Petition for Writ of Certiorari — Eastern Air Lines, Inc. v. Civil Aeronautics Board (No. 450)

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IN THE

Supreme Court of the United States

OctoneR Term, 1961.

No. 450

EASTERN AIR LINES, INC.,

Petitioner,

Vv.

CIVIL AERONAUTICS BOARD,

Respondent.

PETITION FOR WRIT OF CERTIORARI.

E. SMYTHE GAMBRELL,

Haroup L. RussEuL,

Attorneys for Petitioner

Suite 825, The Citizens & Southern

National Bank Building,

Atlanta 3, Georgia.

GAMBRELL, HARLAN, RussELL, Move & RicHArDson,

THEODORE M. Fores, JR.,

Of Counsel.

September 29, 1961.

TABLE OF CONTENTS.

OPINION OF THE CourT BELOW...........--.cccccccccocecececeeeeeeees

Grounps on WHIcH THIS CouRT’s JURISDICTION Is

IRE IE Ae IRS ca ace AEM Seca Se oe

THe Question PRESENTED FOR REVIEW......... .......0.-----+-

SE SEE TD

ARGUMENT:

I. The Civil Aeronautics Board erred in Termi-

natin g the General Passenger Fare Investiga-

tion Without Deciding It, Because the Board

Has a Statutory Duty to Assure Just and Rea-

RR aac emer aoe to

II. The Board Had No Discretionary Authority

to Terminate the General Passenger Fare

Investigation Without Deciding It After the

Examiner Had Rendered An Initial Decision,

the Parties Had Filed Exceptions and Briefs,

and the Board Had Heard Oral Argument......

a sasiasibaiic

Ari -worx A—Opinion of the Court Below....................

Appenpix B—Applicable Provisions of the Civil

Morommntics Act GF BOG... neces. esenceee-e

Applicable Provisions of the Administrative

Procedure Act ........ Catal leds alaetieb sebadalidaalicisenansbienoeniaasi

oo -_ F~ bb

TABLE OF AUTHORITIES.

STaTureEs.

PAGE

Administrative Procedure Act

Section 8(b) (60 Stat. 242; 5 U.S. C. 1007) ............ 2, 5, 47

Civil Aeronautics Act of 1938

Section 2 (52 Stat. 980; 49 U.S. C. A. 402) ........ 2,5, 11, 41

Section 205 (52 Stat. 984; 49 U.S. C. A. 425) ........ 5, 11, 41

Section 401 (52 Stat. 987, as amended by 56 Stat.

265, 61 Stat. 449, 69 Stat. 49, 70 Stat. 591, 71,

ee Fe re ee a Er tineeiskesecidecnessnnccceinkspncdaiennes 5, 10

Section 403 (52 Stat. 992, as amended by 70 Stat.

FR hn ie ale Te aris ss teseenceceressets 5, 11, 42

Section 404 (52 Stat. 993; 49 U.S. C. A. 484)..4, 5, 10, 11, 43

Section 1002 (52 Stat. 1018; 49 U.S. C. A. 642)..5, 11, 28, 43

Section 1006 (52 Stat. 1024, as amended by 63 Stat.

oe Ne Ae Ree nN 4, 5, 9, 46

Federal Aviation Act of 1958 (72 Stat. 737; 49

ERE eae cen Emenee EEE 2, 5, 29

Interstete Commerce Act

I Re Hr asco scnipnssnsnsarecvasaionsnrne 32

I ia aaseencmsnsncenennes 32

I i Oy asic sncactsnnncecenscsentnsvncncncs 32

Judicial Code (62 Stat. 928; 28 U.S. C. 1254)... 4

Natural Gas Act

Section 4(e) (52 Stat. 822; 15 U. S. C. A. 717e).... 28

Section 5(a) (52 Stat. 823; 15 U.S. C. A. 717d)... 28

Caszs.

Anchor Coal Co. v. Public Service Commission, 123

W. Va. 439, 15 S.E.2d 406 (1941)... 22

Atlantic & Gulf Stevedores, Inc. v. Donovan, 274 F.2d

FI FE inca caaeccseecscccsennscicceatesiclexounsinconsens 3, 21

Atlantic Refining Co. v. Public Service Comm’n, 360

a le eT IN aah saith ens elon tebacaceeaindosb och Mectaacinn 23

ili

PAGE

Banker’s Life & Cas. Co. v. Cravey, 208 Ga. 682, 69

STE.Dd BT (TOG) ncn cccecsencecnccosensnonsnsnnnensosesvnoncnnsssonece 21, 22

City of Detroit v. Feac. il Power Comm’n, 97 U.S.

App. D.C. 260, 230 F.2d 810 (1955), cert. denied,

ES ay ST. RRRRRennatean Se emeierS tasennnonnpomen ene 24

East T.V. & G. Ry. v. Interstate Commerce Comm'n,

i) aoe. Se Gey: b RR eeennenEenmercennnn ner ror 4, 32, 33

Episcopal Theological Seminary v. Federal Power

Comm’n, 106 U.S. App. D.C. 37, 269 F.2d 228, cert.

denied sub nom. Pan American Petroleum Corp. Vv.

Federal Power Comm’n, 361 U.S. 895 (1959)........ 24

Federal Power C.mm’n v. Hope Natural Gas Co.,

320 U.S. 591 (1944)............cainc.nseceaceccesesensensssonenscansesseace 23

Fort Worth Investigation, C.A.B. Docket 7382, Order

B-15770 (Sept. 14, 1960) ..............-.-cscscscscscscseeesesnsnenseses 17

Greensboro-High Point Airport Authority v. Civil

Aeronautics Board, 97 U.S. App. D.C. 358, 231 F.2d

GAT CTY onic cniasnestnscconsnencensenesentnrionmns cnonsevedinamnaienstionene 2, 31, 32

Re Indianapolis Rys., Inc., 55 P.U.R.(n.s.) 374 (Ind.

Pub. Serv. Comm’n, Case No. 16288, Aug. 29, 1944).. 22

Isbrandtsen Co. v. United States, 96 F. Supp. 883

(S.D.N.Y. 1951), aff’d sub nom. Rederv v. Isbrandt-

sen Co., 342 U.S. 950 (1952)..................ceccessessseccceeoeene 3, 20-21

Louisville & N.R.R. v. Behlmer, 175 U.S. 648 (1900)..4, 32, 33

Minneapolis Gas Co. v. Federal Power Comm’n,

U.S. App. D.C. , 29 U.S. Law Week 2415 (Mar.

14, 1961) (No. 15452, Mar. 9, 1961)......................-- 3, 25, 26,

27, 29, 30, 31, 32

NLRB v. Radio & Television Broadcast Engineers,

964 U.S. 573 (1961) .-.cccoc----0---- Nee eR cine neel 3, 21

Permian Basin Area Rate Investigation, FPC Docket

I siciccntgs cpanissenaiehnian sitchen sentnbahaunicessniieods 24

Phillips Petroleum Co. v. Wisconsin, 347 U.S. 672

LTR AAS LEON TO 23

Phillips Petroleum Co., FPC (Opinion No. 338,

Sept. 28, 1960)

PAGE

Publix Cars, Inc. v. Yellow Cab é Baggage Co., 130

Neb. 413, 265 N.W. 240 (1936) 22

Richfield Ou Corp. v. California Pub. Util. Comm’n,

Cal. 2d , 304 P.2d 4, cert. denied sub

nom. Southern Counties Gas Co. v. Public Util. _

Comm ’n, 364 U.S. 900 (1960) 22

Rocky Mountain Motor Co. v. Pikes Peak Auto

Invery, 38 P.U.R.(n.s.) 255 (Colo. Pub. Util.

Comm’n, Case No. 4835, Apr. 1, 1941).......000000..... 22

Smyth v. Ames, 169 U.S. 466 (1898) .. poe Ne Rares 23

Subscribers v. Speed Tel. Co., 34 P.U. R. 3d 32 (Mo.

Pub. Serv. Comm’n, Case No. 14341, May 2, 1960) 22

Suspended Passenger Fare Increase Case, 25 CAB

511 (Order E-11812, Sept. 5, 1957)... - 6

Umited-Capital Merger Case, CAB Orders Nos.

E-16605 (Apr. 3, 1961) and E-16880 (Jun. 1, 1960) 22

Washington-Baltimore Adequacy of Service Investi-

gation, CAB Docket 8148, Order No. E-16061

CS ie NE siiiiesbabiinlesdnshd chclaliandaicéhcisahimsenintcicaeniceineine 16

LEGISLATIVE AUTHORITIES.

Senate Report No. 686 (75th Cong., 1st Sess.)............ 10

MisceLLanEous CAB Orpers & Press RELEASES.

Order No. B-11135 (Mar. 15, 1957) cco... eee eee 6

Order No. E-12203 (Feb. 25, 1958)... eee 7

Order No. E-13417 (Jan. 22, 1959) oo... eee cceeceeeee 7

Order No. E-15436 (Jun. 23, 1960)............ sancti .....4, 18-19

Press Release No. 58-5 (Jan. 24, 1958) 00.000... 7

Press Release No. 58-64 (Oct. 14, 1958) 0... 7

Press Release No. 60-10 (Apr. 29, 1960) ...000000000... 12,18

TRADE JOURNALS.

American Aviation Daily

ERE ee eee renee eae 12

I i 12

We eae 12

IN THE

Supreme Court of the Anited States

Octroser Term 1961.

Eastern Arm Lings, Inc.,

Petitioner,

v. "

Crviz AERONAUTICS Boarp,

Respondent.

PETITION FOR WRIT OF CERTIORARI.

Petitioner, Eastern Air Lines, Inc. (‘‘Eastern’’ or

‘‘Petitioner’’), respectfully prays that a writ of certiorari

be issued to the United States Court of Appeals for the Dis-

trict of Columbia Circuit to the end that this Court may

review the judgment which the Federal Court of Appeals

has rendered in the above entitled case.

Opinion of the Court Below.

The opinion of the Court of Appeals has not yet been

officially reported. It appears as Appendix ‘‘A’’ to this

Petition, and it is unofficially reported at 30 U. S. Law Week

2013 (Jul. 11, 1961).

The Order of the Civil Aeronautics Board (‘‘the

Board’’) which the Court of Appeals refused to set aside,

has not been officially reported. It appears in the Joint

Appendix in the Court below (hereinafter cited as ‘‘J. A.

aalccade ”’) at pages 1 through 314.

