Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caDC-99-01129/USCOURTS-caDC-99-01129-0/pdf.json

Parties Involved:
D&F Afonso Realty Trust
Petitioner
Federal Aviation Administration
Respondent
Jane F. Garvey
Respondent

Document Text:

<<The pagination in this PDF may not match the actual pagination in the printed slip opinion>>

United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued April 7, 2000 Decided July 18, 2000

No. 99-1129

D&F Afonso Realty Trust,

Petitioner

v.

Jane F. Garvey and Federal Aviation Administration,

Respondents

On Petition for Review of an Order of the

Federal Aviation Administration

Rachel B. Trinder argued the cause for petitioner. With

her on the briefs was Craig M. Cibak.

William G. Cole, Attorney, U.S. Department of Justice,

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

David W. Ogden, Acting Assistant Attorney General, and

Robert S. Greenspan, Attorney.

USCA Case #99-1129 Document #530235 Filed: 07/18/2000 Page 1 of 10
<<The pagination in this PDF may not match the actual pagination in the printed slip opinion>>

Before: Silberman, Ginsburg and Sentelle, Circuit

Judges.

Opinion for the Court filed by Circuit Judge Sentelle.

Sentelle, Circuit Judge: D&F Afonso Realty Trust petitions for review of the Federal Aviation Administration's

issuance of an aviation hazard determination declaring the

roof of a house constructed by the petitioner to be a navigational hazard. The FAA defends the procedure and evidence

underlying its determination and also argues that the petitioner lacks standing to bring its case before this court.

After considering several affidavits submitted by the petitioner, we conclude that it has Article III standing. We further

conclude, based on a review of the administrative record, that

the FAA inexplicably failed to follow established agency

procedure, did not adequately explain its decision, and acted

arbitrarily and capriciously in making its hazard determination. Therefore, we vacate and remand the agency's determination.

I. Background

D&F Afonso Realty Trust ("D&F"), a husband and wifeowned construction company, decided to build a single family

home in Hopedale, Massachusetts near a small, privatelyowned airport. In October 1997, construction on the house

began after the town of Hopedale issued construction permits

to the company. After building commenced, D&F learned

from the Massachusetts Aeronautics Commission that it needed to notify the Federal Aviation Administration ("FAA")

about the structure in order for the FAA to determine

whether the house would violate any federal regulations.

D&F informed the New England Regional Office of the FAA

about the house-in-progress in late December 1997 by having

its engineering firm file with the agency a Notice of Proposed

Construction or Alteration (FAA Form 7460-1) required by

14 C.F.R. s 77.17 to be submitted at least thirty days before

the earlier of either the start date of construction or the

USCA Case #99-1129 Document #530235 Filed: 07/18/2000 Page 2 of 10
<<The pagination in this PDF may not match the actual pagination in the printed slip opinion>>

construction permit's filing date. In early January, D&F

informed the FAA of the house's completion.

After reviewing D&F's filing, the FAA determined that the

completed house exceeded one of the air navigation obstruction standards listed in 14 C.F.R. s 77.25. Specifically, the

FAA found that 16.1 feet of the house's roof penetrated one

of the "imaginary surfaces" around the airport. An imaginary surface is essentially an artificial engineering boundary

"drawn" in the air around airports. The imaginary surface at

issue here is the "transitional surface" which extends "outward and upward at right angles to the runway centerline

and the runway centerline extended at a slope of 7 to 1 from

the sides of the primary surface and from the sides of the

approach surfaces." 14 C.F.R. s 77.25(e). Because the roof

penetrated the transitional surface, the FAA initiated an

administrative inquiry to ascertain whether the structure

would present a hazard to air navigation around the airport.

Specifically, the FAA began an "aeronautical study" because the house exceeded a Part 77 obstruction standard.

Part 77 of the Federal Aviation Regulations "establishes

standards for determining obstructions to air navigation." 14

C.F.R. s 77.21(a). The FAA uses the standards to evaluate

whether an object represents a hazard to air navigation. See

id. ss 77.31-39 (Subpart D).

At the conclusion of the study, the FAA made a finding

that the house had a substantial adverse effect on air navigation and issued a determination of hazard. The FAA concluded, without further explanation, that because the house "is

immediately adjacent to the final approach course" for the

runway, "it represents a hazard to all aircraft landing on [the]

runway." In justifying the substantial adverse effect finding,

the FAA concluded, without explanation, that the house would

adversely affect all arrivals using Visual Flight Rules. Given

the FAA's cursory reference to some aerial photographs

showing the house's proximity to the runway's final approach

course, the agency apparently relied sub silentio on the

photographs as the core support for its hazard determination.

