United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued November 9, 2006 Decided December 19, 2006

No. 05-1436

PETER PAN BUS LINES, INC. AND

BONANZA ACQUISITION, LLC,

PETITIONERS

v.

FEDERAL MOTOR CARRIER SAFETY ADMINISTRATION,

RESPONDENT

On Petition for Review of an Order of the

Federal Motor Carrier Safety Administration

Jeremy Kahn argued the cause for the petitioners.

Kathy L. Krieger, Craig M. Cibak and Richard P.

Schweitzer were on the joint brief for amici curiae American

Bus Association, Inc. and Amalgamated Transit Union in

support of petitioners.

Robert D. Kamenshine, Attorney, United States Department

of Justice, argued the cause for the respondent. Peter D.

Keisler, Assistant Attorney General, Robert S. Greenspan,

Attorney, United States Department of Justice, Paul M. Geier,

Assistant General Counsel, and Mary F. Withum, Senior Trial

Attorney, United States Department of Transportation, were on

brief.

Before: HENDERSON, TATEL and GRIFFITH, Circuit Judges.
2

Opinion for the court filed by Circuit Judge HENDERSON.

Concurring opinion filed by Circuit Judge TATEL.

KAREN LECRAFT HENDERSON, Circuit Judge: Peter Pan

Bus Lines, Inc. and its subsidiary Bonanza Acquisition, LLC

(collectively, Peter Pan) seek review of a decision of the Federal

Motor Carrier Safety Administration (FMCSA), an entity within

the Department of Transportation (DOT). The challenged

decision rejected Peter Pan’s protest of an FMCSA decision

authorizing Fung Wah Transportation, Inc. (Fung Wah) to

operate regular-route passenger transportation between Boston

and New York City. Peter Pan protested Fung Wah’s

certification application on the ground that Fung Wah was

unwilling or unable to comply with the requirements of the

regulations DOT has promulgated under the Americans With

Disabilities Act (ADA), 42 U.S.C. §§ 12101 et seq. The

FMCSA concluded that the language of 49 U.S.C. § 13902,

which authorizes the FMCSA to make compliance findings and

issue certificates registering motor carriers, prevents the

FMCSA from considering whether a certificate applicant is in

compliance with DOT’s ADA regulations. Because the FMCSA

premised its construction on the plain language of the statute,

which it treated as unambiguous, and because we find that the

statutory language is in fact ambiguous, we vacate the FMCSA’s

decision and remand for it to interpret the statute accordingly.

I.

On April 4, 2005 Fung Wah filed an application for motor

passenger carrier authority to operate a passenger bus line

between Boston and New York City. On May 4, 2005 Peter Pan

submitted a protest under 49 C.F.R. § 365.203 based on Fung

Wah’s “asserted unwillingness and/or inability to comply with

regulations of the Secretary implementing the [ADA].” Joint

App. (JA) 15. The FMCSA’s licensing team, however, granted
3

Fung Wah a certificate as requested on May 12, 2005,

apparently unaware of Peter Pan’s protest.

On May 16, 2005 Peter Pan filed a motion for rehearing,

asking that the FMCSA “immediately vacate the award of its

certificate to applicant and then render a decision on the merits

only after first taking into account protestants’ serious

allegations regarding fitness” and, “in particular, applicant’s

demonstrated failure to meet its obligations under the Americans

With Disabilities Act to assure the availability of transportation

for all members of our society.” JA 49, 48. On October 26,

2005 the FMCSA issued a decision denying rehearing on the

ground that section 13902(a)(1) “does not permit FMCSA to

withhold registration for failure to comply with ADA

requirements.” Fung Wah Bus Transp., Inc., No. MC-405969

(Oct. 26, 2005) (FMCSA Dec.), reprinted in JA at 58, at 3.

Section 13902(a)(1), enacted as part of the Interstate Commerce

Commission Termination Act of 1995, Pub. L. No. 104-88, 109

Stat. 803 (1995), (ICCTA) provides:

(a) Motor carrier generally.—

 (1) In general.—Except as provided in this section,

the Secretary shall register a person to provide

transportation subject to jurisdiction under subchapter

I of chapter 135 of this title as a motor carrier if the

Secretary finds that the person is willing and able to

comply with—

 (A) this part and the applicable regulations

of the Secretary [of Transportation] and the

[Surface Transportation] Board;

 (B)(i) any safety regulations imposed by the

Secretary;
4

1

The statute was amended during the certification proceeding to

add the language in subsection (a)(1)(B)(ii), which did not appear in

the version the FMCSA quoted in its rehearing decision. Safe,

Accountable, Flexible, Efficient Transportation Equity Act: A Legacy

for Users, § 4113(b), Pub. L. No. 109-59, 119 Stat. 1144, 1725 (2005).

The new language affects neither the FMCSA’s decision nor Peter

Pan’s challenge.

 (ii) the duties of employers and employees

established by the Secretary under section

31135; and

(iii) the safety fitness requirements

established by the Secretary under section

31144; and

 (C) the minimum financial responsibility

requirements established by the Secretary

pursuant to sections 13906 and 31138.

