Port Authority v. Department of Transportation

United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued September 11, 2006 Decided March 2, 2007

No. 05-1222

PORT AUTHORITY OF NEW YORK AND NEW JERSEY
PETITIONER

v.

DEPARTMENT OF TRANSPORTATION AND
MARY E. PETERS, SECRETARY OF TRANSPORTATION,
RESPONDENTS

BRENDAN AIRWAYS, LLC, D/B/A USA3000 AIRLINES, ET AL.,
INTERVENORS

Consolidated with
05-1276, 05-1316

On Petitions for Review of Orders of the
United States Department of Transportation

Jeffery A. Tomasevich argued the cause for petitioner Port
Authority of New York and New Jersey. With him on the briefs
were Steven S. Rosenthal, Douglas A. Tucker, and Carlene V.
McIntyre.
 2

John Longstreth argued the cause for petitioners Brendan
Airways, LLC, et al. With him on the briefs were James R.
Weiss and Christopher S. Huther.

Patricia A. Hahn, Thomas R. Devine, and Arthur P. Berg
were on the brief for amicus curiae Airports Council Interna-
tional - North America in support of petitioner Port Authority of
New York and New Jersey and in opposition to petitioners
Brendan Airways, LLC, et al.

David J. Frantz was on the brief for amicus curiae United
Kingdom of Great Britain and Northern Ireland in support of
petitioners Brendan Airways, LLC, et al., urging affirmance in
part and reversal in part.

Mary F. Withum, Trial Attorney, U.S. Department of
Transportation, argued the cause for the respondents. With her
on the brief were Thomas O. Barnett, Assistant Attorney
General, U.S. Department of Justice, Robert B. Nicholson and
Steven J. Mintz, Attorneys, Jeffrey A. Rosen, General Counsel,
U.S. Department of Transportation, Paul M. Geier, Assistant
General Counsel, and Dale C. Andrews, Deputy Assistant
General Counsel. John J. Powers, III, Attorney, U.S. Depart-
ment of Justice, entered an appearance.

Steven S. Rosenthal, Jeffery A. Tomasevich, Douglas A.
Tucker, and Carlene V. McIntyre were on the brief for inter-
venor Port Authority of New York and New Jersey in support of
the respondents.

James R. Weiss and John Longstreth were on the brief for
intervenors Brendan Airways, LLC, et al. in support of the
respondents.
 3

Before: TATEL and BROWN, Circuit Judges, and EDWARDS,
Senior Circuit Judge.

Opinion for the Court filed by Circuit Judge BROWN.

BROWN, Circuit Judge: The Port Authority of New York
and New Jersey (“Port Authority”) runs Newark Liberty
International Airport (“EWR”). When the Port Authority
increased the fees charged at EWR’s International Terminal B
(“ITB”), thirteen airlines operating out of that terminal com-
plained to the Department of Transportation (“DOT”) pursuant
to 49 U.S.C. § 47129, claiming the rates were unreasonable and
unjustly discriminatory. The DOT agreed with the airlines in
part and ordered the Port Authority to issue revised fees and to
refund excess fees already collected. Deeming the DOT’s
orders insufficient, the complainant airlines sought review in
this court, disputing the DOT’s evidentiary rulings and its
finding that the proposed fees were nondiscriminatory. The Port
Authority likewise petitioned for review, contending its rate
calculations were in fact reasonable. More fundamentally, the
Port Authority argued § 47129 applied only to U.S. air carriers
and thus excluded twelve of the thirteen complaining airlines.
For reasons discussed below, we grant the Port Authority’s
petitions for review, deny the airlines’ petition for review, and
remand to the DOT for further proceedings.

I

A 1998 report commissioned by the Port Authority indi-
cated ITB would soon reach capacity. In response, the Port
Authority negotiated a deal with Continental Airlines (“Conti-
nental”) permitting Continental to expand Terminal C, which
Continental leased from the Port Authority for its exclusive use
pursuant to a 1985 agreement. Continental issued over $700
million in bonds to fund the construction of C-3, a new interna-
 4

tional concourse at Terminal C, and the Port Authority leased
the land for C-3 to Continental. Continental then moved its
international flights from ITB to C-3.

Carriers operating international flights out of ITB pay the
Port Authority Federal Inspection Facility Space (“FIS”) fees on
all incoming international passengers who are not pre-screened,
and General Terminal Charge (“GTC”) fees on all passengers,
whether domestic or international and whether inbound or
outbound. In return, the Port Authority maintains the gates and
FIS facilities at ITB. The Port Authority does not charge GTC
or FIS fees at Terminal C but recovers costs from Continental
through its fixed lease.

Following the attacks of September 11, 2001, traffic at
EWR declined, and with it the Port Authority’s FIS and GTC
revenues. Continental’s move to C-3 exacerbated the situation.
In response, the Port Authority decided to raise FIS and GTC
fees at ITB. Carriers complained, demanding a more adequate
explanation and threatening to leave EWR if the Port Authority
increased rates by too much. However, the Port Authority
persevered and implemented the increase effective February 1,
2005, raising FIS fees from $13.50 to $22 per person and GTC
fees from $5.50 to $8 per person.

Thirteen of the eighteen carriers at ITB filed a 49 U.S.C.
§ 47129 complaint (“the Complaint”), arguing the increase was
unreasonable. Of these thirteen carriers (“the Complainants” or
“the Airlines”), only Brendan Airways is a U.S. air carrier. The
Complainants paid the fee increase under protest during the
DOT adjudication, and the Port Authority posted bonds to cover
any repayments the DOT might order.

The DOT determined the Complaint constituted a signifi-
cant dispute. Instituting Order, Brendan Airways, LLC, Order
2005-3-21, Docket OST-05-20407-36, at 19 (DOT Mar. 16,
 5

2005). The DOT denied the Port Authority’s motion to exclude
the foreign carriers and issued two discovery orders: (1)
ordering the Port Authority to disclose specified documents
related to the proposed rate increase; and (2) establishing
standards for the Administrative Law Judge (“ALJ”) to use in
subsequent evidentiary rulings in light of the Airlines’ failure to
include supporting testimony with their Complaint, an oversight
that exposed them to limits under 14 C.F.R. §§ 302.603–605 on
their ability to introduce evidence.

The Complainants sought to have additional documents
disclosed and to depose a Port Authority employee regarding the
disclosures—requests the ALJ denied. The ALJ likewise
generally denied a motion to introduce expert testimony
responding to the disclosures, allowing additional testimony
only to the extent it was advertised in the Airlines’ original
pleadings.

At the hearing, the Complainants claimed the Port Author-
ity’s “Expense Reclassification charge” from 2004 should not
have been included in the cost forecast for 2005. In addition,
they contended the Port Authority’s lease to Continental
effectively charged Continental much lower GTC and FIS fees,
giving that airline an unfair advantage.

The ALJ issued a Recommended Decision, Brendan
Airways, LLC, Docket OST-05-20407-116 (DOT May 9, 2005),
available at http://dms.dot.gov/reports, which the DOT re-
viewed and substantially adopted in its own Final Decision,
Brendan Airways, LLC, Order 2005-6-11, Docket OST-05-
20407-129 (DOT June 14, 2005). The Final Decision deter-
mined: (1) it was unreasonable for the Port Authority to include
its 2004 Expense Reclassification charge in its forecast for 2005
direct costs; (2) the Complainants failed to demonstrate unjust
discrimination; and (3) the ALJ’s evidentiary rulings were
proper.
 6

The DOT ordered the Port Authority to revise its proposed
FIS and GTC fees and to compensate the Complainants for
amounts collected beyond those revised fees. The DOT
accepted the Port Authority’s revised proposal, which excluded
the Expense Reclassification charge. Brendan Airways, LLC,
Order 2005-7-10, Docket OST-05-20407-133, at 6 (DOT July
12, 2005) (“July 12 Order”). With the DOT’s permission, the
Port Authority repaid the excess in the form of credits on the
Complainants’ accounts.

The Port Authority and the Complainants both sought
judicial review of the Final Decision in timely fashion. See 49
U.S.C. § 46110. In a subsequent—but likewise timely—petition
for review, the Port Authority challenged the July 12 Order,
which instituted fees the Port Authority had proposed only under
protest. The Port Authority asks this court to vacate the DOT’s
denial of its motion to dismiss the foreign carriers and to reverse
the DOT’s determination that it was unreasonable to include the
Expense Reclassification charge in cost forecasts. The Com-
plainants, meanwhile, challenge the ALJ’s evidentiary rulings,
and ask us to vacate the DOT’s determination that the proposed
fees were nondiscriminatory, as well as any other orders relying
on those evidentiary rulings. We address the claims of each
petitioner in turn.

II

We first consider the Port Authority’s contention that 49
U.S.C. § 47129 adjudication procedures are available only to
U.S. air carriers. As a threshold matter, the DOT claims the Port
Authority forfeited this argument by failing to raise it in its brief
to the Secretary before the Final Decision. Indeed, this court
may not consider objections to final orders in § 47129 adjudi-
cations “unless objection was urged before an administrative law
judge or the Secretary at a proceeding under this subsection
 7

[§ 47129(c)] or, if not so urged, unless there were reasonable
grounds for failure to do so.” 49 U.S.C. § 47129(c)(6). How-
ever, that same subsection requires the Secretary to “dismiss the
complaint if no significant dispute exists or . . . [to] assign the
matter to an administrative law judge.” § 47129(c)(2). The Port
Authority challenged the participation of the foreign carriers
during the DOT’s determination of whether a “significant
dispute” existed—a “proceeding under this subsection.” Thus,
we have jurisdiction to review the DOT’s ruling.

