Airlines for America; Alaska Airlines, Incorporated; American Airlines, Incorporated; Delta Air Lines, Incorporated; Hawaiian Airlines, Incorporated; Jetblue Airways Corporation; United Airlines, Incorporated; National Air Carrier Association; International Air Transport Association, Petitioners, versus Department of Transportation, Respondent, CONSOLIDATED WITH Spirit Airlines, Incorporated, Petitioner, versus United States Department of Transportation, Respondent.
No. 24-60231 c/w No. 24-60373
United States Court of Appeals for the Fifth Circuit
January 28, 2025
Before SOUTHWICK, HAYNES, and DOUGLAS, Circuit Judges.
HAYNES, Circuit Judge:
In 2024, the Department of Transportation (“DOT“) issued a final rule under
We hold that DOT has authority to make rules under
I. Background
A. Legislative Background
Under the Federal Aviation Act of 1958, the Civil Aeronautics Board regulated the interstate airline industry. Nw., Inc. v. Ginsberg, 572 U.S. 273, 279-80 (2014). “Pursuant to this authority, the Board closely regulated air carriers, controlling, among other things, routes, rates, and services.” Id. at 280. The Board also had authority “to take administrative action against certain deceptive trade practices.” Morales v. Trans World Airlines, Inc., 504 U.S. 374, 378 (1992). Specifically, Congress empowered the Board to “investigate and determine whether any air carrier . . . has been or is engaged in unfair or deceptive practices or unfair methods of competition” and to “order such air carrier . . . to cease and desist from such practices or methods” upon finding after “notice and hearing” that the air carrier was engaged in the same. Nader v. Allegheny Airlines, Inc., 426 U.S. 290, 296 n.7 (1976) (quoting § 411 of the Federal Aviation Act, 72 Stat. 769 (formerly codified at
“In 1978, however, Congress enacted the [Airline Deregulation Act (the “Deregulation Act“)], which sought to promote ‘efficiency, innovation, and low prices’ in the airline industry through ‘maximum reliance on competitive market forces and on actual and potential competition.‘” Ginsberg, 572 U.S. at 280 (quoting
On the initiative of the Secretary of Transportation or the complaint of an air carrier . . . or ticket agent, and if the Secretary considers it is in the public interest, the Secretary may investigate and decide whether an air carrier . . . has been or is engaged in an unfair or deceptive practice or an unfair method of competition in air transportation or the sale of air transportation. If the Secretary, after notice and an opportunity for a hearing, finds that an air carrier . . . is engaged in an unfair or deceptive practice or unfair method of competition, the Secretary shall order the air carrier . . . to stop the practice or method.
B. Administrative Background
Before it was dismantled pursuant to the Deregulation Act, the Civil Aeronautics Board issued rules pursuant to § 41712‘s predecessor, § 411 of the Federal Aviation Act. United Air Lines v. Civ. Aeronautics Bd., 766 F.2d 1107, 1111 (7th Cir. 1985) (“The Board has been issuing rules based on section 411 since 1960.“). Such rules included provisions relating to overbooking, notice of passenger contract terms, and liability for lost luggage. Id.
DOT has likewise issued regulations pursuant to
Further, effective January 2012, sellers of air transportation became required to notify consumers “of the potential for a price increase that could take place prior to the time that the full amount agreed upon has been paid by the consumer,” including but not limited to increases in baggage prices or fuel surcharges.
