Court Opinion

ID: 4531724
Source: CourtListenerOpinion
Date Created: 2020-05-05 15:00:39.66625+00
Date Added: 2024-06-11T12:29:23.999575
License: Public Domain

United States Court of Appeals
         FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued December 11, 2019                 Decided May 5, 2020

                         No. 19-1071

 FLYERS RIGHTS EDUCATION FUND, INC., DOING BUSINESS AS
         FLYERSRIGHTS.ORG AND PAUL HUDSON,
                    PETITIONERS

                               v.

  UNITED STATES DEPARTMENT OF TRANSPORTATION AND
                  ELAINE L. CHAO,
                   RESPONDENTS

         On Petition for Review of an Order of the
         United States Department of Transportation

     Joseph E. Sandler argued the cause and filed the briefs for
petitioners.

    Matthew J. Glover, Counsel to the Assistant Attorney
General, U.S. Department of Justice, argued the cause for
respondents. With him on the brief were Abby C. Wright,
Attorney, Steven G. Bradbury, General Counsel, U.S.
Department of Transportation, Paul M. Geier, Assistant General
Counsel for Litigation and Enforcement, and Charles E. Enloe,
Trial Attorney.

    Warren L. Dean Jr. and Thomas Sean McGowan were on
the brief for amicus curiae Air Transport Association of
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America, Inc. d/b/a Airlines For America in support of
respondents.

   Before: ROGERS and MILLETT, Circuit Judges, and
RANDOLPH, Senior Circuit Judge.

   Opinion for the Court filed by Senior Circuit Judge
RANDOLPH.

     RANDOLPH, Senior Circuit Judge: Petitioners are the Flyers
Rights Education Fund, Inc. (doing business as
FlyersRights.org) and its president. The first issue is whether
they – or one of them – have standing. If so, the second issue is
whether the Department of Transportation acted arbitrarily when
it denied FlyersRights’ request to begin a rulemaking dealing
with the Convention for the Unification of Certain Rules for
International Carriage by Air, May 28, 1999, S. Treaty Doc. No.
106-45 (entered into force Nov. 4, 2003).

     This treaty, commonly known as the Montreal Convention,
is the latest in a long series of international agreements
regulating commercial air travel. One provision of the Montreal
Convention imposes liability on air carriers for damages caused
by passenger delay. Montreal Convention art. 19. Another
requires airlines to give “written notice to passengers”
explaining that the Convention may limit liability for “death or
injury and for destruction or loss of, or damage to, baggage, and
for delay.” Montreal Convention art. 3(4).

     FlyersRights, a non-profit organization, describes its
mission as educating airline passengers of their rights and
advocating on their behalf. In its rulemaking request,
FlyersRights claimed that airlines were not giving passengers
sufficient notice of their right to compensation for delays in
flights. FlyersRights urged the Transportation Department to
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issue regulations requiring the airlines to print written
summaries of passengers’ rights on all international airline
tickets, including information about how passengers suffering
from flight delays might be compensated.

     The Transportation Department denied the rulemaking
request in a letter on February 1, 2019. The Department
explained that it did not have enough “evidence that carriers are
failing to fulfill their notice obligations,” and that it did not have
enough evidence of “consumer confusion.” The Department
also pointed out that another rulemaking proceeding had already
begun, a proceeding that touched upon the concerns
FlyersRights had raised. The Department issued its final rule
in that proceeding on April 16, 2019. See Elimination of
Obsolete Provisions and Correction of Outdated Statutory
References in Aviation Economics Regulation, 84 Fed. Reg.
15,920, 15,929–30 (Apr. 16, 2019). Under that rule, airlines are
now required to print written summaries of passengers’ rights on
international airline tickets, though those summaries do not
include all of the information that FlyersRights requested in its
petition. Id.

     FlyersRights contends that the denial of its request for
rulemaking was arbitrary in violation of the Administrative
Procedure Act because the Transportation Department
disregarded significant evidence of airline deception and ignored
evidence of consumer confusion.

