Competitive Enterprise Institute v. U.S. Dept. of Transp.

• Decision Date: 23 September 1988
• Docket Number: No. 87-1640,87-1640
• Citation: 856 F.2d 1563
• Parties: COMPETITIVE ENTERPRISE INSTITUTE, Fred L. Smith, Jr. and Glenda Hill, Petitioners, v. U.S. DEPARTMENT OF TRANSPORTATION, Respondent.
• Court: U.S. Court of Appeals — District of Columbia Circuit

Page 1563

856 F.2d 1563

272 U.S.App.D.C. 401

COMPETITIVE ENTERPRISE INSTITUTE, Fred L. Smith, Jr. and Glenda Hill, Petitioners, v. U.S. DEPARTMENT OF TRANSPORTATION, Respondent.

No. 87-1640.

United States Court of Appeals, District of Columbia Circuit.

Argued May 13, 1988.

Decided Sept. 23, 1988.

Sam Kazman, Washington, D.C., for petitioners.

Robert D. Young, Atty., U.S. Dept. of Transp., with whom B. Wayne Vance, Gen. Counsel, and Kenneth N. Weinstein, Deputy Asst. Gen. Counsel, U.S. Dept. of Transp., and Robert B. Nicholson and Laura Heiser, Attys., U.S. Dept. of Justice, Washington, D.C., were on the brief, for respondent.

Before WALD, Chief Judge, and STARR and BUCKLEY, Circuit Judges.

Opinion for the court filed by Circuit Judge BUCKLEY.

BUCKLEY, Circuit Judge:

Petitioners seek review of the Department of Transportation's regulations setting standards for the computerized systems used by travel agencies to make airline reservations. Because we conclude that petitioners' alleged injuries are neither caused by the challenged regulation nor would be redressed by the relief they seek, we find that petitioners lack standing and therefore dismiss the petition.

I. BACKGROUND

There are five computerized reservation systems ("CRSs") in use today, each owned by one or more airlines ("system owners"): American Airlines' Sabre, Delta's Data II, Texas Air's SystemOne, United's Apollo, and Pars, owned jointly by Trans World and Northwest Airlines. Each CRS consists of a central computer database that is connected to terminals in participating travel agencies. These databases contain complete information about all scheduled airline flights. By using one of these systems, a travel agent can obtain data on flight availability, make reservations, and purchase tickets for flights on most airlines. Over ninety percent of all U.S. airline tickets are purchased through the five CRSs.

To use a CRS, an agent enters the point of origin, the destination, and the preferred date and time of travel. The computer terminal screen responds with a "primary display," a series of one-line listings of all flights meeting the trip requirements. The CRS ranks the listings in an order determined by the algorithms in the computer program. If the agent cannot find an appropriate flight on the primary screen, he can push a button and go to the next screen. If the agent wishes more elaborate information about a particular flight than appears in the one-line listing on the primary display, he can ask the CRS to show a "secondary display."

In 1984, the Civil Aeronautics Board ("CAB"), the predecessor to the Department of Transportation ("DOT") in regulating airline competition, became concerned that system owners were taking advantage of their control of CRS programming to give their own airlines a competitive edge. The CAB discovered, for example, that certain system owners had written the computer program algorithms in such a manner that their CRS screens would display all of their own flights before listing those of competitors, even though other flights might more closely match the agents' specifications. Because travel agents work under heavy time pressures, they tend to recommend the flights listed first. To eliminate such practices, the CAB adopted a final rule, 14 C.F.R. pt. 255 (1988), that requires that the CRS algorithms generate primary displays based on "neutral" characteristics. See id. Sec. 255.4(b). Secondary displays, which are infrequently consulted by travel agents, were left unregulated. The Seventh Circuit upheld these rules against a challenge by the airline industry. United Air Lines, Inc. v. CAB, 766 F.2d 1107 (7th Cir.1985).

