United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued November 6, 2008 Decided February 3, 2009
Reissued April 10, 2009
No. 07-1279
SOUTHWEST AIRLINES CO.,
PETITIONER
v.
TRANSPORTATION SECURITY ADMINISTRATION,
RESPONDENT
Consolidated with 07-1280, 07-1281, 07-1282, 07-1283, 07-
1284, 07-1285, 07-1286, 07-1287, 07-1288, 07-1289, 07-
1290, 07-1291, 07-1292, 07-1293, 07-1294, 07-1296, 07-
1297, 07-1298, 07-1323, 07-1338, 07-1347
On Petitions for Review of a Final Order of the Transportation
Security Administration
M. Roy Goldberg argued the cause for petitioners. With
him on the joint briefs were Robert W. Kneisley, Carl B.
Nelson Jr., Bruce H. Rabinovitz, Neil J. King, Jonathan B.
Hill, David J.A. Hayes III, Robert E. Cohn, Patrick F.
Philbin, Gregory L. Skidmore, Charles F. Donley, Edward W.
Sauer, Lorraine B. Halloway, Charles C. Lemley, Thomas M.
Messner, Lester M. Bridgeman, Richard D. Mathias, and
2
David Endersbee. Michael D. Shumsky entered an
appearance.
Jay P. Lefkowitz, Patrick F. Philbin, and Gregory L.
Skidmore were on the briefs for petitioner Northwest Airlines.
Carl B. Nelson Jr. was on the briefs for petitioner
American Airlines, Inc.
Charles C. Lemley and Thomas M. Messner were on the
briefs for petitioner Spirit Airlines, Inc.
David A. Berg, Michael S. Sundermyer, and Richard A.
Olderman were on the brief for amicus curiae Air Transport
Association of America in support of petitioners and seeking
reversal.
Jeffrey Clair, Attorney, U.S. Department of Justice,
argued the cause for respondent. With him on the brief were
Jeffrey S. Bucholtz, Acting Assistant Attorney General, and
Scott R. McIntosh, Attorney.
Before: GARLAND and BROWN, Circuit Judges, and
WILLIAMS, Senior Circuit Judge.
Opinion for the Court filed by Senior Circuit Judge
WILLIAMS.
WILLIAMS, Senior Circuit Judge: Before the terrorist
attacks of September 11, 2001, commercial airlines exercised
responsibility for screening passengers and property at U.S.
airports. Shortly after the attacks, Congress passed the
Aviation and Transportation Security Act (“ATSA”), Pub. L.
No. 107-71, 115 Stat. 625 (2001), establishing the
Transportation Security Administration (“TSA”) and
entrusting it with the primary responsibility for civil aviation
security. 49 U.S.C. § 114. We deal here with several airlines’
3
arguments that TSA has erroneously overcharged them for
their statutory portion of these security costs.
The ATSA authorizes TSA to impose two types of fees to
fund its security services. The first, which is not at issue here,
is a fee on airline passengers. 49 U.S.C. § 44940(a)(1). The
second type of fee—referred to as the Aviation and Security
Infrastructure Fee (“ASIF”), 49 C.F.R. § 1511.1(b)—is
imposed directly on airlines. It is meant to plug the gap
between the costs of TSA’s civil aviation security services and
the sums raised by the passenger fee, but it is subject to two
important limits. 49 U.S.C. § 44940(a)(2)(A). Petitioners—a
group of 22 airlines—are claiming that TSA improperly
subjected them to approximately $98 million a year in
increased ASIF liabilities.
ATSA’s two limits on fees are its “overall” and its “per-
carrier” limits. Under the overall limit, the fees in each fiscal
year “may not exceed, in the aggregate, the amounts paid in
calendar year 2000 by carriers . . . for screening passengers
and property, as determined by the Under Secretary.” 49
U.S.C. § 44940(a)(2)(B)(i). Under the per-carrier limit, the
fees collected from a carrier for fiscal years 2002, 2003 and
2004 “may not exceed the amount paid in calendar year 2000
by that carrier for screening passengers and property, as
determined by the Under Secretary.” 49 U.S.C.
