Roberts v. American Airlines, Inc.

• Decision Date: 08 December 1975
• Docket Number: No. 74-1108,74-1146 and 74-1246.,74-1108
• Citation: 526 F.2d 757
• Parties: Keith ROBERTS et al., Plaintiffs-Appellants, v. AMERICAN AIRLINES, INC., et al., Defendants-Appellees. Michael WILLIAMS et al., Plaintiffs-Appellants, v. AMERICAN AIRLINES, INC., et al., Defendants-Appellees. Alan WEIDBERG et al., Plaintiffs-Appellants, v. AMERICAN AIRLINES, INC., et al., Defendants-Appellees. AIR TRAVELERS ASSOCIATION et al., Plaintiffs-Appellants, v. AIR WEST, INC., et al., Defendants-Appellees.
• Court: U.S. Court of Appeals — Seventh Circuit

526 F.2d 757

Keith ROBERTS et al., Plaintiffs-Appellants, v. AMERICAN AIRLINES, INC., et al., Defendants-Appellees.

Michael WILLIAMS et al., Plaintiffs-Appellants, v. AMERICAN AIRLINES, INC., et al., Defendants-Appellees.

Alan WEIDBERG et al., Plaintiffs-Appellants, v. AMERICAN AIRLINES, INC., et al., Defendants-Appellees.

AIR TRAVELERS ASSOCIATION et al., Plaintiffs-Appellants, v. AIR WEST, INC., et al., Defendants-Appellees.

Nos. 74-1108, 74-1146 and 74-1246.

United States Court of Appeals, Seventh Circuit.

Argued September 8, 1975.

Decided December 8, 1975.

Certiorari Denied April 26, 1976.

Albert Koretzky, Chicago, Ill., Michael W. Williams, Corpus Christi, Tex., William M. Brinton, San Francisco, Cal., James H. Ryan, Edward A. Berman, Chicago, Ill., for plaintiffs-appellants.

H. Templeton Brown, Chicago, Ill., Noel H. Thompson, Arlington, Va., for defendants-appellees.

Before CASTLE, Senior Circuit Judge, and SWYGERT and PELL, Circuit Judges.

PELL, Circuit Judge.

These four appeals, consolidated in this court for hearing and disposition, are brought by some of the plaintiffs following an adverse judgment in the district court.

In August, 1969, twenty of the principal domestic air carriers filed tariffs which increased domestic air passenger fares. On September 12, 1969, the Civil Aeronautics Board (CAB) suspended these tariffs under 49 U.S.C. § 1482(g) (1964), but announced that it would accept, without suspension, tariffs which utilized a proposed fare formula. The carriers then withdrew their suspended tariffs and filed new tariffs in accordance with the Board's proposed fare formula. The carrier-filed tariffs were allowed to stand without suspension or investigation.

Thirty-two interested Congressmen then petitioned for review alleging that the CAB, by excluding the public from ex parte meetings with representatives of the air carriers and by holding a pro forma public hearing, had unlawfully approved the increased fare structure. In Moss v. CAB, 139 U.S.App.D.C. 150, 430 F.2d 891 (1970), (Moss I), the Court of Appeals held that the September 12 order was invalid and the tariffs filed by the carriers based thereon were unlawful. Subsequently, a number of class actions were filed on behalf of all or a portion of the passengers on domestic airlines who paid the increased fares, seeking recovery of an amount measured by the alleged illegal increase. The Judicial Panel on Multidistrict Litigation ordered that all of the class actions be transferred to the United States District Court for the Northern District of Illinois for coordinated or consolidated pretrial proceedings under 28 U.S.C. § 1407. In re Air Fare Litigation, 322 F.Supp. 1013 (Jud.Pan.Mult.Lit. 1971). Following transfer, the defendants moved to stay the proceedings pending completion of a CAB investigation entitled "Reasonableness of Passenger Fares charged by Domestic Trunkline and Local Service Carriers from October 1, 1969, through October 12, 1970." In Weidberg v. American Airlines, Inc., 336 F.Supp. 407 (N.D.Ill. 1972), the court granted the stay motion and ordered that all proceedings in the litigation be held in abeyance until further order. On June 1, 1972, this court denied a petition for mandamus seeking to upset the stay order.

No further action, except routine status reports, took place in the suits for approximately eighteen months following this court's denial of the mandamus petition. Meanwhile, the CAB completed its investigation of the reasonableness of passenger fares and, on July 11, 1973, issued Order No. 73-7-39. This order denied to air passengers recovery of any part of the unlawful fares on the grounds that the fares in question were not unjust or unreasonable, and, in any case, resulted in no unjust enrichment of the airlines. After the publication of the CAB order, the district court indicated, during the regular status reports, that he was disposed to grant the defendants' motion to dismiss. At a subsequent status call, the district court judge expressed his view that the seven damage actions were moot. The district court judge observed that absolutely nothing was happening in the case and had not for a year, and he suggested that he would dismiss the cases, subject to reinstatement should the District of Columbia Court of Appeals reverse the CAB finding of just and reasonable rates.

