U.S. Tour Operators Ass'n v. Trans World Airlines, Inc.

• Decision Date: 27 May 1977
• Docket Number: D,1421,Nos. 1197,s. 1197
• Parties: UNITED STATES TOUR OPERATORS ASSOCIATION, Brendan Tours, Europacar Tours, Inc., Arthur Frommer Charters, Inc., Pathfinder Corporation and Unitours, Plaintiffs- Appellees, v. TRANS WORLD AIRLINES, INC., Travellers Air Services, Inc., Travellers International Tour Operators, Inc. and Travellers International, Defendants- Appellants. ockets 77-7134, 77-7141.
• Court: U.S. Court of Appeals — Second Circuit

Page 126

556 F.2d 126

40 A.L.R.Fed. 733

UNITED STATES TOUR OPERATORS ASSOCIATION, Brendan Tours Europacar Tours, Inc., Arthur Frommer Charters Inc., Pathfinder Corporation and Unitours, Plaintiffs- Appellees, v. TRANS WORLD AIRLINES, INC., Travellers Air Services, Inc. Travellers International Tour Operators, Inc. and Travellers International, Defendants- Appellants.

Nos. 1197, 1421, Dockets 77-7134, 77-7141.

United States Court of Appeals Second Circuit.

Argued April 19, 1977.

Decided May 27, 1977.

Harold L. Warner, Jr., New York City (Chadbourne, Parke, Whiteside & Wolff, Steven L. Cohen, New York City, of counsel), for defendant-appellant Trans World Airlines, Inc.

Robert M. Beckman, Washington, D. C. (Beckman & Smith, Washington, D. C., Marshall, Bratter, Greene, Allison & Tucker, New York City, of counsel), for defendants-appellants Travellers Air Services, Inc., and Travellers International Tour Operators, Inc.

Richard Littell, Washington, D.C. (Dickstein, Shapiro & Morin, Arthur J. Galligan and Barry Wm. Levine, Washington, D. C., of counsel), for plaintiffs-appellees.

Nathaniel L. Gerber, Asst. U. S. Atty., New York City (Robert B. Fiske, Jr., U. S. Atty., for the Southern District of New York, New York City, Thomas F. McBride and James W. Tello, Washington, D. C., of counsel), for Civil Aeronautics Board, amicus curiae.

Before MOORE, SMITH and FEINBERG, Circuit Judges.

FEINBERG, Circuit Judge:

Defendants Trans World Airlines, Inc. (TWA) and Travellers Air Service, Inc. (TAS) appeal from a decision of the United States District Court for the Southern District of New York, Charles E. Stewart, Jr., J., denying their motion to dismiss an action brought by plaintiffs, five charter air tour operators and a trade association. The complaint seeks injunctive relief against defendants on the ground that TWA's control over TAS, also an air tour operator, violates section 401(a) of the Federal Aviation Act of 1958, 49 U.S.C. § 1371(a). ¹ In support of their motions to dismiss, defendants argued that the Civil Aeronautics Board (CAB) had primary jurisdiction over plaintiffs' complaint. The CAB filed an amicus brief in the district court in opposition to the motions to dismiss, on the ground that the doctrine of primary jurisdiction is not applicable to the issues raised in the complaint. ² Judge Stewart agreed, and denied defendants' motion to dismiss. They appealed, and obtained in this court a stay of all proceedings in the district court, pending disposition of the appeal. ³ We have heard argument on plaintiffs' motion to dismiss the appeal and on the merits of defendants' appeal, as well. We grant the motion to dismiss the appeal.

The order of the district court under review overruled defendants' argument that the CAB had primary jurisdiction over plaintiffs' complaint and denied motion, based on that contention, to dismiss the complaint. The order did not dispose of the case. It did not even dispose of all the other arguments appellants made as to why the complaint should be dismissed. ⁴ Such an order is not ordinarily considered sufficiently final to allow an appeal from it as a matter of right. Appellants claim, however, that they may appeal under the rule established by Cohen v. Beneficial Industrial Loan Corp., 337 U.S. 541, 546-47, 69 S.Ct. 1221, 93 L.Ed. 1528 (1949).

In Cohen, the Court held that denial of a motion to compel security for costs presented "a serious and unsettled question," which fell "in that small class which finally determine claims of right separable from, and collateral to, rights asserted in the action, too important to be denied review and too independent of the cause itself to require that appellate consideration be deferred until the whole case is adjudicated." 337 U.S. at 546, 69 S.Ct. at 1225-1226. Attempts to come within the scope of the Cohen doctrine have been legion, but we have not been receptive to an expansive reading of this exception to the final judgment rule. See, e. g., UAW v. National Caucus of Labor Committees, 525 F.2d 323 (2d Cir. 1975); West v. Zurhorst, 425 F.2d 919 (2d Cir. 1970); Donlon Industries, Inc. v. Forte, 402 F.2d 935, 937 (2d Cir. 1968). The reasons for the final judgment rule, see American Express Warehousing, Ltd. v. Transamerica Insurance Co., 380 F.2d 277, 280 (2d Cir. 1967), and our reluctance to depart from it hardly need explanation again, particularly at a time of swollen appellate dockets. We have repeatedly said that "Cohen may not be abused by indiscriminate extension." UAW v. National Caucus of Labor Committees, supra, 525 F.2d at 325, and that this exception to the usual rule of non-appealability for interlocutory orders "must be kept within narrow bounds." Weight Watchers of Philadelphia, Inc. v. Weight Watchers Int'l, Inc., 455 F.2d 770, 773 (2d Cir. 1972).

