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CIVIL AERO. BD. V. STATE AIRLINES, 338 U.S. 572 


ARGUED DECEMBER 12, 1949.  - DECIDED FEBRUARY 6, 1950.  - 84 U.S. APP.
D.C. 374, 174 F.2D 510, REVERSED. 


UNDER THE CIVIL AERONAUTICS ACT OF 1938, THE CIVIL AERONAUTICS BOARD
CONSOLIDATED 45 ROUTE APPLICATIONS OF 25 AIR LINES INTO ONE AREA
PROCEEDING.  AFTER HEARINGS, IT MADE FINDINGS OF FACT AS TO WHAT NEW
ROUTES SHOULD BE ESTABLISHED AND WHICH OF THE APPLICANTS COULD BEST
SERVE THESE ROUTES.  IT ENTERED ORDERS AUTHORIZING CERTIFICATES OF
CONVENIENCE AND NECESSITY FOR SEVERAL NEW ROUTES IN THE AREA.  ONE
APPLICANT WAS AUTHORIZED TO ENGAGE IN AIR TRANSPORTATION ALONG CERTAIN
OF THESE ROUTES WHICH WERE DIFFERENT FROM THOSE DESCRIBED IN ITS
APPLICATIONS.  ITS APPLICATIONS REQUESTED AUTHORITY TO TRANSPORT ON
"THE ROUTES DETAILED HEREIN, OR SUCH MODIFICATION OF SUCH ROUTES AS THE
BOARD MAY FIND PUBLIC NECESSITY AND CONVENIENCE REQUIRE" AND ALSO
CONTAINED PRAYERS FOR GENERAL RELIEF.  HELD: 

1.  ON THE RECORD IN THIS CASE, THE APPLICATIONS WERE SUFFICIENT TO
PERMIT CERTIFICATION OF THIS APPLICANT FOR THE ROUTES AWARDED.  PP. 575
578. 

(A)  EXCEPT FOR THE STATUTORY REQUIREMENT OF WRITTEN AND VERIFIED
APPLICATIONS, CONGRESS PLAINLY INTENDED TO LEAVE THE BOARD FREE TO WORK
OUT APPLICATION PROCEDURES REASONABLY ADAPTED TO FAIR AND ORDERLY
ADMINISTRATION OF ITS COMPLEX RESPONSIBILITIES.  P. 576. 

(B)  IN DECIDING THAT THE POLICIES OF THE ACT COULD BEST BE SERVED IN
THIS CASE BY A CONSOLIDATED AREA PROCEEDING, THE BOARD DID NOT EXCEED
ITS PROCEDURAL DISCRETION.  PP. 576-577. 

(C)  IN AWARDING ROUTES VARYING FROM THOSE SPECIFICALLY DETAILED IN
THE APPLICATIONS IN THIS CASE, THE BOARD DID NOT DEPART FROM
CONGRESSIONAL POLICY HINGING CERTIFICATION GENERALLY ON APPLICATION
PROCEDURES.  PP. 577-578. 

(D)  THE STANDARD ADOPTED BY THE BOARD UNDER WHICH THE PUBLIC
INTEREST IS GIVEN PARAMOUNT CONSIDERATION IS A CORRECT STANDARD.  PP.
580-581. 

2.  ON THE RECORD IN THIS CASE, AN UNSUCCESSFUL APPLICANT WAS NOT
DENIED A FAIR HEARING IN THE PROCEEDINGS BEFORE THE BOARD.  PP.  578
581. 

3.  ON THE RECORD IN THIS CASE, THE BOARD'S FINDING THAT THE
SUCCESSFUL APPLICANT WAS FIT AND ABLE TO PERFORM THE SERVICES
AUTHORIZED AND WAS BETTER QUALIFIED TO DO SO THAN THE UNSUCCESSFUL
APPLICANT, WAS SUPPORTED BY SUBSTANTIAL EVIDENCE AND IS SUSTAINED.  PP.
581-582. 

CIVIL AERONAUTICS BOARD V. STATE AIRLINES, INC. 

NO. 157.  CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE
DISTRICT OF COLUMBIA CIRCUIT* . 

*TOGETHER WITH NO. 158, STATE AIRLINES, INC. V. CIVIL AERONAUTICS
BOARD ET AL., AND NO. 159, PIEDMONT AVIATION, INC. V. STATE AIRLINES,
INC., ALSO ON CERTIORARI TO THE SAME COURT. 

THE COURT OF APPEALS REVERSED AN ORDER OF THE CIVIL AERONAUTICS BOARD
GRANTING CERTIFICATES OF CONVENIENCE AND NECESSITY FOR THE OPERATION OF
CERTAIN NEW AIR-LINE ROUTES.  84 U.S. APP. D.C. 374, 174 F.2D 510. 
THIS COURT GRANTED CERTIORARI.  338 U.S. 812.  NO. 158 DISMISSED; NOS.
157 AND 159 REVERSED, P. 582. 

MR. JUSTICE BLACK DELIVERED THE OPINION OF THE COURT. 

