Eastern Air Lines, Inc. v. Civil Aeronautics Board

Citation271 F.2d 752
Decision Date07 October 1959
Docket Number344,No. 341,342,Docket 25422,25532.,25434,341
PartiesEASTERN AIR LINES, INC., Capitol Airways, Inc., City of Nashville and the Nashville Chamber of Commerce, Petitioners, v. CIVIL AERONAUTICS BOARD, Respondent, Delta Air Lines, Inc., Northwest Airlines, Inc., Capital Airlines, Inc., et al., Intervenors.
CourtUnited States Courts of Appeals. United States Court of Appeals (2nd Circuit)

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Harold L. Russell, Atlanta, Ga. (Gambrell, Harlan, Russell, Moye & Richardson, E. Smythe Gambrell, James H. Bratton, Jr., and Allison Wade, Atlanta, Ga., of counsel), for Eastern Air Lines, Inc.

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

C. Frank Reavis, New York City (Hodges, Reavis, McGrath & Downey, Robert Thrun, Frederick R. Adler, Richard B. Smith, New York City; Leasure & Pendleton, Washington, D. C., of counsel), for Northwest Airlines, Inc.

Robert B. Hankins, Macon M. Arthur, Washington, D. C. (Adair, Ulmer, Murchison, Kent & Ashby, Jacksonville, Fla., Charles H. Murchison, Jacksonville, Fla., James H. Bastian, Washington, D. C., of counsel), for Capital Airlines, Inc.

Coates Lear, Lloyd Fletcher, Washington, D. C., for Capitol Airways, Inc.

D. L. Lansden, Lawrence Dortch, Nashville, Tenn., Robert Redding, Silver Spring, Md. (Howard F. Cerny, New York City, Waller, Davis & Lansden, Nashville, Tenn., of counsel), for City of Nashville and Nashville Chamber of Commerce.

Edmund A. Stephan, Robert L. Stern, Floyd M. Rett, Chicago, Ill. (Mayer, Friedlich, Spiess, Tierney, Brown & Platt, Chicago, Ill., of counsel), for United Air Lines, Inc.

Victor R. Hansen, Asst. Atty. Gen., Richard A. Solomon, Atty., Dept. of Justice, Franklin M. Stone, Gen. Counsel, CAB, John H. Wanner, Assoc. Gen. Counsel; O. D. Ozment, Asst. Gen. Counsel, Morris Chertkov, Monte Lazarus, Ulrich V. Hoffmann, Attys., CAB, Washington, D. C., for Civil Aeronautics Board.

Paul L. Adams, Atty. Gen., of the State of Michigan, Robert G. Howlett, Spec. Asst. Atty. Gen., Grand Rapids, Mich., for Michigan Department of Aeronautics.

Before CLARK, Chief Judge, LUMBARD and WATERMAN, Circuit Judges.

WATERMAN, Circuit Judge.

Presented here for our decision are three separate petitions for review of orders of the Civil Aeronautics Board1 arising out of the "Great Lakes-South-east Service Case."2 These orders marked the culmination of an extensive hearing3 on new route applications for service between points in a specified geographic area of the Middle West on the one hand and Florida on the other. The Board's ultimate decision, insofar as pertinent to this opinion, was as follows: Northwest Airlines was awarded a route between Miami and Chicago; the authority of Delta Air Lines was extended so as to permit Miami-Detroit service; and that of Capital Airlines4 was extended so as to confer upon it authority to render service between Miami and the three cities of Cleveland, Pittsburgh, and Buffalo. Prior to these awards the route between Miami and Chicago was served by both Delta and Eastern Air Lines; Eastern offered the only single-carrier service between Miami and the cities of Detroit, Cleveland and Pittsburgh;5 and between Miami and Buffalo there was no direct service. Petitioners are as follows: Eastern, which objects to all three awards; Capitol Airways,6 an unsuccessful applicant for the Miami-Chicago and Miami-Detroit routes, which objects to the Board decision as to these routes; and the City of Nashville, Tennessee, which objects to the fact that the Board drew the geographical boundaries of the "area proceeding" in such a manner that service to and from Nashville was excluded from consideration.

