Phi Air Medical, LLC v. Corizon, Inc.

03/05/2021
IN THE COURT OF APPEALS OF TENNESSEE
AT NASHVILLE
January 28, 2021 Session

PHI AIR MEDICAL, LLC v. CORIZON, INC.

Appeal from the Chancery Court for Williamson County
No. 45485 James G. Martin, III, Judge
___________________________________

No. M2020-00800-COA-R3-CV
___________________________________

PHI Air Medical brought suit based on unjust enrichment and action on sworn account
against Corizon for air ambulance services it provided without a contract after Corizon paid
only a portion of the billed amount, citing its practice of paying according to statutory caps
and Medicare rates. The trial court granted summary judgment, finding that the preemption
clause of the Airline Deregulation Act, 49 U.S.C. § 41713, which provides that 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 transportation,”
preempts PHI’s claims. We affirm the trial court’s finding that PHI’s claims are preempted
and that summary judgment was proper. We reverse the trial court’s grant of PHI’s
voluntary nonsuit of a claim that PHI did not plead.

Tenn. R. App. P. 3 Appeal as of Right; Judgment of the Chancery Court
Affirmed in Part, Reversed in Part; Case Remanded.

JOHN W. MCCLARTY, J., delivered the opinion of the court, in which THOMAS R. FRIERSON,
II, and KRISTI M. DAVIS, JJ., joined.

Erika R. Barnes, Nashville, Tennessee, and Chrisandrea L. Turner, Lexington, Kentucky,
for the appellant, PHI Air Medical, LLC.

E. Todd Presnell, Junaid A. Odubeko, and Edmund S. Sauer, Nashville, Tennessee, for the
appellee, Corizon, Inc.
 OPINION

I. FACTUAL AND PROCEDURAL HISTORY

Corizon, Inc. of Brentwood, Tennessee, is a provider of healthcare services that
contracts with government entities across the country to provide healthcare to individuals
in state custody. PHI Air, LLC (“PHI”) is an Arizona company that has provided air-
ambulance services to inmates at Corizon-serviced correctional facilities.

PHI filed a complaint in Williamson County Chancery Court in August 2016,
alleging that it had provided emergency air ambulance service in Arizona, Indiana, New
Mexico, and Maryland to correctional facilities that had contracted with Corizon for
medical services; that it billed Corizon its “customary and usual” rates; and that Corizon
refused to pay the full amount. Both parties initially agreed that there was no contract
between the parties PHI and Corizon governing the dispute.1 PHI sought relief based on
theories of unjust enrichment and action on sworn account, and asked the court for damages
in the amount of $3,307,345.47, plus any additional amount that may accrue prior to the
resolution of the case, pre-judgment interest, and attorney’s fees.2

In its answer, Corizon denied that PHI was entitled to the damages sought and
asserted that the rates applicable to some of PHI’s claims were governed by Arizona and
Indiana law and that the remaining claims were barred by the doctrines of laches and
waiver. According to Corizon, when rates are not set by a contract or capped by a state
law that regulates taxpayer-funded correctional healthcare expenses, Corizon reimburses
providers a “default rate” based on the Medicare reimbursement rate. Arizona law
statutorily limits provider reimbursement, and Corizon also has a contract with the State of
Arizona containing the statutory limitation. See Ariz. Rev. Stat. § 41-1608(2). In Indiana,
Corizon paid PHI according to the statutory correctional-healthcare rates, which are 104
percent of Medicare reimbursement rates. See Ind. Code § 11-10-3-6(c).

In October of 2017, the parties filed cross-motions for partial summary judgment
on the Arizona and Indiana claims to determine whether the Airline Deregulation Act of
1978 (“ADA”), codified in scattered sections of 49 U.S.C., preempted the state statutes
capping reimbursement for correctional-healthcare services. Corizon asserted that it was
entitled to summary judgment on PHI’s claims related to Arizona and Indiana invoices
because it paid pursuant to state statutes which cap reimbursement for third-party

1
Three years into the litigation, Corizon asserted, as a defense to unjust enrichment, that a contract
governed the Indiana dispute.
2
The trial court permitted PHI Air to amend its complaint in March 2018 to include damages
incurred after the filing of the original complaint. This number reflects the damages requested in the
Amended Complaint; however, the disputed amount continued to increase during the pendency of the case
because Corizon continued to use PHI’s services.

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healthcare providers. PHI argued that the ADA preempted the state statutory caps as
applied to their air ambulance services because those statutes “relate to” air carrier prices.
The Court granted PHI’s motion and denied Corizon’s, agreeing that the ADA preempts
the state correctional-healthcare statutes on which Corizon had relied.3

In October 2019, PHI filed another Motion for Summary Judgment seeking an
award on both the unjust enrichment and action on sworn account claims. Corizon filed a
cross-motion for summary judgment arguing that the ADA preempts PHI’s causes of action
because they “relate to” air-carrier prices and seek to impose implied-in-law payment
obligations. In its March 5, 2020, Memorandum and Order, the trial court denied PHI’s
motion, and granted in part and denied in part Corizon’s motion. The trial court held that
the ADA preempts all unjust enrichment claims involving air carriers, as a matter of law,
but that a genuine issue of material fact existed as to whether the alleged Indiana contract
was enforceable. PHI filed a motion to nonsuit, pursuant to Tenn. R. Civ. P. 41.01, any
claim it may have asserted as to an Indiana contract, and on May 4, 2020, the trial court
entered an Order of Nonsuit of Certain Claim and Entry of Final Judgment dismissing
without prejudice any contractual claim PHI may have had arising from an Indiana contract
and ordering that its March 5 Memorandum and Order was a final and appealable judgment
as a matter of right. PHI timely appealed.

