contemporaneously with the rejection of its settlement offer. Moreover, by its own terms, the rule is inapplicable to the instant case, which involves a claim for damages arising out of Defendant's discrimination, fraudulent misrepresentation and intentional tortious conduct.
21. The Defendant Allegheny Airlines is a common carrier which is licensed or authorized to do business by the Civil Aeronautics Board, as hereinbefore stated, and is the holder of a certificate of public convenience and necessity. As such it has a public duty and an especially large and high fiduciary obligation to make its policies known to all of its customers with regard to its intentional over-booking. The fact that it conceals such practices in its advertising and otherwise, and, by virtue of its failure and refusal to take reasonable steps to avoid harm to the Plaintiffs herein is tantamount to willful and wanton misconduct which gives rise to and provides a proper basis for each of the Plaintiffs' claims for damages.
Conclusions of Law
1. This Court has jurisdiction over the subject matter (28 U.S.C. §§ 1331, 1332, 1337), Fitzgerald v. Pan American World Airways, 229 F.2d 499, 502 (2nd Cir. 1956); moreover, the amount in controversy, exclusive of interest and costs, exceeds $10,000.00. The Court also has pendant jurisdiction over any non-federal claims, United Mine Workers v. Gibbs, 383 U.S. 715, 16 L. Ed. 2d 218, 86 S. Ct. 1130 (1966).
2. The Plaintiff, Mr. Nader, is entitled to both compensatory and punitive damages under the antidiscrimination provisions of the Federal Aviation Act of 1958, Section 404(b), 49 U.S.C. § 1374(b). Mr. Nader has established a prima facie case of unreasonable discrimination: He possessed a confirmed reservation and ticket, and the resultant right to a seat. The Defendant, who intentionally over-sold the seats, did not honor that priority. The Defendant has failed to sustain its burden of proof that the discrimination was reasonable by demonstrating company policy and why, in this particular case, its policy did not work an "undue or unreasonable prejudice or disadvantage in any respect whatsoever" to Mr. Nader, where the Defendant permitted passengers with subsequent or no reservations to have priority over a passenger with a confirmed reservation who had not been informed of the risks attendant to the Defendant's concealed policy of over-booking. Archibald v. Pan American World Airways, 460 F.2d 14, 16-17 (9th Cir. 1972); Kaplan v. Lufthansa German Airlines, 12 CCH Avi. Law Rep. 17,933 (E.D. Pa., Civil No. 68-2611, decided 4/9/73); Mortimer v. Delta Air Lines, 302 F. Supp. 276, 278 (N.D. Ill. 1969); Wills v. Trans World Air Lines, Inc., 200 F. Supp. 360 (S.D. Cal. 1961).
3. The Defendant, through its agents, servants and employees, knowingly and intentionally misrepresented a material fact, namely that Mr. Nader had a guaranteed reservation for a seat, upon which each of the Plaintiffs relied. Accord, Isen v. Calvert Corp., 126 U.S. App. D.C. 349, 379 F.2d 126 (1967); see Sankin v. 5410 Connecticut Avenue Corp., 281 F. Supp. 524 (D.C.D.C. 1968), aff'd sub nom. Benn v. Sankin, 133 U.S. App. D.C. 361, 410 F.2d 1060 (1969), cert. denied, 396 U.S. 1041, 24 L. Ed. 2d 685, 90 S. Ct. 681 (1970). In light of all the evidence in this case, the Plaintiffs' reliance was reasonable and resulted in the injuries and damages which they incurred. It was foreseeable that the Defendant's intentional misrepresentation would be relayed to other members of the public and that they would rely upon the Defendant's representation since the Defendant's legal duty is to provide the public with reliable air transportation under its certificate of public convenience and necessity.
4. CCAG is eligible and entitled to recover herein for damages it has incurred due to the Defendant's intentional misrepresentation even though they were not direct parties to the transaction in issue because: (1) the misrepresentation was knowingly and intentionally made; privity of contract is not required here; (2) CCAG was within the class of foreseeable plaintiffs (the class is determined by the Defendant's legal duty to the public at large both under its license and by its better position to prevent injury to the public by full disclosure of its practices affecting the public); (3) CCAG made a reasonable reliance on the misrepresentation and was thereby damaged. See Prosser, "Misrepresentation and Third Persons," 19 Vand. L. Rev. 231, 246, 250 (1966); 37 C.J.S. Fraud § 61; 37 Am. Jur. 2d, Fraud and Deceit § 298; Cf. Rusch Factors, Inc. v. Levin, 284 F. Supp. 85, 90 (1968).
5. Other than $50 CCAG has not proven its claim for actual damages with sufficient legal precision to permit a specific award of compensatory damages. Even though CCAG probably was less successful in their fund drive due to the loss of prestige and dampening of the drive's momentum when Mr. Nader failed to appear at the rally, their actual loss in fund solicitation is too speculative to provide a basis for an award of compensatory damage. However, the Defendant's intentional misrepresentation did constitute an invasion of CCAG's legal rights, and, therefore, CCAG is entitled to nominal damages. Chesapeake & Potomac Tel. Co. v. Clay, 90 U.S. App. D.C. 206, 194 F.2d 888, 890 (1952). See, Cook Industries, Inc. v. Carlson, 334 F. Supp. 809 (D.C. Miss. 1971); Oklahoma Natural Gas Corp. v. Municipal Gas Co. of Muskogee, 113 F.2d 308 (10th Cir. 1940).
6. Punitive damages are awarded against a tortfeasor to punish him for the good of the community for his outrageous conduct and to deter others from such conduct. Chesapeake & Potomac Tel. Co. v. Clay, 90 U.S. App. D.C. 206, 194 F.2d 888, 891 (1952). Since the Defendant herein intentionally engaged in substantial over-selling, and intentionally did not inform the public of this practice and the attendant risks, and intentionally sought to conceal such information from all its passengers and particularly from the victims of this practice, it is clear that the Defendants acted not only wantonly but with malice. They are, therefore, liable to both plaintiffs for punitive damages for their misrepresentation.
7. Under the Federal Rule and the rule of this district, compensatory damages need not be shown to establish a basis for the assessment of punitive damages. E.g., Wardman-Justice Motors, Inc. v. Petrie, 59 App. D.C. 262, 39 F.2d 512, 516 (1930). Therefore, although the proven damages of the plaintiffs are a nominal sum, the plaintiffs may recover punitive damages.
8. The forty-five (45) day time within which actions may be maintained against the Defendant as set forth in its tariff on file with the CAB is no bar to maintaining this action because of the following:
(a) Shortly after dishonoring Mr. Nader's reservation on Flight 864, the Defendant sent him a written instrument, giving him sixty (60) days within which to accept in complete settlement of all claims against the Defendant; and
(b) The aforesaid sixty (60) day offer of settlement and tender of liquidated damages was a written acknowledgment of the Defendant's actual notice of Plaintiffs' claims and thereby waived any further action on Plaintiff's part within a lesser period of time; and