ACTING UNDER THE CIVIL AERONAUTICS ACT OF 1938,  FN1  THE CIVIL
AERONAUTICS BOARD (C.A.B.)  CONSOLIDATED SOME 45 ROUTE APPLICATIONS OF
25 AIRLINES INTO ONE AREA PROCEEDING, STYLED THE "SOUTHEASTERN STATES
CASE."  AFTER HEARINGS, IT MADE FINDINGS OF FACT AS TO WHAT NEW ROUTES
SHOULD BE ESTABLISHED AND WHICH OF THE APPLICANTS COULD BEST SERVE
THESE ROUTES.  IT THEN ENTERED ORDERS AUTHORIZING CERTIFICATES OF
CONVENIENCE AND NECESSITY FOR SEVERAL NEW ROUTES IN THE AREA.  PIEDMONT
AVIATION, INC., WAS AUTHORIZED TO ENGAGE IN AIR TRANSPORTATION OF
PERSONS, PROPERTY, AND MAIL ALONG CERTAIN OF THESE ROUTES.  STATE
AIRLINES, INC., WAS DENIED AUTHORITY TO ACT AS A CARRIER ON ANY OF
THEM.  FN2  STATE FILED A PETITION IN THE UNITED STATES COURT OF
APPEALS FOR THE DISTRICT OF COLUMBIA CIRCUIT ASKING THAT COURT TO
REVERSE THE ORDERS AND REMAND THE CASE TO THE BOARD WITH DIRECTIONS TO
GRANT CARRIER CERTIFICATES TO STATE INSTEAD OF PIEDMONT.  FN3  THE
COURT REVERSED INSOFAR AS THE ORDERS AWARDED CERTIFICATES TO PIEDMONT
BUT HELD THAT IT WAS WITHOUT POWER TO DIRECT THE BOARD TO CERTIFY
STATE.  FN4  A CRUCIAL GROUND OF THE COURT'S REVERSAL WAS ITS FINDING
THAT PIEDMONT HAD NEVER FILED AN APPLICATION FOR THE PARTICULAR ROUTES
CERTIFIED, AN INDISPENSABLE PREREQUISITE TO CERTIFICATION AS THE COURT
OF APPEALS INTERPRETED THE CIVIL AERONAUTICS ACT.  A SECOND GROUND FOR
REVERSAL WAS THAT SINCE PIEDMONT HAD FILED NO APPLICATION FOR THE
PARTICULAR ROUTES CERTIFIED, STATE FAILED TO HAVE SUFFICIENT NOTICE
THAT THE BOARD MIGHT CONSIDER PIEDMONT AS A COMPETING APPLICANT, AND
THUS WAS DEPRIVED OF A FAIR OPPORTUNITY TO DISCREDIT PIEDMONT'S FITNESS
AND ABILITY TO SERVE THOSE ROUTES.  A THIRD GROUND WAS THAT THE BOARD'S
FINDINGS THAT PIEDMONT WAS FIT AND ABLE TO SERVE THE ROUTES "WERE, IN
THE LEGAL SENSE, ARBITRARY AND CAPRICIOUS AND LACKED THE SUPPORT OF
SUBSTANTIAL EVIDENCE."  BOTH PIEDMONT AND THE BOARD PETITIONED FOR
REVIEW OF THE COURT'S REVERSAL, WHILE STATE CROSS-PETITIONED FOR REVIEW
OF THE COURT'S REFUSAL TO DIRECT CERTIFICATION OF STATE.  FN5  WE
GRANTED CERTIORARI BECAUSE A FINAL DETERMINATION OF THE QUESTIONS
INVOLVED, PARTICULARLY THOSE INVOLVING INTERPRETATION OF THE ACT, IS OF
IMPORTANCE FOR FUTURE GUIDANCE OF THE BOARD IN CARRYING OUT ITS
CONGRESSIONALLY IMPOSED FUNCTIONS.  338 U.S. 812. 

FIRST.  WE HOLD THAT PIEDMONT'S APPLICATIONS WERE SUFFICIENT TO
PERMIT CERTIFICATION OF PIEDMONT FOR THE ROUTES AWARDED.  THE CONTRARY
HOLDING OF THE COURT OF APPEALS RESTED PRIMARILY ON ITS INTERPRETATION
OF SEC. 401(D)(1) AND (2) OF THE CIVIL AERONAUTICS ACT.  THE PARTICULAR
LANGUAGE MOST RELIED ON BY THE COURT WAS THAT WHICH EMPOWERS THE BOARD
TO ISSUE CERTIFICATES "AUTHORIZING THE WHOLE OR ANY PART OF THE
TRANSPORTATION COVERED BY THE APPLICATION, IF IT FINDS THAT THE
APPLICANT IS FIT, WILLING, AND ABLE TO PERFORM SUCH TRANSPORTATION
PROPERLY  ...."  THE COURT OF APPEALS READ THIS LANGUAGE AS SHOWING A
CONGRESSIONAL PURPOSE TO BAR THE BOARD FROM GRANTING ANY CERTIFICATES
IN WHICH THE ROUTES AWARDED DEVIATE MORE THAN SLIGHTLY FROM THE PRECISE
ROUTES DEFINED IN THE APPLICATION.  WE THINK THAT SUCH A NARROW
INTERPRETATION IS NOT COMPELLED BY THE LANGUAGE OF SEC. 401(D) AND THAT
THE ACT AS A WHOLE REFUTES ANY INTENT TO FREEZE THE BOARD'S PROCEDURES
IN SO RIGID A MOLD. 

