Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caDC-14-01168/USCOURTS-caDC-14-01168-0/pdf.json

Parties Involved:
Federal Aviation Administration
Respondent
Flytenow, Inc.
Petitioner

Document Text:

United States Court of Appeals 

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued September 25, 2015 Decided December 18, 2015 

No. 14-1168 

FLYTENOW, INC., 

PETITIONER

v. 

FEDERAL AVIATION ADMINISTRATION, ADMINISTRATOR, 

RESPONDENT

On Petition for Review of an Order 

 of the Federal Aviation Administration 

Jonathan Riches argued the cause for petitioner. With 

him on the briefs were Gregory S. Winton, Clint Bolick, and 

Aditya Dynar. 

Sydney A. Foster, Attorney, U.S. Department of Justice, 

argued the cause for respondent. With her on the brief were 

Benjamin C. Mizer, Acting Assistant Attorney General, 

Ronald C. Machen Jr., U.S. Attorney at the time the brief was 

filed, and Mark R. Freeman, Attorney. 

Before: PILLARD and WILKINS, Circuit Judges, and 

GINSBURG, Senior Circuit Judge. 

Opinion for the Court filed by Circuit Judge PILLARD. 

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PILLARD, Circuit Judge: Flytenow, Inc., developed a 

web-based service through which private pilots can offer their 

planned itineraries to passengers willing to share the pilots’ 

expenses. After starting operations in early 2014, Flytenow 

sought a legal interpretation from the Federal Aviation 

Administration (FAA) regarding its business plan’s 

compliance with the Federal Aviation Act of 1958 and the 

FAA’s regulations. The FAA responded with a Letter 

Interpretation, concluding that pilots offering flight-sharing 

services on Flytenow’s website would be operating as 

“common carriers,” which would require them to have 

commercial pilot licenses. Flytenow’s members, licensed 

only as private pilots, thus would violate FAA regulations if 

they offered their services via Flytenow.com. 

 Flytenow asks us to set aside the FAA’s Interpretation as 

arbitrary and capricious and inconsistent with statutory and 

constitutional law. Because we conclude that the FAA’s 

Interpretation is consistent with the relevant statutory and 

regulatory provisions and does not violate Flytenow’s 

constitutional rights, we deny Flytenow’s petition for review. 

I. 

Flytenow.com facilitates connections between pilots and 

“general aviation enthusiasts” who pay a share of the flight’s 

expenses in exchange for passage on a route predetermined by 

the pilot. Enthusiasts must be members of Flytenow to search 

for flights, but anyone may become a member by filling out 

an online form. Pilots using Flytenow’s service “initially and 

unilaterally dictate the time, date, and points of operation” of 

their proposed flights. J.A. 48. After a member-enthusiast 

expresses interest in being a passenger on a particular flight, a 

pilot may “accept or reject an enthusiast’s request . . . for any 

or no reason.” Id. If a pilot carries one or more passengers, 

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Flytenow facilitates the sharing of expenses on a pro rata 

basis between passengers and pilot. Id. Around the same 

time that Flytenow publicly launched its flight-sharing 

website and requested the FAA’s legal opinion, another firm 

proposing a substantially similar service, AirPooler, Inc., 

submitted a parallel request for a legal interpretation on the 

same issue. 

The FAA is charged with “promot[ing] safe flight of civil 

aircraft.” 49 U.S.C. § 44701. To that end, the FAA is 

empowered to regulate nearly every aspect of private and 

commercial flight, including licensing and regulation of pilots 

and their operations. See, e.g., id. §§ 44701(a), 44703, 44705. 

At issue here is whether the FAA permissibly concluded that 

private pilots using Flytenow’s service to offer flights to 

potential passengers hold themselves out as common carriers 

transporting persons from place to place for compensation in 

violation of the terms of their noncommercial licensure. 

The FAA issues several categories of “airman 

certificates” licensing qualified pilots to fly in various 

capacities subject to specified terms. See id. §§ 44702, 

44703; 14 C.F.R. §§ 61.81-95, 61.102-17, 61.121-33. 

Relevant to this petition are “commercial pilot” licenses, id.

Part 61, subpart F, and “private pilot” licenses, id. subpart E. 

Certified commercial pilots are qualified to transport 

passengers or property for compensation. See id.

§ 61.133(a)(1). Private pilots, by contrast, are barred from 

receiving compensation. See id. § 61.113(a). 

Seven narrow, enumerated exceptions to the 

compensation bar permit private pilots to receive 

compensation in specified circumstances. Id. § 61.113(b)-(h). 

Those exceptions authorize, for example, private pilots to 

accept compensation for certain charity events, id.

