Tulsa Airports Improv. Trust v. FAA , 839 F.3d 945 ( 2016 )

FILED
United States Court of Appeals
Tenth Circuit
PUBLISH October 14, 2016
Elisabeth A. Shumaker
UNITED STATES COURT OF APPEALS Clerk of Court
TENTH CIRCUIT
TULSA AIRPORTS IMPROVEMENT
TRUST, for and on behalf of Cinnabar
Service Company,
Petitioner,
v. No. 15-5009
FEDERAL AVIATION
ADMINISTRATION,
Respondent.
ON PETITION FOR REVIEW OF A FINAL ORDER
OF THE FEDERAL AVIATION ADMINISTRATION
(Court of Federal Claims No. 13-906-CFL)
Roger M. Gassett, of Hall, Estill, Hardwick, Gable, Golden & Nelson, P.C.,
Tulsa, Oklahoma, (John M. Hickey, of Hall, Estill, Hardwick, Gable, Golden &
Nelson, P.C., and Steven K. Metcalf of McDonald, McCann, Metcalf & Carwile,
L.L.P., Tulsa, Oklahoma, with him on the briefs), for Petitioner-Appellant.
Edward Himmelfarb, Attorney, Appellate Staff, Civil Division, Department of
Justice, Washington, D.C., (Benjamin C. Mizer, Principal Deputy Assistant
Attorney General; and Michael S. Raab, Attorney, Appellant Staff, Civil Division,
Department of Justice, Washington, D.C., with him on the brief), for Respondent-
Appellee.
Before BRISCOE, MURPHY and PHILLIPS, Circuit Judges.
BRISCOE, Circuit Judge.
Tulsa Airports Improvement Trust (TAIT) seeks reimbursement for
amounts it paid to a third-party contractor in furtherance of a noise abatement
program funded primarily by grants from the Federal Aviation Administration
(FAA). Because its petition for review of agency action was not timely filed, we
dismiss the action.
I
Since the mid-1990s, TAIT has been working to reduce noise caused by the
Tulsa International Airport. Tulsa Airports Improvements Trust v. United States,
120 Fed. Cl. 254, 256–57 (2015). TAIT’s efforts have largely been funded by
grants from the FAA. Id. at 257. In 2002, while awaiting the approval of
additional grant funding, TAIT instructed its contractors to place some projects
on hold until additional funds were approved. Id. at 257–58. As a result of the
delay, some contractors “demanded contract increases or terminated their
contracts.” Id. at 258. Consequently, TAIT paid $705,913.40 to its contractors
and then sought reimbursement from the FAA. Id. The FAA initially reimbursed
TAIT for the costs, but subsequently demanded repayments totalling $656,574.37
after determining that the payments were “contract delay/escalation costs,” which
were “not allowable” costs under the grants. Id. TAIT reimbursed the FAA for
these amounts. Id. In 2010, TAIT sought reconsideration and the FAA provided
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reimbursements for supplemental allowable costs in the amount of $569,566.00.
See Agency Record (AR) at 2187.
On January 23, 2012, TAIT informed the FAA that it had reviewed the
remaining unpaid expenses 1 and had “identified numerous cost categories which
[were] eligible for reimbursement.” AR at 487. TAIT requested that the FAA
review the attached documentation and approve the reimbursements. Id. On
October 24, 2012, the FAA’s Southwest Region responded that it had “carefully
examined the information” provided and “[could not] make a favorable
determination of additional allowable costs.” AR at 1140. This letter stated that
“additional reviews on the [grants] would not be considered an efficient use of
resources.” Id. TAIT responded by appealing to the FAA’s Associate
Administrator for Airports on December 6, 2012. AR at 1141. On December 31,
2012, the Associate Administrator for Airports issued a letter to TAIT stating
that, because TAIT’s most recent request for reimbursement did not delineate
costs that had been reimbursed as well as allowable costs that were outstanding,
the FAA was “unable to find that there [were] potentially eligible costs that ha[d]
not been reimbursed.” AR at 2190. The letter further stated that TAIT should
1
Although the parties do not specify the amount contested, we estimate
from the record that TAIT is seeking reimbursement for a portion of
approximately $87,000.00 in outstanding expenses.
3
resubmit any information that it believed had not been considered. Id. TAIT
submitted no further documentation to the FAA.
Instead, on November 14, 2013, TAIT filed a breach of contract action in
the Court of Federal Claims, invoking jurisdiction under the Tucker Act, 28
U.S.C. § 1491(a)(1). Tulsa Airports Improvements Trust, 120 Fed. Cl. at 256.
TAIT alleged that the FAA had wrongfully determined that the payments in
question were “not allowable grant costs.” Id. at 256. The Court of Federal
Claims determined that it did not have subject matter jurisdiction because either
49 U.S.C. § 46110 or 49 U.S.C. § 47111 vested exclusive jurisdiction in the
United States Court of Appeals. Id. at 263. Accordingly, it transferred the case to
this court. Id. at 265–66. For procedural purposes, we now consider it as a
petition for review of agency action.
