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United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued March 12, 2004 Decided July 27, 2004
No. 03-1068
VILLAGE OF BENSENVILLE, ET AL.,
PETITIONERS
v.
FEDERAL AVIATION ADMINISTRATION,
RESPONDENT
CITY OF CHICAGO,
INTERVENOR
On Petition for Review of an Order of the
Federal Aviation Administration
David J. Cynamon argued the cause for the petitioners.
Robert E. Cohn, J. E. Murdock III, Alexander Van der
Bellen, and David C. Lashway were on brief.
Ara B. Gershengorn, Attorney, United States Department
of Justice, argued the cause for the respondent. Peter D.
Bills of costs must be filed within 14 days after entry of judgment.
The court looks with disfavor upon motions to file bills of costs out
of time.
2
Keisler, Assistant Attorney General, and Barbara C. Biddle,
Assistant Director, United States Department of Justice,
were on brief. Jacob M. Lewis, Attorney, United States
Department of Justice, entered an appearance.
Michael Schneiderman argued the cause for the interve-
nor. Thomas R. Devine and David T. Ralston, Jr. were on
brief. Mary C. Jester entered an appearance.
Arthur P. Berg and Patricia A. Hahn were on the brief for
amicus curiae, Airports Council International – North Amer-
ica.
Before: EDWARDS and HENDERSON, Circuit Judges, and
WILLIAMS, Senior Circuit Judge.
Opinion for the court filed by Circuit Judge HENDERSON.
KAREN LECRAFT HENDERSON, Circuit Judge:
[T]hat astonishing Chicago—a city where they are always
rubbing the lamp, and fetching up the genii, and contriving
and achieving new impossibilities. It is hopeless for the
occasional visitor to try to keep up with Chicago—she
outgrows his prophecies faster than he can make them.
– MARK TWAIN, LIFE ON THE MISSISSIPPI 326
(Signet Classic 2001) (1883)
The City of Chicago (Chicago or City) has conceived a $6.6
billion program to modernize O’Hare International Airport,
which consistently ranks as one of our nation’s busiest and
most delayed airports. To fund the initial component of the
program—the preparation of an Environmental Impact State-
ment (EIS) regarding the modernization program—Chicago
sought and received from the Federal Aviation Administra-
tion (FAA) approval to impose a $4.50 facility fee on passen-
gers enplaning at O’Hare. Now three Chicago suburbs, the
Villages of Bensenville and Elk Grove and the City of Park
Ridge, petition for review of the FAA’s decision, alleging that,
in approving Chicago’s application, it violated the Federal
Aviation Act of 1958, 49 U.S.C. §§ 40101 et seq., the Adminis-
trative Procedure Act, 5 U.S.C. § 706(2)(A), the National
3
Environmental Policy Act, 42 U.S.C. §§ 4321 et seq., and its
own regulations. Because the FAA did not find, as required
by statute, that Chicago’s passenger facility fee will generate
only that revenue necessary to fund the EIS, we grant the
municipalities’ petition and remand for the FAA’s further
consideration.
I.
The FAA may authorize an ‘‘eligible agency,’’ i.e., a public
agency controlling a commercial airport, see 49 U.S.C.
§ 40117(a)(2), to impose a ‘‘passenger facility fee’’ of from one
to three dollars ‘‘on each paying passenger of an air carrier’’
to be used to finance ‘‘an eligible airport-related project,’’ id.
§ 40117(b)(1). An ‘‘eligible airport-related project’’ includes
‘‘a project for airport development or airport planning.’’ Id.
§ 40117(a)(3)(A). Once the FAA determines that an agency’s
passenger facility fee application is substantially complete, it
must advise the public of its decision by letter and give notice
in the Federal Register of its intent to rule on the application
and invite public comment thereon. See id. § 40117(c)(3); 14
C.F.R. § 158.27(b)-(c). The FAA has 120 days after receiving
the application to approve or deny it, in whole or in part. See
49 U.S.C § 40117(c)(4); 14 C.F.R. § 158.27(c)(4).
Before authorizing any passenger facility fee, however, the
FAA must make three specific findings based on the applica-
tion. See 49 U.S.C § 40117(d). The FAA must find that the
proposed passenger facility fee will not generate excessive
revenue, that is, revenue constituting ‘‘more than the amount
necessary to finance the specific project.’’ Id. § 40117(d)(1).