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§ 61.113(d), search-and-location operations, id. § 61.113(e), 

or airplane-sale-related flights, id. § 61.113(f). One of the 

seven exceptions to the compensation bar provides that a 

private pilot may share expenses with passengers, provided 

that the pilot does “not pay less than the pro rata share of the 

operating expenses” and that the expenses “involve only fuel, 

oil, airport expenditures, or rental fees.” Id. § 61.113(c). The 

pro rata sharing of expenses is further limited by the FAA’s 

“common-purpose test,” which requires private pilots and 

their expense-sharing passengers to share a “bona fide 

common purpose” for their travel. See FAA Legal 

Interpretation Letter from Rebecca B. MacPherson, Assistant 

Chief Counsel for Regulations, to Mark Haberkorn (Oct. 3, 

2011) (Haberkorn Interpretation), J.A. 41-44. Private pilots’ 

receipt of compensation outside of the seven exceptions is a 

violation of section 61.113 subject to civil penalties under 49 

U.S.C. § 46301. 

In addition to pilot licensing, the FAA regulates the 

conduct of aircraft and pilots in flight. The regulations make 

an important distinction between private carriage and 

common carriage, with the latter subject to more stringent 

operating requirements. 

Part 91 of the FAA’s regulations establishes baselines 

that apply to all aircraft operating in the United States. See 14 

C.F.R. § 91.101; see generally id. §§ 91.101-47. Part 91 

governs, for example, the use of seat belts, id. § 91.107, 

minimum safe altitudes, id. § 91.119, aircraft speed, id. 

§ 91.117, and rights of way among aircraft, id. § 91.113. 

Part 119 of the FAA’s regulations subjects flights 

operating as air carriers to safety requirements beyond what 

Part 91 requires of all flights. See 14 C.F.R. § 119.1. An “air 

carrier” under the Federal Aviation Act is a person 

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undertaking to provide “air transportation,” 49 U.S.C. 

§ 40102(a)(2), defined to include “foreign air transportation, 

interstate air transportation, or the transportation of mail by 

aircraft,” id. § 40102(a)(5). Interstate air transportation, the 

category relevant to this case, “means the transportation of 

passengers or property by aircraft as a common carrier for 

compensation . . . .” Id. § 40102(a)(25). Anyone piloting as 

an air carrier must have “an air carrier operating certificate” 

and operate only in compliance with its terms. 49 U.S.C. 

§ 44711(a)(4). The term “[a]ir carrier” for purposes of Part 

119 of the regulations tracks the statutory definition. See 14 

C.F.R. § 1.1. Thus, as relevant here, under the statutory and 

regulatory definitions, an “air carrier” is a person engaged in 

transportation of passengers as a “common carrier.” 

The statute does not define “common carrier” or 

“compensation.” See 49 U.S.C. § 40102(a). Instead, the FAA 

has relied for nearly thirty years on a definition of common 

carriage it announced in an advisory circular. FAA Advisory 

Circular 120-12A (April 26, 1986) (FAA Advisory Circular), 

J.A. 30-32. That circular noted the common-law heritage of 

“common carriage” and “private carriage” and determined 

that, because the Act left those terms undefined, FAA 

“guidelines giving general explanations” of the terms “would 

be helpful.” Id. ¶ 3, J.A. 30. 

The FAA Advisory Circular distinguished “private 

carriage” from “common carriage.” It explained that 

“[p]rivate carriage for hire is carriage for one or several 

selected customers, generally on a long-term basis.” Id.

¶ 4.d., J.A. 31. As long as she does not hold herself out to the 

public generally, and any compensation she receives does not 

exceed the passenger’s pro rata share of expenses, a private 

pilot may offer private carriage consistently with the 

regulations. See generally FAA Advisory Circular, J.A. 30-

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31. In contrast to private carriage, the FAA’s Advisory 

Circular defined “common carriage” as service meeting four 

elements: “(1) a holding out of a willingness to (2) transport 

persons or property (3) from place to place (4) for 

compensation.” Id. ¶ 4, J.A. 30. The two “common carriage” 

definitional factors at issue here are the first and fourth—

holding oneself out as willing to transport passengers, and 

doing or offering to do so for compensation. 

As noted above, a pilot with a commercial license is 

qualified to offer carriage for compensation; a private pilot 

may only receive compensation pursuant to one of the seven 

exceptions in section 61.113. 14 C.F.R. § 61.113. Under the 

FAA Advisory Circular, a pilot’s receipt of compensation 

may be evidence that a pilot’s operations are “air 

transportation,” meaning common carriage, requiring a higher 

level of pilot qualification. FAA Advisory Circular, J.A. 31. 

For example, notwithstanding the regulatory permission for 

private pilots to carry selected customers and share flight 

costs with them pursuant to the express exception set forth in 

section 61.113(c), even carriers flying members of only “one 

organization may be . . . common carrier[s] if membership in 

the organization and participation in the flights are, in effect, 

open to a significant segment of the public.” Id. ¶ 4.f., J.A. 

