DECIDED ON JUNE 12, No UNITED STATES COURT OF APPEALS FOR THE DISTRICT OF COLUMBIA

Transcription

1 USCA Case # Document # Filed: 07/24/2018 Page 1 of 29 DECIDED ON JUNE 12, 2018 No UNITED STATES COURT OF APPEALS FOR THE DISTRICT OF COLUMBIA NATIONAL BUSINESS AVIATION ASSOCIATION, INC., SANTA MONICA AIRPORT ASSOCIATION, INC., BILL S AIR CENTER, INC., KIM DAVIDSON AVIATION, INC., REDGATE PARTNERS, LLC, AND WONDERFUL CITRUS LLC, Petitioners, v. MICHAEL P. HUERTA, ADMINISTRATOR, FEDERAL AVIATION ADMINISTRATION, Respondent. Petition for Review of an Order of the Federal Aviation Administration PETITIONERS PETITION FOR PANEL REHEARING OR REHEARING EN BANC Jolyon ( Jol ) A. Silversmith, Esq. Barbara M. Marrin, Esq. ZUCKERT, SCOUTT & RASENBERGER, LLP th Street, N.W., Suite 700 Washington, D.C (202) jasilversmith@zsrlaw.com bmmarrin@zsrlaw.com July 24, 2018 Richard K. Simon, Esq Decker School Lane Malibu, CA (310) rsimon3@verizon.net

2 USCA Case # Document # Filed: 07/24/2018 Page 2 of 29 TABLE OF CONTENTS Table of Contents Table of Authorities i ii Rule 35(b) Statement 1 Background 2 Argument 4 1) The Panel s Conclusion that the Agreement Is Not a Final Order Is Contrary to Supreme Court and Circuit Precedent 4 2) The Disruptive Implications of the Panel s Decision for Administrative Law an Exception to Judicial Review Are of Exceptional Importance 11 Conclusion 14 Panel Opinion Certificate of Parties and Amici Circuit Rule 26.1 Statement Certificate of Compliance Certificate of Service i

3 USCA Case # Document # Filed: 07/24/2018 Page 3 of 29 TABLE OF AUTHORITIES Cases Abbott Laboratories v. Gardner, 387 U.S. 136 (1967) 13 In re Androgel Antitrust Litigation (No. II), 2014 WL (N.D.Ga. 2014) 10 Ashley v. City of Jackson, 464 U.S. 900 (1983) 10 Bell v. New Jersey, 461 U.S. 773 (1983) 7 Bennett v. Spear, 520 U.S. 154 (1997) 1, 4, 5 Blitz v. Napolitano, 700 F.3d 733 (4th Cir. 2012) 11 Broadcast Music v. CBS, 441 U.S. 1 (1979) 10 California v. DOT, 2016 WL (N.D.Cal. 2016) 12 City of Rochester v. Bond, 603 F.2d 927 (D.C.Cir. 1979) 12, 13 Cleveland County Association v. County Board of Commissioners, 142 F.3d 468 (D.C.Cir. 1998) 1, 9 Coalition for Preservation of Hispanic Broadcasting v. FCC, 893 F.2d 1349 (D.C.Cir. 1990) 9 Domestic Securities v. SEC, 333 F.3d 239 (D.C.Cir. 2003) 1, 6 Elgin v. Treasury Department, 567 U.S. 1 (2012) 11 Fidelity Television v. FCC, 502 F.2d 443 (D.C.Cir. 1974) 6 Friedman v. FAA, 841 F.3d 537 (D.C.Cir. 2016) 14 Friends of Richards-Gebaur Airport v. FAA, 251 F.3d 1178 (8th Cir. 2001) 4 ii

4 USCA Case # Document # Filed: 07/24/2018 Page 4 of 29 Gallup v. FERC, 702 F.2d 1116 (D.C.Cir. 1983) 5 Hawai i County Green Party v. Clinton, 980 F.Supp (D.Haw. 1997) 6 Martin v. Wilks, 490 U.S. 755 (1989) 10 Merritt v. Shuttle, 245 F.3d 182 (2d. Cir. 2001) 8 NRDC v. EPA, 22 F.3d 1125 (D.C.Cir. 1994) 7 NRDC v. SEC, 606 F.2d 1031 (D.C.Cir. 1979) 14 Phoenix v. Huerta, 869 F.3d 963 (D.C.Cir. 2017) 11 Pucciariello v. U.S., 116 Fed. Cl. 390 (2014) 7 Safe Extensions v. FAA, 509 F.3d 593 (D.C.Cir. 2007) 1, 7 Scanwell Laboratories v. Shaffer, 424 F.2d 859 (D.C.Cir. 1970) 14 Southeastern Federal Power Customers v. Geren, 514 F.3d 1316 (D.C.Cir. 2008) 9 Suburban O Hare Commission v. Dole, 603 F.Supp (N.D.Ill. 1985) 8 Suburban O Hare Commission v. Dole, 787 F.2d 186 (7th Cir. 1986) 8 Tur v. FAA, 104 F.3d 290 (9th Cir. 1997) 4 Village of Bensenville v. FAA, 457 F.3d 52 (D.C.Cir. 2006) 6 Statutes 5 U.S.C , U.S.C U.S.C , 11, 12, U.S.C , 5, 7, 8, 9, 10, 11, 12, 14 iii