Grounds on Which this Court’s Jurisdiction

is Invoked.

This Court’s jurisdiction is invoked for the following

reasons:

(1) The Order of the Civil Aeronautics Board termi-

nating, without deciding, the General Passenger Fare Inves-

tigation and the decision below of the Court of Appeals

leave the public and the commercial air line industry with-

out the assurance of just and reasonable fares provided for

in the Civil Aeronautics Act of 1938 and the Federal Avia-

tien Act vf 1958. In view of the broad use of and reliance

upon commercial air transportation in the United States

and in view of the findings of Congress in Section 2 of the

Civil Aeronautics Act! (reaffirmed in Section 102 of the

Federal Aviation Act) that this industry is essential not

only to the commerce of the United States, but also to its

Postal Service and its national defense, the Board’s abdi-

cation from regulatory responsibilities is a matter of grave

public concern requiring the consideration of this Court.

(2) The decision of the Court of Appeals in this case

conflicts with its prior decisions holding that

(a) An administrative agency must decide all of

the issues of law, fact and discretion presented on the

record. Administrative Procedure Act, Section 8(b)

(60 Stat. 242;5 U.S. C. §1007) ; Greensboro-Highpoint

Airport Authority v. Civil Aeronautics Board, 97 U.S.

1The Civil Aercrautics Act of 1938 has been superseded by the .

Federal Aviation Act of 1958 (72 Stat. 737; 49 U. S. C. A. §§1301

et seq.) ; however, proceedings instituted under the 1938 Act con-

tinue to be governed by it. Federal Aviation Act of 1958, Section

1501(b) (72 Stat. 809). The 1958 Act made no changes in the

sections of the 1938 Act iavolved in this case. References herein

to ‘‘the Act’’ are to the Civil Aeronautics Act of 1938.

App. D. C. 358, 231 F. 2d 517 (1956) ; Minneapolis Gas

Co. v. Federal Power Comm’n, U.S. App. D.C.

, 29 U.S. Law Week 2415 (Mar. 14, 1961) (No.

15452, Mar. 9, 1961) ; and

(b) An administrative agency, having mitiated a

rate investigation to.determine whether fares are and

will be just and reasonable, or if not, what fares would

be just and reasonable, and having pursued such inves-

tigation through extensive hearings and Examiner’s

Initial Decision, exceptions, briefs, and vral argument,

has no discretion to terminate the investigation without

deciding the issue of the justness and reasonableness

of fares. Minneapolis Gas Co. v. Federal Power

Comm’n, supra.

(3) The decision of the Court of Appeals in this case

conflicts with decisions of this Court and of other Courts of

Appeals which have uniformly held that an administrative

agency has an affirmative duty to administer the law com-

mitted to its enforcement. NLRB v. Radio & Television

Broadcast Engineers, 364 U. S. 573 (1961) ; Atlantic & Gulf

Stevedores, Inc. v. Donovan, 274 F. 2d 794 (5th Cir. 1960) ;

Isbrandtsen Co. v. United States, 96 F. Supp. 883 (S. D.

N. Y. 1951) (special three-judge court), aff ’d sub nom.

Rederi v. Isbrandtsen Co., 342 U.S. 950 (1952).

(4) The Court of Appeals has decided an important

question oi Federal law which has not been directly before

this Court in the last sixty years and which critically needs

a statement of reaffirmation, as evidenced by the failure of

the Court of Appeals in this case to follow the precedents

of this Court.

(5) The decision of the Court of Appeals in this case has

interpreted the question of the duty of an administrative

agency to decide the cases arising thereunder in a way which

conflicts with the decisions of this Court in Louisville &

N. R. R. v. Behlmer, 175 U. S. 648 (1900), and East T. V. &

G. Ry. v. Interstate Commerce Comm’n, 181 U.S. 1 (1901).

The judgment of the Court of Appeals sought to be

reviewed herein was rendered and entered on June 29, 1961.

Jurisdiction in this Court to review the judgment of

the Court of Appeals, through the issuance of a writ of

certiorari, is established by the provisions of 62 Stat. 928;

28 U.S. C. §1254. (The Court of Appeals is vested with

jurisdiction by Section 1006 of the Civil Aeronautics Act.)

The Question Presented for Review.

The Civil Aeronautics Board is charged with adminis-

tration of the Civil Aeronautics Act of 1938, including the

requirement of §404(a) of that Act that air carriers charge

only ‘‘just and reasonable’’ fares. Pursuant to that sec-

tion, and others giving it broad investigatory and rate-

making powers, the Board, on its own initiative, instituted

the General Passenger Fare Investigation to determine

whether existing fares are and will be just and reasonable,

and if not, what fares would be, which investigation wes

pursued through extensive and exhaustive hearings, an

Examiner’s Initial Decision, exceptions, briefs, and oral

argument before the Board. In view of its statutory obli-

gation to regulate fares, and in view of its commitment to

investigate, carried up to the point of decision, could the

Board lawfully terminate the General Passenger Fare

Investigation without deciding the only issue in it, the

justness and reasonableness of fares? i

Statutes Involved.

The statutes involved in this proceeding are applicable

provisions of the Civil Aeronautics Act of 1938 and ot the

Administrative Procedure Act. The provisions involved

Hy)

are lengthy, end their text is set forth in Appendix ‘‘B”’

hereto. The particular sections involved are:

Crvrz Aeronautics Act or 1938

Section 2 (52 Stat. 980; 49 U.S. C. A. §402) ;

Section 205 (52 Stat. 984; 49 U.S. C. A. $425);

Section 403 (52 Stat. 992, as amended by 70 Stat.

784;49 U.S.C. A. §483);

Section 404 (52 Stat. 993; 49 U.S. C. A. §484) ;

Section 1002 (52 Stat. 1018; 49 U.S. C. A. $642) ;

Section 1006 (52 Stat. 1024, as amended by 63

Stat. 107; 49 U.S. C. A. §646).

ADMINISTRATIVE PROCEDURE ACT

Section 8(b) (60 Stat. 242;5 U.S. C. §1007(b)).

Statement of the Case.

The proceedings below were instituted by the Civil

Aeronautics Buard, on its own motion, on May 10, 1956.?

The Order of investigation stated* that the Board was

proceeding under Sections 2, 205, 403, 404 and 1002(d) of

‘the Civil Aeronautics Act of 1938. Following consideration

of written statements and oral arguments of interested per-

sons, the Board on July 27, 1956, issued a further Order‘

affirming the statement of the scope and issues in the orig-

inal order of investigation. As so defi:z:ed, the matter to be

investigated and decided was:

s6® © © whether the fares and charges demanded, col-

lected, and received by each of the respondents [the

2 Order No. E-10279; J. A. 315a-324a.

8 J. A. 316a.

* Order No. E-10488; J. A. 325a-333a.

twelve domestic trunkline air carriers], individually

or jointly with one or more of the other respondents,

for the transportation of passengers within the conti-

nental United States, excluding Alaska, are generally

* unjust or unreasonable, and if found to be unjust or

unreasonable, to determine what over-all percentage

changes in the fares or charges of the respondents

collectively or individually should be permitted or

required.’”

The General Passenger Fare Investigation commenced

as a fare decrease case.* However, less than a year later the

economics of the air line industry had changed radically for

the worse, and seven of the respondents filed tariffs reflect-

ing a six per cent increase in passenger fares to be effective

April 1, 1957 (plus an additional increase of one dollar per

ticket in the tariffs filed by Eastern and Capital Airlines).

By Order E-11135 (Mar. 15, 1957) the Board suspended

those tariffs and ordered an investigation to determine their

lawfulness. The pendency of that investigation, known as

the Suspended Passenger Fare Increase Case, Docket 8613,

necessitated interruption of the General Passenger Fare

Investigation until the former could be completed.” The six

per cent increase was denied by the Board on September 25,

1957,® and the General Passenger Fare Investigation was

resumed.

Subsequently, the Board has recognized—albeit, East-

ern believes, inadequately—the need of the air lines for

5 J. A. 317a.

®In the Order defining the scope and issues the Board said,

‘*What led to the institution of this investigation was our concern,

based on the level of earnings reported by most of the respondents,

over the possibility that the public was being subjected to excessive

charges, overall, for passenger transportation. The purpose of this

investigation is * * * to determine whether * * * the public is, in

general, being charged too much ® * *.’’ J. A. 326a.

7 Order No. E-11669 (Aug. 8, 1957); J. A. 339a.

8 Order No. E-11812; 25 CAB 511.

i /

additional income by permitting some modest relief from

fares which had failed to keep pace with rising costs of oper-

ation.’ Such increases were specified to be temporary, pend-

ing final decision of the General Passenger Fare Investiga-

tion, which the Board indicated would be the vehicle by

which it would grant permanent and fully adequate relief.’

The increases were allowed without reference to any evi-

dentiary records and without findings that the resulting

fares would be just and reasonable to the public and to the

carriers.

Hearings in the General Passenger Fare Investigation

commenced on November 18, 1957, and continued, with only

brief recesses, for 142 hearing days. The record was closed

® Order No. E-12203 (Feb. 25, 1958) ; CAB Press Release No.

58-64 (Oct. 14, 1958) ; Order No. E-13417 (Jan. 22, 1959); Order

No. E-15436 (Jun. 23, 1960).

10 F.g.,in CAB Press Release No. 58-5 (Jan. 24, 1958) announc-

ing suspension of fare increases proposed by Trans World and Con-

tinental Airlines and indicating that it would approve a lesser

increase, the Board said:

‘‘The increases to be allowed would be a straight four

percent rise plus an additional charge of one dollar on each

ticket. They would be effective until the Board’s decision

in its general passenger fare investigation, now in progress.’’

The tariff suspension thereby announced was made by Order No.

E-12203 (Feb. 25, 1958), which also elaborated on the reasons for

allowing a temporary increase.

CAB Press Release No. 58-64 (Oct. 14, 1958) indicated that

the Board would allow the carriers to eliminate round trip and

miscellaneous other discounts, if the tariffs doing so bore a cut-off

date of July 31, 1959. That date was approximately the date by

which the Board hoped, at that time, to have reached a final decision

in the General Passenger Fare Investigation.