II. ISSUES

PHI states three issues for our review, which can be combined into a single issue:
whether PHI’s unjust enrichment and action on sworn account claims are preempted by the
ADA.

Corizon states the following additional issues for review:

1. Did the Chancery Court mistakenly allow PHI to nonsuit a breach of
contract claim relating to Indiana services that PHI did not plead, seek leave
to plead, or otherwise assert in this litigation?

2. Does the ADA preempt state statutes capping the reimbursable
amount for correctional-healthcare services?

3. Is PHI entitled to recover its unilaterally set “usual and customary”
prices or the reasonable value of the services provided?

3
The ADA provides that “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 effect of law
related to a price, route, or service of an air carrier that may provide air transportation[.]” 49 U.S.C. §
41713(b)(1).

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 4. Do PHI’s claims seeking additional compensation for Indiana services
fail on the merits because a contract governs those services?

5. Does PHI’s action on sworn account fail on the merits because
Corizon disputes the alleged debt?

III. STANDARD OF REVIEW

A trial court’s decision of whether to grant or deny a motion for summary judgment
is a question of law; thus, our review is de novo with no presumption of correctness
afforded to the trial court’s determination. TWB Architects, Inc. v. Braxton, LLC, 578
S.W.3d 879, 887 (Tenn. 2019). Summary judgment is appropriate if no genuine issues of
material fact exist, and the movant meets its burden of proving that it is entitled to a
judgment as a matter of law. Id.; Tenn. R. Civ. P. 56.04. As there are no material facts in
dispute underlying the trial court’s grant of summary judgment, we are tasked with
resolving only issues of law.

IV. ANALYSIS

The outcome of this controversy hinges on the scope of the pre-emption clause of
the ADA, which provides that “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. . . .” 49 U.S.C. § 41713(b)(1). PHI argues that the trial court erred in finding
that its claims based on unjust enrichment and action on sworn account are pre-empted by
the ADA because

(1) an award of PHI’s usual, customary, and reasonable rates under
Tennessee’s general unjust enrichment common law or action on sworn
account statute does not have the requisite “forbidden significant effect” on
air carrier prices, routes, or services to trigger preemption; [] (2) ADA
preemption is a defense unique to air carriers and which cannot be asserted
by non-air carriers, as it was by Corizon in the case below[; and (3) . . .]
holding that the ADA preempts all unjust enrichment and action on account
claims involving air carriers precludes an air carrier’s ability to collect from
the beneficiaries of its Services in all instances where no contract exists, in
contravention of the ADA’s intent.

Conversely, Corizon asserts that PHI’s causes of action “fall squarely within the ADA’s
broad preemptive reach[, as] [b]oth causes of action seek to use the coercive powers of the
State to impose an implied-in-law payment obligation that the parties did not voluntarily
undertake.”

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 The expressed purpose of the ADA is “‘to encourage, develop, and attain an air
transportation system which relies on competitive market forces to determine the quality,
variety, and price of air services[,]’” a goal that “would . . . be[] frustrated if state
regulations were substituted for . . . federal regulations[.]” Morales v. Trans World
Airlines, Inc., 504 U.S. 374, 422–423 (1992) (Stevens, J., dissenting) (quoting H.R. Conf.
Rep. No. 95–1779, p. 53 (1978), U.S. Code Cong. & Admin. News 1978, 3737). Hence,
Congress included an express preemption clause in the ADA.4 Federal preemption of state
law is grounded in the Supremacy Clause of the United States Constitution, which provides
that the “Constitution, and the Laws of the United States…shall be the supreme Law of the
Land….” U.S. Const. art. VI, cl. 2. Generally, the States govern “within their particular
spheres concurrent with the federal government subject only to the power of the Congress
under the Supremacy Clause of the United States Constitution to preempt state law.”
Pendleton v. Mills, 73 S.W.3d 115, 126 (Tenn. Ct. App. 2001) (citing Tafflin v. Levitt, 493
U.S. 455, 458 (1990); BellSouth Telecomm., Inc. v. Greer, 972 S.W.2d 663, 670 (Tenn. Ct.
App. 1997)). Consistent with this principle, a federal law or regulation may preempt a state
claim. See Lake v. Memphis Landsmen, LLC, 405 S.W.3d 47, 55 (Tenn. 2013). Courts
recognize both express and implied preemption, but “no matter what type of preemption is
at issue, ‘the purpose of Congress is the ultimate touchstone.’” Id. (quoting Wyeth v.
Levine, 555 U.S. 555, 556 (2009)). “In cases involving express preemption, the text of the
federal statute will define the domain that Congress intended to preempt.” Pendleton, 73
S.W.3d at 127 (citing Medtronic, Inc. v. Lohr, 518 U.S. 470, 484 (1996)). Courts are
“reluctant to presume” that the state’s powers in matters traditionally subject to its authority
“are [] displaced by a federal statute unless that is the clear and manifest intent of
Congress.” Id. at 126.

