Opposition Brief — Suburban O'Hare Commission v. Dole

OCTOBER TERM, 1986

SUBURBAN O’HARE COMMISSION, ET AL., PETITIONERS

Vv.

ELIZABETH HANFORD DOLE, SECRETARY

OF TRANSPORTATION, ET AL.

ON PETITION FOR A WRIT OF CERTIORARI TO THE

UNITED STATES COURT OF APPEALS

FOR THE SEVENTH CIRCUIT

BRIEF FOR THE FEDERAL RESPONDENTS

IN OPPOSITION

CHARLES FRIED

Solicitor General

F. HENRY HABICHT II

Assistant Attorney General

PETER R. STEENLAND, JR.

KAREN L. FLORINI

Attorneys

Department of Justice

Washington, D.C. 20536

(202) 633-2217

QUESTION PRESENTED

Whether opponents of an airport renovation proj-

ect approved by the Federal Aviation Administration

(FAA) are entitled to have their factual challenges

to the FAA’s conclusions adjudicated by a federal

district court in a de novo trial.

(I)

TABLE OF CONTENTS

Page

ER ae I CE 1

a ca ER I SR 2

Se 4

i eceerdaiedieshemmnninonaeeniin tie 10

Nene ec ns ebvcesmbistpaainan dbsetuasian 16

TABLE OF AUTHORITIES

Cases:

Aircraft Owners & Pilots Ass’n v. FAA, 600 F.2d

Neen en eee somdivucrssansenasee 15

Associated Industries v. Department of Labor, 487

F.2d 342, cert. denied, 416 U.S. 942 _.................... 15

Atlas Roofing Co. v. Occupational Safety & Health

TE ee |. ee 11

Bi-Metalic Co. v. State Board of Equalization, 239

Teen ee eee ne vasbiniwisetenabenasnees 11

Board of Regents v. Roth, 408 U.S. 564 .........000...... 11

SS Lit Sh Se 13

Citizens to Preserve Overton Park, Inc. v. Volpe,

ie a inllnnndasdone 13

City of West Chicago Vv. Nuclear Regulatory Com-

Ne csc veasasnnbaecenentacess 11

Florida Power & Light Co. v. Lorion, No. 83- 703

(Mar. 20, 1985) _........... AEA SLND eR OT OTD 15

Illinois ex rel. Scott v. Butterfield, No. 74 C 2440

4 Se 4 eae 3, 4, 7,9

Izaak Walton League Vv. Marsh, 655 F.2d 346, cert.

EA eee ee 11

National Coal Operators Ass’n Vv. Kleppe, 423 U.S.

vt Sel Sip tate ER a 13

Paccar, Inc. Vv. National Highway Transportation

Safety Administration, 573 F.2d 632, cert. de-

a ne nts onsianmnitnsieneouoone 16

River Road Alliance, Inc. v. Corps of Engineers,

764 F.2d 445, cert. denied, No. 85-785 (Mar. 3,

ei A SE 15

IV

Cases—Continued : Page

United States v. Allegheny-Ludlum Steel Corp., 406

8 AERO Aenea Reenter ine sis mith auesbeys rk WRI 10

United States v. Florida East Coast Ry., 410 U.S.

| SR aaah Se eer ODN eNR Connie erlaubt ev eae IoD 10

Vermont Yankee Nuclear Power Corp. v. Natural

Resources Defense Council, Inc., 485 U.S. 519-... 11

Constitution, statutes and regulations:

U.S. Const. Amend. V (Due Process Clause) .......... 11

Administrative Orders Review Act, 28 U.S.C.

ae i cathensitniemnniaanietirin 8

Administrative Procedure Act:

£ is Co Rn eee isaictigte disiokcetiec cle 10

ED, icsichoek caseibecineiindinseicesnainiesintieaniss 13

Airport and Airway Improvement Act, 49 U.S.C.