31. The FAA also noted that a private pilot’s provision of 

“free transportation” for a hotel or casino that requested 

“nominal charges” for “gifts and gratuities” has been held to 

be “common carriage based on the fact that the passengers 

[we]re drawn from the general public and the nominal charge 

constituted compensation.” Id. ¶ 4.g., J.A. 31.

The FAA Advisory Circular defined “holding out” as 

making representations “to the public, or to a segment of the 

public” that a carrier is “willing to furnish transportation 

within the limits of its facilities to any person who wants it.” 

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Id. The FAA warned that a private pilot may intend to offer 

only private carriage, but the pilot’s flights could come to be 

treated as common carriage: “The number of contracts must 

not be too great, otherwise it implies a willingness to make a 

contract with anybody.” Id. ¶ 4.d., J.A. 31. The FAA 

emphasized that its definition of “holding out” as a factor in 

the definition of common carriage is broad and flexible: 

“‘holding out’ which makes a person a common carrier can be 

done in many ways and it does not matter how it is done.” Id. 

¶ 4, J.A. 30. If a carrier were to show that it did not have rate 

schedules, that it offered services only pursuant to separately 

negotiated contracts, or that the carrier occasionally refused 

service to would-be customers, such facts would not 

necessarily be “conclusive proof” that a carrier is a private—

as opposed to common—carrier. Id. ¶ 4, J.A. 30. A carrier 

cannot avoid a “holding out” determination and its regulatory 

implications simply by avoiding advertising on its own 

behalf; “‘holding out’ may be accomplished through the 

actions of agents, agencies, or salesmen who may, 

themselves, procure passenger traffic from the general public 

 . . . .” Id. ¶ 4.b., J.A. 31. 

The FAA responded to Air Pooler’s and Flytenow’s 

requests for legal interpretations in separate letters on August 

13 and August 14, respectively. The letter to Flytenow 

incorporated by reference the letter to AirPooler. The letters 

concluded that pilots offering services on Flytenow.com or 

AirPooler.com would be engaged in common carriage as the 

FAA defines it, which would subject them to Part 119, the 

more stringent regulations governing pilots in air commerce. 

First, in its letter to AirPooler, the FAA explained the 

general rule that a private pilot may not act as pilot-incommand of an aircraft carrying passengers or property for 

compensation or hire. That general rule admits of a narrow 

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exception for private pilots’ “accept[ance] [of] compensation 

in the form of a pro rata share of operating expenses” from 

their passengers. J.A. 58. That expense-sharing provision is 

cast as “an exception to the compensation or hire prohibition,”

that is, it specifies a circumstance in which compensation is 

permitted. Id. 

Second, the FAA explained that it treats flight-sharing 

services as “common carriage.” Under the FAA’s definition 

of “common carriage,” flight-sharing services meet the 

compensation element of the common-carriage definition 

because expense sharing is compensation. J.A. 59. The 

“holding out” element is met by pilots’ use of the online 

service to “post[] specific flights” to the website. J.A. 60. In 

its letter to Flytenow, the FAA explained that “[h]olding out 

can be accomplished by any ‘means which communicates to 

the public that a transportation service is indiscriminately 

available’ to the members of that segment of the public it is 

designed to attract.” J.A. 62 (quoting Transocean Airlines, 11 

C.A.B. 350 (1950) (enforcement proceeding)). The FAA 

concluded that, “[b]ased on [Flytenow’s] description, the 

website is designed to attract a broad segment of the public 

interested in transportation by air.” J.A. 62. The FAA thus 

concluded that a pilot holding out his services and receiving 

expense-sharing compensation is engaged in “common 

carriage” and requires a Part 119 certificate. 

Flytenow timely filed this petition for review challenging 

the FAA’s Interpretation. 

II. 

We have jurisdiction to review Flytenow’s petition under 

section 46110 of the Federal Aviation Act, whether or not the 

FAA’s interpretation is a final order. Even where no party 

contests jurisdiction, “it is well established that a court of 

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appeals must first satisfy itself of its own jurisdiction, sua 

sponte if necessary, before proceeding to the merits.” 

Blackman v. District of Columbia, 456 F.3d 167, 174 (D.C. 

Cir. 2006) (quoting Citizens for Abatement of Aircraft Noise, 

Inc. v. Metro. Wash. Airports Auth., 917 F.2d 48, 53 (D.C. 

Cir. 1990), aff’d, 501 U.S. 252 (1991)). Neither party has 

identified any jurisdictional defect in this appeal, and we 

perceive none. 

The Federal Aviation Act authorizes review in this court 

by any “person disclosing a substantial interest in an order 

issued by” the FAA Administrator. 49 U.S.C. § 46110(a). 

There would perhaps be an obstacle to our review of the 

FAA’s Interpretation if the Administration’s letter were not 

final action, but the FAA has not objected to our reviewing 

the letter as an “order” under section 46110(a) or otherwise 

contended that the Interpretation is unreviewable as non-final. 

