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DANNA v. AIR FRANCE

November 15, 1971

LOUIS DANNA, ROBERT F. ESLER, and All Others Similarly Situated, Plaintiff,
v.
AIR FRANCE, BRITISH OVERSEAS AIRWAYS CORPORATION, PAN AMERICAN WORLD AIRWAYS, INC., TRANS WORLD AIRLINES, INC., JAPAN AIRLINES COMPANY LTD., AIR-INDIA, OLYMPIC AIRWAYS, S.A., and QANTAS AIRWAYS, LTD.


Gurfein, District Judge.


The opinion of the court was delivered by: GURFEIN

GURFEIN, District Judge.

This is a purported class action which raises the question of whether the so-called Youth Fares initiated by the defendant airlines are in violation of the Federal Aviation Act of 1958, 49 U.S.C. §§ 1301-1542. Jurisdiction is invoked under 28 U.S.C. § 1337 in that the action arises under an Act of Congress regulating commerce, namely, 49 U.S.C. § 1374.

 The complaint, filed on August 17, 1971, alleges two claims for relief. The first claim, on behalf of plaintiff Louis Danna and all others similarly situated, is alleged against defendants Air France, Pan American World Airways, Inc. (PAA), Trans World Airlines, Inc. (TWA), and Olympic Airways, S.A.

 The second claim on behalf of plaintiff Robert F. Esler and others similarly situated, is alleged against defendants British Overseas Airways Corporation (BOAC), PAA, TWA, Japan Airlines Company Ltd., Air-India, and Qantas Airways Ltd.

 In essence, both claims are based on the so-called "Youth Fares," allegedly in effect since June of 1971 and pursuant to which the defendants, for air carriage on certain flights, charge lower fares to persons falling within specified age groups than they charge to those not falling within such age groups. The first claim in the complaint relates to the "Paris Youth Fare," pursuant to which the fare for round-trip economy class for one person between New York City and Paris, France is allegedly $200 plus $3 tax (or $220 plus tax during June, July and August) for persons between 15 and 25 years old, inclusive. *fn1" It is alleged that, for persons older than 25, the fare for one person for the same round-trip economy class flight is $596 plus $3 tax. The second claim in the complaint relates to the so-called "London Youth Fare," pursuant to which the fare for round-trip economy class for one person between New York and London is allegedly $190 plus tax (or $210 plus tax during June, July and August) for persons between 12 and 25 years old, inclusive. It is alleged that for persons older than 25, the fare for one person for the same round-trip economy class flight is $552 plus tax.

 Danna, the plaintiff in the first claim, alleges that he sought to purchase from each of the first claim defendants a ticket for round trip between New York and Paris at the lower fare; that he was refused by reason of his being over the age limit; and that he then purchased a ticket at the higher fare from defendant Air France. Esler, the plaintiff in the second claim, makes substantially the same allegations respecting efforts to purchase a ticket for round trip between New York and London at the lower fare from the second claim defendants, and further alleges that he then purchased a ticket at the higher fare from defendant BOAC.

 Plaintiff Danna alleges that he is a member of a class of persons exceeding 50,000, each of whom is not within the age group to which the Paris Youth Fare applies and each of whom has consequently paid in excess of the Paris Youth Fare for round-trip economy class air passage between New York and Paris. It is claimed that plaintiff Danna and each member of the purported class have been damaged to the extent of the difference in the fares. Plaintiff Esler makes substantially the same allegations with respect to the London Youth Fare, and purports to act for another class of persons exceeding 50,000.

 The fare differential and the estimated size of the class affected results in claimed damages of 20 million dollars on each of the two claims, for an aggregate of 40 million dollars, plus interest, costs, disbursements and a reasonable attorneys' fee.

 The complaint charges that the defendants each violated Federal Aviation Act § 404(b), 49 U.S.C. § 1374(b), which reads as follows:

 
"(b) No air carrier or foreign air carrier shall make, give, or cause any undue or unreasonable preference or advantage to any particular person, port, locality, or description of traffic in air transportation in any respect whatsoever or subject any particular person, port, locality, or description of traffic in air transportation to any unjust discrimination or any undue or unreasonable prejudice or disadvantage in any respect whatsoever."

 The allegation is that each member of the class who was outside the age group eligible for the Youth Fare was, by virtue of being required to pay more for the same service, subjected to an "unjust discrimination" and an "undue or unreasonable prejudice or disadvantage." Concomitantly, it is alleged that those eligible for the Youth Fare were given an "undue or unreasonable preference or advantage."