§ 44940(a)(2)(B)(ii) (emphasis added). Starting with fiscal
year 2005, the act allows the Under Secretary to determine the
per-carrier limit “on the basis of market share or any other
appropriate measure in lieu of actual screening costs in
calendar year 2000.” 49 U.S.C. § 44940(a)(2)(B)(iii).
In its implementing regulations, TSA required every
covered carrier to submit a form—referred to as “Appendix
A”—detailing its passenger and screening costs for the year
2000. 49 C.F.R. § 1511.5(d). It also required carriers to
4
provide an audit of their reported costs. Id. § 1511.9. For the
years 2002-2004, TSA generally set each carrier’s annual fee
at the level of costs listed in the carrier’s Appendix A.
In 2004, with the Department of Homeland Security
Appropriations Act, Pub. L. No. 108-334, 118 Stat. 1298
(2004) (the “2004 DHS Appropriations Act”), Congress
intervened to make sure that TSA was collecting its full
entitlement under ATSA. It directed the Government
Accountability Office (“GAO”) to review the airlines’ cost
information for the year 2000. And it stated that, beginning
with amounts due in the year 2005, if “the result of this review
is that an air carrier or foreign air carrier has not paid the
appropriate fee to the Transportation Security
Administration . . . , the Secretary of Homeland Security shall
undertake all necessary actions to ensure that such amounts
are collected.” Id.
The GAO’s report concluded that the airlines had
collectively under-reported their security screening costs in
the year 2000 by an estimated $129 million. United States
Government Accountability Office, Aviation Fees: Review of
Air Carriers’ Year 2000 Passenger and Property Screening
Costs 7 (2005).
Relying in part on the GAO’s analysis, TSA determined
that each of petitioners had under-reported its year 2000
screening costs. It began by calculating the industry’s average
cost per passenger screened. It then compared that average
with each airline’s reported cost per passenger screened. For
those airlines whose reported costs were at or above the
industry average, it assessed no additional liability. It also
gave a pass to airlines whose reported costs were below the
industry average, but that had presented an adequate audit of
their reporting costs.
5
When TSA determined—as it did for all of the
petitioners—that an airline reported below-average costs and
did not provide an adequate audit, TSA presumed that its
screening costs per passenger in the year 2000 were equal to
the industry average. It then calculated the airline’s total
screening costs for 2000 by multiplying the industry average
by the number of passengers that airline screened in 2000.
Finally it estimated each airline’s additional ASIF liability by
subtracting its reported year 2000 costs from the new figure.
TSA’s director of revenue sent each petitioner a letter
describing this method and advising the petitioner of its
additional liability. Petitioners appealed to TSA, which
upheld the initial decisions in all relevant respects.
In their joint brief, petitioners challenge TSA’s final
decisions, claiming that they reflected substantive statutory
violations, were arbitrary and capricious, and were flawed
procedurally. We find merit in the attack on TSA’s
understanding of the ATSA’s “overall” limit, but not in the
other objections.
In addition, three of the petitioners advance individual
claims, one of which (that of Spirit Airlines (“Spirit”))
prevails.
* * *
Before reaching the merits, we need to address the effect
of two ATSA provisions for jurisdiction-stripping. The
original ATSA provided that “[d]eterminations of the Under
Secretary under this subparagraph [i.e., 49 U.S.C.
§ 44940(a)(2)(B), stating the limitations on air carrier fees]
are not subject to judicial review.” Pub. L. No. 107-71, 115
Stat. 597, 625 (2001). In the Consolidated Appropriations
Act, P.L. 110-161, § 540, 121 Stat. 1944 (December 26,
6
2007), Congress relaxed this restriction, creating an exception
for “estimates and additional collections made pursuant to the
appropriation for Aviation Security in Public Law 108-334
[i.e., collections made pursuant to the 2004 DHS
Appropriations Act]: . . . Provided . . . That such judicial
review shall be limited only to additional amounts collected
by the Secretary before October 1, 2007.” 49 U.S.C.
