Bonano v. East Caribbean Airline Corp., CIV. 00-1964(JP).

• Decision Date: 11 March 2003
• Docket Number: No. CIV. 00-1964(JP).,CIV. 00-1964(JP).
• Citation: 253 F.Supp.2d 166
• Parties: Miguel BONANO, Plaintiff v. EAST CARIBBEAN AIRLINE CORP., et al., Defendants
• Court: U.S. District Court — District of Puerto Rico

253 F.Supp.2d 166

Miguel BONANO, Plaintiff v. EAST CARIBBEAN AIRLINE CORP., et al., Defendants

No. CIV. 00-1964(JP).

United States District Court, D. Puerto Rico.

March 11, 2003.

Jose Rafael Santiago Pereles, Ponce, PR, for Plaintiff.

Edgardo L. Rivera Rivera, San Juan, PR, for Defendants.

Mirta E. Rodriguez Mora, Latimer, Biagggi, Rachid & Godreau, San Juan, PR, for Royal Insurance Co.

OPINION AND ORDER

PIERAS, Senior District Judge.

I. INTRODUCTION AND BACGROUND

The Court has before it Co-Defendants the Ports Authority of Puerto Rico ("Ports Authority") and Hector Rivera's "Motion Requesting Dismissal For Lack of Jurisdiction" (docket No. 68); Co-Defendants Herman Sulsona and Miguel Casillas' "Motion to Dismiss" (docket No. 67); Plaintiffs "Omnibus Motion in Opposition to Motions to Dismiss" (docket No. 78)¹; and Co-Defendants' joint "Motion Reiterating Requests for Dismissal Previously Filed" (docket No. 92). The Court notes that Plaintiffs only "opposition" states simply that he had filed an amended complaint. However, Co-Defendants' have moved to reiterate their motions to dismiss and Plaintiff has not filed an opposition that opposes Co-Defendants' arguments on their merits. Therefore, the Court deems Co-Defendants' motions as unopposed.

Plaintiff filed the instant action on July 20, 2000², allegedly on behalf of a group of persons³ who contracted with Co-Defendant East Caribbean Airline Corp.⁴ ("East Caribbean"), for air transportation and other related travel services commencing on September 22, 1997 through January 11, 1998. Such travel services were to be rendered between Ponce, Puerto Rico and other U.S. cities. Co-Defendant East Caribbean allegedly canceled the contracted flights without giving notice to Plaintiff and the monies payed in advance by Plaintiff for such services were not returned after the cancellation of the flights or after Co-Defendant East Caribbean ceased its business operations.

Plaintiff brings his suit alleging a violation of the Federal Aviation Act, 49 U.S.C. § 1485(e) and its charter regulations⁵. Plaintiff claims that Co-Defendant East Caribbean violated 14 C.F.R. § 217.17(4)⁶ because East Caribbean did not return the amount of money pre-paid by Plaintiff, after Plaintiffs flight was canceled. Plaintiff claims that 14 C.F.R. § 217.17(4)⁷ was violated because Co-Defendant East Caribbean did not maintain a separate account for each charter flight. Lastly, Plaintiff claims that Co-Defendant violated 49 C.F.R. § 1084.6.d⁸ by failing to have a bond approved and accepted by the Interstate Commerce Commission. Plaintiff claims that Co-Defendant East Caribbean violated 14 C.F.R. § 380.12 because it did not notify Plaintiff in writing within seven days after the cancellation.

Co-Defendants the Ports Authority and Hector Rivera claim that this Court does not have jurisdiction to hear Plaintiffs claims and that Plaintiffs complaint should be dismissed against them. Co-Defendants Herman Sulsona and Miguel Casillas argue that Plaintiff has failed to demonstrate a causal relationship between Defendants' alleged acts and omissions and the alleged damages sustained by Plaintiff and, in the alternative, that Plaintiffs claims are time barred. As stated earlier, Plaintiffs only opposition is that his "Second Amended Complaint" cures any defects upon which Co-Defendants' motions are based. The Court will address these issues below.

II. DISMISSAL STANDARD

Under Rule 12(b)(1) of the Federal Rules of Civil Procedure, a party may, in response to an initial pleading, file a motion to dismiss the complaint for failure to state a claim upon which relief can be granted. It is well-settled, however, that "a complaint should not be dismissed for failure to state a claim unless it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief." Conley v. Gibson, 355 U.S. 41, 45-46, 78 S.Ct. 99, 102, 2 L.Ed.2d 80 (1957); see also Miranda v. Ponce Fed. Bank, 948 F.2d 41 (1st Cir.1991). The Court must accept as true "all well-pleaded factual averments and indulg[e] all reasonable inferences in the plaintiffs favor." Aulson v. Blanchard, 83 F.3d 1, 3 (1st Cir.1996) (citations omitted); see also Berrios v. Bristol Myers Squibb Caribbean Corp., 51 F.Supp.2d 61 (D.Puerto Rico 1999) (Pieras, J.). A complaint must set forth "factual allegations, either direct or inferential, regarding each material element necessary to sustain recovery under some actionable theory." Romero-Barcelo v. Hernandez-Agosto, 75 F.3d 23, 28 n. 2 (1st Cir.1996) (quoting Gooley v. Mobil Oil Corp., 851 F.2d 513, 514 (1st Cir.1988)). The Court, however, need not accept a complaint's "`bald assertions' or legal conclusions" when assessing a motion to dismiss. Abbott, III v. United States, 144 F.3d 1, 2 (1st Cir.1998) (citing Shaw v. Digital Equip. Corp., 82 F.3d 1194, 1216 (1st Cir.1996)). It is with this framework in mind that this Court will assess the motions before it.

