Sea Air Shuttle v. United States

• Court: Court of Appeals for the First Circuit
• Decided: April 24, 1997
• Docket: 96-1865
• Status: Published

Opinion

USCA1 Opinion

United States Court of Appeals

                                For the First Circuit

                                 ____________________


No. 96-1865



                             SEA AIR SHUTTLE CORPORATION,



                                Plaintiff, Appellant,



                                          v.



                              UNITED STATES OF AMERICA,



                                 Defendant, Appellee.

                                 ____________________


APPEAL FROM THE UNITED STATES DISTRICT COURT



                           FOR THE DISTRICT OF PUERTO RICO



                   [Hon. Salvador E. Casellas, U.S. District Judge]
                                               ___________________

                                 ____________________


Before



                                Selya, Circuit Judge,
                                       _____________

                            Coffin, Senior Circuit Judge,
                                    ____________________

                              and Stahl, Circuit Judge.
                                         _____________



                                 ____________________



               Lawrence E. Duffy for appellant.
               _________________

               Fernando Campoamor-Sanchez, Trial Attorney, with  whom Frank
               __________________________                             _____

          W. Hunger, Assistant Attorney  General, and Guillermo Gil, United
          _________                                   _____________

          States Attorney, were on brief for appellee.



                                 ____________________



                                    April 24, 1997

                                 ___________________



COFFIN,  Senior Circuit  Judge.   Appellant Sea  Air Shuttle
                        _____________________



          Corp. ("Sea  Air") filed this  damages action against  the United



          States  under the  Federal Tort  Claims Act,  28 U.S.C.     1346,



          2671-2180, claiming that  it was unlawfully deprived of the right



          to use seaplane ramps in the  Virgin Islands and that the Federal



          Aviation Administration's (FAA) failure  to enforce the law makes



          it  responsible for  the company's  resulting  economic hardship.



          The  district court dismissed  Sea Air's complaint  on the ground



          that the Federal Aviation Act (FA Act) provides federal courts of



          appeals with exclusive jurisdiction to review FAA action, see  49
                                                                    ___



          U.S.C. app.    1486(a),1  rendering Sea  Air's FTCA  complaint an



          improper  collateral attack  on the  administrative process.   We



          agree  that the case must be dismissed,  but rely primarily on an



          alternative reason.



                                    I. Background
                                       __________



               The original  protagonist in  this case was  Hurricane Hugo,



          which struck the  United States Virgin Islands in  September 1989



          and led  to the  demise of  the company that  had been  providing



          passenger  air service  between  and among  the various  islands.



          Seeking to find  a new airline  to utilize the seaplane  ramps it



          owned  on St.  Thomas  and St.  Croix,  the Virgin  Islands  Port



          Authority (VIPA)  in early  1990 issued  a request for  exclusive



          lease proposals.  One  of the eight companies that  responded was



                              
          ____________________



               1  Congress in  1994  recodified the  Federal Aviation  Act,

          without substantive  change, at 49  U.S.C.     40101-49105.   We,

          like the parties, will use the code numbers in effect at the time

          of the events that gave rise to this action.  



                                         -2-



Caribbean  Air Services,  Inc.  (CAS), which  later assigned  its



          interest to appellant Sea Air.



               It  is  undisputed  that  VIPA's staff  considered  the  CAS



          proposal  to be the most viable of the three bids recommended for



          further  consideration by VIPA's  Governing Board.   See  Sea Air
                                                               ___  _______



          Shuttle Corp. v. Virgin Islands Port Auth., 800 F. Supp. 293, 295
          _____________    _________________________



          (D.V.I. 1992).  The facts surrounding  the various proposals, and



          the  resulting decision of the  VIPA board to  offer an exclusive



          lease to  a Sea Air  competitor, Caribbean Airboats,  Inc. (CAI),



          are  fully detailed in the district court's thorough opinion in a



          related case,  Sea Air Shuttle, 800 F. Supp. at 295-98, and it is
                         _______________



          unnecessary to repeat them here.