5 USCA Case # Document # Filed: 07/24/2018 Page 5 of U.S.C U.S.C U.S.C. Chapter Pub. L , 52 Stat Rules Rule 35 1 Articles Daniel Egger, Court of Appeals Review of Agency Action: The Problem of En Banc Ties, 100 Yale L.J. 471 (1990) 13 iv

6 USCA Case # Document # Filed: 07/24/2018 Page 6 of 29 RULE 35(B) STATEMENT Petitioners tenants and users of Santa Monica Municipal Airport ( SMO ), and affiliated associations seek panel rehearing or rehearing en banc of the denial of their petition and of the underlying panel decision holding that the settlement agreement ( Agreement ) at issue was not a final order of the Federal Aviation Administration ( FAA ), and thus was not reviewable under 49 U.S.C (a). Rehearing is warranted because the panel decision conflicts with decisions of the United States Supreme Court and this Circuit, including Bennett v. Spear, 520 U.S. 154, (1997); Domestic Securities v. SEC, 333 F.3d 239, 246 (D.C.Cir. 2003); Safe Extensions v. FAA, 509 F.3d 593, 598 (D.C.Cir. 2007); and Cleveland County Association v. County Board of Commissioners, 142 F.3d 468, (D.C.Cir. 1998), which individually and collectively command that the Agreement be regarded a final agency order. Rehearing further is warranted because the panel s decision implicates an issue of exceptional importance. Although unpublished, if allowed to stand, it demarks a path by which agencies may enter final orders without them being subject to Circuit review, contrary to the intent of Congress and well-established precedent that agency decisionmaking is presumptively reviewable. The panel postulates that the possibility of intervention, if allowed, and then objection to a consent decree is an adequate substitute but it is not. That scenario is 1

7 USCA Case # Document # Filed: 07/24/2018 Page 7 of 29 discretionary rather than by right; subject to a different standard of review; and, most importantly, defies Congress 80-year-old mandate that FAA decisionmaking be reviewed by the expertise of a Circuit Court. Simply put, the panel decision upends basic tenets of administrative law. BACKGROUND SMO is a general aviation airport with a century of history, and is a critical reliever airport for flight operations in the congested Los Angeles basin. For decades, FAA opposed the City s persistent efforts to restrict operations at or close SMO. Until recently, FAA agreed with Petitioners that the City was obligated to operate SMO in compliance with federal obligations the City had assumed, including the maintenance of SMO s full-length runway, until 2023 (based on obligations affiliated with federal grants) and in perpetuity (based on obligations affiliated with a federal deed). See generally Petitioners Brief, 5-6. However, in January 2017, FAA and the City entered into the Agreement, which released all of the City s federal obligations, allowing it to immediately reduce the length of SMO s sole runway and to close SMO altogether after While the Agreement was framed as the operative document, it required the parties to seek a consent decree in the U.S. District Court for the Central District of California ( Central District ) in litigation already pending between FAA and the City. The consent decree was requested the first business day after the Agreement 2

8 USCA Case # Document # Filed: 07/24/2018 Page 8 of 29 was signed and was issued within 48 hours, at which time the Agreement became effective. See generally Petitioners Brief, 7-8. Petitioners sought review in this Court on the basis that in executing the Agreement and permitting the release of the City s federal obligations, FAA failed to comply with mandatory statutory requirements, including the Airport Noise and Capacity Act (49 U.S.C ), which imposes predicates to the adoption of restrictions on airport capacity; Chapter 471 of Title 49, which establishes findings and actions necessary for FAA to release airport obligations; and the National Environmental Policy Act (42 U.S.C. 4321), which requires FAA review of the environmental consequences of runway truncation and airport closure. See generally Petitioners Brief, 1-2. FAA did not seriously contest its non-compliance with many of these and other statutory obligations, but instead emphasized arguments that (i) Petitioners lacked Article III standing because a D.C. Circuit decision could not provide redress and (ii) the Agreement was not reviewable in the D.C. Circuit, with the only avenue of review being to seek the Central District s leave to intervene and object to the consent decree. Petitioners responded, explaining that FAA s arguments were both contrary to law and contrary to logic. The unpublished June 12, 2018 panel decision (2018 WL ) held that Petitioners had Article III standing but also that, because it was conditioned on the consent decree, the 3

