Petition for Writ of Certiorari — Air Transport Associates, Inc. v. Civil Aeronautics Board

Office - Supreme Court, U. $

FILED

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cone | JUN 17 1959

CHARLES ELi°°E C20PLIW

CLERK

SUPREME COURT OF THE UNITED STATES

OCTOBER TERM, 1951

No. 136

AIR TRANSPORT ASSOCIATES, INC.,

Petitioner,

v.

CIVIL AERONAUTICS BOARD

Respondent

PETITION FOR WRIT OF CERTIORARI TO THE

UNITED STATES COURT OF APPEALS FOR THE

DISTRICT OF COLUMBIA CIRCUIT

Wansen E. Muzer,

Counsel for Petitioner

910 17th St., N. W.

Washington, D. C.

INDEX

Reasons for Allowance of bee ESE Pe

Sica Oe ec ie

EM ne ct ees

Specification of wear ee

Point 1. The Court below erred in dismissing

the petition which sought review be.

cause of the lack of regularity of the

Proceedings before the Board and the

lack of substantial evidence when the

Court did not have the entire record

of the proceedings before it, although

the statute requires a transcript of

the record be filed incourt......._.

Point 2. The Court erred in dismissing this

cause and not setting aside the orders

Northern Airlines, Ine. and Alaska

Airlines, Inc., because the Board did

not consider petitioner ’s application

for certificate which had been pend-

ing for over sixteen months....._..

Point 3. The Court erred in dismissing the

Petition because it should have re-

versed at least that part of the

Board’s orders —_— & certificate

16

17

18

ii INDEX

Appendix A. Relevant Statutory Provisions.......

ais be oct epi

See. 1(21) (ce) Civil Aeronautics Act, 52 Stat. 977,

Nee as wb oy

See. 205(a), Civil Aeronautics Act, 52 Stat. 984,

ce aansncnees

Sec. 401, Civil Aeronautics Act, 52 Stat. 987, 49

Neen Tn an cons anos oes

Sec. 404(a), Civil Aeronautics Act, 52 Stat. 993,

ee ne wetceccanesas®

Sec. 406, Civil Aeronautics Act, 52 Stat. 998, 49

U. 8. C. GOB... 5.5.2.

49 U. 8. Ne a iss snip a ta'me «

Sec. 1002(b), Civil Aeronautics Act, 2 Stat. 1018,

NS 35

See. 1006, Civil Aeronautics Act, 52 Stat. 1024,

I 36

Table of Cases Cited:

Ashbacker Radio Corp. v. Federal Communica-

eo ae ee: 5, 11,18

a")

Seek FR R RE

602,

Northwest Airlines, Inc. v. Civil Aeronautics

ane eceee 18

Youngstown Sheet and Tube Co. v. Sawyer and

a gS vs ——— Sheet and Tube Co.,

Miscellaneous Citations:

House Report 2254, 75th Congress, 3rd Session 19

SUPREME COURT OF THE UNITED STATES

OCTOBER TERM, 19%

No. 36

AIR TRANSPORT ASSOCIATES, INC.,

Petitioner,

Vv.

CIVIL ABRONAUTICS BOARD

Respondent

PETITION FOR WRIT OF OERTIORARI TO THE

UNITED STATES COURT OF APPEALS FOR THE

DISTRICT OF COLUMBIA CIRCUIT

To the Honorable the Chief Justice and Associate Justices

of the Supreme Court of the United States:

Air Transport Associates, Inc., petitioner, prays that a

writ of certiorari issue to review the order of the United

States Court of Appeals for the District of Columbia Cir-

cuit entered in the above-entitled cause on February 18,

1952, (R. 162) by which order a petition for review, (R.

1-29) of order of the Civil Aeronautics Board was dis-

missed.

Opinions Below

The opinion, (R. 38-68) separate opinion by Member

Jones (R. 68-83) and the supplemental opinion and order

2

of the Civil Aeronautics Board’ (R. 29-32) are not re-

ported. The order (per curiam) of the United States

Court of Appeals for the District of Columbia Circuit (R.

162) is not reported.

Jurisdiction

* The order of the United States Court of Appeals for the

District of Columbia Circuit was entered on February 18,

1952, (R. 162). This court extended the time to and in-

eluding June 17, 1952, for filing this petition (R. 165). The

jurisdiction of this Court is invoked under 28 U.S.C. 1254

(1), and section 1006(f) of the Civil Aeronautics Act, as

amended, 52 Stat. 1024, 49 U.S.C. 646(f).

Questions Presented

The Board in its opinion of September 29, 1950, (R. 38-

68), after extensive hearings and after applying the requi-

site standards as authorized by Congress (sec. 401(d)(1))

of the Civil Aeronautics Act, as amended, 52 Stat. 987,

49 U.S.C. 481(d) (1)? found in effect that Alaska Airlines,

Inc., did not qualify for a certificate of public convenience

and necessity authorizing it to operate regularly and receive

government mail subsidy* to defray its operations; and

directed the entry of an order providing, among other

things, that Alaska Airlines, Inc., and Pacific Northern

Airlines, Inc., be issued certificates of public convenience

and necessity, which certificates were issued (R. 33-35).

1 Hereinafter referred to as “the Board”.

2 This statute provides: “The Authority shall issue a certificate au-

thorizing 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 conform to the provisions of this

Act and the rules, regulations, and requirements of the Authority here-.

under, and that such transportation is required by the public convenience

and necessity; otherwise such applisation shall be denied.”

8 Sec. 406, Civil Aeronautics Act of 1938, on enantind, G6 Rtet, 066,

49 U. 8. C. 486. e

3

This opinion was forwarded to the President of the United

States for approval,‘ who, according to the supplemental

opinion and order (R. 29-32), directed the issuance of cer-

tificates of public convenience and necessity to Pacific

Northern Airlines, Inc., as recommended by the Board,

and, in addition, directed that a certifieate of public con-

venience and necessity be granted to Alaska Airlines, Inc.

An order to this effect was accordingly made by the Board

without further findings (R. 34-35).

Although petitioner filed with the Board an application

for a certificate of public convenience and necessity on

May 9, 1949, (R. 13, 27), such application has never been

considered by the Board, although it was not until Septem-

ber 29, 1950, that its opinion was rendered (R. 36).

The questions presented are:

1. When an administrative agency does not, as expressly

directed by statute, file in court a transcript of the record

upon which an order sought to be reviewed was entered in a

case when the validity of such orders is challenged because

of the lack of regularity of the proceedings, and because of

the lack of substantial evidence, may a Circuit Court of

Appeals properly dismiss the petition without having avail-

able for inspection the entire record of the challenged pro-

ceeding?

2. When mutually exclusive applications for certificates

of public convenience and necessity have been filed with an

administrative agency by different carriers for identical

* See. 801, Civil Aeronautics Act of 1938, as amended, (52 Stat. 1014,

ne 8. C. 601) provides, in part:

4

service over the same route, may that agency grant certifi-

cates to some of the applicants without considering all other

such pending mutually exclusive applications?

3. Whether, in the absence of a statute expressly author-

izing the President to order the issuance of a certificate of

public convenience and necessity to an air carrier to engage

only in ‘‘overseas air transportation’’® in a case not in-

volving ‘‘foreign air transportation’’,* dad the Board hewe Mad

power to issue such certificate at the direction of the Presi-

dent, although it had previously determined as an inde-

pendent body of experts, entirely free from executive con-

trol or influence that the carrier did not meet the standards

prescribed by Congress as a prerequisite to the issuing of

such certificate?