Order No. E-13417 (Jan. 22, 1959) allowed certain surcharges

for travel on jet aircraft to become effective. Order No. E-15436

(Jun. 23, 1960), which allowed a small increase after announcement -

of the Board’s tentative vote on sub-issues in the General Passenger

Fare Investigation, directed that those surcharges and also a-sur-

charge of one dollar on all tickets should expire on June 30, 1961.

In view of the economic conditions in the industry, the carriers

filed tariff amendments making those increases permanent, which

the Board allowed without formal action.

on August 1, 1958. It comprised 13,357 pages of transcript

of oral testimony and a comparable number of pages of

prepared testimony and statistical materials.'' Briefs to

the Examiner were filed by all parties on October 28, 1958,

and on May 27, 1959, the Examiner rendered an Initial Deci-

sion of 189 pages, plus 114 pages of appendices. Exceptions

to the Initial Decision were filed on June 8, 1959, and briefs

to the Board on July 15, 1959. The Board heard oral argu-

ment in the case on July 28-29, 1959, and took it under con-

sideration.

On November 25, 1960, the Board rendered its Order

No. E-16068, from which this appeal was taken.

Order No. E-16068 decided numerous sub-issues relating

to legal and economic principles involved in determining

the justness and reasonableness of passenger fares. How-

ever, it specifically avoided deciding the sole issue in the

case as delineated by the order of investigation. The Board

declined to decide whether existing fares are and will be

just and reasonable in the future, or if not, what fares would

be just and reasonable.

The pertinent language of Order No. E-16068 appears

at J. A. 8, where the Board said:

‘‘Upon consideration of the record, the conten-

tions of the parties, and Form 41"?! data for recent

years, we conclude that the record before us is inade-

quate to permit the fixing of the fare level. How-

ever, the record does permit us to formulate sig-

nificant standards which will contribute to the

regulation of feres.

‘‘Our difficulty in attempting to prescribe the

just and reasonable fare level from the present rec-

ord is very basic. Neither the carriers nor Bureau

11 J. A. 367a.

12 Form 41 is the form upon which all regularly scheduled pas-

senger air lines are required to report to the Board voluminous

information concerning their operations, traffic, revenues, expenses,

financial condition, ete., on a monthly, quarterly, and annual basis.

Counsel!!3} have submitted forecasts of operations,

revenues, and expenses which we find are reliable

indicia of what future results will be. In addition,

there is an absence of data in the record presenting

the experience of operations with the new turbine-

engine aircraft which are becoming an ever-larger

el.ment of the industry’s operations. In these cir-

cumstances, it would be futile to attempt to prescribe

the appropriate fare level on the basis of the record

herein.”’

Having thus refused to decide the issues under investiga-

tion, the Board terminated the proceeding."

Eastern filed a timely petition for review to the United

States Court of Appeals for the District of Columbia Cir-

cuit, raising the issues now presented to this Court. Juris-

diction of that Court is established by Section 1006 of the

Civil Aeronautics Act (52 Stat. 1024, as amended by 63

Stat. 107; 49 U. S. C. A. &646). By its judgment of June

29, 1961, that Court affirmed the Order of the Board.

It is Eastern’s contention herein that the Board had no

authority to terminate the General Passenger Fare Investi-

gation without deciding tiie sole issue in it; viz., the law-

fulness or unlawfulness of fares. That contention is based

upon two premises: first, that the Board had an obligation

to enforce the Civil Aeronautics Act, and second, that after

four and a half years of litigation, after some 25,000 pages

of evidence have been assembled, after an Examiner has

rendered an Initial Decision to which exceptions have been

filed, after the parties have briefed the case to the Board

and presented oral argument, then the parties and the public

are entitled to a decision by the Board on a matter of grave

public importance,—transportation rates.

13 The reference to ‘‘ Bureau Counsel’? is to counsel for the Com-

mercial Rates Section of the Board's Bureau of Air Operations, a

division of its staff, which was a party to the proceedings before the

Board.

4 J. A. 104.

ARGUMENT.

The Civil Aeronautics Board Erred in Terminating

the General Passenger Fare Investigation Without

Deciding It, Because the Board Has a Statutory Duty

to Assure Just and Reasonable Fares.

This Petition presents the basic issue of whether a

Federal regulatory agency may shirk, as it chooses, one

of the regulatory functions assigned to it by Congress.

The Court below ruled that the agency has unfettered dis-

cretion either to enforce the statute or to disregard one of

its major provisions. Petitioner submits that the Board

and the Court of Appeals erred in reaching that conclusion.

The Civil Aeronautics Act of 1938 established in ‘‘ Title

IV—<Air Carrier Economic Regulation’’ a complete pro-

gram for governmental regulation, in the public interest,

of the economics of the air transportation industry. That

program was patterued after ‘‘The recognized and

accepted principles of the regulation of public utilities,

particularly as applied to other forms of transporta-

tion®®*.’”> Those principles provided for limited entry

into the industry through issuance of certificates of public

convenience anc necessity (Section 401 of the Act) and for

regulation of the carriers’ fares, rates, and charges accord-

ing to the accepted standard of ‘‘just and reasonable indi-

vidual and joint rates, fares, and charges’’ (Section 404).

The other provisions of Title IV are ancillary to these basic

15S. Rep. No. 686, 75th Cong., lst Sess., p. 2. This report dealt

with S. 2 pending in that Session of Congress, which bill in sub-

stance became the Civil Aeronautics Act of 1938 in the Third

Session.

aims and are not involved in this case. Title X of the

Act, ‘‘Procedure,’’ also contains ancillary provisions

enabling the Board to investigate in formal hearings and

through informal procedures and to issue orders com-

pelling obedience to the statute.

The General Passenger Fare Investigation was insti-

tuted ‘‘pursuant to the Civil Aeronautics Act of 1938, as

amended, particularly sections 2, 205, 403, 404, and 1002(d)

thereof.’"* The Board’s stated purpose was

‘«® ® © to determine whether the fares and charges

demanded, collected, and received by each of the

respondents [the twelve domestic trunkline air

carriers], individually or jointly with one or more

of the other respondents, for the transportation of

passingers within the continental United States,

excluding Alaska, are generally unjust and unreason-

able, and if found to be unjust and unreasonable, to

determine what over-all percentage changes in the

fares or charges of the respondents collectively or

individually should be permitted or required.’””

After four and a half years of hearings, briefs, and

‘arguments, and consideration of them by an Examiner and

the Board, the General Passenger Fare Investigation was

aborted. By its Order No. E-16068, from which this appeal

was taken, the Board stated that it was unable to decide

whether existing fares were just and reasonable and ter-

minated the proceeding. Although Petitioner does not

agree with the Board’s conclusions concerning the adequacy

of the record, that ix not the issue raised here. Petitioner’s

sole complaint is that the Board terminated the proceeding

without deciding the only issue in it. If the record made

in the 142 days of oral hearings, covering 13,357 pages of

16 J. A. 316a.

7 J. A. 317a.

. transcript and a comparable number of pages of prepared

testimony and statistical exhibits, was in fact inadequate

for decision, then the Board had a statutory power and

duty to reopen the record for the taking of further evi-

dence. The point is, the Board could not just quit, leaving

the public and the carriers alike with no determination

of the justness and reasonableness of fares.

The consequences of the failure to make a decision below

are grave indeed. As it turns out, the parties penalized by

the Board’s refusal to decide are the carriers. In a Press

Release on April 29, 1960, prior to the issuance of its formal

order, the Board announced it would allow the air lines as

a group to earn an average rate of return of 10% per cent.”

The fact is that no carrier had earned a rate of return that

high since 1957, and the industry as a group had not earned

that high a return since 1956."* In 1960 the twelve trunk air

lines earned a total net income of only $4,479,100 and five

of them experienced net losses.” In the first six months of

1961 the trunkline carriers had a net loss of $13,197,352.

The intense competition among them prevents a unilateral

fare increase by any one carrier, except on some few non-

competitive segments,” and the anti-trust laws forbid them

to agree upon a uniform increase for the industry. The

Civil Aeronautics Board alone has the lawful power to

assure fares which will produce the rate of return which it

has heretofore found to be commensurate with just and rea-

sonable fares. .

18 CAB Press Release No. 60-10.

19 J. A. 200-206.

20 American Aviation Daily, May 22, 1961, which compiles the

data from the carriers’ official Form 41 reports to the Board, mat-

ters properly subject to official and judicial notice.

*1 American Aviation Daily, Jun. 12 & Sept. 7, 1961; see foot-

note 20.

= 7. &. WO.

Petitioner believes that the present plight of the air line

industry, which the Board’s disregard for its statutory duty

is perpetuating, sufficiently demonstrates the great public

interest attached to this case. However, an assumed

reversal of the economic situation may tend to point the

matter out even more clearly. If, at the time the Board

declined to perform its duty, the air lines had been earning

a rate of return far in excess of what was fair, what redress

would the travelling public have? Users of air transporta-

tion were represented in the Board proceeding by execu-

tive agencies of the United States: the Department of

Commerce, the Air Force and the General Services Admin-

istration. Surely the courts would not exonerate the Civil

Aeronautics Board from neglect of its duty if it had allowed

the air lines to charge exorbitant fares. Just as surely, the

air lines are entitled to protection from fares which are

unreasonably low.

That the Board’s jurisdiction over fares is an affirma-

tive duty, not a discretionary power, was emphatically

recognized by the Board in the Order terminating the case.

In the portions of the Examiner’s Initial Decision which

the Board adopted as part of its own final decision, it is

said:

‘*Congress, by enactment of the Federal Aviation

Act of 1958, has decided that the Government should

regulate prices and profits and entry into business in

the air-transportation industry and has assigned the

Board the duty of performing this regulation. Con-

tentions in this proceeding that the Board should

ignore this mandate of Congress and should leave

these matters to determination by competitive forces

merit little consideration. The Board must fix rea-

sonable rates wn proceedings raising the issue of such

rates solongas the Act requires it to do so. Requests

for change in the Act should be addressed to Con-

gress. However, it is appropriate to observe that

the air-transportation industry is characterized by

competition between two or more carriers for most

of the high-density segments of the domestic-trunk-

line route system. But the restriction on entry of

new carriers into the business and of existing car-

riers into areas not covered by their certificates

renders it impossible on this record to conclude that

free-market forces can be depended upon to prevent

either too low or too high returns on capital.’

(Emphasis supplied.)

This statement is unequivocal. It cannot be reconciled

with the Order terminating thé case without deciding it.

