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Pan American World Airways Inc. v. Civil Aeronautics Board

decided: July 20, 1967.

PAN AMERICAN WORLD AIRWAYS, INC., TRANS WORLD AIRLINES, INC., AMERICAN AIRLINES INC., PETITIONERS
v.
CIVIL AERONAUTICS BOARD, RESPONDENT; WORLD AIRWAYS, INC., ET AL., INTERVENORS



Hays and Feinberg, Circuit Judges, and McLean, District Judge.*fn*

Author: Hays

HAYS, Circuit Judge:

This is a petition to review five orders of the Civil Aeronautics Board awarding certain supplemental air carriers, intervenors in this action, certificates which authorize them to operate so-called "inclusive tours"*fn1 between points in the United States and various foreign points. Petitioners' principal contention is that the Board lacked the power to authorize inclusive tours. The jurisdiction of this court is invoked under Section 1006 of the Federal Aviation Act of 1958, 49 U.S.C. § 1486. We hold that the Board lacked the power to authorize "inclusive tours" and that the challenged provisions should be stricken from the certificates awarded to the intervening carriers.

I.

Petitioners are three air carriers holding certificates of public convenience and necessity issued by the Civil Aeronautics Board under Section 401(d)(1) of the Federal Aviation Act, 49 U.S.C. § 1371(d)(1), authorizing them to engage in air transportation between the United States and various points abroad. Each of the intervenors, with the exception of the American Society of Travel Agents, Inc., is a supplemental air carrier*fn2 defined under Section 101(32) of the Act, 49 U.S.C.§ 1301(32), as "an air carrier holding a certificate of public convenience and necessity authorizing it to engage in supplemental air transportation." As the name implies, the services of supplemental air carriers are intended to supplement those of the scheduled carriers. See Section 101(33) of the Act, 49 U.S.C. § 1301(33).

In July 1962, Congress enacted Public Law 87-528, 76 Stat. 143, amending the Federal Aviation Act of 1958. The amendment established a comprehensive system for the certification and regulation of supplemental air carriers. In particular, it empowered the Civil Aeronautics Board to grant certificates of public convenience and necessity authorizing these carriers to engage in "supplemental air transportation." Section 401(d)(3), 49 U.S.C. § 1371(d)(3).*fn3 "Supplemental air transportation" was defined as "charter trips in air transportation . . . to supplement the scheduled service" which regular route carriers such as petitioners are authorized to provide. Section 101(33), 49 U.S.C. § 1301(33).

On March 11, 1966 the Board handed down opinions and orders in proceedings known as the Supplemental Air Service Proceeding and the Reopened Transatlantic Charter Investigation.

One of the orders, issued in the Supplemental Air Service Proceeding, Docket No. 13795, approved the certification of certain supplemental air carriers in the domestic area and authorized them to operate inclusive tour charters. CAB Order No. E-23350 (March 11, 1966). Other orders issued under the same name and docket number, (1) approved the certification of certain supplemental carriers to operate in various overseas and foreign areas*fn4 and authorized them to operate inclusive tours (CAB Order No. E-24237 (March 11, 1966)), and (2) adopted proposed regulations defining various terms and setting out the scope of the carriers' inclusive tour authorization (CAB Order No. E-24238 (March 11, 1966)).

Two other orders were issued the same day under the title Reopened Transatlantic Charter Investigation (All-Expense Tour Phase), Docket No. 11908. Under the first of these orders, the right to operate inclusive tours was added to the certificates previously granted to Capitol Airways and Saturn Airways authorizing them to engage in supplemental air transportation in the transatlantic area. CAB Order No. E-24240 (March 11, 1966). The second order adopted for the authorized transatlantic supplemental carriers the regulations referred to above. CAB Order No. E-24241 (March 11, 1966).

Under the statute the orders concerned with foreign air transportation entered in the Reopened Transatlantic and Supplemental Air Service cases were subject to the President's approval. See Section 801 of the Act, 49 U.S.C. § 1461.*fn5 Those are the orders now before us for review. No presidential approval was required for the domestic orders entered in the Supplemental Air Service Proceeding. They immediately became final and subject to judicial review. The petitioners in the instant case were among the parties who sought judicial review of the Board's domestic orders in the Court of Appeals for the District of Columbia Circuit, contending primarily that the Board exceeded its statutory powers in granting supplemental carriers inclusive tour authority. That court had previously decided the "split charter"*fn6 case, American Airlines, Inc. v. Civil Aeronautics Board, 121 U.S. App. D.C. 120, 348 F.2d 349 (1965), in which it had said:

"Congress intended, although not without limits, that the Board should be free to evolve a definition in relation to such variable factors as changing needs and changing aircraft . . . ." 348 F.2d at 354.