Eastern

Eastern's primary contention is that the Board has violated the principle of Ashbacker Radio Corp. v. FCC, 1945, 326 U.S. 327, 66 S.Ct. 148, 90 L.Ed. 108, in failing to consolidate in this "Great Lakes-Southeast Service Case" an Eastern application for extension of its route authority from Chicago to Minneapolis/St. Paul so that this extension application would be considered along with the proposals by the other carriers for new service between Chicago and Miami. By its consolidation order E-9734, issued November 16, 1955, the Board eliminated from consideration in the proceeding all applications for service to areas north and west of Chicago. Eastern points out that, under the award here objected to, Northwest, which was previously certificated for service between Minneapolis/St. Paul and Chicago, will now be permitted to conduct direct service between Minneapolis/St. Paul and Miami.7 Eastern further points out that its application for extension from Chicago to Minneapolis/St. Paul, filed eight years before Northwest's application for Chicago-Miami authority and contemplating exactly the same Miami-Minneapolis/St. Paul service as the Board has here awarded Northwest, was not given simultaneous, comparative consideration. Eastern contends that certification of Northwest for Miami-Minneapolis/St. Paul service will as a matter of economic fact preclude certification of Eastern for that same service. Thus Eastern contends that the Board's procedure has violated the Ashbacker principle.8

Ashbacker Radio Corp. v. FCC, supra, involved two applications for the construction of radio stations. The stations planned to operate at the same frequency and were located in cities less than fifty miles apart. The Federal Communications Commission found that these two applications as a matter of physical fact were mutually exclusive and thereupon granted one application without hearing and relegated the second to a hearing to be held later. The Supreme Court reversed the Commission, holding, as a matter of statutory construction, that two mutually exclusive applications must be granted a concurrent hearing. Although Ashbacker dealt only with physical exclusivity its doctrine soon found its way into aeronautical law, and was applied to applications for the same routes which were mutually exclusive "as a matter of economic fact." Northwest Airlines v. CAB, 1952, 90 U.S.App. D.C. 158, 194 F.2d 339; Delta Air Lines v. CAB, 1955, 97 U.S.App.D.C. 46, 228 F.2d 17. See also Seaboard & Western Airlines, v. CAB, 1949, 86 U.S.App. D.C. 9, 181 F.2d 777; Western Air Lines v. CAB, 9 Cir., 1950, 184 F.2d 545.

On the other hand, it also seems clear that although a given award may adversely affect competitors' applications for other routes, this possible adverse effect of itself does not create an Ashbacker situation. Rather mutual exclusivity must be established. In this and other area proceedings, when faced with the protests of carriers who have applied for routes outside the geographic limits of the Board's consolidation order, the Board has adhered to the practice of permitting these carriers to intervene and contest the issue of mutual exclusivity. This procedure was expressly approved in National Airlines v. CAB, 1952, 101 U.S.App.D.C. 345, 249 F.2d 13. It was followed scrupulously in the present case. Eastern was afforded an ample opportunity to present evidence on the issue of exclusivity. It presented none.9 This failure to make any showing of mutual exclusivity is fatal to Eastern's Ashbacker contentions. The cases which have dealt with this problem clearly suggest that it is incumbent upon the applicant asserting mutual exclusivity to substantiate the claim before the agency. Delta Air Lines v. CAB, supra; National Air Lines v. CAB, supra. We hold that in an area proceeding where an applicant objects to exclusion of his application by a consolidation order, and does not submit evidence in support of his objection, the agency may treat the objection as not having been made.

Second, Eastern points to three instances that it claims are such departures from orderly administrative procedure as to vitiate the Board's action. Eastern's contentions, which will be discussed in turn, relate to (1) a "press release" announcing the Board's tentative decision and released six months before the Board's opinion; (2) participation by assistants of Board members at Board meetings in which tentative awards were made; (3) receipt by the Board immediately prior to oral argument of alleged ex parte representations concerning an equipment program commenced by Capital Airlines, the carrier ultimately awarded authority between the cities of Miami and Cleveland, Pittsburgh and Buffalo.

Pursuant to a policy begun at some time more than two years ago, the Board, approximately two months after the completion of oral argument, issued a "press release" announcing the route awards it was granting in the Great Lakes-Southeast Service Case. The press release expressly stated that the announcement of the awards did not constitute decisions in the case but that decisions would be entered and issued later. We construe this language to mean that the announced awards did not constitute final determinations but were tentative only, and that there were to be no definitive awards until the issuance of the Board's formal opinion.10 The awards conferred by the Board's formal opinion, however, coincided exactly with those announced in the previous press release. Eastern claims that in effect this practice amounts to a prejudgment, in that the opinion, written six months subsequently, represents nothing more than a rationalization of conclusions previously reached; and that, therefore, the opinion is a nullity even if otherwise legally sufficient. We do not mean to express approval of the Board's practice of making public its tentative decisions. We only indicate that Eastern's claim of prejudgment is unsound. Eastern does not contend that the interval between the completion of oral argument and the Board's tentative decision was so short that it precluded thoughtful consideration of the evidence presented. Moreover, if the careful marshaling of...

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