Additionally, the FAA must find that the specific project is an
eligible airport-related project that will maintain or improve
the ‘‘capacity, safety, or security of the national air transpor-
tation system’’; reduce airport noise; or improve conditions
for competition ‘‘between or among air carriers and foreign
air carriers.’’ Id. § 40117(d)(2)(A)-(C). Finally, the FAA
must find that the application includes an ‘‘adequate justifica-
tion’’ for the specified project. Id. § 40117(d)(3).
4
The FAA may also authorize, under a different standard, a
higher passenger facility fee of $4.00 or $4.50. Id.
§ 40117(b)(4). ‘‘[I]n the case of an airport that has more than
.25 percent of the total number of annual boardings in the
United States,’’ the higher fee can be imposed if the FAA
finds that the project ‘‘will make a significant contribution to
improving air safety and security, increasing competition
among air carriers, reducing current or anticipated conges-
tion, or reducing the impact of aviation noise on people living
near the airport.’’1 Id. § 40117(b)(4)(A). The FAA approved
Chicago’s passenger facility fee challenged here under this
statutory framework.
In October 2002, Chicago’s Department of Aviation (De-
partment) applied to the FAA for authority to impose and use
a passenger facility fee of $4.50 to fund a ‘‘Runway Formula-
tion Project,’’ the initial component of the City’s O’Hare
modernization program. Joint Appendix (J.A.) 54, 69, 71–72.
In its application, the Department explained that the modern-
ization program would cost $6.6 billion and provide for the
‘‘phased reconfiguration of the airfield at O’Hare as well as
corresponding expansions and reconfiguration of passenger
terminals, access/circulation systems and necessary support
facilities.’’ J.A. 71. According to the Department, the ‘‘ma-
jor functional components’’ of the program included the addi-
tion of a new runway, the relocation of three existing runways
and the extension of two others. J.A. 71. The Department
explained that the program also entailed ‘‘the construction of
an airside concourse, a western terminal and access roads,’’
acquisition of necessary land and measures to mitigate airport
noise. J.A. 71.
As for the Runway Formulation Project itself, the Depart-
ment explained that it involved the ‘‘[c]ompletion of all techni-
1 The FAA must additionally find that ‘‘the project cannot be paid
for from funds reasonably expected to be available for the programs
referred to in [49 U.S.C. §] 48103,’’ id. § 40117(b)(4)(B), which
section specifies the amounts available from the Airport and Airway
Trust Fund to make grants for airport planning, development and
noise compatibility planning and programs. See id. § 48103.
5
cal, physical and operational planning, as well as environmen-
tal processing’’ needed for the modernization program, ‘‘with
a particular focus on the impacts and requirements for’’ the
first phase of the modernization program.2 J.A. 71. The
Department then explained in greater detail what the Run-
way Formulation Project entailed.
This project TTT includes, but is not limited to, surveys of
existing conditions, including soil borings and geotechni-
cal analyses, utility surveys, environmental surveys, air-
port-wide drainage design, utility and other underground
corridor definition, review and updating design stan-
dards, continued refinement of capital cost estimates,
project scope definition and other studies as required for
processing of the [EIS] for the entire airfield and major
components of other aspects of the [modernization pro-
gram].
J.A. 71–72. The Department initially estimated that the
Runway Formulation Project would cost $200 million, but—in
response to the FAA’s concerns about the project’s scope—
later downsized the project and concomitantly lowered its
estimated cost to $121 million.3 Compare J.A. 254, with J.A.
75, 262, 265.
In support of its modernization program generally and its
Runway Formulation Project specifically, the Department
explained that O’Hare consistently ranks as one of the na-
tion’s busiest and most delayed airports. The modernization
program addresses these conditions, the Department ex-
plained, because it ‘‘has been formulated to preserve and
enhance the capacity of the national air transportation sys-
tem.’’ J.A. 72. The Department further stated that ‘‘[t]he
2 The first phase of the modernization program, the Department
explained, included the design and construction of ‘‘a new northern-
most parallel runway,’’ an extension of ‘‘Runway 10L’’ and ‘‘a new
southern closely-spaced runway.’’ J.A. 71.
