United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued January 29, 1999 Decided June 4, 1999
No. 98-1051
Alaska Professional Hunters Association, Inc., et al.,
Petitioners
v.
Federal Aviation Administration,
Respondent
On Petition for Review of an Order of the
Federal Aviation Administration
William P. Horn argued the cause for petitioners. With
him on the briefs were Douglas S. Burdin and Eric D.
Reicin.
Edward Himmelfarb, Attorney, U.S. Department of Jus-
tice, argued the cause for respondent. With him on the brief
were Frank W. Hunger, Assistant Attorney General, and
Robert S. Greenspan, Attorney.
Before: Henderson, Randolph, and Tatel, Circuit Judges.
Opinion for the Court filed by Circuit Judge Randolph.
Randolph, Circuit Judge: In January 1998 the Federal
Aviation Administration published a "Notice to Operators"
aimed at Alaskan hunting and fishing guides who pilot light
aircraft as part of their guiding service. The Notice required
these guide pilots to abide by FAA regulations applicable to
commercial air operations. The question in this petition for
judicial review, brought by a guide organization and individu-
al guides, is whether s 553 of the Administrative Procedure
Act required the FAA to proceed by way of notice and
comment rule making rather than by announcement in the
Federal Register.
Fishing and hunting are big business in the State of
Alaska. A large proportion of the State's population depends
on the income these activities generate. Small lodges in
remote regions of the State cater to hunters and fisherman,
providing food and shelter, guide services, and air transporta-
tion to and from the lodge and on side trips, all for a flat fee.
It is common for a fishing or hunting guide to serve as the
pilot of the light aircraft typically used in these operations.
Beginning in 1963, the FAA, through its Alaskan Region,
consistently advised guide pilots that they were not governed
by regulations dealing with commercial pilots.
The advice stemmed from Administrator v. Marshall, 39
C.A.B. 948 (1963), a decision rejecting the FAA's attempt to
sanction Ralph E. Marshall, a registered Alaskan hunting and
fishing guide and the holder of an FAA-issued private pilot's
license. On a hunting trip, Marshall flew his customer out of
Kotzebue, Alaska, searching for polar bear. Regulations then
in effect said that a "private pilot may pilot aircraft in
connection with any business or employment if the flight is
merely incidental thereto and does not involve the carriage of
persons or property for compensation or hire." See Mar-
shall, 39 C.A.B. at 948 n.1. The Civil Aeronautics Board,
adopting the hearing examiner's opinion as its own, ruled that
Marshall's flight with the hunter in search of polar bear was
"merely incidental" to his guiding business, in part because he
had not billed for it separately. See id. at 950-51. We will
have more to say about Marshall in a moment.
The versions of parts 121 and 135 of the FAA's regulations
(14 C.F.R. pts. 121 & 135) in effect in the early 1960s applied
to (among others) "commercial operator[s]": those persons
operating aircraft "for compensation or hire."1 14 C.F.R.
ss 121.1(a)(5), (d), 135.1(a)(2) (1965). In view of Marshall,
the FAA's Alaskan Region concluded that these regulations
did not govern guide pilots whose flights were incidental to
their guiding business and were not billed separately. There-
fore only part 91, which provides general instructions regard-
ing the operation of aircraft within the United States, applied
to them. See 14 C.F.R. s 91.1. Despite many amendments
during the last 35 years, parts 121 and 135 continue to apply
to "commercial operator[s]," still defined as those persons
who, "for compensation or hire," carry persons or property by
aircraft. See 14 C.F.R. ss 1.1, 119.1(a)(1), 121.1(a),
135.1(a)(1).2 Although the Alaskan Region never set forth its
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1 Part 121, promulgated in December 1964, prescribed rules
"governing the certification and operations of ... each commercial
operator." It stated that "[f]or the purpose of determining whether
a person is a commercial operator under this part, operations are
considered to be for compensation or hire when they are a major
enterprise for profit and not merely incidental to the person's other
business." See 29 Fed. Reg. 19,186, 19,190 (1964). Part 135, also
added in 1964, prescribed rules "governing ... the carrying in air
commerce by any person, other than an air carrier, of persons or
property for compensation or hire (commercial operations) in small
aircraft." See 29 Fed. Reg. 2,988, 2,992 (1964). Both parts have
been amended numerous times since then.