See Br. of Respondent 1. At oral argument, the FAA 

disclaimed any non-finality bar to our review. We need not 

address finality sua sponte because finality is not 

jurisdictional under either the Administrative Procedure Act 

or the Federal Aviation Act. 

The APA authorizes judicial review of “final agency 

action for which there is no other adequate remedy in a 

court,” as well as “[a]gency action made reviewable by 

statute.” 5 U.S.C. § 704. After a period of uncertainty in our 

circuit, it is “now firmly established” that finality under the 

APA is non-jurisdictional. Vietnam Veterans of Am. v. 

Shinseki, 599 F.3d 654, 661 (D.C. Cir. 2010). 

Like the APA’s section 704, section 46110 of the Federal 

Aviation Act, on which Flytenow relies, authorizes judicial 

review of an “order.” Unlike the APA, however, section 

46110 does not impose any explicit finality requirement. 

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Rather, we have incorporated generally applicable finality 

principles into the analysis of what counts as an “order” under 

section 46110. See, e.g., CSI Aviation Servs., Inc. v. U.S. 

Dep’t of Transp., 637 F.3d 408, 411 (D.C. Cir. 2011) (citing 

Bennett v. Spear, 520 U.S. 154, 178 (1997)); Vill. of 

Bensenville v. Fed. Aviation Admin., 457 F.3d 52, 68 (D.C. 

Cir. 2006) (same); Puget Sound Traffic Ass’n v. Civil 

Aeronautics Bd., 536 F.2d 437, 438-39 (D.C. Cir. 1976) 

(noting that the Federal Aviation Act’s review provision, 

“which gives this court power to review Board orders, has 

been judicially restricted to review of final agency orders”). 

Because the finality requirement under section 46110(a) is 

judicially imported from the APA, it is no more jurisdictional 

than the APA’s own finality requirement. Our precedent 

confirms that finality under the Federal Aviation Act is a 

matter of judicial creation, allowing us to “avoid premature 

intervention in the administrative process.” CSI, 637 F.3d at 

411 (citing Puget Sound, 536 F.2d at 438-39). 

Because finality is non-jurisdictional, we accept the 

FAA’s decision not to pursue any such defense it might have 

had. This case presents no exceptional circumstances 

warranting our consideration of the potential finality bar 

despite its forfeiture. See District of Columbia v. Air Fla., 

Inc., 750 F.2d 1077, 1084-85 (D.C. Cir. 1984). Government 

litigants may sometimes “want to waive or forfeit certain nonjurisdictional, non-merits threshold defenses so as to permit or 

obtain a ruling on the merits.” Grocery Mfrs. Ass’n v. Envtl. 

Prot. Agency, 693 F.3d 169, 185-86 n.5 (D.C. Cir. 2012) 

(Kavanaugh, J., dissenting). We do not second-guess the 

FAA’s decision here. 

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III. 

Flytenow characterizes the FAA’s Interpretation as a 

significant deviation from the Administration’s prior 

interpretation of its own regulations and asserts that such a 

shift requires notice and comment rulemaking under the 

Administrative Procedure Act. That argument is foreclosed 

by Perez v. Mortgage Bankers Ass’n, in which the Supreme 

Court expressly abrogated the doctrine of our circuit upon 

which Flytenow relies. 135 S. Ct. 1199, 1207 (2015) 

(abrogating Paralyzed Veterans of Am. v. D.C. Arena L.P., 

117 F.3d 579 (D.C. Cir. 1997)). As the Supreme Court in 

Perez explained, the APA’s “notice-and-comment 

requirement ‘does not apply . . . to interpretative rules.’” Id.

at 1206 (quoting 5 U.S.C. § 553(b)(A)) (omission in original). 

Perez tells us that its “exemption of interpretive rules from the 

notice-and-comment process is categorical . . . .” Id. The 

Interpretation at issue here is a quintessential interpretative 

rule, as it was “issued by an agency to advise the public of the 

agency’s construction of the statutes and rules it administers.” 

Shalala v. Guernsey Mem’l Hosp., 514 U.S. 87, 99 (1995) 

(quoting Chrysler Corp. v. Brown, 441 U.S. 281, 302 n.31 

(1979)). We thus reject Flytenow’s contention that the 

Interpretation is invalid for want of notice and comment 

rulemaking. 

A. 

On the merits, Flytenow objects that its pilots do not 

engage in “common carriage” and so cannot be required to 

comply with Part 119’s common-carrier licensure 

requirements. Flytenow argues that the FAA has 

misconstrued the definition of common carriage. When we 

consider a challenge to the FAA’s interpretation of its own 

regulations, the familiar Auer v. Robbins framework requires 

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us to treat the agency’s interpretation as controlling unless 

“plainly erroneous or inconsistent with the regulation.” 519 

U.S. 452, 461 (1997). Even without such deference, we have 

no difficulty upholding the FAA’s interpretation of its 

regulations in this case. 

