# Appendix — American Airlines, Inc. v. Civil Aeronautics Board > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385602_1644%3A2 ## Record - **Collection:** Supreme Court brief - **Document type:** Appendix - **Published:** January 1, 1966 - **Citation:** 385 U.S. 843 ## Text UNITED STATES COURT. OF APPEALS FOR THE DISTRICT OF COLUMBIA CIRCUIT No. 18833 AMERICAN ArRuInzs, Inc., Petitioner - v. Civ, Azronauttcs Boarp, Respondent Tue Suick Corporation, Air Freicht Forwarpers ASSOocIATION, Tue Fryine Ticer Linz, Inc., Intervenors. No. 18834 | Trans WORLD. AIRLINES, Inc., Petitioner ne 3 | Crvi, AzRonaltics Boarp, Respondent Tue Stick Corporation, - _.. Am Freicur Forwarpers AssociaTion, Tae Fryine Ticer Linz, Ino., Intervenors. No. 18840 ‘Untrep A Linzs, Inc., Petitioner i ' Crvm' Arronautics Boarp, Respondent THe Suick Corporation, Am Freicot Forwarpers Association, Tue Fiyine Ticzr Linz, Inc., Intervenors. On Petitions for Review of Orders of The Civil Aeronautics Board. " Decided April 15, 1965 ? s & Qa Before BazELon, Chief J udge, and DanaHER and Burcer, Circuit Judges. Bonam, Circuit Judge: indies review are two orders of the’Civil Aeronautics Board, one (E. 21160) permitting i in- ‘tervenor, Slick Airways, a certificated carrier. handling freight only, to put into effect a certain tariff schedule of discounts for blocked space to which the shipper becomes contractually committed and a second order (E 21170) -re- _ jecting tariff schedules with tariffs the same as Slick’s filed by petitioners, who are-also certificated earriers, han- dling pagsengers as well as freight. The effect of the figst order, as the Board advises in its brief, ‘‘is to permit the Slick tariff to become effective pending an investigation of its lawfulness, and the. effect of the subsequent second order is to preclude petitioners [American, Trans World Airlines, Inc. and United Air Lines, Inc.] from providing blocked-space service’’ such as is permitted for‘Slick. —.. _ ; At the outset we note ‘that the air cargo transportation | business since ‘its inception has been carried on by peti- tioners, who. also carry passengers; at some ‘point two other ‘earriers,- The Slick Corporation ‘and The Flying Tiger Line, Inc., intervenors here, became certificated a cargo carriers only. Cargo includes’ property and mail.: In June 1964 intervenor Slick Corporation, one of the — all-cargo carriers, filed with the Civil. Aeronautics Board a tariff in which it proposed to offer sizable ‘‘blecked . space’? discounts on transcontinental freight shipments. ‘To qualify for such a discount under the tariff a shipper is required to reserve and contract for a certain amount | ' of space for regular use over a given period; having. con- tracted for the —_ the shipper i is obliged to pay for it | whether used, or not. -|o Slick’s cies tariff petitioners, the three ‘so- called ‘‘¢ombination carriers”’ (authorized to carry both — passengers and freight on a scheduled basis), filed protests on the ground that the proposed discounts were unlawful under the Federal Aviation Act’s ratemaking provisions. - In addition, the combination carriers filed ‘‘defensive’’ tariffs substantially identical with Slick’s in order to meet . Slick’s competition, should the Board refuse to suspend Slick’s tariff pending investigation of its lawfulness or ° ultimately find it lawful. ‘The Board first, suspended all of the tariffs pending investigation. Orders Under Review On a 7, 1964, the Board issued Order E 21160, the first of its two orders here under review. That order vacated the suspension of Slick’s tariff while leaving in- operative those of petitioners. As its reason for this ac- tion the Board adverted to its simultaneously issued “policy statement,’’ known as Reg. No. PS-24: Pt. 399, ‘approving the cxchisive right of all-cargo. carriers to sell blocked space to combination carriers, air freight forward- _ ers and large volume shippers. ’? (Emphasis added.) On August 11 the Board entered order E 21170, the — second order under review, rejecting petitioners’ tariffs pursuant to its policy statement granting to all-cargo car- — riers the exclusive right to provide blocked-space dis- counts and dismissing the investigation of petitioners’ tariffs. Conténtion of Air Freight Forwarders Association We deal first with the contention of Air Freight For- warders Association, an intervenor, that the blocked-space - concept approved by the Board’s policy -statement and the Slick tariff will subject its members. to unlawful and uneconomic competition by-allowing unauthorized persons to engage in forwarding activities. The Association, as an intervenor, may be heard only on the issues posed by’ the petitions for review. See, e.g., Columbia Gas Co. v. 4a ~ Amer. Fuel Co., 322 U.S. 379, 383 (1944). Those peti- tions, as will appear, do not challenge. the lawfulness of the Slick tariff; and they challenge the Board’s blocked- | space regulation only incidentally insofar: as it formed - the basis of the two orders appealed from. Consequently the questions posed ‘by the, Association may not be re- solved mare. 3 ; eng of Order E 21160 We accept the Board’s informal suggestion of mootneés at argument, acquiesced in by the combination carriers, as to the propriety of Order E 21160, which vacated the a suspension of Slick’s tariff. Under the statute, the Board ‘may suspend a tariff for a maximum of 18 days. That time has now run. Moreover, petitioners’ objections to Order E 21160 are in a sense superseded, by their objec-. tions to Order E 21170,. with which we deal fully below. © _ We thus do not reach the questions (1) whether this court - may ‘review the Board’ s different treatment, pending ex- amination of lawfulness, of substantially identical tariffs when the ground for the disparity (as does Reg. No. PS- ‘24: Pt. 399) indicates that the Board has decided to deny certain of the tariffs regardless of their lawfulness;’ and (2) whether there may exist a basis for distinguishing. as to reviewability between. initial determinations against suspension and orders vacating prior. suspensions. 4 - Validity of Order E 21170 We come finally to Order E 21170, which rejected the proposed tariffs of the combination carriers. Petitioners contend that to allow all-cargo carriers to use blocked- 1 The Board argues that Arrow Transp. Co. v. Iiciiieabe R. Ca, 372 U.S. 658 (1962), > a determination that this order is unreviewable. S See, e.g., Kiclaalthe Gieaet Express v. United States, 138 F. Supp. 411 (N:D. Tex. ne) ¢ 4 . t wey ag 3 . °.. space discount tariffs exclusively and deny the same right to combination carriers operates in .effect to revoke the authority of the combination carriers to transport prop- erty, since, so they assert, the result would be to put them out of the ‘cargo business.’ Under section 401(g) of the Act, certificated authority may not be revoked except for an intentional violatidn of the Act, an order, rule or -. regulation issued thereunder, or a provision of the cer- tificate itself. Revocation may only be after notice and hearing, and must be conditioned on the failure of the . carrier to mend its ways within a reasonable period set ) by the Board. - It is undisputed”that petitioners have not | been put through these revocation procedures. The Board contends, on the other hand, that no’ adjudi- catory proceedings were necéssary, since its regulation was a proper exercise of its rulemaking authority under section 416(a) of the os That section provides as fol- lows: . o The Board may from time to time establish ‘such just and reasonable classifications or groups of air carriers for the purposes of this-title as the nature of the services performed by such air carriers shall require; and such just and reasonable rules and regu-. lations, pursuant to and consistent with the provi- ‘sions of this title, to be observed by each such class _ or group,'as the Board finds ee in the public interest. : The Reni’ policy statement was adopted after rulemak- ing hearings which the Board tells us led it to believe that its ‘‘delineation of roles’’ of: the two categories, of carriers would serve the public interest. In order to find that the ‘Board’s astion penn toa. Es . revocation of petitioners’ certificated authority as cargo carriers, we believe there must be a showing that. peti- tioners would in fact lose a. substantial part of their -6a cargo business, probably to the point where they could ‘not conduct ecenomically feasible operations. There has been no adjudicatory hearing on this question; the rulemaking proceeding did not indicate such a result. The Board has power to amend certificates upon a show- | ing that the public convenience and necessity so require. © Such a showing is to’ be made, after notice, at an adjudi- catory hearing. 49 U.S.C. § 1371(g). See Civil Aero- nautics -Board y. Delta Air Lines, 367 U.S. 316 (1961). We do not need more evidence than the record reveals to see that the operative effect of: the Board’s action is to, amend the outstanding certificates of petitioners. Indeed _ the Board concedes the exclusion of petitioners from per- forming the kind of: carriage they were originally cer- tificated to perform and as to which they have made large investments of capital. The certificates of the All-cargo carriers and those of the combination carriers bestow identical rights and im- pose identical obligations with respect to the carriage of property. It follows that the two types of carriers. must be free to file identical tariffs. for the carriage of cargo. _ By permitting the all-cargo carriers to file blocked-space — tariffs the Board acknowledges their present authority to.