Jack Laveson and Dr. Karl Silver, on Their Own Behalf and on Behalf of All Others Similarly Situated v. Trans World Airlines

471 F.2d 76, 1972 U.S. App. LEXIS 6127, 1972 WL 238000
CourtCourt of Appeals for the Third Circuit
DecidedDecember 26, 1972
Docket71-2156
StatusPublished
Cited by20 cases

This text of 471 F.2d 76 (Jack Laveson and Dr. Karl Silver, on Their Own Behalf and on Behalf of All Others Similarly Situated v. Trans World Airlines) is published on Counsel Stack Legal Research, covering Court of Appeals for the Third Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Jack Laveson and Dr. Karl Silver, on Their Own Behalf and on Behalf of All Others Similarly Situated v. Trans World Airlines, 471 F.2d 76, 1972 U.S. App. LEXIS 6127, 1972 WL 238000 (3d Cir. 1972).

Opinion

OPINION OF THE COURT

ADAMS, Circuit Judge.

The doctrine of primary jurisdiction was formulated in the last several decades as a judicial response to the creation of wide-ranging federal administrative agencies. It may be viewed as an effort to resolve procedural and substantive conflicts inevitably created when there is hewed out for an agency an area of original jurisdiction impinging on the jurisdiction of the courts.

It is in this regard that our judgment is sought here to determine the applicability of the primary jurisdiction doctrine to an antitrust action charging defendant airlines with conspiring to fix the price to coach passengers for the rental of headsets used with inflight motion pictures.

The plaintiffs, claiming to have flown as coach passengers on defendants’ flights, have sued on their own behalf and as class representatives of all coach passengers who have rented headsets. They alleged that commencing in 1967 defendants conspired, in violation of the Sherman Act, to establish a $2.00 rental fee for coach passengers while providing headsets free of charge to first-class passengers.

Although originally seeking both damages and injunctive relief, plaintiffs, in response to defendants’ motion to dismiss or stay the action, filed an amended complaint demanding only damages. Granting defendants’ motion to dismiss directed to the amended complaint, the district court held that the action was subject to the primary jurisdiction of the Civil Aeronautics Board because it “raises various questions of fact and law which ultimately can be determined in a more informed and orderly manner if initially presented to and considered by said Board. . . .”

In their brief and at oral argument, plaintiffs have essentially asserted that the district court erred in applying the primary jurisdiction doctrine to this ease and that, even if the CAB has primary jurisdiction, dismissal of the complaint, as opposed to a stay, was improper. We hold that the district court did not err in finding CAB primary jurisdiction but that the district court should have stayed the action rather than dismissing it.

I.

Before entering the legal thicket surrounding this suit, it is appropriate to examine the regulatory setting implicated here and the CAB’s past involvement in the subject matter of this case.

The air transportation industry has been placed by Congress under the detailed and continuous regulation of an administrative agency — the CAB. 1 Included within the CAB’s jurisdiction are many matters that may also fall within the scope of the antitrust laws. Under the Federal Aviation Act, 2 the *78 Board has jurisdiction over every “contract or agreement” between air carriers relating to, among other things, the establishment of transportation rates and the regulation of “destructive, oppressive, or wasteful competition. . . . ” 3 Airlines are directed by the Act to file such agreements with the Board for approval. 4 Approval by the Board relieves the parties “from the operations of the ‘antitrust laws’, . . . insofar as may be necessary to enable such person to do anything authorized, approved, or required by such order.” 5

Since 1966, the CAB has been engaged in regulating agreements among carriers relating to charges for inflight entertainment. 6 In 1967, twelve domestic air carriers, including the defendants, filed for Board approval an agreement providing for a $2.00 charge for visual inflight entertainment on domestic flights. 7 In an opinion and order dated March 9, 1967, 8 the Board deferred definitive action on the filed agreement but stated: “We would consider that a charge of less than $2 for a full length motion picture would not be reasonable.” 9 Explaining its decision to defer action, the Board asserted: “However, we have also tentatively concluded that, under the circumstances here present, the implementation of such a charge . . . would more appropriately be accomplished by exercise of our rate and rule making flowers under the Act.” 10

Simultaneously with its March 9, 1967 opinion and order, the Board issued a notice of proposed amendments to its Economic Regulations that would require carriers offering visual inflight entertainment to provide therefor in their tariffs. 11

“In addition, the proposed amendments would state the policy of the Board that carriers establish charges to passengers utilizing such services appropriate to the cost and value of the service provided, and that, in the absence of a contrary showing, a tariff providing for a charge of less than $2 for visual entertainment . would be considered unjust and unreasonable and would be suspended and investigated. 12

On March 6, 1968, the Board adopted, in regulation ER-529, the proposed rules requiring tariff provisions for inflight entertainment charges. 13 In doing so, it deleted “all reference to a specified minimum charge for such entertainment, thereby leaving, at least for the present, the matter of the amount of the charge to carrier management discretion.” 14 The Board also noted, however, that it “expects to use the proposed $2 charge as a benchmark in testing reasonableness of tariff filed. . . . ” 15

A few weeks later, on April 19, 1968, the Board stayed the March 6, 1968 regulations, stating: “A number of objections to the rule have been filed. In *79 light of these objections, the Board has determined to stay the effectiveness of ER-529 pending further consideration of the matter.” 16 The status of the matter remains the same today.

Instead of filing a written complaint with the Board, 17 plaintiffs brought the present antitrust action seeking treble damages. 17a The precise question this Court must now decide is whether the district court erred in holding that consideration of the present suit should be deferred, on primary jurisdiction grounds, pending resort to the CAB.

II.

In Far East Conference v. United States 18 the Supreme Court defined the doctrine of primary jurisdiction as:

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471 F.2d 76, 1972 U.S. App. LEXIS 6127, 1972 WL 238000, Counsel Stack Legal Research, https://law.counselstack.com/opinion/jack-laveson-and-dr-karl-silver-on-their-own-behalf-and-on-behalf-of-all-ca3-1972.