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CAB v. AEROMATIC TRAVEL CORP.

October 25, 1972

CIVIL AERONAUTICS BOARD, Plaintiff,
v.
AEROMATIC TRAVEL CORP., ET AL., Defendants


Travia, District Judge.


The opinion of the court was delivered by: TRAVIA

TRAVIA, District Judge:

The plaintiff, Civil Aeronautics Board (hereinafter CAB), instituted this action to enjoin and restrain the defendants, certain travel agencies and certain named individuals associated therewith, from engaging in specific activities as "indirect air carriers and indirect foreign air carriers." See Title 49 U.S.C. § 1301(3), (19). *fn1" In addition, the CAB requested the enforcement of a cease and desist order, issued by the CAB on June 23, 1971. That order, docket numbers 22307 and 22311, was issued against Charter Consultants, Inc., and Fred Meyrow, individually, and directed that they refrain from engaging in air transportation as indirect air carriers. *fn2"

 The CAB alleges that the defendants, while acting as indirect air carriers, are violating certain rules and regulations of the CAB, made pursuant to the Federal Aviation Act and, more particularly, that the defendants' activities are in violation of Title 49 U.S.C. §§ 1371(a) and 1372(a). These sections provide that all air carriers, direct or indirect, domestic (1371) or foreign (1372), must secure a certificate or permit of authorization from the CAB to engage in such activities. *fn3"

 The defendants do not contest the validity of Sections 1371 or 1372, nor do they allege that they have complied with the statutory mandates by securing a certificate or permit. They contend that the statutory mandates are not applicable to them because they are not acting as direct or indirect air carriers but merely as ticket agents as defined in Section 1301(35) of Title 49 U.S.C. *fn4" The defendants also contend that the CAB has not, as to each of them, ruled that their activities would make them indirect air carriers as defined in Sections 1301(3) and 1301(19). They, therefore, request that the court, at this time, exercise its discretion under the doctrine of primary jurisdiction and refer the question of their status within the industry to the CAB for an administrative determination. The defendants urge the necessity of an administrative ruling in the first instance because the agency is better equipped to evaluate the defendants' status within the aviation industry. To fortify their argument on primary jurisdiction, the defendants point out that other members of the industry are presently awaiting the CAB's ruling on the exact question of status presented in this case, and that the CAB has made rulings which affect this proceeding. *fn5"

 A determination of the defendants' status within the aviation industry is the basic question in this proceeding. Clearly, such an issue presents a question of fact. The defendant can only be held liable for the violations alleged if they are in fact found to be operating as indirect air carriers, as defined in Section 1301(3) of Title 49, U.S.C. The court will, therefore, for the purpose of the defendants' renewed motion to dismiss, only consider the question of whether this court should apply the doctrine of primary jurisdiction, and thereby refer the issue of the defendants' status to the CAB for their administrative ruling.

 Before discussing the concept of primary jurisdiction, the court will give a brief chronological summary of the case at bar so as to "set the stage" and, thus, enable the reader to better understand the position now to be taken by this court on the motion before it.

 The original complaint was filed on September 17, 1971. On October 6, 1971 an order to show cause was signed, at the plaintiff's request, which order sought the issuance of a temporary injunction directed against the defendants named. On October 29, 1971, the plaintiff moved for an order to add additional defendants, which was granted. Thereafter, the defendants moved to dismiss the complaint on various grounds, including the theory of primary jurisdiction. Decision was reserved after oral argument on November 5, 1971.

 On November 24, 1971 this court issued its decision concerning the several motions made by the defendants, 341 F. Supp. 1271. In that decision the defendants' motions were "denied with leave to renew at an appropriate time. . . ." Further, the court stated:

 
" That during the evidentiary hearing to be held on the plaintiff's motion for a temporary injunction other facts and circumstances will come to light that may make this Court's determination on the issue of primary jurisdiction easier." Decision of November 24, 1971, at 1282.

 Thereafter, several defendants to the action moved to add party defendants, alleged to be indispensable. Those motions were granted and an order was made directing the plaintiff to amend the complaint and add nine defendants, alleged to be indispensable parties. The plaintiff followed the order of the court as it decided to interpret the said order. It merely amended the caption of the case by adding the additional defendants and then, as if to scorn the real meaning of the order, in allegation after allegation excluded the additional defendants from any blame or wrongdoing. As a result, the court was compelled to grant the motions of the additional defendants to dismiss the amended complaint as against them. The court, on the argument of said motions, directed the original defendants to renew their motions on the issue of primary jurisdiction, considering this to be an appropriate time.

 As a result of the aforementioned dilatory maneuvering, this case is now at the stage that existed in November 1971. This court will now reconsider the renewed motions of the original defendants to dismiss this complaint on the theory that the court should apply the doctrine of primary jurisdiction and refer the matter to the CAB for its administrative decision.

 Primary Jurisdiction

 The doctrine of primary jurisdiction is concerned with promoting proper relationships between the courts and administrative agencies. The doctrine has been invoked to forestall the Federal courts from trying a case which involves issues placed within the special competence of an administrative body. This doctrine is not to be confused with the doctrine of exhaustion of administrative remedies; both are separate and distinct principles of law. *fn6"

 The rationale behind the doctrine of primary jurisdiction is set forth with particular clarity in United States v. Western Pacific Railroad Co. *fn7" That case involved an action for money damages allegedly due from the United States to the Railroad for the shipping of aerial bomb cases filled with napalm gel. The issue presented was whether the Government should have paid higher first-class rates or the lower fifth-class rate. The United States defended by arguing that such a question should be considered and determined by the administrative agency commissioned to ...


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