“[B]ecause ‘[p]re-emption ... is always a federal question,’ Int’l Longshoremen’s
Ass’n, AFL–CIO v. Davis, 476 U.S. 380, 388 (1986), our conclusion in a pre-emption case
must fall within the boundaries prescribed by United States Supreme Court precedent.”
Leggett v. Duke Energy Corp., 308 S.W.3d 843, 854 (Tenn. 2010) (parallel citations
omitted). The U.S. Supreme Court has not addressed the specific issue of whether a claim
of unjust enrichment or an action on sworn account is preempted by the ADA. The Court
has, however, set certain parameters to guide our analysis, which we will briefly review.

Morales v. Trans World Airlines was the first case in which the U.S. Supreme Court
considered the preemptive reach of the ADA. The issue before the Court was whether the
ADA pre-empts states from enforcing their general consumer protection statutes with
respect to airline fare advertisements. 504 U.S. at 378. The Court found that “relating to”
was a key phrase of the statute and that it “express[es] a broad pre-emptive purpose.” Id.
at 383–384. Relying on the ordinary meaning of the words “relating to” and on Supreme

4
Prior to the enactment of the ADA in 1978, “[s]tates were able to regulate intrastate airfares
(including those offered by interstate air carriers)[.]” Morales, 504 U.S. at 378.

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Court jurisprudence with respect to a similarly worded preemption provision of the
Employee Retirement Income Security Act of 1974, 29 U.S.C. § 1144(a), the Court held
that “[s]tate enforcement actions having a connection with or reference to airline ‘rates,
routes, or services’ are pre-empted under [49 U.S.C. § 41713(b)(1)].”5 Id. (emphasis
added). However, the Court also noted that “‘[s]ome state actions may affect [airline fares]
in too tenuous, remote, or peripheral a manner’ to have pre-emptive effect.” Id. at 390
(bracketed text in original) (quoting Shaw v. Delta Air Lines, Inc., 463 U.S. 85, 100 n.21
(1983)).

In American Airlines, Inc. v. Wolens, members of American Airlines’ frequent flyer
program brought a class action suit against the airline for breach of contract and violations
of Illinois’ Consumer Fraud and Deceptive Business Practices Act after the airline
retroactively changed the terms and conditions of the program. 513 U.S. 219, 224–225
(1995). As in Morales, the Court held that the claim brought pursuant to the consumer
protection statute was preempted; however, the contract claim was not. Id. at 222. The
court reasoned that a contract is not a state-imposed obligation but rather a self-imposed
one and “[a] remedy confined to a contract’s terms simply holds parties to their
agreements.” Id. at 229.

In Northwest., Inc. v. Ginsberg, another class action suit involving a frequent flyer
program, the plaintiffs brought a common law claim of breach of the implied covenant of
good faith and fair dealing against the airline when it terminated plaintiffs’ enrollment in
the program. 572 U.S. 273, 276 (2014). The U.S. Supreme Court soundly rejected the
argument that the ADA preemption provision applied only to legislation and to regulations
promulgated by state agencies, noting that “a common-law rule clearly has ‘the force and
effect of law.’” Id. at 282. Moreover, to conclude otherwise would undermine the ADA’s
deregulatory purpose. Id. at 283. Accordingly, the Court concluded that “the phrase ‘other
provision having the force and effect of law’ includes common-law claims.” Id. at 284.
The central issue in Ginsberg, however, was “whether [the] implied covenant claim is
based on a state-imposed obligation or simply one that the parties voluntarily undertook.”
Id. at 285. The court examined Minnesota’s law, which governed the dispute, and held
that “[a] State’s implied covenant rules will escape pre-emption only if the law of the
relevant State permits an airline to contract around those rules[.]” Id. at 288. Otherwise,
the covenant enlarges rather than enforces the contractual agreement between the parties.
See id. at 289.

The U.S. Supreme Court, then, has established that (1) state enforcement actions
having a connection to airline prices fall under the ambit of the ADA preemption clause;
(2) the ADA does not preempt state-law contract claims that merely seek to enforce the
parties’ voluntary agreements; and (3) common law claims based on state-imposed

5
Prior to the revision of Title 49 of the United States Code by PL103-272, the clause was found in
49 U.S.C. App. § 1305(a)(1). PL 103-272, July 5, 1994, 108 Stat 745.

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obligations that seek to enlarge a contractual agreement are preempted.