The Board specifically acknowledged that it ‘‘must fix rea-

sonable rates in proceedings raising the issue of such

rates.’’ Not only was that issue raised in the General

Passenger Fare Investigation, it was the only issue in the

case. The Board had, and admitted in its Order that it

had, a binding, inescapable statutory duty to decide it.

It should be observed that the Board did not find that

there was no present need for it to exercise its rate-making

powers. It did not find that the existing fares were just

and reasonable. It did not find that competition and

monopoly, within the framework of the certificated route

pattern, were in that delicate balance where no rate regula-

tion is necessary, but instead found that such regulation

was essential in the public interest.

The Court of Appeals treated the above statement of the

Board as a statement of the Hearing Examiner and as such,

perhaps, entitled to less weight than would have been

accorded to a statement of the Board itself (slip-sheet p. 4;

p. 38 of Appendix A to this Petition). This misunder-

standing of the source of the statement should be cleared

33 J. A. 109.

up. The statement was originated and written by the

Examiner in his Initial Decision. It was adopted by the

Board as its own finding of law and fact on sub-issnes raised

in exceptions to that Initial Decision. That the precise

nature and import of the statement were considered by the

Board prior to adoption may be appreciated from the fact

that the Initial Decision served by the Examiner was 189

pages long, exclusive of the statistical materials appended

to it. On the other hand, after the Board’s eclectic review

of it, the portion adopted and incorporated into the final

Order was only 93 pages.

The Coit below pointed out (slip-sheet p. 4; p..38 of

Appendix A to this Petition) that the Board acknowledged

“‘that ‘The Board must fix reasonable rates in proceedings

raising the issue of such rates so long as the Act requires

it to do so.’’’? The Court then said, ‘“We agree the Civil

Aeronautics Act imposes the stated duty upon the Board.’’

Such interpretation of the Act is impossible to reconcile

with its decision that, ‘‘The duty of the Board to prevent

unjust and unreasonable rates, and to establish those that

are lawful, does not require that the duty be performed as

a result of this particular investigation’’ (slip-sheet p. 6;

p. 40 of Appendix A to this’ Petition). The Court of

Appeals correctly interpreted the Act, but failed to apply

that interpretation to the case at hand. ‘‘This particular

investigation’’ is certainly a ‘‘ proceeding raising the issue”’

of just and reasonable rates. It had no other issue in it.

The question is presented here without complication:

can a regulatory agency simply abandon and disregard its

duty to regulate? The Court of Appeals answered that it

could under the circumstances of this case. That Court

thus summarized the Board’s excuse for its dereliction:

‘As the investigation progressed changes in the airline

carrier industry were occurring in such important and rele-

vant respects—particularly, the transition to turbine-engine

craft—that the Board felt unable at this time to accomplish

on the available data what initially i: had set out to do’’.

(slip-sheet p. 6; pp. 39-40 of Appendix A to this Petition).**

The procrastination which resulted in a stale record was

not attributable to the carriers. The hearings closed on

August 1, 1958. The parties filed their briefs to the Exam-

iner on October 28, 1958. The Examiner served his Initial

Decision on May 27, 1959, which comprised 189 pages and

an additional 114 pages of appendices. The carriers filed

their exceptions twelve days later, on June 8, 1959. Briefs

to the Board were filed on July 15, 1959. Oral argument

was heard by the Board on July 28-29, 1959. The case then

rested in the bosom of the Board until November 25, 1960,

when it issued the Order from which this appeal was taken.

At the time of oral argument, Capital Airlines’ ‘‘ Viscounts’’

were the only commercial transports in service which had

turbine-powered engines.

The transition to turbine-powered aircraft is a strange

excuse indeed for the Civil Aeronautics Board to offer to

the air lines it regulates for its failure to assure them the

just and reasonable fares to which they are entitled. The

air lines ihemselves had pleaded that in cases involving the

issue of ‘‘adequate service’? to a community within the

meaning of Section 404(b) of the Act could not be decided

fairly in the jet age on the basis of a record made in the

era of piston-powered aircraft. Such arguments received

short shrift from the Board. For example, in the ‘‘Supple-

mental Opinion and Order on Reconsideration’’ in the

Washington-Baltimore Adequacy of Service Investigation,

Docket No. 8148, the Board said:

2° The Board’s full statement of explanation appears at J. A. 8

and is quoted at pp. 8-9 of this Petition.

4é

‘*Hastern states that any possible basis which

may have existed for the guideline has vanished

because of the changeover to jet equipment and

turbo-props which, it asserts, will be completed by

the end of 1960, and which will result in drastic cost

changes.

‘‘Nor do we find that the changeover in equipment

has been such as to invalidate the premises of our

order. Current schedules are part of the stipulated

record before the Board, and we have been able to

take into account such factors as the introduction of

United’s jet service to Chicago and thence to Den-

ver,’ 26

Again, in the ‘‘Supplemental Opinion’’ in the Fort

Worth Investigation, Docket No. 7382, the Board said:

‘‘The plea for further hearing is one commonly

advanced to the Board by disappointed litigants, and

invariably has some color of foundation due to the

rapid technological and economic changes in the

industry. Ther. is hardly a case heard by the Board

which does not present substantial lapses of time

since the evidentiary record was developed. Were

we to hold new hearings for every change of equip-

ment that ensued since the evidence was taken, there

would be untold damage to the effective conduct of

the Board’s work. Accordingly, once a formal hear-

ing has been held, further hearings are denied in the

absence of unusual and compelling circumstances.’ ’?"

In each of those cases the Board relied upon the infor-

mation available to it through official notice of the reports

which it requires the carriers to file with it at regular

intervals (all operational, traffic, revenue, expense, and

26 Order No. E-16061 (Nov. 22, 1960), mimeo. pp. 12, 13; this

Order was issued only three days prior to the Order appealed from

here. :

27 Order No. E-15770 (Sept. 14, 1960), mimeo. p. 18.

investment data must be reported monthly). Such materials

were equally available to the Board in the General Pas-

senger Fare Investigation and were referred to by it in the

Order.

In connection with the Board’s stated excuse for failing

‘to perform its statutory duty to regulate fares, the Court’s

attention is respectfully called to other Board action rela-

tive to fares at the same time it was failing to decide the

General Passenger Fare Investigation. Following public

announcement of the Board’s tentative vote on sub-issues

in that proceeding,” the carriers filed new tariffs reflecting

application of the principles stated in the Press Release to

their own economic situations, which tariffs were suspended

by the Board subject to investigation of their lawfulness.

In ruling upon the fare increases thus proposed, the Board

said:

‘‘The Board has reviewed the fare proposals and

has considered the revenue needs of each carrier, as

well as the other statutory standards of rate-making,

the statements filed by various carriers in support of

their tariff proposals, and the competitive situation

within the industry, which requires, as a practical

matter, that fares for the same service be generally

the same upon competitive segments. In its review

of these tariff proposals the Board has employed the

regulatory standards with respect to which it

announced its tentative decision upon a number of

issues in the General Passenger Fare Investigation,

Docket 8008, and has considered the record in Docket

$008, as well as the latest reported data filed by the

carriers with the Board.

‘‘Upon consideration of these matters, we con-

clude that each of the carrier’s tariff proposals calls

for greater increases than appear warranted, and

that we should order an investigation thereof. * * *

78 CAB Press Release No. 60-10 (Apr. 29, 1960).

‘Based upon these Same considerations, the

Board has determined that it will permit tariffs

which provide a general fare increase of 2.5 percent

plus $1.00 per one-way ticket * * ¢, 9929 (Emphasis

supplied.)

The Board thus admitted that it had in its files sufficient

information upon which to determine whether existing fares

would be unjust and unreasonable in the future in the

General Passenger Fare I nvestigation. Five months earlier

it approved in the above-quoted Order a specific general

fare increase as just and reasonable. If the data were

inadequate at the later date, the Board could have followed

the suggestion of Board Member Minetti in his statement

concurring in the Order authorizing the 2.5 per cent plus

one dollar per ticket increase:

wine 7 my belief that resumed hearings in

the GPFI [General Passenger Fare Investigation],

for the purpose of a full exploration and analysis of

the economies of Operation in the turbine era, are

essential. Only with such information .can we intelli-

gently regulate rates and fares. We cannot, in the

interest of the industry and the public, continue to

proceed half-blind in this critica] area, ’’50

This Court will immediately recognize the incongruity

in the Board’s activities. In the General Passenger Fare

Investigation, the Board failed, because of alleged record

deficiencies, to make findings as to what fares will be just

and reasonable, even though it had before it a voluminous

record compiled at a cost of hundreds of thousands of

dollars. Concurrently, however, the Board was allowing, as

snistibtesitiatns

2° Order No. EB-15436 (Jun. 23, 1960).

8° Tbid., Minetti concurring.

not unjust or unreasonable, some fare increases on no

evidentiary record at all. Quite obviously the Board was

not helpless to carry out its statutory duty and, equally

obviously, the public and the carriers are entitled to findings

on a proper evidentiary record as to justness and reason-

ableness of fares.

When a regulatory agency considers the record before

it inadequate for decision, it has an affirmative duty to

investigate the deficiencies and to obtain such evidence as

may be necessary to fill in the gaps. It was apparently the

view of the Board, and of the Court below, however, that

the Board had no such duty in this proceeding. The error

of that view is apparent when compared with the following

statement by Circuit Judge Frank in reply to a contention

that the Shipping Board had no duty to inquire into unjust

or unfair rate discrimination:

‘This is a somewhat surprising contention, to be

contrasted with the following views of Commissioner

Aitchison of the Interstate Commerce Commission

concerning the obligations of administrative agen-

cics: ‘They are not merely expected to call balls and

strikes, or to weigh the evidence submitted by the

parties and let the scales tip as they will. The agency

does not do its duty when it merely decides upon a

poor or nonrepresentative record. As the sole repre-

sentative of the public, which is a third party in these

proceedings, the agency owes the duty to investigate

all the pertinent facts, and to see that they are

adduced when the parties have not put them in * * °,

The agency must always act upon the record made,

and if that is not sufficient, it should see the record

is supplemented before it acts. It must always pre-

serve the elements of fair play, but it is not fair

play for it to create an injustice, instead of remedy-

ing one, by omitting to inform itself and by acting

ignorantly when intelligent action is possible

* @ @ 924

“*24 Senate Subcommittee Hearings on S. 674, S. 675

and S. 918, April 29, 1941, pp. 465-466,"

Decided cases in the United States, without exception,

support the principle that a regulatory agency has an affrm-

ative duty to regulate and to secure additional evidence

when it considers the record before it inadequate. In NIRB

v. Radio & Television Broadcast Engineers, 364 U. S. 573

(1961), the Labor Board had, in accordance with its past

policy, declined to decide a jurisdictional dispute between

two unions. This Court reversed, holding that the Labor-

Management Relations Act of 1947 empowered and directed

the Board to decide such cases and that it must exercise its

jurisdiction.