App. (& Supp. 11) 2201 ef eed. ........---..-........0----2. 7,

8

Clean Air Act, 42 U.S.C. (& Supp. II) 7401 ef seq... 7

Consumer Product Safety Act, 15 U.S.C. 2060(c) .... 14

Occupational Safety and Health Act, 29 U.S.C.

| SERNA SR otto ek UO ICE EEO CaneOaD emer ciae a OSE E DR CeIIN 14

Toxic Substances Control Act, 15 U.S.C. 2618

tc pitta a Sane One nena aST CO MaB NUDE ete MFP ee ee 14

Oe EI <5 psscrcicpealspnieinteedceoehsarantnce 11

49 U.S.C. App. (& Supp. II) 1301 et seq. .......... 8

On ea a ee 8,9, 10,14

14C.F.R.:

SR, , SEER Ta ee epee reed ae act iE TURD ire 6

gestae elle Sa ance Sh ARR EE NON ame CEE A 6

A aie Ea re AMEE SS DS 6

Miscellaneous:

Attorney General’s Manual on the Administrative

Procedure Act (1947)

Iu the Suprenw Court of the United States

OCTOBER TERM, 1986

No. 86-1

SUBURBAN O’HARE COMMISSION, ET AL., PETITIONERS

Vv.

ELIZABETH HANFORD DOLE, SECRETARY

OF TRANSPORTATION, ET AL.

ON PETITION FOR A WRIT OF CERTIORARI TO THE

UNITED STATES COURT OF APPEALS

FOR THE SEVENTH CIRCUIT

BRIEF FOR THE FEDERAL RESPONDENTS

IN OPPOSITION

OPINIONS BELOW

The petition for certiorari seeks review of two de-

cisions rendered by the court of appeals. The opinion

of the court of appeals in No. 85-1073 (Pet. App.

A4-A30) is reported at 787 F.2d 186. The memo-

randum order of the court of appeals in No. 85-1423

(Pet. App. Al-A2) is unreported. The opinion of the

district court (Pet. App. A31-A68) is reported at 603

F’. Supp. 10138.

(1)

2

JURISDICTION

The judgment of the court of appeals in No. 85-

1073 was entered on March 18, 1986. A petition for

rehearing was denied on April 3, 1986 (Pet. App.

A3). The judgment of the court of appeals in No.

85-1423 was entered on April 14, 1986. The petition

for a writ of certiorari was filed on July 5, 1986. The

jurisdiction of this Court is invoked under 28 U.S.C.

1254(1).

STATEMENT

1. This case involves a challenge to the Federal

Aviation Administration’s (FAA) approval of an

Airport Layout Plan* describing a $1.5 billion proj-

ect to renovate and refurbish Chicago O’Hare Inter-

national Airport, which is owned and operated by the

City of Chicago. O’Hare has long been one of the

busiest transportation centers in the world, serving

the needs of regional, national, and international air

commerce. Most of its facilities and runways were

completed in the early 1960’s, with one additional

runway brought into service in 1967 and another in

1971. Originally designed to accommodate 20 to 25

million passengers annually, the airport’s three pas-

senger terminals recently have been called upon to

handle nearly 40 million passengers a year. Pet.

App. A5-A6; 17 R. Final Environmental Impact

Statement (FEIS) 3. “Simply stated, O’Hare has

grown to the point that demand for gate space and

passenger amenities far exceeds the 20-year old facil-

1 Previous agreements awarding federal aviation funds to

O’Hare (see Pet. App. A76-A77) required that any alteration

of the airport’s existing physical plant first be proposed in the

form of an Airport Layout Plan, which is essentially a detailed

series of maps indicating the proposed changes, along with

supporting documentation.

3

ities’ ability to accommodate it. The airport currently

handles twice the passenger volume for which [it]

was designed” (2bid.).

Today’s problems at O’Hare were not unanticipated.

In 1975, Chicago began a long-range process designed

to produce a plan that would respond to the region’s

aviation needs for the next two decades. The initial

step in this process was the preparation of a Master

Plan Study (MPS) by a consulting firm under con-

tract to the City, with funding provided in part by

the FAA. In the early stages of the Master Plan

process, the City concluded that the projected de-

mands for service at O’Hare could be accommodated

only by the construction of two new air carrier run-

ways. MPS IV-1. In 1980, however, the City con-

cluded that this construction was undesirable, and

that “constrained” development was _ preferable,

“Tb]ased upon considerations such as the level of

community concern about the social costs of major

expansion and extensive operational and financial

analyses * * *.” 14 R. 565, 566.