§ 44940(a)(2)(B)(iv). As the collections here within the scope
of the jurisdiction-stripping provision were made pursuant to
the directive of the 2004 DHS Appropriations Act, and all the
issues apply in part to amounts collected by TSA before
October 1, 2007, we have jurisdiction over all issues that
petitioners pose. Because some of the issues fall outside the
basic jurisdiction-stripping clause, we will note below—as to
each issue on which petitioners prevail—whether our
judgment applies to collections on or after October 1, 2007.
* * *
“Overall limit.” The ATSA’s “overall limit” provides
that the fees in each fiscal year “may not exceed, in the
aggregate, the amounts paid in calendar year 2000 by carriers
. . . for screening passengers and property.” 49 U.S.C.
§ 44940(a)(2)(B)(i) (emphasis added). Petitioners argue that
TSA violated the plain language of the provision by basing its
calculation of the fees on a GAO estimate which had included
the costs of screening non-passengers, such as “meeters-and-
greeters” and sightseers. TSA acknowledges inclusion of the
costs of screening such individuals, but seeks to justify doing
so. Its arguments do not convince us.
TSA argues that the reference to “screening passengers”
is ambiguous, that the word “screening” may mean something
more than the simple evaluation of whether a passenger poses
a threat to aviation security. “To screen” may also mean “to
7
protect.” (“The mother screened her child from the pounding
hailstones.”) Therefore, TSA suggests, the phrase “screening
passengers” can be read to include anything done to protect
passengers, which of course would include exerting control
over the access of potentially dangerous non-passengers. But
“[a]mbiguity is a creature not of definitional possibilities but
of statutory context.” Brown v. Gardner, 513 U.S. 115, 118
(1994). In the context of airport security, the phrase
“screening passengers” has a widely understood meaning: it
refers to the process of searching airline passengers at an
airport security checkpoint, not to the entire set of activities
undertaken to promote passenger safety.
TSA also notes that the statute refers not merely to
screening passengers, but also to screening “property.” True
enough; and the statute does not limit the relevant “property”
to that of passengers. Thus, TSA could include the costs of
screening the property of non-passengers in its calculation.
But that authority provides it no justification for also
including the costs of screening the non-passengers
themselves.
TSA also asserts an equally unpersuasive argument from
statutory purpose. It asserts that Congress did not intend to
“bestow a windfall on carriers by assuming the full burden of
providing services that inured to the benefit of the industry,
and that had previously been provided at the industry’s
expense.” Respondent’s Br. at 39. The argument might
conceivably trump the statutory language if it accorded with
the facts, but it doesn’t. As petitioners observe, sightseers and
meeters-and-greeters “have been barred from secure airport
areas since the September 11 attacks and, therefore, are not
screened by TSA.” Petitioners’ Reply Br. at 11. TSA’s
interpretation serves no windfall-prevention purpose.
8
Finally, TSA argues that petitioners’ interpretation is
inconsistent with another part of the statute. It points to 49
U.S.C. § 44901(a), which directs TSA to “provide for the
screening of all passengers and property.” TSA suggests that
this provision must be interpreted to give it the power to
screen all persons who enter controlled boarding areas; it
would be absurd to deny TSA power to screen non-
passengers. And if “passengers and property” includes non-
passengers in § 44901(a), TSA argues, the phrase should have
the same meaning in § 44940(a)(2)(B)(i). Supporting TSA’s
theory is the standard presumption that “identical words used
in different parts of the same act are intended to have the same
meaning.” Sorenson v. Sec’y of Treasury, 475 U.S. 851, 860
(1986) (quoting Helvering v. Stockholms Enskilda Bank, 293
U.S. 84, 87 (1934)). But this presumption is not so strong as
to displace the plain meaning of a statutory provision simply
by virtue of the fact that interpreting a different provision the
same way would or might be absurd. In addition, although the
question of § 44901(a)’s meaning is not before us, we note
that we are not convinced that it is the only possible source of
TSA’s power to screen non-passengers. See 49 U.S.C.
