{}

PAN AMERICAN WORLD AIRWAYS, INC. V. UNITED STATES 371 U.S. 296 


NO. 23.  ARGUED NOVEMBER 8, 1962.  - DECIDED JANUARY 14, 1963.* - 193 F.
SUPP. 18, REVERSED AND CAUSE REMANDED. 

*TOGETHER WITH NO. 47, UNITED STATES V. PAN AMERICAN WORLD AIRWAYS,
INC., ET AL., ALSO ON APPEAL FROM THE SAME COURT. 


CHARGING VIOLATIONS OF SECS. 1, 2, AND 3 OF THE SHERMAN ACT, THE
UNITED STATES BROUGHT THIS CIVIL SUIT AGAINST PAN AMERICAN WORLD
AIRWAYS, W.R. GRACE & CO. AND THEIR JOINTLY OWNED SUBSIDIARY, PAN
AMERICAN-GRACE AIRWAYS (PANAGRA).  THE COMPLAINT ALLEGED THAT, WHEN PAN
AMERICAN AND GRACE ORGANIZED PANAGRA IN 1928, THEY AGREED THAT PAN
AMERICAN AND PANAGRA WOULD NOT PARALLEL EACH OTHER'S AIR ROUTES, THAT
THIS WAS A COMBINATION AND CONSPIRACY IN RESTRAINT OF TRADE AND
MONOPOLIZATION AND ATTEMPTED MONOPOLIZATION OF AIR TRANSPORTATION
BETWEEN THE UNITED STATES AND SOUTH AMERICA AND ALSO THAT PAN AMERICAN
HAD USED ITS CONTROL OVER PANAGRA TO PREVENT IT FROM OBTAINING
AUTHORITY FROM THE CIVIL AERONAUTICS BOARD TO EXTEND ITS ROUTE FROM THE
CANAL ZONE TO THE UNITED STATES.  THE DISTRICT COURT FOUND THAT PAN
AMERICAN HAD VIOLATED SEC. 2 OF THE SHERMAN ACT BY SUPPRESSING
PANAGRA'S EFFORTS TO EXTEND ITS ROUTE FROM THE CANAL ZONE TO THIS
COUNTRY, AND IT ORDERED PAN AMERICAN TO DIVEST ITSELF OF ITS STOCK IN
PANAGRA; BUT IT DISMISSED THE COMPLAINT AGAINST GRACE AND PANAGRA,
HOLDING THAT NONE OF THEIR PRACTICES VIOLATED THE SHERMAN ACT.  HELD:
THE NARROW QUESTIONS PRESENTED BY THIS COMPLAINT HAD BEEN ENTRUSTED BY
CONGRESS TO THE CIVIL AERONAUTICS BOARD, AND THE ENTIRE COMPLAINT
SHOULD HAVE BEEN DISMISSED.  PP. 298-313. 

(A)  SINCE ENACTMENT OF THE CIVIL AERONAUTICS ACT IN 1938, THE
AIRLINE INDUSTRY HAS BEEN REGULATED UNDER A REGIME DESIGNED TO CHANGE
THE PRIOR COMPETITIVE SYSTEM, AND THE FEDERAL AVIATION ACT OF 1958 MADE
NO CHANGES RELEVANT TO THE PROBLEM PRESENTED BY THIS CASE.  PP. 300
301. 

(B)  UNDER SEC. 411 OF THE FEDERAL AVIATION ACT OF 1958, THE CIVIL
AERONAUTICS BOARD HAS JURISDICTION OVER "UNFAIR PRACTICES" AND "UNFAIR
METHODS OF COMPETITION," EVEN THOUGH THEY ORIGINATED PRIOR TO 1938. 
PP. 302-303. 

(C)  IN REGULATING AIR CARRIERS, THE BOARD IS TO DEAL WITH AT LEAST
SOME ANTITRUST PROBLEMS.  IN ADDITION TO ITS POWER UNDER SEC. 411, IT
IS GIVEN AUTHORITY BY SECS. 408, 409, AND 412 OVER CONSOLIDATIONS,
MERGERS, PURCHASES, LEASES, OPERATING CONTRACTS, ACQUISITION OF CONTROL
OF AN AIR CARRIER, INTERLOCKING RELATIONS, POOLING ARRANGEMENTS, ETC.;
AND THE CLAYTON ACT IS ENFORCED BY THE BOARD, INSOFAR AS IT IS
APPLICABLE TO AIR CARRIERS.  P. 304. 

(D)  THE LEGISLATIVE HISTORY INDICATES THAT THE CIVIL AERONAUTICS
BOARD WAS INTENDED TO HAVE BROAD JURISDICTION OVER AIR CARRIERS,
INSOFAR AS MOST FACETS OF FEDERAL CONTROL ARE CONCERNED.  P. 304. 

(E)  THIS COURT DOES NOT HOLD, HOWEVER, THAT THERE ARE NO ANTITRUST
VIOLATIONS LEFT TO THE DEPARTMENT OF JUSTICE TO ENFORCE.  PP. 304-305. 

(F)  THE ACTS CHARGED IN THIS SUIT AS ANTITRUST VIOLATIONS ARE
PRECISE INGREDIENTS OF THE BOARD'S AUTHORITY IN GRANTING, QUALIFYING,
OR DENYING CERTIFICATES TO AIR CARRIERS, IN MODIFYING, SUSPENDING, OR
REVOKING THEM, AND IN ALLOWING OR DISALLOWING AFFILIATIONS BETWEEN
COMMON CARRIERS AND AIR CARRIERS.  PP. 305-306. 

(G)  WHATEVER THE UNFAIR PRACTICE OR UNFAIR METHOD EMPLOYED, SEC. 411
OF THE ACT WAS DESIGNED TO BOLSTER AND STRENGTHEN ANTITRUST
ENFORCEMENT.  SECTION 411 IS PATTERNED AFTER SEC. 5 OF THE FEDERAL
TRADE COMMISSION ACT, AND CASES INTERPRETING SEC. 5 ARE RELEVANT IN
DETERMINING THE MEANING OF SEC. 411; BUT THE APPLICATION OF SEC. 411 IN
ANY GIVEN SITUATION MUST BE DETERMINED IN LIGHT OF THE STANDARDS SET BY
THE CIVIL AERONAUTICS ACT.  PP. 306-308. 

(H)  THE ACT LEAVES TO THE BOARD UNDER SEC. 411 ALL QUESTIONS OF
INJUNCTIVE RELIEF AGAINST THE DIVISION OF TERRITORIES OR THE ALLOCATION
OF ROUTES OR AGAINST COMBINATIONS BETWEEN COMMON CARRIERS AND AIR
CARRIERS.  PP. 308-310. 

(I)  THE BOARD'S POWER TO ISSUE A "CEASE AND DESIST" ORDER IS BROAD
ENOUGH TO INCLUDE THE POWER TO COMPEL DIVESTITURE WHERE THE PROBLEM
LIES WITHIN THE PURVIEW OF THE BOARD.  PP. 311-313. 

PAN AMERICAN WORLD AIRWAYS, INC., V. UNITED STATES. 

APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN
DISTRICT OF NEW YORK. 

MR. JUSTICE DOUGLAS DELIVERED THE OPINION OF THE COURT. 

THIS IS A CIVIL SUIT BROUGHT BY THE UNITED STATES CHARGING VIOLATIONS
BY PAN AMERICAN, W.R.  GRACE & CO., AND PANAGRA OF SECS. 1, 2, AND 3 OF
THE SHERMAN ACT, 15 U.S.C. SECS. 1, 2, AND 3.  THIS SUIT, WHICH THE
CIVIL AERONAUTICS BOARD REQUESTED THE ATTORNEY GENERAL TO INSTITUTE
CHARGED TWO MAJOR RESTRAINTS OF TRADE.  FIRST, IT IS CHARGED THAT PAN
AMERICAN AND GRACE, EACH OF WHOM OWNS 50% OF THE STOCK OF PANAGRA,
FORMED THE LATTER UNDER AN AGREEMENT THAT PANAGRA WOULD HAVE THE
EXCLUSIVE RIGHT TO TRAFFIC ALONG THE WEST COAST OF SOUTH AMERICA FREE
FROM PAN AMERICAN COMPETITION AND THAT PAN AMERICAN WAS TO BE FREE FROM
COMPETITION OF PANAGRA IN OTHER AREAS IN SOUTH AMERICA AND BETWEEN THE
CANAL ZONE AND THE UNITED STATES.  SECOND, IT IS CHARGED THAT PAN
AMERICAN AND GRACE CONSPIRED TO MONOPOLIZE AND DID MONOPOLIZE AIR
COMMERCE BETWEEN THE EASTERN COASTAL AREAS OF THE UNITED STATES AND
WESTERN COASTAL AREAS OF SOUTH AMERICA AND BUENOS AIRES.  PAN AMERICAN
WAS ALSO CHARGED WITH USING ITS 50% CONTROL OVER PANAGRA TO PREVENT IT
FROM SECURING AUTHORITY FROM THE C.A.B. TO EXTEND ITS ROUTE FROM THE
CANAL ZONE TO THE UNITED STATES.  (FN1) 

IN 1928, WHEN PAN AMERICAN AND GRACE ENTERED INTO AN AGREEMENT TO
FORM PANAGRA, (FN2) AIR TRANSPORTATION WAS IN ITS INFANCY; AND THIS WAS
THE FIRST ENTRY OF AN AMERICAN AIR CARRIER ON SOUTH AMERICA'S WEST
COAST.  PAN AMERICAN IN 1930 ACQUIRED THE ASSETS OF AN AIRLINE
COMPETING WITH IT FOR AIR TRAFFIC FROM THIS COUNTRY TO THE NORTH AND
EAST COASTS OF SOUTH AMERICA AND RECEIVED A POST OFFICE AIR MAIL
SUBSIDY CONTRACT.  (FN3) 

THE DISTRICT COURT FOUND THAT THERE WAS NO VIOLATION BY PAN AMERICAN
AND GRACE OF SEC. 1 OF THE SHERMAN ACT THROUGH THE DIVISION OF SOUTH
AMERICAN TERRITORY BETWEEN PAN AMERICAN AND PANAGRA.  (FN4)  IT HELD,
HOWEVER, THAT PAN AMERICAN VIOLATED SEC. 2 OF THE SHERMAN ACT BY
SUPPRESSING PANAGRA'S EFFORTS TO EXTEND ITS ROUTE FROM THE CANAL ZONE
TO THIS COUNTRY - IN PARTICULAR, BY BLOCKING PANAGRA'S APPLICATION TO
THE CIVIL AERONAUTICS BOARD FOR A CERTIFICATE FOR OPERATION NORTH OF
THE CANAL ZONE.  (FN5)  IT INDICATED THAT PAN AMERICAN SHOULD DIVEST
ITSELF OF PANAGRA STOCK.  BUT IT DIRECTED DISMISSAL OF THE COMPLAINT
AGAINST GRACE AND AGAINST PANAGRA, HOLDING THAT NONE OF THEIR
RESPECTIVE PRACTICES VIOLATED THE SHERMAN ACT.  193 F. SUPP. 18.  BOTH
PAN AMERICAN AND THE UNITED STATES COME HERE ON DIRECT APPEALS (15
U.S.C.  SEC. 29); AND WE POSTPONED THE QUESTION OF JURISDICTION TO THE
MERITS.  368 U.S. 964, 966. 

WHEN THE TRANSACTIONS, NOW CHALLENGED AS RESTRAINTS OF TRADE AND
MONOPOLY, WERE FIRST CONSUMMATED, AIR CARRIERS WERE NOT SUBJECT TO
PERVASIVE REGULATION.  IN 1938 THE CIVIL AERONAUTICS ACT (52 STAT. 973)
WAS PASSED WHICH WAS SUPERSEDED IN 1958 BY THE FEDERAL AVIATION ACT, 72
STAT. 731, 49 U.S.C. SEC. 1301 ET SEQ., THE LATTER MAKING NO CHANGES
RELEVANT TO OUR PRESENT PROBLEM.  SINCE 1938, THE INDUSTRY HAS BEEN
REGULATED UNDER A REGIME DESIGNED TO CHANGE THE PRIOR COMPETITIVE
SYSTEM.  AS STATED IN S. REP. NO. 1661, 75TH CONG., 3D SESS., P. 2,
"COMPETITION AMONG AIR CARRIERS IS BEING CARRIED TO AN EXTREME, WHICH
TENDS TO JEOPARDIZE THE FINANCIAL STATUS OF THE AIR CARRIERS AND TO
JEOPARDIZE AND RENDER UNSAFE A TRANSPORTATION SERVICE APPROPRIATE TO
THE NEEDS OF COMMERCE AND REQUIRED IN THE PUBLIC INTEREST, IN THE
INTERESTS OF THE POSTAL SERVICE, AND OF THE NATIONAL DEFENSE." 

SOME PROVISIONS OF THE 1938 ACT DEAL ONLY WITH THE FUTURE, NOT THE
PAST.  SUCH, FOR EXAMPLE, ARE THE PROVISIONS DEALING WITH ABANDONMENT
OF ROUTES (SEC. 401(K)), WITH LOANS OR FINANCIAL AID FROM THE UNITED
STATES (SEC. 410), AND WITH CRIMINAL PENALTIES.  SEC. 902.  THE ACT,
HOWEVER, DID NOT FREEZE THE STATUS QUO NOR ATTEMPT TO LEGALIZE ALL
EXISTING PRACTICES.  THUS SEC. 401 REQUIRES EVERY "AIR CARRIER" TO
ACQUIRE A CERTIFICATE FROM THE BOARD, A PROCEDURE BEING PROVIDED
WHEREBY SOME COULD OBTAIN "GRANDFATHER" RIGHTS.  BY SEC. 401(H) THE
BOARD HAS AUTHORITY TO ALTER, AMEND, MODIFY, OR SUSPEND CERTIFICATES
WHENEVER IT FINDS SUCH ACTION TO BE IN THE PUBLIC INTEREST. 

CARRIERS AND OTHER COMMON CARRIERS OR BETWEEN AIR CARRIERS AND THOSE
"ENGAGED IN ANY PHASE OF AERONAUTICS," LOOKS NOT ONLY TO THE FUTURE BUT
TO THE PAST AS WELL.  FOR THE PROHIBITION IS THAT NO AIR CARRIER MAY
"HAVE AND RETAIN" OFFICERS OR DIRECTORS OF THE DESCRIBED CLASSES. 
ACQUISITION OF CONTROL OVER AN "AIR CARRIER," MAKES IT UNLAWFUL, UNLESS
APPROVED BY THE BOARD, FOR ANY "COMMON CARRIER" TO "PURCHASE, LEASE, OR
CONTRACT TO OPERATE THE PROPERTIES" OF AN "AIR CARRIER" OR TO "ACQUIRE
CONTROL OF ANY AIR CARRIER IN ANY MANNER WHATSOEVER" OR TO "CONTINUE TO
MAINTAIN ANY RELATIONSHIP ESTABLISHED IN VIOLATION OF ANY OF THE
FOREGOING" PROVISIONS OF SEC. 408(A).  BY SEC. 408(B) A COMMON CARRIER
IS TAKEN TO BE AN "AIR CARRIER" FOR THE PURPOSES OF SEC. 408; AND
TRANSACTIONS THAT LINK "COMMON CARRIERS" TO "AIR CARRIERS" SHALL NOT BE
APPROVED UNLESS THE BOARD FINDS THAT "THE TRANSACTION PROPOSED WILL
PROMOTE THE PUBLIC INTEREST BY ENABLING SUCH CARRIER OTHER THAN AN AIR
CARRIER TO USE AIRCRAFT TO PUBLIC ADVANTAGE IN ITS OPERATION AND WILL
NOT RESTRAIN COMPETITION." 