9 USCA Case # Document # Filed: 07/24/2018 Page 9 of 29 Agreement was not a final FAA order. Thus the panel did not reach the statutory compliance issues. ARGUMENT 1) The Panel s Conclusion that the Agreement Is Not a Final Order Is Contrary to Supreme Court and Circuit Precedent In the Agreement, FAA authorized the City to close SMO in 2028 and to immediately truncate its runway, through the release of its existing grant- and deed-based federal obligations. There should be no serious contention that, in a vacuum, this outcome only could be achieved via a final agency order releasing those obligations per statutory procedures. Friends of Richards-Gebaur Airport v. FAA, 251 F.3d 1178, 1184 (8th Cir. 2001) (challenge to FAA order releasing airport obligations); Tur v. FAA, 104 F.3d 290, 293 (9th Cir. 1997) ( the settlement agreement Tur entered into with FAA constitutes an order ). Nevertheless, because its release of SMO s obligations was conditioned on entry of a consent decree (and even though that condition was satisfied almost immediately), FAA argued that the Agreement was not a final agency order. But, contrary to FAA s position, the Agreement fulfilled the finality test established by Bennett v. Spear, 520 U.S. 154, 178 (1997) (order is final if it is both consummation of the agency's decisionmaking process and produces direct and appreciable legal consequences ). 4

10 USCA Case # Document # Filed: 07/24/2018 Page 10 of 29 Neither FAA nor the panel disputed that the Agreement concluded FAA s decisionmaking process, the first Bennett requirement. FAA and the panel did opine that the Agreement failed to produce direct and legal appreciable consequences, the second Bennett requirement. But once the consent decree was signed a condition which, notably, existed only because the Agreement stipulated it the Agreement was in full effect. Thus, the Agreement had serious consequences for Petitioners, limiting their access to SMO in the short term, and ultimately eliminating it altogether. Consistent with Gallup v. FERC, 702 F.2d 1116, 1123 (D.C.Cir. 1983), at the time the Agreement was final (and was appealed to this Court) it was both complete and passe[d] out of the control of the authority. To avoid this outcome, FAA postulated and the panel embraced a post hoc theory both novel and wrong: That because the Agreement became effective upon the entry of the consent decree, the consent decree was not merely a trigger for but actually subsumed the Agreement. Thus, the panel concluded, even once the Agreement was effective, Section review was unavailable; Petitioners could only seek relief in the Central District despite established precedent that a non-party to a consent decree cannot be required to intervene to protect its rights. No authority was cited for the above proposition which effectively means that an agency may take an action that is substantively final, but for which there is 5

11 USCA Case # Document # Filed: 07/24/2018 Page 11 of 29 nevertheless no agency-issued final order subject to judicial review and there is none. The panel invoked Village of Bensenville v. FAA, 457 F.3d 52 (D.C.Cir. 2006), but that case concerned a letter of intent an odd creature which set a schedule for possible funding for airport projects but did not embody any final plans and did not obligate FAA to do anything. Id., 68; 49 U.S.C (e)(3). In contrast, the Agreement embodied FAA s final decision; affirmatively required FAA to seek a consent decree (JA792, AR1944); and actually, and almost immediately, became effective, imposing legal consequences. Nor does Bensenville remotely address much less justify the proposition that because the entry of the consent decree made the Agreement effective, the consent decree itself became the operative document. This Circuit has established that agency action may be final even if it remains subject a condition and in so doing, this Circuit has never suggested that, if fulfilled, the condition itself would comprise the agency s final action. See, e.g., Domestic Securities v. SEC, 333 F.3d 239, 246 (D.C.Cir. 2003) (holding agency action final, despite implementation condition); Fidelity Television v. FCC, 502 F.2d 443, 448 (D.C.Cir. 1974) (licensing decision held final despite outstanding issues in parallel proceeding). See also Hawai i County Green Party v. Clinton, 980 F.Supp. 1160, 1165 (D.Haw. 1997) (although spacecraft launch required presidential 6

12 USCA Case # Document # Filed: 07/24/2018 Page 12 of 29 authorization, NASA s actions were deemed final for judicial review purposes when agency decided to proceed and seek authorization). As a general proposition this Circuit has emphasized that under Section 46110, an order must be given an expansive definition in determining finality. See, e.g., Safe Extensions v. FAA, 509 F.3d 593 (D.C.Cir. 2007) (describing as absurd FAA claim that advisory circular which had clear legal consequences of enormous significance was not final). Likewise, the Supreme Court cautioned that [o]ur cases have interpreted pragmatically the requirement of administrative finality, focusing on whether judicial review at the time will disrupt the administrative process. Bell v. New Jersey, 461 U.S. 773, 779 (1983). Thus, an agency may not avoid judicial review premised on a self-serving choice of form. NRDC v. EPA, 22 F.3d 1125, (D.C.Cir. 1994). Yet that is exactly what the panel s decision has allowed FAA to do, in irreconcilable conflict with prior decisions. FAA itself routinely opposes challenges to its orders that are filed in a district court, and insists that circuit courts have exclusive jurisdiction, including over settlement-related matters. See, e.g., Pucciariello v. U.S., 116 Fed. Cl. 390, 407 (2014) (complaint alleging FAA breach of settlement agreement held within scope of Section 46110). A sister circuit, when confronted with a similar scenario (in which FAA specifically endorsed circuit court jurisdiction), was unequivocal: 7

