Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caDC-10-01227/USCOURTS-caDC-10-01227-0/pdf.json

Parties Involved:
Southwest Airlines Co.
Petitioner
Transportation Security Administration
Respondent

Document Text:

United States Court of Appeals 

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued May 9, 2011 Decided July 1, 2011 

No. 10-1227 

SOUTHWEST AIRLINES CO., ET AL

PETITIONERS

v. 

TRANSPORTATION SECURITY ADMINISTRATION, 

RESPONDENT

Consolidated with 10-1228, 10-1229, 10-1230, 10-1231, 

10-1232, 10-1236, 10-1237, 10-1238, 10-1240, 10-1241, 

10-1242, 10-1243, 10-1244, 10-1246, 10-1247, 10-1248, 

10-1249, 10-1250 

On Petitions for Review of Final Orders 

of the Transportation Security Administration 

M. Roy Goldberg argued the cause for petitioners. With 

him on the briefs were Robert W. Kneisley, Carl B. Nelson, 

Jr., Bruce H. Rabinovitz, Jonathan B. Hill, J. Parker 

Erkmann, Robert E. Cohn, Patrick R. Rizzi, Lorraine B. 

Halloway, Lester M. Bridgeman, Thomas Newton Bolling, 

USCA Case #10-1227 Document #1316145 Filed: 07/01/2011 Page 1 of 18
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Richard Mathias, and David Endersbee. Christopher T. 

Handman entered an appearance. 

Jeffrey Clair, Attorney, U.S. Department of Justice, 

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

Tony West, Assistant Attorney General, and Scott R. 

McIntosh, Attorney. 

Before: HENDERSON, BROWN, and KAVANAUGH, Circuit 

Judges. 

Opinion for the Court filed by Circuit Judge 

KAVANAUGH, with whom Circuit Judge HENDERSON joins. 

Dissenting opinion filed by Circuit Judge BROWN. 

 KAVANAUGH, Circuit Judge: Until 2001, commercial 

airlines were responsible for screening people and property at 

U.S. airports. That changed after al Qaeda terrorists boarded 

airplanes in Boston, Newark, and Washington, D.C., and 

attacked the United States on September 11, 2001. Congress 

created the Transportation Security Administration and 

directed it to take responsibility for airport screening. TSA’s 

screening operations are funded, in part, by fees that the 

agency collects from airlines. By statute, those fees may not 

exceed the amount that airlines paid for screening passengers 

and property during the year 2000. 49 U.S.C. 

§ 44940(a)(2)(B)(i). Because the fees airlines pay to TSA are 

capped at the level of their 2000 costs, the lower the airlines’ 

screening costs in 2000, the better it is for the airlines now. 

But determining how much the airlines spent in 2000 on 

passenger and property screening at airports has proved to be 

a difficult exercise. Hence, this drawn-out litigation: 

Southwest and 19 other airlines allege that TSA’s 

determination of their year 2000 costs was arbitrary and 

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capricious for purposes of the Administrative Procedure Act 

and also unconstitutional. We disagree, and we deny the 

petitions for review. 

I 

 Shortly after the al Qaeda attacks of September 11, 2001, 

Congress passed and President Bush signed the Aviation and 

Transportation Security Act. Pub. L. No. 107-71, 115 Stat. 

597 (2001). Under that statute, the Federal Government – 

specifically, the newly created Transportation Security 

Administration – assumed responsibility for airport security 

functions that were previously undertaken by private airlines. 

TSA took over the task of screening all passengers and 

property at U.S. airports. 

By statute, TSA imposes two kinds of fees to fund its 

airport security services: a fee on passengers and a fee on 

airlines. 

The fee on airlines is at issue here. That fee may not 

exceed the amount that TSA determines airlines paid for 

screening passengers and property during the year 2000. 49 

U.S.C. § 44940(a)(2)(B)(i). In other words, the airline fee is 

designed to track the costs that airlines incurred to screen 

passengers and property when airlines performed that 

function. 

