Moss v. C. A. B.
| Decision Date | 16 October 1975 |
| Docket Number | Nos. 73-1772,73-1790,s. 73-1772 |
| Parties | John E. MOSS et al., Petitioners, v. CIVIL AERONAUTICS BOARD, Respondent, Northwest Airlines, Inc., American Airlines, Inc., Trans World Airlines, Inc., Continental Air Lines, Inc., Eastern Air Lines, Inc., Delta Air Lines, Inc., Keith Roberts, Allegheny Airlines, Inc., and North Central Airlines, Inc., United AirLines, Inc., Western Air Lines, Inc., Hughes Airwest et al., Braniff Airways,Inc., and National Airlines, Inc., Intervenors. Keith ROBERTS, Petitioner, v. CIVIL AERONAUTICS BOARD, Respondent, American Airlines, Inc., Northwest Airlines, Inc., Continental Air Lines,Inc., Eastern Air Lines, Inc., Delta Air Lines, Inc., Allegheny Airlines, Inc.,and North Central Airlines, Inc., United Air Lines, Inc., Hughes Airwest,Frontier, et al.,Trans World Airlines, Inc., National Airlines, Inc., and Braniff Airways, Inc.,Intervenors. |
| Court | U.S. Court of Appeals — District of Columbia Circuit |
H. David Rosenbloom, Washington, D. C., with whom Stanford G. Ross and Ronald B. Lewis, Washington, D. C., were on the brief, for petitioners in No. 73-1772.
William M. Brinton, San Francisco, Cal., for petitioners in No. 73-1790 and intervenor Keith Roberts in No. 73-1772.
Alan R. Demby, Atty., Civil Aeronautics Board, with whom Thomas J. Heye, Gen. Counsel, O. D. Ozment, Deputy Gen. Counsel and Glen M. Bendixsen Associate Gen. Counsel, Civil Aeronautics Board, were on the brief, for respondent. Howard E. Shapiro, Atty., Dept. of Justice, also entered an appearance for respondent. Richard Littell, Gen. Counsel, Civil Aeronautics Board at the time the record was filed and Howard E. Shapiro, Atty., Dept. of Justice, Robert L. Toomey, Atty., Civil Aeronautics Board entered appearances for respondent.
J. William Doolittle, Washington, D. C., with whom Alfred V. J. Prather, Washington, D. C., was on the brief, for intervenors American Airlines, Inc., Eastern Air Lines, Inc., Trans World Airlines, Inc., and United Air Lines, Inc.
Ronald D. Eastman, Washington, D. C., with whom Harold E. Mesirow, Washington, D. C., was on the brief for intervenors Braniff Airways, Inc., Continental Air Lines, Inc., Delta Air Lines, Inc., National Airlines, Inc., Northwest Airlines, Inc., and Western Air Lines, Inc., James W. Callison, Atlanta, Ga., and Robert Reed Gray, Washington, D. C., also entered appearances for intervenor Delta Air Lines, Inc. Gerald P. O'Grady and Ernest T. Kaufmann, Los Angeles, Cal., also entered appearances for Western Air Lines, Inc.
William C. Burt, Washington, D. C., was on the brief for intervenors Allegheny Airlines, Frontier Airlines, Hughes Airwest, North Central Airlines, Ozark Air Lines, Piedmont Aviation, Southern Airways and Texas International Airlines. James L. Devall, Washington, D. C., entered an appearance for intervenor Allegheny Airlines, Inc. and North Central Airlines, Inc. John W. Simpson, Washington, D. C., entered an appearance for intervenors Hughes Airwest, et al.
Before J. EDWARD LUMBARD, * Senior Circuit Judge for the Second Circuit, and McGOWAN and ROBINSON, Circuit Judges.
This case comes in the aftermath of Moss v. CAB, 139 U.S.App.D.C. 150, 430 F.2d 891 (1970), which invalidated certain airline passenger fares made effective by the Civil Aeronautics Board in violation of Section 1002 of the Federal Aviation Act. 49 U.S.C. § 1482 (1970). The question now is whether there is to be a recovery of any part of those unlawful fares. The Board has denied such relief on the grounds that the fares in question were not unjust or unreasonable, and, in any case, resulted in no unjust enrichment of the airlines. We conclude that these decisional principles are determinative, and that they were correctly applied. Accordingly, we affirm. 1
The history of this case is quite involved, and may best be set out chronologically:
August 20, 1969. Petitioners Moss, et al., requested the Board to suspend a number of proposed fare increases claimed by the airlines to be necessary to offset sharp inflation in their costs and decline in their revenues. Petitioners called at the same time for a rulemaking proceeding in which the Board would undertake a general review of its ratemaking practices.
