Consolidated Flower Shipments v. Civil Aeronautics Bd.
| Decision Date | 03 August 1954 |
| Docket Number | No. 13727.,13727. |
| Citation | 213 F.2d 814 |
| Parties | CONSOLIDATED FLOWER SHIPMENTS, Inc.—BAY AREA v. CIVIL AERONAUTICS BOARD et al. |
| Court | U.S. Court of Appeals — Ninth Circuit |
Antonio J. Gaudio, South San Francisco, Cal., for petitioner.
Stanley N. Barnes, Asst. Atty. Gen., Ralph S. Spritzer, Special Asst. to Atty. Gen., John H. Wanner, Associate General Counsel, Civil Aeronautics Board, Emory T. Nunneley, Jr., General Counsel, James L. Highsaw, Jr., Chief, Litigation & Research Division, O. D. Ozment, Henry M. Switkay, Attys., Civil Aeronautics Board, Washington, D. C., for respondent, Civil Aeronautics Board.
Paul T. Wolf, San Francisco, Cal., for Airborne Flower and Freight Traffic, Inc., respondent.
Before HEALY, ORR and CHAMBERS, Circuit Judges.
In the San Francisco Bay area the growing and marketing of flowers is a substantial business. Air freight transportation has enabled the growers in recent years to sell their flowers in markets formerly denied them.
This case is concerned with some of the aspects of the interstate shipment by air of flowers.1 The grower, of course, could do business directly with an air carrier without using an air freight forwarder, but if he did so he would be shipping his commodity without the advantage of the better rates one can obtain with a larger bulk. Freight forwarders have been long familiar in the rail and trucking industries, gathering small lots together for shipment and shipping the aggregate at the better rates available for quantity, thus making money for themselves and offering an attractive money saving service to customers. Freight forwarders or consolidators are finding they can render a service in connection with air freight which is attractive to shippers and especially so to growers and shippers of fresh flowers. The conventional type of consolidator-forwarder would seem to be the respondent, Airborne Flower and Freight Traffic, Inc., which has submitted itself to regulation by the Civil Aeronautics Board under the Civil Aeronautics Act and regulations issued thereunder.
Consolidated Flower Shipments, Inc., Bay Area,2 is a cooperative shipping organization which has a membership and not a corporate stock base. It was started as a plain California corporation, but was later specially reincorporated as a non-profit cooperative association under the Agricultural Code of the State of California. Its exclusive business seems to be to accomplish in the shipment of flowers what the conventional freight forwarder generally does. However, the method of handling charges for its members (to whom its service is restricted) is somewhat different. The petitioner cooperative (Bay Area) has a uniform advance charge for the pick-up of the boxes of flowers from members. This charge covers the drayage to the local airport. If savings are effected by consolidating shipments, which ordinarily at destination requires breaking bulk, the saving, or some of it, accrues to the member-shipper.
From the record, it appears that the petitioning cooperative (Bay Area) has rendered a popular service, now controlling over half of the shipments of flowers out of the San Francisco Bay area.
Nothing has been suggested that would prevent the petitioner herein from taking the necessary steps required by the Civil Aeronautics Act and the regulations of the Civil Aeronautics Board to qualify as a freight forwarder.3 But it doesn't want to qualify, obtain a proper certificate or authority to do business and be regulated.4
Petitioner is not confronted with such a problem as getting certificated to run another commercial passenger service into Denver or Kansas City, or certificated to carry passengers nonstop, San Francisco to New York. Presently, in indirect carriage, there would seem to be no limit on the number who can qualify and operate as air freight forwarders.
The Civil Aeronautics Board initiated its own investigation on April 9, 1951, to ascertain if the cooperative (Bay Area) has engaged or is engaging indirectly in air transportation, not being legally qualified to do so. Then followed before the Board a complaint against the cooperative filed by the respondent, Airborne Flower and Freight Traffic, Inc. The two matters were consolidated for hearing before the Board and resulted eventually in a single order by the Board that the cooperative (Bay Area) should cease and desist from engaging indirectly in air transportation in violation of the Civil Aeronautics Act, 49 U.S.C.A. § 401 et seq.
The cooperative (Bay Area) brings the Board's order here for review.
This court cannot reappraise the evidence, but may look to see if there was substantial evidence to support the order of the Civil Aeronautics Board, may review the Board's legal conclusions and may see if the Board abused its discretion. The petitioner (Bay Area) complains that the Board's order, in saying the equivalent of "stop breaking the law," is too general. This last contention may be examined here.
There seems to be little dispute as to the factual character of plaintiff's operation. But is it inside or outside the ambit of regulation by the Civil Aeronautics Board?
In many places in the law, cooperatives, especially agricultural cooperatives, have been given special consideration. It is not for us to decide here, but it seems that if the petitioner (the cooperative) were operating in the field of rail or motor transportation, it would be exempt from regulation by the Interstate Commerce Commission under the Interstate Commerce Act. 49 U.S.C.A. § 1002. See U. S. v. Pacific Coast Wholesalers' Ass'n, 338 U.S. 689, 70 S.Ct. 411, 94 L.Ed. 474. But no special exception for cooperatives or agricultural freight forwarders appears in the Civil Aeronautics Act.
It is the function of this court to read the Civil Aeronautics Act as it is. The Congress can make exceptions.
Freight forwarders in interstate commerce in the rail and motor fields were subjected to regulation by the Interstate Commerce Commission in 1942. 49 U.S. C.A. § 1001 et seq. See Acme Fast Freight, Inc., v. Chicago, M. St. P. & P. R. Co., 2 Cir., 166 F.2d 778. The 1942 act as amended (amendments to Interstate Commerce Act) expressly grants certain agricultural cooperative associations and non-profit associations who are consolidating or distributing freight specific exemption from regulation. No contention is here made that the United States does not have the power to regulate freight forwarders in the rail...
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