The Tennessee Supreme Court has only once considered the issue of ADA
preemption, in the 1996 case of Knopp v. American Airlines, Inc., 938 S.W.2d 357 (Tenn.
1996). In this pre-Ginsberg case, the Court recognized a two-part test, based on Morales
and Wolens, for determining that a state law claim is preempted: “(1) the claim must be
related to airline rates, routes, or services, either by expressly referring to them or having
a significant economic effect upon them; and (2) the claim must involve the enactment or
enforcement of a state law, rule, regulation, standard or other provision.” 938 S.W.2d at
360.6 Whether federal law preempts a state statute or common law cause of action is a
question of law that we review de novo. Leggett, 308 S.W.3d at 851.

With this legal landscape in mind, we will consider whether the common law causes
of action before us are preempted by the ADA. Because neither party disputes that PHI is
an air carrier, we will proceed with application of the Knopp test.

A. Unjust Enrichment

1. Knopp’s first prong

Under the first part of the Knopp test, we must determine whether PHI’s claim is
related to air carrier rates or services, “either by expressly referring to them or having a
significant economic effect upon them.” 938 S.W.2d at 360. We will note at the outset,
that the U.S. Supreme Court’s test is worded more broadly: “A claim satisfies this
requirement if it has ‘a connection with, or reference to, airline’ prices, routes, or
services[.]” Ginsberg, 572 U.S. at 284 (quoting Morales, 504 U.S. at 384).7

Because Tennessee’s unjust enrichment law does not specifically reference nor is it
directed toward air carriers, it does not fall within the first category of preempted state law,
and therefore, must have a “significant economic effect” on air carrier prices, routes, or
services to be preempted. Knopp, 938 S.W.2d at 360. PHI asserts that “[a]n award of
PHI’s usual, customary and reasonable rate under any common law theory, including
unjust enrichment, does not have a significant effect on PHI’s prices, and therefore, is not
preempted.” Corizon argues that PHI’s claims “attempt to use state common law to directly

6
In Knopp, the Court held that a common law negligence claim was not preempted by the ADA,
because it did “not impinge in any significant way on Congress’ concern” that states would impair federal
deregulation of airlines. 938 S.W.2d at 362 (quoting Cont’l Airlines, Inc. v. Kiefer, 920 S.W.2d 274, 282
(Tex. 1996)).

7
In its brief and at oral argument, PHI used the phrase “forbidden significant effect” in its
application of the rule. This phrase comes from a sentence in the Morales opinion: “In any event, beyond
the guidelines’ express reference to fares, it is clear as an economic matter that state restrictions on fare
advertising have the forbidden significant effect upon fares.” 504 U.S. at 388.

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impose ‘reasonable’ prices for air-carrier services,” which would have a significant effect
on rates.

The issue raises the question of how significant must the effect be? To resolve this
question, we return to Morales, Wolens, and Ginsberg.

Morales tells us that some state actions may not have pre-emptive effect because
they affect airline fares in too tenuous, remote, or peripheral a manner. 504 U.S. at 390.
State actions may affect fares indirectly, however, and still be preempted. Id. at 386. At
issue in Morales was the attempted state regulation of airline advertising by states who had
adopted the “Air Travel Industry Enforcement Guidelines” from the National Association
of Attorneys General. Id. at 379. The guidelines “contain[ed] detailed standards governing
the content and format of airline advertising, the awarding of premiums to regular
customers (so-called ‘frequent flyers’), and the payment of compensation to passengers
who voluntarily yield their seats on overbooked flights.” Id. Although the regulations had
no direct effect on fares nor did they dictate fares, this case “plainly d[id] not present a
borderline question.” Id. at 390. The Court reasoned that “the obligations imposed by the
guidelines would have a significant impact upon the airlines’ ability to market their
product, and hence a significant impact upon the fares they charge.” Id.

In both Wolens and Ginsberg, the U.S. Supreme Court found that state law claims
challenging frequent flyer programs were sufficiently related to air carrier rates and
services. 513 U.S. at 226; 572 U.S. at 284. The Court explained:

Like the frequent flyer program in Wolens, the Northwest program is
connected to the airline’s “rates” because the program awards mileage credits
that can be redeemed for tickets and upgrades. See 513 U.S. at 226. When
miles are used in this way, the rate that a customer pays, i.e., the price of a
particular ticket, is either eliminated or reduced. The program is also
connected to “services,” i.e., access to flights and to higher service
categories. Ibid.

Ginsberg, 572 U.S. at 284 (parallel citation omitted). Although the frequent flyer program
did not determine the airlines prices generally, it did affect what certain customers paid for
services.

In Musson Theatrical, Inc. v. Federal Express, Corp., an ADA case before this
Court, shippers sued FedEx for fraud and misrepresentation because of FedEx’s practice
of charging more for economy two-day service than for one-day service for certain
packages. No. W2000-01247-COA-R3-CV, 2001 WL 370035, at *1 (Tenn. Ct. App. Apr.
12, 2001). We held:

Considering the first prong, we find that the claims of negligent

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 misrepresentation and fraud are directly related to airline rates, routes, or
service by . . . having a significant economic effect upon rates. Furthermore,
the effect is not “tenuous, remote or peripheral” as would be a prohibition
against obscenity in advertising, a “nonprice” aspect of airline fare
advertising. Morales, 504 U.S. at 390 (giving a hypothetical example of a
claim that would not be preempted). Plaintiffs’ claims specifically involve
rates that FedEx charges for packages under eight ounces shipped by second
day delivery service. Plaintiffs’ allegation of misrepresentation and fraud are
directly in reference to the manner in which those rates are represented in
advertising in FedEx publications.