13 USCA Case # Document # Filed: 07/24/2018 Page 13 of 29 The existence of a consent decree did not override Section Suburban O Hare Commission v. Dole, 787 F.2d 186, (7th Cir. 1986) ( [i]f a decision of an administrative agency is based, in substantial part, on a statutory provision providing for exclusive review by a court of appeals, then the entire proceeding must be reviewed by a court of appeals ). See also Suburban O Hare Commission v. Dole, 603 F.Supp. 1013, 1027 (N.D.Ill. 1985) ( assertion of the defendants Consent Decree violations cannot deprive the Court of Appeals of its exclusive jurisdiction conferred by statute to review the FAA decision at issue in this case ). Here, in an effort to avoid a substantive ruling on the Agreement which facially is at odds with statutory requirements FAA insisted that the proper forum was actually a district court. This unexplained and unjustified reversal of agency position should not be countenanced. As a sister court has recognized, [b]y its terms, Section 46110(c) precludes federal district courts from setting aside any part of FAA final orders or hearing claims inescapably intertwined with such orders. Merritt v. Shuttle, 245 F.3d 182, 187 (2d. Cir. 2001). Thus, the Central District is not the exclusive (or even appropriate) place for Petitioners challenge 8

14 USCA Case # Document # Filed: 07/24/2018 Page 14 of 29 to FAA s authority to enter into the Agreement. Coalition for Preservation of Hispanic Broadcasting v. FCC, 893 F.2d 1349, 1356 (D.C.Cir. 1990). 1 The panel decision also directly conflicts with the basic principle that the terms of a settlement even one incorporated into a consent decree do not and cannot bind third parties, and that those third parties cannot be required to litigate their rights in the same proceeding but rather may vindicate them as otherwise authorized. This Court made that clear in Cleveland County Association v. County Board of Commissioners, 142 F.3d 468, (D.C.Cir. 1998) ( unless one is joined as a party to an action, one is generally not bound by the result, no matter whether that result is reached voluntarily by the parties or imposed upon them by the court ), as have other courts: [A] consent judgment could not have preclusive effect on nonparties. [A] consent judgment, even one entered at the behest of the [Department of Justice], does not immunize the defendant from liability for actions, including those contemplated by the decree, that violate the rights of non-parties. 1 The theoretical opportunity to intervene and object to the consent decree (slip op., 3) also would be no substitute for judicial review of the Agreement. A challenge under Section is by right; intervention and objection is at the discretion of a district court. The standard of review also differs. Under Section 46110, the compliance of a settlement with statute is reviewed de novo. Southeastern Federal Power Customers v. Geren, 514 F.3d 1316, 1321 (D.C.Cir. 2008). Objections to a consent decree are heard under a deferential abuse of discretion standard. 9

15 USCA Case # Document # Filed: 07/24/2018 Page 15 of 29 In re Androgel Antitrust Litigation (No. II), 2014 WL , *8 (N.D.Ga. 2014), quoting Broadcast Music v. CBS, 441 U.S. 1, 13 (1979). See generally Petitioners Brief, 46 n.20, 50. Indeed, the denial of the rights of third parties affected by, but strangers to, a consent decree implicates constitutional due process. As then-justice Rehnquist explained in a dissent from the denial of certiorari in Ashley v. City of Jackson, 464 U.S. 900, 902 (1983): This principle should apply with all the more force to a consent decree, which is little more than a contract between the parties, formalized by the signature of a judge. The central feature of any consent decree is that it is not an adjudication on the merits. The decree may be scrutinized by the judge for fairness prior to his approval, but there is no contest or decision on the merits of the issues underlying the lawsuit. Such a decree binds the signatories, but cannot be used as a shield against all future suits by nonparties seeking to challenge conduct that may or may not be governed by the decree. 2 In rejecting review of the Agreement under Section 46110, the panel s decision allows use of just such a shield by FAA its inclusion of a consent decree as a vehicle in its decisionmaking to deprive Petitioners of access to an independent forum to challenge FAA s decision, in contravention of this basic doctrine. 2 Rehnquist s reasoning was subsequently adopted in Martin v. Wilks, 490 U.S. 755, (1989), the majority concluding that non-parties are neither bound by consent decrees nor obligated to intervene to vindicate their rights, but retain the right to pursue their own claims. 10