- file such tariffs under their’ existing certificates, which, ‘except as to passenger carriage, are the same as the com- bination carriers’. By denying. the combination carriers ~ the opportunity to file such tariffs the Board in effect | amends outStanding certificate authority. : / Board Order E.21170 is therefore of no effect because of the Board’s failure to hold the hearing required by the. Act. No remand on this issue is necessary such as that in. CAB v. Amer. Air Transport, 91 US.App.D.C. 318, 201° F.2d 189 (1952), since no issue ariges as to the fact of alteration of petitioners’ present certificated authority to engage in the same classes of carriage as their long- _ standing competitors. Ve a é FPG v. Texaco, Ine., 377 US. 33 (1964),? advanced by the Board as supporting its ‘‘delineation of roles,’’ is not in point. That case did no more than to uphold the Power Commission’s power to provide for summary re- _ jection of contracts with pricing provisions other than those allowed under its regulations. The petitioners there _ - ., were not being deprived of any authority they had previ- * ously exercised ; rather, they had submitted applications for certificates of public convenience and necessity which disclosed impermissible pricing clauses. ‘The instant case, in contrast, presents an attempt to abridge existing cer- _tificated authority by rulemaking, not the formulation of | reasonable, nondiseriminatory criteria to be met as condi- tions of receiving ‘such authority in the first place. Nor © does Capitol Airways v.,CAB, 110 ee p-D.C. 262,.292 - F.2d 755 (1961), support the Board. - lain implica- ' tion of that case is rather. that where the Board attempts, - as here, to separate ‘‘sheep from goats’’ it can do so only | by a process of adjudication. he authorities cited in the disseft do not .indicate a - Contrary result. Indeed, our -holding is’ in full accord | with Great Lakes Airlines v. on 1 F.2d 354 (9th Cir. 1961) : The question to be ‘dcteniiined is whether the terms ‘of such authority . .. were changed adversely to these petitioners by the sub uent action of the Beard in adopting the amendatory regulations to which peti- | tioners call attention. ¥ so, serena d Proceed- ings were-necessary .. | ‘ Td. at 366. That case ‘held — that there had been no amendment of carrier authority, as a matter of law, since ‘‘the specific prohibitions of the amendatory regulations in question were _made fer purposes -. clarification -of _ + 8 See generally Comment, 39 N.Y.U.L. Rev. 947 (1964). wey ies : “> ... _ Order vacated’ and cases: iS . remanded. — . ; 10a et Bazeton, Chief Judge, dissenting: Not every ‘ile of the Board affecting a carrier certificate is an ‘‘amend- ment’’ requiring an adjudicatory hearing.’ The purpose “of such hearing is primarily to protect ‘‘what has been called ‘security of route’—+.c., providing assurance to the carrier that its investment in operations would be pro- ' tected insofar as reasonably possit e.”’? Civil Aeronautics Board v. Delta Air Lines, 367 US. a6, 324 (1961) . (em- phasis in original). ae ‘Here the Board expliciity found ime vadinataalon of evidence and. oral ergpment in rule-making proceedings ‘ that the combination carriers’ present ‘‘segurity of route’’ would not be affected ‘by excluding them, at least for the present, from the possible expansion of the air freight market through blocked-space’ reduced rates. The Board stated that reduced rates would primarily attract freight ‘now moved on surface carriers’’ and that the diversion to. all-cargo carriers of freight presently on combination car- riers would not be ee ” ee, a See Great’ Lakes Airlines v. Civil ‘iiiediitete Board, 291 F. : 354 (9th Cir. 1961); Air Line Pilots Ass’n, Internati Quesada, 276 F.2d 892 (2d Cir: 1960). Compare Civil Aer side Board v. American Air Transport, 91 U.S. App.D.C. 318, 201 F.2d . 189 (1952), which ‘involved an effort by the Board ‘to separate the ‘sheep from’ - the goats: -to let the Large Irregular Carriers which had obeyed the spirit and letter of the Board’s regulations remain in business undisturbed, while limiting the operations of those - which ‘had violated the authority given them. ... if the Board it would be required to afford an evidentiary hearing to those whose operating authority was to be suspended or revoked for eause.’’ [Capitol Airways v. Civil Aeronautics Board, 110 U.S.App.D.C. 262, 265, 292 F.2d4°755, 758 (1961). (emphasis supplied ).] Cf. Cook Cleland Catalina Airways v. Civil Aeronautics Board, 90 U.S.App.D.C. 220, 195 F.2d 206 (1952). proposed to discriminate between carriers in the same group, . . _ characterizing some as law abiders and some as law breakers, : ‘ sisdoninesinahenstinghen Se ay Ar ER ies 7 _ inter a The court’s holding—that the ‘Board ‘‘amended’’ the - combination carriers’ certificates because they can no longer compete on precisely equivalent terms: with all- cargo carriers—has only formalistic logic. In practical terms, there is no significant change in the certificates if ‘the carriers will not be financially affected by the Board’ 8 action, and the Board has so found. ‘‘Needless to. say, we are ill equipped to weigh such predictions of the ‘eco- omic future. Nowis it our function to act as a super- commission.’’ American Trucking Ass’n vy. United States, . 344 U.S. 298, 309 (1953).?. I therefore cannot agree that the Board acted arbitrarily here in adoptiag, without ad- judicatory hearing; a policy excluding combination :éar- riers from offering blocked-space reduced rates." Moreover, . the Board maintains: ‘that it has excluded combination carriers from offering” blocked-space reduced ‘-rates only temporarily. . It found that any excess cargo, ~ capacity on. a. carrier offering reducéd. rates would make - . such rates areal unfeasible for the carrier. It was - + Mn Deltg Air Lines, sities the Supreing Coutt lield ari adjudi- catory hearing was required to ‘alter Delta’s' certificate’ barring flights Delta was then operating. The Board had found that ‘‘no significant adverse effect will result’’ to Delta from the certificate _ alteration. The Court disregarded this finding, but unlike the present case, the Board: had held no heating whatsoever before alter- in ’s certificate and the alteration in itself clearly threatened felta’s present investments. - 367 U.S. at 330. Compare. Standard Airlines v. Civil Aeronautics Board, 85 U.S.App.D.C. 29, 177 F.2d 18 (1949). 8 The Board’ s action is authorized by § 416(a), Federal os tion Act, 49 U.S.C. .§ 1886(a); ‘‘The Board may from time to. time establish such just and reasonable classifications or groups of air carriers for the purposes of this subchapter as the nature of the services performed by such air carriers shall require; and such . just and reasonable rules and regulations, pursuant to and con- sistent with the provisions of this subchapter, to be observed by each such class or group, as the Board finds — in the public g 12a ; thine necessary to restrict the number. of reduced rate ¢ar- riers until the present air freight market expanded. The Board chose all-cargo carriers because of their prior’ spe- cialization in the market and because ‘‘the exclusive role of performing blocked-space service will .. . provide them with..a needed source of financial strengthening. 1 ee: Board expects the air freight market to grow in response to the reduced rates .and, by implication, the Board will © allow combination ‘carriers to offer these rates when the _ market has grown sufficiently. Adoption of this experimental, temporary policy. does ‘not require the ‘burdens of an adjudicatory proceeding.‘ But in order to insure that the temporary exclusion of combination carriers from blocked-space reduced rates will not become permanent by default, I would’ affirm ‘the « Board’s action without prejudice to the combination car- riers’ right to reopen the question of their exclusion upon ' sufficient showing to the Board. that: their present cargo business was being adversely affected, or that the air _ freight market had sufficiently expanded so. that they could _ participate in blocked-space reduced rates. » | ‘4 For inferential support of this proposition, see Nebraska Dept. * of Aeronautics v. Civil Aeronautics Board, 298 F.2d 286, 292-92 - (8th Cir. 1962); R: A. Holman & Co. v. Securities & Exchange _ Comm/’n, 112 U.S.App.D.C. 43, 299 F.2d 127, cert. denied, 370 B.S. 911 (1962). In this court, the Board argued : ‘‘Certainly the Board should not: be required: to resort. to cumbersome certificate amendment proceedings for the pur- ‘ pose of permitting an effective experiment with a new service concept, with the consequence that still further certificate amendment proceedings would be required to effectuate any _ehange in policy or expansion of the number of carriers ‘ provide blocked-space service. On the contrary, the rule- making method | represents the more flexible and desirable method of procedure in this area.’’ Respondent’s brief at i ee ‘ 7 ; ae - # ©. Pei as totes Ua N ae hae a tle A ATER tg a Be ~- Cr Ke Reh" St Re ete ee ee ee * Z | ° ° eee ~ - : | 3 Mega ua aes ’~gourt held the rhultiple ownership’ rule ‘of the Federal +" ea ., Communications Commission invalid because of the inade- © -\ quacy of the rule making procedure followed inits adop- _ _ tion, an adjudicatory hearing being expressly guaranteed - \by statute to applicants for licenses. - The Supreme Court, . « however, held that notwithstanding the statutory hearing .% . requirement’ the Commissian retained the’ power to pro- mulgate rules of general application consistent with the Act, and to deny an adjudicatory hearing to applicants ’ whose applications on their face showed violations of the “ rule. Storer’s vitality is attested by its recent application . iti FPC v. Texaco, 377 US. 33, 39 (1964),"" where the . Supreme Court stated: Rises Ge eas ns Ps . The. statutory requirement: for a hearing does not — _ preclude the Commission from particularizing statu- . tory standards through the rule-making: process and barring at the threshold those who neither. measure © * up to them nor ‘show reasons why ‘in: the public - interest the rule should be waived. , , : Peis ¢ . Petitioners argue that the Storer. doctrine is restricted > _to regulations affecting future applications for new - licenses , or certificates, whereas here the’ CAB regula- ae tion affected rights under existing certificates. “That such a restrictive reading of the Storer doctrine is unwarranted, are is shown by such decisions as National Broadcasting Co.’ - - 11'The Federal Power Commission had’ validly adopted a rule “te prohibiting certain pricing provisiéns in the rate schedules of , rat independent producers of natural gas, and had summarily rejected . ‘applications for certificates of public conveniénee and necessity which contained rate schedules: with provisions running: afoul of . - the Commission’s rule... The Court. of Appeals for the Tenth °° Cireuit held that the rule could not be. applied to deprive a’ cer- tificate applicant of the adjudicatory hearing guaranteed him by . be § 7 of the Natural Gas Act. 276 F.2d at 896. The Supreme Court --* reversed. See, generally Davis, 2 Administrative Law § 15.03 : (1958). : eee. tes ‘ a) -y. United States, 319 US. 190 (1943) :!2 Air Lines Pilots. _Ass’m v.. Quesada, 276 F.2d 892 (2d Cir. 1960); and Capitol Airways, Inc. v. CAB, 110 U.S.App.D.C. 262, 292. - 12 National Broadcasting Co. upheld’ the validity of regulations © applicable to radio stations engaged in chain broadcasting. The regulations were issued in 1941 after an investigation and legisla- tive hearings appropriate for rule making (see 319 U.S. at 194-95), ’ . but not -the adjudicatory-type - hearing prerequisite under the Communications Act, even prior to the Administrative Procedure . Act, for denial of a license application or ification or non- ‘renewal of license, see Ashbacker Radio Corp. v. FCC, 326 U.S. 327, 332 (1945).. The regulation required’ radio station licensees -. engaged in chain broadcasting to alter long-standing business practices—e.g. precluded network affiliation contracts for a term - - longer than two years—to avoid revocation or at the very least non-renewal of licenses. But theecourt found (p. 225) that there was ‘‘ho basis for any claim that the Commission failed to observe procedural safeguards required by law.’’ ' 18The Court upheld -the promulgation, without sibabbaaiers hearings, of a Féderal Aviation Agency regulation barring indi- viduals sixty years old from serving as pilots, even though that regulation modified rights under all outstanding licenses and ef- . fecteg a termination without hearing of some outstanding licenses, ‘Rejecting a challenge by pilots relying on the statutory provision, 49 US.C.. § 1371(g), that an adjudicatory hearing must be pro- vided before an airman’s license may be revoked or amended, the - court stated (276 F.2d at 896) : The Administrator’s action does not lose the character of rule-making because it modifies the pldintiff pilots’ claimed . property rights in their licenses and their contractual rights under collective bargaining agreements . . . Administrative regulations often limit in the public interest the use that _ persons may make of their property without affording each ‘ . one affected an opportunity to present evidence upon the fairness of the —— A TPs endie ed ond > | R | a | F.2d 755 (1961).* See also Transcontinental Television . Corp, v. FCC, 113 U.S.App.D.C. 384; 308 F.2d 339 (1962). The present case is different in particular aspects of ’ the facts or statutory provisions from Storer:and the other, Storer doctrine cases. However, the Storer doctrine — is not to be revised or reshaped by reference to fortui- tous circumstances. It rests on a fundamental awareness that rule making is a vital part” of the administrative : process, particularly adapted to and needful for sound - evolution. of policy -in ‘guiding the future development of industries subject to intensive administrative. regulation ‘ in the public interest, and that such rule making i is not to ~ be shackled, in the absence of élear and specific Congres- - sional requirement, by importation of formalities developed for the adjudicatory process and basically unsuited for policy rule making. | | | 3. The need‘ for and. importance of policy een made on the basis of a procedure appropriate thereto is clearly identified in the Administrative Procedure Act (APA), 5 USC §1001 et’-seq. In general, the APA establishes a dichotomy between rule-making and adjudi- cation. For adjamenton | a formal system is provided.” impaired, or that. the air freight. - “. : : - hearings. — F . It is part of the genhis of the adininistrative. process that its flexibility permits, adoption of approaches subject 7 to expeditious adjustment in the light of experience. ‘Although the CAB’s regulation is not temporary: in- the ‘sense of being expressly limited in duration, the Board’s findings plainly reflect its assumption that the regulation was intended to be subject to. re-examination.”*: The amended from time’ to time as experience or changing eobnditions may require.’? 14 C.F.R. § 399.4. . In any gvent, it is the obligation of an agency to make re-examinations and adjustments in the light of experience.” To avoid any possible misapprehension, our affirmange : of the Board’s action is without prejudice to the right of | -the combination carriers to reopen the question of their. © exclusion upon a showing that the Board’s assumptions market had 8ufficiently expanded so that the promotion -26Thus the Board noted its conclusion that expansion to com- bination carriérs was not feasible ‘‘at this time.’’ In the accom- . panying order permitting Slick’s tariff to go into effect, the Board stated: ‘‘We believe that Slick is proposing a worthwhile experi- ment which should be tested in the market place. . . . Permitting Slick’s tariff to go into effect. now will also provide the Board with experience data upon which we may better gauge the effect of the ‘ locked space service during the course ofthe ensuing’ investiga- tion.’” Order No, E-21160, gee 7, 1964. 2 See National Broadcasting Co. v. United States, 319 U.S. 190, "225 (1948); United States v. Storer Broadcasting Co., 351 US. . 192, 205 (1956). & Bla. . ; o of the air cargo ‘industry through blocked space reduced rates would not be imperiled by their participation. “Since our ‘records show that this Court took ‘action ‘more than a year ago to permit the regulation to become_” effective (see note 3 supra), it should perhaps be men- tioned that at the argument, respondents stated that thus far there had been little blocked space traffic and no sig- nificant diversiom from petitioners. Petitioners replied that ‘this: period has not been a fair test, ‘since the all- cargo carriers may have been awaiting the outcome of the litigation. before: aggressively exploiting their newly won privileges: It suffices to say that if and when’ peti- tioners have. a showing to make based in significant * measure on actual relevant. experience, they will have a, remedy available to vindicate their asserted rights, both _ before the Board and on judicial review in case of dis- satisfaction with the Board’ s action or inaction. Meanwhile they have’ been accorded a hearing con, forming ‘to and surpassing the minimum. required. for rule. _ making. They have: not been subject to a denial of pro- », cedural rights That 3 undermines the Mca sd of the regula- | tion. | O° Affirmed. 32a ’ Wasuineton, Senior Cirowis en did’ not — _ in this decision. : BurceEr, Circuit Judge, with whom Dananer and Tam, Circuit Judges, join, dissenting: Petitioners, three. air- lines authorized to carry both passengers and cargo on a regular basis, hold certificates for cargo carriage legally — identical with the certificate held by Intervenor, Slick Cor- poration, an all-cargo carrier. Without holding the ‘adjudicatory hearing required by statute before an out- standing certificate»may be amended, the Civil Aeronau- - ties Board laid down what it described as a ‘‘regulation’’ allowing: all-cargo carriers — but no’ others—to offer _ reduced rates for “«Dlocked-space”’ shipments; it expressly excluded combination airlines such as-Petitioners from the benefits of offering the same reduced-rate service. Acting under this ‘‘regulation’’ the Board issued the order under review, specifically denying applications of Petitioners to offer the same service Slick had been authorized to offer. These actions were taken in response to Slick’s request, over the opposition of its fellow all- cargo carrier, Flying giger Line, that the Board. ‘‘délineate the roles’” of combination and all-cargo carriers in such : Federal Aviation Act 0£1958, § 401(g¢), 72 Stat. 756, 49 U.S. 0. § 1871 (g) ’ (1964) ; see O.A.B. v. Delta’ Air Lines, 367 U.S. 316 ~ (1961). 