Concepcion v. Transportation Security Administration, 709 F. App'x 876

Leonard Concepcion was convicted in 2012 of conspiring to launder money and of money laundering under 18 U.S.C. §§ 1956(h) and 1957(a); he admitted piloting charter flights used to transport cocaine and drug proceeds and receiving payment (including $40,000 found in his aircraft).
TSA issued a second Final Determination of Ineligibility (Oct. 17, 2016) barring Concepcion from serving as a flightcrew member.
TSA relied on two independent grounds: (1) Concepcion’s underlying conduct satisfied the § 44936(b)(2) “other factors” that justify exclusion from flightcrew positions; and (2) alternatively, that a § 1957 conviction is categorically a “felony involving dishonesty.”
Concepcion petitioned for review; Ninth Circuit had jurisdiction under 49 U.S.C. § 46110(a).
The panel reviewed whether TSA may consider the factual circumstances of the conviction under the “other factors” provision, whether adjudication (rather than rulemaking) and delegation to the Deputy Director were proper, and whether due process required more procedural protections.
The court concluded TSA validly applied § 44936(b)(2) based on the pleaded facts, upheld the agency’s adjudication and delegation, and rejected Concepcion’s due process challenge; petition denied.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether § 44936(b)(2) permits consideration of underlying facts (not just categorical match)	Concepcion: TSA cannot rely on underlying facts; must be limited to categorical crimes	TSA: statute authorizes specifying “other factors,” including fact-specific circumstances	Court: TSA may consider underlying facts under § 44936(b)(2)
Whether Concepcion’s conduct met the § 44936(b)(2) “other factors” standard	Concepcion: facts do not show lack of trustworthiness warranting exclusion	TSA: admitted conduct (facilitating drug transport, accepting proceeds) shows lack of integrity and trustworthiness	Court: Facts reasonably demonstrate Concepcion lacked required trustworthiness; exclusion upheld
Whether TSA improperly used adjudication instead of rulemaking to specify “other factors”	Concepcion: agency should have used rulemaking for new standards	TSA: statute affords discretion; adjudication permissible and appropriate here	Court: Adjudication was reasonable and not an abuse of discretion
Whether delegation to TSA Deputy Director and procedures violated due process	Concepcion: process was vague; he implies need for additional procedure (e.g., hearing)	TSA: provided written notice, opportunity to respond; no hearing required and none requested	Court: Procedures satisfied Mathews balancing; no due process violation

Nijhawan v. Holder, 557 U.S. 29 (2009) (distinguishing generic-crime categorical language)
Mendez-Garcia v. Lynch, 840 F.3d 655 (9th Cir. 2016) (agency may choose adjudication over rulemaking in the first instance)
Union Flights, Inc. v. Adm’r, FAA, 957 F.2d 685 (9th Cir. 1992) (limits on agency adjudication vs. rulemaking)
Cities of Anaheim, Riverside, Banning, Colton & Azusa v. FERC, 723 F.2d 656 (9th Cir. 1984) (agency rulemaking-adjudication boundary principles)
Ford Motor Co. v. FTC, 673 F.2d 1008 (9th Cir. 1981) (same)
Frankl v. HTH Corp., 650 F.3d 1334 (9th Cir. 2011) (delegation does not always require express statutory authorization)
Inland Empire Pub. Lands Council v. Glickman, 88 F.3d 697 (9th Cir. 1996) (delegation and agency authority principles)
Chevron U.S.A. Inc. v. Nat. Res. Def. Council, Inc., 467 U.S. 837 (1984) (agency deference framework)
LaChance v. Erickson, 522 U.S. 262 (1998) (notice and opportunity to be heard core to due process)
Mathews v. Eldridge, 424 U.S. 319 (1976) (three-factor due process balancing test)
Greene v. Babbitt, 64 F.3d 1266 (9th Cir. 1995) (no hearing required where party did not request one and paper record suffices)
United States v. Consol. Mines & Smelting Co., 455 F.2d 432 (9th Cir. 1971) (agency procedure and prejudice considerations)
Sandgathe v. Maass, 314 F.3d 371 (9th Cir. 2002) (procedural rules on incorporating prior filings)