Opinion ID: 376827
Heading Depth: 1
Heading Rank: 2

Heading: Method of Terminating Service

Text: 18 New Haven's first substantive contention 11 is that the Act prohibits a carrier from suspending service to a certificated point unless it has obtained Board approval upon a showing that public convenience and necessity required the suspension. It argues that the airlines could not suspend service merely by giving notice under § 401(j)(1), but were required to seek a certificate amendment under § 401(g), deleting their authority to serve New Haven. 12 The question is whether the 1978 amendments and specifically, the amendment to § 401(j) altered the substantive requirements of the Act with respect to service suspensions. The Board concluded that the 1978 amendments did effect such a change, and for the reasons that follow, we agree. 19 Prior to the 1978 amendments, a carrier could be relieved of its obligation to serve a certificated point in one of three ways. First, § 401(g) 13 authorized the Board, either on the filing of a petition or on its own initiative, to suspend or terminate a carrier's authority at a point by amending its certificate, if the Board found the amendment to be required by the public convenience and necessity. Second, § 401(j) 14 permitted a carrier to abandon a route for which it was certificated if, upon the carrier's application, the Board found the abandonment to be in the public interest. Finally, the last sentence of § 401(j) permitted the Board, by regulations or otherwise, (to) authorize such temporary suspension of service as may be in the public interest. 20 Thus, before the 1978 amendments, a carrier could permanently halt service to a certificated point only upon prior Board approval. And as to any certificated point, § 404(a)(1) required a carrier to provide . . . safe and adequate service. 15 21 The 1978 amendments did not alter § 404(a)(1), nor did they materially change § 401(g). 16 The termination provision of old § 401(j), however, was replaced in its entirety. The new § 401(j)(1) 17 provides that a certificated carrier shall not terminate or suspend all service to a point unless such air carrier has first given the Board (and the concerned local authorities) at least 90 days notice of its intent to so terminate (or) suspend service. The final sentence of § 401(j)(1), like the final sentence of the old § 401(j), provides that the Board may authorize temporary suspensions of service by regulation or otherwise. 22 In the Board's view, the enactment of new § 401(j)(1) provided a new means by which a carrier may be permanently relieved of service obligations: the carrier may suspend service simply by giving 90 days' notice of its intent to do so. New Haven points out that the language of new § 401(j)(1), read literally, does not directly authorize suspensions on notice, but rather bars a carrier from suspending service unless it has given notice. It argues that the amendment to § 401(j) merely imposed an additional notice requirement on carriers seeking permission to suspend service in § 401(g) proceedings. New Haven's construction of § 401(j)(1), however, cannot be reconciled with other provisions added by the 1978 amendments, and it is inconsistent with the legislative history. 23 The clearest indication in the statute that Congress intended the amended § 401(j)(1) to authorize suspensions on notice is found in §§ 419(a)(6) and (a) (7), which were also added to the Act by the 1978 amendments. Section 419(a)(6) provides that (n)otwithstanding section 401(j), if a carrier serves notice of its intent to reduce service to a point below the essential air transportation level, and if the Board does not find a replacement carrier within the notice period, the Board shall require the original carrier to continue service for additional 30-day periods. Section 419(a)(7) provides that where the Board requires a carrier to continue service beyond the date on which such air carrier would, but for paragraph (6) of this subsection, be able to suspend . . . service to such point, the Board must compensate the carrier for any resulting losses. These provisions clearly contemplate that 90 days after a carrier serves notice under § 401(j)(1), the suspension will go into effect unless the Board prevents it; and the touchstone as to whether or not the Board should prevent it is the essential air transportation level, not the public convenience and necessity. 24 New Haven nonetheless contends that a construction of § 401(j)(1) to permit suspension on notice is inconsistent with § 401(g), taken alone or in conjunction with § 404(a)(1). It argues that Congress evidenced its intention that § 401(g) retain its vitality by amending the section merely to include reference to simplified procedures and leaving it otherwise unchanged. New Haven contends that the Board's construction of § 401(j)(1) renders § 401(g) meaningless. This is hardly so, however, since § 401(g) remains the only means by which a carrier can be eliminated from a market at the instigation of the Board or third parties. 