Source: https://law.justia.com/cases/federal/appellate-courts/F2/512/527/286227/
Timestamp: 2019-08-25 13:42:42
Document Index: 388181542

Matched Legal Cases: ['§ 1374', '§ 250', '§ 1506', '§ 19', '§ 531', '§ 2', 'art, 449', '§ 411', '§ 1106', '§ 1506', '§ 1384', '§ 1374']

Ralph Nader et al. v. Allegheny Airlines, Inc., Appellant, 512 F.2d 527 (D.C. Cir. 1975) :: Justia
Justia › US Law › Case Law › Federal Courts › Courts of Appeals › D.C. Circuit › 1975 › Ralph Nader et al. v. Allegheny Airlines, Inc., Appellant
Ralph Nader et al. v. Allegheny Airlines, Inc., Appellant, 512 F.2d 527 (D.C. Cir. 1975)
US Court of Appeals for the District of Columbia Circuit - 512 F.2d 527 (D.C. Cir. 1975)
Argued Dec. 10, 1974. Decided May 2, 1975. Rehearing and Rehearing En Banc Denied June 23, 1975
Plaintiffs-appellees Ralph Nader and the Connecticut Citizen Action Group (CCAG) brought this suit in district court against defendant-appellant Allegheny Airlines, Inc. (Allegheny) after Allegheny dishonored Nader's reservation for one of its flights. Appellees alleged that as a consequence of Allegheny's actions, Nader was unable to appear at a fund-raising rally in behalf of CCAG, thereby causing the loss of $100,000 in contributions. Appellees claimed that the incident gave rise to a private damage remedy for unjust discrimination under section 404(b) of the Federal Aviation Act of 1958, 49 U.S.C. § 1374(b) (1970) and that Allegheny's failure to disclose the risk of being denied a seat constituted fraudulent misrepresentation. They sought compensatory damages for lost contributions, and for various out-of-pocket expenses, and punitive damages of $150,000. After a non-jury trial, the district judge entered judgments for Nader on the section 404(b) claim and for both appellees on the claim of fraudulent misrepresentation. He assessed compensatory damages at $10 for Nader and $51 for CCAG and also awarded $25,000 punitive damages to each appellee. Nader v. Allegheny Airlines, Inc., 365 F. Supp. 128 (D.D.C. 1973). Allegheny appeals the decision of the district court both with respect to liability and damages. The Air Transport Association of America, on behalf of certain of its members, and the Civil Aeronautics Board (the Board) have submitted briefs as amicus curiae.
Although the Act does not provide for private enforcement of section 404(b), it is well settled that a private damage action is vailable to remedy violations of this provision. See, e.g., Fitzgerald v. Pan American World Airways, Inc., 229 F.2d 499 (2d Cir. 1956); Wills v. Trans World Airlines, Inc., 200 F. Supp. 360 (S.D. Cal. 1961). However, the elements of the cause of action and the litigant's evidentiary burdens are less certain. The trial court's opinion does little to clarify the confusion, and much of the parties' argument on appeal is addressed to the scope of its holding. Allegheny's deceptively simple position is that Nader failed to prove the elements of his cause of action. To adopt this position would dictate that we ignore the trial court's opinion and review the evidence de novo. This we cannot do. Nader argues that he established a prima facie case of discrimination; thereafter, Allegheny carried the burden of introducing rebuttal evidence. Nader maintains that Allegheny was unable to meet this burden, that the trial judge so found, and that his finding is not clearly erroneous.