The FAA concluded that pilots offering their services on 

Flytenow.com would be common carriers. That conclusion 

rests on the FAA’s interpretations of “compensation” and 

“holding out” as the FAA uses those two terms in its 

regulations. Flytenow objects that: (1) the FAA 

misinterpreted its regulations in finding that expense sharing 

under Flytenow’s service would be “compensation” to 

participating pilots; and (2) the FAA erroneously concluded 

that pilots’ participation on Flytenow.com would amount to 

“holding out” an offer of transportation to the public. Both of 

Flytenow’s objections are unpersuasive. 

1. Compensation. The FAA correctly interpreted its 

regulation prohibiting private pilots from receiving 

compensation. The FAA concluded that the exception from 

the general ban on receipt of compensation—allowing private 

pilots to engage in expense sharing in certain circumstances—

did not redefine expense sharing as something other than 

compensation. That exception instead narrowly authorized 

some expense sharing notwithstanding the otherwiseapplicable general ban on private pilots’ receipt of 

compensation. Flytenow argues that the FAA’s reading 

impermissibly treats the “exception to the definition [as] the 

same as the definition”—i.e., that it “contort[s]” the exception 

by treating what Flytenow says the regulation identifies as 

“not compensation” as if it were still compensation. Reply 

Br. 9. Flytenow misapprehends the FAA’s analysis. The 

expense-sharing rule, by excepting certain expense sharing 

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from the ban on private pilots’ receipt of compensation, 

creates a category of compensated flight that is permitted. 

The text and structure of the regulation make clear that 

allowable expense sharing is still compensation, albeit an 

authorized subcategory. Under the heading “Private pilot 

privileges and limitations: Pilot in command,” the rule 

explains that, “except as provided in paragraphs (b) through 

(h) of this section, no person who holds a private pilot 

certificate may act as pilot in command of an aircraft that is 

carrying passengers . . . for compensation or hire.” 14 C.F.R. 

§ 61.113(a). In other words, section 61.113 defines the only 

circumstances in which private pilots may receive 

compensation. Those are set forth in seven categories of 

compensation, including expense sharing, that are exempted 

from the general bar. Id. § 61.113(b)-(h). The most natural 

reading of that rule’s language and structure—and the reading 

the FAA adopted—is that the exempted expense sharing is 

“compensation,” but is nevertheless permitted in the identified 

contexts. The exceptions in paragraphs (b) through (h)—

including the limited expense-sharing exception—set out 

acceptable forms of compensation; they do not change the 

underlying definition of compensation. 

The FAA’s position that expense sharing can be 

permitted compensation is consistent and well established. 

Since at least the 1980s, the FAA has explained that “any 

payment for a flight, even a partial payment, means that the 

flight is for compensation or hire.” FAA Legal Interpretation 

Letter from John H. Cassady, Assistant Chief Counsel, 

Regulations & Enforcement Div., to Hal Klee, Executive 

Director, Pilots & Passengers (undated, identified by FAA as 

1985), J.A. 26-27. “This is true even if the payment is made 

under the ‘expense sharing’ provisions . . . .” Id.; see also

FAA Legal Interpretation from John H. Cassady, Assistant 

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Chief Counsel, Regulations & Enforcement Div., to Thomas 

Chero, Vice President – Legal, AVEMCO Ins. Co. (Dec. 26, 

1985) (Chero Interpretation), J.A. 28. And as recently as 

2011, the FAA explained that it “construes the term 

compensation very broadly; any reimbursement of expenses, 

including a pro rata share of operating expenses, constitutes 

compensation.” Haberkorn Interpretation, J.A. 42 n.1. The 

FAA correctly concluded here, in keeping with its prior 

interpretation, that expense sharing is always compensation.

Flytenow argues that, where a pilot and her passengers 

share a common purpose, as Flytenow’s service contemplates, 

expense sharing cannot be compensation within the meaning 

of the “common carrier” definition. Br. of Petitioner 19-21. 

But that analysis confounds two issues. The FAA applies the 

“common-purpose” test to identify the narrow circumstances 

in which admittedly private pilots may share expenses under 

section 61.113. See FAA Legal Interpretation Letter from 

Kenneth E. Geier, Regional Counsel, to Paul D. Ware (Feb. 

13, 1976) (Ware Interpretation), J.A. 23; Chero Interpretation; 

FAA Legal Interpretation from Rebecca MacPherson, 

Assistant Chief Counsel for Regulations, to Guy Mangiamele 

(Mar. 4, 2009), J.A. 35-36; Haberkorn Interpretation. Here, 

however, the question is whether Flytenow pilots would be 

acting as private pilots, or instead as common carriers without 

adequate licensure. The common-purpose test has no bearing 

on whether compensation in the form of passengers’ expense 

sharing, together with holding out to the general public, tends 

to show that a private pilot is operating as a common carrier. 