2The Board purported to find ‘authority for this delineation in section 416(a) of the Act, 72 Stat. 771, 49 U.S.C. § 1386 (a) (are) which provides: The Board inay from time to time establish such just and reasonable classifications or groups of air carriers for the purposes of this title.as the nature of the sérvices performed ‘ by. such air carriers shall require ; and such just and reasonable rules and regulations, pursuant to and consistent with the pro- visions of this title, to be observed by each such class or group, * as the Board finds necessary in the public interest. The Board’s ‘‘Policy Statements,’’ described in the majority’ 8 footnote 2, asserted the following justification for its action: A logical means of further delineating the role of the all- cargo carriers is to — their development as specialists for cr ~~ 33a a way as to make the all-cargo carriers the ‘‘wholesalers”’ and the combination carriers the ‘‘retailers’’ of air cargo space. I have trouble seeing how a ‘‘regulation’’ which turns identical certificates into- ones which place the licensees in entirely distinct carrier roles, carrying differ- ent types of cargo for different types of shippers, can be said to be anything léss than an amendment of outstand- ing certificates. This much is clear, for it is undisputed that after the “regulation”? Petitioners could not lawfully engage in the same carriage as their all-cargo competi- tors. Indeed the Board concedes that its action has ex- cluded Petitioners from performing the kind of carriage which they were origitally certificated to perform and in which they have made large investments of capital. : 7 therefore dissent from the majority’s, conclusion that ret tm judicatory hearing was not required. As I see it this” is nothing more than a transparent device to favor some carriers at the expense of others, . The certificates of the all-cargo carriers and those of ‘the combination carriers bestow identical rights and impose identical obligations with respect to the carriage’ of property. It follows that the’ two types of carriers must be free to file identical tariffs for\the carriage of - large volume air freight service in all-cargo aircraft. The reservation of blocked space arrangements exclusively to the \ all-cargo carriers is consistent with this objective. The in- * eFeased concentration of the all-cargo carriers on large volume traffic ‘can be expected to be followed by a shift of small volume shipments to the combination carriers, whose cargo operations supplement their passenger services and who are better suited for meeting the needs of this category of traffic and at less (Emphasis added.) ** In light of this statement, it, should~be re- membered that the all-cargo airlines carry about 15 per cent of the nation’s scheduled domestic airfreight, while the combination car- riers carry 85 per cent. Of such freight transported in all-cargo airplanes, the all-cargo lines carry 36 per cent, ead the combination lines 64 per cent. v "34a cargo. By permitting the all-cargo carriers to file blocked- . space tariffs the Board acknowledges their - present authority to file such tariffs under their existing certifi- cates, which, except as to passenger carriage, are the same - as’ those of the combination carriers. By denying the combination carriers the opportunity to file such tariffs _ the Board in effect amends outstanding certificate author- ity. Cf.:FCC v. National nee Co. ety, 319 U.S. .239 (1943). The.majority opinion cites a number of cases.in an — effort to sustain its holding that the Board has authority to amend Petitioners’ certificates by rulemaking rather than an adjudicatory procedure.’ Those cases are’ not in point. First, most of them dealt ‘with agencies. other | than the CAB. The Supreme Court said recently in another context, ‘‘federal agencies are not fungibles-.... — —Congress has treated the matter with attention to the. particular statutory scheme and agency.’? UAW v. Sco- field, 382 U.S. 205, 210. (1965).° . We are dealing here with a statute motivated in. large part by concern for ‘‘seeurity of certificate.’ CAB v. Delta Air Lines, 367 U.S. 316,.322 n.6, 324-25 (1961). This concern is reflected. in the section 401(g) requiremeyg of an evidentiary hearing before a certificate may even be amended. Second, none of the cases relied on by the majority deals with a situa- tion like ‘that before us, where an agency .attempts by rulemaking to amend some—but not all—of the out- standing certificates authorizing a particular kind of serv- ice so as to deprive the licensees of a } significant part of their license authority. * This distinction is particularly applicable to Transcontinent Television Corp. v. FCC, 113 U.S.App.D.C. 384, 308 F.2d 339 (1962), cited by the majority, which dealt with the very different legislative situation of broadcast station license renewals under the Communieations Act of 1934, which gives the FCC broad powers to make frequencies unavailable by rule amendment. > 35a United States v. Storer Broadcasting Co., 351 U.S. 192 _(1956), upon which the majority chiefly relies, as well as FPO v. Texaco, 377 US. 33 (1 4 and National Broad- casting Co. v. United States, agus 190 (1943),° are cases dealing with rulemaking pplying across the board to all applicants for licenses or certificates. Petitioners there were not being: deprived of any authority they had. . formerly exercised; in ,those cases rulemaking was. used — to formulate reasonable; nondiscriminatory criteria to be met as conditions of receiving certificates in the first _ place. By contrast, the present appeal involves a use of rulemaking to abridge existing certificates to give favored ‘carriers a monopoly on certain classes of carriage for the express purpose of ‘¢foster[ing]. their’ development”’ at the expense of others not so favored. These differences are not ‘fortuitous circumstances’’ recognition of which leads to ‘‘revising’’ or. ‘‘reshaping’’ the Storer doctrine, | as the majority suggests. They are basic not only to the statute but also to the question of the appropriateness of rulemaking procedures, as I will show. - 7 Air Line Pilots Ass’n v. Quesada,-276 F.2d 892 (24 Cir. 1960), is even less apposite. That case involved the narrow issue of validity of a rule based on. flight safety considerations against pilots flying scheduled aircraft. after ‘reaching age 60; there was no amendment of cer- tificate authority in the sense here involved. The \licenses originally issued to the pilots specifically provid their duration was as set out in current regulations. the ‘Act itself imposes an express duty’ on the istrator of the FAA’ to prescribe reasonable re ations ‘relating to pilot standards. It was thus in a very harrow and limited context that the court held that an adjudica- tory hearing was not required for each individual pilot; 4 See generally 39 N.Y:U.L. Rev. 347 (1964). 5 It is relevant to note that the opinion in National Broadcasting — Co. does not: mention the issue before us. . | : 36a . the rule laid down there was made applicable to all pilots, not to certain ones selected by the Board. — Finally, the majority relies on Capitol Airways v. CAB, . 110 U.S:App.D.C. 262, °292 F.2d 755 (1961), which expressly distinguishes’ eases like the one before us and includes dictum directly on point here, while distinguishing _ CAB v. American. Air. Transport, Inc., 91 US.App.D.C.. ° _ 818, 201 F.2d 189 (1952) : American Air Prenepor! ... involved an effort by . the Board to separate the sheep from the goats.... This court remanded the case to the District Court to determine whether the Board had in fact changed _ the terms of existing licenses. The inference -to be ‘. drawn is that if the Board proposed to discriminate _ between carriers in the same group, characterizing some as law abiders and some as law breakers, it would be required to afford an evidentiary hearing to those whose operating authority was to be sus- . _ pended or revoked for cause. In contrast, in the present case the impact of the: | Board’s decision is on an entire class, rather than on particular members of the class who are- singled out as law violators or labeled for some reason as unfit or unworthy. Here, the Board has left all com- ~ _ petitors in the field, but has redrawn the rules of the game. Some will be easily able to survive under these new rules; some will not. But there is no a . adjudicate the merits of individual firnte - ‘110 U.S.App.D.C. “ 265, 292 F.2d at 758. (Footnote . omitted.) The majority seeks to distinguish the import of this language and the American Air Transport- case *on thé ground that here