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Village of Bensenville v. Federal Aviation Administration

July 27, 2004


On Petition for Review of an Order of the Federal Aviation Administration

Before: Edwards and Henderson, Circuit Judges, and Williams, Senior Circuit Judge.

The opinion of the court was delivered by: Karen Lecraft Henderson, Circuit Judge

Argued March 12, 2004

Opinion for the court filed by Circuit Judge HENDERSON.

[T]hat astonishing Chicago -- a city where they are always rubbing the lamp, and fetching up the genii, and contriving and achieving new impossibilities. It is hopeless for the occasional visitor to try to keep up with Chicago -- she outgrows his prophecies faster than he can make them.

- MARK TWAIN, LIFE ON THE MISSISSIPPI 326 (Signet Classic 2001) (1883)

The City of Chicago (Chicago or City) has conceived a $6.6 billion program to modernize O'Hare International Airport, which consistently ranks as one of our nation's busiest and most delayed airports. To fund the initial component of the program -- the preparation of an Environmental Impact Statement (EIS) regarding the modernization program -- Chicago sought and received from the Federal Aviation Administration (FAA) approval to impose a $4.50 facility fee on passengers enplaning at O'Hare. Now three Chicago suburbs, the Villages of Bensenville and Elk Grove and the City of Park Ridge, petition for review of the FAA's decision, alleging that, in approving Chicago's application, it violated the Federal Aviation Act of 1958, 49 U.S.C. §§ 40101 et seq., the Administrative Procedure Act, 5 U.S.C. § 706(2)(A), the National Environmental Policy Act, 42 U.S.C. §§ 4321 et seq., and its own regulations. Because the FAA did not find, as required by statute, that Chicago's passenger facility fee will generate only that revenue necessary to fund the EIS, we grant the municipalities' petition and remand for the FAA's further consideration.


The FAA may authorize an "eligible agency," i.e., a public agency controlling a commercial airport, see 49 U.S.C. § 40117(a)(2), to impose a "passenger facility fee" of from one to three dollars "on each paying passenger of an air carrier" to be used to finance "an eligible airport-related project," id. § 40117(b)(1). An "eligible airport-related project" includes "a project for airport development or airport planning." Id. § 40117(a)(3)(A). Once the FAA determines that an agency's passenger facility fee application is substantially complete, it must advise the public of its decision by letter and give notice in the Federal Register of its intent to rule on the application and invite public comment thereon. See id. § 40117(c)(3); 14 C.F.R. § 158.27(b)-(c). The FAA has 120 days after receiving the application to approve or deny it, in whole or in part. See 49 U.S.C § 40117(c)(4); 14 C.F.R. § 158.27(c)(4).

Before authorizing any passenger facility fee, however, the FAA must make three specific findings based on the application. See 49 U.S.C § 40117(d). The FAA must find that the proposed passenger facility fee will not generate excessive revenue, that is, revenue constituting "more than the amount necessary to finance the specific project." Id. § 40117(d)(1). Additionally, the FAA must find that the specific project is an eligible airport-related project that will maintain or improve the "capacity, safety, or security of the national air transportation system"; reduce airport noise; or improve conditions for competition "between or among air carriers and foreign air carriers." Id. § 40117(d)(2)(A)-(C). Finally, the FAA must find that the application includes an "adequate justification" for the specified project. Id. § 40117(d)(3).

The FAA may also authorize, under a different standard, a higher passenger facility fee of $4.00 or $4.50. Id. § 40117(b)(4). "[I]n the case of an airport that has more than.25 percent of the total number of annual boardings in the United States," the higher fee can be imposed if the FAA finds that the project "will make a significant contribution to improving air safety and security, increasing competition among air carriers, reducing current or anticipated congestion, or reducing the impact of aviation noise on people living near the airport."*fn1 Id. § 40117(b)(4)(A). The FAA approved Chicago's passenger facility fee challenged here under this statutory framework.

In October 2002, Chicago's Department of Aviation (Department) applied to the FAA for authority to impose and use a passenger facility fee of $4.50 to fund a "Runway Formulation Project," the initial component of the City's O'Hare modernization program. Joint Appendix (J.A.) 54, 69, 71-72. In its application, the Department explained that the modernization program would cost $6.6 billion and provide for the "phased reconfiguration of the airfield at O'Hare as well as corresponding expansions and reconfiguration of passenger terminals, access/circulation systems and necessary support facilities." J.A. 71. According to the Department, the "major functional components" of the program included the addition of a new runway, the relocation of three existing runways and the extension of two others. J.A. 71. The Department explained that the program also entailed "the construction of an airside concourse, a western terminal and access roads," acquisition of necessary land and measures to mitigate airport noise. J.A. 71.

As for the Runway Formulation Project itself, the Department explained that it involved the "[c]ompletion of all technical, physical and operational planning, as well as environmental processing" needed for the modernization program, "with a particular focus on the impacts and requirements for" the first phase of the modernization program.*fn2 J.A. 71. The Department then explained in greater detail what the Runway Formulation Project entailed.

This project ... includes, but is not limited to, surveys of existing conditions, including soil borings and geotechnical analyses, utility surveys, environmental surveys, airport-wide drainage design, utility and other underground corridor definition, review and updating design standards, continued refinement of capital cost estimates, project scope definition and other studies as required for processing ...

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