With these considerations in mind, we turn to the issue before us. Until a few years ago, it would have been reasonably clear that defendants could not appeal from the orders here involved, in view of Allied Air Freight, Inc. v. Pan American World Airways, Inc., 340 F.2d 160 (2d Cir.) (per curiam), cert. denied, 381 U.S. 924, 85 S.Ct. 1560, 14 L.Ed.2d 683 (1965). In that case, a panel of this court, including the present Chief Judge, dismissed an appeal from a district court order that stayed an antitrust action until the CAB decided whether plaintiffs' claims fell within its primary jurisdiction. The panel pointed out, among other things, that "the stay order, as well as not adjudicating upon plaintiffs' (antitrust) claims, does not finally dispose of the district court suit or necessarily preclude a sometime trial in that forum of plaintiffs' claims." Id. at 161. While the case is not on all fours with the one now before us, it is similar since the legal issue on appeal was whether the doctrine of primary jurisdiction required the CAB to consider plaintiffs' claims before a court did.

Some six years later, in an unrelated case, the CAB sued various travel agencies in the federal district court, seeking injunctive relief against alleged violations of the Federal Aviation Act of 1958. The defendant travel agencies moved to dismiss or stay the district court proceedings on the ground that the doctrine of primary jurisdiction required the CAB to determine whether defendants were indirect air carriers or simply ticket agencies. The district judge granted the stay, as the judge had in Allied Air Freight, and the CAB appealed. A panel of this court, over a vigorous dissent by Judge Mulligan, held that order appealable under the Cohen doctrine because "(t)he issue of whether the doctrine of primary jurisdiction should be invoked is collateral to the ultimate issues of this case, the issue is vital to CAB efforts to secure speedy enforcement of the Federal Aviation Act and the Board's regulations, and the issue is too important to be deferred until the entire case is decided." CAB v. Aeromatic Travel Corp., 489 F.2d 251, 253 (2d Cir. 1974). The majority opinion did not otherwise discuss the question of appealability; nor did it mention this court's decision in Allied Air Freight, supra, although it was the focus of the dissenting judge's opinion.

Appellants apparently believe that Aeromatic held that every interlocutory order involving the issue of primary jurisdiction is per se appealable under the Cohen rule. Whatever the merits of the decision in Aeromatic, it did not go that far and in at least one respect its reasoning hurts, rather than helps, appellants' claim of appealability. In Aeromatic, the district court had granted the motion to stay court proceedings, a ruling which the majority thought was fatal to the CAB's efforts to avail itself of the " speedy enforcement" available only from the district court. The situation here is the reverse. Since Judge Stewart denied the motions to dismiss, the efforts of plaintiffs, supported by the CAB as amicus, to put a quick end to alleged violations of law have not been halted. If we dismiss this appeal, the district court proceedings will merely continue, perhaps with the CAB as a formal party plaintiff. ⁵

Appellants argue that their right to a trial in a different forum (the CAB) is an important "collateral" right under the Cohen rule, which will be irretrievably lost unless they can appeal now. We do not agree that the Cohen rule should apply. In analogous contexts, preliminary rulings establishing the forum are not appealable, even though postponing review forces the would-be appellant to litigate in the forum he seeks to avoid, and creates the risk that an entire proceeding will be rendered nugatory. See D'Ippolito v. American Oil Co., 401 F.2d 764 (2d Cir. 1968) (transfer to another district under 28 U.S.C. § 1404(a) not appealable). Cf. Wilkins v. American Export-Isbrandtsen Lines, Inc., 401 F.2d 151 (2d Cir. 1968) (denial of motion to remand after removal from state court not appealable); McKay Packers, Inc. v. Fireman's Insurance Co., 207 F.2d 955 (2d Cir. 1953) (no appeal from order remanding removed case). It is true that in Local 771, International Alliance of Theatrical State Employees v. RKO General, Inc., WOR Division, 546 F.2d 1107 (2d Cir. 1977), we allowed an appeal from a district court's denial of a motion to dismiss that was based on the exclusivity of the arbitration remedy. But see Greater Continental Corporation v. Schechter, 422 F.2d 1100, 1102 (2d Cir. 1970). Whatever may now be the rule regarding appeal of district court orders refusing to defer to the arbitration forum, ⁶ that rule does not determine the applicability of the Cohen rule to this case. An appellant who seeks arbitration has gained his right not to have to suffer the costs and delays of trial through contract negotiations. See Local 771, ...