To determine how much money airlines paid to screen 

passengers and property in the year 2000, TSA initially relied 

on cost data submitted by the airlines themselves. Suspicion 

mounted that airlines were low-balling their 2000 costs so as 

to reduce the fees they would have to pay to TSA under the 

new system. In 2004, Congress directed the Government 

Accountability Office to independently review airlines’ year 

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2000 screening costs. See Dep’t of Homeland Security 

Appropriations Act for 2005, Pub. L. No. 108-334, Title II, 

118 Stat. 1298 (2004). Upon completing that review, the 

GAO concluded that total airline screening costs in the year 

2000 were $448 million – $129 million more than the airlines 

had claimed. Acting on that estimate, TSA assessed 

additional fees on numerous airlines for 2005 and future 

years. 

It turned out, however, that GAO’s estimate of year 2000 

screening costs included the costs of screening nonpassengers as well as passengers and property. The airline 

fee imposed by TSA, by contrast, is capped at the amount that 

TSA determines airlines “paid . . . for screening passengers

and property” in the year 2000. 49 U.S.C. § 44940(a)(2)(B)(i) 

(emphasis added). Numerous airlines – including many of the 

petitioners here – challenged TSA’s fee increases in this 

Court, arguing that TSA “violated the plain language of the 

[statute] by basing its calculation of the fees on a GAO 

estimate which had included the costs of screening nonpassengers.” Southwest Airlines Co. v. TSA (“Southwest I”), 

554 F.3d 1065, 1069 (D.C. Cir. 2009). This Court agreed, 

and we remanded the matter to TSA for the agency to exclude 

the costs of screening non-passengers from its calculation of 

airline fees and to award refunds accordingly. See id. at 1070, 

1076. 

On remand, TSA was thus required to determine how 

much of the $448 million in year 2000 screening costs was 

attributable to screening passengers and property. To do so, 

the agency commissioned a report from Simat, Helliesen & 

Eichner, Inc., a reputable airline consultant. SH&E conducted 

numerous interviews with airport and government officials 

and reviewed airport survey data on year 2000 screenings. 

SH&E estimated that approximately 61% of individual 

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screenings in 2000 were attributable to passengers and 39% to 

non-passengers. SH&E also determined that a large 

proportion of the airlines’ screening costs were fixed and 

therefore would not decrease if non-passengers were 

excluded. SH&E concluded that the cost of screening 

passengers and property in the year 2000 was approximately 

$420 million. 

The airlines submitted a separate report from Campbell 

Aviation Consultants, known as the Campbell report. The 

Campbell report concluded that the relevant year 2000 costs 

were $305 million, not $420 million. 

But TSA found SH&E’s report more persuasive, and the 

agency recalculated each airline’s fee liability based on the 

$420 million figure. TSA sent a written notice of its refund 

determinations to each airline. The airlines now seek review 

of TSA’s decisions. 

II 

 The airlines raise several challenges to TSA’s remand 

decisions, but only one issue requires extended discussion. 

According to the airlines, TSA’s decisions were arbitrary and 

capricious because TSA should not have relied on the SH&E 

report commissioned by TSA, or at least should have more 

fully explained why it rejected the conclusions of the 

Campbell report submitted by the airlines.1

 

 1

 As a threshold matter, TSA argues that we do not have 

jurisdiction over all the airlines’ claims. It is true that the Aviation 

and Transportation Security Act limits judicial review of TSA’s 

airline fee determinations. See Southwest Airlines Co. v. TSA 

(“Southwest I”), 554 F.3d 1065, 1069 (D.C. Cir. 2009) (“Before 

reaching the merits, we need to address the effect of two ATSA 

provisions for jurisdiction-stripping.”). The ATSA provides that 

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 On remand, the issue before TSA concerned how much 

the airlines spent in 2000 to screen passengers and property, 

excluding the cost of screening non-passengers. To resolve 

that issue, TSA had to determine how many individual 

screenings in 2000 were of passengers versus non-passengers. 

In assessing how TSA performed that task, it is important to 

understand that there was no contemporaneous, objectively 

verified record of the number of screenings. The number of 

screenings was not tracked in the way that, for example, 

attendance at a baseball game is tracked through turnstiles. 

