367 U.S. 316 (1961), 492, Civil Aeronautics Board v. Delta Air Lines, Inc.

Docket Nº:No. 492
Citation:367 U.S. 316, 81 S.Ct. 1611, 6 L.Ed.2d 869
Party Name:Civil Aeronautics Board v. Delta Air Lines, Inc.
Case Date:June 12, 1961
Court:United States Supreme Court
 
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Page 316

367 U.S. 316 (1961)

81 S.Ct. 1611, 6 L.Ed.2d 869

Civil Aeronautics Board

v.

Delta Air Lines, Inc.

No. 492

United States Supreme Court

June 12, 1961

Argued April 27, 1961

CERTIORARI TO THE UNITED STATES COURT OF APPEALS

FOR THE SECOND CIRCUIT

Syllabus

Once a certificate of public convenience and necessity granted by the Civil Aeronautics Board to an air line has become effective under §401(f) of the Federal Aviation Act of 1958, the Board may not alter it without the formal notice and hearing required by § 401 (g) -- even though the Board, at the time of certification, has purported to reserve jurisdiction to make summary modifications pursuant to petitions for reconsideration and such petitions have been filed within the time prescribed by the Board's regulations and before the effective date of the certificate. Pp. 317-334.

(a) Congress intended that certificated air lines should enjoy "security of route," so that they might invest the considerable sums required to support their operations, and it provided in § 401(g) certain minimum protections before a certificated operation could be cancelled. Pp. 321-325.

(b) Notwithstanding the general principle that an administrative order is not "final" for the purposes of judicial review until outstanding petitions for reconsideration have been disposed of, the Board may not, by reserving jurisdiction to make summary modifications pursuant to petitions for reconsideration, do indirectly what Congress has forbidden it to do directly. Pp. 325-334.

280 F.2d 43 affirmed.

Page 317

WARREN, J., lead opinion

[81 S.Ct. 1614] MR. CHIEF JUSTICE WARREN delivered the opinion of the Court.

This case concerns the power of the Civil Aeronautics Board to alter a certificate of public convenience and necessity, granted to respondent Delta Air Lines, after that certificate had become effective under § 401(f) of the Federal Aviation Act of 1958. 72 Stat. 731, 755, [81 S.Ct. 1615] 49 U.S.C. § 1371(f).1 The administrative proceedings from which the present dispute arises date back to May, 1955, and involve consideration by the Board of a number of applications for new service between cities located in an area extending from the Great Lakes to Florida. The Board divided the proceedings into two general categories, consolidating the applications for long haul service in the

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Great Lakes-Southeast Service Case and those for short haul flights in the Great Lakes Local Service Investigation Case. In order to protect fully the interests of local service carriers, the Board allowed these carriers, including petitioner Lake Central Airlines, to intervene in the hearings on the long haul applications.

At the conclusion of the Great Lakes-Southeast Service Case, a number of awards were made, including one permitting Delta to extend an existing route northwest so as to provide service from Miami to Detroit and to add Indianapolis and Louisville as intermediate points on its existing Chicago to Miami route. Certain restrictions for the protection of local carriers were imposed on many of the awards, these restrictions generally providing that flights between specified intermediate cities had to originate at or beyond given distant points. The stated purpose of these restrictions was to prevent the long haul carrier from duplicating so-called "turn-around" service already provided by existing local carriers. One such restriction was applied to Delta's run between Detroit and various locations in Ohio but, by and large, Delta's award was free of protective limitations.

The Board's order issued on September 30, 1958, and it specified that Delta's certificate was to become effective on November 29, 1958, unless postponed by the Board prior to that date. Shortly thereafter, within time limits set by the Board,2 numerous petitions for reconsideration

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were filed, including one by Lake Central protecting the breadth of Delta's certificate. Lake Central requested that, if the Board should be unable [81 S.Ct. 1616] to decide its petition for reconsideration before November 29, the effective date of the certificate be put off. On November 28, one day before Delta's certificate was to become effective, the Board issued a lengthy memorandum and order which stated, in substance, that the requests for stays, with one immaterial exception, were denied, but that judgment on the merits of the petitions for reconsideration would be reserved. The Board explained that the parties had not made a sufficient showing of error to justify postponements, and that, in view of the advent of the peak winter season, further delay would be particularly inappropriate; the Board then said:

To the extent that we have considered the petitions for reconsideration in the present order, we have done so only for the purposes of assessing the probability of error in our original decision. We feel that such action is necessary to a fair consideration of the stay requests, and is in no way prejudicial to the legal rights of those parties seeking reconsideration. Nothing in the present order forecloses the Board from full and complete consideration of the pending petitions for reconsideration on their merits.