Under the Longshoremen’s Act (44 Stat. 1424 as

amended ; 33 U.S.C. A. §§901 et seg.), the Deputy Commis-

sioner is empowered to determine whether compensation

is due an injured worker under the terms of that law, its

remedies being exclusive. The Deputy Commissioner has

an enforceable duty to make such determinations in claims

presented to him. Atlantic & G ulf Stevedores, Inc. v. Dono-

van, 274 F. 2d 794 (5th Cir. 1960).

An insurance commissioner given broad investigative

powers to determine compliance with the laws governing

insurance companies was held to have an obligation to con-

duct investigations where reasonable cause appears in

Bankers Life & Cas. Co. v. Cravey, 208 Ga. 682, 69 S. EB. 2q

87 (1952). The court said: }

“By conferring the power on the Commissioner,

the law, in equal measure, lays upon him the duty to

8% Tsbrandtsen Co. v. United States, 96 F. Supp. 883 (S. D. N. : *

1951) (special three-judge court), aff'd sub nom. Rederi_ v.

Isbrandtsen Co., 342 U. S. 950 (1952),

do so whenever there is an apparent need for infor-

mation @® @ @ 9931

Other cases from the State courts recognizing the duty

of an administrative agency to enforce the law committed

to its administration, even when it is necessary for it to

conduct a special investigation or to pursue one before it

beyond the evidence submitted by the parties, include Rich-

field Oil Corp. v. California Public Util. Comm’x,

Cal. 2d , 304 P. 2d 4, cert. denied sub nom. Southern

Counties Gas Co. v. Public Util. Comm’n, 364 U. S. 900

(1960) ; Anchor Coal Co. v. Public Service Comm’n, 123 W.

Va. 439, 12 S. E. 2d 406 (1941) ; Publix Cars, Inc. v. Yellow

Cab & Baggage Co., 130 Neb. 413, 265 N. W. 240 (1936);

Subscribers v. Speed Tel. Co., 34 P. U. R. 3d 32 (Mo. Pub.

Serv. Comm’n, Case No. 14341, May 2, 1960); Re Indiana-

polis Rys., Inc., 55 P. U. RB. (n. s.) 374 (Ind. Pub. Serv.

Comm’n, Case No. 16288, Aug. 29, 1944) ; Rocky Mountain

Motor Co. v. Pikes Peak Auto Livery, 38 P. U. R. (n. 8.) 255

_ (Colo. Pub. Util. Comm’n, Case No. 4835, Apr. 1, 1941).

The duty of an administrative agency to administer the

law which created it is especially important in the area of

public utility regulation, since a public utility is, by defini-

tion, a business affected with a public interest. In termi-

nating the General Passenger Fare Investigation without

any decision on the issue of just and reasonable fares, the

Civil Aeronautics Board evaded that duty, with a severely

deleterious effect upon the commercial air line industry.

One of the twelve respondents, overwhelmed by its operat-

ing losses, has already been merged into another as a

preferable alternative to bankruptcy.*”

The Board asserted that its neglect of duty was justified

by the fact that the air carriers were just beginning to inau-

31 208 Ga. at 686, 69 S. E. 2d at 90.

*? United-Capital Merger Case, Orders Nos. E-16605 (Apr. 3,

1961) and E-16880 (Jun. 1, 1961).

gurate service with jet aircraft, which put the industry

in a state of economic flux the Board could not compre-

hend, the transition thus making fare regulation impossible.

Petitioner asserts, on the other hand, that this time of

transition, with great demands upon the carriers for funds

with which to pay for the new jet aircraft, is the very time

when the industry and the public it serves are most entitled

to recognition of duty by the regulatory agency created to

encourage and develop ‘‘an air-transportation system prop-

erly adapted to the present and future needs of the foreign

and domestic commerce of the United States, of the Postal

Service, and of the national defense.’’38

Beyond the public interest which attaches to the case

at bar because of the nature of the industry involved, the

decision below sets a dangerous precedent for the future

action of administrative agencies. It should not be for the

agency to determine whether the law should be enforced;

that decision is reserved for the Congress which created

the agency and adopted the law. It agencies are to be

excused from administering the law because a particular

case contains difficult issues or arises in a time of economic

stress, the agency institution cannot survive. Public utility

rate regulation will revert to the legislative branch of gov-

ernment, where it was performed before this Court’s deci-

sion in Smyth v. Ames, 169 U. S. 466 (1898), or else fall

under the supervision of the courts as it did from the Smyth

case until the administrative agencies were given a freer

hand in FPC v. Hope Natural Gas Co., 320 U.S. 591 (1944).

The Civil Aeronautics Board is not the first agency to

encounter difficult problems in regulation. The decisions

in Phillips* and the CATCO Cases* have caused the Fed-

eral Power Commission to have to determine entirely new

33 Civil Aeronautics Act §2.

* Phillips Petroleum Co. v. Wisconsin, 347 U. S. 672 (1954).

35Atlantic Refining Co. v. Public Service Comm’n, 360 U. §.

378 (1959).

problems, perhaps the most difficult ones now extant in

administrative law. Nevertheless, the courts have required

that Commission to solve them without shortcuts,** and it

appears that cases have been decided and other investiga-

tions commenced which may untangle the problem of pro-

ducer regulation.”

The Civil Aeronautics Board also must be directed to

enforce the law committed to its supervision. It must not

be allowed to resign from its position of leadership in the

industry it regulates, especially at a time when leadership

is essential to this public service industry. Only a remand

of this case to the Board with instructions to decide it can

achieve that purpose.

The Board Had No Discretionary Authority to

Terminate the General Passenger Fare Investigation

Without Deciding It After the Examiner Had Ren-

dered An Initial Decision, the Parties Had Filed Excep-

tions and Briefs, and the Board Had Heard Oral

Argument.

At some point in an administrative proceeding the

agency becomes bound to render a decision. While it has

discretion, within the bounds of the governing statute, to

commence a proceeding or not, once it reaches the point of

no return, it must pursue the matter to a conclusion. The

36 City of Detroit v. Federal Power Comm’n, 97 U. S. App.

D. C. 260, 230 F. 2d 810 (1955), cert. dented, 352 U. S. 829 (1956) ;

Episcopal Theological Seminary v. Federal Power Comm’n, 106

U. S. App. D. C. 37, 269 F. 2d 228, cert. dented, sub nom. Pan

American Petroleum Corp. v. Federal Power Comm’n, 361 U. S.

895 (1959).

57 Phillips Petroleum Co, FPC (Opinion No. 338, Sept. 28,

1960); proceedings in Permian Basin Area Rate Investigation,

FPC Docket No. AR61-1, instituted Dec. 23, 1960.

exact point in a case when the agency becomes so com-

mitted appears not to have been determined, because all

the decided cases have reached at least the stage reached

by the Board in the case at bar. That point is the very

threshold of decision; the evidence is in, an Initial Decision

has been rendered, the parties have filed their exceptions

and briefs, and the agency has heard oral argument. At

least then, if not earlier, the parties are entitled as a

matter of right to a decision on the issues of law, fact,

and discretion presented. On this the cases are unanimous,

save for that of the Court below in the instant one.

Petitioner urged the Court below that the instant case

is ‘ton all fours’? with that Court’s decision rendered

three months before in Minneapolis Gas Co.v. FPC, U.S.

App. D.C. 29 U.S. Law Week 2415 (Mar. 14, 1961) (No,

15452, Mar. 9, 1961 ). In that case a natural gas company

subject to the jurisdiction of the Federal Power Commis-

sion had filed a rate increase which the PPC had suspended

subject to investigation. The case proceeded te hearing

and in due course reached the same point which was

reached in the General Passenger Fare Investigation; that

is, oral argument had been heard following submission of

briefs in support of exceptions to an Examiner's Initial

Decision. In its final order the FPC ruled that there no

longer appeared any need for the investigation and termi-

nated it. The result of the termination was to allow the

Increased rates to beconie permanent future rates. The

Minneapolis Gas Company, a loeal distribution company,

and other representatives of consumer Interests appealed

from the order terminating, without deciding, the investi-

gation. On appeal, the Court of Appeals for the District

of Columbia Circuit ruled that the case had proceeded

too far for the FEC to have -diseretion to terminate it with-

out a decision on the only issue in it, whether rates would

be just and reasonable. The Court said:

‘‘We think the Commission cannot terminate a

proceeding after it has actually conducted a hear-

ing to the point of receiving an Examiner’s initial

decision, without rendering a decision upon the issue

presented, which is the lawfulness of the proposed

rates. We do not have before us, and therefore do

not decide, whether the Commission may terminate

a proceeding, once entered upon, at some point prior

to the conclusion of the evidentiary hearing. A

change of mind, midstream so to speak, may or may

not be permissible. But we are of the opinion that

the Commission, having received all the evidence the

parties wish to present, and having before it an —

Examiner’s findings, conclusion and decision, can-

not at that point change its mind, wiping out the

hearing as though it had never occurred, and in

effect decide that it will not enter upon a hearing.

The provisions of Section 4(e) [of the Natural Gas

Act] seem to us to require that, if a hearing is held,

all the pertinent evidence presented, and an initial

decision rendered, the Commission is required either

to let the initial decision stand as its decision or itself

to render a decision.

