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September 14, 1965

Alan S. BOYD et al., as individuals and as members of the Civil Aeronautics Board, Defendant

The opinion of the court was delivered by: HOLTZOFF

 The issue presented in this case is the validity of a regulation of the Civil Aeronautics Board that limits the off-route charter operations of cargo air carriers to a specified percentage of their revenue.

 The Civil Aeronautics Board on September 18, 1964 adopted and promulgated Regulation 207.6(b) reading as follows:

"Effective January 1, 1965, an all-cargo carrier shall not during any calendar year perform off-route charters which in the aggregate, on a revenue plane-mile basis, exceed two percent of the base revenue plane-miles flown by it during the preceding calendar year: Provided, however, That an all-cargo carrier shall be permitted to perform off-route cargo charters within its area of operations without any limitation as to volume of service."

 The manifest purpose of the rule was to bar air carriers from diverting too large a proportion of their facilities and activities to off-route charter flights and to prevent a possible deterioration of regular service for which the carriers received their certificates.

 The plaintiff, an all-cargo air carrier, brought the present action against the members of the Civil Aeronautics Board for a declaratory judgment adjudicating that the regulation is invalid and for an injunction against its enforcement. A passenger air carrier was permitted to intervene. The defendants and the intervenor moved to dismiss the complaint, while the plaintiff moved for summary judgment. The matter is before the Court at this time on these motions.

 The principal objection raised against the validity of the regulation is that it transcends the statutory authority of the Board. This contention is based on the following provision of the Civil Aeronautics Act, 49 U.S.C. § 1371(e)(6), 72 Stat. 754, 76 Stat. 143:

"Any air carrier, other than a supplemental air carrier, may perform charter trips or any other special service, without regard to the points named in its certificate, or the type of service provided therein, under regulations prescribed by the Board."

 It is argued by able counsel for the plaintiff that under this provision every air carrier, other than supplemental air carriers, has unlimited power to operate charter trips or render any other special service, and that such activities may not be curtailed by any regulation of the Civil Aeronautics Board. It is urged that the phrase "under regulations prescribed by the Board" does not comprise authority to proscribe or restrict any such operations. At first blush this reasoning has a superficial allure, especially if the statutory provision is wrenched out of its context and disconnected from other sections of the Act.

 This contention is, however, foreclosed by a decision of the Court of Appeals for this Circuit in Flying Tiger Line, Inc. v. Civil Aeronautics Board, 92 U.S.App.D.C. 260, 204 F.2d 404. In that case the Court rejected a similar argument and construed the statute as meaning merely that it lifts the limitations contained in the certificate of the airline respecting points between which service may be rendered. The Court of Appeals agreed with the position of counsel for the Board that the sentence in question must be read in connection with other provisions of the Act. The opinion of the Court continues, pp. 405-406:

"Thus read, says the Board, the last sentence merely lifts from charter and other special service the limitation respecting points as designated in the certificate. Thus, says the Board, the limitation contained in the certificate respecting the type of service to be rendered - i.e., whether passenger, freight, express or mail - remains unaffected by this last sentence of the paragraph.
"We agree with the latter view, the Board's view. It seems to us that this is a sensible reading of the statute. Tigers' construction would materially upset what seems to us to be a careful congressional plan. * * * Tigers' construction would permit carriers with a certificate specifying one type of service to perform by special arrangement any other type of service without either certificate or exemption order. We think Congress would not have disrupted the general basic plan of the statute by a single obscure and ambiguous sentence placed at the end of a long paragraph.
"We agree with the Board that, if every certificate automatically carried an unlimited special service provision, chaos in regulation would result. Under an interpretation of the statute which would confer unlimited special service authority on every certificated carrier, the Board would have to keep in mind, as it considered any application for a certificate for any type of service, that the carrier would thereby be entitled to be an unlimited competitor in the passenger charter business and in any other special service business."

 At the time of the decision of the Court of Appeals, the statutory provision did not contain the words "or the type of service provided therein". This phrase was inserted by an amendment enacted on July 10, 1962, 76 Stat. 143. It is urged in behalf of the plaintiff that this modification of the statute should lead to a broader construction than that previously adopted. The Court disagrees. The purpose of the amendment was solely to extend the existing provision to all-cargo carriers, in order that as originally worded, it should not be confined to passenger or combination carriers. This purpose clearly appears from the report of the Conference Committee on the bill which ...

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