3 The Department also requested an amount equal to the revised
cost estimate, that is, another $121 million, to cover bond financing
and interest.
6
justification for this capital investment lies in the operational
benefits (reduced delays and airfield capacity enhancement)
that will result from the design and construction of the
[modernization program].’’ J.A. 73. Turning to the subject
of its application, i.e., the Runway Formulation Project, the
Department explained that it will ‘‘preserve and enhance the
capacity and safety of the national air transportation system
by providing for projects which reduce delays and congestion
at O’Hare’’ and that ‘‘[t]he analysis to be performed through
this project is necessary to support environmental process-
ing.’’ J.A. 72 (emphasis in original).
The FAA deemed Chicago’s passenger facility fee applica-
tion substantially complete on November 27, 2002. Accord-
ingly, the FAA published notice in the Federal Register of its
intent to rule on Chicago’s application and invited public
comment. See Notice of Intent To Rule on Application 03–
15–C–00–ORD To Impose a Passenger Facility Charge (PFC)
at Chicago O’Hare Int’l Airport & To Use the Revenue at
Chicago O’Hare Int’l Airport, Chicago, IL & Gary/Chicago
Airport, Gary, IN, 67 Fed. Reg. 77,549, 77,550 (Dec. 18,
2002).
In February 2003, the FAA partially approved Chicago’s
application. See Final Agency Decision, City of Chicago,
Dep’t of Aviation, Chicago, IL, Feb. 28, 2003, reprinted in
J.A. 353–78. In its order, the FAA authorized Chicago to
impose and use a $4.50 passenger facility fee to fund a
Runway Formulation Project with a total estimated cost of
over $220 million, a sum intended to be divided equally
between the cost of the EIS itself and associated financing
and interest costs.4 In doing so, the FAA explained that
‘‘[c]ongestion, capacity, and competition constraints at
[O’Hare] have been noted in many studies and reports,
most recent[ly] the FAA’s 2001 Airport Capacity Bench-
mark Report’’ and that Chicago’s modernization program
4 The FAA reduced the passenger facility fee ‘‘bond capital and
financing and interest amounts’’ in light of the City’s intention to
‘‘utilize $10,178,850 in Fiscal Year 2003 [Airport Improvement Pro-
gram] entitlement funds on this project.’’ J.A. 361.
7
‘‘has been formulated to address some of these concerns.’’
J.A. 361. The FAA repeatedly noted, however, that the
Runway Formulation Project entailed only the work ‘‘lead-
ing to the completion of an EIS,’’ J.A. 360, for the modern-
ization program, which also included the study of alterna-
tives to the modernization program. See, e.g., J.A. 360–61,
368–70. According to the FAA, the Runway Formulation
Project ‘‘includes only that work involved in the completion
of all technical, physical, and operational planning, as well
as environmental processing, leading to the completion of an
EIS for the entire airfield and other major components of
the [modernization program].’’ J.A. 360. The FAA further
stressed that its authorization of the passenger facility fee
to fund the EIS did not ‘‘include any construction or land
acquisition costs nor TTT any design work beyond what the
FAA agrees is necessary to complete the EIS process.’’
J.A. 361.
The municipalities now petition for review of the FAA’s
order approving Chicago’s passenger facility fee. For the
reasons set forth below, we grant their petition and remand
the case to the FAA for further consideration.
II.
Before discussing the merits, we must address the FAA’s
two contentions that we lack jurisdiction to do so. Specifical-
ly, the FAA alleges that the municipalities lack standing to
bring their petition and, in any event, they brought it too
soon. We disagree with both contentions.
To satisfy Article III’s ‘‘irreducible constitutional minimum
of standing,’’ a party must demonstrate injury-in-fact, causa-
tion and redressability. Lujan v. Defenders of Wildlife, 504
U.S. 555, 560–61 (1992); see also Rainbow/Push Coalition v.