September 12, 1969. The Board issued Order 69-9-68, in which it suspended the proposed rates. Recognizing an urgent need for some additional revenue, however, the Board in the same order identified a formula by which the airlines could compute rate increases that would not be suspended. Rate increases of approximately six percent, as contemplated by the formula, were filed and became effective as of October 1, 1969.
January 29, 1970. The Board instituted its Domestic Passenger Fare Investigation, a broad inquiry into various aspects of airline ratemaking. The DPFI was later divided into nine separate phases: (1) aircraft depreciation; (2) leased aircraft; (3) deferred federal income taxes; (4) joint fares; (5) discount fares; (6) seating configurations and load factors (subsequently made the subjects of separate phases 6A and 6B, respectively); (7) fare levels; (8) rate of return; and (9) fare structure.
June 19, 1970. The Board announced its intention to allow the airlines to "round up" their October 1, 1969 fares to the nearest dollar. The increase took effect July 1, 1970, and yielded some $50 million in additional airline revenues.
July 9, 1970. This court rendered its decision in Moss I, invalidating Order 69-9-68 and holding unlawful the fares computed and charged pursuant to it. It was held that the Board had "determined" rates within the meaning of Section 1002(d) and (e) of the Federal Aviation Act, 49 U.S.C. § 1482(d) and (e) (1970), without complying with the requirements of those sections that this be done after notice and hearing, and by reference to statutory ratemaking criteria. The case was remanded to the Board for further proceedings consistent with the court's opinion.
July 28, 1970. The Board continued the rounded-up October 1, 1969, fares in effect, declaring that these were the only ones that could be lawfully charged pending establishment of new fares. Order 70-7-128. It called in the same order for carrier filings of new fares to be effective October 15, 1969, such fares to be "free of any compulsion that may have been inherent in the invalid Order 69-9-68."
July 29, 1970. The Board moved this court for a stay of its mandate in Moss I for ninety days to permit establishment of new fares in the manner described above. The stay was granted.
September 24, 1970. The Board suspended all new fares filed pursuant to its July 28 order, except those that re-established the rounded-up October 1, 1969, fares. These newly filed, though unchanged, fares were, in the Board's view, free of any compulsion from the order invalidated in Moss I.
October 7, 1970. Petitioners requested this court to stay its mandate in Moss I for a further period, and thus to express its disapproval of the manner in which the Board had re-established the rates. We were further requested to order the Board to rule promptly on petitioners' request for relief from the fares held unlawful in Moss I. Both requests were denied.
February 25, 1971. The Board initiated proceedings to determine whether the rates charged between October 1, 1969, and October 15, 1970, were "unjust and unreasonable." The Board noted the pendency of a number of class actions brought in district courts against the airlines for recovery of part of the fares ruled unlawful in Moss I. On February 19, 1971, these cases had been transferred by the Judicial Panel for Multidistrict Litigation to the United States District Court for the Northern District of Illinois. In re Air Fare Litigation, 322 F.Supp. 1013 (Jud.Pan.Mult.Lit., 1971). Partly in order to aid the Northern District of Illinois to resolve these suits, the Board deferred decision of the question of whether it had power to grant relief, and proceeded directly to the question of the reasonableness of the challenged fares. The class action suits were in fact stayed pending the Board's resolution of that question, Weidberg v. American Airlines, 336 F.Supp. 407 (N.D.Ill., 1972), and the suits were subsequently dismissed on the basis of the Board order now under review. Weidberg v. American Airlines, No. 70 C 1879 (N.D.Ill., filed Dec. 10, 1973).
April 9, 1971. The Board issued its final decision in Phase 6B of the DPFI (load factors), and its tentative findings and conclusions in Phase 7 of the DPFI (fare levels). The latter proposed a fare level 12% Higher then the unlawful October 1, 1969 rates. After taking interim adjustments into account, this higher level required an increase of 9% In the then prevailing rates. The Board authorized an increase of 6% Pending its final decision in Phase 7. (The Board's final decision, affirming its tentative one, came on August 11, 1973.)
May 7, 1971. Fare increases of 6%, as provided for in the Board's April 9 orders, went into effect. The lawfulness of these rates has not been challenged by petitioners.
July 11, 1973. The Board issued Order 73-7-39, its final decision denying relief from the rates found by this court in Moss I to have been unlawfully "determined."
July 16, 1973. Petitioners sought direct review in this court of Order 73-7-39.
The foregoing is an account of three sets of interrelated proceedings before the Board, dealing with (1) the establishment of lawful fares in place of those found unlawful in Moss I, (2) the propriety of relief for the public from those unlawful rates, and (3) the general matter of how rates were properly to be set in the future. Since petitioners claim that lawful fares were not re-established until May 7, 1971, they seek relief from rates charged during the period running from that date back to October 1, 1969. 2 This attempt to establish the unreasonableness of rates charged during that period rests largely on the...
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