     This brings us to the threshold question of standing.
FlyersRights sues not because of injury to itself, but to redress
injury to its “members.” The usual requirements for such
“associational standing” are that the organization demonstrate
that “(a) its members would otherwise have standing to sue in
their own right; (b) the interests it seeks to protect are germane
to the organization’s purpose; and (c) neither the claim asserted
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nor the relief requested requires the participation of individual
members in the lawsuit.” Hunt v. Wash. Apple Advert. Comm'n,
432 U.S. 333, 343 (1977). In mentioning organizations with
“members” what comes to mind are common arrangements such
as professional associations, labor unions, social clubs and the
like. But what if the organization asserting associational
standing does not have “members” of this sort?

     The Supreme Court in Hunt held that “[i]n determining
whether an organization that has no members in the traditional
sense may nonetheless assert associational standing, the question
is whether the organization is the functional equivalent of a
traditional membership organization.” Fund Democracy, LLC
v. SEC, 278 F.3d 21, 25 (D.C. Cir. 2002).

    FlyersRights is not “a traditional membership organization”
and does not purport to be one. It claims that it nevertheless has
standing because it is suing on behalf of its “members,” or more
accurately those individuals associated with the organization
who are the “functional equivalent” of members. Hunt
considered three criteria in determining whether the
“nonmembership organization” sufficiently represented its
constituents’ interests to be able to bring suit on their behalf.
Hunt’s “indicia of membership” were these: whether the
individuals play a role in selecting the organization's leadership,
in guiding the organization's activities, and in financing the
organization's activities. Hunt, 432 U.S. at 344–45; see also
Am. Legal Found. v. FCC, 808 F.2d 84, 90 (D.C. Cir. 1987).
Relying on this list, our court has held that readers of a
magazine were not members for associational standing purposes.
See Gettman v. DEA, 290 F.3d 430, 435 (D.C. Cir. 2002).
Viewers who merely watched the news regularly were not
members of a media watchdog group for associational standing
purposes. Am. Legal Found., 808 F.2d at 89–90. Past work
with groups of individual investors did not render the investors
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equivalent to “members” of Fund Democracy.                    Fund
Democracy, 278 F.3d at 25–26.

     Even if the list of “indicia” identified in Hunt was meant to
be exhaustive – which is quite doubtful – we believe that
FlyersRights is entitled to assert associational standing. Counsel
for the petitioners explained at oral argument that one becomes
a “member” of FlyersRights by signing up to receive
information from the organization. FlyersRights operates a
hotline for airline passengers, run by the Board of Directors and
staffed by volunteers from the membership. (Hudson Supp.
Decl. ¶ 3). FlyersRights frequently polls its airline passenger
members in order to determine which policy issues and types of
actions FlyersRights will pursue on their behalf. (Hudson Supp.
Decl. ¶ 4). FlyersRights’ leadership also considers the petitions
members have signed when determining issues and policies to
pursue on their behalf. (Hudson Supp. Decl. ¶ 5). The structure
of the organization enables FlyersRights members to have direct
input, and member input guides the organization’s activity.
(Hudson Supp. Decl. ¶ 4-5).              Further, a majority of
FlyersRights’ funding comes directly from its members, and
many of the organization’s members have contributed some
amount of money to support FlyersRights’ advocacy effort.
(Hudson Supp. Decl. ¶ 6).

     Although the constituents of the organization do not elect
the leadership, the factors mentioned above indicate that there
is a sufficient amount of interaction to influence the
organization’s activities. Cf. Elec. Privacy Info. Ctr. v. Dep’t of
Commerce, 928 F.3d 95, 101 (D.C. Cir. 2019), petition for cert.
filed, No. 19-777 (Dec. 16, 2019); see also Karl S. Coplan, Is
Voting Necessary? Organization Standing and Non-Voting
Members of Environmental Advocacy Organizations, 14 S.E.
Envtl. L.J. 47, 78–79 (2005). Other circuits have also concluded
that if an “organization is sufficiently identified with and subject
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to the influence of those it seeks to represent,” it may assert
associational standing, even though it does not possess all three
indicia of membership considered in Hunt. Or. Advocacy Ctr.
v. Mink, 322 F.3d 1101, 1111 (9th Cir. 2003); see also Doe v.
Stincer, 175 F.3d 879, 886 (11th Cir. 1999).

