American Airlines, Inc. v. Transportation Security Administration
398 U.S. App. D.C. 390
| D.C. Cir. | 2011Background
- After 9/11, TSA authorized in-line baggage screening; American pushed for in-line due to TSA influence and reimbursement expectations.
- Congress later granted TSA authority to fund airport security projects, including in-line EDS, and required a prioritization schedule based on risk.
- American incurred roughly $30 million implementing in-line screening at Terminal 8; TSA initially declined reimbursement citing funding priorities.
- Congress amended the statute in 2007 to require TSA to make grants and to establish a prioritization list for security improvements.
- American repeatedly argued TSA must reimburse completed projects and that its investment fit the prioritization criteria; TSA maintained ongoing funding constraints and risk-based prioritization.
- The agency argued that the October 25, 2010 communication was not final; the court concluded the October 25, 2010 letter denying reimbursement was the final agency action and timely.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Does TSA have to reimburse completed in-line projects under the 2007 Act? | American: 2007 Act mandates grants for qualifying projects, including completed ones. | TSA: prioritization and limited funds allow departures from reimbursement. | TSA denial vacated; remand for proper sequencing under the Act. |
| Was TSA's denial of reimbursement consistent with the 2007 Act's prioritization requirement? | American: prioritization must reflect risk-based criteria and include its completed project. | TSA: discretion to prioritize based on risk; Terminal 8 was considered within the list. | Agency failed to show a proper, adequate, and codified prioritization; remand required. |
| When did the final agency action occur, and was the petition timely filed? | American: October 25, 2010 letter marked final decision; timely filing within 60 days. | TSA: March 2010 communication was the final action; timing may be outside 60 days. | October 25, 2010 letter is the final agency action; petition timely. |
Key Cases Cited
- Bennett v. Spear, 520 U.S. 154 (1997) (finality and reviewability of agency action)
- Abbott Labs. v. Gardner, 387 U.S. 136 (1967) (finality/prioritization considerations in agency actions)
- AT&T Co. v. EEOC, 270 F.3d 973 (D.C. Cir. 2001) (finality and agency action standards in regulatory review)
- Burlington Truck Lines, Inc. v. United States, 371 U.S. 156 (1962) (agency action must be final and not contingent on future events)
- Inhabitants of Montclair v. Ramsdell, 107 U.S. 147 (1883) (statutory interpretation and meaningfulness of legislative commands)
- Motor Vehicle Mfrs. Ass'n v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29 (1983) (arbitrary and capricious review standards under APA)
- United States v. Seals, 130 F.3d 451 (D.C. Cir. 1997) (reasonableness of agency reasoning and decision making)