[PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT
FILED
U.S. COURT OF APPEALS
ELEVENTH CIRCUIT
AUGUST 22, 2005
No. 04-13464
THOMAS K. KAHN
CLERK
D. C. Docket No. 04-20372-CV-UUB
FREDERICK SHOTZ,
DANIELLE BLACK, et al,
Plaintiffs-Appellants,
versus
AMERICAN AIRLINES, INC.,
a Delaware corporation, UNITED AIR
LINES, INC., a Delaware corporation, et al.,
Defendants-Appellees.
Appeal from the United States District Court
for the Southern District of Florida
(August 22, 2005)
Before DUBINA and WILSON, Circuit Judges, and LAWSON*, District Judge.
______________________
*Honorable Hugh Lawson, United States District Judge for the Middle District of Georgia,
sitting by designation.
DUBINA, Circuit Judge:
The plaintiffs, a potential class of disabled persons, filed this putative class
action against ten airline carriers for alleged violations of the Rehabilitation Act,
29 U.S.C. § 701 et seq., and sought damages, declaratory and injunctive relief, and
attorney’s fees and costs. The district court granted the defendants’ Motion to
Dismiss for lack of subject matter jurisdiction, holding that the defendant airline
carriers cannot be sued under the Rehabilitation Act because the funds and
financial benefits that Congress provided to the airline industry in response to the
September 11 terrorist acts did not constitute “‘federal financial assistance’ within
the meaning of the Rehabilitation Act.” Shotz v. American Airlines, 323 F. Supp.
2d 1315, 1319 (S.D. Fla. 2004). The plaintiffs appeal, and, for the reasons that
follow, we affirm the district court’s order.
I. BACKGROUND
The potential class consists of disabled persons whom the defendant airline
carriers allegedly discriminated against on the basis of their disabilities. The
gravamen of the plaintiffs’ amended complaint is that the airline carriers “failed to
implement system wide policies and practices that would make their facilities and
services accessible to people with disabilities,” in violation of the Rehabilitation
2
Act. The Rehabilitation Act provides in pertinent part: “No otherwise qualified
individual with a disability in the United States . . . shall, solely by reason of her or
his disability, be excluded from the participation in, be denied the benefits of, or
be subjected to discrimination under any program or activity receiving Federal
financial assistance . . . .” 29 U.S.C. § 794(a). The plaintiffs contend that the
massive aid package, titled the Air Transportation Safety and System Stabilization
Act, Pub. L. No. 107-42, 115 Stat. 230 (2001) (“Stabilization Act”), that Congress
provided to the airline industry in response to the September 11 terrorist acts
qualified as “federal financial assistance,” thereby subjecting the airline carriers to
the Rehabilitation Act. The district court disagreed and dismissed the case for
lack of subject matter jurisdiction. Shotz, 323 F. Supp. 2d at 1318-20. The
plaintiffs then perfected this appeal.
II. ISSUE
Whether the district court properly concluded that it lacked subject matter
jurisdiction because it found the Rehabilitation Act was inapplicable to the
plaintiffs’ claims.
III. STANDARD OF REVIEW
“In reviewing an order granting a motion to dismiss, the appellate court
must accept the factual allegations of the complaint as true and may affirm the
3
dismissal of the complaint only if it is clear that no relief could be granted under
any set of facts that could be proved consistent with the allegations.” Mesocap
Ind. Ltd. v. Torm Lines, 194 F.3d 1342, 1343 (11th Cir. 1999) (quotation omitted).
IV. DISCUSSION
The Rehabilitation Act does not define “federal financial assistance.”
Courts, however, have defined the term as used in the Rehabilitation Act to mean
the federal government’s provision of a subsidy to an entity. DeVargas v. Mason
& Hanger-Silas Mason Co., 911 F.2d 1377, 1382 (10th Cir. 1990) (finding that a
defendant receives “federal financial assistance” within meaning of Rehabilitation
Act when it receives a subsidy) (citing Jacobson v. Delta Airlines, Inc., 742 F.2d
1202, 1208-09 (9th Cir. 1984)); see also Bachman v. Am. Soc.’y of Clinical
Pathologists, 577 F. Supp. 1257, 1264 (D.N.J. 1983) (“The term ‘assistance’
connotes a transfer of government funds by way of subsidy.”). Generally, “to
determine the applicability of [the Rehabilitation Act], [a court] must determine
whether the government intended to give [the defendant] a subsidy,” as opposed to
compensation. DeVargas, 911 F.2d at 1382; accord Delmonte v. Dep’t of Bus.
and Prof’l Regulation, 877 F. Supp. 1563, 1565 (S.D. Fla. 1995).
