Pan American World Airways, Inc. v. C. A. B., s. 82-1547

• Decision Date: 23 July 1982
• Docket Number: Nos. 82-1547,82-1548 and 82-1552,s. 82-1547
• Citation: 684 F.2d 31
• Parties: PAN AMERICAN WORLD AIRWAYS, INC., Petitioner, v. CIVIL AERONAUTICS BOARD, Respondent, City of New Orleans et al., American Airlines, Inc., and Continental Air Lines, Inc., Intervenors. DELTA AIR LINES, INC., Petitioner, v. CIVIL AERONAUTICS BOARD, Respondent, American Airlines, Inc., Intervenor. TRANS WORLD AIRLINES, INC., Petitioner, v. CIVIL AERONAUTICS BOARD, Respondent.
• Court: U.S. Court of Appeals — District of Columbia Circuit

Page 31

684 F.2d 31

221 U.S.App.D.C. 257

PAN AMERICAN WORLD AIRWAYS, INC., Petitioner, v. CIVIL AERONAUTICS BOARD, Respondent,

City of New Orleans et al., American Airlines, Inc., and

Continental Air Lines, Inc., Intervenors.

DELTA AIR LINES, INC., Petitioner, v. CIVIL AERONAUTICS BOARD, Respondent, American Airlines, Inc., Intervenor.

TRANS WORLD AIRLINES, INC., Petitioner, v. CIVIL AERONAUTICS BOARD, Respondent.

Nos. 82-1547, 82-1548 and 82-1552.

United States Court of Appeals District of Columbia Circuit.

Argued June 21, 1982.

Decided July 23, 1982.

As Amended July 23, 1982.

Appeal from award by Civil Aeronautics Board of interim authority to operate abandoned international routes.

Michael J. Roberts, with whom James M. Verner and Russell E. Pommer, Washington, D. C., were on the brief, for petitioner Pan American World Airways, Inc. Richard L. Cys, Washington, D. C., entered an appearance for petitioner Pan American World Airways, Inc.

Robert Reed Gray, with whom Louis H. Kurrelmeyer, Benjamin R. Achenbach, Jr., Washington, D. C., James W. Callison, and Don M. Adams, Atlanta, Ga., were on the brief, for petitioner Delta Air Lines, Inc.

Edmund E. Harvey, Washington, D. C., was on the brief for petitioner Trans World Airlines, Inc.

Thomas L. Ray, Acting Associate Gen. Counsel, C. A. B., with whom Ivars V. Mellups, Acting Gen. Counsel, and David Schaffer, Atty., C. A. B., and John J. Powers, III, and Robert J. Wiggers, Attys., Dept. of Justice, Washington, D. C., were on the brief, for respondent.

J. William Doolittle, with whom Alfred V. J. Prather and Carl B. Nelson, Jr., Washington, D. C., were on the brief, for intervenor American Airlines, Inc.

Emory N. Ellis, with whom Patrick J. Keeley, Washington, D. C., was on the brief, for intervenor Continental Air Lines, Inc.

Before WRIGHT, TAMM and WILKEY, Circuit Judges.

Opinion for the court PER CURIAM.

Dissenting opinion filed by Circuit Judge WILKEY.

PER CURIAM:

These three consolidated cases arise from the award by the Civil Aeronautics Board (CAB or Board), in an extremely short timeframe, of interim authority to operate international routes abandoned by Braniff ¹ when it sought reorganization in bankruptcy on May 13, 1982. Petitioners Pan Am, Delta, and TWA challenge the CAB's decision to award Dallas/Fort Worth (DFW)-London authority to American. Pan Am alone challenges the award of Central Zone-Venezuela authority to Continental. ² The decision falls far short of the ideal in administrative processes, and the CAB acted illegally in one respect. ³ This single illegality, however, is not properly remedied by setting aside the agency's action, and the CAB otherwise responded reasonably to the emergency facing it. Applying "the traditional (standard) of reasonableness," Air Line Pilots Ass'n, Int'l v. CAB, 494 F.2d 1118, 1123 n.15 (D.C.Cir.1974), we affirm. We also order the CAB to complete certificate proceedings, awarding long-term authority to fly these routes, within six months.

I. Background

On Thursday, May 13, 1982, Braniff filed for reorganization in bankruptcy. Although it was known throughout the industry that Braniff was in dire financial straits, ⁴ there was no advance warning of the bankruptcy filing until Braniff shut down all its operations late on May 12. At a Thursday morning press conference the CAB announced that it would accept emergency applications for temporary exemption authority, see 49 U.S.C. § 1386(b) (1976 & Supp. III 1979) (allowing CAB to exempt carriers from, inter alia, certificate requirement for international routes), on Braniff's abandoned routes until 10:00 A.M. the following day. At some later time on May 13 the CAB announced that it would hold a closed meeting at 2:00 P.M. on May 14 to consider the applications received.

