Braniff Intern., Inc. v. Florida Public Service Commission

• Decision Date: 20 July 1978
• Docket Number: No. 76-3791,76-3791
• Citation: 576 F.2d 1100
• Parties: BRANIFF INTERNATIONAL, INC., et al., Plaintiffs-Appellants, v. FLORIDA PUBLIC SERVICE COMMISSION et al., Defendants-Appellees.
• Court: U.S. Court of Appeals — Fifth Circuit

Page 1100

576 F.2d 1100

BRANIFF INTERNATIONAL, INC., et al., Plaintiffs-Appellants, v. FLORIDA PUBLIC SERVICE COMMISSION et al., Defendants-Appellees.

No. 76-3791.

United States Court of Appeals Fifth Circuit.

July 20, 1978.

John W. Costigan, John A. Madigan, Jr., Tallahassee, Fla., W. A. Nelson, Washington, D. C., William B. Killian, Miami, Fla., for plaintiffs-appellants.

Prentice P. Pruitt, J. B. Curasi, Joseph A. McGlothlin, Tallahassee, Fla., for defendants-appellees.

Appeal from the United States District Court for the Northern District of Florida.

Before TUTTLE, GEE and FAY, Circuit Judges.DJ TUTTLE, Circuit Judge:

The case on appeal presents a question of first impression in this Circuit: the extent to which the Supreme Court's decision in Public Service Comm'n of Utah v. Wycoff Co., 344 U.S. 237, 73 S.Ct. 236, 97 L.Ed. 291 (1952), circumscribes the power of a federal district court to entertain a constitutional challenge to a state statute. The district court, relying primarily upon dictum in Wycoff, concluded that it lacked subject matter jurisdiction over appellants' claims. We reverse.

The appellants in this case are six air carriers, Braniff International, Inc., Delta Airlines, Inc., Eastern Airlines, Inc., Northwest Airlines, Inc., Southern Airways, Inc., and Transworld Airlines, Inc., all of which are engaged in interstate and foreign commerce pursuant to "Certificates of Public Convenience and Necessity" issued by the Civil Aeronautics Board. See 49 U.S.C. § 1371(a). The appellees are the Florida Public Service Commission, its chairman and individual members. The Commission is an agency of the State of Florida charged with the regulation of utilities and transportation companies doing business entirely within the state.

In 1972 the Florida Legislature, with the express purpose of regulating air carriers within the state, ¹ enacted the following statute:

The (public service) commission is empowered to disapprove, after notice and hearing, any change in a rate, fare, or schedule between points in this state of a person engaged in air transportation pursuant to a certificate or certificates issued by the civil aeronautics board pursuant to section 401 of the Federal Aviation Act of 1958, . . . if such change would impose an undue economic burden on state certificated air carriers operating between the same points. The commission shall adopt rules and regulations requiring such persons to file notice of such changes with the commission on the effective date thereof, and the commission shall cause notice thereof promptly to be delivered to every state certificated carrier. A notice of hearing shall be issued within thirty days after such effective date upon complaint of any state certificated air carrier, and the hearing may be held after thirty days after service of such notice of hearing upon the person making such change in a rate, fare, or schedule. . . .

Fla.Stat. § 330.53 (1973) (emphasis added). There is no dispute but that the statutory language purports to empower the Commission, under the prescribed circumstances, to regulate certain business activities of the appellants.

In accordance with the express statutory command that it do so, the Commission, on May 16, 1975, proposed to adopt the following rule 1. All persons engaged in air transportation pursuant to a certificate . . . issued by the Civil Aeronautics Board . . . shall file with the Florida Public Service Commission notice of any change in their rates, fares or schedules between points in the State of Florida. Such notice shall be filed not later than on the effective date thereof.

2. The Commission shall cause notice thereof promptly to be delivered to every state certificated air carrier.

3. A notice of hearing shall be issued within thirty days after such effective date upon complaint of any state certificated air carrier. The hearing may be held after thirty days after service of such notice of hearing upon the person making such change in a rate, fare or schedule.

4. The Commission may disapprove, after notice and hearing, any change in a rate, fare or schedule between points in this state, . . . if such change would impose an undue economic burden on state certificated carriers operating between the same points.

Fla.Admin.Code, Rule 25.15-50. Over the objections of the Air Transport Association of America that the statute and proposed rule were unconstitutional, ² the Commission adopted the rule on August 4, 1975.