Statutes Involved

The pertinent statutes involved are set forth in the Ap-

pendix.

Summary of the Matter Involved

Petitioner, a ‘‘noncertificated’’ air carrier, has been en-

gaged since July, 1948, in transporting cargo and passen-

gers between Seattle, Washington, and Alaska. On March

9, 1948, the Board instituted a proceeding to determine the

adequacy of air cargo service performed by certificated air-

5 The transportation in question was between Seattle, Washington, and

points in and constituted “overseas air transportation”; defined

by See. 1 (21) of the Civil Aeronautics Act (49 U. 8. C. 401) as

transported between:

“, . . @ place in any State of the United States, or the District of

Columbia, and any place in a Territory or possession of the United

States; or between a place in a Territory or possession of the United

States, and a place i in any other Territory or possession of the United

States ;

® See. 1(21) (e) of the Civil Aeronautics Act, 49 U. 8. C. 401, defines

“foreign air transportation” as transportation between “. . . a place

in the United States and any place outside thereof, whether such com-

meree moves wholly by aireraft or partly by aireraft and partly by other

forms of transportation.

5

lines between the Territory: of Alaska and the continental

United States. In this proceeding, the Board consolidated

certain applications for certificates of public convenience

and necessity filed by other airlines. Petitioner moved to

intervene in that proceeding on November 2, 1948, which

motion was not granted until after the close of the hear-

ings in December, 1948. Petitioner filed an application for

a certificate of public convenience and necessity with the

Board on May 9, 1949, 16 months before the Board acted

upon the application of Alaska Airlines, Inc., and Pacific

Northern Airlines, Inc. on September 29, 1950 (R. 38-68).

This application was ‘‘ mutually exclusive’’ with the applica-

tions of Pacific Northern Airlines, Inc., and Alaska Airlines,

Inc., as that term is used in Ashbacker Radio Corp. v. Fed-

eral Communications Comm., 326 U. S. 327, 90 L. Ed. 108,

110. However, the Board has not yet considered peti-

tioner’s application although the Board is directed by stat-

ute to dispose of such applications as speedily as possible,’

and petitioner has unsuccessfully requested early action

thereon.

Petitioner asked the court below to set aside the orders

of the Board (R. 1-28), granting certificates of public con-

venience and necessity to Pacific Northern Airlines, Inc.,

and Alaska Airlines, Inc. (R. 33-35), and i set its applica-

tion for a certificate of public convenience and necessity for

early hearing. Among the grounds urged for reversal of

the Board’s order was that the Board’s action was not based

upon substantia! evidence in the record (R. 25). Notwith-

7 See. 401(¢) of the Civil Aeronautics Act, 52° Stat. 987, 49 U. S. C.

481(c), provides: “(e) Upon the filing of any such application, the

Authority shall give due notice thereof to the public by posting a notice

of such application in the office of the secretary of the Authority and

such other persons as the Authority may by regulation determine.

in person may file with the Authority a protest or memoran-

of opposition to or in support of the issuance of a certificate.

application shall be set for public hearing, and the Authority shall

dispose of such application as speedily as possible.”

i

standing the statut nec the Board to certify and file

in the court below “ne transcript of the record upon which

the order complained of was entered,’ and directs these

applications be set for public hearing and disposed of as

speedily as possible, the Board neglected to file a complete

transcript of the record, but attempted to file an ‘‘abbrevi-

ated record’’, which it lodged with the clerk of the court

below. Petitioner objected to the filing of the ‘‘abbreviated

record’’ upon the ground that the Board had no right to

‘Shand pick’’ only those portions of the record it desired the

court to consider when passing upon the Board’s Motion to

Dismiss, as the petition for review is based in part upon the

lack of substantial evidence to support the orders being

reviewed, and in part upon the lack of regularity of the

administrative proceedings.

Certificates of public convenience and necessity are only

issued in accordance with the standards prescribed by the

Civil Aeronautics Act. That Act does not confer authority

upon the Board to base the issuance of a certificate of public

convenience and necessity solely upon ‘‘national defense’’

reasons (R. 74-75). It was not the intention of Congress to

place upon the Post Office Department the burden of paying

mail subsidy to defray the expense of air routes established

solely for the purpose of national defense, as was done by

the Board here in granting a certificate of public conven-

ience and necessity to Alaska Airlines, Inc. Nothing in the

Civil Aeronautics Act authorizes this.

If Section 801 of the Civil Aeronautics Act, requiring the

President to approve a certificate for overseas transporta-

tion is to be construed as conferring upon him the right to

order the issuance of such a certificate when, as here, such

8 See. 1006(c) of the Civil Aeronautics Act, as amended, 52 Stat. 1024,

49 U. S. C. 646, provides: “(¢) A copy of the petition shall, upon filing,

be forthwith transmitted to the Authority by the clerk of the court;

and the Anthority shall thereupon certify and file in the court a transcript

7

procedure violates the economic standards provided in the

Act, this is a misconstruction of the statute. While the

court below rendered no opinion, nevertheless in reaching

its conclusion, it is apparent that it took this view of the

law, unless it felt that the President had inherent powers

such as he erroneously asserted in the Steel Seizure Cases.

In either event, the action of the court below on this impor-

tant point should be reviewed by this court and a rule of law

established so the Civil Aeronautics Board, as well as the

President, will be aware of their respective functions in

these matters; and future action will not violate, as here,

the rights of others.

The petition for review does not challenge the power of

the President to avprove or disapprove the decision of the

Board in this case, dated September 29, 1950 (R. 36), but

it is petitioner’s position that the President’s power with

respect to this ‘‘overseas air transportation’”’ is limited to

approving or disapproving this decision of the Board

because the statute provides that the issuance of any cer-

tificate ‘‘shall be subject to the approval of the President”

(49 U. S. C. 601). The President’s action in directing (R.

30) that Alaska Airlines, Inc., be issued a certificate, not-

_ withstanding the finding by the Board that it did not meet

the standards and requirements prescribed by statute (R.

36-83) is beyond his constitutional powers. The only au-

thority vested in the President with respect to ‘‘overseas air

transportation”’ as distinguished from ‘‘foreign air trans-

portation’”’ is that contained in Section 801 of the Civil

Aeronautics Act (49 U. S. C. 601) which makes the issuance

or denial of a certificate covering such transportation sub-

ject to the President’s approval. It does not vest in the

President the authority to grant a certificate-of public con-

venience and necessity under the provisions of Section

401(d)(1) of the Civil Aeronautics Act (49 U. 8. C.

481(d)(1)). Under the commerce clause of the Constitution,

8

only Congress has authority to regulate commerce. This it

has done by delegating such authority to the Board with

respect to overseas air transportation.

No formal executive order was ever issued by the Presi-

dent directing the granting of a certificate of public con-

venience and necessity to Alaska Airlines, Inc., under his

general or executive powers. If issued, such executive

order would be clearly beyond the authority and power

vested in the President by the Constitution, and would vio-

late that provision of the Constitution which gives only to

Congress the right to regulate the air commerce here under

consideration. For like reason, the action of the President

here, being in excess of his powers under the Constitution,

should be ignored.