FCC, 330 F.3d 539, 542 (D.C. Cir. 2003). To meet the injury-
in-fact requirement, a party must show some ‘‘invasion of a
legally protected interest which is (a) concrete and particular-
ized[ ] and (b) actual or imminent, not conjectural or hypo-
thetical.’’ Lujan, 504 U.S. at 560 (citations and internal
quotation marks omitted). Accordingly, ‘‘[t]he burden on a
8
party challenging an administrative decision in the court of
appeals is ‘to show a substantial probability that it has been
injured, that the defendant caused its injury, and that the
court could redress that injury.’ ’’ Rainbow/Push Coalition,
330 F.3d at 542 (quoting Sierra Club v. EPA, 292 F.3d 895,
899 (D.C. Cir. 2002)). Here, the municipalities offer, among
other alleged injuries, that they bear the cost of their officers’
and employees’ use of O’Hare for business travel. See Peti-
tioners’ Br. at 12. This is sufficient, we believe, to satisfy
their standing burden. See Rainbow/Push Coalition, 330
F.3d at 542. Having to pay the passenger facility fee every
time an officer or employee enplanes at O’Hare is a legally
cognizable injury, directly traceable to the FAA’s order au-
thorizing it and redressable by a favorable ruling from us.
See Cmtys. Against Runway Expansion, Inc. v. FAA, 355
F.3d 678, 684–85 (D.C. Cir. 2004) (organization had standing
to sue where members would be exposed to increased noise as
result of FAA’s order approving construction project); see
also Ill. Dep’t of Transp. v. Hinton, 122 F.3d 370, 373 (7th
Cir. 1997) (dicta that ‘‘passengers who pay the O’Hare pas-
senger facility charge and use TTT O’Hare Airport’’ would
have standing to challenge diversion of revenue).
That the municipalities will not suffer their alleged injury
alone—Chicago plans to charge all passengers enplaning at
O’Hare—does not, as the FAA alleges, render their injury
insufficient to confer standing. Cf. Warth v. Seldin, 422 U.S.
490, 499 (1975) (‘‘[W]hen the asserted harm is a ‘generalized
grievance’ shared in substantially equal measure by all or a
large class of citizens, that harm alone normally does not
warrant exercise of jurisdiction.’’). The injury the municipali-
ties complain of is no mere ‘‘generalized grievance’’ akin to
the one alleged by the citizens in Schlesinger v. Reservists
Comm. to Stop the War, 418 U.S. 208, 217, 220 (1974), or by
the federal taxpayer in United States v. Richardson, 418 U.S.
166, 175–77, 180 (1974), but a specific injury shared by a
specific—albeit large—group of air travelers, to which their
officers and employees belong. See, e.g., Sierra Club v.
Morton, 405 U.S. 727, 734 (1972) (‘‘[T]he fact that particular
environmental interests are shared by the many rather than
9
the few does not make them less deserving of legal protection
through the judicial process.’’); Common Cause v. DOE, 702
F.2d 245, 251 (D.C. Cir. 1983) (‘‘[T]he widespread character of
an alleged injury does not demean the standing of those who
are in fact injured.’’).
Nor do we think the municipalities’ alleged injury too
attenuated or distant to represent a constitutionally-sufficient
injury-in-fact, as the FAA asserts, by virtue of the fact that
Chicago will not start collecting the passenger facility fee the
FAA authorized until 13 years from now. That Chicago
intends to spend today what it is authorized to collect tomor-
row does not render the municipalities’ alleged injury ‘‘conjec-
tural or hypothetical.’’ Lujan, 504 U.S. at 560 (internal
quotation marks omitted). The FAA’s order is final and,
absent action by us, come 2017 Chicago will begin collecting
the passenger facility fee; accordingly, ‘‘the impending threat
of injury [to the municipalities] is sufficiently real to consti-
tute injury-in-fact and afford constitutional standing.’’ Wyo.