C. Procedural History
In 2022, DOT proposed a new rule that would require airlines to disclose—upfront—the prices of certain ancillary fees, such as those for checking a bag or canceling a flight, during the online booking process. See Enhancing Transparency of Airline Ancillary Service Fees [hereinafter “Notice of Proposed Rulemaking,” or “NPRM“], 87 Fed. Reg. 63718 (Oct. 20, 2022). The proposed rule aimed to increase transparency and thus allow consumers “to determine the true cost of travel and to adequately compare airline pricing.” Id. at 63721. Indeed, the Deregulation Act was issued for the purpose of saving money. DOT also proposed amending
1. The 2022 regulatory impact analysis
After the Office of Management and Budget determined that the proposed rule required an assessment of potential costs and benefits,1 DOT prepared a regulatory impact analysis (the “2022 RIA“). See Doc. No. DOT-OST-2022-0109-0002,2 https://perma.cc/F9E8-HFL9; see also NPRM, 87 Fed. Reg. at 63732 (summarizing 2022 RIA). In a section titled “Need for regulation,” the 2022 RIA said the “main premise underlying the proposed rule” was that “a market failure may exist because airline consumers may have inadequate information about ancillary fees before
buying tickets.” 2022 RIA at 1. It acknowledged that although consumers “can sometimes acquire [the] information on their own,” they are more likely to do so “when search costs are low.” Id. at 5; see also id. (“When consumers can easily acquire the information . . . , they can eliminate the [information] asymmetry through their own actions, albeit with the cost of additional time and effort.“).
The 2022 RIA further said it was “not possible at this time” to “quantitatively evaluat[e] the effects of the rule” due to “a lack of data and other significant uncertainties,”
For example, assuming that “1% of passengers compared prices [including ancillary fees] before the proposed rule” and that “those passengers save 2 minutes of searching after the rule,” DOT calculated that $4.9 million in annual search cost savings would result, or $0.73 in time savings per passenger. 2022 RIA at 21.4 DOT acknowledged, however, that its numbers were highly speculative: it “d[id] not have information to estimate the number of passengers who already compare fares with ancillary fees included or the amount of time they would save due to the proposed
rule,” so it cautioned that its “discussion of potential time savings benefits [was] only illustrative.” Id.
2. Public comments
DOT sought comments regarding the costs of implementing the proposed rule and regarding “the key uncertainties for quantifying or monetizing the economic effects of the proposed rule.” NPRM, 87 Fed. Reg. at 63732. Commenters, including the trade association Airlines for America (“A4A“), questioned the proposed rule‘s benefits.
A4A argued that the proposed disclosure requirements would do more harm than good by “consum[ing] scarce screen real estate.” Comments of Airlines for America at 38 (Jan. 23, 2023) [hereinafter A4A Comments], Doc. No. 90, https://perma.cc/T7LV-8DWB. A4A‘s comments included a regulatory impact assessment prepared for A4A by Campbell-Hill Aviation Group, LLC. See generally Attach. B [hereinafter Campbell-Hill Survey], A4A Comments. The Campbell-Hill Survey estimated that the proposed disclosure rule would result in net benefits of negative $33.7 billion and “will do much more harm than good.” Campbell-Hill Survey at 6. For example, the survey argued that only 20 percent of all passengers pay for a first checked bag, making the proposed disclosure rule “only relevant to one of every five passengers.” Id. at 10.
For its part, Frontier Airlines contended that the proposed rule “would make it impossible . . . to offer consumers the benefit of unbundled service options and ultra-low fares.” Presentation of Frontier Airlines (Mar. 30, 2023) at 12, Doc. No. 728, https://perma.cc/FY8C-PW7H.5 The public comment period closed on April 6, 2023. Rule, 89 Fed. Reg. at 34625.
3. The 2024 RIA
DOT promulgated the final Rule a year later on April 30, 2024. In doing so, it
The 2024 RIA noted that in light of new data, DOT had reevaluated the benefits of the Rule for consumers with respect to time savings. See 2024 RIA at 16. It cited a study by Nicholas Rupp, dated December 15, 2023, that concluded that the “amount of time needed to determine airfares inclusive of checked bag fees” was longer on airline sites compared to online travel sites like Travelocity or Expedia “due to the increase[d] effort needed to find information on baggage fees during airfare search.” Id. DOT “use[d] Rupp‘s finding” to raise its estimate of consumer time savings that would result from the Rule. Id. The 2024 RIA also responded to A4A‘s estimate that only 20 percent of consumers pay to check bags,7 noting that “baggage fee information is not necessarily irrelevant for consumers who do not pay to check bags” and citing the Rupp study‘s finding that “46 percent of student participants consider baggage fee information when they search for airfare.” Id. “Thus,” DOT concluded, “while we estimate time savings benefits using 20 percent, this is only for illustrative purposes. We view 46 percent [from the Rupp study] and 61 percent [from a 2023 A4A survey in which 61
as needed or desired . . . ancillary services such as the ability to change or cancel flights, select specific seats, or take a checked bag.”
percent of respondents said they wanted checked bag fees reported in initial airfare displays] as more plausible proxies for the percentage of consumers who find information on ancillary fees relevant to their search for airfare and use those as primary estimates.” Id. at 16-18.