§ 44903(h) (authorizing TSA screening of “all individuals”
before entry into a secured area of covered airports); 49
C.F.R. §§ 1540.105, 1540.107 (including 49 U.S.C. § 44903
among sources of authority for certain airport screening
activities). In short, TSA violated the plain meaning of the
ATSA’s overall limit when it included the costs of screening
non-passengers in its estimate of the costs of covered
screening in 2000.
This holding governs amounts collected before October 1,
2007; what of the effect of the jurisdiction-stripping provision
on amounts collected thereafter? Our conclusion rests not on
a review of a “determination . . . under” the subparagraph
covered by the provision, but rather resolves the question
whether TSA has made the kind of determination required by
9
the statute. We drew just this distinction in COMSAT Corp. v.
FCC, 114 F.3d 223 (D.C. Cir. 1997), which involved a
provision precluding judicial review of “increases or
decreases in fees made by amendments pursuant to this
paragraph.” Id. at 224 (quoting 47 U.S.C. § 159(b)(3)). We
read the clause to mean simply that “the courts may not
review the Commission’s actions where the Commission has
acted within the scope of its authority” under the controlling
statute. Id. at 227. So, too, here. Therefore, the jurisdiction-
stripping provision does not apply, and our holding on this
point governs the collections made after 2007.
“Per-carrier limit.” Petitioners’ argument here is far less
persuasive. They assert that the statutory language—which
limits each carrier’s ASIF to “the amount [it] paid in calendar
year 2000 . . . for screening passengers and property, as
determined by the Under Secretary,” § 44940(a)(2)(B)(ii)—
unconditionally precludes TSA’s use of the industry average
as a proxy for petitioners’ cost per passenger screened. We
see no such preclusion.
First, the statute’s “amount paid” language is qualified:
“as determined by the Under Secretary.” As then-Judge
Roberts observed in AFL-CIO v. Chao, 409 F.3d 377 (D.C.
Cir. 2005), “We have noted in the past the ‘distinction
between the objective existence of certain conditions and the
Secretary’s determination that such conditions are present,’
stressing that a statute phrased in the latter terms ‘fairly
exudes deference’ to the Secretary.” Id. at 393 (Roberts, J.,
concurring in part and dissenting in part) (quoting Kreis v.
Sec’y of Air Force, 866 F.2d 1508, 1513 (D.C. Cir. 1989).
The ATSA similarly gives TSA broad discretion to choose a
suitable method for making the required determination.
Here TSA’s choices were clearly permissible. Although
the airlines may prefer that TSA rely on their Appendix A
10
information, TSA was certainly entitled to conclude that, in
the absence of an audit, such data were not reliable enough.
TSA was also free to select a reasonable alternative, such as
the industry’s average cost. That average cost—multiplied by
a logically chosen carrier-specific variable, the number of
passengers screened by the carrier in the year 2000—in fact
constitutes a measurement of a specific carrier’s screening
costs.
The 2004 DHS Appropriations Act called for GAO
review of “the calendar year 2000 cost information for
screening passengers and property pursuant to section
44940(a)(2),” 118 Stat. at 1303 (emphasis added); petitioners
therefore reframe their per-carrier argument to claim that the
2004 Act requires the GAO to examine the individual air
carriers’ “actual” security costs, instead of using sampling
data. Petitioners’ Br. at 38, 40. The argument fails here,
naturally, for the same reasons as it did in the context of
§ 44940(a)(2)(B) itself.
