# Petition for Writ of Certiorari — Eastern Air Lines, Inc. v. Northeast Airlines, Inc. > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385602_0803%3A1 ## Record - **Collection:** Supreme Court brief - **Document type:** Petition for Writ of Certiorari - **Published:** January 1, 1965 - **Citation:** 382 U.S. 845 ## Text ERARY a suru -COURT, o, & psf’ In. The _ grouse 6 MAY 19 ‘1965 JOHN F. DAVIS, CLERK Office rans Court, US. F ILE D _Sapceme Guirt of the ei States: October Term Weed EASTERN AIR LINES, INCORPORATED and NATIONAL AIRLINES, INCORPORATED, =n lo Petitioners, _ NORTHEAST AIRLINES, INCORPORATED and THE CIVIL AERONAUTICS BOARD, : Respondents. - PETITION FOR A WRIT OF CERTIORARI TO THE ° . UNITED STATES COURT OF APPEALS as eee POR TES Sener Gee Of Counsel HAROLD L. RUSSELL JAMES H. BRATTON, JR. GAMBRELL, HARLAN, RUSSELL & MOYE 825 Citi Bank Bldg: Atlanta, Ga., 30303 WILLIAM A. NELSON National Airlines, Inc. Miami, Florida. ANDREW T. A: MACDONALD CROSS MURPHY & SMITH 729 15th Street, N.W Washington D. C. 20005 & Southern National : JOHN W. CROSS - 729 15th Street, N.W.. Washington D. C..20005— E. SMYTHE GAMBRELL 825 Citizens & Southern National Bank Bldg. Atlanta, Ga. 30303 a Attorneys for Petitioners ther Picea nas xo ’ PAGE ) Gpinion Below sincatilenions zs soa i 3 . L ‘ ‘one i : Jurisdiction to Review ibe , : a itblaihan 2. a Questions Presented ie aes ee , 3 | Statutes Involved ‘ : mae “s | " Raioregiecene- ‘Statement eae ne Sa | east : © st ut fe Reasons for Granting the Writ a ed ce Se I. The Denial of Intervention Until After Hearing And Decision Deprived Petitioners Of Right Rec- ognized By Controlling - Precedents | entices, 29 II. The Interpretation Placed On Section 7(d) Of The Administrative Procedure. Aet-By- The First Cir- - --euit Is Contrary To The Terms Of That Section, Conflicts With Decisions Of This Court And Of ~ Other Courts Of Appeals, And With Long-Stand-. ing Practices Of Administrative Agencies And. Would Render Many Administrative Proceedings Impossible. Of Completion | a1 A. Section 7(d)_ Was. Interpreted ‘ Conteary oF ————~Law: and Governing Precedent - . 21 - B.. The Statutory and Decisional Rule of Preju- | dicial Error Was Ignored 24 ©. The Effect of the Decision. Would. ‘Be. to Dis- rupt Long-Standing Agency Procedures ......... 26 ConcLusion ......... iis , m silesdainesepulaanioes 28 é : : « ‘ ee - oo 8 s ll >. of : : fi ae VA _ Tass. or AUTHORITIES pane) aoaee as Le eRe — Cases: fs ea on Airport Comm’n of Forsyth County 3 v. CAB,. 296 ) F.9d.95 (4th Cir. 1961) 0.2. 16. Atlantic. Ref. Co. v. Standard Oil Co., _ F. 2d: 387 a (D.C. Cir. 1962) .. | GPAs 18 Amalgamated Meat Cutters v. NLRB, ‘267 F.2d 169. ae ee ee (Ist, Cir.), cert. denied, sub nom. Geilich Tanning ' Co. 'v. Amalgamated Meat Cutters, 361 U.S. 863 3 (1959) Lee Po. 18, 15 "American Airlines, Inc. v. “CAB, 178 F. 2d 903° (7th Cir. 1949) + 16 . American, Trucking buseslation - Friseo Trois: portation Co.,358 U.S. 133 (1958) ...:........... 23 eee FCC, 326 U.S. ‘327 (1945) 4 § Central Minois PSC v. FPC, 338 F. 2d 682 cc i ae 1964) ; 23 _ Chessman v. Teets, 354 U.S. 156 (1957) aE. ccccnnsene 14 - Chicago, South Shore & South Bend R. v. United» . ° States, 221 F.Supy'106 (N.D, Ind. 1963) ............. 23 Cole v. Arkansas, 333 U.S. 196 (1948) ........... spliuetia .. 14 ~ Columbia Broadcasting System v. — States, 316 U.S. 407 (1942) . .. 14 Copgetes v. United States, 369. US. 438 (1962) ieee. 14 | Dallas to the West Service Case, 29 C.A.B. 23, © (1959), affirmed, Bramff Airwaysev. CAB, 277 “Pe OO, Oe oi ie oie ce - ._ + Delta Air Lines v. CAB, 247 F.2d 327 (5th Cir. 1957) LO: = - 24 ge Delta Air Lines, Inc. v.-CAB, sir F.2d 632 (D.C. ' Cir. 1959),, cert. denied, sub nom. is Trans World © Airlines, Inc. vy: Delta Air: ‘Lines, sats .362 US, . PAGE oe _ 969" (1960) . Ribs poreeen : Babies Air Lines, Inc. v. CAB, 271 F.2d 752 (2d Cir. 1959), cert. ‘denied 362 U.S. 970 (1960) ............ 