Turning to the merits, we begin with the statute. Section
47129 establishes an expedited process for determining whether
fees imposed on “one or more air carriers (as defined in section
40102 of this title)” are reasonable. 49 U.S.C. § 47129(a)(1).
The problem, as illustrated by this case, is that § 40102 contains
definitions for both “air carrier,” § 40102(a)(2), and “foreign air
carrier,” § 40102(a)(21). In the vernacular, “foreign air car-
rier[s]” would appear to comprise a subset of “air carrier[s],” but
§ 40102 instead mandates that the two sets be disjoint. Only a
United States citizen can be an “air carrier” in the sense of
(a)(2), while only a non-citizen can be a “foreign air carrier” in
the sense of (a)(21). The DOT however maintains that in
§ 47129, unlike in § 40102(a)(2), the term “air carrier” embraces
all providers of air transportation, regardless of citizenship. See
14 C.F.R. § 302.601(a) (2006) (“This subpart contains the
specific rules that apply to a complaint filed by one or more air
carriers or foreign air carriers (‘carriers’), pursuant to 49 U.S.C.
47129(a) . . . .”); Policy Regarding Airport Rates and Charges,
61 Fed. Reg. 31,994, 32,019 ¶ 1.2.1 (June 21, 1996) [hereinafter
Policy Statement] (same).

Brendan Airways and twelve foreign air carriers filed a
§ 47129 complaint requesting determination of the reasonable-
ness of the proposed rate increase. The Port Authority concedes
Brendan Airways is an “air carrier” even within the narrow
definition laid out in § 40102(a)(2), and hence that the DOT
 8

acted within its authority when it issued the requested
determination.

The disagreement centers on the remedies available to the
foreign complainants. Under § 47129, amounts paid under
protest by “a complainant air carrier” are subject to refund if the
fees are deemed unreasonable, and to assure timely repayment,
“the airport shall obtain a letter of credit, or surety bond, or other
suitable credit facility, equal to the amount in dispute.”
§ 47129(d)(1)(B)–(C). If the non-U.S. complainants are not “air
carriers” in the sense of § 47129(a)(1), then they were not
properly parties to the § 47129 complaint and cannot qualify for
the refunds due “complainant air carrier[s].” Moreover, if
§ 47129(d)(1)(B) gives the DOT no authority to order airports
to refund excess fees to non-U.S. carriers, then the
§ 47129(d)(1)(C) requirement that airports obtain bonds to
secure such potential payments likewise disappears. Thus, this
issue’s resolution hinges on whether “air carrier” in
§ 47129(a)(1) includes non-U.S. carriers.

In resolving this question, we must first determine the
appropriate standard of review. Agency interpretations of the
statutes they administer are generally reviewed according to the
deferential standard set out in Chevron U.S.A. Inc. v. NRDC, 467
U.S. 837 (1984). When applying that standard of review, we
must give effect to the intent of Congress if that intent is clear.
Id. at 842–43. If instead the statute is silent or ambiguous with
respect to the issue at hand, we should defer to the agency’s
interpretation so long as it is reasonable. Id. at 843–44. In
determining whether the intent of Congress is clear, we avail
ourselves of traditional tools of statutory construction. Id. at 843
n.9.

However, we do not automatically apply Chevron deference
regardless of the context. Statutory interpretations by agencies
are “not entitled to deference absent a delegation of authority
 9

from Congress to regulate in the areas at issue.” Motion Picture
Ass’n of Am. v. FCC, 309 F.3d 796, 801 (D.C. Cir. 2002); see
also Gonzales v. Oregon, 126 S. Ct. 904, 916 (2006) (applying
Chevron deference only to those interpretations “promulgated
pursuant to authority Congress has delegated” to the agency).

Here, Congress delegated authority to the DOT to regulate
in this area, but that power was arguably limited to designing
§ 47129 adjudication procedures and setting rules for determin-
ing whether a fee is reasonable. See 49 U.S.C. § 47129(b).
Thus, the DOT’s interpretation at 14 C.F.R. § 302.601(a) of
§ 47129 as including non-U.S. carriers was not issued pursuant
to any explicit delegation. Still, such a delegation can be im-
plicit, in which case “a court may not substitute its own con-
struction of a statutory provision for a reasonable interpretation
made by the administrator of an agency.” Chevron, 467 U.S. at
844; see also Ry. Labor Executives’ Ass’n v. Nat’l Mediation
Bd., 29 F.3d 655, 671 (D.C. Cir. 1994) (en banc). Furthermore,
the fact that the statutory language in question determined the
scope of the DOT’s authority to adjudicate, and in particular to
order retroactive awards, does not in itself render Chevron
inapplicable. See Detroit Edison Co. v. FERC, 334 F.3d 48, 53
(D.C. Cir. 2003); Independent Petroleum Ass’n of Am. v.
DeWitt, 279 F.3d 1036, 1040 (D.C. Cir. 2002).

In the end, we need not definitively answer this question,
because we find that the reference in § 47129 to air carriers “as
defined in section 40102 of this title” unambiguously incorpo-
rates § 40102(a)(2)’s limitation of this term to U.S. citizens.
The Complainants as intervenors, the DOT as respondent, and
the Government of the United Kingdom as amicus offer several
arguments in opposition to this reading of § 47129. As we
would vacate the DOT’s interpretation even under the more
deferential Chevron standard, we shall assume in reviewing
these arguments that Chevron applies.
 10

First, the Complainants contend that since § 47129 refers to
air carriers “as defined in section 40102” and not “as defined in
section 40102(a)(2),” the statute actually incorporates all of the
definitions from § 40102, including in particular both (domestic)
air carriers at § 40102(a)(2) and foreign air carriers at
§ 40102(a)(21). If § 40102(a)(2) in fact defined “domestic air
carrier” rather than simply “air carrier,” this argument would
clearly carry the day. But even as § 40102 stands, the Complain-
ants’ suggestion is at least plausible, for assuming the drafters
of § 47129 intended to include both “air carriers” and “foreign
air carriers,” there is no obvious, succinct formulation that
encapsulates the union of those two terms and no more.

The Complainants effectively read § 40102 as bifurcating
the generic category “air carrier” and then (inconveniently)
assigning to one subdivision the name commonly associated
with the broader class. In such a circumstance, an external
provision using the term “air carrier” might well be read to mean
either the specific subdivision defined in § 40102(a)(2) or else
the more general category, depending on the context.

Section 40102(a)(2) defines “air carrier” as “a citizen of the
United States undertaking by any means, directly or indirectly,
to provide air transportation.” If § 40102(a)(21) defined
“foreign air carrier” as “a person, not a citizen of the United
States, undertaking by any means, directly or indirectly, to
provide air transportation,” then the question would be close.
We would have a natural concept, namely “a person undertaking
by any means, directly or indirectly, to provide air transporta-
tion,” which would commonly be termed “air carrier,” and
which would be subdivided by § 40102 into (domestic) “air
carrier” and “foreign air carrier” based on citizenship, with the
term “air carrier” thus rendered ambiguous.

But § 40102(a)(21) does not define “foreign air carrier” that
way. Rather, it states that “foreign air carrier” means “a person,
 11

not a citizen of the United States, undertaking by any means,
directly or indirectly, to provide foreign air transportation.”
§ 40102(a)(21) (emphasis added). Section 40102(a)(5) in turn
defines “air transportation” as “foreign air transportation,
interstate air transportation, or the transportation of mail by
aircraft,” so that “foreign air transportation” is a strict subset of
“air transportation.” Hence, the definition of “foreign air
carrier” is twice distinguished from the definition of “air
carrier”—first by citizenship, and second by the type of trans-
portation provided.

Thus, the Airlines’ argument breaks down. If § 40102
merely subdivided the pre-statutory term “air carrier” based on
U.S. citizenship, then § 47129’s explicit citation to § 40102
could perhaps be taken as a reference only to the shared terms
in § 40102(a)(2) and § 40102(a)(21). But given that the two
definitions, taken together, indicate no natural, broader concept,
we cannot force such a tortured interpretation on § 47129. See
Brown v. Gardner, 513 U.S. 115, 118 (1994) (“Ambiguity is a
creature not of definitional possibilities but of statutory context
. . . .”). We therefore reject the Airlines’ first argument.

Second, the Complainants point to § 47129(e)(1), which
states that § 47129 does not apply to “a fee imposed pursuant to
a written agreement with air carriers using the facilities of an
airport.” § 47129(e)(1) (emphasis added). By their logic, if “air
carriers” means only “U.S. air carriers” in § 47129, then
§ 47129(e)(1) pointedly bars only U.S. air carriers from chal-
lenging fees imposed pursuant to written agreements, so that by
implication foreign air carriers may indeed challenge such fees
via § 47129. Arguing that challenges by any carrier to fees
imposed pursuant to written agreements would run counter to
the purpose of the statute, the Complainants reason that
§ 47129(e)(1) must be read to exclude both U.S. and foreign
carriers, and hence that “air carriers” in § 47129(e)(1) covers
foreign carriers as well. With no indication that “air carriers”
 12

should mean different things in different parts of § 47129, the
Complainants then infer that this same, broad definition applies
in § 47129(a)(1).

