ALBUQUERQUE — A federal appeals court on Friday reversed a judge's decision that prevented US Airways from serving alcohol on its New Mexico flights after a passenger killed five people in a drunken-driving crash near Santa Fe.

The state had denied US Airways' liquor license application after regulators accused the airline of overserving passengers, including Dana Papst of Tesuque, who caused the 2006 crash in which he also died.

The airline sued, and in October 2009, a federal judge in Albuquerque ruled in favor of the New Mexico Regulation and Licensing Department.

However, the 10th U.S. Circuit Court of Appeals in Denver reversed that decision Friday, saying U.S. District Judge M. Christina Armijo failed to balance state and federal interests. The appeals court sent the case back to the district court.

"We're pleased by the ruling. The court agreed with our position," US Airways spokeswoman Michelle Mohr said. She said the Tempe, Ariz.-based airline was still reviewing all the implications of the ruling.

New Mexico officials didn't immediately return messages seeking comment.

In rejecting the airline's application, state regulators said US Airways "cannot reasonably find that approval of application will protect the public health and safety or that it is in the public interest."

US Airways had argued that the U.S. Department of Transportation has exclusive authority to regulate all aspects of airline safety. The airline also argued it wasn't subject to New Mexico liquor laws because alcohol is loaded onto aircraft in Arizona, is served only during flights, and cannot be removed from the airplanes.

New Mexico had twice cited US Airways for overserving passengers. The most visible case involved Papst, who was drinking on a US Airways flight into Albuquerque in November 2006.

Papst later caused a wrong-way crash on Interstate 25 near Santa Fe, killing himself and five members of a family from Las Vegas, N.M. Passengers told investigators he had been served two drinks on the flight despite already appearing intoxicated.

Papst, a Santa Fe Opera employee, was returning home from a business trip when he drove the wrong way on the interstate south of Santa Fe and plowed into a minivan driven by Paul Gonzales, killing Gonzales, his wife, Renee Collins-Gonzales, three of their children and himself. The sole survivors of the collision were Arissa Garcia, then 15, and the family dog. Investigators determined Papst had a blood-alcohol level of .32, four times the state limit.

The Santa Fe Opera and the Papst estate later reached settlements with survivors of the family killed in the crash.

A clerk at a Bernalillo convenience store was acquitted of charges of that she sold a six-pack of Bud Light to an already drunken Papst after he left the Albuquerque airport.

Associated Press Writer Walter Berry in Phoenix and The New Mexican contributed to this report.



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