USCA Case #99-1129 Document #530235 Filed: 07/18/2000 Page 3 of 10
<<The pagination in this PDF may not match the actual pagination in the printed slip opinion>>

D&F sought administrative review of the FAA's determination and requested a hearing. The FAA denied D&F's

request for a hearing and issued a final determination upholding its prior conclusions. In explaining its position, the FAA

stated:

[T]he proposed structure would lie within the Hopedale

... runway ... traffic pattern buffer. This buffer area

is designed to provide a degree of protection for those

pilots, departing and landing at an airport, operating in

accordance with visual flight rules (VFR).... [B]ecause

of the proposed structure's height and its relative position within the traffic pattern buffer, it is the FAA's

position that the planned structure would be a distraction

to pilots during a critical phase of flight.

To effectuate its findings, the FAA published a warning to

pilots to "use extreme caution when landing ... due to a twostory house located approximately 400' northwest of the

runway threshold."

In addition to the FAA finding the house to be a hazard to

air navigation, the Massachusetts Aeronautics Commission

determined that the house penetrated certain protected airspace in violation of the Code of Massachusetts Regulations.

After the administrative findings came to light, the Hopedale

Airport asked the town to remove the house. Currently, the

town of Hopedale refuses to issue an occupancy permit to

D&F. In light of the foregoing events, D&F seeks review of

the FAA's hazard determination and asks this court to reverse the FAA's determination in an effort to obtain an

occupancy permit from the town as a result.1

__________

1 Subsequent to D&F's filing a Petition for Review in this

court, the FAA issued a new policy which, with certain exceptions,

makes exceeding "[t]he height of the transition surface (other than

abeam the runway)" a per se hazard. Policy Memorandum 99-02.

We will not analyze this case under the new policy. We leave

consideration of the new policy to the FAA because the agency, not

this court, must interpret and apply a new agency policy in the first

instance. See NLRB v. Food Store Employees Union, Local 347,

417 U.S. 1, 10 n.10 (1974).

USCA Case #99-1129 Document #530235 Filed: 07/18/2000 Page 4 of 10
<<The pagination in this PDF may not match the actual pagination in the printed slip opinion>>

II. Discussion

A. D&F's Standing

The FAA challenges D&F's standing to bring this appeal.

In order to establish Article III standing, D&F must show

that "(1) it has suffered an 'injury in fact' that is (a) concrete

and particularized and (b) actual or imminent, not conjectural

or hypothetical; (2) the injury is fairly traceable to the

challenged action of the defendant; and (3) it is likely, as

opposed to merely speculative, that the injury will be redressed by a favorable decision." Friends of the Earth, Inc.

v. Laidlaw Envtl. Servs., Inc., 120 S. Ct. 693, 704 (2000)

(citing Lujan v. Defenders of Wildlife, 504 U.S. 555, 560-61

(1992)); see also Florida Audubon Soc'y v. Bentsen, 94 F.3d

658, 663 (D.C. Cir. 1996) (en banc). D&F established an

actual and concrete and particularized injury consisting of a

diminution in property value due to its inability to obtain an

occupancy permit from the town. The FAA argues, however,

that D&F has not shown a causal link between the agency's

hazard determination and D&F's injury, given the Massachusetts Aeronautics Commission and airport's independent objections to the house. The FAA also challenges the ability of

this court to redress D&F's injury by reversing the agency

because the town, not the agency, controls permit issuance.

If the FAA hazard determination independently diminished

the house's property value or constituted the only factor

motivating the town's denial of the occupancy permit, causation and redressibility would be non-issues because our reversal of the FAA would either provide a remedy for the

financial injury caused by the FAA or prompt the town to

issue the permit. However, neither the record nor the briefs

submitted to this court established which of the events among

the FAA's findings, the Massachusetts Aeronautics Commission's findings, the airport's complaint, or some combination

thereof prompted the town's denial of the occupancy permit

and the diminution in property value. However, at oral

argument, D&F asserted that the FAA's hazard determination in and of itself caused a diminution in property value and

that the town was withholding the occupancy permit solely

USCA Case #99-1129 Document #530235 Filed: 07/18/2000 Page 5 of 10
<<The pagination in this PDF may not match the actual pagination in the printed slip opinion>>

due to the FAA's hazard determination. Therefore, we afforded D&F the opportunity to submit affidavits supporting

its allegations, if true.

