Kirkland & Ellis LLP NABCA N ATIONAL A LCOHOL B EVERAGE C ONTROL A SSOCIATION 19 th Annual Legal Symposium on Alcohol Beverage Law & Regulation Robert R. Gasaway Kirkland & Ellis LLP March 6, 2012

Kirkland & Ellis LLP NEW MEXICO CASE TIMELINE 2 November 2006 Recent US Airways passenger in car accident on New Mexico Highway January 29, 2007 NMLRD Citation November 15, 2007 NMLRD Denial Decision December 7, 2007 US Airways Complaint

Kirkland & Ellis LLP DISTRICT COURT DECISION September 30, 2009Federal Law Preemption by 1978 Airline Deregulation Act? Is State Law or Regulation “A Price, Route, or Service of an air carrier?” Charas v. TWA (9 th Cir. 1998) “Service” refers “to such things as the frequency and scheduling of transportation, and to the selection of markets to or from which transportation is provided” 2 nd, 5 th, 7 th, and 11 th Circuits disagreeUse 21 st Amendment as tie-breaker 3

Kirkland & Ellis LLP DISTRICT COURT DECISION Federal Law Preemption by Federal Aviation Act? 49 U.S.C , et seq. 14 C.F.R “In the absence of any statutory basis demonstrating that the Congress intended for the FAA to regulate the service of alcohol... ” 4

Kirkland & Ellis LLP 10 th CIRCUIT APPEAL DECISION 5 Federal Aviation Act occupies entire field of “airline safety” NMLCA “implicates” the field “New Mexico is seeking to impose additional training requirements on flight attendants and crew members” 21 st Amendment requires “balancing” of “core powers” vs. “federal interests”

Kirkland & Ellis LLP AFTER APPEAL DECISION 6 Settlement reached State and US Airways agree US Airways to get licensed in the same way it had tried to obtain license prior to litigation Case dismissed as of January 23, 2012

Kirkland & Ellis LLP BOTTOM LINE: State No-No’s Impose flight crew (server) training requirements Regulate in- flight service of alcohol 7