Court Opinion

ID: 9365702
Source: CourtListenerOpinion
Date Created: 2023-01-24 19:00:28.107917+00
Date Added: 2024-06-11T17:15:47.093846
License: Public Domain

Case: 20-60676        Document: 00516621078            Page: 1   Date Filed: 01/24/2023

              United States Court of Appeals
                   for the Fifth Circuit                                 United States Court of Appeals
                                                                                  Fifth Circuit

                                                                                FILED
                                                                          January 24, 2023
                                      No. 20-60676                         Lyle W. Cayce
                                                                                Clerk

   Flight Training International, Incorporated,

                                                                         Petitioner,

                                          versus

   Federal Aviation Administration,

                                                                        Respondent.

                         Petition for Review of an Order of the
                           Federal Aviation Administration
                           FAA Order No. 8900.1 CHG 711

   Before King, Dennis, and Ho, Circuit Judges. *
   James L. Dennis, Circuit Judge:
          This case concerns rules and regulations issued by the Federal
   Aviation Administration (FAA) governing two types of pilot credentials:
   airline transport pilot (ATP) certificates, which enable pilots to fly for
   airlines, and type ratings, which authorize pilots to command complex,
   “type-rated” aircraft. Flight Training International, Inc. (FTI), a provider
   of flight training courses, wants to offer a course that uses type-rated aircraft

          *
              Judge Ho concurs in the judgment only.
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                                     No. 20-60676

   but culminates in the issuance of an ATP certificate without a type rating. A
   rule issued by the FAA in 2020 prohibits it from doing that, so FTI petitioned
   us to set aside the rule. See 49 U.S.C. § 46110. FTI argues that the rule
   effectively amends portions of 14 C.F.R. pt. 61, and therefore should have
   been promulgated only after notice and comment in accordance with the
   Administrative Procedure Act (APA). We agree, and therefore grant the
   petition.
                                           I.
                                          A.
          The FAA regulates civil aviation within the United States and holds
   authority over the issuance of pilot certificates. See 49 U.S.C. § 44702(a).
   One such certificate is the ATP certificate. See 14 C.F.R. § 61.5(a)(1)(vi). A
   person must hold an ATP certificate to serve as a pilot in scheduled
   commercial, passenger-carrying operations, such as those offered by major
   airlines. See id. § 121.436(a).
          ATP certificates may be issued with or without a type rating. A type
   rating is an additional credential, “placed on [the] pilot certificate,” id. §
   61.5(b), that allows pilots to command complex aircraft known as type-rated
   aircraft. See id. § 61.31(a)(d). For example, a pilot flying a Boeing 737
   passenger plane for a commercial airline must have an ATP certificate with a
   Boeing 737 type rating. A pilot who is issued an ATP certificate without a
   type rating can also add a type rating to the certificate at a later date. See id.
   § 61.157(b).
          The FAA has promulgated regulations, codified under 14 C.F.R. pt.
   61, that govern the processes for obtaining an ATP certificate and adding a
   type rating to that certificate. An applicant who “satisfactorily accomplishes
   the training and certification requirements” for an ATP certificate or a type

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   rating, as applicable, is “entitled” to receive that certificate or rating. Id. §
   61.13(a)(4).
           To obtain an ATP certificate, a pilot must pass a “practical test.” Id.
   §§ 61.43(a), 61.153(h). The test must cover “areas of operation” listed in the
   regulations, such as preflight preparation and procedures, takeoff and
   departure, in-flight maneuvers, landings, emergency procedures, and
   postflight procedures. Id. § 61.157(e). 1 According to the FAA, the tasks that
   must be completed on a given test will depend on the aircraft used in the test.
   For instance, a pilot who takes the test in a Boeing 737 with turbojet engines
   will be required to master more complex procedures and systems than if they
   had taken the test in a light twin aircraft with wing-mounted propellers.
   Regardless of whether the test is administered for purposes of issuing an ATP
   certificate, a type rating, or both, the pilot must: “(1) [p]erform[] the tasks
   specified in the areas of operation for the airman certificate or rating sought;
   (2) [d]emonstrat[e] mastery of the aircraft by performing each task
   successfully; (3) [d]emonstrat[e] proficiency and competency within the
   approved standards; and (4) [d]emonstrat[e] sound judgment.”                       Id. §
   61.43(a).
           Merely completing a practical test does not automatically entitle a
   pilot to an ATP certificate. The pilot must also, among other things, possess
   sufficient aeronautical experience and pass an aeronautical knowledge test.
   See id. § 61.153(f), (g), 61.157(a)(2)(ii). And pilots seeking an ATP certificate
   to fly multiengine aircraft must complete a training course that includes 30