WE DO NOT SUGGEST THAT GRACE, A COMMON CARRIER, NEED GET THE BOARD'S
APPROVAL TO CONTINUE THE RELATIONSHIP IT HAD WITH PANAGRA WHEN THE 1938
ACT BECAME EFFECTIVE.  (FN6)  IT IS CLEAR, HOWEVER, THAT THE BOARD
UNDER SEC. 411 OF THE 1958 ACT HAS JURISDICTION OVER "UNFAIR PRACTICES"
AND "UNFAIR METHODS OF COMPETITION" EVEN THOUGH THEY ORIGINATED PRIOR
TO 1938. 

THAT SECTION PROVIDES: 

"THE BOARD MAY, UPON ITS OWN INITIATIVE OR UPON COMPLAINT BY ANY AIR
CARRIER, FOREIGN AIR CARRIER, OR TICKET AGENT, IF IT CONSIDERS THAT
SUCH ACTION BY IT WOULD BE IN THE INTEREST OF THE PUBLIC, INVESTIGATE
AND DETERMINE WHETHER ANY AIR CARRIER, FOREIGN AIR CARRIER, OR TICKET
AGENT HAS BEEN OR IS ENGAGED IN UNFAIR OR DECEPTIVE PRACTICES OR UNFAIR
METHODS OF COMPETITION IN AIR TRANSPORTATION OR THE SALE THEREOF.  IF
THE BOARD SHALL FIND, AFTER NOTICE AND HEARING, THAT SUCH AIR CARRIER,
FOREIGN AIR CARRIER, OR TICKET AGENT IS ENGAGED IN SUCH UNFAIR OR
DECEPTIVE PRACTICES OR UNFAIR METHODS OF COMPETITION, IT SHALL ORDER
SUCH AIR CARRIER, FOREIGN AIR CARRIER, OR TICKET AGENT TO CEASE AND
DESIST FROM SUCH PRACTICES OR METHODS OF COMPETITION."  49 U.S.C. SEC.
1381. 

THE WORDS "HAS BEEN OR IS ENGAGED IN UNFAIR  ...  PRACTICES OR UNFAIR
METHODS OF COMPETITION" PLAINLY INCLUDE PRACTICES STARTED BEFORE THE
1938 ACT AND CONTINUED THEREAFTER (FN7) AS WELL AS PRACTICES INSTITUTED
AFTER THE EFFECTIVE DATE OF THE ACT. 

THE PARENTAGE OF SEC. 411 IS ESTABLISHED.  AS THE COURT STATED IN
AMERICAN AIRLINES V. NORTH AMERICAN AIRLINES, 351 U.S. 79, 82, THIS
(FN8) AND "WE MAY PROFITABLY LOOK TO JUDICIAL INTERPRETATION OF SEC. 5
AS AN AID IN THE RESOLUTION OF  ...  QUESTIONS RAISED  ...  UNDER SEC.
411."  AS RESPECTS THE "PUBLIC INTEREST" UNDER SEC. 411, THE COURT
SAID: 

"  ...  THE AIR CARRIERS HERE CONDUCT THEIR BUSINESS UNDER A
REGULATED SYSTEM OF LIMITED COMPETITION.  THE BUSINESS SO CONDUCTED IS
OF ESPECIAL AND ESSENTIAL CONCERN TO THE PUBLIC, AS IS TRUE OF ALL
COMMON CARRIERS AND PUBLIC UTILITIES.  FINALLY, CONGRESS HAS COMMITTED
THE REGULATION OF THIS INDUSTRY TO AN ADMINISTRATIVE AGENCY OF SPECIAL
COMPETENCE THAT DEALS ONLY WITH THE PROBLEMS OF THE INDUSTRY."  ID.,
84. 

THE BOARD IN REGULATING AIR CARRIERS IS TO DEAL WITH AT LEAST SOME
ANTITRUST PROBLEMS.  APART FROM ITS POWER UNDER SEC. 411, IT IS GIVEN
AUTHORITY BY SECS. 408 AND 409, AS ALREADY NOTED, OVER CONSOLIDATIONS,
MERGERS, PURCHASES, LEASES, OPERATING CONTRACTS, ACQUISITION OF CONTROL
OF AN AIR CARRIER, AND INTERLOCKING RELATIONS.  POOLING AND OTHER LIKE
ARRANGEMENTS ARE UNDER THE BOARD'S JURISDICTION BY REASON OF SEC. 412. 
ANY PERSON AFFECTED BY AN ORDER UNDER SECS. 408, 409 AND 412 IS
"RELIEVED FROM THE OPERATIONS OF THE 'ANTITRUST LAWS,'" INCLUDING THE
SHERMAN ACT.  SEC. 414.  THE CLAYTON ACT, INSOFAR AS IT IS APPLICABLE
TO AIR CARRIERS, IS ENFORCEABLE BY THE BOARD.  52 STAT. 973, 1028, SEC.
1107(G); 15 U.S.C. SEC. 21. 

THERE ARE VARIOUS INDICATIONS IN THE LEGISLATIVE HISTORY THAT THE
CIVIL AERONAUTICS BOARD WAS TO HAVE BROAD JURISDICTION OVER AIR
CARRIERS, INSOFAR AS MOST FACETS OF FEDERAL CONTROL ARE CONCERNED. 

THE HOUSE REPORT STATED: 

"IT IS THE PURPOSE OF THIS LEGISLATION TO COORDINATE IN A SINGLE
INDEPENDENT AGENCY ALL OF THE EXISTING FUNCTIONS OF THE FEDERAL
GOVERNMENT WITH RESPECT TO CIVIL AERONAUTICS, AND, IN ADDITION, TO
AUTHORIZE THE NEW AGENCY TO PERFORM CERTAIN NEW REGULATORY FUNCTIONS
WHICH ARE DESIGNED TO STABILIZE THE AIR-TRANSPORTATION INDUSTRY IN THE
UNITED STATES."  H.R. REP. NO. 2254, 75TH CONG., 3D SESS., P. 1. 

NO MENTION IS MADE OF THE DEPARTMENT OF JUSTICE AND ITS ROLE IN THE
ENFORCEMENT OF THE ANTITRUST LAWS, YET WE HESITATE HERE, AS IN
COMPARABLE SITUATIONS, (FN9) TO HOLD THAT THE NEW REGULATORY SCHEME
ADOPTED IN 1938 WAS DESIGNED COMPLETELY TO DISPLACE THE ANTITRUST LAWS
ABSENT AN UNEQUIVOCALLY DECLARED CONGRESSIONAL PURPOSE SO TO DO.
WHILE THE BOARD IS EMPOWERED TO DEAL WITH NUMEROUS ASPECTS OF WHAT ARE
NORMALLY THOUGHT OF AS ANTITRUST PROBLEMS, THOSE EXPRESSLY ENTRUSTED TO
IT ENCOMPASS ONLY A FRACTION OF THE TOTAL.  APART FROM ORDERS WHICH
GIVE IMMUNITY FROM THE ANTITRUST LAWS BY REASON OF SEC. 414, THE WHOLE
CRIMINAL LAW ENFORCEMENT PROBLEM REMAINS UNAFFECTED BY THE ACT.  CF.
UNITED STATES V. PACIFIC & ARCTIC CO., 228 U.S. 87, 105.  MOREOVER, ON
THE CIVIL SIDE VIOLATIONS OF ANTITRUST LAWS OTHER THAN THOSE ENUMERATED
IN THE ACT MIGHT BE IMAGINED.  WE, THEREFORE, REFUSE TO HOLD THAT THERE
ARE NO ANTITRUST VIOLATIONS LEFT TO THE DEPARTMENT OF JUSTICE TO
ENFORCE. 

THAT DOES NOT, HOWEVER, END OUR INQUIRY.  LIMITATION OF ROUTES AND
DIVISIONS OF TERRITORIES AND THE RELATION OF COMMON CARRIERS TO AIR
CARRIERS ARE BASIC IN THIS REGULATORY SCHEME.  THE ACTS CHARGED IN THIS
CIVIL SUIT AS ANTITRUST VIOLATIONS ARE PRECISE INGREDIENTS OF THE
BOARD'S AUTHORITY IN GRANTING, QUALIFYING, OR DENYING CERTIFICATES TO
AIR CARRIERS, IN MODIFYING, SUSPENDING, OR REVOKING THEM, AND IN
ALLOWING OR DISALLOWING AFFILIATIONS BETWEEN COMMON CARRIERS AND AIR
CARRIERS.   (FN10)  THE CASE IS THEREFORE QUITE UNLIKE GEORGIA V.
PENNSYLVANIA R. CO., SUPRA, WHERE A CONSPIRACY AMONG CARRIERS FOR THE
FIXING OF THROUGH AND JOINT RATES WAS HELD TO CONSTITUTE A CAUSE OF
ACTION UNDER THE ANTITRUST LAWS, IN VIEW OF THE FACT THAT THE
INTERSTATE COMMERCE COMMISSION HAD NO POWER TO GRANT RELIEF AGAINST
SUCH COMBINATIONS.  (FN11)  AND SEE UNITED STATES V. R.C.A., 358 U.S.
334, 346.  AND THE PRESENT ACT DOES NOT HAVE ANYTHING COMPARABLE TO THE
HISTORY OF THE CAPPER-VOLSTEAD ACT, WHICH WE REVIEWED IN MILK PRODUCERS
ASSN V. UNITED STATES, 362 U.S. 458, AND WHICH SHOWED THAT FARMER
PRODUCERS WERE NOT MADE IMMUNE FROM THE CLASS OF PREDATORY PRACTICES
CHARGED IN THAT CIVIL SUIT AS ANTITRUST VIOLATIONS.  ID., PP. 464-467. 

THE WORDS "UNFAIR  ...  PRACTICES" AND "UNFAIR METHODS OF
COMPETITION" AS USED IN SEC. 411 CONTAIN A "BROADER" CONCEPT THAN "THE
COMMON-LAW IDEA OF UNFAIR COMPETITION."  AMERICAN AIRLINES V. NORTH
AMERICAN AIRLINES, SUPRA, 85.  THEY DERIVE, AS ALREADY NOTED, FROM THE
FEDERAL TRADE COMMISSION ACT; AND THEIR MEANING IN THE SETTING OF THAT
ACT HAS BEEN MUCH DISCUSSED.  THEY DO NOT EMBRACE A REMEDY FOR PRIVATE
WRONGS BUT ONLY A MEANS OF VINDICATING THE PUBLIC INTEREST.  FEDERAL
TRADE COMM'N V. KLESNER, 280 U.S. 19, 25-30.  THE SCOPE OF "UNFAIR
PRACTICES" AND "UNFAIR METHODS OF COMPETITION" WAS LEFT FOR CASE-BY
CASE DEFINITION.  THE SENATE REPORT STATED: 

"IT IS BELIEVED THAT THE TERM 'UNFAIR COMPETITION' HAS A LEGAL
SIGNIFICANCE WHICH CAN BE ENFORCED BY THE COMMISSION AND THE COURTS,
AND THAT IT IS NO MORE DIFFICULT TO DETERMINE WHAT IS UNFAIR
COMPETITION THAN IT IS TO DETERMINE WHAT IS A REASONABLE RATE OR WHAT
IS AN UNJUST DISCRIMINATION.  THE COMMITTEE WAS OF THE OPINION THAT IT
WOULD BE BETTER TO PUT IN A GENERAL PROVISION CONDEMNING UNFAIR
COMPETITION THAN TO ATTEMPT TO DEFINE THE NUMEROUS UNFAIR PRACTICES,
SUCH AS LOCAL PRICE CUTTING, INTERLOCKING DIRECTORATES, AND HOLDING
COMPANIES INTENDED TO RESTRAIN SUBSTANTIAL COMPETITION."  S. REP. NO.
597, 63D CONG., 2D SESS., P. 13. 

THE LEGISLATIVE HISTORY WAS REVIEWED IN FEDERAL TRADE COMM'N V.
RALADAM CO., 283 U.S. 643, 649-650, THE COURT CONCLUDING THAT "UNFAIR
COMPETITION WAS THAT PRACTICE WHICH DESTROYS COMPETITION AND
ESTABLISHES MONOPOLY."  ID., 650.  THE PROVISION WAS DESIGNED TO
SUPPLEMENT THE SHERMAN ACT BY STOPPING "IN THEIR INCIPIENCY THOSE
METHODS OF COMPETITION WHICH FALL WITHIN THE MEANING OF THE WORD
'UNFAIR.'  ...  ALL THREE STATUTES (THE SHERMAN AND CLAYTON ACTS AND
SEC. 5) SEEK TO PROTECT THE PUBLIC FROM ABUSES ARISING IN THE COURSE OF
COMPETITIVE INTERSTATE AND FOREIGN TRADE."  (FN12)  ID., 647.  SEE
FEDERAL TRADE COMM'N V. BEECH-NUT CO., 257 U.S. 441, 453-454; FEDERAL
TRADE COMM'N V. KEPPEL & BRO., 291 U.S. 304, 310-312; 2 TOULMIN'S ANTI
TRUST LAWS (1949) SEC. 43.6.  JOINT VENTURES MAY BE COMBINATIONS IN
VIOLATION OF THE ANTITRUST LAWS.  TIMKEN ROLLER BEARING CO. V. UNITED
STATES, 341 U.S. 593, 598.  WHATEVER THE UNFAIR PRACTICE OR UNFAIR
METHOD EMPLOYED, SEC. 411 OF THIS ACT, LIKE SEC. 5 OF THE FEDERAL TRADE
COMMISSION ACT (FEDERAL TRADE COMM'N V. MOTION PICTURE ADV.  CO., 344
U.S. 392, 394-395), WAS DESIGNED TO BOLSTER AND STRENGTHEN ANTITRUST
ENFORCEMENT.    WE HAVE SAID ENOUGH TO INDICATE THAT THE WORDS "UNFAIR
PRACTICES" AND "UNFAIR METHODS OF COMPETITION" ARE NOT LIMITED TO
PRECISE PRACTICES THAT CAN READILY BE CATALOGUED.  THEY TAKE THEIR
MEANING FROM THE FACTS OF EACH CASE AND THE IMPACT OF PARTICULAR
PRACTICES ON COMPETITION AND MONOPOLY. 

