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Federal Express Corporation v. Mineta

July 02, 2004

FEDERAL EXPRESS CORPORATION, PETITIONER
v.
NORMAN Y. MINETA, SECRETARY OF TRANSPORTATION, AND THE DEPARTMENT OF TRANSPORTATION, RESPONDENTS KITTY HAWK AIR CARGO, INC. AND EMERY AIR FREIGHT CORPORATION, INTERVENORS



On Petitions for Review of Orders of the United States Department of Transportation

Before: Ginsburg, Chief Judge, Edwards, Circuit Judge, and Williams, Senior Circuit Judge.

The opinion of the court was delivered by: Ginsburg, Chief Judge

Argued October 17, 2003

Five air cargo carriers, Federal Express, Emery Air Freight, Kitty Hawk Aircargo, Polar Air Cargo, and United Parcel Service, petition for review of four rules promulgated by the Department of Transportation to govern the award of compensation to air carriers under the Air Transportation Safety and System Stabilization Act, §§ 101 et seq., 49 U.S.C. § 40101 note. The Carriers argue the four rules -- the offset rule, two rebuttable accounting presumptions, and a procedure for the recoupment of excess payments -- are inconsistent with the terms of the Stabilization Act and were promulgated without an opportunity for comment, in violation of the Administrative Procedure Act. For the reasons set forth below, we deny the petition for review with respect to the APA claims and the offset rule, and dismiss the petition as unripe with respect to statutory challenges to the two accounting rules and the recoupment procedure.

I. Background

On September 11, 2001, as terrorists hijacked four commercial passenger aircraft, the Federal Aviation Administration issued a "ground stop order" halting all civilian air traffic within the United States' airspace. That order was lifted in large part on September 14, 2001, but remained in effect at certain airports, such as Ronald Reagan National Airport, until the late fall of 2001 (a detail we may ignore for the purpose of analysis).

On September 22, 2001 the Congress enacted and the President signed into law the Air Transportation Safety and System Stabilization Act in order to compensate air carriers for the losses they incurred from the ground stop order while it was in effect, and for the losses they would incur through December 31, 2001 as a direct result of the attacks. To that end, § 101(a)(2) of the Act authorizes the President to "[c]ompensate air carriers in an aggregate amount" of $5 billion for:

(A) direct losses incurred beginning on September 11, 2001 ... as a result of any Federal ground stop order issued by the Secretary of Transportation or any subsequent order which continues or renews such a stoppage; and

(B) the incremental losses, incurred beginning September 11, 2001, and ending December 31, 2001 ... as a direct result of such attacks.

In the case of a cargo carrier, however, the amount of compensation is capped at the lesser of "the amount of such air carrier's direct and incremental losses described in section 101(a)(2)," § 103(b)(1), or a percentage of $500 million equal to that carrier's percentage of the "total revenue ton miles" of all cargo carriers for the last quarter for which data are available, § 103(b)(2)(B). Section 103(a) authorizes the Secretary of Transportation to "audit" the documents the air carrier submits in order to determine the carrier's entitlement to compensation.

By the end of September 2001 the DOT had compensated air carriers to the extent of approximately $2.3 billion. The petitioning Carriers, each of which received some compensation, are now pursuing before the Department administrative appeals regarding the exact amounts to which they are entitled.

Over the next year the DOT issued four cumulative and superceding "Final Rules" to govern the award of compensation to air carriers. See Procedures for Compensation of Air Carriers, 66 Fed. Reg. 54,616 (October 29, 2001) (First Final Rule), 67 Fed. Reg. 250 (January 2, 2002) (Second Final Rule), 67 Fed. Reg. 18,468 (April 16, 2002) (Third Final Rule), and 67 Fed. Reg. 54,058 (August 20, 2002) (Fourth Final Rule). The First Final Rule was promulgated, pursuant to the good cause exception of the APA, 5 U.S.C. § 553(b)(B), without prior notice or opportunity for comment, which the Department deemed "impractical, unnecessary, and contrary to the public interest" in view of "the need to move quickly to provide compensation to air carriers." 66 Fed. Reg. at 54,620/1-2. The DOT nonetheless invited public comments after the fact, see id. at 54,616/1, and it responded to them when it issued the Second Final Rule. See 67 Fed. Reg. at 250/1-2. Although the Second Final Rule was also made "immediately effective," the DOT again sought post hoc comments from the public. See id. at 255/1.

The Third Final Rule introduced the four provisions as to which the Carriers now petition for review. The "offset rule" provides

[If] a carrier experienced better-than-forecasted total results for [the period September 11 through December 31, 2001, then] the actual results for the period after the Federal ground stop order was lifted ... must be offset against direct ...


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