Island Airlines, Inc., In re
| Citation | 361 P.2d 390,44 Haw. 634 |
| Decision Date | 27 February 1961 |
| Docket Number | No. 4212,4212 |
| Parties | , 44 Haw. 683 In the Matter of ISLAND AIRLINES, INC. |
| Court | Supreme Court of Hawai'i |
SYLLABUS BY THE COURT
1. When an application for the setting of public utility rates has been dismissed by the Public Utilities Commission on the ground that, by reason of a statute the constitutionality of which is in question, the Commission lacks jurisdiction over the rates, the public utility which contends that R.L.H.1955, § 104-15, is applicable and that it cannot charge any rate until fixed by the Commission, may appeal from the decision as a party aggrieved.
2. Jurisdiction of the Public Utilities Commission of this state over the rates of interisland air carriers does not turn at this time upon that portion of the Federal Aviation Act of 1958 definition of 'interstate air transportation' which concerns commerce between places in the same State 'through the airspace over any place outside thereof,' because the portion of the definition concerning commerce 'between places in the same Territory' has been continued in force in the State during a transitional period which has not yet expired or been terminated.
3. Upon admission of a State all of the Territorial laws are abrogated except as continued in force by competent authority. This principle applies to the intraterritorial aspects of commerce laws.
4. A provision of the Federal Aviation Act of 1958 which, during Hawaii's Territorial status, by vesting jurisdiction in the Civil Aeronautics Board withdrew from the authority of the Territorial Public Utilities Commission the control of rates of common carriers by air between places in the Territory, was in the nature of an exception to the rate-making authority that, according to the terms of the Territorial Public Utilities Commission Act (R.L.H.1955, c. 104), was vested generally in the Territorial Public Utilities Commission. The latter Act was a law 'in force,' and was adopted by section 2 of Article XVI of the State Constitution free of the exception if, but only if, the exception was abrogated upon the admission of the State.
5. By section 15 of the Admission Act, relating to the continuance in force of Territorial laws (P.L. 86-3, sec. 15), Congress continued for a transitional period C.A.B. jurisdiction over carriage by aircraft in commerce between places in the same former Territory, now State, of Hawaii. Article XIV, section 8 of the constitution of this State, as amended by vote of the people at the election held June 27, 1959, constitutes an agreement on the part of the State to this continued jurisdiction. The transitional period is two years, i. e., until August 21, 1961, unless the date of assumption of State responsibility for the area of regulation left to the several States under the Federal Aviation Act of 1958, is advanced by a State enactment. During the transitional period, as during Territorial status, this C.A.B. jurisdiction over commerce between places in the State continues to be an exception to the rate-making authority of the Public Utilities Commission under R.L.H.1955, c. 104.
6. Pursuant to section 15 of P.L. 86-3, the Act providing for admission of the State of Hawaii into the Union, and Article XIV, section 8 of the State Constitution, as amended by vote of the people at the election held June 27, 1959, C.A.B. control over commerce 'between places in the same Territory' was continued for a transitional period. This federal-state arrangement constitutes a valid means of furthering the orderly assumption of the State's duties with respect to air carriers.
Frank D. Padgett, Honolulu (J. Garner Anthony and Arthur B. Reinwald, Honolulu, on the briefs; Robertson, Castle & Anthony, Honolulu, of counsel), for appellant.
Arthur S. K. Fong, Deputy Atty. Gen. (Shiro Kashiwa, Atty. Gen., on the brief), for Public Utilities Commission, appellee.
Herbert Y. C. Choy and Ingram M. Stainback, Honolulu (Fong, Miho, Choy & Robinson, Honolulu, of counsel), for intervener, Aloha Airlines, Inc., appellee.
Richard K. Sharpless, Honolulu (Lewis, Buck & Saunders, Honolulu, of counsel), for intervener, Hawaiian Airlines, Inc., appellee.
Robert A. Bicks, Asst. Atty. Gen., Richard A. Solomon, Atty., Department of Justice, Franklin M. Stone, General Counsel, Civil Aeronautics Board, Washington, D. C. (with John H. Wanner, Deputy General Counsel, O. D. Ozment, Associate General Counsel, and William F. Becker, Atty., Civil Aeronautics Board), Washington, D. C., filed a brief for Civil Aeronautics Board, amicus curiae, but did not argue.
Before TSUKIYAMA, C. J., CASSIDY, WIRTZ, LEWIS, JJ., and J. J. F. DYER, Circuit Judge, Assigned by Reason of Vacancy.
