Opinion ID: 294004
Heading Depth: 1
Heading Rank: 3

Heading: the board's power to grant interim approval

Text: 18 The question of whether the Civil Aeronautics Board has the power under section 412 of the Act to approve an agreement for less than the full term of its effectiveness appears to be a question of first impression in the courts, although the Board has employed this device on several other occasions. 6 The relevant portions of section 412 of the Act, 49 U.S.C. § 1382(b) (1964), offer little guidance, since they merely speak in terms of outright rejection or full approval: 19 The Board shall by order disapprove any such contract or agreement    that it finds to be adverse to the public interest, or in violation of this chapter, and shall by order approve any such contract or agreement    that it does not find to be adverse to the public interest, or in violation of this chapter.    20 Reviewing courts, however, have generally declined to construe this provision rigorously or literally, out of concern for the Board's need to retain some procedural flexibility in administering an area replete with conflicting interests, international implications, and frequent pressure to act expeditiously. Thus, the Second Circuit has upheld the Board's assertion of a closely parallel power, the authority to grant conditional approval under section 412: 21 Nor is the Board bound to approve or disapprove agreements in their entirety. It is true that § 15 of the Shipping Act of 1916, 46 U.S.C.A. § 814, on which § 412 of the Civil Aeronautics Act was modeled, provides that the Federal Maritime Board may disapprove, cancel, or modify any agreement, whereas § 412 says only that the Board may by order disapprove. However, the power to condition its approval on the incorporation of certain amendments is necessary for flexible administrative action and is inherent in the power to approve or disapprove. We would be sacrificing substance to form if we held invalid any conditional approval but affirmed an unqualified rejection accompanied by an opinion which explicitly stated that approval would be forthcoming if modifications were made. 22 McManus v. CAB, 286 F.2d 414, 419 (2d Cir. 1961) (emphasis added); cf. National Aviation Trades Ass'n v. CAB, 136 U.S.App.D.C. 367, 380, 420 F.2d 209, 222 (1969). 23 We think that there are valid reasons to conclude that the power to grant approval for a limited time is similarly inherent in section 412 of the Act. The primary need for such a power arises in a situation where, as in the present case, an attempt is made to introduce novel elements into the fare structure; when this occurs, the Board simply may not have enough factual information to make the kind of determination under the public interest standard that would warrant approval for the full term of the agreement, even though the innovation possesses some obvious advantages. In the present case, the Board's April 30 order explicitly takes note of this rationale with respect to the CBIT fares, pointing out that limited approval will permit some experience to be gained with respect to both the generative aspects of the fares and their impact upon the supplemental carriers. (App. 258.) In addition, some types of fares apparently require a considerable amount of lead time for adequate preparation by concerned parties before the new service can be offered to the general public; the device of interim approval can provide needed short-term predictability to permit implementation of such arrangements. 7 24 There are, however, several theoretical and practical difficulties inherent in the interim approval device. Conceptually, anything short of approval for the entire term of the agreement could be characterized as interim, perhaps with a view toward persuading a reviewing court to look more leniently at the rationale supporting a given order than it would if the approval purported to be plenary. Moreover, the Board's description of interim approval as pendente lite should not be allowed to obscure the fact that action taken under section 412 operates with finality to invest the agreement with immunity to the antitrust laws; for this reason, it is possible that even interim approval would have a serious impact upon those adversely affected by anti-competitive features in an agreement. Obviously, what is called for is a careful balancing of the gravity and duration of the harm likely to be inflicted upon the protesting parties against the benefits flowing from approval for the short period.