Capital Airlines, Inc. v. United States

113 F. Supp. 641, 125 Ct. Cl. 623, 1953 U.S. Ct. Cl. LEXIS 194
CourtUnited States Court of Claims
DecidedJuly 13, 1953
DocketNo. 524-52
StatusPublished

This text of 113 F. Supp. 641 (Capital Airlines, Inc. v. United States) is published on Counsel Stack Legal Research, covering United States Court of Claims primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Capital Airlines, Inc. v. United States, 113 F. Supp. 641, 125 Ct. Cl. 623, 1953 U.S. Ct. Cl. LEXIS 194 (cc 1953).

Opinion

WhitakeR, Judge,

delivered the opinion of the court.

Plaintiff, an air carrier, sues the defendant for the sum of $184,701.12 for mail pay to which it claims it is entitled under the order of the Civil Aeronautics Board establishing the rate of mail pay to be paid it by the Postmaster General. The case is before us on motions by the parties for summary judgment.

On August 18, 1949, the Civil Aeronautics Board entered an order, No. E-3157, fixing the mail pay to be paid plaintiff for the period beginning January 14, 1947 and ending December 31, 1948, in the sum of $9,031,595.00, and thereafter, beginning on January 1, 1949, at a rate provided for in that order.

Subsequently, on October 1, 1951, the Board instituted a proceeding for the fixing of a mail rate to be effective thereafter, and on the 19th day of December 1951, under order No. E-5955, it fixed a rate effective from and after that date. Erom the amount accruing under this latter order the Postmaster General has withheld the total sum of $184,701.12, which he says is deductible from the amount of mail pay paid plaintiff under order E-3157 from January 1,1949 to October 1, ‘ 1951. This is because the formula established by order E-3Í57 resulted in “negative mail pay” for the months of June, August and September. This means that under the formula therein set out the plaintiff was obligated to refund some part of the amounts received in previous months under the order.

" Plaintiff’s position is that it was beyond the power of the Civil Aeronautics Board to require it to refund any portion of'the amounts already paid it. Plaintiff expressly disavows an intention to request us to interpret order E-3157 of the Civil Aeronautics Board, or to review that order in any [625]*625way. It impliedly admits, so far as this proceeding is concerned, the correctness of the Board’s interpretation of the order and its validity, if the Board had the power to enter it. It rests its case alone on the proposition that the Board had no power to enter an order which required the plaintiff to refund to the Postmaster General any amount of mail pay previously paid it. That is the sole issue before us.

Plaintiff says that order No. E-3157 provided for the payment to it of mail pay on the basis of each month of operation, and not on a yearly basis, or on any basis other than a monthly basis. It, therefore, says that, if in a subsequent month no mail pay accrued to it under the Board’s order, but, instead, the formula prescribed by the order resulted in a refund due the Government by plaintiff, the Postmaster General, nevertheless, was not authorized to offset this so-called “negative mail pay” against amounts paid it for previous months.

The correctness of this position depends altogether on the proposition that the rates fixed by the Civil Aeronautics Board, under its order No. E-3157, were on a monthly basis and were not on an annual basis, or on any basis other than a monthly basis. This position, however, cannot be sustained, because the Civil Aeronautics Board has interpreted this order E-3157 as fixing, the rates on an annual basis rather than on a monthly basis.

Since plaintiff does not contest the correctness of the interpretation of this order, we are obliged to treat the order as fixing the mail pay on an annual basis rather than- on a monthly basis. This would mean, of course, that the mail pay to which plaintiff was entitled under this order 15-3151 would be computed for the entire year or longer period. Therefore, from the months in which amounts had accrued to plaintiff there must be deducted any amounts of “negative mail pay” which accrued in other months.

This interpretation of the Board was issued in a proceeding brought by plaintiff in which plaintiff asked for an amendment of order E-3157 nunc pro tuno, so as to eliminate the requirement for plaintiff to pay back to the Postmaster General any sum paid to it within a previous month. The Board refused to so amend its order, on the ground that that [626]*626order bad fixed the rates of mail pay on an annual basis, and not on a monthly basis, and that on an annual basis the order required that a balance be struck at the end of the year, crediting plaintiff with the amounts accruing in the months in which the formula produced an indebtedness in plaintiff’s favor, and charging it with the amounts accruing in the months in which the formula produced amounts in the Government’s favor.

We quote the following from the order of the Board in this proceeding, being No. E-5746:

The difficulty with Capital’s argument is that (1) it overlooks the fact, contrary to its assertions, that the same type formula has been utilized in outstanding orders, concerning rune other domestic air carriers,6 and, more important, it attempts to establish inadvertence or clerical error on the basis of results for a specific month or months, whereas, in our view, the issue presented must be determined on the basis of the operation of the formula over at least an annual period.
Mail rates are not determined on a monthly basis to meet a subsidy carrier’s varying requirements, depending essentially upon seasonal fluctuations, for a particular month or months. Bather, as is plain from even a cursory perusal of the April 1, 1949 Tentative Statement, Capital’s rate was determined on the basis of its need for an annual period.7 The formula is merely an expression of these requirements in terms of a monthly rate, so that the carrier need not await the lapse of a year to receive payment.
The sliding scale mail rate formula, of which Capital’s is not atypical, has as its over-all objectives (1) the [627]*627production during any given annual period of that amount of mail pay which will yield a domestic carrier which requires subsidy the customary rate of return on investment (after taxes) under conditions as forecast, and (2) an increasingly greater return as management achieves economies in cost and improves its nonmail revenue position. These were the stated objectives of the formula under discussion. This formula has attained those objectives.8 This is evident from the table below showing Capital’s earnings under the rate order since its inception:

Free access — add to your briefcase to read the full text and ask questions with AI

Cite This Page — Counsel Stack

Bluebook (online)
113 F. Supp. 641, 125 Ct. Cl. 623, 1953 U.S. Ct. Cl. LEXIS 194, Counsel Stack Legal Research, https://law.counselstack.com/opinion/capital-airlines-inc-v-united-states-cc-1953.