Petitioner here is only asking the court to review the or-

ders of the Board herein complained of, as authorized by

Section 1006 of the Civil Aeronautics Act (49 U. S. C. 646).

It is not asking the court to review any order of the Presi-

dent. In reviewing the orders of the Board, however, peti-

tioner asks the court to set aside such orders issued at

the President’s direction when he told the Board to issue

a certificate to Alaska Airlines, Inc. Such action was not

binding on the Board as it was beyond his constitutional *

powers and was void ab initio.

Petitioner does not take the position here that the record

made before the Board is insufficient to support the Presi-

dent’s action, because the record before the court did not

and does not indicate whether or not the Board’s entire

record in this case was ever sent to the President, eer at

the time the decision of the Board, dated September 29,

1950, was ewer submitted for his approval. The supple-

mental opinion and order only states that the decision of

the Board was submitted to the President for his approval,

and therefore if this case is to be decided without the whole

=—_—"

9

record, we must assume that only the decision of the Board

was sent to the President for action. Consequently, peti-

tioner is not urging here that the record made before the

Board is insufficient to support the President’s action,

because it is only the orders before the Board which are

being reviewed here and not the action of the President.

As in the Steel Seizure cases, there is no statute that

authorizes the President to take the action which he did.

Here, as in the Steel Seieure cases, attempt was made to

justify the action of the President upon the ground of

national defense ; ® but, as in the Steel Seizure cases, there is

no statute authorizing him to take the action which he did;

and as in the Steel Seizure cases, the order cannot properly

be sustained as an exercise of the President’s military

power as Commander-in-Chief of the armed forces.

Here, as in the Steel Seizwre cases, the plan Congress

adopted in the Civil Aeronautics Act did not provide for

the President to step over the bounds fixed by Congress,

and the statute here did not authorize the President to

®R. 30. On May 18, 1951, the President advised the Board that after

taking into account all of the considerations and factors relating to this

matter peculiarly within the scope of the Executive, particularly the

need for air transport services to Alaska arising directly out of national

defense activities, and the direct contribution which the fullest develop-

ment of Alaska would make to the national defense, he had concluded

that the Board’s decision should be approved with the following changes:

1. Pacific Northern Airlines, Inc., should be authorized to serve Port-

land, Oreg., as a co-terminal point with Seattle, Wash.; and

2. Alaska Airlines, Inc., should be waged a route from the co-terminal

points Seattle, Wash., and Portland, Oreg., to Fairbanks, Alaska, carrying

passengers, property, and mail. The certificate should be temporary,

expiring at the same time as the certificates of Northwest Airlines, Inc.,

and Pacific Northern Airlines, Inc., for operations between the United

States and Alaska. (Italies supplied.)

10 Section 801 of the Civil Aeronautics Act, 1938, as amended (52 Stat.

1014, 49 U. 8. C., 601) provides:

“The issuance, denial, transfer, amendment, cancellation, suspension,

or revocation of, and the terms, conditions, and limitations contained

10

direct the issuance of a certificate of public convenience and

necessity after the Board has determined, according to the

standards prescribed by Congress, that a carrier does not

meet such standards. The President cannot change the

facts as found by the Board although he may disapprove the

Board’s findings. But his right to so disapprove does not

carry with it the power to make independent findings which

are contrary to the economically based findings of the

Board.

The action taken by the President in the instant case is

similar to the erroneous belief prevailing in some quarters

prior to this Court’s recent decisions in the Steel Seizure

cases that the President possessed certain ‘‘inherent and

implied war emergency or plenary powers,’’ which were not

prescribed by statute or conferred upon him by the Con-

stitution, as he did in the ‘‘Steel Seizure cases’’ (Youngs-

town Sheet & Tube Co. v. Sawyer, 72 8. Ct. 863, and Sawyer

v. Youngstown Sheet & Tube Co.) where this Court, on

June 2, 1952, held that the order of seizure cannot properly

be sustained as an exercise of any of the President’s pow-

ers, including his military power as commander-in-chief of

the armed forces. The President grounded his action on

‘‘national emergency activities’’ (R. 30). Here, as in that

case:

‘‘The President’s order does not direct that a con-

gressional policy be executed in a manner prescribed

by Congress—it directs that a presidential policy be

executed in a manner prescribed by the Presi-

dent . . .’’ (728. Ct. 863 at p. 867.)

in, any certificate authorizing an air carrier to engage in overseas or

foreign air transportation, or air transportation between places in

the same Territory or possession, or any permit issuable to any

foreign air carrier under section 402, shall be subject to the approval

of the President.”

11

Reasons for Allowance of the Writ

1. The United States Circuit Court of Appeals for the

District of Columbia Circuit has decided an important

question of federal law which has not been, but should be,

settled by this Court.

2. The United States Circuit Court of Appeals for the

District of Columbia Circuit has decided a question of

general importance and of substance relating to the con-

struction of a statute of the United States involving the

application of the Constitution of the United States that has

not been, but should be, settled by this Court.

3. The order of the United States Circuit Court of Ap-

peals for the District of Columbia Circuit is inconsistent

with and probably conflicts with the opinions of this Court

rendered June 2, 1952, in the cases of Youngstown Sheet &

Tube Co. v. Sawyer, and Sawyer v. Youngstown Sheet &

Tube Co., 72 8. Ct. 863 and Ashbacker Radio Corp. v. Fed-

eral Communications Comm., 326 U. S. 327.

These reasons are shown in petitioner’s brief, filed here-

with.

Wuenrerorg, petitioner prays that a writ of certiorari

issue under the seal of this Honorable Court directed to the

United States Court of Appeals for the District of Columbia

Cireuit commanding said court to certify and send to this

court a full and complete transcript of the record and of

the proceedings had in the case numbered and entitled in

its Docket 11,118 (April Term 1951) Air Transport Associ-

ates, Inc. vs. Civil Aeronautics Board, to the end that this

cause may be reviewed and determined by this court as

provided for by the statutes of the United States; and that

the order herein of the said United States Court of Appeals

12

for the District of Columbia Circuit be reversed by this

court, and for such other, further, or different relief as to

this court may seem proper.

Warren E. Mixer,

910 17th Street, N. W..,

Washington 6, D. C.,

Attorney for Petitioner.

SUPREME COURT OF THE UNITED STATES

OCTOBER TERM, 195g,

No. /36

AIR TRANSPORT ASSOCIATES, INC.,

Petitioner

i. etitioner,

CIVIL AERONAUTICS BOARD,

Respondent

PETITION FOR WRIT OF CERTIORARI TO THE

UNITED STATES COURT OF APPEALS FOR THE

DISTRICT OF COLUMBIA CIRCUIT.

BRIEF IN SUPPORT OF PETITION FOR CERTIORARI

Opinion of the Court Below

No opinion was rendered by the United States Court of

Appeals for the District of Columbia Circuit as this matter

was disposed of by per curiam order (R. 162).

Jurisdiction

Reference is made to jurisdictional statement in the

petition.

Statement of the Case

Reference is made to the ‘‘Summary of the Matter In-

volved’’ in petition.