Overall, the 2024 RIA estimated that the Rule would provide net benefits ranging from $30.3 million to $254 million annually, with a 53 percent probability “of net benefits being positive.” Id. at i. This 53 percent probability was based on “plausible assumptions about the percentage of consumers who consider ancillary fees when they purchase airfare.” Rule, 89 Fed. Reg. at 34668. The $30.3 million and $254 million figures were the result of two calculations, the lower of which used the Rupp study to estimate that 46 percent of consumers consider ancillary fees when searching for airfare. 2024 RIA at 24 (cost-benefit table). Both estimates accounted for approximately $5.5 million reduction in deadweight loss. Id.
The bulk of the assumed benefits in both estimates was attributable to a “[r]eduction in search time for consumers interested in ancillary service fees when they search for airline tickets.” Id. DOT acknowledged that its cost-benefit analysis was “highly sensitive to the percentage of consumers who consider ancillary fee information relevant to their airfare purchase decision.” Id. DOT also estimated that the Rule would result in a transfer of $543 million annually from airlines to consumers—an amount that represents what consumers currently overpay in fees. Id. at i-ii; see also Rule, 89 Fed. Reg. at 34622, 34668 (summarizing 2024 RIA).
4. The final Rule
The final Rule provides that airlines must make clear and conspicuous disclosures regarding the costs of “critical ancillary services,” defined as “(1) transporting
itinerary.” Id. at 34649. They also may not occur via a hyperlink because “displaying fees in that manner would disrupt the consumer‘s search.” Id. at 34650.
Otherwise, the Rule allows for flexibility. Various display choices remain available; website platforms can disclose the fees “through a pop-up, in expandable text, or by other means.” Id. (emphasis added). Further, airlines and ticket agents may “enabl[e] consumers to opt out of receiving fee information for a first checked bag, a second checked bag, or a carry-on bag during the search process,” so long as the consumer “affirmatively indicates that no one in their booking party plans to travel with a first checked bag, a second checked bag, or a carry-on bag.” Id. at 34657. In other words, the regulated entities retain some discretion as to how they implement the disclosure requirements.
5. Litigation
On May 10, 2024, A4A and a group of airlines (together “Airline Petitioners“) petitioned for review in this court and moved for a stay of the Rule pending the outcome of their petition. We have jurisdiction over the petition pursuant to
Meanwhile, on June 28, 2024, Spirit Airlines filed a similar petition in the Eleventh Circuit. Since the A4A petition was filed first, the Spirit petition was transferred to this court. See
Frontier Airlines intervened in Spirit‘s case in support of Spirit, we consolidated the A4A and Spirit petitions. We will refer to Spirit and Frontier together as “SF Petitioners” and we list both groups together as simply “Petitioners.”
II. Discussion
Petitioners’ challenges to the Rule fall into three categories. First, they argue that DOT does not have statutory authority under
Second, Petitioners contend that the Rule violates the APA. Under the APA, we must “hold unlawful and set aside agency action” that is “arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law“; “contrary to constitutional right, power, privilege, or immunity“; “in excess of statutory jurisdiction, authority, or limitations, or short of statutory right“; or “without observance of procedure required by law.”
Third, SF Petitioners argue that the Rule violates the First Amendment. Because we ultimately remand the Rule under the APA for further consideration, we decline for now to reach the First Amendment question.
