Petition for Writ of Certiorari — Air Line Pilots Ass'n, International v. Civil Aeronautics Board

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ag JUN 10 1948

SUPREME COURT OF THE UNIT

OCTOBER TERM, 1947’

No. 86

AIR LINE PILOTS ASSOCIATION, INTERNATIONAL,

Petitioner,

v.

CIVIL AERONAUTICS BOARD, anv NATIONAL AIR

LINES, INC.,

Respondents

PETITION FOR WRIT OF CERTIORARI TO THE

UNITED STATES COURT OF APPEALS FOR THE

DISTRICT OF COLUMBIA

4 Sees Kaiser,

J GerHarp P. Van ARKEL,

1830 Jefferson Place, N. W.,

Washington 6, D. C.,

Counsel for Air Line Pilots

Association, International,

Of Counsel:

Dantet D. CarMELL,

J 130 N. Wells Street,

Chicago, Illinois;

| Samusv H. Jarrze,

. Dupont Circle Building,

Wash‘ngton 6, D. C.

SS:

_

SUPREME COURT OF THE UNITED STATES

OCTOBER TERM, 1947

No.

AIR LINE PILOTS ASSOCIATION, INTERNATIONAL,

Petitioner,

v.

CIVIL AERONAUTICS BOARD, anp NATIONAL AIR

LINES, INC.,

Respondents

PETITION FOR WRIT OF CERTIORARI TO THE

UNITED STATES COURT OF APPEALS FOR THE

DISTRICT OF COLUMBIA

To the Honorable the Chief Justice and Associate Justices

of the Supreme Court of the United States:

Air Line Pilots Association, International, prays that a

writ of certiorari issue to review the Judgment and Decree

of the United States Court of Anpeals for the District of

Columbia, entered on April 23, 1948, insofar as the Judgment

and Decree dismissed petitioner’s petition for review of an

order of the Civil Aeronautics Board, dated March 29, 1948.

Opinions Below

The court below rendered no opinion other than the said

Judgment and Decree of April 23, 1948 (R. 96). The

——

order of the Civil Aeronautics Board which petitioner

sought to have reviewed is as yet unreported. It appears

in the record at page 25.

Jurisdiction

The jurisdiction of this Court is invoked under Section

1006 (f) of the Civil Aeronautics Act of 1938, as amended

(52 Stat. 977, 49 U. S. C. A. Supp. sec. 646 (f)), Section 240

(a) of the Judicial Code, as amended (28 U.S. C. A. see,

347 (a)), and Rule 38, paragraph 5 (c) of the Court.

Statutes and Regulations Involved

The pertinent provisions of the Civil Aeronautics Act of

1938, as amended (52 Stat. 977, 49 U. S. C. A. Supp. see.

401 et seq.), are set forth in the Appendix, infra, pages 11-12.

The pertinent provisions of the Administrative Procedure

Act (60 Stat. 237,5 U.S. C. A. Supp. sec. 1001 et seq.), are

set forth in the Appendix, fra, pages 12-13.

The pertinent provisions of the Railway Labor Act (49

Stat. 1189, 45 U.S. C. A. Supp. sec. 151 et seq.), are set forth

in the Appendix, infra, pages 13-14.

The pertinent provisions of the Civil Aeronautics Board’s

Economic Regulations (Part 285 of its Rules of Practice),

are set forth in the Appendix, infra, pages 14-15.

2

Question Presented

1. Whether petitioner has, under the Civil Aeronautics

Act, disclosed a ‘‘substantial interest’’ in, or, under the

Administrative Procedure Act, is a person ‘‘suffering legal

wrong’’ or is ‘‘adversely affected or aggrieved’’ by, the

order of the Civil Aeronautics Board which petitioner

sought to review in the court below.

