# United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued February 8, 2005 Decided July 8, 2005

No. 04-1030

A EROLINEAS A

RGENTINAS S.A.,

P ETITIONER

v.

U.S. D EPARTMENT OF T RANSPORTATION

, R ESPONDENT

A MERICAN A

IRLINES

, I NC

., ET AL

., I NTERVENORS

On Petition for Review of an Order of the

United States Department of Transportation

John N. Romans argued the ca use for petitioner. With him

on the briefs were A lexander C. Vincent and Thomas G.

Corcoran, Jr.

Dale C. Andrews

, Deput y Assistant General Counsel, U.S.

Department of Transportation, argued the caus e for respondent.

With him on the brief we re Robert H. Pate, III , Assistant

Attorney General, U.S. Department of Justice, R obert B.

Nicholson and Steven J. Min tz , Attorneys, J effrey A. Rosen

, General Counsel, U.S. Department of Transporta tion, P aul M.

Geier , Assistant General Counsel, and Thomas L. Ray

.2

Carl B. Nelson, Jr.

, David E. Short

, and Jeffrey A. Manley

were on the brief for intervenor.

Before: G

INS BURG

, C hief Judge

, and H ENDERSON and

G ARLAND

, Circuit Judges

.

Opinion for the Court filed by Chief Judge G INSBURG

.

G INSBURG

, Chief Judge :

Aerolineas Argentinas petitions

for review of an order

of the Department of Transportation

(DoT) conditioning the air line’s permit to provide air

transportation to and from the United States upon its paying into

escrow “the difference between what it actually pays [in user

charges] at Buenos Aires Ezeiza airport and th e higher amounts”

that United States carriers are required to pay at tha t airport.

Aerolineas ackno wledges that it is paying user charges for

international flights that are roughly one third of what United

States carriers are being charged, but it argues that because the

disparity stems not from any intentional discrimination on the

part o f the Government of Argentina, but rather from

“conflicting [Argentine] judicial de cisions,” the DoT abused its

discretion by treating the discrepancy as an “unreasonable

discriminatory

... practice against” the United States carriers

within the condemnation of the Internatio nal Air Transportation

Fair Competitive Practices Act, 49 U.S.C. § 41310(c)(1)(A). In

any event, argues Aerolineas, because neither the Argentine

Congress nor the Executive can control the decisions of the

Argentine Judic iary, the DoT’s countermeasure will not

e liminate the difference and was therefore arbitrary and

capricious in violation of the Administr ative Procedure Act, 5

U.S.C. § 706(2).

For its part, the DoT argues first that 49 U.S.C. § 46110

depr ives the court of jurisdiction to review the challenged order

because it comes withi

n the exception to reviewability for orders3

“relat[ing] to a foreign air carrier [and] subject to disapproval by

the President.”

On the merits, the DoT argues the order was

within its authority under § 41310 and easily withsta nds the

deferential review called for under the APA.

Because the DoT’s order is no longer subject to the

President’s disapproval, we hold the court has juri sdiction to

entertain Aerolineas’ petition, which we deny on its merits.

I. Background

In early 2002 the Government of Argentina del inked its

peso from the U.S. dollar, whereupon the value of the peso

quickl y fell to about 33 U.S. cents. In an attempt to mitigate the

ensuing panic, the Argentine Congr ess passed a law requiring

that public service

tariffs, including airport user fees, which

were formerly denominated in dollars, be paid i n pesos as

though each peso were still worth $1.00, that is, at a one-to-one

rate. The Argentine Executive, however, issued a Decree

purporting to supe rsede that law and requiring that airport user

charges for

international flights -- for landing, parking, and air

traffic control

-- at Buenos Aires Inte rnational Airport

(Aeropuerto Internacional Min istro Pistarini de Ezeiza, or

Ezeiza) be paid in dollars at the floating exchange rate of

roughly three-to-one.

Several airlines ch

a llenged the constitutionality of the

Decree in the Argentine courts, and it is the divergent results of

those actions that gave rise to this case. First, Aerolineas

obtained a

preliminary injunction against enforcement of the

D ecree, thereby allowing it to pay the airport charges at the on e

to-one rate. Then carriers from the United States and other

foreign countries sought, but were denied, the same relief in a

differe nt Argentine court. As a result, since September 2002

Aerolineas has bee n paying user charges at Ezeiza that are4

* 49 U.S.C. § 41 310(d)(1) provides: “An air carrier ...

may file a co mplaint under [§ 41310(c)],” which authorizes the

DoT to “take ac tions ... in the public interest to eliminate an

activity of a government of a foreign country” that is “an

unjustifiable or unreasonable discriminatory, predatory, or

anticompetitive practice against an air carrier.” roughly one third of what the United States ca rriers must pay for

the same services.