THESE WORDS, TRANSFERRED TO THE CIVIL AERONAUTICS ACT, GATHER MEANING
FROM THE CONTEXT OF THAT PARTICULAR REGULATORY MEASURE AND THE TYPE OF
COMPETITIVE REGIME WHICH IT VISUALIZES.  CF. AMERICAN POWER CO. V.
SECURITIES & EXCHANGE COMM'N, 329 U.S. 90, 104-105.  THAT REGIME HAS
ITS SPECIAL STANDARD OF THE "PUBLIC INTEREST" AS DEFINED BY CONGRESS. 
THE STANDARDS TO BE APPLIED BY THE BOARD IN ENFORCING THE ACT ARE
BROADLY STATED IN SEC. 2: 

"IN THE EXERCISE AND PERFORMANCE OF ITS POWERS AND DUTIES UNDER THIS
CHAPTER, THE BOARD SHALL CONSIDER THE FOLLOWING, AMONG OTHER THINGS, AS
BEING IN THE PUBLIC INTEREST, AND IN ACCORDANCE WITH THE PUBLIC
CONVENIENCE AND NECESSITY: 

"(A) THE ENCOURAGEMENT AND DEVELOPMENT OF AN AIR-TRANSPORTATION
SYSTEM PROPERLY ADAPTED TO THE PRESENT AND FUTURE NEEDS OF THE FOREIGN
AND DOMESTIC COMMERCE OF THE UNITED STATES, OF THE POSTAL SERVICE, AND
OF THE NATIONAL DEFENSE: 

"(B) THE REGULATION OF AIR TRANSPORTATION IN SUCH MANNER AS TO
RECOGNIZE AND PRESERVE THE INHERENT ADVANTAGES OF, ASSURE THE HIGHEST
DEGREE OF SAFETY IN, AND FOSTER SOUND ECONOMIC CONDITIONS IN, SUCH
TRANSPORTATION, AND TO IMPROVE THE RELATIONS BETWEEN, AND COORDINATE
TRANSPORTATION BY, AIR CARRIERS: 

"(C) THE PROMOTION OF ADEQUATE, ECONOMICAL, AND EFFICIENT SERVICE BY
AIR CARRIERS AT REASONABLE CHARGES, WITHOUT UNJUST DISCRIMINATIONS,
UNDUE PREFERENCES OR ADVANTAGES, OR UNFAIR OR DESTRUCTIVE COMPETITIVE
PRACTICES: 

"(D) COMPETITION TO THE EXTENT NECESSARY TO ASSURE THE SOUND
DEVELOPMENT OF AN AIR-TRANSPORTATION SYSTEM PROPERLY ADAPTED TO THE
NEEDS OF THE FOREIGN AND DOMESTIC COMMERCE OF THE UNITED STATES, OF THE
POSTAL SERVICE, AND OF THE NATIONAL DEFENSE: 

"(E) THE REGULATION OF AIR COMMERCE IN SUCH MANNER AS TO BEST PROMOTE
ITS DEVELOPMENT AND SAFETY; AND: 

"(F) THE ENCOURAGEMENT AND DEVELOPMENT OF CIVIL AERONAUTICS."  52
STAT. 980.  AND SEE 49 U.S.C. SEC. 1302. 

THE "PRESENT AND FUTURE NEEDS" OF OUR FOREIGN AND DOMESTIC COMMERCE,
REGULATIONS THAT FOSTER "SOUND ECONOMIC CONDITIONS," THE PROMOTION OF
SERVICE FREE OF "UNFAIR OR DESTRUCTIVE COMPETITIVE PRACTICES,"
REGULATIONS THAT PRODUCE THE PROPER DEGREE OF "COMPETITION" - EACH OF
THESE IS PERTINENT TO THE PROBLEMS ARISING UNDER SEC. 411. 

IT WOULD BE STRANGE, INDEED, IF A DIVISION OF TERRITORIES OR AN
ALLOCATION OF ROUTES WHICH MET THE REQUIREMENTS OF THE "PUBLIC
INTEREST" AS DEFINED IN SEC. 2 WERE HELD TO BE ANTITRUST VIOLATIONS. 
IT WOULD ALSO BE ODD TO CONCLUDE THAT AN AFFILIATION BETWEEN A COMMON
CARRIER AND AN AIR CARRIER THAT PASSED MUSTER UNDER SEC. 408 SHOULD RUN
AFOUL OF THE ANTITRUST LAWS.  WHETHER OR NOT TRANSACTIONS OF THAT
CHARACTER MEET THE STANDARDS OF COMPETITION AND MONOPOLY PROVIDED BY
THE ACT IS PECULIARLY A QUESTION FOR THE BOARD, SUBJECT OF COURSE TO
JUDICIAL REVIEW AS PROVIDED IN 49 U.S.C. SEC. 1486.  CF. FEDERAL
MARITIME BD. V. ISBRANDTSEN CO., 356 U.S. 481; SCHAFFER TRANSPORTATION
CO. V. UNITED STATES, 355 U.S. 83. 

IN CASE OF A PROSPECTIVE APPLICATION OF THE ACT, THE BOARD'S ORDER,
AS NOTED, WOULD GIVE THE CARRIER IMMUNITY FROM ANTITRUST VIOLATIONS
"INSOFAR AS MAY BE NECESSARY TO ENABLE SUCH PERSON TO DO ANYTHING
AUTHORIZED, APPROVED, OR REQUIRED BY SUCH ORDER."  SEC. 414. 
ALTERNATIVELY, THE BOARD UNDER SEC. 411 CAN INVESTIGATE AND BRING TO A
HALT ALL "UNFAIR  ...  PRACTICES" AND ALL "UNFAIR METHODS OF
COMPETITION," INCLUDING THOSE WHICH STARTED PRIOR TO THE ACT.  (FN13)
IF THE COURTS WERE TO INTRUDE INDEPENDENTLY WITH THEIR CONSTRUCTION OF
THE ANTITRUST LAWS, TWO REGIMES MIGHT COLLIDE.  FURTHERMORE, MANY OF
THE PROBLEMS PRESENTED BY THIS CASE, WHICH INVOLVES AIR ROUTES TO AND
IN FOREIGN COUNTRIES, MAY INVOLVE MILITARY AND FOREIGN POLICY
CONSIDERATIONS THAT THE ACT, AS CONSTRUED BY A MAJORITY OF THE COURT IN
CHICAGO & SOUTHERN AIR LINES V. WATERMAN S.S. CORP., 333 U.S. 103,
SUBJECTS TO PRESIDENTIAL RATHER THAN JUDICIAL REVIEW.  IT SEEMS TO US,
THEREFORE, THAT THE ACT LEAVES TO THE BOARD UNDER SEC. 411 ALL
QUESTIONS OF INJUNCTIVE RELIEF AGAINST THE DIVISION OF TERRITORIES OR
THE ALLOCATION OF ROUTES OR AGAINST COMBINATIONS BETWEEN COMMON
CARRIERS AND AIR CARRIERS.  (FN14)  SEE TEXAS & PACIFIC R. CO. V.
ABILENE COTTON OIL CO., 204 U.S. 426; KEOGH V. CHICAGO & N.W.R. CO.,
260 U.S. 156. 

THE FACT THAT TRANSACTIONS OCCURRING BEFORE 1938 ARE INVOLVED IN THIS
CASE DOES NOT CHANGE OUR CONCLUSION.  THE PAST IS PROLOGUE AND THE
IMPACT OF PRE-1938 TRANSACTIONS ON PRESENT PROBLEMS OF AIR CARRIERS IS
ELOQUENTLY DEMONSTRATED IN A RECENT ORDER OF THE BOARD CONCERNING THE
UNITED STATES FLAG CARRIER ROUTE PATTERN BETWEEN THIS COUNTRY AND SOUTH
AMERICA WHICH IS SET FORTH IN PART IN THE APPENDIX TO THIS OPINION. 
THE STATUS OF PANAGRA - JOINTLY OWNED BY PAN AMERICAN AND GRACE - IS
CENTRAL TO THAT PROBLEM, (FN15) AS THAT ORDER MAKES CLEAR.  WHAT WAS
DONE IN THE PRE-1938 DAYS MAY BE SO DISRUPTIVE OF THE REGIME VISUALIZED
BY THE ACT OR SO OUT OF HARMONY WITH THE STATUTORY STANDARDS FOR
COMPETITION SET BY THE ACT (FN16) THAT IT SHOULD BE UNDONE IN
PROCEEDINGS UNDER SEC. 411.  THE TRANSACTIONS IN QUESTION ARE REACHED
BY THE TERMS OF SEC. 411.  BUT MORE IMPORTANT, THE PARTICULAR RELATION
OF THIS PROBLEM TO THE GENERAL PROCESS OF ENCOURAGING DEVELOPMENT OF
NEW FIELDS OF AIR TRANSPORTATION MAKES IT ALL THE MORE APPROPRIATE THAT
THE BOARD SHOULD DECIDE WHETHER THESE PARTICULAR TRANSACTIONS SHOULD BE
UNDONE IN WHOLE OR IN PART, OR WHETHER THEY SHOULD BE ALLOWED TO
CONTINUE. 

IT IS SUGGESTED THAT THE POWER OF THE BOARD TO ISSUE A "CEASE AND
DESIST" ORDER IS NOT BROAD ENOUGH TO INCLUDE THE POWER TO COMPEL
DIVESTITURE AND THAT IN ANY EVENT ITS POWER TO DO SO UNDER SEC. 411
RUNS SOLELY TO AIR CARRIERS, NOT TO COMMON CARRIERS OR OTHER
STOCKHOLDERS.  WE DO NOT READ THE ACT SO RESTRICTIVELY.  THE BOARD HAS
NO POWER TO AWARD DAMAGES OR TO BRING CRIMINAL PROSECUTIONS.  NOR DOES
IT, AS ALREADY NOTED, HAVE JURISDICTION OVER EVERY ANTITRUST VIOLATION
BY AIR CARRIERS.  BUT WHERE THE PROBLEM LIES WITHIN THE PURVIEW OF THE
BOARD, AS DO QUESTIONS OF DIVISION OF TERRITORIES, THE ALLOCATION OF
ROUTES, AND THE AFFILIATION OF COMMON CARRIERS WITH AIR CARRIERS,
CONGRESS MUST HAVE INTENDED TO GIVE IT AUTHORITY THAT WAS AMPLE TO DEAL
WITH THE EVIL AT HAND. 

WE NEED NOT NOW DETERMINE THE ULTIMATE SCOPE OF THE BOARD'S POWER TO
ORDER DIVESTITURE UNDER SEC. 411.  IT SEEMS CLEAR THAT SUCH POWER
EXISTS (FN17) AT LEAST WITH RESPECT TO THE PARTICULAR PROBLEMS INVOLVED
IN THIS CASE.  OF PRINCIPAL IMPORTANCE HERE, WE THINK, IS THE FACT THAT
THE BOARD COULD HAVE RETAINED SUCH POWER OVER THESE TRANSACTIONS, IF
THEY HAD OCCURRED AFTER 1938, BY SO CONDITIONING ITS GRANT OF
APPROVAL.  THE TERMS OF SEC. 411 DO NOT DISTINGUISH BETWEEN CONDUCT
BEFORE OR AFTER THAT DATE.  IF THE ACT IS TO BE ADMINISTERED AS A
COHERENT WHOLE, WE THINK SEC. 411 MUST INCLUDE AN EQUIVALENT POWER OVER
PRE-ENACTMENT EVENTS OF THE KIND INVOLVED IN THIS CASE (FN18)  -
ALTHOUGH, OF COURSE, THE BOARD MIGHT FIND THAT THE HISTORIC BACKGROUND
OF THESE PRE-1938 TRANSACTIONS INTRODUCES DIFFERENT CONSIDERATIONS IN
FORMULATING A SUITABLE RESOLUTION OF THE PROBLEM INVOLVED. 

WE THINK THE NARROW QUESTIONS PRESENTED BY THIS COMPLAINT HAVE BEEN
ENTRUSTED TO THE BOARD AND THAT THE COMPLAINT SHOULD HAVE BEEN
DISMISSED.  (FN19)  ACCORDINGLY WE REVERSE THE JUDGMENT AND REMAND THE
CASE FOR PROCEEDINGS IN CONFORMITY WITH THIS OPINION.  SO ORDERED. 

FN1  ANOTHER CHARGE RELATES TO ALLEGED RESTRAINTS ON PANAGRA BY ITS
TWO STOCKHOLDERS WHICH THE DISTRICT COURT SUMMARIZED AS FOLLOWS: 

"TO A LARGE EXTENT THE EVIDENCE OF RESTRAINTS ON PANAGRA IN THE
CATEGORIES OF JOINT OFFICES, COMMUNICATIONS, EQUIPMENT, PUBLICITY AND
SALES ARE MATTERS OF AGREEMENT THAT MUST BE INITIALLY APPROVED BY THE
C.A.B. AND TO A LARGE DEGREE HAVE BEEN APPROVED AND OTHERS ARE AWAITING
APPROVAL OR EXTENSION OF APPROVAL PREVIOUSLY GRANTED."  193 F. SUPP.
18, 22. 

FN2  PANAGRA WAS ORGANIZED JANUARY 25, 1929, AND RECEIVED ON MARCH 2,
1929, AN AIR MAIL CONTRACT FROM THE POSTMASTER GENERAL (SEE 45 STAT.
248, 1449) EVEN THOUGH IT WAS NOT THE LOWEST BIDDER.  SEE 36 OP. ATTY.
GEN. 33. 

FN3  THE DISTRICT COURT SAID: 

"THE AWARD OF A POST OFFICE CONTRACT FOR EACH SECTOR OF SOUTH
AMERICA, IN EFFECT, ASSURED THE AMERICAN CONTRACTOR OF A MONOPOLY IN
THAT SECTOR INSOFAR AS AMERICAN FLAG OPERATIONS WERE CONCERNED, AND THE
INVALUABLE ASSISTANCE OF THE STATE DEPARTMENT AND POST OFFICE
DEPARTMENT IN THE CARRIER'S RELATIONS WITH THE COUNTRIES ALONG ITS
ROUTE."  193 F. SUPP. 18, 31. 

FN4  THE DISTRICT COURT SAID: 

"THE STATE DEPARTMENT ACTIVELY ASSISTED DEFENDANTS IN DEFEATING THE
FOREIGN COMPANY DESIGNS FOR MONOPOLY CONCESSIONS AND IN SECURING
AMERICAN OPERATING RIGHTS ALONG THEIR ROUTES.  THE CONTRACTS AWARDED BY
THE POST OFFICE DEPARTMENT DEFINED THE INTERNATIONAL ROUTE OF THE
CONTRACTOR, AND SO TO A LARGE EXTENT DEFINED THE AREA OF DEVELOPMENT
AND EXPANSION OF ANY SUCH CONTRACTOR.  THE POST OFFICE POLICY DURING
THE YEARS 1928 TO 1938 WAS TO AWARD BUT ONE CONTRACT FOR EACH ROUTE, IN
EFFECT TO SUBSIDIZE ONE AMERICAN CARRIER IN A PARTICULAR SECTOR.  THE
IDEAL ROUTE PATTERN AS ENVISAGED BY THE C.A.B. TODAY IS TO HAVE TWO
CARRIERS, PAN AMERICAN AND A MERGED 'PANAGRA-BRANIFF,' AND THE ONLY
DIFFERENCE FROM THAT EXISTING PRIOR TO BRANIFF'S ENTRY WOULD BE THE
EXTENSION OF 'PANAGRA-BRANIFF' TO THE UNITED STATES.  COMPETITION AMONG
AMERICAN CARRIERS UNDER THE POLICY OF THE POST OFFICE DEPARTMENT UNDER
THE FOREIGN MAIL CONTRACTS, WAS ECONOMICALLY IMPOSSIBLE, AND MOST
LIKELY DETRIMENTAL TO THE SOUND DEVELOPMENT OF AMERICAN FLAG SERVICE,
WHICH WOULD HAVE COMPLICATED OR EMBARRASSED THE EFFECTIVE RENDITION OF
DIPLOMATIC ASSISTANCE FROM THE STATE DEPARTMENT, AND ACTUALLY CAUSE A
WASTE OF PUBLIC MONIES.  COMPETITION BETWEEN PANAGRA AND PAN AMERICAN
CERTAINLY WAS NOT ENCOURAGED BY THIS GOVERNMENT.  ON THE CONTRARY,
THERE APPEARS TO EMERGE FROM THE EVIDENCE PRESENTED A DEFINITE POLICY
OF THE GOVERNMENT APPROVING A SORT OF 'ZONING' FOR THE OPERATIONS OF
THE AMERICAN INTERNATIONAL CARRIERS IN THE NATURE OF EAST AND WEST
COAST SPHERES AS WAS ULTIMATELY ARRANGED BETWEEN PAN AMERICAN AND
PANAGRA.  AGREEMENT NOT TO PARALLEL EACH OTHER'S SERVICE IN SOUTH
AMERICA SEEMS PERFECTLY CONSISTENT WITH THE AIR TRANSPORTATION POLICY
OF THIS COUNTRY IN THOSE FORMATIVE YEARS."  193 F. SUPP. 18, 34. 

