CIVIL AERONAUTICS BOARD, Plaintiff-Appellant, v. AEROMATIC TRAVEL CORP. et al., Defendants-Appellees.
No. 116, Docket 73-1059
United States Court of Appeals, Second Circuit
Decided Dec. 12, 1973
As Amended Feb. 11, 1974
489 F.2d 251
Mulligan, Circuit Judge, dissented and filed opinion.
Submitted Nov. 19, 1973.
Harlington Wood, Jr., Asst. Atty. Gen., Robert A. Morse, U. S. Atty., Walter H. Fleischer and James C. Hair, Jr., Attys., Dept. of Justice, Washington, D. C., and Stephen A. Alterman, Atty., Civil Aeronautics Bd., Washington, D. C., on the brief, for plaintiff-appellant.
Hofheimer, Gartlir, Gottlieb & Gross, New York City, for appellees Consolidated Air Brokers, Inc., Fred Meyrow and Lillian Meyrow, on the brief.
Before LUMBARD, MANSFIELD and MULLIGAN, Circuit Judges.
LUMBARD, Circuit Judge:
Seeking to prevent appellees from participating in what it considers to be a “vast black market in air transportation,” the Civil Aeronautics Board in September 1971 brought this action in the Eastern District of New York to enjoin violations of the Federal Aviation Act of 1958,
I.
The CAB‘s complaint alleged that appellees, five travel agencies and their officers or employees, arranged “charter” flights between the United States and Europe and sold tickets on these flights to members of the general public. The prices for these tickets were alleged to be fixed by appellees and not by the actual air carriers. Together with the tickets for the flights, purchasers were also given false membership documents in the organization chartering the flights. The Board claims that these activities make appellees indirect air carriers1 operating without certificates of public convenience and necessity in violation of
The appellees moved to dismiss or stay the district court proceedings on the ground that the doctrine of primary jurisdiction required that the CAB initially determine whether appellees were indirect air carriers or, as appellees claimed, ticket agents,3 which are not
subject to the same degree of Board regulation.4 They pointed out that the Board in similar cases was proceeding by investigations and hearings before the Board itself.5 Judge Travia denied this motion but gave appellees leave to renew it at an appropriate time during the evidentiary hearing. 341 F.Supp. 1271, 1282 (E.D.N.Y.1971).
At the same time, appellees moved that the airlines that actually provided the air transportation be joined as parties under Rule 19, F.R.Civ.P. Judge Travia granted this motion. 341 F.Supp. at 1276. The CAB subsequently amended its complaint to include the direct air carriers as defendants, but did not allege that they had committed any wrongs. At this point, Judge Travia changed his mind; he dismissed the airlines as defendants and granted the stay originally sought by appellees, without hearing any evidence, 349 F.Supp. at 1154-1157, and, so far as we can see, without any good reason.
II.
We must decide whether we have jurisdiction to hear this appeal. Under the teaching of Cohen v. Beneficial Industrial Loan Corp., 337 U.S. 541, 545-547, 69 S.Ct. 1221, 93 L.Ed. 1528 (1949), we believe that we have jurisdiction. The issue of whether the doctrine of primary jurisdiction should be invoked is collateral to the ultimate issues of this case, the issue is vital to CAB efforts to secure speedy enforcement of the Federal Aviation Act and the Board‘s regulations, and the issue is too important to be deferred until the entire case is decided.
III.
Moving to the merits, we think it was error for the district court to apply the doctrine of primary jurisdiction.6 The Board is given the power to enforce the Act and its regulations by either of two means. It can institute a suit in the district courts for enforcement purposes, as was done here,
In CAB v. Modern Air Transport, Inc., 179 F.2d 622 (2d Cir. 1950), we held that the Board could sue to enjoin an air carrier from engaging in air transportation without proper authorization from the Board, even though the Board had not issued a cease and desist order in the case. We said that the doctrine of primary jurisdiction was not applicable “where the issue, regardless of its complexity, is not the reasonableness of the rate or rule, but a violation of such rate or rule.” 179 F.2d at 624. Subsequent cases may have slightly relaxed this distinction, see, e. g., United States v. Western Pacific R. R., 352 U.S. 59, 77 S.Ct. 161, 1 L.Ed.2d 126 (1956), but we believe that the distinction still holds in the circumstances of this case.