The defendants assert that the Stabilization Act was not a subsidy, but rather
compensation provided to the airline industry in response to the economic crisis
4
the industry faced as a result of the September 11 terrorist attacks. In support of
their argument, defendants point to Congress’s use of the word “compensate” in
the Stabilization Act:
(a) IN GENERAL.– Notwithstanding any other
provision of law, the President shall take the following
actions to compensate air carriers for losses incurred by
the air carriers as a result of the terrorist attacks on the
United States that occurred on September 11, 2001:
...
(2) Compensate air carriers in an aggregate amount equal
to $5,000,000,000 for–
(A) direct losses incurred beginning on September 11,
2001, by air carriers as a result of any Federal ground
stop order issued by the Secretary of Transportation or
any subsequent order which continues or renews such a
stoppage; and
(B) the incremental losses incurred beginning September
11, 2001, and ending December 31, 2001, by air carriers
as a direct result of such attacks.
5
Pub. L. No. 107-42, 115 Stat. 230 (2001) (emphases added). The defendants also
find support for their argument in other federal regulations implementing the
Stabilization Act: for example, Title 14 of the Code of Federal Regulations, part
330, which lays out certain procedures for implementing § 101(a)(2) of the
Stabilization Act, is titled “Procedures for Compensation of Air Carriers;” 14
C.F.R. § 330.1 reads in pertinent part: “This statutory provision is intended to
compensate air carriers for direct losses incurred as a result of the Federal ground
stop order issued by the Secretary of Transportation;”14 C.F.R. § 330.9 details
“the limits on compensation to air carriers;” and 14 C.F.R. § 330.11 states
“[w]hich carriers are eligible to apply for compensation.” The district court agreed
with the defendants, finding that the language in the Stabilization Act, and the
above implementing regulations, unambiguously show Congress intended to
compensate, not subsidize, airline carriers.
The plaintiffs concede, for purposes of argument, that the funds and
financial benefits provided to the defendants under § 101(a)(2)(A) are not a
subsidy. They maintain, however, that the funds and financial benefits provided
under § 101(a)(2)(B) are a subsidy because they went far beyond compensating
actual or potential losses sustained by airline carriers as a result of the September
11 terrorist attacks.
6
The plaintiffs’ argument, however, misses the mark. Although the plaintiffs
are correct in arguing that “federal financial assistance” as used in the
Rehabilitation Act should be interpreted broadly, see Arline v. Sch. Bd. of Nassau
County, 772 F.2d 759, 762 n.9 (11th Cir. 1985), the pertinent inquiry here is
Congress’s intent in passing the Stabilization Act. We must look to the Act itself
to determine whether Congress intended to compensate or provide a subsidy. See
Delmonte, 877 F. Supp. at 1565; see also Harry v. Marchant, 291 F.3d 767, 770
(11th Cir. 2002) (“[W]e begin by examining the text of the statute to determine
whether its meaning is clear.”). In addition, we agree with the Delmonte court that
“the question really is whether Congress intended for this type of assistance to
trigger the coverage of § 504.” Delmonte, 877 F. Supp. at 1565 (recognizing that
regardless of whether financial benefits received by an entity appeared “on its
face” to be a form of “federal financial assistance” within the meaning of the
Rehabilitation Act, the court must determine whether Congress intended for the
recipient of such financial benefits to be subject to the Rehabilitation Act).
