Aeronautical Repair Station Ass'n, Inc. v. F.A.A.

• Decision Date: 17 July 2007
• Docket Number: No. 06-1092.,No. 06-1091.,06-1091.,06-1092.
• Citation: 494 F.3d 161
• Parties: AERONAUTICAL REPAIR STATION ASSOCIATION, INC. et al., Petitioners v. FEDERAL AVIATION ADMINISTRATION, Respondent Aircraft Mechanics Fraternal Association, Intervenors.
• Court: U.S. Court of Appeals — District of Columbia Circuit

494 F.3d 161

AERONAUTICAL REPAIR STATION ASSOCIATION, INC. et al., Petitioners v. FEDERAL AVIATION ADMINISTRATION, Respondent Aircraft Mechanics Fraternal Association, Intervenors.

No. 06-1091.

No. 06-1092.

United States Court of Appeals, District of Columbia Circuit.

Argued March 28, 2007.

Decided July 17, 2007.

On Petitions for Review of a Final Rule of the Federal Aviation Administration.

Albert J. Givray and Andrew D. Herman argued the cause for the petitioners. Jere W. Glover and Marshall S. Filler were on brief.

Edward Himmelfarb, Attorney, United States Department of Justice, argued the cause for the respondent. Peter D. Keisler, Assistant Attorney General, Leonard Schaitman, Attorney, United States Department of Justice, and Paul M. Geier, Assistant General Counsel, Federal Motor Carrier Safety Administration, were on brief. Mark W. Pennak, Attorney, United States. Department of Justice, entered an appearance.

Lee Seham and James R. Klimaski were on brief for amicus curiae Aircraft Mechanics Fraternal Association in support of the respondent.

Before: SENTELLE, HENDERSON and TATEL, Circuit Judges.

Opinion for the court filed by Circuit Judge HENDERSON.

Dissenting opinion filed by Circuit Judge SENTELLE.

KAREN LeCRAFT HENDERSON, Circuit Judge:

The petitioners¹ challenge a final rule (2006 Final Rule or Rule) of the Federal Aviation Administration (FAA) which amends its drug and alcohol testing regulations, promulgated pursuant to 49 U.S.C. § 45102(a)(1), to expressly mandate that air carriers require drug and alcohol tests of all employees of its contractors—including employees of subcontractors at any tier—who perform safety-related functions such as aircraft maintenance. Antidrug and Alcohol Misuse Prevention Programs for Personnel Engaged in Specified Aviation Activities, 71 Fed.Reg. 1666 (Jan. 10, 2006). The petitioners challenge the Rule on the grounds that it impermissibly expands the scope of employees tested in violation of the unambiguous statutory language of section 45102(a)(1), the Administrative Procedure Act, 5 U.S.C. §§ 701-06, and the Fourth and Fifth Amendments to the United States Constitution. In addition, they challenge the FAA's conclusion that it was not required to conduct a regulatory flexibility analysis under the Regulatory Flexibility Act (RFA) because the Rule does not have a significant adverse effect on small entities. For the reasons set forth below, we uphold the substance of the Rule but reject the FAA's RFA determination.

I.

The FAA first promulgated drug testing regulations in 1988 pursuant to the Congress's general directive in 49 U.S.C. app. § 1421(a)(6) (1988) that the Secretary of Transportation "promote safety of flight of civil aircraft in air commerce" by prescribing "reasonable rules and regulations, or minimum standards." See Anti-Drug Program for Personnel Engaged in Specified Aviation Activities, 53 Fed.Reg. 47,024 (Nov. 21, 1988) (1988 Rule).² The 1988 Rule required that each employer test "each of its employees who performs" one of eight enumerated "sensitive safety- or security-related" functions, 14 C.F.R. § 21.457 (1992),³ and defined "employee" as "a person who performs, either directly or by contract" any of the enumerated functions, 14 C.F.R. pt. 121, app. I § II (1992).

In 1991 the Congress enacted the Omnibus Transportation Employee Testing Act (Omnibus Act), which for the first time expressly directed the FAA to promulgate alcohol and drug testing regulations:

The Administrator shall, in the interest of aviation safety, prescribe regulations within 12 months after [October 28, 1991]. Such regulations shall establish a program which requires air carriers and foreign air carriers to conduct preemployment, reasonable suspicion, random, and post-accident testing of airmen, crewmembers, airport security screening contract personnel, and other air carrier employees responsible for safety-sensitive functions (as determined by the Administrator) for use, in violation of law or Federal regulation, of alcohol or a controlled substance. The Administrator may also prescribe regulations, as the Administrator considers appropriate in the interest of safety, for the conduct of periodic recurring testing of such employees for such use in violation of law or Federal regulation.

Pub.L. No. 102-143, tit. v, § 3, 105 Stat. 917, 953 (Oct. 28, 1991) (codified at 49 U.S.C. app. § 1434; recodified, as amended, at 49 U.S.C. § 45102(a)(1)).

