Air California v. U.S. Dept. of Transp.

• Decision Date: 27 August 1981
• Docket Number: 80-5621,Nos. 80-7279,s. 80-7279
• Citation: 654 F.2d 616
• Parties: AIR CALIFORNIA, a California corporation, and Clarence Turner, Petitioners- Appellants, v. UNITED STATES DEPARTMENT OF TRANSPORTATION; Andrew Lewis as Secretary of the Department of Transportation; Federal Aviation Administration; Charles E. Weithoner as Acting Administrator of the Federal Aviation Administration; Albert B. Randall, Acting Chief Counsel, Federal Aviation Administration, * Respondents- Appellees.
• Court: U.S. Court of Appeals — Ninth Circuit

Page 616

654 F.2d 616

AIR CALIFORNIA, a California corporation, and Clarence Turner, Petitioners- Appellants, v. UNITED STATES DEPARTMENT OF TRANSPORTATION; Andrew Lewis as Secretary of the Department of Transportation; Federal Aviation Administration; Charles E. Weithoner as Acting Administrator of the Federal Aviation Administration; Albert B. Randall, Acting Chief Counsel, Federal Aviation Administration, ^* Respondents- Appellees Nos. 80-7279, 80-5621.

United States Court of Appeals, Ninth Circuit.

Argued and Submitted Nov. 3, 1980.

Decided Aug. 27, 1981.

Philip K. Verleger, McCutchen, Black, Verleger & Shea, Los Angeles, Cal., for petitioners-appellants.

David Shilton, App. Section Dept. of Justice, Washington, D.C., argued, for respondents-appellees; James W. Moorman, Asst. Atty. Gen., Washington, D.C., on brief.

Petition for Review of FAA Action and Appeal from the United States District Court for the Central District of California.

Before CHOY and NELSON, Circuit Judges, and HANSON, ^** Senior District Judge.

CHOY, Circuit Judge:

Air California, one of two air carriers operating jet service from Orange County Airport (airport) prior to the actions here in issue, and Clarence Turner, who lives in the vicinity of the airport, petition this court to review actions of the Federal Aviation Administration (FAA), primarily a letter sent by its Chief Counsel to the Orange County Board of Supervisors (Board). They also appeal from a dismissal of a parallel attack on the letter in district court. They contend that the FAA erroneously interpreted applicable law in determining that the Board must permit new carriers to use the airport and improperly coerced the Board's compliance. ¹

Because we find that the letter did not constitute an "order" under 49 U.S.C. § 1486(a), we deny the petition for lack of jurisdiction. We also affirm the district court's dismissal of the case as unripe for review.

I. Facts

Soon after Orange County Airport ² was first equipped to accommodate jet aircraft in 1967, two airlines, Bonanza and Air California, applied for and were granted permission to operate turbojet service from the airport. With the growth of jet service, noise became a significant problem in the communities surrounding the airport, and in 1970 the Board adopted a formal policy designed to freeze the level of airport operations. Accordingly, the Board decided to: oppose new applications for interstate service from the airport; deny terminal leases to new air carriers; prohibit operations by aircraft over a certain weight; and disapprove applications for facility improvements, despite the fact that airport use had already reached the designed capacity of the existing facilities. The Board subsequently restricted the hours during which jet aircraft could operate and limited the number of daily jet flights to 40. These policies resulted in the exclusion of new carriers, which had sought authorization to operate turbojet service from the airport since 1969. As a result, Air California and Hughes Airwest, a corporate successor to Bonanza, continued to provide the only turbojet service from the airport. ³

Between 1970 and 1978, the Board entered into five contracts with the FAA in order to obtain federal airport funds, thereby subjecting itself to the requirements of federal statutes administered by the FAA. These statutes prohibit recipients of federal funds from granting an "exclusive right" of airport use, 49 U.S.C § 1349(a), or from engaging in "unjust discrimination" among airport users, 49 U.S.C. § 1718(1). In 1979, the FAA issued notice of a hearing to investigate claims by unsuccessful airline applicants that the Board was violating federal law. The FAA at that time advised the Board not to enter into any long-term leases pending the completion of the investigation. Air California, which had been negotiating a new long-term lease with the Board, petitioned the FAA to conduct the hearing in accordance with the formal requirements of the Administrative Procedures Act (APA). This petition was denied.

The FAA's Western Regional Counsel, DeWitte Lawson, presided over a four-day investigatory hearing in which Air California, the Board, and various community groups participated. Following the hearing, Lawson issued a report reviewing the history of the noise-related restrictions at the airport and concluding that a continued denial of access to new carriers would constitute a violation of the governing statutes. He expressed sympathy with the airport's noise problem and suggested alternative actions which the Board might take in order to achieve compliance. ⁴ He recommended, however, that the FAA pursue administrative and legal sanctions against the Board if it refused to authorize new carriers.