16 - El ie Natural Gas. Co., 23 F. P.C, 610 me: Lae ae 27 Frank v. . Mangum, 937 U.S. 309 (1915) 14 Great bakes Adilines v, CAB, 291, F.2d 354 54° (9th! a Cir. 1961) / : iin 22, 26 Griffin v. Ulinois, 351 USS. 12 (1956 | ‘14 -Hopt aa 110 U.S. 574 (1884) . 8 Hudson Transit Lines v. United States, 82 F. Supp. 153 (S. D.N.Y. 1948), af, 338. oS 802 (1949) .. 2 hei re Bakers of Washington, Inc.; 15 P. & F. Ad. L. 24399 (FTC 1964)... “27 In re Cabinet Mfg. Corp., 144 N.L.B.B. 82, 14 P..& F. Ad. L. 2d 391 (1963) ; 27° In re Loading Rules—Cantaloupes, 6 P. & F. Ad. ; L. 2d 81 (ICC 1956) ......... ey | In re Petitions of Eastern and National Airlines, . 376 U.S. 931 (1964) ............. 13 In re.Plant City Welding & Tank Co., 9P.&F. Ad. _ L. 2d 264 (NLRB 1959) . ; . 27 Sates -_ te | Pre 6 Section 10(b) ae inivitttedaaus Me OR WO aerscenteencpt iain ; 26 Nescaed jehalion Act of 1958, 72° Stat. 737, 49 _* U.S.C. 1301 | Section 40) 22... .ctecceeedeeeeee seecceeceeDy 15 Section 1006. nceccvncrcwecnensnye--6y 12, 18,17, 20° Section 1007 .......... at, citeape SS, 18, 19 Section 1009 pee HE wre ae kc 13 BURR OE ss af. Retain Ie UNAM Sh. 22 MB WSCA UIBRD) asc ncnemrngedienincnteantntrinia” AOR a a a 2 eee oe ee > é * , | ; | is | PAGE ES I hiicrieconionnas ae \ ae ee ae Sievinadiduissien: cau é ; Rules and Regilations ; Federal Rules. of Civil Procedure’ ans ee a S Beale QA nnn snsannecsnnhnconsosensecnssercosecnersnnseponteecots d 2....18, 19, 20 es i» ° * e 7 Se - 7 , * 5 $ : ~~ oh » sp . oe , . a . ss] 7 " @ e ; ta - | ry , o ' F e : | _ t? we 9 s , F ‘ * ’ . o \ (4) ; = / ¢ Pa v . ‘ o 7 ° : ‘ Oo” 4 ‘ ‘ 5) ‘Supreme Court of ‘the Huited States OctosErR Tin 1964 | No. —— Eastern AIR Lines, INCORPORATED and. NationaL Aruines, INCORPORATED, , : Petitioners, ——V . NorTHEAST ArLinzs, IncorPoRaTED and THE Civm Agronautics Boarp, ae : oe Respondents. scale d PETITION FOR A WRIT OF CERTIORARI TO THE’ UNITED STATES COURT OF APPEALS | FOR THE FIRST CIRCUIT $o the Honoralte the Chief Tustion ef the Gnliek Geter: and Associate ore of the agrees Court of the Umited States: Petitioners, Eastern Air. Lines, re and Na? tional Airlines, Incorporated jointly pray that a writ of certiorari issue to review a final order of the United States Court of Appeals for the First Circuit, entered on April 13, 1965, ‘without an opportunity for Petitioners to be heard, which order remanded the case to the Civil Aero- . nautics Board for further proceedings consistent with the Court’s interpretation of the Board’s order and of the requirements of §7(d) of the Administrative Procedure Act, 5 U.S.C. — ; Opinions Below . The opinions and orders of the Court below, which are not. yet’ reported, and of the Civil Aeronautics Board. (Orders E-21550, ‘Dec. 1, 1964 and H-21872, Mar. 5, 1965) which are not officially reported, are reproduced in the separately bound Appendix hereto.’ | Jurisdiction to Review The date of the opinion and order of the Court of Appeals sought to be reviewed is April 13, 1965. The dates of the - Board’s Orders under review are December 1, . 1964 and March 5, 1965..The jurisdiction of this Court is in-~ _voked under 28 U.S. 6. §1254(1) (1958).” it aq Review is cnlattit of the First ‘Cireuit’s April 13, 1965 opinion “and order, which was entered in regard to the Board’s Orders E-21550 and E-21872. For completenéss the Appendix also reproduces the Court’s Order of October 17, 1963, denying intervention to Eastern. and National in the review proceedings; and of November 6, 1963, allowing Eastern and National to file briefs amici curiae; Board Order E-22084 (Apr. 26, 1965) entered in response to the Court’s April 13, 1965 Order sought to be re- viewed; the Court’s Order of April 28, 1965 allowing Eastern and National to comment on the Board’s Motion filed in Court pursuant to Order E-22084; and the Court’s Opinion and Order of May 11, 1965: An earlier decision ‘of the Court of Appeals is reported at 331.F.2d 579 (1st, Cir. 1964). ; - Insofar as may be necessary, Petitioners also invoke 28 U.S.C. §1651 - (1958) out of abundance of caution in view of the fact that they had neither been granted nor denied intervention (except “sub silentio,” see opinion of May 11, 1965 at 2, Appendix 205a) at the time the Court ‘below entered the order now complained of, one of the grounds of com- plaint here being that Petitioners were not allowed to be. heard prior to entry of that order, which had the effect of reversing prior Board Orders that granted petitioners substantial and important. rights. Questions Presented | 1. When, in a proceeding for judicial review of an Order of the Civil Aeronautics Board denying renewal of a tem-. _ porary certificate of public convenience. and necessity, the Court of Appeals is presented with a Motion For an.Order © Directing the Board to Receive Further Evidence, may, consistent with due process, such an order be entered with- - ‘out affording air carriers, which were parties to the agency proceeding and which actively contended for the denial of renewal and bore a major share of the burden of develop- ing the record there, the opportunity to be heard on the questions of law anid fact presented! 2. Where the Civil Aecronauties Board has seaitiadl on the basis of the evidentiary record, to deny the application of an air carrier for renewal of a temporary, certificate, and then takes notice of uncontested facts contained in official air carrier reports to the Board in order to deter- mine whether a different result be required or the record - reopened, does §7(d) of the Administrative Procedure Act | require that a party be permitted to show the contrary of inferences drawn by the Board from the uncontested facts by means of adducing additional facts through expert testi- mony, and forecasts and by updating the record to as recent a date as possible when there has been neither showing nor finding of prejudicial error? 3 ‘ Statutes Involved * Section 7(d) of the Administrative Procedure Act of 1946, 60 Stat. 241; 5 U.S.C. 1006(d) : (d) Recorp—The transcript of testimony and.- ex- hibits, together with all papers and requests filed in 4 . the proceeding, shall constitute the exclusive record for decision in accordance. with section 8 and, upon payment. of lawfully prescribed costs, shall be made available to the parties. Where any the First Circuit’s interpretation of §7(d) of the Ad- | ministrative Procedure Act. That interpretation. appears | to be in ¢onflict with leading decisions of this Court on. the matter of official notice by administrative agencies, as well as in’ conflict with decisions of other Circuits and — eo .- ‘ is at war with prevailing practices before agencies. If allowed to stand; it will render it virtually impossible for any agency finally to determine any matter in which the hearing and decisional process require the passage of substantial time, and will destroy, as a decisional tool, that vital aid to the decisional process—official notice. It is submitted that an important question of federal ad- ‘ministrative law is presented which warrants disposition - by this Court. © Reasons for Granting the Writ This Case Presents the Important and Recurrent Issue of the Rights of Parties to Administrative Pro- ceedings to Be Allowed to Intervene in Judicial Re- view of Agency Action in Time to Be- Afforded a Hearing, and the Important and Pervasive Issue of the Extent to Which Administrative Agencies, in Disposing of Lengthy Licensing Cases, are to be Permitted to Take Notice of Facts Outside the Record ° Without Violating the Requirements of §7(d) of the . Administrative Procedure Act. - I. - : The Denial of Intervention Until After Hearing And Decision Deprived Petitioners Of Right Recognized By Controlling Precedents. : | ; _ The Federal Aviation Act of 1958 provides in Section 1006* that any person “disclosing a substantial interest” in any order of the. Board, affirmative or negative, may seek review thereof in a Court of Appeals where venue - is found. The Act, however, contains no express provi- / _ 492 Stat. 795, 49 U.S.C. 1486. @ y. 13 sion relating to intervention by parties who have prevailed — before the Board and who seek to’ support the Board’s order under judicial review.’ The thajority of the Courts of Appeals nevertheless permit such intervention without discussing the issue.’ Two Circuits—the First? and the Seventh—have a conflicting policy, and refuse to permit - intervention. Very recently, the Second Circuit has denied _such an intervention. This Court has:now granted “cer- tiorari to. review the decisions of the Second Circuit. and of the Seventh Circuit: UAW v. Fafnir Bearing Co., cert. granted, —— US. —, "85 S. Ct. 1087 (1965); UAW v. Scofield, cert. granted, — US. — ,/85 S. Ct. 666 (1965). The first question presented here differs from ‘the above two cases only in that the First Circuit permitted peti- tioners to intervene at the énd of the proceedings below— after it had reached its decision—and solely for the pur- pose of allowing Eastern and National to seek certiorari. Basically, then; the same considerations are involved. Those considerations are that denial of intervention (1) infringes upon the Constitutional guarantees of due process “of law, (2) presents a clear conflict’ among the Circuits, - (3) makes fortuity controlling upon the right of interven- tion, and (4) is’ subject to this Court’s remedial review and correction under’ its general supervisory authority over the administration of justice in Federal courts. LJ 5 The Act puvislie intervention by interested persons in proceedings for enforcement. of the. “provisions of the Act. (Section 1009; 72 Stat. 796, 49 U.S.C. 1489). It also gives. private persons the right to enforee certain provisions (Section 1006(2) ). ® See Subpart I.B. below. ‘Amalgamated Meat Cutters v. NLRB, 267 F.2d 169 (1st Cir.), cert. denied, sub nom. Geilich Tanning Co. v. Amalgamated Meat Cutters, 361 U.S. 863 (1959). Northeast Airlines v. CAB (printed in Appendix hereto » at la), cert. denied sub nom. In re Petitions of Eastern and National » oO Airlines, 376 U.S. 931 (1964), upon the representation: of the Board and — the Solicitor ayn that certiorari was then untimely. . 14 A.. The ruling of the First Circuit infringes due process. The Courts have always held that a competitor is entitled to intervene before the Board and to obtain review of adverse ° Board orders. E.g., Seaboard & Western Air. vy. CAB, 181 F.2d 515 (D. C. Cir. 1949), cert. denied, 339:U. S. 963 (1950). And where due process applies .it does so from the beginning to the end of the adjudicatory proceedings. . It includes equal opportunity to invoke and to participate in appellate judicial review. . ‘Thus the due process injury in denial of participation in the Court of Appeals is clear at the stage when the case .is heard before that Court. For, fhe party denied interven- _ tion continues in a non-party status which is inconsistent with this Court’s announced policy that orderly deter- mination of issues “requires that they be adjudicated in a proceeding in which all the interested parties, are before the Court.” United States v. Louisiana, 354 U.S. 515 (1957). It is no answer that the latter day intervenor may protect his rights by participation in further agency proceedings | at the conclusion of which he: might’ seek judicial eview of an order running against him. The sotion” that an “ex post facto” judicial hearing suffices to protect the rights of a party is incénsistent with this Court’s ruling “in Ashbacker v. FCC, 326 U.S. 327 (1945). ; In the past, intervention has been denied. by. certain Circuit Courts of Appeals in cases arising out of appeals 8 See Morgan v. United States, 298 U.S. 468 (1936); Saunders v. Shaw, 244 U.S. 317 (1917); Frank v. Mangum, 237 U.S. 309, 327 (1915); Hopt v. Utah, 110 U.S. 574 (1884) ; cf>“Ashbacker v. FCC, 326, U.S. 327 (1945) ; Columbia Broadcasting System v. United States, 316 U.S. 407 (1942); Western Pacific v. Southern Pacific Co.,.284 U.S. 47 (1931). * Price v. Johnston, 334 U.S. 266, 280 (1948); Saunders v. Shaw, 244. U.S. 317 (1917), See also Coppedge v. United States, 369 U.S. 438, 447-448 (1962); Chessman v. Teets, 354 U.S. 156 (1957); Griffin v. Minoie, 351 U.S. 12 (1956); Cole v. ‘Arkansas, 333 U.S. 196, 201-202 (1948); Inter- national Steel & Iron Co. v. National Surety Co., 297 U.S. 657, 665 (1936). 