Professional Documents
Culture Documents
Document #1541908
Filed: 03/11/2015
Page 1 of 86
No. 14-1168
IN THE UNITED STATES COURT OF APPEALS
FOR THE DISTRICT OF COLUMBIA CIRCUIT
_____________________
FLYTENOW, INC.,
Petitioner,
v.
FEDERAL AVIATION ADMINISTRATION, ADMINISTRATOR,
Respondent.
_____________________
ON PETITION FOR REVIEW FROM
THE FEDERAL AVIATION ADMINISTRATION
_____________________
BRIEF FOR THE RESPONDENT
_____________________
BENJAMIN C. MIZER
Acting Assistant Attorney General
RONALD C. MACHEN JR.
United States Attorney
MARK R. FREEMAN
(202) 514-5714
SYDNEY FOSTER
(202) 616-5374
Attorneys, Appellate Staff
Civil Division, Room 7513
U.S. Department of Justice
950 Pennsylvania Ave., N.W.
Washington, D.C. 20530
Document #1541908
Filed: 03/11/2015
Page 2 of 86
The ruling under review is a legal interpretation issued by the Federal Aviation
Administration on August 14, 2014, which appears in the Joint Appendix (JA) at
JA 61-62. There is no official citation for the legal interpretation, but it is available on
Westlaw at 2014 WL 4185827.
C.
Related Cases
This case has not been before this Court or any other court, and counsel is not
aware of any other related cases within the meaning of D.C. Circuit Rule 28(a)(1)(C).
s/Sydney Foster
Sydney Foster
Document #1541908
Filed: 03/11/2015
Page 3 of 86
TABLE OF CONTENTS
Page
CERTIFICATE AS TO PARTIES, RULINGS, AND RELATED CASES
GLOSSARY
STATEMENT OF JURISDICTION ................................................................................. 1
STATEMENT OF THE ISSUES ....................................................................................... 1
PERTINENT STATUTES AND REGULATIONS ....................................................... 2
STATEMENT OF THE CASE .......................................................................................... 2
A.
B.
II.
B.
Document #1541908
Filed: 03/11/2015
Page 4 of 86
B.
C.
CONCLUSION ................................................................................................................... 48
CERTIFICATE OF COMPLIANCE
CERTIFICATE OF SERVICE
ADDENDUM
ii
Document #1541908
Filed: 03/11/2015
Page 5 of 86
TABLE OF AUTHORITIES
Cases:
Page
Document #1541908
Filed: 03/11/2015
Page 6 of 86
Document #1541908
Filed: 03/11/2015
Page 7 of 86
Document #1541908
Filed: 03/11/2015
Page 8 of 86
Document #1541908
Filed: 03/11/2015
Page 9 of 86
49 U.S.C. 106(g)(1)(A)....................................................................................................... 35
49 U.S.C. 40102(a)(2) .............................................................................................. 4, 34, 39
49 U.S.C. 40102(a)(5) .............................................................................................. 4, 34, 39
49 U.S.C. 40102(a)(8)(A) .................................................................................................... 3
49 U.S.C. 40102(a)(23) ............................................................................................ 4, 34, 39
49 U.S.C. 40102(a)(25) ............................................................................................ 4, 34, 39
49 U.S.C. 40113(a) ..................................................................................................... 1, 3, 35
49 U.S.C. 41101(a)(1) ........................................................................................................ 35
49 U.S.C. 44701-44711 ..................................................................................................... 1
* 49 U.S.C. 44701 ................................................................................................................. 36
49 U.S.C. 44701(a) ............................................................................................................... 3
49 U.S.C. 44701(a)(5) .................................................................................................. 17, 35
49 U.S.C. 44701(c) ............................................................................................................... 3
49 U.S.C. 44701(d)(1)(A)-(B) ........................................................................................... 39
* 49 U.S.C. 44702(a) ........................................................................................ 3, 4, 17, 34, 35
* 49 U.S.C. 44705 ................................................................................................ 4, 17, 34, 35
49 U.S.C. 44711(a)(2)(A) .................................................................................................... 3
49 U.S.C. 44711(a)(2)(A)-(B) ............................................................................................ 44
49 U.S.C. 44711(a)(2)(B) ..................................................................................................... 6
49 U.S.C. 44711(a)(4) ................................................................................................ 4, 6, 44
vii
Document #1541908
Filed: 03/11/2015
Page 10 of 86
Document #1541908
Filed: 03/11/2015
Page 11 of 86
Document #1541908
Filed: 03/11/2015
Page 12 of 86
Document #1541908
Filed: 03/11/2015
Page 13 of 86
Document #1541908
Filed: 03/11/2015
Page 14 of 86
Rule:
Fed. R. App. P. 16(a) ............................................................................................................ 12
xii
Document #1541908
GLOSSARY
FAA
JA
Joint Appendix
Pet. Br.
Petitioners Brief
Filed: 03/11/2015
Page 15 of 86
Document #1541908
Filed: 03/11/2015
Page 16 of 86
Document #1541908
Filed: 03/11/2015
Page 17 of 86
operating expenses. The FAA concluded that such pilots hold themselves out to the
public as available to provide transportation in exchange for compensation and thus
are common carriers. Accordingly, the FAA determined that Flytenow pilots must
obtain the necessary certificate under FAA regulationsknown as a Part 119
certificateto provide that flight service. The questions presented are:
1. Whether the agencys decision is consistent with governing regulations.
2. Whether 49 U.S.C. 46110(d) bars this Court from considering Flytenows
statutory and constitutional challenges because no such objections were raised before
the agency.
3. If not barred by 46110(d), whether the agencys decision is consistent with
the notice-and-comment requirements of the Administrative Procedure Act; the
Federal Aviation Act; the Due Process Clause of the Fifth Amendment; and the First
Amendment.
PERTINENT STATUTES AND REGULATIONS
Pertinent statutes and regulations are reproduced in the addendum to this brief.
STATEMENT OF THE CASE
Petitioner Flytenow operates a website on which a pilot may post information
about upcoming flights to attract passengers willing to pay a pro rata share of the
pilots operating expenses. Flytenow requested a legal interpretation from the FAA
regarding the companys business model. The FAA concluded that pilots who
2
Document #1541908
Filed: 03/11/2015
Page 18 of 86
Document #1541908
Filed: 03/11/2015
Page 19 of 86
For example, to be eligible for a private pilot certificate, the type of certificate most
pertinent here, a pilot seeking to operate a single-engine or multiengine plane
generally must have at least 40 hours of flight experience. Id. 61.103(g), 61.109(a),
(b). A person holding a private pilot certificate, in turn, is authorized to engage in
certain aircraft operations but not others. Id. 61.113-61.117.
Second, Congress instructed the FAA to regulate persons who wish to provide
transportation by air as a common carrier. The FAA issues air carrier operating
certificate[s] authorizing persons to operate as air carrier[s] if those persons are
properly and adequately . . . equipped and able to operate safely under relevant
statutes, regulations, and standards. 49 U.S.C. 44705; id. 44702(a), 44711(a)(4).
Congress defined air carrier[s] to include persons who undertak[e] . . . to provide
interstate or foreign aircraft transportation to passengers as a common carrier for
compensation. Id. 40102(a)(2), (5), (23), (25). Although the statute does not define
the term common carrier, the FAA has interpreted that term to mean any person
who (1) . . . hold[s] out [to the public or a segment of the public] . . . a willingness
to (2) transport persons or property (3) from place to place (4) for compensation.
FAA Advisory Circular No. 120-12A (JA 30); see also CSI Aviation Servs., Inc. v. U.S.
Dept of Transp., 637 F.3d 408, 415 (D.C. Cir. 2011).
As relevant here, Part 119 of the FAAs regulations governs any person
operating or intending to operate civil aircraft as a common carrier, whether as an
4
Document #1541908
Filed: 03/11/2015
Page 20 of 86
The regulatory definition of the term air carrier is based on the statutory
definition and includes persons who transport passengers by air as a common carrier
for compensation or hire in commerce in interstate, overseas, or foreign settings. 14
C.F.R. 1.1. The term commercial operator encompasses (1) persons operating as
common carriers in intrastate settings, and (2) persons transporting passengers for
compensation but who are not common carriersi.e., persons who do not hold
themselves out to the public or a segment of the public as available to provide
transportation servicesin intrastate, interstate, overseas, or foreign settings. See id.;
see also Gorman v. NTSB, 558 F.3d 580, 589-91 (D.C. Cir. 2009) (explaining statutory
authority for issuing commercial operator certificates and holding that commercial
operators include persons operating in the intrastate setting). For present purposes,
the distinction between air carriers and commercial operators is not material; the
salient point is that Part 119 governs any person who operates civil aircraft as a
common carrier.
