Source: https://supreme.justia.com/cases/federal/us/367/316/case.html
Timestamp: 2018-05-22 15:53:42
Document Index: 419011947

Matched Legal Cases: ['§ 401', '§ 1371', '§ 401', '§ 10', '§ 401', '§ 308', '§ 401', '§ 401', '§ 401']

CAB v. Delta Air Lines, Inc., (full text) :: 367 U.S. 316 (1961) :: Justia US Supreme Court Center
Justia › US Law › US Case Law › US Supreme Court › Volume 367 › CAB v. Delta Air Lines, Inc. › Case
CAB v. Delta Air Lines, Inc.,
367 U.S. 316 (1961)
280 F.2d 43 affirmed.
This case concerns the power of the Civil Aeronautics Board to alter a certificate of public convenience and necessity, granted to respondent Delta Air Lines, after that certificate had become effective under § 401(f) of the Federal Aviation Act of 1958. 72 Stat. 731, 755, 49 U.S.C. § 1371(f). [Footnote 1] The administrative proceedings from which the present dispute arises date back to May, 1955, and involve consideration by the Board of a number of applications for new service between cities located in an area extending from the Great Lakes to Florida. The Board divided the proceedings into two general categories, consolidating the applications for long haul service in the
The Board's order issued on September 30, 1958, and it specified that Delta's certificate was to become effective on November 29, 1958, unless postponed by the Board prior to that date. Shortly thereafter, within time limits set by the Board, [Footnote 2] numerous petitions for reconsideration
On review in the Court of Appeals for the Second Circuit, however,
Whenever a question concerning administrative, or judicial, reconsideration arises, two opposing policies immediately demand recognition: the desirability of finality, on the one hand, and the public interest in reaching that, ultimately, appears to be the right result, on the other. [Footnote 5] Since these policies are in tension, it is necessary
(Emphasis added.) This language represents to us an attempt by Congress to give the Board comprehensive instructions to meet all contingencies and the Board's duty is to follow these instructions, [Footnote 7] particularly in light of the fact that obedience thereto raises no substantial obstacles. It is true, of course, that statutory language necessarily derives much of its meaning from the surrounding circumstances. However, we think that, while there is no legislative history
directly on point, the background of the Aviation Act strongly supports what we believe to be the plain meaning of § 401(f) and (g). It is clear from the statements of the supporters of the predecessor of the Aviation Act -- the Civil Aeronautics Act of 1938 -- that Congress was vitally concerned with what has been called "security of route" -- i.e., providing assurance to the carrier that its investment in operations would be protected insofar as reasonably possible. [Footnote 8] And there is no other explanation but that Congress delimited the Board's power to reconsider its awards with precisely this factor in mind; hence the language that a certificate "shall be effective . . .
However, petitioners argue that there is an implied exception to the statutory mandate when the Board, pursuant to a petition for reconsideration filed before the certificate's effective date, makes a statement that the certificate is subject to later amendment after further deliberation upon the petition. Petitioners admit that there is no express statutory authority for the Board to entertain
The appeal of this argument comes, in the main, from the general notion that an administrative order is not "final," for the purposes of judicial review, until outstanding petitions for reconsideration have been disposed of. See, e.g., Outland v. Civil Aeronautics Board, 109 U.S.App.D.C. 90, 284 F.2d 224; Braniff Airways Inc. v. Civil Aeronautics Board, 79 U.S.App.D.C. 341, 147 F.2d 152. Once it is established that the certificate is not "final" for one purpose, the argument runs, then it is logical to assume that the certificate lacks "finality" for another. The difficulties with this line of reasoning, however, are many. First, insofar as it is bottomed on cases such as Outland and Braniff, the argument relies on holdings that were never made. The Courts of Appeals in these cases decided only that petitions for review were timely if filed in time from the date on which the Board disposed of pending petitions for reconsideration; the question whether the Board's action on the petitions for reconsideration should have been taken after notice and hearing did not arise. Furthermore, petitioners' argument skips an important logical step: it assumes, without explanation, that questions of administrative finality present the same problems, and therefore deserve the same solutions, as questions concerning the timeliness of an appeal.
