37 F.4th 667
D.C. Cir.2022Background:
- APHIS (USDA) administers the Agricultural Quarantine and Inspection Program (inspections of international conveyances and passengers). The FACT Act (1990) authorized user fees; a 1996 amendment defined three fee-authorities: (A) cover inspection costs, (B) cover administration, and (C) collect fees “through fiscal year 2002” to maintain a reserve in the User Fee Account.
- After criticisms about fee justification, APHIS hired Grant Thornton to model fees; in 2015 APHIS adopted a Final Rule raising the Commercial Aircraft User Fee and adjusting the Commercial Air Passenger Fee; the fee structure funded costs and a reserve balance and exempted eight user classes.
- Air carrier trade associations sued (2016), alleging (inter alia) that APHIS: lacked authority to collect a post-2002 reserve surcharge; unlawfully double‑charged inspections via both per‑aircraft and per‑passenger fees; impermissibly cross‑subsidized exempt classes; and violated the APA by withholding key Grant Thornton materials.
- The district court granted summary judgment for APHIS on most claims but held subparagraph (a)(1)(C) did not authorize collecting fees to fund a reserve after FY2002 and remanded the reserve surcharge; on remand APHIS issued an interpretive rule claiming (A)/(B) authorize a reserve and the district court upheld APHIS. Plaintiffs appealed.
- The D.C. Circuit affirms in part, reverses insofar as the Final Rule authorizes collecting fees to fund a reserve after 2002, and remands for proceedings consistent with that holding.
Issues:
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Reserve surcharge authority (post‑2002) | (Airlines) §136a(a)(1)(C) expressly limited reserve authority “through fiscal year 2002”; APHIS lacks post‑2002 authority to collect a reserve surcharge | APHIS: (A)/(B) independently authorize collecting a reserve; (C) only limited where the reserve is held through 2002 | Court: Held for Plaintiff — (C) sunset reserve authority through FY2002; APHIS cannot rely on (A)/(B) to continue collecting a reserve after 2002; remanded to vacate that portion of the Rule |
| Double charging (per‑aircraft + per‑passenger fees) | Charging both fees for inspections of one aircraft makes passenger fee non‑commensurate because passenger fee must cover “related inspections of the aircraft” | APHIS: statute allows passenger fees to cover only inspections related to passengers; multiple inspections/classes per aircraft contemplated; methodology supported by Grant Thornton | Court: Held for Defendant — statute’s word “related” narrows passenger responsibility; Congress contemplated multiple inspections and APHIS’s interpretation is reasonable; dual fees lawful |
| Cross‑subsidization (exempt classes and commingling) | Overcharging fee‑paying classes to subsidize exempt classes; impermissible commingling of fees across classes | APHIS: appropriations fund exempt classes; FACT Act does not forbid appropriations or commingling; commensurateness limits fees charged, not spending | Court: Held for Defendant — appropriations can fund exempt classes and record shows appropriations cover those costs; FACT Act does not prohibit comingling funds; no unlawful cross‑subsidy shown |
| Withheld Grant Thornton data (APA participation) | APHIS withheld underlying model/data, denying meaningful opportunity to comment and prejudice plaintiffs’ ability to rebut the rulemaking basis | APHIS: provided sufficient materials; withheld data did not prejudice commenters in a way that would have produced substantively different comments | Court: Held for Defendant — plaintiffs failed to show they had substantively different challenges that they would have raised; no APA violation shown |
Key Cases Cited
- Chevron U.S.A., Inc. v. Natural Resources Defense Council, 467 U.S. 837 (agency statutory interpretation—Chevron framework)
- Motor Vehicle Manufacturers Ass'n v. State Farm Mutual Automobile Insurance Co., 463 U.S. 29 (arbitrary and capricious standard in rulemaking)
- Amoco Production Co. v. Watson, 410 F.3d 722 (canon: give effect to every clause and word)
- United States v. Menasche, 348 U.S. 528 (statutory construction—avoid surplusage)
- D. Ginsberg & Sons v. Popkin, 285 U.S. 204 (do not apply general language to matters specifically dealt elsewhere in statute)
- RadLAX Gateway Hotel, LLC v. Amalgamated Bank, 566 U.S. 639 (statutory silence and specific provisions)
- Time Warner Entertainment Co. v. FCC, 240 F.3d 1126 (agency may not rest a rule on data known only to agency)
- Association of Data Processing Service Orgs. v. Board of Governors of the Federal Reserve System, 745 F.2d 677 (must disclose critical factual material used to support agency position)
- Chamber of Commerce v. SEC, 443 F.3d 890 (prejudice standard for withheld rulemaking information)
- Florida Power & Light Co. v. United States, 846 F.2d 765 (no harm where comments would not have differed substantively)
- N.L.R.B. v. Federal Labor Relations Authority, 952 F.2d 523 (surplusage undermining a Chevron Step One argument)
- Merck & Co. v. United States Dep't of Health & Human Services, 962 F.3d 531 (Chevron step one/ordinary tools of statutory construction)