2 After amendments to parts 121 and 135 in December 1995, and
the addition of part 119, parts 121 and 135 no longer apply to
commercial operators directly. See Commuter Operations and Gen-
eral Certification and Operations Requirements, 60 Fed. Reg.
65,832, 65,879 (1995). Parts 121 and 135 currently apply to certain
operations of persons who hold, or are required to hold, an Operat-
ing Certificate under part 119. See 14 C.F.R. ss 121.1(a),
135.1(a)(1). Part 119 preserves the application of parts 121 and 135
to "commercial operator[s]," because it applies to persons who
interpretation of parts 121 and 135 in a written statement, all
agree that FAA personnel in Alaska consistently followed the
interpretation in official advice to guides and guide services.
Whether FAA officials in Washington, D.C. were aware of
the advice being given by their counterparts in Alaska is
uncertain. No correspondence or other writing bearing on
the question has surfaced. This may be attributable to the
FAA's organizational structure from the 1960's through the
late 1980's. "The agency's first Administrator favored a
management system under which officials in Washington
exercised direct control over programs in the field. In 1961,
however, his successor began a decentralization process that
transferred much authority to regional organizations. This
pattern generally endured until a 1988 'straightlining' again
charged managers at national headquarters with more di-
rection of field activities." A Brief History of the Federal
Aviation Administration (last modified April 30, 1999) .
In 1990, after the agency had reorganized, an FAA attor-
ney in the Alaskan Region corresponded with the FAA's
Washington, D.C. headquarters regarding an inquiry he had
received from the manager of a fishing lodge. In a twist on
Marshall, this lodge manager proposed to pick up clients
staying at another lodge, fly them to a fishing spot, guide
them, and then return the clients to their lodge. The manag-
er wanted to know whether he could provide this service
consistent with part 91 of the regulations. The Alaskan
Region believed that Marshall controlled, but an Assistant
Chief Counsel in the FAA's Washington office disagreed.
Although he expressed the need for more facts, the Assistant
Chief Counsel thought the manager's situation distinguishable
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operate civil aircraft as "commercial operator[s]" (or air carriers) in
air commerce. See 14 C.F.R. s 119.1(a)(1). It consolidates the
certification and operations requirements for persons who operate
under parts 121 and 135 and provides a roadmap for certificate
holders to lead them to the operating rules in those parts that they
must comply with. See Commuter Operations, 60 Fed. Reg. at
65,879.
because--as he read Marshall--the guide pilot there took off
from the hunting camp and returned without landing else-
where, whereas the manager intended to take off from a
lodge, land at a fishing spot, and then return. To the
Assistant Chief Counsel, this meant the flight would not be
"merely incidental" to the guiding service and would be "for
compensation or hire." Hence, the pilot had to be certified
under, and comply with, the requirements of part 135.
The record does not reveal whether the FAA issued a
formal opinion in the lodge manager's case. All that appears
is the internal agency correspondence we have just summa-
rized. What occurred after the Assistant Chief Counsel's
analysis reached the Alaskan Region in 1991 is uncertain.
The material before us indicates that the Alaskan Region did
not begin advising guide pilots to comply with part 135. We
also know, from a decision included in the parties' Supple-
mental Joint Appendix, that in 1992 an administrative law
judge rejected the FAA's attempt to sanction an Alaskan
guide pilot in a situation comparable to that in Marshall.
Cecil V. Humble, a guide, a pilot and the manager of the
Rainy Pass fishing and hunting lodge in Alaska, sold a
hunting package to two men, who were accompanied by their
wives. After staying at the lodge for a few days, the wives
decided to leave before the hunt ended. Humble, who did not
have part 135 credentials, flew them back to Anchorage.
Citing a Civil Aeronautics Board pronouncement but not the
decision in Marshall, the ALJ ruled that the flight was
merely "incidental" to Humble's business, "simply an adjunct
to the hunting package for which they had contracted," and
therefore Humble did not need to comply with part 135.