The impact of the regulatory scheme was virtually immediate. Only two months after the rule's effective date, a state certificated carrier complained that appellant Southern had "changed its schedules so as to compete with the (complaining) carrier." The Commission's independent investigation confirmed that Southern had changed its schedules without complying with the statutory notice requirement, prompting the issuance of a show cause order in the following terms:

ORDERED . . . that Southern Airways, Inc., show cause in writing within thirty (30) days from the date of this order why it should not be penalized by fine and/or ordered to cease and desist from future violations (of the notice provision).

In addition Southern was ordered to appear before the Commission at a time and place to be fixed by the Commission.

Consistent with its previously expressed position that the regulatory scheme was unconstitutional, Southern did not comply with the order and, joining with the remaining appellants, filed suit in federal district court. The complaint, which asserted federal jurisdiction under 28 U.S.C. §§ 1331, 1337 and invoked 28 U.S.C. §§ 2281, 2284 to require appointment of a three-judge court, alleged that the state's attempts to regulate the schedules of interstate air carriers violated the Supremacy Clause, the Commerce Clause, and the Due Process and Equal Protection Clauses of the Fourteenth Amendment. ³ Appellants sought injunctive and declaratory relief, and a stay of the execution or operation of the show-cause order.

After denying appellants' request for interim relief, ⁴ the district court, without ruling upon a plethora of other motions, proceeded to rule upon appellees' motion to dismiss. Citing Public Service Comm'n of Utah v. Wycoff Co., 344 U.S. 237, 73 S.Ct. 236, 97 L.Ed. 291 (1952), and Allegheny Airlines v. Pennsylvania Public Utility Comm'n, 319 F.Supp. 407 (E.D.Pa.1970), aff'd, 465 F.2d 237 (3d Cir. 1972), cert. denied, 410 U.S. 943, 93 S.Ct. 1367, 35 L.Ed.2d 609 (1973), the court reasoned:

(P)laintiffs have failed to make out a case for federal-question jurisdiction. This action seeks merely to obtain for plaintiffs a federal defense to the action pending before the Florida Public Service Commission. The cause of action which defendants threaten to institute will involve only an issue of state law whether plaintiffs should be required to comply with the PSC's notice provision. That a defense based on federal law will be asserted is immaterial to the jurisdiction of this court.

On the sole basis stated above, the court granted the motion to dismiss.

Appellants subsequently learned that on July 20, 1976, a state certificated carrier, Florida Airlines, Inc., had filed a complaint under the statute. The complaint alleged that appellant Eastern intended to initiate new service between Jacksonville and Tampa, Florida, and requested the Commission to exercise its statutory authority to disapprove the schedule change. This additional action, which was raised in appellants' motion to vacate the dismissal order, did not sway the court. The motion to vacate was denied, and this appeal followed.

Before discussing the substance of the case, we think it necessary to illuminate what is not before us on appeal. We are not here concerned with the merits of appellants' constitutional claims, with the appointment of a three-judge court, or with the availability of injunctive or declaratory relief. The district court did not reach these questions, and we decline to do so on the record before us. The only issue decided below involved the exercise of subject matter jurisdiction over appellants' claims. It is to that issue, and that issue alone, that we now proceed.

As already mentioned, the decision in Public Service Comm'n of Utah v. Wycoff Co., 344 U.S. 237, 73 S.Ct. 236, 97 L.Ed. 291 (1952), lies at the very core of this appeal. The plaintiff there was engaged in the business of importing, processing and transporting picture film and newsreels. These endeavors required plaintiff's carriers to traverse the highways between certain points within the State of Utah. In a suit against the Utah Public Service Commission and its members, it was alleged that defendants were violating the Commerce Clause by threatening and attempting to prevent plaintiff's transportation of materials between Utah cities. Plaintiff sought a declaratory judgment that its Utah activities constituted "interstate commerce" and an injunction restraining defendants from interfering with those activities. Significantly, plaintiff did not challenge the constitutionality of any state statute or administrative ruling, nor did it present any evidence of any past, pending or threatened action against it by defendants. Id. at 239-40, 73 S.Ct. 236.

Following a trial, the district court agreed with defendants' contention that plaintiff's Utah business involved only intrastate commerce and therefore dismissed the complaint. The court of appeals, however, concluding in essence that plaintiff's "intrastate transportations (were) nonetheless integral parts of interstate transportation," reversed and remanded for further proceedings. Wycoff Co. v. Public Service Comm'n of Utah, 195 F.2d 252 (10th Cir. 1952). ⁵ The Supreme Court in turn reversed and directed dismissal.

The language in issue here came late in the Court's opinion. After concluding that plaintiff was not entitled to injunctive relief, 344 U.S. at 240-41, 73 S.Ct. 236,...