To be sure, airlines had at least a rough idea of the number of 

passengers. But no one apparently kept records of the 

number of screenings of non-passengers. And thus there was 

no good way to know what percentage of screenings were of 

passengers. Given the difficult task this Court assigned it, the 

TSA on remand commissioned an expert report to help the 

agency make the best estimate it could about the percentage 

 

“[d]eterminations of the Under Secretary under this subparagraph 

[stating the limitations on airline fees based on year 2000 costs] are 

not subject to judicial review.” Pub. L. No. 107-71, Title I, § 118, 

115 Stat. 597, 626 (2001). In 2007, however, Congress created an 

exception to that rule for “estimates and additional collections made 

pursuant to the appropriation for Aviation Security in Public Law 

108-334 [i.e., collections made pursuant to the 2005 Appropriations 

Act that instructed GAO to recalculate year 2000 costs]: . . . 

Provided . . . [t]hat such judicial review shall be limited only to 

additional amounts collected by the Secretary before October 1, 

2007.” Pub. L. No. 110-161, Title V, § 540, 121 Stat. 1844, 2079 

(2007), codified at 49 U.S.C. § 44940(a)(2)(B)(iv). Because the 

fees at issue here were collected pursuant to the 2005 

appropriations law, this Court may review TSA’s airline fee 

determinations as applied to amounts collected before October 1, 

2007. See Southwest I, 554 F.3d at 1069. Each of the airlines’ 

claims here applies in part to amounts collected by TSA before 

October 1, 2007. We therefore may review the issues raised by the 

airlines. Cf. id. 

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of screenings attributable to passengers versus nonpassengers. SH&E performed a detailed analysis and 

ultimately concluded that 61% of individual screenings were 

of passengers and that airlines incurred $420 million in costs 

from screening passengers and property in 2000. 

 The airlines provided TSA with an alternative to the 

SH&E report – a report from Campbell Aviation Consultants. 

The Campbell report also calculated airport screening costs 

attributable to passengers and property, excluding nonpassengers. In so doing, Campbell relied heavily on an earlier 

Department of Transportation report indicating that a total of 

1.812 billion individuals were screened in U.S. airports during 

the year 2000. Relying on that number, and on the fact that 

the total number of passengers in 2000 was estimated to be 

527 million (some of whom were screened more than once), 

Campbell estimated that about 36% of all individual 

screenings at U.S. airports in the year 2000 were of 

passengers. Based on that percentage, Campbell concluded 

that airlines spent about $305 million to screen passengers 

and property in the year 2000. 

The Campbell report’s bottom-line number of $305 

million – the cost of screening passengers and property in 

2000 – was thus $115 million lower than the SH&E report’s 

bottom-line number of $420 million. The fundamental 

dispute in this case concerns that $115 million difference. 

The airlines contend that TSA should not have relied on 

the SH&E report and instead should have accepted the 

Campbell report, or at least better explained why it rejected 

the Campbell report. But in TSA’s letter to each airline, the 

agency stated that it had “conducted a thorough review of the 

Campbell report that included an examination of both the data 

and methodologies utilized to construct the report findings.” 

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See, e.g., Letter from Transportation Security Administration 

to Gary Kelly, Chairman of the Board, Chief Executive 

Officer, and President, Southwest Airlines at 2 (June 22, 

2010) (J.A. 468). In light of that “thorough review,” TSA 

concluded that the Campbell report was “insufficient for 

further consideration due to the report’s use of limited data 

and broad, simplistic methodologies that did not consider the 

full spectrum of specific cost categories.” Id. The letter also 

explained SH&E’s more extensive methodology. Id.

TSA thus considered the Campbell report and its 

underlying data, and TSA explained why the Campbell report 

was inferior to the SH&E report on which the agency relied. 

TSA adequately considered the submissions of dueling 

experts before determining year 2000 screening costs for 

passengers and property. When an agency “adequately 

considers contradictory evidence, . . . our standard of review 

does not permit a reviewing court to displace the [agency’s] 

choice between conflicting views.” American Wrecking 

Corp. v. Sec’y of Labor, 351 F.3d 1254, 1261 (D.C. Cir. 

