Air Canada v. Department of Transportation
148 F.3d 1142 | D.C. Cir. | 1998
United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued March 13, 1998 Decided July 31, 1998
No. 97-1274
Air Canada, et al.,
Petitioners
v.
Department of Transportation and
Rodney E. Slater, Secretary of Transportation,
Respondents
Dade County, Florida and
American Airlines, Inc.,
Intervenors
Consolidated with
No. 97-1284
On Petitions for Review of an Order
of the Department of Transportation
Stephen M. Shapiro argued the cause for petitioners, with
whom Kenneth S. Geller, Roy T. Englert, Jr., Timothy S.
Bishop, Joel Stephen Burton, Stephen P. Sawyer, Mary
McGuire Voog and Lawrence M. Nagin were on the briefs.
Thomas L. Ray, Senior Trial Attorney, U.S. Department of
Transportation, argued the cause for respondents, with whom
Joel I. Klein, Assistant Attorney General, U.S. Department of
Justice, Robert B. Nicholson and Marion L. Jetton, Attor- neys, Nancy E. McFadden, General Counsel, U.S. Depart- ment of Transportation, and Paul M. Geier, Assistant Gener- al Counsel, were on the brief.
Alvin B. Davis, William K. Hill, James H. Burnley, IV,
and John R. Keys, Jr. were on the brief for intervenor
American Airlines, Inc. Karen L. Grubber entered an ap- pearance.
Thomas R. Devine, Charles A. Spitulnik, Michael M.
Conway, Ross E. Kimbarovsky and Thomas P. Abbott and
Gail P. Fels, Assistant County Attorneys, Dade County,
Florida, were on the brief for intervenor Dade County Flori- da.
Scott P. Lewis and Kenneth W. Salinger were on the brief
for amicus curiae Airports Council International--North
America. Patricia A. Hahn entered an appearance.
Before: Henderson, Rogers and Garland, Circuit Judges.
Opinion for the Court filed by Circuit Judge Rogers.
Rogers, Circuit Judge: Six airlines ("Carriers") petition for
review of two Department of Transportation ("Department"
or "DOT") orders 1 investigating and approving the fees
charged by Dade County, Florida, at Miami International
Airport ("MIA").2 The essential dispute focuses on the rea- __________
1 Miami Int'l Airport Rates Proceeding, No. OST-96-1965,
DOT Order 96-12-23 (Dec. 19, 1996) [hereinafter "Instituting Or- der"], and DOT Order 97-3-26 (Mar. 19, 1997) [hereinafter "Final
Order"].
2 The Carriers are Air Canada, Delta Airlines, Inc., Lufthansa
German Airlines, Trans World Airlines, Inc., United Air Lines, Inc.,
sonableness of fees that the County increased to cover the
cost of MIA renovations and allocated according to an estab- lished equalization methodology. The Carriers contend that
the Department failed to apply the correct standard of rea- sonableness, relied on findings unsupported by substantial
evidence, made arbitrary and capricious decisions, erroneous- ly placed the burden of proving unreasonableness on the
Carriers, and denied the Carriers due process by assigning
this burden in mid-proceeding without affording the Carriers
an opportunity to present additional evidence. Because the
Department applied valid and ascertainable legal standards
and based its decision on substantial evidence and valid
reasoning, and because the Carriers can point to no prejudice
resulting from the allegedly incorrect assignment of the bur- den of proof or the timing of that assignment, we deny the
petitions.
I.
Section 511 of the Airport and Airway Improvement Act of
1982 requires airports that receive federal grants for develop- ment projects to charge "reasonable" fees. See 49 U.S.C.
s 47107 (1994); Air Transp. Ass'n of America v. DOT, 119
F.3d 38, 39 (D.C. Cir.), amended by 129 F.3d 625 (D.C. Cir.
1997). In addition, the Anti-Head Tax Act authorizes public- ly owned airports to collect only "reasonable" fees from
airlines. See 49 U.S.C. s 40116(e)(2) (1994); Air Transp.
Ass'n, 119 F.3d at 39. Traditionally, an airline could request
an investigation by the Federal Aviation Administration
("FAA") into potential violations of these reasonableness re- quirements, but the FAA faced no deadline for initiating an
investigation or making a final determination and taking
appropriate enforcement action. See 14 C.F.R. ss 13.1, 13.3,
__________ and US Airways, Inc. Three entities other than the Department
have filed briefs in support of the orders: as intervenors, Dade
County and American Airlines, Inc., and as amicus curiae, the
Airports Council International-North America, a trade association
representing the government bodies that own and operate the
principal United States airports served by scheduled carriers.
13.5 (1998); see, e.g., New England Legal Found. v. Massa- chusetts Port Auth., 883 F.2d 157, 159-60 (1st Cir. 1989).
Before 1994, the Department was not required to issue
standards for determining the reasonableness of fees and did
not do so. See Air Transp. Ass'n, 119 F.3d at 39-40; see also
Northwest Airlines, Inc. v. County of Kent, Mich., 510 U.S.
355, 366-67 & n.11 (1994).
To provide an expedited process and guidelines for resolv- ing reasonableness disputes, Congress enacted Section 113 of
the Federal Aviation Administration Authorization Act of
1994, directing the Secretary of Transportation ("Secre- tary") 3 to determine whether an airport fee is reasonable
upon an airport's request or an airline's complaint. See 49
U.S.C. s 47129(a), (c) (1994). Consequently, airlines now
have two administrative options for challenging the reason- ableness of airport fees--traditional investigation by the FAA
or expedited determination by the Secretary--while airports
have only the latter option. Section 113 also directs the
Secretary to publish "final regulations, policy statements, or
guidelines" establishing both procedures for acting on a re- quest or complaint and standards for determining reasonable- ness, id. s 47129(b), but the section neither amends the
Airport and Airway Improvement Act of 1982 or the Anti- Head Tax Act nor defines "reasonable."