THE LANGUAGE OF SEC. 401(D)(1) AND (2) UNQUALIFIEDLY GIVES THE BOARD
POWER, AFTER APPLICATION AND APPROPRIATE FINDINGS, TO ISSUE
CERTIFICATES FOR THE WHOLE OR ANY PART OF TRANSPORTATION COVERED IN AN
APPLICATION.  THIS MANIFESTS A PURPOSE GENERALLY TO GEAR THE AWARD OF
CERTIFICATES TO AN APPLICATION PROCEDURE.  BUT CONGRESS MADE NO ATTEMPT
IN (1) AND (2) OF SEC. 401(D) TO DEFINE THE FULL REACH OR CONTENTS OF
AN APPLICATION.  THESE SUBSECTIONS DO NOT EVEN REQUIRE AN APPLICANT TO
DESIGNATE THE TERMINAL CITIES OR THE INTERMEDIATE POINTS A PROPOSED
ROUTE WOULD SERVE.  A DIFFERENT PROVISION, SEC. 401(B), CONTAINS THE
ONLY REQUIREMENTS DIRECTLY IMPOSED BY CONGRESS - THAT AN APPLICATION
MUST BE IN WRITING AND VERIFIED.  FN7  WITH THIS ONE EXCEPTION, SEC.
401(B) PROVIDES THAT AN APPLICATION "SHALL BE IN SUCH FORM AND CONTAIN
SUCH INFORMATION  ...  AS THE BOARD SHALL BY REGULATION REQUIRE."  AND
IN SEC. 1001 CONGRESS GRANTED THE BOARD AUTHORITY TO "CONDUCT ITS
PROCEEDINGS IN SUCH MANNER AS WILL BE CONDUCIVE TO THE PROPER DISPATCH
OF BUSINESS AND TO THE ENDS OF JUSTICE."  THUS, EXCEPT FOR THE
STATUTORY REQUIREMENT OF WRITTEN AND VERIFIED APPLICATIONS, CONGRESS
PLAINLY INTENDED TO LEAVE THE BOARD FREE TO WORK OUT APPLICATION
PROCEDURES REASONABLY ADAPTED TO FAIR AND ORDERLY ADMINISTRATION OF ITS
COMPLEX RESPONSIBILITIES. 

HERE THE BOARD DECIDED THAT THE POLICIES OF THE ACT COULD BEST BE
SERVED BY A CONSOLIDATED AREA PROCEEDING.  IN DOING SO IT DID NOT
EXCEED ITS PROCEDURAL DISCRETION.  ONLY THROUGH SUCH JOINT HEARINGS
COULD THE BOARD EXPEDITIOUSLY DECIDE WHAT NEW ROUTES SHOULD BE
ESTABLISHED, IF ANY, AND WHICH OF THE NUMEROUS APPLICANTS SHOULD BE
SELECTED AS APPROPRIATE CARRIERS FOR DIFFERENT ROUTES.  AND IN SUCH A
PROCEEDING, AS THE BOARD HAS FOUND, LIMITING ALL APPLICATIONS TO THE
PRECISE ROUTES THEY DESCRIBE WOULD DESTROY NECESSARY FLEXIBILITY.  FOR
THE BOARD'S DECISION AS TO WHAT NEW ROUTES ARE ACTUALLY AVAILABLE IS
NOT REACHED UNTIL LONG AFTER THE APPLICATIONS ARE FILED.  RECOGNIZING
THIS, PIEDMONT, LIKE OTHER AIRLINES, INSERTED A SO-CALLED "CATCHALL
CLAUSE" IN ITS APPLICATIONS, BROADLY REQUESTING AUTHORITY TO TRANSPORT
ON "THE ROUTES DETAILED HEREIN, OR SUCH MODIFICATION OF SUCH ROUTES AS
THE BOARD MAY FIND PUBLIC CONVENIENCE AND NECESSITY REQUIRE."  IT ALSO
INCLUDED A GENERAL PRAYER "FOR SUCH OTHER AND FURTHER RELIEF, GENERAL
AND SPECIFIC, UNDER SECTION 401 OF THE ... ACT  ...  AS THE BOARD MAY
DEEM APPROPRIATE, AND TO WHICH THE APPLICANT MAY BE ENTITLED IN ANY
PROCEEDING IN WHICH THE APPLICATION MAY BE HEARD IN PART OR IN ITS
ENTIRETY." 

WE ARE CONVINCED THAT THE BOARD, IN AWARDING ROUTES VARYING FROM
THOSE SPECIFICALLY DETAILED IN PIEDMONT'S APPLICATION, HAS NOT DEPARTED
FROM THE CONGRESSIONAL POLICY HINGING CERTIFICATION GENERALLY ON
APPLICATION PROCEDURES.  WHILE THE ROUTES SOUGHT BY PIEDMONT DID DIFFER
MARKEDLY FROM THOSE AWARDED,  FN8  THEY WERE ALL IN THE GENERAL AREA
COVERED BY THE CONSOLIDATED HEARINGS.  ALL TWENTY-FIVE APPLICANTS HAD
ASKED FOR ROUTES SOMEWHERE IN THE AREA, AND MANY OF THESE ROUTES
OVERLAPPED.  IN SUCH AN AREA PROCEEDING IT WOULD EXALT IMAGINARY
PROCEDURAL RIGHTS ABOVE THE PUBLIC INTEREST TO HOLD THAT THE BOARD IS
HAMSTRUNG BY THE LACK OF FORESIGHT OR SKILL OF A DRAFTSMAN IN
DESCRIBING ROUTES.  THE FLEXIBLE REQUIREMENTS SET BY THE BOARD WERE
REASONABLE.  THEY ACCORDED WITH THE POLICIES OF THE ACT.  THE BOARD IN
WELL-CONSIDERED OPINIONS HELD THAT PIEDMONT'S APPLICATION MET THESE
REQUIREMENTS.  THAT APPLICATION ALSO MET THE CONGRESSIONAL REQUIREMENTS
OF WRITING AND VERIFICATION.  SO FAR AS SEC. 401(D)(1) AND (2) ARE
CONCERNED, THE BOARD ACTED WITHIN ITS POWER IN ENTERING THE ORDERS. 