Even if overbooking is not a per se section 404(b) violation, the determination of which passengers will be denied boarding presents the possibility for abusive and discriminatory actions. Therefore, each carrier is required by section 250.3 of the Board's economic regulations, 14 C.F.R. § 250.3, to establish and enforce nondiscriminatory priority rules for making this decision. Obviously, a carrier's violation of its own prima facie nondiscriminatory priority rules is the type of conduct that section 404(b) was designed to prevent. Several courts have specifically found that a carrier's violation of its priority rules gives rise to a section 404(b) cause of action. Kaplan v. Luthansa German Airlines, 12 Avi. 17,933 (Civil No. 68-2611, E.D. Pa. April 9, 1973); Mortimer v. Delta Air Lines, Inc., 302 F. Supp. 276 (N.D. Ill. 1969); Wills v. Trans World Airlines, Inc., supra. See also Stough v. North Central Airlines, Inc., 55 Ill.App.2d 338, 204 N.E.2d 792 (1965). We find their reasoning persuasive. Nevertheless, defining the elements of the cause of action with respect to overbooking, namely (1) that the plaintiff possessed a designated priority, and (2) that the carrier boarded persons with a lower priority, does not end our inquiry. Although a plaintiff generally carries the burden of persuasion on each element of his cause of action, special circumstances may lead a court to shift the burden of persuasion to the defendant on some part of the accepted is that the burden will be shifted where the material necessary to prove or disprove an element 'lies particularly within the knowledge' of the defendant. International Harvester Co. v. Ruckelshaus, 155 U.S.App.D.C. 411, 478 F.2d 615, 643 (1973); see Campbell v. United States, 365 U.S. 85, 96, 81 S. Ct. 421, 5 L. Ed. 2d 428 (1961). We think that this exception must be applied to the case sub judice: Once the plaintiff proves that the carrier failed to honor his priority, the burden of proving the priority rules and compliance therwith shifts to the carrier. Accord, Archibald v. Pan American World Airways, Inc., supra.
The remaining issue is whether under the principles set forth above, the trial judge properly found that Nader established his right to recovery. We recognize that we are bound to accept the findings of fact of the trial judge unless they are clearly erroneous. See, e.g., Case v. Morrisette,155 U.S.App.D.C. 31, 475 F.2d 1300, 1306-07 (1973). However, findings that an appellate court believes were induced by an erroneous interpretation of law are not sheltered by the clearly erroneous standard. See United States v. Singer Manufacturing Co., 374 U.S. 174, 194 n. 9, 93 S. Ct. 1773, 10 L. Ed. 2d 823 (1963); Case v. Morrisette, supra, 475 F.2d at 1307; Rowe v. General Motors Corp., 457 F.2d 348, 356 n. 15 (5th Cir. 1972). Moreover, while findings of fact need not be in any particular form, they must provide sufficient guidance for the appellate court to identify the basis of the decision. See Russo v. Central School District No. 1, 469 F.2d 623, 628-29 (2d Cir. 1972), cert. denied 411 U.S. 932, 93 S. Ct. 1899, 36 L. Ed. 2d 391 (1973); Alpha Distributing Co., Inc. v. Jack Daniel Distillery, Lem Motlow, Prop., Inc., 454 F.2d 442, 453 (9th Cir. 1972).
Nader v. Allegheny Airlines, Inc., supra, 365 F. Supp. at 132 (citations omitted).
That remainder, the sentence set out in italics above, certainly can be viewed as holding that Allegheny could not meet its burden of proof merely by introducing its duly filed priority rules and showing its adherence to them. In fact, the trial judge made no reference to the priority rules at all, and instead focused on a more general concept of reasonableness. If the trial judge expected Allegheny to prove the reasonableness of its rules with reference to some abstract judicial standard of that concept, then he made an error of law. It is beyond dispute that the reasonableness, Vel non, of Allegheny's priority rules must be determined, in the first instance, by the Civil Aeronautics Board. See Montana-Dakota Utilities Co. v. Northwestern Public Service Co., 341 U.S. 246, 251, 71 S. Ct. 692, 95 L. Ed. 912 (1951). Moreover, the trial judge indicated that Allegheny failed to meet its burden of proof because it allowed 'passengers with subsequent or no reservations to have priority over a passenger with a confirmed reservation . . ..' Nader v. Allegheny Airlines, Inc., supra, 365 F. Supp. at 132 (emphasis supplied). However, neither party contended that Allegheny determined boarding priority based on the time that a passenger made his reservation or purchased his ticket. Accordingly, asserting that Allegheny boarded passengers who reserved space after Nader is irrelevant unless the trial judge believed that he could make his own determination of reasonableness based on this record. Finally, this interpretation of the standard that the district court applied is reinforced by its emphasis that passengers with subsequent or no reservations were boarded ahead of Nader although he 'had not been informed of the risks attendant to the Defendant's concealed policy of overbooking.' Id. Nader's knowledge of Allegheny's overbooking practices, while relevant to the misrepresentation issue, is not material to the section 404(b) cause of action.
