Civil Aeronautics Board v. Delta Air Lines, Inc.

Background

A federal agency, the Civil Aeronautics Board, awarded Delta Air Lines a certificate to expand routes and set an effective date. Lake Central Airlines, a smaller local carrier, filed timely petitions asking the Board to reconsider and to protect local services. The Board allowed Delta’s certificate to take effect, Delta began operations, and months later the Board revised the certificate to impose route restrictions without giving Delta formal notice or holding a new hearing.

Reasoning

The Court asked whether Congress had given the Board power to alter a certificate after it became effective without following the statutory process. Looking at the Federal Aviation Act’s sections 401(f) and 401(g), the majority held that Congress required notice and a hearing before an effective certificate may be altered, suspended, or revoked. The Court emphasized Congress’ goal of providing “security of route” so carriers can invest confidently and rejected the idea that the Board could rely on implied powers or prior reservations to make summary changes after a certificate had gone into effect. The Court affirmed the Court of Appeals’ reversal of the Board’s May 7, 1959 order.

Real world impact

Airlines that begin service under a granted certificate are protected from abrupt administrative cuts unless the Board follows the statute’s procedures. The Board retains the ability to reconsider, but must give notice and a hearing, postpone the effective date, or issue a clearly time-limited temporary certificate instead of making summary post-certification changes.

Dissents or concurrances

A dissent argued that a timely motion for reconsideration keeps the proceeding open and that the Board had authority to grant reconsideration and revise the certificate without a separate plenary proceeding.