In point of fact, this assertion is not only unsupported, but erroneous. The pertinent statutory language is not similar in the two instances, [Footnote 9] and the other points under analysis are different. Thus, a court considering the timeliness of a litigant's appeal is concerned with the wisdom of exercising its own power to act, and the result depends on such factors as fairness to the appellant and the intent of Congress in passing a general statute -- § 10(c) of the Administrative Procedure Act -- which applies equally to almost all administrative agencies. There is no call, as Outland and similar cases illustrate by their omissions, for considering either the sections of a particular act which are not concerned with appellate review or the problem -- which, at that point, is of historical interest only -- whether the petition for reconsideration should have been decided summarily, or after notice and hearing. One might argue, of course, that the question is similar in both instances because, if the Board's action on the petition for reconsideration is too late, then an appeal which is timely only from the Board's action on reconsideration is also too late. However, this line of reasoning overlooks the confines of the result we are reaching in this case. We are not saying that the Board cannot entertain petitions for reconsideration after effective certification, nor are we holding that such petitions cannot be denied summarily; all we hold is that the petitions cannot be granted, and the certificated carrier's operations curtailed, without notice or hearing. Therefore, since the cases such as Outland concerned the denial of a petition for reconsideration, there is no conflict, express or implied, between those decisions and this one. [Footnote 10] In this
Cook, The Logical and Legal Bases of the Conflict of Laws, 159. [Footnote 11] Thirdly, were we to adopt the position urged by petitioners, we would have to hold that, in the words of a former chairman of the Board, the power to reconsider a case may be the lever for "nullify[ing] an express provision of the Act." Ryan, The Revocation of an Airline Certificate of Public Convenience and Necessity, 15 J.Air L. & Comm'n 377, 384. As Commissioner Ryan indicated, the power the Board asks for in this case seems nothing more or less than the power to do indirectly what it cannot do directly. Parenthetically, it should be noted that, for purposes of this dispute, it is difficult to draw a distinction between a petition for reconsideration filed by a party and one initiated by the Board sua sponte. Sprague v. Woll, 122 F.2d 128. This being the case, it is all the more significant that the Court, in United States v. Seatrain Lines, 329 U. S. 424, while overruling the Interstate
Although we feel that the language and background of the statute are sufficiently clear so that affirmance can rest solely on that basis, it seems appropriate, in light of petitioners' vigorous assertion that policy reasons compel their result, to discuss some of the ramifications of our decision. In the first place, it bears repetition that we are not deciding that the Board is barred from reconsidering its initial decision. All we hold is that, if the Board wishes to do so, it must proceed in the manner authorized by statute. Thus, for example, the Board may reconsider an effective certificate at any time if it affords the certificated carrier notice and hearing prior to decision; or, if it feels uncertain about the decision prior to its effective date, it may postpone the effective date until all differences have been resolved; and, if neither of these procedures seem practical in a given case, the Board may issue a temporary certificate set to expire on the date the Board prescribes for reexamination. [Footnote 12]
Furthermore, it would seem that any realistic appraisal of the relative hardships involved in this case cuts in favor of the respondent. To be sure, the Board may be able to act quicker under the rule it espouses, and, by eliminating the necessity of a new hearing, Lake Central will be spared the expense of preparing a new record. However, were the Board correct, respondent would be subjected to the loss of valuable routes, routes it had already begun to operate after considerable initial investment, without being heard in opposition. The Board points out that respondent had notice that the Board had reserved the right to amend the certificate. But it is not clear what comfort respondent could take from such notice; respondent could not hedge, since § 401(f) of the Act provides that a certificated carrier may lose the right to conduct any service it does not initiate within 90 days of certification. Concededly, the fact of notice gives considerable surface appeal to petitioners' assertions; they can and do argue that respondent knew what it was getting into, and should not be heard to complain when the gamble turns out unfavorable. However, it must be remembered that the problem is not presented to us in the abstract; we are dealing with it in the context of this
In short, our conclusion is that Congress wanted certificated carriers to enjoy "security of route" so that they might invest the considerable sums required to support their operations; and, to this end, Congress provided certain minimum protections before a certificated operation could be cancelled. We do not think it too much to ask that the Board furnish these minimum protections as a matter of course, whether or not the Board in a given