           1
             Through further interpretive rulemaking (not challenged here), the FAA has
   broken these “areas of operation” down into a detailed set of “Tasks” (e.g., “Preflight
   Assessment,” “High Altitude Aerodynamics,” “Steep Turns,” etc.), which are then
   divided further into dozens of discrete skills and areas of knowledge that must be tested.
   See FAA, U.S. Dep’t of Transp., FAA-S-ACS-11, Airline Transport Pilot and Type Rating
   for Airplane: Arman Certification Standards (June 2019).

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   hours of academic instruction and 10 hours of flight simulation. See id. §§
   61.153(e), 61.156. The FAA characterizes the training requirements for an
   ATP certificate as “extensive.”
          A pilot who wishes to add a type rating to an existing ATP certificate
   or be issued a type rating concurrently with an ATP certificate must
   “perform the practical test in actual or simulated instrument conditions,”
   subject to exceptions not relevant here. Id. § 61.157(b)(3); see also id. §
   61.157(a)(1) (“The practical test for an [ATP] certificate is given for . . . [a]n
   aircraft type rating”). Such pilots must also document that they received
   training in the “areas of operation” for the type rating sought. Specifically,
   the pilot:
          (1) Must receive and log ground and flight training from an
          authorized instructor on the areas of operation under [§ 61.157]
          that apply to the aircraft type rating; [and]
          (2) Must receive a logbook endorsement from an authorized
          instructor that certifies the applicant completed the training on
          the areas of operation listed under [§ 61.157(e)] that apply to
          the aircraft type rating[.]
   Id. § 61.157(b)(1)-(2). Some pilots applying for type ratings are exempt from
   these requirements, but only if they “present[] a training record that shows
   completion” of an “approved training program for the aircraft type rating.”
   Id. § 61.157(c).
          To summarize: in order to obtain an ATP certificate, a pilot must: (1)
   pass a practical test; and (2) satisfy various other regulatory requirements.
   See id. § 61.153. To add a type rating to an ATP certificate, a pilot must: (1)
   pass a practical test, which may be concurrent with the ATP certificate
   practical test; and (2) satisfy certain training-related prerequisites. See id. §
   61.157(b).

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                                          B.
          FTI is a Texas-based flight training center. Pursuant to a delegation
   of authority from the FAA, FTI’s examiners are authorized to conduct flight
   tests and “issue temporary pilot certificates and ratings to qualified
   applicants.” 14 C.F.R. § 183.23; see 49 U.S.C. § 44702(d)(1) (authorizing
   the FAA to delegate examination, testing, inspection, and issuance of
   certificates to “qualified private person[s]” and their employees). Although
   FTI is a private enterprise, its examiners “represent the Administrator” of
   the FAA when conducting practical tests for pilot certificates and type
   ratings. 14 C.F.R. § 61.47(a).
          For years, FTI has offered a flight training course which, though
   utilizing type rated aircraft, culminates in the issuance of an ATP certificate
   without a type rating. This course is shorter and less expensive than FTI’s
   combined course, in which students receive an ATP certificate with a type
   rating. FTI asserts that the opportunity to offer a standalone ATP course
   benefits student pilots who wish to defer their type rating until after they have
   obtained employment with a private airline and determined which particular
   type rating they need.
          The FAA’s Denver office approved FTI’s standalone ATP course in
   2012. However, on February 25, 2019, the Acting Manager of the FAA’s Air
   Transportation Division instructed the Denver office to revoke approval of
   this program. The Acting Manager found that, because FTI’s course was
   conducted in type rated aircraft, FTI could not issue ATP certificates upon
   successful completion of the course without also issuing type ratings. The
   Acting Manager reasoned that “the identical Practical Test Standards are
   used for both the ATP and the additional type rating” and “[s]uccessful
   completion of curricula utilizing the type rated aircraft result [sic] in the
   applicant being tested to act as pilot in command of the aircraft.” Therefore,