‘‘The substance of the difference between a ter-

mination of a proceeding, which is equivalent to a

nunc pro tunc determination not to embark upon the

proceeding, and a decision rendered upon the record

is that the former lies within the broad discretion

of the Commission, and so is not reviewable except

for abuse, whereas the latter is circumscribed with

requirements as to substantial basis and reasonable

progress from that basis to the conclusion. The dif-

ference is not a mere technicality. It seems to us

that the statute requires the Commission to make

an early choice between its discretion and the bind-

ing necessities of a decisional process. It cannot, we

think, pursue one course almost to the end and then

protect its last step by reverting to its discretionary

power. This may not be too important in *he case

at bar as a lone specific case, but as a general rule

applicable to administrative proceedings generally,

which it would be if we laid it down as a rule for this

case, it would be a major error of considerable

importance. ’”**

The Court below attempted to distinguish the Minne-

apolis Gas case from the case at bar. At pages 5-6 of the

slip-sheet opinion (pages 39-40 of Appendix A to this

Petition) the Court said:

‘‘In a narrow procedural sense the point reached

was similar to that reached in Minneapolis Gas, but

the differences in the two proceedings render the

procedural point reached in the two cases of quite

different significance. This case was a general inves-

tigation of the general level of the passenger fares

of all the trunkline carricrs. It was not an inquiry

into the justness and reasonableness of increases in

rates set forth in a particular new tariff filed by a

carrier. Moreover, as the investigation progressed

changes in the airline carrier industry were occur-

ring in such important and relevant respects—par-

ticularly, the transition to turbine-engine craft—that

the Board felt unable at this’ time to accomplish on

the available data what initially it had set out to do.”’

The Court below thus suggested two differences between

the General Passenger Fare Investigation and the Min-

geapolis Gas case: first, the air line case involved the exist-

ing tariffs of twelve carriers rather than the new tariff of

one carrier, and second, in the air line case the regulatory

agency pleaded lack of ability to do the job at hand as its

38 Slip-sheet opinion pp. 6-7.

justification, whereas in the gas case the agency made an

affirmative finding that under the circumstances surround-

ing the industry under its jurisdiction there was no longer

any need to investigate that particular tariff. The alleged

distinctions will be discussed in order.

Essentially, the first distinction made by the Court

below amounts to this. If the investigation is precipitated

by the filing of a new tariff by the utility and is instituted

under Section 4(e) of the Natural Gas Act (52 Stat. 822;

15 U. S. C. A. §717c) or Section 1002(g) of the Civil Aero-

nautics Act (52 Stat. 1018; 49 U.S. C. A. §642), then repre-

sentatives of the public are entitled to a decision. On the

other hand, if the investigation is instituted by the agency

- under Section 5(a) of the Natural Gas Act (52 Stat. 823;

15 U. S. C. A. §$717d) or Section 1002(d) of the Civil

Aeronautics Act (which investigation must, a fortiori, be

of an existing tariff and whether it shouid apply in the

future), then the utility (or the public) is not entitled to a

decision. That cannot be the law, because it is based upon

the suggestion that the General Passenger Fare Investi-

gation was merely an exercise to find out how much money

the air lines were making and that no specific far-s or

tariffs were at issue. The Board’s Order defining the

scope of the investigation negates that interpretation of

the Board’s purpose:

‘“WhA&t led to this investigation was our concern,

based on the level of earnings reported by most of

the respondents, over the possibility that the public

was being subjected to excessive charges, overall, for

passenger transportation. The purpose of this inves-

tigation is to explore into the level of earnings for

each of the respondents to determine whether, in the

light of such earning levels, the public is, in general,

being charged too much (or too little); and, if so,

to take such across-the-board action as would bring

the general level of fares and charges in line with the

level of earnings determined to be reasonable.’’*

The Board left nothing to the imagination. What it had

in mind was a finding that every fare named in every |

passenger tariff of every carrier was unjustly and unrea-

sonably high (or low) and should be reduced: (or increased)

by a specific amount. The carriers’ tariffs could not have

been any more directly in issue than they were. No dis-

tinction may be drawn, either, from the fact that all the

fares in each tariff were subject to across-the-board adjust-

ment. The tariff of a gas pipeline company contains many

different rates for its different classes of service, which are

ordinarily adjusted across-the-board in proceedings under

both Section 4(e) and Section 5(a) of the Natural Gas Act.

Thus this basis for distinguishing the General Passenger

Fare Investigation from the Jinneapolis Gas case is not

well taken. (Nor would there be any real distinction in the

fact that one case involved 12 respondents and the other

one respondent.) )

The second stated basis for distinction, that the Board

was confounded by the changes taking place in the industry,

rests upon no sounder ground than a plea that the Civil

Aeronautics Act (and hence the Federal Aviation Act of

1958, since the two are identical in this respect) provides

an unworkable plan of regulation. If an administrative

agency cannot regulate air line fares under the flexible

standard of ‘‘just and reasonable,’’ how can they be regu-

lated at all? Certainly the slower processes of the legis-

lative and judicial branches of government proved to be

ill suited for rate regulation. If the Civil Aeronautics

Board cannot do it, then no one can. The public (and the

89 J. A. 326a-327a.

carriers) are entitled at least to an attempt at regulation.

They cannot be protected by alleged administrative con-

fusion or impotency.

Comparison of the reason given by the Civil Aeronaatics

Board for its refusal to decide this case with that given by

the Federal Power Commission in Minneapolis Gas empha-

sizes the weakness of this alleged distinction. In Minne-

apolis Gas the Federal Power Commission made positive

findings that:

«s* * © we are of the opinion that the rates fall

within the zone of reasonableness and that the pro-

ceedings should be terminated leaving the proposed

rates in effect.

ee _—e

‘‘Taking into consideration all of these factors,

the low price of this gas in relation to other prices

in the area, the small increase requested, the fact

that it is the only increase provided for in the con-

tract dufing its 20-year term, the evidence of |

increased costs to Shamrock since the contract was

executed and the need for still further investments

in the future we are of the opinion that the rates

of Shamrock are just and reasonable to the consum-

ing public, and that further proceedings are unneces-

sary.

‘*Tt is necessary and appropriate to carry out the

provisions of the Natural Gas Act to terminate the

above-ertitled proceedings, to deny the motion for

oral argument and to deny the alternative request

to reopen the proceedings.’’ (Quoted at pages 3-4

of the slip-sheet opinion of the Court of Appeals.)

The FPC order thus made it clear that subsequent informa-

tion acquired by it concerning the prices of gas in the same

field, together with the evidence of record, demonstrated

that it had improvidently commenced the investigation and

that it would be in the public interest for it to spend its

regulatory time and effort in more fruitful proceedings.

However, that manner of handling the case cut off the

right of appeal of parties representing consumer interests,

and as a result, the case was sent back to the FPC. for

decision.

In the case at bar, the Civil Aeronautics Board decided

sub-issues in the case, including what was a fair and reason-

able level of earnings. I1t further found that the carriers

had not achieved that level of earnings in the preceding

four years,*° and its other Orders and Dress Releases relat-

ing to fares all indicated a realization that they would not

achieve it in the foreseeable future. Certainly in such a

circumstance as this it had at least as great a duty to follow

through to a decision on just and reasonable rates as the

FPC was held to have in Minneapolis Gas. To use the

Board’s own phraseology of what should be done, it should

be directed ‘‘to take such across-the-board action as would

bring the general level of fares and charges in line with the

level of earnings determined to be reasonable.’’*

Discussion under this heading has, up to this point, been

limited to the decision of the Court below in Minneapolis

Gas vis-a-vis its decision in the case ai bar. However, other

cases Cecided by it and by this Court portended the decision

which had to be made in Minneapolis and which should be

made in the case at bar. In Greensboro-High Point Airport

Authority v. Civil Acronautics Board, 97 U. 8. App. D. C.

358, 231 F. 2d 517 (1956), the Board had failed to decide

one of the issues in the case. The Court of Appeals

remanded the case to the Board to decide that issue, either

upon the record already made, or after receiving such addi-

tional evidence as the Board might find necessary.

40 J. A. 200.

41 J. A. 327a.

Decisions of this Court in two connected cases also

require decision of the issues in administrative proceed-

ings. Louisville &é N. R. R.v. Behlmer, 175 U.S. 648 (1900),

and East T. V. d G. Ry. v. Interstate Commerce Comm’n,

181 U. S. 1 (1901), arose from the complaints of certain

cities and state regulatory agencies to the Interstate Com-

merce Commission that the defendant railroads were vinlat-

ing Sections 1 (just and reasonable rates), 3 (preference,

prejudice and discrimination) and 4 (long and short haul

charges) of the Interstate Commerce Act (49 U.S. C. §$§1, 3,

& 4). The ICC ruled in favor of the complainants on the

Section 4 issue and directed the carriers to file rates which

would give the shorter haul the benefit of the lower rate.

The railroads refused to file such rates, and the Commis-

sion obtained an enforcement order in the Circuit Court.

On appeal, the Circuit Court of Appeals held that the

Commission had interpreted Section 4 incorrectly and that

the carriers had asserted a valid defense in the ICC hearing.

However, the court further ruled that the rates were pat-

ently in violation of Section 3 and decreed that the Com-

mission’s order should be enforced for that reason. This

Court held that both the ICC and the Circuit Court of

Appeals had incorrectly construed the law and that the rail-

roads had presented facts which would constitute a defense

to both the Section 3 and the Section 4 charges. Neverthe-

less, said this Court, the-issue of justness and reasonable-

ness had not beer ruled upon, and the parties were entitled

to a decision. This Court instructed the Cireuit Court

to remand the cases to the Commission for decision of that

issue upon the evidence already before it, or upon such

further evidence as it might receive.

The decision of the Court below in the case at bar can-

not be reconciled in principle with its own prior decisions

in the Minneapolis Gas and Greensboro cases or with the

: 33

decisions of this Court in Behlmer and East T.V. & G. Ry.

That conflict, and the manifest error of the Court of

Appeals in this case, require decision by this Court in the

interest of justice and clarity of the law.

Conclusion.

This case is deserving of treatment by this Court. The

economic health of the commercial air line industry is a

matter of broad, urgent public interest. Presently, its

economic status is chaotic as a result of the resignation of

the Civil Aeronanties Board from its responsibility for

regulation, a resignation sanctioned by the decision of the

Court of Appeals. There is no other way for the air lines to

realize stable earnings at.the level found reasonable by

the Board than by a mandate from this Court to that agency

to respond to its obligation to assure just and reasonable

air fares.

The public also has an interest in just and reasonable

air fares, an interest growing not merely out of the fact

that it should not be overcharged, but also out of the car-

riers’ need for adequate fares tosassure the proper develop-

ment of the nation’s air transportation system. The Board

and the Court below are in the untenable position of defend-

ing a situation where no one knows whether, and no one

has found that, existing fares are just and reasonable

despite five years of expensive litigation. The public

deserves better treatment. It may lawfully demand a deci-

sion from the Board.