In June 1996, in compliance with Section 113, the Secretary
published the Policy Regarding Airport Rates and Charges
("Policy Statement"), 61 Fed. Reg. 31994 (1996). As relevant
here, paragraph 2.6 of the Policy Statement permits an
airport to "use any reasonable methodology to determine
[non-airfield] fees, so long as the methodology is justified and
applied on a consistent basis." Id. at 32020-21 p 2.6. Para- graphs 2.1 and 3.1 require an airport to apply its rate-setting
methodology consistently to, respectively, "similarly situated"
__________
3 The Secretary has delegated his authority under 49 U.S.C.
s 47129 to the Assistant Secretary for Aviation and International
Affairs. See 49 C.F.R. s 1.56a(i) (1997). For the purposes of this
opinion, we refer to the ultimate agency decisionmaker under 49
U.S.C. s 47129 as the "Department" or the "Secretary."
and "comparable" aeronautical users.4 Id. at 32019 p 2.1,
32021 p 3.1. Subsequently, this court vacated certain portions
of the Policy Statement, including paragraph 2.6, because the
Department had not justified its decision to treat non-airfield
fees (such as terminal fees) differently from airfield fees. See
Air Transp. Ass'n, 119 F.3d at 41-45, amended by 129 F.3d
at 625. While reserving judgment on whether paragraph 2.6
satisfies the Section 113 requirement that the Secretary
publish reasonableness standards, see id. at 41, the court
suggested that it does not:
The Secretary's "guideline" seems to be missing a "line."
The regulation merely states that any reasonable meth-
odology will serve as a basis for non-airfield fees. That
concept does not seem to add much--if anything--to the
statutory requirement that airport fees be reasonable. Id. at 41. The court added:
[The Policy Statement] provides no real guidance as to
how the Secretary will determine reasonableness....
[H]is regulation surely is inadequate under the [Adminis-
trative Procedure Act]. Id. at 43.
Against the statutory and regulatory backdrop before this
court vacated portions of the Policy Statement, Dade County
sought to increase MIA fees in order to finance a ten-year,
$4.6 billion Capital Improvement Program ("CIP"). See Decl.
of Guillermo Carreras 1. The improvements planned in the
CIP include adding another runway and dual taxiways, dou- bling the size of the terminal building, increasing the number
of gates, adding moving sidewalks, improving Concourses E,
F, G, and H, building a new Concourse J, and reconfiguring
Concourses A through D from a layout that resembles four
spokes on a wheel to a design featuring one long, linear A/D
__________
4 "Airports collect the bulk of their revenues from two general
groups of users: aeronautical users, such as commercial (passenger)
airlines, and non-aeronautical concessionaires, including car rental
agencies, parking lots, restaurants, gift shops, and other small
vendors." Air Transp. Ass'n, 119 F.3d at 39 n.1.
Concourse for the use of American Airlines, Inc. ("Ameri- can"). See Decl. of Gary J. Dellapa 6-11. American operates
a hub at MIA and, together with its commuter affiliate,
carries 51% of the airport's passengers; the next largest
carrier is United Air Lines, Inc. ("United"), which handles
but 6.24% of MIA's passengers. See Decl. of John Van Wezel
4. The A/D Concourse is designed to handle efficiently
American's large passenger load. Furthermore, based on an
agreement with Dade County, American will have exclusive
use of the A/D gates so long as it averages 250 jet flights per
day.5
The County plans to include nearly all CIP costs in the
terminal fees paid by all airlines, and to allocate the costs
according to an equalization methodology developed by a
committee that included American, Delta Airlines, Inc. ("Del- ta") and US Airways, Inc. ("USAir"). Under this methodolo- gy, used by MIA since 1990, fees for terminal space used
exclusively by a single airline, such as ticket counters, are
based on square footage without regard to age or condition of
the particular space, while fees for facilities and services
shared by airlines, such as baggage claim and concourse
areas, are based on the number of aircraft seats carried by
each airline. See John F. Brown Company, Inc., Dade County,
FL, Overview of Airline Rates and Charges 7 (1994). Fees
allotted by square footage account for approximately 20% of
all terminal fees, while those allotted by number of seats
account for 80%. See Test. of Daniel M. Kaspar, Tr. 1306.
Allocated this way, the costs of CIP improvements to the
terminal building will be pooled and divided proportionally
among all airlines at MIA, such that each airline will inevita- bly pay for improvements to some facilities and services that
it does not use. See Decl. of Van Wezel 14-15. Dade County
will except from the pooled costs, however, the costs of
certain facilities used by only one airline; for instance, Ameri- can will pay for an enhanced baggage sorting system dedicat- ed to its exclusive use. Because most fees are proportional to
passenger traffic, and American carries more than half of
__________
5 American will only have a month-to-month lease on terminal
facilities such as ticket counters.
MIA's passengers, American currently pays 40.7% of MIA
airline fees and would pay 46.5% under Dade County's pro- posed new fee schedule under the CIP. See Decl. of Kaspar
5.
In September 1995, the Carriers, minus Lufthansa German
Airlines, asked the United States District Court for the
Southern District of Florida for a declaratory judgment that
Dade County's proposed fees are unreasonable in violation of
the Anti-Head Tax Act, because the cost of the A/D Con- course 6 will be borne by all airlines even though only Ameri- can will use the facility unless it reduces or ends its service.
See Air Canada, Inc. v. Dade County, No. 95-2037-CIV- LENARD, slip. op. at 2 (D.Fla. Nov. 7, 1996) (order on
motions for summary judgment). The district court ruled
that "determination of the reasonableness of the fees charged
carriers by airport proprietors is properly made by the FAA,"
id. at 12, granted Dade County's motion to refer the determi- nation of reasonableness to the FAA, id. at 21-22, and
directed the parties to "take appropriate action pursuant to
49 U.S.C. s 47129," id. at 22, even though that statute
pertains to determinations by the Secretary rather than by
the FAA.7 Accordingly, Dade County filed a request for
__________
6 Dade County and the Carriers dispute the cost of the A/D
Concourse. The County asserts that renovation of the whole
terminal building will cost $2.8 billion, with $975 million designated
for the A/D Concourse and $1.8 billion for improvements to other
concourses. See Decl. of Van Wezel 5. The Carriers maintain that
the costs attributable to the A/D Concourse will reach almost $1.7
billion. In addition to this disputed amount that will be divided
among all airlines under the equalization methodology, American
plans to spend $60 million on its own for an enhanced baggage
sorting system and $90 million for communications equipment,
furniture, fixtures, and finishes for its VIP lounge and other facili- ties. See Decl. of Frank R. Erickson 18.
7 Section 47129 provides in pertinent part:
The Secretary of Transportation shall issue a determination as
to whether a fee imposed upon one or more air carriers ... is
reasonable.... 49 U.S.C. s 47129(a)(1).
determination of reasonableness by the Secretary under 49
U.S.C. s 47129, while the Carriers filed a complaint with the
FAA under 14 C.F.R. s 13.5. See Miami Int'l Airport Rates
Proceeding, No. OST-96-1965, DOT Order 96-12-23, at 10-11
(Dec. 19, 1996) [hereinafter "Instituting Order"].