16 USCA Case # Document # Filed: 07/24/2018 Page 16 of 29 Accordingly, in holding that there was no FAA final order for Circuit review, the panel decision is directly at odds with binding precedent, and should be reheard. 2) The Disruptive Implications of the Panel s Decision for Administrative Law an Exception to Judicial Review Are of Exceptional Importance The panel decision not only is inconsistent with precedent, but implicates an issue of exceptional importance: It would significantly restructure how agency decisions are susceptible to review. For more than 80 years, Congress has required aviation-related final orders to be appealed to a circuit court a direct review requirement which pre-dates FAA itself. See, e.g., Civil Aeronautics Act of 1938, Pub. L , 52 Stat. 973, As sister courts have recognized, the purpose of Section and its predecessors is palpable: Congress clearly expressed its intention that any legal challenge to a order be brought in the first instance in a court of appeals. Blitz v. Napolitano, 700 F.3d 733, 740 (4th Cir. 2012), citing Elgin v. Treasury Department, 567 U.S. 1, 9 (2012). The effect of the panel s decision in the context of Petitioners NEPA claim is instructive. FAA did not dispute that in allowing runway truncation and airport closure, it neither prepared any analysis of the environmental effects of attendant aircraft relocations nor documented any exemption therefrom. And until now, this Circuit considered it self-evident that claims of FAA non-compliance with NEPA 11

17 USCA Case # Document # Filed: 07/24/2018 Page 17 of 29 were to be heard via Section See, e.g., Phoenix v. Huerta, 869 F.3d 963 (D.C.Cir. 2017); City of Rochester v. Bond, 603 F.2d 927, 936 (D.C.Cir. 1979). Indeed, the numerous challenges to FAA actions implicating environmental issues have, since the enactment of NEPA in 1970, been heard only by circuit courts, with a possible exception overridden by a 2003 amendment to Section to clarify that jurisdiction for review of all orders issued by the Administrator of the FAA, pertaining to 49 U.S.C. Part B Airport Development and Noise, now lies in the United States Court of Appeals. California v. DOT, 2016 WL , *5 (N.D.Cal. 2016). The decision here uniquely holds that Petitioners should have challenged FAA s compliance with NEPA before a district court. While the panel may have been concerned to uphold the integrity of the Central District s consent decree, the outcome cannot be reconciled either with Congress intent or with decades of precedent. On this basis alone, the decision proposes a marked departure from established law and creates significant future uncertainty. Direct review statutes collectively have more than a century of history, starting from at least the 1914 Federal Trade Commission Act (15 U.S.C. 45(c)). They embody the judgment of Congress that designated agency actions should be reviewed in the first instance through the expertise of the circuit courts: Statutes mandating direct circuit court review of agency action indicate a congressional preference for more certain judicial review 12

18 USCA Case # Document # Filed: 07/24/2018 Page 18 of 29 than that expressed by the APA. The inclusion of original circuit court review provisions in an agency's enabling statute also indicates that Congress sought to provide parties affected by that agency's actions prompt and final resolution of legal questions that, until settled, may chill the activities of litigants and similarly situated third parties. Daniel Egger, Court of Appeals Review of Agency Action: The Problem of En Banc Ties, 100 Yale L.J. 471, 485 (1990). See also City of Rochester, 603 F.2d at 936 ( [t]he rationale for statutory review is that coherence and economy are best served if all suits pertaining to designated agency decisions are segregated in particular courts ). The implications of the panel s decision thus are not limited to FAA (or NEPA), but would allow numerous agencies to circumvent the intent of Congress by redirecting challenges designated for circuit courts by direct review statutes to district courts. And even agencies subject to Administrative Procedure Act ( APA ; 5 U.S.C. 704)-based review procedures in district courts would be motivated to similarly utilize consent decrees to render legal challenges subject to discretionary and deferential review procedures, rather than the mandatory and de novo review Congress intended under the APA. The basic presumption that all final orders, however creatively framed by an agency, are subject to direct judicial review should be vindicated. See, e.g., Abbott Laboratories v. Gardner, 387 U.S. 136, 140 (1967) ( judicial review will not be cut off unless there is persuasive reason to believe that such was the purpose of 13

19 USCA Case # Document # Filed: 07/24/2018 Page 19 of 29 Congress ); Scanwell Laboratories v. Shaffer, 424 F.2d 859, 874 (D.C.Cir. 1970) (agencies may not opt to act illegally. When the bounds of discretion give way to the stricter boundaries of law, administrative discretion gives way to judicial review ); NRDC v. SEC, 606 F.2d 1031, 1043 (D.C.Cir. 1979) (the strong presumption of reviewability can be rebutted only by a clear showing that judicial review would be inappropriate ). FAA in this case insisted that it should and can do exactly the opposite negotiate an agreement which circumvents mandatory statutory requirements, and yet be immunized from equally-mandated circuit court review. This Court has been emphatic that FAA cannot impede judicial review via procedural manipulation. Friedman v. FAA, 841 F.3d 537, 542 (D.C.Cir. 2016). But regrettably, the panel gave insufficient attention to the consequences that necessarily follow from its per curiam acceptance of FAA s contention that Section is inapplicable to Petitioners claims. Because FAA s proposition is not only contrary to precedent, but of exceptional importance, it should be reheard, to ensure that judicial review and court oversight of agency decisionmaking continues to be available as intended by Congress. CONCLUSION The panel erred in ruling that the Agreement was not a final FAA order and as a consequence was not reviewable under 49 U.S.C (a). Accordingly, 14

