Court Opinion

ID: 9461559
Source: CourtListenerOpinion
Date Created: 2023-08-04 22:17:28.853965+00
Date Added: 2024-06-11T17:37:07.718869
License: Public Domain

FAHY, Senior Circuit Judge
(concurring in part, dissenting in part):
I concur in the conclusion reached in the opinion of Judge Tamm for the court that the question whether appellee Nader was entitled to recover under section 404(b) of the Federal Aviation Act must be remanded for further consideration. I also concur in the conclusion of the court, assuming arguendo that Allegheny committed fraudulent misrepresentation, that appellee Connecticut Citizen Action Group (CCAG) is not within the class which can recover on that ground. Furthermore, I concur that punitive damages may not be awarded on the present record for a section 404(b) violation.
My dissent is due to the court’s disposition of the claim of Mr. Nader based on allegedly fraudulent misrepresentation by Allegheny. The court holds that the finding of the District Court in that regard must be reversed and the case stayed until the Board determines whether the reservation practices of the airlines are deceptive. In my opinion the finding by the District Court of fraudulent misrepresentation is ripe for review now by this court without reference to the Board, under section 411, of the reservation practices of the airlines. That section, entitled “Methods of Competition”, provides as follows:
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.)
The authority thus granted the Board looks only to the future cessation of practices determined by the Board to be *553unfair or deceptive. It does not either provide or preclude a remedy for past tortious conduct of a carrier injurious to an individual. Moreover, section 1106 of the Act provides:
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.
Pub.L. 85-726, title XI, § 1106, Aug. 23, 1958, 72 Stat. 798. 49 U.S.C. § 1506.
Yet our court now holds, if the Board properly finds that a practice is not deceptive, a common law action for misrepresentation must fail as a matter of law.
I assume the court, by the language “properly finds”, means finds in a manner which would meet judicial approval on review of such a finding made in the exercise of the Board’s power under section 411, without such power being conditioned by the common law or section 1106 of the Act. I so assume because it is clear the court now vests the Board with decisional authority to determine that an individual who has suffered injury due to a carrier’s fraudulent misrepresentation, and who otherwise would have a common law remedy, would have no such remedy should the Board determine the conduct was not deceptive. This position of the court that if the Board in a section 411 proceeding determines that a practice is non-deceptive then a common law action for fraudulent misrepresentation must fail as a matter of law seems to me to nullify section 1106. Moreover, the court thus divests itself not only of the authority to adjudicate a claim of fraudulent misrepresentation but also vests the Board with authority to define fraudulent misrepresentation in a manner which the courts must accept for the airline industry. I do not find that Congress has so provided or intended. Indeed, section 1106 seems to me clearly to the contrary. Section 411 affords, or denies, only a statutory remedy, unknown to the common law.
The court well describes the problem facing the airlines due to persons with reservations failing to “show”. This problem continues to be of deep concern to the industry and to the Board. It is the subject now of some regulation and further regulation is under consideration.1 Clearly the matter is appropriate for such consideration and possibly additional regulation under section 411 and perhaps under other provisions of the Act. My disagreement with the Board and my colleagues is that the Act nevertheless falls short of eliminating judicial determination whether a particular factual situation such as now before us amounted to fraudulent misrepresentation.
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 *554presented a claim of common law tort liability, as now, the jurisdiction of the court for its determination is independent of that of the Board.
Bumping may not be per se a deceptive practice. Moreover, it may not be the result of fraudulent misrepresentation, but when in a particular instance it is claimed to have been due to the latter the question is for the court to decide, though hopefully the need for resort to the court will be obviated when the practice is regulated not inconsistent with my position.
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:
we must be guided by the principle that repeals by implication are not favored, and indeed that a statute will not be construed as taking away a common law right existing at the date of its enactment, unless that result is imperatively required; that is to say, unless it be found that the pre-existing right is so repugnant to the statute that the survival of such right would in effect deprive the subsequent statute of its efficacy; in other words, render its provisions nugatory-
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.