A. Rulemaking Authority
Petitioners argue that DOT exceeded its statutory authority in issuing the Rule because
through case-by-case adjudication. Further, Airline Petitioners contend that even if
We conclude that DOT has the power to make rules under
1. Forfeiture
At the threshold, DOT argues that Petitioners conceded the agency‘s rulemaking authority during the notice-and-comment process and thus forfeited their statutory challenge, citing our decision in BCCA Appeal Group. v. EPA, 355 F.3d 817, 828 (5th Cir. 2003) (“Generally, in considering a petition for review from a final agency order, this court will not consider questions of law which were neither presented to nor passed on by the agency.“).9 In reply, Petitioners argue that City of Seabrook v. EPA, 659 F.2d 1349, 1360 (5th Cir. Unit A Oct. 1981), controls and that they are allowed to raise legal challenges not made before the agency in the first instance.
For two reasons, we agree with Petitioners. First, Seabrook was the first case in this court addressing whether a litigant who challenges agency action on grounds not raised during notice and comment has forfeited the
challenge in court. The Seabrook panel determined that “courts should not generally hold a petitioner estopped from objecting to an agency rule because his specific objection was not made during the ‘notice and comment’ period.” Id. So, to the extent that BCCA contradicts it, we follow Seabrook under the rule of orderliness. See Burge v. Par. of St. Tammany, 187 F.3d 452, 466 (5th Cir. 1999) (“It is a firm rule of this circuit that in the absence of an intervening contrary or superseding decision by this court sitting en banc or by the United States Supreme Court, a panel cannot overrule a prior panel‘s decision.“).
Second, our precedent suggests that forfeiture is most apt when a petitioner raises an arbitrary and capricious challenge before the courts and makes arguments not developed during underlying rulemaking proceedings. Compare, e.g., BCCA Appeal Grp., 355 F.3d at 829 n.10 (arbitrary and capricious challenge forfeited), and Tex. Oil & Gas Ass‘n v. EPA, 161 F.3d 923, 933 n.7 (5th Cir. 1998) (arbitrary and capricious challenge forfeited), with Am. Forest & Paper Ass‘n v. EPA, 137 F.3d 291, 295, 297 (5th Cir. 1998) (statutory authority challenge not forfeited). Here, DOT argues that Petitioners forfeited their challenge to its rulemaking authority under
2. Statutory interpretation
Airline Petitioners and SF Petitioners both argue that DOT lacks power to promulgate regulations like the Rule at issue here. Airline Petitioners focus mostly on the text of
a. Statutory text and framework
Airline Petitioners’ argument centers on their contention that
We agree with DOT that the agency has authority to issue some prescriptive rules under
Another section of Part A,
We are not persuaded by Airline Petitioners’ argument that other Title 49 provisions’ express use of the word “prescribe” forecloses the possibility that Congress authorized prescriptive rulemaking under
Airline Petitioners also elide the word “shall” in
. . . against an act of criminal violence or aircraft piracy.” (emphasis added));
This distinction between mere authorization and affirmative command undermines Airline Petitioners’ argument. Once the distinction becomes clear, it makes perfect sense that
Supreme Court precedent bolsters our conclusion. In American Hospital Ass‘n v. NLRB, 499 U.S. 606, 608 (1991), the Court heard a challenge to an NLRB rule pertaining to bargaining units in the hospital industry. The rule provides that the NLRB will generally recognize only eight bargaining units for employees of acute-care hospitals: registered
nurses, physicians, other professionals, technical employees, skilled maintenance employees, clerical employees, guards, and other nonprofessional employees.
