United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued April 7, 2000 Decided July 18, 2000
No. 99-1129
D&F Afonso Realty Trust,
Petitioner
v.
Jane F. Garvey and Federal Aviation Administration,
Respondents
On Petition for Review of an Order of the
Federal Aviation Administration
Rachel B. Trinder argued the cause for petitioner. With
her on the briefs was Craig M. Cibak.
William G. Cole, Attorney, U.S. Department of Justice,
argued the cause for respondent. With him on the brief were
David W. Ogden, Acting Assistant Attorney General, and
Robert S. Greenspan, Attorney.
Before: Silberman, Ginsburg and Sentelle, Circuit
Judges.
Opinion for the Court filed by Circuit Judge Sentelle.
Sentelle, Circuit Judge: D&F Afonso Realty Trust peti-
tions for review of the Federal Aviation Administration's
issuance of an aviation hazard determination declaring the
roof of a house constructed by the petitioner to be a naviga-
tional hazard. The FAA defends the procedure and evidence
underlying its determination and also argues that the peti-
tioner lacks standing to bring its case before this court.
After considering several affidavits submitted by the petition-
er, we conclude that it has Article III standing. We further
conclude, based on a review of the administrative record, that
the FAA inexplicably failed to follow established agency
procedure, did not adequately explain its decision, and acted
arbitrarily and capriciously in making its hazard determina-
tion. Therefore, we vacate and remand the agency's determi-
nation.
I. Background
D&F Afonso Realty Trust ("D&F"), a husband and wife-
owned construction company, decided to build a single family
home in Hopedale, Massachusetts near a small, privately-
owned airport. In October 1997, construction on the house
began after the town of Hopedale issued construction permits
to the company. After building commenced, D&F learned
from the Massachusetts Aeronautics Commission that it need-
ed to notify the Federal Aviation Administration ("FAA")
about the structure in order for the FAA to determine
whether the house would violate any federal regulations.
D&F informed the New England Regional Office of the FAA
about the house-in-progress in late December 1997 by having
its engineering firm file with the agency a Notice of Proposed
Construction or Alteration (FAA Form 7460-1) required by
14 C.F.R. s 77.17 to be submitted at least thirty days before
the earlier of either the start date of construction or the
construction permit's filing date. In early January, D&F
informed the FAA of the house's completion.
After reviewing D&F's filing, the FAA determined that the
completed house exceeded one of the air navigation obstruc-
tion standards listed in 14 C.F.R. s 77.25. Specifically, the
FAA found that 16.1 feet of the house's roof penetrated one
of the "imaginary surfaces" around the airport. An imagi-
nary surface is essentially an artificial engineering boundary
"drawn" in the air around airports. The imaginary surface at
issue here is the "transitional surface" which extends "out-
ward and upward at right angles to the runway centerline
and the runway centerline extended at a slope of 7 to 1 from
the sides of the primary surface and from the sides of the
approach surfaces." 14 C.F.R. s 77.25(e). Because the roof
penetrated the transitional surface, the FAA initiated an
administrative inquiry to ascertain whether the structure
would present a hazard to air navigation around the airport.
Specifically, the FAA began an "aeronautical study" be-
cause the house exceeded a Part 77 obstruction standard.
Part 77 of the Federal Aviation Regulations "establishes
standards for determining obstructions to air navigation." 14
C.F.R. s 77.21(a). The FAA uses the standards to evaluate
whether an object represents a hazard to air navigation. See
id. ss 77.31-39 (Subpart D).
At the conclusion of the study, the FAA made a finding
that the house had a substantial adverse effect on air naviga-
tion and issued a determination of hazard. The FAA conclud-
ed, without further explanation, that because the house "is
immediately adjacent to the final approach course" for the
runway, "it represents a hazard to all aircraft landing on [the]
runway." In justifying the substantial adverse effect finding,
the FAA concluded, without explanation, that the house would
adversely affect all arrivals using Visual Flight Rules. Given
the FAA's cursory reference to some aerial photographs
showing the house's proximity to the runway's final approach
course, the agency apparently relied sub silentio on the
photographs as the core support for its hazard determination.
