58 F.4th 234
5th Cir.2023Background
- Flight Training International (FTI), an FAA-delegated training center, long offered a shorter, standalone course using type‑rated aircraft that culminated in issuance of an ATP certificate without a type rating.
- FAA issued a policy memorandum (Dec. 2019) and amended Order 8900.1 (June 2020) to add a “Must‑Issue Rule”: when a practical test for an ATP is conducted in a type‑rated aircraft or simulator, the examiner must issue the ATP certificate with the applicable type rating.
- The FAA revoked and then reinstated prior approval of FTI’s standalone program; FTI sued under 49 U.S.C. § 46110 seeking review of the Must‑Issue Rule as codified in Order 8900.1.
- FTI’s core contention: the Rule effectively amends 14 C.F.R. Part 61 by requiring issuance of a type rating whenever an ATP practical test is taken in a type‑rated aircraft, in conflict with § 61.157(b)’s independent training and logbook‑endorsement prerequisites.
- FAA’s position: the Rule is interpretive—a clarification of existing Part 61 requirements—and therefore exempt from APA notice‑and‑comment.
- Holding: the Fifth Circuit concluded the Must‑Issue Rule is a legislative rule that conflicts with Part 61 (particularly § 61.157) and was promulgated without required notice‑and‑comment, so the Rule was set aside.
Issues
| Issue | FTI's Argument | FAA's Argument | Held |
|---|---|---|---|
| Whether the Must‑Issue Rule is a legislative rule requiring notice‑and‑comment or an interpretive rule exempt from notice‑and‑comment | The Rule effectively amends Part 61 by mandating issuance of a type rating when an ATP practical test is conducted in a type‑rated aircraft, conflicting with existing regulatory prerequisites | The Rule merely interprets and clarifies existing Part 61 requirements and thus is interpretive and exempt from § 553 notice‑and‑comment | The Rule is legislative because it is irreconcilable with Part 61 and was therefore subject to APA notice‑and‑comment; set aside for procedural error |
| Whether the Rule’s use of mandatory language or withdrawal of agency discretion precludes its characterization as interpretive | The Rule’s binding language and withdrawal of discretion show it is legislative | Binding language or limits on discretion do not automatically make a rule legislative; interpretive rules may be mandatory in form | Court rejected the argument that binding language alone makes a rule non‑interpretive; but still found the Rule legislative on other grounds |
| Whether completing an ATP practical test in a type‑rated aircraft necessarily satisfies the separate training and documentation prerequisites for issuance of a concurrent type rating under § 61.157(b) | ATP practical test completion in a type‑rated aircraft satisfies the practical‑test and training areas, so a type rating must be issued | Completion of the ATP practical test does not necessarily satisfy § 61.157(b)’s distinct training and logbook‑endorsement requirements; the Rule short‑circuits those requirements | Court held § 61.157(b)’s training and logbook‑endorsement requirements are distinct and not necessarily fulfilled by merely passing the ATP practical test; Rule conflicts with Part 61 |
Key Cases Cited
- Professionals & Patients for Customized Care v. Shalala, 56 F.3d 592 (5th Cir. 1995) (interpretive rules clarify rather than create law)
- Perez v. Mortgage Bankers Ass'n, 575 U.S. 92 (2015) (interpretive rules advise public of agency’s construction of statutes/regulations)
- Syncor Intern. Corp. v. Shalala, 127 F.3d 90 (D.C. Cir. 1997) (distinguishing interpretive rules from legislative rules)
- Clean Water Action v. EPA, 936 F.3d 308 (5th Cir. 2019) (a rule that repudiates or is irreconcilable with a prior legislative rule effectively amends it)
- American Mining Congress v. Mine Safety & Health Admin., 995 F.2d 1106 (D.C. Cir. 1993) (a rule that effectively amends a prior legislative rule is itself legislative)
- Chrysler Corp. v. Brown, 441 U.S. 281 (1979) (legislative rules promulgated pursuant to congressionally‑delegated authority have force and effect of law)
- St. Mary's Hospital, Inc. v. Harris, 604 F.2d 407 (5th Cir. 1979) (agency legislative rules bind courts when promulgated under delegated authority)
- Kisor v. Wilkie, 139 S. Ct. 2400 (2019) (framework for deference to agency interpretations; distinguish interpretive rule status)