In a unanimous opinion, the Supreme Court upheld the NLRB rule. Id. at 609. First, the Court concluded that the general NLRB rulemaking authority set forth in § 6 of the NLRA “was unquestionably sufficient to authorize the rule at issue in this case unless limited by some other provision in the Act.” Id. at 609-10. This general grant of NLRB authority is analogous to Title 49‘s general grant to the Secretary of Transportation of rulemaking authority. See
The Court then rejected the challenger‘s argument that NLRA § 9(b)‘s “in each case” language limits the grant of general authority in § 6. Am. Hosp. Ass‘n, 499 U.S. at 610. Observing that the requirement that the NLRB “exercise its discretion in every disputed case cannot fairly or logically be read to command the Board to exercise standardless discretion in each case,” the Court held that ”even if a statutory scheme requires individualized determinations, the decisionmaker has the authority to rely on rulemaking to resolve certain issues of general applicability unless Congress clearly expresses an intent to withhold that authority.” Id. at 612 (emphasis
added); see also Lopez v. Davis, 531 U.S. 230, 244 (2001) (reaffirming American Hospital Ass‘n and stating that even if statute required individualized determinations, federal agency was not “required continually to revisit issues that may be established fairly and efficiently in a single rulemaking proceeding” (internal quotation marks and citation omitted)). We think the Supreme Court‘s interpretation of NLRA § 9 is equally applicable to
Airline Petitioners’ attempt to distinguish American Hospital Ass‘n is not persuasive. Airline Petitioners say American Hospital Ass‘n “didn‘t concern legislative rules” and instead concerned an NLRB “policy statement telling regulated parties how it would exercise its enforcement discretion in future adjudications.” But that is not true. The provision challenged in American Hospital Ass‘n is the same type of provision challenged here: a final rule issued pursuant to the APA. Compare Rule, 89 Fed. Reg. at 34620, with Collective-Bargaining Units in the Health Care Industry, 54 Fed. Reg. 16,336, 16,336, 16,347 (Apr. 21, 1989) (publishing “Final rule” at issue in American Hospital Ass‘n pursuant to
Further, Airline Petitioners make a distinction that is largely without a difference. They do not explain how, as a practical matter, a rule issued under the APA is different than a “statement telling regulated parties how [an agency] w[ill] exercise its enforcement discretion in future adjudications.” Assuming the Rule is otherwise lawful in stopping the deceptive or unfair acts of the airline, Airline Petitioners will not automatically be subject to civil penalties upon its effective date. If the Rule
were to take effect and the Secretary suspects that an air carrier is violating it, the Secretary would have discretion to (in other words, he “may“) “investigate and decide” whether the carrier is in fact doing so, and the carrier would be entitled to
In short, Supreme Court precedent and the plain text of the statutory framework containing
b. History of airline deregulation
Petitioners’ Deregulation Act argument centers on that law‘s repeal of the Federal Aviation Act‘s rate-filing requirements. Prior to the Deregulation Act, air carriers were required to file with the Civil Aeronautics Board “tariffs showing all rates, fares, and charges for air transportation” and to keep the tariffs “open to public inspection.” Federal Aviation Act of 1958, tit. IV, § 403(a), 72 Stat. 731, 758. SF Petitioners contend that the abolition of this requirement precludes DOT from issuing the Rule because it “re-
introduc[es] specifically how, when, and where airlines publish rates for specific air transportation services.”
But, importantly, the Rule is a disclosure requirement, not a rate-filing requirement. Under the Rule, air carriers do not have to file rates or tariffs with any government agency; they have to disclose certain fees to consumers “whenever fare and schedule information is provided for flights to, within, and from the United States.” Rule, 89 Fed. Reg. at 34620. Further, as explained above, the Deregulation Act did not abolish the federal government‘s authority to prohibit unfair or deceptive practices or unfair methods of competition in the airline industry. Compare
Petitioners’ argument that the Deregulation
We thus hold as a general matter that DOT has authority to issue rules under
3. Major questions doctrine
Our conclusion is not inconsistent with the major questions doctrine. Airline Petitioners argue that the question of DOT‘s rulemaking authority is of such “vast economic and political significance” that this panel should hesitate before concluding it exists here. West Virginia v. EPA, 597 U.S. 697, 716 (2022) (quotation omitted). We disagree.
The few cases in which the Supreme Court has applied the major questions doctrine instruct lower courts to hesitate before accepting a “colorable textual basis” for agency authority when confronted with structural, separation-of-powers concerns. West Virginia, 597 U.S. at 722. These worries are at their peak when an agency claims power to regulate conduct far beyond the “history and the breadth of the authority” that it has traditionally asserted. See FDA v. Brown & Williamson Tobacco Corp., 529 U.S. 120, 160 (2000).