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   the Acting Manager concluded, “denial of or failure to issue the type rating
   in conjunction with the ATP certificate is denying the applicant of a type
   rating for which all requirements have been met.”
           The FAA notified FTI of the revocation on March 18, 2019. Although
   the FAA withdrew that revocation a few months later, it circulated a “policy
   memo” on December 20, 2019, largely tracking its February 25
   communiqué. This new policy memorandum specified that, if a training
   center offers a practical test in a full flight simulator (FFS) that replicates a
   type-rated aircraft, the examiner must issue an ATP certificate with the
   applicable type rating. The memorandum stated that, under § 61.157, “the
   same practical test is given for an ATP certificate and an aircraft type rating,”
   and therefore “an examiner must issue the ATP certificate with the . . .
   applicable type rating to an applicant who successfully completes a practical
   test for an ATP certificate conducted in an FFS which replicates a type rated
   aircraft.”
          On June 20, 2020, the FAA amended Order 8900.1 in conformance
   with the December 20, 2019 policy memorandum. See FAA Order 8900.1,
   Flight Standards Information Management System (FSIMS), available at
   https://drs.faa.gov/browse/ORDER_8900.1/doctypeDetails. 2                         That
   amendment added the following paragraph to a list of provisions that training
   center evaluators “must observe:”
          When conducting a practical test for the issuance of a pilot
          certificate in a type-rated aircraft or simulator, the event should
          be treated as a concurrent test, and the [training center
          evaluator] must issue the pilot certificate with the type rating.

          2
             Order 8900.1 is a public document intended to “standardize the functions” of
   aviation safety inspectors and “provide consistency to industry stakeholders.” FAA Order
   8900.1, Vol. 1, Ch. 1, § 1, ¶ 1-3.

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           For example, if the TCE is conducting a practical test for the
           issuance of an ATP Certificate in a type-rated airplane, the
           ATP Certificate with the type rating must also be issued if the
           test is successfully completed.
   FAA Order 8900.1, Vol. 3, Ch. 54, § 2, ¶ 3-4355(D)(6)(f) (June 20, 2020).
   For ease of reference, we refer to this as the “Must-Issue Rule” or the
   “Rule.” 3
           FTI timely petitioned for review of the Rule pursuant to 49 U.S.C. §
   46110. 4 FTI argues that the Rule will necessarily force it to violate 14 C.F.R.
   pt. 61 any time one of its students takes a practical test in a type rated aircraft
   and qualifies for an ATP certificate but not a type rating. That is because,
   according to FTI, the regulations would require them to withhold a type
   rating, while the Rule would obligate them to issue one. FTI argues that,
   because the Rule contradicts FAA regulations, it is a legislative rule that
   could only be promulgated after notice and comment procedures in
   accordance with the APA. See 5 U.S.C. § 553. It is uncontested that the Rule
   was not promulgated through those procedures.

           3
              While FTI’s petition was pending, this paragraph was renumbered and
   underwent non-substantive changes, which do not affect our analysis. See FAA Order
   8900.1, Vol. 3, Ch. 54,                  § 2, ¶ 3-4355(H)(6), available at
   https://fsims.faa.gov/PICDetail.aspx?docId=8900.1,Vol.3,Ch54,Sec2 (codifying the
   current version of the Must-Issue Rule).
           4
              49 U.S.C. § 46110(a) provides, in relevant part, that “a person disclosing a
   substantial interest in an order issued by . . . the Administrator of the Federal Aviation
   Administration with respect to aviation duties and powers designated to be carried out by
   the Administrator . . . may apply for review of the order by filing a petition for review in . .
   . the court of appeals of the United States for the circuit in which the person resides or has
   its principal place of business.” Once the petition is transmitted to the Administrator, “the
   court has exclusive jurisdiction to affirm, amend, modify, or set aside any part of the
   order[.]” Id. § 46110(c). Here, FTI’s petition is limited to the Rule as codified in Order
   8900.1 and does not challenge any other agency actions. The FAA does not contest
   jurisdiction, and we independently agree that we possess jurisdiction.