Four United States carriers filed co mplaints with the DoT

pursuant to 49 U.S.C. § 41310(d)(1). * The discrepancy in

charges, they argued, pu t the Government of Argentina in

violation of its bilateral agreemen t with the United States that

“[a]irlines shall not be required to pay charges higher than those

paid by the airlines of the [other] party,” Air Transport Services

Agreement Between the Government s of the United States of

America and the Republic of Argentina, Oct. 22, 1985, T.I.A.S.

No. 11262, and therefore constituted an “unreasonable

discriminatory

... practice against” the United States carriers, 49

U.S.C. § 41310(c)(1)(A). The DoT agreed, concluding “the

imposition of higher fees at Ezeiza airport on U.S. carriers than

those paid by Aerolineas Argentinas constitutes, on its face, the

type of activity that 49 U.S.C. § 4131 0 was intended to reach.”

After diplomatic efforts to avoid a confrontation failed, the DoT

imposed a co untermeasure: Aerolineas’ permit to operate in the

United States was conditioned upon the air l ine’s depositing in

an escrow account in the United States the diffe rence, for each

of its international flights landing at Ezeiza, between the user fee

it pays and the fee that United States carriers pay there.

S hortly thereafter Aerolineas moved the DoT to stay i t s

order because an appellate c ourt in Argentina had modified the

preliminary inj u nction granted in its favor and required the

carrier to pay the same difference (that is, two pesos on the5

dollar) into an escrow account in Argentina pending final

resolution on

the merits of its constitutional challenge to the

Decree. The DoT refused to stay its order because Aerolineas

had appealed th

e modification to the Supreme Court of

Argentina and, in the meantime, w as not making escrow

payments in Argentina. Aerolineas then petitioned this court for

review of the DoT’s order.

II. Analysis

Aerolineas argues first that conflicting decisions by the

courts of Argentina do not amount to a “discriminatory,

predatory, or anticompetitive practice” by the Government of

Argentina against the United States carriers w ithin the meaning

of 49 U.S.C. § 41310(c)(1)(A) and, in any event, the DoT’s

countermeasure shou

ld be set aside as arbitrary and capricious,

5 U.S.C. § 706(2), because in Argentina, as here, neither the

Congress nor the Executive can dictate th e decisions of the

Judiciary. Before turning to those contentions, however, we

must a ddress the DoT’s objection that we are without

jurisdiction to review the order.

A. Jurisdiction

Under 49 U.S.C. § 41307, the Secretary of Transportation

was required to submit his order to the President for review as

a “decision [to]

. .. amend ... a permit ... authorizing a foreign air

carrier

... to provide foreign air transportation.” Under that

section:

The President may disapprove the decision of the Secretary

only if the reason for disapproval is based on foreign

relations or national defense considerations that are under

the jurisdiction of the President. The President may not

disapprove

... if the reason is economic .... A decision of the6

Secretary --

...

(2)(A) takes effect as a decision of the Secretary if the

President doe s not disapprove the decision not later

than 60 days after the decision is submitte d to the

President; and (B) whe n effective, may be reviewed

judicially under section 46110 ....

Section 46 110 makes reviewable in this court any order of the

Department of Trans p ortation “[e]xcept for an order related to

a foreign air carrier subject to disapproval by the Pr e sident under

section 41307.”

The DoT argues its order to Aerolineas comes within the

exception in § 46110 and is therefore unreviewable. Aerolineas

responds as follows: (1) The DoT’s decisi on was “economic,”

and because “the President may not disap p rove ‘economic’

decisions” the orde r was not “subject to disapproval by the

President”; and (2) even if the order was initially subject to

disapproval by the President, because he did not disapprove it

within the 60 days provided therefor, and the or der has since

“take[n] effect

as a decision of the Secretary” that is no longer

subject to president ial disapproval, it is now subject to judicial

review.

Aerolineas’ first “argument” is really a conclusion, for

which it offers no support whatsoever. We reject it in kind.

Aerolineas’ second argument gains traction from South

African Airways v. Dole , 817 F.2d 119, 123 (D.C. Cir. 1987), in

which we considered the predecessor to § 46110, and concluded

that “if a DOT action is not disapproved [by the President, then]

it ‘shall take effect as [an] action of [the DoT], not of the7

* By Executive Order 12597 the President delegated this

authority to the Secretary, who in turn delegated it to the President , and as such shall be subject to judicial review as

provided in section 1486 of this Appendix.’ 49 U.S.C. app. §

1461(a) (1982).”