FN5  SEE PANAGRA TERMINAL INVESTIGATION, 4 C.A.B. 670, REMANDED, W.R.
GRACE & CO. V. C.A.B., 154 F.2D 271.  WE GRANTED CERTIORARI, 328 U.S.
832, AND LATER DISMISSED THE CASE AS MOOT, 332 U.S. 827, BECAUSE PAN
AMERICAN AND PANAGRA HAD SETTLED THEIR DISPUTE THROUGH AN AGREEMENT
APPROVED BY THE C.A.B. (SEE NOTE 15, INFRA), AFTER THE C.A.B. HAD SAID
THAT JOINT CONTROL OF PANAGRA BY PAN AMERICAN AND GRACE WAS "UNHEALTHY"
(4 C.A.B. 670, 678) AND THAT "THE JOINT OWNERS COOPERATIVELY SHOULD
ENABLE PANAGRA TO APPLY FOR ACCESS TO THE EAST COAST OF THE UNITED
STATES."  ADDITIONAL SERVICE TO LATIN AMERICA, 6 C.A.B. 857, 914. 

FN6  THE BOARD HAS HELD THAT SEC. 408(A) IS NOT RETROACTIVE. 
RAILROAD CONTROL OF NORTHEAST AIRLINES, 4 C.A.B. 379, 386.  AND SEE
NATIONAL AIR FREIGHT FORWARD CORP. V. C.A.B., 90 U.S. APP. D.C. 330,
335, 197 F.2D 384, 389. 

FN7  THE SHERMAN ACT WAS APPLIED TO PRE-1890 COMBINATIONS: UNITED
STATES V. TRANS-MISSOURI FREIGHT ASSN., 166 U.S. 290, 342; WATERS
PIERCE OIL CO. V. TEXAS (NO. 1), 212 U.S. 86, 107-108 (TEXAS VERSION OF
THE SHERMAN ACT); SEE ALSO COX V. HART, 260 U.S. 427, 435; AMERICAN
P.&L.  CO. V. SECURITIES & EXCHANGE COMM'N, 141 F.2D 606, 625 (C.A. 1ST
CIR.), AFFIRMED, 329 U.S. 90. 

MOREOVER, AS WE RECENTLY STATED IN UNITED STATES V. DUPONT & CO., 353
U.S. 586, 607, "  ...  THE TEST OF A VIOLATION OF SEC. 7 IS WHETHER, AT
THE TIME OF SUIT, THERE IS A REASONABLE PROBABILITY THAT THE
ACQUISITION IS LIKELY TO RESULT IN THE CONDEMNED RESTRAINTS." 

FN8  THE ORIGINAL ACT TOOK OUT FROM UNDER THE JURISDICTION OF THE
FEDERAL TRADE COMMISSION, "AIR CARRIERS AND FOREIGN AIR CARRIERS
SUBJECT TO THE CIVIL AERONAUTICS ACT OF 1938."  52 STAT. 973, 1028,
SEC. 1107(F). 

FN9  CF. GEORGIA V. PENNSYLVANIA R. CO., 324 U.S. 439, HOLDING THAT
THE INTERSTATE COMMERCE ACT IS NO BAR TO AN ANTITRUST SUIT AGAINST A
CARRIER; UNITED STATES V. R.C.A., 358 U.S. 334, HOLDING THAT THE
FEDERAL COMMUNICATIONS ACT IS NO BAR TO AN ANTITRUST SUIT AGAINST TV
AND RADIO LICENSEES; UNITED STATES V. BORDEN CO., 308 U.S. 188, 195
199, HOLDING THAT NEITHER THE AGRICULTURAL ADJUSTMENT ACT NOR THE
CAPPER-VOLSTEAD ACT DISPLACED THE SHERMAN ACT; AND CALIFORNIA V.
FEDERAL POWER COMM'N, 369 U.S. 482, HOLDING THAT THE CLAYTON ACT WAS
NOT DISPLACED BY THE NATURAL GAS ACT.  AND SEE MILK PRODUCERS ASSN. V.
UNITED STATES, 362 U.S. 458. 

FN10  IN PAN AMERICAN-MATSON-INTER-ISLAND CONTRACT, 3 C.A.B. 540, THE
BOARD REJECTED A PROPOSAL FOR THE CREATION OF A JOINT COMPANY SIMILAR
TO PANAGRA FOR SERVICE TO HAWAII.  SUCH JOINT VENTURES, AS WE NOTE IN
THE OPINION, MAY BE COMBINATIONS IN VIOLATION OF THE ANTITRUST LAWS. 
SEE TIMKEN ROLLER BEARING CO. V. UNITED STATES, 341 U.S. 593, 598. 
FN11  IT SHOULD BE NOTED THAT THE RESULT IN GEORGIA V. PENNSYLVANIA R.
CO., SUPRA, MIGHT TODAY BE DIFFERENT AS A RESULT OF THE ACT OF JUNE 17,
1948, 62 STAT. 472, WHICH GIVES THE INTERSTATE COMMERCE COMMISSION
AUTHORITY TO APPROVE COMBINATIONS OF THE CHARACTER INVOLVED IN THAT
CASE AND GIVE THEM IMMUNITY FROM THE ANTITRUST LAWS.  SEE S. REP. NO.
1511, 79TH CONG., 2D SESS.; H.R. REP. NO. 1212, 79TH CONG., 1ST SESS.;
H.R. REP. NO. 1100, 80TH CONG., 1ST SESS.  THIS ACT WAS PASSED OVER A
PRESIDENTIAL VETO.  SEE 94 CONG. REC. 8435, 8633. 

FN12  AND SEE THE DEBATES IN 51 CONG. REC. 11874-11876, 12022-12025;
12026-12032.  FN13  WE NOTE, IN ADDITION, THAT THE BOARD ITSELF HAS
ASSUMED JURISDICTION UNDER CHANGED CIRCUMSTANCES IN THOSE AREAS COVERED
BY SEC. 408, IN WHICH IT HAS FOUND ONLY PROSPECTIVE AUTHORITY. 
RAILROAD CONTROL OF NORTHEAST AIRLINES, SUPRA, NOTE 6. 

FN14  AN "AIR CARRIER" IS DEFINED IN SEC. 1(2) AS "ANY CITIZEN OF THE
UNITED STATES WHO UNDERTAKES, WHETHER DIRECTLY OR INDIRECTLY OR BY A
LEASE OR ANY OTHER ARRANGEMENT, TO ENGAGE IN AIR TRANSPORTATION:
PROVIDED, THAT THE AUTHORITY MAY BY ORDER RELIEVE AIR CARRIERS WHO ARE
NOT DIRECTLY ENGAGED IN THE OPERATION OF AIRCRAFT IN AIR TRANSPORTATION
FROM THE PROVISIONS OF THIS ACT TO THE EXTENT AND FOR SUCH PERIODS AS
MAY BE IN THE PUBLIC INTEREST."  WHETHER THERE MIGHT BE "A REASONABLE
BASIS IN LAW" (LABOR BOARD V. HEARST PUBLICATIONS, INC., 322 U.S. 111,
131) FOR A BOARD CONCLUSION THAT GRACE IS AN "AIR CARRIER" BY REASON OF
ITS NEGATIVE CONTROL OVER PANAGRA IS A MATTER ON WHICH WE INTIMATE NO
VIEW.  WE MENTION THE MATTER SO AS NOT TO FORECLOSE THE QUESTION BY ANY
IMPLICATION DRAWN FROM OUR SEPARATE TREATMENT OF COMMON CARRIERS AND
AIR CARRIERS. 

FN15  PHASES OF ISSUES RELATED TO THOSE IN THE PRESENT LITIGATION
HAVE INDEED BEEN BEFORE THE BOARD.  NOTE 5, SUPRA.  IT HELD IN AN
INVESTIGATION THAT IT HAD NO AUTHORITY TO ACCOMPLISH THE COMPULSORY
EXTENSION OF PANAGRA'S ROUTE TO THE UNITED STATES (PANAGRA TERMINAL
INVESTIGATION, 4 C.A.B. 670), A RULING REVIEWED BY THE COURT OF APPEALS
WHICH REMANDED THE MATTER TO THE BOARD FOR FURTHER CONSIDERATION.  W.R.
GRACE & CO. V. CIVIL AERONAUTICS BOARD, 154 F.2D 271.  BEFORE THAT
CONTROVERSY HAD BEEN RESOLVED, PAN AMERICAN AND PANAGRA ENTERED A
"THROUGH FLIGHT AGREEMENT" WHICH IN ESSENCE PROVIDED THAT PAN AMERICAN
WOULD CHARTER ANY AIRCRAFT OPERATED BY PANAGRA FROM THE SOUTH TO THE
CANAL ZONE AND OPERATE IT ON ITS SCHEDULES TO THE UNITED STATES.  THIS
AGREEMENT WITH EXCEPTIONS NOT MATERIAL HERE, WAS APPROVED BY THE
BOARD.  PAN AMERICAN-PANAGRA AGREEMENT, 8 C.A.B. 50. 

FN16  FOR A DISCUSSION OF THE BOARD'S POLICY IN ISSUING CERTIFICATES
TO COMPETING AIR CARRIERS, SEE HALE AND HALE, COMPETITION OR CONTROL
IV: AIR CARRIERS, 109 U. OF PA. L. REV. 311, 314-318. 

FN17  WE HAVE HERETOFORE ANALOGIZED THE POWER OF ADMINISTRATIVE
AGENCIES TO FASHION APPROPRIATE RELIEF TO THE POWER OF COURTS TO
FASHION SHERMAN ACT DECREES.  FEDERAL TRADE COMM'N V. MANDEL BROS., 359
U.S. 385, 392-393.  AUTHORITY TO MOLD ADMINISTRATIVE DECREES IS INDEED
LIKE THE AUTHORITY OF COURTS TO FRAME INJUNCTIVE DECREES (LABOR BOARD
V. EXPRESS PUB. CO., 312 U.S. 426, 433, 436; LABOR BOARD V. CHENEY
LUMBER CO., 327 U.S. 385) SUBJECT OF COURSE TO JUDICIAL REVIEW. 
DISSOLUTION OF UNLAWFUL COMBINATIONS, WHEN BASED ON APPROPRIATE
FINDINGS (SCHINE THEATRES V. UNITED STATES, 334 U.S. 110, 129-130), IS
AN HISTORIC REMEDY IN THE ANTITRUST FIELD, EVEN THOUGH NOT EXPRESSLY
AUTHORIZED.  UNITED STATES V. CRESCENT AMUSEMENT CO., 323 U.S. 173,
189.  LIKEWISE, THE POWER TO ORDER DIVESTITURE NEED NOT BE EXPLICITLY
INCLUDED IN THE POWERS OF AN ADMINISTRATIVE AGENCY TO BE PART OF ITS
ARSENAL OF AUTHORITY, AS WE HELD ONLY THE OTHER DAY IN GILBERTVILLE
TRUCKING CO. V. UNITED STATES, 371 U.S. 115.  CF. FEDERAL TRADE COMM'N
V. EASTMAN KODAK CO., 274 U.S. 619. 

FN18  THERE IS NO EXPRESS AUTHORITY FOR DIVESTITURE IN EITHER THE
SHERMAN OR CLAYTON ACT.  SEE 15 U.S.C. SECS. 4, 25.  THE REASONING THAT
SUPPORTS SUCH A REMEDY UNDER THOSE ACTS IS AS APPLICABLE TO THE BOARD
AS IT IS TO THE COURTS, AND IT IS AS VALID TODAY AS IT WAS WHEN
ORIGINALLY STATED BY THE FIRST JUSTICE HARLAN: 

"ALL WILL AGREE THAT IF THE  ...  ACT BE CONSTITUTIONAL, AND IF THE
COMBINATION IN QUESTION BE IN VIOLATION OF ITS PROVISIONS, THE COURTS
MAY ENFORCE THE PROVISIONS OF THE STATUTE BY SUCH ORDERS AND DECREES AS
ARE NECESSARY OR APPROPRIATE TO THAT END AND AS MAY BE CONSISTENT WITH
THE FUNDAMENTAL RULES OF LEGAL PROCEDURE."  NORTHERN SECURITIES CO. V.
UNITED STATES, 193 U.S. 197, 344. 

FN19  IF IT WERE CLEAR THAT THERE WAS A REMEDY IN THIS CIVIL
ANTITRUST SUIT THAT WAS NOT AVAILABLE IN A SEC. 411 PROCEEDING BEFORE
THE C.A.B., WE WOULD HAVE THE KIND OF PROBLEM PRESENTED IN HEWITT
ROBINS INC. V. EASTERN FREIGHT-WAYS, INC., ANTE, P. 84, WHERE
LITIGATION IS HELD BY A COURT UNTIL THE BASIC FACTS AND FINDINGS ARE
FIRST DETERMINED BY THE ADMINISTRATIVE AGENCY, SO THAT THE JUDICIAL
REMEDY, NOT AVAILABLE IN THE OTHER PROCEEDING, CAN BE GRANTED.  NOR IS
THIS A CASE WHERE A PROCEEDING BEFORE A SECOND TRIBUNAL IS DESIRABLE
(THOMPSON V. MAGNOLIA PETROLEUM CO., 309 U.S. 478) OR NECESSARY
(GENERAL AM. TANK CAR CORP. V. EL DORADO TERMINAL CO., 308 U.S. 422;
THOMPSON V. TEXAS MEXICAN R. CO., 328 U.S. 134, 150-151) FOR AN
AUTHORITATIVE DETERMINATION OF A LEGAL QUESTION CONTROLLING IN THE
FIRST TRIBUNAL. 

DISMISSAL OF ANTITRUST SUITS, WHERE AN ADMINISTRATIVE REMEDY HAS
SUPERSEDED THE JUDICIAL ONE, IS THE USUAL COURSE.  SEE UNITED STATES
NAV. CO. V. CUNARD S.S. CO., 284 U.S. 474; FAR EAST CONFERENCE V.
UNITED STATES, 342 U.S. 570, 577. 

MR. JUSTICE CLARK AND MR. JUSTICE HARLAN TOOK NO PART IN THE
CONSIDERATION OR DECISION OF THESE CASES. 

FOR DISSENTING OPINION OF MR. JUSTICE BRENNAN, SEE POST, P. 319. 

                              APPENDIX TO OPINION OF THE COURT. 

       ORDER NO. E-17289

 UNITED STATES OF AMERICA

   CIVIL AERONAUTICS BOARD

       WASHINGTON, D.C.

                           ADOPTED BY THE CIVL AERONAUTICS BOARD

AT ITS OFFICE IN WASHINGTON, D.C. ON THE

               8TH DAY OF AUGUST, 1961. 

IN THE MATTER OF THE UNITED STATES-SOUTH AMERICAN ROUTE CASE.  -
DOCKET 12895. 