14

Specification of Errors

1. The Court of Appeals erred in dismissing this com-

plaint, because

a. No findings were made by the Board as prescribed by

49 U. S. C. paragraph 481(d), which is essential to the

granting of a certificate of public convenience and necessity.

b. The Board found Alaska Airlines, Inc. to not meet the

standards prescribed by the Civil Aeronautics Act as a pre-

requisite to granting of a certificate of public convenience

and necessity.

c. When ‘‘Overseas air transportation’’ only is involved,

after an agency determines that a carrier did not meet the

standards prescribed by Congress as a prerequisite to the

issuing of a certificate of public convenience and necessity,

and the President for asserted reasons of ‘‘National De-

fense’’ later directs the agency to issue a certificate and

the agency pursuant to such directions and without any

further findings issues a certificate, the Agency’s action is

void and should be set aside.

d. When mutually exclusive applications for certificates

of public convenience and necessity have been filed by dif-

ferent carriers for identical service the agency’s action

in granting certificates to some of the applicants without

considering all other pending mutually exclusive applica-

tions is contrary to law.

e. The Court below misconstrued Section 801 of the Civil

Aeronautics Act (49 U. S. C. 601).

f. There is no Act of Congress or provisions of the Con-

stitution authorizing the issuance of a certificate of public

convenience and necessity by direction of the President

when the carrier receiving the certificate has been found to

not meet the standards prescribed by Congress as a pre-

requisite to receiving one.

15

g. The orders sought to be reviewed contravene the fol-

lowing provisions of Section 10(e) of the Administrative

Procedure Act (5 U. 8S. C. 1009(e)):

‘*So far as necessary to decision and where presented

the reviewing court shall decide all relevant questions

of law, interpret constitutional and statutory provi-

sions, and determine the meaning or applicability of

the terms of any agency action. It shall * * * (B)

hold unlawful and set aside agency action, findings, and

conclusions found to be (1) arbitrary, capricious, an

abuse of discretion, or otherwise not in accordance with

law; (2) contrary to constitutional right, power, privi-

lege, or immunity; (3) in excess of statutory jurisdic-

tion, authority, or limitations, or short of statutory

right; (4) without observance of procedure required

by law; (5) unsupported by substantial evidence * * *,’’

(h) The hearings before the Board constitute a lack of

procedural due process of law.

(i) The finding of the Board that Pacific Northern was

fit and able properly to perform such transportation was

not supported by substantial evidence, and hence was un-

lawful.

(j) The orders here reviewed violate the ‘‘Declaration

of Policy’’ prescribed by section 2(c) of the Civil Aero-

nautics Act (49 U.S.C. 402 (c)).

(k) As all questions touching on the regularity and

validity of proceedings of the Board pertaining to Alaska

Airlines, Inc., are open to review by the Court, its respon-

sibility can be discharged only by a review of the entire

record of the proceeding before the Board in this case, the

regularity and validity of which proceeding is herein

challenged.

(1) The orders of the Board herein challenged do not,

as required by Section 8(b) of the Administrative Pro-

16

cedure Act (5 U.S.C. 1007(b))"™ include a statement of the

findings and conclusions as well as the reasons or basis

therefor upon all the material issues of fact, law, or dis-

cretion presented on the record with respect to Alaska

Airlines, Inc.

(m) The only delegation of authority by Congress, which

alone can regulate commerce (Article I, Section 8 of the

Constitution) is contained in Section 401 of the Civil Aero-

nautics Act giving the Board as an independent body of

experts entirely free from executive control the right to

act in accordance with that section.

Pornt 1

THE COURT BELOW ERRED IN DISMISSING THE PETITION

WHICH SOUGHT REVIEW BECAUSE OF THE LACK OF

REGULARITY OF THE PROCEEDINGS BEFORE THE BOARD

AND THE LACK OF SUBSTANTIAL EVIDENCE WHEN THE

COURT DID NOT HAVE THE ENTIRE RECORD OF THE PRO-

CEEDINGS BEFORE IT, ALTHOUGH THE STATUTE REQUIRES

A TRANSCRIPT OF THE RECORD BE FILED IN COURT.

Section 1006(c) of the Civil Aeronautics Act (49 U.S.C.

646@)provides that upon filing petition, the Board shall

thereupon certify and file in the court a transcript of the

record upon which the order complained of was entered.

This clearly contemplates the filing of the entire record and

-not an ‘‘abbreviated record’’ as the Board here unsuccess-

fully sought to file (R-137). This Court said in American

115 U. 8. C. 1007(b) provides: “The record shall show the ruling upon

each such finding, conclusion, or exception presented. All decisions (in-

cluding initial, recommended, or tentative decisions) 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 record; and (2) the appropriate

rule, order, sanction, relief, or denial thereof,”

17

Power Company vs. Securities and Exchange Commission,

325 U. S. 385, at page 392: ‘

«* * * Apparently it was not satisfied that the filing

of an abbreviated transcript furnished a basis for

affirmance. The Commission, without inordinate de-

lay or additional expense, might have fiJed. the full

transcript of the proceedings before it obtained

the indepth ita court on the adequacy of the peti-

tion. We re not called upon to examine the

merits of the Commission’s contentiongor to reverse

the decision denying the motion to dismiss, or that

denying the motion to dismiss or affirm * * *,’?

It is petitioner’s position that all issues stemming from the

petition filed herein are open for review.

As all questions touching on the regularity and validity

of proceedings of the Board pertaining tg Alaska Air-

lines, Inc. are open to review by the Court, its responsi-

bility can be discharged only by a review of the entire

record of the proceeding before the Board in this case, the

regularity and validity of which proceeding is herein chal-

lenged. As the entire record of the proceeding before the

Board was not before the Court below when it dismissed the

petition, this court should take jurisdiction and reverse the

lower court.

Pont 2

THE COURT ERRED IN DISMISSING THIS CAUSE AND NOT

SETTING ASIDE THE ORDERS OF THE BOARD GRANTING

CERTIFICATES OF CONVENIENCE AND NECESSITY TO

PACIFIC-NORTHERN AIRLINES, INC. AND ALASKA AIR-

LINES, INC., BECAUSE THE BOARD DID NOT CONSIDER

PETITIONER’S APPLICATION FOR CERTIFICATE WHICH HAD

BEEN PENDING FOR OVER SIXTEEN MONTHS. 3

Petitioner is Entitled to a Hearing on Its Application

for a Certificate of Public Convenience and Necessity and

Comparative Consideration with Other Applicants Seek-

18

ing to Engage in Substantially Similar Air Transporta-

tion.

Petitioner requests in its petition for review herein that

the Civil Aeronautics Board be directed to set the matter

of its application for a certificate of public convenience

and necessity for early hearing. Its application is mutually

exclusive of those that were consolidated in the United

States-Alaska Service Case, supra, but its application

was not consolidated with the others in that proceeding.

Its application was filed with the Board after the close of

the hearings before the Board but more than two years

before the Board on May 24, 1951 issued its order herein

sought to be reviewed (R. 29).

The situation here is similar to that existing in the case

of Northwest Airlines, Inc. v. Civil Aeronautics Board, 194

Fed. (2d)339Where the court stated ‘‘the test of mutual

exclusiveness because of economical conditions should be

as of the time the applications are being considered and an

award is being made. * * * Where two bona fide applications

are mutually exclusive, it is ordinarily true that one may

not be granted without a hearing to both. This fundamental

principle of fair play was announeed by this Court in Ash-

backer Radio Corporation v. Federal Communications Com-

mission, 326 U. S. 327.

Port 3

THE COURT ERRED IN DISMISSING THE PETITION BE-

CAUSE IT SHOULD HAVE REVERSED AT LEAST THAT PART

OF THE BOARD’S ORDERS GRANTING A CERTIFICATE TO

ALASKA AIRLINES, INC.