Starting with the fiscal year 2005, of course, 49 U.S.C.
§ 44930(a)(2)(B)(iii) gives TSA even broader latitude,
authorizing application of the per-carrier limit by reference to
“market share or any other appropriate measure.” For the
collections at issue here, however, TSA hasn’t invoked this
section.
Finally, we note that the per-carrier limit, like the overall
limit, rests on an estimate of the costs of “screening
passengers and property.” Because TSA’s industry average
included the costs of screening non-passengers, that
calculation was not a “determination . . . under” 49 U.S.C.
§ 44940(a)(2)(B), and must be corrected on remand.
Claims that TSA acted arbitrarily and capriciously.
Petitioners’ first such argument is that TSA penalized them
11
for not complying with its requirement of providing an
unqualified audit opinion for their Appendix As—a
requirement they say was impossible to fulfill. Their records
were inadequate to provide the required information without
making significant assumptions, and thus their auditors would
not provide unqualified opinions.
Assuming arguendo that TSA was obligated to supply a
feasible alternative before relying on an industry average, this
argument still fails because TSA did in fact supply such an
alternative. In response to the industry’s concerns, TSA
announced that it would accept a qualified opinion if an
auditor could not provide an unqualified one. But TSA
stipulated that, as the qualified opinions would not supply
adequate “details and reasoning,” a carrier relying on such an
opinion would have to submit the auditor’s working papers
(rather than merely assuring their availability to TSA). See
Joint Appendix (“J.A.”) 365-67.
Petitioners do not claim that they complied with this
alternative procedure. In their reply brief, however, they seem
to argue that they could not have done so, on the grounds that
an auditor’s working papers are its property, not theirs.
Petitioners’ Reply Br. at 15. It is not clear to us why an
auditor’s property interest (presumably a negotiable matter in
any event) would allow the airlines to make the papers
available upon request, but not to submit them in the way
outlined by TSA. In any event, petitioners waived the
argument by failing to make it in their opening brief.
Carducci v. Regan, 714 F.2d 171, 177 (D.C. Cir. 1983).
In petitioners’ second arbitrary-and-capricious argument,
they reformulate their contention that TSA misread the
statute’s per-carrier limit, now saying that it was arbitrary to
use the industry average cost per passenger as a proxy for
each petitioner’s per-passenger cost. They also say that TSA
12
wrongly ignored their Appendix As and failed to give proper
weight to their evidence that their screening costs were below
the industry average.
Assuming this argument is actually distinct from the
statutory interpretation claim, it fares no better. Given the
technical character of the issue, TSA is entitled to a good deal
of deference on its resolution. See, e.g., West Virginia v.
EPA, 362 F.3d 861, 867 (D.C. Cir. 2004); Milk Train, Inc. v.
Veneman, 310 F.3d 747, 754 (D.C. Cir. 2002). Here, the
carriers’ own explanations as to why it was impossible for
them to obtain unqualified audits completely undermine their
position: for carriers that did not collect adequate carrier-
specific information on screening costs for 2000, it was hardly
arbitrary for TSA to rely on an industry average.
Petitioners then object that the GAO report on which
TSA relied had allocated excessive amounts of airport law
enforcement officer (“LEO”) costs to passenger screening.
(The calculations, of course, were based on TSA’s mistaken
decision to include the costs of non-passenger screening; it
may be that the redo necessitated by our decision will
occasion agreement between the parties on these subsidiary
issues, or at least less disagreement.) Specifically, when an
airport explicitly identified an LEO charge as being for
“Flexible Response,” GAO, in reliance on its contractor,
included 100% of LEO costs in screening; when an airport
allocated a portion of its airport-wide LEO budget to “the
terminal cost center,” GAO accepted its contractor’s decision
to “judgmentally” apply 50% of such costs to screening. See
J.A. 15-16 (GAO), 108 (contractor).
