Appellants Brief — United Air Lines, Inc. v. Public Utilities Commission

IN THE

Supreme Court of the United States

October Term, 1951.

WEsTERN Arr Lines, INc.,

Appellant,

vs.

Pustic Uritities CoMMISSION OF THE STATE OF CALI-

FORNIA,

Appellee.

Brief of Appellant Under Rule 12(3) in Opposition to

Appellee’s Motion to Dismiss or Affirm Included

in Statement Against Jurisdiction.

Preliminary Statement.

The basic point that this Court is asked to decide is the

extent to which, if at all, states have the power to exercise

any control over interstate air carriers serving the public.

The question is easy to state but the answer is not simple.

Only this Court can shed light on the somewhat confused

status of the law.

Appellee rests its motion to dismiss the appeal or affirm

the orders of the California Supreme Court on the single

ground that no substantial federal question is presented

by the appeal.

Appellant believes that the answer of this Court to the

basic question should be that the states have no control

eile

over the interstate or intrastate operations, safety or

economics of commercial air carriers. But an unwanted

answer is better than no answer. Accordingly, the mis-

sion of this brief will be to show that the basic question

must be answered, thus demonstrating that it is substan-

tial, rather than placing emphasis on what the answer

should be. That will come later.

4

The Basic Question Involved Is Substantial.

A. Uncertainty Exists With Respect to the Extent of the

Power, if Any, Which States May Exercise Over Air

Carriers.

The very existence of this proceeding exposes the con-

fusion that prevails over the issue of state control versus

Federal control of commercial air carriers.

The record discloses that Appellant increased its air-

coach tariff between Los Angeles and San Francisco,

California, from $9.95 to $11.70, effective March 1, 1951,

pursuant to the request of the Civil Aeronautics Board

and in compliance with the Civil Aeronautics Act. The

order of Appellee which is being challenged approved the

increase effective May 9, 1951, rather than March 1, 1951,

and ordered restitution wherever possible of the excess

between $9.95 and the $11.70 charged by Appellant be-

tween March 1 and May 9, 1951.

If the Civil Aeronautics Board under the Civil Aero-

nautics Act has control over the tariffs charged by Ap-

pellant for carrying passengers between intrastate points

on its interstate routes, Appellant would be subject to

the criminal penalties of Section 902 of the Civil Aero-

nautics Act (49 U. S. Code 622) if it made a single re-

fund in response to Appellee’s order. If Appellee’s order

Mt

pe on

be valid and Appellant should fail to make restitution

wherever possible of the “excess” tariff charged, Appel-

lant may be subject to a penalty of not less than $500.00

nor more than $2,000.00 for each offense, imposition of

which penalty is threatened by Appellee in unveiled lan-

guage appearing in its order.

It is not right that Appellant should have to undertake

the burden of determining which putative master it should

obey, and speculating on which, if either, might be dis-

inclined to exact the penalty for disobedience. Even though

Appellant were to choose wisely in this instance, if left to

its own devises, the confusion would not be removed.

Appellant, along with all other air carriers similarily situ-

ated, will not know which order to fulfill and which order

to reject as conflicting orders arise in the future.

Although the specific point here in dispute involves

only the question of control over passenger tariffs charged

by an air carrier for the transportation of persons between

intrastate points on an interstate air route, the basic

question at issue involves much more and connotes grave

disruptions to the economic welfare of the American flag

air transportation industry.

Appellee seems to concede without too much reluctance,

possibly because resistance would be quite futile, that the

states have no right to interfere with safety matters con-

cerning air carriers. But Appellee insists that neither the

Civil Aeronautics Act nor the commerce clause of the

Federal Constitution imposes a barrier against complete

control by the states relating to the intrastate operations

of air carriers from the standpoint of economic matters.

Economic regulation is by no means limited to con-

trolling tariffs. Economic matters, as distinguished from

safety matters, in air trarisportation include the issuance,

na teas Fy,

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modification and abandonment of Certificates of Conveni-

ence and Necessity (49 U. S. Code 482). They include

the rates to be paid by the Post Office Department for the

carriage of mail by air (49 U. S. Code 486). They in-

clude the type of reports to be filed, disclosure of stock

ownership, form of accounts and inspection of accounts

and property (49 U. S. Code 487). They also include

matters relating to consolidations, mergers and acquisitions

of control (49 U. S. Code 488), interlocking relationships

(49 U. S. Code 489), eid pooling agreements (49 UV. S.

Code 492), without exhausting all of them.

If the Civil Aeronautics Act and the commerce clause

do not prohibit the states from controlling passenger tariffs

charged by air carriers for transportation between intra-

state points on interstate routes, there would be no prohi-

bition against state control of Certificates of Convenience

and Necessity covering intrastate segments. If the State

of California acting through Appellee have the power to

grant or deny to Appellant a Certificate of Public Con-

venience and Necessity to operate between Los Angeles

and San Francisco, California, that would include the

power to block effective issuance by the Civil Aeronautics

Board of an interstate air route between Los Angeles,

California, and Seattle, Washington, via Oakland and San

Francisco, California, and Portland, Oregon, which repre-

sents Appellant’s Certificate of Convenience and Necessity

for Route 63 issued by the Civil Aeronautics Board.