Id. at *8 (parallel citation omitted).

On the basis of the foregoing case law, we find that PHI’s claims have a sufficient
“connection to” airline prices such that they are preempted by the ADA. In Morales,
advertising guidelines were sufficiently connected to prices such that the Court did not find
it a “borderline” case or a “tenuous” connection, and in Musson, this Court found a
sufficiently close relationship between the state-law claim and pricing, when the claim
involved the manner in which the air carrier advertised its rates. PHI’s claims are even
more closely related to prices than the claims in Morales and Musson, because PHI seeks
court enforcement of the prices it has set or, alternatively, for the court to determine a
reasonable price. As in Wolens and Ginsberg, the state claims in the case before us may
not affect prices paid by all customers, but they do directly affect the prices to be paid by
Corizon. Accordingly, we conclude that PHI’s claims have the requisite “significant
economic effect” on air carrier prices.

2. Knopp’s second prong

The second part of Knopp test requires that “the claim [] involve the enactment or
enforcement of a state law, rule, regulation, standard or other provision.” 938 S.W.2d at
360. Unjust enrichment is such a claim, as it “is a quasi-contractual theory or is a contract
implied-in-law in which a court may impose a contractual obligation where one does not
exist.” 8 B & L Corp. v. Thomas & Thorngren, Inc., 162 S.W.3d 189, 217 (Tenn. Ct. App.
8
In Tennessee, a party asserting unjust enrichment must demonstrate the following elements:

(1) there must be no existing, enforceable contract between the parties covering the same
subject matter; (2) the party seeking recovery must prove that it provided valuable goods
and services; (3) the party to be charged must have received the goods and services; (4) the
circumstances must indicate that the parties involved in the transaction should have
reasonably understood that the person providing the goods or services expected to be
compensated; and (5) the circumstances must also demonstrate that it would be unjust for
the party benefitting from the goods or services to retain them without paying for them.

Smith v. Hi-Speed, Inc., 536 S.W.3d 458, 480 (Tenn. Ct. App. 2016) (citing Crye–Leike, Inc. v. Carver, 415

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2004) (citing Whitehaven Cmty. Baptist Church v. Holloway, 973 S.W.2d 592, 596 (Tenn.
1998)). These implied contracts are not based on the intentions of the parties, but are
obligations created by law. B & L, 162 S.W.3d at 217. It provides an avenue for recovery
when no enforceable contract exists between the parties. Freeman Indus., LLC v. Eastman
Chem. Co., 172 S.W.3d 512, 524 (Tenn. 2005). In the case at bar, PHI asserted that it
provided air ambulance services to inmates and that Corizon was required to financially
provide for their healthcare needs. Therefore, Corizon was conferred a benefit for which
Corizon was required to pay, contends PHI. Because whether the ADA preempts claims
based on unjust enrichment is an issue of first impression in Tennessee, we will consider
federal jurisprudence on the matter.

In Brown v. United Airlines, Inc. from the First Circuit Court of Appeals, skycaps
(porters who provide curbside service at airports), brought suit against two airlines for
unjust enrichment after the airlines introduced a $2.00 per bag fee for curbside service for
departing passengers at airports. 720 F.3d 60, 62 (1st Cir. 2013). The skycaps, whose
income depended largely on tips, alleged that their compensation significantly decreased
because passengers wrongly assumed that the charge was a mandatory gratuity. Id. The
plaintiffs asserted unjust enrichment, among other state law claims. In this pre-Ginsberg
case, the appellate court held that “to the extent that a state common-law claim relates to a
price, route, or service of an air carrier, it is preempted by the ADA.” Id. at 66. The court
further observed that “[t]he cases that have held claims not preempted appear to have been
decided on the linkage sub-question; that is, the litigated claims did not relate to prices,
routes, or services of an air carrier.” Id. at 67 (citing Wellons v. Northwest Airlines, Inc.,
165 F.3d 493, 494–96 (6th Cir. 1999); Taj Mahal Travel, Inc. v. Delta Airlines, Inc., 164
F.3d 186, 194–95 (3d Cir. 1998); Charas v. Trans World Airlines, Inc., 160 F.3d 1259,
1261, 1265–66 (9th Cir. 1998) (en banc), amended by 169 F.3d 594 (9th Cir. 1999) (en
banc)). Presented again with essentially the same facts in the 2015 case of Overka v.
American Airlines, Inc., the court came to the same conclusion, stating, “Nothing in
Ginsberg . . . undermines our reasoning in Brown about the application of the Wolens
exception to the common law claims the plaintiffs press here, as those claims, too, seek to
enforce a similarly ‘state-imposed’ obligation.” 790 F.3d 36, 39–40 (1st Cir. 2015). The
court continued, “In that regard, Brown held first that the unjust enrichment claims fell
outside the Wolens exception because they were ‘predicated on the lack of any agreement’
between the parties and instead turned on external considerations by which the parties had
not agreed to be bound.” Id. at 40 (quoting Brown, 720 F.3d at 71).