But this argument ignores the basic structure of § 47129.
Section 47129(a)(1) states that “air carriers,” and only air
carriers, may make use of § 47129. Section 47129(e)(1) does
not provide an exhaustive list of all persons unable to use
§ 47129, but rather merely carves out specific exceptional
circumstances in which the “air carriers” mentioned in
§ 47129(a)(1) cannot use § 47129, that earlier subsection
notwithstanding. Therefore, regardless of how we interpret “air
carrier,” § 47129(e)(1) cannot be read to authorize anyone to
contest fees imposed pursuant to written agreements.
Section 47129(e)(1) thus provides no insight into the proper
interpretation of “air carrier” in § 47129, and we reject the
Complainants’ second argument.

Third, all three parties argue that there is no legislative
history indicating an intention to exclude foreign air carriers
from § 47129 procedures.1 In the words of the Complainants,

1
The Airlines in fact maintain that the legislative history reveals
a clear intention to include foreign air carriers, but none of their
citations are convincing. Senator Ford’s assurance that § 47129 “will
not affect the fees and arrangements that are a part of a written
agreement between an airport and the airlines,” 140 CONG. REC.
13,261 (1994), merely restates § 47129(e)(1), and is equally true
regardless how “air carrier” is interpreted. Senator Feinstein’s
reference to “a partnership interest between air carrie[r]s and airport
owners” indeed appears to include foreign air carriers, but Senator
Feinstein was not describing the effects of the immediate bill but
rather broadly opining on “the entire reason we are dealing with the
issue of rates and charges.” 140 CONG. REC. at 13,264. Senator
Feinstein further emphasized that the bill would not affect the ongoing
dispute in Los Angeles, id. at 13,265, but since § 47129(e)(2)–(3) and
(f)(2) explicitly exclude preexisting conflicts from the new procedure,
 13

“The Port Authority does not cite a shred of evidence based on
the history, purpose or structure of the statute to support its
notion that Congress intended to deny foreign carriers the
benefits of Section 47129.” Comp’ts’ Intervenor Br. 17.
Amicus amplifies this point, claiming it would have been
“inconsistent” and not “logical” for Congress to create an
expedited adjudication procedure that excluded foreign air
carriers so soon after the United States signed a bilateral
agreement with the United Kingdom requiring each party to
“maintain a system to safeguard users from charges that do not
meet the criteria” of the agreement, including “a process for
resolving complaints which the contracting parties in principle
expect to be used in the first instance.” U.K.’s Amicus Br. 14
(internal quotation marks omitted) (quoting Agreement Between
the Government of the United States of America and the
Government of the United Kingdom of Great Britain and
Northern Ireland Concerning Air Services, U.S.-U.K., July 23,
1977, 28 U.S.T. 5367, as amended by Agreement Between the
United States of America and the United Kingdom of Great
Britain and Northern Ireland, U.S.-U.K., Mar. 11, 1994, T.I.A.S.
No. 12,536 [hereinafter Bermuda II], art. 10(4)).

Indeed, legislative history is silent on this point. Section
47129 began life as House Bill 2739 in 1993. The House of
Representatives’ version of the bill made no reference to
expedited resolution of fee disputes. See H.R. 2739, 103d

this again sheds no light on the meaning of “air carrier.” This court
had occasion to interpret these same comments in Los Angeles
Department of Airports v. U.S. DOT, 103 F.3d 1027 (D.C. Cir. 1997).
But our statement there that “Congress specifically intended that the
airlines be able to use the newly-created procedure to challenge the
LAX fee increase,” id. at 1037, concerned the time limits in 49 U.S.C.
§ 47129(a)(1)(B), not the applicability of § 47129 to foreign air
carriers. All in all, the Airlines point to no statement that proves even
one Senator or Representative intended § 47129 to cover non-U.S.
carriers, much less that the majority in each chamber agreed.
 14

Cong., 139 CONG. REC. 24,036–54, 24,272–81 (as passed by
House of Representatives, Oct. 13, 1993). The Senate’s version
would have inserted most of the current § 47129 into the Airport
and Airway Improvement Act of 1982, Pub. L. No. 97-248, tit.
V, 96 Stat. 324, 671–702, in which the definitions now con-
tained at 49 U.S.C. § 40102 did not apply. H.R. 2739, sec. 504,
§ 536, 103d Cong., 140 CONG. REC. 13,513, 13,520–21 (as
passed by Senate, June 16, 1994). The reference to the § 40102
definition first appeared in the conference report reconciling
these two versions, which provided no explanation for the
change, absent which the DOT would have been free to interpret
“air carrier” in the resulting provision in any reasonable fashion.
H.R. REP. NO. 103-677, at 9, 69 (1994) (Conf. Rep.). Con-
gress’s motivation in adopting this new provision must hence
remain a mystery.

But ours not to reason why: Be it ever so illogical and
inconsistent with government policy, § 47129 was duly passed
by Congress and signed by the President, and we must give it
effect. The plain language of a statute is strong evidence of
Congress’s intent. See Sierra Club v. EPA, 294 F.3d 155, 161
(D.C. Cir. 2002) (“The most reliable guide to congressional
intent is the legislation the Congress enacted . . . .”). We
certainly cannot aggrandize an agency’s power in contravention
of such plain language based solely on Congressional silence as
to the impetus behind its chosen phrasing. That way madness
lies. See Ry. Labor Executives’ Ass’n, 29 F.3d at 671 (“Were
courts to presume a delegation of power absent an express
withholding of such power, agencies would enjoy virtually
limitless hegemony, a result plainly out of keeping with Chevron
and quite likely with the Constitution as well.”). We therefore
refuse the DOT’s invitation to pare § 47129 down to only those
portions explained in the Congressional Record.

Fourth, the DOT argues § 47129 must be construed in
keeping with the United States’ international commitments as a
 15

matter of basic statutory interpretation.2 According to the DOT
and the United Kingdom, the United States would be in breach
of Bermuda II if it barred non-U.S. carriers from § 47129
adjudications, given that the DOT’s alternative fee dispute
procedure, 14 C.F.R. Part 16, does not clearly authorize retroac-
tive remedies.3 As the DOT rightly notes, “an act of Congress
ought never to be construed to violate the law of nations if any
other possible construction remains.” Murray v. The Schooner
Charming Betsy, 6 U.S. (2 Cranch) 64, 118 (1804). But this
leaves open the question of whether the DOT’s proposed
construction is possible. As the Supreme Court has cautioned:

When [a treaty and a federal statute] relate to the same
subject, the courts will always endeavor to construe them so
as to give effect to both, if that can be done without violat-
ing the language of either; but if the two are inconsistent,
the one last in date will control the other, provided always
the stipulation of the treaty on the subject is self-executing.

2
The DOT’s suggestion that such interpretation is required by 49
U.S.C. § 40105(b)(1) is incorrect. Section 40105(b)(1) states that
“[i]n carrying out this part, the Secretary of Transportation and the
Administrator . . . shall act consistently with obligations of the United
States Government under an international agreement.” § 40105(b)(1)
(emphasis added). But § 40105 is in Part A of Title 49, Subtitle VII,
while § 47129 is in Part B of that subtitle.
3
Whether Part 16 can be so interpreted as to permit such
retroactive remedies is a question for the DOT in the first instance, and
we do not purport to decide it today. Likewise, while 14 C.F.R.
§ 16.1(a) disallows the use of Part 16 in “disputes between U.S. and
foreign air carriers and airport proprietors concerning the
reasonableness of airport fees covered by 14 CFR part 302,” which
regulates § 47129 adjudications, in light of our holding today it is
unclear whether § 16.1(a) still bars foreign air carriers from Part 16
procedures, and the DOT has the first say in this matter.
 16

Whitney v. Robertson, 124 U.S. 190, 194 (1888). Where, as
here, the statute admits of only one reasonable interpretation,
that interpretation governs even in the face of strongly contrary
language in earlier international agreements.4

Fifth, the DOT urges us to interpret § 47129 in light of the
since-deleted section 101 of the Federal Aviation Act of 1958.
In relevant part, this provision read as follows:

As used in this Act, unless the context otherwise requires—

....

(3) “Air carrier” means any citizen of the United States who
undertakes, whether directly or indirectly or by a lease or
any other arrangement, to engage in air transportation . . . .