These allocations are hardly rock solid. But TSA was
operating in a data-poor environment, as shown by
petitioners’ own arguments about their carrier-specific data.
TSA’s contractor interviewed airport officials, eliciting a wide
13
range of statements about the actual role of LEOs. This is
most certainly not a case where there is reason to believe that
materially superior information could be readily obtained, and
where, accordingly, a court would be likely to find an
agency’s disregard of the alternative as arbitrary. Air
Transport Ass'n of Canada v. FAA, 323 F.3d 1093, 1095-97
(D.C. Cir. 2003). Any decision here would have required
considerable guesswork, and we cannot say that TSA’s
guesses were unreasonable.
Petitioners also claim that the GAO report relied on faulty
statistical techniques. They argue, for instance, that in
estimating the cost of private screening contractors, the GAO
relied on data from only nine companies, which were not
shown to be representative of the field as a whole. In fact
GAO’s contractor has sought data from the 10 largest
screening contractors, which represented between 84% and
95% of the market (depending on whether one relies on
number of screeners or number of passengers screened). J.A.
72. It excluded data from the largest simply because nearly
7000 of its invoices appeared to be incomplete and
inconsistent. J.A. 79. While complaining about GAO’s
reliance on “such small samples,” Petitioners’ Br. at 58,
petitioners quite sensibly make no argument for inclusion of
data from the largest screening company. Nor do they
acknowledge the contractor’s finding that the 2d-through-10th
largest firms accounted for between 63% and 67% of all
screening. J.A. 80.
TSA accepted the results, observing that, while other
approaches to data collection and statistical analysis were
available, they would not have yielded results that were
“substantially different or more reliable.” J.A. 565, 566.
Even before us, petitioners do not directly claim the existence
of an alternative so visibly superior that TSA could be faulted
14
for making the choice it did. We cannot say the choice was
arbitrary or capricious.
Petitioners similarly object to the GAO’s extrapolation of
other airport costs for all 419 airports from a sample of 59.
(In fact GAO sought data from 70 airports, the top 20 and 50
others. O’Hare did not provide sufficient information for
inclusion, but the other top 19 did.) The 70 sampled airports
accounted for about 75% of screened passengers in 2000. J.A.
15, 98.
They argue that the extrapolation was unreliable because
it was based on screened passenger volumes, which do not
correlate closely with actual airport costs. TSA found,
however, that this objection was invalid because the
formulation used by the GAO was not directly tied to the
volume of the passengers screened. J.A. 567. More
generally, the TSA found that the lack of independently
verifiable data forced the GAO to make assumptions based on
its “professional judgment and expertise” as well as the
available data. J.A. 566. Although these assumptions can be
questioned, it was not arbitrary and capricious for the TSA to
rely on them.
Finally, petitioners argue that the decisions were arbitrary
and capricious because TSA violated its own regulations,
specifically 49 C.F.R. §§ 1511.11(a), 1511.5(c) & (d), which
petitioners try to read as mandating individual company audits
by TSA rather than reliance on GAO. A glance at the
regulations shows that they impose no such mandate.
Procedural claims. Petitioners claim a right under the
due process clause to see certain documents relevant to TSA’s
decisions, such as the data file used by the GAO. TSA
responded to this claim with an assertion that the airlines’
access to the GAO report and their own records should be
15
“sufficient to substantiate all relevant grounds, if any, for
relief” from TSA’s claims for additional compensation. J.A.
373. (The airlines also, of course, had the GAO contractor’s
report, with considerable additional detail.)
The airlines correctly cite McClelland v. Andrus, 606
F.2d 1278, 1285 (D.C. Cir. 1979), for the general proposition
that in some circumstances due process will entitle a party to
discovery in an agency proceeding. There we appeared to
assume that the decision was adjudicative, and thus belonged
to the class of cases for which due process is typically, and
almost exclusively, applicable. See Decatur Liquors, Inc. v.