Lacking the full strength of the Los Angeles-San Fran-

cisco intrastate segment, the Los Angeles-Seattle inter-

state route would provide but little public service. .

If the State of California acting through Appellee have

the power to block a merger of Appellant with some other

air carrier because the merger would involve Appellant’s

eS

Oe Re Sa a

operation between Los Angeles and San Francisco, the

Civil Aeronautics Board’s control over mergers of air

carriers would be stultified, if not nullified.

It is not known, and has not been known since the Civil

Aeronautics Act was passed in 1938, with any degree of

certainty the extent to which, if at all, the various states

have control over these economic matters which are so im-

portant to the welfare of the air transportation industry.

The basic question involved on this appeal concerns these

matters and the answer pronounced by this Court. will

remove the uncertainties.

B. Dual Control of the Airline Industry Would Be

Disruptive.

It is not to be denied that conflicting orders addressed

to an air carrier by separate agencies with neither agency

having authoritative primacy would create an untenable

and intolerable condition in the air transportation industry.

This is so whether the conflicting orders concern safety,

and therefore involve lives, or concern economic matters,

and therefore involve only dollars. Indeed, the latter

would have a direct impact on the efficiency of the car-

rier’s operation, and if allowed to continue an inefficient

operation will become a dangerous operation.

It is no answer to say, as Appellee has said, that a state

agency is as duty-bound to fix just and reasonable intra-

State fares as is the Civil Aeronautics Board duty-bound to

fix just and reasonable interstate fares, and that there are

adequate administrative and judicial remedies should either

governmental regulatory agency become remiss in its duty.

A state agency in the highest good faith might con-

sider an intrastate air tariff of 2¢ a mile just and rea-

sonable and the highest court of that state in like good

a od et

er ee

faith might agree. Should the Civil Aeronautics Board

in the highest good faith conclude that 6¢ a mile’ is a

reasonable rate and should this Court agree, a high block

would be placed in the road of an efficient operation by

the air carriers directly concerned. Nor would it matter

that both courts acting independently were to rule that the

state order applied only to intrastate traffic and the Fed-

eral order only to interstate traffic. Even though it were

possible to screen out intrastate passengers and to prevent

ceweka .

interstate passengers from making the trip by segments

on separately purchased segment tickets, an impossible sit-

uation would exist if a Los Angeles-Seattle passenger had

to pay three times as much to fly over the Los Angeles-

San Francisco segment of his interstate flight as the Los

bia ee ee ee ee ee

Angeles-San Francisco passenger would pay for his in-

trastate flight. If this were multiplied by the number of

times that the same situation could exist, should all forty-

eight states exercise similar power in like fashion, the

impact on the air transportation industry would not be

responsive to the public interest.

Dual control over air tariffs would prevent the mainten-

ance of a uniform national rate structure and could lead

to direct violation of Section 404(b) of the Civil Aero-

nautics Act (49 U. S. Code 484), which reads:

“No air carrier or foreign air carrier shall make,

give, or cause any undue or unreasonable preference

1The prevailing first-class air passenger rate nationally averages

approximately 6¢ per mile.

or advantage to any particular person, port, locality,

or description of traffic in air transportation in any

respect whatsoever or subject any particular person,

port, locality, or description of traffic in air trans-

portation to any unjust discrimination or any undue

or unreasonable prejudice or disadvantage in any re-

spect whatsoever.”

Appellee will argue that this section of the Act refers

only to “air transportation” and that this term is de-

fined in Section 1(10) (49 U. S. Code 401), to mean in-

terstate, overseas or foreign air transportation or the

transportation of mail by aircraft, and thus that the anti-

discrimination provision was not intended by Congress to

apply to intrastate matters.

Such an argument would do little credit to the in-

telligence of Congress. If a person who travels by

air between Los Angeles and San Francisco is not a

person within the meaning of that section, or if Los

Angeles and San Francisco are not ports, and the inter-

vening area a locality within the meaning of the section,

and if the traffic between Los Angeles and San Fran-

cisco does not come within the purview of any “descrip-

tion of traffic in air transportation” the section will be

of little value in maintaining reasonable standards in the

air transportation industry. And although San Francisco-

Los Angeles may be the most important intrastate air

segments in the United States, it is by no means the only

one,

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+

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C. Dual Control Would Divest the Board of Its Air Mail

Rate Authority.

Perhaps the most important element which exposes the

substantial nature of the basic question raised by this

appeal concerns air mail rates.