First, a reading of the Act indicates that Congress intended that the CAB be able to enforce the Act and regulations without an initial determination by the Board that they had been violated. See generally L. Jaffe, Judicial Control of Administrative Action 124-25 (1965). Congress provided in
Second, when the agency chooses to go to the district court for enforcement, it makes little sense to refer the very question at issue to the agency. Reference to the CAB of a major issue in a suit in which the Board is plaintiff would be, as we said in Modern Air Transport, a “delaying formalism.” 179 F.2d at 625. Professor Davis has written that the principal reason behind the doctrine of primary jurisdiction is the “recognition of the need for orderly and sensible coordination of the work of agencies and of courts.” 3 K. Davis, Administrative Law Treatise § 19.01, at 5 (1958). Therefore, the doctrine does not apply when the agency itself is plaintiff. Id. § 19.02, at 13-14.
The district court felt that Modern Air Transport was not apposite since it was presented with the difficult factual issue of whether appellees are indirect air carriers. However, the factual issues, which do not seem to be seriously disputed, can and should be resolved by the district court; this is the business of the district court, whether the issues be simple or complex. The major issue here is one of statutory interpretation: Do the facts as found regarding the operations of appellees make them subject to the Board‘s powers to regulate air carriers?9 There is no reason why both the factual and legal issues cannot be decided by the district court without delay.10 Therefore, as in Modern Air Transport, “we find no judicial barrier to granting the swift remedy accorded [the CAB] by Congress.” 179 F.2d at 626.
As mentioned above, the district court first held that Rule 19, F.R.Civ.P., required that the direct air carriers be joined as defendants but then dismissed them from the case when the CAB‘s amended complaint failed to allege that they had committed any wrong. The court erred in its initial ruling that joined the airlines under Rule 19.
Complete relief could have been accorded the original parties in this action by granting the injunction sought by the CAB since the Board never sought any remedy against the airlines. The airlines themselves argued below that they had no interest in this case and that they should not have been joined. They have no interest which requires protection by their appearance in this case. Therefore, further proceedings in this case are properly based on the original complaint which named only the appellees as defendants.
Reversed and remanded for further proceedings before a different district judge.
MULLIGAN, Circuit Judge (dissenting):
In my view, this court has no appellate jurisdiction here. Allied Air Freight, Inc. v. Pan American World Airways, Inc., 340 F.2d 160 (2d Cir.) (per curiam), cert. denied, 381 U.S. 924, 85 S.Ct. 1560, 14 L.Ed.2d 683 (1965), also involved an appeal from an order of the district court which had stayed an action by the plaintiff on the ground that the C.A.B. had primary jurisdiction. This court held that it had no appellate jurisdiction, stating that “[o]bviously, the stay order, as well as not adjudicating upon plaintiffs’ claims, does not finally dispose of the district court suit or necessarily preclude a sometime trial in that forum of plaintiffs’ claims.” Id. 340 F.2d at 161.
I do not see how Cohen v. Beneficial Indus. Loan Corp., 337 U.S. 541, 545-547, 69 S.Ct. 1221, 93 L.Ed. 1528 (1949), is applicable. While the question of primary jurisdiction is collateral to the ultimate issue of this case, this is the only criterion of Cohen met on this appeal. Certainly the majority opinion here settles no important issue once and for all. International Business Machines Corp. v. United States, 480 F.2d 293, 298 (2d Cir. 1973) (en banc). This is simply a reversal based on established authority and with which I would agree if we had appellate jurisdiction.
While the C.A.B. may be anxious for a speedy enforcement of its own regulations, there is no showing here that a decision by the district court is critical or that any irreparable harm will flow if the agency makes its own determination on the merits. Eisen v. Carlisle & Jacquelin, 479 F.2d 1005, 1007 n.1 (2d Cir. 1973), cert. granted, 414 U.S. 908, 94 S. Ct. 235, 38 L.Ed.2d 146 (1973). The relegation of this matter by the district court to the C.A.B. with its wide enforcement powers, while erroneous, is hardly calamitous. The C.A.B. admits that 22 cases involving the same question have been or are presently before the Board. Thirteen of these have already been resolved by cease and desist orders. One has been dismissed and one settled. The balance are still pending before the Board. If this case was remanded to the Board, no irreparable harm could possibly ensue.
This court has “often indicated that Cohen must be kept within narrow bounds, lest this exception swallow the salutary ‘final judgment’ rule.” Weight Watchers, Inc. v. Weight Watchers Int‘l, Inc., 455 F.2d 770, 773 (2d Cir. 1972). The wisdom of containing the Cohen exception to that small class of cases presenting questions of crucial significance should be particularly apparent today with our calendar at an all-time peak.