Delta Air Lines, Inc. v. CAB

Decision Date29 June 1960
Docket NumberNo. 248,Docket 25852.,248
Citation280 F.2d 43
PartiesDELTA AIR LINES, INC., Petitioner, v. CIVIL AERONAUTICS BOARD, Respondent, Lake Central Airlines, Inc., et al., Intervenors.
CourtU.S. Court of Appeals — Second Circuit

R. S. Maurer, James W. Callison, Atlanta, Ga. (Frank F. Rox, Atlanta, Ga., of counsel), Legal Division, Delta Air Lines, Inc. for petitioner.

Robert A. Bicks, Acting Asst. Atty. Gen., Richard A. Solomon, Atty., Dept. of Justice; Franklin M. Stone, Gen. Counsel, Civil Aeronautics Bd.; John H. Wanner, Deputy Gen. Counsel; O. D. Ozment, Assoc. Gen. Counsel, Litigation and Research; Morris Chertkov, Atty., Civil Aeronautics Bd., Washington, D. C., for respondent.

Albert F. Grisard, Washington, D. C., for intervenor, Lake Central Airlines, Inc.

Before WATERMAN and MOORE, Circuit Judges, and SMITH, District Judge.

WATERMAN, Circuit Judge.

Petitioner is a certificated trunk-line air carrier possessing routes that, in the main, run from the mid-west to the southeast quarter of the country. The present controversy arises out of the Board's area proceeding known as the "Great Lakes-Southeast Service Case." Other aspects of this same area proceeding were recently before this court in Eastern Air Lines v. C. A. B., 2 Cir., 1959, 271 F.2d 752, 755, certiorari denied 362 U.S. 970, 80 S.Ct. 954, 4 L.Ed.2d 901. For a general description of this "area proceeding" and for a statement of the air transportation the Board had under consideration in the "Great Lakes-Southeast Service Case" we refer to our opinion in Eastern Air Lines v. C. A. B., supra.

In its decision and order in the above area proceeding, Order No. E-13024 of September 30, 1958, the Board added six cities to Delta's pre-existing Route 54, which prior to that time served Chicago and Miami with certain intermediate points, but bypassed Indianapolis. The addition to Delta's authority of the three cities of Columbus, Toledo, and Detroit permitted Delta for the first time to offer service between Miami and Detroit, and for that reason this authority extension was important to the issues presented to this court in Eastern Air Lines v. C. A. B., supra, but it has no bearing on the question now before us. The addition of the three cities of Dayton, Louisville, and Indianapolis permitted Delta for the first time to offer service between these cities and the other cities which lay on its Route 54. Since Indianapolis already was an authorized intermediate point on Delta's Route 8 between New Orleans and Detroit, the inclusion of Indianapolis as an intermediate point on Route 54 had the additional effect, which the Board recognized and approved, of permitting Delta on the same flight, provided that the flight stopped at Indianapolis, to serve cities on both of these routes.1 By the Board's September 30 order Delta's new certificate, incorporating this additional authority, was to become effective on November 29, with the proviso that prior thereto the Board might extend that effective date upon its own initiative or upon a petition for reconsideration of the Board's September 30 order. The new certificates of other carriers who had received new authorizations under the "Great Lakes-Southeast Service" decision had the same effective date and were subject to the same proviso.

Numerous petitions for reconsideration were indeed filed. Included among these were petitions by Lake Central Airlines, Inc. and Piedmont Aviation, Inc., two local service carriers. The new route applications of all local service carriers had been excluded by the Board from the "Great Lakes-Southeast Service Case," the Board stating that it would consider them later in a separate proceeding. The local service carriers, however, were permitted to intervene to present evidence as to the effect that an award to a trunkline carrier might have upon the local service carriers' present or contemplated operations. In their petitions for reconsideration Lake Central and Piedmont sought, inter alia, to have restrictions imposed on Delta's service between ten pairs of cities2 which, as a result of the addition of Indianapolis, Louisville and Dayton to Route 54, Delta would be able to serve without restriction under the certificate authorized by the Board's September 30 decision. Lake Central's petition contained a request to stay the effective date of Delta's certificate. By order No. E-13190, dated November 21, the Board stayed the effectiveness of Delta's certificate for the period to and including December 6 for the convenience of this court in considering Eastern's request for a judicial stay. Two other certificates were also stayed for this reason. On November 28, 1958 the Board issued Order No. E-13211, which, with one exception,3 refused to stay the effective date of any new certificate beyond December 7. The Board assigned two interrelated reasons for its refusal to grant further stays. First, the Board found that the various reconsideration petitions did not make sufficient showings of probable legal error or abuse of discretion. Second, the Board wished to have the new services inaugurated in time for the peak period of winter travel. The Board's opinion in Order No. E-13211 closed with the statement that the order was not a disposition of the several petitions for reconsideration on their merits.4