                              ORDER INSTITUTING INVESTIGATION 

THE BOARD HAS DECIDED THAT IT IS APPROPRIATE AT THIS TIME TO
INSTITUTE A COMPREHENSIVE REVIEW OF THE U.S. FLAG CARRIER ROUTE PATTERN
BETWEEN THE UNITED STATES AND SOUTH AMERICA.  THE MOST RECENT EXTENSIVE
STUDY OF THAT ROUTE STRUCTURE WAS UNDERTAKEN IN 1946, SOME 15 YEARS
AGO.  SINCE THEN CONSIDERABLE DEVELOPMENTS, HEREINAFTER REFERRED TO,
HAVE TAKEN PLACE WHICH AFFECT THESE SERVICES AND REQUIRE THE REVIEW
HERE CONTEMPLATED. 

THREE U.S. CARRIERS ARE PRESENTLY CERTIFICATED TO PROVIDE THE MAJOR
SERVICES TO POINTS IN SOUTH AMERICA.  PAN AMERICAN WORLD AIRWAYS, INC.
(PAN AMERICAN), IS AUTHORIZED TO PROVIDE SERVICE BETWEEN SAN FRANCISCO,
LOS ANGELES, HOUSTON, NEW ORLEANS, WASHINGTON, PHILADELPHIA AND NEW
YORK-NEWARK, ON THE ONE HAND, AND POINTS ON THE NORTH AND EAST COASTS
OF SOUTH AMERICA INCLUDING RIO DE JANEIRO AND BUENOS AIRES, ON THE
OTHER HAND, VIA POINTS IN CENTRAL AMERICA AND THE CARIBBEAN, ON ROUTE
136.  PAN AMERICAN-GRACE AIRWAYS, INC. (PANAGRA) IS AUTHORIZED TO
PROVIDE SERVICE BETWEEN BALBOA, GUAYAQUIL, LIMA, SANTIAGO AND BUENOS
AIRES, VIA INTERMEDIATE POINTS, PRIMARILY ALONG THE WEST COAST OF SOUTH
AMERICA, ON ROUTE 146.  BRANIFF AIRWAYS, INC. (BRANIFF) IS AUTHORIZED
TO PROVIDE SERVICE BETWEEN HOUSTON AND MIAMI, ON THE ONE HAND, AND
HAVANA, BALBOA, BOGOTA, GUAYAQUIL, LIMA, RIO DE JANEIRO AND BUENOS
AIRES, ON THE OTHER HAND, VIA INTERMEDIATE POINTS, ON ROUTE FAM-34. 
(FN1) 

AS PREVIOUSLY INDICATED, THE BASIC U.S. FLAG CARRIER ROUTE PATTERNS
BETWEEN THE UNITED STATES AND SOUTH AMERICA PRESENTLY IN EFFECT WERE
ESTABLISHED SOME YEARS AGO IN THE ADDITIONAL SERVICE TO LATIN AMERICA
CASE, 6 C.A.B. 857 (1946).  MATTERS INVOLVING SERVICE BETWEEN THE
UNITED STATES AND SOUTH AMERICA WERE, HOWEVER, FURTHER CONSIDERED IN
THE NEW YORK-BALBOA THROUGH SERVICE PROCEEDING, REOPENED, 18 C.A.B. 501
(1954), 20 C.A.B. 493 (1954), AND CERTAIN THROUGH-SERVICE AIRCRAFT
INTERCHANGE AGREEMENTS WERE APPROVED AS A RESULT OF THE NEW YORK-BALBOA
CASE BY ORDER E-9481, 21 C.A.B. 1005 (1955).  ALSO, THE CERTIFICATION
OF A LOS ANGELES/SAN FRANCISCO-GUATEMALA CITY ROUTE, LAST CONSIDERED IN
ORDER E-9514, AUGUST 3, 1955, PERMITTED PAN AMERICAN TO OPERATE BETWEEN
THE WEST COAST OF THE UNITED STATES AND POINTS IN SOUTH AMERICA. 

SINCE THE ORIGINAL ESTABLISHMENT OF THE BASIC SOUTH AMERICA ROUTE
STRUCTURE, THERE HAVE BEEN BASIC CHANGES IN TECHNOLOGY AND PATTERNS OF
SERVICE.  THUS, IN 1944, THE RANGE OF AIRCRAFT WAS RELATIVELY LIMITED
AND OPERATIONAL REQUIREMENTS, AS WELL AS ECONOMIC CONSIDERATIONS,
REQUIRED MULTIPLE STOPS ON THE LONG-HAUL SERVICE.  TODAY, AVAILABLE
AIRCRAFT CAN, AND DO, SERVE THE MOST DISTANT POINTS ON A NONSTOP
BASIS.  OF THE RELATIVE ATTRACTIVENESS OF NONSTOP TO MULTI-STOP SERVICE
IN COMPARABLE EQUIPMENT THERE CAN BE NO QUESTION; CONSEQUENTLY, THE
CHANGED TECHNOLOGY WHICH HAS MADE NONSTOP SERVICES OPERATIONALLY
FEASIBLE WARRANTS A CAREFUL REVIEW OF THE ECONOMICS OF SUCH SERVICE IN
RELATION TO THE EXISTING AND FUTURE ROUTE STRUCTURE.  SIMILARLY,
CHANGES HAVE TAKEN PLACE IN THE COMPETITIVE PICTURE.  PRIOR TO THE
DECISION IN THE LATIN AMERICA CASE, SUPRA, PAN AMERICAN AND PANAGRA
OPERATED IN COMPETITION WITH THREE FOREIGN AIR CARRIERS.  TODAY, 19
SOUTH AMERICAN FOREIGN AIR CARRIERS ARE AUTHORIZED TO SERVE THE UNITED
STATES-SOUTH AMERICA MARKET.  THERE HAS ALSO BEEN AN INCREASE IN
SERVICE WITHIN SOUTH AMERICA BY LOCAL CARRIERS.  NOT ONLY DO THESE
SERVICES RENDERED BY NON-U.S. FLAG CARRIERS DILUTE THE POTENTIAL
ECONOMIC SUPPORT FOR THE SERVICES OF THE U.S. CARRIERS, BUT ALSO THEY
BRING INTO QUESTION THE NEED FOR POINT-TO-POINT DUPLICATION OF SUCH
SERVICES.  IN THIS CONNECTION, WE CANNOT BE UNMINDFUL OF THE FACT THAT
THE U.S. FLAG CARRIERS' OPERATIONS ARE MARGINAL ECONOMICALLY. 

OUR CONCERN WITH THE CURRENT SOUTH AMERICA ROUTE PATTERN IS NOT A
RECENT ONE.  AS LONG AGO AS 1954, THE BOARD PUBLICLY SUGGESTED THAT THE
AVAILABLE TRAFFIC IN SOUTH AMERICA DID NOT WARRANT CONTINUATION OF
THREE UNITED STATES FLAG SERVICES.  (FN2)  IN THE INTERIM OPINION, IN
THE NEW YORK-BALBOA CASE, SUPRA, IT WAS NOTED THAT BRANIFF WAS NOT AN
EFFECTIVE COMPETITOR FOR SOUTH AMERICAN TRAFFIC AND THAT THE PUBLIC
INTEREST OF THE UNITED STATES WOULD BE SERVED BY THE ESTABLISHMENT OF A
SINGLE INDEPENDENT CARRIER OPERATION BETWEEN HOUSTON AND MIAMI, ON THE
ONE HAND, AND THE POINTS SERVED ON THE COMBINED ROUTES OF PANAGRA AND
BRANIFF, ON THE OTHER HAND.  THE BOARD THEN ALSO VOICED ITS INTEREST IN
MAKING SUCH A ROUTE AVAILABLE TO NORTHEASTERN UNITED STATES TRAFFIC. 
THE HOPE THEN WAS THAT THE CARRIERS CONCERNED WOULD VOLUNTARILY SEEK TO
RESOLVE THE PROBLEM ALONG THE LINES SUGGESTED.  (FN3)  IN THIS
CONNECTION, WE WERE FULLY COGNIZANT OF THE RECENT INSTITUTION OF A SUIT
BY THE ATTORNEY GENERAL AGAINST PAN AMERICAN, PANAGRA, AND W.R.  GRACE
AND COMPANY, WHICH, ON ANTITRUST GROUNDS, SOUGHT DIVESTITURE BY PAN
AMERICAN AND GRACE OF THEIR INTEREST IN PANAGRA.  HOWEVER, THE
PRINCIPALS DID NOT COME FORWARD WITH A PROPOSAL.  INSTEAD, THE SUIT WAS
PERMITTED TO PROCEED TO TRIAL AND JUDGMENT, AND IT IS CURRENTLY PENDING
POSSIBLE REVIEW BY THE UNITED STATES SUPREME COURT.  (FN4) 

ASSUMING THAT THE DISTRICT COURT'S JUDGMENT, AT LEAST INSOFAR AS IT
ORDERED DIVESTITURE BY PAN AMERICAN OF ITS INTEREST IN PANAGRA, IS
SUSTAINED, (FN5) IT IS CLEAR THAT THE BOARD WILL, IN THE NEAR FUTURE,
BE CALLED UPON TO CONSIDER FURTHER THE CONSEQUENCES OF DIVESTITURE WITH
RESPECT TO U.S. FLAG SERVICES IN SOUTH AMERICA.  AND IN ORDER FOR THE
BOARD TO BE ABLE PROMPTLY AND EFFECTIVELY TO TAKE SUCH FURTHER STEPS AS
MIGHT BE REQUIRED IN THE CIRCUMSTANCES, IT WOULD BE WELL FOR IT TO HAVE
CONSIDERED CAREFULLY THE OVERALL NEED FOR U.S. FLAG SERVICES IN SOUTH
AMERICA IN THE LIGHT OF A LITIGATED RECORD. 

SINCE THE SELECTION OF CARRIER ISSUES WILL REMAIN SOMEWHAT CLOUDED
UNTIL FINAL RESOLUTION OF THE PENDING ANTITRUST SUIT, IT APPEARS
APPROPRIATE AND IN THE INTEREST OF A SOUND AND ORDERLY DISPOSITION OF
THIS PROCEEDING TO CONSIDER SEPARATELY THE APPROPRIATE ROUTE STRUCTURE
PRIOR TO CONSIDERATION OF SELECTION OF CARRIER MATTERS.  WE RECOGNIZE
THAT FACTUAL MATTERS RELATIVE TO PUBLIC CONVENIENCE AND NECESSITY
ISSUES MAY ALSO HAVE THEIR CARRIER SELECTION ASPECTS; SIMILARLY, WE ARE
NOT UNMINDFUL OF THE FACT THAT, WHILE THE PRESCRIBED ROUTE PATTERN CAN
BE ESTABLISHED IN SUBSTANTIAL PART WITHOUT REGARD TO CARRIER SELECTION,
SOME ADJUSTMENT IN ROUTE PATTERN MAY BE FOUND NECESSARY AT THE TIME WE
DECIDE THE CARRIER SELECTION ISSUES.  WE ANTICIPATE, HOWEVER, THE FULL
COOPERATION OF ALL CONCERNED TO FACILITATE AN APPROPRIATE SEPARATION OF
THESE ISSUES. 

THE BOARD INTENDS THAT THE SCOPE OF THE PROCEEDING INSTITUTED HEREIN
INCLUDE ISSUES WITH RESPECT TO AUTHORIZATION OF SERVICES TO NEW POINTS,
THE DELETION OF PRESENTLY CERTIFICATED POINTS, AND THE CONSOLIDATION OF
SEPARATE ROUTES INTO SINGLE ROUTES.  (FN6)  CARIBBEAN POINTS WILL BE
CONSIDERED ONLY TO THE EXTENT THAT THEY ARE IN ISSUE AS POSSIBLE
INTERMEDIATE POINTS ON UNITED STATES-SOUTH AMERICA ROUTES, AND THE
PROCEEDING WILL NOT EXAMINE SERVICES WHOLLY WITHIN THE CARIBBEAN AREA,
OR BETWEEN POINTS IN THE UNITED STATES AND THE CARIBBEAN. 

IN ITS STUDY OF THE SOUTH AMERICAN ROUTE PATTERN, THE BOARD HAS
TENTATIVELY CONCLUDED THAT AN EAST COAST ROUTE AND A WEST COAST ROUTE
ARE REQUIRED.  THE DETAILS OF THE ROUTES ARE SET FORTH IN THE ATTACHED
ANALYSIS.  IN ADDITION, AND BECAUSE WE HAVE FOUND THAT CONSIDERABLE
ROUTE MODIFICATIONS ARE NECESSARY TO MEET PRESENT NEEDS AND PROBLEMS,
WE HAVE COMPILED AND ATTACHED HERETO DATA WHICH WE BELIEVE WILL
FACILITATE HEARING AND DECISION.  THE ATTACHED MATERIALS SHOULD SERVE
AS THE FOCAL POINT FOR THE TRIAL OF THIS CASE, AND WE DIRECT THAT THE
PRESENTATION OF PARTICIPANTS IN THE PROCEEDING, UNLESS OTHERWISE
ORDERED BY THE BOARD UPON GOOD CAUSE SHOWN THEREFOR, BE POINTED TO
SHOWING WHY AND IN WHAT MANNER THE CONCLUSIONS DERIVED FROM THE STUDY
SHOULD BE MODIFIED.  SUCH AN APPROACH CAN RESTRICT THE HEARING TO
RELEVANT AND MATERIAL FACTS AND OTHERWISE MINIMIZE PROCEDURAL DELAY. 

FN1  DELTA AIR LINES, INC. (DELTA) IS AUTHORIZED TO SERVE CARACAS AND
CERTAIN CARIBBEAN POINTS ON ITS CARIBBEAN ROUTE 114 FROM HOUSTON AND
NEW ORLEANS; AND AEROVIAS SUD AMERICANA, INC. (ASA) IS AUTHORIZED TO
PROVIDE CARGO AND MAIL SERVICE (ON A NONSUBSIDY BASIS) BETWEEN FLORIDA
POINTS AND POINTS IN CENTRAL AND SOUTH AMERICA.  THE ONLY SOUTH
AMERICAN POINTS PRESENTLY SERVED BY ASA ARE QUITO AND GUAYAQUIL,
ECUADOR. 

FN2  REOPENED NEW YORK-BALBOA THROUGH SERVICE CASE, 18 C.A.B. 501. 

FN3  THE POWERS GRANTED THE BOARD IN THE FEDERAL AVIATION ACT OF 1958
AND ITS PREDECESSOR, THE CIVIL AERONAUTICS ACT OF 1938, DO NOT INCLUDE
AUTHORITY TO COMPEL MERGER, OR TO TERMINATE THE ENTIRE ROUTE OF A
CARRIER. 

FN4  THE DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK HANDED
DOWN A DECISION ON MAY 8, 1961, U.S. V. PAN AMERICAN WORLD AIRWAYS,
INC., W.R. GRACE AND COMPANY, AND PAN AMERICAN-GRACE AIRWAYS, INC.,
CIV. 90-259.  PAN AMERICAN FILED A NOTICE OF APPEAL IN THE SUPREME
COURT ON MAY 11, 1961. 

FN5  THE ATTORNEY GENERAL HAD SOUGHT DIVESTITURE BY BOTH GRACE AND
PAN AMERICAN. 

FN6  PENDING CERTIFICATE APPLICATIONS INVOLVING SERVICE BETWEEN THE
UNITED STATES AND SOUTH AMERICA WILL BE CONSIDERED FOR CONSOLIDATION
UPON APPROPRIATE REQUEST SUBMITTED WITHIN 20 DAYS OF THE DATE OF
SERVICE OF THIS ORDER.  APPLICATIONS NOT MOVED FOR CONSOLIDATION WILL
BE SUBJECT TO DISMISSAL FOR LACK OF PROSECUTION. 

