Northwest Airlines, Inc. v. Goldschmidt

• Decision Date: 02 April 1981
• Docket Number: No. 80-2015,80-2015
• Citation: 645 F.2d 1309
• Parties: 11 Envtl. L. Rep. 20,845 NORTHWEST AIRLINES, INC., Petitioner, v. Neil E. GOLDSCHMIDT, Secretary of the Department of Transportation et al., Respondents, and Pan American Airways et al., Intervenors.
• Court: U.S. Court of Appeals — Eighth Circuit

Page 1309

645 F.2d 1309

11 Envtl. L. Rep. 20,845

NORTHWEST AIRLINES, INC., Petitioner, v. Neil E. GOLDSCHMIDT, Secretary of the Department of

Transportation et al., Respondents,

and

Pan American Airways et al., Intervenors.

No. 80-2015.

United States Court of Appeals,

Eighth Circuit.

Submitted Jan. 15, 1981.

Decided April 2, 1981.

Ronald D. Eastman (argued), Jeffrey D. Komarow, Barry S. Spector, Cadwalader, Wickersham & Taft, Washington, D. C., for petitioner Northwest Airlines, Inc. and intervenors.

Gerry Levenberg, P.C. (argued), and Jeffrey S. Christie, Van Ness, Feldman & Sutcliffe, A Professional Corp., Washington, D. C., for New York Air.

Thomas G. Allison, Gen. Counsel, U. S. Dept. of Transportation (argued), Kenneth Weinstein, Trial Atty., U. S. Dept. of Transportation, Washington, D. C., for respondents.

Before BRIGHT, McMILLIAN and ARNOLD, Circuit Judges.

McMILLIAN, Circuit Judge.

Northwest Airlines, Inc. (Northwest) brought this action for judicial review of Special Federal Aviation Regulation 43 (SFAR 43), 45 Fed.Reg. 72637 (1980) (to be codified at 14 C.F.R. Part 93), issued on October 29, 1980, by the Secretary of the Department of Transportation (the Secretary) under § 307(a), (c) of the Federal Aviation Act of 1958 (the FA Act), as amended, 49 U.S.C. § 1348(a), (c). SFAR 43 temporarily allocates Instrument Flight Rules (IFR) reservations for takeoffs and landings ("slots") at Washington, D. C.'s National Airport (National). Other carriers and interested groups have appeared as intervenors. ¹ The Civil Aeronautics Board (CAB) has filed an amicus brief in support of the Secretary.

On November 21, 1980, following oral argument, this court denied Northwest's motion for a stay of SFAR 43 pending review. An expedited briefing schedule was established and this appeal followed.

In the late 1960's several of the nation's airports experienced severe congestion, resulting in numerous and substantial delays. In 1968 the Federal Aviation Administration (FAA) issued the High Density Traffic Airports Rule (HDAR), 14 C.F.R. § 93.121-.133 (1980) (effective April 27, 1969), in order to reduce delays in takeoffs and landings at five crowded airports (Kennedy International Airport, LaGuardia Airport, Newark Airport, O'Hare Airport, and National) and thus promote efficient utilization of the navigable airspace. ² HDAR limits the number of IFR operations (takeoffs and landings, or "slots") ³ that can be reserved to 60 per hour at National, for 16 hours per day, from 0700 to 2200 hours (7 a. m. to 10 p. m.), and allocates the slots among three different classes of airport users. Commercial air carriers have 40 slots per hour, air taxis have 8 slots per hour, and general or private aviation has 12 slots per hour. 14 C.F.R. § 93.123(a).

HDAR does not limit the total number of operations at high density airports. Operations under Visual Flight Rules (VFR) ⁴ are not restricted by HDAR, as long as the operation can be accommodated without significant additional delay to reserved operations. Id. § 93.129(b). Nor are extra sections of scheduled air carrier flights restricted. Id. § 93.123(b)(4). In addition, IFR operations beyond those allocated by reservation are permitted if the operations can be accommodated without significant additional delay to reserved operations. Id. § 93.129(a).

Although the need for slot limitations has changed at several of the high density airports since 1968, see note 2 supra, conditions evidently have not improved at National. Air carrier demands for increased access at National have continued (National is the most conveniently located of the three airports serving the Washington, D. C. metropolitan area; Dulles International Airport and Baltimore/Washington International Airport are farther away from downtown Washington and not on the new Washington subway line). However, the runways, ground facilities and passenger terminals at National are outdated and overcrowded. Severe congestion in the air and on the ground and the prospect of delay remain serious problems. In addition, the communities surrounding National have actively opposed increased use of National, primarily because of noise pollution.

Until October, 1980, allocation of the 40 slots per hour among the air carriers serving National had been achieved by voluntary agreement through airline scheduling committees (ASC) made up of all air carriers operating at the airport, under a grant of antitrust immunity from the CAB. The National ASC meets approximately every six months and reports the terms of the slot allocation agreements to the Airport Reservation Office of FAA's Air Traffic Service.