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          The FAA counters that the Rule is consistent with Part 61 and merely
   clarifies what those regulations already say. As such, the FAA argues, the
   Rule is “interpretive” and exempt from the APA’s notice-and-comment
   requirement. 5 U.S.C. § 553(b)(A).
                                         II.
                                         A.
          Under the APA, an agency must provide the public with notice and an
   opportunity to comment before it issues a final, legislative rule. See 5 U.S.C.
   § 553(b), (c). Under this section, legislative rules are defined by what they
   are not: “interpretive rules, general statements of policy, or rules of agency
   organization, procedure, or practice.” Id. § 553(b)(A).
          An interpretive rule is one that “clarifies, rather than creates, law.”
   Professionals and Patients for Customized Care v. Shalala, 56 F.3d 592, 602 (5th
   Cir. 1992). Interpretive rules “advise the public of the agency’s construction
   of the statutes and rules which it administers.” Perez v. Mortgage Bankers
   Ass’n, 575 U.S. 92, 97 (2015) (quoting Shalala v. Guernsey Memorial Hosp.,
   514 U.S. 87, 99 (1995)). When an agency issues an interpretive rule, it “does
   not claim to be exercising authority to itself make positive law.” Syncor
   Intern. Corp. v. Shalala, 127 F.3d 90, 94 (D.C. Cir. 1997).
          By contrast, legislative rules “bind the public and courts in a manner
   indistinguishable from a statute.” Richard J. Pierce, Jr., Distinguishing
   Legislative Rules from Interpretive Rules, 52 ADMIN. L. REV. 547, 552 (2000)
   (citing Kenneth Davis & Richard Pierce, Administrative Law Treatise 233 (3d
   ed. 1994)). Such rules are accorded the “force and effect of law” in the
   adjudicative process because they are “promulgated pursuant to legislative
   authority delegated to the agency by Congress.” St. Mary’s Hospital, Inc. v.
   Harris, 604 F.2d 407, 408 (5th Cir. 1979); see Chrysler Corp. v. Brown, 441

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   U.S. 281, 302 (1979)). The hallmark of a legislative rule is that it “modifies
   or adds to a legal norm.” Syncor, 127 F.3d at 95 (emphasis omitted). 5
           We have previously recognized that that “[i]f a second rule repudiates
   or is irreconcilable with a prior legislative rule, the second rule must be an
   amendment to the first; and, of course, an amendment to a legislative rule
   must itself be legislative.” Clean Water Action v. E.P.A., 936 F.3d 308, 314
   n.11 (5th Cir. 2019) (cleaned up). This is consistent with the approach
   recommended by Judge Williams of the D.C. Circuit, who stated that a rule
   is properly considered legislative when it “effectively amends a prior
   legislative rule.” American Mining Congress v. Mine Safety & Health Admin.,
   995 F.2d 1106, 1112 (D.C. Cir. 1993). 6 If a rule is legislative in nature, it must
   pass through notice and comment. Guernsey Memorial Hosp., 514 U.S. at 100
   (notice and comment is “required” if a rule “adopt[s] a new position