In Stout v. Med-Trans Corporation, the plaintiffs alleged that they were charged an
excessive amount for emergency air ambulance service for their minor daughter and

S.W.3d 808, 824 (Tenn. Ct. App. 2011)). Courts frequently use the terms “unjust enrichment,” “quasi-
contract,” “quantum meruit,” and “contract implied-in-law” interchangeably, as they are “essentially the
same.” Metro. Gov’t of Nashville & Davidson Cty. v. Cigna Healthcare of Tenn., Inc., 195 S.W.3d 28, 32
(Tenn. Ct. App. 2005) (citing Paschall’s, Inc. v. Dozier, 407 S.W.2d 150, 154 (Tenn. 1966)).

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brought an unjust enrichment claim against the air carrier. 313 F. Supp. 3d 1289, 1293
(N.D. Fla. 2018). As is true under Tennessee law, “[u]nder Florida law, a claim for unjust
enrichment is not based on the parties’ agreement but rather an agreement created by law.”
Id. at 1296. The court, therefore, found that the ADA preempted the unjust enrichment
claim because it was “not based on the parties’ ‘self-imposed obligations’” and thus
“constitute[d] a state-imposed obligation.” Id.

We find the amassed federal case law on the matter persuasive. See, e.g., Scarlett
v. Air Methods Corp., 922 F.3d 1053, 1068 (10th Cir. 2019) (finding that the ADA
prohibited the courts from imposing the equitable remedy of unjust enrichment because it
“would reflect the court’s policy judgments, not the parties’ mutual assent”); Gordon v.
United Cont’l Holding, Inc., 73 F. Supp. 3d 472, 480 (D.N.J. 2014) (“It is well settled that
claims against airlines for unjust enrichment fall within the ADA’s preemption clause”);
All World Prof’l Travel Servs., Inc. v. Am. Airlines, Inc., 282 F. Supp. 2d 1161, 1169, 1171
(C.D. Cal. 2003) (concluding that unjust enrichment claims involve the enforcement of
state law, but under the facts of the case, enforcement “will not have the effect of regulating
[airline] pricing policies” or services). Consequently, we hold that because PHI’s unjust
enrichment claim is related to air carrier rates or services and is based on a state-imposed
obligation rather than a self-imposed one, it is preempted by the ADA.

B. Action on Sworn Account

We now turn to the question of whether the ADA preempts an action on sworn
account based on Tennessee Code Annotated § 24-5-107, which provides:

(a) An account on which action is brought, coming from another state or
another county of this state, or from the county where suit is brought, with
the affidavit of the plaintiff or its agent to its correctness, and the certificate
of a state commissioner annexed thereto, or the certificate of a notary public
with such notary public’s official seal annexed thereto, or the certificate of a
judge of the court of general sessions, with the certificate of the county clerk
that such judge is an acting judge within the county, is conclusive against the
party sought to be charged, unless that party on oath denies the account or
except as allowed under subsection (b).
(b) The court shall allow the defendant orally to deny the account under
oath and assert any defense or objection the defendant may have. Upon such
denial, on the plaintiff’s motion, or in the interest of justice, the judge shall
continue the action to a date certain for trial.

The trial court held an action on sworn account was not a remedy available to PHI, as
Section 24-5-107 is merely “a procedural mechanism used to simplify and effectuate a
party’s remedy in debt collection matters.”

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 Statutory construction is a question of law that is reviewable on appeal on a de novo
basis without any presumption of correctness of the lower court decision. Mills v.
Fulmarque, Inc., 360 S.W.3d 362, 366 (Tenn. 2012). In interpreting a statute, “[t]he text
of the statute is of primary importance, and the words must be given their natural and
ordinary meaning in the context in which they appear and in light of the statute’s general
purpose.” Id. at 368.

The statute implicated is in Title 24, “Evidence and Witnesses,” section 5
“Presumptions.” The statute — in keeping with the title — establishes rules for the
admission of evidence of a debt and provides for a presumption that the debt is valid in the
absent of a denial by the defendant. Section 24-5-107 facilitates recovery for specific debts,
such as a credit card balance. Chumley v. Navistar, Inc., No. 3:18-CV-0510, 2018 WL
3997347, at *2 (M.D. Tenn. Aug. 20, 2018) (citing Am. Exp. Bank, FSB v. Fitzgibbons,
362 S.W.3d 93, 96–97 (Tenn. Ct. App. 2011)). The plain language of the statute does not
create a cause of action; rather, it provides a mechanism by which to pursue a cause of
action. As this Court has stated, “The reason and policy of this act are said to be to furnish
an easy and ready means of collecting accounts when no real defense exists, unless it shall
be denied on oath, and the plaintiff thereby notified to make proof.” Fitzgibbons, 362
S.W.3d at 96 (citations omitted). The trial court, in its well-researched and well-reasoned
analysis, stated:

