# United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued January 14 , 201 5 Decided March 10, 201 5

No. 1 4

- 1143

A IRLINES FOR A MERICA AND I NTERNATIONAL A IR T RANSPORT A SSOCIATION , P ETITIONER S

v.

T RANSPORTATION S ECURITY A DMINISTRATION AND J OHN S. P ISTOLE , A DMINISTRATOR R ESPONDENTS

On Petition for Review of an Order of the Transportation Security Administration

Paul D. Clement argued the cause for petitioners

. With him on the briefs were Jeffrey M. Harris
, William R. Levi
, David A. Berg

, and Jeffrey N. Shane

. Jeffrey Clair , Attorney, U.S. Department of Justice, argued the cause for respondents . With him on the brief was Scott R. McIntosh , Attorney

.
Before: H ENDERSON , Circuit Judge , and W ILLIAMS and R ANDOLPH , Senior Circuit Judge s

.2

Opinion for the Court filed by Senior Circuit Judge W ILLIAMS

.

W ILLIAMS , Senior Circuit Judge : T he Transportation Security Administration (“TSA”) has charge of the “screening of all passengers and property ” moving by passenger aircraft

. 49 U.S.C. § 44901(a). To cover the costs of screening, it is authorized to impose a “ uniform fee

. . . on passengers

. . . in air transportation and intrastate air transportation originating at airports in the United States .” § 44940(a)(1). A irlines collect the fee s from passengers and remit the funds to TSA. § 44940(e)(2)

- (3).

In 2013, Congress re set the fee to “ $5.60 per one

- way trip in air transportation or intrastate air transportation that originates at an airport in the United States. ” Bipar tisan Budget Act of 2013, Pub. L. No. 113

- 67, § 601(b), 127 Stat. 1165 , 1187 ( 2013) ( codified as amended at 49 U.S.C. § 44940(c) (1))

. TSA implemented this amendment in an Interim Final Rule. Adjustment of Passenger Civil Aviation Security Service Fee (“ Interim Final Rule ”) , 79 Fed. Reg. 35,462, 35 ,465

- 66 (Jun. 20, 2014) ( codified as amended at 49 C.F.R. §§ 1510 et seq .)

. The parties agree that a “one

- way trip ” means the same in the statute as in TSA’s regulations

, namely

, a continuous trip from one point to another with no stopover exceeding specified limits ( e.g., four hours between domestic flights). See 49 C.F.R. § 1510.3. Thus a trip from New York to Los Angeles to San Francisco and back to New York, with stopovers ex ceeding four hours in each of the California cities, would be a round trip comprised of three

one

- way trips.

Airline trade or ganizations representing individual airlines filed this petition to challenge TSA’s rules on two grounds. First, the airlines ar gued that TSA had no authority3

to impose fees in excess of $11.20 on passengers with round

trip itineraries that involved multiple “one

- way trips” (as in the example above). While the case has been pending, Congress further amended the fee statute , adding language that the parties agree gave the airlines what they sought and therefore moots this aspect of the case. Pub. L. No. 113

- 294, § 1, 128 Stat. 4009 (2014) (codified at 49 U.S.C. § 44940(c)(1)) ; TSA, Office of Revenue, Notice of Immediate Adjustments (Dec. 19, 2014 ). We thus dismiss that claim.

The airlines’ remaining claim is that the statute precludes TSA from charging a fee on passengers whose travel begins abroad but includes a conne cting flight with in the U nited States

— for exampl e , a passenger who flies from Paris to New York and then takes a connecting flight on to Chicago. On th is claim, we find that the airlines have standing but lose on the merits.

* * *

T SA contends that the airlines lack standing for want of suffering any “injury in fact” : t h e security fees are paid by
customers , not the airlines themselves, and t he airlines failed
to produce evidence demonstrating that the fees caused any economic losses

. But the passengers’ role as ultimate payers of the fee says nothing about its incidence

— that is, how much of the burden falls upon the customers and airlines, respectively. W e recognized i n Branton v. FCC , 993 F.2d 906 (D.C. Cir. 1993)

, the basic proposition that “ increasing the price of an activity

. . . will decrease the quantity of that activity demanded in the market

. ” Id . at 911

- 12 (citing P AUL A. S AMUELSON & W ILLIAM D. N ORDHAUS , E CONOMICS 60

- 61 (12th ed. 1985))

. In Branton itself we saw an exception to the principle, thinking it “speculative” that fining NPR for broadcasting indecent language would deter it from doing so4

in the future because, as a non

- profit journalistic entity, it was somewhat insulated from market forces. Id

. While there are other exceptions to the rule (the cognoscenti will th ink immediately of so

