States Lose Supreme Court Battle to Airlines Over Ads : Decision: The justices let stand a ruling that only the U.S. can regulate merchandising that California and 33 others contend is deceptive.

Airlines that boldly advertise low fares but mention extra charges only in tiny type cannot be attacked for deceptive advertising under state laws, according to a ruling that the Supreme Court let stand Monday.

The high court refused to hear an appeal by attorneys from 34 states, including California, who contended that the airlines are misleading consumers through deceptive ads.

In April, a U.S. appeals court in New Orleans ruled that airline ads are off-limits to state law. Its ruling was based on the Airline Deregulation Act of 1978, which forbids state interference in matters “relating to rates, routes or services” of the airlines.

Only officials of the U.S. Transportation Department can regulate airline ads, the court said. The current federal rules require airlines to disclose extra charges in fine print, but they do not require that these costs be included in the boldly advertised low fare.

The court decision marked a sharp setback for state attorneys, such as John K. Van de Kamp of California and Jim Mattox of Texas, who have sought to use state law to protect consumers as the federal government has increasingly deregulated the industry.

In 1988, the attorneys for 34 states informed several airlines, including TWA, Continental and British Air, that their promotions violated state guidelines on fair advertising.

Albert Shelden, a California deputy attorney general, said that officials wanted airlines to advertise the cost of a round-trip fare rather than the one-way cost and to include extra charges in its advertised price.

“We can require all other industries to advertise in a non-deceptive manner and we thought we could do the same with the airlines,” Shelden said.

But before the states could take legal action against the airlines, lawyers for the airlines filed suit against the states. They won a judge’s order forbidding state interference with their advertising policies.

The appeals court not only upheld the judge’s order, but agreed that his ruling could cover all 34 states that wanted to intervene.

Congress intended to preempt state laws affecting the airlines, the appeals court said, so that the airlines would face “only one regulator in matters pertaining to rates, routes and services.”

On Monday, the Supreme Court refused to review this decision (Mattox vs. TWA, 90-221, and Atty. Gen. of California vs. TWA, 90-232).

Since the judge’s original order was a preliminary injunction, the state officials could appeal again when the order is final. But David Corban, a Houston attorney for the airlines, said that the result likely would be the same.

“We think the court has correctly construed the intent of the (1978) law,” Corban said.