Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caDC-12-05294/USCOURTS-caDC-12-05294-0/pdf.json

Nature of Suit Code: 890
Nature of Suit: Other Statutory Actions
Cause of Action: 

---

United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued May 14, 2013 Decided June 18, 2013

No. 12-5294

DELTA AIR LINES, INC.,

APPELLANT

v.

EXPORT-IMPORT BANK OF THE UNITED STATES, ET AL.,

APPELLEES

AIR LINE PILOTS ASSOCIATION, INTERNATIONAL,

INTERVENOR-APPELLANT

Appeal from the United States District Court

for the District of Columbia

(No. 1:11-cv-02024)

Michael K. Kellogg argued the cause for appellants. 

With him on the briefs were Wan J. Kim, Gregory G. 

Rapawy, W. Joss Nichols, Jonathan A. Cohen, R. Russell 

Bailey, and Stephen B. Moldof.

Mark B. Stern, Attorney, U.S. Department of Justice, 

argued the cause for appellees. With him on the brief were 

Stuart F. Delery, Principal Deputy Assistant Attorney 

General, Ronald C. Machen Jr., U.S. Attorney, Beth S. 

Brinkmann, Deputy Assistant Attorney General, Helen L. 

Gilbert, Attorney, and Sparkle L. Sooknanan, Attorney.

USCA Case #12-5294 Document #1441755 Filed: 06/18/2013 Page 1 of 8
2

Steven G. Bradbury, C.B. Buente, and Quentin Riegel

were on the brief for amicus curiae National Association of 

Manufacturers in support of appellees. 

Before: HENDERSON, GRIFFITH, and KAVANAUGH, 

Circuit Judges.

Opinion for the Court filed PER CURIAM.

PER CURIAM: The Export-Import Bank of the United 

States is a federal agency that issues loans and loan 

guarantees to foreign corporations so that they can purchase 

American goods and services. In 2011, the Export-Import 

Bank approved $3.4 billion in loan guarantees to Air India so 

that Air India could purchase Boeing airplanes. Air India 

plans to use the planes to provide air service on transoceanic 

routes. Before issuing the loan guarantees, the Bank was 

required under the Export-Import Bank Act to consider the 

effects that the loan guarantees would have on U.S. industries 

and U.S. jobs. See 12 U.S.C. §§ 635(b)(1)(B), 635a-2. Delta 

Air Lines argues that the Bank failed to consider those effects, 

in violation of the Bank Act. At this stage, we conclude 

simply that the Bank failed to reasonably explain its 

application of the Bank Act in this case, as required by the 

Administrative Procedure Act. We therefore reverse the 

judgment of the District Court. The District Court is directed 

to remand the case to the Bank without vacating any of the 

Bank’s actions in this matter to date.

I

The Export-Import Bank Act establishes the ExportImport Bank of the United States and authorizes the Bank to 

provide loans and loan guarantees that allow foreign 

USCA Case #12-5294 Document #1441755 Filed: 06/18/2013 Page 2 of 8
3

companies to purchase American goods and services. The 

Bank Act also contains numerous provisions that limit the 

Bank’s authority to extend loans and loan guarantees to 

foreign corporations. Two such provisions are directly

relevant in this case. Section 635(b)(1)(B) of Title 12 

provides that the Bank “shall take into account any serious 

adverse effect” of a loan or loan guarantee on certain U.S. 

industries and U.S. jobs. 12 U.S.C. § 635(b)(1)(B). 

Similarly, Section 635a-2 provides that the Bank “shall 

implement such regulations and procedures as may be 

appropriate to insure that full consideration is given to the 

extent to which any loan or financial guarantee is likely to 

have an adverse effect” on U.S. industries and U.S. jobs. 12 

U.S.C. § 635a-2.1

 

To comply with the Bank Act, the Bank has developed a 

set of Economic Impact Procedures. Those procedures are 

designed to identify categories of loans and loan guarantees

that do not have an adverse effect on the relevant portions of 

 1

In relevant part, Section 635(b)(1)(B) provides that the Bank:

shall take into account any serious adverse effect of such loan 

or guarantee on the competitive position of United States 

industry, the availability of materials which are in short 

supply in the United States, and employment in the United 

States, and shall give particular emphasis to the objective of 

strengthening the competitive position of United States 

exporters and thereby of expanding total United States 

exports. 

In relevant part, Section 635a-2 provides that the Bank:

shall implement such regulations and procedures as may be 

appropriate to insure that full consideration is given to the 

extent to which any loan or financial guarantee is likely to 

have an adverse effect on industries, including agriculture, 

and employment in the United States, either by reducing 

demand for goods produced in the United States or by 

increasing imports to the United States. 