     In addition, there is no question that the litigation here is
germane to FlyersRights’ organizational purpose and that the
relief requested – a rulemaking – does not require participation
by individual members. See Hunt, 432 U.S. at 343.

     These conclusions do not end the standing inquiry.
FlyersRights still must identify at least one member with
independent standing to sue the Department. See Warth v.
Seldin, 422 U.S. 490, 511 (1975). It puts forth two candidates.
One, Robert Lax, purportedly suffered an injury when his
parents were affected by a flight cancellation and he was forced
to spend time communicating with the airline about that
cancellation. The Department contests Lax’s standing on the
ground that he was not personally injured. The other, Leopold
de Beer, claims to have suffered an injury when his own flight
was significantly delayed and the airline’s inadequate notice
regime hindered his ability to claim compensation. The
Department does not challenge de Beer’s standing, or his sworn
declaration that he was personally delayed and would have been
eligible for compensation, but the inadequate notice regime left
him uninformed of his rights and impeded his ability to claim
his compensation. Thus, de Beer had standing to bring suit and
so does FlyersRights.

    As to the merits, FlyersRights claims that the Department’s
denial of its petition for rulemaking was arbitrary and capricious
because the Department’s explanation was inadequate and
lacked support in the record.
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     Under the Administrative Procedure Act, when an agency
denies a petition for rulemaking it is obligated to give notice and
an explanation. 5 U.S.C. § 555(e). The explanation need not be
exhaustive. All that is required is “a brief statement of the
grounds for denial.” Id. Because an agency’s denial of a
petition for rulemaking is akin to an exercise of prosecutorial
discretion, judicial review is “limited” and “deferential.”
Massachusetts v. EPA, 549 U.S. 497, 527–28 (2007) (quoting
Nat’l Customs Brokers & Forwarders Ass’n of Am., Inc. v.
United States, 883 F.2d 93, 96 (D.C. Cir. 1989)). “[A]n agency
has broad discretion to choose how best to marshal its limited
resources and personnel to carry out its delegated
responsibilities” and thus to determine its own regulatory
agenda. Mass. v. EPA, 549 U.S. at 527.

     Here, the Department adequately explained why it denied
the request for rulemaking. FlyersRights’s petition for
rulemaking presented two arguments in favor of a more robust
notice regime: that the airlines were not meeting their
obligations under the Montreal Convention and that there was
widespread consumer confusion regarding passengers’ rights to
compensation in the event of delay. The Department’s
explanation responded to both of FlyersRights’s concerns.

     First, the Department found that airlines were fulfilling their
obligations under the Montreal Convention. Specifically, it
reviewed airlines’ contracts of carriage and found that they gave
“adequate notice regarding the availability of compensation for
delays.”      The Montreal Convention requires only that
“passenger[s] shall be given written notice to the effect that
where this Convention is applicable it governs and may limit the
liability of carriers in respect of … delay.” Montreal
Convention, art. 3(4). The record includes the contracts of
carriage from several major airlines, each of which includes
language to that effect. This amply supports the Department’s
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conclusion that the airlines have satisfied their notice obligations
under the Montreal Convention.

     The Department’s finding that there was insufficient
evidence of consumer confusion to warrant a rulemaking was
also supported. FlyersRights presents some evidence of
consumer confusion, citing both its interactions with passengers
and media reports. But the Department has “broad discretion to
choose how best to marshal its limited resources and personnel.”
Mass. v. EPA, 549 U.S. at 527. Determining whether this
quantum of evidence of consumer confusion – meaningful but
not overwhelming – warrants a rulemaking falls within the
Department’s discretion. The fact that the Department was
already engaged in a separate rulemaking process addressing
many of the concerns raised by FlyersRights further strengthens
the Department’s position. See, e.g., Defenders of Wildlife v.
Gutierrez, 532 F.3d 913, 921 (D.C. Cir. 2008).

    The petition for judicial review is therefore denied.

                                                      So ordered.