5
Document #1541908
Filed: 03/11/2015
Page 21 of 86
135.243(a), (b)(1)-(2), (c)(1)-(2) (explaining, e.g., that certain Part 119 pilots must
have 500 hours of flight experience and others must have 1,200 hours of flight
experience); id. 119.21(a)(4)-(5) (making certain operations subject to Part 135
requirements); see also, e.g., Alaska Profl Hunters Assn v. FAA, 177 F.3d 1030, 1033
(D.C. Cir. 1999), abrogated on other grounds, Perez v. Mortg. Bankers Assn, 2015 WL
998535 (S. Ct. 2015); FAA v. Landy, 705 F.2d 624, 628 (2d Cir. 1983). 2
Regardless of which type of certificate a person is issued, Congress specified
that no person may operate an aircraft in violation of the terms of the certificate or
any related regulations. 49 U.S.C. 44711(a)(2)(B), (a)(4), (a)(5). In addition, [n]o
person may advertise or otherwise offer to perform an operation subject to [Part 119]
unless that person is authorized by the [FAA] to conduct that operation. 14 C.F.R.
119.5(k).
2. In general, FAA regulations forbid persons who hold private pilot
certificates from transporting passengers or property in exchange for money. Under
Document #1541908
Filed: 03/11/2015
Page 22 of 86
14 C.F.R. 61.113(a), no person who holds a private pilot certificate may act as pilot
in command of an aircraft that is carrying passengers or property for compensation or
hire; nor may that person, for compensation or hire, act as pilot in command of an
aircraft. That principle, however, is subject to several exceptions, including what is
known as the expense-sharing rule: A private pilot may not pay less than the pro rata
share of the operating expenses of a flight with passengers, provided the expenses
involve only fuel, oil, airport expenditures, or rental fees. Id. 61.113(c).
In prior legal interpretations, the FAA has explained that 61.113(a) and (c) do
not bar a private pilot from accepting payment from his passengers for enumerated
operating expenses as long as he remains responsible for paying his pro rata share of
those expenses and as long as the pilot and the passengers share a common
purpose. 3 The FAA has stated that the common purpose requirement is satisfied
where the destination was dictated by the pilot . . . , and both [the pilot] and [the]
passengers have personal business to conduct [at the destination], thus establishing
that the purpose of th[e] flight is not merely to transport [the] passengers in
E.g., Legal Interpretation to Mark Haberkorn (FAA 2011) (JA 43); Legal
Interpretation to Don Bobertz (FAA 2009) (JA 39); Legal Interpretation to Guy
Mangiamele (FAA 2009) (JA 36-37); Legal Interpretation to Thomas H. Chero (FAA
1985) (JA 28).
7
3
Document #1541908
Filed: 03/11/2015
Page 23 of 86
exchange for compensation.4 The expense-sharing rule thus permits casual expense
sharing by a pilot wishing to take some friends or acquaintances with him on a trip.
Legal Interpretation to Thomas H. Chero (FAA 1985) (JA 28). See also, e.g., Pet. Br. 12,
19-20 (agreeing that a common purpose is required to satisfy 61.113(c)).
B.
upcoming flights to attract passengers willing to pay a pro rata portion of the pilots
operating expenses. Any member of the public may use Flytenows service and pay to
become a passenger on a posted flight: although individuals must apply for
membership to the website, there is no indication in the record that Flytenow
denies membership to any prospective passenger. JA 47. Once individuals are
accepted as members, they have access to Flytenows flight-listing service. JA 47.
A Flytenow pilot may post on the website the dates, times, and points of
operation of any upcoming flight, provided the flight involves a plane under a certain
size. 5 JA 47, 49 n.10. Prospective passengers who are Flytenow members may view all
Haberkorn Interpretation (JA 43); see also Mangiamele Interpretation (JA 3637); Legal Interpretation to Peter Bunce (FAA 2008) (JA 33); Chero Interpretation
(JA 28).
5
Flytenow does not permit pilots to list flights involving airplanes with a seat
configuration of 20 or more passengers or a maximum payload capacity of 6,000
pounds or more. JA 49 n.10. That restriction tracks the FAAs regulations, which
specify that the operation of such airplanes requires a Part 119 certificate without
regard to whether the operator is a common carrier. See 14 C.F.R. 119.1(a)(1)-(2).
8
4
Document #1541908
Filed: 03/11/2015
Page 24 of 86
flights posted by pilots and request to be a passenger on any such flight. JA 47-48. A
pilot may then accept or reject the prospective passengers request for any reason. JA
48. If a pilot and passenger connect through the website, the website enables the
pilot to accept pro rata reimbursement from the passenger for expenses identified
in 14 C.F.R. 61.113(c)fuel, oil, airport expenditures, and rental fees. JA 48.
According to Flytenows brief, Flytenow facilitates this transaction by transferring
payment from the passenger to the pilot at the conclusion of the flight. Pet. Br. 13.
2. a. In February 2014, Flytenow sent the FAA a letter requesting that the
FAAs Office of the Chief Counsel provide a legal interpretation regarding its
website. JA 47-50. Flytenows letter described the website and requested that the FAA
address whether Flytenowor a pilot or passenger using the websitewould run
afoul of the Federal Aviation Regulations. JA 49; see also JA 47-48. Flytenow offered
its own proposed analysis, contending that (1) pilots who use the website share
operating expenses consistent with 14 C.F.R. 61.113(c); and (2) pilots who use the
website are not common carriers under Part 119 of the FAAs regulations. JA 48-49.
At no point did Flytenow assert that the FAA was required by statute or the
Constitution to permit it to operate its website or to permit pilots and passengers to
use its website, nor did Flytenow request that the FAA address any statutory or
constitutional questions.
Document #1541908
Filed: 03/11/2015
Page 25 of 86
Document #1541908
Filed: 03/11/2015
Page 26 of 86
(emphasis added). In addition, the FAA determined that pilots participating in the
AirPooler website were holding out to the public to transport passengers, thus
satisfying the holding out element of common carriage. JA 60. The FAA explained
that [t]his position is fully consistent with prior legal interpretations related to other
nationwide initiatives. 6
In the legal interpretation issued to Flytenow, the FAA further emphasized that
[h]olding out can be accomplished by any means which communicates to the public
that a transportation service is indiscriminately available to the members of that
segment of the public it is designed to attract. JA 62 (quoting In re Transocean Air
Lines, Inc., 11 C.A.B. 350, 353 (1950) (JA 4)). The FAA explained that, [b]ased on
[Flytenows] description, the website is designed to attract a broad segment of the
public interested in transportation by air. JA 62. Because Flytenow and AirPooler
pilots are engaged in common carriage, the FAA concluded that they require Part 119
certificates. JA 61-62.
This petition for review followed. 7
Document #1541908
Filed: 03/11/2015
Page 27 of 86
SUMMARY OF ARGUMENT
Flytenow operates a website on which an aircraft pilot can post information
about upcoming flights to attract passengers who are willing to pay a pro rata share of
the pilots operating expenses. In the decision under review, the FAA determined that
Flytenow pilots are common carriers and thus must obtain a Part 119 certificate
that subjects them to heightened safety standards. Flytenow does not dispute that
common carriers are required to obtain Part 119 certificates, nor does Flytenow
contest the agencys definition of common carriera person who holds himself out
to the public as available to provide transportation in return for compensation.
Instead, Flytenow contends that the agencys conclusion that Flytenow pilots are
common carriers under this definition is arbitrary and capricious.
The agency reasonably determined that Flytenow pilots are common carriers.
Flytenow pilots offer flight services to paying strangers. Postings by pilots on the
Flytenow website are accessible to any member of the public who applies to become a
Flytenow member, and thus the holding out requirement of common carriage is
satisfied. Indeed, Flytenow does not seriously argue otherwise. In addition, the
agencys regulations and prior legal interpretations establish that the payment of a pro
rata share of expenses in exchange for transportation qualifies as compensation, a
before this Court. See 49 U.S.C. 46110(b); 28 U.S.C. 2112(b); Fed. R. App. P. 16(a);
see also, e.g., American Wildlands v. Kempthorne, 530 F.3d 991, 1001-02 (D.C. Cir. 2008).
12
Document #1541908
Filed: 03/11/2015
Page 28 of 86
conclusion consistent with the ordinary meaning of that term. Flytenow contends that
the agency misconstrued various regulations in reaching these conclusions, but the
agencys interpretation of those provisions is both sensible and persuasive. At a
minimum, the agencys interpretation of its own rules is not plainly erroneous or
inconsistent with the regulations.
Flytenow also asserts a variety of statutory and constitutional challenges to the
agencys decision, but this Court is barred by 49 U.S.C. 46110(d) from considering
those challenges because Flytenow failed to raise them during the administrative
proceedings. In any event, all of Flytenows statutory and constitutional challenges fail
on their own terms. First, the Administrative Procedure Act did not require the
agency to engage in notice-and-comment rulemaking prior to adopting the
interpretations of its regulations set forth in the decision on review because those
interpretations are interpretive rules or statements of policy. Second, the FAA plainly
has statutory authority to require that pilots advertising flights to the public on the
Internet obtain Part 119 certificates. Congress specifically granted the FAA authority
to require common carriers to obtain specialized certificates, and a person is a
common carrier if he holds himself out to the public as available to provide
transportation in exchange for compensation, including when he does so on the
Internet.