Those concerns are not present in this case. At bottom, DOT has argued that
The major questions doctrine is not a talisman to be invoked by concerned litigants whenever they are beholden to new administrative requirements. Petitioners concede that they already disclose ancillary fees, through hyperlinks on their websites. Requiring that these disclosures merely move to a more prominent position on the websites is not a vastly significant economic or political issue like student loan forgiveness, see Biden v. Nebraska, 143 S. Ct. 2355, 2374 (2023); vaccine mandates, see Nat‘l Fed‘n of Indep. Bus. v. OSHA, 595 U.S. 109, 122 (2022) (Gorsuch, J., concurring); or healthcare tax credits worth billions of dollars, see King v. Burwell, 576 U.S. 473, 485-86 (2015). In sum, concluding that DOT can issue rules under
4. Nondelegation doctrine
Finally, we reject Airline Petitioners’ argument that if
The Supreme Court has held that there are two ways a delegation of authority to an agency can violate the nondelegation doctrine: (1) Congress failed to provide an “intelligible principle” by which the agency can exercise its authority; or (2) the power granted to the agency is vast beyond measure, akin to the ability to “regulate the entire economy on the basis of no more precise a standard than stimulating the economy by assuring fair competition.” Whitman, 531 U.S. at 474 (internal quotation marks and citation omitted). Under this governing standard, the Supreme Court has approved statutes that delegate extremely broad authority to agencies. See, e.g., Gundy v. United States, 588 U.S. 128, 145-48 (2019) (plurality opinion); Mistretta v. United States, 488 U.S. 361, 372 (1989) (“Congress simply cannot do its job absent an ability to delegate power under broad general directives.“).
Here, the governing statutory scheme provides an intelligible standard to DOT akin to one we recently upheld against a nondelegation challenge. In Mayfield v. DOL, 117 F.4th 611, 621 (5th Cir. 2024), we held that the statutory directive in the Fair Labor Standards Act (“FLSA“) to “eliminate substandard labor conditions that are detrimental to the health, efficiency, and general wellbeing of workers” was sufficient to guide the Department of Labor when it issued the “Minimum Salary Rule,” which raised the minimum income that workers must receive before they are exempt from FLSA protections. Because the FLSA‘s text provided “some guidance” to DOL, there failed to be a nondelegation concern. Id. Here, too, DOT has received guidance from Congress: it can only issue
B. APA Compliance
The APA instructs courts to set aside agency action found to be “without observance of procedure required by law.”
“At the same time . . . an agency may use supplementary data, unavailable during the notice and comment period, that expands on and confirms information contained in the proposed rulemaking and addresses alleged deficiencies in the pre-existing data, so long as no prejudice is shown.” Solite Corp., 952 F.2d at 484 (alterations adopted) (internal quotation marks and citation omitted); see also
Airline Petitioners argue that DOT justified the Rule using cost-benefit data—specifically data from the Rupp study—that was not available during the notice-and-comment period. They contend that this data is central to the Rule rather than merely supplementary.
We agree. DOT‘s reliance on new data here resembles the SEC‘s reliance on materials outside the rulemaking record in Chamber of Commerce v. SEC, 443 F.3d 890 (D.C. Cir. 2006). There, the D.C. Circuit had remanded an SEC rule to the agency because the SEC had not satisfied its obligation under the Investment Company Act of 1940 to determine the economic implications of the rule. Id. at 894.14 On remand, the SEC had declined to reopen the rulemaking record for further comment, concluding that the D.C. Circuit‘s concerns could be addressed by information in the existing record and publicly available information outside the record. Chamber of Com., 443 F.3d at 895. When the case returned to the D.C. Circuit, the court held that the SEC violated the APA by relying on extra-record material that “did not merely supplement the rulemaking record” but rather “suppl[ied] the basic assumptions used by the Commission to establish the range of costs that [regulated parties] are likely to bear in complying with the [rule].” Id. at 901-02. When doing so, the D.C. Circuit clarified that an agency must generally provide an opportunity for comment on “data critical to support a rule” even if the extra-record data is meant to cure a deficiency in the existing record. Id. at 903. A request the SEC had made in its notice of proposed rulemaking for comments and empirical data on costs “did not place interested parties on notice that, in the absence of receiving reliable cost data during the comment period, the Commission would base its cost estimates on . . . extra-record survey data.” Id. at 904.