Plainly, the express language found in the Stabilization Act unambiguously shows
Congress intended for the funds and financial benefits at issue to compensate, not
subsidize, airline carriers. Indeed, the Stabilization Act begins by stating “the
President shall take the following actions to compensate air carriers for losses
7
incurred by the air carriers as a result of the terrorist attacks on the United States
that occurred on September 11, 2001.” Pub. L. No. 107-42, 115 Stat. 230
(emphasis added). Accordingly, upon “find[ing] the terms of a statute
unambiguous, judicial inquiry is complete.” Burlington N. R.R. Co. v. Oklahoma
Tax Comm’n, 481 U.S. 454, 461, 107 S. Ct. 1855, 1860 (1987) (quoting Rubin v.
United States, 449 U.S. 424, 430, 101 S. Ct. 698, 701 (1981)); See, e.g., Conn.
Nat’l Bank v. Germain, 503 U.S. 249, 253-54, 112 S. Ct. 1146, 1149 (1992)
(“[C]ourts must presume that a legislature says in a statute what it means and
means in a statute what it says there.”). Further, we cannot ignore the unique
circumstances under which Congress passed this legislation. In this regard, it
seems illogical to infer that, in passing the Stabilization Act in response to the
enormous economic crisis the airline industry faced as a result of the September 11
terrorist acts, Congress also intended to expose airline carriers to additional
economic risk by allowing private lawsuits for damages to be brought under the
Rehabilitation Act.
Additionally, our conclusion that Congress clearly did not intend for the
Rehabilitation Act to apply to airline carriers is further buttressed by the very
existence of the Air Carrier Access Act passed in 1986 (“ACAA”), 49 U.S.C. §
41705 et seq. Congress passed the ACAA in response to the Supreme Court’s
8
ruling in Dep’t of Transp. v. Paralyzed Veterans of America, 477 U.S. 597, 610-
12, 106 S. Ct. 2705, 2713-14 (1986), in which the Court held that certain forms of
federal funding provided to airport operators and to air traffic control systems did
not subject airline carriers to the Rehabilitation Act because they were not direct
recipients of the funds.1 The ACAA not only specifically addresses and prohibits
airline discrimination based on disabilities, it provides various remedies and
enforcement mechanisms (e.g., civil penalties, enforcement actions brought by the
Department of Transportation (“DOT”) upon complaints, and, in certain instances,
the opportunity for review in the D.C. circuit regarding DOT orders promulgated
under the ACAA). 49 U.S.C. § 41705 et seq.; see also Love v. Delta Airlines, 310
F.3d 1347, 1354-58 (11th Cir. 2002) (finding that Congress “create[d] an elaborate
and comprehensive enforcement scheme” to prohibit discrimination by airline
1
The plaintiffs’ reliance on Paralyzed Veterans is misplaced. Simply because the defendant
airline carriers are direct recipients of funds and financial benefits provided through the Stabilization
Act does not mean that such aid is automatically “federal financial assistance” within the meaning
of the Rehabilitation Act. Rather, as detailed herein, the relevant inquiry is whether Congress
intended for such aid to constitute a subsidy and subject the recipients to the provisions of the
Rehabilitation Act. Delmonte, 877 F. Supp. at 1565. In Paralyzed Veterans, there was no dispute
over, or discussion on, whether Congress intended for the federal funding at issue, provided through
grants pursuant to the Airport and Airway Development Act of 1970, to constitute “federal financial
assistance” within the meaning of the Rehabilitation Act. Similarly, in Flores v. Puerto Rico
Telephone Co., 840 F. Supp. 3, 4 (D.P.R. 1993), rev’d on other grounds, 64 F.3d 742 (1st Cir. 1995),
another case heavily relied upon by the plaintiffs, there was no dispute over, or discussion on,
whether Congress intended for the funds at issue, provided through the Federal Emergency
Management Agency, to constitute “federal financial aid” within the meaning of the Rehabilitation
Act.
9
carriers on the basis of disability). To accept plaintiffs’ contention here, one
would have to believe that Congress intended, in the wake of the September 11
terrorist acts, to undermine the ACAA by providing a separate and distinct method
for addressing an airline carrier’s discrimination on the basis of disability, one that
allows for an individual to bring a private lawsuit in a district court–something not
available under the ACAA. 49 U.S.C. § 41705 et seq.; see also Love, 310 F.3d at
1359-60 (11th Cir. 2002) (holding that there is no implied private right of action to
sue under the ACAA in federal district court). We decline to accept plaintiffs’
arguments.