MR. JUSTICE BRENNAN, WITH WHOM THE CHIEF JUSTICE CONCURS,
DISSENTING. 

THE COURT HOLDS THAT THE "NARROW QUESTIONS PRESENTED BY THIS
COMPLAINT HAVE BEEN ENTRUSTED TO THE (CIVIL AERONAUTICS) BOARD AND THAT
THE COMPLAINT SHOULD HAVE BEEN DISMISSED."  THE GROUND OF THE DECISION
IS THAT THE PROVISIONS FOR ECONOMIC REGULATION IN THE CIVIL AERONAUTICS
ACT OF 1938, WHICH WERE REENACTED WITHOUT CHANGE IN THE FEDERAL
AVIATION ACT OF 1958, DISPLACED THE SHERMAN ACT INSOFAR AS "ALL
QUESTIONS OF INJUNCTIVE RELIEF AGAINST THE DIVISION OF TERRITORIES OR
THE ALLOCATION OF ROUTES OR AGAINST COMBINATIONS BETWEEN COMMON
CARRIERS AND AIR CARRIERS" IS CONCERNED.  WITH ALL RESPECT, I THINK
THIS CONCLUSION IS CONTRARY TO REASON AND PRECEDENT. 

                                            I. 

THE ROOT ERROR, AS I SEE IT, IN THE COURT'S DECISION IS THAT IT WORKS
AN EXTRAORDINARY AND UNWARRANTED DEPARTURE FROM THE SETTLED PRINCIPLES
BY WHICH THE ANTITRUST AND REGULATORY REGIMES OF LAW ARE ACCOMMODATED
TO EACH OTHER.  AS A RESULT OF TODAY'S DECISION, CERTAIN QUESTIONS
UNDER THE ANTITRUST LAWS ARE PLACED IN THE EXCLUSIVE COMPETENCE OF THE
BOARD AND WILL NOT BE THE SUBJECT OF ORIGINAL COURT ACTIONS TO ENFORCE
THE ANTITRUST LAWS.  IN EFFECT, A PRO TANTO REPEAL OF THE ANTITRUST
LAWS IS CONTEMPLATED, SINCE THE LAW TO BE APPLIED IN BOARD PROCEEDINGS
UNDER SEC. 411 IS BASED NOT UPON THE ANTITRUST LAWS BUT UPON THE
"PUBLIC INTEREST" AND "COMPETITION TO THE EXTENT NECESSARY" STANDARDS
OF THE BOARD'S OVERALL MANDATE.  SEE 49 U.S.C.  SEC. 1302.  AND THOUGH
THE BOARD'S DECISIONS UNDER SEC. 411 ARE SUBJECT TO JUDICIAL REVIEW,
PRESUMABLY SUCH REVIEW WILL BE LIMITED TO ENSURING THAT THE BOARD
ADHERES TO THE CRITERIA SET OUT IN ITS MANDATE.  SEE AMERICAN AIRLINES,
INC., V. NORTH AMERICAN AIRLINES, INC., 351 U.S. 79, 85. 

BUT OF THE INSTRUMENTS OF ACCOMMODATION THAT ARE AVAILABLE, PRO TANTO
REPEAL OF THE ANTITRUST LAWS BY IMPLICATION FROM A REGULATORY STATUTE
SUCH AS THE AERONAUTICS ACT IS SURELY THE VERY LAST THAT OUGHT TO BE
RESORTED TO.  IT CANNOT BE JUSTIFIED AS A MATTER OF STATUTORY
CONSTRUCTION.  SECTION 414 OF THE ACT IMMUNIZES FROM THE OPERATION OF
THE ANTITRUST LAWS TRANSACTIONS AS TO WHICH THE BOARD HAS ISSUED ORDERS
OF APPROVAL UNDER SECS. 408, 409, AND 412 (CONSOLIDATIONS AND MERGERS,
INTERLOCKING DIRECTORATES, AND COOPERATIVE WORKING ARRANGEMENTS).  THE
EXISTENCE OF THIS EXPRESS AND SPECIFIC PROVISION FOR EXEMPTION WOULD
SEEM TO PRESUPPOSE THE GENERAL APPLICABILITY OF THE ANTITRUST LAWS TO
THE AIRLINE INDUSTRY, AND TO LIMIT THE BOARD'S EXEMPTING POWER TO THE
ENUMERATED ORDERS, WHICH DO NOT INCLUDE ORDERS ISSUED UNDER SEC. 411;
THE COURT CONCEDES THAT THE BOARD HAS NO POWER UNDER SECS. 408, 409, OR
412 TO APPROVE THE TRANSACTIONS UPON WHICH THE INSTANT SUIT IS
PREDICATED.  FURTHERMORE, IT IS ODD INDEED THAT THE BOARD SHOULD HAVE
EXPRESS STATUTORY AUTHORIZATION TO ENFORCE SECS. 2, 3, 7, AND 8 OF THE
CLAYTON ACT (SEE 15 U.S.C. SEC. 21) WHILE THE SHERMAN ACT IS NOT
ENFORCEABLE BY ANY PROCEDURE WITH RESPECT TO THE WIDE RANGE OF
TRANSACTIONS COMPRISED IN THE RULE LAID DOWN BY THE COURT TODAY.  IT IS
ODD BECAUSE THE CLAYTON ACT WAS INTENDED TO SUPPLEMENT AND REINFORCE
THE BASIC ANTITRUST PROHIBITIONS OF THE SHERMAN ACT, RATHER THAN TO
FORM AN INDEPENDENT AND SELF-SUFFICIENT SCHEME OF REGULATION.  BY ITS
ACTION TODAY, THE COURT SUBJECTS THE AIRLINE INDUSTRY TO A CRAZY QUILT
OF ANTITRUST CONTROLS THAT CONGRESS CAN HARDLY HAVE CONTEMPLATED. 

TWO FURTHER ASPECTS OF THE AERONAUTICS ACT CUT AGAINST THE COURT'S
INTERPRETATION.  THE FIRST IS THE PRESENCE OF A SAVING CLAUSE: "NOTHING
CONTAINED IN THIS CHAPTER SHALL IN ANY WAY ABRIDGE OR ALTER THE
REMEDIES NOW EXISTING AT COMMON LAW OR BY STATUTE, BUT THE PROVISIONS
OF THIS CHAPTER ARE IN ADDITION TO SUCH REMEDIES."  49 U.S.C. SEC.
1506.  THE SECOND IS THE TOTAL ABSENCE FROM THE ACT OF ANY PROVISION
FOR DAMAGES OR REPARATIONS.  THIS LACUNA LEADS THE COURT, SOMEWHAT
UNUSUALLY IN LIGHT OF CERTAIN PRIOR DECISIONS, (FN1) TO INTIMATE THAT
THE DAMAGES REMEDY UNDER THE ANTITRUST LAWS SURVIVES WHERE THE
INJUNCTIVE REMEDY IS BARRED - AN IMPRACTICAL SOLUTION, AS I SHALL TRY
TO DEMONSTRATE, SEE INFRA, PP. 326-327.  THE MORE REASONABLE
INTERPRETATION OF THE ABSENCE OF A PROVISION FOR DAMAGES IS THAT THE
ACT WAS NOT INTENDED TO BE AN ABSOLUTELY ALL-INCLUSIVE SCHEME OF
REGULATION WHICH WOULD OUST EVERY REMEDY AFFORDED BY A DIFFERENT
STATUTE OR BY THE COMMON LAW.  THE ANTITRUST LAWS WERE TO BE ALLOWED TO
FUNCTION, SAVE AS REGARDS THE SPECIFIC EXEMPTIONS PROVIDED FOR IN SEC.
414, AND THESE LAWS WOULD SUPPORT ACTIONS FOR DAMAGES AND FOR EQUITABLE
RELIEF. 

I AM SATISFIED THAT THE SCHEME OF THE AERONAUTICS ACT REFUTES ANY
INFERENCE THAT PRO TANTO REPEAL OF THE ANTITRUST LAWS WAS INTENDED. 
NOR DOES THE LEGISLATIVE HISTORY FURNISH ANY SUPPORT FOR THE COURT'S
POSITION.  THE COURT CITES BUT A SINGLE SENTENCE: "IT IS THE PURPOSE OF
THIS LEGISLATION TO COORDINATE IN A SINGLE INDEPENDENT AGENCY ALL OF
THE EXISTING FUNCTIONS OF THE FEDERAL GOVERNMENT WITH RESPECT TO CIVIL
AERONAUTICS  ...  ."  H.R. REP. NO. 2254, 75TH CONG., 3D SESS., P. 1. 
PRIOR TO THE ENACTMENT OF THE AERONAUTICS ACT OF 1938, THE REGULATION
OF CIVIL AVIATION HAD BEEN DIVIDED BETWEEN THE INTERSTATE COMMERCE
COMMISSION, THE DEPARTMENT OF COMMERCE, AND THE POST OFFICE DEPARTMENT;
AND THE PLAIN MEANING OF THE QUOTED SENTENCE, ESPECIALLY IN LIGHT OF
THE DEBATES THAT PRECEDED PASSAGE OF THE ACT, IS THAT AS A RESULT OF
THE ACT REGULATION OF CIVIL AVIATION WOULD BE CENTRALIZED IN ONE
AGENCY, THE CAB.  SEE HEARINGS ON H.R. 9738 BEFORE THE HOUSE COMMITTEE
ON INTERSTATE AND FOREIGN COMMERCE, 75TH CONG., 3D SESS., P. 37. 

BUT A STILL MORE CONCLUSIVE REFUTATION OF THE COURT'S READING OF THE
ACT IS PROVIDED BY AN UNBROKEN CHAIN OF DECISIONS BY THIS COURT
REJECTING, IN COMPARABLE SITUATIONS, CLAIMED PRO TANTO REPEALS BY
IMPLICATION OF THE ANTITRUST LAWS.  PERHAPS THE LEADING CASE IS UNITED
STATES V. BORDEN CO., 308 U.S. 188, 197-206, WHERE THE COURT HELD
EMPHATICALLY THAT THE ENACTMENT OF A REGULATORY STATUTE WOULD NOT BE
DEEMED TO WORK A PRO TANTO REPEAL OF THE ANTITRUST LAWS, SAVE ONLY IF
THERE WAS A PLAIN REPUGNANCY BETWEEN THE TWO REGIMES (WHICH THE COURT
DOES NOT SUGGEST, EXCEPT IN THE VAGUEST CONCLUSIONAL TERMS, IS THE CASE
HERE), IN WHICH CASE REPEAL WOULD BE IMPLIED ONLY TO THE EXTENT OF THE
REPUGNANCY.  BUT THE HOLDING OF THE BORDEN CASE HAD BEEN ANTICIPATED IN
MUCH EARLIER DECISIONS OF THE COURT.  SEE UNITED STATES V. TRANS
MISSOURI FREIGHT ASSN., 166 U.S. 290, 314-315; KEOGH V. CHICAGO &
N.W.R. CO., 260 U.S. 156, 161-162; CENTRAL TRANSFER CO. V. TERMINAL
RAILROAD ASSN., 288 U.S. 469, 474-475; TERMINAL WAREHOUSE CO. V.
PENNSYLVANIA R. CO., 297 U.S. 500, 513-515.  SEE ALSO UNITED STATES V.
JOINT TRAFFIC ASSN., 171 U.S. 505; UNITED STATES V. PACIFIC & ARCTIC
RY. & NAV. CO., 228 U.S. 87, 107-108.  AND THE CANON OF CONSTRUCTION
THAT REPEALS BY IMPLICATION ARE NOT FAVORED HAS EVEN A LONGER HISTORY
IN THIS COURT'S JURISPRUDENCE.  SEE, E.G., UNITED STATES V. TYNEN, 11
WALL.  88, 92; HENDERSON'S TOBACCO, 11 WALL.  652. 

GEORGIA V. PENNSYLVANIA R. CO., 324 U.S. 439, 456-457, STRONGLY
REAFFIRMED THE BORDEN PRINCIPLE IN THE CONTEXT OF A REGULATORY SCHEME,
THE INTERSTATE COMMERCE ACT, NO LESS PERVASIVE THAN THAT WHICH GOVERNS
THE AIRLINE INDUSTRY.  I BELIEVE IT IS ACCURATE TO SAY THAT THE COURT
HAD NEVER UNTIL TODAY DEVIATED FROM THIS POSITION.  SEE UNITED STATES
ALKALI EXPORT ASSN. V. UNITED STATES, 325 U.S. 196, 205-206; ALLEN
BRADLEY CO. V. LOCAL UNION NO. 3, 325 U.S. 797; UNITED STATES V. RADIO
CORP. OF AMERICA, 358 U.S. 334; MARYLAND & VA. MILK PRODUCERS ASSN. V.
UNITED STATES, 362 U.S. 458, 464-466; CALIFORNIA V. FEDERAL POWER
COMM'N, 369 U.S. 482.  CF. UNITED STATES V. SOCONY-VACUUM OIL CO., 310
U.S. 150, 226-227; FEDERAL MARITIME BD. V. ISBRANDTSEN CO., 356 U.S.
481.  ONLY LAST TERM, IN CALIFORNIA V. FEDERAL POWER COMM'N, SUPRA, WE
WROTE: "IMMUNITY FROM THE ANTITRUST LAWS IS NOT LIGHTLY IMPLIED  ...  .
WE COULD NOT ASSUME THAT CONGRESS, HAVING GRANTED ONLY A LIMITED
EXEMPTION FROM THE ANTITRUST LAWS, NONETHELESS GRANTED AN OVERALL
INCLUSIVE ONE.  SEE UNITED STATES V. BORDEN CO., 308 U.S. 188, 198
202."  369 U.S., AT 485. 

FURTHERMORE, ALTHOUGH THIS COURT HAD NOT UNTIL TODAY PASSED ON THE
QUESTION WHETHER THE AERONAUTICS ACT REPEALED BY IMPLICATION ANY PART
OF THE ANTITRUST LAWS, THE LOWER FEDERAL COURTS HAVE UNIFORMLY HELD
THAT IT DID NOT.  SEE S.S.W., INC., V. AIR TRANSPORT ASSN., 89 U.S.
APP. D.C. 273, 191 F.2D 658 (1951), CERT. DENIED, 343 U.S. 955; APGAR
TRAVEL AGENCY, INC., V. INTERNATIONAL AIR TRANSPORT ASSN., 107 F. SUPP.
706 (D.C.S.D.N.Y. 1952); SLICK AIRWAYS, INC., V. AMERICAN AIRLINES,
INC., 107 F. SUPP. 199 (D.C.D.N.J. 1951), PETITION FOR PROHIBITION
DISMISSED SUB NOM. AMERICAN AIRLINES V. FORMAN, 204 F.2D 230 (C.A. 3D
CIR. 1953), CERT. DENIED SUB NOM. AMERICAN AIRLINES, INC., V. SLICK
AIRWAYS, INC., 346 U.S. 806. 