In the first order under review ("Instituting Order"), the
Department decided that the reasonableness of MIA's fees
should be determined by the Secretary under 49 U.S.C.
s 47129 rather than by the FAA under 14 C.F.R. s 13.5.8
See Instituting Order at 17-18. The Department assigned
the dispute to an administrative law judge for a hearing and,
consistent with 14 C.F.R. ss 302.605(a), 302.607(b) (1998),
which require the requesting and answering parties to set
forth all arguments and evidence in their initial submissions
to the Secretary, directed the administrative law judge to
confine the hearing to the specific issues and evidence already
submitted, allowing additional evidence to be submitted "only
for good cause shown." Id. at 23. In addition, the Depart- ment limited the scope of the proceedings in certain ways,
including by directing the administrative law judge
not [to] determine whether the equalization method is
inherently reasonable since the airlines do not challenge
it, nor ... whether the A/D Concourse is desirable or
necessary.... The question in this proceeding instead
is whether the airport's allocation of the costs of that
project is reasonable. Id. at 24-25. The Department also directed the administra- tive law judge to "follow the Policy Statement in determining
whether the fees are reasonable" because no party challenged
its applicability to the dispute. Id. at 25.
Concluding that American should pay a larger share of the
costs of the A/D Concourse, the administrative law judge
found the fees related to the CIP and A/D Concourse to be
unreasonable. The administrative law judge also determined
that Dade County had the burden of proving reasonableness,
although finding that "even if the burden of proof were on the
__________
8 The Carriers do not challenge this decision.
... Carriers, ... the preponderance of reliable and probative
evidence establishes that the application of the [equalization]
methodology to [the A/D Concourse] is unfair and unreason- able." Miami Int'l Airport Rates & Charges, No. OST-96- 1965, Recommended Decision of A.L.J. 22 (served Feb. 17,
1997) ("ALJ Decision").
Both sides sought review, and in the second order under
review ("Final Order"), the Department rejected many of the
administrative law judge's key findings. See Miami Int'l
Airport Rates Proceeding, No. OST-96-1965, DOT Order 97- 3-26 (Mar. 19, 1997) [hereinafter "Final Order"]. All parties
agreed that the Department should apply the reasonableness
standards embodied in the Policy Statement,9 specifically
paragraphs 2.1, 2.6, and 3.1, and the Department concluded
that the fees affected by the CIP and A/D Concourse would
be reasonable under those standards.10 See Final Order at 1.
Although noting that "the practices of other airports are not
necessarily decisive for reasonableness determinations," the
Department found that two other airports, O'Hare Interna- tional and Pittsburgh International, had similarly undertaken
projects required by a hub airline that increased the costs of
other airlines. Id. at 34. Citing the lack of any evidence to
the contrary, see id. at 22-23, the Department also found,
contrary to the Carriers' argument, that "there is a substan- tial likelihood" that CIP projects other than the A/D Con- course will be completed, id. at 12, and that "the A/D Con- course will be comparable to the facilities being built for other
airlines." Id. The Department also concluded that errors in
__________
9 Although aware that other parties had petitioned for review of
the Policy Statement, the Department concluded that "[t]he issues
... raised by those parties do not involve the issues raised" by the
Carriers. Final Order at 4 n.3. This court did not issue its
decision vacating certain portions of the Policy Statement until
more than four months after the Department issued this order.
10 The Department placed two conditions on this determination:
American's obligation to pay the cost of its enhanced baggage
system must be unlimited; and, consistent with its equalization
methodology, Dade County must charge American the cost of
terminal facilities it exclusively uses. See Final Order at 37.
Dade County's initial fee calculations were irrelevant to
whether the fees were allocated reasonably, see id. at 35-36,
and rejected the administrative law judge's assignment of the
burden of proving reasonableness, concluding that the Carri- ers should bear the burden because five of them had initiated
these legal proceedings by filing suit in district court. In so
assigning the burden of proof, the Department observed that
"[a]n important factor in our decision on the burden of proof
is that our ruling will cause no unfairness for the Carriers
given their opportunity to conduct discovery in the district
court proceeding." Id. at 17.
II.
The Carriers begin by contending that the Department
applied standards that this court recently invalidated as
arbitrary and capricious and that do not meaningfully limit
fees. But, acknowledging that this contention may not carry
the day, they contend that if some of those standards survive,
the Department lacked substantial evidence to support its
findings that the A/D Concourse is comparable to new facili- ties planned for other airlines, that Dade County applied its
equalization methodology consistently, and that financing of
other airports, namely, O'Hare International and Pittsburgh
International, is similar to MIA's. Further, the Carriers
contend that the Department acted in an arbitrary and
capricious fashion in four respects: it relied on the prospect
of future construction as proof that all airlines would eventu- ally have comparable facilities but ignored evidence that at
least one concourse can never be made comparable to the A/D
Concourse; it took issue with the policy decisions of the
administrative law judge yet claimed that its Final Order did
not set general policy; it requested findings on MIA's fee
calculations but later deemed them irrelevant; and it ignored
evidence that MIA's fee allocation would harm competition
among airlines. Finally, the Carriers maintain that the De- partment's decision to place the burden of proof on them was
erroneous because the County filed the request for a reason- ableness determination and possessed the cost data and other
information most relevant to the reasonableness of its fees,
and further, that due process requires a new hearing because
the Carriers had proceeded on the understanding that they
did not bear the burden of proof. Notably, the Carriers
make no attack on the equalization methodology itself, only
on its application. For the reasons that follow we conclude
that the Carriers' contentions fail.
A.
The Carriers contend that the Department failed to apply a
legally correct reasonableness standard or, indeed, any dis- cernable reasonableness standard at all. They make three
arguments: first, the Department based its orders on an
invalid rule; second, the Policy Statement's reasonableness
standards provide no restraints on terminal fees; and third,
these standards do not comport with the Supreme Court's
instructions in Northwest Airlines, 510 U.S. at 355.
The Carriers maintain first that a remand is necessary
because, in the orders under review, the Department applied
the legal standards embodied in the Policy Statement, part of
which the court vacated and viewed as providing "no real
guidance as to how the Secretary will determine reasonable- ness." Air Transp. Ass'n, 119 F.3d at 43. Even if an agency
adjudication invokes a subsequently vacated rule, however,
the adjudication does not automatically become invalid. If a
petitioner cannot show any way in which its interests were
impaired by the agency's adherence to the rule, the court
need not remand in light of that rule's vacation. See Inde- pendent U.S. Tanker Owners Comm. v. Lewis, 690 F.2d 908,
920-22 (D.C. Cir. 1982). Only one of the three Policy State- ment paragraphs upon which the Department relied was
vacated, see Air Transp. Ass'n, 129 F.3d at 625, and the
Carriers have no substantial argument that this invalidated
paragraph so affected the Department's actions as to require
a remand. The two surviving paragraphs require airports to
apply their fee-setting methodologies consistently to compara- ble airlines, see Policy Statement, 61 Fed. Reg. at 32019 p 2.1,
32021 p 3.1, while the vacated paragraph included these same
consistency and comparability requirements plus the require- ment that the airport's methodology be reasonable and justi-
fied, see id. at 32020-21 p 2.6. This extra requirement is not
relevant in this case, however, for the Carriers conceded in
their submissions to the Department and this court that the
equalization method is generally a fair way to calculate non- airfield fees; that is, the Carriers do not contest the method- ology's reasonableness or justification, only the way it was
applied. See Joint Carriers Answer & Brief 5 n.6, 9-10, 16.