Federal Aviation Act of 1958, Pub. L. No. 85-726, § 101, 72
Stat. 731, 737 (codified with some differences in language at 49
U.S.C. app. § 1301 (1988)) (repealed 1994) (emphasis added).
This definition was codified at 49 U.S.C. § 40102 by Public Law
No. 103-272 in 1994, prior to the passage of § 47129. The
codification act changed “As used in this Act” to “In this part”
and dropped entirely the proviso, “unless the context otherwise
requires.”5 However, that same act indicated that its first four

4
In similar fashion, the DOT’s assertion that its interpretation
deserves especial deference on account of its vintage fails to change
the final result. It is true that we “will normally accord particular
deference to an agency interpretation of longstanding duration,”
Barnhart v. Walton, 535 U.S. 212, 220 (2002) (internal quotation
marks omitted); see also Sec’y of Labor v. Excel Mining, LLC, 334
F.3d 1, 7–8 (D.C. Cir. 2003), but as such deference must still yield to
the plain meaning of the statute, this point more properly addresses the
second step under Chevron, which we do not reach.
5
The change from “Act” to “part” is less dramatic than it appears.
All but one of the references to “air carriers” in the Federal Aviation
 17

sections, which restated and replaced laws not yet codified,
“may not be construed as making a substantive change” in “laws
enacted before July 1, 1993.” Act of July 5, 1994, Pub. L. No.
103-272, § 6(a), 108 Stat. 745, 1378. The DOT infers that, if the
deletion of the context proviso effected no substantive change,
then the proviso must be implicit in 49 U.S.C. § 40102. By this
logic, when § 47129 appeals to § 40102 for the definition of “air
carrier,” it incorporates the proviso and is hence susceptible to
variable interpretation. If true, this would take us to the second
step of Chevron.

But the DOT’s analysis misses the mark. Even if we
assume arguendo that § 47129 incorporates the context proviso,
the context surrounding “air carrier” in § 47129(a)(1) in fact
demands a narrow reading of that term. Specifically,
§ 47129(a)(1) says to interpret “air carrier” “as defined in
section 40102 of this title.” 49 U.S.C. § 47129(a)(1). Absent
this explicit cross-reference, the definition from § 40102 would
not apply to § 47129, as § 47129 is in Part B of Title 49, Subtitle
VII, while § 40102 covers only Part A of that subtitle. See
§ 40102(a). It can hardly have been Congress’s intention to
include this cross-reference and thereby incorporate the other-
wise inapplicable definition, only to have the DOT disregard the
definition. Thus, the cross-reference to § 40102, contained as it
is in the immediate context of the term requiring interpretation,
is determinative, and § 47129(a)(1) cannot be read to include
foreign air carriers.6
Act were moved to Part A of Title 49, Subtitle VII. The lone
exception, the current 39 U.S.C. § 5007(b), explicitly refers to the
definition: “In this subsection, ‘air carrier’ and ‘aircraft’ have the
same meanings given those terms in section 40102(a) of title 49.” 39
U.S.C. § 5007(b)(1).
6
The DOT cites two cases in which courts overrode the § 40102
definition for “air carrier” based on context. However, even leaving
aside the fact that the cases were decided when section 101 of the
Federal Aviation Act—including the context proviso—was still in
 18

In summary, the language of § 47129(a)(1) leaves us no
choice but to infer that Congress intended to limit § 47129
procedures to U.S. carriers. We must therefore give effect to
that clear Congressional intent, the DOT’s contrary interpreta-
tion of the statute notwithstanding. Chevron, 467 U.S. at
842–43. The DOT makes a compelling case for the more
inclusive approach, which might indeed fit better with the
United States’ international obligations. But it is Congress, not
the courts, that has the power to expand § 47129 to include
foreign air carriers. Cf. Friends of the Earth, Inc. v. EPA, 446

force, they both dealt with statutes that referenced outside language
supporting a broad definition, whereas here § 47129 references outside
language supporting a narrow definition. In South African Airways v.
Dole, 817 F.2d 119 (D.C. Cir. 1987), we analyzed the meaning of “air
carrier” in section 306(a)(1) of the Comprehensive Anti-Apartheid Act
of 1986, Pub. L. No. 99-440, 100 Stat. 1086, 1100 (repealed 1993),
which referenced the Agreement Between the Government of the
United States of America and the Government of the Union of South
Africa Relating to Air Services Between Their Respective Territories,
U.S.-S. Afr., May 23, 1947, 61 Stat. 3057 [hereinafter South Africa
Agreement]. South Africa’s power under the South Africa Agreement
to “designate[]” carriers extended only to South African carriers.
South Africa Agreement annex § 1. Hence, when section 306(a)(1)
discussed “the rights of any air carrier designated by the Government
of South Africa under the [South Africa Agreement],” the external
language militated for an interpretation of “air carrier” that included
foreign (specifically South African) companies. Similarly, in Lawal
v. British Airways, PLC, 812 F. Supp. 713 (S.D. Tex. 1992), a district
court interpreted “air carrier” in the phrase “any air carrier having
authority under subchapter IV of this chapter to provide air
transportation,” 49 U.S.C. app. § 1305(a)(1) (1988), to include foreign
air carriers, because “[s]ubchapter IV deals with economic regulation
of various types of carriers, including foreign air carriers.” Lawal, 812
F. Supp. at 718. Finally, the DOT’s related reference to Morales v.
Trans World Airlines, Inc., 504 U.S. 374 (1992), is unpersuasive, as
Morales did not discuss whether “air carrier” included foreign air
carriers.
 19

F.3d 140 (D.C. Cir. 2006) (instructing the EPA to “take its
concerns to Congress” if it objected to the plain meaning of a
statute). In keeping with the statute as it currently stands, we
grant the Port Authority’s petition for review of the Final
Decision and set aside the DOT’s denial of the Port Authority’s
motion to dismiss the Complaint as to the twelve non-U.S.
carriers.

III

Pursuant to 49 U.S.C. § 47129(a)(1), the DOT declared the
Port Authority’s new GTC and FIS fees unreasonable to the
extent they were based on a $2.13 million “Expense Reclassifi-
cation charge” from 2004. The Port Authority now asks us to
reverse this determination.

Section 47129(b) instructed the Secretary of Transportation
to publish, not later than November 21, 1994, “regulations,
policy statements, or guidelines establishing . . . the standards or
guidelines that shall be used by the Secretary in determining . . .
whether an airport fee is reasonable.” 49 U.S.C. § 47129(b). In
response, the DOT released the Policy Statement, 61 Fed. Reg.
31,994, described above. The Policy Statement placed separate
limits on airfield fees and non-airfield fees. Compare Policy
Statement ¶ 2.5.1 (“In determining the total costs that may be
recovered from fees for the use of airfield assets and public-use
roadways in the rate base, the airport proprietor must value them
according to their historic cost to the original airport proprietor
(HCA).”) with id. ¶ 2.6 (“For other facilities and land . . . , the
airport proprietor may use any reasonable methodology to
determine fees, so long as the methodology is justified and
applied on a consistent basis to comparable facilities . . . .”).
This court deemed the DOT’s disparate treatment of airfield and
non-airfield fees arbitrary and capricious, Air Transp. Ass’n v.
DOT, 119 F.3d 38, 41–44 (D.C. Cir. 1997), and thus vacated
 20

many paragraphs of the Policy Statement, id. at 45, as modified
on reh’g, 129 F.3d 625. To date, the DOT has not revised the
Policy Statement. See Policy Regarding Airport Rates and
Charges, 68 Fed. Reg. 6530 (Feb. 7, 2003) (withdrawing
Advance Notice of Proposed Policy, which was to supersede the
Policy Statement).

Lacking a regulation directly applicable to FIS and GTC
(non-airfield) fees, the DOT used the Policy Statement’s rules
for airfield fees as “guidance.” Final Decision at 11. Uniform
application of such rules to both airfield and non-airfield fees
would at least arguably resolve the problems we noted in Air
Transport Ass’n. The Port Authority contested the applicability
of those Policy Statement rules before the DOT but did not
renew this objection before us. Hence, we assume without
deciding that Policy Statement paragraphs 2.2 to 2.5.4 provide
a valid test for the reasonableness of the disputed fees.

Under the Policy Statement, fees are unreasonable if they
generate revenue exceeding the “rate base”; i.e., the cost of
providing airport services to aeronautical users. Policy State-
ment ¶¶ 2.2–2.3, 4.2; see also 49 U.S.C. § 47107(b)(1) (listing
permissible uses of airport revenues). In setting fees for 2005,
the Port Authority forecasted its 2005 costs based on actual costs
for 2002–2003 and estimated costs for 2004. Direct Interna-
tional Facility Expenses made up the largest component of these
costs. The Port Authority scaled up its 2004 Direct International
Facility Expenses by 3% for its 2005 forecast. The 2004 figure
included an Expense Reclassification charge of $2,131,482.
Hence, in effect, the Port Authority predicted that it would take
a similar Expense Reclassification charge in 2005. Moreover,
the proposed fee increase was predicated on the inclusion of the
Expense Reclassification charge in the rate base, with the Port
Authority including that charge in the pro forma income
statement it used to demonstrate the increased fees would result
in no appreciable surplus. See Policy Statement ¶ 4.2 (“In
 21

establishing new fees, and generating revenues from all sources,
airport owners and operators should not seek to create revenue
surpluses that exceed the amounts to be used for airport system
purposes and for other purposes for which airport revenues may
be spent under 49 U.S.C. § 47107(b)(1) . . . .”). The Port
Authority now challenges the DOT’s determination that it was
unreasonable to include this Expense Reclassification charge
forecast in its rate base for ITB.