Flytenow invokes an interpretation from a local field 

office that, it claims, read the regulations differently from all 

of the interpretations issued by the FAA’s Office of the Chief 

Counsel. See Br. of Petitioner 20 (citing Legal Interpretation 

Letter from Loretta E. Alkalay, Regional Counsel, to Ron 

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Levy (Oct. 25, 2005)). To the extent that the Levy 

Interpretation concluded that, so long as the passenger and 

pilot share a common purpose, a private pilot may generally 

hold herself out as providing flights on an expense-sharing 

basis and remain in compliance with Part 119, it was 

erroneous. An anomalous local field office interpretation 

cannot control. Cf. Paralyzed Veterans of Am., 117 F.3d at 

587 (“A speech of a mid-level official of an agency, however, 

is not the sort of ‘fair and considered judgment’ that can be 

thought of as an authoritative departmental position.”), 

abrogated on other grounds by Perez, 135 S. Ct. 1199. In 

sum, we reject Flytenow’s effort to recast the commonpurpose limitation as part of the definition of compensation 

rather than as part of an exception under which the FAA 

permits private pilots to receive compensation. 

2. Holding Out. Flytenow’s argument regarding the 

“holding out” element of common carriage is questionbegging and incorrect. Flytenow contends that the limitation 

against pilots “holding out” is “codified in” section 119.5(k), 

which bars advertising or offering unauthorized service. Br. 

of Petitioner 24; 14 C.F.R. § 119.5(k). Section 119.5(k) 

states: “No person may advertise or otherwise offer to 

perform an operation subject to this part [governing air 

carriers] unless that person is authorized by the [FAA] to 

conduct that operation.” Flytenow reads that restriction to 

mean that any pilot not subject to Part 119’s stringent rules 

for air carriers may “advertise or otherwise offer” herself or 

himself as willing to provide expense-sharing services, 

without that conduct establishing the “holding out” element of 

the “common carrier” definition. See Brief of Petitioner 24-

25. 

As the FAA rightly notes, section 119.5(k) is not the 

codification of the “holding out” requirement. Rather, section 

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119.5(k) is a prohibition on advertisement of unauthorized 

services. The statute and regulations do not define “holding 

out”; the FAA instead uses “holding out” as that concept is 

defined through the common law, see CSI Aviation, 637 F.3d 

at 415; FAA Advisory Circular, J.A. 30, and applies it in a 

functionalist, pragmatic manner, see FAA Advisory Circular, 

J.A. 30; Haberkorn Interpretation, J.A. 42-43. 

Flytenow’s reliance on section 119.5(k) has the reasoning 

backwards. The central question in this case is whether 

Flytenow’s pilots are “subject to this part”—i.e. Part 119 on 

commercial operation—and the answer depends on whether 

the pilots are acting as “air carriers,” see 14 C.F.R. 

§ 119.1(a)(1) (“This part applies to each person operating or 

intending to operate civil aircraft . . . [a]s an air carrier . . . .”). 

As noted above, an “air carrier” is a “common carrier.” See 

14 C.F.R. § 1.1 (defining “air carrier”). Section 119.5(k) does 

not define, but depends on, whether a pilot is operating as a 

common carrier, which turns in part on whether the pilot is 

“holding out.” 

Under the definition of “holding out” the FAA articulated 

in the 1986 circular, J.A. 30, we have no trouble finding that 

Flytenow’s pilots would be doing so. Flytenow.com is a 

flight-sharing website putatively limited to members, but 

membership requires nothing more than signing up. Any 

prospective passenger searching for flights on the Internet 

could readily arrange for travel via Flytenow.com. 

Flytenow’s statement to its members that its pilots may on a 

case-by-case basis decide not to accept particular passengers 

is not to the contrary. As the FAA noted in its circular, no 

“conclusive proof” that a pilot is not a common carrier can be 

gleaned from the absence of rate schedules, or pilots 

occasionally refusing service or offering it only pursuant to 

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separately negotiated contracts. FAA Advisory Circular, J.A. 

30. 

 Finding that Flytenow’s pilots are “holding out” does not 

lead to the absurd consequences of which Flytenow warns. 

See Br. of Petitioner 25. It is simply not accurate, as 

Flytenow fears, that “any pilot communicating an expensesharing flight, for the sole purpose of identifying a common 

purpose, will now be considered holding out to provide 

common carriage.” Id. Pilots communicating to defined and 

limited groups remain free to invite passengers for commonpurpose expense-sharing flights. See Br. of Respondent 30. 

As the FAA notes, id., nothing in the challenged 

Interpretation calls into question the FAA’s reasoning or 

conclusions in its 1976 Ware Interpretation, in which the FAA 

opined that posting on a bulletin board is permitted in certain 

circumstances. J.A. 23. Nor does the Interpretation call into 

question the continuing vitality of the expense-sharing rule. 

See Br. of Petitioner 33. Private pilots continue to enjoy the 

right to share expenses with their passengers, so long as they 

share a common purpose and do not hold themselves out as 

offering services to the public. 