Both Nader and CCAG recovered on the second cause of action, the common law tort of fraudulent misrepresentation. Applying the accepted definition of the tort,32 the trial judge found that: Allegheny 'knowingly and intentionally misrepresented a material fact, namely that Mr. Nader had a guaranteed reservation for a seat;' Nader and CCAG relied to their detriment on the misrepresentation; their reliance was reasonable; and CCAG could recover because it was foreseeable that members of the public would rely on Allegheny's misrepresentations. Nader v. Allegheny Airlines, Inc., supra, 365 F. Supp. at 132.
It seems clear that the deceptive practices that the Board has power to proscribe under the Act would include all of the carrier misrepresentations actionable under the common law. However, we simply cannot accept the proposition that the existence of the Board's power under section 411 eliminates all private remedies for common law torts arising from those types of misrepresentations or other forms of unfair or deceptive practices. The Supreme Court has noted in American Airlines, Inc. v. North American Airlines, Inc., 351 U.S. 79, 85, 76 S. Ct. 600, 100 L. Ed. 953 (1956) that section 411 of the Federal Aviation Act was modeled after section five of the Federal Trade Commission Act, and this court indicated in Holloway v. Bristol-Myers Corp., 158 U.S.App.D.C. 207, 485 F.2d 986, 989 (1973), that the remedies of section five were additional to rather than in derogation of the common law remedies for fraud and deceit. Moreover, while the arsenal of remedies available to the Civil Aeronautics Board is significant, it does not include the power to award damages to injured parties.38 Finally, to hold that the Act preempts the common law remedies would ignore section 1106 of the Act, 49 U.S.C. § 1506 (1970), which states: 'Nothing contained in this chapter shall in any way abridge or alter the remedies now existing at common law or by statute, but the provisions of this chapter are in addition to such remedies.'
However, despite the similarities between section 5 of the Federal Trade Commission Act and 411 of the Federal Aviation Act, the differences between the two would itself suggest that the common law misrepresentational torts did not remain unaffected by the Act. The Supreme Court recognized as much in American Airlines, Inc. v. North American Airlines, Inc., supra, 351 U.S. at 83-84, 76 S. Ct. at 604:
Lastly, although the saving clause of section 1106 purports to speak in absolute terms it cannot be read so literally. Nearly seventy years ago, in the celebrated case of Texas & Pacific Railway Co. v. Abilene Cotton Oil Co., 204 U.S. 426, 446, 27 S. Ct. 350, 358, 51 L. Ed. 553 (1907), the Supreme Court, ruling on the applicability of an identical clause in the Interstate Commerce Act, stated: 'This clause, however, cannot in reason be construed as continuing in shippers a common law right, the continued existence of which would be absolutely inconsistent with the provisions of the act. In other words, the act cannot be held to destroy itself.'
This result is but another application of the principles of primary jurisdiction, a doctrine whose purpose is the coordination of the workings of agency and court. See 3 K. Davis, Administrative Law Treatise, § 19.01 (1958). Primary jurisdiction recognizes that even though a claim may be cognizable in the courts, technical questions often call for the judgment of an agency presumably expert in the field under judicial consideration. Perhaps more importantly, where Congress has entrusted the regulation of an industry to a single regulatory body, uniformity of policy and practice can only be achieved by submitting relevant issues to the affected agency for consideration. See generally Far East Conference v. United States, 342 U.S. 570, 72 S. Ct. 492, 96 L. Ed. 576 (1952); Price v. Trans World Airlines, Inc.,481 F.2d 844 (9th Cir. 1973); Lichten v. Eastern Airlines, Inc., 189 F.2d 939 (2d Cir. 1951); Adler v. Chicago & Southern Air Lines, Inc., 41 F. Supp. 366 (E.D. Mo. 1941).