On December 4 this court denied Eastern's request for a judicial stay, and, in recognition thereof, on December 5 the Board by Order No. E-13245 dissolved the stay imposed by Order No. E-13190. Accordingly, on December 5, 1958, Delta's certificate became effective. On January 1, 1959, pursuant to schedules filed with the Board, Delta inaugurated service between Chicago and Indianapolis, with flights continuing beyond Indianapolis southward to Evansville, Indiana, a city Delta was authorized to service on its previously established Route 8.

On May 7, 1959 the Board issued the order here complained of, Order No. E-13835.5 This order constituted the Board's formal disposition of the various petitions for its reconsideration of the September 30 decision. This order modified the former decision. One modification was that restrictions were imposed on Delta's service between the ten pairs of cities set forth in footnote 2, supra, so that a Delta flight serving any of the pairs of cities was required to originate at Atlanta or at a point on Route 54 south thereof.6 One effect of the restrictions was to forbid the service Delta had inaugurated between Evansville and Chicago via Indianapolis unless that flight began at Atlanta and proceeded on a circuitous routing through Memphis.

The issue here is whether, on the above facts, the Board had power to alter Delta's certificate without resort to a modification proceeding under Section 401(g) of the Act, 49 U.S.C.A. § 1371(g).7 It is the Board's contention that it may modify a certificate subsequent to the effective date of the certificate in the course of passing upon timely filed petitions for reconsideration of the award contained therein; and that the proceedings provided for in Section 401(g) only need to be followed after the Board has finally disposed of these petitions for reconsideration. We disagree.

Section 401(f), relating to the effective date and duration of an air carrier's certificate of public convenience and necessity provides as follows: "Each certificate shall be effective from the date specified therein, and shall continue in effect until suspended or revoked as hereinafter provided * * *"8 (Italics supplied.) The phrase "as hereinafter provided" would appear to require our rejection of the Board's argument that it has some form of implied power to alter the authority conferred in an effective certificate. Section 401(g) is the only section of the Act expressly dealing with the modification of certificates. The Board maintains that power to modify an effective certificate can be found in Section 204(a), 49 U.S.C.A. § 1324(a), but this argument is almost identical to the position taken by the Interstate Commerce Commission in United States v. Seatrain Lines, 1947, 329 U.S. 424, 67 S.Ct. 435, 91 L.Ed. 396, and there rejected by the Supreme Court, supra, 329 U.S. at pages 432-433, 67 S.Ct. at page 439. This holding of the Supreme Court in Seatrain is likewise fully dispositive of any Board reliance upon Section 1005(d), 49 U.S. C.A. § 1485(d) as express statutory support for its position.

Save for the exceptions in Section 401(f) set forth in footnote 8, supra, Sections 401(f) and 401(g) are patterned very closely upon Section 212(a) of Part II of the Interstate Commerce Act, 49 U.S.C.A. § 312(a). In Smith Bros., Revocation of Certificate, 33 MCC 465, 472 (1942), the Interstate Commerce Commission in construing Section 212(a) announced the following principle: "We may issue decision upon decision, and order upon order, on an application for a certificate so long as sufficient reason therefor appears and until all controversy is determined, but once a certificate, duly and regularly issued, becomes effective, our authority to terminate it is expressly marked off and limited." The Board makes a futile effort to distinguish the Smith Bros. case on the ground that a revocation of a certificate is more closely circumscribed by statute than a certificate's modification. Under both Sections 212(a) of Part II of the Interstate Commerce Act and Section 401(g) of the Federal Aviation Act modification differs from revocation only as to the matters the Commission or Board must demonstrate once a proper proceeding has been instituted. The statutory requirement to institute a proceeding is the same whether the certificate is to be modified or revoked. The Smith Bros. case has been frequently cited with apparent approval in the Supreme Court and other federal courts. We follow it, believing its principle to be as applicable to the Federal Aviation Act as to Part II of the Interstate Commerce Act...

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3 cases
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