Law Motor Freight, Inc. v. CAB, 6731.
| Decision Date | 20 July 1966 |
| Docket Number | No. 6731.,6731. |
| Citation | 364 F.2d 139 |
| Parties | LAW MOTOR FREIGHT, INC., et al., Petitioners, v. CIVIL AERONAUTICS BOARD et al., Respondents. |
| Court | U.S. Court of Appeals — First Circuit |
Bryce Rea, Jr., Washington, D. C., with whom Kenneth B. Williams, Boston, Mass., F. G. Freund, Thomas M. Knebel, Washington, D. C., Williams, Kelly, Shrigley & Ryan, Boston, Mass., and Rea, Cross, Knebel & Kinnaird, Washington, D. C., were on brief, for petitioners.
Warren L. Sharfman, Associate General Counsel, with whom Joseph B. Goldman, General Counsel, O. D. Ozment, Deputy General Counsel, Robert L. Toomey, Attorney, Civil Aeronautics Board, Donald F. Turner, Asst. Atty. Gen., and Howard E. Shapiro, Attorney, Department of Justice, were on brief, for Civil Aeronautics Board, respondent.
George C. Neal, Washington D. C., with whom Pogue & Neal, Washington, D. C., was on brief, for Emery Air Freight Corporation, intervening respondent.
Before ALDRICH, Chief Judge, McENTEE and COFFIN, Circuit Judges.
This case comes to us on petition to review an order of the Civil Aeronautics Board (the Board) granting Emery Air Freight Corporation (Emery) authority to file tariffs and, pursuant thereto, perform pickup and delivery services for air freight traffic between Boston, Massachusetts and Nashua, New Hampshire. The petitioner, Law Motor Freight, Inc. (Law), is an Interstate Commerce Commission certificated motor carrier which has hitherto carried air freight for Emery between Boston and Nashua, and, accordingly foresees loss of this business.1
Jurisdiction and venue rest on 49 U.S. C. §§ 1486(a) and 1486(b). The Board's order is challenged for lack of a prior hearing, and absence of sufficient subsidiary facts to justify its ultimate finding that Emery's proffered service was truly pickup and delivery and thus "in connection with" air transportation.
Emery is an air freight forwarder. Its business is to assemble goods which are to be shipped by air, organize them into cargoes for carriage by an air carrier, and receive, divide, and distribute them to consignees on arrival. It serves Boston, among other cities, and presently provides pickup and delivery service between Boston and Lowell, Massachusetts, 14 miles distant from Nashua. Such service, though performed over the roads from an airport to a municipality by motor vehicles, can be performed by air carriers or air forwarders, if authorized by the Board as "services in connection with * * * air transportation". Section 403(a), Federal Aviation Act, 49 U.S.C. § 1373(a), and Section 222, Civil Aeronautics Board Economic Regulations, 14 C.F.R. § 222.2
These regulations are in themselves important facts in this case, fixing the framework for assessing the action of the Board and the rights of the parties. The background and concept of the Board's present policies are set forth in a narrative preamble; specific procedures, in numbered sections. The preamble recites that in the past a 25 mile radius from an airport was followed as a rule of thumb governing authorization of pickup and delivery tariff proposals. This radius, however, had been substantially exceeded in a number of cases. After criticism of the rule of thumb approach, the Board solicited comments from carriers and participated in interagency committee study with the Interstate Commerce Commission. The Board's conclusions were that:
"full development of air cargo transportation depends, in large measure, upon efficient surface transportation; effective customer-oriented pickup and delivery service can best be guaranteed when it is under the control of the direct air carrier or the air freight forwarder; this control can be maintained by the operation of trucks directly by the air carrier and the air freight forwarder or under contract with local cartage agents; and a reasonable amount of freedom for the direct air carriers and air freight forwarders to establish pickup and delivery services and to test their adequacy and economy is vital to prevent a stifling of the potential of air cargo transportation."