Section 406(a) of the Act (49 U. S. Code 486), di-

rects the Board to fix and determine the fair and reason-

able rates of compensation for the transportation of mail

by aircraft. Section 406(b) sets forth the factors which

the Board shall take into consideration in determining the

mail rate in each case, including:

the need of each such air carrier for com-

pensation for the transportation of mail sufficient to

insure the performance of such service, and, to-

gether with all other revenue of the air carrier,’ to

enable such air carrier under honest, economical, and

efficient management, to maintain and continue the

development of air transportation to the extent and

of the character and quality required for the com-

merce of the United States, the Postal Service, and

the national defense.”

The term “all other revenue” is not all-embracing, as

it does not include income from matters not directly re-

lated to the carriers’ air transportation operations, but

?Emphasis in quoted material added throughout unless otherwise

noted.

actions

manifestly it does include tariff derived from the carriage

of persons and property between points within a single

state.

If the several states have control of intrastate air

tariffs the various state agencies and not the Civil Aero-

nautics Board necessarily will become the final arbitrators

of what rate the Post Office Department must pay for

the carriage of mail. This cannot be disputed, nor can it

be cast aside with the bland declaration that each state

would be duty-bound to fix just and reasonable intrastate

tariffs.

If a particular state agency, being concerned largely

with its own citizens, determine that intrastate tariffs

should be less per mile than the standard interstate

tariff approved by the Civil Aeronautics Board, neces-

sarily every air carrier operating intrastate segments with-

in that state would derive less passenger revenue than

would be the case otherwise, with the result that the Board

would be under compulsion to offset the diminished passen-

ger revenue from intrastate tariffs by increasing the mail

rate. Congress could not have intended this to be so.

That the basic question involved on this appeal is sub-

stantial and of great importance to the air transportation

industry is scarcely open to fair challenge. It remains only

to be seen whether there is merit to the points of law

which will be urged by Appellant in support of the an-

swer Appellant believes to be legally correct,

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II.

The Legal Points Which Will Be Urged by Appellant

Have Merit.

A. Preface.

Appellant concedes that no matter how important the

question involved may be to it and to the air transporta-

tion industry, Appellee’s motion to dismiss or affirm would

be in order unless the legal principles to be urged in

support of the answer sought by Appellant have merit.

Since it is thought that the need for this brief is simply

to reveal that the main question is substantial and that the

supporting legal points have real merit, the effort will not

necessarily be made to present the law under color of

finality. That will be done in the brief which will be filed

under Rule 27.

The basic point urged by Appellant is that the states

have no power to interfere with the operations of air car-

riers, either with respect to safety matters or economic

matters. This basic point splits into two—(1) by the

Civil Aeronautics Act the Congress has preempted the

field, and (2), if that be not so, the commerce clause of

the United States Constitution of itself bars interference

by the states.

It is axiomatic that under our system the Federal Gov-

ernment has exclusive control of matters pertaining to

interstate commerce, with the states retaining exclusive

control of local matters. Another maxim is that state

control of local matters must yield when the exercise of

that control would be a burden upon interstate commerce.

It is in this phase—intermingling and overlapping—

when the line sometimes becomes fuzzy and judicial inter-

pretation becomes essential.

= WS

a

The extent, if any, to which states may exercise power

over matters of commerce in a given circumstance does

not admit of measurement by slide rule tactics. In each

instance all of the factors must be weighed and the over-

all picture surveyed. The point was well expressed by

Mr.

Justice Black in Hines v. Davidowitz, 312 U. S. 52:

“There is not—and from the very nature of the

problem there cannot be—any rigid formula or rule

which can be used as a universal pattern to determine

the meaning and purpose of every act of Congress.

This Court, in considering the validity of State laws

in the light of treaties or federal laws touching the

same subject, has made use of the following ex-

pressions ; conflicting ; contrary to; occupying the field;

repugnance; difference; irreconcilability; inconsisten-

cy; violation; curtailment; and interference. But

none of these expressions provides an infallible con-

stitutional test or an exclusive constitutional yard-

stick. In the final analysis, there can be no one

crystal clear distinctly marked formula. Our primary

function is to determine whether, under the circum-

stances of this particular case, Pennsylvania’s law

stands as an obstacle to the accomplishment and

execution of the full purposes and objectives of

Congress.” pp. 67-8.

* * * * * * * *

“The nature of the power exerted by Congress, the

object sought to be attained, and the character of the

obligations imposed by the law, are all important in

considering the question of whether supreme federal

enactments preclude enforcement of state laws on the

same subject.” p. 70.

~~“

es

The same principle—lack of a formula—applies when

a state act intrudes on a United States constitutional

provision absent legislative implementation. This language

was used by Mr. Justice Reed in Morgan v. Common-

wealth of Virginia, 328 U. S. 373:

“The precise degree of a permissible restriction on

state power cannot be fixed generally or indeed not

even for one kind of state legislation, such as taxa-

tion or health or safety. There is a recognized ab-

stract principle, however, that may be taken as a

postulate for testing whether particular state legis-

lation in the absence of action by Congress is beyond

state power. This is that the state legislation is in-

valid if it unduly burdens that commerce in matters

where uniformity is necessary—necessary in the con-

stitutional sense of useful in accomplishing a per-

mitted purpose. Where uniformity is essential for

the functioning of commerce, a state may not inter-

pose its local regulation. Too true it is that the prin-

ciple lacks in precision. Although the quality of such

a principle is abstract, its application to the facts of

a situation created by the attempted enforcement of

a statute brings about a specific determination as to

whether or not the statute in question is a burden

on commerce. Within the bread limits of the prin-

ciple, the cases turn on their own facts.