               It suffices  to say  that appellant  Sea Air was  displeased



          with  the outcome of  the bid  process, and,  based on  a federal



          statute  barring exclusive  lease agreements  for the use  of air



          navigation facilities, see 49 U.S.C. app.   1349,2 unsuccessfully
                                 ___



          sought access  to the contested ramps.  Sea Air then sued CAI and



          VIPA  in  the Virgin  Islands  federal  district court  based  on



          federal,  constitutional and  Virgin  Islands law.   That  action



          ultimately  also proved  unsuccessful, with  the court  ruling in



          March  1992 that  VIPA was  entitled to  enter into  an exclusive



          leasing arrangement with CAI.  See 800 F. Supp. at 304-05.
                                         ___


____________________



               2 Section 1349(a) states, in relevant  part: "There shall be

          no  exclusive  right for  the  use of  any  landing  area or  air

          navigation facility upon which Federal funds have been expended."

          There is no dispute that VIPA has received federal funds.



                                         -3-



Meanwhile, Sea Air completed the steps for receiving an  air



          carrier certificate from the  FAA, and began Caribbean operations



          in March 1991 without using  the St. Thomas and St. Croix  ramps.



          In  October of  that  year, Sea  Air's  president wrote  to  then



          Secretary of Transportation Samuel Skinner  to inform him of  the



          lawsuit pending against VIPA  and CAI.  Allegedly because  of its



          inability  to use  the  two contested  seaplane ramps,  appellant



          encountered severe financial difficulties and voluntarily filed a



          petition for bankruptcy under Chapter 11 in January 1992.



               A month  later, responding to Sea Air's  letter to Secretary



          Skinner and  other communications,  the FAA informed  the company



          that efforts  to resolve the  dispute informally had  failed, and



          that Sea Air  could file an administrative complaint against VIPA



          pursuant  to 49 U.S.C.  app.   1482.3   Sea  Air did so  in March



          1992.   It  asserted that  VIPA was in  violation of  federal law



          barring exclusive  lease agreements  for facilities  that receive



          federal  funding,  see  49 U.S.C.     1349(a),  and  that it  had
                             ___



          unlawfully  interfered with  Sea  Air's route  structure, see  49
                                                                    ___



          U.S.C.   1305.4   It is the  FAA's failure to  act on that  still



                              
          ____________________



               3 Section 1482(a) states, in relevant part:



                    Any  person   may  file  with  the   Secretary  of

               Transportation  .  .  .  a complaint  in  writing  with

               respect to anything done  or omitted to be done  by any

               person in  contravention  of  any  provisions  of  this

               chapter,  or of  any  requirement established  pursuant

               thereto. . . .



               4  Section   1305  is   titled  "Federal   preemption,"  and

          subsection (a)(1) states, in relevant part:


-4-



pending complaint  that underlies Sea Air's claim  for damages in



          this action.



               On  June 29,  1992,  Sea Air's  bankruptcy proceedings  were



          converted  to Chapter  7.  The  next day,  Sea Air  wrote to then



          Secretary  of  Transportation Andrew  Card  accusing  the FAA  of



          "allow[ing] the  illegal conduct of the VIPA to continue, thereby



          causing  the  Chapter  7   proceeding,"  and  urging   "immediate



          corrective action."  See App. at 160, 163.
                               ___



               On March 4,  1993, Sea Air  filed a claim for  money damages



          with the Department of Transportation and FAA, claiming that  the



          corporation had suffered nearly $13 million in damages because of



          the FAA's  negligent failure to  act on Sea  Air's administrative



          complaint.  The claim was denied three months later and, pursuant



          to  the provisions of the  FTCA, Sea Air  subsequently filed this



          lawsuit.



               The district court dismissed the action  for lack of subject



          matter jurisdiction and for  failure to state a claim  upon which



          relief  could be  granted.  The  court held that,  pursuant to 49


____________________



               [N]o  State  or political  subdivision  thereof  and no

               interstate agency  or other political agency  of two or

               more  States  shall enact  or  enforce  any law,  rule,

               regulation,  standard,  or other  provision  having the

               force and effect  of law relating to  rates, routes, or

               services  of any  air  carrier  having authority  under

               subchapter  IV   of  this   chapter   to  provide   air

               transportation.



          Sea Air asserted in its FAA complaint that  VIPA's denying it the

          use of the  ramps "amount[s] as  surely to the regulation  of the

          routes of the Complainant as would the enactment of an actual law

          or regulation relating to such routes . . . ."