           5
              Legislative rules are sometimes called “substantive rules.” In truth, the
   requirement of notice and comment attaches only to rules that are both “substantive” and
   “legislative.” A rule may be called “substantive,” in the sense that it is neither procedural
   nor a mere policy statement, if it is binding on the rights and obligations of private persons.
   See Texas v. U.S., 809 F.3d 134, 171, 176 (5th Cir. 2015), cert. granted, 577 U.S. 1101 (2016),
   aff’d by an equally divided court, 579 U.S. 547 (2016). But such a rule will still be exempt
   from notice and comment if all that it does is “interpret[]” existing, substantive law. 5
   U.S.C. § 553(b)(A). What makes a rule “legislative” is that it spawns from the agency’s
   congressionally-delegated powers (if any) to create law. Chrysler Corp., 441 U.S. at 302-
   303. Such rules bind courts, not because they are entitled to deference, but because they
   actually are law. See Kisor v. Wilkie, 139 S. Ct. 2400, 2420 (2019). In other words, it is only
   when the agency seeks to make substantive law that notice and comment is required (unless
   Congress has elsewhere excepted the agency from this requirement). See id.; Perez, 575
   U.S. at 96; Chrysler Corp., 441 U.S. at 303.
           6
               A word of caution is in order. The fact that a rule reverses an agency’s prior
   interpretation of its regulations does not make the rule legislative. See Perez, 575 U.S. at 101
   (“Because an agency is not required to use notice-and-comment procedures to issue an
   initial interpretive rule, it is also not required to use those procedures when it amends or
   repeals that interpretive rule.”). All that matters under the “effectively amends” test is
   whether the rule is inconsistent with an underlying legislative rule.

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   inconsistent with any of the Secretary’s existing regulations”). Applying our
   Circuit’s precedent for determining whether a rule is legislative, we conclude
   that the Must-Issue Rule is a legislative rule adopted without notice and
   comment as required by the APA.
                                        B.
          Before considering whether the Must-Issue Rule effectively amends
   Part 61, we pause to address another one of FTI’s arguments: that the Rule
   is legislative because it is “binding on its face” and “withdraws the agency’s
   . . . previously-held discretion.” This argument misapplies the proper legal
   standard.
          Whether a rule limits agency discretion is relevant only in determining
   if the rule is a “general statement[] of policy” under the APA. 5 U.S.C. §
   553(b)(A). As we stated in Texas v. U.S.:
          We evaluate two criteria to distinguish policy statements from
          substantive rules: whether the rule (1) imposes any rights and
          obligations and (2) genuinely leaves the agency and its
          decision-makers free to exercise discretion.
   809 F.3d at 171 (emphasis added) (cleaned up).
          The text of the APA makes clear that “general statements of policy”
   are different from “interpretive rules,” and an agency action need only fall
   under one of these categories to be exempt from notice-and-comment
   procedures. 5 U.S.C. § 553(b)(A). In contrast to policy statements—which
   are “issued by an agency to advise the public prospectively of the manner in
   which the agency proposes to exercise a discretionary power,” Lincoln v.
   Vigil, 508 U.S. 182, 197 (1993) (quoting Chrysler Corp., 441 U.S. at 302,
   n.31)—interpretive rules explain what an agency thinks a statute or
   regulation actually says. If the law is mandatory, then it is natural for an

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   agency’s restatement of the law to speak in mandatory terms as well. 7 We
   therefore join other Circuits in rejecting the proposition that a rule cannot be
   interpretive if it limits discretion or uses binding language. See American Min.
   Congress, 995 F.2d at 1111 (“[R]estricting discretion tells one little about
   whether a rule is interpretive”); Syncor, 127 F.3d at 94 (distinguishing policy
   statements and interpretive rules); Warder v. Shalala, 149 F.3d 73, 82-83 (1st
   Cir. 1998) (interpretive rules may “bind agency personnel”), cert. denied, 526
   U.S. 1064 (1999); Metropolitan School Dist. of Wayne Tp., Marion County, Ind.
   v. Davila, 969 F.2d 485, 493 (7th Cir. 1992) (“All rules which interpret the
   underlying statute must be binding because they set forth what the agency
   believes is congressional intent”), cert. denied, 507 U.S. 949 (1993); see also
   John F. Manning, Nonlegislative Rules, 72 GEO. WASH. L. REV. 893, 919 n.36
   (2004) (discussing judicial developments and concluding that “a lack of
   binding effect is no longer the distinguishing feature of interpretive rules”).
           FTI cites no contrary holding from this Circuit. In Texas v. U.S., 787
   F.3d 733 (5th Cir. 2015), the Court held the Government failed to make a
   strong showing that the Deferred Action for Parents of Americans and
   Lawful Permanent Residents (DAPA) program did not require notice and
   comment. See id. 762-67. But the Court’s discussion of agency “discretion”
   was limited to “[t]he government’s main argument . . . that DAPA is a policy