District of Columbia, 478 F.3d 360, 363 (D.C. Cir. 2007);
Wisconsin Gas Co. v. FERC, 770 F.2d 1144, 1166 & n.35
(D.C. Cir. 1985). Compare Londoner v. Denver, 210 U.S. 373,
385 (1908), with Bi-Metallic Inv. Co. v. State Bd. of
Equalization, 239 U.S. 441, 445-46 (1915). Moreover, as a
later decision recognized, “McClelland was seeking a specific
document ‘uniquely relevant to [his] case.’” Echostar
Communications Corp. v. FCC, 292 F.3d 749, 756 (D.C. Cir.
2002). The document requests here appear both less specific
and less urgent than McClelland’s. In Echostar, in fact, we
found no due process violation even though the agency’s
explanation was “terse” and “cryptic.” Id. at 755, 756. Given
the nature of TSA’s decision—an inquiry into industry-wide
costs (once TSA validly decided to rely on such data rather
than on petitioners’ Appendix As)—and the “extreme
deference” with which we review agency denials of discovery,
id. at 756, the denial here clearly passes (again assuming the
application of due process requirements at all).
Petitioners also object to contacts between the official
who rendered the final decisions and those responsible for the
initial decisions, contacts that we may assume would violate
the separation-of-functions rules of the Administrative
Procedure Act (“APA”) if those rules were applicable. See 5
16
U.S.C. § 554(d). But § 554 applies only to “adjudication[s]
required by statute to be determined on the record after
opportunity for an agency hearing,” 5 U.S.C. § 553(a), and
nothing in the ATSA or the DHS Appropriations Act requires
such a hearing. Cf. Dist. No. 1., Pac. Coast Dist., Marine
Eng’rs Beneficial Ass’n v. Maritime Admin., 215 F.3d 37, 42
(D.C. Cir. 2000) (addressing claim of ex parte contacts in
matter not covered by the APA’s ban).
Petitioners also assert a constitutional theory, resting
primarily on Stone v. FDIC, 179 F.3d 1368 (Fed. Cir. 1999), a
case involving discharge of a government employee found to
have a property interest in his job and thus clearly entitled to
due process. Id. at 1374-75. But the court in Stone expressly
confined its opinion to instances where the decider received
“new and material” information, of which there is no claim,
nor any reason to suspect, here. Thus the Stone decision
appears quite consistent with Withrow v. Larkin, 421 U.S. 35,
58 (1975), rejecting any due process requirement of separation
of functions unless special circumstances indicate “that the
risk of unfairness is intolerably high.” Even if we assumed in
petitioners’ favor that the proceeding was subject to due
process requirements at all, we would not have the rare
conditions rendering the agency’s procedures
unconstitutional. See also Gottlieb v. Pena, 41 F.3d 730, 737
(D.C. Cir. 1994) (upholding against due process challenge an
adjudicative procedure allowing staff to communicate ex parte
with the ultimate decisionmaker); Chem. Waste Mgmt. Inc. v.
EPA, 873 F.2d 1477, 1484 (D.C. Cir. 1989) (relying on
Withrow v. Larkin to reject facial attack on regulations
allowing combination of functions).
Finally, petitioners argue that they had a due process right
to an oral hearing. Again, assuming that the proceeding was
of a nature to make due process requirements applicable, the
claim fails because of the nature of the issues. Here they
17
involved statutory construction, the validity of GAO’s
statistical methods, and the accuracy of the carriers’ cost
information—issues of a kind that can be adequately resolved
on written submissions. See Lomak Petroleum, Inc. v. FERC,
206 F.3d 1193, 1199 (D.C. Cir. 2000); CNG Transmission
Corp. v. FERC, 40 F.3d 1289, 1295 (D.C. Cir. 1994).
Petitioners rely primarily on Gray Panthers v. Schweiker, 652
F.2d 146, 170 (D.C. Cir. 1980), a healthcare benefits case.