It is ACAP's view that, if there has been any material increase in deliberate multiple overbooking during recent months, this should be seen as a natural defensive strategy to what the public sees as unstable conditions in the industry and abusive practices by the carriers. In short, much of the travelling public has lost confidence in the reliability and integrity of airline commitments because of schedule irregularities, last-minute equipment substitutions, employee layoffs, frequent misinformation and lack of candor by the carriers, and the recent revelations of industry-wide practices of deliberate overbooking. See e.g., Nader v. Allegheny Airlines, Inc., 365 F. Supp. 128 (D.D.C. 1973). By controlling those practices to protect the public, much of the incentive for multiple overbooking would be removed.
We think that the decision in the Emergency Reservation Practices Investigation should substantially resolve whether the practices at issue are deceptive within the meaning of section 411. Cf. Aloha Airlines, Inc. v. Hawaiian Airlines, Inc., 489 F.2d 203, 211 (9th Cir. 1973), cert. denied, 417 U.S. 913, 94 S. Ct. 2612, 41 L. Ed. 2d 217 (1974). However, since petitions for discretionary review of the administrative law judge's decision are currently pending before the Board, we instruct the district court to stay further proceedings on the misrepresentation cause of action pending the outcome of the proceedings in the Emergency Reservation Practices Investigation.44 See Ricci v. Chicago Mercantile Exchange, 409 U.S. 289, 93 S. Ct. 573, 34 L. Ed. 2d 525 (1973); General American Tank Car Corp. v. El Dorado Terminal Co., 308 U.S. 422, 60 S. Ct. 325, 84 L. Ed. 361 (1940). While it is possible that, in light of the broader scope of those proceedings, the Board would not in the normal course give specific attention to the deceptiveness of failing to publicize overbooking practices, we may assume that the Board will give the matter such attention (sua sponte if necessary) in response to this opinion.
Nader v. Allegheny Airlines, Inc., supra, 365 F. Supp. at 132-33 (citations omitted).
Of course, questions involving the scope of liability for fraudulent misrepresentation are questions of 'local' rather than federal law. Thus, we must look to the common law of the District of Columbia since, under all of the various choice of law principles, the law of this jurisdiction would be applied. See generally Dovell v. Arundel Supply Corp., 124 U.S.App.D.C. 89, 361 F.2d 543 (1966); Emmert v. United States, 300 F. Supp. 45 (D.D.C. 1969). Apparently, the question of third party recovery for fraudulent misrepresentation is virtually one of the first impression, as the parties have not referred us to any District of Columbia decisions that have confronted this issue, and our research has uncovered only one such case. In that case, New York Title & Mortgage Co. v. Hutton, 63 App.D.C. 266, 71 F.2d 989, cert. denied, 293 U.S. 605, 55 S. Ct. 122, 79 L. Ed. 696 (1934), the court applied the then prevalent rule to determine that a title company which lauded the facilities of another title company by letter in order to obtain title business could not be held liable for fraudulent misrepresentation where the letter was used by the other title company to aid in the sale of its stock. We therefore turn to the legal principles that have guided other courts and commentators.
It is unequivocal that privity of contract is not a prerequisite to recovery where the plaintiff proves fraudulent misrepresentation. See, e.g., id. at 991; Miller v. Bargain City, U.S.A., Inc., 229 F. Supp. 33, 39-40 (E.D. Pa. 1964); Oppenhuizen v. Wennersten, 2 Mich.App. 288, 139 N.W.2d 765 (1966). But see Denning v. Bolin Oil Co., 422 F.2d 55, 58 (10th Cir. 1970) (applying Oklahoma law). Even before the celebrated case of Ultramares Corp. v. Touche, 255 N.Y. 170, 174 N.E. 441 (1931), the generally accepted rule was that the maker of a fraudulent misrepresentation is liable to those he intends to influence, regardless of privity of contract. See, e.g., Wollenberger v. Hoover, 346 Ill. 511, 179 N.E. 42, 67 (1931); Restatement (Second) of Torts, Explanatory Notes § 531, at 96 (Tent.Draft No. 10, 1964). In Ultramares, Justice Cardozo, while Chief Judge of the New York Court of Appeals, broadened the rule by finding that an accountant not only owed a duty to his employer to prepare and certify financial statements without fraud, but also owed the same duty to creditors and investors to whom the financial statements might be exhibited, 'since there was notice in the circumstances of its making that the employer did not intend to keep it to himself.' 174 N.E. at 444. In 1964, the revisors of the Restatement of Torts reported that '(t)he prestige of the case has been so great that it must be taken as a new point of departure. The problem is to find language to state the broader rule without going too far.' Restatement (Second) of Torts, supra, at 96.
