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Mohawk Airlines Inc. v. Civil Aeronautics Board

decided: June 5, 1969.


Waterman, Smith and Kaufman, Circuit Judges.

Author: Kaufman

KAUFMAN, Circuit Judge:

Mohawk Airlines, Inc. (Mohawk) petitions this court to review and set aside that portion of Civil Aeronautics Board Order No. 68-9-73 which granted to Allegheny Airlines, Inc. (Allegheny) a revised certificate of public convenience and necessity authorizing it to provide nonstop service between the following three pairs of junctions: (1) Islip, New York -- Cleveland, Ohio, (2) Islip, New York -- Detroit, Michigan, and (3) Bridgeport, Connecticut -- Detroit, Michigan.*fn1

By its Order E-23856, issued on June 23, 1966, the Civil Aeronautics Board (the Board) instituted Allegheny Airlines Route 97 Investigation. After several preliminary proceedings, a hearing before an Examiner commenced on August 15, 1967. Nine airlines, including Allegheny and Mohawk, and other interested parties participated. On January 16, 1968, the Examiner entered his Initial Decision concluding, inter alia, that Allegheny should be granted nonstop authority in the Islip-Cleveland, Islip-Detroit and Bridgeport-Detroit markets. Mohawk then filed a timely petition with the Board seeking discretionary review of this portion of the Examiner's Initial Decision. After denying Mohawk's petition, the Board, on September 19, 1968, entered Order No. 68-9-73 formally amending Allegheny's certificate in accordance with the Examiner's recommendations. On September 27 the Board further denied Mohawk's motion for a stay of the order, and on December 9 this court also refused a stay pending review. In the proceeding now before us, Allegheny has intervened in support of the Board.


Mohawk's prayer for relief is grounded on its claim that the Board did not provide it with adequate notice that nonstop authority for the three pairs of routes we have referred to would be at issue in the Route 97 Investigation. It further claims that it suffered substantial prejudice as a result of the lack of notice because the nonstop traffic on these routes is not large enough to support more than one airline, and therefore the award of authority to Allegheny precludes it from obtaining similar competitive operating rights in these markets.

Under the doctrine of Ashbacker Radio Corp. v. F.C.C., 326 U.S. 327, 90 L. Ed. 108, 66 S. Ct. 148 (1945), if an agency's award of one application for operating authority would be mutually exclusive as a matter of fact with the award of others before the agency, the competing applications must be considered contemporaneously. In accordance with this doctrine, the Board's rules allow motions for consolidation of proceedings involving competing applications in order that they may be given comparative consideration. 14 C.F.R. ยง 312.12. Mohawk contends its lack of notice that the Route 97 Investigation might result in a grant of the indicated nonstop prevented it from moving for consolidation in time so that its qualifications for such authority could be considered contemporaneously with those of Allegheny. Thus, it asserts it was deprived of its Ashbacker rights.*fn2


In order to assess Mohawk's claim, it is necessary to review the descriptions of the scope of the investigation set forth by the Board and the Examiner as the proceeding progressed. First, in its order instituting the Route 97 Investigation, the Board listed the issues it intended the investigation to include. With regard to Allegheny, the Board recorded seven possible alterations of the certificate which it would consider. Items 1 through 5 and 7 all dealt with specifically identified individual routes or a series of routes, referred to as a "segment." None of these included the routes here in issue. Item 6 stated as one of the objectives of the investigation: "to consider the realignment of segments 1, 3, 4, 5, 6 and 7 in such manner as to permit increased flexibility in flight scheduling and greater operational efficiency and economy."*fn3 Segment 8, the only segment on which Islip is located, was not mentioned.

The intended scope of the investigation was further elucidated by the explanatory portion of the order, in which the Board stated:

" . . . At the present time liberalized operating authority and improved route structure for Allegheny on the eastern part of its system, which is primarily north-south oriented, are being considered in the pending Allegheny Airlines, Inc. Segment 8 Renewal and Route Realignment Investigation, . . . and the New York-Florida Renewal Case . . . However, neither of these cases involves issues related to the western part of the carrier's system. This is the area to which we intend to direct our attention in the instant investigation."

The Board further stated that it wished to consider a realignment of the six enumerated Allegheny segments so as to consolidate them into a lesser number of segments "consistent with the general nature of the carrier's operations." In accompanying footnotes, the Board elaborated by stating: "Segments 2 and 8 are excluded"; and, "We do not propose by this realignment to affect Allegheny's basic authority, but rather to eliminate duplicate authority and unnecessary restrictions and conditions."

Not entirely content with this delineation of the scope of the investigation, Allegheny submitted to the Board a Petition for Reconsideration and Clarification of the order. In this petition, Allegheny requested that the Board include within the scope of the investigation its application for nonstop authority on certain specified routes not mentioned in points 1 through 5 and 7 of the Board's order. These explicitly particularized routes also did not include the three here in question. Additionally, Allegheny requested that the Board clarify its description of the route realignment issue involving segments 1, 3, 4, 5, 6 and 7 to provide that no limitations were imposed upon the manner in which these segments might be realigned or consolidated. Mohawk submitted an answer to Allegheny's petition, objecting to an expansion of the scope of the proceeding beyond that outlined in the Board's original order. It called attention to the Board's statement that the investigation would focus on the "western part" of Allegheny's route system, and that the realignments proposed would not have significant competitive effects on other airlines but would merely solve Allegheny's internal problems. Anticipating the possibility that the Board might nevertheless agree to expand the scope of the investigation in accordance with Allegheny's request, Mohawk reserved the right to move for consolidation of its own applications which would be mutually exclusive with any of the route issues which the Board might add to the investigation.

Eventually, the Board issued its Order of Reconsideration and Consolidation (Order E-24905) on March 27, 1967. In this order, the Board agreed to include in the investigation Allegheny's request for nonstop authority for certain additional specified routes and denied ...

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