Court Opinion

ID: 8871285
Source: CourtListenerOpinion
Date Created: 2022-11-26 18:28:43.970128+00
Date Added: 2024-06-11T17:06:11.157229
License: Public Domain

McGOWAN, Circuit Judge
(dissenting) :
My respectful disagreement with the majority in this case extends both to the merits of the order in question and our jurisdiction to review it. The court, working back from its conclusion on the merits, finds that it is without jurisdiction. There are, of course, situations in the law where this must be the order of inquiry. In my view, this is not one of them. Had I agreed with my colleagues on the merits, I still would have thought the order properly before us.
The reviewability of this order depends in the first instance upon its finality, and, secondarily, upon whether the Congress has, in Section 1006(a) of the Federal Aviation Act, expressly forbidden review of the order as one “subject to the approval of the President.” The majority opinion appears to me to assume finality in the conventional sense, provided that petitioners in fact have an Ashbacker right. The difference may not be too important in terms of result here, but my own thought is that finality attaches in this case because the order effectively puts an end to petitioners’ opportunity to press their claim of right to an Ashbacker determination, either on the record as it stood at the -time the order was entered or after the receipt by the Board in the future of evidence on the exclusivity issue. The Ashbacker claim was hardly frivolous; and, thus, the order was appropriate for review, even though petitioners might be unable to establish their Ashbacker contentions to our satisfaction.
Section 1006(a) here contributes to finality.1 It is urged upon us that petitioners could have submitted evidence *911on exclusivity in the hearings to be held upon the merits of Lufthansa's application and then argued to the Board for an alteration of its procedure in the light of such evidence. But certainly one outcome of the Section 402 hearing can be an order granting the application. That order would be- one clearly subject to Presidential discretion; judicial review would be out; and petitioners would presumably be left only with a strong personal conviction of the justice of their Ashbacker position. The finality of administrative orders, for purposes of amenability to judicial review, is a highly practical concept. It derives meaning only from the immediate context. In the distinctive concatenation of circumstances in which petitioners found themselves upon the entry of the order before us, I have no doubt that they could seek relief here and that we were warranted in hearing them out, even though we might ultimately disagree with what they said.
However, I do not so disagree. I take Ashbacker to mean the following: Where a licensing agency has before it at any one point in time two applicants for a grant which surrounding circumstances indicate strongly can justifiably be made only to one, it is not to go ahead and decide for the one before it hears the other. To do otherwise, said the Supreme Court, “may satisfy the strict letter of the law but certainly not its spirit or intent,” and “deprives the loser of the opportunity which Congress chose to give him.” These procedural limitations in the interest of fair hearing have been accepted as fully applicable by this court to applications by domestic air carriers under Section 401 of the Federal Aviation Act.2
3 The question we now face is whether they also apply when the Board has before it apparently conflicting applications under Section 401 and Section 402, the latter being the provision made by Congress whereunder foreign air carriers, as distinct from United States flag lines, may seek authority to fly between the United States and foreign countries.
Although the foregoing is, I believe, an accurate formulation in general terms of the issue to be decided, it is the part of caution to bear in mind that the resolution of any Ashbacker problem cannot be divorced from the peculiar facts giving rise to it. This Court has said in Delta that Ashbacker is “a rule of substance and not * * * a mere prescription of form,” noting that the Supreme Court in its initial formulation avowed its concern to be with the “practicalities” of the particular case before it. 97 U.S.App.D.C. 46, 50, 228 F.2d 17, 21 (1955). Fair hearing in the administrative area is nothing if not a fluid concept, with its contours changing from case to case in accordance with the realities confronting the parties. The central reality faced by petitioners here is the Board’s view, announced in its order initiating an investigation of the Latin American route situation, that the proliferation of foreign air carriers on the route served by petitioners appeared to make it desirable for one of them to have its route extended to New York and for the other to be eliminated. It is against this backdrop that one more in a long line of foreign carriers presents itself to the Board with a Section 402 application to serve the New York-South America route. The Board schedules that application for prompt hearing and presumably prompt disposition. It tells petitioners that their applications for single-line service from New York to Latin America will be heard later.3
*912I do not understand my colleagues as questioning the substantial, as distinct from the merely formal, impact of this proposed procedure upon petitioners. Their disposition not to interfere with the course the Board has determined to follow rests upon two foundations. One is essentially the idea that Congress did not intend that the Board, in considering an application by a foreign air carrier under Section 402, should concern itself with the effects of the granting of that application upon a domestic line currently seeking authority under Section 401 to serve the same route. This position seems implicit in the opinion’s early reference to “the obligation of the Board as agent of the United States in connection with Lufthansa’s application involves Presidential consideration of our international relations with Germany as they arise with respect both to Lufthansa and American domestic carriers operating abroad.” If “abroad” here is read as “Germany,” as I think may fairly be said to be its import, the thesis seems to be that the Board has no significant aspect of the public interest to weigh under Section 402 other than that of the possible harm to be done to our international aviation interests in Germany if this application is denied. The implication is that to take a broader view of the public interest would be to countenance repudiation or frustration of the Executive purposes in entering into the 1955 agreement with the German Federal Republic.
The President cannot, of course, be repudiated or frustrated if he chooses not to be, since he is empowered by the statute, for any or no reason and without exposure to judicial scrutiny, to direct the Board to issue the requested authority to Lufthansa, despite any recommendation the Board might make to the contrary. But the argument seems to be that the Board was not intended by Congress to waste its time in an inquiry which might conceivably lead the Board to be so presumptuous as to recommend in the public interest a course of action contrary to that contemplated by an executive agreement. A President who had not negotiated the agreement in question, and a Congress which has no function with respect to the approval or disapproval of executive agreements, might each be of the view that the Board’s conception of the entire public interest at any one point in time would be a useful element in the President’s store of knowledge as he turns to the discharge of his responsibilities under Section 801.