13
Document #1541908
Filed: 03/11/2015
Page 29 of 86
Flytenows constitutional challenges are equally wide of the mark. First, the
FAAs conclusion that Flytenow pilots must obtain Part 119 certificates is consistent
with the equal protection component of the Due Process Clause because it is rational
for the FAA to impose stricter safety standards on expense-sharing pilots who serve
the public than on expense-sharing pilots who operate privately. Second, the holding
out element of the common carriage analysis, as applied by the FAA, is not
unconstitutionally vague. There is no uncertainty as to how that standard applies to
Flytenow pilots, who advertise flights on a website accessible by any member of the
public. In any case, the standard is not vague as applied to others, and entities may
seek clarification by requesting a legal interpretation from the FAA. Flytenow did just
that and received a clear and definitive answer from the agency.
Finally, the First Amendment does not bar the FAA from using a pilots
advertisement to the public as evidence that the pilot has held himself out to the
public, thereby triggering the requirement that the pilot obtain a Part 119 certificate.
Nor is 14 C.F.R. 119.5(k), which precludes persons from advertising operations
subject to Part 119 prior to obtaining authorization from the FAA to conduct those
operations, problematic. That regulation bars persons from offering to engage in
illegal transactions, and such offers receive no protection under the First Amendment.
Even if advertisements by pilots on the Flytenow website are protected by the First
Amendment, those advertisements are commercial speech that may be restricted
14
Document #1541908
Filed: 03/11/2015
Page 30 of 86
under the test articulated in Central Hudson Gas & Electric Corp. v. Public Service
Commission, 447 U.S. 557 (1980). The FAAs regulations requiring pilots who post
flights on the Flytenow website to obtain Part 119 certificates easily pass scrutiny
under Central Hudson because they are narrowly tailored to the FAAs substantial
interest in ensuring that those pilots who serve the publici.e., those who hold out
the availability of transportation by air to the publicsatisfy heightened safety
standards.
STANDARD OF REVIEW
The FAAs decision must be upheld unless it is arbitrary, capricious, an abuse
of discretion, . . . otherwise not in accordance with law, or contrary to constitutional
right. 5 U.S.C. 706(2)(A), (B). See City of Santa Monica v. FAA, 631 F.3d 550, 554
(D.C. Cir. 2011). The agencys interpretation of its own regulations is controlling
unless plainly erroneous or inconsistent with the regulation. Auer v. Robbins, 519 U.S.
452, 461 (1997) (internal quotation marks omitted); see also, e.g., Town of Barnstable v.
FAA, 740 F.3d 681, 687 (D.C. Cir. 2014).
ARGUMENT
The FAA reasonably concluded that pilots who use Flytenows website to
solicit paying passengers are common carriers and thus require a Part 119
certificate. Flytenow pilots offer point-to-point transportation by air to interested
strangers in exchange for moneythe traditional hallmark of a common carrier. That
15
Document #1541908
Filed: 03/11/2015
Page 31 of 86
the payment they receive is measured by the passengers pro rata share of the flight
expenses does not alter the fact that the pilots are providing flight services in
exchange for compensation. That conclusion follows from the plain language of the
FAAs regulations, which reflect the commonsense determination that defraying a
pilots fuel, oil, and other expenses in exchange for transportation is a form of
compensation. Flytenows arguments to the contrary (Pet. Br. 19-25) are meritless.
In addition, Flytenow argues (Pet. Br. 26-57) for the first time in this Court that
the agencys decision violates the notice-and-comment requirements of the
Administrative Procedure Act, exceeds the agencys authority under the Federal
Aviation Act, and violates the Constitution in various respects. Because Flytenow did
not raise these objections before the FAA, it is barred under 49 U.S.C. 46110(d)
from pressing them in this Court. See, e.g., Cronin v. FAA, 73 F.3d 1126, 1133-34 (D.C.
Cir. 1996). In any event, as explained below, Flytenows statutory and constitutional
challenges fail on their own terms.
I.
In the decision under review, the FAA reasonably determined that pilots who
solicit passengers on the Flytenow website are common carriers within the meaning
of the agencys regulations and thus require a Part 119 certificate. Flytenow does not
16
Document #1541908
Filed: 03/11/2015
Page 32 of 86
dispute that common carriers generally must obtain Part 119 certificates under the
governing regulations, whether as air carriers or commercial operators. 8 See Pet.
Br. 9, 11, 50; 14 C.F.R. 119.1(a)(1), 119.21(a); see also 49 U.S.C. 44701(a)(5),
44702(a), 44705, 44711(a)(5) (statutory authority); Gorman v. NTSB, 558 F.3d 580,
589-90 (D.C. Cir. 2009). Nor does Flytenow dispute the definition of common
carrier the agency has adoptedany person who (1) . . . hold[s] out [to the public
or a segment of the public] a willingness to (2) transport persons or property (3) from
place to place (4) for compensation, FAA Advisory Circular No. 120-12A (JA 30).
See Pet. Br. 6 n.6, 11 & n.14, 23-25 & n.21. The only dispute in this case centers
around whether Flytenow pilots are common carriers within the meaning of the
agencys definition. The agency reasonably determined that they are.
First, the FAA concluded that Flytenow pilots satisfy the holding out
element of common carriage, and Flytenow offers no argument in this Court to the
contrary. As the agency explained, and as Flytenow does not dispute, [h]olding out
can be accomplished by any means which communicates to the public that a
transportation service is indiscriminately available to the members of that segment of
the public it is designed to attract. JA 62 (quoting In re Transocean Air Lines, Inc., 11
Document #1541908
Filed: 03/11/2015
Page 33 of 86
C.A.B. 350, 353 (1950) (JA 4)); see also Pet. Br. 11 n.14, 24 n.21 (agreeing with this
formulation). As the administrative record establishes, any member of the public can
view flights that pilots post on the Flytenow website simply by applying for
membership to the website, and there is no indication that Flytenow ever denies
membership to a prospective passenger. JA 47. Indeed, the purpose of Flytenows
website is to allow pilots to attract strangers who are interested in becoming
passengers. The FAA thus reasonably concluded that, because Flytenows website is
designed to attract a broad segment of the public interested in transportation by air,
the holding out element of common carriage is satisfied. JA 62.
The FAA also reasonably determined that the for compensation element of
common carriage is satisfied by pilots who post flights on the Flytenow website. See
JA 61 (citing Legal Interpretation to Rebecca B. MacPherson (FAA 2014) (JA 57-60)).
Pilots posting flights on the Flytenow website offer transportation to passengers in
exchange for payment of a pro rata share of the flight expenses enumerated in 14
C.F.R. 61.113(c)fuel, oil, airport expenditures, and rental fees. JA 48. Receipt of
this money in exchange for transportation satisfies the ordinary meaning of the term
compensation, which the agency explained includes the act of making up for
whatever has been suffered or lost through another, and the act of remuneration. JA
59 (internal quotation marks omitted). The pilot transports the passenger, and the
passenger compensates the pilot by paying a portion of the flight expenses.
18
Document #1541908
Filed: 03/11/2015
Page 34 of 86
The agency explained that the plain language of 14 C.F.R. 61.113 supports
this interpretation. JA 59. Section 61.113(a) states that, [e]xcept as provided in, inter
alia, 61.113(c), no person who holds a private pilot certificate may act as pilot in
command of an aircraft that is carrying passengers or property for compensation or
hire; nor may that person, for compensation or hire, act as pilot in command of an
aircraft. 14 C.F.R. 61.113(a) (emphasis added). Section 61.113(c), in turn, provides
an exception to that ban on compensation for expense-sharing arrangements,
provided that a private pilot may not pay less than the pro rata share of the operating
expenses of a flight with passengers. Id. 61.113(c). As the agency explained, because
61.113 authorizes the sharing of operating expenses as an exception to the bar on
compensation or hire, that regulation reflects the FAAs commonsense judgment
that reimbursement of a pilots flight expenses is a form of compensation to the
pilot. JA 59. That interpretation of 61.113, the agency observed, is further supported
by the 1963 Notice of Proposed Rulemaking that preceded the initial codification of
the expense-sharing rule, 28 Fed. Reg. 8157 (Aug. 8, 1963). JA 59. That Notice
observed that [s]haring of expenses would appear to be prohibited when for hire or
compensation is prohibited, so that an exception to the rule is necessary to preserve
the traditional right to share expenses. 28 Fed. Reg. at 8158.
Because there is no dispute that the remaining elements of common carriage
transport[ing] persons or property . . . from place to place, FAA Advisory Circular
19
Document #1541908
Filed: 03/11/2015
Page 35 of 86
No. 120-12A (JA 30)are satisfied, the agency reasonably concluded that Flytenow
pilots are common carriers who require a Part 119 certificate. As the agency explained,
moreover, that conclusion is supported by prior FAA legal interpretations addressing
similar nationwide initiatives involving expense-sharing flights. JA 60. In 1985, for
example, the FAA concluded that pilots participating in a service to match them with
passengers willing to share expenses under the predecessor to 61.113(c)9 were
probably engaged in common carriage and thus subject to the certification rules
that preceded Part 119. 10 Legal Interpretation to Hal Klee (FAA 1985) (JA 26); Legal
Interpretation to Thomas H. Chero (FAA 1985) (JA 29). The agency based its
conclusion on its determinations that the passengers are solicited . . . from a broad
segment of the general public and that payment[s] . . . made under the expense
sharing provisions of the predecessor to 61.113(c) were compensation in the
relevant sense. JA 26; see also JA 29. Accord Legal Interpretation to D. David Brown
Document #1541908
Filed: 03/11/2015
Page 36 of 86
(FAA 1976) (JA 24-25) (similar conclusion regarding nationwide referral service
designed to allow pilots and passengers to share expenses).11
The FAA thus reasonably construed its regulations in concluding that pilots
using Flytenows website to offer point-to-point flight services to interested strangers
in exchange for money are common carriers who require a Part 119 certificate. At a
minimum, the agencys interpretation of its regulations is not plainly erroneous or
inconsistent with the regulation[s], Auer v. Robbins, 519 U.S. 452, 461 (1997) (internal
quotation marks omitted), and it is entitled to deference.