15 ; _ of orders of the NLRB. This line of cases includes Amal- gamated Meatcutters v. NLRB, 267 F.2d 169 (1st -Cir.), cert, denied, sub nom. Geilich Tanning Co. v. Amalgamated Meatcutters, 361 U.S. 863 (1959), the First Circuit’s lead- ing precedent. Those cases had been justified on the basis of the statutory provision making the NLRB the sole agency for-abating’ unfair labor practices. See 29 U.S.C. §160 (a) (1958). However, this Court has evidenced its concern with those decisions in the Scofield and the Fafnir Bearings cases previously mentioned, to review which it has granted certiorari. The right of intervention on re- view of decisions of the Civil Aeronautics Board in route - proceedings is much clearer, inasmuch as a favorable de- cision by the Board on a route award gives the successful litigant before the agency definite and enforceable rights, whereas the National.Labor Relations Act gives him none. Section 1007 (a), of the Federal Aviation Act, 49 U.S.C. §1487(a) (1958), provides in pertinent part: “[I]n the case of a violation of section 401(a)** of this Act, any party in interest. may apply to the district court of the United States, for any district wherein such person carries on his business or wherein the violation occurred, for the enforcement of such provi- sion of this Act ... and such court shall have jurisdic- tion to enforce obedience thereto. . . .” (Footnote added.) Thus, ‘Petitioners here would, upon the successful de- ~ fense of the Board’s decisions in the proceedings at issue; have had a right to go into’ a Federal district court to _ enjoin operations by Northeast over the route at igsue.. The rights Petitioners seek to protect by intervention in “a review proceeding on the side of the Board for the pur- “10 Section 401 (a) makes it unlawful for any person to engage in air _ transportation without a certificate of public convenience and necessity © ‘authorizing such transportation. See 49 U.S.C. §1371 (a) (1958). y 16 3 ” pose of ite. the Board’s wee are real, vital as - %. _. Important rights of—the- “Petitionors— ~thomselves-~Those- frag "rights, as shown, are far stronger than the rights that may be asserted by the successful litigant in an unfair labor practice case before the NLRB. B. Conflicts Between the Courts of Appeals Are Mani. ~ fest, There is a conflict of law among the Circuit Courts ~- on the question of intervention in appeals of orders of the Civil Acronauties Board. So far.as we are aware, ‘no | _ competing carrier, having a direct and substantial .inter- est in the preservation of a CAB decision in a route case ae has been refused leave, except by the First -Circuit here, to intervene and protect that decision upon appeal. On the contrary, intervention has uniformly. been allowed -Witheut discussion or dissent. Indeed, we are aware of no case where the matter has ever been litigated. E.g., Nebraska Dep't of Aeronautics v. CAB, 298 F.2d 286 (8th Cir. 1962); Airport Comm'n of Forsyth County v. CAB, 296 F.2d 95 (4th-Cir.1961); Delta Air Lines, Inc. v. CAB, 275 F.2d 632 (D.C. Cir. 1959), cert. denied, sub. nom., Trans World Airlines, Inc. v. Delta Air Lines, Inc., 362 U.S. 969 papel Eastern Air Lines, Inc. v. r. CAB, 271 F.2d 752 (2d ; Cir. 1959), cert. denied, 362 U. S. 970 (1960); Delta Air Lines v. CAB, 247 F.2d 327 (sth Cir.. -1957) ; United Air Lines, Inc. v. CAB, 198 F.2d 100 (7th Cir. 1952) ; Western Airlines, Inc. ¥. CAB, 196 F.2d 933 (9th Cir.), cert. denied 344 U.S. 875 (1952); Southwest Airwar ys Co. v. CAB, 196 F.2d 937. (9th Cir. 1952); State Airlines, Inc. v. CAB,. 