the Board does not accuse peti- . tioners of violating the law. I confess great difficulty in understanding why licensees not accused of violating the . law are not as much entitled to an adjudicatory hearing - . os nance tre hits gn te pi 87a as licensees whe are so accused, wins the two are hs. jected to equivalent’ Board action. The majority’s pro- posed distinction seems to me to pose substantial prob- - lems of equal Pore of the laws under the fifth and fourteenth amendments. ae Although it is not necessary to discuss the relive . desirability of rulemaking and adjudicatery procedures in a situation where Congress has spoken as clearly as it hag here, I note that my conclusion as to congressional meaning is reinforced by a consideration of the types of issues involved here. Rulemaking is normally directed ~ toward the formulation of’ requirements having a general application to all members of a broadly identifiable class. As pointed out above, however, the CAB’s result here is reached by a rule which has different impacts upon mem- bers of the same basic category. When the Board makes ‘such a differentiation, the proceedings ineseapably become highly adversary in character, especially where the final determination purports to rest upon asserted differences in capabilities and potentialities as between individua] car- riers. The rulemaking procedure’s lack of direct testi-. mony of witnesses, cross-examination, and other features of adjudicatory hearings is totally inadequate for the testing of such competing considerations, both factual ~ and inferential. While the question whether er te rs ‘“blocked- space’’ service may be offered by any carrier might well be appropriate for rulemaking, the selection of particular carriers to provide such service is clearly the’ sort of ques- tion which can be resolved properly and fairly only in an adjudicatory proceeding. Once the Board had decided that it should not allow every freight carrier to offer such service, it was faced with the. problem of picking. and choosing among competing, mutually exclusive appli- cations. Cf. Ashbacker Radio Corp. v. FCC, 326 U.S. 327 (1945). Furthermore, these were not applicants compet- - ing for a new right which neither had. previously held; _ they were competing to retain a right which their cer- — ' tifidates already authorized. The Board’s action made some carriers ‘‘more equal?’ than others. ~The majority ’ seems to be aEoery & repeated '. references. to the combination carriers as a “class”, that’ ~ any multiple of one automatically makes a class for these purposes; two seems sufficient to make a ‘‘elass’’ of the only domestic all-cargo carriers now certificated. The ‘‘formal’’ procedural safeguards which seem to distress the majority, see-pp. 10-14 supra, were written into law by Congress precisely because Congress. believed that they were necessary in making this crucial kind of deter- - mination: A general dissatisfaction with the ‘‘rigors’’ of procedural safeguards should not lead to dispensing with them in a case where they are most appropriate, nor to — amending the statute judicially. While ‘it is not essential to my view of this case, it seems to me of no little significance that the history of all transportation, air, water or land, is that the carriage of bulk freight becomes the dominant and most, lucrative | business. I see no reason why this is not likely to be true | in air carriage.® ‘Although passenger carriage is clearly a major and profitable market now, it does not follaw that it has the bright prospects for expansion that ar open ‘to air freight carriage. History indicates that the future ° will see a steadily increasing ratio of freight tonnage to passenger tonnage..- The Board action here arbitrarily | permits one group ef favored carriers to preempt much - this lucrative and a — by ; ne 6 As the majority itself recognizes, the fact that experience since ‘the order became effective shows ‘‘no significant diversion”’ of cargo from petitioners is a. makeweight argument lacking in probative value. Moreover, such off-the-record egument is not properly before us. ree 398 vi omnis certificated carriers of part of. their duly oe . authority. The Board’s ‘‘Policy Statements” confirm the ° accuracy of this forecast by declaring that the opportunity to offer reduced blocked-space rates would give the all- cargo carriers ‘‘a needed source of financial strengthening,” while implying that the combination carriers ‘‘can be. . expected’? to suffer no reduction in the amount of air freight they presently carry. Even if the Board has the power to realign so drastically’ the competitive positions _ of carriers holding equal certificates, the Act as I read it requires that the Board first hold an evidentiary hearing, before it may make such a certificate amendment. Ff 40a - | oa APPENDIX B Filed March 2, 1966 UNITED STATES COURT OF APPEALS FOR THE DISTRICT OF COLUMBIA CIRCUIT September Term, 1965. No. 18,833 . ; AMERICAN Arruines, Inc., Petitioner, } v. sili ahah ‘heieiees B3oarp, Respondent, THE Suick CorPoRATION, Arm Freight Forwarpers ASSOCIATION, Tse Fiyine Tickr Line, Inc., Intervenors.. ¢ No. 18,834 e Trans Worip Arruines, Inc., Petitioner, : v. : : . an Arronavutics Boarp, Respondent, Tue Suick Corporation, Am FREIGHT ForwArpERs ASSOCIATION, . THe FLy1ne TIGER Linz, Inc., Intervenors. No. 18,840 Unrrep Ai Lines, Inc., Petitioner, | yu | Crvi. Axronavtics Boarp, Respondent, Tue Suick CoRPORATION, | Arr Freight Forwarpers. ASSOCIATION, Tue Fiyiye Ticer Line, Inc., Intervenors. ay 4 - . @ _ 4ila . On Petitions to Review an Order of the x | Civil Aeronautics Board. : . Before: Bazeton, Chief*Sudge, and Fany, Wasuinctox* , DananeER, Burcer, WRIGHT, McGowan, Tamm and LEVENTHAL, Circuit Judges, sitting en bance. ". Judgment ~ - ‘These cases came on-to be reheard before the court en banc on the record from the Civil Aeronautics Board, and ‘. were. reargued by counsel. , - On Consmeration “WHEREOF, it is ordered and adjudged ’ by this court en banc that the order of the Civil Aeronautics | . Board \ on réview in these cases is affirmed. : ‘Per Circuit J udge LEevENTHAL Dated: March 2, 1966 Senior Circuit J udge Washington did not ee in the decision of these cases. Separate dissenting opinion by Circuit Judge Buréit, . with whom Circuit J udges Danaher and Tamm join. “ "8 a P ; f 4 ° - ~/: * Circuit J udge Washington became Senior Circuit Judge on | Keven 10, 1965. ae 2 APPENDIX C. eo No! ‘E21170 . UNITED STATES OF AMERICA . CIVIL Pose Sod BOARD | WASHINGTON, D. ©. ‘Adopted by the Civil Aeronautics Board __ 4 _ at its office in Washington, D. C., | on the.11fh day of August, 1964 - Docket 15419. Blocked-space. air freight. tariffs of | AMERICAN Arumes, Inc. Trans Wortp AIRLings, INc. _ Unrrep Ar Lines, Inc. Order - The Board, iw Order E-21076; of July 17, 1964, suspended — and instituted . an investigation of the proposed. block . space tariffs of The Slick Corporation and Trans World Airlines, Iné; Subsequently, by Orders E-21122 dated July 27, 1964 and H-21167 dated August 10, 1964, the Board took similar action with respect to the same type of tariffs’ _ filed-by American Airlines, Inc., and United -Air Lines, Inc., respectively... On August 7, 1964,"the Board adopted a Statement of General Policy, Amendment No..3 to Part 399 of the Board’s Regulations. In that regulation we " determined that on the basis of policy considerations there- in before us, the combination, passenger-cargo carriers should not be permitted to offer blocked space service. _ American, TWA and United: are combination carriers as - contemplated in this regulation and without authority to provide blocked nee Ore. It follows, in view of this @ > 1Order E-21160 dated August 7, 1964 vacating the suspension ’ of the Slick tariff was stayed to and including August 17, 1964, by. — E-21166 dated fciguat 7, 1964. 43a ' determination, that the tariffs of American, TWA, and’ United are inconsistent with the regulations of the Board as well as with the provisions of se¢ction 403 of .the. Federal Aviation Act of 1958. Consequently we will herein reject the block space tariffs of American, TWA,.. and | ‘United as unauthorized by section 403 of the Act and _- provisions ‘of the Board’ s regulations. . The rejection herein. of the blocked apace’ | tariffs of American, TWA, and United removes as an issue in this 7 proceeding the lawfulness of such tariff proposals and we *. will accordingly dismiss the investigation previously ordered in this docket as tothe blocked space tariffs of these _ earriers.?- However, for the reasons heretofore stated in Order E-21076 of July 17, 1964, the investigation of the -lawfulness-of the Slick blocked space tariff. proposal is necessary, and the processing of that ‘matter will continue unaffected by -any action taken herein, Accordingly, pursuant to the Federal “Aviation Act of © 1958, and particularly sections 102, 204(a), and 403, thereof, ‘Ir 1s ORDERED TuHatT: i 1. The following tariffs and revised. pages are iad rejected : : (a) American Airlines, Ine. ‘Tariff C. cake: No. 166; _ (b) Trans World Airlines, Inc. Tariff C.A.B. No. (125; (e) Agent J. Aniello’s Tariff CA. B. No. 28; jaa (d). 10th: and 11th’ Revised Pages 18 of — J. _Aniello’ 8 7 ‘OAB. No. 13. 