Court Opinion

ID: 2785023
Source: CourtListenerOpinion
Date Created: 2015-03-10 16:01:03.601148+00
Date Added: 2024-06-11T11:03:05.969243
License: Public Domain

United States Court of Appeals
         FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued January 14, 2015              Decided March 10, 2015

                       No. 14-1143

               AIRLINES FOR AMERICA AND
       INTERNATIONAL AIR TRANSPORT ASSOCIATION,
                      PETITIONERS

                             v.

     TRANSPORTATION SECURITY ADMINISTRATION AND
           JOHN S. PISTOLE, ADMINISTRATOR
                     RESPONDENTS

           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: HENDERSON, Circuit Judge, and WILLIAMS and
RANDOLPH, Senior Circuit Judges.
                               2

   Opinion for the Court filed by Senior Circuit Judge
WILLIAMS.

     WILLIAMS, Senior Circuit Judge: The 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). Airlines
collect the fees from passengers and remit the funds to TSA.
§ 44940(e)(2)-(3).

     In 2013, Congress reset 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.” Bipartisan
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 exceeding four hours in each of the
California cities, would be a round trip comprised of three
one-way trips.

     Airline trade organizations representing individual
airlines filed this petition to challenge TSA’s rules on two
grounds. First, the airlines argued that TSA had no authority
                               3

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 connecting flight within the United
States—for example, a passenger who flies from Paris to New
York and then takes a connecting flight on to Chicago. On
this claim, we find that the airlines have standing but lose on
the merits.

                           *   *    *

     TSA contends that the airlines lack standing for want of
suffering any “injury in fact”: the security fees are paid by
customers, not the airlines themselves, and the 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. We recognized in 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 PAUL
A. SAMUELSON & WILLIAM D. NORDHAUS, ECONOMICS 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 so
                                4

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 think
immediately of so-called “Giffen goods”), TSA has given no
reason to suspect that any such exception is applicable here.
Thus, the security fees injure the airlines by increasing 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 change 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, the court’s duty to refrain
from merits rulings until assured of jurisdiction, see Steel Co.
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 principles rather than from any special
circumstances, it is sufficiently “self-evident” that we require
“no evidence 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 this as
authorizing it to collect fees from passengers whose travel
begins abroad but includes a connecting flight within the
United States, 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 arguments.

     First, TSA argues that the italicized clause 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. Attaching 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 incoherent. Unlike “air
transportation,” which spans 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 the 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 nearly
                                6

identical phrase as used in two neighboring provisions.
Section 44940(a)(1) tells 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.” This 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 transportation or
intrastate air transportation that originates at an airport in the
United States”—harmonizes usage across the two provisions
and is preferable on that account. See, e.g., Powerex Corp. v.
Reliant Energy Servs., Inc., 551 U.S. 224, 232 (2007).

     Second, 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 began 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.”).
The airlines seem to share this idea, if only for a moment.
Their opening brief acknowledges that an 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 United
States”—a proposition implying that “air transportation” may
refer to segments of “one-way trips.” See Pet’rs’ Br. 27.
Elsewhere, 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
originate abroad.” Pet’rs’ Reply Br. 12.

    The statute’s definitional provisions—all but ignored by
both parties here—do provide some indication that “air
                                 7

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’
means 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, similarly, “‘interstate air transportation’ means
the transportation . . . 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 the
transportation is by aircraft” in both of the last two definitions
may seem to imply 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 originates 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 the
                               8

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 Congress intended to
make enplanements entirely irrelevant to the scheme. But all
the legislative history shows is that Congress meant to render
irrelevant “the number of enplanements” in the course of
imposing a cap of “a flat, $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 New 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 situated 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 such
“disparate treatment” appears 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 Resources Defense 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 interpretation, 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 the 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

                         Dismissed in part and denied in part.