Relying in part on the quoted statement and in part on its own analysis of the relevant legislative history, the court rejected the contention that Congress had not empowered the Board to authorize inclusive tours. American Airlines v. Civil Aeronautics Board, 125 U.S. App. D.C. 6, 365 F.2d 939 (D.C. Cir. 1966).

Thereafter, on September 27, 1966, the orders concerning foreign air transportation were approved by the President. Petitioners now seek review of the orders in this court contending that the Board exceeded its statutory powers in granting inclusive tour authority to supplemental air carriers. They also urge that the Board erred in denying them a hearing before it granted inclusive tour authority to the supplemental carriers involved in the Reopened Transatlantic Charter Investigation and that the orders are unlawful under the statute since they were approved by only two members of the five man Board, one member dissenting and two not participating.

In view of our decision that the grant of authority for inclusive tours was beyond the Board's power, we find it unnecessary to reach the other points raised by petitioners.

The Board contests petitioners' claims on the merits. It also argues that its power with respect to the orders in question was conclusively determined in the prior action involving these petitioners, American Airlines v. Civil Aeronautics Board, supra, 365 F.2d 939, and that the doctrine of res judicata precludes relitigation of this issue.

II.

The Board has moved that the appeal be dismissed or transferred to the Court of Appeals for the District of Columbia Circuit. It is conceded that our court has jurisdiction of the petition and that venue is proper under Section 1006 of the Act, 49 U.S.C. § 1486. However, the Board argues that petitioners are guilty of forum-shopping, seeking a determination from this court contrary to that reached by the District of Columbia Circuit, thus enhancing their opportunity for review in the Supreme Court of the legal issues here tendered. We are urged to transfer the appeal, either under the provisions of 28 U.S.C. § 2112,*fn7 or in the exercise of our inherent discretionary power.

Section 2112 authorizes transfer only where "proceedings have been instituted in two or more courts of appeals with respect to the same order." It is clear that the orders before us are not the same as those reviewed by the Court of Appeals for the District of Columbia Circuit. See Far East Conference v. Federal Maritime Comm'n, 119 U.S. App. D.C. 110, 337 F.2d 146, 148 n. 1 (1964), cert. denied, 379 U.S. 991, 85 S. Ct. 704, 13 L. Ed. 2d 611 (1965).

Even assuming that this court has inherent discretionary power to transfer a case to another court of appeals in the interests of orderly judicial administration (but see Gulf Oil Corp. v. Federal Power Comm'n, 330 F.2d 824 (5th Cir. 1964)), we find nothing in the decided cases that would justify us in transferring this case to the District of Columbia Circuit. We have jurisdiction of the action and, since petitioners' principal place of business is in the Second Circuit, venue is properly laid. Cf. Panhandle Eastern Pipe Line Co. v. Federal Power Comm'n, 343 F.2d 905 (8th Cir. 1965); Panhandle Eastern Pipe Line Co. v. Federal Power Comm'n, 337 F.2d 249 (10th Cir. 1964). Reaching the merits in this case will not require us to construe a prior order of another circuit (cf. Pacific Gas & Electric Co. v. Federal Power Comm'n, 106 U.S. App. D.C. 281, 272 F.2d 510 (1958) (accepting transfer from 9th Circuit)) and we are not presented with the very unusual circumstances thought by the court to justify transfer in Eastern Air Lines v. Civil Aeronautics Board, 122 U.S. App. D.C. 375, 354 F.2d 507 (1965).

In the absence of any showing of inconvenience to respondent, we are not convinced that there are any interests of sound judicial administration which suggest that this case should be transferred. We can perceive no reason for treating this case as an exception to the principle affording a litigant wide latitude in his selection of a forum where Congress has given him a choice.

III.

The Board's motion to dismiss is based on its contention that the doctrine of Chicago & S. Air Lines v. Waterman S.S. Co., 333 U.S. 103, 92 L. Ed. 568, 68 S. Ct. 431 (1948), precludes review of the Board's challenged orders and that, in any event, principles of res judicata prevent petitioners from relitigating the issues. We hold that neither the Waterman ...


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