Moreover, the decision below is contrary to the decision

of the same Court in a ease decided only three months

earlier. This conflict in the case law of the District of

Columbia Circuit can be quite serious. Most of the Federal

statutes creating administrative agencies provide for judi-

cial review in that Circuit. Neither litigant nor agency can

know, now, whether the agency may just terminate a pro-

ceeding before it, cutting off all rights to judicial review,

or whether it must, after reaching the point of decision,

issue an order conforming to the requirements of Section

8(b) of the Administrative Procedure Act (60 Stat. 242; 5

U. S. C. §1007) that an agency decision shall ‘‘include a

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

reasons or basis therefor, upon all material issues of fact,

law, or discretion presented on the record; and (2) the

appropriate rule, order, sanction, relief, or denial thereof,’’

and also enabling aggrieved parties to pursue their rights

in court.

For these reasons Petitioner urges this Court to issue a

writ of certiorari to the United States Court of Appeals

for the District of Columbia Circuit to the end that this

Court may correct the error of the decision of the ‘Court

below.

Respectfully submitted,

/8/ EK. SmytHe GAMBRELL

E. Smytue GAMBRELL

/s/ Hanoxp L. Russew

Harotp L. Russeuu

Attorneys for Petitioner

825 Citizens & Southern Nat’l Bank Bldg.

Atlanta 3, Georgia

GAMBRELL, HarLan, Russett, Moye & Ricnarpson

THeEoporeE M. Fores, Jr.

Atlanta, Georgia

Of counsel

September 29, 1961

Appendix A.

UNITED STATES COURT OF APPEALS

For THE District or CoLtumsBia Crecuitr

No. 16181.

Eastern Arr Lives, Ivc.,

Petitioner,

Crvm Arronavutics Boarp,

Respondent,

American Arrunes, Inc.,

Branirr Airways, Inc.,

ContTINENTAL Arr Lryzs, INc.,

Unrtrep Arm Liygs, Inc.,

Western Ar Lives, Inc.,

Intervenors.

ON APEAL FROM AN ORDER OF THE

CIVIL AERONAUTICS BOARD.

Decided June 29, 1961.

Mr. Harotp L. Russrtz, with whom Mr. E. Smytue .

GamMBRELL was on the brief, for petitioner.

Mr. O. D. Ozment, Associate General Counsel, Litiga-

tion, Civil Aeronautics Board, Jonn H. Wanner, General

Counsel, Civil Aeronautics Board, JosepH B. Gotpman,

Deputy General Counsel, Civil Aeronautics Board, Wm.1am

F. Becker, Attorney, Civil Aeronautics Board, RicHarp A.

Sotomon and Rospert AtexanpeR Hammonp, III, Attorneys,

Department of Justice, were on the brief, for respondent.

Mr. Franxun M. Stone, General Counsel, Civil Aeronau-

tics Board at the time the record was filed, also entered an

appearance for respondent.

Messrs. Howarp C. Westwoop, ALFrep V. J. PratHer

and Wmu1am H. Aten were on the brief for intervenor,

American Airlines, Inc.

Mr. B. Howetti Him was on the brief for intervenor,

Braniff Airways, Ince.

Mr. C. Epwarp Leasure was on the brief for intervenor,

Continental Air Lines, Ince.

Mr. James Francis Remuy was on the brief for inter-

venor, United Air Lines, Inc.

Mr. Joun W. Simpson was on the brief for intervenor,

Western Air Lines, Ince.

Before PretryMaN, Bazevton and Fany, Circuit Judges.

Fany, Circuit Judge: Eastern Air Lines, Incorporated,

petitions this court to review an order of the Civil Acro-

nautics Board of November 25, 1960.1. The order termi-

nated a Board proceeding known as the General Pas-

senger Fare Investigation, which the Board had initiated

May 10, 1956, on its own motion for the purpose, as stated

by the Board, of determining

[Whether the fares and charges demanded, col-

lected, and received by each of the respondents, indi-

vidually or jointly with one or more of the other

respondents, for the transportation of passengers

within the continental United. States, excluding

Alaska, are generally unjust or unreasonable, and if

found to be unjust or unreasonable, to determine

what over-all percentage changes in the fares or

charges of the respondents collectively or individu-

ally should be permitted or required.”

1 CAB, Order E-16068, Nov. 25, 1960.

2 CAB, Order E-10279, May 10, 1956.

CD heed

The scope of the possible orders to be issued on the basis

of the investigation was limited to flat percentage changes

in the fares of particular air carriers or groups of car-

riers. The twelve domestic trunkline carriers, of which

Eastern is one, were tnade respondents. Other parties,

including the United States through the General Services

Administration, were made intervenors’ After a lengthy

hearing and other very extensive and expensive proceed-

ings, including Initial Decision by the Examiner, exeep-

tions thereto, briefs and oral arguments before the Board,

the Board entered the order complained of without deter-

mining the justness and reasonableness of existing trunk-

line passenger fares or the fares that would be just and

reasonable. What the Board did is summarized in the

following portion of its opinion: ‘

Upon consideration of the record, the contentions of

the parties, and Form 41 data for recent years, we

conclude that the record before us is inadequate to

permit the fixing of the fare level. However, the

record does permit us to formulate significant stand-

ards which will contribute to the reculation of fares.

Our difficulty in attempting to prescribe the just

and reasonable fare level from the present record is

very basic. Neither the carriers nor Bureau Counsel

have submitted forecasts of operations, revenues,

and expenses which we find are reliable indicia of

what future results will be. In addition, there is an

absence of data in the record presenting the expe-

rience of operations with the new turbine-engine

aircraft which are becoming an ever-larger clement

of the industry’s operations. In these circumstances,

it would be futile to attempt to prescribe the appro-

priate fare level on the basis of the record herein.‘

As indicated from the foregoing the investigation was

not entirely barren. The Board discussed at considerable

8 CAB, Order E-10488, July 27, 1956.

* Order E-16068, at 3.

length, and made findings and conclusions respecting, to

use its own language, ‘‘standards . .. for passenger fare

regulation in four basic areas: profit element, rate base,

depreciation, and taxes.’* The Board further stated:

‘‘These standards will be used in assessing future fare

proposals of the carriers, and in assisting the Board in

evaluating the reported results of the carriers so that

the Board may determine when action on its own motion

should be taken.’”

Kastern’s petition for review, however, is not directed

to these matters which were determined by the Board,

but, as we have said, to its failure to decide the question

of justness »ud reasonableness of fares, a principal if not

the chief purdose for which the investigation had been

instituted. Eastern seeks remand to the Board with direc-

tions to decide the case either upon the present record

or after receiving additional evidence, contending that

the Board erred in not performing its duty to regulate

rates. Eastern points out that the Board has clearly

recognized this duty, and that the Examiner’s Initial Deci-

sion acknowledges that ‘‘The Board must fix reasonable

rates in proceedings raising the issue of such rates 80

long as the Act requires it to do so.”’

We agree the Civil Aeronautics Act imposes the stated

duty upon the Board.” Our recent decision in Minneapolis

Gas Co. v. Federal Power Comm’n, ........ U. S. App. D. C.

consid an F. 2d ........, upon which Eastern heavily relies,

is an instance where this court required the Federal Power

Commission, having a comparable duty under the Natural

Gas Act, to perform its duty by deciding a particular

case in the circumstances there present. The Power Com-

mission by order under section 4(e)® of the Act had entered

upon a hearing concerning the lawfulness of a new schedule

5 Td. at 4.

¢ Tbid.

TSee §404, 52 Stat. 993 (1938), as amended, 49 U. S. C. §1374

(1958) ; §1002, 52 Stat. 1018 (1938), as amended, 49 U. 8. C.

§1482 (1958).

® 52 Stat. 823 (1938), 15 U. S. C. §717¢(e) (1958).

proposing increased rates filed with the Commission by a

producer of natural gas. The Commission suspended the

new schedule pending a hearing and decision. After a hear-

ing the Examiner decided that the company had failed to

sustain its burden of proof. The Commission, upon excep-

tions made, then terminated the proceedings, reciting in its

order that the result was to leave the proposed rates in

effect. While the order also recited that the rates were

jus: and reasonable, this court concluded that in terminat-

ing the proceedings the Power Commission ‘‘did not render

a decision’’ and that it should have done so. While there

are similarities between that case and this, the dissimilari-

ties lead us to a different result. There the hearing was

directed to a particular new schedule of rates filed by a

producer. A discretion resided in the Commission to permit

the new tariff to go inio effect or to enter upon a section

4(e) hearing as to the lav/fulness of the increases. Having

exercised its discretion tc do the latter, and having pursued

the course embarked upon through hearing, Examiner’s

decision and Board hearin on exceptions thereto, and thns

having come to the point of decision, this court held that to

terminate the proceedings and fail to decide the case was

inconsistent with the Commission’s obligation cither to let

the Initial Decision of the Examiner stand or itself to

render a decision ; that is, that the point of no retarn in the

exercise of its discretion under section 4(e) had heen passed.

In the end our question is whether in the present pro-

ceedings the Board reached a point where it could not law-

fully exercise a discretion to terminate the proceedings. In

a narrow procedural sense the point reacked was similar to

that reached in Minneapolis Gas, but the differences in the

two proceedings render the procedural point reached in the

two cases of quite different significance. This case was a

general investigation of the general level of the passenger

fares of all the trunkline carriers. It was not an inquiry

into the justness and reasonableness of increases in rates

set forth in a particular new tariff filed by a carrier. More-

over, as the investigation progressed changes in the airline

carrier industry were occurring in such important and rele-

40 :

vant respects—particularly, the transition to turbine-engine

cratt—that the Board felt unable at this time to accomplish

on the available data what initially it had set out to do.

The duty of the Board to prevent unjust and unreason-

able rates, and to establish those that are lawful, does not

require that the duty be performed as a result of this par-

ticular investigation. We cannot say that the Board deci-

sion not to decide the question of justness or reasonableness

of the general level of trunkline fares requires this court

to compel the Board to do so on this record or as it might be

enlarged at this time, especially in view of the changes now

under way in the industry. The Board’s duty is to be per-

formed in the context of particular proceedings. It is not

mandatory in this one.®

While we neither commend nor condemn the Board for

abandoning a principal objective of its investigation, after

having subjected Eastern to a very substantial outlay of

time and money, we are not convinced, as we were convinced

in the circumstances presented by Minneapolis Gas, that the

Board lost all discretion as to the course the investigation

should take.