FINALLY, IT HAS BEEN HELD THAT SEC. 411 OF THE AERONAUTICS ACT WAS
MODELED ON SEC. 5 OF THE FEDERAL TRADE COMMISSION ACT, 15 U.S.C. SEC.
45, AND THAT DECISIONS UNDER SEC. 5 ARE PRECEDENTS FOR THE CONSTRUCTION
OF SEC. 411.  AMERICAN AIRLINES, INC., V. NORTH AMERICAN AIRLINES,
INC., 351 U.S. 79, 82.  AND SEC. 5 HAS UNIFORMLY BEEN CONSTRUED TO
PROVIDE FOR DUAL ENFORCEMENT BY COURTS AND AGENCY OF THE ANTITRUST
LAWS, NOT EXCLUSIVE ENFORCEMENT BY THE AGENCY.  UNITED STATES ALKALI
EXPORT ASSN. V. UNITED STATES, 325 U.S. 196, 205-211; FEDERAL TRADE
COMM'N V. CEMENT INSTITUTE, 333 U.S. 683, 692-695; UNITED STATES V.
CHARLES PFIZER & CO., 205 F. SUPP. 94 (D.C.S.D.N.Y. 1962); UNITED
STATES V. CEMENT INSTITUTE, 85 F. SUPP. 344 (D.C.D. COLO. 1949). 

IN LIGHT OF THIS DECISIONAL HISTORY, IT CANNOT BE SUPPOSED THAT
CONGRESS, WHEN IT FIRST ENACTED A SCHEME OF COMPREHENSIVE ECONOMIC
REGULATION OF THE AIRLINE INDUSTRY IN 1938 AND WHEN IT REENACTED THESE
ECONOMIC PROVISIONS WITHOUT CHANGE IN 1958, INTENDED ANY DISPLACEMENT
OF THE ANTITRUST LAWS BEYOND THAT SPECIFICALLY PROVIDED FOR IN SEC.
414.  NOR DID THE DECISIONS I HAVE CITED REST UPON THE MECHANICAL
APPLICATION OF ONE OF THE COMMON LAW'S CANONS OF STATUTORY
CONSTRUCTION.  HOWEVER QUESTIONABLE THE PRINCIPLE THAT REPEALS BY
IMPLICATION ARE NOT FAVORED MAY BE IN OTHER CONTEXTS, IT IS ENTIRELY
SOUND WHEN DEALING WITH THE ANTITRUST LAWS, AND ESPECIALLY THE SHERMAN
ACT.  FOR THIS ACT EMBODIES PERHAPS THE MOST BASIC ECONOMIC POLICY OF
OUR SOCIETY, BASIC AND CONTINUING: ABHORRENCE OF MONOPOLY.  THE KIND OF
CONDUCT PROSCRIBED BY THE SHERMAN ACT IS SIMPLY NOT SUCH THAT
CONGRESSIONAL SILENCE MAY BE INTERPRETED AS CONGRESSIONAL APPROVAL. 
WHERE, AS HERE, NEITHER THE SCHEME OF THE REGULATORY STATUTE NOR
ANYTHING IN THE LEGISLATIVE HISTORY SUPPORTS A PRO TANTO REPEAL BY
IMPLICATION OF THE SHERMAN ACT, IT SEEMS TO ME INESCAPABLE THAT WE MUST
REJECT SUCH A SOLUTION.  NOR CAN IT BE SERIOUSLY CONTENDED THAT ON THE
FACTS OF THE INSTANT CASE JUDICIAL ENFORCEMENT OF THE ANTITRUST LAWS
WOULD DISRUPT, EVEN SLIGHTLY, THE BOARD'S REGULATION OF CIVIL
AVIATION.  SEE PART III, P. 327, INFRA.  AND SINCE NO QUESTION OF
CERTIFICATION FOR FOREIGN AIR CARRIAGE IS INVOLVED, THERE IS NO DANGER
OF COURT INTERFERENCE IN MATTERS COMMITTED TO THE PRESIDENT'S
DISCRETION BY 49 U.S.C. SEC. 1461. 

                             II. 

THE DECISION TODAY IS, TO ME, NOT ONLY UNSOUND IN LAW, BUT
IMPRACTICAL.  THE COURT PURPORTS TO LAY DOWN A GENERAL RULE GOVERNING
THE DIVISION OF RESPONSIBILITIES BETWEEN THE COURTS AND THE CAB; AND
WHILE CERTAIN ANTITRUST QUESTIONS, INCLUDING THOSE AT BAR, ARE TO BE
WITHDRAWN FROM THE COURTS, OTHERS ARE TO REMAIN SUBJECT TO JUDICIAL
ENFORCEMENT.  I CONSIDER THE COURT'S PROPOSED LINE OF DEMARCATION
BETWEEN THE JUDICIAL AND ADMINISTRATIVE REGIMES UNSUPPORTABLE.  I SEE
NO BASIS UPON WHICH TO WITHDRAW QUESTIONS OF ROUTE ALLOCATION,
TERRITORIAL DIVISION, AND COMBINATIONS BETWEEN COMMON CARRIERS AND AIR
CARRIERS FROM JUDICIAL COGNIZANCE, YET LEAVE UNAFFECTED (AS THE COURT
APPEARS TO INTEND TO DO) QUESTIONS OF RATE FIXING, COMBINATIONS BETWEEN
AIR CARRIERS SIMPLICITER, AND OTHER SERIOUS ANTICOMPETITIVE PRACTICES. 
BY WHAT ARCANE LOGIC DOES A CONSPIRACY TO FIX ROUTES GO MORE TO THE
HEART OF THE REGULATORY SCHEME THAN A CONSPIRACY TO FIX RATES?  TRUE,
THE BOARD, WHILE IT HAS AUTHORITY TO FIX ROUTES IN FOREIGN AIR
TRANSPORTATION, HAS NO AUTHORITY TO FIX RATES THEREIN; BUT THE ACT
BROADLY PROHIBITS ALL FORMS OF UNJUST DISCRIMINATION, WHICH OF COURSE
WOULD EMBRACE MANY RATE-FIXING PRACTICES.  SEE 49 U.S.C. SEC. 1374(B);
GEORGIA V. PENNSYLVANIA R. CO., 324 U.S. 439, 478, 480 (DISSENTING
OPINION).  AND WHAT JUSTIFICATION CAN THERE BE FOR THE BOARD'S HAVING
EXCLUSIVE JURISDICTION OF A COMBINATION ONE PARTY TO WHICH IS PROBABLY
OUTSIDE THE BOARD'S JURISDICTION, SEE INFRA, PP. 330-331, BUT NOT OF A
COMBINATION BOTH PARTIES TO WHICH ARE CLEARLY WITHIN THE BOARD'S
JURISDICTION?  THE ONLY EXPLANATION I CAN CONCEIVE FOR THESE DUBIOUS
DISTINCTIONS IS THAT THE COURT DOES NOT WANT TO GO SO FAR AS FLATLY TO
OVERRULE SOME WELL-ESTABLISHED DECISIONS OF THIS COURT.  (FN2) 

I FIND IT EQUALLY DIFFICULT TO UNDERSTAND THE COURT'S APPARENTLY
LIMITING ITS PRO TANTO REPEAL OF THE ANTITRUST LAWS TO QUESTIONS OF
INJUNCTIVE RELIEF.  IT IS TRUE THAT AN ORDER OF DIVESTITURE OR SOME
OTHER EQUITABLE REMEDY MAY BE MORE EFFECTIVE TO DETER CERTAIN ANTITRUST
VIOLATIONS THAN EITHER CRIMINAL OR DAMAGES SANCTIONS.  BUT THE
DIFFERENCE IN EFFECTIVENESS IS ONE ONLY OF DEGREE.  AN AIR CARRIER IS
NOT LIKELY TO PERSIST IN A COURSE OF CONDUCT IF HEAVY CRIMINAL
PENALTIES AND AWARDS OF TREBLE DAMAGES MAY BE VISITED UPON IT.  BUT
JUST THIS POSSIBILITY THE COURT SEEMS TO ALLOW.  I FIND IT HARD TO
FOLLOW THE COURT'S ATTEMPTED JUSTIFICATION FOR MUTILATING THE ANTITRUST
LAWS IN TERMS OF AVOIDING CLASHES BETWEEN TWO REGIMES OF LAW, THE
ADMINISTRATIVE AND THE JUDICAL, WHEN, THE MUTILATION ACHIEVED, THE
CLASHES REMAIN ACUTELY PRESENT.  IN PART, I MUST CONCLUDE THAT THE
COURT'S ARTIFICIAL DISTINCTION AGAIN WAS PROMPTED BY A DESIRE TO SKIRT,
HOWEVER DISINGENUOUSLY, PRIOR HOLDINGS.  (FN3)  IN ADDITION, THE COURT
HAD TO CONJURE WITH THE FACT THAT THE CAB'S STATUTE NOWHERE PROVIDES A
REMEDY, DAMAGES OR REPARATIONS, FOR PAST MISCONDUCT. 

                                     III. 

I SHOULD ALSO LIKE TO SUGGEST THE UNREALITY OF THE COURT'S DECISION
IN THE LIGHT OF THE PARTICULAR CIRCUMSTANCES OF THE INSTANT CASE.  BY
ITS DECISION TODAY THE COURT BRINGS TO NAUGHT NINE YEARS OF
LITIGATION.  YET THESE NINE YEARS ACTUALLY REPRESENT ONLY THE MOST
RECENT PHASE OF A CONTINUING PROBLEM FIRST PLACED BEFORE THE CIVIL
AERONAUTICS BOARD 22 YEARS AGO.  (FN4)  FOR 22 YEARS PAN AMERICAN WORLD
AIRWAYS HAS STAVED OFF THE DAY OF RECKONING IN RESPECT TO THE TACTICS
WHICH, JUDGE MURPHY FOUND BELOW, VIOLATED SEC. 2 OF THE SHERMAN ACT. 
TODAY'S DECISION VINDICATES THESE TACTICS BEYOND PAN AMERICAN'S FONDEST
EXPECTATIONS, FOR THE PROBLEM IS NOW BACK WITH THE CAB WHICH HAS FROM
THE OUTSET PROTESTED ITS INABILITY TO DEAL WITH IT. 

THIS SUIT WAS INSTITUTED BY THE GOVERNMENT AT THE URGING OF THE CAB,
WHICH IN ADDITION FILED AN AMICUS CURIAE BRIEF IN THE DISTRICT COURT IN
SUPPORT OF THE GOVERNMENT'S POSITION.  AND REPEATEDLY OVER A PERIOD OF
MANY YEARS, THE BOARD HAS ADVERTED TO ITS FELT HELPLESSNESS IN THE FACE
OF THE DIVIDED CONTROL OF PANAGRA BY TWO POWERFUL CORPORATIONS, ONE THE
DOMINANT UNITED STATES COMPANY IN THE FIELD OF FOREIGN TRANSPORTATION. 
(FN5)  TO BE SURE, WE ARE NOT OBLIGED TO HONOR THE BOARD'S
DISINCLINATION TO ASSUME JURISDICTION.  TRANS-PACIFIC AIRLINES, LTD.,
V. HAWAIIAN AIRLINES, LTD., 174 F.2D 63 (C.A. 9TH CIR. 1949).  BUT IT
IS ENTITLED TO SOME WEIGHT, SEE 3 DAVIS, ADMINISTRATIVE LAW (1958), 14,
AND INDEED, SINCE THE BOARD'S POSITION HAS BEEN LONG AND CONSISTENTLY
ADHERED TO, TO GREAT WEIGHT.  UNITED STATES V. RADIO CORP. OF AMERICA,
358 U.S. 334, 350, N. 18.  THE SEARCH FOR A PRACTICAL ACCOMMODATION OF
COURT AND AGENCY, WHICH IS THE PROBLEM OF THIS CASE, IS NOT ADVANCED BY
OUR IGNORING THE AGENCY'S CONSIDERED SENSE OF SELF-LIMITATION. 

IT IS NOT AS IF THE BOARD'S HESITANCY TO MOVE AGAINST THE ABUSES
DISCLOSED BY THE RECORD IN THIS CASE WERE NOT BASED UPON SUBSTANTIAL
CONSIDERATIONS.  WE MAY CONCEDE THE BREADTH OF THE BOARD'S POWER UNDER
SEC. 411 TO REMEDY UNFAIR METHODS OF COMPETITION, WHICH MAY SOMETIMES
BE VIOLATIONS OF THE SHERMAN ACT, YET STILL RECOGNIZE THE
UNSUITABLENESS OF SUCH A REMEDY IN THE PARTICULAR CIRCUMSTANCES OF THIS
CASE.  FOR ONE THING, I SHOULD THINK A PROCEEDING RESPECTING CONTROL OF
PANAGRA WOULD BE RATHER LOPSIDED UNLESS THE BOARD HAD JURISDICTION OF
GRACE; BUT I AM NOT SURE THAT COULD BE DONE.  SECTION 411 ONLY
PROSCRIBES UNFAIR METHODS OF COMPETITION BY AIR CARRIERS AND TICKET
AGENTS.  GRACE IS NEITHER, UNLESS IT FITS THE BROAD LANGUAGE IN WHICH
THE ACT DEFINES AN "AIR CARRIER" AS ANYONE "WHO UNDERTAKES, WHETHER
DIRECTLY OR INDIRECTLY OR BY A LEASE OR ANY OTHER ARRANGEMENT, TO
ENGAGE IN AIR TRANSPORTATION."  49 U.S.C. SEC. 1301(3).  IT IS NOT
ENTIRELY CLEAR THAT "AIR CARRIER" MAY BE READ AS INCLUDING A 50% OWNER
OF AN AIR CARRIER, FOR THE ACT IN GENERAL DOES NOT PURPORT TO REGULATE
STOCKHOLDERS OF ITS SUBJECT CARRIERS, AND WHERE IT DOES, NOTABLY IN
SEC. 408, IT DOES SO EXPLICITLY.  (FN6)  THE OPINION OF THE COURT SEES
FIT NOT TO RESOLVE THIS JURISDICTIONAL DIFFICULTY.  I FEAR THE BOARD
HAS SOLID JUSTIFICATION FOR NOT PROCEEDING AGAINST PAN AMERICAN UNLESS
IT CAN PROCEED AGAINST GRACE AS WELL.  BUT AT ALL EVENTS THE COURT'S
SILENCE IS SURE TO RESULT IN AN ADDED STEP IN THIS ALREADY INTOLERABLY
PROLONGED LITIGATION. 

A FURTHER BASIS FOR THE BOARD'S HESITANCY IS THAT THE BOARD HAS NO
EXPERIENCE IN THE ENFORCEMENT OF THE ANTITRUST LAWS, BECAUSE SEC. 411
HAS ONLY BEEN USED AGAINST COMMON-LAW UNFAIR COMPETITION, NEVER AGAINST
PRACTICES DEEMED UNFAIRLY COMPETITIVE BY VIRTUE OF THE ANTITRUST LAWS. 
HALE AND HALE, COMPETITION OR CONTROL IV: AIR CARRIERS, 109 U. OF PA.
L. REV. 311, 346-347 (1961).  (FN7)  MOST OF THE LEGAL ISSUES WHICH
HAVE ARISEN IN THE INSTANT LITIGATION - THE RIGHT OF A JOINT OWNER TO
EXERCISE HIS NEGATIVE CONTROL IN AN ANTICOMPETITIVE FASHION, THE
SUBSTANTIALITY OF THE COMMERCE RESTRAINED AS A RESULT OF THE
DEFENDANTS' CONDUCT, THE RELEVANT GEOGRAPHICAL AND SERVICES MARKETS,
THE APPROPRIATENESS OF DIVESTITURE AS A REMEDY, AND SO FORTH - ARE
TYPICAL ANTITRUST PROBLEMS AND NOT AT ALL TYPICAL AIRLINE LAW
PROBLEMS.  THE EXPERTNESS REQUIRED IS THAT OF THE JUDGE SKILLED IN
ANTITRUST ADJUDICATION - NOT THAT OF THE BOARD, WHICH, SO FAR AS I CAN
TELL, HAS NEVER DEALT WITH AN ANTITRUST PROBLEM. 