                                         -5-



U.S.C.  app.    1486,5 federal courts  of appeals  have exclusive



          jurisdiction  to review the FAA's  alleged failure to  act on Sea



          Air's administrative complaint, and that an FTCA action  would be



          an improper collateral  attack on the administrative process.  In



          a footnote at the conclusion of its opinion, the court identified



          two additional factors rendering the complaint not viable: first,



          that it was based solely  on the FAA's alleged failure  to comply



          with  a  federal statute,  and  federal  statutes  do not  create



          actionable  duties   under  the  FTCA;  and,   second,  that  the



          challenged  conduct  was  protected   from  suit  by  the  FTCA's



          discretionary function exception, 28 U.S.C.   2680(a).



               On  appeal,  Sea  Air  contends  that  an  FTCA   action  is



          compatible  with the  pending administrative process  because its



          objective -- to remedy the  negligence of government actors  with



          damages  --  is outside  the scope  of  that process.   Appellant



          additionally disputes  the alternative bases for  dismissal noted



          by the district court.  



                                    II. Discussion
                                        __________



               The analysis  in this  case  logically is  divided into  two



          stages.    The first  focuses on  the  Federal Aviation  Act, and



          whether  that statute  bars  a  complainant  from  simultaneously



          seeking relief through the  administrative process and through an

                              
          ____________________



               5 Section 1486(a) states, in relevant part:



                    Any order,  affirmative or negative, issued by the

               Board or Secretary of Transportation under this chapter

               . .  . shall  be  subject to  review by  the courts  of

               appeals of the United States or the United States Court

               of Appeals for the District of Columbia . . . .



                                         -6-



FTCA  claim.    The  second  stage  focuses  specifically  on the



          asserted FTCA claim: does it rest on an actionable tort duty and,



          if so,  is the  allegation nonetheless non-actionable  because it



          addresses discretionary  conduct  that is  immunized  from  legal



          challenge?   If,  as the  district court  held, the  only way  to



          challenge  the FAA's failure to take action on a complaint within



          its  jurisdiction  is  through  a  direct  appeal  or  a  related



          proceeding, such as mandamus, then the second stage will never be



          reached.   If, however, federal law does not categorically  bar a



          parallel tort suit, the  viability of the specific claim  must be



          examined.



               The district  court stopped at  stage one, holding  that Sea



          Air could pursue only the remedial path carved out by the FA Act.



           It thus held that the FAA's failure to act in a timely manner on



          Sea Air's  complaint could be  addressed only through  a petition



          for mandamus that had to be filed in the court of  appeals -- the



          court  with  exclusive   jurisdiction  over   appeals  from   FAA



          decisions.  See 49 U.S.C. app.   1486(a).6
                      ___



               Sea Air energetically  debates that outcome  on appeal.   It



          contends  that the jurisdictional limitation is inapplicable here



          because its complaint is not about an FAA decision, but about the



          agency's  negligent  performance  of its  responsibilities.    It



          points out that the FTCA confers jurisdiction  on district courts



          for damages  actions against federal  actors based on  common law

                              
          ____________________



               6  Our review  of  a  finding  of  lack  of  subject  matter

          jurisdiction  is de novo.  Coventry Sewage Ass. v. Dworkin Realty
                           __ ____   ____________________    ______________

          Co., 71 F.3d 1, 3 (1st Cir. 1995).
          ___



                                         -7-



negligence principles,  and emphasizes that the  FTCA contains no



          exception that would  exclude this  case from its  scope.  It  is



          significant,  Sea Air  contends,  that the  FTCA  action seeks  a



          damages  remedy, which is  unavailable through the administrative



          process. 



               We  decline to consider whether  an FTCA claim  based on FAA



          inaction ever could be  cognizable, though we think  it unlikely.



          It is well  established that the exclusive jurisdiction  given to



          the  courts  of appeals  to review  FAA  actions also  extends to



          lawsuits  alleging FAA delay in issuing final orders.  See George
                                                                 ___ ______



          Kabeller,  Inc. v. Busey, 999  F.2d 1417, 1421  (11th Cir. 1993);
          _______________    _____



          Telecommunications  Research &  Action  v. FCC,  750 F.2d  70, 76
          ______________________________________     ___



          (D.C. Cir. 1984) ("TRAC").  This grant, together with appellant's



          acknowledgment that there is no private right of action under the



          relevant provisions of the  FA Act, see Interface Group,  Inc. v.
                                              ___ ______________________



          Massachusetts  Port  Auth., 816  F.2d 9,  14-15 (1st  Cir. 1987);
          __________________________



          Montauk-Caribbean Airways, Inc. v. Hope, 784 F.2d 91, 97 (2d Cir.
          _______________________________    ____



          1986),7 suggests  a congressional intent  to limit review  of the



          FAA's handling of complaints to the  scheme set out in   1486(a).



