                                                                                                                           Opinions of the United
2003 Decisions                                                                                                             States Court of Appeals
                                                                                                                              for the Third Circuit


3-21-2003

Lancaster Airport v. Department of Transp
Precedential or Non-Precedential: Non-Precedential

Docket 02-2805




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Recommended Citation
"Lancaster Airport v. Department of Transp" (2003). 2003 Decisions. Paper 731.
http://digitalcommons.law.villanova.edu/thirdcircuit_2003/731


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                                                                               NOT PRECEDENTIAL

                             UNITED STATES COURT OF APPEALS
                                  FOR THE THIRD CIRCUIT


                                             No. 02-2805


                              LANCASTER AIRPORT AUTHORITY,
                                                   Petitioner

                                                   v.

                             DEPARTMENT OF TRANSPORTATION
                              and The Honorable Norman Y. Mineta,
                              Secretary, Department of Transportation,
                                                          Respondent


                                 Petition for Review of an Order of the
                                      Department of Transportation
                                        Issued on April 29, 2002
                                  (Docket No. OST-2002-11450-9)


                                  Argued March 11, 2003
                    Before: RENDELL, AMBRO and MAGILL*, Circuit Judges

                                        (Filed: March 21, 2003)


                                                        Christina L. Hausner, Esq. [ARGUED]
                                                        Russell, Krafft & Gruber
                                                        930 Red Rose Court
                                                        Hempfield Center, Suite 300
                                                        Lancaster, PA 17601
                                                         Counsel for Petitioner


*The Honorable Frank J. Magill, Senior Circuit Judge for the Eighth Circuit, sitting by
designation.
                                                       Dale C. Andrews, Esq.
                                                         Peter S. Smith, Esq. [ARGUED]
                                                         Paul M. Geier, Esq.
                                                         U.S. Department of Transportation
                                                         Office of General Counsel
                                                         400 7th Street, S.W.
                                                         Room 4102
                                                         Washington, DC 20590
                                                           Counsel for Respondents

                                                         Robert B. Nicholson, Esq.
                                                         Steven J. Mintz, Esq.
                                                         U.S. Department of Justice
                                                         Antitrust Division
                                                         601 D Street, N.W.
                                                         Room 10535
                                                         Patrick Henry Building
                                                         Washington, DC 20530
                                                            Counsel for Respondent Department
                                                            of Transportation


                                      OPINION OF THE COURT


RENDELL, Circuit Judge.

         Lancaster Airport Authority (“Lancaster”) appeals the Department of

Transportation’s (“DOT”) final order denying it an Essential Air Service (“EAS”) subsidy

and allowing Chautauqua Airlines, Inc. (“Chautauqua”) to suspend service to Lancaster. We

will affirm.

         This appeal arises out of Lancaster’s objections to the DOT’s Order to Show Cause

why it should not allow Chautauqua to suspend service. Chautauqua itself is not a party to

the appeal; its ability to suspend service has been brought into issue solely by Lancaster.

Lancaster has standing to pursue this appeal pursuant to 49 U.S.C. § 46110(a) as a “person

                                                    2
disclosing a substantial interest” in the order. We have jurisdiction pursuant to § 46110(a)

as “the court of appeals of the United States for the circuit in which [Lancaster] resides or

has its principal place of business.” We must defer to the DOT’s interpretation of the

statute it is charged with administering if it is “a permissible construction of the statute,”

Chevron U.S.A., Inc. v. Natural Res. Def. Council, 467 U.S. 837, 843 (1984). We review

the DOT’s factual findings for substantial evidence, § 46110(c), and its final decision not to

award the subsidy for abuse of discretion. 5 U.S.C. § 706(2)(A).

        As we write solely for the parties, our recitation of the facts will be brief. On

January 31, 2002, as required by 49 U.S.C. § 41734, Chautauqua filed a 90-day notice of its

intention to suspend service at Lancaster on May 1, 2002. Chautauqua indicated that it

would not suspend service if it received an EAS subsidy. In March 2002, the DOT issued an

Order to Show Cause tentatively allowing Chautauqua to suspend service. Lancaster filed

objections to the notice, requesting that Chautauqua be prohibited from terminating service

and given an EAS subsidy. In April 2002, the DOT issued a Final Order terminating

Lancaster’s subsidy eligibility and allowing Chautauqua to suspend service. Lancaster

appeals.

        Under 49 U.S.C. § 41731 et seq., an airport is entitled to an EAS subsidy if it is an

“eligible place.” An airport is an “eligible place” if it was an “eligible point” before

October 1, 1988, received scheduled air transportation after January 1, 1990, and is not

listed as ineligible. In its 2000 Appropriations Act, Congress created an exception to the

automatic grant of subsidies to eligible places: “Hereafter, notwithstanding 49 U.S.C.

