B-153803, NOV. 25, 1964

B-153803: Nov 25, 1964

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THE AMOUNT CLAIMED WAS FOUND BY THE CIVIL AERONAUTICS BOARD TO BE DUE THE UNITED STATES AND REPRESENTS PART OF THE MAIL PAY SUBSIDY RECEIVED BY CARIBAIR FOR THE PERIOD OCTOBER 1. A SLIDING SCALE MAIL RATE FOR CARIBAIR UNDER WHICH THE CARRIER'S MAIL COMPENSATION WAS BASED. THE CLAIM WAS SENT HERE FOR COLLECTION AND APPROPRIATE DEMAND FOR PAYMENT HAS BEEN MADE ON THE CARRIER. MONIES OTHERWISE DUE THE CARRIER FROM THE UNITED STATES (NOW TOTALING $931) HAVE BEEN WITHHELD AND APPLIED HERE TO REDUCE THE INDEBTEDNESS. THE CASES YOU MENTION ARE TRANSCONTINENTAL AND WESTERN AIR. WE BELIEVE THAT THE CASES CITED BY YOU ARE INAPPOSITE. IN OUR OPINION THE ACTION OF THE BOARD IN THIS INSTANCE AMOUNTED TO NOTHING MORE THAN A CHANGE IN A MILEAGE BASE (SCHEDULED MILEAGE FLOWN) TO WHICH THE PREVIOUSLY FIXED FINAL RATE IS APPLIED AND NOT A CHANGE IN THE FINAL RATE ITSELF.

B-153803, NOV. 25, 1964

TO WHITEFORD, HART, CARMODY AND WILSON:

WE REFER AGAIN TO YOUR LETTER OF SEPTEMBER 8, 1964, IN WHICH YOU REQUEST THAT THE GOVERNMENT WITHDRAW ITS CLAIM FOR $2,623.47, AGAINST CARIBBEAN ATLANTIC AIRLINES, INC. (CARIBAIR). THE AMOUNT CLAIMED WAS FOUND BY THE CIVIL AERONAUTICS BOARD TO BE DUE THE UNITED STATES AND REPRESENTS PART OF THE MAIL PAY SUBSIDY RECEIVED BY CARIBAIR FOR THE PERIOD OCTOBER 1, 1953, THROUGH JUNE 30, 1955.

THE CIVIL AERONAUTICS BOARD ESTABLISHED IN ORDER NO. E-5279, CARIBBEAN- ATLANTIC AIRLINES, INC., MAIL RATES, 12 C.A.B. 851 (1951), A SLIDING SCALE MAIL RATE FOR CARIBAIR UNDER WHICH THE CARRIER'S MAIL COMPENSATION WAS BASED, IN PART, UPON THE NUMBER OF SCHEDULED MILES FLOWN. THE ORDER DEFINED SCHEDULED MILEAGE FLOWN AS (PAGE 852) "THE DIRECT AIRPORT-TO- AIRPORT MILEAGE BETWEEN POINTS ACTUALLY SERVED ON EACH TRIP FLOWN IN SCHEDULED SERVICE, INCLUDING ALL TRIPS OPERATED AS EXTRA SECTIONS.'

THE CIVIL AERONAUTICS BOARD AUDITED THE MAIL PAY SUBSIDY CLAIMED BY AND PAID TO CARIBAIR FOR THE PERIOD IN QUESTION AND CONCLUDED THAT, FOR THE PURPOSE OF DETERMINING MAIL COMPENSATION, ONLY EXTRA SECTION MILEAGE FLOWN WITH ONE OR MORE PASSENGERS OVER SOME SEGMENT OF A ONE WAY TRIP COULD BE INCLUDED IN THE COMPUTATION OF "SCHEDULED MILES FLOWN.' THE BOARD'S ANALYSIS OF CARIBAIR'S MILEAGE REPORTS INDICATED THAT CARIBAIR HAD INCLUDED AS "SCHEDULED MILES FLOWN" 5,500 EXTRA SECTION MILES WHICH HAD BEEN OPERATED WITHOUT ANY PASSENGERS; IT THEREFORE REQUESTED THAT CARIBAIR REFUND THE RESULTING SUBSIDY OVERPAYMENT OF $2,623.47. THE CLAIM WAS SENT HERE FOR COLLECTION AND APPROPRIATE DEMAND FOR PAYMENT HAS BEEN MADE ON THE CARRIER. IN THE ABSENCE OF REFUND, MONIES OTHERWISE DUE THE CARRIER FROM THE UNITED STATES (NOW TOTALING $931) HAVE BEEN WITHHELD AND APPLIED HERE TO REDUCE THE INDEBTEDNESS.

