Alaska Professional Hunters Ass'n, Inc. v. F.A.A.

• Decision Date: 04 June 1999
• Docket Number: No. 98-1051,98-1051
• Parties: ALASKA PROFESSIONAL HUNTERS ASSOCIATION, INC., et al., Petitioners, v. FEDERAL AVIATION ADMINISTRATION, Respondent.
• Court: U.S. Court of Appeals — District of Columbia Circuit

177 F.3d 1030

ALASKA PROFESSIONAL HUNTERS ASSOCIATION, INC., et al., Petitioners, v. FEDERAL AVIATION ADMINISTRATION, Respondent.

No. 98-1051.

United States Court of Appeals District of Columbia Circuit.

Argued Jan. 29, 1999.

Decided June 4, 1999.

On Petition for Review of an Order of the Federal Aviation Administration.

William P. Horn argued the cause for petitioners. With him on the briefs were Douglas S. Burdin and Eric D. Reicin.

Edward Himmelfarb, Attorney, U.S. Department of Justice, argued the cause for respondent. With him on the brief were Frank W. Hunger, Assistant Attorney General, and Robert S. Greenspan, Attorney.

Before: HENDERSON, RANDOLPH, and TATEL, Circuit Judges.

Opinion for the Court filed by Circuit Judge RANDOLPH.

RANDOLPH, Circuit Judge:

In January 1998 the Federal Aviation Administration published a "Notice to Operators" aimed at Alaskan hunting and fishing guides who pilot light aircraft as part of their guiding service. The Notice required these guide pilots to abide by FAA regulations applicable to commercial air operations. The question in this petition for judicial review, brought by a guide organization and individual guides, is whether § 553 of the Administrative Procedure Act required the FAA to proceed by way of notice and comment rule making rather than by announcement in the Federal Register.

Fishing and hunting are big business in the State of Alaska. A large proportion of the State's population depends on the income these activities generate. Small lodges in remote regions of the State cater to hunters and fisherman, providing food and shelter, guide services, and air transportation to and from the lodge and on side trips, all for a flat fee. It is common for a fishing or hunting guide to serve as the pilot of the light aircraft typically used in these operations. Beginning in 1963, the FAA, through its Alaskan Region, consistently advised guide pilots that they were not governed by regulations dealing with commercial pilots.

The advice stemmed from Administrator v. Marshall, 39 C.A.B. 948 (1963), a decision rejecting the FAA's attempt to sanction Ralph E. Marshall, a registered Alaskan hunting and fishing guide and the holder of an FAA-issued private pilot's license. On a hunting trip, Marshall flew his customer out of Kotzebue, Alaska, searching for polar bear. Regulations then in effect said that a "private pilot may pilot aircraft in connection with any business or employment if the flight is merely incidental thereto and does not involve the carriage of persons or property for compensation or hire." See Marshall, 39 C.A.B. at 948 n.1. The Civil Aeronautics Board, adopting the hearing examiner's opinion as its own, ruled that Marshall's flight with the hunter in search of polar bear was "merely incidental" to his guiding business, in part because he had not billed for it separately. See id. at 950-51. We will have more to say about Marshall in a moment.

The versions of parts 121 and 135 of the FAA's regulations (14 C.F.R. pts. 121 & 135) in effect in the early 1960s applied to (among others) "commercial operator[s]": those persons operating aircraft "for compensation or hire." ¹ 14 C.F.R. §§ 121.1(a)(5), (d), 135.1(a)(2) (1965). In view of Marshall, the FAA's Alaskan Region concluded that these regulations did not govern guide pilots whose flights were incidental to their guiding business and were not billed separately. Therefore only part 91, which provides general instructions regarding the operation of aircraft within the United States, applied to them. See 14 C.F.R. § 91.1. Despite many amendments during the last 35 years, parts 121 and 135 continue to apply to "commercial operator[s]," still defined as those persons who, "for compensation or hire," carry persons or property by aircraft. See 14 C.F.R. §§ 1.1, 119.1(a)(1), 121.1(a), 135.1(a)(1). ² Although the Alaskan Region never set forth its interpretation of parts 121 and 135 in a written statement, all agree that FAA personnel in Alaska consistently followed the interpretation in official advice to guides and guide services.

Whether FAA officials in Washington, D.C., were aware of the advice being given by their counterparts in Alaska is uncertain. No correspondence or other writing bearing on the question has surfaced. This may be attributable to the FAA's organizational structure from the 1960's through the late 1980's. "The agency's first Administrator favored a management system under which officials in Washington exercised direct control over programs in the field. In 1961, however, his successor began a decentralization process that transferred much authority to regional organizations. This pattern generally endured until a 1988 'straightlining' again charged managers at national headquarters with more direction of field activities." A Brief History of the Federal Aviation Administration (last modified April 30, 1999) .