NOR IS REMISSION OF THE INSTANT CASE TO THE CAB NECESSARY TO PROTECT
THE INTEGRITY OF THE BOARD'S REGULATORY SCHEME FOR THE AIRLINE
INDUSTRY.  PAN AMERICAN ARGUES THAT IF ITS HOLDINGS IN PANAGRA ARE
DIVESTED, PANAGRA WILL APPLY FOR AND BE GRANTED TERMINAL POINTS IN THE
CONTINENTAL UNITED STATES, WITH THE RESULT THAT PAN AMERICAN WILL BE
DRIVEN OUT OF BUSINESS ON MANY ROUTES, TO THE SERIOUS DETRIMENT OF THE
AIRLINE INDUSTRY.  BUT THERE IS MORE TO ACQUIRING A ROUTE CERTIFICATE
THAN APPLYING FOR IT.  IF PANAGRA, FREED OF PAN AMERICAN'S NEGATIVE
CONTROL, APPLIES FOR A NORTHWARD EXTENSION OF ITS ROUTES, IT WILL BE
OPEN TO PAN AMERICAN TO ARGUE BEFORE THE BOARD THE UNWISDOM OF ITS
GRANTING THE APPLICATION.  A JUDICIAL ORDER IN THE INSTANT CASE WOULD
NOT AFFECT A SINGLE ROUTE, BUT WOULD SIMPLY FREE THE PROCESS WHEREBY
ROUTES ARE ESTABLISHED AND TERRITORIES ARE DIVIDED FROM THE OBSTRUCTIVE
EFFECTS OF MONOPOLISTIC TACTICS.  JUDICIAL ENFORCEMENT OF THE SHERMAN
ACT HERE WOULD THUS REMOVE THE CLOG OF MONOPOLIZATION FROM THE
ADMINISTRATIVE PROCESS - NOT DISRUPT THAT PROCESS.  CF. GEORGIA V.
PENNSYLVANIA R. CO., 324 U.S. 439.  THE COURT'S RELIANCE ON TEXAS &
PAC. R. CO. V. ABILENE COTTON OIL CO., 204 U.S. 426, AND KEOGH V.
CHICAGO & N.W.R. CO., 260 U.S. 156, IS MISPLACED.   THE PLAINTIFF IN
KEOGH SOUGHT DAMAGES UNDER THE ANTITRUST LAWS, COMPLAINING THAT BUT FOR
THE CONSPIRACY THE RATES HE HAD PAID, THOUGH LAWFUL BECAUSE APPROVED BY
THE ICC, WOULD HAVE BEEN LOWER.  THE COURT HELD THAT THE EXCLUSIVE
REMEDY FOR EXCESSIVE RATES HAD BEEN VESTED BY CONGRESS IN THE ICC.   IT
DID NOT MATTER ON WHAT THEORY THE SHIPPER SOUGHT TO RECOVER; THE COURTS
HAD NO POWER TO UNDO A LAWFUL RATE BY GRANTING DAMAGES, WHETHER ON
COMMON-LAW GROUNDS (AS IN ABILENE) OR UNDER THE ANTITRUST LAWS.  THE
COURT IN KEOGH MADE VERY PLAIN, HOWEVER, THAT INJUNCTIVE RELIEF IN
RESPECT OF A CONSPIRACY TO RAISE RATES MIGHT LIE, AT LEAST IF SUCH
RELIEF WAS SOUGHT BY THE GOVERNMENT, AS HERE.  260 U.S., AT 161-162. 
FOR (AS GEORGIA SHOWS) AN INJUNCTION MAY BE GRANTED WITH NO DISTURBANCE
TO THE EXISTING RATE STRUCTURE. 

IT SHOULD ALSO BE NOTED THAT THE COURT'S DECISION TODAY VINDICATES
PAN AMERICAN'S HARDLY CREDITABLE "TACTIC  ...  CHARACTERISTIC OF ITS
LITIGIOUS NATURE" OF FIRST RAISING THE JURISDICTIONAL ISSUE IN A POST
TRIAL BRIEF FILED SIX YEARS AFTER THE COMPLAINT.  193 F. SUPP., AT 46. 
OF COURSE, WE ARE OBLIGED TO CONSIDER SUCH ISSUES SUA SPONTE.  UNITED
STATES V. WESTERN PACIFIC R. CO., 352 U.S. 59, 63; NOTE, REGULATED
INDUSTRIES AND THE ANTITRUST LAWS:  SUBSTANTIVE AND PROCEDURAL
COORDINATION, 58 COL. L. REV. 673, 690 AND N. 114 (1958).  BUT I FIND
IT A WRY COMMENTARY ON THE COURT'S RESULT THAT EVERY FACTOR OF FAIRNESS
AND PRACTICALITY ARGUES AGAINST OUR ABDICATING JURISDICTION OF THE
PRESENT CASE. 

                                             IV. 

IN SEEKING TO ACCOMMODATE THE REGULATORY AND ANTITRUST REGIMES BY
MEANS OF PRO TANTO REPEAL OF THE ANTITRUST LAWS, THE COURT DOES NOT
TELL US WHY IT HAS DEPARTED FROM THE USUAL PATTERN OF PREFERRING A MORE
FLEXIBLE TECHNIQUE OF ACCOMMODATION:  THAT AFFORDED BY THE DOCTRINE OF
PRIMARY JURISDICTION.  SEE GENERALLY 3 DAVIS, ADMINISTRATIVE LAW
(1958), 1-55.  THAT DOCTRINE REQUIRES THAT THE COURTS ABSTAIN FROM
PROCEEDING IN A CASE OF WHICH THEY HAVE ORIGINAL JURISDICTION,
REMITTING THE PARTIES IN THE FIRST INSTANCE TO THEIR RIGHTS AND
REMEDIES BEFORE THE AGENCY, WHERE NECESSARY TO PROTECT THE INTEGRITY OF
THE REGULATORY SCHEME ADMINISTERED BY THE AGENCY.  SUCH A REQUIREMENT
OF PRIOR RESORT DOES NOT PRECLUDE A LATER JUDICIAL ANTITRUST
PROCEEDING, BUT SIMPLY ENSURES THAT THE LATER PROCEEDING WILL FULLY
RECOGNIZE THE AGENCY'S INTEREST IN THE PREMISES.  THE ANTITRUST LAWS
ARE IN NO WISE REPEALED.  CF. FEDERAL MARITIME BD. V. ISBRANDTSEN CO.,
356 U.S. 481, 498-499.  THIS MODE OF RESOLVING CONFLICTS BETWEEN COURT
AND AGENCY AVOIDS THE PRACTICAL AND CONCEPTUAL DIFFICULTIES OF PRO
TANTO REPEALS BY IMPLICATION.  UNTIL TODAY, THE COURT HAD NEVER FAILED
TO INVOKE PRIMARY JURISDICTION IN PREFERENCE TO REPEAL BY IMPLICATION
AS A MEANS OF ACCOMMODATING THE ANTITRUST AND REGULATORY LAWS; I SEE NO
BASIS FOR DEVIATION IN THE INSTANT CASE FROM THAT SALUTARY APPROACH. 
CERTAINLY THE COURT SUGGESTS NONE. 

I MUST IN CANDOR ADD THAT TO APPLY THE DOCTRINE OF PRIMARY
JURISDICTION TO THE CASE AT BAR WOULD BE SOMEWHAT OF AN EXTENSION OF
OUR DECISIONS IN THE AREA, SO JEALOUSLY HAVE WE GUARDED THE OBLIGATION
OF JUDICIAL ENFORCEMENT OF THE ANTITRUST LAWS.  THE TENDENCY OF THE
CASES HAS BEEN TO INVOKE THE DOCTRINE NOT WHEN THERE ARE SIMPLY
OVERLAPPING JUDICIAL AND ADMINISTRATIVE REMEDIES FOR THE SAME CONDUCT,
AS IS THE CASE HERE, BUT ONLY WHEN "THERE IS A POSSIBILITY THAT A
SUBSEQUENT ADMINISTRATIVE DECISION WOULD APPROVE THE QUESTIONED
ACTIVITIES," AS IS NOT TRUE HERE, SINCE THE APPROVAL POWER VESTED IN
THE CAB BY SEC. 414 DOES NOT INCLUDE ORDERS UNDER SEC. 411.  SCHWARTZ,
LEGAL RESTRICTION OF COMPETITION IN THE REGULATED INDUSTRIES: AN
ABDICATION OF JUDICIAL RESPONSIBILITY, 67 HARV. L. REV. 436, 464
(1954).  COMPARE UNITED STATES NAV.  CO. V. CUNARD S.S. CO., 284 U.S.
474, AND FAR EAST CONFERENCE V. UNITED STATES, 342 U.S. 570, WITH
UNITED STATES V. PACIFIC & ARCTIC RY. & NAV. CO., 228 U.S. 87; GEORGIA
V. PENNSYLVANIA R. CO., 324 U.S. 439; UNITED STATES V. RADIO CORP. OF
AMERICA, 358 U.S. 334; AND CALIFORNIA V. FEDERAL POWER COMM'N, 369 U.S.
482.  SEE GENERALLY JAFFE, PRIMARY JURISDICTION RECONSIDERED: THE ANTI
TRUST LAWS, 102 U. OF PA. L. REV. 577 (1954).  BUT EVEN IF IT WOULD
TAKE SOME STRAINING TO FIT THE INSTANT CASE WITHIN THE ESTABLISHED
FRAMEWORK OF THE LAW OF PRIMARY JURISDICTION, WHAT THE COURT HAS DONE
TODAY IS A FAR GRAVER DEPARTURE FROM HERETOFORE SETTLED GUIDEPOSTS OF
THE LAW.  (FN8) 

FN1  SEE T.I.M.E. INC. V. UNITED STATES, 359 U.S. 464, AND CASES
CITED THEREIN.  AT LEAST ONE FEDERAL COURT OF APPEALS HAS HELD THAT THE
CAB'S LACK OF POWER TO AWARD MONEY REPARATIONS LEAVES OPEN A COURT
ACTION FOR DAMAGES SOUNDING IN TORT.  FITZGERALD V. PAN AMERICAN WORLD
AIRWAYS, INC., 229 F.2D 499 (C.A.2D CIR. 1956). 

FN2  SEE UNITED STATES V. PACIFIC & ARCTIC RY. & NAV. CO., 228 U.S.
87, 107-108; GEORGIA V. PENNSYLVANIA R. CO., 324 U.S. 439; KEOGH V.
CHICAGO & N.W.R. CO., 260 U.S. 156, 161-162; CENTRAL TRANSFER CO. V.
TERMINAL RAILROAD ASSN., 288 U.S. 469, 475; TERMINAL WAREHOUSE CO. V.
PENNSYLVANIA R. CO., 297 U.S. 500, 513-515.  THE COURT'S HANDLING OF
GEORGIA V. PENNSYLVANIA R. CO., SUPRA, SEEMS TO ME PARTICULARLY
DISINGENUOUS.  THE COURT CONCEDES THAT A CONSPIRACY TO SECURE CAB
APPROVAL OF ILLICIT AGREEMENTS MIGHT FORM THE PREDICATE OF AN ANTITRUST
SUIT, YET NOWHERE EXPLAINS WHY THE USE OF NEGATIVE CONTROL TO FURTHER A
SCHEME OF MONOPOLIZATION BY PREVENTING CAB APPROVAL OF A ROUTE
EXTENSION FOR PANAGRA CANNOT FORM SUCH A PREDICATE.  FURTHERMORE, IT IS
NOT THE CASE THAT THE ICC WAS HELPLESS TO GRANT THE RELIEF SOUGHT IN
GEORGIA V. PENNSYLVANIA R. CO. THE COURT CONCEDED THAT THE COMMISSION
HAD "AUTHORITY TO REMOVE DISCRIMINATORY RATES OF THE CHARACTER ALLEGED
TO EXIST HERE."  324 U.S., AT 459.  TO BE SURE, THE COMMISSION DID NOT
HAVE AUTHORITY TO REGULATE RATE-FIXING COMBINATIONS AS SUCH.  BUT
NEITHER HAS THE CAB AUTHORITY TO PROHIBIT VIOLATIONS OF THE ANTITRUST
LAWS AS SUCH; IT IS LIMITED BY ITS MANDATE, SO THE COURT HOLDS, TO
FACILITATING "COMPETITION TO THE EXTENT NECESSARY."    FN3  SEE UNITED
STATES V. PACIFIC & ARCTIC RY. & NAV. CO., 228 U.S. 87, 105; TERMINAL
WAREHOUSE CO. V. PENNSYLVANIA R. CO., 297 U.S. 500, 515. 

FN4  ON DECEMBER 16, 1941, GRACE FILED A PETITION WITH THE CAB
REQUESTING MODIFICATION OF PANAGRA'S CERTIFICATE SO AS TO PROVIDE FOR A
TERMINAL IN THE CONTINENTAL UNITED STATES; ON APRIL 29, 1942, GRACE
REQUESTED THE BOARD TO PROCEED UNDER SEC. 411 TO ORDER PAN AMERICAN TO
DIVEST ITSELF OF ITS HOLDINGS IN PANAGRA.  SEE W.R. GRACE & CO. V. CAB,
154 F.2D 271, 274 (C.A.2D CIR. 1946), CERT. DISMISSED FOR MOOTNESS SUB
NOM. PAN AMERICAN AIRWAYS CORP. V. W.R.  GRACE & CO., 332 U.S. 827. 

FN5  SEE PANAGRA TERMINAL INVESTIGATION, 4 C.A.B. 670, 678 (1944);
ADDITIONAL SERVICE TO LATIN AMERICA, 6 C.A.B. 857, 913-914 (1946); PAN
AMERICAN-PANAGRA AGREEMENT, 8 C.A.B. 50, 61 (1947); NEW YORK-BALBOA
THROUGH SERVICE PROCEEDING, REOPENED, 18 C.A.B. 501, 504-506 (1954);
REOPENED NEW YORK-BALBOA THROUGH SERVICE PROCEEDING, 20 C.A.B. 493, 516
517 (1954).  CF. NEW YORK-MEXICO CITY NONSTOP SERVICE CASE, 25 C.A.B.
323 (1957). 

FN6  FOR EXAMPLE: 

"IT SHALL BE UNLAWFUL UNLESS APPROVED BY ORDER OF THE BOARD AS
PROVIDED IN THIS SECTION: 

     *       *         *         *         * 

"(2) FOR ANY AIR CARRIER, ANY PERSON CONTROLLING AN AIR CARRIER, ANY
OTHER COMMON CARRIER, OR ANY PERSON ENGAGED IN ANY OTHER PHASE OF
AERONAUTICS, TO PURCHASE, LEASE, OR CONTRACT TO OPERATE THE PROPERTIES
...  OF ANY AIR CARRIER  ...  ."  49 U.S.C. SEC. 1378(A)(2). 

FN7  ALSO, ALTHOUGH THE CAB HAS EXPRESS AUTHORITY TO ENFORCE THE
CLAYTON ACT, SEE 15 U.S.C.  SEC. 21, I HAVE FOUND NO INSTANCE OF ITS
EVER HAVING ATTEMPTED TO DO SO. 

FN8  SINCE THE COURT DISPOSED OF THE CASE AT BAR ON JURISDICTIONAL
GROUNDS AND DID NOT REACH THE MERITS OF THE ANTITRUST ISSUES, I DEEM IT
INAPPROPRIATE FOR ME TO INTIMATE ANY VIEW OF THOSE MERITS.