20 USCA Case # Document # Filed: 07/24/2018 Page 20 of 29 the panel or full Circuit should revisit the June 12, 2018 decision; reverse its holdings regarding finality; and enable the panel to reach the substantive allegations of the underlying petition, namely that the releases at issue do not comply with mandatory statutory requirements and are thus invalid. Respectfully submitted, ZUCKERT, SCOUTT & RASENBERGER, LLP /s/ Jolyon A. Silversmith Dated: July 24, 2018 JOLYON ( JOL ) A. SILVERSMITH, Esq. D.C. Circuit Bar no BARBARA M. MARRIN, Esq. D.C. Circuit Bar no th Street, N.W., Suite 700 Washington, D.C (202) jasilversmith@zsrlaw.com bmmarrin@zsrlaw.com RICHARD K. SIMON, Esq. D.C. Circuit Bar no Decker School Lane Malibu, CA (310) rsimon3@verizon.net Counsel for Petitioners 15

21 USCA Case # Document # # Filed: 07/24/ /12/2018 Page 211 of 429 United States Court of Appeals FOR THE DISTRICT OF COLUMBIA CIRCUIT No September Term, 2017 FILED ON: JUNE 12, 2018 NATIONAL BUSINESS AVIATION ASSOCIATION, INC., ET AL., PETITIONERS v. MICHAEL P. HUERTA, ADMINISTRATOR AND FEDERAL AVIATION ADMINISTRATION, RESPONDENTS CITY OF SANTA MONICA, INTERVENOR On Petition for Review of an Order of the Federal Aviation Administration Before: TATEL, WILKINS and KATSAS, Circuit Judges. J U D G M E N T The court considered this petition for review on the record and on the briefs and oral arguments of the parties. The court has given the issues full consideration and determined that they do not warrant a published opinion. See Fed. R. App. P. 36; D.C. Cir. R. 36(d). For the reasons stated below, it is ORDERED and ADJUDGED that the petition for review be denied. This case arises from longstanding disputes between the Federal Aviation Administration and the City of Santa Monica, California regarding the Santa Monica Municipal Airport. The City owns and operates the airport, but has long wished to close it. In these disputes, the FAA at times has maintained that deed restrictions require the City to operate the airport in perpetuity, and that grant conditions require the City to operate the airport through According to the City, the deed restrictions expired decades ago, and the grant conditions expired in To adjudicate the deed issue, the City brought a quiet-title action against the United States in the District Court for the Central District of California. To adjudicate the scope of the grant conditions, the City filed a petition for review of an adverse FAA decision in the Court of Appeals for the Ninth Circuit.

22 USCA Case # Document # # Filed: 07/24/ /12/2018 Page 222 of 429 While both actions remained pending, the FAA and the City undertook to settle their differences. On January 30, 2017, the parties signed a document styled Settlement Agreement/Consent Decree. Under the terms of that document, the City would operate the airport through 2028, but could close the airport in Moreover, the City could immediately shorten the airport s sole runway. By its terms, the January 30 agreement was conditioned upon further judicial action in the quiet-title case. Specifically, the parties promised to present the agreement to the district court for entry as a Consent Decree (JA 792), and the agreement would become effective only upon the date the [district court] enter[ed] an order approving it (JA 800). Critically, without such a court order, the agreement would be of no force and effect and [could] not be used by either Party for any purpose whatsoever. JA 795. On February 1, 2017, the district court found the proposed agreement to be fair, reasonable and adequate to all concerned. JA 818 (quotation marks omitted). It therefore sign[ed] and approv[ed] the Order/Consent Decree. Id.; see also JA 822 (signing stipulation as order); JA 833 (signing Settlement Agreement/Consent Decree as order). Petitioners are businesses and trade groups who want the airport to continue operating indefinitely and without a shortened runway. They contend that the arrangement summarized above violated various federal laws, including the Surplus Property Act, the Airport Noise and Capacity Act, and the National Environmental Policy Act. Petitioners do not dispute that the February 1 consent decree a judicial order entered by the Central District of California is reviewable only in the Ninth Circuit. Yet petitioners seek to disentangle that decree from the preliminary agreement that the parties reached on January 30, which they contend is final agency action reviewable in this Court under 49 U.S.C (a). That statute provides for judicial review in the courts of appeals of an order issued by... the [FAA] Administrator. In a line of settled decisions, this Court has held that only final orders are reviewable under 46110(a). See, e.g., Ass n of Flight Attendants-CWA v. Huerta, 785 F.3d 710, 716 (D.C. Cir. 2015). The FAA argues that the petition should be dismissed for two reasons. First, it contends that petitioners lack Article III standing because a decision invalidating the agreement, but leaving the consent decree undisturbed, would not redress petitioners alleged injuries. Second, the FAA contends that the agreement does not constitute final agency action reviewable under 46110(a). We disagree with the first contention, but agree with the second. The redressability prong of Article III standing requires a likelihood that the requested relief will redress the alleged injury of the party invoking federal-court jurisdiction. Steel Co., 523 U.S. at 103. The plaintiff or petitioner must show that a favorable decision would result in a significant increase in the likelihood that [it] would obtain relief. Utah v. Evans, 536 U.S. 452, 464 (2002). It need not show to a certainty that a favorable decision will redress its injury. Teton Historic Aviation Found. v. U.S. Dep t of Defense, 785 F.3d 719, 726 (D.C. Cir. 2015) (quotation marks and brackets omitted). There is at least a significant possibility that a decision by this Court invalidating the January 30 agreement also would unravel the February 1 consent decree, thus redressing any harms flowing from both. To be sure, the Central District of California is not bound by this Court s decisions as a matter of precedent. However, if the settlement agreement were final agency action (which we address below), then this Court would have exclusive jurisdiction to determine its 2