SECOND.  THE COURT OF APPEALS RECOGNIZED THAT FULL HEARINGS WERE HELD
IN THE AREA PROCEEDINGS AFTER DUE NOTICE TO ALL INTERESTED PARTIES. 
BUT THAT COURT NEVERTHELESS HELD THAT STATE WAS WITHOUT ADEQUATE NOTICE
THAT THE BOARD MIGHT CONSIDER PIEDMONT AS AN APPLICANT FOR ROUTES
ENCROACHING ON THOSE SOUGHT BY STATE.  THIS CONTENTION LARGELY RESTS ON
THE STATUTORY INTERPRETATION WE HAVE REJECTED.  STATE ARGUES, HOWEVER,
THAT SINCE IT NEVER CONSIDERED PIEDMONT AS A POSSIBLE APPLICANT FOR THE
ROUTES AWARDED, IT FAILED TO PRODUCE AVAILABLE EVIDENCE AND ARGUMENTS
TO CONVINCE THE BOARD THAT PIEDMONT WAS NOT FIT AND ABLE TO SERVE AS A
CARRIER ON THE ROUTES. 

THIS CHALLENGE IS SUBSTANTIAL.  THE BOARD'S MAJOR STANDARD IS THE
PUBLIC INTEREST IN HAVING CONVENIENT ROUTES SERVED BY FIT AND ABLE
CARRIERS.  THESE QUESTIONS ARE TO BE DETERMINED IN HEARINGS AFTER
NOTICE.  THE PRIME PURPOSE OF ALLOWING INTERESTED PERSONS TO OFFER
EVIDENCE IS TO GIVE THE BOARD THE ADVANTAGE OF ALL AVAILABLE
INFORMATION AS A BASIS FOR ITS SELECTION OF THE APPLICANT BEST
QUALIFIED TO SERVE THE PUBLIC INTEREST.  CF. FEDERAL COMMUNICATIONS
COMM'N V. SANDERS RADIO STATION, 309 U.S. 470, 477.  IF THE BOARD HAD
NEGLECTED THIS PURPOSE, STATE COULD RIGHTLY COMPLAIN. 

HERE, HOWEVER, WE FIND THAT THE BOARD FULLY APPRECIATED ITS
RESPONSIBILITY IN THIS RESPECT.  IT SEEMS PLAIN TO US FROM THE ENTIRE
RECORD THAT STATE DID FULLY RECOGNIZE THAT PIEDMONT WAS A POTENTIAL
COMPETITIVE APPLICANT IN THE CONSOLIDATED PROCEEDINGS.  THEIR
APPLICATIONS IN LARGE PART SOUGHT CERTIFICATES IN THE SAME GENERAL
AREA.  EACH ARGUED AGAINST THE OTHER BEFORE THE BOARD. 

MOREOVER, AFTER ISSUANCE OF THE ORDER, THE BOARD GRANTED STATE A
LIMITED REHEARING TO SHOW, IF IT COULD, THAT THE PROCEEDING SHOULD BE
REOPENED TO ENABLE STATE TO OFFER NEW EVIDENCE AGAINST PIEDMONT'S
FITNESS AND ABILITY.  IN THE REHEARING ARGUMENT, STATE'S MAIN
CONTENTION WAS THAT THE BOARD LACKED JURISDICTION BECAUSE OF THE
LIMITED NATURE OF PIEDMONT'S APPLICATION, A CONTENTION WE HAVE ALREADY
REJECTED.  BUT STATE ALSO CONTENDED THAT HAD IT KNOWN PIEDMONT TO BE AN
ACTUAL COMPETITOR, STATE WOULD HAVE MADE DILIGENT EFFORTS BY CROSS
EXAMINATION AND OTHERWISE TO PREVENT THE BOARD'S FINDING THAT
PIEDMONT'S QUALIFICATIONS WERE SUPERIOR TO STATE'S.  THE RECORD REVEALS
THAT THE BOARD GAVE MOST CAREFUL CONSIDERATION TO ALL THE CONTENTIONS
MADE BY STATE'S COUNSEL.  THE BOARD IN AN OPINION DISCUSSED EACH OF
THOSE CONTENTIONS.  8 C.A.B. 716.  WITH PARTICULAR REFERENCE TO THE
GENERAL CONTENTION THAT IN REOPENED PROCEEDINGS STATE COULD OFFER
EVIDENCE TO REFUTE THE BOARD'S FINDINGS OF PIEDMONT'S SUPERIOR
QUALIFICATIONS, THE BOARD SAID:  "ALTHOUGH IN THE COURSE OF THE
SUBSEQUENT ARGUMENT STATE ASSERTED THAT HAD IT BEEN AWARE OF THE
SITUATION IT MIGHT HAVE PRESENTED ADDITIONAL OR DIFFERENT EVIDENCE AND
WOULD HAVE ENLARGED UPON ITS INQUIRIES INTO PIEDMONT'S CASE, IT DID
NOT, IN THE COURSE OF THE ARGUMENT OR IN ITS PETITION FOR
RECONSIDERATION, SPECIFY WHAT THE NATURE OF SUCH ADDITIONAL EVIDENCE OR
INQUIRIES WOULD HAVE BEEN."  FN9  ID., AT 721.  IT WAS IN THIS SETTING
THAT THE BOARD HELD STATE'S SHOWING INADEQUATE TO JUSTIFY NEW HEARINGS
CONCERNING THE RESPECTIVE QUALIFICATIONS OF STATE AND PIEDMONT.  IN
REAFFIRMING ITS PREVIOUS HOLDING OF PIEDMONT'S SUPERIOR QUALIFICATIONS,
THE BOARD SAID:  "THE ONLY PRACTICAL APPROACH THAT CAN BE TAKEN IN
CASES OF THIS TYPE IS TO CONSIDER THE APPLICATIONS, NOT WITH A VIEW AS
TO HOW AN INDIVIDUAL PROPOSAL WOULD BENEFIT THE APPLICANT, OR WHETHER A
PARTICULAR PROPOSED ROUTE IS REQUIRED PRECISELY AS SET FORTH IN AN
APPLICATION, BUT RATHER TO CONSIDER THE ENTIRE CASE WITH THE OBJECTIVE
OF ESTABLISHING A SOUND TRANSPORTATION PATTERN IN THE AREA INVOLVED." 
FN10  8 C.A.B. AT 722. 