2 Under our statement of general policy of August 7, 1964, blocked space services may be provided by all-cargo carriers and the blocked spate tariff filed by Slick, an all-cargo carrier is prop- erly fileable under section 403 of the act and the Board’s regulations, ” 44a : : 2. The investigation ‘instituted by ordering paragraphs 1 ‘of Orders E-21076, E-21122, and EY1167, insofar as they are applicable to blocked spaced tariffs of American . or possession of the United States; or between a place in a Territory or possession of the United States, and a place in any other eed or possession of the United States; and .(c) a place in the United States and any aes out- ° side thereof; whether such eummeste moves wholly by aircraft or partly | _ by aireraft and partly by other fornis of transportation. ~ Sec. 102 [72 Stat. 740, 49 U.S.C. §1302]. ~ ConsmpeRATIon or Marrters 1n Pvustiic “3 Interest By Boarp In the exercise ‘and performance of its powers and duties under this chapter, the Board shall consider the ‘ following, among other things, as being in the public in- — terest, and in accordance with the public convenience and (a) The encouragement and avuones of an air- transportation system properly adapted to the present and ' future needs of the foreign and domestic commerce of the United States, of the Postal eatin, and of the national defense ; ; (b) The. regulation of air transportation i in such manner as‘ to recognize and. preserve “the inherent advantages of, assure the highest degree of safety in, and foster sound economic conditions in, such transportation, and to im-. prove the relations between, and coordinate transportation by, air carriers; ‘ is) sone eee 47a (c) The promotion of gihectitin; economical, and efficient ” service by air carriers at reasonable charges, without unjust discriminations, undue preferences or advantages, or unfair or destructive compétitive practices; (d) Competition to the extent necessary to assure | the sound development of an air-transportation system prop- erly adapted to the needs of the foreign and domestic. _eommerce of the. United States, of the Postal Service, and of the national defense ; (e) Thé promotion.of safety in air commerce; and (f) ‘The promotion, encouragement, and development of civil aeronautics. aie * * wor Sec. 204 [72 Stat.'743, 49 U.S.C. § 1324]. GeneRAL Powers AND Duties OF THE BoarpD _ (a). Performance of acts; conduet of investigations ; orders, rules, regulations, and procedure. \ The Board is empowered to perform such acts, to con- . duet such investigations, to issue and amend such orders, and to make and amend such general or special rules, regu- lations, and procedure, pursuant to and consistent with the provisions of this chapter, as it shall deem necessary to carry out the provisions of, and to exercise and perform its powers and duties under, this chapter. * * a Sec. 401 [72 Stat. 754, as amended, 49 US. - § 1371]. _ CERTIFICATE OF Punurc Comvanmace AND Necesstry. “es Essentiality. “No air carrier shall engage in any air transportation unless there is in force a certificate issued by the Board ~ ” 48a, authorizing such air carrier to engage in porn transporta- of - tion. ;@ * . (c) Notice of application; filing of protest. or memo- randum; hearing. : Upon the filing of any such application, the —_" shall © _ give due notice thereof to the public by posting a notice of such application in the office of the secretary of the - Board and to such other persons as the Board may. by regu- lation determine. Any interested person may file with the . Board a protest or memorandum of opposition to or in - support of the issuance of a certificate. Such applica- tion shall be set for public hearing; and the Board shall dispose of such application-as speedily as possible. (d) Issuance. 4 (t) The Board shall issue a certificate authorizing the ‘ whole: or any part of. the transportation covered. by the . application, if it finds that the applicant is fit, willing, and able to perform such transportation properly, and to con- form to the provisions of this chapter and the rules, regu- latior s, and requirements: of the Board hereunder, and that such transportation is required by the publie con- venience and necessity ; otherwise such application shall be ‘. denied. (2) In the case of an application for a certificate to en- gage in temporary air transportation, the Board may issue a certificate authorizing the whole or any part thereof for such limited periods as may’ be required by the public convenience and necessity, if it finds that the applicant i is fit, willing» and able properly to: perform such transporta- Gon and to conform to the provisions of this chapter and the rules, regulations, and requirements of the Board here- ’ under. 49a . (e) Terms, conditions, and limitations. (1) Each certificate issued under this section Rall specify the termirral points and intermediate points, if any, between which the air carrier is authorized to engage in air trans- - portation and the service to be rendered; and there shall — be attached to the exercise of the privileges granted by the certificate, or amendment thereto, such reasonable terms, conditions, and limitations as the public interest may re- quire. ° e - © om ._ * (4) No term, condition, or limitation of a certificate shall restrict the right of an air carrier to add. to or change schedules, equipment, accommodations, and facilities for. performing the authorized transportation and service as the development of the business and the demands of the’ public shall require; except that the Board may impose ’ such terms, conditions, or limitations in a certificate for supplemental air: transportation-when required by subsec- tion (d)(3) of this section. i: Si : (6) Any air earrier, other than a supplemental air car- rier, may perform charter trips or any other special service, - without regard to the points named in its certificate, or the - type of service provided therein, under regulations pre- scribed by the Board. ~* ¢ . . - (f ) Effective date and duration. Kach certificate shall be effective from the date specified therein, and shall continue in effect until suspended or re-. voked as hereinafter provided, or until the Board shall certify that operation thereunder has ceased, or, if issued. for a limited period of time under subsection (d)(2) of this section shall continue in effect until the expiration thereof, unless, prior to the:date of expiration such certificate shall be suspended or revoked as provided herein, or the Board shall certify that operations thereunder have ceased: 50a Provided, That if any service authorized by a: certificate — is not inaugurated within such period, not less than ninety days, after the date of the authorization as shall be fixed - by thé Board, or if, for a period of ninety days or such - other ‘period as may be designated by the Board any such service is not operated, the Board may by order, entered after notice and hearing, direct that such certificate shall thereupon cease to be effective to the extent of such service. Pg . (g) Alteration, amendment, . modification, suspension, or: revocation. The Board upon petition or complaint or upén its own initiative, after notice and hearings, ° may alter, amend, modify, or suspend any such certificate, in whole or in - - part, if the public convenience and necessity so require, or: may revoke any such certificate, in whole or in part, for intentional. failure to comply with any pfovision of this sub-chapter or any ordér, rule, or regulation issued here- _ under or any term, condition, or limitation of such certifi- eate: Provided, That no such certificate shall be revoked un- less the holder thereof fails to comply, within a reasonable time to be fixed by the Board, with an order of the Board commanding obedience to the provision, or to the order (other than an order issued in accordance with this pro- viso); ‘rule, regulation, term, condition, or limitation found by the Board. to have been violated.. Any interested per- son may file with the Board a protest or memorandum in support of. or in opposition to the alteration, amendment, _. modification, suspension, or revocation of. the certificate. _ * * ¥ : a “Sec. 403 [72 Stat. 758, as amended, 49 U.S.C. § 1873]. a seis of Tartrrs or Ar CARRIERS . | (a) Filing, posting, and publication; rejection of tariffs. » Every air carrier and every foreign air carrier shall file: with the Board, and print, and keep open to public in-. & 5la spection, tariffs showing all rates, fares, and charges for air transportation between points served by it, and points served by any other air carrier or foreign air carrier when through service and through rates shall have been established, and showing to the extent required by regula- tions of the Board, all classifications, rules, regulations, practices and services in connection with ‘such air transpor- . tation: Tariffs shall be filed, posted, and published in such | form and manner, and shall contain such information, as ‘the Board shall by: regulation prescribe; and the Board is empowered to reject any tariff so filed which is not con- sistent with this section and such regulations. .Any tariff so rejected shall be void. The rates, fares, and charges shown in atfy tariff shall be stated in. terms of lawful money of ‘the