The DoT points out that § 1486 differed from t he current §

46110 in that it excepted from judicial review any order relating

to a foreign air carrier “subject to the approval”

-- not t h e

“disapproval”

-- of the President; th e order at issue in that case

was by statute made subject only to the disapproval of the

President, a n d we therefore concluded it was not within the

exception to judicia l review. 817 F.2d at 122. Because the

order under review in this case was subject to the “disapproval”

of the President, pursuant to the exception in § 46110, the DoT

argues the resul

t in this case should be different. The DoT fails

to appreciate, however, that in th e prior case we went on to

explain that “even if we were to equate ‘ subject to approval’

with ‘subject to disapproval,’”

-- that is, even if the exception to

reviewability in § 1486 were the same as the exception in §

46110

-- “the order would still be reviewable.” I d

. That leaves

the DoT with no basis upon which to distinguish South African

Airways

.

We now make explicit what was necessarily impl i cit in

South African Airways

, namely, that § 46110 does not

permanently preclude judicial review of an order “relat[ing] to

a foreign air carrier” merely because the order was initially

“subject to disapproval by the Pr esident.” When an order is no

longer “subject to disapproval by the President,” there is no

l onger any reason to shield it from judicial scrutiny, o r so the

Congress apparently concluded. Here, the order was submitted

for the President’s review on November 19, 2003, and on

November 25 the President’s designee * notified the DoT that he8

General Counsel of the DoT. 49 C.F.R. § 1.57(p).

* We recognize this interpretation of § 46110 leaves t h e

exception to judicial review with only limited practical effect;

despite the court’s best efforts, judicial review could hardly be

ha d in less than 60 days, nor would we ordinarily review an

order before it “takes effect.” 49 U.S.C. § 41307. It is the

cumulative effect of several Acts of Congress, however, and not

our de cision today, that accounts for the limited sweep of the

exception. The original version of the exception in what is now did not intend to disapprove it. Even absent such notification,

“60 days after the decision is submitted to the President” or his

designee, i f not disapproved the order “takes effect as a decision

of the Secretary” and, “when effective, may be reviewed

judicially und e r section 46110.” 49 U.S.C. § 41307(2)(A)&(B).

If the Congress had intended permanently to shield from

judicial review all orders initially “subject to disapproval by the

President,” then it would have s aid so. The more natural

meaning of the phrase “subject to disapproval” is as a temporal

limitation; a court may not review an order “relating to a foreign

air carrier” as long as that order is “subjec t to disapproval by the

President.”

The lack of presidential disapproval, however,

indicates only that the order is not harmful to the foreign

relations or def

ense of the Nation. We should not lightly

presume the Congress intended to grant the Do T an

unreviewable discretion to engage in otherwise noxious

decisionmaking. S ee Steenh o ldt v. FAA

, 314 F.3d 633, 638

(D.C. Cir. 2003) (not ing the “strong presumption of

reviewability under the [APA]”). Accordingly, as we held in

South African Air

ways , “if a DOT action is not disapproved, it

... shall be subject to judicial review” pursuant to the APA. 817

F.2d at 123. *9

§ 46110 wa s crafted prior to the Congress’s having regularized

judicia l review of administrative action in the APA, s ee Pub. L.

No. 75-706, June 23, 1938, 52 Stat. 1024 (“except any order in

respect of any foreign air carri er subject to the approval of the

President”). Meanwhile, § 41307 has been changed

significantly over time:

An order “amend[ing] ... any permit

issuable to any foreign

air carrier” was originally made “subject

to the approval of the Presid ent” without any limitation either of

time or of the ground upon which he might reject it. 52 Stat.

1014. Although all such orders had to be “submitted to the

President before publication,” id ., another section provided that

“all orders ... of the [then-Civil Aeronautics] Authority shall take

effect within such reasonable time as the Authority may

prescribe,” 52 Stat. 1023. Thus, it was apparently possible for

an order to take effect while it was still subject to the President’s

“approval

... denial, transfer, amendmen t, cancellation or

suspension,” Chicago & So. Air Lines v. Waterman S.S. Corp

., 333 U.S. 103, 109 (1948), and the exception precluded judicial

review until such ti

me as the President had acted. Now the

President’s time to act has been cut short, but the order does not

take effect until that time is up, leavi ng little if any time during

which the exception bars judicial review. B. The Merits

Aerolineas argues “the plain languag e of § 41310 requires

discriminatory intent,” whereas “the current different rates being

paid by differen

t carriers is strictly ... fortuitous.” The DoT

takes issue with the carrie r’s premise, arguing “it is irrelevant

whether the foreign gover nment’s discriminatory activity was

intentional.”