                                                       3
41742 [providing funds for EAS subsidies], no essential air service subsidies shall be

provided to communities in the 48 contiguous states that are located fewer than 70 highway

miles from the nearest large or medium hub airport.” P.L. 106-69, Section 332. The next

year, Congress passed the Wendell H. Ford Aviation Investment and Reform Act for the

21st Century (“AIR 21"), P.L. 106-181, including a section slightly backtracking on this

exception that stated: “The Secretary may provide assistance under [49 U.S.C. 41731] with

respect to a place that is located within 70 highway miles of a hub airport . . . if the most

commonly used highway route between the place and the hub airport exceeds 70 miles.” Id.

Section 205 (emphasis added). Taken together, these regulations prohibit the DOT from

granting subsidies to airports within 70 highway miles of a large or medium hub airport, but

give the DOT discretion to grant a subsidy to an airport that is more than 70 miles from a

hub along the most commonly used highway route.

        In its final order, the DOT determined that Lancaster was not eligible for an EAS

subsidy because 1) under section 332's prohibition, Lancaster was within 70 miles of

Philadelphia International Airport (“PHL”), as determined by the Department’s Federal

Highway Administration measurements; and 2) even if section 205's exception to the

prohibition applied and the “most commonly used highway route” to PHL exceeded 70

miles, it was within the Secretary’s discretion to deny the subsidy because of the proximity

of alternative airports, namely, Baltimore-Washington International Airport (75 miles), and

Harrisburg International Airport (30 miles).

        Lancaster objects to the DOT’s order on two grounds: 1) a lack of substantial

                                                      4
evidence and abuse of discretion in refusing to consider the “most commonly used highway

route” between Lancaster and PHL; and 2) abuse of discretion in considering Lancaster’s

proximity to BWI and Harrisburg airport. In essence, Lancaster argues that the DOT should

have granted a subsidy because Lancaster is an eligible place under § 41731, and the most

commonly used highway route between the airport and a hub airport exceeds 70 miles.

Lancaster argues that section 205 is not “merely precatory” and that DOT’s interpretation

of section 205 as giving it discretion to look at other, unlisted factors in determining

whether to grant a subsidy is erroneous.

        Lancaster’s arguments must fail. First, substantial evidence supports the DOT’s

finding that, under section 332, Lancaster is not entitled to an EAS subsidy because it is

less than 70 highway miles from PHL. On appeal, Lancaster does not dispute this

measurement. Second, the DOT’s interpretation of section 205 (as giving it discretion to

grant a subsidy if the most commonly used highway route between the airport and a hub

airport exceeds 70 miles) is a permissible view of section 205's language, which states that

“the Secretary may” grant a subsidy under those circumstances, but does not compel the

subsidy. Our standard of review is limited to determining whether the DOT’s interpretation

of Section 205 is permissible; it clearly is.

        Further, Lancaster’s arguments that the DOT’s order was an abuse of discretion

under section 205 are unavailing. Our review of an administrative agency’s determination

is extremely deferential, as the agency is best able to take into account the many factors

that affect its decisions. Lancaster argues that § 41731(b) limits the DOT from denying

                                                      5
subsidies on a basis that is not specifically stated, and that the proximity of other airports is

not a stated basis. Lancaster thus contends that the DOT abused its discretion by denying a

subsidy based on the proximity of BWI and Harrisburg. However, § 41731(b) does not

apply in the way Lancaster urges, as it only limits a finding that a place is not an “eligible

place.” The DOT does not dispute that Lancaster is an eligible place. Rather, it determined

that notwithstanding that fact, under section 205, the grant of a subsidy was discretionary,

and Lancaster was not entitled to a discretionary subsidy because the Lancaster community

was already well-served by airports in the area. In making that determination, the DOT did

not abuse its discretion in taking BWI and Harrisburg into account. The proximity of other

airports is a relevant and permissible factor that may be examined in determining whether a

community is adequately connected to the air transportation system.

        Lancaster also cites to the Air Transportation and System Stabilization Act

(“ATSSA”), P.L. 107-42, passed in the aftermath of September 11, 2001, and argues that

Congress intended to fund EAS subsidies to ensure continued service to small communities

such as Lancaster. Section 105 of the ATSSA states: “The Secretary of Transportation

should take appropriate action to ensure that all communities that had scheduled air service

before September 11, 2001, continue to receive adequate air transportation service and that

essential air service to small communities continues without interruption.” The DOT did

not specifically address the ATSSA in its order because Lancaster did not raise this

argument in its objections. As the DOT noted at oral argument, however, the ATSSA is

aspirational, not mandatory, and did not strip the DOT of discretion.

                                                       6
        We conclude that, since Congress clearly intended to leave the final decision

regarding EAS subsidies to the Secretary, the DOT is in the best position to prioritize its

resources and must consider the interests and needs of disparate communities around the

country. Administrative expertise is the reason we have Chevron deference; it is not our

role to second-guess the DOT’s discretionary determination.

        For the foregoing reasons, we will affirm the DOT’s order denying Lancaster an

EAS subsidy and allowing Chautauqua Airlines to suspend service.




                                                    7
TO THE CLERK OF COURT:

     Please file the foregoing opinion.




                                              /s/ Marjorie O. Rendell
                                              Circuit Judge




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