(CN) - New Mexico cannot ban US Airways from serving alcohol to passengers on its flights in the state, according to a 10th Circuit ruling.
Chief Judge Mary Beck Briscoe wrote that the airline is already regulated by the Federal Aviation Act, and the state must balance the state's liquor laws with the 21st Amendment, which repealed Prohibition.
New Mexico tried to block US Airways from selling alcohol to passengers in the state after a fatal 2006 drunken driving accident was linked to the airline.
Dana Papst died in a crash that killed five others after drinking on a US Airways flight to Albuquerque. The FAA declined to take any action against US Airways, but the alcohol and gaming division of the New Mexico Regulation and Licensing Department served the airline with a citation and a cease-and-desist order, demanding compliance with the New Mexico Liquor Control Act (NMLCA).
New Mexico then refused to issue US Airways a permanent license and criticized the airline's alcohol server training as inadequate. The state also refused on the basis of the Papst accident and another drunken driver who was caught about an hour after his US Airways flight landed in Albuquerque.
A federal judge upheld the state's liquor laws after US Airways sued Kelly O'Donnell, superintendent of the New Mexico Regulation and Licensing Department, and Gary Tomada, director of the department's alcohol and gaming division.
But the circuit court in Denver reversed the ruling and sent the case back to the district court for a balancing of state and federal interests.
"Based on the pervasive federal regulations concerning flight attendant and crew member training and the aviation safety concerns involved when regulating an airline's alcoholic beverage service, we conclude that NMLCA's application to an airline implicates the field of airline safety that Congress intended federal law to regulate exclusively," Briscoe wrote for the court.
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