Reasons for Granting the Writ

Determination by the Courts of the Distinction between

Executive and Regulatory Functions under the Civil Aero-

nautics Act of 1938 Was Intended by Framers of the Act

and the Congress in Adopting the Act.

19

The drawing of the line between executive action and

administrative, quasi-judicial action was considered in con-

nection with the study of the Civil Aeronautics Act of 1938.

From the hearings conducted by the Committee on Inter-

state and Foreign Commerce of the House of Representa-

tives, it appears that the question as to the limitations upon

the action of the executive with respect to decisions of the

Authority or Board arose several times. The proposal that

the disposition of certificates of public convenience and

necessity be subject to the approval of the President was

left substantially as it appears in Section 801 of the Act

under the belief of the Congress and governmental agencies

interested that the courts would determine the area of

executive function except as to the specific exception. Im-

munity from judicial review was specifically limited to

orders in respect ef any foreign air carrier subject to the

approval of the President as provided in Section 801 of the

Civil Aeronautics Act. ;

The following is from the testimony of Clinton M. Hester,

Assistant General Counsel of the Treasury and representa-

tive of the Interdepartmental Committee on Civil Aviation,

and Fred D. Fagg, Jr., Director of Air Commerce of the

Department of Commerce, at the hearings before the Com-

mittee on Interstate and Foreign Commerce of the House of

Representatives, 75th Congress, 3rd Session (House Report

No. 2254) :

‘Mr. Halleck: I recognize that, but I was looking at

that section in. the light of the words contained in sec-

tion 801, subsection (a), which purports to make the

action of the Authority subject to the general direction

of the President except as respects those acts that are

reviewable by the courts.

‘Mr. Hester: Well, we say that the dividing line is

purely executive functions; the exercise of purely ex-

20

ecutive functions, which are not to be reviewable.’’

Id., page 411; April 1, 1938.

* 7. =

‘‘There (reference is to the reorganization statute of

1932, the Hoover Act) the President of the United

States was trusted, or was authorized, to determine

what isa regulatory function and what is an executive

function.

‘‘Under this bill we leave it to the courts to determine.

‘‘So, Congress has once decided that the President

did not need any definition of these terms, as they felt

that the regulatory functions and the Executive func-

tions were so well known and so well defined within the

decisions that it is not necessary to define them.

‘‘Here we turn it over to the courts.’’

” “ om

‘*Mr. Halleck. Is it fair to say that this language of

subsection (e) ‘The terms and éonditions, and limita-

tions contained in any permit shall be subject to the

approval of the President,’ arises out of the fact that

they involve foreign operations?

‘*Mr. Fagg. Yes, sir; and definitely so, and is limited

to that.’’ Id., page 412.

The legislative intention appears to have been that there

should be judicial review of all matters under the Act except

those relating to foreign operation. It is unfortunate that

‘‘or’’ is used instead of ‘‘and”’ in the phrase ‘‘overseas or

foreign air transportation’’ included in section 801 of the

Act, as the House Committee on Interstate and Foreign

Commerce was not only informed as above by the repre-

sentatives of the government agencies which had studied

‘the matter and collaborated in the drafting of the law, but

Mr. Hester testified earlier in the hearings (March 10,

1938) :

‘*In the exercise of its quasi-legislative, or so-called

quasi-judicial functions, such as the fixing of rates and

the issuance of certificates authorizing the operation of

air lines, the agency would sit as an administrative

21

court entirely independent of the executive branch of

the Government.’’ Id., page 37, italics ours.

Application of the principles laid down to date mearmone

standard as to citizens applying for certificates of public

convenience and necessity authorizing air transportation

within the continental United States and another standard

as to citizens applying for certificates authorizing air trans-

portation between the continental United States and a terri-

tory, with no definition or way of ascertaining the standard

in the latter instance. If the findings of the Civil Aero-

nautics Board are to be disregarded and a carrier found not

to meet the requirements of the Act is to be granted a

certificate, uniformity of application of legal requirements

appear to require some definition and thet the selection of

such a carrier over other applicants should have a sound

relationship to foreign affairs. This important matter

should be determined by this court.

IN THE ABSENCE OF A STATUTE EXPRESSLY AUTHOR-

IZING THE PRESIDENT TO ORDER THE ISSUANCE OF A

CERTIFICATE OF PUBLIC CONVENIENCE AND NECESSITY

TO AN AIR CARRIER TO ENGAGE ONLY IN “OVERSEAS AIR

TRANSPORTATION” IN A CASE NOT INVOLVING “FOREIGN

AIR TRANSPORTATION”, THE BOARD DID NOT HAVE POWER

TO ISSUE SUCH CERTIFICATE AT THE DIRECTION OF THE

PRESIDENT, AS IT HAD PREVIOUSLY DETERMINED THAT

THE CARRIER DID NOT MEET THE STANDARDS PRESCRIBED

BY CONGRESS AS A PREREQUISITE TO THE ISSUING OF

SUCH CERTIFICATE@

As stated by Member Jones in his separate opinion (R.

68), the principal issues **

‘fare to be determined in accordance with the Civil

Aeronautics Act of 1938, as amended, particularly sec-

12 He stated the principal issues to be as follows:

“(1) Whether the existing air freight service is adequate and/or

whether there is a need for additional service in the transportation of

property by the carriers named in the Board’s order of investigation;

(2) whether additional routes are required by the public convenience

22

tions 205(a); 401; 404(a); 801; and 1002(b) ... In

making a recommendation to the President under Sec-

tion 801, the Board must arrive at a quasi-judicial de-

cision, which, incorporated in an opinion and order,

must be delivered to the President prior to publication.

This it must do as an independent body of experts en-

tirely free from executive control or influence. ‘Its

duties are performed without executive leave and, in

the contemplation of the statute, must be free from

executive control.’ ’’ ®

These issues, in so far as Alaska Airlines was concerned,

were answered in the negative by the Board’s opinion of

September 29, 1950 (R. 36-83) in which it refused to recom-

mend the issuance of a certificate of public convenience and

necessity to this carrier. As was stated by Member Jones

(R. 74):

‘‘The Civil Aeronautics Act does not authorize the

Board to. make new route awards based solely on na-

tional defense requirements. The phrase ‘and the na-

tional defense’ as used in the Declaration of Policy

must be read in context. It does not stand alone. It

must be considered together with such phrases as

‘sound economic conditions in [air transportation)],’

‘economic and efficient services,’ and ‘sound develop-

ment of air transportation’.

‘‘The Board adopted this view early in its history.

In a letter addressed to Congress through Senator

Walter F. George in 1942, it made abundantly clear

its belief that Congress had not intended to direct the

Board to achieve national defense objectives™ un-

and necessity; and (3) if any additional routes are required by the

public convenience and necessity, which applicant or applicants should

be selected to perform such services.”

18 333 U. S. at 109, quoting from Humphrey’s Executor v. United

States, 295 U. S. 602, 628.

14“Tf the contrary interpretations were adopted, there would be no

limit to the national defense projects which carriers might be expected

to perform; and the required financial assistance from Post Office appro-

priations might well be multiplied many times. The Board does not

23

related to the development of a sound air transpor-

tation system.”’ ‘

The Post Office Department took the position that there

was no requirement for additional services for the carriage

of mail in so far as the Postal Service was concerned

(R. 75).