18 25 As to § 404(a)(1), which requires that a carrier provide safe and adequate service at any place for which it is certificated, 19 New Haven points out that Congress provided that § 404(a)(1) would cease to be effective on December 31, 1981, and argues that the section continues in full force and effect until that date. 20 Thus, the argument goes, Eastern and Allegheny must provide service to New Haven as long as they are certificated for New Haven, and their certificates can be amended only pursuant to § 401(g). While this argument may have some technical appeal, we do not believe it is persuasive or that our rejection of it eviscerates § 404(a)(1). The Board's construction of § 401(j) (1) does not give a carrier complete freedom to evade its § 404(a)(1) obligation to provide service; the carrier must still wait at least 90 days until its notice of suspension becomes effective, and there are circumstances in which suspension could be delayed indefinitely (see Part IV A, infra ). In any event, we believe New Haven's § 404(a)(1) argument must yield to the clear indications in §§ 419(a)(6) and (7), described above, that Congress intended § 401(j)(1) to allow termination of service on notice. 21 26 Our conclusion is reenforced by a reading of the legislative history. The new § 401(j)(1) was put into its final form by the Conference Committee. The section as enacted, however, is in large part the same as § 401(h)(1) passed by the Senate in S.2493, 95th Cong., 2d Sess. (1978). See H.R.Rep.No.1779, 95th Cong., 2d Sess. 61, 67 (1978) (Conference Report). 22 Section 401(h)(1) of the Senate bill, like § 401(j)(1) as enacted, was framed in negative terms as prohibiting suspensions unless the carrier has given notice, rather than as an explicit affirmative authorization of suspensions on notice. The sponsor of S. 2493, Senator Cannon, clearly expected his bill to permit suspension of service on notice, absent Board action to block the suspension: 27 Under sections 401 and 419, exit is permitted after notice of 90 days, unless the carrier is the last one serving the community in which case extensions are required if no replacement carrier has been found. 28 124 Cong.Rec. S5850 (daily ed. Apr. 19, 1978) (remarks of Sen. Cannon). The Senate Report reflects the same understanding: 29 While carriers certificated under this section (401) will be permitted to exit communities under the notice requirements provided(,) if the carrier's termination will result in the communities' essential air transportation needs being unmet, the Board will require the carrier to continue service until a replacement carrier is found. 30 S.Rep.No.631, 95th Cong., 2d Sess. 61 (1978). These explanations persuasively support the Board's construction of § 401(j)(1). 31 New Haven relies on a comment by Representative Anderson, to the effect that the House version of the 1978 amendments, H.R. 12611, 95th Cong., 2d Sess. (1978), would not affect the Act's requirement that a carrier obtain prior Board approval before terminating all service to a point. 124 Cong.Rec. H10320 (daily ed. Sept. 21, 1978). The pertinence of Representative Anderson's comment, however, is diminished by the fact that H.R. 12611 did not provide any modification of the old § 401(j). See H.R.Rep.No.1211, 95th Cong., 2d Sess. 49 (1978) U.S.Code Cong. & Admin.News 1978, p. 3737. The Conference Committee followed the Senate bill on this point, replacing the old § 401(j) with a version which resembled § 401(h)(1) of the Senate bill. See H.R.Rep.No.1779, supra at 61, 67. Thus Representative Anderson's comments were not directed to the provision finally enacted, and do not affect our reading of the new § 401(j)(1). 32 Finally, we note that the Board's construction of § 401(j)(1) is more closely attuned to the Congressional concern, in passing the 1978 amendments, with promoting free competition in the airline industry, see S.Rep.No.631, supra at 5-6; H.R.Rep.No.1211, supra at 3-4, and with (t)he placement of maximum reliance on competitive market forces and on actual and potential competition . . . to provide the needed air transportation system. § 102(a)(4), 49 U.S.C.A. § 1302(a)(4) (Cum.Supp.1979). The effectiveness of freer entry, as a means of fostering competition, would be substantially undercut by a construction of § 401(j)(1) which did not allow correspondingly free exit from markets. 33 Thus, we agree with the Board that the new § 401(j)(1) conditionally permits a carrier to suspend service to a point upon giving 90 days' notice of its intent to do so. Allegheny and Eastern were entitled to suspend service at New Haven, unless the suspensions reasonably appear(ed) to deprive New Haven of essential air transportation. § 419(a)(10). 34