Court Opinion

ID: 9439150
Source: CourtListenerOpinion
Date Created: 2023-08-03 06:23:31.721196+00
Date Added: 2024-06-11T17:26:11.562473
License: Public Domain

SILBERMAN, Circuit Judge,
concurring in the denial of rehearing en banc:
The dissent seems to quarrel fundamentally with the sentence in the panel opinion that states, “In reviewing the Department’s order, we do not sit as a panel of referees on a professional economics journal, but as a panel of generalist judges obliged to defer to a reasonable judgment by an agency acting pursuant to congres-sionally delegated authority.” City of Los Angeles v. DOT, 165 F.3d 972, 977 (1999). It is apparently the dissent’s view that we are authorized to review de novo the DOT’s application of the concept of opportunity cost (as if economics were incorporated into, or somehow on an independent par with the Constitution). Cf. Lochner v. New York, 198 U.S. 45, 75, 25 S.Ct. 539, 49 L.Ed. 937 (1905) (Holmes, J., dissenting) (“The Fourteenth Amendment does not enact Mr. Herbert Spencer’s Social Statics.”). And if we think the Department insufficiently appreciated the virtue of opportunity cost pricing as a signaling device generating a more optimal allocation of society’s resources, we are justified in rejecting the Department’s decision as “erroneous.” By contrast, the panel, although recognizing that economists (or we) might disagree with the Department’s rejection of opportunity cost pricing in this case, did not think that warranted us, as a reviewing court under a deferential standard of review, to object to the Department’s decision. City of Los Angeles, 165 F.3d at 977.
Even assuming the issue should be thought as purely an economic one — which of course it is not (the issue might properly be described as whether LAX, having taken taxpayer money under the condition that it would continue to use LAX as an airport is legally entitled to charge a significant group of those taxpayers, airline passengers flying in and out of LAX, its opportunity cost based on a nonexistent opportunity) — petitioners did not produce testimony (or writings) of any economist to the effect that the market price of the airfield land should be considered as its opportunity cost under these circumstances.1 Professor Arrow, who testified in the original proceeding as to the general appropriateness of opportunity cost pricing, see Los Angeles Int’l Airport Rates Proceeding and Second Los Angeles Int’l Airport Rate Proceeding (Remand Decision), Order 97-12-31, at 11-12 (Dec. 23, 1997), never appeared in this remand proceeding, and, therefore, neither he nor any “non-resident” economist has expressed a view on the matter. Indeed, we ourselves had recognized that the scenario was more complicated than the typical opportunity cost setting in a prior opinion — which Judge Ginsburg joined (presumably pre-Econ 101) — concerning DOT’s rulemaking proceeding for airport fees. See Air Transp. Ass’n of Am. v. DOT, 119 F.3d 38, 44 (D.C.Cir.1997) (“[Sjince airports are *939obliged to use their property as an airport, the concept of opportunity cost, and therefore fair market value, does not quite fit.”).
DOT alternatively assumed that if the grant condition were disregarded for purposes of opportunity cost 'analysis, the City — rather than just the airport — should be viewed as the relevant economic actor. The Department noted the enormous economic impact of LAX on the City: state and local tax revenues flowing from LAX were estimated at $1.7 billion in a 1992 study. Pursuing another opportunity on the LAX land would require forgoing this revenue or else building a new airport or expanding an existing minor airport like Burbank. Either option would be tremendously costly, and this cost should, in the DOT’s view, be subtracted, in calculating the City’s opportunity cost, from the profits to be earned in pursuing alternate uses of the LAX land. Perhaps an economist would treat the airport alone as the relevant economic actor. But again the City did not produce any economist’s testimony in support of that proposition, so DOT’S perspective was certainly reasonable. Judged from that viewpoint, the dissent’s suggestion that if Los Angeles sold all of its LAX airport land to a real estate developer, airlines could simply fly into Burbank airport is about as realistic as Marie Antoinette’s apocryphal advice to the hungry poor of Paris, “Let them eat cake.”
Had this case turned on the quality of briefs and oral advocacy (as cases sometimes do), petitioners would have won hands down. The Department of Transportation was represented, not by the excellent appellate lawyers from the Civil Division of the Justice Department, but by the General Counsel’s office of DOT. Lawyers from the Antitrust Division of the Justice Department appear on the brief as of counsel. Insofar as that suggests Justice Department lawyers actually read and contributed to the briefs, I think the FTC should investigate for truth-in-labeling.

. The dissenters’ wish to assume away LAX’s legal obligation reminds me of the old joke: How does an economist escape from a 25 foot hole? Answer: Assume a ladder.