Petitioners' final argument is that their position is supported by consistent administrative construction and analogous case authority. The administrative construction argument appears less than substantial in light of the fact that, on the last and, it appears, only occasion when the present question was expressly considered, the Board said in dictum that it had "grave doubts" about proceeding in the manner followed in this case. Kansas City-Memphis-Florida Case, 9 C.A.B. 401; [Footnote 14] cf. Smith Bros., Revocation of Certificate, 33 M.C.C. 465. See generally Ryan, supra, where Commissioner Ryan went to great lengths to expose what he felt were the fallacies in the contentions now advanced by petitioners. With respect to prior cases, petitioners again are unable to cite any holdings on point. Petitioners rely heavily on Frontier Airlines, Inc. v. Civil Aeronautics Board, 104 U.S.App.D.C. 78, 259 F.2d 808, 810, but the dispute here involved was not raised in that case. The closest analogy in Frontier
Perhaps more favorable to petitioners is this Court's decision in United States v. Rock Island Motor Transport Co., 340 U. S. 419, where it was held that the Interstate Commerce Commission could modify a motor carrier's effective certificate pursuant to a reservation in the initial order. However, two important distinctions between that case and this are apparent: (1) the Motor Carrier Act makes express provision for summary modifications after certification, 49 U.S.C. § 308, and (2) the Court in Rock Island was very careful to limit its holding to the particular modification made in that case. Finally, the decision which is analytically most relevant to this case, United States v. Seatrain Lines, supra, furnishes support for respondent, rather than petitioners. While Seatrain may be distinguishable on its facts, [Footnote 15] the Court spoke in
This case is but a facet of a multiparty, highly complex, and protracted route proceeding known as the "Great Lakes-Southeast Service Case," commenced before the Civil Aeronautics Board in May, 1955. It involved, "predominantly," the "long haul" service needs of an area extending roughly between the Great Lakes and Florida. Numerous trunkline carriers sought new or additional operating rights in that area. The Board was also confronted with a number of petitions by local carriers for authority to provide new or improved short haul service between certain intermediate cities in that area.
On November 28, 1958, one day prior to the date upon which, as stated in the Board's order of September 30, the Delta certificate would become effective, the Board filed a lengthy memorandum and order in which it denied Lake Central's request (and also -- with one exception not material here -- the similar requests of others) for a stay of the effective date of the Delta certificate until after the Board had decided Lake Central's motion for reconsideration. In that order, the Board expressed its view that "the parties [had] not made a sufficient showing of probable
On Delta's appeal from that order, the United States Court of Appeals for the Second Circuit reversed. 280 F.2d 43, 48. It held that, notwithstanding the timely filed and unruled motion for reconsideration, "once [the Board allowed the] certificate [to] become effective," it lost all power thereafter to grant the motion and accordingly to modify its order and the resulting certificate, and that
280 F.2d at 48. Because of the importance of the question involved to the proper administration of the Act, we brought the case here. 364 U.S. 917, 918.
Under every relevant reported decision, save one to be later noted, a timely motion for reconsideration, being an authorized and appropriate step in the proceeding, "operate[s] to retain the Board's authority over the [original] order," Waterman S.S. Corp. v. Civil Aeronautics Board, 159 F.2d 828, 829,
"reopen[s] the case," Black River Valley Broadcasts v. McNinch, 69 App.D.C. 311, 316, 101 F.2d 235, 240, and prevents the "proposed decision" -- which at that stage, is all it is (Waterman case, supra, 159 F.2d at 828) -- from becoming "final." Outland v. Civil Aeronautics Board, 109 U.S.App.D.C. 90, 284 F.2d 224, 227. The proceeding being thus held open by the motion, and the Board having both the power and the duty to decide it, it would seem to be fundamental that the Board has power to decide it either way -- including, of course, the "power to grant [it]," Enterprise Co. v. Federal Communications Comm'n, 97 U.S.App.D.C. 374, 378, 231 F.2d 708, 712, as it did here.
Outland v. Civil Aeronautics Board, 109 U.S.App.D.C. at 93, 284 F.2d at 227, and,
Waterman S.S. Corp. v. Civil Aeronautics Board, supra, 159 F.2d at 829. It necessarily follows that, if a timely motion for reconsideration is pending before the Board, its "proposed decision" (id. at 828) has "not become final in the sense that it [is] no longer subject to change upon reconsideration," Enterprise Co. v. Federal Communications Comm'n, 97 U.S.App.D.C. at 378, 231 F.2d at 712, and
(Ibid.) Hence, "no [final] rights accrued to [Delta] as a result of the order originally granting [its] permit," Black River Valley Broadcasts v. McNinch, 69
App.D.C. at 316, 101 F.2d at 240. See also, e.g., Braniff Airways v. Civil Aeronautics Board, supra; Albertson v. Federal Communications Comm'n, supra; Western Air Lines v. Civil Aeronautics Board, 194 F.2d 211; and Butterfield Theatres v. Federal Communications Comm'n, 99 U.S.App.D.C. 71, 237 F.2d 552.