B.
1. Flytenows principal contention (Pet. Br. 19-23) is that the FAA erred in
concluding that Flytenow pilots receive compensation (as required to be common
carriers) when passengers pay them a pro rata share of their operating expenses in
11
Document #1541908
Filed: 03/11/2015
Page 37 of 86
return for transportation. But Flytenow fails to explain why a passengers payment of
money to a pilot in exchange for flight services is not compensation in every
relevant sense.
a. According to Flytenow (Pet. Br. 19-22), the agency misconstrued 14 C.F.R.
61.113(c). Relying on the agencys legal interpretations concluding that expense
sharing is permissible under 61.113(c) only if a pilot and his passengers share a
common purpose,12 Flytenow argues (Pet. Br. 19-21) that where the common
purpose requirement is satisfied, expense sharing does not constitute compensation.
This contention conflates two distinct concepts. Under the agencys longstanding
common purpose gloss on 61.113(c), the pilot must have independently set the
destination, and both the pilot and the passenger must have personal business at the
destination. Legal Interpretation to Mark Haberkorn (FAA 2011) (JA 43). That rule is
another way that the FAA seeks to ensure that the expense sharing that is permitted
under 61.113(c) is appropriately limited in scope. See, e.g., Chero Interpretation (JA
28) (noting that the expense-sharing rule permits casual expense sharing by a pilot
wishing to take some friends or acquaintances with him on a trip). The common
purpose requirement is distinct from the threshold question whether the
Document #1541908
Filed: 03/11/2015
Page 38 of 86
Document #1541908
Filed: 03/11/2015
Page 39 of 86
Legal Interpretation to Andy Dobis (FAA 2014) (JA 45) (emphasis added);
Legal Interpretation to Mike Sommer, 2010 WL 4038518, at *1 (FAA 2010) (free
dinner in return for flight is compensation); Legal Interpretation to John W.
Harrington, 1997 WL 34613525, at *2 (FAA 1997) (accumulating flight time without
bearing expenses is compensation; lodging and other amenities in exchange for flight
is compensation); see also, e.g., Legal Interpretation to Joseph A. Kirwan, 2005 WL
4994728, at *1 (FAA 2005).
15
By contrast, the two legal interpretations in the administrative record that
were written by other regional counsel were coordinated with the Office of the Chief
Counsel, which expressly concurred in those interpretations. See Ware Interpretation
(JA 23) (noting that AGC-20a reference to the Regulations and Enforcement
Division of the Office of the Chief Counselconcur[red] (capitalization omitted));
Brown Interpretation (JA 24-25) (same).
24
Document #1541908
Filed: 03/11/2015
Page 40 of 86
16
Just as 61.113(a) provides that private pilots generally may not transport
passengers for compensation or hire, FAA regulations governing noncommon
carriage generally provide that a Part 119 certificate is required to transport passengers
for compensation or hire even when there is no holding out to the public. See 14
25
Document #1541908
Filed: 03/11/2015
Page 41 of 86
C.F.R. 119.23; id. 110.2 (definition of noncommon carriage). The FAA has
consistently treated the limited expense-sharing exception for private pilots under
61.113(c) as an exception not only to the ban on compensation in 61.113(a), but
also to the requirement that noncommon carriers obtain Part 119 certificates. The
FAA reasonably insists, however, that a pilot who holds out transportation to the
public for compensation must obtain a Part 119 certificate, even if the only
compensation the pilot demands is a pro rata share of the flight expenses. On its face,
61.113(c) does not address, much less sanction, expense sharing where a pilot holds
himself out to the public, and the agency has a significant interest in ensuring that
persons who provide transportation to the general public satisfy the higher safety
standards applicable to common carriers. See infra pp. 39-40.
26
Document #1541908
Filed: 03/11/2015
Page 42 of 86
(Apr. 4, 1997).17 But those statements reflect nothing more than the agencys
judgment that expense sharing should not be barred under 61.113(a). That is why
the agency concluded it was necessary to promulgate the expense-sharing rule as an
[e]xcept[ion] to 61.113(a)s bar on flying for compensation or hire. 14 C.F.R.
61.113(a) (emphasis added). If Flytenow were correct that giving money to a pilot
for flight expenses is somehow not compensation at all, that exceptionand the
Federal Register notices on which Flytenow relieswould have been unnecessary.
c. Flytenow also notes (Pet. Br. 22-23) that the agencys regulation defining
commercial operator states that [w]here it is doubtful that an operation is for
compensation or hire[,] the test applied is whether the carriage by air is merely
incidental to the persons other business or is, in itself, a major enterprise for profit.
14 C.F.R. 1.1. But, as the agency explained in the MacPherson Interpretation (upon
which the agency relied in the decision on review, JA 61), the major enterprise for
profit test . . . is wholly inapplicable here. JA 60. By its terms, that test applies only
when it is unclear whether an operation is undertaken for compensation, and 61.113
17
To the extent that Flytenow suggests (Pet. Br. 33) that the 1997 amendments
to the expense-sharing rule materially expanded its scope, Flytenow is wrong. Instead,
the 1997 amendments merely (1) explicitly enumerated the four types of operating
expenses that may be shared (fuel, oil, airport expenditures, or rental fees); and
(2) used the phrase pro rata share to clarify the minimum amount of expenses a
pilot must pay. Compare 14 C.F.R. 61.118(b) (1997), with id. 61.113(c) (1998); see also
62 Fed. Reg. at 16,262-63, 16,266.
27
Document #1541908
Filed: 03/11/2015
Page 43 of 86
Document #1541908
Filed: 03/11/2015
Page 44 of 86
this Court that Flytenow pilots do not satisfy the holding out element. Flytenow
nonetheless contends (Pet. Br. 23-25) that the holding out element is inapplicable in
this case. According to Flytenow (Pet. Br. 24), the holding out element of the
common carrier analysis is codified in 14 C.F.R. 119.5(k), which states that [n]o
person may advertise or otherwise offer to perform an operation subject to [Part 119]
unless that person is authorized by the [FAA] to conduct that operation. Flytenow
asserts (Pet. Br. 25) that its pilots operations are not subject to [Part 119] within the
meaning of 119.5(k) and therefore argues that the holding out inquiry is
inapplicable to them.
But Flytenow simply assumes its own conclusion. As an initial matter, a person
is subject to [Part 119] under 119.5(k) if the person is, inter alia, an air carrier or
a commercial operator, 14 C.F.R. 119.1(a)(1). As explained earlier, and as
Flytenow does not dispute, air carriers and commercial operators are defined by
regulation to include common carriers. See supra pp. 4-5 & note 1. Accordingly,
where, as here, a pilot satisfies the common carrier definition, he is necessarily
subject to [Part 119] and covered by 119.5(k).
In any event, 119.5(k) is not the codification of the holding out element of
common carriage. Rather, that section prohibits offers of unauthorized transportation
by any person covered by Part 119, regardless of whether that person engages in
common carriage. See, e.g., 14 C.F.R. 119.1(a)(2) (noting that Part 119 applies to
29
Document #1541908
Filed: 03/11/2015
Page 45 of 86
certain larger planes not at issue in this case that are not involved in common
carriage). The holding out element of common carriage is not separately codified,
but it has been consistently articulated by the FAA and endorsed by this Court in
applying the common carrier concept. See CSI Aviation Servs., Inc. v. U.S. Dept of
Transp., 637 F.3d 408, 415 (D.C. Cir. 2011) (explaining that common carrier is a
well-known term that comes to us from the common law and requires some type
of holding out to the public); FAA Advisory Circular No. 120-12A (JA 30).
Flytenow also contends (Pet. Br. 25) that, under the FAAs decision, any pilot
communicating an expense-sharing flight . . . will now be considered [to be] holding
out to provide common carriage. That is incorrect. As the agency explained in the
decision on review, [h]olding out [is] accomplished by any means which
communicates to the public that a transportation service is indiscriminately available to
the members of that segment of the public it is designed to attract. JA 62 (emphases
added) (quoting In re Transocean Air Lines, Inc., 11 C.A.B. at 353 (JA 4)). Thus, a pilot
remains free, for example, to call or email a friend to determine if he would be
interested in sharing expenses on a planned flight. A pilot may even post his expensesharing flight plans on a bulletin board if the bulletin boards audience is sufficiently
limited in scope. See, e.g., Legal Interpretation to Paul D. Ware (FAA 1976) (JA 23)
(community college bulletin board); supra p. 21 note 11. Private pilots are not
permitted, however, to solicit passengers interested in transportation by air from a
30
Document #1541908
Filed: 03/11/2015
Page 46 of 86
broad segment of the public, which is what Flytenow pilots are doing. JA 62. The
agencys conclusion that Flytenow pilots are common carriers who require a Part
119 certificate is entirely reasonable.