WE THINK THE STANDARD ADOPTED BY THE BOARD UNDER WHICH THE PUBLIC
INTEREST IS GIVEN A PARAMOUNT CONSIDERATION IS A CORRECT STANDARD.  AND
SINCE THE BOARD'S CONCLUSION THAT THE PROCEEDING SHOULD NOT BE REOPENED
REPRESENTS ITS INFORMED JUDGMENT AFTER A SEARCHING INQUIRY, WE ACCEPT
ITS CONCLUSION.  BECAUSE OF THE FOREGOING AND OTHER CIRCUMSTANCES
DISCLOSED BY THE RECORD WE THINK THERE IS NO GROUND FOR STATE'S
CONTENTION THAT IT FAILED TO HAVE A FAIR HEARING.  SEE CHICAGO, ST.
PAUL, MINNEAPOLIS & OMAHA R. CO. V. UNITED STATES, 322 U.S. 1, 3. 

THIRD.  DURING THE REHEARING ARGUMENT, COUNSEL FOR STATE WAS ASKED BY
A MEMBER OF THE BOARD WHETHER STATE TOOK THE POSITION THAT PIEDMONT WAS
"NOT CAPABLE OF RUNNING THE ROUTE THAT WAS AWARDED."  HE REPLIED:  "WE
ARE TAKING THE POSITION THAT BOTH STATE AND PIEDMONT ARE FIT AND ABLE,
IT'S A QUESTION OF WHICH HAS DEMONSTRATED IN THIS RECORD TO BE MORE
FIT, WILLING AND ABLE."  STATE NEVERTHELESS CONTENDS HERE, AND THE
COURT OF APPEALS HELD, THAT THERE WAS NO SUFFICIENT EVIDENCE TO SUPPORT
THE BOARD'S FINDING OF PIEDMONT'S FITNESS AND ABILITY.  THIS
CONTENTION, LIKE OTHERS, RESTS ALMOST WHOLLY ON THE ARGUMENT THAT
PIEDMONT HAD NOT APPLIED FOR THE PARTICULAR ROUTES AWARDED AND THUS
COULD NOT HAVE EVIDENCED ITS ABILITY TO HANDLE THOSE ROUTES.  THE COURT
OF APPEALS ALSO EMPHASIZED THE FACT THAT THE ROUTES AWARDED REQUIRED
PIEDMONT TO TRANSPORT OVER MOUNTAINS, WHEREAS THE DETAILED PASSENGER
ROUTES FOR WHICH IT HAD APPLIED WOULD NOT HAVE CROSSED THE MOUNTAINS;
IT CONTRASTED THIS WITH STATE'S APPLICATIONS, WHICH HAD SPECIFICALLY
SHOWN ROUTES CROSSING THE MOUNTAINS.  PRECISELY WHAT ADDED SKILLS, IF
ANY, ARE REQUIRED FOR FLIGHTS ACROSS MOUNTAINS IS A MATTER OF PROOF. 
IN THE EXTENSIVE HEARINGS HELD IN THIS AREA PROCEEDING, EACH APPLICANT
WAS REQUIRED TO AND DID OFFER EVIDENCE CONCERNING FITNESS AND ABILITY. 
MUCH OF THIS EVIDENCE CONCERNED THE FINANCIAL CONDITION AND EXPERIENCE
IN AVIATION OF BOTH PIEDMONT AND STATE.  THE BOARD'S OPINIONS SHOW THE
PAINSTAKING CONSIDERATION GIVEN THIS EVIDENCE.  THE BOARD FOUND BOTH
AIRLINES FIT AND ABLE, BUT FOUND THE EVIDENCE OF QUALIFICATIONS AS
BETWEEN THE TWO WEIGHTED ON PIEDMONT'S SIDE.  WE HOLD THAT THE
CONCLUSION WAS SUPPORTED BY SUBSTANTIAL EVIDENCE.    IN VIEW OF OUR
CONCLUSION WE NEED NOT CONSIDER THE ALLEGATIONS OF STATE'S CROSS
PETITION IN NO. 158 AND THAT CASE IS THEREFORE DISMISSED.  IN NOS. 157
AND 159 THE JUDGMENT OF THE COURT OF APPEALS IS REVERSED.  IT IS SO
ORDERED. 

FN1  52 STAT. 973, 49 U.S.C. SEC. 401 ET SEQ. 

FN2  THE SEVERAL OPINIONS OF THE BOARD ARE REPORTED.  7 C.A.B. 863; 8
C.A.B. 585 AND 716. 

FN3  AUTHORITY FOR JUDICIAL REVIEW IS GIVEN BY SEC. 1006 OF THE ACT,
52 STAT. 1024, 49 U.S.C. SEC. 646. 

FN4  84 U.S. APP. D.C. 374, 174 F.2D 510. 

FN5  THE BOARD'S PETITION IS OUR DOCKET NO. 157; PIEDMONT'S IS NO.
159; STATE'S CROSS-PETITION IS NO. 158. 