49 U.S.C. § 13902(a)(1).1 The FMCSA determined that the

phrase “applicable regulations” in subsection (a)(1)(A) modifies

the preceding phrase “this part,” which refers to “title 49,

subtitle IV, Part B, which consists of statutory authority

transferred from the [ICC] to the Secretary of Transportation

and the Surface Transportation Board following enactment of

the ICCTA.” FMCSA Dec. at 2. The FMCSA then concluded

that it is without authority to enforce compliance with DOT’s

ADA regulations in the certification process because the ADA

regulations were not promulgated pursuant to Part B and do not

fit in any of the categories identified in subsections (a)(1)(B) or

(a)(1)(C). FMCSA Dec. at 2. 

On November 21, 2005 Peter Pan filed a petition for review

challenging the FMCSA’s construction of section 13902(a)(1).
5

II. 

Because this appeal involves the FMCSA’s “interpretation

of a statute the agency is charged with implementing, we apply

the two-part test of Chevron U.S.A. Inc. v. Natural Resources

Defense Council, Inc., 467 U.S. 837 (1984).” Pub. Citizen, Inc.

v. Nat’l Highway Traffic Safety Admin., 374 F.3d 1251, 1257

(D.C. Cir. 2004) (parallel citation omitted). “[U]nder the

Chevron two-step, we stop the music at step one if the Congress

‘has directly spoken to the precise question at issue’ because

we—and the agency—‘must give effect to [its] unambiguously

expressed intent.’ ” Northpoint Tech., Ltd. v. FCC, 412 F.3d

145, 151 (D.C. Cir. 2005) (quoting Chevron, 467 U.S. at 842-

43). “But if the statute is silent or ambiguous, we dance on and,

at step two, defer to the Commission's interpretation if it is

‘based on a permissible construction of the statute.’ ” Id.

(quoting Chevron, 467 U.S. at 843). The text of the FMCSA’s

decision certifying Fung Wah makes clear that the Agency

construed section 13902(a)(1) as an unambiguous expression of

the Congress’s intent, thereby triggering review under Chevron

step 1. 

In rejecting Peter Pan’s argument that the phrase

“applicable regulations of the Secretary” refers to all of DOT’s

regulations that are applicable to motor carriers, including its

ADA regulations, the FMCSA unequivocally declared: “This

interpretation is not consistent with the plain language of the

statute and the legislative history of the [ICCTA], which enacted

section 13902 into law. The term ‘applicable regulations of the

Secretary’ is clearly meant to modify the term ‘this part.’ ”

FMCSA Dec. at 2 (emphasis added). Thus, the FMCSA

concluded, section 13902(a)(1) “does not permit FMCSA to

withhold registration for failure to comply with ADA

requirements.” Id. at 3 (emphasis added). To the contrary, we

find the text of the statute to be ambiguous.
6

2

While “requirements” is not synonymous with “regulations” used

in subsection (a)(1)(A), the FMCSA in fact established minimum

levels of financial responsibility for passenger motor carriers by

regulation. See 49 C.F.R. pt. 387, subpt. B. 

The FMCSA rejected Peter Pan’s interpretation in part

because “if ‘applicable regulations of the Secretary’ included all

DOT regulations applicable to motor carriers, sections

13902(a)(1)(B) and (C) would be superfluous, since FMCSA

regulations governing safety and financial responsibility would

fall within section 13902(a)(1)(A).” FMCSA Dec. at 2. The

FMCSA’s reading of “applicable regulations of the Secretary,”

however—to include only regulations applicable to Part B of

Subtitle IV—itself renders superfluous the reference in section

13902(a)(1)(C) to “minimum financial responsibility

requirements established by the Secretary pursuant to section[]

13906” because section 13906 is codified in Part B and financial

requirements established pursuant to it are therefore already

included under section 13902(a)(1)(A).2

 Thus, section 13902

contains surplusage under either reading and, as a result, we

cannot say that either proffered construction reflects the

Congress’s unambiguously expressed intent. Cf. NLRB v.

FLRA, 952 F.2d 523, 532 (D.C. Cir. 1992) (“[p]etitioners cannot

plausibly make a Chevron step one argument” to support

interpretation that makes other statutory language “surplusage”)

(emphasis in original). We therefore cannot uphold the

FMCSA’s interpretation under step 1 of Chevron. Nor may we

review it under step 2.

In PDK Laboratories, Inc. v. DEA, 362 F.3d 786 (D.C. Cir.

2004), we recently affirmed a line of circuit decisions which

hold that “deference to an agency's interpretation of a statute is

not appropriate when the agency wrongly ‘believes that

interpretation is compelled by Congress.’ ” 362 F.3d at 798

(quoting Arizona v. Thompson, 281 F.3d 248, 254 (D.C. Cir.
7

3

In this case, unlike PDK, the Agency expressly requested

Chevron deference. Compare Resp’t’s Br. at 18 (invoking Chevron

and stating “ ‘[u]nless the statute resolves the issue, [the Court] must

uphold the [FMCSA] so long as its interpretation is reasonable’ ”

(quoting Safe Food & Fertilizer v. EPA, 350 F.3d 1263, 1268 (D.C.