We have considered the Board’s contention that, in any

event, Eastern’s petition for review should be dismissed

because it is not adversely affected by the order. The statu-

tory basis for review is that one must disclose ‘‘a substan-

tial interest’’ in the order.’ Our outline of the proceedings

in this opinion, huwever brief, we think has sufficiently

demonstrated that Eastern’s interest in the order is sub-

stantial. Its claim of a right to obtain in the terminated

proceedings a more definite decision as to its passenger

rates, though a claim we do not enforce on the merits, is by

ne means so insubstantial that we are not required to con-

sider it.

Affirmed.

® Had the Board determined that existing rates were unjust or

unreasonable the case would be different. Eastern does not contend

that its rates are unjust or unreasonable.

1° §1006, 72 Stat. 795 (1958), 49 U. S. C. §1486(a) (1958).

Appendix B.

Applicable Provisions of the Civil Aeronautics Act of 1938.

Sec, 2 [52 Stat. O80, 49 UT. S.C) AL 4027 Tn the exer-

cise and performance of its powers and duties under this

Act. the Board shall consider the following, among other

thines. as being in the public interest, and in accordance

with the public convenience and necessity—

(n) The encouragement and development of an air-

transportation system properly adapted to the present and

future needs of the foreign and domestic commerce of the

United States. of the Postal Service, and of the national

defense ; ?

(hb) The regulation of air transportation in such manner

as to recoenize and preserve the inherent advantages of,

assure the highest degree of safety in, and foster sound

economic conditions in, such transportation, and to improve

the relations between, and coordinate transportation by,

air carriers;

cient service by air carriers at reasonable charves, without

unjust discriminations, undue preferences or advantages,

or unfair or destructive competitive practices ;

(1) Competition to the extent necessary to assure the

sound development of an air-transportation system prop-

erly adapted to the needs of the foreign and domestie com-

merce of the United States, of the Postal Service, and of

the national defense ;

(e) The regulation of air commerce in such manner as

to best promote its development and safety; and

(f) The encouragement and development of civil aero-

nautics.

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

Board is empowered to perform such acts, to conduct such

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

and amend such general or special rules, regulations, and

procedure, pursuant to and consistent with the provisions

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

provisions and to exercise and perform its powers and

duties under this Act.

Src. 403. [52 Stat. 992, as amended by 70 Stat. 784,

49 U.S. C. A. 483] (a) Every air carrier and every foreign

air carrier shall file with the Board, and print, and keep

open to public inspection, tariffs showing all rates, fares,

and charges for air transportation between points served

‘by it, and between points served by it and points served by

any other air carrier or foreign air carrier when through

service and through rates shall have been established,

and showing to the extent required by regulations of the

Board, all classifications, rules, regulations, practices, and

services in connection with such air transportation. Tariffs

shall be filed, posted, and published in such form and man-

ner, and shall contain such information, as the Board shall

by regulation prescribe; and the Board is empowered to

reject any tariff so filed which is not consistent with this

section and such regulations. Any tariff so rejected shall

be void. * * °

(b) No air carrier or foreign air carrier shall charge |

or demand or collect or receive a greater or less or different

compensation for air transportation, or for any service in

coxnection therewith, than the rates, fares, and charges

specified in its currently effective tariffs; and no air carrier

or foreign air carrier shall, in any manner or by any device,

directly or indirectly, or through any agent or broker, or

otherwise, refund or remit any portion of the rates, fares,

or charges so specified, or extend to any person any privi-

leges or facilities, with respect to matters required by the

Board to be specified in such tariffs, except those specified

therein. * * °

or any classification, rule, regulation, or practice affecting

such rate, fare, or charge, or the value of the service there-

under, specified in any effective tariff of any air carrier or

foreign air carrier, except after thirty days’ notice of the

proposed change filed, posted, and published in accordance

with subsection (a) of this section. Such notice shall plainly

state the change proposed to be made and the time such

change will take effect. The Board may in the public inter-

est, by regulation or otherwise, allow such change upon

notice less than that herein specified, or modify the require-

ments of this section with respect to filing and posting of

tariffs, either in particular instances or by general order

applicable to special or peculiar circumstances or conditions.

(d) Every air carrier or foreign air carrier shall keep

currently on file with the Board, if the Board so requires,

the established divisions of al] joint rates, fares, and

charges for air transportation in which such air carrier

or foreign air carrier participates.

Sec. 404. [52 Stat. 993, 49 U.S. C. A. 484] (a) It shall

be the duty of every air carrier tv provide and furnish inter-

state and’overseas air transportation, as authorized by its

certificate, upon reasonable re.,uest therefor and to provide

reasonable through service in such air transportation in

connection with other air carriers; to provide safe and ade-

quate service, equipment, and facilities ia 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 ease of such joint rates, fares, and charges, to

establish 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. :

Sec. 1002. [52 Stat. 1018, 49 U.S. C. A. 642] (a) Any

person may file with the Board a complaint in writing with

respect to anything done or omitted to be done by any

person in contravention of any provision of this Act, or of -

any requirement established pursuant thereto. If the per-

son complained against shall not satisfy the complaint and

there shall appear to be any reasonable ground for investi-

gating the complaint, it sball be the duty of the Board to

investigate the matters complained of. Whenever the Board

is of the opinion that any complaint does noi state facts

which warrant an investigation or action on its part, it

may dismiss such complaint without hearing.

(b) The Board is empowered at any time to institute an

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

anv matter or thing concerning which complaint is author-

ized to be made to or before the Board 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 enforce-

ment of any of the provisions of this Act. The Board shall

have the same power to proceed with any investigation

instituted on its own motion as though it had been appealed

to by complaint.

investigation instituted upon complaint or upon its own

initiative, that any person has failed to comply with any

provision of this Act or any requirement established pur-

suant thereto, the Board shall issue an appropriate order

to compel such person to comply therewith.

(1) Whenever, after notice and hearing, upon complaint,

or upon its own initiative, the Beard shall be of the opinion

that any individual or joint rate, fare, or charge demanded,

charged, collected or received by any air ca-rier for inter-

state or overseas air transportation, or any classification,

rule, regulation, or practice affecting such rate, fare, or

charge, or the value of the service thereunder, is or will be

unjust or unreasonable, or unjustly discriminatory, or

unduly preferertial, or unduly prejudicial, the Board shall

determine and prescribe the lawful rate, fare, or charge (or

the maximum or minimum, or the maximum and minimum

thereof) thereafter to be demanded, charged, collected, or

received, or the lawful classification, rule, regulation, or

practice thereafter to be made effective: Provided, That as

to rates, fares, and charges for overseas air transportation,

the Board shall determine and prescribe ouly a just and

reasonuble maximum or minimum or maximum and mim-

mum rate, fare, or charge.

(e) In exercising and performing it. powers and duties

with respect to the determination of rates for the carriage

of persons or property, the Board shall take inte considera-

tion, among other factors—

(1) The effeet of sneh rates upon the movement

of traffic;

(2) The need in the public interst of adeqnate

and efficient transportation of persons and property

by air carriers at the lowest cost cons'stent with the

furnishing of such service:

(3) Such standards respecting the character and

quality of service te be rendered by air carriers as

may be prescribed by or pursnant te law;

(4) The inherent advantages of transportation

by aircraft: and

(5) The need of each air carrier for revenue suf-

ficient to enable such air carrier, under honest, eco-

nomical, and efficient management, to provide ade-

quate and efficient air carrier service,

(¢) Whenever any air carrier shail file with the Board

a tariff stating a new individual or joint (between air car-

riers) rate, fare, or charge for interstate or overseas air

transportation or any classification, rule. regenlation, or

practice affecting such rate, fare, or charge, or the value of

the service thereunder, the Board is empowered, upon com-

plaint or upon its own initiative, at once, and, if it so orders,

without answer or other formal pleading by the air carrier,

but upon reasonable notice, to enter upon a hearing con

cerning the lawfulness of such rate, fare. or charge, or such

classification, rule, regulation, or practice: and pending

such hearing and the decision thereon, the Board, by filing

with such tariff, and delivering to the air carrier affected

thereby, a statement in writing of its reasons for such

suspension, May suspend the operation of such tariff and

defer the use of such rate, fare, or charge, or such classifi-

cation, rule, regulation, or practice, for a period of ninety

days, and, if the proceeding has not been concluded and a

final order made within such period, the Board may, from

time to time, extend the period of suspension, but not for a

longer period in the aggregate than one hundred and eighty

days beyond the time when such tariff would otherwise go

into effect; and, after hearing, whether completed before or

-after the rate, fare, charge, classification, rule, regulation,

_or practice goes into effect. the Board may make such order

with reference thereto as would be proper in a proceeding

instituted after such rate, fare, charge, classification, rule,

regulation, or practice had become effective. If the pro-

ceeding has not been concluded and an order made within

the period of suspension, the proposed rate, fare, charge,

classification, rule, regulation, or practice skall go into

effect at the end of such period: Provided, That this sub-

section shall not apply to any initial tariff filed by any air

carrier.

Sec. 1006. [52 Stat. 1024, as amended by 63 Stat. 107,

49 U.S. C. A. 646] (a) Any order, affirmative ur negative,

issued by the Board under this Act, except any order in

respect of anv foreign air carrier subject to the approval

of the President as provided in section 801 of this Act, shall

be subject to review by the courts of appeals of the United

States or the United States Court of Appeais for the Dis-

trict 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.

(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.

Applicable Provisions of the Administrative Procedure Act.

Sec. 8. [60 Stat. 242;5 U.S. C. 1007]

(b) Scspmittraus anp Dectstons.—Prior to each recom-

mended, initial, or tentative decision, or decision upon

agency review of the decision of subordinate officers the

parties shall be afforded a reasonable opportunity to sub-

mit for the consideration of the officers participating in suck

decisions (1) proposed findings and conclusions, or (2)

exceptions to the decisions or recomended decisions of

subordinate officers or to tentative agency decisions, and

(3) supporting reasons for such exceptions or proposed

findings or conclusions. The record shall show the ruling

upon each such finding, conclusion, or exception presented.

All decisions (including 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 upon the record; and (2)

the appropriate rule, order, sanction, relief, or denial

thereof.

This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.