174 F.2d 510 (D. C. Cir. 1949), rev'd on other grounds, 338 ; U.S. 572 (1950) ; American Airlines, Inc. y. CAB, 178 F.2d 903 tava Cir. sen ole 1 se enough the Seventh Circuit, where the Scofield « case, supra, arose out of that cireuit’s denial of intervention in -review of an Sy ee — H 17 ©. Intervention 1s Controlled By Fortuity im the Ab- sence of an Authoritative Policy. The conflict between the oirenits— is particularly significant in that $1006 of the Federal Aviation Act, 49 U.S.C. §1486, provides that re- | view may be taken either to United States Court. of Ap- peals for the District of Columbia Circuit or to the Court of Appeals for the Circuit wherein the petitioner resides or has his principal place of business. Thus, if ‘Northeast had elected to seek review from the District of Columbia Circuit (which receives the great bulk of appeals from: the CAB), Eastern and National would have been granted | intervention automatically. However, Northeast, by choos-° ing the First Circuit, as it had a right to do under the statute, was able to bar its competitors, your Petitioners, from participating’ in the judicial review proceedings. Ironically enough, Northeast has been allowed to intervene: in support of CAB orders beneficial to it without question of its right to do so in two recent appeals by your Peti- tioners challenging those orders. National ‘Airlines, Inc. v. CAB, 321 F.2d 380 (D.C. Cir. 1963) ; National Airlines, Inc. v. CAB, 306 F.2d 753 (D.C. Cir. 1962). However, when » ‘astern and National received a decision beneficial to them, - ‘ the same adverse: ‘parties (Eastern and National) in the proceedings just cited were deprived of intervention to protect their interests when Northeast elected to seek re-- ~~ view in the First Circuit. Intervention was not granted until it was too late to affect decision. D. An Appropriate i Issue Is Presented. The above conflict of rules in different circuits on a matter involving rights of substance and a requires this Court’s review y and harmonization. NLRB proceeding, has granted. intervention in appeals of CAB cases, as indeed, appears to have been its former practice with regard to NLRB . appeals. 682, 684 (7th Cir. 1964) ; Spitzer v. Commissioner, 153 F.2d 967, 972 (8th Cir. 1946). See also Chicago, South Shore & South Bend R, v. on — 221 F. sai 106 cm D. Ind. 1963). ee Vibes the updating of the record which the First Cireuit required is beyond the province of a reviewing 24 Court to order. United States v. Pierce Auto Freight Lines, supra, 327 U.S. at 534-535. “B. The Statutory. and Decisional Rule of Prejudicial Error Was Ignored. In both of its Orders upon remand from the First Circuit (E-21550 and E- 21872), the Board expressly stated that it had reached its decision (not to renew Northeast’s au- ‘thority) on the basis of the evidentiary. record, and had looked at official carrier reports (to the Board) of traffic and profit and loss only to verify the correctness of its conclusion and to determine whether events happening after the close of the record required the exercise of the Board’s discretion to reopen the proceeding. In its opinion, the Court of Appeals did not conclude otherwise. It con- cluded only that the Board “chose to look at some subse- quent matters,” and that “having elected to look at such ‘matters it could not pick and choose, at least to the extent of denying an objecting. party the rights guaranteed, but by no means created, by, §7(d) ‘to rebut not only those matters it looked to, but also the inferences which were sought to be drawn therefrom:” (Appendix 195a). Section 7(d) does not, by its terms, prohibit the use of official notice. Nor, by its terms, does it require that the use of extra-record facts be followed, in every case, by an opportunity for a party to show the contrary. It-states only that when agency decision rests on matters of official notice, such an opportunity shall be afforded. The deciSion of the Board on the major issue of the proceeding—1.e., renewal or nonrenewal