It follows therefore that the order of the Board dated

May 24, 1951 (R-29-32) so far as it relates to Alaska Air-

lines, Inc., and the Certificate of Public Convenience and

Necessity issued to Alaska Airlines, Inc. (R-34-35) should

have been set aside by the court below.

Conclusion

The petition for a writ of certiorari should be granted.

Respectfully submitted,

Warren E. Mier,

Attorney for Petitioner,

910 Seventeenth Street, N. W.,

Washington 6, D. C.

understand that Congress intended to authorize the Board to require air

carriers, for example, to build up a large reservoir of aircraft, personnel,

equipment, and other facilities greatly in excess of the requirements of

a civil air transportation system, to be held virtually in trust or on eal!

for war air-transport purposes. Congress vested in the Board no power

by which it might effect such a result, and in the absence thereof, the

objective of such a reservoir of planes, equipment, and reserve personnel,

and organization could be realized only through the voluntary coopera-

tion of the carriers . . . It normally would not be possible to absorb

such a reservoir of aircraft, equipment, and such an organization in a

sound air transportation system”. (Underscoring supplied. )

Letter from the Chairman of the Civil Aeronautics Board in response

to 8. Res. 228; S. Doe. 206, Part 2, 77th Cong. 2d Sess., 1942.

24

APPENDIX A

RELEVANT STATUTORY PROVISIONS

28 U.S.C. 1254(1) provides:

‘*Cases in the courts of appeals may be reviewed by the -

Supreme Court by the following methods:

‘*(1) By writ of certiorari granted upon the petition of

any party to any civil or criminal case, before or after

rendition of judgment or decree ;’’

Sec. 1(21)(c), Civil Aeronautics Act, 52 Stat. 977, 49

U.S.C. 401 provides:

"aii(c) a place in the United States and any place outside

thereof, whether such commerce moves wholly by aircraft or

partly by aircraft and partly by other forms of transpor-

tation.

See. 205(a), Civil Aeronautics Act, 52 Stat. 984, 49 U.S.C.

425(a), provides:

6 Sec. 205 [52 Stat. 984, 49 U. S.C. 425] (a) The Authority

is empowered to perform such acts, to conduct such investi-

gations, to issue and amend such orders, and to make and

amend such general or special rules, regulations, and pro-

cedure, pursuant to and consistent with the provisions of

this Act, as it shall deem necessary to carry out such provi-

sions and to exercise and perform its powers and duties

under this Act. “”

“‘c00, 401, Civil Aeronautics Act, 52 Stat. 987, 49 U.S.C.

481 provides:

Src. 401 [52 Stat. 987, 49 U. S. C. 481] (a) No air carrier

shall engage in any air transportation unless there is in

force a certificate issued by the Authority authorizing such

air carrier to engage in such transportation: Provided,

That if an air carrier is engaged in such transportation on —

the date of the enactment of this Act, such air carrier may

continue so to engage between the same terminal and inter- —

mediate points for one hundred and twenty days after said

25

and twenty days such

rovided herein,

made in writing

shall be in such

and shall be accom-

such interested per-

on require.

Notice of Application

4c) Upon the filing of any such a

shall give due notice thereof to the

of such application in the office

Authority and to such o

Issuance of Certificate

“(d) (1) The Authority shall issue a certificate authoriz-

ing 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

conform to the provisions of this Act and the rules, regula-

tions, and requirements of the Authority hereunder, and

that such transportation is required by the public conven-

ience and necessity; otherwise such application shall be

denied.

26

tion and to conform to the provisions of this Act and the

rules, regulations, and requirements of the Authority here-

under.

Existing Air Carriers

"(e) (1) If any applicant who makes application for a

certificate within one hundred and twenty days after the

date of enactment of this Act shall show that, from May 14,

1938, until the effective date of this section, it, or its prede-

cessor in interest, was an air carrier, continuously operat-

ing as such (except as to interruptions of service over which

the applicant or its predecessor in interest had no control),

the Authority, upon proof of such fact only, shall, unless

the service rendered by such applicant for such period was

inadequate and inefficient, issue a certificate or certificates,

authorizing such applicant to engage in air transportation

(A) with respect to all classes of traffic for which authoriza-

tion is sought, except mail, between the terminal and inter-

mediate points between which it, or its predecessor, so con-

tinuously operated between May 18, 1938, and the effective

date of this section, and (B) with respect to mail and all

other classes of traffic for which authorization is sought,

between the terminal and intermediate points between

which the applicant or its predecessor was authorized by

the Postmaster General prior to the effective date of this

section, to engage in the transportation of mail: Provided,

That no applicant holding an air-mail contract shall receive

a certificate authorizing it to serve any point not named in

such contract as awarded to it and not served by it prior

to April 1, 1938, if any other air carrier competitively serv-

ing the same point under authority of a contract as awarded

to such air carrier shall prove that it is adversely affected

thereby, and if the Authority shall also find that trans-

portation by the applicant to and from such point is not

required by the public convenience and necessity.

(2) If paragraph (1) of this subsection does not author-

ize the issuance of a certificate authorizing the transporta-

tion of mail between each of the points between which air-

mail service was provided for by the Act of Congress

making appropriations for the Treasury Department and

the Post Office Department, approved March 28, 1938, the

27

Authority shall, notwithstanding any other provision of

this Act, issue certificates authorizing the transportation

of mail, and all other classes of traffic for which authoriza-

tion is sought, between such points, namely, (A) from

Wichita, Kansas, to Pueblo, Colorado, via intermediate

cities; (B) from Bismarck, North Dakota, to Minot, North

Dakota ; (C) from Detroit, Michigan, to Sault Sainte Marie,

Michigan, via intermediate cities; (D) from Brownsville,

Texas, via Corpus Christi, to Houston to San Antonio,

Texas; (E) from Phoenix, Arizona, to Las Vegas, Nevada,

via intermediate cities; (F) from J acksonville, Florida, to

New Orleans, Louisiana, via intermediate cities; (G) from

Tampa, Florida, to Memphis, Tennessee, via intermediate

cities, and from Tampa, Florida, to Atlanta, Georgia, via

intermediate cities (which projects have been advertised) ;

and (H) by extension from Yakima, Washington, to Port-

land, Oregon; and (I) by extension from Grand Rapids,

Michigan, to Chicago, Illinois.

Terms and Conditions of Certificate

. (f) Each certificate issued under this section shall specify

the terminal 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. A certificate issued under this section to engage in

foreign air transportation shall, insofar as the operation

is to take place without the United States, designate the

terminal and intermediate points only insofar as the Au-

thority shall deem practicable, and otherwise shall desig-

nate only the general route or routes to be followed. Any

air carrier holding a certificate for foreign air transporta-

tion shall be authorized to handle and transport mail of

countries other than the United States. No term, condition,

or limitation of a certificate shall restrict the right of an air

carrier to add to or change schedules, equipment, accommo-

dations, and facilities for performing the authorized trans-

portation and service as the development of the business

28

and the demands of the public shall require. No air carrier

shall be deemed to have violated any term, condition, or —

limitation of its certificate by landing or taking off during

an emergency at a point not named in its certificate or by

operating in an emergency, under regulations which may

be prescribed by the Authority, between terminal and inter-

mediate points other than those specified in its certificate.

Any air carrier may make charter trips or perform any —

other special service, without regard to the points named

in its certificate, under regulations prescribed by the

Authority.