2. While the Master Plan Study was still in the

preparation stage, opponents of growth at O’Hare

sought relief in the courts. In 1974, the then-Attor-

ney General of Illinois, William Scott, brought an

action against the FAA and the Civil Aeronautics

Board in which the federal agencies were alleged,

among other things, to have violated the National

Environmental Policy Act (NEPA) by adopting a

policy of unlimited growth at O’Hare. Illinois ex rel.

Scott v. Butterfield, No. 74 C 2440 (N.D. Ill.). Peti-

tioners were permitted to intervene in that action.

The Butterfield litigation was settled on October 15,

1982, when the parties and intervenors entered into

4

a consent decree governing key aspects of future air-

port development at O’Hare. Pet. App. A109-A117.

The decree provided that the City would present the

Master Plan projects to the FAA for review “as a

single, comprehensive submission.” The FAA, in

turn, agreed to process an environmental impact

statement for those projects. The decree specified

which projects would be covered in the City’s submis-

sion and in the FAA’s environmental impact state-

ment. The consent decree also included a general pro-

vision that “‘[a]ll future development at O’Hare will

comply with all then applicable requirements of Fed-

eral and State of Illinois laws requiring environmen-

tal analyses and processing.” Jd. at A110-A112.

Finally, the decree provided for continuation of the

O’Hare Advisory Committee (OHAC)—an organiza-

tion whose members include representatives of Chi-

cago’s suburban communities—through June 30, 1995,

and designated that committee the appropriate forum

“for consideration of the relationship between O’Hare

and the [plaintiff] communities” (id. at A113-

A114).

* At the same time that the consent decree was signed, the

participants in the Butterfield litigation entered into an In-

tergovernmenta!l Agreement. 2 R. 615-621. That agreement

provided that the City would use a specified analytic model in

preparing a noise map and that a specified noise level “is a

goal toward which the Communities, the People, the FAA and

Chicago should aim in carrying out their respective obliga-

tions under this Agreement * * *.” Jd. {1(d). In addition,

the agreement provided that “the Communities and Chicago

shall take feasible and reasonable steps to discourage the

further development of incompatible land uses around O’Hare

and to reduce existing incompatible land uses * * *.” Id.

"3(c). Finally, the agreement acknowledged that Chicago

“has no current plans to add new runways to O’Hare suitable

5

3. After the consent decree was signed in 1982,

Chicago continued to refine and revise its plans for

the development program. Eventually, the City de-

cided, subject to FAA approval, to undertake a two-

stage development of O’Hare’s facilities. Phase | of

the City’s plan, which is not challenged in this litiga-

tion, involves the construction of a new terminal and

an associated passenger concourse. Phase Ii is more

extensive: it calls for replacement of the old inter-

national terminal, construction of new commuter and

international terminals and new general aviation and

cargo facilities, and minor extensions of two run-

ways. Related projects also are planned, including

development of aircraft taxiways, concourse aprons

and holding pads; expansion of automobile parking

and roadways; and relocation of severa! other facili-

ties. FEIS 11-18.

In October 1982, the proposed environmental re-

view process for the project was described to the pub-

lic by the FAA and the City, initially at an OHAC

meeting. 19 R. 7578. Shortly thereafter, the City and

the FAA jointly held a public meeting to discuss the

appropriate scope of the environmental impact state-

ment to be prepared for the project. See 1 R. 49-53,

54-57. Representatives of petitioners attended, as did

numerous other organizations and individuals. 1 R.

123, 182-133, 143-147. In addition, petitioners filed

four pages of written comments on the proposed

scope of the environmental impact statement. 1 R.

173-176. Other parties also supplied written and oral

comments as part of the “scoping” process, as did

several federal and state agencies. 1 R. 162-195.

for aircraft classified by the FAA as ‘large,’”’ and provided

that Chicago would not bring such new runways into service

before June 30, 1995. Id. {| 4(a).

6

After reviewing these comments, the City prepared

a Preliminary Draft Environmental Impact State-

ment, which was made available to the public at

nearly 30 libraries and other locations. 1 R. 217-220.

In addition, public hearings were held on June 1 and

June 2, 1983, at different suburban locations. Peti-

tioners were provided with an uninterrupted period

at the beginning of each hearing to make comments

following the City’s description of the plan. After

taking into account all of the information available

to it, the City put its Airport Layout Plan into final

form and submitted it to the FAA for approval.