USCA Case #12-5294 Document #1441755 Filed: 06/18/2013 Page 3 of 8
4

the U.S. economy. Such loans and loan guarantees are thus 

effectively screened out from more detailed economic

analysis during the consideration of particular loans or loan 

guarantees. As relevant here, the Economic Impact 

Procedures screen out transactions that do not “result in the 

foreign production of an exportable good.” J.A. 1129. In 

other words, loans and loan guarantees that help foreign 

service providers (such as Air India’s airline service) have 

been categorically determined not to affect U.S. industries and 

U.S. jobs. 

Here, the Bank applied those procedures to Air India’s 

loan guarantees. Because Air India planned to use the loan

guarantees to increase the number of transoceanic flights it 

offered – a service, not an exportable good – the Bank did not 

specifically consider the impact of the loan guarantees on 

U.S. industries and U.S. jobs. Delta argues that this approach 

is inconsistent with the Bank Act, which according to Delta

requires consideration of the impact of individual loans and 

loan guarantees – including to foreign service providers – on 

U.S. industries and U.S jobs. The District Court agreed with 

the Bank, and Delta now appeals.

II

The Bank’s initial defense to Delta’s challenge is that its 

implementation of these provisions of the Bank Act is 

committed to its discretion by law and is therefore judicially 

unreviewable under the Administrative Procedure Act. See 5 

U.S.C. § 701(a)(2). The District Court concluded otherwise. 

We agree with the District Court. 

Agency action, the Supreme Court has said, is 

presumptively subject to judicial review. See Abbott 

Laboratories v. Gardner, 387 U.S. 136, 140 (1967) (APA 

USCA Case #12-5294 Document #1441755 Filed: 06/18/2013 Page 4 of 8
5

“embodies the basic presumption of judicial review to one 

‘suffering legal wrong because of agency action, or adversely 

affected or aggrieved by agency action within the meaning of 

a relevant statute’”) (citation omitted). The APA contains two 

exceptions: Review is unavailable when (i) it is precluded by 

statute or (ii) when agency action is committed to agency 

discretion by law. See 5 U.S.C. § 701(a)(1)-(2). 

The Bank primarily argues that the second exception 

applies here. Under that exception, agency action is 

committed to agency discretion by law and thus judicially 

unreviewable when there is “no law to apply.” Heckler v. 

Chaney, 470 U.S. 821, 830 (1985) (exception “applicable in 

those rare instances where statutes are drawn in such broad 

terms that in a given case there is no law to apply”) (internal 

quotation marks omitted). 

Section 635(b)(1)(B) mandates that the Bank “shall take 

into account any serious adverse effect” a guarantee might 

have on certain U.S. industries or U.S. jobs. See 12 U.S.C. § 

635(b)(1)(B) (emphasis added). Similarly, Section 635a-2 

mandates that the Bank “shall implement such regulations and 

procedures as may be appropriate to insure that full 

consideration is given to the extent to which any loan or 

financial guarantee is likely to have an adverse effect” on U.S. 

industries and U.S. jobs. Id. § 635a-2 (emphasis added). The 

language in both provisions identifies factors that the Bank 

must consider – namely, the adverse effects on U.S. industries 

and U.S. jobs. Ensuring that agencies follow commands of 

this sort is of course standard judicial fare. These statutes 

provide enough law to qualify as “law to apply” under the 

relevant APA precedents. See Amador County v. Salazar, 640 

F.3d 373, 381 (D.C. Cir. 2011) (review available because 

statute imposes mandatory obligations on agency); Armstrong 

v. Bush, 924 F.2d 282, 293 (D.C. Cir. 1991) (same); Robbins 

USCA Case #12-5294 Document #1441755 Filed: 06/18/2013 Page 5 of 8
6

v. Reagan, 780 F.2d 37, 45 (D.C. Cir. 1985) (per curiam) 

(“The mere fact that a statute grants broad discretion to an 

agency does not render the agency’s decisions completely 

nonreviewable under the ‘committed to agency discretion by 

law’ exception unless the statutory scheme, taken together 

with other relevant materials, provides absolutely no guidance 

as to how that discretion is to be exercised.”); see also 3 

RICHARD J. PIERCE, JR. ADMINISTRATIVE LAW TREATISE

§ 17.6 (4th ed. 2002) (“statute can confer on an agency a high 

degree of discretion, and yet a court might still have an 

obligation to review the agency’s exercise of its discretion to 

avoid abuse,” especially on procedural grounds).