Consequently, the Department's orders did not depend upon
an invalid rule, but rather rested on the comparability and
consistency standards embodied in two valid paragraphs of
the Policy Statement along with the equalization methodology
that the Carriers accepted. Because the vacated paragraph
did not affect the Department's decision, any basis for the
Carriers' contention that the orders were issued under an
invalid rule evaporates. See Independent U.S. Tanker Own- ers Comm., 690 F.2d at 921-22.
Second, the Carriers maintain that the Policy Statement
provides no restraint on fees because its standards in general
are not based on public utility ratemaking law and economics,
and because its comparability and consistency standards are
meaningless. The Carriers, however, failed to raise these
objections in their submissions to the Department.11 See
Joint Carriers Response to Judge's Order 14; Joint Carriers
Answer and Brief 16. Yet "[n]o objection to ... a final order
shall be considered by the court unless objection was urged
before an administrative law judge or the Secretary ...
unless there were reasonable grounds for failure to do so."
49 U.S.C. s 47129(c)(6). The Carriers contend that they
were not required to satisfy this exhaustion provision because
the Department received notice of these objections in the
earlier proceedings challenging the Policy Statement, see Air
__________
11 The Carriers did argue to the Department and this court
that the A/D Concourse and American's right to use it are not
comparable to the facilities used by and rights of other airlines.
See Joint Carriers Answer & Brief 57-58. Because this argument
is not an objection to the validity of the legal standards but instead
to their application, we address those arguments in our discussion
of whether the Department's orders were based on reasoned deci- sionmaking. See infra section II.B.
Transp. Ass'n, 119 F.3d at 41, and it would have been futile to
reargue the same issues.12 Whether or not these precise
objections were raised in the Air Transp. Ass'n proceedings,
the Department plainly stated in the Instituting Order that it
did not consider the issues raised in those proceedings to be
relevant to the MIA fee dispute. See Instituting Order at 4
n.2. The Carriers never objected to this position, instead
implying that they agreed with it by accepting the Policy
Statement's standards as governing the dispute. See Joint
Carriers' Response to Judge's Order 3; Joint Carriers' Brief
to Dep't Decisionmaker 14-15, 42-43. Under these circum- stances, the Carriers were obliged, in order to avoid "sand- bagging" the Department, to alert the Department to their
objections to the Policy Statement's degree of restraint on
fees and the purported meaninglessness of the "comparabili- ty" and "consistency" standards. Cf. USAir, Inc. v. DOT, 969
F.2d 1256, 1260 (D.C. Cir. 1992). The Carriers offer no
reasons why the Department would not have considered these
objections had they been raised. Consequently, we decline to
consider them. See 49 U.S.C. s 47129(c)(6).
Third, the Carriers maintain that the Department's reason- ableness standards must be at least as stringent as those
applied by the Supreme Court in Northwest Airlines and
must therefore both prohibit excessive cross-subsidies and
require cost-benefit analysis. In Northwest Airlines, the
Court examined whether fees at Kent County International
Airport in Grand Rapids, Michigan, were reasonable under
the Anti-Head Tax Act and the Commerce Clause. See
Northwest Airlines, 510 U.S. at 358. Observing that the
__________
12 Like many statutes that contain similar exhaustion provi- sions, Section 113 of the Federal Aviation Administration Authoriza- tion Act of 1994 codifies the judicial doctrine of exhaustion of
administrative remedies. See 49 U.S.C. s 47129(c)(6); Washington
Ass'n for Television & Children v. FCC, 712 F.2d 677, 681-82 (D.C.
Cir. 1983). This doctrine permits courts to waive exhaustion re- quirements in certain circumstances, including when the agency has
considered an argument after another party raised it and when
raising the argument before the agency would have been futile. See
id. at 682 & nn.9-10.
Secretary is better equipped than the courts to determine
reasonableness under the Anti-Head Tax Act but had provid- ed no guidance on the subject, the Court applied dormant
Commerce Clause jurisprudence 13 to the Anti-Head Tax Act
claims and held the fees to be reasonable. See id. at 366-69,
374. The Court stated, however, that should the Secretary
determine that "some other formula (including one that en- tails more rigorous scrutiny)" is preferable, "his exposition
will merit judicial approbation so long as it represents 'a
permissible construction of the statute.' " Id. at 368 n.14
(quoting Chevron U.S.A. Inc. v. Natural Resources Defense
Council, Inc., 467 U.S. 837, 843 (1984)); see also id. at 366-67.
Thus the Court made clear that it was not establishing a
standard for reasonableness under the Anti-Head Tax Act,
and that the Secretary could establish another standard,
whether more or less stringent than the standard the Court
adopted in Northwest Airlines, so long as it was a permissible
construction of the statute. We need not delve into whether
Northwest Airlines requires a cost-benefit analysis or any
other particular study,14 nor whether the Department's rea- __________
13 Under the dormant Commerce Clause, a fee is reasonable "if
it (1) is based on some fair approximation of use of the facilities, (2)
is not excessive in relation to the benefits conferred, and (3) does
not discriminate against interstate commerce." Northwest Air- lines, 510 U.S. at 369 (citing Evansville-Vanderburgh Airport Auth.
Dist. v. Delta Airlines, Inc., 405 U.S. 707, 716-17 (1972)).
14 In any event, the Carriers cannot accept the equalization
methodology as generally reasonable and yet at the same time
insist on a prohibition on cross-subsidies and a cost-benefit analysis
of the CIP because these concepts are meaningless under an
equalization methodology. The Carriers have not shown how these
two positions are consistent. Because facilities are renovated at
different times, some airlines will always be subsidizing improve- ments to facilities used by other airlines. Likewise, a cost-benefit
analysis for a renovation project will naturally show that the airline
whose facility is being improved by that project receives benefits
that exceed costs. While it would be unreasonable for one airline
exclusively and consistently to receive much greater benefits than
others without bearing greater costs as well, the Carriers have not
sonableness standards are consistent with those applied by
the Supreme Court in Northwest Airlines, because the De- partment was not bound to the standards in that case.