No action taken by a ny branch of the Government of

Argentina appears to have bee n aimed at disadvantaging United10

States carriers. Nevertheless, as the DoT explained in its order,

“the Government of Argentina is a signator y to an agreement

with ... the United States,” which provides:

User charges, imposed by the competent charging authority

of the other Pa rty shall be just, reasonable, and nondiscriminatory. Airlines shall not be required to pay charges

higher than those paid by airlines of the charging Party.

The treaty makes no exception for “fortuitous” circumstances

and contemplates no inquiry into the cause of higher charges or,

indeed, whether it is within the power of a signatory government

to eliminate that difference; it simply state s “[a]irlines shall not

be required to pay charges higher th an those paid by airlines of

the [other nation],” and thereby defines “non-discrimi natory” in

t erms of impact, rather than intent. Because Aerolineas does not

dispute that it

is paying only about one third of what the United

States carriers are pay

ing for international flights at Ezeiza, we

c a n hardly say the DoT acted unreasonably in concluding the

United States carriers are paying “charges higher” tha n their

Argentine counterpart, c ontrary to the agreement between the

Government of Argentina and the United States prohibiting

“discriminatory” charges.

Whether the higher charges constitute an “unreasonable

discriminat

ory ... practice” under § 41310(c) is a question

committed to the Do T to answer “in the public interest,” subject

only to limited review by the President and to judicial review

under the APA, see 5 U.S.C. § 706(2) (court shall “set aside

agency action

... found to be ... arbitrary, capricious, an abuse of

discretion, or otherwise not in accordance with law”). To the

extent Aerolineas argues the DoT misco nstrued § 41310, we

must defer to the DoT’s reasonable interpretation of that section.

Chevron U.S.A. Inc. v. NRDC

, 467 U.S. 837, 843 (1984) (“[I]f

the statute is silent or ambiguous with respect to the specific11

issue, the question for the court is whether the age ncy’s answer

is based on a permissible construction of the statute”).

The DoT poin

ts out that “the words ‘intentional’ or ‘intent’

appear nowhere in the statut[e],” and we see no reason to think,

in this context, the term “discriminatory” necessarily requires a

showing of intent, as opposed merel y to a disparate impact. C f.

Raytheon Co. v. Hernandez , 540 U.S. 44, 52 (2003) (“Under a

disparate-impact theory of discrimi nation, a facially neutral

employment practice ma

y be deemed illegally discriminatory

without evidenc e of the employer’s subjective intent to

d iscriminate”). Absent such a requirement, Aerolineas offers no

reason to believe the DoT a cted unreasonably in concluding that

charging Argentine and Uni ted States carriers different rates was

an “unreasonable discriminatory

... practice” under § 41310(c).

C. The Countermeasure

Aerolineas also argues the DoT abused its discretion in

adopting a countermeasure without “indicat[ing] just how

assessing Aerolineas wit h additional fees will eliminate the

alleged discriminatory activity.” According to Aerolineas,

because the Argentine Executive is not empowered to dictate the

decisions of the Argentine Judiciary, the DoT’s countermeasure

will have no effect. As the DoT points out, however, the

Executive could unilaterally eliminate the difference in user

charges at Ezeiza merely by staying its own Decree.

Aerolineas’ next argumen

t, that the DoT may not “[take] it

upon itself

... to level the playing field,” is directly contrary to

statute; § 41 310(b) provides that “[i]f the discrimination is not

ended in a reasonable time through negotiation, the [DoT] shall

establish a compensati

ng charge equal to the discriminatory

charge.” Whether this means the DoT might have taken the

further step of passing Aerolineas’ escrow payments through to12

the United State s carriers, we need not decide. The DoT was

plainly authorized to levy the charge it imposed.

Finally, Aerolineas argues the DoT’s order may itself prove

to be “discriminatory” because Aerolineas, in the event it los e s

its appeal to the Supreme Court of Argentina, would “be in the

position of paying a total

of three pesos in Argentina and two to

the DOT, making it the only airline that is p aying at the rate of

five” pesos per dollar for user charges on inter national flights at

Ezeiza. The DoT’s order, however, requires Aerolineas to pay

into escrow in the U

nited States only the difference between

what it is paying for the use of Ezeiza and what United States

carriers are paying. The DoT reasonably represents that, “[i]f

circumstances

... change, and Aerolineas Argentinas in fact

begins paying at the rate charged to other carriers, it will have

every opportunity to bring this to the attention of the

Department,” where we trust it will find relief.

III. Conclusion

For the foregoing reasons, the petition for review is

Denied.