Outdoor Council v. United States Forest Serv., 165 F.3d 43,
51 (D.C. Cir. 1999); cf. Whitmore v. Arkansas, 495 U.S. 149,
158 (1990) (‘‘A threatened injury must be certainly impending
to constitute injury in fact.’’ (internal quotation marks omit-
ted)). So, too, is the municipalities’ petition ripe for our
review now.
The ripeness doctrine requires us to consider ‘‘the fitness of
the issues for judicial review and the hardship to the parties
of withholding court consideration.’’ Abbott Labs. v. Gardner,
387 U.S. 136, 149 (1967), overruled on other grounds by
Califano v. Sanders, 430 U.S. 99, 105 (1977); see Harris v.
FAA, 353 F.3d 1006, 1011–12 (D.C. Cir. 2004). Under the
doctrine’s first prong, ‘‘we look to see whether the issue is
purely legal, whether consideration of the issue would benefit
from a more concrete setting, and whether the agency’s
action is sufficiently final.’’ Clean Air Implementation Pro-
ject v. EPA, 150 F.3d 1200, 1204 (D.C. Cir. 1998) (internal
quotation marks omitted), cert. denied sub nom. Appalachian
Power Co. v. EPA, 527 U.S. 1021 (1999). And under the
second, we consider ‘‘not whether the[ parties] have suffered
any ‘direct hardship,’ but rather whether postponing judicial
review would impose an undue burden on them or would
10
benefit the court.’’ Harris, 353 F.3d at 1012 (emphasis in
original); see also Ohio Forestry Ass’n v. Sierra Club, 523
U.S. 726, 733 (1998); AT&T v. FCC, 349 F.3d 692, 700, 702
(D.C. Cir. 2003). The FAA’s decision is plainly ‘‘fit’’ for our
consideration now as the municipalities challenge a final FAA
order on purely legal grounds, see Atl. States Legal Found.,
Inc. v. EPA, 325 F.3d 281, 284 (D.C. Cir. 2003) (‘‘Claims that
an agency’s action is arbitrary and capricious or contrary to
law present purely legal issues.’’), which challenge, by statute,
they have only sixty days to make. See 49 U.S.C. § 46110(a)
(‘‘The petition must be filed not later than 60 days after the
order is issued.’’). Moreover, although the FAA reasonably
asserts that the municipalities will not ‘‘suffer [any] immedi-
ate hardship from an EIS,’’ Respondent’s Br. at 23, we see no
benefit to us in postponing review of its final order. See, e.g.,
Harris, 353 F.3d at 1012. Postponing review, moreover,
could burden the parties by preventing the municipalities
from bringing their challenge at all, see 49 U.S.C. § 46110(a),
or by leaving in doubt whether Chicago will recoup the funds
it spends on the EIS. Accordingly, the municipalities’ peti-
tion is ripe for our consideration.
Finding that the municipalities have standing to petition for
review of the FAA’s action and did not jump the gun in doing
so now, we accordingly turn to the merits of their petition.
We agree that the FAA acted arbitrarily, capriciously and
contrary to law in authorizing Chicago’s Runway Formulation
Project with an estimated total cost of over $220 million—half
to pay for the EIS, half to cover financing and interest costs.
See 5 U.S.C. § 706(2)(A); Motor Vehicle Mfrs. Ass’n of
United States, Inc. v. State Farm Mut. Auto. Ins. Co., 463
U.S. 29, 43 (1983). Before authorizing the City’s passenger
facility fee, the FAA must find, based on Chicago’s applica-
tion, that the amount it proposes to impose and use ‘‘is not
more than the amount necessary to finance the specific
project.’’ 49 U.S.C. § 40117(d)(1). The FAA failed to do so,
however, which error is fatal to its approval of the fee
application. See 5 U.S.C. § 706(2)(A); Motor Vehicle Mfrs.
Ass’n, 463 U.S. at 43.