III. FACTUAL ALLEGATIONS

Plaintiffs allegations as found in his Second Amended Complaint, and which are taken as true for purposes of this motion, are as follows:

A. Prior to September 22, 1997, Plaintiff entered into a contract with East Caribbean and was the sole beneficiary of contracts entered between East Caribbean and other airlines (who's identity remains unknown), for air transportation and other travel services between Ponce, Puerto Rico and other cities in the United States in return for good and valuable consideration.

B. This travel was to occur on various dates between September 22, 1997 and January 11,1998.

C. One of the terms and conditions of the agreement between the parties was to place any money received by East Caribbean from Plaintiff, in an escrow account at Banco Popular and Citibank⁹.

D. On or about December 20, 1997, Co-Defendant East Caribbean ceased business operations. Thereafter, it failed and refused to deliver the contracted travel services to Plaintiff.

E. Additionally, Co-Defendant East Caribbean failed to place into escrow accounts all monies paid by Plaintiff, failed to maintain separate accounts for each charter flight and failed to return Plaintiffs money upon cancellation of Plaintiffs flights.

F. The cancellations forced Plaintiff to incur additional expenses (e.g. alternate air transportation, meals, phone calls, accommodations etc.) to complete his intended travel. The actions of Co-Defendant caused Plaintiff discomfort, annoyance, humiliation and pecuniary loss.

G. Co-Defendant Bernie Rosado¹⁰ was the President of East Caribbean and the intellectual author of the fraud scheme. Through his position, he misappropriated the money paid by the class for their intended airline travel.

H. Co-Defendant Miguel Casillas gave authorization to East Caribbean to deliver and sell their airline services at the Mercedita Airport, without a services contract and the required federal, state and municipal permits. He also encouraged the use of East Caribbean as an airline services provider.

I. Co-Defendant Hernan Sulsona was Co-Defendant Casillas' manager and was responsible for the entire Ports Authority operation, including supervision, training, monitoring, controlling, federal and state law compliance and permits evaluation and authorization.

J. Co-Defendant Sulsona did not appropriately supervise his personnel actions and permitted East Caribbean to operate at Mercedita Airport while knowing that they did not comply with federal and state laws.

K. Co-Defendant Ports Authority, represented by Co-Defendant Hector Rivera did not appropriately supervise the Mercedita Airport operation, by permitting Co-Defendant East Caribbean to use its facilities without complying with required federal, state, and municipal laws and regulations, which caused and/or contributed to the damages in this case.

IV. DISCUSSION

A. Jurisdiction

Co-Defendants the Ports Authority and Hector Rivera argue that this Court does not have jurisdiction to hear Plaintiffs claims. They argue that the basis of jurisdiction claimed by Plaintiff, namely 14 C.F.R. §§ 207 and 380, are not an "act of Congress" and that even if they were, they do not create a private cause of action upon which jurisdiction can be based under 28 U.S.C. § 1337. Section 1337(a) states in pertinent portion:

The district courts shall have original jurisdiction of any civil action or proceeding arising under any Act of Congress regulating commerce or protecting trade and commerce against restraints and monopolies.

28 U.S.C. § 1337(a) (West 2002). Co-Defendants generally state that 14 C.F.R. §§ 201 and 380, are not "Act(s) of Congress" because they are not statutory laws. Co-Defendants do not substantiate their argument with even a single reference. However, the Supreme Court of the United States has made it abundantly clear that the Code of Federal Regulations can indeed invoke federal jurisdiction. See generally Gade v. National Solid Wastes Mgmt. Ass'n, 505 U.S. 88, 112 S.Ct. 2374, 120 L.Ed.2d 73 (1992). Furthermore, the First Circuit has held that for an action to "arise under" a federal statute, it is sufficient if that statute creates the cause of action. See Mar. Serv. Corp. v. Sweet Brokerage De Puerto Rico, 537 F.2d 560 (1st Cir.1976).

This brings the Court to Co-Defendants' next argument. They argue that Plaintiffs C.F.R. claims do not create a private cause of action. They argue this in two manners. Co-Defendants generally claim that 14 C.F.R. §§ 207 and 380 do not create a private cause of action which may favor Plaintiff and specifically argue that the regulations do not impose any obligations upon airport owners or their officers and employees. The Court deals with the general contention first. The Court finds that Section 380.4 strikes to the heart of Co-Defendants' contention:

In the case of any violation of the provision of the Statute or of this part, or any other rule, regulations, or order...