The Expense Reclassification charge consists of two
components. The first reflects signage expenditures that were
erroneously coded as capital expenditures and then reclassified
as operating expenses. If this error was both made and corrected
in 2004, then the expenses recognized in 2004 properly reflect
the costs allocable to that year, and it was appropriate for the
Port Authority to include the reclassified signage expense in its
2005 cost forecast. However, if the signage expenditures
reclassified in 2004 were in fact capitalized back in 2003, then
it was unreasonable for the Port Authority to include that charge
in its 2005 forecast: If such expenditures are made annually,
then the 2004 income statement includes both 2004 signage
expenses and reclassified 2003 signage expenditures, so that by
including all 2004 expenses in its 2005 forecast, the Port
Authority doubled the appropriate signage expense forecast;
alternatively, if such expenditures are not made annually, then
it was improper for the Port Authority to include in its 2005
forecast the full signage expense as recognized in 2004, rather
than a pro-rated amount. In short, the Port Authority’s treatment
of the signage reclassification charge in its 2005 forecast was
proper if and only if the expenditures underlying that charge
were originally capitalized in 2004, not some earlier year.

The record gives no clear indication of whether the signage
expenditures were capitalized in 2003 or 2004. The Complain-
ants’ witness, Dr. Daniel Kaplan, described the Expense
Reclassification charge as “capital charges that had been
 22

charged in the previous period,” Tr. 97:11–12, but did not
indicate whether this “period” was a previous year or just an
earlier quarter within 2004. The Complainants’ attorney asked
the Port Authority’s witness, David Kagan, whether this charge
represented “expenses that were capitalized or anticipated as
capital expenses in prior years that [the Port Authority] reclassi-
fied as costs in this year, in 2004,” Tr. 396:4–6 (emphasis
added), but Mr. Kagan’s answer gave no indication of timing.
The DOT’s findings of fact are conclusive if supported by
substantial evidence, 49 U.S.C. § 47129(c)(6), but here there is
no evidence on the crucial issue of when the signage expendi-
tures were originally capitalized. Accordingly, we vacate the
Final Decision’s current ruling on the reasonableness of
including the signage component of the Expense Reclassifica-
tion charge in the Port Authority’s 2005 cost forecast, and we
remand this case to the DOT for further consideration of that
issue. In addition, we grant the Port Authority’s petition for
review of the July 12 Order and vacate that order to the extent
it implements fees calculated pursuant to the DOT’s ruling on
the signage component.

The second component represents accumulated planning
costs for capital projects that were canceled in 2004. In essence,
the Port Authority argues that while this component includes
costs incurred prior to 2004, Supp. Kagan Decl. 16 ¶ 59, the
Complainants failed to demonstrate that similar charges would
not be taken in subsequent years. We disagree. For the 2004
charge, which covers planning costs incurred over multiple
years, to serve as a reasonable forecast for future single-year
charges, it would have to be the case that the Port Authority
routinely pursued multiple capital projects simultaneously and
canceled at least one per year, of a magnitude similar to that
seen in 2004. The record indicates no such pattern of annual
cancellations. Mr. Kagan described as “normal Port Authority
practice” the designation of capitalized planning costs as
Expense Reclassification charges upon cancellation, id., and yet
 23

those charges registered exactly zero in 2002 and only $279,797
in 2003 before skyrocketing to over $2.13 million in 2004. Such
a discrepancy casts significant doubt on the 2004 figure as an
accurate basis for forecasts.7 We therefore find the DOT’s
determination that 2004’s canceled project charge was not
representative to be supported by substantial evidence and hence
conclusive.

In rebuttal, the Port Authority argues its forecast for 2005
Direct International Facility Expenses was lower than the
average from 2002 to 2004, so that it could not be an unreason-
able forecast. However, this merely shows the Port Authority
reduced direct expenses other than the Expense Reclassification
charge between 2003 and 2004. The similarity between
2002–2003 costs and the 2005 forecast is probative only if it
was expected that those reduced direct expenses would return to
2003 levels in 2005, and the Port Authority presented no
evidence to support this theory.

In the alternative, the Port Authority cites Policy Statement
¶ 2.3, which allows “all costs” to be included in the rate base,
and reasons that it was improper for the DOT to declare the
Expense Reclassification charge in the rate base unreasonable
simply because it was not an “ordinary and recurring” expense.
While the ALJ arguably did treat “ordinary and recurring” status
as a sine qua non for inclusion in the rate base, Recommended
Decision at 14, it is the DOT’s Final Decision that we must
review, and that decision was rather more nuanced:

While we agree generally with the principle cited by the
Port Authority that it is entitled to recover its costs incurred,

7
While the record does not indicate how much of the 2004 charge
comes from each of the two components, the complete absence of such
a charge in 2002, on its own, provides substantial evidence for the
DOT’s finding.
 24

we disagree that the Port Authority is entitled to use
$2.13M in one time costs to establish its cost basis for fee
increases. Were evidence presented by the Port Authority
to show, in response to the complainants’ prima facie
showing of unreasonableness, that the Port Authority has
incurred expense reclassification costs in the range of their
2005 estimate of $2M for each of the last several years,
then we could find that the Port Authority could reasonably
base an estimate of $2M going forward into 2005 and
beyond. . . . Because the Port Authority did not present
such evidence, we determine that the Expense Reclassifica-
tion portion of the fee is unreasonable.

Final Decision at 16–17. We find this logic compelling, and we
affirm the DOT’s decision with regard to the abandoned capital
projects.

IV

The Complainants8 likewise seek review of particular
components of the DOT’s Final Decision, but as a threshold
matter, they object to certain evidentiary rulings underlying that
order. Specifically, the Complainants maintain the ALJ erred
when he refused (1) to amend the Instituting Order, (2) to order
Mr. Kagan to submit to a deposition, and (3) to admit additional
testimony responding to Port Authority disclosures.

In order to meet 49 U.S.C. § 47129’s aggressive time limits,
the DOT has promulgated regulations requiring complaints to
include “all supporting testimony and exhibits on which the
filing party intends to rely.” 14 C.F.R. § 302.603(a) (2005). A
8
We continue to refer to the Complainants in the plural, as they
collaborated on their briefs and arguments before this court, but in
light of our holding in Part II above, any ruling in their favor would
inure to the benefit of Brendan Airways alone.
 25

complainant’s reply “may include supporting testimony and
exhibits responsive to new matters raised in the answers,”
§ 302.605(b), but aside from that exception, once the complaint
is filed, complainants can generally introduce new evidence only
to the extent it relies on information the respondents had
previously refused to disclose, see § 302.603(c)(3).

Here, the Complaint certified that “[a]dditional information
on which Joint Complainants intend to rely is not included with
the brief, exhibits, or testimony because the Airport owner or
operator has expressly refused to make that information avail-
able.” Complaint at 19. Despite the defects in this certifica-
tion,9 the DOT ordered the Port Authority to disclose additional
information described in Attachment 1 to the Instituting Order.
Furthermore, the Instituting Order specified the ALJ could, “for
good cause shown, modify Attachment 1 if the ALJ believes the
circumstances so warrant.” Instituting Order at 28. Finally, the
Airlines were permitted to submit testimony based on informa-
tion the Port Authority would disclose pursuant to Attachment
1, but the ALJ was instructed “not [to] allow Complainants to
submit new evidence at the hearing without a showing of good
cause.” Id. at 3.

9
Contrary to 14 C.F.R. § 302.603(c)(3), the certification did not
“specify the date and form of the carrier’s request for information
from the airport owner or operator.” The form letter the Airlines sent
to the Port Authority “request[ed] that the information required by the
Policy Statement be provided for Terminal C as well as Terminal B,”
Complaint Ex. C at 2 (emphasis added), when in fact the Policy
Statement does not “require” the sharing of any information
whatsoever, see Policy Statement ¶ 1.1.2 (“Appendix 1 of this policy
statement contains a description of information that the Department
considers would be useful to the U.S. and foreign air carriers . . . .”
(emphasis added)); id. app. 1 (“The Department of Transportation
ordinarily expects the following information to be available to
aeronautical users . . . .” (emphasis added)).
 26

The Complainants now challenge the ALJ’s rulings on two
of its subsequent motions. First, the Complainants moved to
amend Attachment 1 so as to require additional disclosures by
the Port Authority and asked to depose Mr. Kagan regarding the
disclosures. Finding no “good cause” for either request, the ALJ
denied the motion. Second, after the Port Authority made the
required Attachment 1 disclosures, the Complainants moved to
introduce testimony responding to those disclosures. Again
finding good cause lacking, in that the Complainants had failed
to show (1) that the testimony could not have been introduced
earlier; (2) that the disclosures raised new issues warranting
additional testimony; or (3) that the testimony directly re-
sponded to the disclosures, the ALJ disallowed most of the
proffered testimony.

We review agency rulings on discovery with “extreme
deference.” Hi-Tech Furnace Sys., Inc. v. FCC, 224 F.3d 781,
789 (D.C. Cir. 2000) (internal quotation marks omitted). “[T]he
conduct and extent of discovery in agency proceedings is a
matter ordinarily entrusted to the expert agency in the first
instance and will not, barring the most extraordinary circum-
stances, warrant the Draconian sanction of overturning a
reasoned agency decision.” Trailways Lines, Inc. v. ICC, 766
F.2d 1537, 1546 (D.C. Cir. 1985).