Effective Date and Durution of Certificate

"(g) Each certificate shall be effective from the date speci-

fied therein, and shall continue in effect until suspended or

revoked as hereinafter provided, or until the Authority 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 Author-

ity shall certify that operations thereunder have ceased:

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

the Authority, or if, for a period of ninety days or such other

period as may be designated by the Authority, any such

service is not operated, the Authority may by order, entered

after notice and hearing, direct that such certificate shall

thereupon cease to be effective to the extent of such service.

Authority to Modify, Suspend, or Revoke

(nh) The Authority, upon petition or complaint or upon

its own initiative, after notice and hearing, 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 provision of this title

or any order, rule, or regulation issued hereunder or any

term, condition, or limitation of such certificate: Provided,

29

That no such certificate shall be revoked unless the holder

thereof fails to comply, within a reasonable time to be fixed

by the Authority, with an order of the Authority command-

ing obedience to the provision,-or to the order (other than

an order issued in accordance with this proviso), rule, regu-

lation, term, condition, or limitation found by the Authority

to have been violated. Any interested person may file with

the Authority a protest or memorandum in support of or in

opposition to the alteration, amendment, modification, sus-

pension, or revocation of a certificate.

Transfer of Certificate

“ i) No certificate may be transferred unless such trans-

fer is approved by the Authority as being consistent with

the public interest.

Certain Rights Not Conferred by Certificate

'(j) No certificate shall confer any proprietary, property,

or exclusive right in the use of any air space, civil airway,

landing area, or air-navigation facility.

Application for Abandonment

‘(k) No air carrier shall abandon any route, or part

thereof, for which a certificate has been issued by the Au-

thority, unless, upon the application of such air carrier,

after notice and hearing, the Authority shall find such

abandonment to be in the public interest. Any interested

person may file with the Authority a protest or memo-

randum of opposition to or in support of any such abandon-

ment. The Authority may, by regulations or otherwise,

authorize such temporary suspension of service as may be

in the public interest.

Compliance With Labor Legislation

* (1) (1) Every air carrier shall maintain rates of com-

pensation, maximum hours, and other working conditions

and relations of all of its pilots and copilots who are en-

gaged in interstate air transportation within the continental

United States (not including Alaska) so as to conform with

30

decision numbered 83 made by the National Labor Board

on May 10, 1934, not withstanding any limitation therein as

to the period of its effectiveness.”

(2) Every air carrier shall maintain rates of compensa-

tion for all of its pilots and copilots who are engaged in

overseas or foreign air transportation or air transportation

wholly within a Territory or possession of the United

States, the minimum of which shall be not less, upon an

annual basis, than the compensation required to be paid

under said decision 83 for comparable service to pilots and

copilots engaged in interstate air transportation within

the continental United States (not including Alaska).

(3) Nothing herein contained shall be construed as re-

stricting the right of any such pilots or copilots, or other

employees, of any such air carrier to obtain by collective

bargaining higher rates of compensation or more favorable

working conditions or relations.

(4) It shall be a condition upon the holding of a certifi-

cate by any air carrier that such carrier shall comply with

title II of the Railway Labor Act, as amended.

(5) The term ‘‘pilot’’ as used in this subsection shall

mean an employee who is responsible for the manipulation

of or who manipulates the flight controls of an aircraft

while under way including take-off and landing of such air-

craft, and the term ‘‘copilot’’ as used in this subsection

shall mean an employee any part of whose duty is to assist

or relieve the pilot in such manipulation, and who is prop-

erly qualified to serve as, and holds a currently effective

airman certificate authorizing him to serve as, such pilot or

copilot.

Requirement as to Carriage of Mail

“(m) Whenever so authorized by its certificate, any air

carrier shall provide necessary and adequate facilities and

service for the transportation of mail, and shall transport

mail whenever regaiired by the Postmaster General.. Such

15 Para. (1) of Sec. 401 (1) was amended by act of April 29, 1942

56 Stat. 265. The amendment was repealed by Act of July 25, 1947,

61 Stat. 449.

31

air carrier shall be entitled to receive reasonable compensa-

tion therefor as hereinafter provided.

- Application for New Mail Service

(n) Whenever, from time to time, the Postmaster Gen-

eral shall find that the needs of the Postal Service require

the transportation of mail by aircraft between any points

within the United States or between the United States and

foreign countries, in addition to the transportation of mail

authorized in certificates then currently effective, the Post-

master General shall certify such finding to the Authority

and file therewith a statement showing such additional

service and the facilities necessary in connection therewith,

and a copy of such certification and statement shall be

posted for at least twenty days in the office of the secretary

of the Authority. The Authority shall, after notice and

hearing, and if found by it to be required by the public

convenience and necessity, make provision for such addi-

tional service, and the facilities necessary in connection

therewith, by issuing a new certificate or certificates or by

amending an existing certificate or certificates in accord-

ance with the provisions of this section.

See. 404(a), Civil Aeronautics Act, 52 Stat. 993, 49 U.S.C.

484(a) provides:

“Src. 404 [52 Stat. 993, 49 U. S.C. 484] (a) It shall be

the duty of every air carrier to provide and furnish inter-

state 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 carriers; to provide safe and

adequate service, equipment, and facilities in connection

with such transportation ; to establish, observe, and enforce

just and reasonable individual and joint rates, fares, and

charges, and just and reasonable classifications, rules, regu-

lations, and practices, relating to such air transportation ;

and, in case of such joint rates, fares, and charges, to estab-

ish just, reasonable, and equitable divisions thereof as

‘between air carriers participating therein which shall not

unduly prefer or prejudice any of such participating air

carriers,

7

32

Sec. 406, Civil Aeronautics Act, 52 Stat. 998, 49 U.S.C.

486, provides:

Rates for Transportation of Mail

Authority to Fix Rates

* S20. 406 [52 Stat. 998, 49 U. S.C. 486] (a) The Author.

ity is empowered and directed, upon its own initiative or.

upon petition of the Postmaster General or an air carrier,

(1) to fix and determine from time to time, after notice and

hearing, the fair and reasonable rates of compensation for

the transportation of mail by aircraft, the facilities used and

useful therefor, and the services connected therewith (in-

cluding the transportation of mail by an air carrier by

other means than aircraft whenever such transportation is

‘incidental to the transportation of mail by aircraft or is

made necessary by conditions of emergency arising from

aircraft operation), by each holder of a certificate author-

izing the transportation of mail by aircraft, and to make

such rates effective from such date as it shal! determine to

be proper; (2) to prescribe the method or methods, by

aircraft-mile, pound-mile, weight, space, or any combination

‘thereof, or otherwise, for ascertaining such rates of com-

pensation for each air carrier or class of air carriers; and

(3) to publish the same; and the rates so fixed and deter-

mined shall be paid by the Postmaster General from appro-

priations for the transportation of mail by aircraft.