23 USCA Case # Document # # Filed: 07/24/ /12/2018 Page 233 of 429 lawfulness. See 49 U.S.C (c). Moreover, if the settlement agreement did violate federal law (which we assume for purposes of determining redressability), then so too would a consent decree incorporating its terms. And under Ninth Circuit precedent binding on the Central District, courts cannot immunize agency actions from judicial review by incorporating them into consent decrees. See, e.g., Conservation Nw. v. Sherman, 715 F.3d 1181, 1187 (9th Cir. 2013). Finally, even if the Central District found unpersuasive a ruling by this Court that the settlement agreement was final agency action reviewable only by this Court, it still might well find persuasive this Court s analysis of the merits. After all, the objections pressed here by petitioners were not before the Central District when it entered the consent decree. For these reasons, we conclude that petitioners alleged injuries are redressable, and petitioners thus have Article III standing. However, the settlement agreement is not a final order of the FAA, and therefore is not reviewable under 49 U.S.C (a). [I]n order for us to entertain a petition under this section, the challenged order must possess the quintessential feature of agency decisionmaking suitable for judicial review: finality. Ass n of Flight Attendants, 785 F.3d at 716 (quotation marks omitted). An order is final if it both ends the agency s decisionmaking process and produces direct and appreciable legal consequences. Bennett v. Spear, 520 U.S. 154, (1997) (quotation marks omitted). Here, the preliminary agreement that the parties reached on January 30, as distinct from the consent decree that the district court entered on February 1, produced no legal consequences at all. To the contrary, the agreement did not become effective until the decree was entered (JA 800) and, absent that decree, the agreement would have been of no force and effect whatsoever (JA 795). At most, the agreement reflected the FAA s intent to be bound by subsequent judicial action that the agency was inviting. In that respect, it resembles the nonbinding letter of intent that we held not to constitute final FAA action in Village of Bensenville v. FAA, 457 F.3d 52, (D.C. Cir. 2006). Petitioners invite us nonetheless to deem final the January 30 agreement, lest the FAA escape judicial review through what petitioners describe as procedural trickery. Pet. Br However, there is nothing unusual or untoward about parties seeking to settle litigation through a consent decree. Moreover, the consent decree was itself reviewable in the Ninth Circuit. We recognize that two of the petitioners had previously been denied intervention in the quiet-title action on the ground that the FAA adequately protected their interests. However, none of the petitioners sought intervention after the Settlement Agreement/Consent Decree created fissures between the FAA, which now wants to compromise, and petitioners, who want to press for the airport to remain open in perpetuity. Moreover, another petitioner was seeking intervention in the Ninth Circuit appeal regarding the grant conditions, yet it raised no objection when the appeal was dismissed as provided for in the decree. Petitioners further object that because the quiet-title action was limited to a dispute about certain deed restrictions, they could not have raised their current arguments in that case. Petitioners are mistaken; the Ninth Circuit repeatedly has held that intervenors may challenge consent decrees entered into by federal agencies as violating any applicable statutes or regulations. See, e.g., Conservation Nw., 715 F.3d at ; Turtle Island Restoration Network v. U.S. Dep t of Commerce, 672 F.3d 1160, (9th Cir. 2012). Petitioners further contend that the Settlement Agreement/Consent Decree, by its terms, makes the January 30 agreement stand on its own bottom, separate and apart from the February 1 consent decree. For example, petitioners note that only some provisions of the decree are enforceable by injunction, whereas the parties expressly reserved the right to judicially enforce 3

