Delta Air Lines v. Summerfield Civil Aeronautics Board v. Summerfield, Nos. 222

CourtUnited States Supreme Court
Writing for the CourtDOUGLAS
Citation347 U.S. 74,74 S.Ct. 350,98 L.Ed. 513
PartiesDELTA AIR LINES, Inc. v. SUMMERFIELD, Postmaster General et al. CIVIL AERONAUTICS BOARD v. SUMMERFIELD, Postmaster General et al
Docket NumberNos. 222,223
Decision Date01 February 1954

347 U.S. 74
74 S.Ct. 350
98 L.Ed. 513
DELTA AIR LINES, Inc.

v.

SUMMERFIELD, Postmaster General et al. CIVIL AERONAUTICS BOARD v. SUMMERFIELD, Postmaster General et al.

Nos. 222, 223.
Argued Dec. 9, 10, 1953.
Decided Feb. 1, 1954.

Mr. Emory T. Nunneley, Jr., Washington, D.C., for C.A.B.

Page 75

Mr. L. Welch Pogue, Washington, D.C., for Delta Air Lines.

Mr. Hugh W. Darling, Los Angeles, Cal., for Western Air Lines.

Mr. Daniel Friedman, for Summerfield et al.

Mr. Justice DOUGLAS delivered the opinion of the Court.

Delta Air Lines, petitioner in No. 223, is the successor by merger to Chicago and Southern Air Lines (C & S). C & § was an air carrier which conducted both domestic and foreign operations prior to the merger. The present case involves subsidy mail pay for its foreign operations from 1946 through 1950.

In 1948 the Board, on applications made by C & § in 1944 and 1945, fixed a prospective annual subsidy for its domestic operations beginning January 1, 1948, which the Board Estimated would yield a net return after taxes of 7.4 percent on that part of its investment allocable to those operations. 9 C.A.B. 786. The following three years—1948, 1949, and 1950—the rates in operation produced a subsidy of more than $654,000 in excess of a 7.4 percent return.

In 1946 C & § applied for subsidy mail pay on its Latin American routes. On October 18, 1951, the Board issued its opinion and order. Rates were fixed retroactively from November 1, 1946, to December 15, 1950, and prospectively from December 16, 1950. The subsidy awarded was designed to give the carrier a 7 percent re-

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turn, on the property. allocable to foreign operations, after taxes for the past period, and 10 percent for the future. 14 C.A.B. 681.

In fixing the subsidy for the past period the Board refused to offset against the carrier's need for foreign operations the excess earnings on its domestic flights. It gave two 'considerations of economic policy' for that position. 1 First, the Board said it would put

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an 'unjustifiable strain' on domestic operations if the latter were required to carry the international operations. Second, it concluded that regulatory ends would be better served by maintaining 'the comparative status between those domestic operators which have foreign routes as against those which do not have foreign routes.'

On the Postmaster General's petition for review the Court of Appeals reversed the Board. 92 U.S.App.D.C. 256, 207 F.2d 207. The cases are here on certiorari and were argued with 347 U.S. 67, 74 S.Ct. 347.

As we have already noted in the companion cases, § 406(a) of the Civil Aeronautics Act, 52 Stat. 998, 49 U.S.C. § 486(a), 49 U.S.C.A. § 486(a), directs the Board to fix 'fair and reasonable rates of compensation for the transportation of mail by aircraft'. Section 406(b) provides that the Board in determining those rates

'shall take into consideration, among other factors, * * * the need of each such air carrier for compensation for the transportation of mail sufficient to insure the performance of such service, and, together with all other revenue of the air carrier, to enable such air carrier under honest, economical, and efficient management, to maintain and continue the development

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of air transportation to the extent and of the character and quality required for the commerce of the United States, the Postal Service, and the national defense.'

The mandate is that the Board 'shall take into consideration' what 'the need' of the carrier is. The Act thus poses as the initial question for the Board whether the financial condition of the carrier is such that it needs a subsidy or has no need for one. The Board did not find that Delta had a 'need' for an additional $654,000. It merely concluded that those exces domestic profits should not 'as a matter of economic policy' be taken into account in computing a subsidy for international operations. In that posture the decision of the Board seems not in conformity with the law.

The Board answers to the effect that under § 406(b) it 'may fix different rates for different air carriers or classes of air carriers, and different classes of service.' It may, therefore, fix a rate for international service. Since it may do that, it may, consistently with rate-making decisions (see, e.g., American Toll Bridge Co. v. Railroad Commission, 307 U.S. 486, 494, 59 S.Ct. 948, 953, 83 L.Ed. 1414) fix the rate at a level which will sustain the particular unit. Therefore the Board need do no more...