[A]n action on sworn account is not a separate claim in of itself, but a
procedure used to simplify and effectuate a party’s remedy. Wheat
Enterprises, Inc. v. Redi-Floors, Inc., [501 S.E.2d 30, 34] ([Ga. Ct. App.]
1998) (quoting Watson v. Sierra Contracting Corp., [485 S.E.2d 563] ([Ga.
Ct. App.] 1997) (“An action on open account is a simplified pleading
procedure where a party can recover what he was justly and equitably entitled
to without regard to a special agreement to pay such amount for goods or
services as they were reasonably worth when there exists no dispute as to the
amount due or the goods or services received.”); Am. Sec. Serv., Inc. v.
Baumann, 289 N.E.2d 373, 379 (Ohio Ct. App. 1972) (“The provision for
short form pleadings in an action on an account is merely a procedural device
to shorten the pleadings permitting inferences of averments surrounding the
contractual relationship, which otherwise would have to be pleaded.”).

We agree that “[t]he statute is not meant to provide an alternative theory of liability to
traditional tort or contract actions,” Chumley, 2018 WL 3997347, at *2. Therefore, we
conclude that Tennessee Code Annotated § 24-5-107 does not create a separate cause of
action, but rather establishes a procedure by which a plaintiff may pursue a cause of action.

We have already found that PHI’s underlying cause, unjust enrichment, is
preempted by the ADA, so we affirm the trial court’s holding that PHI cannot recover by
asserting “action on sworn account” as a separate cause of action.

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C. PHI’s Remaining Arguments

PHI argues that ADA preemption cannot be asserted except by air carriers. In
support of this notion, PHI cites an opinion from the intermediate appellate court in Texas
that stated: “The Act was intended to pre-empt only those state actions having a regulatory
effect upon the airlines rather than to preclude airlines from seeking the benefits and
protections of state law to enforce their self-imposed standards, regulations, and contracts.”
Frequent Flyer Depot, Inc. v. Am. Airlines, Inc., 281 S.W.3d 215, 221 (Tex. App. 2009).
Inasmuch as we have identified no other authority that reaches that conclusion, we find it
unpersuasive. PHI also cites language from a U.S. Supreme Court opinion which states
that “[the ADA] confers on private entities (i.e., covered carriers) a federal right to engage
in certain conduct subject only to certain (federal) constraints.” Murphy v. Nat’l Collegiate
Athletic Ass’n, 138 S. Ct. 1461, 1480 (2018). The cited language was used by the Court to
give an example of a Congressional statute with preemptive effect in a case that was wholly
unrelated to the ADA. Thus, viewing the quotation in its proper context, it would be
unreasonable to read that single sentence as determinative of the ADA’s preemptive scope.
Therefore, we reject the argument that ADA preemption may only be asserted by air
carriers.

Moreover, we find PHI’s argument – that preemption would “destroy PHI’s ability
to enforce the rates it sets in direct contravention of the ADA’s central purpose” – flawed.
A central purpose of the ADA, as expressed by Congress, is “to encourage, develop, and
attain an air transportation system which relies on competitive market forces to determine
the quality, variety, and price of air services, and [] other purposes[.]” H.R. Conf. Rep.
No. 95-1779, p. 53 (1978), U.S. Code Cong. & Admin. News 1978, 3737. One of the
several policy considerations set out by Title 49 of the United States Code is “encouraging,
developing, and maintaining an air transportation system relying on actual and potential
competition – to provide efficiency, innovation, and low prices.” U.S.C. § 40101
(a)(12)(A). PHI retains the ability to enforce its rate through contract, consistent with the
U.S. Supreme Court’s opinion in Wolens. If potential customers decline to contract with
PHI at its rates, that is the nature of “competitive market forces” at work.

PHI further asserts that preemption of its claim “leads to an absurd result – the total
inability of a non-contracted air ambulance provider to collect any amount of payment for
its services, since there is no federal common law claim for unjust enrichment or quantum
meruit.” PHI cites Dan’s City Used Cars, Inc. v. Pelkey, 569 U.S. 251 (2013), for support
of its supposition that “Corizon’s position is untenable.” PHI’s reliance on this case is
misplaced. In Dan’s City, a vehicle owner brought suit under New Hampshire law against
a towing company that towed his vehicle and later traded it to a third party without
compensating the owner. 569 U.S. at 254–55. The Court considered a preemption clause
in the Federal Aviation Administration Authorization Act of 1994 (FAAAA) applicable to
motor carriers, which provides: “[A] State ... may not enact or enforce a law, regulation, or