           7
             To illustrate: 18 U.S.C. § 922(d) makes it unlawful to sell or transfer a firearm if
   there is “reasonable cause to believe” that the recipient “is an unlawful user of or addicted
   to any controlled substance.” In 2011, the Bureau of Alcohol, Tobacco, Firearms, and
   Explosives published an open letter discussing whether a person who holds a medical
   marijuana registry card, in a state that authorizes marijuana for medicinal use, is prohibited
   from receiving a firearm. The ATF answered in the affirmative, telling licensees that “you
   may not transfer firearms or ammunition” to such persons. ATF, U.S. Dept. of Justice,
   Open Letter to All Federal Firearms Licensees (Sept. 21, 2011) (emphasis added). Because
   the statute imposed a mandatory rule, the ATF’s letter did so as well. But that did not
   make it a legislative rule. To the contrary, the Ninth Circuit held that it was “textbook
   interpretive.” Wilson, 835 F.3d at 1100.

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   statement.” Id. at 763-65. Moreover, the decision confirmed that the
   presence or absence of agency discretion was irrelevant to other types of rules
   exempt from notice-and-comment under § 553, such as procedural rules. See
   id. at 765. In a later decision arising out of the same litigation, the Court again
   addressed whether it was substantially likely that the DAPA memorandum
   withdrew agency discretion, but only in the context of determining whether
   it was a “policy statement,” not an interpretive rule. Texas, 809 F.3d at 171-
   76.
           In Texas v. E.E.O.C., 933 F.3d 433 (5th Cir. 2019), the Court
   addressed the “jurisdictional” question of whether agency guidance was a
   “final agency action.” Id. at 441. There the Court stated that “withdrawal
   of discretion distinguishes a policy statement . . . from a final agency action.”
   Id. at 442. Nothing in this passage considered “interpretive rules” in the
   context of § 553. 8
           Finally, in Texas Sav. & Community Bankers Ass’n v. Federal Housing
   Finance Bd., 201 F.3d 551 (5th Cir. 2000), we stated, somewhat imprecisely,
   that “[n]on-legislative rules . . . ‘genuinely leave the agency and its

           8
             E.E.O.C. stated in passing that the guidance had to undergo notice and comment,
   possibly implying that it was not interpretive. See 933 F.3d at 451. The Court cited no
   authority for this remark, and a close reading shows it was dictum. United States v. Segura,
   747 F.3d 323, 328 (5th Cir. 2014) (“A statement is dictum if it could have been deleted
   without seriously impairing the analytical foundations of the holding and being peripheral,
   may not have received the full and careful consideration of the court that uttered it.”). The
   Court’s actual holding rested on narrower grounds: the agency lacked statutory authority
   to issue the guidance because it was not “procedural.” E.E.O.C., 933 F.3d at 439, 451
   (quoting 42 U.S.C. § 2000e-12(a)); see Gen. Elec. Co. v. Gilbert, 429 U.S. 125, 141 & n.20
   (1976) (noting the Equal Employment Opportunities Commission may only issue
   “procedural regulations” under Title VII). But a rule can be interpretive even if it is non-
   procedural. See 5 U.S.C. § 553(b)(A) (listing “interpretive rules” and “rules of . . .
   procedure” separately). Indeed, the entire question of notice and comment was irrelevant
   in E.E.O.C., because that agency never has to undergo notice and comment when issuing
   regulations under Title VII. See Edelman v. Lynchburg College, 535 U.S. 106, 114 n.7 (2002).

