66 F.4th 272
D.C. Cir.2023Background
- Air Excursions (doing business as Alaska Seaplanes) operates regional passenger air service in Alaska and sought to enter routes served by FLOAT Shuttle.
- Corvus Airlines, which had applied for CARES Act PSP funds, filed Chapter 11 and sold assets to FLOAT; bankruptcy court approved the sale and stated FLOAT was not Corvus’s successor.
- Treasury approved Corvus’s PSP Agreement and disbursed $30 million while the bankruptcy sale had closed; the PSP Agreement named Corvus as the “Recipient” and prohibited assignment of PSP funds without Treasury approval.
- Air Excursions alleges Treasury’s disbursements effectively subsidized FLOAT (a windfall), enabling FLOAT to charge below-market fares and to negotiate a gate-space sublease in bad faith, harming Air Excursions’ entry and competitive prospects.
- Air Excursions sued under the Administrative Procedure Act seeking a declaration the disbursements were unlawful and injunctive relief (including Treasury “clawback”); the district court found competitor standing but dismissed on the merits as committed to agency discretion.
- The D.C. Circuit vacated the merits dismissal and remanded with instructions to dismiss for lack of Article III standing, concluding the complaint failed to plausibly plead causation/competitive injury.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Article III standing (injury, traceability, redressability) | Treasury’s PSP disbursements caused concrete competitive injury to Air Excursions that a court can redress (clawback, injunction). | Alleged harms are speculative or not fairly traceable to Treasury action; plaintiff lacks a plausible causal link. | D.C. Cir.: No Article III standing—complaint fails to plausibly trace Air Excursions’ alleged injuries to the Treasury’s disbursements; remand to dismiss for lack of jurisdiction. |
| Competitor standing (does agency action increase competition?) | FLOAT’s receipt of PSP funds increased competition (subsidy enabled below-market pricing and blocked entry). | Receipt of a cash ‘‘windfall’’ alone does not demonstrate an actual or imminent increase in competition or a concrete economic injury. | D.C. Cir.: Competitor standing not established; a windfall alone is insufficient absent plausible allegations that it increased competition (pricing or entry). |
| Causation between PSP funds and FLOAT’s conduct (pricing, sublease) | PSP funds enabled FLOAT to charge low fares and negotiate in bad faith; these actions injured Air Excursions. | Allegations are conclusory; complaint lacks factual details on fares, timing, or how PSP funds were used to affect conduct. | D.C. Cir.: Causation allegations are conclusory and implausible; pleadings do not show FLOAT used PSP funds to subsidize prices or the sublease refusal. |
| APA reviewability / committed-to-discretion (merits) | Treasury exceeded or violated PSP Agreement and statutory terms by allowing disbursement/assignment without approval. | CARES Act and successor statutes commit PSP disbursement terms to Treasury discretion, limiting reviewability. | D.C. Cir.: Did not resolve merits; vacated district court’s merits dismissal and ordered dismissal for lack of jurisdiction (standing). |
Key Cases Cited
- Lujan v. Defenders of Wildlife, 504 U.S. 555 (1992) (Article III standing requires concrete injury fairly traceable to defendant and redressable).
- Lexmark Int’l, Inc. v. Static Control Components, Inc., 572 U.S. 118 (2014) (standing elements and causation standard).
- Ashcroft v. Iqbal, 556 U.S. 662 (2009) (courts need not accept legal conclusions; plausibility pleading standard).
- Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007) (plausibility requirement for complaints).
- Friends of the Earth, Inc. v. Laidlaw Environmental Services, 528 U.S. 167 (2000) (traceability and sufficiency of factual allegations).
- Sherley v. Sebelius, 610 F.3d 69 (D.C. Cir. 2010) (competitor standing recognizes injury when agency action increases competition).
- PSSI Global Services, LLC v. FCC, 983 F.3d 1 (D.C. Cir. 2020) (cash payments/windfalls to competitors do not automatically confer competitor standing).
- Mobile Relay Associates v. FCC, 457 F.3d 1 (D.C. Cir. 2006) (mere allegation of a skewed playing field or undervalued grant insufficient for standing).
- U.S. Telecom Ass’n v. FCC, 295 F.3d 1326 (D.C. Cir. 2002) (subsidy that directly enables lower pricing can support competitor standing).
- La. Energy & Power Auth. v. FERC, 141 F.3d 364 (D.C. Cir. 1998) (agency action that leads to increased price competition can cause cognizable injury).