2003). We will not second-guess TSA’s determination of this 

obscure calculation in a “data-poor environment” in which 

“[a]ny decision . . . would have required considerable 

guesswork.” Southwest Airlines Co. v. TSA (“Southwest I”), 

554 F.3d 1065, 1073 (D.C. Cir. 2009); cf. Marsh v. Or. 

Natural Res. Council, 490 U.S. 360, 376 (1989) (controversy 

presents “a classic example of a factual dispute the resolution 

of which implicates substantial agency expertise”). Our 

deference is particularly strong here because the statute says 

that the fee is based on the amount TSA “determined” the 

airlines paid in 2000. See Southwest I, 554 F.3d at 1071; 

AFL-CIO v. Chao, 409 F.3d 377, 393 (D.C. Cir. 2005) 

(Roberts, J., concurring in part and dissenting in part) (“We 

have noted in the past the distinction between the objective 

existence of certain conditions and the [agency]’s 

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determination that such conditions are present, stressing that a 

statute phrased in the latter terms fairly exudes deference to 

the [agency].”) (internal quotation marks omitted). 

The airlines also complain that TSA, in rejecting the 

Campbell report, never specifically mentioned the figure 

contained in the prior Department of Transportation report on 

the number of individuals screened in 2000. That argument 

fails for two reasons. 

First, although TSA did not mention the Department of 

Transportation report by name, TSA explained that it found 

the data underlying the Campbell report to be limited and thus 

unreliable – and the most important piece of data in the 

Campbell report was the figure contained in the Department 

of Transportation report. 

Second, and most importantly, the airlines presented no 

evidence that the figure in the Department of Transportation 

report was at all reliable. The Department of Transportation 

figure was based on industry-reported data, not a government 

or independent audit of some kind. At the time before 

September 11 that the airlines provided that information, 

moreover, they had an incentive to aim high when estimating 

the number and cost of screenings – so as to convince the 

Government either to shoulder some of the costs or to impose 

less burdensome security requirements on the airlines.2

 The 

airlines here suggest that the Department of Transportation 

number has talismanic significance because it was published 

in “official government reports.” Reply Br. at 14. But the 

 2

 Indeed, prior to and immediately after September 11, 2001 – 

before the current system was implemented – airline industry 

representatives estimated that airport security cost the airlines 

nearly $1 billion per year.

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report simply regurgitated highly speculative industryreported numbers when the industry had an incentive to 

estimate on the high end. Shaky numbers in, shaky numbers 

out. 

In reality, there was no authoritative source for the 

number of airport screenings during the year 2000 – no 

government audit of all U.S. airports, no contemporaneous 

and independently verified calculation. Determining the 

figure in response to this Court’s remand thus involved a good 

deal of inquiry and ultimately required a dash of art as well as 

science. TSA was therefore fully justified in relying on the 

estimates in SH&E’s report, which mitigated the uncertainty 

by conducting a thorough inquiry and deriving data from 

several independent sources. TSA reasonably concluded and 

reasonably explained that the SH&E report was far more 

detailed and reliable than the Campbell report. Given the 

choice between the SH&E report and the Campbell report, 

TSA chose the SH&E report – with good reason, and 

certainly sufficient reason that we cannot overturn that 

decision on Administrative Procedure Act arbitrary and 

capricious review. 

III 

 The airlines raise three other arguments, which we can 

dispose of in short order. 

First, the airlines contend that TSA’s decisions were 

arbitrary and capricious under the Administrative Procedure 

Act and also violated the Due Process Clause because the 

agency did not disclose the SH&E report until the day before 

it released the fee letters. That argument fails. In “informal 

adjudication[s]” like these, agencies must satisfy only 

“minimal procedural requirements.” Butte County, Calif. v. 

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Hogen, 613 F.3d 190, 194 (D.C. Cir. 2010). An agency 

conducting an informal adjudication has no statutory 

obligation to prematurely disclose the materials on which it 

relies so that affected parties may pre-rebut the agency’s 

ultimate decision. See Pension Benefit Guaranty Corp. v. 

LTV Corp., 496 U.S. 633, 655 (1990). The Due Process 

Clause likewise does not require more in this kind of case. 