Cir. 2003) (alterations in original))), with PDK Labs, 362 F.3d at 794

(“DEA neither invokes Chevron . . . nor asks us to give any special

deference to the Deputy Administrator's judgment about the meaning

2002)); (citing ITT Indus., Inc. v. NLRB, 251 F.3d 995, 1004

(D.C. Cir. 2001); Transitional Hosps. Corp. v. Shalala, 222 F.3d

1019, 1028-29 (D.C. Cir. 2000); Alarm Indus. Commc’ns Comm.

v. FCC, 131 F.3d 1066, 1072 (D.C. Cir. 1997)); see also Teva

Pharms. USA, Inc. v. FDA, 441 F.3d 1, 4-5 (D.C. Cir. 2006);

Prill v. NLRB, 755 F.2d 941, 956-57 (D.C. Cir. 1985). As we

explained in PDK, Chevron step 2 deference is reserved for

those instances when an agency recognizes that the Congress’s

intent is not plain from the statute’s face. “In precisely those

kinds of cases, it is incumbent upon the agency not to rest

simply on its parsing of the statutory language”—“[i]t must

bring its experience and expertise to bear in light of competing

interests at stake.” PDK, 362 F.3d at 797-98 (citing Chevron,

467 U.S. at 865-66) (footnote omitted). “When it does so it is

entitled to deference, so long as its reading of the statute is

reasonable.” Id. at 798. But here, as in PDK Labs, the Agency

has not done so and “at this stage it is not for the court ‘to

choose between competing meanings.’ ” Id. (quoting Alarm

Indus. Commc’ns Comm., 131 F.3d at 1072) (citing Prill, 755

F.2d at 956-57; Transitional Hosps. Corp., 222 F.3d at 1028-29;

ITT Indus., Inc., 251 F.3d at 1004; Arizona v. Thompson, 281

F.3d at 254). We must therefore remand for the FMCSA to

interpret the statutory language anew. See id. (“The law of this

circuit requires in those circumstances that we withhold Chevron

deference and remand to the agency so that it can fill in the

gap.”).3
8

of the provision.”) (ellipsis added). We find this distinction of no

significance because it is “[t]he expertise of the agency, not its

lawyers,” that “must be brought to bear on this issue in the first

instance.” Pub. Citizen v. FMCSA, 374 F.3d 1209, 1218 (D.C. Cir.

2004) (citing SEC v. Chenery Corp., 318 U.S. 80, 87-88 (1943)).

For the foregoing reasons, the decision of the FMCSA is

vacated and the case is remanded to the FMCSA to fill the gap

in section 13902(a)(1) by interpreting the ambiguous term

“applicable” in subsection (a)(1)(A), taking into account the

particular statutes and regulations that are enumerated in

subsections (a)(1)(B) and (a)(1)(C). In so ruling, we express no

opinion on whether the construction of section 13902(a)(1) the

FMCSA now advances is permissible under Chevron step 2.

So ordered.
TATEL, Circuit Judge, concurring: I agree with my

colleagues that section 13902 is not so clear as to allow us to

rule for the FMCSA under Chevron step one. I also agree that

because FMCSA acted under a mistaken belief that the statute

compelled the result it reached we must remand before

moving on to Chevron step two. I write separately to set forth

my serious doubts regarding the reasonableness of FMCSA’s

principal justification for declining to review bus company

ADA compliance during the registration process.

 In its brief, FMCSA explains that denying Fung Wah

the registration it seeks “hardly is in the public interest even if

Fung Wah has serious ADA-problems that must be rectified.”

Resp’t’s Br. 32. Amplifying this point at oral argument,

FMCSA counsel told us that even if an applicant carrier

declared its intention to provide low-cost service by operating

buses without wheel-chair lifts, the agency would register that

company, leaving it to the Department of Justice to

investigate. Oral Arg. at 30:49. FMCSA’s position is

puzzling given that Congress, having enacted the statute to

keep motor carriers off the road until they demonstrate they

are willing and able to follow the law, must have understood

that this requirement would lead to temporary sacrifices of

competition. FMCSA’s argument, therefore, must rest on the

proposition that, unlike the interests protected by “the

applicable regulations of the Secretary,” the interests of the

disabled are so unimportant that they must yield to the interest

in competition. If the “applicable regulations of the

Secretary” consisted only of safety regulations, then perhaps

FMCSA’s interpretation would represent a plausible

understanding of congressional intent. But the regulations

promulgated under Part B – which FMCSA concedes it must

consider – go beyond safety to address, among other things,

financial responsibility, 49 C.F.R. § 387, race discrimination,

49 C.F.R. § 374.101, .105, and less weighty interests such as

noise emissions, 49 C.F.R §§ 325.1-325.93, radar detectors,

49 C.F.R § 392.71, and records storage, 49 C.F.R § 379.5.
2

Absent a satisfactory explanation for why the interests

protected by the Americans with Disabilities Act are less

important than the interests protected by these other

regulations, I doubt very much that FMCSA’s justification

could survive Chevron step two.