II.
Flytenow brings this petition for review of the FAAs decision under 49 U.S.C.
46110. Under the express terms of 49 U.S.C. 46110(d), however, this Court may
consider an objection to an order of the . . . [FAA] Administrator only if the objection
was made in the proceeding conducted by the . . . Administrator or if there was a
reasonable ground for not making the objection in the proceeding.
Flytenow did not argue before the FAA that construing the agencys
regulations to require Flytenow pilots to obtain Part 119 certificates would require
notice-and-comment rulemaking, nor did it raise any objection to the FAAs statutory
31
Document #1541908
Filed: 03/11/2015
Page 47 of 86
authority. See JA 47-50. Flytenow has not suggested in this Courtmuch less
establishedthat it had any reasonable ground for failing to raise these arguments
before the agency. Under the plain terms of 46110(d), therefore, Flytenow cannot
seek review of the FAAs decision in this Court on those grounds. See, e.g., City of
Olmsted Falls v. FAA, 292 F.3d 261, 274 (D.C. Cir. 2002).
The same is true of Flytenows constitutional arguments. Flytenow failed to
raise any contention under the First or Fifth Amendments in its correspondence with
the agency. See JA 47-50. This Court has specifically held that 46110(d) bars review
of unexhausted constitutional claims, at least where (as here) the petitioner does not
assert a facial constitutional challenge to the statutory scheme as a whole. Continental
Air Lines, Inc. v. Dept of Transp., 843 F.2d 1444, 1455-56 (D.C. Cir. 1988) (interpreting
predecessor to 46110(d) to bar a First Amendment claim); Cronin v. FAA, 73 F.3d
1126, 1133-34 (D.C. Cir. 1996) (Fourth and Fifth Amendments). Flytenows
constitutional argumentsall raised for the first time in this Courtare therefore
foreclosed under 46110(d).
B.
Even assuming they are not barred, Flytenows statutory objections to the
FAAs decision are without merit.
32
Document #1541908
Filed: 03/11/2015
Page 48 of 86
1. Flytenow first contends (Pet. Br. 26) that the Administrative Procedure Act
required the agency to undertake notice-and-comment rulemaking prior to adopting
the interpretation at issue here. But the FAA did not adopt a new legislative rule or
amend an existing rule; it merely provided its legal interpretation of existing regulatory
requirements in response to Flytenows inquiry. That interpretation is at most a
general statement of policy or an interpretative rule that is exempt from notice
and comment under 5 U.S.C. 553(b)(A) because it merely spell[ed] out a duty fairly
encompassed within the regulation[s]. Appalachian Power Co. v. EPA, 208 F.3d 1015,
1024 (D.C. Cir. 2000) (internal quotation marks omitted). As already discussed, the
FAAs regulations make clear that common carrier[s] must obtain Part 119
certificates, see 14 C.F.R. 1.1, 119.1(a)(1), 119.21(a); supra pp. 4-5 & note 1, and the
agencys decision here merely interpreted the term common carrier and the FAAs
related regulations, such as 14 C.F.R. 61.113.
Flytenow contends (Pet. Br. 26) that the agencys decision upended more than
40 years of agency precedent, apparently invoking this Courts decisions concluding
that notice-and-comment rulemaking is required, even for interpretive rules, [w]hen
an agency has given its regulation a definitive interpretation, and later significantly
revises that interpretation, Alaska Profl Hunters Assn, 177 F.3d at 1034. Since
Flytenow filed its brief, however, the Supreme Court has squarely rejected that line of
cases. See Perez v. Mortg. Bankers Assn, 2015 WL 998535, at *6-9 (S. Ct. 2015).
33
Document #1541908
Filed: 03/11/2015
Page 49 of 86
18
Flytenow cites (Pet. Br. 27) 49 U.S.C. 41101(a)(1) as the relevant statutory
provision that grants the FAA authority to issue air carrier certificates, but
34
Document #1541908
Filed: 03/11/2015
Page 50 of 86
regulations for any other practices, methods, and procedure the [FAA] Administrator
finds necessary for safety in air commerce and national security. Id. 44701(a)(5).
Pursuant to that and other statutory authority, including 49 U.S.C. 106(f)(3)(A),
(g)(1)(A), 40113(a), the FAA has promulgated regulations requiring commercial
operator[s] to obtain FAA certificates under Part 119, and it has defined
commercial operator[s] to include persons engaged in intrastate common carriage.
14 C.F.R. 1.1, 119.1(a)(1), 119.21(a); see supra pp. 4-5 & note 1; see also Gorman v.
NTSB, 558 F.3d 580, 589-90 (D.C. Cir. 2009) (holding that the FAA has statutory
authority to issue commercial operator certificates).
This Court has already interpreted the term common carrier in the governing
FAA statute, explaining that it is a well-known term that comes to us from the
common law and requires some type of holding out to the public. CSI Aviation
Servs., Inc. v. U.S. Dept of Transp., 637 F.3d 408, 415 (D.C. Cir. 2011). Accord FAA
Advisory Circular No. 120-12A (JA 30) (observing that holding out is an element of
common carriage); Pet. Br. 6 n.6, 11 & n.14, 23-25 & n.21 (not disputing that
holding out is an element of common carriage). Because the FAA has statutory
authority to regulate common carriers, and because a person is a common carrier if
41101(a)(1) provides authority for the Department of Transportation to issue separate
air carrier certificates relating to economic regulation. This case concerns the FAAs
issuance of air carrier certificates relating to air safety, for which 49 U.S.C.
44702(a) and 44705 provide the relevant statutory authority. See also 49 U.S.C.
106(g).
35
Document #1541908
Filed: 03/11/2015
Page 51 of 86
he holds out himself out to the public as willing to provide transportation in return
for compensation, it follows that the FAA is authorized to inquire into whether any
person has held himself out in this waywhether in person, on the Internet, or
anywhere else. Cf. Association of Flight Attendants-CWA v. Chao, 493 F.3d 155, 157 (D.C.
Cir. 2007) ([t]he [FAA] has broad authority to regulate civil aviation under 44701);
Jifry v. FAA, 370 F.3d 1174, 1176 (D.C. Cir. 2004) (same).
In this case, Flytenow contacted the FAA, described the operation of its
website and the purposes for which pilots use it, and asked the agency to provide its
opinion concerning whether pilots who use the Flytenow website to attract passengers
are engaged in common carriage and thus require a Part 119 certificate. The FAA did
not exceed its statutory authority by answering the question that Flytenow put to it.
3. Flytenow also argues at length (Pet. Br. 29-36) that this Court should not
afford deference to the FAAs interpretation under Chevron, U.S.A., Inc. v. Natural
Resources Defense Council, Inc., 467 U.S. 837 (1984). But Flytenow misunderstands the
relevant principles of administrative law. At issue in this case is the FAAs
interpretation of its own regulations. The agency determined that a pilot who holds
himself out to the public as available to provide transportation in exchange for
payment of a pro rata share of the flight expenses identified in 14 C.F.R. 61.113(c) is
engaged in common carriage and thus requires a certificate under Part 119 of the
FAAs regulations. JA 61-62. Flytenow attacks that conclusion on the grounds that the
36
Document #1541908
Filed: 03/11/2015
Page 52 of 86
37
C.
Document #1541908
Filed: 03/11/2015
Page 53 of 86
Document #1541908
Filed: 03/11/2015
Page 54 of 86
314-15 (1993) (emphasis added) (internal citation and quotation marks omitted); see
also, e.g., Nordlinger v. Hahn, 505 U.S. 1, 15 (1992).
Flytenow cannot seriously dispute that the FAA has a rational basis for
imposing more stringent safety standards on expense-sharing common carriers (such
as Flytenow pilots) than on expense-sharing pilots who do not hold themselves out to
the public as available to provide flight services. The FAAs paramount concern is the
safety of the public. The agency thus reasonably imposes more stringent safety
regulations on persons who offer transportation services to the general public. Indeed,
Congress has directed the FAA Administrator to consider . . . the duty of an air
carrieri.e., a common carrier in the interstate or foreign settingsto provide
service with the highest possible degree of safety in the public interest, and it has directed
the FAA to consider differences between air carriers and others. 49 U.S.C.
44701(d)(1)(A)-(B) (emphasis added); see also id. 40102(a)(2), (5), (23), (25).