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13 practice notes
  • Trans World Airlines, Inc. v. CAB, No. 19408.
    • United States
    • United States Courts of Appeals. United States Court of Appeals (District of Columbia)
    • September 12, 1967
    ...2 Transatlantic Final Mail Rate Case, C.A.B. Dkt. No. 1706 et al. Initial Decision of R. Vernon Radcliffe, Examiner (March 26, 1954). 3 347 U.S. 74, 74 S.Ct. 350, 98 L.Ed. 513 4 Reopened Transatlantic Final Mail Rate Case, C.A.B. Dkt. No. 1706 et al. Order E-8672 (September 29, 1954). 5 The......
  • American Airlines, Inc. v. CAB, No. 72-1741
    • United States
    • United States Courts of Appeals. United States Court of Appeals (District of Columbia)
    • March 29, 1974
    ...The requirement is that the Board offset all of a carrier\'s revenues in determining the subsidy. Delta Airlines, Inc. v. Summerfield, 347 U.S. 74, 79, 74 S.Ct. 350, 353, 98 L.Ed. 513 (1954). See also Western Air Lines, Inc. v. CAB, 347 U.S. 67, 74 S.Ct. 347, 98 L.Ed. 508 (1954). Similarly,......
  • Jacobson v. Delta Airlines, Inc., No. CA
    • United States
    • United States Courts of Appeals. United States Court of Appeals (9th Circuit)
    • September 18, 1984
    ...(1976). He also cites a number of cases referring to payments under section 406 as "subsidies." See Delta Air Lines v. Summerfield, 347 U.S. 74, 74 S.Ct. 350, 98 L.Ed. 513 (1954); Delta Air Lines, Inc. v. CAB, 280 F.2d 636, 638 (D.C.Cir.1960); American Overseas Airlines v. CAB, 254 F.2d 744......
  • Civil Aeronautics Board v. Delta Air Lines, Inc Lake Central Airlines, Inc v. Delta Air Lines, Inc, Nos. 492 and 493
    • United States
    • United States Supreme Court
    • June 12, 1961
    ...it can do. See United States v. Seatrain Lines, 329 U.S. 424, 433, 67 S.Ct. 435, 439, 91 L.Ed. 396. Cf. Delta Air Lines v. Summerfield, 347 U.S. 74, 79—80, 74 S.Ct. 350, 353—354, 98 L.Ed. 513. This proposition becomes clear beyond question when it is noted that Congress has been anything bu......
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13 cases
  • Trans World Airlines, Inc. v. CAB, No. 19408.
    • United States
    • United States Courts of Appeals. United States Court of Appeals (District of Columbia)
    • September 12, 1967
    ...2 Transatlantic Final Mail Rate Case, C.A.B. Dkt. No. 1706 et al. Initial Decision of R. Vernon Radcliffe, Examiner (March 26, 1954). 3 347 U.S. 74, 74 S.Ct. 350, 98 L.Ed. 513 4 Reopened Transatlantic Final Mail Rate Case, C.A.B. Dkt. No. 1706 et al. Order E-8672 (September 29, 1954). 5 The......
  • American Airlines, Inc. v. CAB, No. 72-1741
    • United States
    • United States Courts of Appeals. United States Court of Appeals (District of Columbia)
    • March 29, 1974
    ...The requirement is that the Board offset all of a carrier\'s revenues in determining the subsidy. Delta Airlines, Inc. v. Summerfield, 347 U.S. 74, 79, 74 S.Ct. 350, 353, 98 L.Ed. 513 (1954). See also Western Air Lines, Inc. v. CAB, 347 U.S. 67, 74 S.Ct. 347, 98 L.Ed. 508 (1954). Similarly,......
  • Jacobson v. Delta Airlines, Inc., No. CA
    • United States
    • United States Courts of Appeals. United States Court of Appeals (9th Circuit)
    • September 18, 1984
    ...(1976). He also cites a number of cases referring to payments under section 406 as "subsidies." See Delta Air Lines v. Summerfield, 347 U.S. 74, 74 S.Ct. 350, 98 L.Ed. 513 (1954); Delta Air Lines, Inc. v. CAB, 280 F.2d 636, 638 (D.C.Cir.1960); American Overseas Airlines v. CAB, 254 F.2d 744......
  • Civil Aeronautics Board v. Delta Air Lines, Inc Lake Central Airlines, Inc v. Delta Air Lines, Inc, Nos. 492 and 493
    • United States
    • United States Supreme Court
    • June 12, 1961
    ...it can do. See United States v. Seatrain Lines, 329 U.S. 424, 433, 67 S.Ct. 435, 439, 91 L.Ed. 396. Cf. Delta Air Lines v. Summerfield, 347 U.S. 74, 79—80, 74 S.Ct. 350, 353—354, 98 L.Ed. 513. This proposition becomes clear beyond question when it is noted that Congress has been anything bu......
  • Request a trial to view additional results

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