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   decisionmakers free to exercise discretion.’” Id. (quoting Professionals and
   Patients, 56 F.3d at 595). Plucked from context, that statement could be
   misread to say that any rule that restricts discretion is a legislative rule. But,
   once again, the Court’s analysis focused only on whether the rule was a policy
   statement.      See id. Because the Court answered that question in the
   affirmative, see id., it had no occasion to decide the counterfactual: whether a
   rule which fails to preserve discretion could nevertheless qualify as
   interpretive.
          In this case, the FAA does not dispute that the Must-Issue Rule
   restricts agency discretion and is not a policy statement. We do not address
   the merits of that question, finding it waived. But, for the reasons already
   noted, this does not preclude the FAA from arguing that the Rule is an
   interpretive rule.
                                          C.
          As explained in Part II.A, a rule is legislative, not interpretive, if it is
   irreconcilable with a prior legislative rule. We agree with FTI that the Must-
   Issue Rule is inconsistent with FAA regulations.
          The Rule speaks in no uncertain terms. “[I]f the [training center
   evaluator] is conducting a practical test for the issuance of an ATP Certificate
   in a type-rated airplane, the ATP Certificate with the type rating must . . . be
   issued if the test is successfully completed.” FAA Order 8900.1, Vol. 3, Ch.
   54, § 2, ¶ 3-4355(D)(6) (June 20, 2020) (emphasis added). Therefore, the
   Rule mandates issuance of a type rating upon the satisfaction of, at most, only
   two criteria:

              • The pilot completes an ATP certificate practical test in
                   a type-rated airplane; and
              • The pilot otherwise satisfies the prerequisites for an
                   ATP certificate (which are set forth in § 61.153).

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   But as discussed in Part I.A, § 61.157 codifies its own set of criteria for type
   ratings to be issued concurrently with ATP certificates. Subject to certain
   exceptions, a type rating may only be issued if:

               • The pilot completes a practical test; and
               • The pilot otherwise satisfies the training requirements
                    for a type rating (which are set forth in § 61.157(b)(1)-
                    (2)).
   14 C.F.R. § 61.157(b). The issue, then, is whether the latter set of criteria,
   under § 61.157(b), are subsumed by the former set of criteria, established by
   the Must-Issue Rule. If they are not—that is to say, if it is possible that a pilot
   would need do something extra under § 61.157(b) to earn a type rating that
   they would not have to do under the Rule—then the Rule and the regulations
   conflict, and FTI’s petition must be sustained.
           FTI vigorously contends that the practical test requirements for an
   ATP certificate and a type rating differ, even when the test is conducted in a
   type rated aircraft. The FAA denies this with equal vigor. For argument’s
   sake, we grant the FAA’s claim that “if the pilot successfully completes the
   completes the airline transport pilot certificate practical test in a type-rated
   aircraft, the pilot has also successfully completed the practical test for a type
   rating” (emphasis added). This proposition does not get the FAA across the
   finish line, though, because the agency must also persuade us that the training
   requirements of § 61.157(b) to obtain a type rating are also satisfied when a
   pilot completes their practical test in a type-rated aircraft and thereby
   qualifies for an ATP certificate. It is here that we think the FAA falls short. 9

           9
              Critically, the Rule does not say a candidate who takes their practical test in a
   type-rated aircraft and thereby qualifies for an ATP certificate has merely satisfied the
   practical test requirement—one of several—for a type rating. Nor does the Rule contain any
   proviso stating that such a candidate may only be issued a type rating if they satisfy the non-