United States, but such tariffs may also state rates, fares, and charges in terms of currencies other ‘than lawful money of the United States, and may, in the | ease of foreign air transportation, contain such information as may be. required under the laws of any country in or to which an air carrier or foreign air carrier is authorized to. operate. (b) Observance of tariffs; granting Pe ee 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 oftecttye tariffs; and no air car- rier or foreign air capzise shall, in any manner or by any device, directly or ihdirectly, 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 anypprivileges or facilities, wath respect to matters required by the Board to be specified i 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 preseribe, ; : ” oo ; 62a ( yf i from issuing or interchanging tickets or passes for free or reduced-rate transportation -to their directors, officers, _ and employees (including’ retired directors, officers, and ~ employees who are receiving retirement benefits from any air carrier or foreign air carrier), the ‘parents and im- — mediate families of such officers and employees, and thé immediate families of such. directors; widows, widowers, and minor children of employees who:have died as a direct . result of personal injury sustained while in the per- formance of duty in the service of such air carrier or foreign air carrier; witnesses and attorneys attending any legal ‘investigation in which any such air carrier is in- terested; persons injured in aircraft accidents and ° physi- cians ana nurses attending such persons ; immediate fami- + lies, including parents, of persons injured or killed in air- — craft accidents where the object is to transport such per- sons in connection with such accident; and. any person or, . property with the object of providing relief in cases of ° general epidemic, pestilence, or other calamitous visita- tion; and, in' the case of overseas or foreign air transpor- tation, to.such other persons and under such other circum- stances as the Board may by regulations ‘prescribe. ‘Any air carrier or foreign air carrier, under such terms and conditions as the Board may prescribe, may grant reduced- _ rate transportation to ministers of religion on a space- available basis. . » (c) Notice of change in tariff. No change shall be made in. any rate, fare, or charge, or ~ - any classification, rule, regulation, or practice affecting such ‘rate, fare, or charge, or the value of the service thereunder, specified i in any effective tariff of any air carrier or foreign . _ air carrier, except after thirty days’ notice of the proposed change filed, posted, and published in aceordance with sub- | section (a) of this section. Such notice shall plainly state . the change proposed to be made and the time stich change will take effect. The Board may in the public interest, by ee Ma" ae 53a regulation or otherwise, allow such change upon notice less than that herein specified, or modify the,requirements of this section with respect to filing and posting of tariffs, either in particular instances or by ‘general order applica- ble to special or peculiar circumstances or conditions. | (a) Filing of divisions of rates and charges, . Every air carrier or foreign air carrier shall keep-cur-_ rently om file with the Board, if the Board so requires, © the established divisions of “all joint rates, fares, and foreign air earrier participates. ; . ; i? . . . . charges for air transportation in which such alr carrier or Sec. 404 [72 Stat. 760, 49 U.S.C. $1374]. Rates For CarRiaGeE or Persons anp Property; Duty To Provipe Service, Rares, anp Divisions; DiscriMINAtIoNn. fa) It shall be the duty of every air carrier to provide and. furnish interstate and overseas air transportation, . as authorized by its certificate, upon reasonable request ._ therefor and to provide reasonable through service in such air transportation in connection with other air carrier’; to provide safe and adequate service, equipnient, and facilities in connection with~such transportation ;' to establish, ob-~ serve, and enforce-just and reasonable individual and joint rates, fares, and. charges, and just and reasonable classifica- tions, rules, regulations, and practices relating to such air transportation ; and, in case of’ such joint rates, fares, and . charges, to establish just, reasonable, and equitable divi- sions thereof as between air carriers participating therein which shall,not unduly prefer or prejudice any of such participating air carriers. | - (b) No tir carrier or foreign air carrier shall make, give, or cause any undue’ or unreasonable preference or advantage to any particular person,. port, locality, or de- scription of traffic in air transportation in any respect. whatsoever or subject any particular person, port, locality, ’ bda _ or description of traffic in air transportation to any unjust ' discrimination or any undue or unreasonable. prejudice or disadvantage in any respect whatsoever. .— a mae EF | i ae 2 * See. 412 [72 Stat. 770, 49 U.S.C. § 1382]. * PooLING AND OrHER AGREEMENTS; Fine; | _ APPROVAL BY Bodrb. Q (a) "Every | air carrier shall file with the Board a true copy, or, if oral, a true and complete memorandum, of - every contract or agreement (whether enforceable by pro- visions for liquidated damages, penalties, bonds, or other- wise) affecting air transportation and in force’ on the effective date of this section or hereafter entered into, or any modification or cancellation thereof, between such air carrier and\ any other air carrier, foreign air carrier, or ‘ other carrier for pooling or apportioning earnings, losses, traffic, service, or equipment, or relating to the establish- ~ ment of trandy ortation rates, fares, charges, or classifica-’ tions, or for preserving and improving safety, economy and efficiency of. o, eration, or. for controlling, regulating, preventing, or otherwise eliminating destructive, oppres- sive, or wasteful competition, or for regulating stops, -schedules, and character of service, or for other cooperative _ working arrangements. ' (b) The Board shall by onder deeuiere: any any con- tract or agreement, whether or not previously approved by - it, that-it finds to be adverse to the public intérest, or in ' violation of this chapter, and shall by order approve any such contract or agreement, or any modification or cancella- tion thereof, that it does not find to be adverse to the public ‘interest,‘or in violation of this chapter; except. that.the Board may not approve-any contract or agreement between an air carrier not directly engaged in the operation of ait- craft in air transportation and a common carrier subject to the Interstate Commerce Act, as amended, tdesiane. 3 UE Le Me ARG RIE, a ee iSNS \ Os . we a 50a - the compensation to be received by such common carrier for transportation services performed by it. \ * - * * ’ se 416 [72 Stat. 771, 49 U.S.C. § 1386). oe AND EXEMPTION OF CARRIERS. (a) The Board may from time to time. establish such just and reasonable classifications or groups of air car- ~ riers for the purposes of this: subchapter as the nature of the services performed by such air carriers Shall re-° quire; and such just and reasonable rules and regulations, pursuant to and consistent with the provisions of this sub- chapter, to be observed by each such class or group, as the Board finds necessary in’ the public interest. | ’ (b)(1) The Board, from time to time and ‘to rn extent necessary, may (except as provided in paragraph (2) of ‘ this subsection) exempt from the requirements of this sub- chapter or any ‘provision théreof, or any rule, regulation, term, condition, or limitation prescribed thereunder, any _ air carrier or class of air carriers, if it finds that. the en- forcement of this subchapter or such provision, or such rule, regulation, ‘term, condition, or limitation is or would be an undue burden on such air carrier or class of air carriers by ° reason of the limited extent of, or unusual circumstances © affecting, the operations of such air carrier or-class of air carriers and is not in the public interest. ' % * ‘* Sec. 1002 [72 Stat, 788, 49° U.8.0. $1482]. _ CoMPLAINTS TO AND Inveistications BY THE ADMINISTRATOR AND THE Boarp. ° « - * . * (ce) Entry of orders for compliance-with chapter, If the Kdeninistrator or the Board finds, ‘after notice. | and hearing, in any or instituted upon com- nr 6a , , Net plaint or upon their own initiative, with respect to matters within their jurisdiction, that any person has failed to comply with any provision.of this chapter or any require- ‘ment established pursuant thereto, the Administrator or the Board shall issue an appropriate order to compel such " person to comply therewith. (d) Power to prescribe. rates and pee of air car- riers. Whenever, ~ ae notice and hearing, upon complaint, or ‘abe its own initiative, the Board shall be of the opinio that any individual or joint rate, fare, or charge demandéd, charged, collected or received by any air carrier for ‘inter- state or overseas air transportation, or any classification, rule, regulation, or practice affecting such raté, fare, or . charge, or the value of the service "thereunder, is or will ~ be unjust or unreasonable, or, unjustly discriminatory, or unduly preferential, or unduly prejudicial, the Board shall determine and. prescribe the lawful rate, fare; or charge (or the maximum or minimum, or the maximum and mini- mum: thereof) thereafter to. be’ demanded, charged, col- lected, or received, or the lawful classifiéation, rule, regu- lation, or practice thereafter to be made effective: Provided, ‘That as to rates, fares, and charges for overseas air trans- _ portation, the Board shall détermine and prescribe only a Just and. reasonable maximum or minimum, or maximum and ; mhinimum rate, fare, or charge. g (e) ‘Rule of: rate making..