the CMV radar ban issue due to political pressure. Petitioners alleged that FHWA had been improperly influenced by Congressional pressure on two occasions: (i) when Congress ordered the agency to promulgate a rulemaking on a CMV radar ban by mandating it in a rider to the 1992 DOT Appropriations Act; and (ii) when the senate committee which controlled the FHWA's budget subsequently applied pressure. Return

 The Court stated that before FHWA';s rulemaking could be reversed on the grounds of improper Congressional pressure, two conditions had to be met: First, "the content of the pressure upon the Secretary [must be] designed to force him to decide upon factors not made relevant by Congress in the applicable statute. . .[and][s]econd the Secretary's determination must be affected by those extraneous considerations." Radio Ass'n, supra, citing Sierra Club v. Costle, 675 F.2d 1231 (D.C. Cir. 1971), cert, denied, 405 U.S. 1030 (1972)). The court found that the test had not been met in this case.

 9 See 49 U.S.C. Section 3102(d) and 49 U.S.C. app. Section 2505(c)(2). Return

 10 Radio Ass'n, supra, citing, Center for Auto Safety v. Peck, 751 F.2d 1366, 1366 (D.C. Cir. 1985). Return

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