Now there is no question but that our international relations are a highly important factor for the Board to take into account under Section 402. But it is not the only one, nor is there to be attributed to it, in my view, the almost overpoweringly dominant role contemplated by the majority opinion. It would have been very easy for Congress to make plain its purpose to make it so, if such purpose it had. Section 402 could clearly have said that, where the President has made a commitment to another sovereign nation that a national of the latter designated by it shall be permitted to serve the United States, the only issue before the Board upon such an application is the fitness, willingness, and ability of the designee to provide the service and to observe our regulatory laws and regulations. Section 402 presently says as much. It also says more, namely, that the Board is to find, further, that the “transportation will be in the public interest.”
Throughout I follow only the Board's reading of the statute. Its own concept of what it may do in passing upon an application under Section 402 is set forth at pp. 7-8 of its brief. A fair summary is as follows: Despite the provisions of Section 1102, directing the Board to *913act “consistently” with any international commitment, the Board “considers that it is not required to recommend issuance of a foreign carrier permit to the President merely because there is an agreement providing for such permit.” The Board receives evidence in respect of each of the various standards set forth in Section 402. As to that of the public interest, it “normally” regards the predominant issue to be that of whether the application should be granted because of reciprocity considerations. But where it is asserted that the grant will be injurious to U. S. carriers, “hence contrary to the public interest,” it weighs that adverse impact against the reciprocity benefits, and submits its findings and conclusions to the President so that “he has the benefit of the Board’s views in determining what his action should be.” The existence of a bilateral executive agreement is, in the Board’s view, a “prima facie public interest factor pointing to the grant,” and a “strong showing would be required to warrant a recommendation to the President that the application should be denied and the bilateral denounced.”
This all seems to me to say that one who hopes to persuade the Board to recommend to the President the denial of a foreign air carrier permit contemplated by an executive agreement has something of an uphill road. But the way is there if he can make it, and the Board will, upon a “strong showing,” tell the President that it believes the time has come to deny the permit and to denounce the agreement. I do not understand petitioners to be under any illusions as to the difficulties they face, or to be complaining about them. Their claim is, rather, that fair hearing comprehends the opportunity to mount the attack on a scale commensurate with the barrier to be breached.
With the relevant standards prescribed as stated above, Section 402 directs that public notice be given of the application, and that a public hearing be held, with participation in the latter contemplated to be accorded to “any interested person.” The Board in this case has recognized its obligation in the latter respect by permitting the intervention of petitioners in the Section 402 hearing, and it tells us that it will receive evidence from them. But the Board also tells us that, by reason of the narrower scope which it places upon the concept of “public interest,” petitioners will be limited in their showing to representations of the adverse economic effect upon them and, that upon a record so confined, the Board will proceed to formulate and transmit its recommendation to the President before it turns to the more leisurely labor of hearing petitioners’ applications. My colleagues say in substance, and as the second base of their holding, that, even if the Board be deemed to be something more than a mere agent of the President in his conduct of our international relations with Bonn, this restricted hearing which the Board proposes to give petitioners is amply adequate to the objectives which Congress subsumed under the rubric of “the public interest.”
Absent a more precise definition of that term than Congress has given us, I am not convinced that this is so, nor that the shadow of Ashbacker does not fall squarely across the procedure the Board has in prospect for the handling of these applications. The concept of the “public interest,” when used in a public utility licensing statute, immemorially and customarily comprehends, among others, such things as which of two or more competing applicants can render the best and cheapest service to the public. Until Congress says plainly that a consideration of this kind is not to enter into the exploration of “public interest” as that term is used in Section 402, I am disabled from saying that it is irrelevant. The Board, however, does not intend to afford petitioners an opportunity to make the affirmative case in support of their own applications until after its recommendation with respect to Lufthansa has gone to the President. By the time the Board hears, decides, and makes recommendations to the President with respect to petitioners’ applications, the additional *914Service provided by Lufthansa may be the last straw on the economic back which compels the Board to effectuate its preliminary determination that the market will not support both Panagra and Braniff. What consolation would there then be for petitioners, or for the travelling public, in the knowledge that both petitioners had demonstrated by affirmative evidence their ability to furnish a better and cheaper service than the foreign carrier? Is it conceivable that Congress intended that the President should know that before he acted on any of the Board’s recommendations ? 4
I do not, of course, intimate any opinion that petitioners can in fact make such a showing. We are concerned here, however, with the scope and timing of administrative hearings, and not with their likely result. The Supreme Court in Ashbacker was not motivated by any conjecture that the aggrieved applicant would probably prevail if he could only stave off decision until the merits of his case were before the agency. It was impelled to the result it reached by its divination of the sense of Congress as to what would constitute a fair hearing under the special circumstances there present. I am not persuaded that the problem here arises in a setting so different as to justify a contrary appraisal of the legislative will.
Had the Board elected to follow a different plan and to hear both the 401 and 402 applications before making its recommendations to the President as to each, I doubt that a protest by any one of the applicants would be regarded by us as presenting any serious legal problem. What is argued in substance to us now by the Board is that it cannot so elect because it will take it too long to hear and pass upon petitioners’ applications; and that the resulting delay will embarrass the President and the Secretary of State in their conduct of our relations with Germany. But Ashbacker appears to me to contemplate some delay as a price Congress was willing to pay for fairness; and there is nothing in this record demonstrating utter incapacity in the Board to minimize the asserted embarrassment to the Executive by proceeding to hear and determine these applications with greater dispatch than has perhaps been characteristic of major route proceedings in the past.