Prosser, Misrepresentations and Third Persons, 19 Vand. L. Rev. 231, 251-52 (1966) (citation omitted); see id. at 246-53. Court decisions have generally supported this limitation; no court has gone any further and many restricted recovery to a greater extent. See, e.g., Denning v. Bolin Oil Co., supra, 422 F.2d at 59 (concurring opinion); Miller v. Bargain City, U.S.A., Inc., supra, 229 F. Supp. at 38-40; Pamela Amusement Co., Inc. v. Scott Jewelry Co., 190 F. Supp. 465, 468 (D. Mass. 1960); Cohen v. Citizens National Trust & Savings Bank, 143 Cal. App. 2d 480, 300 P.2d 14 (1956); Gulf Oil Corp. v. Newton, 130 Conn. 37, 31 A.2d 462 (1943); Metric Investment, Inc. v. Patterson, 101 N.J.Super. 301, 244 A.2d 311 (App.Div.1968); Westcliff Co., Inc. v. Wall, 153 Tex. 271, 267 S.W.2d 544 (1954); cf. Rozny v. Marnul, 43 Ill. 2d 54, 250 N.E.2d 656, 662-63 (1969). With these principles in mind, we consider whether Nader and CCAG are within the class of persons who may recover.
Although the trial judge apparently did not explicitly consider Nader's position, it is manifest that Nader was not in privity with Allegheny at the time of the misrepresentation, nor was he identified as a person to whom the misrepresentation was directed. However, he was within an identifiable class of third persons-potential passengers-that Allegheny intended to influence. Although the class of persons is large, liability is justified by the notion that, in general, loss caused by intentional wrongdoing should be placed on the wrongdoer rather than on the innocent party. See Rusch Factors, Inc. v. Levin, 284 F. Supp. 85, 90 (D.R.I. 1968).
CCAG, however, is a party more remote from the transaction than Nader. It was not identified to Allegheny until this law suit was instituted.45 Allegheny had no special reason to know of CCAG's reliance or even of its existence. In fact, CCAG is really a member of a vast indeterminate class that may be equated with the public itself. The trial judge seems to have recognized this, as he stated: 'It was foreseeable that the Defendant's intentional misrepresentation would be relayed to other members of the public and that they would rely upon the Defendant's representation . . ..' Nader v. Allegheny Airlines, Inc., supra, 365 F. Supp. at 132 (emphasis supplied). However, as discussed above, foreseeability is not the test to be used in determining the class of third persons who may recover; otherwise, liability in a case such as this could become indeterminate. To hold that CCAG is within the class of persons who may recover would mean that virtually any plaintiff, no matter how far removed from the transaction or incident, can recover the full amount of his damages. We are unwilling to extend liability that far and consequently hold that CCAG cannot recover as Allegheny's duty did not extend to it.46
The trial judge awarded punitive damages of $25,000 to each appellee. Nader's award was apparently premised both on the finding that Allegheny violated section 404(b) and that it misrepresented material facts; CCAG's award was apparently based only on the latter ground. See Nader v. Allegheny Airlines, Inc., supra, 365 F. Supp. at 132-33. Although we vacate each of the holdings that support the awards, we believe that the course of this litigation will best be advanced by considering the propriety of the punitive damage award.
It is a cardinal rule that punitive damages may be awarded to punish a defendant for the outrageous nature of his conduct and to deter the defendant and others from engaging in the same or similar acts. See, e.g., Chesapeake & Potomac Telephone Co. v. Clay, 90 U.S.App.D.C. 206, 194 F.2d 888, 891 (1952); W. Prosser, Law of Torts, supra, § 2, at 9-10. As such, mere inadvertence or even gross negligence will not suffice to support an award of punitive damages. See id. The tort must be 'aggravated by evil motive, actual malice, deliberate violence or oppression.' Black v. Sheraton Corp. of America, 47 F.R.D. 263, 271 (D.D.C. 1969). Since we held earlier that overbooking is not per se a violation of section 404(b), but that a violation occurs when an airline disregards its own priority rules, the question becomes whether the nature of Allegheny's conduct in denying Nader a seat on flight 864 contains elements of intentional wrongdoing or conscious disregard for Nader's rights. This question must be answered in the negative.