See Southwest Airlines Co. v. TSA (“Southwest I”), 554 F.3d 

1065, 1074 (D.C. Cir. 2009). 

Second, the airlines argue that TSA improperly delegated 

its responsibilities to SH&E. We disagree. In U.S. Telecom 

Association v. FCC, this Court identified “three specific types 

of legitimate outside party input into agency decision-making 

processes: (1) establishing a reasonable condition for granting 

federal approval; (2) fact gathering; and (3) advice giving.” 

359 F.3d 554, 566 (D.C. Cir. 2004). SH&E was involved in 

the “fact gathering” stage of TSA’s decision-making process: 

SH&E’s report detailed its factual findings on the screening 

of non-passengers during the year 2000. TSA evaluated the 

report, found it reliable, and used it to recalculate airline fees. 

The agency did not improperly delegate decision-making 

responsibility to SH&E. 

Third, the airlines point out that the combined refunds 

provided by TSA to individual airlines fall short of the total 

amount due to the airlines under SH&E’s methodology. But 

TSA has explained that those numbers do not match for a 

number of reasons, such as that several airlines that paid fees 

later went out of business. And the airlines have not pointed 

to any specific problem with any individual refund decision. 

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* * * 

 We deny the airlines’ petitions for review. 

So ordered. 

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BROWN, J., dissenting. My disagreement with the 

majority is a narrow albeit decisive one. When the 

Transportation Security Administration calculated passengerand property-screening costs for the year 2000, it failed to 

consider another Government agency’s estimate of the total 

number of persons screened that year. Notwithstanding the 

Airlines’ protestations, neither TSA nor the consultant whose 

analysis it relied on even mentioned that critical data. 

Although TSA’s calculation of the security fee is entitled to 

broad deference, the agency’s discretion is not unlimited. I 

respectfully dissent, because I think TSA impermissibly 

ignored contradictory evidence.

The Department of Transportation’s Bureau of 

Transportation Statistics estimated that in the year 2000, the 

Airlines screened 1.812 billion persons—more than double 

TSA’s estimate of 865.5 million. After we remanded TSA’s 

first decision, see Southwest Airlines Co. v. TSA (Southwest 

I), 554 F.3d 1065 (D.C. Cir. 2009), the Airlines provided 

DOT’s estimate to TSA in a consultant’s report (the 

“Campbell Report”). Accepting DOT’s estimate would have 

resulted in a substantially lower security fee for the Airlines.1

Not surprisingly, TSA did nothing of the sort. Although TSA 

had promised to consider the Campbell Report, it adopted 

wholesale its own consultant’s report (the “SH&E Report”), 

which arrived at its estimate of 865.5 million persons 

screened without even mentioning the Campbell Report or the 

DOT data it cited.

 1 The security fee is capped at the year 2000 cost of screening 

persons and property ($448 million) minus the cost of screening 

non-passengers. See Maj. Op. at 4; Southwest I, 554 F.3d at 1069 

(D.C. Cir. 2009). The parties agree there were 527 million 

passengers in 2000.

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TSA’s decision on remand gives no reason for choosing

SH&E’s estimate of the total number of passengers screened 

over DOT’s estimate. The decision’s treatment of the 

Campbell report is confined to a two-sentence paragraph. It is 

in this cursory statement that the court purports to divine

TSA’s reasoned consideration of the DOT data:

TSA conducted a thorough review of the 

Campbell report that included an examination 

of both the data and methodologies utilized to 

construct the report findings. TSA concluded 

that the Campbell report and findings were 

insufficient for further consideration due to the 

report’s use of limited data and broad, 

simplistic methodologies that did not consider 

the full spectrum of specific cost categories.

Joint Appendix (“J.A.”) 468, quoted in Maj. Op. at 7, 8. Aside 

from this vague gesture toward the Campbell Report and its 

data, the remand decision does not address the discrepancy 

between DOT’s estimate of 1.812 billion screened persons 

and SH&E’s estimate of 865.5 million. The court interprets

TSA’s reference to “broad, simplistic methodologies” and 

“limited data” as an assessment of Campbell’s uncritical

adoption of DOT’s estimate. Maj. Op. at 8. TSA’s statement, 

however, cannot sustain that charitable reading. 