On April 3, 1980, the FAA's Chief Counsel, Clark Onstad, sent a letter to the chairman of the Board announcing Onstad's concurrence in the conclusions reached in Lawson's report. Onstad warned that a failure to undertake negotiations to accommodate new carriers "will warrant our pursuance of contractual, injunctive, and civil penalty remedies." He further stated that the FAA would take no formal action for a period of 30 days in order to permit the Board an opportunity to comply. ⁵ He commented briefly upon Lawson's suggestions for reconciling the Board's noise concerns with the entry of new carriers and offered FAA aid in resolving the problem. He did not, however, specify a particular course of action beyond the initiation of negotiations with the applicants.

The FAA has never taken the formal action mentioned in the April 3 letter. During the summer of 1980, FAA correspondence with the Board urged speedier action and suggested that future federal funding would be jeopardized by Board recalcitrance. In response to an inquiry by Congressmen Norman Mineta and Glenn Anderson, Onstad suggested a general course of Board actions which would constitute compliance, including adoption of an interim plan which would allocate a certain number of flights to new carriers within 60 days. He did not specify whether those flights necessarily would be taken from the incumbents, but noted that the FAA would not require that the Board take actions which would increase the cumulative noise level.

On September 10, 1980, the Board met and agreed to prepare an interim plan which would reduce the number of authorized flights for Air California and Hughes Airwest and reallocate them to other carriers. Representatives of Air California attended and argued that the FAA's position misconstrued the relevant statutes. Comments by members of the Board, however, revealed no willingness to challenge the FAA.

Prior to the meeting, Air California sought judicial review of the April 3 letter, contending that it would suffer substantial economic loss if the Board submitted to the FAA's demands by reallocating flights from Air California to new carriers. It brought suit both in the district court and in this court, raising identical arguments: (1) that the FAA action violated the National Environmental Policy Act in that no Environmental Impact Statement was prepared; (2) that the FAA action flowed from an erroneous interpretation of the applicable federal law regarding exclusive rights and unjust discrimination; and (3) that the FAA action violated the procedures set forth in the Administrative Procedures Act (APA). The district court dismissed the action on the ground that the issues were not ripe for review and that no case or controversy existed. The appeal from the district court was consolidated with a petition for review of the FAA action by this court.

II. Appellate Jurisdiction

Because this court is a court of limited jurisdiction, we are empowered to hear only those cases which fall within the scope of a statutory grant of jurisdiction. California ex rel. Younger v. Andrus, 608 F.2d 1247, 1249 (9th Cir.1979); C. Wright, Law of Federal Courts § 7 (3d ed.1976). Air California argues that the FAA's actions are reviewable under 49 U.S.C. § 1486(a), which provides that "(a)ny order, affirmative or negative, issued by the ... Administrator under this chapter ... shall be subject to review" in the courts of appeals upon petition filed "by any person disclosing a substantial interest in such order." The reviewability of the FAA's actions in this case thus turns upon whether or not the FAA General Counsel's April 3, 1980 letter is properly characterized as an "order." Although the APA defines "order" expansively as "the whole or a part of a final disposition ... of an agency in a matter other than rule making," 5 U.S.C. § 551(6), the power to review FAA orders has been judicially restricted to review of final agency orders. Rombough v. FAA, 594 F.2d 893, 895-96 n.4 (2d Cir.1979); Puget Sound Traffic Ass'n v. CAB, 536 F.2d 437, 438-39 (D.C. Cir.1976). Because the FAA's actions here lacked the requisites of finality, we find that they did not constitute a reviewable order.

The Supreme Court recently addressed the issue of "final agency action" in holding that the Federal Trade Commission's issuance of a complaint based upon its "reason to believe" that a violation had occurred was unreviewable because it was not final. Federal Trade Commission v. Standard Oil of California 449 U.S. 232, 101 S.Ct. 488, 66 L.Ed.2d 416 (1980). The decision reversed a ruling by this court that the question whether the FTC had properly made a "reason to believe" determination or had merely succumbed to political pressure was reviewable. Standard Oil of California v. Federal Trade Commission, 596 F.2d 1381, 1384 (9th Cir.1979). The Court distinguished the issuance of the FTC complaint from the situation involved in the earlier case of Abbott Laboratories v. Gardner, 387 U.S. 136, 87 S.Ct. 1507, 18 L.Ed.2d 681 (1967), which held that Food and Drug Administration regulations were final and ripe for review before the FDA sought enforcement. The Court noted several...