Opinion ID: 618328
Heading Depth: 1
Heading Rank: 3

Heading: TSA's Denial of Reimbursement

Text: As amended by the 2007 Act, the statute states that TSA shall make grants to airport sponsors for qualifying airport security projects. 49 U.S.C. § 44923(a). The statute also requires that TSA shall establish a prioritization schedule for airport security improvement projects and must base that prioritization schedule on risk and other relevant factors. 49 U.S.C. § 44923 note. That prioritization list shall include airports that have incurred eligible costs associated with development of partial or completed in-line baggage systems before the date of enactment of the statute, in reasonable anticipation of receiving a grant. Id. At issue is whether TSA has properly exercised discretion under the statute in denying American's reimbursement request and whether TSA has properly created and followed the prioritization list required by the 2007 Act.
American contends, above all, that TSA' s denial of reimbursement stands in direct conflict with the command in the 2007 Act that TSA shall make grants to airport sponsors of qualifying projects, including those who have already completed their projects. See 49 U.S.C. § 44923 (a). Because TSA's actions are contrary to the plain meaning of the 2007 Act, American urges, TSA' s decision is not entitled to deference. claim regarding the finality of the March 2010 letter. At any rate, we note, as does Petitioner, that TSA' s casual statement that the decision could actually have become final at some unspecified point in the past only highlights the absence of clear, firm statements prior to the October 2010 letter. 11 PUBLIC COPY - SENSITIVE SECURITY INFORMATION DELETED The statute's language, American suggests, contains repeated mandates that TSA must provide reimbursement for qualified projects, and American's project, completed with reasonable expectation of reimbursement, qualifies. Next, American argues that even if TSA has discretion in awarding funding to qualified projects, it has abused that discretion. First, American argues that the 2007 Act requires TSA to prioritize reimbursement requests for completed in-line projects, such as Terminal 8, and TSA failed in its communications to examine the relevant data and articulate a satisfactory explanation for departing from that statutory command. Motor Vehicle Mfrs. Ass 'n v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29,43 (1983). Further, American argues that the agency's limited-funding rationale is both inaccurate and Ie TSA responds to these arguments by noting that the prioritization requirement in the 2007 Act logically must be understood to mean that some projects would be reimbursed while others would not-otherwise, there would be no need to prioritize at all. Congress, knowing that, intended that TSA would have the discretion to make funding determinations based on risk and other relevant factors, as specified in the 2007 Act. 49 U.S.C. § 44923 note. TSA asserts in its brief that the agency included the Terminal 8 project on the prioritization list it submitted to Congress and that its decision to prioritize funding for unresolved security risks over resolved risks like that at Terminal 8 is both rational and consistent with the agency's 12 PUBLIC COpy - SENSITIVE SECURITY INFORMATION DELETED intended discretion under the 2007 Act.
We review TSA's decision under familiar standards. When Congress delegates to an agency the authority to interpret and apply a statute, appellate courts review the agency's actions under the two-step process from Chevron, U.S.A., Inc. v. Natural Res. De! Council, Inc., 467 U.S. 837 (1984). If the intent of Congress is clear, that is the end of the matter, and the Court will apply the statute accordingly. Id. at 842. But if a statute is unclear on the point in question, the Court will defer to the agency's reasonable interpretation. Id. at 843-44. Nonetheless, a regulation contrary to a statute is void. Orion Reserves Ltd. P'ship v. Salazar, 553 F.3d 697, 703 (D.C. Cir. 2009) (citing Manhattan Gen. Equip. Co. v. Comm 'r ofInternal Revenue, 297 U.S. 129, 134 (1936)). The 2007 Act gives TSA both the authority and the mandate to create a prioritization list. 49 U.S.C. § 44923 note. That said, we will not set aside the agency's policy determinations in doing so unless they are arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law. 5 U.S.C. § 706(2)(A). Despite the deference owed to TSA' s policy determinations, the agency decision before us cannot survive judicial scrutiny because the agency either has not made a prioritization schedule as required by 49 U.S.C. § 44923 note, or, if the schedule TSA has provided to the Court is the schedule mandated by statute, the agency has acted arbitrarily and capriciously in deviating from that schedule by denying American's reimbursement request without providing a sufficient rationale on the record for doing so. Regardless of which is the case, we vacate the decision to deny reimbursement to American and remand to the agency to conduct further 13 PUBLIC COPY - SENSITIVE SECURITY INFORMATION DELETED proceedings. Congress's explicit mandate that TSA develop a prioritization list for reimbursing airport security proj ects carries with it the implication that the agency will actually follow that prioritization list in making its reimbursement decisions. Otherwise, the mandate of the 2007 Act that TSA create such a prioritization list becomes a meaningless exercise. See Inhabitants of the Twp. ofMontclairv. Ramsdell, 107 U.S. 147, 152 (1883) (It is the duty of the court to give effect, ifpossible, to every clause and word of a statute .... ); see also United States v. Seals, 130 F.3d 451, 462 (D.C. Cir. 1997). At the same time, we agree with TSA that Congress's intent in requiring the agency to prioritize projects logically compels the understanding that some projects will be currently funded while others will not. Otherwise, there would be little need to prioritize funding at all. With that in mind, we must reject any suggestion that the 2007 Act must be read-or could even reasonably be read-to absolutely require reimbursement for any and all qualified projects. TSA's discretion under the 2007 Act is not, however, unlimited. By the plain terms of the statute, TSA must create a prioritization list and must base the prioritization on risk and other relevant factors. 49 U.S.C. § 44923 note. The list must include completed projects undertaken with reasonable expectation of reimbursement. Id. And while there could be cases in which the agency finds that it must deviate from its general prioritization, the agency must adequately define the circumstances that 'trigger' the case-by-case analysis, and the agency must promulgate an identifiable standard to guide those determinations. Oceana, Inc. v. Locke, No. 10-5299,2011 WL 2802989, at  (D.C. Cir. July 19,2011). TSA has not done so. Rather, TSA has stated the prioritization list it created is 14 PUBLIC COPY - SENSITIVE SECURITY INFORMATION DELETED merely a top-down initial guide, and it has expressly reserved the discretion to depart from the list on a case-by-case basis using a different, bottom-up methodology when making actual funding decisions. Like the provision at issue in Oceana, Inc., TSA cannot make an exception to the prioritization list so vague or large as to make the rule meaningless, id., nor can TSA promulgate a prioritization list and then act contrary to it based on previously unannounced factors. Ultimately, TSA's decision here must be vacated either because the agency improperly deviated from its provided prioritization list or because the agency has failed to make a prioritization list that would comport with the mandates of the 2007 Act. 15 PUBLIC COPY - SENSITIVE SECURITY INFORMATION DELETED purports to con.slal~r a point for making funding determinations based on other criteria, it has failed to sufficiently establish and follow criteria for departing from its general rule, thus rendering its prioritization list inadequate. See Oceana, Lll!!lnc. 2011 WL 2802989, at . If instead we consider the I I prioritization list provided to the Court to be t e bona fi e, complete prioritization list already accounting for risk and other relevant factors mandated by the 2007 Act, 49 U.S.C. § 44923 note, then TSA simply failed to abide by it in making this decision and thus is acting contrary to the statute. See 5 U.S.C. § 706(2)(A). In either case, the agency's actions here must be vacated, and the issues remanded to the agency for further action or explanation.