Pursuant to the Omnibus Act, in 1994 the FAA revised its drug testing regulations, Antidrug Program for Personnel Engaged in Specified Aviation Activities, 59 Fed.Reg. 42,922 (Aug. 19, 1994) (1994 Drug Rule), and promulgated regulations for the first time for alcohol testing, Alcohol Misuse Prevention Program for Personnel Engaged in Specified Aviation, 59 Fed.Reg. 7380 (Feb. 15, 1994) (1994 Alcohol Rule). Both the 1994 Drug Rule and the 1994 Alcohol Rule required that an "employer" test each covered "employee," again defined as "a person who performs, either directly or by contract" any of eight listed "safety-sensitive" functions, 59 Fed. Reg. at 7390 (alcohol), at 42,928 (drugs). Both rules also listed the same eight functions, which were substantially the same as those in the 1988 Rule, see supra note 3:

1. Flight crewmember duties.

2. Flight attendant duties.

3. Flight instruction duties.

4. Aircraft dispatcher duties.

5. Aircraft maintenance or preventive maintenance duties.

6. Ground security coordinator duties.

7. Aviation screening duties.

8. Air traffic control duties.

59 Fed.Reg. at 7391, 42,928.

On February 28, 2002, the FAA issued a notice of proposed rulemaking seeking to revise its drug and its alcohol testing regulations. Antidrug and Alcohol Misuse Prevention Programs for Personnel Engaged in Specified Aviation Activities, 67 Fed. Reg. 9366 (Feb. 28, 2002) (NPRM). Significantly, the NPRM proposed to amend the definition of a covered "employee" subject to testing as "[e]ach employee who performs a function listed in this section directly or by contract (including by subcontract at any tier) for an employer." 67 Fed.Reg. at 9377 (drugs) (proposed to be codified at 14 C.F.R. pt. 121, app. I § III), 9380 (alcohol) (proposed to be codified at 14 C.F.R. pt. 121, app. J § II) (emphasis added). The FAA explained that it proposed including the italicized language "to clarify that each person who performs a safety-sensitive function directly or by any tier of a contract for an employer is subject to testing." 67 Fed.Reg. at 9368 (emphasis added). The FAA maintained that the added language did not work "a substantive change because the current rule language states that anyone who performs a safety-sensitive function `directly or by contract' must be tested" and "[t]he regulations have always required that any person actually performing a safety-sensitive function be tested, and we are proposing to clarify that performance `by contract' means performance under any tier of a contract." Id. at 9369. The FAA further explained that it believed the clarification necessary because of "conflicting guidance provided by the FAA." Id.⁴ The NPRM requested "comment on [its] proposal to clarify this subject." Id. at 9370.

In early 2004, after receiving a substantial number of critical comments, the FAA issued a final rule in which it announced that, "[i]n order to gather more information on the concerns expressed by the commenters," it was "not adopting the proposed revision in th[e] final rule" but would be "publishing a Supplemental Notice of Proposed Rulemaking (SNPRM) in the near future." Antidrug and Alcohol Misuse Prevention Programs for Personnel Engaged in Specified Aviation Activities, 69 Fed.Reg. 1840, 1841 (Jan. 12, 2004).

On May 17, 2004, the FAA published the SNPRM, addressing the subcontractor issue at length and responding to comments it had received. Antidrug and Alcohol Misuse Prevention Programs for Personnel Engaged in Specified Aviation Activities, 69 Fed.Reg. 27,980 (May 17, 2004). The SNPRM again proposed adding the "subcontract at any tier" language and reopened the subject for public comment.

The 2006 Final Rule, issued January 10, 2006, amended the testing regulations, as proposed in the NPRM and the SNPRM, to require testing employees who perform the listed functions "directly or by contract (including by subcontract at any tier)." Antidrug and Alcohol Misuse Prevention Programs for Personnel Engaged in Specified Aviation Activities, 71 Fed.Reg. 1666, 1676, 1677 (Jan. 10, 2006). In addition, the FAA certified that the 2006 Final Rule "will not have a significant economic impact on a substantial number of small entities" and that it was therefore "not required to conduct an RFA analysis." 71 Fed.Reg. at 1674.

The petitioners filed petitions for review on March 10 and March 13, 2006.

II.

The petitioners challenge the 2006 Final Rule on four grounds. We address each ground separately.

A. Statutory Authority

First, the petitioners assert that the scope of employee testing expressly required under the 2006 Final Rule—including employees of subcontractors "at any tier"—exceeds the FAA's statutory authority under the Omnibus Act. We review the FAA's interpretation of the statutory language under the familiar two-step framework of Chevron U.S.A. Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837, 104 S.Ct. 2778, 81 L.Ed.2d 694 (1984). Under Chevron, we ask first "whether Congress has directly spoken to the precise question at issue"; if it has, "that is the end of the matter" and "the court, as well as the agency, must give effect to the unambiguously expressed intent of Congress." Chevron, 467 U.S. at 842-43, 104 S.Ct. 2778. If, however, "the statute is silent or ambiguous with respect to the specific issue, the question for the court is whether the agency's answer is based on a permissible construction of the statute." Id. at 843, 104 S.Ct. 2778. The Omnibus Act directed the...