Rate-Making Elements

"yy In fixing and determining fair and reasonable rates

of compensation under this section, the Authority, con-

sidering the conditions peculiar to transportation by air-

craft and to the particular air carrier or class of air car-

riers, may fix different rates for different air carriers of

classes of air carriers, and different classes of service. In

determining the rate in each case, the Authority shall take

into consideration, among other factors, the condition that

such air earriers may hold and operate under certificates

authorizing the carriage of mail only by providing necessary

and adequate facilities and service for the transportation

of mail; such standards respecting the character and

33

quality of service to be rendered by air carriers as may

be prescribed by or pursuant to law; and the need of each

such air carrier for compensation for the transportation

of mail sufficient to insure the performance of such service,

and, together with all other revenue of the air carrier, to

enable such air carrier under honest, economical, and

efficient management, to maintain and continue the develop-

ment of air transportation to the extent and of the charac-

ter and quality required for the commerce of the United _

States, the Postal Service, and the national defense,

Statement of Postmaster General and Carrier

(c) Any petition for the fixing of fair and reasonable

rates of compensation under this section shall include a

statement of the rate the petitioner believes to be fair and

reasonable. The Postmaster General shall introduce as

part of the record in all proceedings under this section a

comprehensive statement of all service to be required of

the air carrier and such other information in his possession

as may be deemed by the Authority to be material to the

inquiry.

Weighing of Mail

“(a) The Postmaster General may weigh the mail trans-

ported by aircraft and make such computations for statisti-

cal and administrative purposes as may be required in the

interest of the mail service, The Postmaster General is

authorized to employ such clerical and other assistance as

may be required in connection with proceedings under this

Act. If the Authority shall determine that it is necessary

or advisable, in order to carry out the provisions of this Act,

to have additional and more frequent weighing of the mails,

the Postmaster General, upon request of the authority, shall

provide therefor in like manner, but such weighing need not

be for continuous periods of more than thirty days.

Availability of Appropriations

hi

(e) Except as otherwise provided in section 405(k), the

unexpended balances of all appropriations for the trans-

portation of mail by aircraft pursuant to contracts entered

34

into under the Air Mail Act of 1934, as amended, and the

unexpended balances of all appropriations available for the

transportation of mail by aircraft in Alaska, shall be avail-

able, in addition to the purposes stated in such appropria-

tions, for the payment of compensation by the Postmaster

General, as provided in this Act, for the transportation of

mail by aircraft, the facilities used and useful therefor, and

the services connected therewith, between points in the

continental United States or between points in Hawaii or

in Alaska or between points in the continental United States

and points in Canada within one hundred and fifty miles of

the international boundary line. Except as otherwise pro-

vided in section 405(k), the unexpended balances of all

appropriations for the transportation of mail by aircraft

pursuant to contracts entered into under the Act of March 8,

1928, as amended, shall be available, in addition to the pur-

poses stated in such appropriations, for payment to be

made by the Postmaster General, as provided by this Act,

in respect of the transportation of mail by aircraft, the

facilities used and useful therefor, and the services con-

nected therewith, between points in the United States and

points outside thereof, or between points in the continental

United States and Territories or possessions of the United

States or between Territories or possessions of the United

States.

Payments to Foreign Air Carriers

fy In any case where air transportation is performed

between the United States and any foreign country, both

by aircraft owned or. operated by one or more air carriers

holding a certificate under this title and by aircraft owned

or operated by one or more foreign air carriers, the Post-

master General shall not pay to or for the account of any

such foreign air carrier a rate of compensation for trans-

porting mail by aircraft between the United States and such

foreign country, which, in his opinion, will result (over such

reasonable period as the Postmaster General may deter

mine, taking account of exchange fluctuations and other fae

tors) in such foreign air carrier receiving a higher rate of

compensation for transporting such mail than such foreign

country pays to air carriers for transporting its mail by

35

aircraft between such foreign country and the United States,

or receiving a higher rate of compensation for transport-

ing such mail than a rate determined by the Postmaster

General to be comparable to the rate such foreign country

pays to air carriers for transporting its mail by aircraft

between such foreign country and an intermediate country

on the route of such air cartier between such foreign coun-

try and the United States.

Sec. 801, Civil Aeronautics Act, 52 Stat. 1014, 49 U. 8. C.

601, provides:

The President of the United States

7 Sec. 801 [52 Stat. 1014, 49 U. 8. C. 601] The issuance,

denial, transfer, amendment, cancellation, suspension, or

revocation of, and the terms, conditions, and limitations con-

tained in, any certificate authorizing an air carrier to engage

in overseas or foreign air transportation, or air transporta-

tion between places in the same Territory or possession, or

any permit issuable to any foreign air carrier under section

402, shall be subject to the approval of the President. Copies

of all applications in respect of such certificates and permits

shall be transmitted to the President by the Authority be-

fore hearing thereon, and all decisions thereon by the Au-

thority shall be submitted to the President before publica-

tion thereof. This section shall not apply to the issuance

or denial of any certificate issuable under section 401 (e)

or any permit issuable under section 402 (c) or to the

original terms, conditions, or limitations of any such

certificate or permit.

Sec. 1002(b), Civil Aeronautics Act, 2 Stat. 1018, 49

U.S. C. 642(b), provides:

“(b) The Authority is empowered at any time to institute

an investigation, on its own initiative, in any case and as to

any matter or thing concerning which complaint is author-

ized to be made to or before the Authority by any provision

of this Act, or concerning which any question may arise

under any of the provisions of this Act, or relating to the

enforcement of any of the provisions of this Act. The

Authority shall have the same power to proceed with any

investigation instituted on its own motion as though it had

been appealed to by complaint. *

Sec. 1006, Civil Aeronautics Act, 52 Stat. 1024, 49 U.S. ©,

646, provides:

Orders of Authority Subject to Review

*’ See. 1006 [52 Stat. 1024, 49 U. S.C. 646] (a) Any order,

affirmative or negative, issued by the Authority under this

Act, except any order in respect of any foreign air carrier

subject to the approval of the President as provided in see-

tion 801 of this Act, shall be subject to review by the circuit

courts of appeals of the United States or the United States

Court of Appeals for the District of Columbia upon petition,

filed within sixty days after the entry of such order, by any

person disclosing a substantial interest in such order. After

the expiration of said sixty days a petition may be filed only

by leave of court upon a showing of reasonable grounds for

failure to file the petition theretofore.

Venue

“ (b) A petition under this section shall be filed in the court

for the circuit wherein the petitioner resides or has his

principal place of business or in the United States Court of

Appeals for the District of Columbia.

Notice of Authority; Filing of Transcript

"“¢) A copy of the petition shall, upon filing, be forthwith

transmitted to the Authority by the clerk of the court; and

the Authority shall thereupon certify and file in the court a

transcript of the record, if any, upon which the order com-

plained of was entered.

Power of Court

(a) Upon transmittal of the petition to the Authority, the

court shall have exclusive jurisdiction to affirm, modify, or

set aside the order complained of, in whole or in part, and if

need be, to order further proceedings by the Authority.

Upon good cause shown, interlocutory relief may be granted

by stay of the order or by such mandatory or other relief as

37

may be appropriate: Provided, That no interlocutory re-

lief may be granted except upon at least five days’ notice to

the Authority.

Findings of Fact by Authority Conclusive

“(e) The findings of facts by the Authority, if supported

by substantial evidence, shall be conclusive. No objection

to an order of the Authority shall be considered by the court

unless such objection shall have been urged before the Au-

thority or, if it was not so urged, unless there were reason-

able grounds for failure to do so.

Certification or Certiorari

“ef ) The judgment and decree of the court affirming, modi-

fying, or setting aside any such order of the Authority shall

be subject only to review by the Supreme Court of the

United States upon certification or certiorari as provided in

sections 239 and 240 of the Judicial Code. ”

(2404)