24 USCA Case # Document # # Filed: 07/24/ /12/2018 Page 244 of 429 any terms or provisions of this Agreement. JA 799. But that provision cannot be read to exclude certain provisions of the agreement from the consent decree, for the very next provision says that all of the terms of this Agreement shall be memorialized and embodied in a consent decree. Id. Moreover, the Settlement Agreement/Consent Decree channels all enforcement disputes under the Agreement into the Central District, as the court having jurisdiction over the Consent Decree, thus confirming that the two operate as a unified whole. JA 795. The sole exception involves terms related to airport curfews, which the parties specified would not be affected by this Agreement, and for which final FAA decisions thus would remain within the exclusive jurisdiction of the applicable U.S. Court of Appeals. JA 797. No similar exception governs the terms that petitioners seek to challenge those involving runway length (JA ) and the contested deed restrictions and grant conditions (JA 798). Along similar lines, petitioners highlight a provision of the Settlement Agreement/Consent Decree stating that the Consent Decree... shall expire on December 31, 2028, but expiration of the Decree shall have no effect on the terms or condition[s] of this Agreement, which terms or conditions shall survive the expiration of the Decree. JA 795. We interpret this language to mean simply that the terms of the agreement, as embodied in the consent decree, will retain their force after Given the terms of the deal, it made perfect sense for active judicial supervision to end after 2028, when the City will no longer have any obligation to operate the airport. And it likewise made perfect sense to confirm that, after 2028, the FAA could no longer press Santa Monica to keep the airport open. Unlike the petitioners, we see all of this as flowing most proximately from the terms of the consent decree, without which none of these terms would ever have come into effect. For these reasons, we deny the petition. * * * * * Pursuant to D.C. Circuit Rule 36(d), this disposition will not be published. The clerk is directed to withhold issuance of the mandate until seven days after resolution of any timely petition for rehearing or rehearing en banc. See Fed. R. App. P. 41(b); D.C. Cir. R. 41. FOR THE COURT: Mark J. Langer, Clerk BY: /s/ Ken Meadows Deputy Clerk 4

25 USCA Case # Document # Filed: 07/24/2018 Page 25 of 29 CERTIFICATE OF PARTIES AND AMICI The parties are Petitioners National Business Aviation Association, Inc., Santa Monica Airport Association, Inc., Wonderful Citrus LLC, Bill s Air Center, Inc., Kim Davidson Aviation, Inc., and Redgate Partners, LLC; Respondent Michael P. Huerta, Administrator, Federal Aviation Administration ( FAA ); Intervenor the City of Santa Monica, California ( City or Santa Monica ); and Amici in support of the Petitioners, Aircraft Owners and Pilots Association, Inc. and General Aviation Manufacturers Association, Inc.

26 USCA Case # Document # Filed: 07/24/2018 Page 26 of 29 CIRCUIT RULE 26.1 STATEMENT The National Business Aviation Association is an aeronautical trade association, incorporated in the District of Columbia, and has no parent companies; no publicly-held company has a 10% or greater ownership interest. The Santa Monica Airport Association is an aeronautical trade association, incorporated in California, and has no parent companies; no publicly-held company has a 10% or greater ownership interest. Wonderful Citrus is a Delaware limited liability company that utilizes Santa Monica Municipal Airport in support of its business and is a wholly-owned subsidiary of Wonderful Citrus Holdings LLC which is in turn a wholly-owned subsidiary of The Wonderful Company LLC; no publicly-held company has a 10% or greater ownership interest. Bill s Air Center is a California corporation that offers aeronautical services at Santa Monica Municipal Airport and has no parent companies; no publicly-held company has a 10% or greater ownership interest. Kim Davidson Aviation is a California corporation that offers aeronautical services at Santa Monica Municipal Airport and has no parent companies; no publicly-held company has a 10% or greater ownership interest.

27 USCA Case # Document # Filed: 07/24/2018 Page 27 of 29 Redgate Partners is a California limited liability company that utilizes Santa Monica Municipal Airport in support of its business and has no parent companies; no publicly-held company has a 10% or greater ownership interest.

28 USCA Case # Document # Filed: 07/24/2018 Page 28 of 29 CERTIFICATE OF COMPLIANCE I certify that this petition complies with the type requirements of Rules 35 and 40 because, excluding the parts of the document exempted by the rules, it contains 3,319 words, and was prepared in a proportionally spaced typeface using Microsoft Word 2013 in 14-point Times New Roman. /s/ Jolyon A. Silversmith JOLYON ( JOL ) A. SILVERSMITH, Esq. ZUCKERT, SCOUTT & RASENBERGER, LLP th Street, N.W., Suite 700 Washington, D.C (202) jasilversmith@zsrlaw.com

29 USCA Case # Document # Filed: 07/24/2018 Page 29 of 29 CERTIFICATE OF SERVICE I hereby certify that on this 24th day of July 2018, I electronically filed the foregoing with the Clerk of the Court for the United States Court of Appeals for the D.C. Circuit using the appellate CM/ECF system. Service was accomplished on all counsel through the CM/ECF system. /s/ Jolyon A. Silversmith JOLYON ( JOL ) A. SILVERSMITH, Esq. ZUCKERT, SCOUTT & RASENBERGER, LLP th Street, N.W., Suite 700 Washington, D.C (202) jasilversmith@zsrlaw.com