United States Court of Appeals, District of Columbia Circuit
AIRLINES FOR AMERICA AND INTERNATIONAL AIR TRANSPORT ASSOCIATION, PETITIONERS
TRANSPORTATION SECURITY ADMINISTRATION AND JOHN S. PISTOLE, ADMINISTRATOR, RESPONDENTS
Argued: January 14, 2015.
On Petition for Review of an Order of the Transportation Security Administration.
Paul D. Clement argued the cause for petitioners. With him on the briefs were Jeffrey M. Harris, William R. Levi, David A. Berg, and Jeffrey N. Shane.
Jeffrey Clair, Attorney, U.S. Department of Justice, argued the cause for respondents. With him on the brief was Scott R. McIntosh, Attorney.
Before: HENDERSON, Circuit Judge, and WILLIAMS and RANDOLPH, Senior Circuit Judges. OPINION filed by Senior Circuit Judge WILLIAMS.
Williams, Senior Circuit Judge:
The Transportation Security Administration (" TSA" ) has charge of the " screening of all passengers and property" moving by passenger aircraft. 49 U.S.C. § 44901(a). To cover the costs of screening, it is authorized to impose a " uniform fee . . . on passengers . . . in air transportation and intrastate air transportation originating at airports in the United States." § 44940(a)(1). Airlines collect the fees from passengers and remit the funds to TSA. § 44940(e)(2)-(3).
In 2013, Congress reset the fee to " $5.60 per one-way trip in air transportation or intrastate air transportation that originates at an airport in the United States." Bipartisan Budget Act of 2013, Pub. L. No. 113-67, § 601(b), 127 Stat. 1165, 1187 (2013) (codified as amended at 49 U.S.C. § 44940(c)(1) ). TSA implemented this amendment in an Interim Final Rule. Adjustment of Passenger Civil Aviation Security Service Fee (" Interim Final Rule " ), 79 Fed. Reg. 35,462, 35,465-66 (Jun. 20, 2014) (codified as amended at 49 C.F.R. § § 1510 et seq.). The parties agree that a " one-way trip" means the same in the statute as in TSA's regulations, namely, a continuous trip from one point to another with no stopover exceeding specified limits (e.g., four hours between domestic flights). See 49 C.F.R. § 1510.3. Thus a trip from New York to Los Angeles to San Francisco and back to New York, with stopovers exceeding four hours in each of the California cities, would be a round trip comprised of three one-way trips.
Airline trade organizations representing individual airlines filed this petition to challenge TSA's rules on two grounds. First, the airlines argued that TSA had no authority to impose fees in excess of $11.20 on passengers with round-trip itineraries that involved multiple " one-way trips" (as in the example above). While the case has been pending, Congress further amended the fee statute, adding language that the parties agree gave the airlines what they sought and therefore moots this aspect of the case. Pub. L. No. 113-294, § 1, 128 Stat. 4009 (2014) (codified at 49 U.S.C. § 44940(c)(1)); TSA, Office of Revenue, Notice of Immediate Adjustments (Dec. 19, 2014). We thus dismiss that claim.
The airlines' remaining claim is that the statute precludes TSA from charging a fee on passengers whose travel begins abroad but includes a connecting flight within the United States--for example, a passenger who flies from Paris to New York and then takes a connecting flight on to Chicago. On this claim, we find that the airlines have standing but lose on the merits.
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TSA contends that the airlines lack standing for want of suffering any " injury in fact" : the security fees are paid by customers, not the airlines themselves, and the airlines failed to produce evidence demonstrating that the fees caused any economic losses. But the passengers' role as ultimate payers of the fee says nothing about its incidence--that is, how much of the burden falls upon the customers and airlines, respectively. We recognized in Branton v. FCC, 993 F.2d 906, 301 U.S.App.D.C. 244 (D.C. Cir. 1993), the basic proposition that " increasing the price of an activity . . . will decrease the quantity of that activity demanded in the market." Id. at 911-12 ...