The higher standards the FAA imposes on common carriers reflect in part the
fact that it is difficult for members of the public to evaluate the safety qualifications of
pilots they do not know, making it critical for the government to regulate stringently
the qualifications of pilots providing transportation to the general public. By contrast,
where an expense-sharing flight does not involve common carriage, passengers are
more likely to know the pilots in question, providing at least some basis for evaluating
the safety of accompanying the pilot on the flight. See also Woolsey v. NTSB, 993 F.2d
39
Document #1541908
Filed: 03/11/2015
Page 55 of 86
516, 521-22 (5th Cir. 1993) (The policy behind [the common carrier] distinction
appears to be that the general public has a right to expect that airlines which solicit
their business operate under the most searching tests of safety.); cf. Professional Pilots
Fedn v. FAA, 118 F.3d 758, 767-68 (D.C. Cir. 1997); Air Line Pilots Assn, Intl v.
Quesada, 276 F.2d 892, 898 (2d Cir. 1960).
Flytenow is wrong when it suggests (Pet. Br. 46-47, 48-49) that Flytenow pilots
are subject to precisely the same requirements as those imposed on large air carriers
like American Airlines operating, for example, a Boeing 747 aircraft. To the contrary,
the requirements for obtaining a Part 119 certificate and for conducting operations
under related parts of the FAAs regulationsParts 121 and 135vary greatly
depending on a number of factors, such as the size of the aircraft in question and
whether the service at issue is scheduled or irregular. 19 In any case, for the reasons
19
Document #1541908
Filed: 03/11/2015
Page 56 of 86
described above, it is not irrational for the FAA to treat Flytenow pilots and other
common carriers similarly with respect to safety requirements because Flytenow pilots
and other common carriers share the relevant trait of holding themselves out to the
public as available to provide transportation in exchange for money.
2. Flytenow next contends (Pet. Br. 51-57) that the holding out element of
the common carriage analysis, as applied by the FAA, is unconstitutionally vague. This
contention is baseless. As an initial matter, the holding out inquiry is not remotely
uncertain with respect to Flytenows pilots, who offer transportation by air to any
member of the public who applies for membership to Flytenow. See JA 47, 62. 20
Indeed, as already discussed, Flytenow does not offer any argument to the contrary in
this Court. Because the inquiry is not vague as applied to Flytenow and its pilots,
Flytenow cannot complain of the vagueness of the law as applied to the conduct of
others. Holder v. Humanitarian Law Project, 561 U.S. 1, 20 (2010).
generally must, inter alia, have 500 hours of flight experience and, when required, hold
a rating for the relevant type of aircraft. Id. 135.243(b)(1)-(2).
20
See also FAA Advisory Circular No. 120-12A (JA 30) (explaining that
holding out is satisfied by, inter alia, [s]igns and advertising to the public, or to
a segment of the public); Haberkorn Interpretation (JA 42) ([a]dvertising is not
confined to print media and may include internet posts); In re Transocean Air Lines,
Inc., 11 C.A.B. at 352-54 (JA 3-5) (further elaborating on holding out); cf. National
Oilseed Processors Assn v. OSHA, 769 F.3d 1173, 1183 (D.C. Cir. 2014) (public
statements issued by the agency may be considered in evaluating whether relevant
standards are vague).
41
Document #1541908
Filed: 03/11/2015
Page 57 of 86
In any event, Flytenows various hypotheticals (Pet. Br. 56) underscore that the
holding out inquiry is not unconstitutionally vague. It is plain, for example, that a
pilot who phones or emails a friend to inform him of an upcoming flight is not
holding out to the public. And the FAA has already explained in the Haberkorn
Interpretation that posting flights on an airport bulletin board or Facebook may be
construed as holding out depending on the relevant circumstances, such as the size
of the relevant audience. Haberkorn Interpretation (JA 42-43). Contrary to Flytenows
suggestion (Pet. Br. 55), the fact that a legal standard cannot be applied without all
[of the relevant] facts, Haberkorn Interpretation (JA 42), hardly renders that standard
unconstitutionally vague.
This Court has also emphasized that concerns about vagueness are lessened
where, as here, a regulated party has the ability to clarify the meaning of the
regulation by its own inquiry, or by resort to the administrative process, Aeronautical
Repair Station Assn v. FAA, 494 F.3d 161, 173-74 (D.C. Cir. 2007) (internal quotation
marks omitted); Trans Union Corp. v. FTC, 245 F.3d 809, 817 (D.C. Cir. 2001). Here,
pilots and Flytenow had the opportunity to seek a legal interpretation from the FAA
regarding the legality of the Flytenow website, and Flytenow took advantage of that
opportunity to obtain a clear answer from the agency, JA 61-62. Flytenows vagueness
challenge must fail. See also Go Leasing, Inc. v. NTSB, 800 F.2d 1514, 1524-26 (9th Cir.
42
Document #1541908
Filed: 03/11/2015
Page 58 of 86
1986) (concluding that the term holding out in an FAA regulation was not
unconstitutionally vague).
3. Finally, Flytenow asserts (Pet. Br. 36-46) that the FAAs decision violates the
First Amendment. But Flytenow cannot plausibly contend that the First Amendment
bars the FAA from requiring that persons who offer flight services to the public
satisfy more stringent safety standards than persons who are engaged in purely private
operations. Under the traditional common carrier analysis, the FAA examines
whether a pilot has held himself out to the public as available to provide
transportation by air for compensation. Cf. CSI Aviation Servs., 637 F.3d at 415
(explaining that some type of holding out to the public is the sine qua non of
common carriage). Although advertising and signs are the most direct means of
holding out, holding out may be established by any means, including where a
persons conduct demonstrates that he is willing to serve the public. FAA Advisory
Circular No. 120-12A (JA 30-31) (holding out may be accomplished where a
reputation to serve all is gained); In re Transocean Air Lines, Inc., 11 C.A.B. at 353 (JA
4) (course of conduct may establish holding out where the carrier generally
accept[s] within the limits of its facilities all customers desiring its services).
The fact that the speech of Flytenow pilots may also be used to establish that
they are holding out flight services to the publicand thus that they should be
regulated under the strict safety regulations applicable to pilots who serve the
43
Document #1541908
Filed: 03/11/2015
Page 59 of 86
publicdoes not establish a violation of the First Amendment. As this Court has
explained, the First Amendment allows the evidentiary use of speech to establish the
elements of a crime or to prove motive or intent. Whitaker v. Thompson, 353 F.3d
947, 953 (D.C. Cir. 2004) (quoting Wisconsin v. Mitchell, 508 U.S. 476, 489 (1993)); see
also Sorrell v. IMS Health Inc., 131 S. Ct. 2653, 2664-65 (2011) (the First Amendment
does not prevent restrictions directed at commerce or conduct from imposing
incidental burdens on speech); Ohralik v. Ohio State Bar Assn, 436 U.S. 447, 456
(1978) ([I]t has never been deemed an abridgment of freedom of speech or press to
make a course of conduct illegal merely because the conduct was in part initiated,
evidenced, or carried out by means of language, either spoken, written, or printed.
(internal quotation marks omitted)).
The FAAs regulation barring a person from advertising an operation subject to
Part 119 unless the FAA has authorized the operation, 14 C.F.R. 119.5(k), is equally
unproblematic under the First Amendment. Pursuant to statute and regulation, no
person may conduct an operation subject to Part 119 without an appropriate
certificate. See 49 U.S.C. 44711(a)(2)(A)-(B), (a)(4), (a)(5); 14 C.F.R. 119.5(g), (l),
119.33(a)(2), (b)(2). The FAAs regulation barring pilots from advertising air
operations for which they lack the required certificate, 14 C.F.R. 119.5(k), thus
prohibits offers to engage in illegal transactions. As the Supreme Court has made
clear, such offers are categorically excluded from First Amendment protection.
44
Document #1541908
Filed: 03/11/2015
Page 60 of 86
United States v. Williams, 553 U.S. 285, 297 (2008); Pittsburgh Press Co. v. Pittsburgh
Commn on Human Relations, 413 U.S. 376, 388 (1973); see also, e.g., Ford Motor Co. v. Tex.
Dept of Transp., 264 F.3d 493, 505-07 (5th Cir. 2001).
These principles are well illustrated by the Sixth Circuits recent decision in
Liberty Coins, LLC v. Goodman, 748 F.3d 682 (6th Cir. 2014), which addressed a First
Amendment challenge to a state statute requiring certain persons who hold[]
[themselves] out to the public as willing to purchase [certain precious metal] articles
to obtain a special license. Id. at 686-87 & n.1 (quoting Ohio Rev. Code Ann.
4728.01(A); 1986 Ohio Legis. Serv. Ann. 5-963). The Sixth Circuit had little
difficulty rejecting the First Amendment challenge, holding that the statute
proscribes business conduct and economic activity, not speech. Id. at 697; see also id.
at 695-97. As the court explained, the statute does not burden the commercial
speech rights of unlicensed precious metals dealers because such dealers do not have a
constitutional right to advertise or operate an unlicensed business that is not in
compliance with the reasonable requirements of [the state statute]. Id. at 697; see also
Johnson v. Cal. State Bd. of Accountancy, 72 F.3d 1427, 1430-33 (9th Cir. 1995) (similar
conclusion regarding statute with holding out provisions).
