Air Transp. Ass'n of Am., Inc. v. U.S. Dep't of Agric.

• Decision Date: 17 July 2018
• Docket Number: Civil Action No. 16-919 (RMC)
• Citation: 317 F.Supp.3d 385
• Parties: AIR TRANSPORT ASSOCIATION OF AMERICA, INC. d/b/a Airlines for America, et al., Plaintiffs, v. UNITED STATES DEPARTMENT OF AGRICULTURE, et al., Defendants.
• Court: U.S. District Court — District of Columbia

317 F.Supp.3d 385

AIR TRANSPORT ASSOCIATION OF AMERICA, INC. d/b/a Airlines for America, et al., Plaintiffs,

v.UNITED STATES DEPARTMENT OF AGRICULTURE, et al., Defendants.

Civil Action No. 16-919 (RMC)

United States District Court, District of Columbia.

Signed July 17, 2018

James W. Crooks, Pro Hac Vice, Benjamin G. Bradshaw, Jonathan D. Hacker, O'Melveny & Myers, LLP, Washington, DC, for Plaintiffs.

Joseph Evan Borson, Julie Straus Harris, U.S. Department Of Justice, Washington, DC, for Defendants.

MEMORANDUM OPINION

ROSEMARY M. COLLYER, United States District Judge

The Air Transport Association of America, Inc. and the International Air Transport Association challenged a Final Rule issued by the Animal and Plant Health Inspection Service (APHIS) within the United States Department of Agriculture. The Final Rule set fees for checking international aircraft for unwanted pests, including an additional amount for a "reserve." The Court agreed that the adoption of the Final Rule as to the reserve was problematic and remanded that portion of the Final Rule to APHIS for further rulemaking. Now the Plaintiffs move to reconsider the Court's order, particularly the remand of the reserve portion of the Final Rule without vacatur. They also ask the Court to impose a schedule for further rulemaking by the agency and ask that the Court certify part of its opinion for interlocutory review. Specifically, Plaintiffs ask the Court to certify for immediate review the question of whether APHIS violated the Administrative Procedure Act when it determined to apply the fee for commercial aircraft to passenger aircraft without explaining inconsistencies in the rulemaking record.

The Court finds that: (1) the reserve portion of the Final Rule is properly remanded without vacatur; (2) a deadline and schedule for periodic status reports shall be imposed; and (3) certification for interlocutory appeal is not warranted. Thus, the Court will grant in part and deny in part Plaintiffs' motion to amend the March 28, 2018 Order.

I. BACKGROUND

The facts were discussed in detail in the Court's March 28, 2018 Opinion in this case, and will only be repeated to the extent that they are relevant to the pending motion. See Air Transp. Ass'n of Am., Inc. v. USDA , 303 F.Supp.3d 28, 33-38 (D.D.C. 2018). In short, Congress granted APHIS the authority to inspect "persons and vessels entering the customs territory of the United States for possible infection or infestation with pests and diseases that threaten the resident flora and fauna." Air Transp. Ass'n , 303 F.Supp.3d at 33 ; see also Plant Protection Act, 7 U.S.C. § 7701, et seq. (2010) ; 7 C.F.R. § 330.105. Congress enacted the Food, Agriculture, Conservation, and Trade Act (FACT Act) in 1990, "authoriz[ing] APHIS to collect user fees for certain agricultural quarantine and inspection (AQI) services." Air Transp. Ass'n , 303 F.Supp.3d at 34. When the FACT Act was amended as part of the Federal Agricultural Improvement Act of 1996, Congress revised the section describing the authorized fees and created a temporary Agricultural Quarantine Inspection User Fee Account in the Department of Treasury. See Pub. L. No. 104-127, § 917, 110 Stat. 888, 1187-88 (1996) (codified at 21 U.S.C. § 136a (2013) ). Under § 136a(a)(1)(C), the Secretary of Agriculture was authorized to assess fees to "maintain a reasonable balance in the Agricultural Quarantine Inspection User Fee Account" for FY96 through FY02. 21 U.S.C. § 136a(a)(1)(C). APHIS has explained that "[t]he reserve fund ensures that AQI program operations continue without interruption when service volumes fluctuate due to economic conditions or other circumstances." Air Transp. Ass'n , 303 F.Supp.3d at 35.

On April 25, 2014, APHIS submitted a proposed new rule for notice and comment as part of an ongoing attempt to adjust fees to cover the costs of the AQI program. See id. at 37. The October 29, 2015 Final Rule decreased the air passenger fee to $3.96 and increased the commercial aircraft fee to $225. See id. Plaintiffs objected to the Final Rule and filed their Complaint on May 14, 2016, alleging four Administrative Procedure Act (APA), 5 U.S.C. § 500, et seq. (2012), violations. See 5 U.S.C. § 706(2)(A) ; Air Transp. Ass'n , 303 F.Supp.3d at 37-38.

The Court denied Plaintiffs' motion for summary judgment as to Counts I, II, and IV, see Air Transp. Ass'n , 303 F.Supp.3d at 57 ; and granted Plaintiffs' motion as to Count III, agreeing that APHIS violated the FACT Act by maintaining a reserve fund after the expiration of its statutory authority in 2002 under § 136a(a)(1)(C). See id. at 51-52. The Court concluded that "[w]hether there is authority to be found elsewhere, reliance on expired statutory language was unreasonable and therefore arbitrary and capricious," and remanded to the agency for "further consideration and possible rulemaking by APHIS." Id. at 52.