of Northeast— did not rest on any matters other than those in the evi- dentiary record. The Board .itself said so in both its opinions. And the Court of Appeals did not conclude to . the contrary. It could not have done so. For, in declining y ‘ ) to pass “on ‘the merits” (Appendix 195a) and in basing its decision solely on a determination that the Board: had “opened the door to new data” and. must therefore take a full look, it obviously could not have determined whether the agency decision rested..on official notice of faéts ‘or whether it rested, as the Board said it did, on the facts of record. But before §7(d) can come into play, that ques- tion has to be determined. The plain words of the section. permit no other interpretation. In failing to make the above determination—a deter- mination which it could hardly make short of accusing the Board of misrepresentation—the Court of Appeals ignored not only the words of §7(d) but also the require-— ment of §10(e) that due account be given in judicial review proceedings to the rule of prejudicial error. For, if the decision did not rest on matters of official notice, as the Board said it did not, but was grounded on substantial evidence of record, the use of officially-noticed facts did not prejudice Northeast. | The opinions of this Court and of lower tribunals except the First Circuit have made it abundantly clear that the use of official notice is not reversible error where the matters noticed are delineated in the opinion and where . substantial prejudice does not result from such use. United States v. Pierce Auto Freight Lines, 327 U.S. 515, 529-530 (1946); Market Street Railway Co. v. Railroad Commis- sign, 324 U.S. 548, 559-562 (1945) ; Opp Cotton Mills v. Administrator, 312 U.S. 126, 154, 155 (1941). In Pierce Auto, supra, this Court said ‘that it— “... has not undertaken to make a fetish of sticking squarely within the four corners of the specific record in administrative proceedings or of pinning down. such agencies, with reference to.fact determinations, even more rigidly than the courts in | strictly judicial 26 proceedings. On the contrary, in the one case as in the other, the mere fact.that the determining body _ has looked beyond the record proper does not in- ‘- validate its action unless substantial prejudice is shown to result.” (327 U.S. at 530). The rule that - substantial prejudice must be ‘shown is incorporated in §10(e) of the Administrative Pro- ~ cedure Act.® And it has been followed by other Courts of Appeals since the passage of the Act. State of Wisconson v. FPC, 201 F.2d 183, 186-87 (D.C. Cir. 1952), cert. denied, 345 U.S. 934 (1953); NLRB v. Johnson, 310 F.2d 550, 552 (6th Cir. 1962) ; Great Lakes Airlines v. CAB, 291 F.2d 354, 369 (9th Cir. 1961). The first circuit, however, has ignored the rule and has held that whenever an agency uses any - matter of official notice. it has committed legal error and must reopen the proceeding. _C. The Effect of the Decision Would Be to Durnge Long-Standing Agency Procedures. The use .of official notice is longstanding in administra- tive practice. The Civil -Aeronautics Board constantly refers to matters in reports filed with it by carriers to assist in decision of cases before it, and as a check upon its decisions. Washington-Baltimore Adequacy of Service In- _ vestigation, 30 C.A.B.° 1255 (1960), affirmed, National’ Air Lines v. CAB, 800 F.2d 711 (D.C. Cir. 1962); Dallas to the West Service Case, 29 C.A.B. 23, 30 (1959), affirmed, Braniff . Airways v. CAB, 277 F.2d 334 (D.C. Cir. 1960) ; Reopened ' Delta-C € S Mail Rate Case, 28 CAB 820 (1959) ; Southwest- Northeast Service Case, 23 C.A.B. 42, 45 (1956); Spearfish 15 See also Attorney General’s Manual on the Administrative Procedure Act, p. 110.. “. . . errors which have no substantial bearing on the rights of the parties ‘will be disregarded.” Significantly, the Manual relies on Market Street a supra. ewe Freee ane : Suspension Case, 18 C.A.B. 657 (1954) ; Latin