Page 320

For reasons not presently pertinent, Delta's certificate became effective on December 5,3 rather than November 29, 1958, and Delta commenced its newly authorized operations shortly thereafter. On May 7, 1959, the Board issued a new order disposing of the still-pending petitions for reconsideration. By this order, the Board amended Delta's certificate in response to the restrictions proposed by Lake Central. Specifically, the Board barred Delta's operations between ten pairs of intermediate cities unless the flights initiated at Atlanta or points farther south; the effect of this order was to bar certain flights Delta was then operating. Even then, the Board's action was not final; the Board reserved the power to lift these restrictions pending the outcome of the Great Lakes Local Service Case.4 The Board's disposition of the petitions was taken summarily, without formal notice to the parties or the opportunity for a hearing prior to decision.

Delta sought review of this order before the Board, challenging the Board's power to change the terms of its certificate after the effective date thereof without notice or hearing. The Board overruled Delta's objection, stating that:

[W]e believe we have such power, and we have exercised it in the past. Moreover, there is no showing, and we are unable to conclude, that any significant adverse effect will result to either Delta or the public from observance of the conditions here involved.

On review in the Court of Appeals for the Second Circuit, however,

Page 321

the Board's order was overturned, the court reasoning that Congress had made notice and hearing a prerequisite to the exercise of the Board's power to change an existing certificate. Delta Air Lines, Inc. v. Civil Aeronautics Board, 280 F.2d 43.

The issue in this case is narrow, and can be stated briefly: has Congress authorized the Board to alter, without formal notice or hearing, a certificate of public convenience and necessity once that certificate has gone into effect? If not, should it make any difference that the Board has purported to reserve jurisdiction prior to certification to make summary modifications pursuant to petitions [81 S.Ct. 1617] for reconsideration? We think that both these questions must be answered in the negative.

Whenever a question concerning administrative, or judicial, reconsideration arises, two opposing policies immediately demand recognition: the desirability of finality, on the one hand, and the public interest in reaching that, ultimately, appears to be the right result, on the other.5 Since these policies are in tension, it is necessary

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to reach a compromise in each case, and petitioners have argued at length that the Board's present procedure is a happy resolution of conflicting interests. However, the fact is that the Board is entirely a creature of Congress, and the determinative question is not what the Board thinks it should do, but what Congress has said it can do. See United States v. Seatrain Lines, 329 U.S. 424, 433. Cf. Delta Air Lines v. Summerfield, 347 U.S. 74, 79-80. This proposition becomes clear beyond question when it is noted that Congress has been anything but inattentive to this issue in the acts governing the various administrative agencies. A review of these statutes reveals a wide variety of detailed provisions concerning reconsideration, each one enacted in an attempt to tailor the agency's discretion to the particular problems in the area.6 In this respect, the Federal Aviation Act is no exception since, in § 401(f) and (g) of the Act, Congress has stated the limits of the Board's power to reconsider in unequivocal terms. Section 401(f) provides that

Each certificate shall be effective from the date specified therein, and shall continue in effect until suspended or revoked as hereinafter

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provided.

The phrase "as hereinafter provided" refers to § 401(g), which states:

Authority to Modify, Suspend, or Revoke

(g) The Board upon petition or complaint or upon its own initiative, after notice and hearings, may alter, amend, modify, or suspend any such certificate, in whole or in part, if the public convenience and necessity so require, or may revoke any such certificate, in whole or in part, for intentional failure to comply with any provision of this title or any order, rule, or regulation issued hereunder or any term, condition, or limitation of such certificate: Provided, That no such certificate shall be revoked unless the holder thereof fails to comply, within a reasonable time to be fixed by the Board, with...

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