D&F sought administrative review of the FAA's determina-
tion and requested a hearing. The FAA denied D&F's
request for a hearing and issued a final determination uphold-
ing its prior conclusions. In explaining its position, the FAA
stated:
[T]he proposed structure would lie within the Hopedale
... runway ... traffic pattern buffer. This buffer area
is designed to provide a degree of protection for those
pilots, departing and landing at an airport, operating in
accordance with visual flight rules (VFR).... [B]ecause
of the proposed structure's height and its relative posi-
tion within the traffic pattern buffer, it is the FAA's
position that the planned structure would be a distraction
to pilots during a critical phase of flight.
To effectuate its findings, the FAA published a warning to
pilots to "use extreme caution when landing ... due to a two-
story house located approximately 400' northwest of the
runway threshold."
In addition to the FAA finding the house to be a hazard to
air navigation, the Massachusetts Aeronautics Commission
determined that the house penetrated certain protected air-
space in violation of the Code of Massachusetts Regulations.
After the administrative findings came to light, the Hopedale
Airport asked the town to remove the house. Currently, the
town of Hopedale refuses to issue an occupancy permit to
D&F. In light of the foregoing events, D&F seeks review of
the FAA's hazard determination and asks this court to re-
verse the FAA's determination in an effort to obtain an
occupancy permit from the town as a result.1
__________
1 Subsequent to D&F's filing a Petition for Review in this
court, the FAA issued a new policy which, with certain exceptions,
makes exceeding "[t]he height of the transition surface (other than
abeam the runway)" a per se hazard. Policy Memorandum 99-02.
We will not analyze this case under the new policy. We leave
consideration of the new policy to the FAA because the agency, not
this court, must interpret and apply a new agency policy in the first
instance. See NLRB v. Food Store Employees Union, Local 347,
417 U.S. 1, 10 n.10 (1974).
II. Discussion
A. D&F's Standing
The FAA challenges D&F's standing to bring this appeal.
In order to establish Article III standing, D&F must show
that "(1) it has suffered an 'injury in fact' that is (a) concrete
and particularized and (b) actual or imminent, not conjectural
or hypothetical; (2) the injury is fairly traceable to the
challenged action of the defendant; and (3) it is likely, as
opposed to merely speculative, that the injury will be re-
dressed by a favorable decision." Friends of the Earth, Inc.
v. Laidlaw Envtl. Servs., Inc., 120 S. Ct. 693, 704 (2000)
(citing Lujan v. Defenders of Wildlife, 504 U.S. 555, 560-61
(1992)); see also Florida Audubon Soc'y v. Bentsen, 94 F.3d
658, 663 (D.C. Cir. 1996) (en banc). D&F established an
actual and concrete and particularized injury consisting of a
diminution in property value due to its inability to obtain an
occupancy permit from the town. The FAA argues, however,
that D&F has not shown a causal link between the agency's
hazard determination and D&F's injury, given the Massachu-
setts Aeronautics Commission and airport's independent ob-
jections to the house. The FAA also challenges the ability of
this court to redress D&F's injury by reversing the agency
because the town, not the agency, controls permit issuance.
If the FAA hazard determination independently diminished
the house's property value or constituted the only factor
motivating the town's denial of the occupancy permit, causa-
tion and redressibility would be non-issues because our rever-
sal of the FAA would either provide a remedy for the
financial injury caused by the FAA or prompt the town to
issue the permit. However, neither the record nor the briefs
submitted to this court established which of the events among
the FAA's findings, the Massachusetts Aeronautics Commis-
sion's findings, the airport's complaint, or some combination
thereof prompted the town's denial of the occupancy permit
and the diminution in property value. However, at oral
argument, D&F asserted that the FAA's hazard determina-
tion in and of itself caused a diminution in property value and
that the town was withholding the occupancy permit solely
due to the FAA's hazard determination. Therefore, we af-
forded D&F the opportunity to submit affidavits supporting
its allegations, if true.
Upon review of D&F's submissions, we conclude that D&F
alleges facts satisfying the standing requirements of causation
and redressibility. D&F supplied an affidavit explaining that
"a real estate broker ... informed [D&F] that the FAA's
Hazard Determination has resulted in a diminution of value to
the Afonso House independent of whether an occupancy
permit is granted." In addition, D&F submitted an affidavit
establishing that the Massachusetts Aeronautics Commission
would "defer to the outcome of the FAA-related proceedings
currently before this Court." Moreover, D&F supplied an
affidavit from the Hopedale Building Commissioner declaring
that "the only obstacle to issuance of the occupancy permit is
the FAA's Hazard Determination. But for that Determina-
tion, the occupancy permit would have already issued. If the
FAA's Hazard Determination is withdrawn or reversed, [the
town] will issue an occupancy permit for the Afonso House
forthwith." We must construe the statements made in the
affidavits in the light most favorable to the petitioner. See
Warth v. Seldin, 422 U.S. 490, 501 (1975). Taken together,
the statements show that the FAA's hazard determination
causes D&F injury in the form of diminished property value
and comprises the sole obstacle between D&F and an occu-
pancy permit. Therefore, we conclude that D&F has stand-
ing to challenge the FAA's hazard determination.