Supp. Joint App. 235.3
In the meantime, the FAA had begun studying guiding
operations in Alaska. An FAA report, issued in 1992, ex-
pressed concern about the safety of guide pilots operating
pursuant to part 91 rather than part 135. In recognition of
__________
3 The ALJ did sanction Humble for directing one of his Rainy
Pass pilots to fly clients of another guide and lodge owner between
Anchorage and Neal Lake (Supp. Joint App. 237).
the longstanding practice in Alaska and of the agency's advice
beginning in 1963 that guide pilots were covered by part 91,
the report found that "[a]ny departure from the established
practice could have an economical impact on a portion of the
commercial guiding populace." See A Study of Aviation
Commercial Guiding Activities Within the State of Alaska,
prepared by the Technical Analysis Branch, Alaskan Flight
Standards Division, at 9 (December 1992). The report there-
fore recommended amending part 135.1 to allow the FAA "to
issue a letter of authorization" to hunting and fishing guide
pilots, allowing them to transport clients under limited condi-
tions. See id. at 8-9. The FAA did not implement the
recommendation.
In January 1997, petitioner Alaska Professional Hunters
Association,4 aware that the FAA was still considering a new
regime for regulating Alaskan guide pilots, submitted a peti-
tion for rule making.5 See Petition for Rulemaking, 63 Fed.
Reg. 16,913, 16,914 (1998). The Association proposed that the
FAA amend part 91 to enhance the safety of guiding opera-
tions. See id. In January 1998, without having responded to
the Association's petition, the FAA published its "Notice to
Operators" in the Federal Register. See Compliance with
Parts 119, 121 and 135 by Alaskan Hunt and Fish Guides
Who Transport Persons by Air for Compensation or Hire, 63
Fed. Reg. 4 (1998).
The Notice, which is the subject of the Association's peti-
tion for judicial review, announced that Alaskan guides who
transport customers by aircraft to and from sites where they
provide guiding services, with transportation included in the
__________
4 The Alaska Professional Hunters Association is an organization
of more than six hundred individual guides, outfitters and other
persons interested in hunting or recreational activities in the State
of Alaska. Many are, or rely on, guide pilots who fly customers to
remote hunting and fishing sites as part of their guiding services.
5 The Administration did not publish the Alaska Professional
Hunters Association's petition for rule making until more than a
year later, in April 1998. See Petition for Rulemaking, 63 Fed.
Reg. at 16,913.
package price of the trip, henceforth must comply with the
regulations of parts 119, 121 and 135, as applicable. See 63
Fed. Reg. at 4-5. In the future the FAA would treat these
guides as commercial operators or air carriers, transporting
passengers for compensation or hire. See 63 Fed. Reg. at 5.
The FAA acknowledged that the Alaskan Region had not
enforced parts 121 or 135 against guide pilots in the past.
But it attributed this to a misreading of the Marshall case.
See id. A guide's use of aircraft is, the FAA stated, integral
to his business, and the customer pays for the transportation
regardless whether there is or is not a separate charge for it.
See id. The Notice also stated that guide pilot operations
would be safer if they were conducted pursuant to the stricter
aviation standards of parts 119, 121 and 135. See id.
The Association, joined by two Alaskan guide pilots, con-
tends that the Notice to Operators altered the FAA's well-
established interpretation of its regulations and should have
been promulgated pursuant to notice and comment rule mak-
ing. The FAA raises several defenses, among which are that
the Alaskan Region's interpretation of the regulations did not
represent the FAA's view because it rested on a misreading
of Marshall and that the Notice to Operators was merely an
interpretative rule, exempt from the notice and comment
requirements of APA s 553. See 5 U.S.C. s 553(b)(A).
Our analysis of these arguments draws on Paralyzed Veter-
ans of America v. D.C. Arena, 117 F.3d 579, 586 (D.C. Cir.
