Slick Airways, Inc. v. United States

• Decision Date: 19 July 1961
• Docket Number: No. 60-58.,60-58.
• Citation: 154 Ct. Cl. 417,292 F.2d 515
• Parties: SLICK AIRWAYS, INC. v. UNITED STATES.
• Court: U.S. Claims Court

154 Ct. Cl. 417, 292 F.2d 515 (1961)

SLICK AIRWAYS, INC. v. UNITED STATES.

No. 60-58.

United States Court of Claims.

July 19, 1961.

Robert J. Corber, Washington, D. C., for plaintiff. Richard P. Taylor and Steptoe & Johnson, Washington, D. C., were on the brief.

Lewis A. Dille, Kensington, Md., with whom was Asst. Atty. Gen. William H. Orrick, Jr., for defendant. Thomas A. Hett, Washington, D. C., was on the briefs.

DURFEE, Judge.

This is a suit on a contract for air transportation of Government cargo by the plaintiff, a certificated air carrier. The contract, dated June 30, 1951, provided a rate of 70 cents per air mile, which was warranted by the carrier to be the lowest appropriate tariff then in effect and on file with the Civil Aeronautics Board. The original contract period was one year and the contract specified the estimated mileages involved. The rate of 70 cents per air mile was the lowest applicable tariff rate between July 1, 1951, and March 20, 1952, and the plaintiff submitted bills and was paid at that rate for shipments during that period.

On February 20, 1952, the plaintiff published a revision of its Charter Tariff No. 1, ATB No. 1, CAB No. 17, for Curtiss C-46 aircraft for 1,000 miles and over, the tariff referred to in the contract. This increased the tariff rate from 70 cents to 77 cents per air mile. The defendant received notice of publication but, as it conceded in oral argument, it filed no objection or request for suspension of the tariff increase with the CAB, either before or after March 21, 1952, the date on which the increased tariff rate of 77 cents became effective.

As a result of a clerical error, Slick continued to bill the defendant at the rate of 70 cents per mile and was paid at this rate from March 21, 1952, through June 30, 1952, for 216 flights. The plaintiff is now seeking payment at the revised tariff rate, that is, seven cents per mile more than it has received for shipments between the above dates. The contract was later renewed through September 30, 1952, but the parties agree that 77 cents per mile is the correct rate for this period. While there is no dispute as to the proper rate between July 1, 1951, and March 20, 1952, there is a dispute as to how the mileage factor in the charges is to be calculated. The defendant has asserted counterclaims on the theory that the computation of the distances flown was excessive and that it has, therefore, overpaid the plaintiff.

The mileage controversy arises in the following fashion. While the contract sets forth the mileages to be used between shipping and receiving points, the tariff specifies that the mileages are to be determined with reference to "airport-to-airport" distances. The defendant in contending for the "airport-to-airport" rates says that the mileages are to be determined by reference to the Department of Commerce publication Airline Distances between Cities in the United States¹ (commonly called the "Redbook.") The plaintiff maintains that in the absence of a CAB regulation delineating how "airport-to-airport" mileages for charter flights are to be determined the specific contract mileages must be applied. The question is, then, what standard is to be employed in determining "airport-to-airport" miles.

First, however, we will consider the question of whether the charges from March 21, 1952, through June 30, 1952, should be based upon the revised tariff rate of 77 cents per mile or upon the original contract rate of 70 cents.

In answer to the plaintiff's contention that it is entitled to the minimum tariff rate of 77 cents per mile, the defendant asserts that the United States can lawfully accept from a carrier a contract rate that is less than the tariff rate available to all other shippers and that the contract which provided a rate of 70 cents per mile was such a contract by which the plaintiff was bound for the duration of the original contract period.

As an air carrier operating under a certificate of public convenience and necessity for air cargo in interstate commerce, the plaintiff was subject to the Civil Aeronautics Act and the economic regulation of the Civil Aeronautics Board. Section 403(b) of the Civil Aeronautics Act, 49 U.S.C.A. § 483(b) (now known as the Federal Aviation Act of 1958, 49 U.S.C.A. § 1301 et seq.), provided:

"No air carrier or foreign air carrier shall charge or demand or collect or receive a greater or less or different compensation for air transportation, or for any service in connection therewith, than the rates, fares, and charges specified in its currently effective tariffs; and no air carrier or foreign air carrier shall, in any manner or by any device, directly or indirectly, or through any agent or broker, or otherwise, refund or remit any portion of the rates, fares, or charges so specified, or extend to any person any privileges or facilities, with respect to matters required by the Board to be specified in such tariffs, except those specified therein. Nothing in this chapter shall prohibit such air carriers or foreign air carriers, under such terms and conditions as the Board may prescribe, from issuing or interchanging tickets or passes for free or reduced-rate transportation to their directors, officers, and employees and their immediate families; witnesses and attorneys attending any legal investigation in which any such air carrier is interested; persons injured in aircraft accidents and physicians and nurses attending such persons; and any person or property with the object of providing relief in cases of general epidemic, pestilence, or other calamitous visitation; and, in the case of overseas or foreign air transportation, to such other persons and under such other circumstances as the Board may by regulations prescribe."

While the Act is definite as to the classes of persons to whom air carriers are authorized to furnish free or reduced-rate transportation, the Government is not included in such exceptions to the general prohibition against "greater or lesser or different compensation for air transportation * * * than the rates, fares, and charges specified in its currently effective tariffs."

The defendant cites the Certificated Air Carrier Military Tender Investigation, CAB Docket No. 9036, Order E-13536, February 25, 1959, for the proposition that the Civil Aeronautics Board has held that section 403 of the Civil Aeronautics Act does not prohibit a reduced rate to the Federal Government. This is true only as far as it goes. In that case the Board was considering a joint military air transportation agreement between the military agencies of the Government and an association of air carriers providing discounts for official military traffic from regular fares via both scheduled and charter services. At pages 16 and 17 of its mimeographed opinion, the Board said:²

"3. Aside from the considerations of competitive necessity and lower costs of service, the military establishment urges the approval of the 10 per cent military discount, as a matter of law, because the Federal Government is the beneficiary. However, there is no provision in the Act which expressly authorizes the granting of reduced-rate air transportation to the Federal Government, nor does our review of the legislative history of the Act manifest any intention on the part of the Congress to permit preferential treatment of official military or Government travel. Citing cases. Also, while there are dicta of the Supreme Court indicating that discrimination in favor of the Government is permissible without specific statutory authorization, citing cases we are unable to find a square holding to that effect. In any event, it is not necessary under the circumstances of this case for us to predicate our conclusion solely upon any theory that the Federal Government may be granted discriminatory rate concessions without any explicit provision therefor in the Federal Aviation Act. Rather, the fact that the Federal Government is the recipient of the discriminatory military fare discount is itself another circumstance or condition material to the issue of the validity of the discount. This additional factor, taken into consideration with other factors, serves to buttress our conclusion that the circumstances and conditions surrounding official military travel are substantially different from those of standard-fare travel to justify fare concessions to the military establishment."

In brief, the Board did not recognize any right of the Government to preferential rates; rather it approved the military discount because "the circumstances and conditions surrounding official military travel are substantially different from those of standard-fare travel to justify fare concessions to the military establishment." Furthermore, the Board's approval of the discount still required the publication of an appropriate tariff as required by section 403(b) of the Act, supra, and the regulations of the CAB.

The defendant next directs our attention to section 22 of the Interstate Commerce Act, 24 Stat. 379, 387, as amended, 49 U.S.C.A. § 22, which provides that "nothing in this chapter shall prevent the carriage, storage, or handling of property free or at reduced rates for the United States * * *."...