FN6  THERE ARE SLIGHT BUT IMMATERIAL VARIANTS IN THE RELEVANT
LANGUAGE AS IT APPEARS IN (1) AND (2) OF SEC. 401(D).  THOSE SECTIONS,
AS ITALICIZED BY THE COURT OF APPEALS, READ: 

"(1)  THE BOARD SHALL ISSUE A CERTIFICATE AUTHORIZING THE WHOLE OR
ANY PART OF THE TRANSPORTATION COVERED BY THE APPLICATION, IF IT FINDS
THAT THE APPLICANT IS FIT, WILLING, AND ABLE TO PERFORM SUCH
TRANSPORTATION PROPERLY, AND TO CONFORM TO THE PROVISIONS OF THIS
CHAPTER (ORIGINALLY THIS ACT) AND THE RULES, REGULATIONS, AND
REQUIREMENTS OF THE BOARD HEREUNDER, AND THAT SUCH TRANSPORTATION IS
REQUIRED BY THE PUBLIC COVENIENCE AND NECESSITY; OTHERWISE SUCH
APPLICATION SHALL BE DENIED. 

"(2)  IN THE CASE OF AN APPLICATION FOR A CERTIFICATE TO ENGAGE IN
TEMPORARY AIR TRANSPORTATION, THE BOARD MAY ISSUE A CERTIFICATE
AUTHORIZING THE WHOLE OR ANY PART THEREOF FOR SUCH LIMITED PERIODS AS
MAY BE REQUIRED BY THE PUBLIC CONVENIENCE AND NECESSITY, IF IT FINDS
THAT THE APPLICANT IS FIT, WILLING, AND ABLE PROPERLY TO PERFORM SUCH
TRANSPORTATION AND TO CONFORM TO THE PROVISIONS OF THIS CHAPTER AND THE
RULES, REGULATIONS, AND REQUIREMENTS OF THE BOARD HEREUNDER." 

FN7  "APPLICATION FOR A CERTIFICATE SHALL BE MADE IN WRITING TO THE
(BOARD) AND SHALL BE SO VERIFIED, SHALL BE IN SUCH FORM AND CONTAIN
SUCH INFORMATION, AND SHALL BE ACCOMPANIED BY SUCH PROOF OF SERVICE
UPON SUCH INTERESTED PERSONS, AS THE (BOARD) SHALL BY REGULATION
REQUIRE."  CIVIL AERONAUTICS ACT OF 1938, AS AMENDED, SEC. 401(B). 

FN8  THE COURT OF APPEALS PLACED IN ITS OPINION TWO MAPS CHARTING THE
PASSENGER ROUTES APPLIED FOR BY PIEDMONT AND STATE AND INDICATING THAT
THE ROUTES AWARDED PIEDMONT FAR MORE NEARLY APPROXIMATED THOSE SOUGHT
BY STATE.  THE BOARD AND STATE TAKE THE POSITION THAT THESE MAPS DO NOT
SHOW ALL OF THE POINTS AND ROUTES APPLIED FOR BY EITHER AIRLINE, AND
THE COURT OF APPEALS SAID AS MUCH WITH REFERENCE TO THE MAPS.  BUT THE
VIEW WE TAKE MAKES IT UNNECESSARY TO ELABORATE THE DIFFERENT VIEWS AS
TO THE PRECISE ROUTES FOR WHICH PIEDMONT AND STATE APPLIED. 

FN9  THE RECORD DOES SHOW A STATEMENT BY STATE'S COUNSEL, MADE NEAR
THE END OF THE REHEARING ARGUMENT, THAT "HAD STATE KNOWN THAT PIEDMONT
WAS AN APPLICANT FOR THESE ROUTES" IT COULD HAVE PROVEN IN THE ORIGINAL
HEARINGS THAT PIEDMONT DID NOT HAVE "FACILITIES FOR ALL TYPES OF
OVERHAUL."  IT MAY BE THAT THIS GENERAL SUGGESTION CAN BE CONSIDERED AS
A REQUEST BY STATE TO REOPEN THE PROCEEDINGS FOR PROOF ON THIS
PARTICULAR SINGLE POINT.  IF SO CONSIDERED, IT IS SUFFICIENT TO POINT
OUT THAT THE BOARD FOUND THAT PIEDMONT HAD ADEQUATE FINANCING TO OBTAIN
ALL NECESSARY EQUIPMENT, WHICH IS A MAJOR CONSIDERATION IN DETERMINING
THE COMPARATIVE FITNESS AND ABILITY AS BETWEEN APPLICANTS WHO PROPOSE
TO OPERATE NEWLY ESTABLISHED ROUTES.  SEE THE CASE CITED IN THE BOARD'S
OPINION, AMERICAN EXPORT AIRLINES, INC., TRANS-ATLANTIC SERVICE, 2
C.A.B. 16, 38(1940). 

FN10  IN THIS COURT A SUGGESTION IS MADE THAT TWO SENTENCES BY ONE
MEMBER OF THE BOARD DURING THE REHEARING ARGUMENT INDICATE THAT THE
BOARD ACTED ON A WRONG STANDARD OF PUBLIC INTEREST: "YES, BUT APART
FROM ALL THESE LEGALISMS, ISN'T THE REAL ISSUE WHETHER OR NOT WE MADE A
MISTAKE AND PICKED A CARRIER WHO CANNOT RUN THIS ROUTE?  IF WE REALLY
GET DOWN AND TRY TO FIND WHAT IS THE PUBLIC INTEREST, ISN'T THAT THE
REAL POINT?"  IT IS SAID THAT THIS STATEMENT DEPARTS FROM THE STANDARD
OF "PUBLIC INTEREST, CONVENIENCE, OR NECESSITY."  BUT IN THE STATEMENT
ITSELF THE BOARD MEMBER POINTED OUT THAT THE PROPER STANDARD WAS "THE
PUBLIC INTEREST."  MOREOVER, HE WENT ON TO SAY THAT "THE IMPORTANT
THING IS NOT WHETHER YOU WIN OR PIEDMONT WINS BUT WHETHER THE PEOPLE OF
NORTH CAROLINA AND KENTUCKY AND VIRGINIA AND THAT AREA IN THERE GET THE
KIND OF SERVICE THAT THEY SHOULD." 