“In the field of transportation, there have been

a series of decisions which hold that where Congress

has not acted and although the state statute affects

intersiate commerce, a state may validly enact legis-

lation which has predominantly only a local influ-

ence on the course of commerce. It is equally well

settled that, even where Congress has not acted,

state legislation or a final court order is invalid which

materially affects interstate commerce.” pp. 377-9.

—. oe

First, Appellant will show that there is merit to the

legal argument that by the Civil Aeronautics Act Con-

gress pre-empted the entire field of commercial air trans-

portation regulation, both safety and economic. Next,

Appellant will show that even though the Civil Aeronau-

tics Act should be held not to occupy the field, sound

merit exists in the legal argument that the commerce

clause of the United States Constitution of itself bars

interference by the states.

| B. The Argument That the Civil Aeronuatics Act Pre-

| empts the Field of Commercial Air Transportation Has

Merit.

1. Lacx or Speciric LANGUAGE IN THE Act Is

IM MATERIAL.

At the outset it is admitted that the Civil Aeronautics

Act contains no direct language that the Civil Aeronau-

tics Board has exclusive control of either the safety fac-

tors or the economic factors pertaining to air transpor-

tation. Nor does the Act provide in so many words that

the states shall not interfere.

Appellee has conceded that the Civil Aeronautics Act

occupies the entire field of safety with respect to air

transportation with this declaration in its Statement in

Opposition :

“A review of the definition of ‘air commerce’ and

the safety provisions of the Civil Aeronautics Act

clearly demonstrates that the Congress knows how

to use language to extend federal regulation to intra-

State activities when it desires to do so.”

The concession of Appellee is commendable. It is

believed, however, that this concession is based more on

— —_— BI LTE RA eI Mal MRIS EN A RR

lites

the fact that “under the circumstances of this particular

case, (California's) law stands as an obstacle to the ac-

complishment and execution of the full purposes and ob-

jectives of Congress” concerning safety regulation in air

transportation, to paraphrase the //ines case, rather than

on the language used by Congress in the Civil Aeronautics

Act.

The absolute necessity of having a single master with

respect to safety regulations in air transportation—far

and above any form of ground transportation—is so over-

whelmingly manifest that no matter what language might

have been used in the Civil Aeronautics Act no one would

be heard to argue that the several states could exercise

independent control over safety regulations of intrastate

air transportation. If each state established its own levels

at which aircraft could fly when on instruments, there

would be no blind flying. There is no need to multiply this

example.

If this Court were called upon to consider the validity

of a state law impinging on the exclusiveness of the

Board’s control of safety matters in air transportation,

every expression noted in the Hines case—conflicting,

contrary to, repugnance, irreconcilability and interference,

to state five of the ten—could be employed. Nonethe-

less, the language in the Act with respect to pre-emption

of the field of safety is by no means as convincing or

compelling as the circumstances themselves.

Section 601(a) of the Act (49 U. S. Code 551) reads

in part:

“The Board is empowered, and it shall be its duty

to promote safety of flight in air commerce by pre-

scribing and revising from time to time—”

—15—

various safety standards and rules which are quite all-

embracing. This power is confined to flight in air com-

merce.

Section 1(3) of the Act (49 U. S. Code 401(3)), de-

fines air commerce in this manner:

“*Air commerce’ means interstate, overseas, or

foreign air commerce or the transportation of mail

by aircraft or any operation or navigation of air-

craft within the limits of any civil airway or any

operation or navigation of aircraft which directly

affects, or which may endanger safety in, interstate,

overseas, or foreign air commerce.”

Mail is carried by air between points in a single state

—Los Angeles to San Francisco, for example. Operation

of an aircraft within the limits of any civil airway may

be entirely within a single state—again Los Angeles to

San Francisco, for example. Careless operation of an

aircraft flying between Los Angeles and San Francisco

might endanger the safety of an interstate flight between

Los Angeles and Seattle. So Congress must have, and

if it did not it should have, intended to exclude states

from interfering with safety matters in any form of air

transportation. But Congress did not say so in so many

words.

The difference between the words used in the Act re-

specting safety factors and those used respecting economic

factors is very thin and far from sufficient to hold cate-

gorically, as Appellee concedes, that safety matters have

been pre-empted, but that, as Appellee contends, economic

matters have not been.

