Court Opinion

ID: 9443915
Source: CourtListenerOpinion
Date Created: 2023-08-03 19:33:55.813929+00
Date Added: 2024-06-11T17:29:38.759795
License: Public Domain

PRETTYMAN, Circuit Judge (dissenting).
The court holds that in fixing mail pay for transportation in foreign commerce the Board must include as “other revenue” so-called “excess” earnings on domestic operations and must include that figure in its computation of the carrier’s need. The court says that failure “to make the offset” is at variance with the plain meaning of the statute.
The court also expresses its understanding that the omission by the Board of the domestic profits from the calculation was for the purpose of establishing a new incentive policy. So the court finds no essential difference between this case and Summerfield v. Civil Aeronautics Board, 92 U.S.App.D.C. 248, 207 F.2d 200, and Western Air Lines v. Civil Aeronautics Board, 92 U.S.App.D.C. 248, 207 F.2d 200, decided today. I agree that the statute does not authorize the Board to make the omission for the purpose of establishing an industry incentive. My reasons for that view are set out in detail in the opinion in the cases mentioned. But I do not find that problem in the *211present case. To be sure, the same phrase of the statute — “all other revenue” — is involved in all three cases. But in the present case the problem is the extent to which the classification of rates authorized by the statute goes. When the statute authorizes one rate for foreign carriage and another rate for domestic carriage, does that cleavage go all through the accounts, so that “all other revenue” in the computation of a foreign rate really means all other revenue from the foreign operation? That problem was not in the other cases.
In its tentative findings in the case at bar the Board held that, without passing on any question of its power, it would as a matter of economic policy omit the domestic earnings from the foreign rate calculation. The Postmaster General challenged that action, maintaining that the statute (the “all other revenue” language in Section 406(b)) required the Board to offset the excess domestic earnings against the need resulting from foreign operations in establishing the foreign rates. In its final opinion the Board held the statute did not so require. But the Board seems not to have rested that conclusion upon a premise that these earnings were not “other revenue” which it must take into consideration, but upon the premise that having taken them into consideration it could for economic reasons omit them from the calculation of the need in the foreign business. The Board then affirmed its former position that it would omit those earnings as a matter of economic policy. It recited several economic reasons why the domestic rates and the foreign rates should be determined separately; for example, that the more robust segment of the industry ought not to be burdened with the obligations of the economically weaker part; and, again, the desirability of preserving a comparative status of domestic carriers. The Board did not consider or decide whether it had power to include these earnings in the computation. It went only so far as to decide that it had power not to include them.
As I analyze the case, it falls into these questions: In fixing different rates for different services, must the Board “take into consideration” the sum total of all the revenue of the carrier from all its services? Or, on the contrary, in such a case does the statutory term “all other revenue” mean only revenue directly related to the service for which the rate is being fixed; in other words, must the Board omit unrelated earnings from consideration? If the answer to the first question be “yes” — that is, if the Board must take into consideration the sum total of all the earnings of the carrier from all services — may the Board take such earnings into consideration but nevertheless, having considered them, omit them from the calculation of the separate rate?
The statute provides that the Board may fix different rates for different classes of service. Thus the Board clearly had power to fix different rates for international service and for domestic service. The statute provides that in determining the rate “in each case” the Board shall take into consideration the need of the carrier for compensation sufficient to insure the performance of “such service”. Then follows the provision that the Board shall consider the need of the carrier for compensation, “together with all other revenue of the air carrier,” to enable the carrier to maintain and continue development.
The Supreme Court held in the T. W. A. case1 that this is a rate-making process. It seems to me that the statute means that in fixing an international rate the Board should determine the amount needed by the carrier to perform that service and to maintain and continue development of that service. The Board should determine what amount the carrier needs, as payment for its international carriage of mail, to meet its foreign expenses and its allocated federal" income taxes and receive a fair return on *212its foreign investment. It seems to me that the Board could require the foreign transportation and the domestic transportation to stand each on its own feet, neither to be supported by the other. When Congress gave the Board power to fix different rates for different classes of service, it meant for the Board to make separate calculations for each service and rate.
In this connection it seems to me that the concept of different rates for different services in carrying the mail has a definite bearing upon the meaning of “take into consideration”. When the Board is fixing a particular rate it should take into consideration factors related to that rate, and none other. Such is plain sense, a sort of rule of relevancy.
So I reach the conclusion that, when the Board is determining a separate rate for a certain type of mail service, the “all other revenue” which it must “take into consideration” means revenue related to that service for which the rate is being fixed. But, if I am in error in that construction of those statutory terms, I am so convinced of the soundness of a complete separation of this foreign rate from the domestic operation that I would have to agree with the Board that the elastic statutory phrase “take into consideration” is sufficiently flexible to permit the omission of domestic earnings from the foreign calculation, even after such earnings are taken into consideration. It is noteworthy that the statute does not describe need as the remainder after all other revenue is deducted. The statute does not speak of offsets or deductions. The statute is affirmative in its prescription. It speaks of compensation which “together with” all other revenue will enable the carrier, etc. This is language appropriate to a measure of discretion in respect to the particular carrier and to the particular service. It seems to me that the intermingling of foreign and domestic factors in the computation of each separate rate would lead to great confusion and to inaccuracy in the supposedly separate results.
The Board said that the fact that the carrier had earned in its domestic operation $654,000 more than had been anticipated created another problem, namely the problem whether the domestic rates had been fixed at too high a level. It directed its staff to begin an investigation of those rates. I think that was correct.
I would affirm the order.

. Transcontinental & Western Air v. Civil. Aeronautics Board, 1949, 336 U.S. 601, 69 S.Ct. 756, 93 L.Ed. 911.