II
TAIT asks us to compel the FAA “to conduct a hearing to formally consider
TAIT’s request for reimbursement under the Grants” — the procedure required by section
47111. Aplt. Br. at 9. TAIT argues that section 47111 applies; that under either section
46110 or section 47111, the FAA did not issue a final order appropriate for judicial
review; and that even if the FAA did issue a final order, its wording created confusion
that caused TAIT’s delay in filing this petition. We disagree.
First, we conclude that 49 U.S.C. § 46110 governs this action because 49 U.S.C
§ 47111 does not apply. Section 46110 is a general review provision that allows a person
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to petition for review of an order in which the person has a substantial interest.2 49
U.S.C. § 46110(a). Section 47111 specifically allows a person to petition for review of
an agency’s decision to withhold a payment that is due under a grant agreement.3 49
2
Section 46110(a) provides:
(a) Filing and Venue. — Except for an order related to a
foreign air carrier subject to disapproval by the President
under section 41307 or 41509(f) of this title, a person
disclosing a substantial interest in an order issued by the
Secretary of Transportation (or the Under Secretary of
Transportation for Security with respect to security duties and
powers designated to be carried out by the Under Secretary or
the Administrator of the Federal Aviation Administration with
respect to aviation duties and powers designated to be carried
out by the Administrator) in whole or in part under this part,
part B, or subsection (l) or (s) of section 114 may apply for
review of the order by filing a petition for review in the United
States Court of Appeals for the District of Columbia Circuit or
in the court of appeals of the United States for the circuit in
which the person resides or has its principal place of business.
The petition must be filed not later than 60 days after the order
is issued. The court may allow the petition to be filed after the
60th day only if there are reasonable grounds for not filing by
the 60th day.
3
Section 47111(d) provides:
(d) Withholding Payments. — (1) The Secretary may withhold
a payment under a grant agreement under this subchapter for
more than 180 days after the payment is due only if the
Secretary— (A) notifies the sponsor and provides an
opportunity for a hearing; and (B) finds that the sponsor has
violated the agreement. (2) The 180-day period may be
extended by— (A) agreement of the Secretary and the sponsor;
or (B) the hearing officer if the officer decides an extension is
necessary because the sponsor did not follow the schedule the
officer established. (3) A person adversely affected by an
order of the Secretary withholding a payment may apply for
review of the order by filing a petition in the United States
(continued...)
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U.S.C. § 47111(d). This section also sets forth procedures that must be followed before a
payment may be withheld. See 49 U.S.C. § 47111(d)(1).
Contrary to TAIT’s contention, section 47111 does not apply to a finding that
certain costs are not allowable under a grant agreement. Before the United States may be
obligated to make a payment under a grant agreement, the statutory scheme requires that
the Secretary first decide that the cost is allowable. 49 U.S.C. § 47110. Until such a
determination has been made, no payment can be due. Section 47111 only applies to the
withholding of payments that are “due” under a grant agreement. 49 U.S.C.
§ 47111(d)(1) (emphasis added). A determination that a particular cost is not allowable is
not a withholding of a payment that is due, but merely a determination that no payment
was ever owed. Furthermore, section 47111 applies to situations in which the payment is
withheld due to a violation of the grant agreement. See 49 U.S.C. § 47111(d)(1)(B). In
order to withhold a payment under this section, the Secretary must notify the sponsor,
provide an opportunity for a hearing, and make a finding that the sponsor has violated the
grant agreement. 49 U.S.C. § 47111(d)(1). The FAA made no such finding because there
is no allegation that TAIT violated the grant agreement. The payments were denied
because the costs were not allowable, and not because of an independent violation of the
(...continued)
Court of Appeals for the District of Columbia Circuit or in the
court of appeals of the United States for the circuit in which
the project is located. The petition must be filed not later than
60 days after the order is served on the petitioner.
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grant agreement. Because section 47111 does not apply, TAIT must challenge the FAA’s
action under the general judicial review provision, 49 U.S.C. § 46110.
Second, we conclude that the December 31, 2012 letter is a final order issued
by the FAA. We have not previously had the opportunity to address what
constitutes an “order” under section 46110, but those circuits that have considered
the meaning of “order” under this section or its predecessor, 49 U.S.C. § 1486,
have concluded that an agency decision is an “order” only if it possesses “the
quintessential feature of agency decisionmaking suitable for judicial review:
finality.” Vill. of Bensenville v. FAA, 457 F.3d 52, 68 (D.C. Cir. 2006) (citing
Aerosource, Inc. v. Slater, 142 F.3d 572, 577 (3d Cir. 1998) (collecting cases)).
