Delta Air Lines, Inc. v. Department of Transportation, American Airlines, Inc., Intervenors

51 F.3d 1065, 311 U.S. App. D.C. 175, 1995 U.S. App. LEXIS 8467, 1995 WL 217049
Court of Appeals for the D.C. Circuit·Decided April 14, 1995·No. 94-1011·Published·Cited by 2 cases

Opinion

ROGERS, Circuit Judge:

The principal issue presented in this petition for review is whether the Department of Transportation failed to comply with its own regulations by not using insulated procedures in awarding two air carrier routes between the United States and London, England. American Airlines and Delta Air Lines sought certificates of public convenience and necessity from the Department for these routes: American requested both routes, proposing service from Raleigh-Durham (N.C.) and Nashville (Tenn.), and Delta sought one route for flights from Salt Lake City (Utah). After the Acting Assistant Secretary for Aviation and International Affairs issued an order to show cause why the routes should not be awarded to American, he awarded both routes to American. Petitioner Delta Air Lines seeks review on the grounds that the Department’s senior career official, rather than the Acting Assistant Secretary, should have made the decision and that “insulated procedures” should have been used to shield the decisionmaker from political influence and limit review by political appointees. Delta also contends that the decision was arbitrary and capricious in its weighing of the relevant criteria. We conclude that the Department’s interpretation of its regulations is reasonable and that its decision was not arbitrary or capricious; accordingly, we deny the petition for review.

*1067 I.

The two London routes at issue became available because British Airways replaced USAir on its Charlotte-London and Baltimore-London routes. The Department, acting through the Acting Assistant Secretary for Aviation and International Affairs, 1 instituted carrier selection proceedings to decide among the three route proposals and by order announced that it would use the show cause procedures described in Subpart Q of its regulations. See 14 C.F.R. §§ 302.1701-.1790. The order explained that show cause procedures would be used because of the need for an expedited decision and the relatively simple nature of the proceeding, since only two carriers were involved.

Following receipt of written submissions from American, Delta, and other parties before the Department, the Acting Assistant Secretary issued a show cause order tentatively selecting American for both routes and rejecting Delta’s application for one route. The show cause order stated a preference for American’s routes because of their superior service benefits to potential passengers and the competition that the routes would create against British Airways’ routes from Charlotte (N.C.) and Baltimore (Md.). Although the Utah Air Travel Commission and the Salt Lake City Corporation (“the Utah parties”) and Delta objected to both the procedures and the result of the show cause order, the Acting Assistant Secretary issued a final order and certificate of public convenience and necessity, awarding the routes to American. In the order, the Acting Assistant Secretary acknowledged that the decision was “close and difficult” but again noted the comparative superiority of American’s routes in both service and competition against foreign carriers. The order also stated that the procedural concerns expressed by Delta and the Utah parties were untimely but, in any event, were meritless because the carrier selection proceeding was not a “hearing case” as defined by departmental regulations and hence was appropriately decided by the Acting Assistant Secretary without the “insulation” of a decision by the senior career official after an evidentiary hearing. Delta seeks review of the Department’s decision. See 49 U.S.C. §§ 41307(2)(B), 46110(a).

II.

In challenging the Department’s use of show cause procedures, Delta concedes that the Department is not required by statute to use insulated procedures in international carrier selection cases. Rather, Delta maintains that the Department violated its regulations by failing to use insulated procedures. In Delta’s view, insulated procedures entail three components: (1) the decision-maker is the senior career official, who is a career civil servant not subject to removal at will; (2) the process includes an oral evidentiary hearing before an Administrative Law Judge (“ALJ”); and (3) review by political appointees is limited to approving the decision or ordering a remand. The Department maintains that its regulations did not require these procedures in the instant case. The court will reverse the Department’s interpretation of its regulations only if it is plainly erroneous or inconsistent with the regulations. 2 Stinson v. United States, — U.S. *1068 -, -, 113 S.Ct. 1913, 1919, 123 L.Ed.2d 598 (1993) (quoting Bowles v. Seminole Rock & Sand Co., 325 U.S. 410, 414, 65 S.Ct. 1215, 1217, 89 L.Ed. 1700 (1945)); United States v. Larionoff, 431 U.S. 864, 872, 97 S.Ct. 2150, 2155, 53 L.Ed.2d 48 (1977) (same); North American Fund Mgt. Corp. v. FDIC, 991 F.2d 873, 875 (D.C.Cir.) (quoting K.N. Energy, Inc. v. FERC, 968 F.2d 1295, 1299 (D.C.Cir.1992)), cert. denied, — U.S. -, 114 S.Ct. 418, 126 L.Ed.2d 364 (1993).

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Delta Air Lines, Inc. v. Department of Transportation, American Airlines, Inc., Intervenors, 51 F.3d 1065, 311 U.S. App. D.C. 175, 1995 U.S. App. LEXIS 8467, 1995 WL 217049 (D.C. Cir. 1995).

51 F.3d 1065 (Delta Air Lines, Inc. v. Department of Transportation, American Airlines, Inc., Intervenors) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

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