We see no reason to disturb the ALJ’s denial of the Air-
lines’ motion to amend Attachment 1. The Airlines’ proposed
additions went well beyond the material specified in Appendix
1 to the Policy Statement, which formed the basis for their pre-
Complaint requests for information from the Port Authority.
Their case for good cause relied solely on the specified docu-
ments’ relevance and unavailability, factors the Instituting Order
deemed sufficient for the introduction of new evidence, but not
 27

for the forced discovery of such evidence.10 The Airlines
themselves admitted “the Port Authority’s responses may well
contain all of the information needed to resolve the issues in this
proceeding.” Br. Supp. Comp’ts’ Mot. Modify Attach. 1 at 3.
We therefore defer to the ALJ’s decision to deny the motion, as
reaffirmed by the DOT in its Final Decision at 12.

The ALJ’s refusal to order a deposition of Mr. Kagan was
likewise sound. The Instituting Order foresaw no such deposi-
tions. Moreover, Mr. Kagan actually appeared as a witness in
the hearing before the ALJ. Finding no “extraordinary circum-
stance[]” warranting reversal, we defer to the DOT’s ruling in
this matter.

The ALJ’s restrictions on the Complainants’ follow-on
testimony present a closer question. The Instituting Order
included the following instructions:

We are, however, requiring the Port Authority to provide
additional information on its fee methodologies, so the
Complainants may submit testimony based on the new
information at the hearing. The ALJ shall not allow

10
The Instituting Order set out separate standards for these two
events: “The ALJ accordingly should not allow any party to introduce
additional evidence except for good cause, for example, if a party was
unable to submit relevant and material evidence earlier due to its
inability to obtain it from an opposing party.” Instituting Order at 28
(emphasis added). “The ALJ assigned to this proceeding may, for
good cause shown, modify Attachment 1 if the ALJ believes the
circumstances so warrant.” Id. (emphasis added). It is not clear that
the inability to obtain relevant evidence, which the order describes as
good cause for permitting the introduction of such evidence, likewise
qualifies as good cause for modifying Attachment 1. Furthermore,
even if good cause is present, the ALJ is merely permitted to (“may”)
modify the attachment, not required to do so.
 28

Complainants to submit new evidence at the hearing
without a showing of good cause.

Instituting Order at 3. It is not clear whether the second sen-
tence was intended to constrain the first, with “evidence”
subsuming “testimony,” or whether instead the two sentences
mere meant to indicate two separate standards for admissibility,
with “testimony” generally admissible so long as it was “based
on the new information,” but “evidence” (i.e., exhibits) admissi-
ble only upon a showing of good cause.

The ALJ read the good cause requirement as applying to
testimony and measured good cause based on the degree to
which the proffered testimony was truly “based on the new
information.” For example:

Complainants fail to establish good cause for expanding the
scope of Mr. Brennan’s testimony. Specifically, Com-
plainants fail to show why the expanded proffer could not
have previously been introduced or submitted. They fail to
establish how the new documents and information provided
pursuant to Attachment 1 of the I.O. [Instituting Order]
presented new issues warranting the expended [sic] testi-
mony of Mr. Brennan. They fail to show how expansion of
Mr. Brennan’s testimony . . . responds directly to the
additional documents and information the I.O. directed the
Respondent to provide.

Order Pursuant Comp’ts’ Mot. Intro. Witness Testimony at 3.
The Final Decision adopted the ALJ’s evidentiary ruling,
reaffirming that testimony was to be admitted only upon a
showing of good cause, which in particular required that the
testimony respond to new information:

The complainants gave only vague descriptions of the
testimony to be offered and did not meet their burden to
 29

show good cause. Because complainants did not establish
that the testimony they wished to submit was based on new
information from the Port Authority, the ALJ was correct to
deny the complainants’ Motion for Testimony.

Final Decision at 12–13. In light of the ambiguity in the
Instituting Order’s instruction, we defer to the DOT’s interpreta-
tion and thus deem the ALJ to have applied the proper test when
determining whether the proffered testimony was admissible.11

Were we reviewing the DOT’s application of this test de
novo, we might reach a different conclusion than did the ALJ.
According to the Complainants’ motion, Dr. Kaplan was to
“testify as to the economics of the cost-allocation and fee-setting
methodologies utilized by the Port Authority, as revealed by the
newly-produced materials and information,” and accountant
Robert N. Yerman was to “explain how the costs of the services
provided by the Port Authority are allocated among various
users.” Joint Comp’ts’ Mot. Intro. Testimony Pursuant Inst.
Order at 3, 5. Both of these seem directly responsive to infor-
mation disclosed pursuant to Attachment 1, such as “[t]he
methods used by the Port Authority in allocating the Terminal
B ‘Expense’ categories” and “the allocation methodology” for
“direct and indirect costs” at “Terminals A, B, and C and all
components thereof,” Attachment 1 ¶¶ 5, 7.

11
As we find the DOT’s interpretation of the Instituting Order’s
instructions reasonable, we do not consider the ALJ’s erroneous
quotation of those instructions particularly problematic. Compare
Instituting Order at 22 (“The ALJ should allow a party to submit
additional evidence only for good cause shown.” (emphasis added))
with Order Pursuant Comp’ts’ Mot. Intro. Witness Testimony at 2
(“‘The ALJ should allow a party to submit additional testimony only
for good cause shown.’” (emphasis altered) (quoting Instituting Order
at 22)) and Order Pursuant Mot. Recons. at 4 (same).
 30

But we do not review evidentiary rulings de novo. In light
of the time pressures inherent in § 47129 adjudications, it was
not unreasonable for the ALJ to demand a more specific proffer
before admitting testimony not included in the Complaint.
While the DOT’s decision in this matter may be surprising, it
does not rise to the level of the “extraordinary circumstances”
we require for reversal. We therefore affirm all of the chal-
lenged evidentiary rulings.

V

Finally, the Complainants ask us to review the DOT’s
rejection of their discrimination claim. The Port Authority’s
new FIS and GTC fees applied only to ITB carriers, not to
Continental, which operates out of Terminal C. The Complain-
ants maintained the resulting difference in costs between
Terminal B and Terminal C unjustly discriminated against the
ITB carriers vis-à-vis Continental. The DOT’s Final Decision
rejected this claim, reasoning that Continental was a “signatory”
in the sense of 49 U.S.C. § 47107(a)(2)(B)(ii) and that Policy
Statement ¶ 3.1.1 therefore permitted the Port Authority to treat
the ITB carriers and Continental differently.

The Complainants object to the DOT’s ruling on their
discrimination claim on five grounds. First, the Complainants
argue Continental did not in fact qualify for differential treat-
ment under Policy Statement ¶ 3.1.1. In reviewing the DOT’s
application of ¶ 3.1.1, we must give the Department’s interpreta-
tion of that paragraph “controlling weight unless it is plainly
erroneous or inconsistent with the regulation.” Thomas Jeffer-
son Univ. v. Shalala, 512 U.S. 504, 512 (1994) (internal
quotation marks omitted); see also Nat’l Treasury Employees
Union v. Chertoff, 452 F.3d 839, 859 (D.C. Cir. 2006).
 31

Paragraph 3.1.1, which was not invalidated by Air Trans-
port Ass’n, reads as follows:

The prohibition on unjust discrimination does not prevent
an airport proprietor from making reasonable distinctions
among aeronautical users (such as signatory and non-
signatory carriers) and assessing higher fees on certain
categories of aeronautical users based on those distinctions
(such as higher fees for non-signatory carriers, as compared
to signatory carriers).

Policy Statement ¶ 3.1.1. This language is in turn based on 49
U.S.C. § 47107(a)(2)(B), which permits “differences based on
reasonable classifications, such as between—(i) tenants and
nontenants; and (ii) signatory and nonsignatory carriers.”

Superficially, it seems significant that ¶ 3.1.1 drops
§ 47107’s reference to tenant status. The DOT cannot simply
equate signatories with tenants, since Congress in 1987 explic-
itly added the signatory distinction to § 47107’s predecessor,
which had theretofore recognized only tenancy as a reasonable
basis for classification, while retaining tenancy as a separate
ground for differential treatment. See Airport and Airway
Safety and Capacity Expansion Act of 1987, Pub. L. No. 100-
223, § 109(a)(3), 101 Stat. 1486, 1499 (1987). However, the
reference in ¶ 3.1.1 to distinctions such as signatory status
suggests that other distinctions, including tenant status, may
qualify as “reasonable” in the sense of ¶ 3.1.1, and under such
a reading ¶ 3.1.1 would not conflict with the plain meaning of
§ 47107(a)(2)(B). See Chevron, 467 U.S. at 842–43. Indeed,
the Final Decision reads ¶ 3.1.1 in just that way. Final Decision
at 23 (“The DOT Policy Statement also expressly permits
differences in treatment of differently situated airlines, and
makes clear that tenant/non-tenant and signatory/non-signatory
airlines are not similarly situated. DOT Policy Statement
¶ 3.1.1.”). As this interpretation of ¶ 3.1.1 is not “plainly
 32

erroneous,” we treat it as controlling. Thomas Jefferson Univ.,
512 U.S. at 512.