On December 20, 1973, the district court, on its own motion, dismissed the seven actions with prejudice and without costs on the ground that the causes were moot. Four of the civil actions which were appealed are encompassed in these consolidated appeals;¹ the named plaintiffs in the other three actions did not seek appellate review. The appellants seek to reverse the judgment of dismissal.

The procedural history of these cases is inextricably related to other administrative and judicial proceedings. On July 16, 1973, Congressman John E. Moss and some twenty-four colleagues petitioned for direct review of CAB Order No. 73-7-39. It was they who had instituted the CAB proceedings which culminated in that order, just as it was they (or a similar group) who secured the Moss I ruling that invalidated the September 12, 1969, order. Keith Roberts, a named plaintiff in one of the district court suits and appellant in No. 74-1108, also filed a petition (No. 73-1790) seeking review of the 1973 order. He had successfully sought to intervene before the CAB in the proceedings which produced the Board's final decision in Order No. 73-7-39, and he was also allowed to intervene in the Moss review petition (No. 73-1772).

At the time of oral argument of the present appeals, there had been no decision in the related review petitions. Subsequent to oral argument, the D.C. Circuit in Moss v. CAB, 521 F.2d 298 (D.C.Cir.1975), (Moss II), affirmed the challenged order. That court faced the question as to whether there was to be a recovery of any part of the unlawful fares, and it concluded that the decisional principles used by the CAB in denying such relief were determinative and correctly applied. Not only did the court expressly hold that the petitioners (Moss and Roberts) had no right to recover all amounts in excess of the last lawfully established rates, but it also confronted, and rejected, the alternative claim that recovery of an amount measured by the difference between the charged fares and "reasonable" fares was available to the Moss petitioners or to Roberts.

The question originally raised in these consolidated appeals was whether passengers are entitled to recover damages or secure restitution of monies paid under illegal air passenger tariffs which the Civil Aeronautics Board has found not to be unjust or unreasonable. As originally argued, our primary task was to explicate the precise legal meaning of the Moss I holding that the September 12, 1969, CAB order was invalid and that the passenger tariffs were illegal. 430 F.2d at 902. The opposing parties found different meanings in the opinion, and they directed argument to the question whether the 1969 order was void or voidable. We think that Moss II clearly and correctly explicates the earlier decision and establishes that the CAB order attacked in Moss I was voidable rather than void.

Accordingly, we need not undertake a lengthy analysis of the substantive questions of law raised in these appeals. However, Moss II does not effectively resolve all of the vexing questions raised here, and we deem it necessary to address ourselves to some of the remaining problems.

I. Res Judicata and Mootness

A. Res Judicata

At the January 14, 1974, hearing on the motion to reconsider the orders of dismissal, the district judge focused directly on the impact on the present cases of an affirmance of CAB Order No. 73-7-39:

THE COURT: * * *

"My logic is, in fact, the dismissal stands because the District Court of Appeals, District of Columbia affirms that the fares were reasonable and fair, that that is res judicata, and it takes care of the issue once and for all, or, at least it is estoppel by judgment if not res judicata. There may be some technical differences between the parties.

* * * * * *

"However, there is no damage because if these improperly adopted fares are subsequently determined to be fair and reasonable, then I don't know what there is left to litigate, except to give it to some law school moot court, or put it on an examination; but, there is nothing more useless than litigating issues from which there can be no recovery in the nature of damages or other relief.

"So, the fact that the FAA sic has now found these fares to be reasonable, and that is now on appeal, seems to me means that these cases will all be moot. They are moot at this point unless that determination is reversed." (Emphasis added.)

Accordingly, the district court dismissed the cases as moot, with the proviso that it would reinstate the causes should the challenged CAB order later be reversed.

The above quotation from the transcript puts flesh on the bare bones of the formal minute order. The latter statement embodies only a one-sentence formulation, grounding the dismissal on "mootness." Our own reading of the record convinces us that the district court concluded that all of the plaintiffs' claims for restitution were barred by the CAB determination that the air passengers were not injured by paying the fares in question. The lower court relied on the fundamental legal premise that mere illegality which causes no injury is not ordinarily compensable. Thus, the district judge disposed of the cases upon the basis that the CAB finding that the challenged fares were not unjust and unreasonable necessarily implied that the plaintiffs had not been injured and the defendants had not been unjustly enriched.

At the time of the dismissal order, of course, the challenged CAB order was the subject of review proceedings. As we have previously noted, appellant Keith Roberts was a party to the review petitions....