Several recent cases have emphasized the deterrent value of punitive damages; however, they do not explicitly reject the concept that the conduct must be malicious. See, e.g., International Brotherhood of Boilermakers v. Brasswell, 388 F.2d 193 (5th Cir. 1968); Kozar v. Chesapeake & Ohio Railway Co., 320 F. Supp. 355 (W.D. Mich. 1970), vacated in part, 449 F.2d 1238 (6th Cir. 1971). If the trial judge's theory was deterrence, that is to force Allegheny to change its boarding or reservation procedures to eliminate denied boarding incidents, then the award cannot stand because it interferes with the primary jurisdiction of the Civil Aeronautics Board. As stated previously, Congress has entrusted the regulation of the airline industry to the Board, and prospective changes in air carrier practices must first be considered by it, subject to judicial review. Significantly, the Wills court denied an injunctive remedy against the same practice for which it awarded punitive damages, reasoning that 'the Act specifies . . . that a complaint may be brought before the administrative agency, which is duty bound to investigate, and then may issue an order compelling further compliance with the requirements of the Act.' Wills v. Trans World Airways, Inc., supra, 200 F. Supp. at 365-66. The district court in Mortimer v. Delta Air Lines, supra, was even more explicit. Ruling on a motion to dismiss for lack of jurisdiction, the court stated:
302 F. Supp. at 282. We agree with the Mortimer court. As there is no other basis for awarding punitive damages based on Allegheny's violation of section 404(b), the award must be reversed.
Nader v. Allegheny Airlines, Inc., supra, 365 F. Supp. at 133. It is fundamental that the trier of fact may find malice by drawing inferences from the defendant's conduct. These deductions are findings of fact and are subject to the clearly erroneous standard. However, inferences based on a mistake of fact or of law must be reversed.
Nader v. Allegheny Airlines, Inc., supra, 365 F. Supp. at 131 (citations omitted). Moreover, in finding of fact no. 21, he stated:
In light of the Board's dominant role in determining whether Allegheny's policy of nondisclosure is or is not deceptive, and its continued exercise of jurisdiction to control the carriers' overbooking practices, we think that finding no. 18 is clearly erroneous. Also, we cannot accept the notion that air carriers ipso facto become fiduciaries and are held to a standard of full disclosure to the public merely because they possess a certificate of public convenience and necessity. While special obligations are sometimes imposed upon common carriers, the trial court offered no support for its interpretation of the scope of a certificate. If Congress had intended to import such significant extra duties to the carriers, some glimmer of its intent should be found in the statute or the legislative history. However, we have been unable to find such a message. See United States v. Bradley, 252 F. Supp. 804 (S.D. Tex. 1966).
The Board may, upon its own initiative or upon complaint by any air carrier, foreign air carrier, or ticket agent, if it considers that such action by it would be in the interest of the public, investigate and determine whether any air carrier, foreign air carrier, or ticket agent has been or is engaged in unfair or deceptive practices or unfair methods of competition in air transportation or the sale thereof. If the Board shall find, after notice and hearing, that such air carrier, foreign air carrier, or ticket agent is engaged in such unfair or deceptive practices or unfair methods of competition, it shall order such air carrier, foreign air carrier, or ticket agent to cease and desist from such practices or methods of competition. (Pub. L. 85-726, title IV, § 411, Aug. 23, 1958, 72 Stat. 769.)
Pub. L. 85-726, title XI, § 1106, Aug. 23, 1958, 72 Stat. 798. 49 U.S.C. § 1506.