In 1990, after the agency had reorganized, an FAA attorney in the Alaskan Region corresponded with the FAA's Washington, D.C. headquarters regarding an inquiry he had received from the manager of a fishing lodge. In a twist on Marshall, this lodge manager proposed to pick up clients staying at another lodge, fly them to a fishing spot, guide them, and then return the clients to their lodge. The manager wanted to know whether he could provide this service consistent with part 91 of the regulations. The Alaskan Region believed that Marshall controlled, but an Assistant Chief Counsel in the FAA's Washington office disagreed. Although he expressed the need for more facts, the Assistant Chief Counsel thought the manager's situation distinguishable because--as he read Marshall--the guide pilot there took off from the hunting camp and returned without landing elsewhere, whereas the manager intended to take off from a lodge, land at a fishing spot, and then return. To the Assistant Chief Counsel, this meant the flight would not be "merely incidental" to the guiding service and would be "for compensation or hire." Hence, the pilot had to be certified under, and comply with, the requirements of part 135.

The record does not reveal whether the FAA issued a formal opinion in the lodge manager's case. All that appears is the internal agency correspondence we have just summarized. What occurred after the Assistant Chief Counsel's analysis reached the Alaskan Region in 1991 is uncertain. The material before us indicates that the Alaskan Region did not begin advising guide pilots to comply with part 135. We also know, from a decision included in the parties' Supplemental Joint Appendix, that in 1992 an administrative law judge rejected the FAA's attempt to sanction an Alaskan guide pilot in a situation comparable to that in Marshall. Cecil V. Humble, a guide, a pilot and the manager of the Rainy Pass fishing and hunting lodge in Alaska, sold a hunting package to two men, who were accompanied by their wives. After staying at the lodge for a few days, the wives decided to leave before the hunt ended. Humble, who did not have part 135 credentials, flew them back to Anchorage. Citing a Civil Aeronautics Board pronouncement but not the decision in Marshall, the ALJ ruled that the flight was merely "incidental" to Humble's business, "simply an adjunct to the hunting package for which they had contracted," and therefore Humble did not need to comply with part 135. Supp. Joint App. 235. ³

In the meantime, the FAA had begun studying guiding operations in Alaska. An FAA report, issued in 1992, expressed concern about the safety of guide pilots operating pursuant to part 91 rather than part 135. In recognition of the longstanding practice in Alaska and of the agency's advice beginning in 1963 that guide pilots were covered by part 91, the report found that "[a]ny departure from the established practice could have an economical impact on a portion of the commercial guiding populace." See A STUDY OF AVIATION COMMERCIAL GUIDING ACTIVITIES WITHIN THE STATE OF ALASKA, prepared by the Technical Analysis Branch, Alaskan Flight Standards Division, at 9 (December 1992). The report therefore recommended amending part 135.1 to allow the FAA "to issue a letter of authorization" to hunting and fishing guide pilots, allowing them to transport clients under limited conditions. See id. at 8-9. The FAA did not implement the recommendation.

In January 1997, petitioner Alaska Professional Hunters Association, ⁴ aware that the FAA was still considering a new regime for regulating Alaskan guide pilots, submitted a petition for rule making. ⁵ See Petition for Rulemaking, 63 Fed.Reg. 16,913, 16,914 (1998). The Association proposed that the FAA amend part 91 to enhance the safety of guiding operations. See id. In January 1998, without having responded to the Association's petition, the FAA published its "Notice to Operators" in the Federal Register. See Compliance with Parts 119, 121 and 135 by Alaskan Hunt and Fish Guides Who Transport Persons by Air for Compensation or Hire, 63 Fed.Reg. 4 (1998).

The Notice, which is the subject of the Association's petition for judicial review, announced that Alaskan guides who transport customers by aircraft to and from sites where they provide guiding services, with transportation included in the package price of the trip, henceforth must comply with the regulations of parts 119, 121 and 135, as applicable. See 63 Fed.Reg. at 4-5. In the future the FAA would treat these guides as commercial operators or air carriers, transporting passengers for compensation or hire. See 63 Fed.Reg. at 5. The FAA acknowledged that the Alaskan Region had not enforced parts 121 or 135 against guide pilots in the past. But it attributed this to a misreading of the Marshall case. See id. A guide's use of aircraft is, the FAA stated, integral to his business, and the customer pays for the transportation regardless whether there is or is not a separate charge for it. See id. The Notice also stated...