Statement

The proceedings in the court below began with a petition

filed on April 5, 1948, by Air Line Pilots Association, Inter-

national (Association) (R. 1), a labor organization repre-

senting pilots employed by National Air Lines, Inc. (Na-

tional), seeking review and stay of an order of the Civil

Aeronautics Board (Board) (BR. 25), which granted to Na-

tional a ‘‘temporary mail rate’? including a retroactive

award of public monies amounting to $545,000 and further

‘nereased compensation of approximately $60,000 per

month.

The proceedings which led to the order referred to may

be summarized as follows: On October 31, 1947, National

Sled with the Board, an administrative agency of the Fed-

eral Government, a supplemental petition for a ‘““temporary

mail rate’? (R. 17). On January 23, 1948, certain of Na-

tional’s employees, represented by the International Asso-

ciation of Machinists, a labor organization, went on strike

(R. 19). On January 30, 1948, the Board denied National’s

petition (R. 18). On February 2, 1948, National filed a

petition with the Board for reconsideration; this petition

referred to the strike as a reason for asking for the ‘‘tem-

porary mail rate’’ (R. 18,35). On February 3, 1948, certain

of National’s pilots, represented by the Association, went

on strike (R. 19). On February 9, 1948, National filed an

amended petition deleting any reference to the strike (R.

25). On February 24, 1948, the Board issued an order

“directing National to show cause why a proposed tempo-

rary rate should not be established’’ (R. 18-19).

On March 1, 1948, the Association, in its own behalf as a

labor organization having contractual relations with Na-

3

tional, in behalf of its pilot members who were (and still

1 Under the Board’s procedure set out in its Economie Regulations, sec.

285.13(b) (1) and (2), it is provided that “In proceedings instituted upon

petition . . ., the Board, before further procedural steps are taken,

will normally issue an order directing the parties to show cause why spe-

cified rates . . . should not be fixed and determined by the Board”;

it is further provided that “The rates . . . specified in any order

issued pursuant to this section will represent tentative rates. . . .”

—

are) engaged in the strike referred to, and in behalf of the

public, petitioned the Board (R. 19) for leave to intervene

in the ‘‘temporary mail rate’’ proceedings.

The Board, by its Opinion and Order of March 5, 1948

(R. 18), denied the Association the right to intervene,

though permitting it ‘‘to participate’’, subject, however,

to prescribed limitations placed by the Board upon the

issues and the evidence the Association sought and offered

to adduce. These limitations, as described by the Board

in its said Opinion and Order of March 5, 1948 (and adopted

by it in the subsequent proceedings before the Board re-

ferred to hereinafter), were principally based on the

Board’s assertion therein that in ‘‘temporary”’ rate pro-

ceedings ‘‘compliance with substantive and procedural statu-

4

tory requirements [is] impossible . . .’’; that there are

‘‘only two requirements that must be met to entitle a car-

rier to a temporary rate . . . [1] that its immediate

financial position is critical [and (2)] that its existing rate

is substantially inadequate’’; that ‘‘substantial reliance

must necessarily be placed on the data submitted by the

[airline ; and that] the emphasis [must be placed] on speedy

determination [and] on estimates . . .”’

Such limitations, as alleged by the Association below,

necessarily resulted not only (1) in complete abandonment

by the Board of the ‘‘substantive and procedural statutory

requirements’’ provided by the Civil Aeronautics Act, and

which must be applied by the Board in the determination

of mail rates, but in addition (2) in abandonment by the

Board of the principles of fair hearing and due process

required by said Act, by the Board’s Economic Regulations,

by the Administrative Procedure Act, and by the Constitu-

tion of the United States.

The said substantive statutory requirements principally

consist of: (a) public interest, convenience and necessity

(Civil Aeronautics Act, secs. 2 and 401(d)(1)); (b) compli-

—

5

ance by the airline with title II of the Railway Labor Act

(Civil Aeronautics Act, sec. 401(1) (4) ) ; and (c) need by air-

line for adequate mail-rate compensation ‘‘under honest,

economical, and efficient management’’ (Civil Aeronautics

Act, sees. 406(b) and 1002(e) (5)).

