Island Airlines, Inc., Application of

• Decision Date: 21 June 1963
• Docket Number: No. 4339,4339
• Citation: 47 Haw. 1,384 P.2d 536
• Parties: , 47 Haw. 87, 50 P.U.R.3d 27 Application of ISLAND AIRLINES, INCORPORATED.
• Court: Hawaii Supreme Court

Page 536

384 P.2d 536

47 Haw. 1, 47 Haw. 87, 50 P.U.R.3d 27

Application of ISLAND AIRLINES, INCORPORATED.

No. 4339.

Supreme Court of Hawai'i.

June 21, 1963.

Supplemental Opinion July 22, 1963.

SYLLABUS BY THE COURT.

1. The Public Utilities Commission is required by statute to fix both rates and schedules of air carriers, and these may not be abandoned, changed, modified or departed from without the prior approval of the Commission. R.L.H.1955, § 104-15, as amended.

2. Under R.L.H.1955, §§ 104-6 and 104-14, the Public Utilities Commission has the power and duty, when the circumstances merit such, to examine into, and if necessary effect, compliance with federal law by all available means.

3. It is the duty of the Public Utilities Commission to determine whether the market will support a federally certificated air service and the applicant's as well, when conflicting evidence on this question is introduced after the Commission has rendered a preliminary decision that assumes interstate passengers will avail themselves of the joint-through-fare arrangements of the existing federally certificated air carriers and will not patronize applicant so that applicant will not require federal certification, as in the face of the subsequently received evidence the preliminary decision is inconclusive.

4. Honolulu International Airport is not the point of destination of, for example, Hilo residents homeward bound from California; Hilo's airport is the true destination of their interstate journey. An interisland airline carrying such passengers is engaged in 'air transportation' within the meaning of the Federal Aviation Act of 1958 (49 U.S.C.A. § 1301(10) and (21)) whether such passengers are preticketed or not.

5. Congress has not pre-empted exclusive jurisdiction over air carriers which transport both intrastate and interstate passengers.

6. Absent congressional authority for federal regulation of intrastate rates, they remain under the jurisdiction of the states even though within reach of the federal power if the intrastate rates have a substantial effect on interstate commerce.

Supplemental Opinion

7. Air transportation between the islands of Oahu, Molokai, Lanai, Maui, Hawaii and Kauai is within the jurisdiction of the Public Utilities Commission under Chapter 104, R.L.H.1955.

8. An interisland air carrier does not, merely because of flying interisland, require a federal certificate from the Civil Aeronautics Board under section 401 of the Federal Aviation Act of 1958 (49 U.S.C.A. § 1371). The jurisdiction of the Civil Aeronautics Board over such carrier depends upon the carriage by the carrier of persons or property 'in commerce' between a place in one state and a place in another state within the meaning of the first clause of the definition of 'interstate air transportation' in the Federal Aviation Act of 1958 (49 U.S.C.A. § 1301(21)(a)).

9. All of the economic regulation provisions of Title 49 of the United States Code are laws in pari materia and should be construed together.

10. It is a cardinal rule of statutory construction that significance and effect shall, if possible, be accorded to every word.

11. The word 'place' denotes a definite locality, a specific area with definite physical limits. As used in the Federal Aviation Act of 1958 in the second clause of the definition of 'interstate air transportation' (49 U.S.C.A. § 1301(21)(a)), the words 'over any place' refer to a place which itself has boundaries, not international waters which are a 'no man's land' outside the boundaries of any place.

12. The words 'through the airspace over any place outside thereof' in the clause 'between places in the same State through the airspace over any place outside thereof' (the second clause of the definition of interstate air transportation in the Federal Aviation Act of 1958, 49 U.S.C.A. § 1301(21)(a)), construed with the act as a whole and laws in pari materia, and upon application of other rules of statutory construction, denote passage through the airspace over another state or country having jurisdiction of airspace, not merely passage through airspace outside the State without encountering the sovereignty of any other state or country.

13. An administrative ruling cannot attain the status of having been 'consistent and generally unchallenged' so as to be of persuasive weight in statutory construction under the rule of Norwegian Nitrogen Prods. Co. v. United States, 288 U.S. 294, 315, 53 S.Ct. 350, 77 L.Ed. 796, when there has been no one to challenge it.

14. The legislative history of an act of Congress may be examined in ascertaining the intention of Congress in that act, but interpretation by members of Congress of an earlier act during consideration of the later act before them is not of weight for the purpose of construing the earlier act.

Richard K. Sharpless, Honolulu (Lewis, Buck & Saunders, Honolulu, of counsel), for intervenor-appellant Hawaiian Airlines, Inc.