IN URGING WITHDRAWAL OF THE CLAIM YOU STATE IN SUBSTANCE THAT THE BOARD'S ACTION INVOLVES THE SUBJECTIVE AND RETROACTIVE REDETERMINATION OF A FINAL RATE, AN ACTION INDICATED BY YOU TO BE BEYOND THE POWER OF THE CIVIL AERONAUTICS BOARD, AND YOU RELY ON CERTAIN CASES WHICH, IN EFFECT, HOLD THAT THE CIVIL AERONAUTICS ACT OF 1938, NOW THE FEDERAL AVIATION ACT OF 1958, DID NOT CONFER ON THE BOARD THE POWER TO RETROACTIVELY ADJUST A SUBSIDY RATE. THE CASES YOU MENTION ARE TRANSCONTINENTAL AND WESTERN AIR, INC. V. CIVIL AERONAUTICS BOARD, 336 U.S. 601 (1949); SUMMERFIELD V. CIVIL AERONAUTICS BOARD, 207 F.2D 200 (1953). AFFD. 347 U.S. 67; CAPITAL AIRLINES, INC. V. CIVIL AERONAUTICS BOARD, 171 F.2D 339 (1948), CERT.DEN. 336 U.S. 961.

WE BELIEVE THAT THE CASES CITED BY YOU ARE INAPPOSITE; IN OUR OPINION THE ACTION OF THE BOARD IN THIS INSTANCE AMOUNTED TO NOTHING MORE THAN A CHANGE IN A MILEAGE BASE (SCHEDULED MILEAGE FLOWN) TO WHICH THE PREVIOUSLY FIXED FINAL RATE IS APPLIED AND NOT A CHANGE IN THE FINAL RATE ITSELF. AND IT SEEMS UNQUESTIONED THAT THE BOARD HAS THE POWER TO INTERPRET ITS OWN RATE ORDERS. MOHAWK AIRLINES, INC. V. CIVIL AERONAUTICS BOARD, 329 F.2D 894, 897 (1964); PAN AMERICAN AIRWAYS, NORTH ATLANTIC ROUTE, 7 C.A.B. 849, 852 (1947); CF. AMERICAN TRUCKING ASSNS. V. FRISCO CO., 358 U.S. 133, 145 (1958); ADIRONDACK TRANSIT LINES V. UNITED STATES, 59 F.SUPP. 503 (1944).

THE MOHAWK CASE, CITED ABOVE, IS FACTUALLY SIMILAR TO THIS ONE. THE COURT HELD THAT THE BOARD'S ACTION IN INFORMING MOHAWK BY LETTER OF THE DISALLOWANCE OF EXTRA SECTION MILEAGE WAS NOT AN ORDER OF THE BOARD AND WAS NOT REVIEWABLE IN THAT COURT AND THAT A SUIT IN THE COURT OF CLAIMS WAS THE PROPER PROCEDURE TO TEST THE PROPRIETY OF THE BOARD'S ACTION IN DISALLOWING THE QUESTIONED MILEAGE AND IN SUBSEQUENTLY WITHHOLDING THE LATER SUBSIDY PAYMENTS TO SATISFY THE OVERPAYMENT. WE NOTE THAT IN THE PRESENT CASE THE BOARD INFORMED CARIBAIR OF THE DISALLOWANCE OF THE EXTRA SECTION MILEAGE IN A LETTER DATED JANUARY 21, 1963.

WE THEREFORE BELIEVE THAT THE GOVERNMENT CLAIM IS VALID AND ARE OBLIGED TO CONTINUE COLLECTION ACTION. THE BALANCE DUE SHOULD BE PROMPTLY REFUNDED TO AVOID THE NECESSITY OF COLLECTION BY DEDUCTION OR OTHER MEANS.