 In a series of six motions now before this Court, all the defendant airlines move to dismiss the complaint upon the ground that it fails to state a claim upon which relief can be granted. Fed. Civ. P. 12(b)(6). *fn2" The plaintiffs also move for a determination that this action may be maintained as a class action and for a delineation of membership of the class.

 The defendants' contentions, particularly as made by PAA, are the following:

 (1) the claim that discrimination or preference in an air carrier's field fares constitutes a violation of the above-quoted § 404(b) of the Federal Aviation Act is within the primary jurisdiction of the Civil Aeronautics Board (CAB); (2) even if the CAB, in the exercise of its primary jurisdiction, finds that such fares do violate § 404(b), no private action exists for the charging of such fares during the period before such CAB determination; and (3) even if such private right of action did exist, it would be maintainable only by one who has sustained a private injury by reason of the violation of § 404(b), and, as a matter of law, the mere paying of a higher fare than that paid by someone else for the same flight is not a private injury giving rise to a claim.

 The plaintiffs, on the other hand, contend: (1) that there is no primary jurisdiction in the CAB, as is evidenced by the assumption of jurisdiction by the Federal courts in cases involving alleged violations of § 404(b); (2) that there is a private right of action for damages for past unjust discriminations and preferences; and (3) that the plaintiffs have been damaged by the defendants' preferential discounts and unjust discriminations, in that the plaintiffs have been compelled to pay discriminatorily higher rates for the same service and are in effect subsidizing Youth Fare passengers and the airlines. As a further source of damage, they urge in argument *fn3" that the defendants have committed a breach of an implied contract that the plaintiffs would not pay more than other passengers for the same service and that the fares charged would be lawful. The plaintiffs contend, moreover, that the fact that the Youth Fare rates were filed with the CAB is irrelevant because no unjustly discriminatory or unduly preferential rate can be lawful, filed or not, and that mere filing does not signify acceptance or approval of the rate by the Board. Finally, it is urged, the U.S. carriers cannot defend upon the ground that they had to match foreign competition for they could have sought injunctive relief instead of willingly participating in the discrimination and preference.

 Section 403 of the Federal Aviation Act, 49 U.S.C. § 1373, provides in part:

 
"(a) Every air carrier *fn4" and every foreign air carrier *fn5" shall file with the Board, and print, and keep open to public inspection, tariffs showing all rates, fares, and charges for air transportation between points served by it, and between points served by it and points served by any other air carrier or foreign air carrier when through service and through rates shall have been established, and showing to the extent required by regulations of the Board, all classifications, rules, regulations, practices, and services in connection with such air transportation. Tariffs shall be filed, posted, and published in such form and manner, and shall contain such information, as the Board shall by regulation prescribe; and the Board is empowered to reject any tariff so filed which is not consistent with this section and such regulation . . .
 
(b) No air carrier or foreign air carrier shall charge or demand or collect or receive a greater or less or different compensation for air transportation, or for any service in connection therewith, than the rates, fares and charges specified in its currently effective tariffs . . ."

 The Court will take judicial notice that the tariffs filed under § 403 actually showed the Youth Fare charged to that age group as well as the higher rates charged to the plaintiffs. There is no claim that there was an "overcharge" on any particular filed rate. The defendants evidently charged each category of passengers the exact fare as filed for that category in currently effective tariffs. The mischief suggested, in the claim of plaintiffs, is not that the defendants departed from their tariffs, or even that the regular economy round-trip fare to Paris and London was unreasonably high, but rather that the existence of the Youth Fare constituted an unjust discrimination, preference and prejudice.

 The CAB has the power to correct filed rates if they amount to discrimination, preference or prejudice. § 1002(a) of the Federal Aviation Act, 49 U.S.C. § 1482(a), provides that any person may file a complaint with the CAB "with respect to anything done or omitted to be done" in contravention of any provision of the Act or the regulations promulgated thereunder. The Board is empowered, as well, to institute an investigation "on its own initiative" § 1002(b), 49 U.S.C. § 1482(b).

 Section 1002(f), 42 U.S.C. § 1482(f), provides:

 
"(f) Whenever, after notice and hearing, upon complaint, or upon its own initiative, the Board shall be of the opinion that any individual or joint rate, fare, or charge demanded, charged, collected, or received by any air carrier or foreign air carrier for foreign air transportation, *fn6" or any classification, rule, regulation, or practice affecting such rate, fare, or charge, or the value of the service thereunder, is or will be unjustly discriminatory, or unduly preferential, or unduly prejudicial, the Board may alter the same to the extent necessary to correct such discrimination, preference, or prejudice and make an order that the air carrier or foreign air carrier shall discontinue demanding, charging, collecting, or ...

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