Even if postings by Flytenow pilots on the Flytenow website constitute speech
protected by the First Amendment, they plainly constitute commercial speech
because they do[] no more than propose a commercial transactionthey offer
45
Document #1541908
Filed: 03/11/2015
Page 61 of 86
transportation in exchange for money. Virginia State Bd. of Pharmacy v. Va. Citizens
Consumer Council, Inc., 425 U.S. 748, 762 (1976) (internal quotation marks omitted); JA
47-48. Under Central Hudson Gas & Electric Corp. v. Public Service Commission, 447 U.S.
557 (1980), the government may impose a restriction on commercial speech as long as
it directly advances a substantial public interest and is not more extensive than is
necessary to serve that interest. Id. at 566. Here, Flytenow cannot dispute that the
government has a substantial interest in ensuring that pilots providing the public with
transportation services comply with stringent safety requirements. The government
directly advances that interest by subjecting those who act as common carriersi.e.,
those who hold themselves out to the public as available to provide transportation in
exchange for compensationto the stringent safety requirements set forth in Part 119
(and related parts) of the agencys regulations, and the fit between the restriction
and the goals is plainly reasonable. Board of Trs. of State Univ. of N.Y. v. Fox, 492 U.S.
469, 480 (1989) (internal quotation marks omitted); see also, e.g., Trans Union LLC v.
FTC, 295 F.3d 42, 53 (D.C. Cir. 2002); Kansas v. United States, 16 F.3d 436, 442-43
(D.C. Cir. 1994).
Flytenows suggestion (Pet. Br. 37-41) that the decision on review and 14
C.F.R. 119.5(k) impose an unlawful prior restraint is equally wide of the mark. Even
assuming that prior restraint principles apply to commercial speech, but cf. Central
Hudson, 447 U.S. at 571 n.13; Pearson v. Shalala, 164 F.3d 650, 660 & n.11 (D.C. Cir.
46
Document #1541908
Filed: 03/11/2015
Page 62 of 86
1999), they do not apply here. As Flytenow appears to recognize (Pet. Br. 37), the
FAA decision on review is not itself a prior restraint because it does not forbid[]
pilots from engaging in any speech. Alexander v. United States, 509 U.S. 544, 550 (1993).
And, as already discussed, although 14 C.F.R. 119.5(k) bars a person from
advertising a Part 119 operation prior to receiving authorization from the FAA to
conduct that operation, that regulation simply prohibits advertisements to engage in
illegal transactions, which are outside of the First Amendment altogether. See, e.g.,
Williams, 553 U.S. at 297. Moreover, 119.5(k) conditions a persons advertising on
the FAAs determination as to whether the person can safely conduct an aircraft
operation, not on a determination of the propriety of the proposed advertising. See 14
C.F.R. 119.5(k); see also, e.g., id. 119.33-119.36, 119.39. Flytenow cites no decisions
extending prior restraint doctrine to circumstances where the relevant governmental
authorization concerns non-expressive conduct, let alone where, as here, the relevant
speech is an advertisement for the non-expressive conduct. There is no sound reason
for extending the doctrine in this manner.
47
Document #1541908
Filed: 03/11/2015
Page 63 of 86
CONCLUSION
For the foregoing reasons, the petition for review should be denied. 21
Respectfully submitted,
BENJAMIN C. MIZER
Acting Assistant Attorney General
RONALD C. MACHEN JR.
United States Attorney
MARK R. FREEMAN
(202) 514-5714
s/ Sydney Foster
SYDNEY FOSTER
(202) 616-5374
Attorneys, Appellate Staff
Civil Division, Room 7513
U.S. Department of Justice
950 Pennsylvania Ave., N.W.
Washington, D.C. 20530
MARCH 2015
21
Although Flytenow requests (Pet. Br. 57) attorneys fees under the Equal
Access to Justice Act, that request is plainly premature and lacks the required
supporting documentation. See 28 U.S.C. 2412(d)(1)(B).
48
Document #1541908
Filed: 03/11/2015
Page 64 of 86
CERTIFICATE OF COMPLIANCE
I hereby certify that this brief complies with the type-volume limitation of
Federal Rule of Appellate Procedure 32(a)(7)(B) because the brief contains 12,039
words, excluding the parts of the brief exempted by Federal Rule of Appellate
Procedure 32(a)(7)(B)(iii) and D.C. Circuit Rule 32(a)(1). I hereby certify that this brief
complies with the typeface requirements of Federal Rule of Appellate Procedure
32(a)(5) and the type style requirements of Federal Rule of Appellate Procedure
32(a)(6) because it has been prepared using Microsoft Word 2010 in a proportionally
spaced typeface, 14-point Garamond font.
s/Sydney Foster
Sydney Foster
Document #1541908
Filed: 03/11/2015
Page 65 of 86
CERTIFICATE OF SERVICE
I hereby certify that on March 11, 2015, I filed and served the foregoing with
the Clerk of the Court by causing a copy to be electronically filed via the appellate
CM/ECF system. On or before March 12, 2015, I will cause eight paper copies to be
delivered to the Court via hand delivery. I also hereby certify that the participants in
the case are registered CM/ECF users and will be served via the CM/ECF system.
s/Sydney Foster
Sydney Foster
Document #1541908
ADDENDUM
Filed: 03/11/2015
Page 66 of 86
Document #1541908
Filed: 03/11/2015
Page 67 of 86
Document #1541908
Filed: 03/11/2015
Page 68 of 86
Document #1541908
Filed: 03/11/2015
Page 69 of 86
Add. 2
Document #1541908
Filed: 03/11/2015
Page 70 of 86
Add. 3
Document #1541908
Filed: 03/11/2015
Page 71 of 86
(B) equipment and facilities for, and the timing and manner of, the
inspecting, servicing, and overhauling; and
(C) a qualified private person, instead of an officer or employee of the
Administration, to examine and report on the inspecting, servicing, and
overhauling;
(3) regulations required in the interest of safety for the reserve supply of
aircraft, aircraft engines, propellers, appliances, and aircraft fuel and oil,
including the reserve supply of fuel and oil carried in flight;
(4) regulations in the interest of safety for the maximum hours or periods of
service of airmen and other employees of air carriers; and
(5) regulations and minimum standards for other practices, methods, and
procedure the Administrator finds necessary for safety in air commerce and
national security.
(b) Prescribing minimum safety standards.--The Administrator may prescribe
minimum safety standards for-(1) an air carrier to whom a certificate is issued under section 44705 of this title;
and
(2) operating an airport serving any passenger operation of air carrier aircraft
designed for at least 31 passenger seats.
(c) Reducing and eliminating accidents.--The Administrator shall carry out this chapter
in a way that best tends to reduce or eliminate the possibility or recurrence of
accidents in air transportation. However, the Administrator is not required to give
preference either to air transportation or to other air commerce in carrying out this
chapter.
Add. 4
Document #1541908
Filed: 03/11/2015
Page 72 of 86
Document #1541908
Filed: 03/11/2015
Page 73 of 86
Document #1541908
Filed: 03/11/2015
Page 74 of 86
(2) specify the places to and from which, and the airways of the United States
over which, a person may operate as an air carrier.
49 U.S.C. 44711. Prohibitions and exemption
(a) Prohibitions.--A person may not-(1) operate a civil aircraft in air commerce without an airworthiness certificate
in effect or in violation of a term of the certificate;
(2) serve in any capacity as an airman with respect to a civil aircraft, aircraft
engine, propeller, or appliance used, or intended for use, in air commerce-(A) without an airman certificate authorizing the airman to serve in the
capacity for which the certificate was issued; or
(B) in violation of a term of the certificate or a regulation prescribed or
order issued under section 44701(a) or (b) or any of sections 4470244716 of this title;
(3) employ for service related to civil aircraft used in air commerce an airman
who does not have an airman certificate authorizing the airman to serve in the
capacity for which the airman is employed;
(4) operate as an air carrier without an air carrier operating certificate or in
violation of a term of the certificate;
(5) operate aircraft in air commerce in violation of a regulation prescribed or
certificate issued under section 44701(a) or (b) or any of sections 44702-44716
of this title;
(6) operate a seaplane or other aircraft of United States registry on the high seas
in violation of a regulation under section 3 of the International Navigational
Rules Act of 1977 (33 U.S.C. 1602);
(7) violate a term of an air agency, design organization certificate, or production
certificate or a regulation prescribed or order issued under section 44701(a) or
Add. 7
Document #1541908
Filed: 03/11/2015
Page 75 of 86
(b) or any of sections 44702-44716 of this title related to the holder of the
certificate;
(8) operate an airport without an airport operating certificate required under
section 44706 of this title or in violation of a term of the certificate;
(9) manufacture, deliver, sell, or offer for sale any aviation fuel or additive in
violation of a regulation prescribed under section 44714 of this title; or
(10) violate section 44732 or any regulation issued thereunder.
(b) Exemption.--On terms the Administrator of the Federal Aviation Administration
prescribes as being in the public interest, the Administrator may exempt a foreign
aircraft and airmen serving on the aircraft from subsection (a) of this section.
However, an exemption from observing air traffic regulations may not be granted.
***
49 U.S.C. 46110. Judicial review
(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.