The chief procedural statutory requirement and principle

of fair hearing violated by the Board involves sec. 285.13

(b)(2) of the Board’s Economic Regulations,’ and sec. 8(b)

of the Administrative Procedure Act.* Nowhere in any of

its orders or decisions did the Board incorporate the ex-

hibits referred to or include a statement of the reasons er

basis for its findings and conclusions upon the material

issues, nor have such exhibits ever been made available to

the Association or seen by it.

Following a purported ‘‘hearing’’ which was thus limited

(to all of which, and to the denial of intervention, the Asso-

ciation duly objected) the Board by its order of March 29,

1948 (R. 25), granted a ‘‘temporary mail rate’’ to National,

increasing by approximately $60,000 per month the sums to

be received by National for the carriage of mail, and also

granted to National a retroactive award of $545,000. This

order was a complete reversal of the earlier order of the

Board issued January 30, 1948, only three weeks before,

which had denied National’s petition for a temporary mail

rate.

On April 5, 1948, as stated above, the Association filed a

petition seeking review and stay of the Board’s order of

March 29, alleging therein the substance of the above. On

April 8, the Board filed objections to the request for stay,

2“ | . Such orders [setting rates] will be accompanied by and in-

corporate exhibits setting forth the basis upon which the tentative rates

. have been formulated.”

s« | . All decisions (including initial, recommended, or tentative

decisions) shall . . . include a statement of (1) findings and conclu-

sions, as well as the reasons or basis therefor, upon all the material issues

of fact, law, or discretion presented on the record. . . .”

LALIT TIE IO BO

a

and, on April 9, a motion to dismiss the petition (R. 1, 5, 30).

On April 14, the Association filed a reply to the objections

(R. 34). On April 21, oral argument on these documents

was had before the court below. On April 23, the court

below issued a Judgment and Decree denying the petition

for stay, and granting the motion to dismiss ‘‘for failure

by petitioner to disclose a substantial interest in the order

sought to be reviewed’’ (R. 96).*

6

Specification of Errors to Be Urged

The Court below erred:

1. In dismissing the Association’s petition for review

assertedly ‘‘for failure by petitiouer to disclose a sub-

stantial interest in the order sought to be reviewed’’, and

in failing to find that such interest was disclosed, under the

Civil Aeronautics Act, sec. 1006 (a).

2. In failing to find that the Association was a person

‘‘suffering legal wrong’’ and one ‘‘adversely affected or

aggrieved’’ by the Board’s order of March 29, 1948, within

the meaning of the Administrative Procedure Act, sec.

10 (a).

Reasons for Granting the Writ

1. The issue here involved raises a substantial question

directly affecting the public interest. The Civil Aeronautics

Act is clearly designed principally to protect the public in-

terest (see sec. 2, Appendix, page 11; W. R. Grace € Co. v.

4 Since the court below based its Judgment and Decree solely on the

asserted failure to disclose the substantial interest referred to, no refer-

ence is made herein to the issue of whether the Board’s order, review of

which was sought in the court below, was a final order; that issue was

raised below, but is clearly not before us in the present posture of the

_ ——e

Civil Aeronautics Board, 154 F. 2d 271 (C. C. A. 2)). Courts

will go farther to protect the public interest than they are

accustomed to go when only private interests are invclved.

Virginian Ry. Co. v. System Federation, 300 U. S. 515, 552;

FCC v. Sanders Bros. Radio Station, 309 U. S. 470, 476-7;

Scripps-Howard Radio v. FCC, 316 U. S. 4, 15-18; American

Power & Light Co. v. FCC, 325 U. S. 385, 390-1. As the

Second Circuit, commenting upon the Sanders and Scripps-

Howard cases, said (In Associated Industries of New York

y. Ickes, 134 F. 2d 694, 704): ‘*. . . Congress can constitu-

tionally encct a statute conferring on any non-official person

authority to bring a suit to prevent action by an

officer in violation of his statutory powers . . . even if

the sole purpose is to vindicate the public interest. Such

persons, so authorized, are, so to speak, private Attorney

Generals.’’