11
One thing the parties appear to agree on is that over $110
million for an airport project EIS is an extraordinarily high
estimate.5 Despite the FAA’s repeated assurances that the
City may only use this immense sum to fund an EIS of the
modernization program,6 however, it simply accepts at face
value that the sum is in fact necessary to do so. See 49
U.S.C. § 40117(d)(1). Chicago’s modernization project may
be so unique that over $110 million is necessary to pay for an
EIS regarding it, but the FAA never said as much. See
PanAmSat v. FCC, 198 F.3d 890, 897 (D.C. Cir. 1999) (‘‘We
do not ordinarily consider agency reasoning that ‘appears
nowhere in the [agency’s] order.’ ’’ (quoting Graceba Total
Communications, Inc. v. FCC, 115 F.3d 1038, 1041 (D.C. Cir.
1997))); see also SEC v. Chenery Corp., 332 U.S. 194, 196
(1947).
5 Compare Petitioners’ Br. at 25 (‘‘A quarter of a billion dollars is
an exorbitant and unprecedented amount to fund an airport envi-
ronmental study. The proposed funding level would be an order of
magnitude greater than any EIS in aviation history.’’), with Oral
Arg. Tr. at 16:50 (FAA counsel acknowledging EIS estimate is
‘‘extraordinarily high’’) & 18:31 (FAA counsel acknowledging ‘‘we all
agree that [the EIS estimate] is an extraordinarily high number
based on what anyone has ever done in this connection’’); cf.
Uncertain Economy Forces Scaling Back of Int’l Airport’s First
Phase, AVIATION WEEK & SPACE TECHNOLOGY, Mar. 11, 1991, at 48
(‘‘Pre–1990 planning [for Denver International Airport], including
the [EIS] and airport master plan, cost an additional $20.716
million.’’ (emphasis added)), reprinted in Petitioner’s Br. at App. B.
6 See, e.g., J.A. 360 (‘‘this project includes only work TTT leading
to the completion of an EIS’’); J.A. 361 (‘‘[t]his formulation project
will result in an EIS TTT and does not include any construction or
land acquisition costs nor does it include any design work beyond
what the FAA agrees is necessary to complete the EIS process’’);
J.A. 368 (‘‘the FAA is only approving those tasks needed in order to
complete the [EIS] for the proposed [modernization program]’’);
J.A. 369 (‘‘the FAA is only approving the tasks necessary for
preparation of the [EIS]’’); J.A. 370 (‘‘the FAA is limiting its
approval to only that work which the FAA agrees is required for
the completion of an [EIS]’’).
12
The municipalities have an explanation of their own for
Chicago’s eye-popping EIS estimate. They point out that
Chicago’s initial ‘‘clarification’’ of its passenger facility fee
application estimated that ‘‘Project Formulation,’’ including
the ‘‘[c]ompletion of all planning [and] environmental process-
ing,’’ would cost $42 million, while preliminary engineering—
‘‘[t]o transition from initial planning concepts into formal
design’’—and runway design would cost an additional $45 and
$99 million, respectively. J.A. 254 (emphasis added). In
response to the FAA’s concerns about the scope of the
project, however, the City clarified its application again less
than one week later, this time purporting to limit the project
to the tasks necessary to prepare an EIS. See J.A. 255–58
(‘‘[W]e have spent a good deal of time clarifying the informa-
tion we sent previously, and reconsidering the level of [pas-
senger facility fee] resources needed in support of the envi-
ronmental process.’’). But in the City’s second clarification, it
estimated that ‘‘Program Formulation,’’ again including plan-
ning and environmental processing as well as ‘‘[p]reliminary
engineering in support of [the] environmental review pro-
cess,’’ would total $93.1 million.7 J.A. 257–58.
Why did Chicago’s cost estimate for planning and environ-
mental processing balloon in less than a week from $42
million to over $93 million? The municipalities allege that the
cost of planning and environmental processing in fact did not
change—Chicago merely moved the preliminary engineering
work to support the formal design of the modernization
program that the FAA questioned—as well as its associated
costs—into those categories. The FAA, the municipalities
7 Chicago also estimated in its second application clarification that
‘‘Phase 1 Project Formulation’’ would cost $27.9 million, see J.A.
260–61, in addition to the $93.1 million for ‘‘[p]reliminary engineer-
ing in support of [the] environmental review process.’’ J.A. 258. In
a revision of its second clarification, the City provided the identical
cost estimates for ‘‘Program Formulation’’ and ‘‘Phase 1 Project
Formulation.’’ As discussed above, the FAA ultimately authorized
Chicago to collect approximately $220 million, having reduced the
City’s bond capital and financing and interest estimates by over $10
million apiece. See slip op. supra at p.6 & n.4.
