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Lichten v. Eastern Airlines Inc.

decided.: May 22, 1951.


Author: Chase

Before CHASE, CLARK and FRANK, Circuit Judges.

CHASE, Circuit Judge.

The appellant sued to recover the value of certain jewelry, and the District Court granted the defendant's motion for summary judgment. 87 F.Supp. 691. The pertinent facts, which have been stipulated for purposes of this appeal, are as follows. On January 18, 1947, the appellant, a citizen of Pennsylvania, traveled from Miami, Florida, to Philadelphia, Penna., as a passenger aboard one of the appellee's airplanes. Pursuant to the terms of her ticket, she delivered two pieces of baggage to the appellee for carriage on the trip. One of these bags was taken from the plane and delivered to her when she alighted in Philadelphia, but the other was mistakenly carried on a continuation of the flight to Newark, New Jersey. It was there delivered to some unknown person, without the surrender of the baggage check which the appellant had been given. Some time later the bag was returned to the appellee in Newark by an unknown person whose identity the appellee did not discover and later it was delivered by the appellee to the appellant. Upon its return to the appellant, there were missing from the bag three articles of jewelry of a total value of $3,187.95.

The appellee is a Delaware corporation and an air carrier subject to the Civil Aeronautics Act of 1938, 49 U.S.C.A.§ 401 et seq. In compliance with section 403(a) of that Act, 49 U.S.C.A. § 483(a) it had filed with the Civil Aeronautics Board a tariff, which provided in part:

Rule 10,

Par. II "* * * Money, jewelry, silverware, samples, negotiable paper, securities and similar valuables or business documents will be carried only at the risk of the passenger."

Par. III(A) "* * * no participating carrier shall be liable for the loss of, or any damage to, or any delay in the delivery of, any property of the following types which is included in a passenger's baggage, whether with or without the knowledge of the carrier: fragile or perishable articles, money, jewelry, silverware, negotiable paper, securities, or other valuables, samples, or business documents; or any other loss or damage of whatever nature resulting from any such loss, damage, or delay."

To the extent that these rules are valid, they became a part of the contract under which the appellant and her bagage were carried. Western Union Telegraph Co. v. Esteve Brothers & Co., 256 U.S. 566, 41 S. Ct. 584, 65 L. Ed. 1094. Mack v. Eastern Air Lines, Inc., D.C.Mass., 87 F.Supp. 113. The question presented is thus one of the validity of these provisions.

By Sections 1002(a), (d), and (g) of the Civil Aeronautics Act, 49 U.S.C.A. § 642(a), (d), and (g), the Civil Aeronautics Board (Formerly Authority) is empowered, upon complaint of any person or upon its own initiative, and after notice and hearing, to decide whether any individual or joint rate, fare, or charge demanded or received, or any classification, rule, regulation, or practice affecting such rate, fare, or charge, is or will be unjust or unreasonable, or unjustly discriminatory, or unduly preferential or prejudicial, and if it so finds, to determine and prescribe the lawful rate, fare, or charge, or the lawful classification, rule, regulation, or practice; and it is further authorized to conduct a hearing upon any new tariff filed with it, and to suspend the operation of the tariff and defer the use of any rate, fare, charge, classification, rule, regulation, or practice pending such hearing, and to make such order with reference to the tariff as would be proper in a proceeding instituted after it had become effective.

Under these provisions, and similar provisions of other enactments, it is well settled that questions of the reasonableness of rates and practices are to be left to the administrative agency in the first instance, and that under this doctrine of "primary jurisdiction" the provisions of a tariff properly filed with the Board and within its authority are deemed valid until rejected by it. Texas & Pac. Ry. v. Abilene Cotton Oil Co., 204 U.S. 426, 27 S. Ct. 350, 51 L. Ed. 553; Civil Aeronautics Board v. Modern Air Transport, 2 Cir., 179 F.2d 622, 624.

If, then, the Civil Aeronautics Act is to be construed as investing the Board with power to approve and accept a tariff which, like this one, exempts the carrier from all liability for the loss of or damage to certain named classes of articles, the reasonableness of the rule could be raised here only after the exhaustion of administrative remedies, and the exculpatory provisions must now be enforced. The appellant, however, takes the position that the Act should not be interpreted to allow the Board to modify the common law rule that a common carrier may not by contract relieve itself from liability for the consequences of its own negligence. See New York Central Railroad Co. v. Lockwood, 17 Wall. 357, 21 L. Ed. 627; The Ansaldo San Giorgio I v. Rheinstrom Bros. Co., 294 U.S. 494, 55 S. Ct. 483, 79 L. Ed. 1016. It therefore follows, appellant argues, that the common law rule still obtains to invalidate the exculpatory provisions of the tariff regardless of any action of the Civil Aeronautics Board. We cannot agree.

A primary purpose of the Civil Aeronautics Act is to assure uniformity of rates and services to all persons using the facilities of air carriers. Civil Aeronautics Act §§ 404(a), 902(a), 49 U.S.C.A. §§ 484(a), 622(a). To achieve this, it is essential, in the judgment of Congress, that a single agency, rather than numerous courts under diverse laws, have primary responsibility for supervising rates and services. Cf. Southern Ry. v. Prescott, 240 U.S. 632, 36 S. Ct. 469, 60 L. Ed. 836. Accordingly, this broad regulatory scheme, and not the common law, must govern the contract of the parties. Adams Express Co. v. Croninger, 226 U.S. 491, 33 S. Ct. 148, 57 L. Ed. 314; Mack v. Eastern Air Lines, Inc., supra.

In its purpose, as in its general statutory provisions, the Civil Aeronautics Act is similar to the Interstate Commerce Act. Cf. Director General of Railroads v. Viscose Co., 254 U.S. 498, 41 S. Ct. 151, 65 L. Ed. 372. The latter, however, contains an express provision prohibiting exemption from liability for any loss or damage to baggage caused by the carrier, regardless of negligence, but permitting reasonable valuation agreements to limit that liability. Interstate Commerce Act § 20(11), 49 U.S.C.A. § 20(11). Hartzberg v. New York Cent. R.R., 181 Misc. 129, 41 N.Y.S.2d 345, affirmed 268 App.Div. 904, 51 N.Y.S.2d 741, affirmed 295 N.Y. 703, 65 N.E.2d 337, certiorari denied 328 U.S. 849, 66 S. Ct. 1121, 90 L. Ed. 1622. The absence of a similar provision in the Civil Aeronautics Act compels the conclusion that such an exemption is not forbidden to air carriers, and that the Board could properly accept the appellee's tariff.

The appellant argues, however, that even though the rule is valid it is made inapplicable by the over-carriage of the bag containing the jewelry.This deviation, she insists, constituted a breach of the contract so fundamental that it deprived the carrier of the benefit of the exculpatory provisions of the tariff. The argument rests on an analogy to admiralty cases of which The Sarnia, 2 Cir., 278 F. 459, is typical. It overlooks, however, the farreaching effect of the principle of uniformity of treatment, which requires that the tariff be applied to all matters arising from the attempted performance of the contract. Misdelivery is not a conversion which deprives a carrier of the benefit of a tariff provision ...

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