Continental therefore benefits from Policy Statement ¶ 3.1.1
provided it qualifies as either a “tenant” or a “signatory.”12 In
testing whether Continental qualifies for either status, we must
rely on the DOT’s decision as stated, not our own analysis from
first principles. See Detroit Newspaper Agency v. NLRB, 435
F.3d 302, 311 (D.C. Cir. 2006) (“[W]e must accept the Board’s
decision on it[s] own terms, ignoring post-hoc rationalizations
by counsel and rejecting the temptation to supply reasons to
support the Board’s decision that the Board itself has not
offered.”). The Final Decision treats “tenant” as synonymous
with “lessee.” See Final Decision at 23 (“[Section 47107]
allows airports to treat signatory and non-signatory carriers (and
carriers with leases and those without) differently.”). The record
demonstrates definitively that Continental leases the land under
Terminal C from the Port Authority, Complainants’ Ex. CA29-
61 (“Continental leases from the Port Authority, pursuant to the
Port Authority Leases, the premises on which the Project is
located.”), and the ALJ so found, Recommended Decision at 21.
The Final Decision “agree[d] with and adopt[ed] the conclusions
of the ALJ” on this point, noting in particular the ALJ’s finding
that non-ITB carriers “are not similarly situated because
compensation to the Port Authority is incorporated into leases.”
Final Decision at 23. Thus, the DOT reasonably determined
Continental was a lessee and hence eligible for preferential
treatment under Policy Statement ¶ 3.1.1.13

12
The Complainants have not claimed to qualify for either of
these preferred categories.
13
The Final Decision also found Continental was a signatory.
Final Decision at 23. As the Complainants indicate, the DOT gave no
explanation for this finding. However, since the DOT permissibly
read Policy Statement ¶ 3.1.1 to permit differential treatment on the
basis of tenancy, as well, see Thomas Jefferson Univ., 512 U.S. at 512,
 33

In their second argument, the Complainants suggest the
differences in fees permitted by Policy Statement ¶ 3.1.1 are in
fact barred by 49 U.S.C. § 47107(a)(2), which mandates that at
federally subsidized airports:

air carriers making similar use of the airport will be subject
to substantially comparable charges—
(A) for facilities directly and substantially related to
providing air transportation; and
(B) regulations and conditions, except for differences
based on reasonable classifications, such as between—
(i) tenants and nontenants; and
(ii) signatory and nonsignatory carriers . . . .

49 U.S.C. § 47107(a)(2). A fee schedule that violated this
mandate—such as by subjecting classes of air carriers14 to
charges that are not “substantially comparable”—would be
patently unreasonable. However, Policy Statement ¶ 3.1.1
permits just such dissimilar fees, provided they are based on
“reasonable distinctions among aeronautical users (such as
signatory and non-signatory carriers).” This provision is valid
only if it falls within the exception to § 47107(a)(2) stated at
§ 47107(a)(2)(B).

Observing that the phrase “except for differences based on
reasonable classifications” is placed within § 47107(a)(2)(B),
and not in the flush text of § 47107(a)(2), the Complainants infer
reasonable classifications excuse dissimilar regulations and
conditions but not dissimilar charges. However, assuming the

the Complainants’ first argument fails even if we excise the finding of
signatory status from the Final Decision.
14
As 49 U.S.C. § 47107 is in Part B of Title 49, Subtitle VII, the
definitions from § 40102 do not apply, and the DOT may reasonably
interpret “air carrier” in this context to include non-U.S. carriers.
 34

Airlines properly advanced this theory before the DOT, see 49
U.S.C. § 47129(c)(6), we reject this line of reasoning.

If the arrangement of § 47107 renders the statute ambigu-
ous, we should defer to the DOT’s reasonable interpretation.
Chevron, 467 U.S. at 842–44. Moreover, DOT’s interpretation
is consistent with the original statute, requiring airports seeking
federal grants to deliver assurances that

each air carrier using such airport (whether as a tenant,
nontenant, or subtenant of another air carrier tenant) shall
be subject to such nondiscriminatory and substantially
comparable rates, fees, rentals, and other charges with
respect to facilities directly and substantially related to
providing air transportation and such nondiscriminatory
and substantially comparable rules, regulations, and
conditions as are applicable to all such air carriers which
make similar use of such airport and which utilize similar
facilities, subject to reasonable classifications such as
tenants or nontenants, and signatory carriers and non-
signatory carriers . . . .

49 U.S.C. app. § 2210(a)(1)(A) (1988) (emphases added).
Logically, we must read § 2210(a)(1)(A) to permit only “such
. . . charges . . . and such . . . rules . . . as are applicable to all
such air carriers . . . , subject to reasonable classifications,” with
the reasonable classifications applying to rules and charges
equally. As noted above, the act codifying this provision
indicated no intention to change the substance of existing laws.
See Pub. L. No. 103-272, § 6(a), 108 Stat. at 1378.15 Indeed, “it

15
The compilers’ notes accompanying this codification act
indicate that the language in § 2210(a)(1)(A) was changed “to
eliminate unnecessary words” and “surplus” phrases, “because of the
definition of ‘airport’ in section 47102 of the revised title,” and
(ironically) “for clarity.” 49 U.S.C. § 47107 note.
 35

is well established that language revisions in codifications will
not be deemed to alter the meaning of the original statute.”
Rainbow Navigation, Inc. v. Dep’t of the Navy, 783 F.2d 1072,
1076 (D.C. Cir. 1986). We therefore interpret the current 49
U.S.C. § 47107(a)(2) as permitting differences in charges based
on tenant or signatory status as described at Policy Statement
¶ 3.1.1 and hence reject the second argument.

Third, the Airlines contend the DOT wrongly applied a “per
se test” to the question of discrimination, holding that since
Continental was a lessee or signatory and the ITB carriers were
not, any difference in their fee structures was permissible. Even
if Policy Statement ¶ 3.1.1 permits airports to charge non-lessees
more than lessees, the Airlines argue, there is some maximum
difference beyond which the distinction should be deemed
unreasonable.

Determining the difference in fees under the proposed rate
increase is not unproblematic, as Continental pays the Port
Authority under a fixed lease, with no per-passenger FIS or GTC
fees. However, by adjusting Continental’s lease payments for
the costs it saves the Port Authority by maintaining Terminal C
itself, one can estimate Continental’s implied FIS and GTC fees.
Under a per se test these implied fees would be immaterial, with
Continental’s status as a lessee dispositive as to questions of
discrimination. Under the Complainants’ preferred test,
however, the proposed rate increase would be unreasonable
unless the difference between Continental’s implied fees and the
new fees at ITB were commensurate with the carriers’ differ-
ence in status.

The Complainants propose numerous grounds for finding
that a per se test is improper. While several of these are without
 36

merit, we find two at least arguably valid.16 We hence assume
without deciding that a per se test would indeed be improper, so
that the Final Decision would be invalid if it rejects the Com-
plainants’ discrimination claim based solely on a per se test. But
the Final Decision is ambiguous as to which test it applies.
While much of its language suggests a per se test, it nonetheless
entertains the notion that details of the deal between Continental
and the Port Authority could override the per se result: “The
record does not show the nature of the contractual relationship
between Continental and the Port Authority, so the Department
is without any basis for saying that the fees are unjustly discrimi-
natory.” Final Decision at 23–24.

In essence, this sentence recognizes the Airlines failed to
carry their burden of persuasion concerning the degree to which
fees could reasonably differ between ITB and Terminal C.
While the Complainants undeniably have the burden of persua-
sion as to their claim of discrimination, 5 U.S.C. § 556(d), the
exception at 49 U.S.C. § 47107(a)(2)(B) could arguably be
viewed as an affirmative defense. Still, since the statute does
not resolve the ambiguity, the agency is free to choose which
party bears the burden of proof. See NLRB v. Transp. Mgmt.
Corp., 462 U.S. 393, 401–03 (1983) (allowing NLRB in mixed-
motive cases to treat proof that an employee would have been
fired even absent union activity as an affirmative defense, with
16
First, the Airlines argue that we should resolve the ambiguity
of § 47107 so as to avoid conflict with various international
agreements to which the United States is a party, which they read as
barring per se tests. Second, they contend that the DOT’s Policy
Statement foresees a limit on rate differences based on signatory
status, in that it states that extra costs and risks incurred by airport
operators in serving non-signatories “would provide a justification for
imposing a surcharge, in some amount, on non-signatory carriers” and
concludes that the new rules “provide adequate flexibility to airport
proprietors to charge reasonable surcharges to non-signatory carriers.”
Policy Statement, 61 Fed. Reg. at 32015 (emphases added).
 37

the burden of persuasion placed on the employer), reaffirmed in
Dir., OWCP v. Greenwich Collieries, 512 U.S. 267, 278 (1994)
(“And although we reject Transportation Management’s reading
of § 7(c), the holding in that case remains intact. . . . [T]he
NLRB place[d] the burden of persuasion on the employer as to
its affirmative defense.”). Hence, the DOT did not err when it
assigned this burden to the Airlines.17