In early 1987, the DOT became concerned over passenger complaints of excessive delays in scheduled flights. It determined that airlines were listing unrealistically short elapsed flight times. Furthermore, it found that many airlines were scheduling more departures and arrivals in popular time slots than the airports could reasonably accommodate. To limit these as well as other practices, the DOT adopted the regulations at issue in this case. 52 Fed.Reg. 34,056 (1987) (codified at 14 C.F.R. pt. 234 & Secs. 255.3 & 255.4 (1988)).

The rule requires carriers to include, in their one-line primary display for each flight, a one-digit "on-time performance code" reflecting the flight's on-time arrival record, "on-time" being defined as arrival at the gate within fifteen minutes of schedule. 14 C.F.R. Secs. 255.4(e)(1), 234.8 & 234.2 (1988). The digit "9," for example, would represent that the flight had arrived on time at least ninety percent of the time during the prior month. Id. Sec. 234.8(b)(2) & (c). The rule further provides that this performance code is the only information regarding schedule performance that may appear in the primary display. Id. Sec. 255.4(e); 52 Fed.Reg. at 34,068. Additional on-time performance information may appear only in the secondary displays and only if based on data reported according to the DOT's rules. See id. Sec. 255.4(e)(1) & (3); 52 Fed.Reg. at 34,068.

These requirements are challenged by the following petitioners: The Competitive Enterprise Institute ("CEI"), an organization interested in regulatory matters, which participated in the DOT's Notice and Comment proceedings and asserts that the rule hinders its ability to make airline reservations and to obtain data for use in analyzing airline regulation; Fred L. Smith, Jr., president of the CEI, who claims that the rule limits his ability to use CRSs to make flight reservations; and Glenda Hill, a travel agent, who alleges that the rule hinders her ability to make reservations for her clients. No airline or system owner has appeared before the court to challenge these regulations.

Reduced to essentials, petitioners complain that the agency's rule injures them in three distinct ways. First, the mandatory inclusion of the one-digit performance code displaces information that would otherwise be included in the primary display. Second, the rule intrudes on the system owners' right to use the performance codes in the CRS algorithms to rank flights in the primary display on the basis of their on-time performance. Third, the rule bars use of any on-time performance information that is not based on information reported to the DOT. Petitioners do not ask us to require the DOT to adopt regulations that would mandate the inclusion of information in the CRSs; rather, they ask that we order the DOT not to bar system owners and airlines from deciding what information is to be provided by the CRSs.

II. DISCUSSION

Petitioners do not have a right to seek court review of administrative proceedings merely because they participated in them. Unlike an agency, our authority to hear a case is limited by the standing requirements of the United States Constitution. In order to establish standing, petitioners must, at a minimum, demonstrate that (1) they suffer an injury-in-fact, (2) the injury is fairly traceable to (i.e., caused by) the challenged regulation, and (3) it is likely to be redressed by the remedy they seek. Valley Forge Christian College v. Americans United for Separation of Church &amp State, Inc., 454 U.S. 464, 472, 102 S.Ct. 752, 758-59, 70 L.Ed.2d 700 (1982).

In this case, petitioners assert that the rule interferes with their right to "hear" information from "speakers" (i.e., the system owners and the airlines) who are subject to its provisions. They ask that we void these restraints on the system owners' and airlines' freedom to speak, not that we mandate regulations that would require them to speak. Absent evidence that the system owners or the airlines wish to say what petitioners would like to hear, however, we cannot assume that the regulations cause petitioners any harm. Moreover, absent such evidence, merely voiding the challenged rule will not ensure that any system owner or airline would provide the information petitioners wish to have.

It is well established that petitioners, as listeners, can suffer injury from government regulations that prevent speakers from saying what the listeners wish to hear. Virginia State Bd. of Pharmacy v. Virginia Citizens Consumer Council, Inc., 425 U.S. 748, 96 S.Ct. 1817, 48 L.Ed.2d 346 (1976). While the Court acknowledged, in Virginia Pharmacy, that listeners deprived of their right to information can suffer cognizable injury, it...