B.
Turning to the Carriers' challenges to the Department's
findings, we conclude that none of the challenges is persua- sive. The Carriers contest the findings that: the A/D Con- course and American's right to use it are comparable to the
facilities and rights of use of other airlines; MIA applied its
equalization methodology consistently; and O'Hare Interna- tional and Pittsburgh International airports have built newer
or better facilities for hub airlines and charged all airlines the
costs of these facilities. The court must defer to the Depart- ment's decision if it was reasoned, see City of Los Angeles
Dep't of Airports v. DOT, 103 F.3d 1027, 1031 (D.C. Cir.
1997), and must affirm the Department's decision unless it
was arbitrary, capricious, an abuse of discretion, or otherwise
not in accordance with law, see 5 U.S.C. s 706(2)(A) (1994).
The Department's findings of fact are conclusive if supported
by substantial evidence.15 See 49 U.S.C. s 47129(c)(6). __________ demonstrated that such an imbalance exists at MIA. See infra
section II.B. Whether or not the Policy Statement provides so
little guidance as to allow such an imbalance under a different set of
facts is a question left for another day, because the Policy State- ment is presently on remand to the Secretary. See Air Transp.
Ass'n, 119 F.3d at 45, amended by 129 F.3d at 625.
15 The Carriers suggest that the court should review the De- partment's findings under a less deferential standard because the
Department overturned findings made by the administrative law
judge. The Supreme Court instructs, however, that the substantial
evidence standard is not modified in any way when an agency and
an administrative law judge disagree; instead, where credibility of
witnesses is at stake, an administrative law judge's evaluation of the
witness' testimony may be an indicator of the substantiality of the
evidence. See Universal Camera Corp. v. NLRB, 340 U.S. 474,
496-97 (1951); see also Chen v. GAO, 821 F.2d 732, 734 (D.C. Cir.
1987); National Ass'n of Recycling Indus., Inc. v. Federal Mari- time Comm'n, 658 F.2d 816, 824-25 (D.C. Cir. 1980). Ultimately,
First, in challenging the Department's determination that
the A/D Concourse is comparable to other facilities, the
Carriers point to evidence that the A/D Concourse will be
bigger and more expensive than the other concourses, will
include special features such as a people-mover (a train-like
vehicle), moving walkways, larger gates, and access to dual
taxiways, will be subsidized by airlines other than American,
is dedicated for American's exclusive use under a unique
agreement, and includes features that other concourses will
never have under the CIP. Further, the Carriers note that
there is no agreement guaranteeing the construction of new
facilities other than the A/D Concourse. The Carriers supply
no evidence contradicting that relied on by the Department,
but instead contend that due to these differences, many of
which Dade County acknowledges, the A/D Concourse cannot
logically be comparable to other concourses.
While there is evidence to support many of the Carriers'
observations, the Department's finding of comparability is
nevertheless based on substantial evidence and reasoned
analysis. The Department relied on testimony from a CIP
architect, see Test. of Guillermo Carreras, Tr. 571-74; Second
Decl. of Carreras 3-5, and an airport planning engineer, see
Decl. of Richard Haury 12-13, to conclude that the "A/D
Concourse will be essentially comparable with the other new
concourses in terms of size, scope, finish, and furnishings."
Final Order at 24. The Department further relied on the
CIP architect's testimony, see Test. of Carreras, Tr. 550-55,
and that of the representative of USAir, see Test. of Charles
Stipancic, Tr. 1577-78, in finding that the "gates contained in
all of the new or renovated concourses will be of the same size
as much as possible." Final Order at 24. The Department
also reasonably concluded that MIA's decision to provide
larger gates on the A/D Concourse than are needed to
accommodate American's current fleet of aircraft was based
on MIA's desire to increase its number of international gates
__________ where there is substantial evidence supporting its results, the
Department's view governs. See Greater Boston Television Corp.
v. FCC, 444 F.2d 841, 853 (D.C. Cir. 1970).
overall and to build gates that could accommodate larger
aircraft in the future. See id. at 24-25.
The Department found that, except for the baggage sorting
system for which American agreed to pay, the features of the
A/D Concourse were not "so special or unusual that they
should be charged entirely to American." Id. at 27. Specifi- cally, the Department observed that the A/D Concourse will
not be the only one with a people-mover, since Concourse E
already has one and will receive a better one as part of the
CIP, and accepted an airport planning engineer's testimony
that this train-like vehicle would be necessary on any con- course as lengthy as the A/D. See id. at 28; Second Decl. of
Haury 2-3. The Department also found, based on the same
engineer's testimony, see Second Decl. of Haury 5, that the
demolition costs associated with the A/D Concourse are typi- cal of airport renovation projects and are normally borne by
all airlines. See Final Order at 29. Based on the CIP
architect's testimony, the Department found that some
concourses other than A/D would have access to dual taxi- ways. See id. at 29-30; Test. of Carreras, Tr. 483-86. In
addition, the Department found that American's right to use
the A/D Concourse so long as it maintains an average of 250
daily jet flights should not affect the comparability analysis
because at issue is cost allocation, and the rights conferred on
American do not entail any costs. Furthermore, American
committed to maintain a certain level of service in exchange
for these rights, unlike other airlines that made no similar
commitments. See Final Order at 31-32.
The Department reasoned that comparability of facilities
must be assessed over time because the equalization method- ology relies on assumptions that different facilities are reno- vated at different times and that at any point some airlines
will be using older facilities than others, but that over time,
every airline will obtain new facilities. See id. at 25-26. In
other words, once the equalization methodology is adopted,
inequalities at any moment in time are inevitable, but eventu- ally every carrier benefits albeit not necessarily to the same
exact extent. The Department also concluded that it was
unlikely that Dade County would not complete the CIP
projects for airlines other than American because: several of
those projects are underway and scheduled to be completed
before the A/D Concourse; MIA must be expanded to meet
traffic needs; and the Carriers presented no evidence to
indicate that Dade County will not complete projects other
than the A/D Concourse. See id. at 22-23.