- called “Giffen goods”) , TSA has given no reason to suspect that any such exception is applicable here. Thus, the security fee s injure the airlines by increas ing the net price for airline tickets and reducing demand for those tickets

.
While the impact on demand is likely to be modest, the direction of chang e in demand is clear (downward). The Government Accountability Office estimated in 2012 that a proposed increase in fees from $2.50 to $5. 50 per enplanement , though very small as a proportion of average airline charges, would decrease the demand for airline tickets

, offsetting the government’s net revenue gain from the fee increase by over $100 million over a three

- year period

. Government Accountability Office, 2012 Annual Report at 309

- 10 (Feb. 2012). In any event, t he court’ s duty to refrain from merits rulings until assured of jurisdiction, see Steel C o. v. Citizens for a Better Env’ t , 523 U.S. 83 (1998) , does not mandate an econometric study of the exact quantity of change. And , as the injury is inferable from generally applicable economic principle s rather than from any special circumstances, it is sufficiently “self

- evident” that we require

“ no eviden ce outside the administrative record .” Sierra Club v. EPA , 292 F.3d 895, 900 (D.C. Cir. 2002)

.

* * *

Section 44940(c) (1) provides that the security fee
shall be $5.60 per one

- way trip in air transportation or intrastate air transportation that originates at an airport in the United States

. . . .5

49 U.S.C. § 44940(c)(1) (emphasis added)

. TSA reads th is as authorizing it to collect fee s from passenger s whose travel begins abroad but includes a connecting flight within the United S tates , as in the example we gave earlier : a passenger traveling from Paris to Chicago with a connecting flight in New York. Interim Final Rule , 79 Fed. Reg. at 35 ,465

- 66

. This reading rests on two interpretive a rguments

. First, TSA argues that the italicized clau se does not modify “one

- way trip”

— a term TSA concedes means overall trip and not a mere segment

— but only “air transportation or intrastate air transportation.” We agree. A ttaching the clause
to “one

- way trip

, ” as the airlines propose, would mean that in the pre

- 2013 version of the statute the clause modified “enplanement

, ” which the 2013 statute replaced with “one

way trip.” See Aviation and Transportation Security Act, Pub. L. No. 107

- 71, § 118, 115 Stat. 597 , 626 (2001) (codified
at 49 U.S.C. § 44940(c) before the 2013 amendment) (directing TSA to set the fee at no more than “ $2.50 per enplanement in air transportation or intrastate air transportation that originates at an airport in the United States

. . . . ”). But this would be in coherent. U nlike “air transportation

, ” which span s multiple locations, an “enplanement” happens at a single place

— the airport of departure. It would be very odd to speak of an enplanement as “originating” somewhere. Congress’s specification of an originating location must have applied to the “air transportation or intrastate air transportation

, ” not the “enplanement

. ” And t he airlines themselves insist that the 2013 substitution of the term “one

- way trip” for “enplanement ” “did not alter which antecedent was modified ” by the italicized clause. Pet’rs’ Reply 12 ; see also id . at 13

- 14

. Moreover, under the airlines ’ reading we would have to believe that Congress intended different meanings for a nearly6

identical phras e as used in two neighborin g provisions

. Section 44940(a)(1) tell s TSA to impose the fee on

“ passengers of air carriers and foreign air carriers in air transportation and intrastate air transportation originating at airports in the United States .” Th is provision unmistakably uses the phrase “originating at airports in the United States ” to modify the immediately preceding nouns “air transportation and intrastate air transportation.” A similar reading for § 44940(c) (1) ’s nearly identical phrase

— “air transportatio n or intrastate air transportation that originates at an airport in the United States”

— harmonize s usage across the two provisions and is prefe r able on that account

. See, e.g., Powerex Corp. v. Reliant Energy Servs., Inc. , 551 U.S. 224, 232 (2007)

.
Sec ond, TSA contends that the terms “air transportation ” and “ intrastate air transportation” may refer to segments of longer trips, such that, for instance, a flight from New York to Chicago constitutes “ air transportation . . . that originates at an airport in the United States

, ” even if it is part of a longer “one

way trip” that beg an in Paris. See Interim Final Rule

, 79 Fed. Reg. at 35,465 (“[I]f there is covered air transportation at any point in the trip . . . TSA has authority to impose the fee.”). T he airlines seem to share this idea , if only for a moment

. T heir opening brief acknowledges that a n itinerary that does not contain a one

- way trip in air transportation originating at an airport in the United States might, nonetheless, include “ air transportation . . . originating at airports in the U nited States”

— a proposition implying that “air transportation” may refer to segments of “one

- way trips

. ” See Pet’rs’ Br. 27

. E lsewhere, however, the airlines maintain that “in the case of

a one

- way trip beginning abroad with a tail

- end domestic enplanement, both the one

- way trip and the air transportation

or i ginate abroad.” Pet’rs’ Reply Br. 12.