In this case, like the SEC in Chamber of Commerce, DOT relied on “extra-record material critical to its cost[-benefit] estimates“—here, the Rupp study—“without affording an opportunity for comment.” Id. at 908. The study “did not merely supplement
DOT argues that the Rupp study “merely elaborate[d] on the Department‘s point in the proposed rule that the new disclosure requirements would benefit consumers,” but DOT mischaracterizes its earlier position. In fact, DOT expressly acknowledged at the NPRM stage that it was “not possible to quantify whether the proposed rule would yield benefits that exceed costs,” 2022 RIA at ii, and that the rule would only “yield societal benefits if it leads to reduced deadweight loss . . . or reduced search costs,” NPRM, 87 Fed. Reg. at 63732. It was only after the public comment period closed that DOT, using the Rupp study, justified its conclusion that hundreds of millions of dollars in annualized benefits would result from reduced search costs. 2024 RIA at 24; see id. at 16-18 (taking 46 percent scenario from Rupp study).
DOT cites Chemical Manufacturers Ass‘n v. EPA, in which a number of companies challenged pollution regulations. 870 F.2d at 184. There, the EPA had announced its intent to prepare an economic-impact study relying on an “industry-wide” database containing Dun & Bradstreet data covering the years 1976-81. Id. at 201. After industry members commented that the database was outdated and “did not have adequate data for plants whose sales exceeded $10 million annually,” the EPA announced in the preamble to the final rules that it had relied on newer Dun & Bradstreet data that the EPA did not reveal. Id. The new data was “edited in the same manner” as the older data and was used “to increase the size of the entire data base, to increase the number of plants in the ‘greater than $10 million sales’ category . . . , and to update the data base to cover the period from 1981 to 1986.” Id. The EPA “also relied on data that had earlier been obtained from other sources,” and it “did not supplant its economic-impact study, or replace its original data, but, in response to industry criticisms, updated and expanded one of several data sources.” Id. at 202. We thus concluded that the EPA‘s use of the updated and expanded Dun & Bradstreet data “did not require further notice and comment.” Id.
Here, DOT did not merely “update[]” or “expand[] one of several data sources.” Id. Instead, the agency issued a cost-benefit analysis based in large part on a study outside the administrative record. Unlike the updated Dun & Bradstreet data in Chemical Manufacturers, the Rupp study
Nor may DOT rely solely on its solicitation of comments regarding quantifying costs and benefits or on the fact that at the time of the NPRM, the agency could not say whether its proposal would produce net societal benefits. An agency cannot “generally . . . rely, without affording comment, on data critical to support a rule solely because the existing record contains a deficiency that extra-record data might cure.” Chamber of Com., 443 F.3d at 903.
DOT contends that Petitioners were not prejudiced by its failure to afford public comment on the Rupp study, see
We therefore remand the Rule to DOT so it can afford Petitioners an opportunity to comment on the new data. Vacatur is often the appropriate remedy for unlawful agency action. See Braidwood Mgmt., Inc. v. Becerra, 104 F.4th 930, 952 (5th Cir. 2024), cert. granted, No. 24-316, __ S. Ct. __, 2025 WL 65913 (U.S. Jan. 10, 2025).16 But it is not always required. See, e.g., Tex. Ass‘n of Mfrs., 989 F.3d at 389-90. Because we are leaving the stay of the Rule in place, we see no need to vacate it at this time.17
III. Conclusion
For the above reasons, we REMAND the Rule to DOT. The current Rule shall remain stayed until the matters required above are met.