TSA explicitly faulted the Campbell Report for its failure 

to “consider the full spectrum of specific cost categories.” 

J.A. 468. This has nothing to do with DOT’s estimate of the 

total number of passengers screened in 2000. To be sure, the

SH&E Report attempts a more sophisticated comparative 

analysis of the respective costs of screening passengers and 

non-passengers than the Campbell Report. In particular, 

SH&E accounted for fixed costs that would have remained in 

the absence of non-passenger screenings, whereas Campbell 

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assumed non-passengers contributed an equal share to the 

cost of screening persons. Compare J.A. 279–323 (SH&E 

Report pt. 3), with J.A. 174–79 (Campbell Report). But this 

issue is beside the point. Accepting SH&E’s estimates of the 

respective costs of individual passenger- and non-passenger 

screenings, a higher raw number of screenings would still 

result in a lower security fee for the Airlines than the one

TSA calculated. There is no evidence TSA considered this 

critical difference between the reports at all.2 Without 

considering the issue, TSA could not have reasonably decided

to credit SH&E’s estimate of total screenings over DOT’s.

Even if TSA’s denigration of the Campbell Report’s 

“limited data” is interpreted as a reference to the DOT data, 

such conclusory treatment of alternative evidence “provides

no basis upon which we could conclude that it was the 

product of reasoned decisionmaking.” Butte County, Cal. v. 

Hogen, 613 F.3d 190, 195 (D.C. Cir. 2010) (quoting Tourus 

Records, Inc. v. DEA, 259 F.3d 731, 737 (D.C. Cir. 2001)). 

To merit deference, TSA ought to have given some reason for 

rejecting DOT’s estimate. See Int’l Union, United Mine 

Workers of Am. v. Mine Safety & Health Admin., 626 F.3d 84, 

 2 A letter written by TSA’s Acting Assistant Chief Counsel after 

the agency’s final remand decision confirms that the agency 

misunderstood the fundamental difference between the Campbell 

and SH&E Reports. Like the remand decision, the letter failed to 

mention—much less refute—DOT’s estimate of 1.812 billion 

screened persons. In response to the airlines’ “concern regarding 

SH&E’s estimate of the ratio of passenger to non-passenger 

screenings,” the letter points out that the Campbell report 

“extrapolated the experience of just six aviation industry 

representatives.” J.A. 504. But Campbell relied on those six 

industry representatives to construct an estimate of the relative 

average cost of individual passenger and non-passenger screenings. 

Those surveys were irrelevant to the DOT data on the relative

volume of passenger and non-passenger screenings.

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93 (D.C. Cir. 2010) (remanding a rule “because . . . it defies 

the expert record evidence and is unexplained”). Labeling the 

DOT data “limited”—if indeed that pejorative may be read as 

a criticism of DOT’s estimate—is not a reasoned explanation. 

In United Mine Workers, we concluded the challenged rule 

was arbitrary and capricious because the agency’s only basis

for rejecting contrary evidence was the agency’s own 

“knowledge and expertise.” 626 F.3d at 84. TSA’s rejection 

of the Campbell Report, and its silent neglect of the DOT data 

contained therein, is no more descriptive. Such “[c]onclusory 

explanations for matters involving a central factual dispute 

where there is considerable evidence in conflict do not suffice 

to meet the deferential standards of our review.” Id. at 94 

(quoting AT&T Wireless Servs. v. FCC, 270 F.3d 959, 968 

(D.C. Cir. 2001)).

TSA does not even argue its decision on remand meets 

the standard we applied in United Mine Workers. Instead,

TSA asks us to limit the holding of that case to situations 

where the neglected “contrary evidence” is “set forth in a 

congressionally-ordered study conducted by an independent 

federal agency with expertise in the subject matter.” 

Respondent’s Br. at 43. TSA does not explain why it is 

essential that the study be “congressionally-ordered” or why 

DOT’s Bureau of Transportation Statistics lacks “expertise in 

the subject matter” of air transportation security statistics. 

Regardless of the specific character of the contrary evidence, 

an agency is required by “[b]asic principles of administrative 

law” to “examine the relevant data and articulate a 

satisfactory explanation for its action including a rational 

connection between the facts found and the choice made.”

