Opinion ID: 394180
Heading Depth: 1
Heading Rank: 3

Heading: anti-competitive rates

Text: 33 In considering the lawfulness of tariffs, the CAB must consider the statutory goal of the prevention of 34 predatory, or anti-competitive practices in air transportation, and the avoidance of 35 (A) unreasonable industry concentration, excessive market domination, and monopoly power; and 36 (B) other conditions; 37 that could tend to allow one or more air carriers unreasonably to increase prices, reduce services, or exclude competition in air transportation. 38 49 U.S.C. § 1302(a)(7). 39 The courts have also confirmed, though, that:the (mere) fact that these questions are difficult and important ... does not mean an evidentiary hearing is an essential prerequisite to their satisfactory resolution. As we have said before, there is no statutory requirement for a hearing as a pre-condition to Board approval under Section 412. It is true that in certain cases the anti-trust issues may not lend themselves to a satisfactory disposition without a hearing. But we have made it quite clear that the Board should have a degree of latitude in determining whether a full evidentiary hearing will be necessary in a particular case. In reviewing this determination, this court will not substitute its own view for that of the Board. Rather, the question for us is whether there exist substantial and material disputed issues of fact or whether by refusing to conduct a hearing the Board denied (itself) the materials requisite for a rational decision. 40 Air Line Pilots Association, International v. C.A.B., 475 F.2d 900, 903-04 (D.C.Cir.1973) (footnote and citations omitted). 19 41 The complainants contend that they established a prima facie case that the courier baggage tariff is predatory, and, thus, an investigation was required. Predatory means any practice which would constitute a violation of the antitrust laws. 49 U.S.C. § 1301(35). They allege that: (1) Pan Am offers a small-parcel express service which directly competes with courier service, and that British Airways plans to offer a similar service; and (2) the airlines possess substantial monopolistic power on many routes. They rely upon Berkey Photo, Inc. v. Eastman Kodak Co., 603 F.2d 263, 275 (2d Cir. 1979), cert. denied, 444 U.S. 1093, 100 S.Ct. 1061, 62 L.Ed.2d 783 (1980), for the proposition that a company violates antitrust laws by using its monopoly power in one market to gain a competitive advantage in another. The complainants maintain that by raising the baggage rates for couriers, the carriers were gaining a competitive advantage for their similar service. The CAB dismissed this allegation because it found that the types of services were not in direct competition. 20 42 In its brief, the CAB now admits that Pan Am's services do compete with the courier services. Based on the record presented to it, the CAB's failure to find direct competition, however, was not in error. The Pan Am rates cited by the complainants for comparison purposes were Pan Am's rates for airport-to-airport service, not its rates for desk-to-desk service, the service akin to the courier service to which rates were submitted. In desk-to-desk service, documents are picked up at the customer's office and delivered to the address of the recipient. In airport-to-airport service the customer delivers and picks up documents at the airport. Since the complaints failed to produce an evidentiary basis to establish their claim that there was predatory direct competition, the CAB did not abuse its discretion in failing to investigate the complaint. 43 Nevertheless, the CAB, as noted, now admits that there is direct competition. Because of this, and in fairness to the couriers, our affirmance of the CAB's order on this point is without prejudice to the complainants to reopen the anti-competitiveness issue before the CAB. We believe that there should be suitable opportunity for reconsideration or modification 'in the light of actual experience'. Alabama Power Co. v. Federal Power Commission, 511 F.2d 383, 392 (D.C.Cir.1974). This principle of agency law is not without precedence in the aviation regulation field. See American Airlines, Inc. v. C.A.B., 359 F.2d 624, 633 (D.C.Cir.) (en banc), cert. denied, 385 U.S. 843, 87 S.Ct. 73, 17 L.Ed.2d 75 (1966) (affirmance of the Board's (CAB's) action is without prejudice to the right of the combination carriers to reopen the question); Northeast Airlines, Inc. v. C.A.B., 345 F.2d 488, 489 (1st Cir.) cert. denied, 382 U.S. 845, 86 S.Ct. 41, 15 L.Ed.2d 85 (1965) (it is appropriate to remand to the CAB to consider the issue afresh in light of the most recent data).