If we transpose it from its own context to that of the present case, the above language would arguably support the court’s position except that the subject of fraudulent misrepresentation is *555within the conventional experience of judges. For other reasons I do not believe the situation we face justifies such transposition. Congress has expressly-limited the present Board’s authority by preserving common law remedies. In addition, the Supreme Court, in its recognition of the great public interest served by administrative law has never gone so far as to import into agency regulatory authority the right to approve a tortious injury to an individual, quite a different matter from exempting an industry from statutory accountability under the antitrust laws for conduct approved in the public interest under authority expressly granted by Congress.
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:
In the case before us there is no order of the CAB authorizing the conduct which has been made the basis of the antitrust complaint filed by Aloha [Airlines]. HAL [Hawaiian Airlines] takes the position, however, that the fact that section 411 of the Act provides that the Board may, upon its own initiative or upon complaint by any air carrier, investigate and determine whether any air carrier has been or is engaged in unfair or deceptive practices or unfair methods of competition in air transportation and if it should find the existence of such practices, it shall issue a cease and desist order amounts to an explicit commitment of exclusive authority to the Board to deal in all aspects with charges of unfair competition.
To be sure, Pan American [371 U.S. 296, 83 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 restraining HAL’s past conduct of which Aloha complains.
The Court made it plain in Pan American that such jurisdiction was restricted to prospective relief since the Court said “[t]he Board has no power to award damages or to bring criminal prosecutions.” This was noted at the point in which the Court was recognizing limitation on the kinds of relief that were committed to the Board. The dissenting opinion by Mr. Justice Brennan was based "largely upon the distinction made by the Court between the granting of exclusive jurisdiction to the Board as to injunctive matters while leaving to the antitrust court the handling of damage claims.
We conclude, therefore, that the grant of authority to the Board by section 411 does not withdraw from the antitrust litigants the right to proceed for damages alleged to have occurred by reason of antitrust violations of the kind with which the Board has authority to deal only by issuing a cease and desist order.
489 F.2d at 208.
By comparable reasoning, section 411 does not withdraw from appellee Nader *556the right to sue for damages alleged to have occurred by reason of common law fraudulent misrepresentation.4
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 qase 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:
This Act [the Federal Trade Commission Act] does not purport to affect a consumer’s right to obtain damages in a common law action sounding in fraud or deceit, or in any expansion of that action that may evolve in common law jurisprudence.
485 F.2d at 999. The Supreme Court in American Airlines, however, observed that section 5 of the Trade Commission Act was “concerned with purely private business enterprises,” and differed from a statute where, as in our case, Congress has committed the regulation of a particular industry to an agency of special competence to deal only with that industry’s problems. Our court now reasons from this difference that the common law remedies for fraud and deceit cannot remain totally unaffected by section 411. I agree to the extent that the Board may add to common law remedies, and require a carrier to cease and desist unfair and deceptive practices, as in American Airlines, but I find no support in that case for a view that the Board has power to eliminate a common law private action for fraudulent misrepresentation by deciding that past conduct of that character by an airline in a particular case was not a deceptive practice.
I do not intimate that should the court sustain the finding of the District Court of fraudulent misrepresentation the punitive damages awarded by the District Court would also be sustained.
I respectfully dissent from that part of the decision of the court which defers decision of the Nader claim of fraudulent misrepresentation to await Board determination whether the reservation practices of the airlines are deceptive.5

. As pointed out by Judge Tamm the Board presently has the matter under consideration in Docket 26253, Emergency Reservation Practices Investigation. 39 Fed.Reg. 823 (1974).

. As this court stated in Holloway, supra, at 989, with respect to the Federal Trade Commission Act, so here, “Congress has superimposed a structure of Federal law upon the existing system of common law remedies for fraud and deceit without preempting or superseding the latter.”

. See, also, Bell Telephone Company of Pennsylvania v. F. C. C„ 503 F.2d 1250, 1280 (3d Cir. 1974), where the court notes:
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.....

. I think this would be so even if the Board had previously approved bumping as not per se deceptive. The present case must rest upon its particular facts on the issue of fraudulent misrepresentation.

. It is not clear to me that increased passenger fares need follow from the position I hold, even should it result in some readjustment within the over-all economics of the industry operating free of fraudulent misrepresentation. Moreover, I am unable legally to justify barring the courts from according a remedy for injury found after fairly conducted judicial proceedings to have resulted from the fraudulent misrepresentation of an airline.