Island Airlines, Incorporated, referred to herein as 'applicant' or 'island,' on May 20, 1960, submitted to the Public Utilities Commission of the State an application which, as subsequently amended, shows as follows:
Applicant has been incorporated under the laws of the State with a present capitalization of $15,000. It intends to increase its capitalization to $250,000, 'upon approval by the Commission of the rates filed herewith * * *.' Its articles of association provide for this extension of the capital stock 'at such time as the corporation's rate schedule is approved by the Public Utilities Commission of the State * * *.' Applicant seeks approval by the Commission under R.L.H.1955, § 104-15, of its proposed passenger tariff, Exhibit A filed with the application, and pursuant to R.L.H.1955, § 104-16, requests approval of the Commission for the issuance of the additional stock.
Exhibit A shows that applicant proposes to operate as a common carrier of passengers by air, flying between the following points: Honolulu on the Island of Oahu, to Lihue Airport, on the Island of Kauai, and return; Honolulu, Oahu, to Kahului Airport on the Island of Maui, thence either to Hilo on the Island of Hawaii or else to Kona Airport, Kailua, Island of Hawaii, and return. Applicant also has submitted proposed fares for service between Hoolehua, Island of Molokai and various points, i. e., Kahului, Hilo, and Kona, to the east, and Honolulu and Lihue, to the west.
As above appears, all of the proposed flights are between islands. Of the eight principal islands which make up the State, the five largest would be served by applicant to some extent.
Hawaiian Airlines, Inc., and Aloha Airlines, Inc., carriers presently holding certificates issued by the Civil Aeronautics Board for interisland service in Hawaii, intervened in the proceeding before the Public Utilities Commission and also appeared here. The Civil Aeronautics Board, as amicus curiae, filed a statement with the Commission and submitted a brief to this court. Both the intervener airlines (referred to herein as the 'interveners') and the Civil Aeronautics Board (C.A.B.) contested the Commission's jurisdiction.
It was the decision of the Commission, one member dissenting, that the Commission was 'without jurisdiction to entertain this application' on the ground that section 15 of the Admission Act, 48 U.S.C.A. preceding § 491 (P.L. 86-3, 73 Stat. 4, approved March 18, 1959) 'effectively retains jurisdiction over the proposed air operation in the C.A.B.' The Commission ordered the application dismissed.
This decision and order were filed August 18, 1960, and on August 19 Island appealed to this court therefrom under R.L.H.1955, § 104-15. In the jurisdictional statement required by Supreme Court Rule 3(b)(2), also 3(c), the effect of the Reorganization Act (Second Sp. S.L.H.1959, c. 1) has not been covered. While we perceive no effect of that Act in this case, we here state the court's desire that the effect thereof be briefed in future cases involving administrative agencies.
Preliminarily, we note that the Commission said nothing in its decision concerning the proposed capital stock issuance. It is conceded by all parties that the Commission had, and it clearly did have, jurisdiction over this matter under R.L.H.1955, § 104-16. However, according to the application, the capital stock issuance was contingent upon approval of the rates. When the Commission ruled that it had no jurisdiction over the latter, the portion of the application seeking approval of the stock issuance became moot. It is the jurisdiction of the Commission over the fixing of applicant's rates which concerns us.
Is applicant aggrieved by the Commission's decision if the Commission erred in declining jurisdiction? Our jurisdiction depends upon the answer to this question. United States v. Storer Broadcasting Co., 351 U.S. 192, 197, 76 S.Ct. 763, 100 L.Ed 1081; Inter-Island Resorts, Ltd. v. Akahane, 44 Haw. 93, 99, 352 P.2d 856; Airborne Freight Corp. v. C. A. B., 103 U.S.App.D.C. 206, 257 F.2d 210. Applicant says it has been aggrieved because, under R.L.H.1955, § 104-15, it cannot charge any rate until fixed by the Commission and therefore cannot operate at all. In making this argument applicant necessarily assumes that what it considers the correct view of the law might be applied to it in such a way as to interfere with its operations, notwithstanding the Commission's decision. Irrespective of the effect of the res judicata doctrine in the ordinary case of an unreviewed Commission decision (see 42 Am.Jur., Public Administrative Law, §§ 161-162), judicial determination of the Commission's jurisdiction is necessary to applicant's protection in this case, which involves the constitutionality of section 15 of the Admission Act. Under the circumstances applicant may appeal as a party aggrieved.
There is no question as to the status of applicant as a 'public utility' within the meaning of R.L.H.1955, § 104-1. It clearly is, and chapter 104, R.L.H.1955, read alone, empowers the Commission to fix applicant's rates. Consideration of the situation prevailing as to common carriers by air and water immediately prior to the admission...
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Island Airlines, Inc., Application of
...to regulate interisland air transportation, though authority over issuance of securities would remain. Cf., In re Island Airlines, Inc., 44 Haw. 634, 637-639, 361 P.2d 390, 392-393. Applicant then would require federal certification under section 401 of the Federal Aviation Act of 1958 (49 ......