Upon receiving the Plan, the FAA performed its

own assessment of the proposal, reviewing the infor-

mation supplied by the City and the views received

from petitioners and the public. On the basis of that

review, the FAA prepared its own draft environmen-

tal impact statement, which was circulated for public

comment in December 1983. After revising the docu-

ment in response to the comments received, the agency

issued a Final Environmental Impact Statement on

May 31, 1984.

The FAA subsequently approved the Airport Lay-

out Plan by a Record of Decision (ROD) issued on

November 14, 1984 (Pet. App. A74-A102). The ROD

described the scope of the project, potential alterna-

tives, environmental considerations, and other factors.

The ROD noted that the FAA had evaluated the pro-

posal under Parts 77, 152 and 157 of the Federal

Aviation Regulations (14 C.F.R. Pts. 77, 152, 157),

which respectively govern obstruction evaluations for

flight operations, the federal airport aid program,

and notice requirements for airport construction or

modification. Pet. App. A100-A101. The ROD fur-

7

ther observed that “[a]pproval of the Airport Layout

Plan does not represent approval as far as necessity

for the development is concerned * * *. It signifies

a concurrence for planning purposes based on review

of conformance with current standards for safety,

utility, and efficiency” (id. at A75).

On December 4, 1984, petitioners filed suit in the

United States District Court for the Northern Dis-

trict of Illinois, alleging that the approval of the

Airport Layout Plan (ALP) violated the Butterfield

consent decree, NEPA, the Airport and Airway Im-

provement Act, 49 U.S.C. App. (& Supp. II) 2201

et seq., and the Clean Air Act, 42 U.S.C. (& Supp.

II) 7401 et seg. The district court did not reach the

merits of these claims, however, ruling that review

of the FAA’s decision was available only in the court

of appeals (Pet. App. A31-A68). The district court

noted that its decision did not bar petitioners from

obtaining judicial review of the FAA’s action, because

on January 14, 1985, petitioners had filed a petition

for review of the FAA’s decision in the Seventh Cir-

cuit (id. at A37).

4, In their petition for review, petitioners alleged

an array of factual and legal deficiencies in the ALP

approval process and in the associated Fina] Environ-

mental! Impact Statement. These included an asserted

failure to give adequate consideration to alternatives

to the proposed project (specifically to the options of

directing transfer traffic to other airports and of

constructing a new airport); failure to analyze the

impact of these alternatives; failure to disclose “data,

calculations, methodology and worksheets”; failure to

identify costs and bei.cfits adequately and to include

a cost/benefit analysis; and improper segmentation of

the project. Petitioners also contended that the FAA’s

approval of the ALP violated the agency’s regulations

8

for implementing the Clean Air Act, and violated the

Airport and Airway Improvement Act by improperly

concluding that the runway extensions shown in the

ALP were “minor” rather than “major.” Finally,

petitioners argued that consideration of these issues

required the decision of disputed questions of fact

that could only be resolved by the district court.

The court of appeals rejected all of petitioners’

claims. The court first determned that it had juris-

diction, concluding that the FAA’s decision to ap-

prove the ALP was, in substantial part, an “order”

made pursuant to Chapter 20, 49 U.S.C. App. (&

Supp. II) 1301 et seq., and as such was reviewable

only in the courts of appeals as provided in 49 U.S.C.

App. 1486. In reaching this conclusion, the court

rejected petitioners’ contention that approval of the

ALP could not be considered an “order’”’ because the

administrative record was inadequate to permit judi-

cial review. The court noted that “the existence of a

reviewable administrative record is the determina-

tive element in defining an FAA decision as an

‘order’ for purposes of Section 1486” (Pet. App. A17).

Here, the court found the 53-volume administrative

record adequate to allow for review. Similarly, the

court of appeals found the Administrative Orders

Review Act (Hobbs Act), 28 U.S.C. 2347(b)—

which permits trial de novo in the district court of

certain challenges to the decisions of five specifically

enumerated agencies—inapposite here because the

FAA is not among the agencies enumerated by Con-

gress in the statute.’ Pet. App. A18.

* The court of appeals also rejected petitioners’ assertions

(not repeated here) that it lacked jurisdiction because the

FAA’s decision was made in part under Chapter 31, 49 U.S.C.

