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United Airlines, Inc. v. Transportation Security Administration

United States Court of Appeals, District of Columbia Circuit

June 13, 2017

United Airlines, Inc., Petitioner
Transportation Security Administration, Respondent

          Argued April 21, 2017

         On Petition for Review of a Decision of the Transportation Security Administration

          Adam P. Feinberg argued the cause for petitioner. With him on the briefs was Adam W. Braskich.

          Jeffrey Clair, Attorney, U.S. Department of Justice, argued the cause for respondent. With him on the brief were Benjamin C. Mizer, Principal Deputy Assistant Attorney General, and Scott R. McIntosh, Attorney.

          Before: Brown and Pillard, Circuit Judges, and Silberman, Senior Circuit Judge.



         Petitioner United Airlines sought refunds from the Department of Homeland Security's Transportation Security Administration (TSA) for overpayments it made to TSA. These payments relate to fees charged airline passengers that fund aviation security expenses and are to be remitted to TSA. In an informal adjudication, TSA refused to consider Petitioner's refund request because four years before TSA had concluded an audit of United's remittances during the relevant period, the audit did not discover any overpayments, and United had not objected to the report of the audit. We conclude, however, that TSA's position is unsupportable.


         The Aviation and Transportation Security Act created TSA and tasked the agency with civil aviation security.[1] To fund some of its security measures, the TSA is required to impose a per-passenger fee on travelers, which is collected by the airlines and remitted to the agency.[2] The agency conducts audits pursuant to its statutory authority to require airlines to provide information "necessary to verify that fees have been collected and remitted at the proper times and in the proper amounts."[3](Two regulations govern the audit process: carriers must establish a system to account for the fees collected and remitted, and the agency may conduct audits to ensure that the security service fees are accurately collected and remitted.[4]) The Act provides that the agency "may refund any fee paid by mistake or any amount paid in excess of that required."[5]

         United Airlines claimed a refund after it hired an outside consultant to review payments it had made to TSA. The consultant determined that Petitioner had overpaid the agency during 2010, 2011, and 2012 in the amount of $1.5 million.[6] On April 8, 2016, the consultant sent an email to TSA requesting a refund. He included in the email all of the data and calculations supporting the request. On April 18, 2016, ten days after receiving the refund request, TSA denied it. According to TSA, Petitioner's problem was that TSA had already conducted an audit for the relevant time period. That audit was conducted in 2012 "to evaluate the accuracy and reliability of [the fees] imposed, collected, recorded, refunded, remitted, and reported . . . for the periods in which [Petitioner] is seeking to re-examine." It was determined that Petitioner owed the agency $3.07, which Petitioner promptly paid following a final exit conference. Therefore, TSA concluded that United had "accepted and agreed with" the agency's audit findings.

         Shortly thereafter, Petitioner responded to TSA's denial. Petitioner "request[ed] [TSA's] guidance concerning the TSA's rules and procedures for obtaining . . . administrative review, " and Petitioner suggested that it was "hoping to keep this matter within TSA's administrative review process." It requested a response from the agency within four days. When it did not receive a reply, Petitioner filed this petition for review, identifying the April 18 Refund Denial as the agency decision under review.

         On August 10, 2016, after this petition for review was filed and two months after the Petitioner's second request, TSA finally responded. The agency again pointed out that Petitioner had been the subject of an audit of the fees collected during the contested period, and that the audit report stated that Petitioner had thirty days to submit an administrative appeal. Instead, it only paid the trivial sum owed, $3.07. Nor did United file a petition for review before us within sixty days of TSA's audit- which TSA described as its "final order." Then, TSA concluded: "Given the foregoing, TSA has determined that United has no entitlement to administrative review or judicial review."


         We are met with a jurisdictional objection. The government argues that since Petitioner's request for administrative review was pending when the petition was filed in our court, the petition was incurably premature, and we should therefore dismiss it. See TeleSTAR, Inc. v. FCC, 888 F.2d 132, 134 (D.C. Cir. 1989). This contention is a rather thin one; ...

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