Section 403(a) of the Act (49 U. S. Code 483(a)),

provides that every air air carrier shall file with the Board

YF oo ’ . = ek v : : 7.

tariffs showing all rates for “air transportation” between

points served by it. Section 1(10) of the Act (49 U. S.

Code 401(10)) reads: “‘Air transportation’ means in-

terstate, overseas or foreign air transportation or the °

transportation of mail by aircraft.” Section 1(21) defines

“interstate air transportation” as the carriage by aircraft

of persons or property as a common carrier for com-

pensation or hire or the carriage of mail by aircraft in

commerce between a place in one state to a place in an-

other state, among other combinations. These words

standing alone and strictly construed could be held to

exclude intrastate operations. But a broader analysis pro-

duces an entirely different reflection on the Congressional

intent.

Section 403(a) requires that the tariffs show all rates

for air transportation between points served by the car-

rier. This means all points, not just those that are inter-

state. Section 403(b) provides that no air carrier shall

charge “different compensation for air transportation, or

for any service in connection therewith, than the rates

. . Specified in its currently effective tariffs;”. Even

though it could be argued that the “points” referred to

in Section 403(a) were intended to be interstate only,

intrastate air transportation by an interstate air carrier

necessarily is “service in connection” with interstate air

transportation.

There is no possibility of reading into Section 403 any

conclusion other than the conclusion that Congress in-

tended to vest in the Civil Aeronautics Board complete

control over the tariffs of air carriers. There is no room

for serious contention that Congress intended to leave to

the several states the power to determine what tariffs

atl

—]7—

interstate air carriers should charge for air transportation

between points located within the borders of a single state.

Section 401 of the Act (49 U. S. Code 481) covers the

issuance, modification, suspension, revocation, transfer

and abandonment of Certificates of Public Convenience

and Necessity for air routes. Subsection (f) of that sec-

tion states that “Each certificate under this section shall

specify the terminal points and intermediate points, if

any, between which the air carrier is authorized to en-

gage in air transportation and the service to be ren-

dered.” Though the term “air transportation” is used,

this declaration necessarily mist give the Board control

over intrastate segments of the certificates as it is doubted

that a single domestic interstate certificate has been issued

by the Board under the Act which does not contain at

least one intrastate segment.

If the certificates issued by the Board do not confer

upon the carrier the right to serve the traffic between

intermediate points which are located within a single

state, the value to the public of the certificate would be

reduced sharply and the Board’s power to compel the

carrier to provide safe and adequate service at just and

reasonable rates (49 U. S. Code 484) would be mini-

mized considerably.

So it is that Section 407 of the Act relating to accounts,

records znd reports, Section 408 relating to consolidations

and mergers, and Section 412 relating to pooling and

other agreements would be stripped of vitality if they

applied only to the strictly interstate operations of air

carriers,

It is not necessary that the Civil Aeronautics Act in so

many words recite that it is all-embracing to the exclu-

aioli

sion of state interference. Mr. Chief Justice Marshall

had this to say in Sturges v. C rowninshield, 17 U. S.

122:

“Whenever the terms in which a power is granted

to Congress, or the nature of the power, required

that it should be exercised exclusively by Congress,

the subject is as completely taken from the state

legislatures as if they had been expressly forbidden

to act on it.” p. 193.

Equally effective language was used by Mr. Justice

Jackson in Bethlehem Steel v. New York Labor Rela-

tions Board, 330 U. S. 767, in which these statements

appear :

“Our question is primarily one of the construc-

tion to be put on the Federal Act. It long has been

the rule that exclusion of state action may be im-

plied from the nature of the legislation and the sub-

ject matter although express declaration of such

result is wanting. Napier v. Atlantic Coast Line R.

Co., 272 U. S. 605, 71 L. ed. 432, 47 S. Ct. 207.

“In determining whether exclusion of state power

will or will not be implied, we well may consider

the respective relation of federal and state power

to the general subject matter as illustrated by the

case in hand. These companies are authorized to

do business in New York State, they operate large

manufacturing plants in that state, they draw their

labor supply from its residents, and the impact of

industrial strife in their plants is immediately felt

by state police, welfare and other departments. Their

labor relations are primarily of interest to the state,

* oA STARRETT Se

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are within its competence legally and practically to

regulate, and until recently were left entirely to state

control. Thus, the subject matter is not so ‘inti-

mately blended and intertwined with responsibilities

of the national government’ that its nature alone

raises an inference of exclusion. Cf. Hines v.

Davidowitz, 312 U. S. 52, 66, 85 L. ed. 581, 586,

61 S. Ct. 399,

“Indeed, the subject matter is one reachable, and

one which Congress has reached, under the federal

commerce power, not because it is interstate com-

merce but because under the doctrine given classic

expression in the Shreveport Case, Congress can

reach admittedly local and intrastate activities ‘hav-

ing such a close and substantial relation to inter-

state traffic that the control is essential or appro-

priate to the security of that traffic, to the efficiency

of the interstate service, and to the maintenance of

conditions under which interstate commerce may be

conducted upon fair terms and without molestation

or hindrance.’”’ pp. 772-3.

