State Airlines v. Civil Aeronautics Board, 9748.

• Decision Date: 06 April 1949
• Docket Number: No. 9748.,9748.
• Citation: 174 F.2d 510
• Parties: STATE AIRLINES, Inc., v. CIVIL AERONAUTICS BOARD et al.
• Court: U.S. Court of Appeals — District of Columbia Circuit

174 F.2d 510 (1949)

STATE AIRLINES, Inc., v. CIVIL AERONAUTICS BOARD et al.

No. 9748.

United States Court of Appeals District of Columbia Circuit.

Argued December 8, 1948.

Decided April 6, 1949.

Mr. Frederick W. P. Lorenzen, of New York City, with whom Messrs. Wilmer A. Hill and Philip Schleit, both of Washington, D. C., were on the brief, for petitioner.

Mr. Edward Dumbauld, Special Assistant to the Attorney General with whom Messrs. William D. McFarlane, Special Assistant to the Attorney General, Herbert A. Bergson, Assistant Attorney General, Emory T. Nunneley, Jr., General Counsel, John H. Wanner, Assistant General Counsel, Oliver Carter, Acting Chief, Enforcement and Litigation Section, O. D. Ozment and J. A. Seeley, Attorneys, Civil Aeronautics Board, all of Washington, D. C., were on the brief, for respondent. Mr. Edward J. Hickey, Jr., Special Assistant to the Attorney General also entered appearance for respondent.

Mr. Robert B. Hankins, of Jacksonville, Fla., with whom Mr. Charles H. Murchison, of Jacksonville, Fla., was on brief for intervenor Piedmont Aviation, Inc.

Before EDGERTON, CLARK, and PRETTYMAN, Circuit Judges.

CLARK, Circuit Judge.

The case comes before us on a petition to review certain orders of the respondent Civil Aeronautics Board (hereinafter called the Board or respondent), insofar as those orders grant a certificate of public convenience and necessity to Piedmont Aviation, Inc. (hereinafter called Piedmont or intervenor), and deny the application of State Airlines, Inc. (hereinafter called State or petitioner), for such a certificate. There is now no question as to the finality of the orders under review.¹

Those orders had their origin in a so-called "area proceeding" before the Board in a case known below as the Southeastern States Case. This area proceeding was a consolidated proceeding involving some 45 applications by 25 airline companies (including State and Piedmont) for authority to provide proposed service in a geographical area which included all or a part of about 14 states in southeastern United States. However, we are here concerned with, and shall in the main refer to, only so much of the area proceeding as concerns State and Piedmont. Although this proceeding also treated with applicants for through or "trunkline" services in southeastern United States, we shall focus our attention on only the local or "feeder" air transportation services sought in that area since both Piedmont and State were applicants for "feeder" services.

The numerous applications which came within the geographical scope of the proceeding were consolidated for hearing and a lengthy hearing was held in Greensboro, North Carolina, before Examiners Newmann and Henderson.² This hearing commenced in May and ran through the greater part of June of 1945. Both State and Piedmont actively participated in this hearing and both have continued to so participate throughout the various subsequent stages of the proceeding. On June 4, 1946, the Examiners issued a 159-page report in which it was "recommended that the Board find that the public convenience and necessity require," inter alia, that both Piedmont and State be granted certificates authorizing their providing air transportation service over certain specified routes. The recommendation of the Examiners, generally speaking, suggested that Piedmont be given certain routes it sought running roughly north and south, no point on such routes being west of the main range of the Appalachian Mountains. The Examiners' recommendation as to State, on the other hand, urged the award to State of certain specified routes for which it had applied which ran mostly east and west and which crossed the main Appalachian range thus connecting key points in the Ohio Valley with the so-called Piedmont region of North Carolina.

Numerous exceptions to the recommendations of the Examiners were duly filed by State, by Piedmont, by Public Counsel,³ and by others. After due notice to all interested parties, a full hearing was held before the Board, beginning August 28, 1946. The Board's first decision in the case came down in the form of an Opinion and an Order, both dated April 4, 1947. This decision, so far as concerns the case now before us, granted a temporary (3 year) certificate to Piedmont authorizing air transportation service by Piedmont to designated points along specified routes. That same decision denied the applications of State in their entirety. Since one of the critical questions in this case requires our close scrutiny of the routes ultimately awarded and of the routes sought respectively by Piedmont and by State, we reproduce below two diagrammatic maps which adequately illustrate the main route proposals of both State and Piedmont as contrasted with the authorizations granted by the Board's decision of April 4, 1947 (see Maps Nos. 1 and 2 infra).