The statute’s definitional provisions

— all but ignored by both parties here

— do provide some indication tha t “air7

transportation” refers to an overall trip

. “Air transportation” is defined as “foreign air transportation, interstate air transportation, or the transportation of mail by aircraft.” 49 U.S.C. § 40102(a)(5). In turn, “‘foreign air transportation’

m eans the transportation . . . between a place in the United States and a place outside the United States when any part of the transportation is by aircraft .” § 40102 (a)(23) (emphasis added). And, s imilarly, “‘interstate air transportation’ means the tran sportation . . . between a place in . . . a State . . . and a place in . . . another State . . . when any part of the transportation is by aircraft .” § 40102 (a)(25) (emphasis added). Use of the limiting phrase “when any part of th e transportation is by ai rcraft ” in both of the last two definitions
may seem to impl y that the reference is to overall trips, not mere segments. If only the whole trip constitutes “air transportation,” a trip from Paris to Chicago with a connecting flight in New York would not include any “air transportation . . . that o riginates at an airport in the United States

. ” (More curiously, neither would a flight from Detroit to Chicago if the passenger starts out by bus in Windsor, Ontario.)

But even if the definitional provisions demonstrate that “air transportation” refers to an overall trip, the same term
may also refer to the individual segments of such a trip. Indeed, the ordinary meaning of the term encompasses both a whole trip and its parts.

The airlines argue that the logic of TSA’s rule for the passenger traveling from abroad would permit TSA to charge multiple fees on one

- way trips, defying Congress’s intention to “simplif[y] the fee structure to a flat, $5.60 fee per one

- way trip , regardless of the number of enplanements.” H. Comm. On the Budget, 113th Cong., Rep. on Bipartisan Budget Act of 2013, at 18 (Comm. Print Feb. 2014). But the fee imposed here is entirely in line with § 44940(c)(1)’s instruction that the8

fee “shall be $ 5.60 per one

- way trip” ; the fact that the trips in question include non

- domestic segments does not change that.

The airlines further contend that Cong ress intended to make enplanements entirely irrelevant to the scheme

. But a ll the legislative history shows is that Congress meant to render irrelevant “ the number of enplanements” in the course of imposing a cap of “a f lat, $5.60 fee per one

- way trip. ” TSA’s imposition of a single fee on a one

- way trip from Paris to Chicago with a connecting flight in Ne w York is fully consistent with this purpose.

The airlines also claim that TSA’s rule flouts Congress’s intention to promote “uniform treatment” across passengers with similar itineraries. Indeed, TSA’s interpretation requires certain similarly situate d passengers to be “treated disparately,” as the airlines suggest. For instance, passengers traveling from Paris to Chicago will or will not be charged depending on whether their one

- way trip includes a connecting flight in the United States. But some su ch “disparate treatment” a ppears unavoidable. Under the airlines’ preferred reading, for example, passengers traveling from New York to Chicago will or will not be charged the fee depending on whether the flight was part of a longer itinerary commencing abroad or a complete trip in itself. Contrary to the airlines’ suggestion, neither Congress’s stated purpose of “simplif[ying] the fee structure” nor its statutory instruction that the fee be “uniform,” § 44940(a)(1), gives any indication that one form of asymmetry is preferable to the other.

Under Chevron v. Natural Res ources Def ense Council, Inc. , 467 U.S. 837 (1984)

, the agency’s interpretation

“ governs if it is a reasonable interpretation of the statute

— not necessarily the only possible interpretatio n, nor even the interpretation deemed most reasonable by the courts. ” Entergy Corp. v. Riverkeeper, Inc., 556 U.S. 208, 218 (2009)

.9

The textual ambiguity, coupled with the lack of any compelling legislative history, and TSA ’s explanation that its construction “better aligns the imposition of th e fee with those who benefit from the security services provided,” Interim Final Rule, 79 Fed. Reg. at 35,465, clearly allows TSA ’s decision to surmount this hurdle.

* * *

The petition for review is

Dis missed in part and d enied in part

.