* * * * * * * *

“However, the power of the state may not so deal

with matters left to its cc rtrol as to stand ‘as an

obstacle to the accomplishment and execution of the

full purposes and objectives of Congress’ ;

When Congress has outlined its policy in rather

general and inclusive terms and delegated determina-

tion of their specific application to an administrative

tribunal, the mere fact of delegation of power to deal

with the general matter, without agency action, might

preclude any state action if it is clear that Congress

has intended no regulation except its own ae

p. 773.

* * * * * * * a”

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2. CoOMMINGLING OF INTRASTATE AND INTERSTATE

Matters Does Not PrectupE ExcLusivE FEDERAL

CONTROL.

The fact that there is a commingling of intrastate and

interstate transactions in no wise detracts from the

Board’s exclusive power. In fact, there are but few inter-

state activities that are completely divorced from some

intrastate functions. If the intrastate activities can be

segregated from the interstate activities, and if the intra-

state activities do not impede the interstate functions,

dual controls are permissible. But when the commingling

cannot be unraveled, or when state control of the intra-

state transactions will trespass on Federal control of the

interstate transactions, state control must yield.

Mr. Justice Hughes had this to say on the point in

Houston East and West Texas Railway v. U. S., 234

U. S. 342:

“Tt is unnecessary to repeat what has frequently

been said by this court with respect to the complete

and paramount character of the power confided to

Congress to regulate commerce among the several

states. It is of the essence of this power that, where

it exists, it dominates. Interstate trade was not

left to be destroyed or impeded by the rivalries of

local government. The purpose was to make im-

possible the recurrence of the evils which had over-

whelmed the Confederation, and to provide the neces-

sary basis of national unity by insuring ‘uniformity

of regulation against conflicting and discriminating

state legislation.’ By virtue of the comprehensive

terms of the grant, the authority of Congress is at

all times adequate to meet the varying exigencies that

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arise, and to protect the national interest by securing

the freedom of interstate commercial intercourse from

local control.” pp. 350-351.

* * * * * * * *

“The fact that carriers are instruments of intra-

State commerce, as well as of interstate commerce,

does not derogate from the complete and paramount

authority of Congress over the latter, or preclude the

Federal power from being exerted to prevent the

intrastate operations of such carriers from being

made a means of injury to that which has been con-

fided to Federal care. Wherever the interstate and

intrastate transactions of carriers are so related that

the government of the one involves the control of

the other, it is Congress, and not the state, that is

entitled to prescribe the final and dominant rule, for

otherwise Congress would be denied the exercise of

its constitutional authority, and the state, and not

the nation, would be supreme within the national

field.”” pp. 351-352.

* * * x * x * *

“We find no reason to doubt that Congress is en-

titled to keep the highways of interstate communica-

tion open to interstate traffic upon fair and equal

terms That an unjust discrimination in the rates

of a common carrier, by which one person or locality

is unduly favored as against another under substan-

tially similar conditions of traffic, constitutes an evil,

is undeniable; and where this evil consists in the

action of an is -rstate carrier in unreasonably dis-

criminating against interstate traffic over its line,

the authority of Congress to prevent it is equally

clear. It is iminaterial, so far as the protecting

power of Congress is concerned, that the discrimina-

tion arises from intrastate rates as compared with

=~

interstate rates. The use of the instrument of inter-

state commerce in a discriminatory manner so as to

inflect injury upon that commerce, or some part

thereof, furnishes abundant ground for Federal inter-

vention. Nor can the attempted exercise of state

authority alter the matter, where Congress has acted,

for a state may not authorize the carrier to do that

which Congress is entitled to forbid and has forbid-

den.” p. 354.

* * * »*” * * * *

“We are not unmindful of the gravity of the

question that is presented when state and Federal

views conflict. But it was recognized at the begin-

ning that the nation could not prosper if interstate

and foreign trade were governed by many masters,

and, where the interests of the freedom of inter-

state commerce are involved, the judgment of Con-

gress and of the agencies it lawfully establishes must

control.” p. 360.

Added force to the argument that the Civil Aeronautics

Act precludes state interference is found in the words of

Mr. Chief Justice Hughes reported in Currin v. Wallace,

306 U. S. 1:

“The fact that intrastate and interstate transac-

tions are commingled on the tobacco market does

not frustrate or restrict the congressional power to

protect and control what is committed to its own

care. . . . Here, the transactions on the tobacco

market were conducted indiscriminately at virtually

the same time, and in a manner which made it neces-

sary, if the congressional rule were to be applied, to

make it govern all the tobacco thus offered for sale.”

p. Il.

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The special circumstances attending the air transporta-

tion industry coupled with the wording of the Civil Aero-

nautics Act bring these cases into play. It cannot be

said with conviction that Appellant’s legal argument that

the Civil Aeronautics Act occupies the entire field of com-

mercial air transportation—economic as well as safety—

is lacking in merit.