          The fact  that the FTCA does not  explicitly exclude such a claim
                                                       _______



          in no way serves to support its existence.  



               We  recognize, nonetheless, that there  is some logic in Sea



          Air's  contention that,  because  section 1486  does not  embrace



                              
          ____________________



               7 In Interface Group, we considered the exclusive rights bar
                    _______________

          of section 1349(a) and noted that the "provision taken as a whole

          suggests that Congress sought to benefit the public at large, not

          carriers in particular."  816 F.2d at 14.



                                         -8-



damages claims, a  plaintiff harmed by  the negligent conduct  of



          FAA employees should  be able  to seek a  remedy under the  FTCA,



          since  the FTCA was designed specifically  to provide redress for



          the negligence of government actors.  See Beins v. United States,
                                                ___ _____    _____________



          695 F.2d 591, 597-98 (D.C. Cir. 1982) (FTCA claim seeking damages



          for denial  of medical certificate  may be brought  against FAA);



          cf. Mace  v. Skinner,  34 F.3d  854, 859-60 (9th  Cir. 1994)  (no
          ___ ____     _______



          federal question jurisdiction over actions against FAA only as to



          "those classes  of claims"  reviewable under  section 1486  of FA



          Act).   Presumably,  as the  D.C. Circuit  suggested in  Beins, a
                                                                   _____



          court  could avoid  conflict  with the  administrative scheme  by



          staying a timely  filed FTCA  action pending the  outcome of  the



          administrative process.  See Beins, 695 F.2d at 599.
                                   ___ _____



               We  need not, however, delve any more deeply into this issue



          because, even if  an FTCA  claim were permitted,8  it would  fail



          here at the second stage of  analysis.  It is virtually axiomatic



          that the FTCA does not apply "where the claimed negligence arises



          out of the failure of the  United States to carry out a [federal]



          statutory duty in  the conduct  of its own  affairs," Johnson  v.
                                                                _______



          Sawyer, 47 F.3d 716,  727-28 (5th Cir. 1995) (en  banc) (citation
          ______                                        __  ____



                              
          ____________________



               8 As the  cases relied  upon by  the United  States and  the

          district   court    make   clear,   federal    appellate   courts

          unquestionably  are  the  exclusive  forum  for  appeals  of  FAA

          rulings,  or for  efforts  to  instigate  action on  pending  FAA

          complaints.   See, e.g., George Kabeller, Inc. v. Busey, 999 F.2d
                        ___  ____  _____________________    _____

          1417, 1421 (11th Cir. 1993); Telecommunications Research & Action
                                       ____________________________________

          v. FCC, 750 F.2d 70, 76 (D.C.  Cir. 1984).  The open question  is
             ___

          whether this exclusive jurisdiction  to review the administrative

          process  automatically  forecloses  a  tort  suit,  even  if  all

          elements of tort liability are present.   



                                         -9-



omitted).  See  also,  e.g.,  Art-Metal-U.S.A.,  Inc.  v.  United
                     ___  ____   ____   _______________________      ______



          States,  753 F.2d  1151, 1157-60  (D.C. Cir.  1985); Clemente  v.
          ______                                               ________



          United States, 567 F.2d  1140, 1149 (1st Cir. 1977);  Sellfors v.
          _____________                                         ________



          United  States, 697 F.2d 1362,  1365 (11th Cir.  1983).  In other
          ______________



          words, violation of a federal statute by governmental actors does



          not create liability unless state law would impose liability on a



          "private individual under like  circumstances," 28 U.S.C.   2674.