Herbert Y. C. Choy, Honolulu (Fong, Miho, Choy & Robinson, Honolulu, of counsel), for intervenor-appellant Aloha Airlines, Inc.

Frank D. Padgett, Honolulu (Robertson, Castle & Anthony, Honolulu, of counsel), for applicant-appellee Island Airlines, Inc.

Arthur S. K. Fong, Deputy Atty. Gen. (Bert T. Kobayashi, Atty. Gen., on the brief), for appellee Public Utilities Commission.

O. D. Ozment, Associate Gen. Counsel (Lee Loevinger, Asst. Atty. Gen., Richard A. Solomon, Atty., Dept. of Justice, John H. Wanner, Gen. Counsel, Joseph B. Goldman, Deputy Gen. Counsel, Arthur R. Schor and William F. Becker, Attys., on the brief), for Civil Aeronautics Board, amicus curiae.

Before TSUKIYAMA, C. J., and CASSIDY, WIRTZ, LEWIS and MIZUHA, JJ.

WIRTZ and LEWIS, Justices.

This proceeding originated with an application of Island Airlines, Inc., herein referred to as 'Island' or 'applicant,' which was filed with the Public Utilities Commission on July 11, 1961 and docketed on August 21, 1961, ¹ seeking approval of rates and capitalization for operation of 'a public utility business as a carrier of passengers by air within the State of Hawaii.'

These appeals were taken by intervenors Hawaiian Airlines, Inc. and Aloha Airlines, Inc., herein sometimes referred to as 'Hawaiian' and 'Aloha,' respectively, from Decision and Order No. 1107 of the Public Utilities Commission, filed August 16, 1962, which approved applicant's rates 'for the intrastate transportation of passengers by air between the islands of Oahu, Molokai, Lanai, Maui, Hawaii and Kauai as submitted and amended,' and authorized the proposed capitalization of $250,000. Two matters are involved, first the jurisdiction of the Commission over the application and, second, the manner in which it exercised its jurisdiction.

On October 2, 1961, the intervenors filed motions challenging the jurisdiction of the Commission and seeking dismissal of the application. These motions presented the following grounds:

1. As stated by Aloha: ² 'The proposed flights of the Applicant would be 'between places in the same State through the airspace over any place outside thereof' within the meaning of the Federal Aviation Act of 1958 (72 Stat. 737), 49 U.S.C.A. § 1301, Subsections (10) and 21(a), and would thus be in interstate air transportation without first obtaining a certificate of convenience and necessity from said Board contrary to the prohibition contained in said act (Section 1371).'

2. As further stated by Aloha:2 'Such proposed flights would undoubtedly involve 'the carriage by aircraft of persons or property as a common carrier for compensation * * * in commerce between, respectively----

"(a) a place in any State of the United States, or the District of Columbia, and a place in any other State of the United States, or the District of Columbia; or between places in the same State of the United States through the airspace over any place outside thereof; * * *.' (Section 1301, 21(a) (italics supplied)

contrary to the prohibition above-mentioned contained in said Act.'

3. Hawaiian specifically contends that applicant will be engaged 'in commerce' between a place in one state and a place in another state within the meaning of the Federal Aviation Act of 1958, to such extent as to 'substantially affect interstate commerce;' and that 'the proposed carriage is interstate commerce within the meaning of Article One, Section 8 of the Constitution of the United States, and the consequences of regulation of rates therefor by the State of Hawaii will result in an unreasonable burden on interstate commerce.'

By Decision and Order No. 1089 of December 20, 1961 the Commission sustained its jurisdiction and denied the motions of the intervenors to dismiss the application. The intervenors took interlocutory appeals, which were allowed by the Commission at its hearing of December 14, 1961. It was at this hearing that the Commission orally announced its decision on the motions. After allowing the interlocutory appeals it immediately set the application down for further proceedings. When the interlocutory appeals came before this court, we learned that pending the interlocutory appeals further hearings on the application had indeed been held and were nearing completion. ³ By order entered on May 4, 1962, after briefing and argument on the status of the interlocutory appeals, we ruled that 'even if an interlocutory appeal lies from an order of the Public Utilities Commission, these interlocutory appeals were nonetheless improvidently and improperly allowed * * *' and ordered the same dismissed. See Smythe v. Takara, 26 Haw. 69, 70; McCandless v. Carter, 18 Haw. 218, 219; Fraser v. Morrison, 39 Haw. 370, 376.

Upon argument of the status of the interlocutory appeals questions from the bench called attention to the incompleteness of the second part of Decision and Order No. 1089, where factual matters were and are involved. Unfortunately Decision and Order No. 1107, the final action of the Commission from...