The difference between the positions of the Carriers and
the Department arises largely from their differing percep- tions of the meaning of comparability. The Carriers main- tain, in essence, that comparable facilities should have similar
costs and be of similar overall size. They also maintain that
facilities cannot be comparable if an old facility, like Con- course G, is substantially inferior to a new one, or if a facility
for one airline is being subsidized by other airlines.16 These
views, however, clash with the equalization methodology, un- der which comparability is measured over time, and each
airline subsidizes the construction of new facilities for other
airlines but then benefits when new facilities are constructed
for its main use. Further, facilities for an airline that carries
more than half of an airport's passengers must necessarily be
more expensive and larger on an absolute basis than those for
airlines that carry less than seven percent each of the air- port's passengers; evidence of larger size and scope on an
__________
16 Although decrying cross-subsidies in general, the Carriers
produced no evidence of cross-subsidization. Their sole expert
witness on this topic estimated that airlines other than American
would pay twelve to forty-eight million dollars more in annual fees if
the A/D Concourse were constructed than if it were not. See Decl.
of Daniel P. Kaplan 6-7. Even if true, this assertion does not
establish the existence of a "subsidy" because it does not compare
American's contributions to the costs of renovating other airlines'
facilities with other airlines' contributions to the costs of the A/D
Concourse, and it does not take into account the increase in
American's fees--and consequent decrease in other airlines' fees-- that will result from an increase in American's passenger traffic.
Further, the Carriers have not demonstrated that American did not
subsidize their operations in the past, when its facilities were less
modern than those for other airlines such as USAir. See Final
Order at 19-20.
absolute basis does not imply disproportionality when passen- ger traffic and overall fees are taken into account. The
Carriers offer no evidence that compares the benefits of the
CIP to each airline on a per-fee-dollar basis,17 a per- passenger basis, or any other basis that takes into account
the vast differences between the scale of American's opera- tions at MIA and those of other airlines.
In contrast, the Department observed that because 80% of
terminal fees are based on passenger traffic, American cur- rently pays 40.7% of MIA airline fees and would pay 46.5%
after the CIP is completed. The Department also noted that
American will pay approximately half of the total costs of the
CIP, see Final Order at 31; because the A/D Concourse
makes up slightly more than a third of the CIP's total costs
according to the County's estimate, see supra note 6, Ameri- can will bear significant costs for renovations to facilities that
it does not use. The Department also emphasized that if, as
expected, the increased efficiencies of the A/D Concourse
enable American to increase its passenger traffic at MIA,
then its terminal fees will increase, and the Carriers' fees will
decrease. See Final Order at 20.
Although the Carriers' view of the meaning of comparabili- ty may be reasonable, there is nothing unreasonable about
the Department's alternative view. Given the deference that
the court must accord an agency's interpretation of its own
regulations, see Udall v. Tallman, 380 U.S. 1, 16 (1965), it
follows that the Department's view of the meaning of "com- parability" prevails, and given the deference to an agency
adjudication inherent in substantial-evidence review, see Al- lentown Mack Sales & Serv., Inc. v. NLRB, 118 S. Ct. 818,
828 (1998), it follows that the Department's finding of compar- ability is valid.
Second, the Carriers challenge the Department's finding
that MIA applied the equalization methodology consistently,
on the ground that MIA plans to charge American for some
__________
17 The Carriers submitted no such analysis, and indeed, their
expert witness complained about the failure of the County's expert
to do so. See Decl. of Kaplan 9.
specialized facilities it exclusively uses, such as American's
enhanced baggage sorting system, but not for other unique
features of the A/D Concourse, such as those on the "better- ments list," which a consultant developed at MIA's request to
itemize arguably unusual features of the A/D Concourse
considered to be potential charges to American. The Depart- ment determined that the question of whether MIA applied
the equalization methodology consistently was premature.
See Final Order at 32-33. Because the A/D Concourse had
not yet been designed, it was not yet possible to determine
which features ought to be charged to American. The De- partment addressed this analytic difficulty by conditioning its
finding of reasonableness on Dade County's applying its
methodology consistently. The Department also rejected any
use of the "betterments list" as evidence that certain items
ought to be charged to American, because the MIA staffer
who requested the list stated that it was merely a negotiating
tool and because "neither the County government nor the
airport's executive officials ever approved the list as a state- ment of policy on the proper allocation of charges." Id. at 27.
Because the question of whether MIA applied the equaliza- tion methodology consistently cannot be answered until de- signs for the A/D Concourse are completed and costs allocat- ed, we conclude that there is nothing unreasonable about the
Department's approach.
Third, the Carriers challenge as unsupported by substantial
evidence the Department's finding that O'Hare International
and Pittsburgh International airports built facilities demand- ed by hub airlines and imposed some of the costs on other
airlines. The Department stated in its Final Order, however:
the practices of other airports are not necessarily deci-
sive for reasonableness determinations. Our decision
here is based on the specific facts of this case, particular-
ly the airport's need to improve and expand all of its
facilities and its plans to build new facilities for most of
the airlines at MIA. Final Order at 34-35. Because the Department's findings
regarding other airports were not decisive, and because the
Department's comparability findings--which were decisive-- were supported by substantial evidence, the court need not
address this challenge further. See 5 U.S.C. s 706 ("[D]ue
account shall be taken of the rule of prejudicial error."); Salt
River Project Agric. Improvement & Power Dist. v. United
States, 762 F.2d 1053, 1060 n.8 (D.C. Cir. 1985); Consolidated
Gas Supply Corp. v. FERC, 606 F.2d 323, 328-29 (D.C. Cir.
1979); 3 Charles H. Koch, Jr., Administrative Law and
Practice s 10.7 (2d ed. 1997).
C.
The Carriers further challenge the Department's decision- making as arbitrary and capricious, based on four instances of
allegedly illogical or inconsistent reasoning. We disagree.
First, the Carriers point to inconsistent reasoning in that
the Department stated that it would be concerned if other
airlines would pay for much of the cost of a hub airline's new
facilities when they would not have comparable facilities, see
Final Order at 13, acknowledged that Concourse G, used by
Trans World Airlines, Inc. ("TWA") and Air Canada, would
not be rebuilt under the CIP and is not currently similar to
the A/D Concourse, see id. at 25, and yet, seemingly inconsis- tently, approved the fees at issue as reasonable. As noted,
under the equalization methodology, all airlines share in the
costs of renovating all concourses. An underlying assumption
of the methodology is that some airlines will have newer or
better facilities while others have older or poorer ones, but
that, over time, all airlines will receive newer and better
facilities. For example, as USAir's representative testified,
Concourse H, used by Delta and USAir, will be renovated
first, at which time it will be superior to Concourses C, D, and
G, but all airlines will share its costs. See Test. of Stipancic,
Tr. 1583. Likewise, Concourse F, used by United, is current- ly superior to Concourse G, and yet all airlines share in its
costs. See Prehearing Conf. Tr. 352. As the Department
observed:
After all, other airlines already have better space than
TWA and Air Canada, yet no one has objected to the
airport's use of the equalization methodology to charge
TWA and Air Canada the same rate as the airlines with
the better space. Notably, neither Air Canada nor TWA
has challenged the airport's use of the methodology for
space which is not as good as the space used by other
airlines. Final Order at 25. Although Concourse G will not be rebuilt
under the CIP, it will be improved, and a CIP architect
testified that it may later be demolished, with TWA and Air
Canada moving into Concourse H or some other space newer
and better than Concourse G. See Test. of Carreras, Tr. 518- 20. Thus, the Department's reasoning regarding Concourse
G is consistent with the equalization methodology, which the
Carriers acknowledge is generally fair.