          See Myers v. United States, 17 F.3d 890, 899 (6th Cir. 1994); see
          ___ _____    _____________                                    ___



          also Howell v. United States, 932 F.2d 915, 917 (11th Cir. 1991).
          ____ ______    _____________



               The challenged conduct  of the Department of  Transportation



          and FAA does  not meet  that "private individual"  standard.   At



          issue  here is the United States'  failure, through the Secretary



          of  Transportation and FAA, to  take enforcement action under the



          statute that prohibits exclusive  leases for aviation  facilities



          that  receive federal  funding, 49  U.S.C. app.    1349,  and the



          statute that  bars non-federal lawmaking relating  to air carrier



          rates, routes  and services, id.  at   1305(a).9   The  fact that
                                       ___



          oversight of  air carriers is a  peculiarly governmental function



          does not,  of course, necessarily preclude FTCA  coverage, as the



          Supreme Court  explained in Indian  Towing Co. v.  United States,
                                      __________________     _____________



          350 U.S. 61, 64-65 (1955).   The Court held there that the United



          States  could  be liable  under the  FTCA  for the  Coast Guard's



          negligence in the operation of  a lighthouse, observing that  "it



          is  hornbook tort law that one who  undertakes to warn the public



                              
          ____________________



               9  The complaint  additionally  invoked provisions  of  more

          general scope that are less useful for Sea Air's argument.



                                         -10-



of a danger and  thereby induces reliance must perform  his 'good



          Samaritan' task in a careful manner," id..    
                                                ___



               No comparable  common  law  principle  is at  play  in  this



          context,  however.    What  is necessary  is  "some  relationship



          between the  governmental employee[s] and the  plaintiff to which



          state  law  would  attach  a  duty  of  care  in  purely  private



          circumstances," Myers, 17  F.3d at 899.10   The controversy  here
                          _____



          wholly  concerns  the  FAA's   alleged  failure  to  perform  its



          regulatory  functions  vis  a  vis  an  entity  that  is  out-of-



          compliance with federal laws  and rules.  Its sole  obligation in



          enforcing the exclusive  lease prohibition is to  cut off federal



          funding.   See DOT/FAA Order 5190.1A,   10 (Enforcement) (App. at
                     ___



          302).  Although  the Secretary of Transportation or an authorized



          representative has the discretion to seek an  injunction or other
                                 __________



          process  barring further violation of  the FA Act,  see 49 U.S.C.
                                                              ___



          app.   1487(a), this optional regulatory  remedy cannot be deemed



          to  give rise to an enforceable  duty to any individual victim of



          the unlawful conduct.  Sea Air has pointed to no case utilizing a



          similar   basis   for   liability   in  any   of   the   relevant



          jurisdictions.11 

                              
          ____________________



               10 The  law  at issue  is  the state  or  local law  of  the

          relevant jurisdiction(s), here alleged  to be the Virgin Islands,

          Puerto  Rico, the District of  Columbia, and Georgia.   The FAA's

          Southern Region is based in Atlanta. 



               11  Sea Air argues that "[t]he failure of two Secretaries of

          Transportation and  their designees  to enforce the  statutes and

          Sea Air's rights  and privileges,  where only  they and/or  their

          designees could  act to do so, is  the 'garden variety common law

          torts',  recognized by  State law  and  the common  law, anywhere

          within the jurisdiction of the United States."



                                         -11-



In short, Sea  Air has  challenged a type  of conduct  "that



          private  persons  could not  engage in,  and  hence could  not be



          liable  for under local  law," Sky Ad, Inc.  v. McClure, 951 F.2d
                                         ____________     _______



          1146, 1147 &  n.2 (9th  Cir. 1991) (quoting  C.P.Chemical Co.  v.
                                                       ________________



          United States,  810 F.2d 34 (2d Cir. 1987)).12  As we observed in
          _____________



          rejecting  an FTCA  claim  in another  FAA  context, "even  where



          specific  behavior of  federal employees  is required  by federal



          statute, liability to  the beneficiaries of that statute  may not



          be founded on the Federal Tort Claims Act if state law recognizes



          no comparable private liability," Clemente, 567 F.2d at 1149.
                                            ________



               Sea Air attempts to establish an actionable link between the



          government's conduct  and its own  adversity by  pointing to  the



          FAA's grant to it of an air carrier certificate to operate in the

                              
          ____________________



               Reduced  to its  essence, this  argument is  no more  than a

          claim that the United States should be liable for failing to meet

          its  statutory obligations.  Even  in states that  have a general

          doctrine of negligence  per se  based on  violation of  statutes,
                                  ___ __

          courts have declined to  find this an adequate basis for  an FTCA

          claim against the United States.  See Johnson v.  Sawyer, 47 F.3d
                                            ___ _______     ______