9

|

The court of appeals then addressed the appropri-

ate standard of review. The court noted that, under

Section 1486, the FAA’s findings of fact, “if sup-

ported by substantial evidence, shall be conclusive”

(Pet. App. A18). The court accordingly found the

substantial evidence test applicable here. While it

recognized “[t]he fact that the agency findings in

this case were the product of an informal informa-

tion-gathering process” (id. at Al19), the court

reasoned:

The ‘informality’ of the FAA decisionmaking

process is less important to our decision [to ap-

ply the substantial evidence standard] than the

fact that petitioner’s views were represented at

virtually every stage of the decisionmaking proc-

ess. * * * The lengthy and elaborate decision-

making procedures preceding the FAA’s Novem-

ber 14 decision in this case are not the sort of

informal processes the drafters of the APA had

in mind when they adopted the arbitrary and

capricious standard of review.

Id. at A21. The court proceeded to apply this stand-

ard, rejecting all of petitioners’ substantive conten-

tions (id. at A21-A30).*

App. (& Supp. II) 2201 et seq. (see Pet. App. A15-A16), and

that district court jurisdiction to entertain the suit was created

by the Butterfield consent decree (id. at A17).

* Petitioners meanwhile had filed an appeal from the district

court’s December 4, 1984, holding that it lacked jurisdiction to

entertain their claims. Shortly after rejecting the petition for

review on the merits, the court of appeals summarily affirmed

the district court’s jurisdictional ruling (Pet. App. Al-A2).

10

ARGUMENT

Petitioners now make essentially one claim: that

they have a right either to a hearing on the record

before the FAA or to a trial-type proceeding de novo

before a district court in which to contest the agency’s

factual conclusions. This contention, which cannot be

reconciled with the decisions of this Court and of the

courts of appeals, is wholly without merit and does

not warrant further review.

1. As the court of appeals noted, the challenged

FAA action was composed of four elements. Three

of those elements were undertaken pursuant to Chap-

ter 20 of the Federal Aviation Act; Section 1486 of

that Act specifies that decisions rendered under Chap-

ter 20 are reviewable in the court of appeals under a

substantial evidence standard. The fourth element of

the FAA’s decision was rendered under Chapter 31.

See Pet. App. A14-A16. While the Act does not spe-

cifically address judicial review of agency action

taken under that Chapter, such decisions are review-

able under the Administrative Procedure Act (APA),

5 U.S.C. 704.

Thus, review was had here under the combined

auspices of the Federal Aviation Act and the APA.

Neither Act expressly requires use of an on-the-record

trial-type proceeding in the context of an informal

adjudication such as that conducted in this case by

the FAA.’ The Federal Aviation Act nowhere refers

to such proceedings, and the APA requires them only

where the underlying statute directs the agency to

° The right to a trial-type hearing is generally denoted by

Congress's inclusion in a statute of the words “hearing on the

record.” See United States v. Florida East Coast Ry., 410

U.S. 224 (1973); United States v. Allegheny-Ludlum Steel

Corp., 406 U.S. 742, 757 (1972).

11

conduct a formal adjudication ‘on the record after

opportunity for an agency hearing.” 5 U.S.C. 554(a).

The relevant portions of tr: Federal Aviation Act

contain no such language.®

2. Petitioners evidently recognize that the appli-

cable statutory provisions do not expressly call ee

on-the-record proceeding before the agency,

knowledge that the courts lack the authority to re-

quire the FAA to hold such proceedings (Pet. 28,

citing Vermont Yankee Nuclear Power Corp. v. Nat-

ural Resources Defense’ Council, Inc., 435 U.S. 519

(1978)). Petitioners nevertheless assert (Pet. 27)

that the court of appeals should have eschewed juris-

diction—in disregard of the express language of the

Federal Aviation Act—and instead remanded the

matter to the district court for a trial de novo. Peti-

tioners base this argument on their view that “the

Court of Appeals attempted to honor the letter of the

* Petitioners do not appear to contend that a trial-type pro-

ceeding is constitutionally required under the Due Process

Clause. To the extent that such an argument is advanced in

the petition, however, it is without merit. While due process

requirements are triggered only where a “liberty” or “prop-

erty” interest is implicated (see Board of Regents v. Roth,

408 U.S. 564, 571 (1972)), “{gjeneralized health, safety, and

environmental concerns do not constitute liberty or property

subject to due process protection.” City of West Chicago v.