MR. JUSTICE DOUGLAS TOOK NO PART IN THE CONSIDERATION OR DECISION OF
THIS CASE. 

MR. JUSTICE REED, WITH WHOM MR. JUSTICE FRANKFURTER JOINS,
DISSENTING. 

THE CIVIL AERONAUTICS BOARD HAS BEEN AUTHORIZED BY CONGRESS TO AWARD
CERTIFICATES OF CONVENIENCE AND NECESSITY TO APPLICANTS FOR AIR
ROUTES.  THE BOARD MAY GIVE TO ONE APPLICANT, AND DENY TO OTHERS, THE
EXCLUSIVE PRIVILEGE OF SERVING AN AIR ROUTE TO THE APPLICANT'S PRIVATE
PROFIT.  A DETERMINATION BY THE BOARD, HOWEVER, INVOLVES MORE THAN A
CHOICE AMONG COMPETING INDIVIDUALS; THE BOARD HAS BEEN MADE THE
GUARDIAN OF THE NATIONAL INTEREST AND THE ARBITER OF THE CONFLICTING
CONCERNS OF VARIOUS COMMUNITIES.  THE INTERESTS TO BE PROTECTED ARE SO
IMPORTANT THAT CONGRESS HAS LEGISLATED TO INSURE THAT THOSE SEEKING
THIS UNIQUE PUBLIC PRIVILEGE BE NOT INSULATED FROM CHALLENGE AND
COMPETITION.  THE CIVIL AERONAUTICS ACT PROVIDES, 52 STAT. 987, SEC.
401:

        "APPLICATION FOR CERTIFICATE 

"(B)  APPLICATION FOR A CERTIFICATE SHALL BE MADE IN WRITING TO THE
AUTHORITY AND SHALL BE SO VERIFIED, SHALL BE IN SUCH FORM AND CONTAIN
SUCH INFORMATION, AND SHALL BE ACCOMPANIED BY SUCH PROOF OF SERVICE
UPON SUCH INTERESTED PERSONS, AS THE AUTHORITY SHALL BY REGULATION
REQUIRE. 

                        "NOTICE OF APPLICATION 

"(C)  UPON THE FILING OF ANY SUCH APPLICATION, THE AUTHORITY SHALL
GIVE DUE NOTICE THEREOF TO THE PUBLIC BY POSTING A NOTICE OF SUCH
APPLICATION IN THE OFFICE OF THE SECRETARY OF THE AUTHORITY AND TO SUCH
OTHER PERSONS AS THE AUTHORITY MAY BY REGULATION DETERMINE.  ANY
INTERESTED PERSON MAY FILE WITH THE AUTHORITY A PROTEST OR MEMORANDUM
OF OPPOSITION TO OR IN SUPPORT OF THE ISSUANCE OF A CERTIFICATE.  SUCH
APPLICATION SHALL BE SET FOR PUBLIC HEARING, AND THE AUTHORITY SHALL
DISPOSE OF SUCH APPLICATION AS SPEEDILY AS POSSIBLE. 

"ISSUANCE OF CERTIFICATE 

"(D)(1)  THE AUTHORITY SHALL ISSUE A CERTIFICATE AUTHORIZING THE
WHOLE OR ANY PART OF THE TRANSPORTATION COVERED BY THE APPLICATION, IF
IT FINDS THAT THE APPLICANT IS FIT, WILLING, AND ABLE TO PERFORM SUCH
TRANSPORTATION PROPERLY, AND TO CONFORM TO THE PROVISIONS OF THIS ACT
AND THE RULES, REGULATIONS, AND REQUIREMENTS OF THE AUTHORITY
HEREUNDER, AND THAT SUCH TRANSPORTATION IS REQUIRED BY THE PUBLIC
CONVENIENCE AND NECESSITY; OTHERWISE SUCH APPLICATION SHALL BE
DENIED." 

THE PROCEDURES SO DEFINED BY CONGRESS PROVIDE THE FRAME WITHIN WHICH
THE BOARD'S DISCRETION MAY FREELY MOVE.  SO LONG AS THAT DISCRETION IS
EXERCISED WITHIN THE FRAME, THE COURTS SHOULD NOT INTERFERE.  BUT
BECAUSE THE RESPONSIBILITY PLACED IN THE BOARD BY CONGRESS IS GREAT,
AND BECAUSE THE DAMAGE A BOARD ERROR IN AWARDING A CERTIFICATE MAY
CAUSE TO OTHER CARRIERS AND THE PUBLIC IS IRREPARABLE, THE COURTS
SHOULD INSIST THAT THE PROCEDURES BE STRICTLY FOLLOWED. 

