British Caledonian Airways, Ltd. v. Civil Aeronautics Board

584 F.2d 982, 190 U.S. App. D.C. 1
CourtCourt of Appeals for the D.C. Circuit
DecidedJune 15, 1978
DocketNo. 75-1991
StatusPublished
Cited by14 cases

This text of 584 F.2d 982 (British Caledonian Airways, Ltd. v. Civil Aeronautics Board) is published on Counsel Stack Legal Research, covering Court of Appeals for the D.C. Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
British Caledonian Airways, Ltd. v. Civil Aeronautics Board, 584 F.2d 982, 190 U.S. App. D.C. 1 (D.C. Cir. 1978).

Opinion

Opinion for the court filed by Circuit Judge MacKINNON.

MacKINNON, Circuit Judge:

Petitioner here challenges a declaratory order of the Civil Aeronautics Board (the Board) issued under the authority of 5 U.S.C. § 554(e) (1976) to terminate a controversy and remove uncertainty.1 The order in question is attacked on both procedural and substantive grounds. Although no argument is made that the order was not issued pursuant to those procedures required for declaratory orders, petitioners assert that in issuing this order, the Board was in fact improperly promulgating a new legislative regulation for the airline industry without following the procedures prescribed for either formal or informal rule-making which mandate, respectively, trial type procedures and an opportunity for notice and comment. Should this court find that the Board’s use of a declaratory order was procedurally proper, petitioner further contends that the substance of this order is unreasonable and at variance with several recent court decisions. Our jurisdiction derives from 49 U.S.C. § 1486(a) (1970),2 and we find petitioner’s contentions without sufficient merit to persuade us to overturn the Board’s order.

I. FACTUAL SETTING

A. The Cancellation Charges

The petition for review involves a round trip charter flight booked on April 18, 1973 by Ford Employees Recreation Association (Ford) with World Airways (World), an American charter line. The charter contract, which provided for a firm departure date of December 28,1973, also provided for a series of part payments due at fixed dates in advance of the flight, which payment would be forfeited if Ford cancelled the trip after the due date of the second advance payment, September 30, 1973. On November 13,1973, some 44 days after the last day Ford could withdraw from the charter without suffering a forfeiture, World Airways informed Ford that the then existing international fuel crisis might make- the flight impossible. Ford construed this asserted [3]*3uncertainty concerning what previously had been an assured departure date as anticipatory repudiation, cancelled its flight, and requested refund of the $10,700 advance payments. World refused to return this sum on the grounds that the charter contract it had entered into with Ford specified that pre-flight installments were not refundable in the event of cancellation. The contractual question whether World had itself breached the charter agreement, however, is not before this court. The only issue with which we. are confronted is the legitimacy vel non of the provision for the forfeiture of pre-flight payments in light of the fact that this forfeiture provision was not included in the tariff that World filed with the CAB as required by the applicable statute and regulations.

Petitioner British Caledonian Airways (Caledonian) is also involved in charter flight bookings, and follows a plan of advance payments and cancellation penalties generally similar to those of World. It also has petitioned to review the agency action (J.A. 94), contending that the declaratory order constitutes rulemaking and thus is invalid due to the Board’s failure to follow rulemaking procedures (J.A. 199). Intervenors Show of the Month Club, International and Maritz Travel Company (Maritz) are other charterers of flights with World who suffered the forfeiture of steep cancellation charges in 1974 and 1975. In each case, the terms of the cancellation policy were clearly made known in the contracts signed by those chartering the flights and the airlines. The sole objection raised by the charterers is that the cancellation charges in question were not included in tariffs on file with the Civil Aeronautics Board.3

B. The Prior Industry Letter

In July of 1974, a letter was sent from the Civil Aeronautics Board, Director of the Bureau of Economics and the Director of Operating Rights, to all passenger air carriers. Caledonian Airways claims not to have received a copy until November of 1974. World makes no such claim. The letter stated that many carriers were not conforming to the Board’s requirements with respect to filing cancellation provisions included in charter contracts, (J.A. 93), and continued:

We regard this as a very serious situation. Several carriers, particularly those operating ITC [inclusive tour] and TGC [travel group] charters, have already been advised that cancellation provisions should be included in their tariffs. We believe that this situation is sufficiently wide-spread to make the matter the subject of an industry letter.
Sections 207.4a, 208.32(a), 212.3(a), 214.-13(a) and 221.38(a)(2) of the Board’s Economic Regulations provide that no air carrier shall perform any charter trip unless it has on file with the Board currently effective tariffs showing all rates, fares, and charges for the air transportation and showing all rules, regulations, practices, and services in connection with such air transportation. The provisions of these sections clearly require the inclusion of a carrier’s charter cancellation provisions in its tariffs. Furthermore, sections 207.4a(b), 208.31(b), 212.3a(b) and 214.13a(b) provide that “no term or condition of the charter contract shall, on its face be inconsistent with any provision of the carrier’s published tariffs.” The absence of charter cancellation provisions in a carrier’s tariffs would in effect render [4]*4the cancellation provisions of the charter contract inconsistent with the carrier’s tariffs. Thus, the inclusion of cancellation provisions in a carrier’s charter contract, which conflict with the cancellation provisions in a carrier’s published tariff, would be a direct violation of the Board’s rules. Likewise, we would view the charging of charter cancellation fees which are not contained in a carrier’s tariffs to be a violation of section 403 of the Act [49 U.S.C. § 1373 (1970)]. Under these circumstances, all carriers should take immediate steps to include appropriate charter cancellation provisions in their tariffs. All such provisions must be deleted from carrier’s charter contracts unless and until included in their tariffs.

(J.A. 93) (Emphasis added).

This CAB letter to the industry was precise and definite. It was presented as a statement of the then-existing agency law, not as a declaration of a new regulation. World and Caledonian considered it to be no more than a non-binding advisory notice. On May 9, 1975, Ford, supported by the other two charterer-intervenors here (Show of the Month and Maritz), petitioned the Board to issue a declaratory order4 stating that the Federal Aviation Act and the Board’s regulations required the inclusion of charter cancellation charges in filed tariffs.5 Notice of this petition was sent to all certified U.S. air carriers, both those offering scheduled service and those offering supplemental charter flights. Responses were received by the Board from World, Caledonian and one other supplemental charter line not a party here.

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584 F.2d 982, 190 U.S. App. D.C. 1, Counsel Stack Legal Research, https://law.counselstack.com/opinion/british-caledonian-airways-ltd-v-civil-aeronautics-board-cadc-1978.