B. 

In its reply brief, Flytenow raises a new line of attack 

against the Interpretation, contending that it must be set aside 

because the FAA’s definition of common carriage 

contravenes the common-law definition. “Ordinarily, we will 

not entertain arguments or claims raised for the first time in a 

reply brief.” Forman v. Korean Air Lines Co., 84 F.3d 446, 

448 (D.C. Cir. 1996). As we have explained, considering 

such arguments “is not only unfair to an appellee, but also 

entails the risk of an improvident or ill-advised opinion on the 

legal issues tendered.” McBride v. Merrell Dow & Pharm., 

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Inc., 800 F.2d 1208, 1211 (D.C. Cir. 1986) (internal citations 

omitted). 

 In its opening brief to this court, Flytenow did not contest 

the FAA’s definition of common carriage. To the contrary, it 

invoked the FAA Advisory Circular’s articulation of the 

FAA’s understanding of common carriage. See Br. of 

Petitioner 6 n.6, 11, 25. Thus, in its response, the FAA did 

not defend its Interpretation on the ground that its definition 

of common carriage is in keeping with the common law, aside 

from making passing reference to a decision in this court that 

noted the common-law pedigree of “common carriage.” See 

Br. of Respondent 30 (citing CSI, 637 F.3d at 415). We 

therefore do not consider Flytenow’s argument that the FAA’s 

decision contravenes the common law. That argument is 

forfeited. 

IV. 

Flytenow raises several other statutory and constitutional 

claims. The government argues that these claims are barred 

by the Federal Aviation Act’s exhaustion requirement, 49 

U.S.C. §46110(d), because Flytenow did not raise them 

before the agency. The exhaustion requirement does not 

apply here, however, because there was a “reasonable 

ground” for Flytenow’s failure to raise its arguments before 

the agency. Id. The Interpretation did not result from the 

type of administrative “proceeding” in which Flytenow was 

notified of an agency proposal and had a chance to raise 

statutory or constitutional objections. See Elec. Privacy Info. 

Ctr. v. U.S. Dep’t of Homeland Sec., 653 F.3d 1, 8 (D.C. Cir. 

2011); cf. Cont’l Air Lines v. Dep’t of Trans., 843 F.2d 1444, 

1455-56 (D.C. Cir. 1988). Remand to the FAA in this case 

would not serve the policies that exhaustion is meant to 

protect. The agency has not identified any factual disputes 

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relevant to Flytenow’s statutory or constitutional objections, 

nor does it hint that it missed any opportunity to apply its 

expertise or revise its rule to avoid Flytenow’s objections. 

See generally McKart v. United States, 395 U.S. 185, 194 

(1969). Flytenow was not required to have raised these 

challenges before the FAA. 

A. 

Flytenow argues that the FAA has exceeded its 

jurisdiction under the Federal Aviation Act by regulating 

private communications on a website. That argument 

misreads the statute and misapprehends the role of the FAA. 

The Federal Aviation Act directs the FAA to regulate 

common carriers. 49 U.S.C. § 44705. As noted above, the 

“sine qua non” of a common carrier is “some type of holding 

out to the public.” CSI, 637 F.3d at 415. 

The FAA must consider whether air carriers hold 

themselves out to the public to determine which FAA rules 

apply. In considering what information pilots communicate 

via Flytenow.com, and to whom, the FAA relies on the 

communications as evidence of “holding out,” thereby 

reaching conduct the Act indisputably authorizes it to 

regulate. Flytenow’s complaint that the FAA treats “all 

Internet-based communications by a pilot, concerning a 

proposed expense-sharing flight” as “necessarily ‘holding 

out’” is inaccurate. Br. of Petitioner 27. The FAA opined 

only on the type of flight-sharing program described in 

Flytenow’s and AirPooler’s requests for legal interpretation. 

See J.A. 60, 61-62. Other kinds of internet-based 

communications, such as e-mail among friends, for example, 

seem unlikely to be deemed “holding out” under the FAA’s 

Interpretation. 

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If accepted, Flytenow’s argument that the FAA lacks 

statutory authority to consider the evidentiary value of 

Flytenow’s speech would frustrate the FAA’s enforcement of 

the Federal Aviation Act. The Act calls on the FAA to 

regulate certain aspects of the commercial speech of pilots 

and airlines. For example, the FAA regulates in detail airline 

computerized reservation systems, requiring that they display 

particular information, including schedules and fares, in 

particular ways. 14 C.F.R. §§ 255.1-.8. The FAA requires 

that airline websites disclose on-time performance data for 

any domestic flight for which the sites provide schedule 

information. Id. § 234.11(b). The FAA also requires 

disclosure of code-sharing arrangements among airlines, and 

bans airlines from holding out code-sharing flights for sale 

without such disclosure. Id. §§ 257.4-.5. In each such case, 

the FAA’s speech-related requirement is consistent with its 

statutory mandate. 

