Priority Air Dispatch, Inc. v. National Transportation Safety Board and Alexander P. Butterfield, Administrator of the Federal Aviation Administration , 514 F.2d 1335 ( 1975 )

Opinion for the Court filed by District Judge JUSTICE.

Opinion filed by Senior Circuit Judge DANAHER, concurring and dissenting.

JUSTICE, District Judge.

In its petition for review, Priority Air Dispatch, the petitioner, challenges certain rulings of the National Transportation Safety Board.

Before August 3, 1973, Priority, an air taxi operator, was engaged in the business of transporting hazardous materials for various government agencies. Priority began the conduct of this business in 1967, when the Federal Aviation Agency granted it, simultaneously, an Air Taxi/Commercial Operator’s (ATCO) Certificate under section 604 of the Federal Aviation Act¹ and an exemption that permitted it to vary from certain FAA regulations related to the transportation of hazardous materials.² Substantially all of Priority’s business apparently was carried on by grace of the exemption, although it theoretically could have engaged in other activities permitted the holders of ATCO certificates, on the sole authority of the certificate. Accordingly, it was a serious blow to Priority’s status when, on August 3, 1973, the FAA terminated Priority’s exemption, effective immediately. Priority had been notified that this action was contemplated, and had been offered the opportunity to present its views, together with any data that it wished to submit, in writing. It was not, however, afforded any type of adversary hearing before the FAA’s action; in particular, the FAA did not hold a proceeding of the description set out in sections 7 and 8 of the Administrative Procedure Act.³ The FAA’s order revoking the exemption alleged that Priority had been guilty of “violations of the terms and conditions of the exemption, violations of the Federal Aviation Regulations, and other incidents of questionable operating practice”. On the same day, August 3, 1973, the FAA entered an order revoking Priority’s. ATCO certificate.

Priority, believing that it was entitled to notice and hearing before its twin grants of authority to operate its business were revoked pursuant to these charges of misconduct, proceeded to contest the FAA’s actions on two fronts. First, on August 4, 1973, it filed a complaint in United States District Court, setting forth the events above described and' demanding a temporary restraining order to prevent the FAA from enforcing its revocation order, pending a hearing on its motion for a preliminary injunction. The district court granted the temporary restraining order.⁴ Second, Priority appealed the FAA’s actions to the National Transportation Safety Board, the respondent.

The NTSB has authority, pursuant to the Department of Transportation Act of 1966, to review “the suspension, modification, revocation, or denial of any certificate or license issued by the Secretary [of Transportation] or an Administrator [of the Federal Highway Administration, Federal Railroad Administration, or FAA]”.⁵ (Italics added.) With the action in district court we are not concerned, except to note that the district court merged the temporary restraining order into a preliminary injunction on August 14, 1973, pending final hearing.

In Priority’s appeal before the National Transportation Safety Board, the Administrator of the FAA filed a motion to dismiss, asserting that the NTSB had no jurisdiction over Priority’s appeal from the revocation of its exemption and ATCO certification. In this connection, the Administrator argued that the FAA’s action had been of a “special rule-making” nature, and hence no appeal to the NTSB was authorized under the applicable statutes. An Administrative Law Judge of the NTSB denied the motion to dismiss. The five-man Board, however, reversed his decision with respect to the appeal from the revocation of the exemption, holding that it was not a “certificate or license”, as described by the Department of Transportation Act.

Priority has applied to this court for relief from the NTSB’s decision, pursuant to statutes granting this court jurisdiction to consider petitions for review of the actions of the NTSB.⁶ Our sole concern here is the correctness of the decision of the NTSB that it lacked jurisdiction over Priority’s appeal from the FAA’s revocation of its exemption. The cancellation of the ATCO certificate is not at issue before us.

After a survey of the history of the 1966 Act and its predecessors, as well as the practices of the NTSB in the past, it is our view that the Board’s statutory authority extends to the FAA’s revocation of an airline’s exemption from regulations, if the exemption in question is an essential component of the operating authority of the airline. The legislative history of the language found in the 1966 Act pertaining to “certificate or license” is murky. Prior to the creation of the National Transportation Safety Board, the Act assigned the review function to the Civil Aeronautics Board.⁷ The statute vesting review powers in the CAB provided that the Board could review actions relating to “any type certificate, production certificate, airworthiness certificate, airman certificate, air carrier operating certificate, air navigation facility certificate, or air agency certificate.”⁸ The Department of Transportation Act of 1966 created the NTSB and transferred to the new agency the review responsibilities formerly exercised by the CAB. It is noted that the 1966 Act used more general language (“certificate or license”) in describing the subjects of the Board’s review authority⁹ than was employed in the Act setting out the review powers of the CAB.