Accordingly, the agency action must “mark the consummation of the agency’s
decisionmaking process,” and “be one by which rights or obligations have been
determined, or from which legal consequences will flow.” Bennett v. Spear, 520
U.S. 154, 177–78 (1997) (quotations omitted); see also Vill. of Bensenville, 457
F.3d at 68 (applying Bennett in the context of 49 U.S.C. § 46110). In addition,
most circuits require that the alleged order “be predicated on an administrative
record sufficient to allow a court to engage in a meaningful review,” but this
requirement is “not a demanding one.” Burdue v. FAA, 774 F.3d 1076, 1080 (6th
Cir. 2014) (collecting cases).
A communication need not be formal to constitute a final agency action.
Numerous circuits have held that letters from the FAA, including those not issued
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by the Administrator, constitute “orders” for purposes of 49 U.S.C. § 46110.
Aerosource, Inc., 142 F.3d at 577–78 (collecting cases). Further, under a similar
statute, we have concluded that an informal agency communication may constitute
an order suitable for judicial review. TransAm Trucking, Inc. v. Fed. Motor
Carrier Safety Admin., 808 F.3d 1205, 1212 n.4 (10th Cir. 2015) (“[T]he informal
nature of the email communication doesn’t necessarily determine whether it was a
‘final order’ within the meaning of [28 U.S.C.] § 2342(3)(A).”). In addition,
“[t]he mere possibility that an agency might reconsider in light of ‘informal
discussion’ and invited contentions of inaccuracy does not suffice to make an
otherwise final agency action nonfinal.” Sackett v. E.P.A., 132 S. Ct. 1367, 1372
(2012).
The FAA’s December 31, 2012 letter is a final order. The letter marks the
consummation of the FAA’s decisionmaking process. It details TAIT’s prior
requests and the FAA’s responses thereto, including the various requests, reviews,
grants, and denials over the preceding ten years. There is no indication in the
letter or in the record that any additional process on the FAA’s part was to follow.
Although the letter does provide TAIT an opportunity to resubmit any information
the FAA had not yet considered, this invitation does not make an otherwise final
decision nonfinal. Absent additional action from TAIT, the FAA made clear that
it would not reconsider the request. Following the receipt of the December 31,
2012 letter, TAIT took no further action. In addition, the letter determined rights
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and obligations by concluding that TAIT had no right to reimbursement for the
requested funds and that the FAA had no obligation to pay them. These are legal
consequences sufficient to indicate finality. Further, the administrative record,
which includes nearly 3000 pages of letters, agreements, and payment records
from 2002 through 2012, is sufficient for review. The parties have provided us
with relevant communications between themselves, as well as documentation
supporting TAIT’s claim to reimbursement. Thus, the December 31, 2012 letter
from the FAA is a final order suitable for judicial review under section 46110.
Third, we conclude that the action was not timely filed. Section 46110 provides
that a petition for review of an agency order generally must be filed not later than
sixty days after the agency order is issued. 49 U.S.C. § 46110(a). A court does
have discretion to allow a petition filed after the sixtieth day if there are
reasonable grounds for the delay. Id. Because the FAA’s letter on December 31,
2012 was a final order, the sixty-day period expired on March 1, 2013. TAIT did
not file its action in the Court of Claims until November 14, 2013 4 — more than
eight months after the statutory period expired. Further, TAIT has not established
any reasonable grounds to justify its delay.
4
We consider this petition for review as if it had been filed in this court on
the date on which it was actually filed in the Court of Federal Claims. See 28
U.S.C. § 1631.
9
Agency-created confusion has been recognized in some circuits as a basis
for finding delay to be reasonable. See, e.g., Safe Extensions, Inc. v. FAA, 509
F.3d 593, 603–04 (D.C. Cir. 2007) (excusing delay when the FAA had stated that a
revision was forthcoming but never issued one); Greater Orlando Aviation Auth.
v. FAA, 939 F.2d 954, 960 (11th Cir. 1991) (excusing delay when the FAA’s
inconsistent communications caused confusion), abrogated on other grounds by
Henderson v. Shinseki, 562 U.S. 428, 438 (2011), as recognized in Corbett v.
TSA, 767 F.3d 1171, 1174 (11th Cir. 2014). But we do not have such factual
circumstances here. The D.C. Circuit has twice held this year that ambiguity in a
letter issued by an agency does not excuse delay. See Nat’l Fed’n of the Blind v.
DOT, 827 F.3d 51, 57 (D.C. Cir. 2016); Elec. Privacy Info. Ctr. v. FAA, 821 F.3d
39, 43 (D.C. Cir. 2016). We agree with the D.C. Circuit that parties should
assume finality in the face of ambiguity and file protectively for judicial review.
See id. Thus, if there was any ambiguity in the December 31, 2012 letter, it does
not excuse TAIT’s delay in filing a petition for review. Moreover, a plain reading
of the December 31, 2012 letter makes clear that the FAA’s determination was
final and no reimbursements would be issued unless TAIT took further action,
either by resubmitting documentation in the format recommended by the FAA, or
by appealing to this court within sixty days. TAIT did neither.
III
The petition for review of agency action is DISMISSED as not timely filed.
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