State filed a petition for reconsideration of that decision which was granted in part, the Board having limited reargument by State and Piedmont to the questions of "(1) whether the public interest requires the selection of State or Piedmont, and (2) whether the Board committed legal error by awarding the route to Piedmont." After further argument before the Board on these questions, the Board issued a supplemental opinion, dated December 12, 1947, in which it adhered to its original decision and indicated that Piedmont would be granted the temporary certificate sought. That same day an order was entered granting to Piedmont such a certificate. Thereafter, State filed in this court its second petition for review,⁴ and this court (a) denied State's motion for stay of the effectiveness of the orders of the Board being reviewed and (b) granted Piedmont's motion for leave to intervene.

The contentions of the parties to this review, as set forth in their briefs and in oral argument before us, make it clear that our decision depends upon the answers which must be given to the following two questions: (1) was Piedmont, at the time of the Board's decision, an applicant for the routes it was ultimately awarded; and (2) if not, can the Board award a certificate to one who was not an applicant for the routes authorized by that certificate?

I. Was Piedmont an applicant for the routes awarded?

We reproduce immediately below the two diagrammatic maps spoken of above:

These maps do not purport to show all of the points and routes applied for at any time by State and by Piedmont, nor do they attempt to portray all applications by both parties for all types of proposed service. A careful study of the very voluminous record (consisting of 29 volumes totalling close to 17,000 pages) leads us to believe that the routes shown by broken lines on the two maps are those for which the parties actually applied in the sense that they had filed applications therefor and actively, by brief and by oral argument before the Board, sought. Only such routes as included proposed passenger service are included in these maps.⁵

As indicated by the legends to the two maps above, the broken lines represent the routes sought respectively by Piedmont and by State.⁶ It will be noted that the solid route lines are identical in both maps, they being, of course, those awarded to Piedmont by the Board's decision of April 4, 1947.

Turning now to a critical comparison of the routes sought by Piedmont with the routes it was awarded, we believe that even a superficial examination of Map No. 1 reveals with certainty that Piedmont did not apply for, and hence was not an applicant for, the routes which the Board has authorized it to serve. The broken lines on Map No. 1 evidence Piedmont's plan to operate on routes running predominantly north and south and to serve points lying east of the mountains. The only point Piedmont proposed to serve which was in any sense across the mountains was Knoxville, Tennessee, and that point is not west of all the mountains and, as can be seen, was not one of the points which the Board ultimately authorized Piedmont to serve. It will also be noted from examination of Map No. 1 that Piedmont's broken-line (proposed) routes coincide exactly with the Board's (awarded) routes in only two places and there, in each case, for only very short distances and only between two adjacent points on a branch route.⁷ Of the total of 39 points which Piedmont proposed to serve, only 9 lie along routes awarded by the Board. We think it completely obvious that Piedmont did not, in fact, specifically apply for the routes it was awarded by the Board.

Respondent tacitly concedes that Piedmont did not specifically apply for the awarded routes but directs the bulk of its argument on this issue to its claim that Piedmont's application was "sufficiently broad" (by virtue of a so-called "catch-all clause" in the Piedmont application) to justify its being considered an applicant. This "catch-all clause" as contained in Piedmont's amended application states that Piedmont applies "for the authorization to engage in scheduled air transportation as an air carrier of passengers, mail and property, in local and feeder passenger service and mail, express and property pick-up service on the routes detailed herein, or such modification of such routes as the Board may find public convenience and necessity require." (Emphasis supplied.) We do not read this clause as requesting, in any sense, authority to operate on the routes ultimately awarded in this case. We do not agree with the Board and with Piedmont that (referring again to Map No. 1) the routes represented by the solid lines are a mere modification of the routes represented by the broken lines. Such a claim seems to us to be a distortion of reality and a totally unreasonable, capricious, and arbitrary interpretation of the word "modification." To be sure, the word "modification" normally connotes change or altering, but such change or altering must not be great and must not result in so transforming...