          716, 728-29 (5th  Cir. 1995) (en  banc).  We  agree that an  FTCA
                                        __  ____

          action is "unavailable where  '[t]he existence or nonexistence of

          the claim' 'depends entirely upon Federal statutes.'"  Id. at 728
                                                                 ___

          (quoting United States v.  Smith, 324 F.2d 622, 624-25  (5th Cir.
                   _____________     _____

          1963)).  Cf. Moody v. United  States, 774 F.2d 150, 157 (6th Cir.
                   ___ _____    ______________

          1985) (although  finding no actionable duty,  holding that United

          States  could  be held  liable under  negligence per  se doctrine

          because Tennessee  law exposes  private individuals to  liability

          for violation of a federal regulation).



               12  In Sky Ad, the  plaintiff claimed, inter  alia, that the
                      ______                          _____  ____

          United States was  liable under  the FTCA for  the FAA's  alleged

          failure  to adhere to the procedures required to promulgate a new

          rule.  951 F.2d at 1147.  Sea Air attempts to distinguish Sky  Ad
                                                                    _______

          from  its  own  case  because   it  involved  the  FAA's  "quasi-

          legislative" powers  to issue  rules.  The  underlying principle,

          however,  is the  same:  if the  challenged  conduct is  uniquely

          governmental, meaning  there is no state  private party analogue,

          the United States may not be sued under the FTCA.



                                         -12-



Caribbean,  including between the ramps at issue.  It claims that



          this authorization,  following Sea Air's fulfillment  of numerous



          prerequisites, imposed a duty on the FAA to  ensure its access to



          the approved routes.  We think not.  Sea Air points to nothing in



          the FA Act suggesting that the FAA's permission for it to operate



          in a given location  is more than  a green light  to fly, if  and



          when the arrangements are made with the necessary air facilities.



          Although federal rules govern the availability of such facilities



          to  interested  parties,  Sea   Air  has  acknowledged  that  the



          statutorily prescribed  recourse for  VIPA's failure to  abide by



          the  non-exclusive  lease rules  is for  the FAA  to cut  off its



          federal funding.  Further sanctions are discretionary.   Sea Air,



          therefore, cannot reasonably have relied on the FAA's securing it



          access to the two ramps,  and there consequently is no basis  for



          finding a duty under state law that would support an FTCA claim.



               Our  holding does not mean that a potential beneficiary of a



          federal law is  helpless in  the face of  serious violations  and



          agency inaction.   As the  district court noted,  appellant could



          have pursued a writ of mandamus from the court of  appeals.  See,
                                                                       ___



          e.g., TRAC,  750 F.2d at 76.  Although such an approach would not
          ____  ____



          have  provided  Sea Air  with the  damages  remedy it  now seeks,



          filing of the formal FAA complaint and timely pursuit of mandamus



          might have alleviated the  loss -- assuming, of course,  that its



          challenge to the exclusive lease proved meritorious.13

                              
          ____________________



               13  The St.  Croix  federal district  court  ruled that  the

          exclusive  lease  granted to  Sea  Air's  rival  did not  violate

          federal law. See  Sea Air  Shuttle Corp. v.  Virgin Islands  Port
                       ___  ______________________     ____________________



                                         -13-



We note,  finally, our  agreement with the  district court's



          observation  that  the  FTCA's  discretionary  function exception



          would  serve as an alternative  basis for dismissal  of Sea Air's



          action.    As  we  have  explained,  the  statutory  penalty  for



          violating  the exclusive  lease  prohibition is  loss of  federal



          funds.  See supra at 10-11.  Any further remedy is discretionary.
                  ___ _____



          Id.  The government had no obligation to secure use  of the ramps
          ___



          for Sea  Air, and it  cannot be  held liable in  damages for  its



          failure to do so.



               Affirmed.  No costs.
               ________   _________


____________________



          Auth., 800 F.  Supp. 293, 303-05 (D.V.I. 1992).   Sea Air filed a
          _____

          motion  for reconsideration, which was denied, but did not appeal

          the ruling.



                                         -14-