Opinion ID: 294004
Heading Depth: 1
Heading Rank: 2

Heading: procedural history of the controversy

Text: 11 The procedural steps underlying the present posture of this case constitute only a small portion of the continuing battle between the scheduled airlines which are members of IATA and the supplemental carriers. The supplementals, which include both foreign and domestic airlines, are engaged in providing charter transportation only. See 49 U. S.C. § 1301(33) (1964). In contrast, the IATA regular-route carriers offer both charter and regularly scheduled services. In the past few years, the percentage of all transatlantic passengers using charter rather than scheduled services has increased, and the market share of the supplemental carriers has increased also. (Brief for the Respondent at 7 n. 7.) The competition between the supplementals and the scheduled airlines for charter passengers is direct and intense. 12 On February 25, 1969, shortly after the IATA resolutions described above had been filed, the National Air Carrier Association (NACA) informed the Civil Aeronautics Board of its intention to oppose the agreement. (App. 10 n. 2.) NACA is a trade organization of supplemental carriers; the six other petitioners in the present action are members of this organization. On March 3, 1969, the Board issued an order establishing the schedule for receipt of documentary evidence, complaints, objections, and answers relating to the IATA resolutions. This schedule was expedited because of the fact that the agreement contains controversial elements and is intended to become effective in a relatively short period of time. (App. 10-11.) NACA thereupon filed a petition for reconsideration of this procedural schedule, alleging in essence that the substantiality and complexity of the issues presented by the agreement demanded an evidentiary hearing, rather than an exchange of documents, as a basis for proper decision. (App. 12-19.) Later, NACA filed a motion to suspend the procedural schedule (App. 65-71) which was denied by the Board. (App. 82.) 13 On April 4, 1969, after various papers had been filed by the participating parties, the Board issued another order scheduling oral argument in light of the considerable controversy surrounding the agreement (App. 201), but continuing in its determination that an evidentiary hearing was unnecessary. Oral argument was held on April 16, and on April 30, 1969, the basic order presently under challenge was issued. In this April 30 order, the Board granted approval for the full term of the agreement to the Affinity Group, Incentive Group, and GIT fares. At the same time, the order granted approval through March 31, 1970 to the elimination of the round-trip discount, the CBIT's, and the California Proportional Fares, 2 and ordered an expedited investigation of the desirability of extending approval beyond that date. NACA sought a stay of this order pending judicial review, but the Board denied the motion. (App. 271-281.) Thereafter the intervenors in the present action and several other parties to the administrative proceedings moved for reconsideration of the April 30 order, seeking an extension of the limited-term approval of the CBIT fares. This motion was denied by the Board on July 16, 1969. (App. 290-293.) In the present action, the petitioners assert two major grounds for reversal: (1) that the Board erred in approving the three group fares without an evidentiary hearing, and (2) that the Board's findings were insufficient to support interim approval for those fare changes which were scheduled for further investigation. A third major question emerged clearly at oral argument: does the Civil Aeronautics Board have statutory power to grant the kind of interim approval, or approval pendente lite, that it ordered in the present case? 14 Subsequent to the filing of the instant petition for review, a number of significant developments in the controversy transpired. On October 19, 1969 — approximately three months after the Board had denied the petition to reconsider the April 30 order — the underlying IATA conference resolutions expired as a result of the withdrawal of the Italian airline Alitalia from the agreement. This withdrawal was made possible by an IATA rule which permits any member carrier to terminate an agreement if any of the other carriers' governments places conditions on its approval of the agreement; Alitalia evidently took the position that the Board's interim authorization of the CBIT fare amounted to a conditional approval. A new traffic conference was convened for the purpose of reaching another fare agreement and ending the open rate situation caused by Alitalia's withdrawal. 15 At the time that Alitalia withdrew from the IATA agreement, there was pending before the Board a motion by Pan American World Airways seeking reconsideration of the April 30 order and an extension of the interim approval of the CBIT fares through September 30, 1970. On November 26, 1969, the Board issued another order which technically dismissed Pan American's petition as moot, but accepted the basic arguments in favor of extending the approval of the CBIT's and allowed the tariffs filed pursuant to the expired IATA resolution to remain in effect. Order 69-11-122 (Nov. 26, 1969). Petitioners subsequently filed a motion to include this November 26 order within the scope of the present petition for review, but this motion has been denied. 16 On December 11, 1969, the Board's hearing examiner issued his initial decision 3 regarding the three fares which had been set for evidentiary hearing in the April 30 order. In this decision the examiner concluded in general that the elimination of the round-trip discount was adverse to the public interest, but that the CBIT and California Proportional fares were not. The examiner also ordered the American scheduled carriers and supplementals to continue supplying monthly traffic data to the Board. The Board determined to review this initial decision (Order 69-12-86, December 19, 1969), but shortly thereafter, on December 29 and 30, 1969, the IATA carriers reached a new fare agreement which was the product of a traffic conference held in Caracas, Venezuela. This agreement embodied many of the same features contained in the resolutions presently under review; accordingly, the Board considered the Caracas agreement as a part of its pending proceeding. On February 27, 1970, the Board issued two orders relating to these resolutions. The first of these, Order 70-2-123, dealt with fare elements peculiar to the Caracas agreement; the second, Order 70-2-124, concerned fares which were common to both the Cannes/Dallas agreement and the Caracas fare package. ( See Order 70-2-124 at 2 n. 4 and accompanying text.) In pertinent part, this latter order accepted the examiner's conclusion that the CBIT and California Proportional fares were not adverse to the public interest or violative of the Act, but rejected his determination that the elimination of the round-trip discount should be disapproved. On March 4, 1970, the petitioners in the present action filed a petition to review the Board's two February 27 orders; that petition has been docketed as case No. 23,988, and has not as yet been scheduled for oral argument. 17 We do not believe that any of these events subsequent to the bringing of this action have mooted any of the issues presented in this petition. As will be developed more fully below, the petitioners' basic ground of complaint is that the Board improperly cut off the supplemental carriers' antitrust rights by granting approval (whether full or interim) to the IATA fare agreement without holding a necessary evidentiary hearing or making sufficient findings of fact. If this contention is correct, then the supplemental carriers may have viable claims for relief under the antitrust laws which accrued during the period of time in which the Board's April 30 order purported to bar those rights, 4 or ground for seeking further relief before the agency regarding the still-effective elements of tariffs filed pursuant to the original agreement. Cf. 49 U.S.C. § 1381 (1964). Therefore, we proceed to an examination of the merits of petitioners' arguments. 5