Here is a really interesting case of what takes precdence: US Airways' right not to be regulated by state liquor laws on its airplanes, or state's right to deny an airline a liquor license because of public safety concerns. Last week, a U.S. District judge in Albuquerque said New Mexico has the right to deny a license to US Airways to protect its citizens. In particular, the state said the airline had served a man drinks after he was intoxicated, and he caused a highway accident that killed a family of five.
US Airways argued that the state did not have the power to regulate its practices in this case because the Airline Deregulation Act gave only the federal government that right. Airlines have successfully used that argument in the past to fend off efforts by states to regulate them, usually on consumer-rights issues. Read more about what happened in this case here.
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