## Facts

- Ralph Nader reserved a seat on an Allegheny Airlines flight from Washington, D.C. to Hartford, Connecticut, where he had scheduled paid speaking engagements.
- When Nader checked in shortly before departure, Allegheny denied him boarding because the flight was full.
- Allegheny acknowledged it deliberately overbooked the flight and offered standard denied-boarding compensation, which Nader refused.
- Nader sued on two theories: (1) common-law fraudulent misrepresentation based on confirming a reservation without disclosing the deliberate overbooking policy, and (2) violation of § 404(b) of the Federal Aviation Act for failing to follow boarding priorities in its filed tariffs.
- The district court found for Nader and awarded compensatory and punitive damages on both theories.
- The court of appeals remanded aspects of the § 404(b) claim and punitive damages, and required Nader’s common-law fraud claim to be stayed and referred to the Civil Aeronautics Board (CAB) under primary jurisdiction for a § 411 “deceptive practices” determination.
- The Supreme Court granted review limited to whether the common-law fraudulent misrepresentation action had to be stayed pending CAB consideration.

## Issues

1. Whether the doctrine of primary jurisdiction required a federal court to stay a common-law fraudulent misrepresentation claim against an airline pending a CAB determination under § 411 of the Federal Aviation Act regarding “deceptive practices” tied to nondisclosure of deliberate overbooking.

## Decision

- The Supreme Court unanimously reversed the stay-and-referral requirement.
- The Court held that Nader’s common-law fraudulent misrepresentation action could proceed in court without prior CAB action under § 411.
- The Court concluded that the Federal Aviation Act, including its saving clause, preserved existing common-law remedies and did not displace them through § 411.
- The Court rejected the view that a CAB “not deceptive” determination under § 411 would necessarily bar a common-law fraud claim.

## Legal Principles

- A federal regulatory scheme may coexist with state common-law remedies when Congress preserves such remedies through a saving clause and there is no direct conflict.
- Primary jurisdiction applies when resolution turns on technical or policy issues committed to an agency’s special competence or when uniform administrative treatment is necessary; it is not required for ordinary tort issues within judicial competence.
- An agency’s authority to police “unfair or deceptive practices” through prospective regulatory remedies does not, without more, confer exclusive jurisdiction or implied immunity from private damages actions.
- A claim alleging fraudulent nondisclosure in connection with a confirmed reservation, without challenging the validity or reasonableness of an agency-approved tariff or rate, generally does not require prior administrative determination.

## Conclusion

The Court held that a passenger’s common-law fraudulent misrepresentation claim based on an airline’s nondisclosure of deliberate overbooking need not be stayed for agency referral, because Congress preserved common-law remedies and the dispute involved traditional tort questions suitable for judicial resolution rather than issues requiring specialized administrative expertise.


Nader v. Allegheny Airlines, Inc., 426 U.S. 290 (1976)