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           As noted, § 61.157(b)(1) and (2) provide that that a pilot cannot obtain
   a type rating unless they have “receive[d] and log[ged] ground and flight
   training from an authorized instructor on the areas of operation under [§
   61.157] that apply to the aircraft type rating” and “receive[d] a logbook
   endorsement from an authorized instructor that certifies the applicant
   completed” such training. The FAA argues that the “areas of operation”
   for which training is required under these provisions are the same as those
   covered by the ATP certificate practical test, at least when that test is taken
   in a type-rated aircraft. See id. § 61.153(h). But even if that is true, there is a
   difference between being tested on a subject and being trained in it. A pilot
   can theoretically pass a test without having received all necessary training,
   just as one could theoretically pass a bar examination without having
   attended law school. But type ratings—like law licenses—require both.
   Therefore, the practical test given for an ATP certificate does not obviate the
   training that must be receive under § 61.157(b).
           Nor do the other prerequisites for an ATP certificate categorically
   require pilots to receive the same training as that which is required under §
   61.157(b). See id. § 61.153 (listing requirements for ATP certificate). The
   only ATP certificate requirement that even potentially overlaps is the
   requirement that pilots wishing to fly multiengine aircraft receive a course of
   academic and flight simulation training. See id. §§ 61.153(e), 61.156. But
   unlike the training contemplated under § 61.157(b) for type rating candidates,
   nothing in § 61.156 (the multiengine training course for an ATP certificate)
   specifically references the “areas of operation” listed in § 61.157. Compare

   practical test requirements as well. Instead, it mandates issuance of a type rating then and
   there. We stress that this would likely be a different case if the Rule contained language
   ensuring that it did not dilute the requirements for a type rating under § 61.157.

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                                     No. 20-60676

   id. § 61.156 with id. § 61.157(b)(1)-(2). Moreover, these two regulations
   require pilots to document their training in different ways. Under § 61.156,
   one must “present a graduation certificate from an authorized training
   provider,” whereas under § 61.157(b)(2), one “[m]ust receive a logbook
   endorsement from an authorized instructor.”
          The FAA also points to 14 C.F.R. § 142.39, which provides that
   “[e]ach training program curriculum must meet” various “requirements”
   set out in Part 142. We do not perceive how Part 142 aids the agency’s
   position. While it requires curricula to meet certain standards, such as those
   pertaining to who may serve as a training instructor or evaluator, see, e.g., id.
   §§ 142.47, 142.55, it does not clearly show that one who qualifies for an ATP
   certificate after completing a practical test in a type-rated aircraft will have
   completed the training-related requirements of § 61.157(b). Simply put, if
   there are any FAA rules or regulations establishing that this is so, then we are
   unaware of them, because the agency has not directed them to our attention.
          The FAA’s argument can also be understood in a different way.
   Although an ATP certificate does not technically require that a pilot check
   all the boxes under § 61.157(b), the agency appears to suggest that this may
   not matter; the ATP certificate prerequisites are “more extensive than those
   for a type rating.” In support, the agency gestures not only the training
   program described in § 61.156, but also the fact that individuals must pass a
   knowledge test, practical test, and possess a commercial pilot certificate or
   comparable military or foreign airline credential. See id. § 61.153. The gist is
   that, because anyone who obtains an ATP certificate after completing their
   practical test in a type-rated airplane is obviously well-qualified to fly
   complex aircraft, it is unnecessary that they satisfy the less-onerous
   requirements of § 61.157(b). But that is a policy judgment, not an act of legal
   interpretation. The regulations are unambiguous that “a person who . . .
   applies for a type rating to be concurrently completed with an airline

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                                    No. 20-60676

   transport certificate” must perform the tasks listed in § 61.157(b). If the
   agency believes that requirement to be redundant in some cases, it must
   follow notice and comment procedures and promulgate a new regulation.
                                        ***
          The Must-Issue Rule is a legislative rule, but it was not promulgated
   after notice and comment as required by the APA. Because the Rule was
   issued “without observance of procedure required by law,” FTI’s petition
   must be granted and the Rule set aside. Id. § 706(2)(D); see Clark County,
   Nev. v. F.A.A., 522 F.3d 437 (D.C. Cir. 2008) (FAA rule petitioned under 49
   U.S.C. § 46110 may be set aside on grounds set forth in 5 U.S.C. § 706(2)).
   In light of this disposition, we do not reach FTI’s alternative argument that
   the Rule is “arbitrary, capricious, an abuse of discretion, or otherwise not in
   accordance with law.” 5 U.S.C. § 706(2)(A).
                                        III.
          For the foregoing reasons, we GRANT the petition for review and
   SET ASIDE the Must-Issue Rule.

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