B. The Hazard Determination
We review decisions of federal agencies, including the FAA,
under the standards set forth by the Administrative Proce-
dure Act. See Public Citizen, Inc. v. FAA, 988 F.2d 186, 196
(D.C. Cir. 1993). That Act provides that a reviewing court
must set aside agency action if it is "arbitrary, capricious, an
abuse of discretion, or otherwise not in accordance with law."
5 U.S.C. s 706(2)(A). As we have often held, "[t]he require-
ment that agency action not be arbitrary or capricious in-
cludes a requirement that the agency adequately explain its
result...." Public Citizen, 988 F.2d at 197. In the hazard
determination under review, the FAA has offered no such
explanation. As we have stated before, we must strike down
agency action if the agency failed to consider relevant factors
or made a clear error of judgment. See Motor Vehicle Mfrs.
Ass'n v. State Farm Mut. Auto Ins. Co., 463 U.S. 29, 43
(1983); Starr v. FAA, 589 F.2d 307, 311 (7th Cir. 1978).
The FAA made a finding that the house penetrated an
imaginary surface, specifically the transitional surface. How-
ever, mere penetration, and even evidence of adverse effect
alone, do not provide adequate support for a hazard determi-
nation. In dealing with obstruction standard violations, the
FAA follows a handbook entitled "Procedures for Handling
Airspace Matters," FAA Procedures 7400.2D (1993) ("Hand-
book"), which mandates conducting aeronautical studies, in
accordance with Subpart D of Part 77, of proposed structures
exceeding Part 77 obstruction standards. See Br. for FAA at
4 (citing chapter 5 of Handbook). According to Subpart D of
Part 77, "[i]n the aeronautical studies, present and future ...
aeronautical operations and procedures are reviewed and any
possible changes in those operations and procedures and in
the construction proposal that would eliminate or alleviate the
conflicting demands are ascertained." 14 C.F.R. s 77.31.
Pursuant to the Handbook, objects exceeding an obstruction
standard are "presumed to be hazards to air navigation
unless an aeronautical study determines otherwise." Id. at
s 7-1(b). In order to issue a hazard determination, the FAA
must find by a clear showing that the penetration in question
will have a "substantial adverse effect" on air navigation. See
id. at ss 7-2 to 7-5, 8-2. The Handbook provides that
"substantial adverse effect" occurs when a structure has or
would have an "[a]dverse effect" and "a significant volume of
aeronautical operations would be affected." Id. at s 7.4.
A substantial adverse effect finding requires three ele-
ments. First, the structure in question must have exceeded
the relevant obstruction standards or have been found to have
a physical or electromagnetic radiation effect on the operation
of air navigation facilities. See id. at s 7.3. Second, the
structure will be considered to have an adverse effect if it
would, inter alia, "require a [Visual Flight Rules] operation,"
that is, an operation in which the pilot lands an aircraft or
takes off using visual approach procedures only, "to change
from a regular flight course or altitude," "[d]erogate airport
capacity/efficiency," or "[a]ffect future [Visual Flight Rules]
... operations indicated by plans on file." Id. Third, the
structure must affect a significant volume of aeronautical
activity; the FAA considers the type of activity involved and
the frequency of occurrence. See id. at s 7.5. In addition, a
study must include, inter alia, an evaluation regarding mark-
ing and lighting the structure, see id. at s 7-9, and every
hazard finding is supposed to include "a clear, but brief,
statement why aviation can or cannot accommodate the pro-
posal." Id. at s 8-2.
Here, the FAA first sought comments from twenty-four
interested parties concerning the effect the house would have
on aviation. Apart from the manager of the Providence,
Rhode Island Traffic Control Tower who declared, without
further elaboration, that the house "would result in a negative
impact to air traffic operations," the responding parties either
did not object to the house or failed to provide any comments
pertaining to the hazardousness of the structure.