Morse v. United States, 270 U. S. 151, 270 U. S. 153-154, and "[t]his is also true in administrative proceedings," Black River Valley Broadcasts v. McNinch, 69 App.D.C. at 316, 101 F.2d at 240. [Footnote 2/4]
The only reported decision to the contrary is Consolidated Flowers Shipments, Inc., Bay Area v. Civil Aeronautics Board, 205 F.2d 449, 451. It was there held that the time within which a petition for review must be filed runs from the date of the Board's decision, not from the date on which it overruled a timely motion for reconsideration; and, inasmuch as the petition for review had not been filed within the former period, the court dismissed the petition as untimely. Recognizing that this result was contrary to its prior decisions, [Footnote 2/5] the Court thought it was
(Emphasis added.) The fallacy of that reasoning was completely exposed and soundly rejected in Outland v. Civil Aeronautics Board, supra. [Footnote 2/6]
There is only one reported decision, involving procedures before the Civil Aeronautics Board, that has presented the precise question we have here. It is Frontier Airlines, Inc. v. Civil Aeronautics Board, 104 U.S.App.D.C. 78, 259 F.2d 808. There, just as here, after a Board certificate had been permitted to become "effective," the Board granted an earlier and timely filed motion for reconsideration and revised the certificate accordingly. It was contended that the revision of the order, and hence also of the certificate, so made, was "a nullity because it was rendered . . . after the certificate . . . had become effective." Id., 104 U.S.App.D.C. at 80, 259 F.2d at 810. That contention was there soundly rejected.
It therefore seems quite clear to me that, under historic legal procedures and all, save one, of the numerous relevant decisions, the timely filing of the motion for reconsideration -- being a legally authorized step in the proceeding -- kept the proceeding open and continuing; that, having the power as well as the duty to decide that motion, the Board had power to grant it as it did, and thus, necessarily, accordingly to revise its earlier decision -- which, until then, was only "a proposed decision" (Waterman case, supra, 159 F.2d at 828) -- and that, inasmuch as the Board sustained that motion, the earlier "proposed decision" never did become the final decision in the proceeding.
Inasmuch as all of the reported cases, save the discredited and now overruled Consolidated Flowers case, supra, are against it, Delta is compelled to rely almost entirely on its claim that the "plain language" of § 401(f) deprives the Board of power, once it has allowed a certificate to become "effective," to revise its initial decision and the
The obvious defects in that argument are that (1) under § 401(f), the "proposed decision" (Waterman case, supra, 159 F.2d at 228) remained subject to revision by the Board in response to the timely filed motion for reconsideration, and (2) the argument ignores the fact that § 401(g) applies only to proceedings to alter, amend, suspend or revoke a certificate in existence after the authorization proceeding has been fully concluded and finally ended -- i.e., after all timely filed motions for reconsideration have been denied and the time for appeal has expired without an appeal being taken or, if an appeal was taken, the Board's decision has been finally affirmed.
Apart from the discredited and now overruled Ninth Circuit case of Consolidated Flowers Shipments v. Civil Aeronautics Board, supra, Delta cites no case that involves the effect upon a Board decision of a timely filed motion
The Watson case, supra, has no relevance whatever to this one. In the Smith case, supra, the Commission was careful to point out that " . . . the certificate marks the end of the proceedings, just as the entry of a final judgment or decree marks the end of a court proceeding. . . ." 33 M.C.C. at 472. (Emphasis added.) It is certain that "a proposed decision" (Waterman case, supra, 159 F.2d at 228) of a court does not, while a timely filed
motion for new trial, rehearing, or reconsideration is pending, end the proceeding, but it is the denial of the motion, and expiration of the time to appeal, that "marks the end of a court proceeding"; and "[t]his is also true in administrative proceedings." Black River Valley Broadcasts v. McNinch, 69 App.D.C. at 316, 101 F.2d at 240.
Surely Lake Central's timely filed motion for reconsideration kept the whole proceeding open, including the Board's order and resulting certificate, until that motion
109 U.S.App.D.C. at 93-94, 284 F.2d at 227-228.