As the Complainants put forward no evidence detailing the
value to the Port Authority of Continental’s signatory or lessee
status, the DOT had no basis for finding the estimated difference
in fees was not commensurate with the difference in costs the
Port Authority incurred at each terminal.18 Given the DOT’s
17
The Final Decision’s separate reference to a burden placed on
the Port Authority apparently indicates a burden of production, not
persuasion. The DOT first recites the rule for the burden of persuasion
and then discusses the shifting burden of production:
When an airline seeks a determination as to the reasonableness of
a fee imposed on the airline by an airport, the airline bears the
burden of proof. The airline complainants must submit evidence
sufficient to show that the challenged fees are unreasonable.
However, if the complainants present a prima facie case that a fee
is unreasonable, the burden shifts to the airport. The airport must
then submit sufficient evidence to show that the fee is, in fact,
reasonable.
Final Decision at 14 (first and third emphases added) (citations
omitted). The final sentence would violate 5 U.S.C. § 556(d) if it
placed the full burden of persuasion on the Port Authority as to the
reasonableness of the proposed fees. See Nat’l Mining Ass’n v. Dep’t
of Labor, 292 F.3d 849, 871–72 (D.C. Cir. 2002) (discussing how
Greenwich Collieries permits a shift in the burden of production but
not in the burden of “proof”; i.e., persuasion).
18
Without deciding whether a per se test would violate the Policy
Statement or § 47107(a)(2), we note the Final Decision comes close
to applying one. While we find here that the DOT’s ambiguous
statement slightly favors a reading that defeats the Complainants’ third
 38

permissible assignment of the burden of proof to the Complain-
ants, the Final Decision’s ruling was valid even if we excise its
reliance on a per se test.

Fourth, the Complainants object to the DOT’s reliance on
the ITB carriers’ ability to leave EWR as a basis for charging
higher fees. They argue the DOT’s approach “undermine[s] the
protections afforded by [§ 47107] and the bilateral treaties,”
which assume “international airports will remain open on
relatively equal terms to all airlines who want to use them, and
not that some airlines will face unequal rates with their recourse
being to leave the airport entirely.” Comp’ts’ Br. 36. But this
fundamentally mischaracterizes the Final Decision’s reasoning.
The primary recourse available to non-signatory airlines that
object to paying higher fees is signatory status. See
§ 47107(a)(3) (“[T]he airport operator will not withhold
unreasonably the classification or status of tenant or signatory
from an air carrier that assumes obligations substantially similar
to those already imposed on air carriers of that classification or
status.”). As § 47107(a)(2)(B) recognizes, higher fees compen-
sate airport operators for the risk that non-tenant airlines will
leave on short notice. Here, the DOT found the Complainants
had put forward no evidence tending to show the incremental
fees imposed on them as non-tenants were not commensurate
with the incremental risk the Port Authority incurred by letting
them use ITB without long-term leases. If the Complainants felt
that the higher fees hurt them more than signatory status would,
they could sign a lease; they were not given a Hobson’s choice
of paying fees at a non-signatory level or else abandoning the
airport entirely.

argument, the Department would do well to make its reasoning
explicit, as “[w]e cannot defer to what we cannot perceive,” Int’l
Longshoremen’s Ass’n v. Nat’l Mediation Bd., 870 F.2d 733, 736
(D.C. Cir. 1989).
 39

Finally, in their fifth line of attack, the Complainants argue
the difference in fees between Terminal C and ITB cannot have
been “based on” the extra costs and risks incurred by the Port
Authority in servicing the ITB carriers, as required by
§ 47107(a)(2) and the Policy Statement, because the Port
Authority admittedly did not take into account the fees charged
at other terminals when it set the fees at ITB, see Tr. 280:14–19,
282:4–9, 283:7–10. By the Complainants’ logic, even if the
proposed fees happened not to differ from those imposed on
Continental by enough to qualify as discrimination, the mere
fact that the Port Authority did not consider this possibility when
setting the rates so taints the process as to render the resulting
rates unreasonable.

As the record demonstrates, the DOT has steadfastly
refused to treat the fee-setting process as a basis for finding fees
unjustly discriminatory. The ALJ noted the Complainants
objected to “the Port Authority’s methodology” in setting the
rates, Recommended Decision at 20, but rejected this argument
because the Policy Statement required consistent application of
methodologies only across “similarly situated” or “comparable”
aeronautical users, id. at 21 (internal quotation marks omitted);
see also Policy Statement ¶¶ 2.1, 3.1. The Final Decision’s
analysis of the Complainants’ discrimination claim does not
discuss the Port Authority’s rate-setting process at all. See Final
Decision at 23–24. As the DOT’s test clearly rejects the logic
of the Complainants’ fifth argument, in order to prevail they
must show the DOT’s test is improper.

If § 47129, § 47107, or the Policy Statement required a
different test, then the Airlines might prevail, but they do not.
First, on its face, § 47129(a)(1) instructs the Secretary of
Transportation to determine the reasonableness of a fee, not of
the process used to set the fee. Moreover, we can find nothing
in the United States’ international obligations that would
preclude the passage of a statute creating expedited review of
 40

the amount of a fee in the absence of investigation into the fee’s
origin. Cf. Chevron, 467 U.S. at 843 n.9; Murray, 6 U.S. (2
Cranch) at 118. Thus, § 47129 can reasonably be interpreted in
keeping with the DOT’s current test.

Similarly, § 47107(a)(2) requires airport proprietors to
certify that “air carriers making similar use of the airport will be
subject to substantially comparable charges” in order to receive
development grants but demands no such certification regarding
the processes used to set the charges. Nothing in the United
States’ bilateral agreements would seem to block the govern-
ment from imposing such a requirement on grant applicants; nor
do the agreements require the government to obtain certifica-
tions disavowing discriminatory processes before issuing grants.
Therefore § 47107, too, can be read so as to permit the DOT’s
current test.

The Complainants’ argument with regard to the Policy
Statement is equally unavailing. An unexplained deviation from
the Policy Statement could lead us to set the Final Decision
aside, see, e.g., Chelsea Indus., Inc. v. NLRB, 285 F.3d 1073,
1075–76 (D.C. Cir. 2002) (“The agency acts unreasonably if it
departs from established policy without giving a reasoned
explanation for the change . . . .”), but we find no such devia-
tion. The Policy Statement includes the following rule:

Relevant provisions of the Convention on International
Civil Aviation (Chicago Convention) and many bilateral
aviation agreements specify, inter alia, that charges im-
posed on foreign airlines must not be unjustly discrimina-
tory, must not be higher than those imposed on domestic
airlines engaged in similar international air services and
must be equitably apportioned among categories of users.
Charges to foreign air carriers for aeronautical use that
are inconsistent with these principles will be considered
unjustly discriminatory or unfair and unreasonable.
 41

Policy Statement ¶ 3.3 (emphasis added). In light of our holding
above that foreign air carriers are not “air carriers” in the sense
of § 47129(a)(1), it is not clear that ¶ 3.3, which deals only with
“[c]harges to foreign air carriers,” can serve as a ground for
finding fees unreasonable in § 47129 proceedings. However,
assuming arguendo that this is the case, we believe ¶ 3.3
measures discrimination based on the size of charges, not on the
process that produces them. Paragraph 3.3 does not explicitly
indicate otherwise, and the convention and bilateral agreements
it incorporates by reference all focus on the magnitude of fees
rather than the processes behind them. See, e.g., Bermuda II,
art. 10(2) (describing as “unjustly discriminatory” user charges
that are higher than those imposed on similar domestic airlines);
Air Transport Agreement Between the Government of the
United States of America and the Government of the Kingdom
of the Netherlands, U.S.-Neth., art. 7(a), Apr. 3, 1957, 12 U.S.T.
837, as amended by Aviation Transport Services Agreement
Between the United States of America and the Netherlands,
U.S.-Neth., ¶ 8(1), May 11, 1993, T.I.A.S. No. 11,976 (requiring
that user charges be assessed “on terms not less favorable than
the most favorable terms available to any other airline at the
time the charges are assessed”); Convention on International
Civil Aviation, art. 15, opened for signature Dec. 7, 1944, 61
Stat. 1180, 15 U.N.T.S. 295 (barring charges that are higher than
those imposed on domestic carriers). As the DOT’s test does
not violate the Policy Statement either, it is permissible. We
thus reject all of the Airlines’ proposed grounds for setting aside
the DOT’s finding that the fee increase was not unjustly
discriminatory.

VI

For the foregoing reasons, the Port Authority’s petitions for
review are granted, and the Complainants’ petition for review is
denied. The DOT’s Final Decision is vacated to the extent it
 42

requires the Port Authority to pay refunds to carriers other than
Brendan Airways. The DOT’s finding that the Port Authority’s
inclusion of its 2004 Expense Reclassification charge in its 2005
cost forecast was unreasonable is affirmed to the extent it relates
to costs incurred on canceled capital projects, but vacated to the
extent it relates to signage expenses. As the Port Authority’s
revised fee proposal was based on the DOT’s ruling on signage
expenses, the July 12 Order is likewise vacated to the extent it
implements that fee proposal. All other challenged portions of
the DOT’s Final Decision and July 12 Order are affirmed. The
case is remanded to the DOT for whatever further proceedings
should be required, consistent with this opinion. On remand, the
DOT is instructed to dismiss the Complaint to the extent it
applies to carriers other than Brendan Airways.

So ordered.