There we held: “Where factual issues involving the credibility
or veracity of the claimant are at stake, particular
consideration of a policy granting on request an oral interview
before the final denial on reconsideration should be given.”
Id. at 172 (emphasis added). The difference in the character
of issues could hardly be more stark.
Individual airline claims. We close with the individual
claims of Spirit, American Airlines (“American”) and
Northwest Airlines (“Northwest”), in that order.
TSA acknowledged that the language of the audit
submitted by Spirit complied with the requirements of the
relevant regulation, 49 C.F.R. § 1511.9, yet declined to
classify the opinion as “unqualified.” It explained that the
audit did not include information that was “further required by
clarification published in the Federal Register,” citing 67 Fed.
Reg. 21,582, 21,584 (May 1, 2002). It therefore subjected
Spirit to additional ASIF liability. J.A. 1824.
But the “clarification” to which TSA referred was
contained in a guidance that explicitly states that it “does not
impose any additional requirements” and that “[c]arriers
should not infer that it represents the only acceptable means of
completing Appendix A.” 67 Fed. Reg. 21,582, 21,582,
21583. Thus the guidance did not “further require” anything,
and TSA’s stated grounds for rejecting Spirit’s audit do not
hold water. We therefore set aside the additional ASIFs
18
imposed on Spirit with respect to all amounts collected before
October 1, 2007. As TSA’s error here is plainly a
“determination . . . under” 49 U.S.C. § 44940(a)(2)(B),
however, the jurisdictional bar of 49 U.S.C.
§ 44940(a)(2)(B)(iv) applies to later collections.
American argues that TSA owes it almost $14 million for
development and installation of an inline baggage security
system. It asserts that under the common law right of offset,
its ASIF should be reduced by the amount it is owed. The
initial version of this opinion disposed of American’s claim by
relying on 41 U.S.C. § 605, a statute not cited by the parties.
American later petitioned for rehearing, arguing that our
analysis of the statute was erroneous, but conceding that its
claim was not validly presented in this proceeding.
Ordinarily, we would not excise a legal analysis from an
opinion simply on the basis of the losing party’s conceding
the ultimate issue on another ground. In this case, however,
we accept American’s concession rather than rely on a
resolution that the parties never had an opportunity to
satisfactorily address. Thus, assuming without deciding that
a petitioner has the right to claim an offset from an agency
before our court, American has not validly presented any such
claim.
Finally, Northwest objects to being charged for screening
costs that TSA did not assume. When calculating its total
year 2000 costs for its Appendix A, Northwest excluded
screening costs that it continued to bear. In 2005 TSA
informed Northwest that it should have included those costs in
its ASIF payment. As a result, quite independently of TSA’s
substitution of its calculation of screening costs for the
carriers’, Northwest was over $3 million in arrears and would
have to pay higher fees going forward. J.A. 1548-49.
19
Northwest has a two-fold claim: it argues that statute
prohibits TSA from imposing ASIFs based on security costs it
has not taken over, and that in any case TSA was not
authorized to impose these fees retroactively. Both arguments
fail.
Northwest’s insuperable difficulty is that the limit that it
seeks to impose—that an airline can only be charged for as
much of its year 2000 screening costs as TSA has taken
over—is nowhere to be found in the statute. We rehearsed at
the outset the statute’s overall and per-carrier limits, and those
are the only ones it states. It thus provides no protection for
airlines against what may seem to be double collection for
costs an airline continues to bear.
Nor is there anything retroactive—in any legally material
sense—in TSA’s collection of the additional fees. TSA is not
retroactively imposing a new rate; rather, it is collecting
amounts that Northwest, because of its mistaken calculation,
had failed to pay.
* * *
In sum, TSA erred in its interpretation of the ATSA’s
overall limit and in its classification of Spirit’s audit opinion.
We therefore remand for modifications consistent with this
opinion, and otherwise affirm TSA’s decision in all respects.
So ordered.