The preamble in essence ratified the use of the 25 mile rule of thumb approach for numerous certificated points, which have presented no difficulty for either the Board or I.C.C., as well as the existing tariffs which had authorized pickup and delivery services beyond the 25 mile radius. In indicating the Board's approach to future requests for extension beyond a 25 mile radius, the preamble stated:
The regulations themselves (§§ 222.1, 222.2, 222.3) provided for the filing of written applications for tariffs, in which would be set forth the desired locations, reasons why the contemplated service is deemed appropriate, and economic data and other facts relied on. Instructions for service of copies on interested parties were followed by the requirement that answers of opponents or supporters of an application "shall set forth in detail the reasons for the position taken and include such economic data and facts as are relied upon."
Passing from the regulations to the events in this case, the relevant facts are set forth in Emery's application, as amended, for authority to provide pickup and delivery service between Boston and Nashua; petitioner's motion to dismiss with accompanying affidavit and exhibits of its Vice President of Traffic; and the Board's order granting Emery's application.
Emery's application, as amended, addressed itself both to the rationale for bringing Nashua within the Boston air freight pickup and delivery zone and to the service it would provide. As to the first issue, Emery set forth the distance between Boston and Nashua (34 miles), Nashua's "strong cultural, commercial and industrial affinity" to Boston, and the allegation that most of Nashua's commerce moves through "the Boston gateway". As to Emery's proposed service, "same day" delivery from Boston and "same night" shipment from Nashua would be offered through coordination with airlines schedules, straight vans of not over 5,000 pound capacity would be utilized, and charges would be $2.00 per hundred pounds, compared with its $1.55 cwt charge already provided in its service to Lowell.
The motion to dismiss made the following points: (1) that I.C.C. criteria should govern; (2) that therefore the question was whether Nashua lay within the "terminal area" of Boston; and (3) that coordination with airline schedules, utilization of straight vans as opposed to tractor-trailers, and the proposed charges had nothing to do with the inclusion of Nashua within Boston's terminal area. The motion prayed that Emery's application be dismissed or, alternatively, that a hearing be had. The affidavit of Law's Vice President set forth its I.C.C. authority as a common carrier, giving line-haul service between Boston and various points in New Hampshire, the pickup service provided from its Keene and Nashua terminals, and its equipment and efforts to accommodate air freight shippers and receivers. The affidavits alleged that Emery accounts for 75 per cent of the air freight Law handles and that granting Emery's application would seriously jeopardize Law's "same night" service to all areas of New Hampshire and northern Massachusetts.3
The Board's order, after reciting the averments of the petition and the motion to dismiss, noted that the proposed service was no more extensive than that which had been authorized in other metropolitan areas, and that the proposed service would be coordinated with airline schedules, that the equipment to be used was that traditionally used for pickup and delivery operations, and that rates would be charged which would be closely related to those for similar services within the presently recognized terminal zone. The Board concluded that the service was truly pickup and delivery and was "in connection with air transportation". Meeting petitioner's various objections, it held that Emery had filed sufficient data, that it was not limited by any view the I.C.C. might have taken in administering its own regulations, and that neither legislation nor the exercise of its discretion indicated the need for an evidentiary hearing.
The first issue to consider is whether or not a hearing was required. Petitioner bases its claimed right to a hearing on the theory that the Board's action was that of licensing Emery to engage in motor transportation in competition with Law. Licensing being an act of adjudication, argues petitioner, a hearing is required, even if the proceeding is labelled rule-making, and even though the governing statute does not require a hearing. This conclusion is further indicated, claims petitioner, by the application of principles of due process since Law's property, its I.C.C. license, would be impaired by the Board's action in granting Emery's application.
We do not accept this line of argument. Analysis, recognized administrative practice, specific statutory guidance, accepted principles of statutory construction, and constitutional interpretation all militate against petitioner's point.
The result of the Board order in this case is to declare Nashua within the Boston pickup and delivery area so that all air carriers and air freight forwarders may henceforth, on approval of tariffs filed, operate surface transportation service to Nashua which will be considered to be "in connection with * * * air...
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