. The order under review represents a' procedural determination as to how certain applications are to be handled. It decides nothing with respect to the merits of the applications. Whether or not it is- properly regarded as final rather than interlocutory for judicial review ' purposes, it does not constitute an order “subject to the approval of the President” within the reach of Section 1006 (a). That category is reserved for orders of the Board which are inextricably intertwined with the merits of the grant or denial of applications. Congress cannot be taken to have intended that the President pass upon the various procedural orders- made by the Board in the course of moving towards a recommendation on the merits. I do not find British Overseas Airways Corp. v. C. A. B., 113 U.S.App.D.C. 76, 304 P.2d 952 (1962), to be to the contrary. There, the Board initiated a proceeding looking toward the promulgation of a proposed regulation amending the conditions upon which a foreign air carrier permit was to continue to be held. The carrier’s motion to dismiss the proceeding was denied, and review was sought here of that order. This court thought such review was barred by Section 1006(a), for the reason that the conditions upon which foreign air carrier permits are to be granted or withheld is ultimately a matter committed to the President’s sole discretion. The court felt that it could not review the Board order in question without getting into the area of Presidential discretion. BOAC did not involve a claim of unfairness in respect of a procedural determination ; it involved substantive issues, the resolution of which by this court would inevitably impinge upon the role assigned to the President by Congress. Conversely, how the Board schedules its hearings in this case does not infringe in any way upon the President’s latitude of action in determining whether, or upon what conditions, to grant Lufthansa’s application.

. Delta Air Lines, Inc. v. C. A. B., 97 U.S.App.D.C. 46, 228 F.2d 17 (1955). See, also, Delta Air Lines, Inc. v. C. A. B., 107 U.S.App.D.C. 174, 275 F.2d 632 (1959), cert. denied, 362 U.S. 969, 80 S.Ct. 953, 4 L.Ed.2d 900 (1960), and Northwest Airlines, Inc. v. C. A. B., 90 U.S.App.D.C. 158, 194 F.2d 339 (1952).

. Some chronology may help to put the legal issue before us in perspective. The Board’s order initiating an investigation of petitioners’ routes and certificates was entered August 8, 1961. In response to what that order foreshadowed, petitioners filed applications to extend their service to New York in June and September, *9121962, respectively. Lufthansa’s application was filed February 27, 1964. This last application was set down for hearing to commence June 10, 1964, whereas petitioners were told that their applications would not be reached for hearing before January of 1965. The hearing for Lufthansa has been stayed by this court pending this appeal.

. The President has, of course, an absolute and unreviewable discretion to do as he pleases, and without stating his reasons, in accepting or rejecting the Board’s recommendations in respect of international routes. What petitioners seek here, however, is a meaningful chance to try to persuade the Board that its recommendations to the President should be one way rather than another. That is not an insubstantial privilege, as anyone knows who is familiar with the phenomenon in large organizations of first-draft inertia. The Board is made up of Presidential appointees, presumably chosen for their expertise and because the President has confidence in their judgment. It is not to be assumed that a course of action recommended to the President by the Board is without significant weight in his deliberations.