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other provision having the force and effect of law related to a price, route, or service of any
motor carrier ... with respect to the transportation of property.” Id. at 254 (quoting 49
U.S.C. § 14501(c)(1)). The Court held that FAAAA does not preempt state-law claims
stemming from the storage and disposal of a towed vehicle. Id. at 266. The Court did state
that “the preemption . . . [would] leave vehicle owners without any recourse for damages,
[and] it would eliminate the sole legal authorization for a towing company’s disposal of
stored vehicles that go unclaimed.” Id. at 265. However, the basis of the Court’s holding
was that while 49 U.S.C. § 14501(c)(1) “[b]orrow[ed] from the ADA’s preemption clause,
[it] add[ed] a new qualification[.]” Id. at 256. The Court explained: “[t]he addition of the
words ‘with respect to the transportation of property’ . . . . massively limits the scope of
preemption ordered by the FAAAA.” Id. at 261 (internal quotation marks and citations
omitted). Indeed, the Court stated that the plaintiff’s claims “do[] not involve
‘transportation’ within the meaning of the federal Act” and that they “also survive
preemption under § 14501(c)(1) because they are unrelated to a ‘service’ a motor carrier
renders its customers.” Id. at 262.

Due to the significant difference between the FAAAA preemption clause and the
ADA preemption clause, we find it inappropriate to broaden the Court’s holding in Dan’s
City to include the ADA,9 particularly because the Supreme Court itself has not done so.
Notably, in Ginsberg, the following year, the Court did not use any of the Dan’s City
language in preserving a remedy for the plaintiffs, but instead carved out a contract
exception to ADA preemption. Our holding that PHI’s claims are preempted is also in
accord with most federal jurisprudence interpreting the ADA’s preemption clause. Thus,
if Congress’ intent was other than what the case law provides, the remedy is a legislative
one.

Having resolved the legal issues in Corizon’s favor, we affirm the trial court’s grant
of summary judgment. We turn now to Corizon’s issues on appeal.

D. Voluntary Nonsuit

Both PHI and Corizon agree that PHI never asserted a breach of “the alleged Indiana
contract,” and that there was no breach of contract claim in PHI’s complaint or amended
complaint. It was Corizon that raised the issue of a contract in Indiana in its defense, some

9
In Brown, the First Circuit also declined to extend the Dan’s City holding to the ADA, stating:

Grasping at straws, the plaintiffs next suggest that the Supreme Court’s recent decision in
Dan’s City Used Cars, Inc. v. Pelkey, [59] U.S. [251], 133 S.Ct. 1769, 185 L.Ed.2d 909
(2013), somehow changed the landscape and reshaped preemption doctrine to favor their
position. This suggestion represents a triumph of hope over reason. . . . Fairly read, Dan’s
City does not advance the plaintiffs’ cause by so much as an inch.

720 F.3d at 71.

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three or more years into the litigation. In its March 2020 Order, the trial court granted
PHI’s motion for summary judgment, “except as to the Indiana contract,” and stated,
“There is a genuine dispute of material fact as to whether the Indiana contract remains in
effect between the parties which must be decided by evidentiary hearing.” PHI states that
in order “[t]o dispense with an evidentiary hearing on a breach of contract claim PHI had
never asserted,” it moved to nonsuit any Indiana contract claim. In its motion, PHI stated,
“To the extent that a claim by PHI for payment under the Indiana Contract exists, PHI
moves to nonsuit this claim, without prejudice, pursuant to Tenn. R. Civ. P. 41.01.” The
trial court subsequently ordered, “Any contractual claim plaintiff may have arising from
the Indiana Contract is hereby dismissed without prejudice.” Corizon, opposing the
nonsuit, filed a motion to vacate, alter or amend, which the trial court denied.

Corizon argues that the trial court erred in permitting PHI, pursuant to Tennessee
Rule of Civil Procedure 41.01, to nonsuit a contract claim for Indiana service when PHI
“did not plead, seek leave to plead, or otherwise assert” such a claim, and asks this Court
to reverse this aspect of the trial court’s judgment. The interpretation of the Tennessee
Rules of Civil Procedure is a question of law which we review de novo. Lacy v. Cox, 152
S.W.3d 480, 483 (Tenn. 2004). Rule 41 of the Tennessee Rules of Civil Procedure states,
in relevant part, “the plaintiff shall have the right to take a voluntary nonsuit to dismiss an
action without prejudice by filing a written notice of dismissal at any time before the trial
of a cause and serving a copy of the notice upon all parties[.]” Tenn. R. Civ. P. 41.01(1).
The rule does not permit the dismissal of a claim that is not actually before the court.
Accordingly, we reverse the trial court’s grant of voluntary nonsuit to PHI as a nullity.

Corizon’s remaining issues are pretermitted by our holding that PHI’s claims are
preempted, and we express no opinion with respect to them.

V. CONCLUSION

Based on the forgoing, we find that PHI’s claims are preempted by the ADA and
we, therefore, affirm the trial court’s grant of summary judgment in favor of Corizon. We
reverse the trial court’s grant of voluntary nonsuit to PHI for the unpled contract claim.
Costs of this appeal are taxed to the appellant, PHI Air Medical, LLC, for which execution
may issue if necessary.

_________________________________
JOHN W. MCCLARTY, JUDGE

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