AT&T Wireless, 270 F.3d at 968 (quoting Motor Vehicle

Mfrs. Ass’n v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29, 43 

(1983)).

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Our deference to the substance of an agency’s decision 

does not permit us to ignore the process by which the agency 

makes it. The court rightly observes that an agency is entitled 

to especially strong deference where the relevant statute turns 

on “the [agency’s] determination that certain conditions are 

present”—here the cost of screening passengers and property 

in 2000, as determined by the TSA—rather than “the 

objective existence of [those] conditions.” Maj. Op. at 8 

(quoting Southwest I, 554 F.3d at 1071). But even when our 

review is at its most deferential, we may not allow an agency 

to shirk its duty to provide a reason for choosing one body of 

evidence over another. In AEP Texas North Co. v. STB, 609 

F.3d 432 (D.C. Cir. 2010), the court noted that the Surface 

Transportation Board was “entitled to particular deference” 

because the rate-setting decision at issue was one in which the 

Board acts “at the zenith of its powers.” Id. at 438. 

Nevertheless, the court held that the Board acted arbitrarily 

and capriciously when it “entirely failed to consider an 

important aspect of the problem.” Id. at 441. For the same 

reason, TSA should not be able to hide its neglect of DOT’s 

estimate behind our standard of review. 

The court’s “most important[]” response to the Airlines’ 

argument that TSA failed to consider the DOT data is that 

“the airlines presented no evidence that the figure in the 

[DOT] report was at all reliable.” Maj. Op. at 9. The court 

conducts its own analysis of the DOT estimate, finds it to be 

based on self-serving, industry-reported data, and then 

concludes the SH&E Report’s estimate of total screenings 

was more reliable. Id. at 9–10. This is exactly the sort of 

analysis TSA should have undertaken, and it is exactly the 

sort of reasoning to which a court may defer.

3

 3 This is not to say the court’s reasoning is self-evidently correct. 

The SH&E Report’s estimate of the ratio of passenger to nonpassenger screenings was based on “passenger surveys” conducted 

But TSA’s 

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remand decision makes none of these findings, which appear 

for the first time as arguments in the agency’s appellate brief. 

See Respondent’s Br. at 38–42. Such post hoc justifications 

cannot satisfy the agency’s obligation to give reasons for 

rejecting alternative evidence. See SEC v. Chenery Corp., 332 

U.S. 194, 196–97 (1947); United Mine Workers, 626 F.3d at 

94.

Especially where an agency adopts the reasoning of an 

outside consultant in toto, as TSA did here, the agency must

articulate its reasons for rejecting evidence the consultant 

ignored. TSA’s failure to do so leaves me with the sneaking 

suspicion that neither the agency nor its consultant ever 

seriously considered DOT’s estimate. I would remand once 

again for further consideration and an explanation. See United 

Mine Workers, 626 F.3d at 94; AT&T Wireless, 270 F.3d at 

968.

 

at two airports and on interviews with airport personnel. It is not 

obvious that the resulting estimate is more reliable than DOT’s. 

The Campbell Report gives an intuitive explanation for DOT’s 

large estimate of the number of non-passengers screened in 2000, 

relative to the present. Before 9/11, it was common for nonpassengers to drop off and pick up passengers; screenings were less 

onerous; and airline, airport, vendor, and contractor employees 

passed easily and often through screenings. Most persuasively, the 

Campbell Report shows that the large reduction in screened persons 

between 2000 and 2006 (a drop from 1.812 billion to 708 million) 

corresponds to the increased transaction costs associated with 

TSA’s management of the screening process and new rules 

restricting non-passengers from the “sterile” area of the airport. It is 

impossible to perform a similar comparison with the SH&E data 

TSA relied on, because SH&E did not estimate screening volume 

for any year besides 2000. Of course, TSA may have had a 

reasonable basis for favoring SH&E’s much smaller estimate of 

year 2000 screenings, but the agency was obliged to explain its 

reasons.

USCA Case #10-1227 Document #1316145 Filed: 07/01/2011 Page 18 of 18