1997), in which we said: "Once an agency gives its regulation
an interpretation, it can only change that interpretation as it
would formally modify the regulation itself: through the
process of notice and comment rulemaking." We there ex-
plained why an agency has less leeway in its choice of the
method of changing its interpretation of its regulations than
in altering its construction of a statute. "Rule making," as
defined in the APA, includes not only the agency's process of
formulating a rule, but also the agency's process of modifying
a rule. 5 U.S.C. s 551(5). See Paralyzed Veterans, 117 F.3d
at 586. When an agency has given its regulation a definitive
interpretation, and later significantly revises that interpreta-
tion, the agency has in effect amended its rule, something it
may not accomplish without notice and comment. Syncor
Int'l Corp. v. Shalala, 127 F.3d 90, 94-95 (D.C. Cir. 1997), is
to the same effect: a modification of an interpretive rule
construing an agency's substantive regulation will, we said,
"likely require a notice and comment procedure."
The FAA thinks Paralyzed Veterans is inapposite because
its January 1998 Notice to Operators did not fundamentally
change any "authoritative interpretation" of its regulations.
See Paralyzed Veterans, 117 F.3d at 586. The FAA is
confident that the Alaskan Region's advice to guide pilots for
more than 30 years stemmed from a misreading of the
Marshall decision and so could not have represented the view
of the agency.6 The Notice to Operators put it this way:
"there appears to have been a misinterpretation of the scope
and effect of a 1963 enforcement case involving a registered
hunting guide, Administrator v. Marshall, 39 CAB 948 (1963)
(decided on an extremely narrow set of facts that involved a
registered guide's single flight from base camp to spot game
from the air and return to base camp, with no landing at a
point other than the point of takeoff)." See 63 Fed. Reg. at 5.
We do not share the FAA's confidence that the ruling in
Marshall--piloting was "merely incidental to [the pilot's]
business as a registered Alaska guide," Marshall, 39 C.A.B.
at 950--applied only to a guide pilot flying his customer from
a base camp and returning to the camp without landing in
between. The FAA believes these were the "extremely nar-
row set of facts" in Marshall because the opinion stated: "On
the polar bear hunt respondent [the guide] utilizes his aircraft
only to the extent of getting the hunter from the base camp
out over the ice in order to spot the polar bear and return
hunter to the camp." See id. at 949. According to the FAA,
this means the pilot did not land his plane on the ice; the
guide pilot and his passenger merely spotted the bear from
the air and then turned for home.
__________
6 Respondent's brief also asserts that the Alaskan Region's advice
to guide operators was not pursuant to any FAA regulation. This
is clearly not the case.
This reading of Marshall is, we suppose, possible but it is
quite implausible. For one thing, the guide's client was not in
Alaska for sightseeing. His objective was to hunt and kill a
polar bear and the guide's objective was to help him do just
that: "in the event a polar bear was not killed, there was to
be no payment of money made by [the customer] to the
guides." See id. Why use a plane? The opinion explained:
"It is the general practice in Alaska to utilize aircraft in
transporting hunters over the ice in the hunt of polar bears
where formerly dog sleds were used." See id. The guide
was not searching for a polar bear so that his customer could
see what one looked like. He and his customer were hunting,
and hunting involves killing the quarry.7 This must be why
the opinion says several times, before and after the sentence
that mentions spotting a bear, that the "sole" purpose of the
flight was "hunting polar bear." See id. at 949, 951. How
could this be done without landing? The plane substituted
for a dog sled. It would therefore be very unlikely for the
hunter and guide, after spotting a bear from the air, to return
to camp and then set out on foot over the ice to shoot it.
Perhaps the customer could fire at the bear from the air
(although Alaskan hunting regulations might have prohibited
this). Even so, one would expect the hunter to want his
"trophy," which he could only recover if the plane landed. If
the FAA's current reading of Marshall were correct, the
existence of a regulatory violation would depend on the
success of the hunt, a senseless regulatory approach. Fur-
thermore, the Marshall opinion's failure even to mention
whether the plane landed outside the base camp is powerful
evidence that the decision turned on no such consideration.
Compare 14 C.F.R. s 119.1(e)(2) (exempting nonstop "sight-
seeing flights"). On the face of the Marshall opinion--all
that the FAA in Washington had before it--we think it fairly
implicit that a landing away from the camp was planned and
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7 International treaties now prohibit the hunting, capturing or
killing of polar bears. See, e.g., Agreement on the Conservation of
Polar Bears, Nov. 15, 1973, 27 U.S.T. 3918.
contemplated. At the least, there is severe doubt that the
FAA's Alaskan Region had been misinterpreting the Mar-
shall decision and its import.