Second, the Carriers maintain that it was inconsistent for
the Department to disagree with the policy views of the
administrative law judge regarding when facilities are compa- rable, see Final Order at 12 n.7, yet elsewhere indicate that
its orders were not intended to set general policy on the
allocation of costs associated with the construction of new
facilities for a hub airline, see id. at 34-35. In stating that it
disagreed with the policy views of the administrative law
judge, the Department was merely acknowledging that it
accepts the premise of the equalization methodology that fees
are reasonable if airlines receive new and comparable facili- ties over time, even when at any given point in time, some
airlines have newer and better facilities than others, while the
administrative law judge essentially rejected this view, see
ALJ Decision at 65-70. In other words, the administrative
law judge erred, for example, in finding that MIA's fees
cannot be reasonable so long as the A/D Concourse will be
better than Concourse G. See Final Order at 25. In dis- claiming that it was setting broad policy, the Department was
simply stating that reasonableness determinations would be
made based on the specific facts of each case, and that it was
not endorsing any general fee practice. We are unpersuaded
that its statements are inconsistent.
Third, the Carriers maintain that the Department capri- ciously shifted position, first directing the administrative law
judge to make findings on the validity of the fee calculation,
see Instituting Order at 23, but then ruling this issue irrele- vant when Dade County acknowledged errors in its calcula- tions, see Final Order at 35-36. The Department explained,
however, that the administrative law judge had misconstrued
its Instituting Order, which also directed consideration only of
issues raised in the parties' pleadings. See Final Order at 35.
Although the Carriers did refer to flaws in the cost data, see
Joint Carriers' Answer & Brief 25-26, 32 n.30, 37, they did so
in the context of making general arguments that Dade Coun- ty was improperly requesting an advisory opinion on future
rates and that the financing of the A/D Concourse was unlike
development projects at other airports or previous projects at
MIA. They did not make a general claim that the fees were
unreasonable because they were miscalculated. As a result,
the Department concluded that only the allocation of the fees,
not their calculation, was at issue, and the calculation errors
were irrelevant. See Final Order at 36. Additionally, the
Department concluded, and the Carriers do not dispute, that
the calculation errors meant only that too large a share of the
A/D Concourse costs was attributed to landing fees and too
little a share to terminal fees. See id. The Carriers have
offered no argument why the court should reject the Depart- ment's interpretation of their initial submissions or its conclu- sions as to the lack of prejudice from the error in calculations.
See 5 U.S.C. s 706. Thus, there is no basis to find the
Department's treatment of the fee calculation errors to be
arbitrary and capricious.
Fourth, the Carriers maintain that the Department ignored
evidence and arguments on the impact of the fee allocation on
competition among airlines. Construction of the A/D Con- course will increase American's efficiency, resulting in shorter
time periods between connecting flights, which will make
American more desirable to airline customers. The Carriers
contend that fees cannot be reasonable where they force
airlines to pay for renovations to enhance the efficiency of
their competitors. Yet this argument is simply another way
to state the Carriers' position that fees cannot be reasonable
when one airline subsidizes renovations to benefit another.
Because renovations, improvements, and reconfigurations of
facilities will likely increase the efficiency of the airlines using
them, as the new people-mover planned for Concourse E will
increase the efficiency of airlines using that concourse, any
fee allocation based on the equalization methodology will
necessarily force airlines to subsidize projects that increase
their competitors' efficiency.
D.
Finally, the Carriers contend that the Department erred in
placing the burden of proving reasonableness on them and
denied them due process by assigning this burden to them in
mid-proceeding without allowing them to submit new argu- ments or evidence. The administrative law judge placed the
burden of proof on Dade County, as the requestor of the
reasonableness determination, because the proponent of a
rule or order generally has the burden of proof under the
Administrative Procedure Act ("APA"), see 5 U.S.C. s 556(d)
(1994); Director, Office of Workers' Compensation Programs,
Dep't of Labor v. Greenwich Collieries, 512 U.S. 267, 272
(1994), and the administrative law judge saw no good reason
for assigning this burden differently. The administrative law
judge also thought placing the burden on the Carriers would
be unfair to them because the requesting party, here Dade
County, has sixty days following the notice of imposition of
fees to file a request and may frame arguments and submit
evidence in both a requesting brief and a reply brief, while
the answering party, here the Carriers, has but fourteen days
from the filing of the requestor's initial filing to file its only
submission. See 14 C.F.R. ss 302.603(b), 302.607(c),
302.609(a) (1998).
The Department rejected the administrative law judge's
analysis, concluding that the Carriers should bear the burden
of proof because they initiated the legal dispute by filing suit
in district court and, thus, Dade County is in the position of
"requestor" only because the district court directed the par-
ties to seek review under 49 U.S.C. s 47129.18 See Final
Order at 16-17. The Department explained, however:
An important factor in our decision on the burden of
proof is that our ruling will cause no unfairness for the
... Carriers. They began the litigation over the air-
port's fees, they were able to conduct discovery in the
district court proceeding, and they have known since the
district court issued its order in November 1996 that the
fee issue would be litigated in an administrative forum.
The ... Carriers accordingly have had ample opportuni-
ty to prepare their case in response to the airport's
request for a determination. This is not a case where
the airlines had neither notice that there would be litiga-
tion over the reasonableness of an airport's fees nor an
opportunity to investigate the airport's documentation for
the fees in dispute. Id. at 17.
As this court has previously observed, the "burden of
proof" refers to different concepts in different legal regimes.
In some regimes, the party carrying the burden of proof
bears the responsibility for persuading the factfinder of the
validity of its claims. See Hazardous Waste Treatment
Council v. EPA, 886 F.2d 355, 366 (D.C. Cir. 1989). In other
regimes, such parties bear merely the threshold responsibility
for coming forward with evidence; they must present a prima
__________
18 The Department observed in the Final Order that:
[T]his case is unusual because of the circumstances giving rise
to the filing of Dade County's request. In our view, if an
airport imposes a new or increased fee and then files a request
with us for a determination under 49 U.S.C. 47129 that the fee
is reasonable, the airport would generally bear the burden of
proof in support of its request.... When an airport seeks an
affirmative determination by us as to a fee's reasonableness
and validity, and no airline complaint is simultaneously filed, we
see no unfairness in placing the burden of proof on the airport.