The NTSB has taken the position that it was the Congressional intent that the 1966 Act transfer to the NTSB only such aviation-related functions as were formerly exercised by the CAB, neither enlarging nor expanding them. In explaining the inclusion of the term “licenses” in the 1966 Act, the NTSB argues that in addition to the functions previously assigned to the CAB, the NTSB took on the former duties of the Coast Guard in “licensing” vessels and their crews. We accept this explanation. It appears, however, that even before 1966, the FAA and the CAB treated certain privileges not formally denominated as “certificates” in the same manner that they treated actual certificates. Thus, the regulations formulated by the FAA Administrator pursuant to Title VI of the Federal Aviation Act (which only authorizes the FAA to issue various types of “certificates”) make provision for the issuance of such documents as “instrument ratings”,¹⁰ “type ratings”,¹¹ “aircraft category ratings”,¹² “airplane class ratings”,¹³ “rotorcraft class ratings”,¹⁴ “air traffic control facility ratings”,¹⁵ “mechanic ratings”,¹⁶ and “inspection authorizations”.¹⁷ Moreover, prior to 1966, the CAB routinely took jurisdiction over appeals from the revocation or suspension of such privileges.¹⁸

In Administrator v. Rawdon,¹⁹ decided by the CAB in 1960, it was held that a mechanic’s “inspection authorization” was the equivalent of a “certificate” under the statute conferring review authority on the CAB. Overruling its own hearing examiner, the full Board explained that an “inspection authorization” is “related to a mechanic’s certificate”; that the CAB, therefore, had review jurisdiction over its revocation.²⁰ In so ruling, the CAB implicitly rejected the hearing examiner’s reasoning that the “inspection authorization” cannot be a “certificate”, because it is evidenced by a document separate from the holder’s airman certificate.

Decisions of the National Transportation Safety Board since the 1966 Act accept without question the NTSB’s jurisdiction over revocations of “ratings” and “authorizations” originally issued by the FAA Administrator.²¹ Although none of the decisions articulate a reason for the Board’s assumption of jurisdiction, logic suggests the same reason that recommended itself to the CAB in its 1960 decision: “ratings” and “authorizations” are inextricably entwined with the “certificates” of their holders and together with these certificates afford a variety of privileges that would be altered by revocation of the rating or authorization. It is manifest that a certificate would not be worthless without an associated “rating” or “authorization”. Neither would Priority’s ATCO certificate be valueless in the absence of its “related” exemption from certain regulations. But the FAA Administrator’s revocation of the exemption had the effect of altering Priority’s operating authority, and both history and reason dictate that the NTSB has statutory jurisdiction to review his decision. In so doing, the NTSB will of course be guided by the provisions of the Administrative Procedure Act, as well as by its own statutory procedures.

Reversed and remanded, with directions.

1 . 49 U.S.C. § 1424 (1970).

2 . The regulations are found at 14 C.F.R. §§ 103.3, 103.9(a), 103.11, 103.31(b). The exemption was granted pursuant to section 601(c) of the Federal Aviation Act, 49 U.S.C. § 1421(c) (1970).

3 . 5 U.S.C. § 551 et seq.

4 . Priority Air Dispatch, Inc. v. Brinegar, Civil Action No. 1573-73 (D.D.C. August 4, 1973).

5 . Section 5(b)(2), Department of Transportation Act of 1966, 49 U.S.C. § 1654(b)(2) (1970).

6 . Sections 609 and 1006, Federal Aviation Act, 49 U.S.C. §§ 1429, 1486 (1970); Section 4(c), Department of Transportation Act of 1966, 49 U.S.C. § 1653(c).

7 . Section 609, Civil Aeronautics Act of 1938, 52 Stat. 1008-1011.

8 . Id.

9 . 49 U.S.C. § 1654(b)(2).

10 . 49 C.F.R. § 61.5(b)(6).

11 . 49 C.F.R. § 61.5(b)(5).

12 . 49 C.F.R. § 61.5(b)(1).

13 . 49 C.F.R. § 61.5(b)(2).

14 . 49 C.F.R. § 61.5(b)(3).

15 . 49 C.F.R. §§ 65.31(b), 65.39, 65.41, 65.43.

16 . 49 C.F.R. §§ 65.71, 65.73, 65.85, 65.87.

17 . 49 C.F.R. § 65.91.

18 . See, e. g., Administrator v. Saupp, 45 C.A.B. 989 (1966); Administrator v. Proud, 42 C.A.B. 1014 (1965); Administrator v. Light, 40 C.A.B. 1008 (1964); Administrator v. Jones and Scott, 38 C.A.B. 1223 (1963).

19 . 31 C.A.B. 1167 (1960).

20 . Id. at 1168.

21 . See, e. g., Administrator v. Jackson, 1 N.T. S.B. 2027 (1972) (instrument rating); Administrator v. Stroupe, 1 N.T.S.B. 1708 (1972) (pow-erplant rating); Administrator v. Phipps, 1 N.T.S.B. 1614 (1972) (airline transport pilot rating); Administrator v. Roche, 1 N.T.S.B. 1140 (1971) (inspection authorization); Administrator v. Terwilliger, 1 N.T.S.B. 1096 (1971) (B-727 type rating); Administrator v. Harrington, 1 N.T.S.B. 1042 (1971) (D.C.-8 type rating).

In Administrator v. Kline, 1 N.T.S.B. 1591 (1972), the Board discussed the suspension of a pilot’s airline transport pilot rating, referring to it as “airline transport pilot privileges”. The decision of the Administrative Law Judge had referred to the suspended item as a “license”. Obviously, the NTSB has not always harbored its present concern with semantics.