The CAB received 18 applications by its stated deadline. ⁵ It also received various supplements and oppositions on May 14, including two pleadings from Delta commenting on other carriers' applications. Pan Am and TWA did not file oppositions within the severely limited timeframe available. All of the parties to this case specifically requested emergency treatment, and American specifically requested that the CAB, pursuant to 14 C.F.R. § 302.410 (1981), not await responses before acting. The CAB did meet from 2:00 to 4:00 P.M. in closed session, ⁶ and at approximately 6:40 P.M. its staff released Order 82-5-77, which designated American and Continental for the London and Venezuela exemption authority, respectively. ⁷ Order 82-5-77 explained that the unprecedented Braniff bankruptcy, brought on without advance notice, had created an emergency requiring the CAB to act. It contained no explanation of why it was "consistent with the public interest" to grant these particular requests, and no explanation of why the awards of exemption authority would "continue until April 23, 1983, or until final Board action involving each route, whichever occurs first." Instead, the CAB said it had directed its staff to prepare an order containing its detailed findings and conclusions, to be released at some unspecified future time.

By 5:00 P.M. the next day (Saturday, May 15) Pan Am and Delta had prepared petitions for review and emergency stay motions, which they lodged at the guard's desk in this courthouse. The papers were extensive. Pan Am and Delta emphasized that they (and TWA), unlike American, already had facilities and operations in London. Pan Am also emphasized that it, unlike Continental, had facilities and operations in Venezuela. By 4:00 P.M. on Monday, May 17, TWA had filed a largely identical petition and motion, and the CAB, American, Continental, and aspiring intervenors the New Orleans parties had filed oppositions. These papers were also extensive. Replies were filed the next morning (Tuesday, May 18). On Tuesday, May 18, we denied all stay motions but expedited the case. American's first Dallas-London flight took place on May 19. Continental did not fly between the Central Zone points and Venezuela until July 3 (after we heard oral argument), because its ongoing negotiations with the Venezuelan government for the necessary permission to fly were until early July unsuccessful.

On May 27, 1982 the CAB issued Order 82-5-145, which contained the promised detailed findings and conclusions. The CAB declared that it had "select(ed) for temporary exemption authority those carriers that could most closely duplicate Braniff's service, institute replacement service with requisite speed, and maintain the existing competitive market structure pending a review of the routes in future proceedings." Order 82-5-145 at 5. It also declared: "Since these factors focus on the pressing need for replacement service in the short-term, they leave us the flexibility needed to decide long-term issues in subsequent proceedings." Id. With respect to the doctrine that short-term awards should be made in such a way as to minimize prejudice to long-term awards, ⁸ the CAB stated that there were compelling public-interest reasons favoring the selection of American and Continental, and that these factors overcame the potential prejudice that might arise from selection of carriers who had no current operations at the foreign airports involved. The CAB also declared that the necessary expenditures of funds by American to move into the London market were, compared to potential revenues, so insubstantial that no prejudice would arise in the proceedings on long-term certificate authority for these routes. Id. at 12-13 & n.36. Finally, the CAB asserted that its eleven-month awards were justified by the need to allow carriers "time to stabilize their operations," by the need to protect carriers who would apply for certificate (long-term) authority, and by the need "to recognize Braniff's reorganization efforts." Id. at 14. Chairman McKinnon and Member Schaffer dissented in part, saying they would have given DFW-London to Pan Am. Member Dalley dissented in part, saying he would have given Central Zone-Venezuela to Pan Am.

All briefs were filed in this court on or before June 14. Pan Am, Delta, and TWA attack Order 82-5-145 as both a post hoc rationalization and arbitrary considered on its own merit. The CAB, American, and Continental support the order. The New Orleans parties have filed a short brief in which they simply emphasize New Orleans' need for nonstop service to Venezuela and argue that the award to Continental should be upheld because New Orleans has been without such service since Braniff shut down.

II. The CAB's Closed Meeting

Our recent decision in Common Cause v. NRC, 674 F.2d 921 (D.C.Cir.1982), should have sufficed to put every multi-member agency of the federal government on notice of its duties under the Government in the Sunshine Act, 5 U.S.C. § 552b (1976). Section 552b(b) states the broad requirement that "every portion of every meeting * * * be open to public observation." The Act provides that this requirement "shall not apply to any portion of an agency meeting * * * where the agency properly determines that such portion or portions of its meeting" fall within one or more of ten specific, narrow exemptions. 5 U.S.C. § 552b(c) (1976) (emphasis added). Thus we summarized the statutory scheme in Common Cause: "Every meeting of a multi-member agency must be open to the public, except that specific portions of a meeting may be closed if the discussion is reasonably likely to fall within one or more of ten narrowly defined exemptions." 674 F.2d at 928 (emphasis added).

There was absolutely no warrant for the CAB to close its entire May 14 meeting because of a belief that some exempt material would be discussed. "(T)he Sunshine Act provides for an examination of each item of business to ascertain whether it may be closed under the terms of one of ten specific exemptions." Id. at 932 (citing Pacific Legal Foundation v. Council on Environmental Quality, 636 F.2d 1259, 1265 (D.C.Cir.1980)). At a bare,...