Plaintiffs now move under Rule 54(b) to amend the Court's order to:

(1) Remand with vacatur the reserve portion of the Final Rule;

(2) Require APHIS to respond to the Court's remand Order by publishing a new or amended rule for public notice and comment, or by taking other action, by August 31, 2018, and to require status reports from the parties every 90 days during the course of the remand period; and

(3) Certify for interlocutory appeal under 28 U.S.C. § 1292(b) whether APHIS's application of the commercial aircraft fee to passenger aircraft satisfies the requirements of the APA given the inconsistencies in the agency's expert report from Grant Thornton and the Final Rule and APHIS's failure to explain these discrepancies in the rulemaking.

See Pls.' Mot. to Amend Order (Mot.) [Dkt. 38] at 1. The motion is ripe for decision.¹

II. LEGAL STANDARD

Federal Rule of Civil Procedure 54(b) governs a court's reconsideration of non-final, or interlocutory, orders. See Murphy v. Exec. Office for U.S. Att'ys , 11 F.Supp.3d 7, 8 (D.D.C. 2014), aff'd , 789 F.3d 204 (D.C. Cir. 2015). An order granting a motion for summary judgment in part is an interlocutory order. Cuban v. SEC , 795 F.Supp.2d 43, 48 (D.D.C. 2011) ("Court action that terminates fewer than all claims in a case is considered interlocutory.") (citing Langevine v. District of Columbia , 106 F.3d 1018, 1023 (D.C. Cir. 1997) ). Rule 54(b) provides that an interlocutory order "may be revised at any time before the entry of a judgment adjudicating all the claims and all the parties' rights and liabilities." Fed. R. Civ. P. 54(b).

A motion for reconsideration under Rule 54(b) may be granted "as justice requires." United States v. Dynamic Visions, Inc. , 321 F.R.D. 14, 17 (D.D.C. 2017) (quoting Singh v. George Washington Univ. , 383 F.Supp.2d 99, 101 (D.D.C. 2005) ). A court may consider whether it "patently misunderstood a party, made a decision beyond the adversarial issues presented to the court, made an error in failing to consider controlling decisions or data, or whether a controlling or significant change in the law or facts has occurred since the submission of the issue to the Court." Id. (internal quotation marks and citations omitted).

III. ANALYSIS

A. Remand of Reserve Portion of Final Rule

Plaintiffs move to amend the March 28, 2018 Order so that the reserve portion of the Final Rule is vacated upon remand. The APA requires that the reviewing court "hold unlawful and set aside agency action, findings, and conclusions found to be—(A) arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law." 5 U.S.C. § 706(2). "An inadequately supported rule, however, need not necessarily be vacated." Allied-Signal, Inc. v. U.S. Nuclear Regulatory Comm'n , 988 F.2d 146, 150 (D.C. Cir. 1993) ; see also Heartland Reg'l Med. Ctr. v. Sebelius , 566 F.3d 193, 199 (D.C. Cir. 2009) ("[V]acatur need not be the remedy for an invalidly adopted rule."). In fact, this Circuit has "commonly remanded without vacating an agency's rule or order where the failure lay in lack of reasoned decisionmaking, but also where the order was otherwise arbitrary and capricious." Int'l Union, United Mine Workers of Am. v. Fed. Mine Safety and Health Admin. , 920 F.2d 960, 966-67 (D.C. Cir. 1990) (citations omitted); see also Checkosky v. SEC , 23 F.3d 452, 465 (D.C. Cir. 1994) (Silberman, J., separate opinion) (noting that "[e]ven after condemning an agency action as arbitrary and capricious, we have recognized our remedial discretion not to vacate the agency decision").

The district court exercises its discretion to remand a rule with or without vacatur once it has found deficiencies in an agency's reasoning. See, e.g., Advocates for Highway and Auto Safety v. Fed. Motor Carrier Safety Admin. , 429 F.3d 1136, 1151 (D.C. Cir. 2005) ("While unsupported agency action normally warrants vacatur, this court is not without discretion.") (citations omitted). Whether a court should vacate an unreasonable agency action on remand, or not, depends on: (1) "the seriousness of the order's deficiencies (and thus the extent of doubt whether the agency chose correctly)" and (2) "the disruptive consequences of an interim change that may itself be changed." Allied-Signal , 988 F.2d at 150-51 (quoting Int'l Union , 920 F.2d at 967 ).

If the first prong of the Allied-Signal analysis supports remand without vacatur, the second prong is "only barely relevant." Standing Rock Sioux Tribe v. U.S. Army Corps of Eng'rs , 282 F.Supp.3d 91, 108 (D.D.C. 2017) (quoting Fox Television Stations, Inc. v. FCC , 280 F.3d 1027, 1049 (D.C. Cir. 2002), opinion modified on reh'g , 293 F.3d 537 (D.C. Cir. 2002) ). If there is "at least a serious possibility that the [agency] will be able to substantiate its decision on remand," then vacatur is not necessary. Allied-Signal , 988 F.2d at 151 ; see also In re Core Commc'ns, Inc. , 531 F.3d 849, 861 (D.C. Cir. 2008) (declining to vacate rule when there was a "non-trivial likelihood" that the agency had a valid legal basis for it).

Plaintiffs argue that the seriousness...