Upon review of D&F's submissions, we conclude that D&F

alleges facts satisfying the standing requirements of causation

and redressibility. D&F supplied an affidavit explaining that

"a real estate broker ... informed [D&F] that the FAA's

Hazard Determination has resulted in a diminution of value to

the Afonso House independent of whether an occupancy

permit is granted." In addition, D&F submitted an affidavit

establishing that the Massachusetts Aeronautics Commission

would "defer to the outcome of the FAA-related proceedings

currently before this Court." Moreover, D&F supplied an

affidavit from the Hopedale Building Commissioner declaring

that "the only obstacle to issuance of the occupancy permit is

the FAA's Hazard Determination. But for that Determination, the occupancy permit would have already issued. If the

FAA's Hazard Determination is withdrawn or reversed, [the

town] will issue an occupancy permit for the Afonso House

forthwith." We must construe the statements made in the

affidavits in the light most favorable to the petitioner. See

Warth v. Seldin, 422 U.S. 490, 501 (1975). Taken together,

the statements show that the FAA's hazard determination

causes D&F injury in the form of diminished property value

and comprises the sole obstacle between D&F and an occupancy permit. Therefore, we conclude that D&F has standing to challenge the FAA's hazard determination.

B. The Hazard Determination

We review decisions of federal agencies, including the FAA,

under the standards set forth by the Administrative Procedure Act. See Public Citizen, Inc. v. FAA, 988 F.2d 186, 196

(D.C. Cir. 1993). That Act provides that a reviewing court

must set aside agency action if it is "arbitrary, capricious, an

abuse of discretion, or otherwise not in accordance with law."

5 U.S.C. s 706(2)(A). As we have often held, "[t]he requirement that agency action not be arbitrary or capricious includes a requirement that the agency adequately explain its

result...." Public Citizen, 988 F.2d at 197. In the hazard

USCA Case #99-1129 Document #530235 Filed: 07/18/2000 Page 6 of 10
<<The pagination in this PDF may not match the actual pagination in the printed slip opinion>>

determination under review, the FAA has offered no such

explanation. As we have stated before, we must strike down

agency action if the agency failed to consider relevant factors

or made a clear error of judgment. See Motor Vehicle Mfrs.

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

(1983); Starr v. FAA, 589 F.2d 307, 311 (7th Cir. 1978).

The FAA made a finding that the house penetrated an

imaginary surface, specifically the transitional surface. However, mere penetration, and even evidence of adverse effect

alone, do not provide adequate support for a hazard determination. In dealing with obstruction standard violations, the

FAA follows a handbook entitled "Procedures for Handling

Airspace Matters," FAA Procedures 7400.2D (1993) ("Handbook"), which mandates conducting aeronautical studies, in

accordance with Subpart D of Part 77, of proposed structures

exceeding Part 77 obstruction standards. See Br. for FAA at

4 (citing chapter 5 of Handbook). According to Subpart D of

Part 77, "[i]n the aeronautical studies, present and future ...

aeronautical operations and procedures are reviewed and any

possible changes in those operations and procedures and in

the construction proposal that would eliminate or alleviate the

conflicting demands are ascertained." 14 C.F.R. s 77.31.

Pursuant to the Handbook, objects exceeding an obstruction

standard are "presumed to be hazards to air navigation

unless an aeronautical study determines otherwise." Id. at

s 7-1(b). In order to issue a hazard determination, the FAA

must find by a clear showing that the penetration in question

will have a "substantial adverse effect" on air navigation. See

id. at ss 7-2 to 7-5, 8-2. The Handbook provides that

"substantial adverse effect" occurs when a structure has or

would have an "[a]dverse effect" and "a significant volume of

aeronautical operations would be affected." Id. at s 7.4.

A substantial adverse effect finding requires three elements. First, the structure in question must have exceeded

the relevant obstruction standards or have been found to have

a physical or electromagnetic radiation effect on the operation

of air navigation facilities. See id. at s 7.3. Second, the

structure will be considered to have an adverse effect if it

would, inter alia, "require a [Visual Flight Rules] operation,"

USCA Case #99-1129 Document #530235 Filed: 07/18/2000 Page 7 of 10
<<The pagination in this PDF may not match the actual pagination in the printed slip opinion>>

that is, an operation in which the pilot lands an aircraft or

takes off using visual approach procedures only, "to change

from a regular flight course or altitude," "[d]erogate airport

capacity/efficiency," or "[a]ffect future [Visual Flight Rules]

... operations indicated by plans on file." Id. Third, the

structure must affect a significant volume of aeronautical

activity; the FAA considers the type of activity involved and

the frequency of occurrence. See id. at s 7.5. In addition, a

study must include, inter alia, an evaluation regarding marking and lighting the structure, see id. at s 7-9, and every

hazard finding is supposed to include "a clear, but brief,

statement why aviation can or cannot accommodate the proposal." Id. at s 8-2.

Here, the FAA first sought comments from twenty-four

interested parties concerning the effect the house would have

on aviation. Apart from the manager of the Providence,

Rhode Island Traffic Control Tower who declared, without

further elaboration, that the house "would result in a negative

impact to air traffic operations," the responding parties either

did not object to the house or failed to provide any comments

pertaining to the hazardousness of the structure.