Certainly it cannot be claimed that the point here con-

tended for by Appellee is so clear that this case should

be dismissed or affirmed in summary fashion. The air

transportation industry is entitled to a decision of this

Court resolving the issue one way or another with suffi-

cient clarity and preciseness to enable the members of

the industry to plan their operations with knowledge of

the circumstances, if any there be, under which orders of

state agencies must be oheyved and conflicting orders of the

Civil Aeronautics Board may be ignored with impunity.

C. The Argument That the Commerce Clause of the

United States Constitution, Without Aid From the Civil

Aeronautics Act, Excludes Any State Control Over Air

Carriers Has Merit.

GER YS RPI RIN GOREN ESN EINER TE EER

It is not conceded for an instant that the Civil Aero-

nautics Act has not pre-empted the entire field of air

transportation. But should it be the ruling of this Court ;

that Congress did not intend the Civil Aeronautics Act

to pre-empt the field, then the commerce clause of itself

establishes the needed barrier against state intervention.

ee en

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The Federal Government has exclusive control over :

interstate commerce. States may not impose burdens on ‘

this commerce whether or not Congress has chosen to

speak,

Ci FORT A SRE TS al Rai aN Wie ip lose Tanah Ste

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Mr. Justice Sutherland in Missouri ex rel. Barrett v.

Kansas National Gas Co., 265 U. S. 298, upholds Mr.

Justice Hughes’ words in the Minnesota Rate Cases in

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this language:

“In Minnesota Rate Cases (Simpson v. Shepard)

230 U. S. 352, 396, 57 L. ed. 1511, 1540, 48 L. R. A.

(N. S.) 1151, 33 Sup. Ct. Rep. 729, Ann. Cas.

1916A, 18, Mr. Justice Hughes, speaking for the

court, said: ‘If a state enactment imposes a direct

burden upon interstate commerce, it must fall, re-

gardless of Federal legislation. The point of such an

objection is not that Congress has acted, but that the

State has directly restrained that which, in the ab-

sence of Federal regulation, should be free.’ The

question is so fully discussed in that case that noth-

ing beyond its citation is required.” pp. 307-8.

(Emphasis included.)

More recently Mr. Chief Justice Stone in Southern

Pacific Company v. Arizona, 325 U. S. 761, confirmed

the principle in this language:

“But ever since Gibbons v. Ogden, 9 Wheat.

(U. S.) 1, 6 L. Ed. 23, the states have not been

deemed to have authority to impede substantially the

free flow of commerce from state to state, or to regu-

late those phases of the national commerce which,

because of the need of national uniformity, demand

that their regulation, if any, be prescribed by a single

authority. Cooley v. Port Wardens, supra (12 How.

(U. S.) 319, 13 L. ed. (1004); Leisy v. Hardin,

———— Oo

———————————— Oe oe ee

135 U. S. 100, 108, 109, 34 L. ed. 128, 132, 10 S. Ct.

681, 3 Inters Com. Rep. 36; Minnesota Rate Cases

(Simpson v. Shepard) supra 230 U. S. 399, 400, 57

L. ed. 1541, 1542, 33 S. Ct. 729,48 L. R. A. (N. S.)

1151, Ann. Cas. 1916A 18); Edwards v. California,

314 U. S. 160, 176, 86 L. ed. 119, 126, 62 S. Ct. 164.

Whether or not this long recognized distribution of

power between the national and the state govern-

ments is predicated upon the implications of the com-

merce clause itself, Brown vy. Maryland, 12 Wheat.

(U. S.) 419, 447, 6 L. ed. 678, 688; Minnesota

Rate Cases (Simpson v. Shepard) supra (230 U. S.

399, 400, 57 L. ed. 1541, 1542, 33 S. Ct. 729, 48

L. R. A. (N. S.) 1151, Ann. Cas. 1916A 18); Penn-

sylvania v. West Virginia, 262 U. S. 553, 596, 67

L. ed. 1117, 1132, 43 S. Ct. 658, 32 A. L. R. 300;

Baldwin v. G. A. F. Seelig, Inc., 294 U. S. 511, 522,

79 L. ed. 1032, 1037, 55 S. Ct. 497, 101 A. L. R.

55; South Carolina State Highway Dept. v. Barn-

well Bros. supra (303 U. S. 185, 82 L. ed. 738, 58

S. Ct. 510); or upon the presumed intention of Con-

gress, where Congress has not spoken, Welton v.

Missouri, 91 U. S. 275, 282, 23 L. ed. 347, 350;

Hall v. De Cuir, 95 U. S. 485, 490, 24 L. ed. 547,

548; Brown v. Houston, 114 U. S. 622, 631, 29 L. ed.

257, 200, 5 S. Ct. 1091; Bowman vy. Chicago & N.

W. R. Co. 125 U. S. 465, 481, 482, 31 L. ed. 700,

705, 706, 8 S. Ct. 689, 1062, 1 Inters. Com. Rep.