American Air | Freight Case, 16 C.A.B. 107 (1952). en Other agencies also rely frequently on official notice. E.g., In re Sears Roebuck & Co., 15 P. & F. Ad. L. 2d 748 (FTC 1964) ; In re Bakers of Washington, Inc., 15 P. & F. Ad. L. 2d 399 (FTC 1964) ; In re Cabinet, Mfg. Corp., 144 'N.L.R.B. 82, 14 P. & F.:Ad. L. 2d 391 (1963) ; El Paso Natu- _ ral Gas Co., 23 F.P.C. 610 (1960) ; In re Plant City Welding & Tank Co.,9 P. & F. Ad. L. 2d 264 (NLRB 1959) ; N.Y. - Central R. Co. Abandonment, P. & F. Ad. L. 2d 1021 (ICC _ 1960); In re Loading an 6 P. & F. Ad. . L, 2d 81 (ICC 1956). _ Agencies such as the Civil iovemiiiiin teork the Fed- eral Power Commission and the Interstate Commerce Commission, all: of which are charged with the grant or denial of licenses, ‘have before them cases which,are com- plex and of long duration. Inevitably there are. lengthy periods between the close of the record at the hearing and the date of agency decision. Although the law requires that agency decision be based upon substantial evidence of record, it cannot be construed to prohibit an agency from looking to the reports filed with it by the companies which it regulates in order to verify its conclusions in light of recent data or to determine whether a reopened record may. be desirable because of such data. Yet such is the effect of the decision of the First Circuit. For, on the one hand, that decision declares. that concen- tration solely on the record without checking more recent | data by ‘official notice is subject to “criticism, legal or _ otherwise” (Appendix 195a) and, on the other, it holds that the evidentiary record should be: reopened, explained and updated whenever such data are noticed. The result in lengthy licensing proceedings is obvious; the proceed- 98 ings would become interminable: The agency must use official notice to escape criticism. But, if it does, any per- son aggrieved will seek to reopen, explain and’ update. Thereafter, due to the lag in the decisional process, official _notice..must again be taken to avoid criticism. And; on. application, another reopened, explanatory and updated © proceeding must be held. And so on. We do not believe that the administrative process, already. under attack for the length of its proceedings, can function properly under the decision of the First Circuit. We respectfully submit that this Court should review that decision. CONCLUSION The denial of intervention to petitioners herein pre- : cludéd them from an opportunity to be heard. . That denial is contrary to decisions of this Court, and in conflict with decisions of the Circuits. This Court should exercise its ‘power of review and supervision to put this — question of Federal law beyond dispute. The First Circuit’s .interpretation of §7(d) of the Ad- ministrative Procedure Act is contrary to decisions of this Court and also in conflict with decisions of other Circuits, and with the prevailing practices of the agencies. The correct application of the law in respect to official | notice is of widespread importance to the administrative process. This Court is respectfully requested to review the action of the First Circuit and thereby to settle the law which all agencies must follow in respect to official notice. Petitioners suggest that this Court upon review as re- quested herein may find it desirable to review and affirm the decisions of the Civil Aeronautics Board and thus . terminate a proceeding already more than four years old * ? sabe prt: sikh 5 ADA ABE ali PAE te Rae a 29" and involving almost one billion revenue dollars to date, and Petitioners respectfully ask the Court so to do. _ Respectfully submitted, JoHn W. Cross E. SmytHe GaMBRELL Attorneys for Petitioners Of Counsel Haroitp L. Russeun James H. Bratton, Jk. GamBRELL, Hartan, Russett & Move Wiuum A. NELson | Anprew T. A. MacDonap Cross Murpoy & Smiru “May 19, 1965 --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385602_0803%3A1. Public record. Not legal advice.