13
say, unwittingly authorized the City to fund preliminary
engineering and formal design work in furtherance of its
modernization program beyond that necessary to complete
the EIS. The FAA made no effort to dispel the municipali-
ties’ theory. Nor does Chicago’s application (together with
the clarifications thereof) on its face explain what the FAA
itself failed to, see Motor Vehicle Mfrs. Ass’n, 463 U.S. at 43
(court may ‘‘uphold a decision of less than ideal clarity if the
agency’s path may reasonably be discerned’’ (internal quota-
tion marks omitted)), for the generic task list it contains tells
us nothing about the specific costs of the tasks or why they
are necessary to prepare an EIS.
By statute, the FAA’s factual findings are ‘‘conclusive’’ if
based on ‘‘substantial’’ record evidence. See 49 U.S.C.
§ 46110(c). Despite Chicago’s extraordinarily high cost esti-
mate of its proposed EIS and the FAA’s express statutory
duty, however, the FAA made not one finding regarding the
necessity of over $110 million to prepare an EIS for the
modernization program. The FAA simply concluded that the
fee ‘‘will not result in revenue that exceeds the amount
necessary to finance the projects.’’ J.A. 358. But in these
circumstances, such a simple recitation of the statutory stan-
dard neither satisfies the statute, see 49 U.S.C. § 40117(d)(1),
nor assures us that the agency’s decision is rational. See 5
U.S.C. § 706(2)(A); Motor Vehicle Mfrs. Ass’n, 463 U.S. at
43.
Seeking to assure us that the authorized sum is necessary,
the FAA counsel claims that ‘‘[t]he amount of funds necessary
to perform air transportation projects is a quintessential
example of the type of decision that falls within an agency’s
expertise and as to which this Court defers.’’ Respondent’s
Br. at 36. We have no quarrel with this general principle; it
is true that we owe considerable deference to an agency’s
exercise of its judgment and expertise in estimating costs.8
8 See Nat’l Ass’n of Secs. Dealers, Inc. v. SEC, 801 F.2d 1415,
1419 (D.C. Cir. 1986) (Buckley, J. (‘‘Because ‘[r]atemaking is TTT
much less a science than an art,’ and because ‘[c]ost itself is an
inexact standard,’ this court has held that ‘great deference is given
14
We do have difficulty, however, with its application in this
case. The FAA cannot simply declare its ‘‘expertise’’; it
must exercise that expertise and demonstrate sufficiently that
it has done so9 else we have nothing to review much less defer
to. Nor is it enough for the FAA to assert that we need not
worry about Chicago’s fee now because the municipalities can
mount a challenge later if Chicago in fact diverts passenger
facility fee revenue to any unapproved projects. The asser-
tion is irrelevant, however, to the municipalities’ current
challenge because the FAA must specifically find that the fee
will not generate excessive revenue before authorizing its
assessment and collection. See 49 U.S.C. § 40117(d)(1).
* * *
For the foregoing reasons, we grant the municipalities’
petition for review and remand the matter to the Federal
Aviation Administration for its further consideration in accor-
dance with this opinion. In light of this holding, we do not
reach the municipalities’ other claims.
So ordered.
to [agency] expertise and judgment on the reasonableness of a
particular rate proposalTTTT’ ’’ (quoting Al. Elec. Coop., Inc. v.
FERC, 684 F.2d 20, 27 (D.C. Cir. 1982) (alternations in original)))).
9 Cf. Am. Lung Ass’n v. EPA, 134 F.3d 388, 392 (D.C. Cir. 1998)
(‘‘With its delicate balance of thorough record scrutiny and defer-
ence to agency expertise, judicial review can occur only when
agencies explain their decisions with precision, for ‘[i]t will not do
for a court to be compelled to guess at the theory underlying the
agency’s actionTTTT’ ’’ (quoting Chenery Corp., 332 U.S. at 196–97
(alterations in original))).