823; Leisy v. Hardin, supra (135 U. S. 109, 34 L.

ed. 132, 10 S. Ct. 681, 3 Inters. Com. Rep. 36); Re

Rahrer (Wilkerson v. Rahrer) 140 U. S. 545, 559,

560, 35 L. ed. 572, 575, 576, 11 S. Ct. 865; Bren-

a

nan v. Titusville, 153 U. S. 289, 302, 38 L. ed. 719,

723, 14S. Ct. 829, 4 Inters. Com. Rep. 658; Coving-

ton & C. Bridge Co. v. Kentucky, 154 U. S. 204,

212, 38 L. ed. 962, 966, 14 S. Ct. 1087, 4 Inters.

Com. Rep. 649; Graves v. New York, 306 U. S.

466, 479, note, 83 L.. ed. 927, °32,note, 59 S. Ct. 595,

120 A. L. R. 1466; Dowling, Interstate Commerce

and State Power, 27 Va. L. Rev. 1, the result is the

same.” pp. 767-8.

“For a hundred years it has been accepted con-

stitutional doctrine that the commerce clause, with

out the aid of Congressional legislation, thus af-

fords some protection from state legislation inimical

to the national commerce, and that in such cases,

where Congress has not acted, this Court, and not

the state legislature, is under the commerce clause

the final arbiter of the competing demands of state

and national interests. Cooley v. Port Wardens, 12

How. (U. S.) 299, 13 L. ed. 996, supra; Kansas

City Southern R. Co. v. Kaw Valley Drainage Dist.

233 U. S. 75, 79, 58 L. ed. 857, 859, 34 S. Ct. 564;

South Covington & C. Street R. Co. v. Covington,

235 U. S. 537, 546, 59 L. ed. 350, 353, 35 S. Ct.

158, L. R. A. 1915F 792, P. U. R. 1915A 231; Mis-

souri, K. & T. R. Co. v. Texas, 245 U. S. 484, 488,

62 L. ed. 419, 421, 38 S. Ct. 178, L. R. A. 1918C

535, P. U. R. 1918B 602; St. Louis & S. F. R. Co.

vy. Public Serv. Commission, 254 U. S. 535, 537, 65

L. ed. 389, 391, 41 S. Ct. 192, P. U. R. 1921B 504;

Foster-Fountain Packing Co. v. Haydel, 278 U. S. 1,

10, 73 L. ed. 147, 152, 49 S. Ct. 1; Gwin, White

& Prince v. Henneford, 305 U. S. 434, 441, 83 L.

A OF SNe EE Ne one ie PINE Rr [ky Rai

27 s

ed. 272, 277, 59 S. Ct. 325; McCarroll vy. Dixie

Greyhound Lines, 309 U. S. 176, 84 L. ed. 683, 60

S. Ct. 504.” p. 769.

The very nature of air transportation, relatively new,

fast and fast growing, requires the removal of all need-

less impediments to the free flow of its operations. Even

though Congress had remained silent forty-eight differ-

ent sets of safety regulations for air transportation

would be an impossible burden on interstate commerce by

air. Forty-eight conflicting sets of economic regulations

would make it just as impossible for air carriers to con-

duct an efficient and safe air transportation system in

interstate commerce,

But Congress has spoken wisely and effectively by

means of the Civil Aeronautics Act. So speculation need

not be indulged concerning what might have happened

to the still young but important air transportation in-

dustry had there not been a central guide.

The Civil Aeronautics Board has proved its ability

to guide and control the air transportation industry and

the states have recognized that at least there was grave

doubt about their right to interfere in any phase of the

industries operations, otherwise this case would not be the

test case on the subject.

Clearly, the argument that the commerce clause will

not brook interference by the states with the operations

of air carriers, regardless of any limitations in the Civil

Aeronautics Act, has ample merit to invite the attention of

this Court.

= =

Conclusion.

The issues raised by this appeal are more than sub-

stantial, they are crucial to the well-being of the American

2 flag air transportation industry and to the flying public.

The legal arguments which will be made in support of

Appellant's claim that the Civil Aeronautics Act has pre-

empted the entire field and that even without the benefit

of that Act the commerce clause of the United States

Constitution bars all significant state interference are

sufficiently sound to justify a denial of Appellee’s motion

ne

to dismiss or affirm.

Los Angeles, California.

December 3, 1951.

Respectfully submitted,

Hucu W. DarLIne,

Attorney for Appellant.

Certificate of Service.

I, George G. Gute, an associate of the firm of Guthrie,

Darling & Shattuck, attorneys for Appellant Western

Air Lines, Inc., certify that on this date I will have

caused to be mailed copies of the within Brief to Everett

C. McKeage, Esquire, General Counsel for Appellee

Public Utilities Commission of the State of California,

with postage prepaid, addressed to 514 State Building,

San Francisco 2, California.

Los Angeles, California.

December 3, 1951.

GrorcE G. GuTE

2tay eer