The Bank also suggests, in passing, that the Bank Act 

implicitly precludes judicial review, the first Section 701(a) 

exception to judicial review. In support, the Bank says that it 

is designed to function like a commercial bank, not a federal

agency. But the Bank is indisputably a federal agency. 12 

U.S.C. § 635(a)(1) (“There is created a corporation with the 

name Export-Import Bank of the United States, which shall be 

an agency of the United States of America.”). The Bank 

further contends that judicial review would undermine its 

ability to operate effectively. No doubt many agencies feel 

that way at times, but an agency that wants a carve-out from 

the APA should direct its arguments to Congress. The Bank 

Act does not preclude judicial review for purposes of Section 

701(a)(1). 

In sum, the Bank’s actions in this case are subject to 

judicial review to determine whether the Bank complied with 

the Bank Act or otherwise acted in an arbitrary and capricious 

manner. See 5 U.S.C. § 706.

USCA Case #12-5294 Document #1441755 Filed: 06/18/2013 Page 6 of 8
7

III

Delta argues that the Bank, by not performing a detailed 

economic analysis of the loan guarantees, failed to “take into 

account any serious adverse effect” of its loan guarantees and

failed to give “full consideration” to whether the loan 

guarantees were likely to have the relevant adverse economic 

harm. See 12 U.S.C. §§ 635(b)(1)(B), 635a-2.

2

 The Bank 

actually shares Delta’s view that the statute requires 

consideration of those factors for all loans and loan 

guarantees. But the Bank says that its Economic Impact 

Procedures do just that because they expressly state that they 

are designed to “ensure that all transactions are screened for 

economic impact implications.” J.A. 1129. 

The dispute here arises because the procedures 

categorically determine that loans and loan guarantees to 

foreign service providers will not affect U.S. industries and 

U.S. jobs. Delta acknowledges that categorical assessments 

are permissible under the Act in appropriate circumstances. 

Tr. of Oral Arg. at 5. The real disagreement between the 

parties, then, is whether the Bank’s categorical assessment of 

the impact of loans and loan guarantees to foreign service 

providers is a reasonable application of the Bank Act and has

been reasonably explained for purposes of the Administrative 

Procedure Act. See Motor Vehicle Manufacturers Assn. v. 

State Farm Mutual Auto. Insurance Co., 463 U.S. 29, 57 

(1983); 5 U.S.C. § 706(2)(A). We agree with Delta that the 

 2 Delta also argues that the Bank violated a provision of the 

Bank Act that prohibits the Bank from making a loan or loan 

guarantee that helps a foreign country expand production capacity

of a competing “commodity” by one percent or more. See 12 

U.S.C. § 635(e). But the ordinary meaning of the word 

“commodity” encompasses goods, not services, and so that 

provision does not apply here. 

USCA Case #12-5294 Document #1441755 Filed: 06/18/2013 Page 7 of 8
8

Bank, at a minimum, has not reasonably explained its

justification for the categorical conclusion at issue here. In 

particular, the Bank has not reasonably explained its apparent 

conclusion that loans and loan guarantees to help a foreign 

company provide a service (as opposed to a good) can never

cause adverse effects to U.S. industries and U.S. jobs.

We need not prolong the matter. Applying this Court’s 

precedents regarding remand without vacatur, we direct the 

District Court to remand the case to the Bank without 

vacating any of the Bank’s actions in this matter to date. See 

Allied-Signal, Inc. v. Nuclear Regulatory Commission, 988 

F.2d 146, 150-51 (D.C. Cir. 1993) (vacatur not required if “it 

is conceivable” that agency may correct error and vacatur 

would be too disruptive). On remand to the Bank, the Bank 

should (i) attempt to provide a reasonable explanation for how 

the Economic Impact Procedures, which screen out loans and 

loan guarantees to service providers, square with the statute’s

requirements, or (ii) adequately consider and explain any 

adverse effects that these particular Air India loan guarantees

have on U.S. industries and U.S. jobs, or (iii) take whatever 

other action the Bank deems appropriate to comply with the 

Bank Act and the APA. The Bank’s actions on remand of 

course will be subject to later judicial review if an aggrieved 

party wishes to challenge the Bank’s actions as unlawful.

* * *

We reverse the judgment of the District Court. The 

District Court is directed to remand the case to the Bank for 

further proceedings consistent with this opinion, but the 

District Court should not vacate any of the Bank’s actions in 

this matter to date.

So ordered.

USCA Case #12-5294 Document #1441755 Filed: 06/18/2013 Page 8 of 8