The Civil Aeronautics Act, sec. 1006 (a) says that ‘‘Any

order [with an exception not here pertinent] shall be sub-

ject to review . . . uponpetition .. . by any person

disclosing a substantial interest in such order . . .’’ The

Administrative Procedure Act, sec. 10 (a) says that, ‘‘ Any

person suffering legal wrong because of any agency action,

or adversely affected or aggrieved by such action, within

the meaning of any relevant statute, shall be entitled to

judicial review thereof.’’® Under sec. 285.6 (b) of the

Board’s Economic Regulations, it appears that petitions

for intervention will generally be granted where the peti-

tioner has a ‘‘property or financial interest’’ (Appendix

page 14). It has been stated hereinabove that the Civil

Aeronautics Act (sec. 401 (1) (4)) makes it a condition

7

5 Under sec. 1(27) of the Civil Aeronautics Act, a person includes “any

association . . .”; sec. 2(b) of the Administrative Procedure Act is

to the same effect.

ate ce a

upon the holding of a certificate of public convenience and

necessity that the airline comply with the labor legislation

referred to in title Il of the Railway Act. The rights

granted the Association under the Railway Act have been

recognized by this Court as valuable constitutional and

property rights. Texas ¢ N. O. Ry. Co. v. Bro. of Ry. & SS.

Clerks, 281 U. S. 548, 571.

2. It is not necessary for a person, in order to be ‘‘ad-

versely affected or aggrieved’’, for such person to be a

competitor as that term is more commonly understood. One

may be so affected or aggrieved in other ways. The rela-

tionship of the Association to National and to the proceed-

ings was not that of a stranger, nor that of a taxpayer, nor

of some other person whose connection with the proceedings

is insubstantial, indirect, or remote.* In this instance, the

effect of the Board’s order in granting National a tempo-

rary mail rate is that the power of the government has been

injected into an economic contest between a labor organiza-

tion and an employer, on the side of one contestant, and

that this has been done by resort to a procedure which is

illegal, arbitrary, and capricious. Clearly, the monies un-

lawfully awarded by the Board to National (which in one

year will total well over a million dollars)‘ will be of mate-

® For example, as in the cases of Perkins v. Lukens Steel Co., 310 U. S.

113; Mass. v. Mellon, 262 U. 8. 447; see also other decisions summarized

in the Reply to Objections to Stay of Order (R. 34, 43-46).

™ We are informed that some $400,000 or more has already been paid,

and that $60,000 of increased compensation will continue to be paid

monthly—unless the Board’s procedure is held invalid.

9

rial assistance to National in this economic contest. Those

familiar with the dynamics of such contests know full well

that such a strengthening of one side works a weakening

of the other, for the outcome of such contests generally

depends upon the relative economic strength of the partici-

pants. The Association is, under the circumstances, at

least ‘‘adversely affected or aggrieved.’’ This is especially

true where, as here, it is the public interest which is pri-

marily involved and not mere private litigation. See the

Sanders, Scripps-Howard, Associated Industries, Grace,

and American Power & Light Co. cases referred to above.

The dismissal by the court below of the Association’s peti-

tion for review is in conflict with the decisions of the Second

Cireuit cited above, and the court below has not given

proper effect to the American Power & Light and other deci-

sions of this Court.