Nuclear Regulatory Commission, 701 F.2d 632, 645 (7th Cir.

1983) ; see Izaak Walton League vy. Marsh, 655 F.2d 346, 361

(D.C. Cir. 1981), cert. denied, 454 U.S. 1092 (1982). See also

Bi-Metalic Co. v. State Board of Equalization, 239 U.S. 441,

445 (1915). Moreover, it is clear that, in the context of con-

gressionally created “public rights,” Congress enjoys great

latitude both in establishing agency factfinding mechanisms

and in providing for judicial review of agency decisions. Cf.

Atlas Roofing Co. Vv. Occupational Safety & Health Commis-

sion, 430 U.S. 442, 450-456 (1977).

12

statutory command without honoring the corollary re-

quirement that the substantial evidence test [whose

use is mandated by the Federal Aviation Act] only

be applied where there has been an agency trial be-

low” (Pet. 27). |

Petitioners, however, are fundamentally mistaken

in asserting that there is, as a general matter, any

such “corollary requirement” of a de novo proceeding

before a district court when the agency has not pre-

viously conducted an on-the-record hearing. In sup-

port of their contention, petitioners cite (Pet. 20-21)

isolated portions of the APA’s legislative history (and

cite nothing at all from the background of the Fed-

eral Aviation Act).’ But the text of the APA as en-

7 Petitioners’ analysis of the APA’s legislative history is

flawed. As explained in the Attorney General’s Manual on

the Administrative Procedure Act 109 (1947):

As to Clause (6) [now paragraph (F) of 5 U.S.C.

706 (2)], the legislative history has resulted in misunder-

standing. As S. 7 was introduced in the Senate, clause

(6) was followed by a provision that ‘The relevant facts

shall be tried and determined de novo by the original

court of review in all cases in which adjudications are

not required by statute to be made upon agency hearing.”

When S. 7 was reported by the Senate Committee, the

quoted provision was omitted. Notwithstanding, the sub-

sequent legislative history contains repeated statements

to the effect that clause (6) embodies the “established

rule * * * [which requires a judicial] trial de novo to

establish the relevant facts as to the applicability of any

rule and as to the propriety of adjudications where there

is no statutory administrative hearing.” Senate Compara-

tive Print, June 1945, p. 20 (Sen. Doc. pp. 39-40) ; H.R.

Rep. p. 45 (Sen. Doc. p. 279).

To the contrary, the language of clause (6), “to the ex-

tent that facts are subject to trial de novo by the review-

ing court,” obviously refers only to those existing situa-

13

acted contains no such requirement of a de novo

trial.®

That this omission was not an oversight is con-

firmed by Citizens to Preserve Overton Park, Ine. v.

Volpe, 401 U.S. 402 (1971). That case involved a

challenge to an agency’s approval of the commence-

ment and funding of a construction project. As here,

no relevant statute expressly required the agency to

make “formal findings” as part of its decision (id.

at 409, 417; see also Camp v. Pitts, 411 U.S. 138,

140 (1973) ; National Coal Operators Ass’n v. Kleppe,

423 U.S. 388, 388-399 (1976) ). As here, no relevant

statute required an adjudicatory hearing “to pro-

duce a record that is the basis for agency action”

(401 U.S. at 415). In these circumstances, this Court

held that the agency decision was not subject to re-

view by de novo trial; it explained that de novo re-

view is available only where factfinding procedures

are inadequate (and that there may be independent

judicial factfinding where issues that were not before

the agency are raised in judicial proceedings to en-

force nonadjudicatory agency action). Jbid.; see

Camp, 411 U.S. at 141-142. As in Overton Park,

neither of these prerequisites to de novo review is

present here.

tions in which judicial review has consisted of a trial de

novo. * * * In addition, there is no “established rule”

requiring a judicial trial de novo wherever statutes fail

to require an agency hearing.

8 Indeed, the APA’s judicial review provision, 5 U.S.C.

706(2)(F) (emphasis added), simply provides that the re-

viewing court shall set aside agency action “unwarranted by

the facts to the extent that the facts are subject to trial de novo

by the reviewing court.” Thus, it is implicit in the APA that

de novo review is available only if a de novo trial is otherwise

required by applicable law.