In October, 1980, the National ASC was unable to reach any agreement on slot allocations for the period after November 30, 1980, largely because a new air carrier, New York Air, announced that it wanted to serve the New York City-Washington, D. C. corridor and requested 20 slots at peak operation hours (early morning and late afternoon), beginning December 1, 1980. ⁵ In the past new entrants had requested fewer slots and had been accommodated by minor adjustments by the other air carriers. New York Air, however, refused to reduce its demand for 20 slots at peak hours, apparently because ten round trip flights per day during commuter hours was the minimum service necessary to compete effectively with Eastern Air Lines' New York-Washington shuttle.

On October 14, 1980, the National ASC notified the FAA by letter that it was unable to agree on slot allocations after November 30, 1980. On October 16, the Secretary issued a Notice and Request for Comments, Notice 80-14, 45 Fed.Reg. 69403 (published on October 20, 1980). The notice requested public comments on the mechanism that should be used for the temporary allocation of IFR reservations or slots available for operations of air carriers at National for the period from December 1, 1980, to April 26, 1981. The notice stated that comments would be received until 5:30 p. m., October 23, 1980. The notice did not describe any specific allocation mechanism. Thirty-seven comments were submitted. On October 29, 1980, the Secretary issued SFAR 43, effective immediately. ⁶

SFAR 43 was ostensibly based upon the air carriers' agreement for slot allocations for the period from October 26, 1980, to November 30 and adjusted according to the allocation which had received the most support at the October meeting of the National ASC. ⁷ Under SFAR 43 several air carriers received fewer slots than they had in November and the twelve carriers with the most slots under the November schedule were required to slide one slot to the less desirable 2200 hour (10 p. m.). The new entrants and several other carriers received slot allocations from the yielded slots. ⁸ SFAR 43 specifically provided that any adjustments and exchanges could be made pursuant to any future ASC agreement, subject to CAB authorization. SFAR 43 allocated eighteen slots to New York Air.

In support of its claim that SFAR 43 is unlawful and should be set aside, Northwest argues that (1) the Secretary has no statutory authority to allocate slots among air carriers, (2) SFAR 43 is not a product of "reasoned decision-making" and is "arbitrary and capricious," and (3) the Secretary did not comply with certain procedural requirements before issuing SFAR 43. For the reasons discussed below, we disagree with the arguments advanced by Northwest and deny the petition for review.

I. Jurisdiction

Neither Northwest nor the Secretary has discussed in detail the question of our jurisdiction to review SFAR 43. The Secretary refers to SFAR 43 as a final order under the FA Act. Northwest states that this court has jurisdiction to review a final order under the FA Act under § 1006(a) of the FA Act, 49 U.S.C. § 1486(a). We agree.

Recent case law, particularly from the Court of Appeals for the District of Columbia Circuit, has construed the word "order" "for purposes of special review statutes expansively, to permit direct review (in the courts of appeals) of regulations promulgated through informal notice-and-comment rule-making." Sima Products Corp. v. McLucas, 612 F.2d 309, 313 (7th Cir.) (citations omitted), cert. denied, 446 U.S. 908, 100 S.Ct. 1834, 64 L.Ed.2d 260 (1980); accord, City of Rochester v. Bond, 195 U.S.App.D.C 345, 603 F.2d 927, 932-35 & n.26 (1979); Investment Company Institute v. Board of Governors, 179 U.S.App.D.C. 311, 551 F.2d 1270 (1977); Deutsche Lufthansa Aktiengesellschaft v. CAB, 156 U.S.App.D.C. 191, 479 F.2d 912 (1973). See generally Currie & Goodman, Judicial Review of Federal Administrative Action: Quest for the Optimum Forum, 75 Colum.L.Rev. 1 (1975); Verkuil, Judicial Review of Informal Rulemaking, 60 Va.L.Rev. 185 (1974). These cases construe "order" "to mean any agency action capable of review on the basis of the administrative record." Sima Products Corp. v. McLucas, supra, 612 F.2d at 313.

We think that the administrative record in the present case is a sufficient basis for judicial review of SFAR 43. ⁹ The record contains the notice and request for comments published in the Federal Register, some of the comments received by the Secretary, various affidavits, the promulgated rule and its published explanation, and supplementary materials. This record is sufficient for reviewing Northwest's claims of lack of statutory authority, arbitrary and capricious agency action, and procedural inadequacy. See id. at 314-15; Rodway v. United States Department of Agriculture, 168 U.S.App.D.C. 387, 514 F.2d 809, 816 (1975).

II. Statutory Authority

Northwest challenges the statutory authority of the Secretary to issue SFAR 43 on a variety of grounds. First, Northwest argues that SFAR 43 is an economic regulation and thus a matter within the exclusive jurisdiction of the CAB. We disagree. Under the bifurcated regulatory scheme designed by Congress to govern civil air transportation, the FA Act divided regulatory responsibility...