3. To deny judicial review on the facts set out would have

these pernicious results: (a) there could be no review by

anyone of an order which the Association asserts is illegal,

arbitrary, and capricicus; (b) the Board will have given

away thousands of dollars of public monies because of the

application of standards of the Board’s own creation—

standards which clearly conflict with those laid down by

Congress ; (c) the Board’s refusal even to consider evidence

that National violated the Railway Act means that the gov-

ernment rewards the law breaker, while, at the same time,

it punishes the public and the Union, who desire the law

upheld; and (d) the refusal even to consider evidence that

National is not conducting its business honestly, econom-

ically, and efficiently, means that a carrier guilty of even

the grossest dishonesty is nevertheless rewarded by the

government.

10

Conclusion

Wuenerorg, petitioner respectfully prays that this peti-

tion be granted.

Respectfully submitted,

Henry Kaiser,

Geruarp P. Van ARKEL,

1830 Jefferson Place, N. W..,

Washington 6, D. C.,

Counsel for Air Line Pilots

Association, International.

Of Counsel:

Danret D. CarMELL,

130 N. Wells Street,

Chicago, Illinois;

Samvuet H. Jarrer, |

Dupont Circle Building,

Washington 6, D. C.

June, 1948.

~~

1l

APPENDIX

Civil Aeronautics Act of 1938 as Amended

The pertinent provisions of the Civil Aeronautics Act of

1938, as amended, 52 Stat. 977, 49 USCA Supp. sec. 401

et seq., are as follows:

Sec. 1. [Derinitions] As used in this Act, unless the

context otherwise requires—

(27) ‘‘Person’’ means any * * “association * * *

Sec. 2. [Deciaration or Poxicy] In the exercise and

performance of its powers and duties under this Act,

the Board shall consider the following, among other

things, as being in the public interest, and in accord-

ance with the public convenience and necessity—

(c) The promotion of adequate, economical, and effi-

cient service by air carriers * * *

Sec. 401(d)(1). [Cerrttricate or Pustic Conven-

IENCE AND Necessity] The Board shall issue a certificate

authorizing the * * * transportation covered by the

application, if it finds that the applicant is fit, willing,

and able to * * * conform to the provisions of this

Act * * * and that such transportation is required

by the public convenience and necessity ; otherwise such

application shall be denied.

Sec. 401(1)(4). [Compliance with Labor Legisla-

tion] It shall be a condition upon the holding of a cer-

tificate by any air carrier that such carrier shall comply

with title II of the Railway Labor Act, as amended.

Sec. 406(b). [Rares ror TRANSPORTATION OF Maru]

In fixing and determining fair and reasonable rates of

compensation under this section, the Board * * *

shall take into consideration, among other factors,

* * * the need of each such air carrier for compen-

ae.

sation for the transportation of mail sufficient * * +

to enable such air carrier under honest, economical, and

efficient management, to maintain and continue the

development of air transportation * * *

12

Sec. 1002(e). [Compiarnts To anp INVESTIGATIONS By

THE Boarv. Rule of Rate Making] In exercising and

performing its powers and duties with respect to the

determination of rates for the carriage of persons or

property, the Board shall take into consideration,

among other factors—

(5) The need of each air carrier for revenues suffi-

cient to enable such air carrier, under honest, economi-

cal, and efficient management, to provide adequate and

efficient air carrier service.

Sec. 1006(a). [Juprc1ra, Review] Any order, affirm-

ative or negative, issued by the Board under this Act

[with an exception not here pertinent] shall be subject

to review by * * * the United States Court of Ap-

peals for the District of Columbia upon petition * * *

by any person disclosing a substantial interest in such

aun” *

Sec. 1006(f). The judgment and decree of the court

affirming, modifying, or setting aside any such order

of the Board shall be subject only to review by the Su-

preme Court of the United States upon certification or

certiorari as provided in sections 239 and 240 of the

Judicial Code.

