Chicago & Southern Air Lines, Inc. v. Waterman Steamship Corp.

1948-04-13

Headline: Court blocks judicial review of Board orders approving overseas and foreign air routes when the President approves them, leaving airline route awards effectively immune from court challenge and limiting carriers’ ability to seek review.

Holding:

Real World Impact:

Prevents courts from reviewing Board orders on overseas or foreign air routes before Presidential approval.
After approval, parts based on the President’s direction are immune from judicial challenge.
Airline applicants for routes to foreign countries or U.S. territories will have limited legal remedies.

Topics: airline route decisions, presidential approval, judicial review limits, foreign and overseas routes

Summary

Background

Waterman Steamship Corporation, a shipping company, applied for a certificate to operate an overseas air route and lost when the Civil Aeronautics Board granted the route to Chicago and Southern Air Lines, a rival airline. The Board submitted its decision to the President, who required changes and then approved the revised order. Waterman asked a federal court to review the Board's order under §1006 of the Civil Aeronautics Act. The court below said it could review the Board's decision even though the President had to approve it; the Supreme Court took the case to resolve a split between appeals courts.

Reasoning

The central question was whether orders resolving applications by citizen carriers for overseas or foreign routes — which must be submitted to and approved by the President under §801 — are subject to judicial review under §1006. The Court majority said no. It explained that before Presidential approval the Board's decision is tentative and imposes no legal rights or obligations. After approval, the final order reflects Presidential discretion on political, military and foreign-affairs matters that courts are not equipped to decide. The majority stressed risks of forcing courts to evaluate secret intelligence, to issue advisory opinions, and to intrude into decisions constitutionally committed to the political branches.

Real world impact

The ruling means that challenges to Board awards or denials for overseas and foreign air transportation generally cannot be heard by the courts before Presidential approval, and after approval courts cannot review parts based on Presidential direction. Airline applicants and competitors seeking routes to foreign countries or U.S. territories will face limited judicial remedies. In this case the Court dismissed Waterman's petition and reversed the court of appeals.

Dissents or concurrances

Justice Douglas (joined by Justices Black, Reed and Rutledge) dissented, arguing Congress plainly made Board orders reviewable and that courts can review the Board's portion of an order without intruding on Presidential foreign-affairs discretion.