Frontier Airlines, Inc., Application of
| Decision Date | 05 July 1963 |
| Docket Number | No. 35315,35315 |
| Parties | Application of FRONTIER AIRLINES, INC., for an Order declaring no jurisdiction, or, in the alternative, for an Order Authorizing Suspension and Discontinuation of Service over Sagment 13. FRONTIER AIRLINES, INC., Appellant, v. NEBRASKA DEPARTMENT OF AERONAUTICS et al., Appellees. |
| Court | Nebraska Supreme Court |
Syllabus by the Court
1. The power of Congress to regulate commerce among the several states and with foreign nations is supreme and plenary; it is complete in itself and knows no limitations except the prohibitions and limitations of the United States Constitution and its amendments.
2. Wherever interstate and intrastate transactions are so related that the government of the one involves the control of the other, it is Congress, and not the state, that is entitled to prescribe the final and dominant rule, for otherwise Congress would be denied the exercise of its constitutional authority and the state, and not the nation, would be supreme within the national field.
3. Although activities may be intrastate in character when separately considered, if they have such a close and substantial relation to interstate commerce that their control is essential or appropriate to protect that commerce from burdens and obstructions, Congress cannot be denied the power to exercise that control.
4. While Congress cannot delegate power to regulate foreign or interstate commerce to a state or municipal corporation, it may leave certain matters or details to officers, departments, or commissions without violating the rule.
5. The execution by Congress of its power to regulate interstate commerce is not limited by the fact that intrastate transactions may have become so interwoven therewith that the effective control of interstate commerce by the federal Congress incidentally controls intrastate commerce.
6. It appears that Congress has pre-empted the field of interstate air transportation in regard to the routes and points to be served by interstate air carriers to the exclusion of conflicting regulation by the states.
7. The Nebraska State Railway Commission lacks authority to compel a carrier licensed by the Civil Aeronautics Board to continue operations over a segment which that board has authorized to be discontinued, since the federal authority is paramount in this area and the conflicting directive of the state's agency interferes with the national policy.
Marti, O'Gara, Dalton & Sheldon, Lincoln, William A. Nelson, Denver, Colo., for appellant.
Clarence A. H. Meyer, Atty. Gen., Lincoln, Rush C. Clarke, Special Asst. Atty. Gen., North Platte, Bevin B. Bump, Chadron, John C. Coupland, Valentine, John B. Cassel, Ainsworth, Andrew D. Mapes, Norfolk, Henry L. Holst, Lincoln, Harry C. Sundblad, Omaha, for appellees.
John E. Stephen, James E. Landry, Lee Loevinger, Lionel Kestenbaum, Michael I. Miller, John H. Wanner, Joseph B. Goldman, O. D. Ozment, Arthur R. Schor, Washington, D. C., amicus curiae.
Heard before WHITE, C. J., and CARTER, MESSMORE, YEAGER, SPENCER, BOSLAUGH, and BROWER, JJ.
This proceeding was commenced on March 22, 1961, by the filing of an application by Frontier Airlines, Inc., before the Nebraska State Railway Commission. The application requested that the commission disclaim any jurisdiction over the matter of discontinuance of service over applicant's segment No. 13; and in the alternative that the commission authorize the discontinuance of that service.
The Department of Aeronautics of the State of Nebraska; the cities of Chadron, Valentine, Ainsworth, Norfolk, and Lincoln, Nebraska; the Chambers of Commerce of Valentine, and Norfolk; and the Airport Authority of the city of Lincoln, filed protests to the granting of said application.
For convenience at times hereafter the Frontier Airlines, Inc., will be referred to as the applicant or Frontier; the protestants as such; and the Nebraska State Railway Commission as the commission.
The commission conducted extensive hearings in Ainsworth, Nebraska, during June and August of 1961, and a supplemental hearing at Lincoln, Nebraska, on January 5, 1962. On April 6, 1962, the commission entered its order denying the application in its entirety.
Frontier thereafter timely filed its motion for a rehearing which was overruled by the commission on May 2, 1962. Thereafter, Frontier brought the matter to this court on appeal.
Frontier is engaged in interstate commerce as a common carrier of persons, property, and mail. The whole system which it operates is properly described as its 'route.' The route consists of numerous segments, which together serve portions of the States of Arizona, New Mexico, Utah, Colorado, Wyoming, Montana, North Dakota, South Dakota, Missouri, Kansas and Nebraska.
The route segments over which Frontier operates were established by virtue of a certificate of public convenience and necessity issued by the Civil Aeronautics Board, which for convenience will at times be referred to herein as the Federal Board, pursuant to the provisions of the Federal Aviation Act of 1958, 49 U.S.C.A. § 1301 et seq. Applicant's total system is designated by the Federal Board as Route No. 73. The particular segment involved herein is No. 13 which, according to the certificate extended between Omaha, Nebraska, and Casper, Wyoming, via the intermediate points of Lincoln, Columbus, Norfolk, Ainsworth, Valentine, and Chadron in Nebraska, and Douglas and Lusk in Wyoming.
Applicant's certificate of public convenience and necessity was issued by the Federal Board on December 8, 1958. It reflected amendments to a prior certificate authorized by it also. The order was entered at the conclusion of an extended hearing generally called the Seven States Area Investigation, a proceeding in which the State of Nebraska and some, but not all, of the present protestants participated. The service authorized by that board clearly appeared from its order to be on an experimental basis in order to extend local service to small communities with unknown or marginal traffic potentialities contingent upon there being sufficient service to justify the heavy expenditures of federal subsidy, which would be required and which are authorized under 49 U.S.C.A. section 1376, subsection (b), which reads in part: 'In determining the rate in each case, the Board shall take into consideration, among other factors, (1) the condition that such air carriers may hold and operate under certificates authorizing the carriage of mail only by providing necessary and adequate facilities and service for the transportation of mail; (2) such standards respecting the character and quality of service to be rendered by air carriers as may be prescribed by or pursuant to law; and (3) the need of each such air carrier (other than a supplemental 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 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 Federal Board's order contained the following provisions:
'Keeping in mind the extensive new services awarded in the Seven States area at considerable expense to the carriers and the Government, we are adopting a companion policy looking toward an early and critical reassessment of the traffic results of the new authorizations to see whether the cities are making sufficient use of the air service they requested or should lose it. Specifically, under our 'use it or lose it' policy, each city will be required to meet a minimum standard of use, e. g., enplane an average of five or more passengers daily. Unless a city enplanes an average of at least five passengers daily for the 12 months following the initial six months of service, we will, in the absence of unusual or compelling circumstances, institute a formal investigation to determine whether that city should lose its air service for lack of use. This policy will be applicable regardless of whether the city has been certificated for a temporary or an indefinite period. And, it must be emphasized that those cities enplaning the bare minimum--an average of five daily passengers during the trial period--should not assume that continued air service for them is assured. * * *
* * *
The Federal Board, in appendix H attached to its decision and order, estimated the total revenue to be obtained in the future from all service revenue on segment No. 13 to be annually $503,461; and that the total annual expenses of the operation would be $782,687, requiring $279,226 to break even. It also estimated the return element for Frontier on its investment should be $37,335, and that the total mail subsidy needed from the United States for the operation of segment No. 13 would be $279,226 per year.
Frontier had prior to the making...
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