Moreover, we would expect the airport to be prepared in such a
case to demonstrate the fee's reasonableness.... Final Order at 17.
facie case, but the ultimate burden of persuasion may lie
elsewhere. See id. The APA uses the latter application,
requiring the proponent of an order to put forth evidence of a
prima facie case, but not necessarily to bear the burden of
persuading the agency. See 5 U.S.C. s 556(d); Hazardous
Waste Treatment Council, 886 F.2d at 366; Environmental
Defense Fund, Inc. v. EPA, 548 F.2d 998, 1013-15 (D.C. Cir.
1977). In establishing guidelines for resolving disputes under
49 U.S.C. s 47129, the Department explicitly rejected a re- quest by the Airports Council International-North America
to establish a presumption of validity of airport fees, thereby
refusing to set the burden of persuasion on airlines challeng- ing the fees. See Policy Statement, 61 Fed. Reg. at 31996.
Further, the Carriers do not argue that the Department
employed such a presumption, nor do they raise any issue
related to the burden of persuasion. Thus, it would appear
that at stake here is only the question of which party bore
responsibility for initially coming forward with evidence--an
issue of indeterminate significance because the Department's
regulations require both sides to present all evidence with
their initial submissions to the Secretary. See 14 C.F.R.
ss 302.615(a), 302.607(b). Although we cannot be sure that
the Department conceived of the burden of proof in this
limited fashion, we find no indication that it did not, and the
Carriers point to none.
Without implying that a mid-course change in the assign- ment of the burden of proof can produce anything other than
problems, and is hardly a preferred method of procedure, the
court need not determine whether the Department correctly
placed the burden of proof on the Carriers. Even if that
decision was erroneous, the Carriers show no prejudice as a
result. As incorporated into the APA, the harmless error
rule requires the party asserting error to demonstrate preju- dice from the error. See 5 U.S.C. s 706 ("[D]ue account shall
be taken of the rule of prejudicial error.") (emphasis added);
Doolin Sec. Savings Bank, F.S.B. v. OTS, 139 F.3d 203, 212
(D.C. Cir. 1998) (citing U.S. Dep't of Justice, Attorney
General's Manual on the Administrative Procedure Act 110
(1947), reprinted in Administrative Conference of the Unit-
ed States, Federal Administrative Procedure Sourcebook 67,
176 (2d ed. 1992)); cf. Burkhart v. Washington Metro. Area
Transit Auth., 112 F.3d 1207, 1214 (D.C. Cir. 1997). While
the Carriers contend that they were prejudiced when the
Department placed the burden of proof on them because they
tailored their case to their initial understanding of the bur- den, they fail to explain how they were harmed. When
questioned twice during oral argument about what specifically
the Carriers would have done differently had they known at
the outset of the agency proceedings that they bore the
burden of proof, the Carriers' attorney answered twice that
they would have cross-examined the Dade County witness
who acknowledged errors in the fee calculations and that they
would have presented evidence about how other airports
calculate their fees. Because neither of these issues was
essential to the Department's determination of reasonable- ness, the Carriers fail to show they were prejudiced because
they could not explore them further.
Likewise unpersuasive is the Carriers' contention that they
were prejudiced because, as the answering party, they were
permitted to file only one submission while the County filed
two, and had only fourteen days to file their submission while
the County had sixty days. They point to no evidence or
arguments they would have made with the additional submis- sion and time. The Department's regulations required the
Carriers to put forth all arguments and evidence in their
answer to Dade County's request. See 14 C.F.R.
s 302.607(b). Hence, their arguments and evidence presum- ably would have been virtually the same regardless of wheth- er they knew that they bore the burden of proof. Indeed, the
administrative law judge expressly noted in his opinion that
which party had the burden of proof was irrelevant to the
ultimate determination. Additionally, as the Department not- ed, the Carriers had ample time for discovery in the district
court proceedings and knew from the time of the district
court's order that they would have to present their evidence
against the reasonableness of the fees in an administrative
proceeding. See Final Order at 17.
Further, although the Carriers assert that the burden of
proof assignment was outcome-determinative, they do not
explain why or how. This assertion rests on a single footnote
in which the Department states that its disagreement with
the administrative law judge's comparability determination
"largely results from our different policy views, our conclu- sions on the burden of proof, and our analysis of the airport's
fee structure and [CIP]." Final Order at 12 n.7. But this
sentence alone cannot suffice to demonstrate prejudice to the
Carriers because it does not indicate that the Department
would have found the fees to be unreasonable had it reached
a different conclusion on the burden of proof, nor does it
indicate that the Department concluded that the Carriers
failed to put forth a prima facie case of the unreasonableness
of MIA's fees. See Final Order at 17.
Finally, the burden of proof could hardly be outcome- determinative in the instant case because the Department's
conclusions did not turn on evidence or the lack thereof. The
Department relied on the parties' acceptance of both the
Policy Statement and the general fairness of the equalization
methodology in determining what legal standard to employ.
The Department found that the A/D Concourse was compara- ble to other concourses by applying that methodology to
largely undisputed evidence. The Department concluded that
it would be premature to make any determination of whether
MIA applied its fee methodology consistently, but conditioned
its Final Order on consistent application. While the Depart- ment's conclusion regarding the financing of different airports
was based on disputed facts, it was unimportant to the
Department's ultimate decision.
Undoubtedly, there generally should be clarity at the out- set of an administrative proceeding regarding where the
burden of proof will lie, and some assurance that it will
remain there while the matter is before the agency. The
unusual circumstances giving rise to the filing of Dade Coun- ty's request may explain what happened here. In any event,
given the Department's evidentiary and procedural regula- tions requiring parties to put forth all of their evidence at the
outset, see 14 C.F.R. ss 302.605(a), 302.607(b), and the De-
partment's notice directing the parties to so proceed, see
Instituting Order at 23, after the Carriers had obtained
considerable discovery during the pendency of the district
court proceeding, the Carriers now would have to demon- strate actual prejudice. The Carriers have made no such
showing.
Accordingly, because the Department applied a valid and
ascertainable legal standard, and the Carriers failed to dem- onstrate that the Department's decision was arbitrary, capri- cious or unsupported by substantial evidence or that they
were prejudiced by the Department's decision to place the
burden of proof on them, we deny their petitions.