Based on the FAA's explanation, or lack thereof, in the
issuance of this hazard determination, we conclude that the
FAA acted arbitrarily by issuing a hazard determination
inconsistent with established standards. Thus, we hold that
the FAA exceeded the permissible bounds of agency action.
Nowhere in the record before us can we find a link between
established hazard determination standards and the hazard
determination reached by the FAA in this case. The FAA
made a finding that the house penetrated an imaginary
surface. However, as we previously noted, mere penetration,
and even evidence of adverse effect alone, cannot support a
hazard determination. See Handbook ss 7-3, 7-4, 8-2. Ac-
cording to the Handbook, the FAA is to conduct a "substan-
tial adverse effect" inquiry and only upon a clear showing of
substantial adverse effect issue a hazard determination. See
id. at ss 7-1, 7-3, 7-4, 8-2(b)(3). However, here, the FAA
failed both to conduct a complete inquiry and make a clear
showing of substantial adverse effect.
More specifically, the FAA arbitrarily based its hazard
finding on an unsupported pilot distraction finding instead of
following the policy outlined in the controlling Handbook.
"We review the FAA's findings of fact merely to see whether
they are 'supported by substantial evidence.' " Public Citi-
zen, 988 F.2d at 196 (quoting 49 U.S.C. App. s 1486(e)
(1988)). Here, if there is substantial evidence, the FAA has
not alluded to it.
The FAA also acted contrary to its own procedure by
failing to explicitly apply the established multi-factor test
which considers adverse effect and the volume of operations
affected. See Handbook ss 7-3 to 7-5. For example, the
FAA based its finding on the house's effect on VFR opera-
tions but failed to consider the relevant VFR adverse effect
factors of potential changes in flight course and potential
effects on future VFR operations. See id. at s 7-3. In
addition, the agency did not investigate the available airport
traffic figures and instead based its "significant volume"
finding on the "proximity of [the] structure to the final
approach course." Even assuming the FAA's reference to a
traffic buffer zone in the order affirming the hazard determi-
nation has meaning as a technical and practical matter, the
agency did not do its job of connecting the buffer zone
concept to the "substantial adverse effect" inquiry. In short,
the FAA did not consider relevant factors or sufficiently
explain the basis of its hazard determination.
The FAA's post hoc rationalizations for deviating from
procedure and for failing to substantiate its hazard determi-
nation cannot pass muster as a matter of law. For example,
the Handbook requires that every aeronautical study include
an evaluation regarding the marking and lighting of the
structure in question. See id. at s 7-9. However, the agen-
cy did not make any findings concerning the marking or
lighting of the house. The agency cannot claim to be engag-
ing in reasoned analysis when it cavalierly brushes off specific
mandates such as a marking and lighting evaluation. Nor
can it claim to be acting reasonably when it ignores, without
explanation, policy provisions such as the one establishing the
inclusion of "a clear, but brief, statement why aviation can or
cannot accommodate [a] proposal." See id. at s 8-2.
Moreover, the agency inexplicably refused to take into
consideration the trees and other structures in the vicinity
also apparently intruding into the transitional surface in the
surrounding terrain which might alter the geometry of its
calculations. In Aircraft Owners and Pilots Association v.
FAA, 600 F.2d 965 (D.C. Cir. 1979), we recognized that
surrounding terrain could possibly "mitigate what might oth-
erwise have been a potential hazard to aircraft." Id. at 973.
In other words, the FAA should have considered the land-
scape in its entirety when making its hazard determination.
See id. Yet, according to the FAA, only D&F's house
presents cause for concern. All in all, the FAA failed to
rationally substantiate or explain its process and findings.
In essence, the FAA adopted an ipse dixit approach to
making a hazard determination: the house creates a naviga-
tional hazard because the agency says so. Even our highly
deferential standard of review requires more than the FAA
offers. Thus, the FAA's abandonment of its own established
procedure and its lack of reasoned analysis on the record
constitute arbitrary and capricious agency action in violation
of the law. Due to the shortcomings in the FAA's hazard
determination, we reverse and remand D&F's case to the
agency in order for it to undertake an appropriate hazard
analysis.
III. Conclusion
In sum, we hold that D&F has alleged facts sufficient for
standing to challenge the FAA's hazard determination. Upon
review, we vacate and remand the FAA's determination due
to the agency's engaging in an arbitrary and capricious
hazard determination procedure.