14

Nor can petitioners derive from the inclusion of the

term “substantial evidence” in Section 1486 a re-

quirement that judicial review proceed de novo in the

district court unless the agency previously has con-

ducted on-the-record proceedings. Petitioners cite

nothing from the legislative history of the Act sup-

porting such a contention. Instead, petitioners at-

tempt to demonstrate that Congress invariably cor-

related use of the substantial evidence standard of

review by a court with a prior trial-type hearing be-

fore the agency. To this end, petitioners devote the

major portion of their argument (see Pet. 18-23) to

a discussion of what they term the “five basic frame-

works” for judicial review of agency action involving

disputed facts.

Petitioners’ contention, however, rests on a non

sequitur.® While Congress in some circumstances may

have linked judicial review under a “substantial evi-

dence” standard to the prior conduct by the agency

of a trial-type hearing on-the-record, it has not in-

variably done so, and petitioners have pointed to

nothing in the Federal Aviation Act to suggest that

* As the district court noted, petitioners’ argument “in-

evitably leads to the conclusion that any time a party merely

alleges that the agency’s administrative record is insufficient,

or that it is based on disputed fact issues, a special judicial

review statute that vests exclusive jurisdiction in the Court

of Appeals is immediately set aside in favor of jurisdiction

in the district court” (Pet. App. A68).

1°TIn a variety of statutes (e.g., Consumer Product Safety

Act, 15 U.S.C. 2060(c)}; Toxic Substances Control Act, 15

U.S.C. 2618(c) (1) (B) ; Occupational Safety and Health Act,

29 U.S.C. 655(j)), Congress has provided for review of rule-

making under a “substantial evidence” standard while failing

to require that an agency conduct a formal hearing as part

of its rulemaking process.

15

Congress created such a nexus here. To the contrary,

Congress clearly indicated that review was to occur

in the courts of appeals, and neither stated nor im-

plied that such review was contingent upon the agen-

cy’s prior conduct of an on-the-record hearing.

In any event, even if use of the “substantial evi-

dence” standard is inextricably linked to the prior

holding of an on-the-record hearing by the agency,

that conclusion would suggest only that the court be-

low should have employed the “arbitrary and capri-

cious” standard in reviewing the FAA’s decision—

not that the court of appeals should have transferred

the case to the district court. As the court below ex-

plained, petitioners’ challenge does not fall within the

narrow category of cases that may be sent to the dis-

trict courts pursuant to the Hobbs Act. In the ab-

sence of such a statutory directive, the “ ‘focal point

for judicial review should be the administrative rec-

ord already in existence, not some new record made

inititially in the reviewing court.’” Florida Power

c¢: Light Co. v. Lorion, No. 83-703 (Mar. 20, 1985),

slip op. 14 (citation omitted). The court of appeals

thus acted properly in considering the case on the

record compiled by the FAA. And if the court erred

in applying the ostensibly stricter substantial evi-

dence test," rather than the arbitrary and capricious

11 A number of courts, including the Seventh Circuit, have

questioned whether there is any meaningful distinction be-

tween the two standards where, as here, informal agency

action is under review. See, e.g., River Road Alliance, Ine. Vv.

Corps of Engineers, 764 F.2d 445, 449 (7th Cir. 1985), cert.

denied, No. 85-785 (Mar. 3, 1986); Aircraft Owners & Pilots

Ass’n V. FAA, 600 F.2d 965, 971 (D.C. Cir. 1979) ; Associated

Industries v. Department of Labor, 487 F.2d 342, 349-350

(2d Cir. 1973), cert. denied, 416 U.S. 942 (1974); Paccar,

16

standard, that error plainly did not prejudice peti-

tioners.

CONCLUSION

The petition for a writ of certiorari should be

denied.

Respectfully submitted.

CHARLES FRIED

Solicitor General

F. HENRY HABICHT IT

Assistant Attorney General

PETER R. STEENLAND, JR.

KAREN L. FLORINI

Attorneys

SEPTEMBER 1986

Inc. v. National Highway Transportation Safety Administra-

tion, 573 F.2d 632, 636 (9th Cir. 1978), cert. denied, 439 U:S.

862 (1979).

W ou. s. covexnment PRIMTING OFFICE; 1986 491507 20320

¥ .

%

Say

ot so

oe