If the present question were whether the bumping of Mr. Nader constituted a deceptive practice within the meaning of the Act, I would agree the matter would of course be within the primary jurisdiction of the Board. If, however, as I see it, the question now is whether he was the victim of fraudulent misrepresentation-a common law tort-it is for the court alone to decide. Cf., Great Northern Ry. Co. v. Merchants Elevator Co., 259 U.S. 285, 290-91, 42 S. Ct. 477, 66 L. Ed. 943 (1922), opinion by Brandeis, J.; Holloway v. Bristol-Myers Corporation, 158 U.S.App.D.C. 207, 485 F.2d 986, 989 (1973). Whatever this court should decide as to the claim of fraudulent misrepresentation-whether for or against Nader-the Board would be free to exercise its statutory authority. Thus, the respective jurisdiction of court and Board overlap;2 but where there is presented a claim of common law tort liability, as now, the jurisdiction of the court for its determination is independent of that of the Board.
Texas & Pacific Ry. Co. v. Abilene Cotton Oil Co., 204 U.S. 426, 446, 27 S. Ct. 350, 51 L. Ed. 553 (1907), I think fails to support the court. In construing the Interstate Commerce Act, which lodged in the Interstate Commerce Commission decisional responsibility for the reasonableness of filed rates, the Court held that this purpose of the Act would be destroyed if a statutory reservation of a common law remedy were construed to vest this very question of reasonableness of rates in the courts independently of the Commission. In so holding, the Court emphasized the importance of preserving common law remedies, and explained its decision as follows:
Id. at 437, 27 S. Ct. at 354.3 The statute we now construe sets forth no specific conduct which is to be protected or prohibited by the Board under section 411.
There is no denying the broad scope accorded the expertise of regulatory agencies by the Supreme Court, especially where, as in the present case, the agency has been granted by Congress regulatory authority over a particular industry. Practices which would be held to offend another statute, such as the Sherman Act, have been permitted when approved in the public interest by the agency regulating the industry. Illustrative is Far East Conference v. United States, 342 U.S. 570, 72 S. Ct. 492, 96 L. Ed. 576 (1952). The case involved a Conference Agreement of steamship companies, approved by the United States Shipping Board under statutory authority. The question was whether a dual system of rates violated the Sherman Act, as the United States contended. The Court held the matter must be passed upon by the Federal Maritime Board before being decided by a District Court, describing the issue as the relation of the Sherman Act to the Shipping Act. Adhering to its previous analysis in United States Navigation Co., Inc. v. Cunard Steamship Co. Ltd., 284 U.S. 474, 52 S. Ct. 247, 76 L. Ed. 408 (1932), of the powers entrusted by Congress to the United States Shipping Board under the Shipping Act, the Court said it was 'now firmly established, that in cases raising issues of fact not within the conventional experience of judges or cases requiring the exercise of administrative discretion, agencies created by Congress for regulating the subject matter should not be passed over.' Far Eastern Conference, supra, 342 U.S. at 574, 72 S. Ct. at 494.
Even where the present Board, under section 414 of the Act, 49 U.S.C. § 1384, is authorized to immunize from the antitrust laws conduct which it has approved in the public interest under other sections of the Act, as in Far Eastern Conference, supra, conduct which violates those laws but which has not been approved under the Act, is not exempted from their application. Aloha Airlines, Inc. v. Hawaiian Airlines, Inc., 489 F.2d 203 (9th Cir. 1973), rehearing denied, January 29, 1974. There the court, opinion by Tuttle, J., distinguished Hughes Tool Co. v. Trans World Airlines, 409 U.S. 363, 93 S. Ct. 647, 34 L. Ed. 2d 577 (1973) and Pan American World Airways v. United States, 371 U.S. 296, 305, 83 S. Ct. 476, 9 L. Ed. 2d 325 (1963), where antitrust problems 'expressly entrusted to the CAB (the Board) are withdrawn from consideration by the Courts.' The court reasoned as follows:
'To be sure, Pan American (371 U.S. 296, 63 S. Ct. 476, 9 L. Ed. 2d 325) held that the CAB had exclusive jurisdiction to halt certain alleged anticompetitive practices, but the alleged practices in that case had been the subject of specific orders of the CAB dealing with 'the division of territories or the allocation of routes or . . . combinations between common carriers and air carriers'-all matters within the Board's primary jurisdiction under section 408 or section 409. In contrast, the CAB has not issued any orders authorizing or restaining HAL's past conduct of which Aloha complains.