We are unpersuaded by the FAA's additional claim that the
Alaskan Region's interpretation of parts 119, 121 and 135
represented simply a local enforcement omission, in conflict
with the agency's policy in the rest of the country. It is true
that when a local office gives an interpretation of a regulation
or provides advice to a regulated party, this will not necessar-
ily constitute an authoritative administrative position, particu-
larly if the interpretation or advice contradicts the view of the
agency as a whole. See, e.g., Paralyzed Veterans, 117 F.3d at
587; Drummond Coal Co. v. Hodel, 796 F.2d 503, 508 (D.C.
Cir. 1986); N.Y. State Dep't of Social Servs. v. Bowen, 835
F.2d 360, 365 (D.C. Cir. 1987). But the situation here is quite
different. Agency officials in the Alaskan Region uniformly
advised all guides, lodge managers and guiding services in
Alaska that they could meet their regulatory responsibilities
by complying with the requirements of part 91 only. FAA
officials gave that advice for almost thirty years. As for the
agency as a whole, the FAA noted in 1992 that its "past
policy" permitted guide pilots and lodge operators to operate
aircraft under Part 91. And it acknowledged in 1997 that
"[u]ntil recently, lodge/guide operators have been advised
that Part 135 did not address their operation of aircraft."
This must be why the National Transportation Safety Board,
in its 1995 Study of Aviation Safety in Alaska, described
"current FAA policy" as permitting guides to fly their cus-
tomers "as noncommercial operations under the general oper-
ating rules of 14 CFR Part 91, which are less restrictive than
those in Part 135."
Even if the FAA as a whole somehow had in mind an
interpretation different from that of its Alaskan Region,
guides and lodge operators in Alaska had no reason to know
this. Cf. Paralyzed Veterans, 117 F.3d at 587. Those regu-
lated by an administrative agency are entitled to "know the
rules by which the game will be played." See Holmes,
Holdsworth's English Law, 25 Law Quarterly Rev. 414
(1909). Alaskan guide pilots and lodge operators relied on
the advice FAA officials imparted to them--they opened
lodges and built up businesses dependent on aircraft, believ-
ing their flights were subject to part 91's requirements only.
Cf. Paralyzed Veterans, 117 F.3d at 587. That advice became
an authoritative departmental interpretation, an administra-
tive common law applicable to Alaskan guide pilots. The
FAA's current doubts about the wisdom of the regulatory
system followed in Alaska for more than thirty years does not
justify disregarding the requisite procedures for changing
that system. Throughout this period, guide pilots and lodge
operators had no opportunity to participate in the develop-
ment of the part 135 regulations and to argue in favor of
special rules for their operations. Air transportation regula-
tions have evolved considerably since 1963 and part 135 has
been the subject of numerous rule making proceedings. Had
guides and lodge operators been able to comment on the
resulting amendments and modifications to part 135, they
could have suggested changes or exceptions that would have
accommodated the unique circumstances of Alaskan air car-
riage.8 As the FAA pointed out in its brief, the agency's
regulations have, in several respects, treated Alaska differ-
ently from the continental United States. See, e.g., 14 C.F.R.
ss 135.261(b)(1), 121.353, 91.323. There is no reason to sup-
pose that with the participation of Alaskan guide pilots and
lodge operators, the regulations in part 135 would not have
been affected. If the FAA now wishes to apply those regula-
tions to these individuals, it must give them an opportunity to
comment before doing so. The Notice to Operators was
published without notice and comment and it is therefore
invalid. The petition for review is granted.
So ordered.
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8 For example, in 1994, the National Transportation Safety Board
recommended that part 135 be amended to establish certification,
experience, qualification and training requirements specific to pilot
guide/aerolodge operations. In 1995, it noted that the safety of
such operations could be improved by applying some, rather than
all, of part 135's requirements to Alaskan guide pilots. In both
instances, it suggested that the Administration propose a rule
making if it chose to place guide pilot operations under part 135.