Importantly, Congress usually requires federal agencies to obtain from the
recipients of “federal financial aid” written, executed assurances that they will
comply with the Rehabilitation Act. See generally 49 C.F.R. § 27.9(a).
Indisputably, such implementing assurances were not promulgated here. In fact,
the DOT, the agency charged with implementing the Stabilization Act, has filed an
amicus curiae brief on behalf of the defendant airline carriers stating that it “did
not require assurances prior to disbursing the funds due under the Stabilization
Act,” because it did not believe the funds were “federal financial assistance”
within the meaning of the Rehabilitation Act. As the implementing agency of the
Stabilization Act, the DOT’s interpretation of the Stabilization Act warrants
10
deference from this court. Chevron, U.S.A., Inc. v. Natural Res. Defense Council,
Inc., 467 U.S. 837, 844, 104 S. Ct. 2778, 2782 (1984) (“We have long recognized
that considerable weight should be accorded to an executive department’s
construction of a statutory scheme it is entrusted to administer, and the principle of
deference to administrative interpretations.”).
The plaintiffs counter by claiming such assurances were not promulgated
because no member of Congress wanted to be accused of stalling such important
September 11-related legislation. Besides offering no evidence of this, a far more
logical and plausible inference is that, in passing the Stabilization Act, Congress
did not intend the Rehabilitation Act to apply to airline carriers.
In an effort to show that the Stabilization Act provided the airline industry
with a subsidy, the plaintiffs point us to some of the defendants’ descriptions of
the funds and financial benefits they received through the Stabilization Act found
in their various SEC filings or 10-k’s, wherein the defendants use descriptions
such as “grants” or “assistance.” This argument is unavailing. As previously
noted, the relevant inquiry is Congress’s intent in passing the Stabilization Act,
see, e.g., DeVargas, 911 F.2d at 1382, not how the defendant airline carriers
described or handled the funds and financial benefits they received. See, e.g.,
Delmonte, 877 F. Supp. at 1565.
11
The plaintiffs also assert that, under Jarno v. Lewis, 256 F. Supp. 2d 499
(E.D. Va. 2003), and other similar cases, payments or financial benefits received
by private entities from the federal government can only constitute
“compensation” if the subject entity provided or rendered services to the federal
government in exchange. The plaintiffs have, however, misstated the holdings of
these cases. These cases simply found that “payments for services rendered
qualified as compensation.” Shotz, 323 F. Supp. 2d at 1319. Moreover, as the
district court aptly noted, “whether [d]efendants performed services in this case in
exchange for funds they received is irrelevant [because] the inquiry of whether
Defendants received ‘federal financial assistance’ . . . focuses on the intent of
Congress when enacting the Stabilization Act, and not on the acts of the recipient
of the funds.” Id.
The plaintiffs further contend that because the Stabilization Act contains the
terms “financial assistance” or “assistance” in different portions of the Act, this
means the aid received from the Stabilization Act is “federal financial aid” within
the meaning of the Rehabilitation Act. This argument is also without merit.
Plaintiffs are merely cherry picking the Stabilization Act while ignoring
Congress’s clear intent and its critical use of the word “compensate.”
12
Lastly, in an attempt to show that Congress went far beyond compensating
the airline industry and provided a subsidy, Plaintiffs cite extensive statements
from different members of Congress criticizing the proposed bailout of the airline
industry for being too large and unfairly burdening taxpayers. We will not
consider such statements in deciding this case because we have already concluded
that the statutory provisions at issue are unambiguous, and thus such consideration
would be improper. See, e.g., Am. Bankers Ins. Group v. United States, 408 F.3d
1328, 1333 (11th Cir. 2005). Nevertheless, even if we did consider such
statements or any other portion of the legislative history of the Stabilization Act,
there is no mention or indication of subjecting airline carriers to the Rehabilitation
Act.
V. CONCLUSION
For the foregoing reasons, we affirm the district court’s order granting the
defendants’ Motion to Dismiss.
AFFIRMED.
13
14