B. 

Flytenow’s three constitutional arguments are unavailing. 

1. First Amendment. Flytenow challenges the 

Interpretation as a First Amendment violation on the grounds 

that: (1) the Interpretation imposes an unconstitutional prior 

restraint on Flytenow’s commercial speech; and (2) the 

Interpretation is an impermissible content-based regulation. 

Flytenow misdescribes the Interpretation as a prior 

restraint. See generally Alexander v. United States, 509 U.S. 

544, 549-54 (1993). The Interpretation does not bar any 

speech in advance, but sets forth the FAA’s view that pilots 

advertising their services on Flytenow.com risk liability if 

they are not licensed for the offered services. Thus, the 

Interpretation explains the possible consequences of speech, 

but does not enjoin it. In any event, the advertising of illegal 

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activity has never been protected speech. See, e.g., Pittsburgh 

Press Co. v. Pittsburgh Comm’n on Human Relations, 413 

U.S. 376, 388-89 (1973). 

The FAA’s reliance on Flytenow’s speech as evidence of 

“holding out” is fully compatible with the First Amendment. 

It is well settled that “the First Amendment allows ‘the 

evidentiary use of speech to establish the elements of a crime 

or to prove motive or intent.’” Whitaker v. Thompson, 353 

F.3d 947, 953 (D.C. Cir. 2004) (quoting Wisconsin v. 

Mitchell, 508 U.S. 476, 489 (1993)). In Whitaker, the court 

upheld the FDA’s reliance on a drug company’s speech (via 

its drug labeling) to infer that company’s intent to sell a drug 

for purposes for which it was not authorized. Id. In this case, 

the FAA is doing much the same thing: it is using speech 

(postings on Flytenow.com) as evidence that pilots are 

offering service that exceeds the limits of their certifications. 

 Any incidental burden the FAA’s regulations impose on 

pilots’ speech does not violate the First Amendment because 

the regulations further an important government interest 

unrelated to the suppression of free expression. United States 

v. O’Brien, 391 U.S. 367, 377 (1968). Barring pilots from 

holding themselves out to the public to provide services for 

which they are not licensed directly advances the 

government’s interest in “promot[ing] safe flight of civil 

aircraft in air commerce.” 49 U.S.C. § 44701(a). Seeking to 

prevent advertising of services by or on behalf of pilots not 

licensed to offer them is a constitutionally permissible way to 

advance the policy that “the general public has a right to 

expect that airlines which solicit their business operate under 

the most searching tests of safety.” Woolsey v. Nat’l Transp. 

Safety Bd., 993 F.2d 516, 522 (5th Cir. 1993). 

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2. Equal Protection. Flytenow’s Equal Protection 

challenge also fails. Flytenow makes no claim that the FAA’s 

classification implicates any fundamental right or categorizes 

on any inherently suspect basis, but contends that the FAA’s 

regulations cannot be sustained under rational basis review. 

See, e.g., Fed. Commc’ns Comm’n v. Beach Commc’ns, Inc., 

508 U.S. 307, 313-15 (1993). To succeed, Flytenow would 

have to negate “every conceivable basis which might support” 

the challenged classification. Id. at 315 (quoting Lehnhausen 

v. Lake Shore Auto Parts Co., 40 U.S. 356, 364 (1973)) 

(internal quotation marks omitted). 

The FAA’s distinction between pilots offering expensesharing services on line to a wide audience and those offering 

expense-sharing services to a limited group is justified: 

holding out to the public creates the risk that unsuspecting 

passengers, under the impression that the service and its pilots 

lawfully offer common carriage, will contract with pilots who 

in fact lack the experience and credentials of commercial 

pilots. Regulators have good reasons to distinguish between 

pilots who are licensed to offer services to the public and 

those who are not, as other courts have recognized. See 

Woolsey, 993 F.2d at 522. 

3. Vagueness. Finally, there is no credible claim that the 

Interpretation is unconstitutionally vague. The FAA 

announced that pilots offering expense-sharing flights on 

Flytenow.com are holding themselves out to provide common 

carriage and are therefore subject to Part 119. The Agency 

was clear in its application of its regulation to Flytenow: 

“You suggest there is no holding out . . . . We disagree. . . . 

[Flytenow.com] is designed to attract a broad segment of the 

public interested in transportation by air.” J.A. 62. Flytenow 

is in no position to assert a facial vagueness challenge. “[A] 

plaintiff who engages in some conduct that is clearly 

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proscribed cannot complain of the vagueness of the law as 

applied to the conduct of others.” Holder v. Humanitarian 

Law Project, 561 U.S. 1, 18-19 (2010) (quoting Hoffman 

Estates v. Flipside, Hoffman Estates, Inc., 455 U.S. 489, 495 

(1982)). 

* * * 

 For the foregoing reasons, Flytenow’s petition for review 

is denied. 

So ordered. 

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