The court refers also to American Airlines Inc. v. North American Airlines, Inc., 351 U.S. 79, 76 S. Ct. 600, 100 L. Ed. 953 (1956). The case arose in a proceeding by the Board itself under section 411 to require North American Airlines to cease and desist from using 'North American' in its name in competition with the previously licensed American Airlines. No claim by American of a common law wrong or remedy was involved. In its opinion the Supreme Court pointed out that section 411 was modeled after section 5 of the Federal Trade Commission Act. We had stated in Holloway, supra, that the remedies of section 5 were additional to rather than in derogation of the common law remedies for fraud and deceit:
The trial judge awarded Nader $10 in actual damages, which consisted of $7 for long-distance telephone calls and $3 for the additional cost of a ticket to Boston. CCAG was awarded $50 for the expense of sending a car to Boston to transport Nader to Storrs, Connecticut. Nader v. Allegheny Airlines, Inc., 365 F. Supp. 128, 130 (D.D.C. 1973)
The district court's holding on this contention was: 'The Plaintiff, Mr. Nader, is entitled to both compensatory and punitive damages under the antidiscrimination provisions of the Federal Aviation Act of 1958, Section 404(b), 49 U.S.C. § 1374(b).' Nader v. Allegheny Airlines, Inc., supra, 365 F. Supp. at 132 (D.D.C. 1973). However, the district court's holding on the second claim, that of fraudulent misrepresentation, was that both appellees could recover. Id. at 132-33. Therefore, we must conclude that the trial judge's failure to mention CCAG with respect to the implied private action arising from a violation of section 404(b) means that appellee CCAG failed to meet its burden of proof on this issue. See Switzer Bros., Inc. v. Locklin, 297 F.2d 39, 45 (7th Cir. 1961), cert. denied, 369 U.S. 851, 82 S. Ct. 934, 8 L. Ed. 2d 9 (1962). Appellees appear to accept this interpretation of the district judge's decision as their first argument is captioned '(t)he trial court's finding that Allegheny
The elements of fraudulent misrepresentation are set forth in Sankin v. 5410 Connecticut Avenue Corp., 281 F. Supp. 524, 545 (D.D.C. 1968), aff'd sub nom. Benn v. Sankin, 133 U.S.App.D.C. 361, 410 F.2d 1060 (1969), cert. denied, 396 U.S. 1041, 90 S. Ct. 681, 24 L. Ed. 2d 685 (1970):
Compare T.I.M.E., Inc. v. United States, 359 U.S. 464, 79 S. Ct. 904, 3 L. Ed. 2d 952 (1959) with Hewitt-Robins, Inc. v. Eastern Freight-Ways, Inc., 371 U.S. 84, 83 S. Ct. 157, 9 L. Ed. 2d 142 (1962)
Throughout this litigation, Allegheny has maintained that appellees' action is barred by Allegheny's tariff-Tariff CAB No. 142, Local and Joint Passenger Tariff No. Pr-6, Rule 40(b)-because appellees failed to give written notice of the incident to Allegheny within 45 days of its occurrence. However, private statutes of limitations such as the one before us can be waived by the carrier. See United Fruit Co. v. J. A. Folger & Co., 270 F.2d 666 (5th Cir. 1959), cert. denied, 362 U.S. 911, 80 S. Ct. 682, 4 L. Ed. 2d 619 (1960). The district court held that Allegheny's denied boarding compensation draft to Nader of $32.41, which if accepted released Allegheny from all claims arising from the incident, and which, on its face, remained open to acceptance for 60 days, constituted a waiver of the 45 day tariff provision. Since Nader brought this suit within the 60 day period, we cannot say that the district court's holding was clearly erroneous
We have recognized that 'a statute should not be considered in derogation of the common law unless it expressly so states or the result is imperatively required from the nature of the enactment.' Bauers v. Heisel, 361 F.2d 581, 587 (3d Cir. 1966) (en banc), cert. denied, 386 U.S. 1021, 87 S. Ct. 1367, 18 L. Ed. 2d 457, . . . see also Texas & Pacific Ry. v. Abilene Cotton Oil Co. . . ..