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RAUCH v. UNITED INSTRUMENTS

September 11, 1975

JOHN RAUCH, GERALD MIKLOSH, ABBEY ALAN KRAMER, on behalf of themselves and all others similarly situated
v.
UNITED INSTRUMENTS, INC. and TOKYO AIRCRAFT INSTRUMENT COMPANY



The opinion of the court was delivered by: LOUIS C. BECHTLE

MEMORANDUM AND ORDER

 BECHTLE, J.

 SEPTEMBER 11, 1975

 This action is the result of the manufacture and distribution by defendants of allegedly defective aircraft altimeters. The complaint contains in its three counts allegations of breach of warranty, strict liability in tort, negligence and violation of the Federal Aviation Act of 1958, 49 U.S.C.A. § 1301 et seq., and regulations promulgated thereunder. The named plaintiffs claim that they and the other members of the proposed class, which is composed of all those who own either the altimeters in question or aircraft equipped with the altimeters, each suffered approximately $ 75.00 in damages as a result of defendants' actions and that they are, accordingly, entitled to compensatory relief from defendants. *fn1" Presently before the Court is plaintiffs' motion for leave to file an amended complaint pursuant to Fed.R.Civ.P. 15(a). *fn2" The amended complaint will add to the above-mentioned allegations a count charging defendants with common law fraud. It will ask for punitive as well as compensatory damages.

 Although a district court is required to allow amendments to pleadings freely "when justice so requires," it is clear that the court retains wide discretion over the granting of leave to amend. Wolff v. Calla, 288 F.Supp. 891, 894 (E.D.Pa. 1968). Defendants' opposition to the motion under consideration focuses on the legal sufficiency of the proposed amendment. It is defendants' contention that this Court will lack jurisdiction over the subject matter of the proposed amended complaint. Additionally, defendants argue that the proposed amendment is simply an attempt to enlarge federal jurisdiction and, as such, is beyond the scope of an appropriate amendment under Fed.R.Civ.P. 15.

 In order to avoid engaging in a useless act, a court must measure a proposed amended complaint in terms of its ability to withstand a motion to dismiss. Therefore, we will first examine the legal sufficiency of the presently proposed amendment in that light. Hodnik v. Baltimore & Ohio Railroad, 54 F.R.D. 184 (W.D.Pa. 1972).

 Both the original complaint and the proposed amended complaint invoke the jurisdiction of this Court under 28 U.S.C. § 1337, *fn3" as well as under the general federal question jurisdictional Statute, 28 U.S.C. § 1331. Plaintiffs conceded at oral argument that 28 U.S.C. § 1331 will not support jurisdiction here due to the inability of each individual class member's claim to satisfy that statute's $ 10,000 jurisdictional amount requirement. Each member of the proposed class has an individual claim of only $ 75, and the rule is clear that it is not permissible to aggregate the claims of the individual class members in order to satisfy the requirement of 28 U.S.C. § 1331(a). Zahn v. International Paper Co., 414 U.S. 291, 38 L. Ed. 2d 511, 94 S. Ct. 505 (1973); Snyder v. Harris, 394 U.S. 332, 22 L. Ed. 2d 319, 89 S. Ct. 1053 (1969). *fn3"

 Jurisdiction does exist here, however, by reason of 28 U.S.C. § 1337. That section requires no minimum jurisdictional amount. Since the Federal Aviation Act is a congressional act regulating commerce, there can be no doubt that 28 U.S.C. § 1337 provides a proper jurisdictional basis for this action. Mortimer v. Delta Air Lines, 302 F.Supp. 276, 278 (N.D. Ill. 1969). Defendants' argument that this Court lacks subject-matter jurisdiction centers on the contention that no private right of action in favor of plaintiffs may be implied from the Aviation Act. However, "the implication of a civil remedy from the provisions of this Act has been characterized, and properly so, as a question regarding the statement of a claim for which relief can be granted," and not one of subject-matter jurisdiction. Id. at 278.

 The objection presented by a Rule 12(b)(1) motion is that the court has no authority or competence to hear and decide the case. Subject matter jurisdiction questions should not be confused with motions under Rule 12(b)(6) to dismiss for failure to state a claim for relief under federal law. 5 Wright & Miller, Federal Practice and Procedure: Civil § 1350, at 543 (1969). Plaintiffs' claims under the Federal Aviation Act are neither clearly "immaterial and made solely for the purpose of obtaining jurisdiction" nor "wholly insubstantial and frivolous." Thus, the alleged failure to state a proper cause of action calls for a judgment on the merits and not for a dismissal for want of jurisdiction. Whether the complaint states a cause of action for which relief can be granted is a question of law and, just as respects an issue of fact, this question must also be decided after, and not before, the court has assumed jurisdiction over the controversy. Bell v. Hood, 327 U.S. 678, 682-683, 90 L. Ed. 939, 66 S. Ct. 773 (1946). Since the right of plaintiffs to recover under their complaint, or the amended complaint, will be sustained if the Aviation Act is given one construction and will be defeated if it is given another, this Court has jurisdiction See Bell v. Hood, supra at 685. However, we will treat defendants' objections as going to the issue of whether plaintiffs have stated a claim upon which relief can be granted.

 The Supreme Court, in its recent opinion in Cort v. Ash, 422 U.S. 66, 95 S. Ct. 2080, 45 L. Ed. 2d 26 (1975), set forth a checklist of the relevant factors to be considered when determining whether a private remedy is implicit in a statute not expressly providing one. An examination of these factors as they apply to the instant case leads this Court to conclude that the Federal Aviation Act, and the regulations promulgated thereunder, impose a duty upon defendants and that a violation of this duty creates a cause of action in favor of those injured or damaged as a result.

 The first question is whether the statute creates a federal right in favor of plaintiffs or, in other words, whether they are members of the class for whose especial benefit the statute was enacted. Cort v. Ash, supra, 95 S. Ct. at 2087-2088; Texas & Pacific Ry. v. Rigsby, 241 U.S. 33, 60 L. Ed. 874, 36 S. Ct. 482 (1916). The House Report on the bill which became the Federal Aviation Act of 1958 contained the following statement: "The principal purpose of this legislation is to establish a new Federal agency with powers adequate to enable it to provide for the safe and efficient use of the navigable airspace by both civil and military operations." H.R. Rep. No. 2360, 85th Cong. 2d Sess. (1958) (emphasis added). In the section headed "Background of Legislation," this same House Report quotes a June 13, 1958, message to Congress from President Eisenhower which stated:

 
Recent midair collisions of aircraft, occasioning tragic losses of human life, have emphasized the need for a system of air traffic management which will prevent, within the limits of human ingenuity, a recurrence of such accidents.
 
In this message, accordingly, I am recommending to the Congress the establishment of an aviation organization in which would be consolidated among other things all the essential management functions necessary to support the common needs of our civil and military aviation.

 The legislative history of the Aviation Act clearly indicates that one of Congress' overriding concerns in enacting the statute was the maximization of safety in the air industry. The direct and intended beneficiaries of that concern are ...


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