* In exercising ‘and performing its’ powers = duties with respect.to the determination of rates for the carriage of per- sons or property, the Board shall take into consideration, among other factors— o.- (1) The ‘effect of. such ‘rates upon the sieiridniiel of traffic; ~ | ses a” » (2) The need in the ae inthrest of. + cea and — cfficient ar acanen SM persons and property by air : "s “ “i . " 3@# F en ee ee ee ee ad 57a | carriers at the lowest cost ‘consistent with the furnishing of such service; _ (3) Such standards respecting the character and quality - - of service to be rendered by air carriers as may be pre- scribed by or ‘pprsuant to law; (4) The inherent advantages . of transportation by dle. craft; and | (5) The need of each air carrier for revenue sufficient to enable such air carrierg, under honest, eeonomical; and - efficient management, t6 provide adequate and efficient air ‘ carrier service. * «© «6 (gz) Suspension of rates. Whenever any air carrier shall file with the Board aYarift stating a new individual or joint (between air carriers) rate, fare, or charge for interstate or overseas air transportation or any classification, rule, regulation, or practice affecting such rate, fare, or charge, or the value of the service there- _under, the Board is empowered, upon complaint or upon its own initiative, at pnee, and, if it so orders, without answer _ of other formal pleading by the air carrier; but upon rea- sonable notice, to enter upon a hearing concerning-the law- fulness of such rate, fare, or charge, or such classification, - rule, regulation, or practice; and pending such hearing and the decision thereon, the Board, by filing with such tariff, _ and delivering to the air carrier affected thereby, a state- ment in writing ‘of, its reasons for such suspension, may suspend the operation of such tariff and*defer the use of. ' such rate, fare, or charge, or such classification, rule, regu- lation, or practice, for a period of ninety days, and, if the _ proceeding has not been conchided and a final order made within such period, the Board may, from time to'time, éx- — tend the period of suspension, but not for a longer period, - in the aggregate than one hundred and eighty days beyond the time when such, tariff would otherwise go into e' effect ; “a a fa ” 4 wei 9 58a and, after hearing, whether completed before or after the rate, fare, charge, classification, rule, regulation,-or practice _ goes into-effect, the Board may make such order with refer- ence thereto as would be proper in a proceeding instituted after such rate, fare, charge, classification, rule, regulation, or practice had become effective. If the proceeding has not — been coneluded and an order made within the period of suspension, the proposed rate, fare, charge, classification, rule, regulation, or practice shall go into effect at the\end of such period: Provided, That this subsection shall no apply to any initial tariff filed by any air carrier, ° B. The Following Sustidens of Gio Gilmiinisteative Proceduce Act, 00° Stat. 737 (1946), as Amended, 5 U.S.C. §1001 et seq. Are . ‘ Principally Involved: . - Sec. 2 [60 Stat. 237, as amended, 5 U.S.C. § 1001]. Dertnirions: ms As used in this chapter— . ee (ce) Rule and rule making. ‘*Rule’’ means the whole or any part of any agency state- ment of general or particular applicability and future effect _ designed to implement, interpret, or prescribe law or policy or to deseribe the organization, procedure, or practice re- . quirements of any agency and includes the approval or prescription for the future of rates, wages, corporate or financial structures or reorganizations thereof, prices, . facilities, appliances, services or allowances therefor or of — valuations, costs, or accounting, or practices bearing upon ‘any of the foregoing. ‘‘Rule making’’ means agency proc- ess for the formulation, amendment, or repeal of a rule. | iy 59a (a): Order and adjudication. ‘ . “Order”? means the whole or any part of the final disposi- tion (whether affirmative, negative, injunctive, or declara- . tory in form) of any agency in any matter other than rule _making bunt including licensing. ‘‘Adjudication’’ means . agency process for the formulation of an: order. (e) License’ and licensing. ‘‘License”’ includes the whole or part of any agency | permit, certificate, approval, registration, charter, member- ship, statutory exemption or other form of permission. ‘*Licensing’’ includes agency process respecting the grant, renewal, denial, revocation, suspension, annulment, with- drawal, limitation, amendrhent, modification, or oe. ing of a license. : . + ; ‘See. 4 [60 Stat. 238, 5 U.S.C. § 1003]. A . Rute Maxine . Except to the extent that there is involved (1) -any ‘military, naval, or foreign affairs function of the United States or (2) any matter relating to agency management or personnel or to public ery: loans, grants, benefits, or contracts— ( a) Notice; publication and contents. - General notice of proposed rule making shall be published *in the Federal Register (unless all persons subject thereto- are named and either personally served or otherwise have _ actual notice thereof in accordance with law) and shall include (1) a statement of*the time, place, and nature of public rule making proceedings; (2) reference to the authority-under which the rule is proposed; and (3) either the terms or substance of the proposed rule ‘or a description ‘of the subjects and issues involved. Except where notice or hearing is required by statute, this subsection shall 60a “not apply to interpretative rules, general statements of policy, rules of agency organization, procedure, or practice, or in any situation in which the agency for good cause finds (and incorporates the finding and a brief statement of the reasons therefor in the rules issued) that notice and public procedure thereon are impracticable, unnecessary, or -con- trary to the public interest, (b) Procedures. - After notice required by this section, the ¢ agency shall afford interested persons an opportunity to participate in the rule making through submission of written data, views, or arguménts ‘with. or without opportunity to present the same orally in any manner; and, after consideration. of all ' relevant matter presented, the agency shall incorporate. in , any rules adopted. a concise general statement of their basis _ - and purpose. Where rules are required by statute to be made on the record after opportunity for an agency hear- ing, the requirements of sections 1006 and 1007 of this title shall-apply in place of the aoe ‘of this” subsection. ce of rules. The required publication or service of any substantive ‘rule (other than.one granting or recognizing exemption or | relieving restriction or interpretative rules and statements of policy) shall be made not less than thirty days prior to the effective date thereof'except as otherwise provided by | the agency upon ante cause found and published with the © rale. (¢) Time of publication or se gg (a) Petitions. Every agency shall dceord any inhwwesiel person the right _ to petition for the issuance, amendment, or repeal of.a— rule. 6la ‘ ro Tile Board's Statement of General Policy on Blocked Space Service, 14 CFR. § 399.37, Reads as Follows: § 399.37 Blocked Space Service. (a) As used in this’ statement: (1) ‘‘All-eargo carrier’? means an air carrier holding a certificate of public convenience and necessity issued pur- . suant to Section 401(d)(1) or (2) of the Federal’Aviation Act of 1958 which authorizes the carriage of property Snly or of property. and mail only. (2) ‘‘Blocked space service’’ means the carriage of prop- erty in all-cargo aircraft at wholesale rates pursuant to an effective tariff stating a rate applicable only when the user _ reserves and agrées to pay for a specified amount of space or lift on a regular recurring pants for a } ewes not less than 60 days. (3) ‘‘Combination carrier’’ means an air carrier holding a‘certificate of public convenience and necessity issued pur- suant. to Section 401 (d) (1) and (2) of the Act which au-’ thorizes the carriage of persons, property and mail or persons and property only. ! (b) It is ‘the policy of the Board to permit all-cargo carriers to provide blocked space service to (1) such com- bination carriers as may choose to use it to provide service over routes which are certificated to both the combination and the all-cargo carrier involved; (2) air freight for- warders; and (3) large volume. individual shippers. (c) It is the policy of the Board not to permit combina- tion.carriers to provide blocked space service. o --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385602_1644%3A2. Public record. Not legal advice.