303 F. Supp. 3d 28
D.C. Cir.2018Background
- APHIS (USDA) and CBP (DHS) jointly operate the Agricultural Quarantine Inspection (AQI) program; Congress authorized AQI user fees in the FACT Act (1990) and amended the statute several times (notably 1991 and 1996).
- In 2015 APHIS adopted a fee rule (Final Rule) using Grant Thornton's activity-based costing (ABC) model based on FY2010–FY2011 data: air passenger fee lowered to $3.96 and commercial aircraft fee raised to $225.
- Airlines (Air Transport Association of America and International Air Transport Association) sued under the APA challenging duplicative aircraft/passenger fees, cross-subsidization, the legality of APHIS’s reserve funding, and reliance on/withholding of data.
- The agency treated passenger fees as covering passenger-related inspections (passenger cabin, baggage, passenger garbage) and commercial aircraft fees as covering aircraft exterior, cargo, and cargo-hold inspections; small aircraft under 65 seats are exempt unless carrying regulated articles.
- Grant Thornton’s reports contained some ambiguous language about whether the commercial aircraft fee applied only to cargo planes, but the numerical model used total (passenger + cargo) flights to compute the $225 per-aircraft fee.
- GAO and DHS OIG reports documented longstanding CBP data limitations; APHIS relied on the best available FY10–FY11 data and provided additional materials post‑rule.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Timeliness / reopening doctrine | Challenges to longstanding practices (separate passenger/aircraft fees; reserve) are time-barred because underlying rules date from the 1990s/early 2000s | 2015 rule constituted a comprehensive re-evaluation (new methodology), reopening prior determinations | Court: 2015 rule reopened the duplicative-fee issue (timely). Reserve claim also timely (close call); motion to dismiss denied. |
| Duplicative commercial-aircraft fee | Passenger fee must "include the costs of related inspections of the aircraft," so charging both fees on passenger flights duplicates charges; Grant Thornton intended aircraft fee only for cargo planes | "Related inspections" means only those inspections related to passengers; statute permits separate aircraft fee for non-passenger inspections; Grant Thornton’s numeric model used total aircraft volumes, supporting charging both fees | Court: Statute unambiguously permits both fees; APHIS’s interpretation reasonable; Grant Thornton’s calculations support charging both passenger and aircraft fees. Summary judgment for APHIS on Count I. |
| Reserve account authority | 1996 amendments limited authority to maintain a "reasonable balance" to through FY2002; charging fees to fund a reserve after FY02 exceeds statutory authority | APHIS relied on historical statute language and treated reserve as part of administrating fees; alternatively, agency would invoke Chevron deference | Court: APHIS relied on expired §136a(a)(1)(C) language in the rulemaking (Chenery limits). No authority in that provision post-FY02; agency action arbitrary as to the reserve. Summary judgment for Plaintiffs on Count III; remand for reconsideration. |
| Notice, data disclosure, and cross-subsidization | APHIS withheld underlying Grant Thornton data during comment period and relied on unreliable FY10–FY11 data, depriving meaningful comment and risking cross-subsidization among user classes | Agency provided relevant data and explanations, relied on best available data, and GAO/OIG documented why perfect data were unavailable; non‑charged classes are funded by CBP appropriations, not fee revenue | Court: Although some materials were not initially posted, plaintiffs failed to show prejudice; APHIS reasonably relied on FY10–FY11 data despite imperfections. No arbitrary-and-capricious finding on data or cross-subsidization; summary judgment for APHIS on Counts II and IV. |
Key Cases Cited
- Chevron U.S.A., Inc. v. Natural Res. Def. Council, Inc., 467 U.S. 837 (deference framework for agency statutory interpretation)
- Motor Vehicle Mfrs. Ass'n v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29 (arbitrary-and-capricious standard)
- Marsh v. Oregon Nat. Res. Council, 490 U.S. 360 (consideration of relevant factors and rulemaking rationales)
- Bowen v. American Hospital Ass'n, 476 U.S. 610 (agency must connect facts to choices)
- Chenery Corp. v. Securities & Exchange Comm'n, 318 U.S. 80 (agency must articulate rationale at time of decision)
- Public Citizen v. Nuclear Regulatory Comm'n, 901 F.2d 147 (D.C. Cir.) (reopening doctrine for rule challenges)
- Smith‑Haynie v. District of Columbia, 155 F.3d 575 (D.C. Cir.) (statute of limitations on Rule 12(b)(6))
- CTIA — The Wireless Ass'n v. FCC, 466 F.3d 105 (D.C. Cir.) (agency does not reopen merely by responding to unsolicited comments)
- Kennecott Utah Copper Corp. v. Dept. of Interior, 88 F.3d 1191 (D.C. Cir.) (limits on forcing agency reopening via comments)
- Mount Royal Joint Venture v. Kempthorne, 477 F.3d 745 (D.C. Cir.) (Chevron deference principles reaffirmed)
- Nat. Cable & Telecomms. Ass'n v. Brand X Internet Servs., 545 U.S. 967 (agency interpretations via notice-and-comment are entitled to deference)
- Thomas Jefferson Univ. v. Shalala, 512 U.S. 504 (deference in complex technical regulatory schemes)