THEY WERE NOT FOLLOWED HERE.  IN 1945 THE CIVIL AERONAUTICS BOARD
CONSOLIDATED FOR A COMMON HEARING THE APPLICATIONS, PARTICULARIZED AS
REQUIRED BY THE STATUTE AND REGULATIONS, OF TWENTY-FIVE AIR-LINE
COMPANIES WHICH HAD FILED DOCUMENTS SEEKING CERTIFICATES FOR FORTY-FIVE
SPECIFIC ROUTES, VARYING CONSIDERABLY, BUT ALL WITHIN AN AREA THAT
EXTENDS ROUGHLY FROM MARYLAND TO FLORIDA, VIRGINIA TO MISSOURI.  AFTER
SETTLING UPON THE FEW ROUTES TO BE AWARDED, THE COMMISSION, WITHOUT
FURTHER NOTICE TO ANYONE, SELECTED FOR ONE OF THESE PIEDMONT, WHICH HAD
ASKED FOR A QUITE DIFFERENT ROUTE.  HOW MUCH THE ROUTE GRANTED DIFFERED
FROM THAT APPLIED FOR MAY BE SEEN READILY BY A GLANCE AT THE MAPS IN 84
U.S. APP. D.C. 374, 377, 174 F.2D 510, 513.  THIS COURT SAYS IT
DIFFERED "MARKEDLY." 

AN ADMINISTRATIVE BODY MUST FOLLOW CAREFULLY THE SPECIFIC
REQUIREMENTS LAID DOWN BY CONGRESS TO PROTECT THE PUBLIC FROM
ADMINISTRATIVE ABSOLUTISM.  TO INSIST THAT THE STATUTE BE FOLLOWED IS
NOT MERE SEARCH FOR PRECISION.  THE FACT THAT STATE KNEW OF THE AWARD
OF THE ROUTE TO PIEDMONT IN TIME TO APPLY FOR A REHEARING DOES NOT
JUSTIFY THE FAILURE OF THE BOARD TO GIVE NOT ONLY STATE, BUT OTHERS AS
WELL, AN OPPORTUNITY TO CONTEST FAIRLY FOR THE SELECTED ROUTE BEFORE
THE BOARD'S OPINIONS CRYSTALLIZED. 

SINCE THE ERROR OF THE BOARD LAY IN ITS FAILURE TO FOLLOW REQUIRED
PROCEDURE, IT SHOULD BE ENOUGH TO CALL FOR A NEW DETERMINATION IF ON
ADDITIONAL EVIDENCE FROM STATE OR THE PUBLIC, OR ON A DIFFERENT MANNER
OF PRESENTATION, THE BOARD MIGHT HAVE MADE ITS AWARD TO A CARRIER OTHER
THAN PIEDMONT.  THAT IT IS NOT FANCIFUL TO ASSUME IT MIGHT HAVE DONE SO
MAY BE INFERRED FROM THE STATEMENT OF THE BOARD IN ITS FIRST OPINION
THAT EVEN THEN THE CHOICE BETWEEN STATE AND PIEDMONT WAS "A CLOSE AND
DIFFICULT QUESTION."  7 C.A.B. 863, 901.  MOREOVER, WHEN THE LIMITED
REHEARING WAS GRANTED, THE ISSUE, AT LEAST IN THE MIND OF ONE MEMBER OF
THE COMMISSION, MAY HAVE SHIFTED.  AT ONE POINT THIS MEMBER SAID:
"YES, BUT APART FROM ALL THESE LEGALISMS, ISN'T THE REAL ISSUE WHETHER
OR NOT WE MADE A MISTAKE AND PICKED A CARRIER WHO CANNOT RUN THIS
ROUTE?  IF WE REALLY GET DOWN AND TRY TO FIND WHAT IS THE PUBLIC
INTEREST, ISN'T THAT THE REAL POINT?"  THIS IS QUITE DIFFERENT FROM THE
QUESTION OF WHICH CARRIER CAN BEST SERVE THE PUBLIC INTEREST,
CONVENIENCE AND NECESSITY. 

I SEE NO OBJECTION TO A PROCEEDING IN WHICH APPLICATIONS FOR
SEPARATELY DEFINED ROUTES IN A SINGLE LARGE REGION ARE CONSIDERED
TOGETHER.  BUT WITHIN THE FRAMEWORK OF AN "AREA PROCEEDING" THE
PROCEDURE FOR NOTICE REQUIRED BY THE STATUTE SHOULD HAVE BEEN
FOLLOWED.  AFTER DECIDING ON THE ROUTES FOR THE "AREA," THE BOARD
SHOULD HAVE PERMITTED APPLICANTS TO AMEND THEIR APPLICATIONS TO CONFORM
WITH THE SELECTED ROUTES.  SUCH MATERIAL CHANGES AS PIEDMONT WOULD HAVE
HAD TO MAKE WOULD HAVE REQUIRED PUBLIC NOTICE UNDER SEC. 401(C) OF THE
STATUTE, AND THUS THE ATTENTION OF COMPETING AIR LINES AND INTERESTED
MUNICIPALITIES WOULD HAVE BEEN DIRECTED TO THE CONTROLLING QUESTION OF
WHICH AIR LINE WOULD BEST SERVE THE PUBLIC INTEREST ON THE SELECTED
ROUTE.  THIS WOULD HAVE BEEN THE "PROPER DISPATCH" OF BUSINESS THAT THE
STATUTE REQUIRES. 

IT IS TRUE THAT A REMAND MIGHT WELL RESULT IN THE ISSUANCE AGAIN OF A
CERTIFICATE TO PIEDMONT.  THAT AWARD, HOWEVER, WOULD BE ON AN AMENDED
APPLICATION AND ON PROPER NOTICE, AND, AT LEAST, THE PUBLIC AND
PIEDMONT'S POSSIBLE COMPETITORS WOULD HAVE AN OPPORTUNITY TO BE HEARD
AFTER PREPARATION AND IN REGULAR COURSE. 

THE JUDGMENT OF THE COURT OF APPEALS SHOULD BE AFFIRMED.