Vedder Price attorneys achieved a major victory for an airport lighting supplier against the Federal Aviation Administration (FAA) in the U.S. Court of Appeals for the DC Circuit. Washington DC. Shareholder David M. Hernandez and Associate Philip M. Livingston represented a manufacturer of airport lighting devices who challenged the publication of an FAA Advisory Circular (AC). In the AC, the FAA arbitrarily and capriciously imposed a strict test on the client’s product but not on other similar products. The Court noted that the “FAA responds with a laundry list of reasons why this court supposedly cannot hear the challenge. The FAA then argues that even if we may hear the case, substantive evidence supports its decision.” The Court then held that “[b]ecause the FAA’s jurisdictional arguments are wholly meritless and because the agency offers nothing more than one employee’s bare assertions unsupported by any actual evidence, we grant the petition for review.”
The case is significant because it is the first time in the FAA’s 40-year history that any entity has successfully challenged the publication of an AC. ACs are supposed to be merely advisory in nature as the name suggests and exempt from the requirements of the APA. However, over the years, some FAA Offices have begun to view ACs as mandatory and use them as a means to implement new regulations without conducting a notice and comment period as required by the APA. The APA requires the FAA to provide a rational basis to the public for its actions. In addition, the FAA’s informal rulemaking via ACs is often unchallenged because by the time an interested party becomes apprised of the FAA’s action it is usually after the 60-day deadline in which to file and appeal or because an entity fears reprisals from the FAA for challenging the FAA action. Given the detrimental impact of the AC on the client, Mr. Hernandez advised his client that it should challenge the FAA’s decision because likelihood of prevailing on the merits was very good. The FAA vigorously challenged the client’s petition for review on many levels. Nevertheless, the Court issued a scathing opinion against the FAA holding that its respective arguments were “absurd”, “wholly meritless” and “ludicrious”. Fortunately, as a result of the case, the FAA may no longer use ACs as an informal tool to revise regulations without conducting a public notice and comment period or otherwise providing a rational basis for its positions supported by substantial evidence in the record.
For a copy of the court's order, please select the document link below.
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