Based on the FAA's explanation, or lack thereof, in the

issuance of this hazard determination, we conclude that the

FAA acted arbitrarily by issuing a hazard determination

inconsistent with established standards. Thus, we hold that

the FAA exceeded the permissible bounds of agency action.

Nowhere in the record before us can we find a link between

established hazard determination standards and the hazard

determination reached by the FAA in this case. The FAA

made a finding that the house penetrated an imaginary

surface. However, as we previously noted, mere penetration,

and even evidence of adverse effect alone, cannot support a

hazard determination. See Handbook ss 7-3, 7-4, 8-2. According to the Handbook, the FAA is to conduct a "substantial adverse effect" inquiry and only upon a clear showing of

substantial adverse effect issue a hazard determination. See

id. at ss 7-1, 7-3, 7-4, 8-2(b)(3). However, here, the FAA

USCA Case #99-1129 Document #530235 Filed: 07/18/2000 Page 8 of 10
<<The pagination in this PDF may not match the actual pagination in the printed slip opinion>>

failed both to conduct a complete inquiry and make a clear

showing of substantial adverse effect.

More specifically, the FAA arbitrarily based its hazard

finding on an unsupported pilot distraction finding instead of

following the policy outlined in the controlling Handbook.

"We review the FAA's findings of fact merely to see whether

they are 'supported by substantial evidence.' " Public Citizen, 988 F.2d at 196 (quoting 49 U.S.C. App. s 1486(e)

(1988)). Here, if there is substantial evidence, the FAA has

not alluded to it.

The FAA also acted contrary to its own procedure by

failing to explicitly apply the established multi-factor test

which considers adverse effect and the volume of operations

affected. See Handbook ss 7-3 to 7-5. For example, the

FAA based its finding on the house's effect on VFR operations but failed to consider the relevant VFR adverse effect

factors of potential changes in flight course and potential

effects on future VFR operations. See id. at s 7-3. In

addition, the agency did not investigate the available airport

traffic figures and instead based its "significant volume"

finding on the "proximity of [the] structure to the final

approach course." Even assuming the FAA's reference to a

traffic buffer zone in the order affirming the hazard determination has meaning as a technical and practical matter, the

agency did not do its job of connecting the buffer zone

concept to the "substantial adverse effect" inquiry. In short,

the FAA did not consider relevant factors or sufficiently

explain the basis of its hazard determination.

The FAA's post hoc rationalizations for deviating from

procedure and for failing to substantiate its hazard determination cannot pass muster as a matter of law. For example,

the Handbook requires that every aeronautical study include

an evaluation regarding the marking and lighting of the

structure in question. See id. at s 7-9. However, the agency did not make any findings concerning the marking or

lighting of the house. The agency cannot claim to be engaging in reasoned analysis when it cavalierly brushes off specific

mandates such as a marking and lighting evaluation. Nor

USCA Case #99-1129 Document #530235 Filed: 07/18/2000 Page 9 of 10
<<The pagination in this PDF may not match the actual pagination in the printed slip opinion>>

can it claim to be acting reasonably when it ignores, without

explanation, policy provisions such as the one establishing the

inclusion of "a clear, but brief, statement why aviation can or

cannot accommodate [a] proposal." See id. at s 8-2.

Moreover, the agency inexplicably refused to take into

consideration the trees and other structures in the vicinity

also apparently intruding into the transitional surface in the

surrounding terrain which might alter the geometry of its

calculations. In Aircraft Owners and Pilots Association v.

FAA, 600 F.2d 965 (D.C. Cir. 1979), we recognized that

surrounding terrain could possibly "mitigate what might otherwise have been a potential hazard to aircraft." Id. at 973.

In other words, the FAA should have considered the landscape in its entirety when making its hazard determination.

See id. Yet, according to the FAA, only D&F's house

presents cause for concern. All in all, the FAA failed to

rationally substantiate or explain its process and findings.

In essence, the FAA adopted an ipse dixit approach to

making a hazard determination: the house creates a navigational hazard because the agency says so. Even our highly

deferential standard of review requires more than the FAA

offers. Thus, the FAA's abandonment of its own established

procedure and its lack of reasoned analysis on the record

constitute arbitrary and capricious agency action in violation

of the law. Due to the shortcomings in the FAA's hazard

determination, we reverse and remand D&F's case to the

agency in order for it to undertake an appropriate hazard

analysis.

III. Conclusion

In sum, we hold that D&F has alleged facts sufficient for

standing to challenge the FAA's hazard determination. Upon

review, we vacate and remand the FAA's determination due

to the agency's engaging in an arbitrary and capricious

hazard determination procedure.

USCA Case #99-1129 Document #530235 Filed: 07/18/2000 Page 10 of 10