Administrative Procedure Act

The pertinent provisions of the Administrative Pro-

cedure Act, 60 Stat. 237, 5 USCA Supp. sec. 1001 et seq.,

are as follows:

Sec. 2. [Derrnirions]As used in this Act—

_

13

(b) * * * ‘*Party’’ includes any person or agency

named or admitted as a party, or properly seeking and

entitled as of right to be admitted as a party, in any

agency proceeding * * *

Sec. 8. [Decistons] * * * (b) * * * All deci-

sions (including initial, recommended, or tentative de-

cisions) shall become a part of the record and include a

statement of (1) findings and conclusions, as well as

the reasons or basis therefor, upon all the material

issues of fact, law, or discretion presented on the

r ecord . 7 *

Sec. 10. [Jupictan Review] Except as far as (1)

statutes preclude judicial review or (2) agency action

is by law committed to agency discretion—

(a) * * * Any person suffering legal wrong be-

cause of any agency action, or adversely affected or

aggrieved by such action within the meaning of any

relevant statute, shall be entitled to judicial review

thereof.

Railway Labor Act

The pertinent provisions of the Railway Labor Act, 49

Stat. 1189, 49 USCA sec. 151 et seq., are as follows:

Sec. 201. [Trrie 11; Common Carriers By Arr; APPLI-

cation TO Common Carriers By Arr] All of the provi-

sions of title I of this Act, except the provisions of sec-

tion 3 thereof, are extended to and shall cover every

common carrier by air engaged in interstate and for-

eign commerce, and every carrier by air transporting

mail for or under contract with the United States Gov-

ernment, and every air pilot or other person who per-

forms any work as an employee or subordinate official

of such carrier or carriers * * *

Sec. 202. [Extent or AppLicaBiLity oF Titte I ro Arm

Carriers] The duties, requirements, penalties, benefits,

and privileges prescribed and established by the pro-

visions of title I of this Act, except section 3 thereof,

shall apply to said carriers by air and their employees

in the same manner and to the same extent as though

such carriers and their employees were specifically in-

cluded within the definition of ‘‘carrier’’ and ‘em.

ployee’’, respectively, in section 1 thereof.®

Economic Regulations

The pertinent provisions of the Civil Aeronautics

Board’s Economic Regulations (Part 285 of its Rules of

Practice) are as follows:

285.6 APPEARANCES BY THIRD PERSONS AND Format

INTERVENTIONS

(b) Formal Interventions.

(1) Any person having a substantial interest in the

subject matter of any proceeding may petition for leave

to intervene in such proceeding and may become a

party thereto upon compliance with the provisions of

this paragraph. In general, such petitions will not be

granted unless it shall be found:

(i) that such person has a statutory right to be made

a party to such proceeding ; or

(ii) that such person will or may be bound by the

order to be entered in the proceeding ; or

(iii) that such person has a property or financial

interest which may not be adequately represented by

existing parties, if such intervention would not unduly

broaden the issues or delay the proceeding * * *

8 The principal provisions of title I which National allegedly violated

are: Sec. 1, First (duty “to exert every reasonable effort to make and

maintain agreements, rates of pay, rules, and working conditions, and to

settle all disputes . . .”); Second ‘disputes to “be considered, and, if

possible, decided, with all expedition, in conference between” carrier and

Union) ; Fourth (“Employees shall have the right to organize and bargain

collectively through representatives of their own choosing”); and Sixth

(duty to confer with other party in case of labor dispute).

a.

985.13 Procepure in Rate Proceepincs

15

(b) Order setting tentative rates, fares or charges.

« *# *

(1) In proceedings instituted upon petition or com- *

plaint, the Board before further procedural steps are

taken, will normally issue an order directing the parties

| to show cause why specified rates, fares, or charges set

out in such order should not be fixed and determined by

the Board.

(2) The rates, fares, or charges specified in any

order issued pursuant to this section will represent

tentative rates, fares, or charges which appear to the

Board to be fair and reasonable on the basis of the

cairier’s monthly and annual reports and other in-

formation available to the Board. Such orders will be

accompanied by and incorporate exhibits setting forth

the basis upon which the tentative rates, fares, or

charges have been formulated.

(6643)