(b) Judicial procedures.--When a petition is filed under subsection (a) of this section,
the clerk of the court immediately shall send a copy of the petition to the Secretary,
Under Secretary, or Administrator, as appropriate. The Secretary, Under Secretary, or
Add. 8
Document #1541908
Filed: 03/11/2015
Page 76 of 86
Administrator shall file with the court a record of any proceeding in which the order
was issued, as provided in section 2112 of title 28.
(c) Authority of court.--When the petition is sent to the Secretary, Under Secretary, or
Administrator, the court has exclusive jurisdiction to affirm, amend, modify, or set
aside any part of the order and may order the Secretary, Under Secretary, or
Administrator to conduct further proceedings. After reasonable notice to the
Secretary, Under Secretary, or Administrator, the court may grant interim relief by
staying the order or taking other appropriate action when good cause for its action
exists. Findings of fact by the Secretary, Under Secretary, or Administrator, if
supported by substantial evidence, are conclusive.
(d) Requirement for prior objection.--In reviewing an order under this section, the
court may consider an objection to an order of the Secretary, Under Secretary, or
Administrator only if the objection was made in the proceeding conducted by the
Secretary, Under Secretary, or Administrator or if there was a reasonable ground for
not making the objection in the proceeding.
(e) Supreme Court review.--A decision by a court under this section may be reviewed
only by the Supreme Court under section 1254 of title 28.
14 C.F.R. 1.1 General definitions.
As used in Subchapters A through K of this chapter, unless the context requires
otherwise:
***
Air carrier means a person who undertakes directly by lease, or other arrangement, to
engage in air transportation.
Air commerce means interstate, overseas, or foreign air commerce or the
transportation of mail by aircraft or any operation or navigation of aircraft within the
limits of any Federal airway or any operation or navigation of aircraft which directly
affects, or which may endanger safety in, interstate, overseas, or foreign air commerce.
***
Add. 9
Document #1541908
Filed: 03/11/2015
Page 77 of 86
Document #1541908
Filed: 03/11/2015
Page 78 of 86
airspace over any place outside thereof; or between places in the same territory or
possession of the United States, or the District of Columbia.
Interstate air transportation means the carriage by aircraft of persons or property as a
common carrier for compensation or hire, or the carriage of mail by aircraft in
commerce:
(1) Between a place in a State or the District of Columbia and another place in
another State or the District of Columbia;
(2) Between places in the same State through the airspace over any place
outside that State; or
(3) Between places in the same possession of the United States;
Whether that commerce moves wholly by aircraft or partly by aircraft and partly by
other forms of transportation.
***
Overseas air commerce means the carriage by aircraft of persons or property for
compensation or hire, or the carriage of mail by aircraft, or the operation or
navigation of aircraft in the conduct or furtherance of a business or vocation, in
commerce between a place in any State of the United States, or the District of
Columbia, and any place in a territory or possession of the United States; or between a
place in a territory or possession of the United States, and a place in any other
territory or possession of the United States.
Overseas air transportation means the carriage by aircraft of persons or property as a
common carrier for compensation or hire, or the carriage of mail by aircraft, in
commerce:
(1) Between a place in a State or the District of Columbia and a place in a
possession of the United States; or
Add. 11
Document #1541908
Filed: 03/11/2015
Page 79 of 86
(2) Between a place in a possession of the United States and a place in another
possession of the United States; whether that commerce moves wholly by
aircraft or partly by aircraft and partly by other forms of transportation.
***
14 C.F.R. 61.113 Private pilot privileges and limitations: Pilot in command.
(a) Except as provided in paragraphs (b) through (h) of this section, no person who
holds a private pilot certificate may act as pilot in command of an aircraft that is
carrying passengers or property for compensation or hire; nor may that person, for
compensation or hire, act as pilot in command of an aircraft.
(b) A private pilot may, for compensation or hire, act as pilot in command of an
aircraft in connection with any business or employment if:
(1) The flight is only incidental to that business or employment; and
(2) The aircraft does not carry passengers or property for compensation or hire.
(c) A private pilot may not pay less than the pro rata share of the operating expenses
of a flight with passengers, provided the expenses involve only fuel, oil, airport
expenditures, or rental fees.
(d) A private pilot may act as pilot in command of a charitable, nonprofit, or
community event flight described in 91.146, if the sponsor and pilot comply with
the requirements of 91.146.
(e) A private pilot may be reimbursed for aircraft operating expenses that are directly
related to search and location operations, provided the expenses involve only fuel, oil,
airport expenditures, or rental fees, and the operation is sanctioned and under the
direction and control of:
(1) A local, State, or Federal agency; or
(2) An organization that conducts search and location operations.
Add. 12
Document #1541908
Filed: 03/11/2015
Page 80 of 86
(f) A private pilot who is an aircraft salesman and who has at least 200 hours of
logged flight time may demonstrate an aircraft in flight to a prospective buyer.
(g) A private pilot who meets the requirements of 61.69 may act as a pilot in
command of an aircraft towing a glider or unpowered ultralight vehicle.
(h) A private pilot may act as pilot in command for the purpose of conducting a
production flight test in a light-sport aircraft intended for certification in the lightsport category under 21.190 of this chapter, provided that-(1) The aircraft is a powered parachute or a weight-shift-control aircraft;
(2) The person has at least 100 hours of pilot-in-command time in the category
and class of aircraft flown; and
(3) The person is familiar with the processes and procedures applicable to the
conduct of production flight testing, to include operations conducted under a
special flight permit and any associated operating limitations.
14 C.F.R. 119.1 Applicability.
(a) This part applies to each person operating or intending to operate civil aircraft-(1) As an air carrier or commercial operator, or both, in air commerce; or
(2) When common carriage is not involved, in operations of U.S.-registered
civil airplanes with a seat configuration of 20 or more passengers, or a
maximum payload capacity of 6,000 pounds or more.
(b) This part prescribes-(1) The types of air operator certificates issued by the Federal Aviation
Administration, including air carrier certificates and operating certificates;
(2) The certification requirements an operator must meet in order to obtain and
hold a certificate authorizing operations under part 121, 125, or 135 of this
chapter and operations specifications for each kind of operation to be
Add. 13
Document #1541908
Filed: 03/11/2015
Page 81 of 86
conducted and each class and size of aircraft to be operated under part 121 or
135 of this chapter;
(3) The requirements an operator must meet to conduct operations under part
121, 125, or 135 of this chapter and in operating each class and size of aircraft
authorized in its operations specifications;
(4) Requirements affecting wet leasing of aircraft and other arrangements for
transportation by air;
(5) Requirements for obtaining deviation authority to perform operations under
a military contract and obtaining deviation authority to perform an emergency
operation; and
(6) Requirements for management personnel for operations conducted under
part 121 or part 135 of this chapter.
(c) Persons subject to this part must comply with the other requirements of this
chapter, except where those requirements are modified by or where additional
requirements are imposed by part 119, 121, 125, or 135 of this chapter.
(d) This part does not govern operations conducted under part 91, subpart K (when
common carriage is not involved) nor does it govern operations conducted under part
129, 133, 137, or 139 of this chapter.
(e) Except for operations when common carriage is not involved conducted with
airplanes having a passenger-seat configuration of 20 seats or more, excluding any
required crewmember seat, or a payload capacity of 6,000 pounds or more, this part
does not apply to-(1) Student instruction;
(2) Nonstop Commercial Air Tours conducted after September 11, 2007, in an
airplane or helicopter having a standard airworthiness certificate and passengerseat configuration of 30 seats or fewer and a maximum payload capacity of
7,500 pounds or less that begin and end at the same airport, and are conducted
within a 25statute mile radius of that airport, in compliance with the Letter of
Authorization issued under 91.147 of this chapter. For nonstop Commercial
Air Tours conducted in accordance with part 136, subpart B of this chapter,
Add. 14
Document #1541908
Filed: 03/11/2015
Page 82 of 86
National Parks Air Tour Management, the requirements of part 119 of this
chapter apply unless excepted in 136.37(g)(2). For Nonstop Commercial Air
Tours conducted in the vicinity of the Grand Canyon National Park, Arizona,
the requirements of SFAR 502, part 93, subpart U, and part 119 of this
chapter, as applicable, apply.
(3) Ferry or training flights;
(4) Aerial work operations, including-(i) Crop dusting, seeding, spraying, and bird chasing;
(ii) Banner towing;
(iii) Aerial photography or survey;
(iv) Fire fighting;
(v) Helicopter operations in construction or repair work (but it does
apply to transportation to and from the site of operations); and
(vi) Powerline or pipeline patrol;
(5) Sightseeing flights conducted in hot air balloons;
(6) Nonstop flights conducted within a 25-statute-mile radius of the airport of
takeoff carrying persons or objects for the purpose of conducting intentional
parachute operations.
(7) Helicopter flights conducted within a 25 statute mile radius of the airport of
takeoff if-(i) Not more than two passengers are carried in the helicopter in addition
to the required flightcrew;
(ii) Each flight is made under day VFR conditions;
Add. 15
Document #1541908
Filed: 03/11/2015
Page 83 of 86
Add. 16
Document #1541908
Filed: 03/11/2015
Page 84 of 86
(d) A person authorized to engage in common carriage under part 121 or part 135 of
this chapter, or both, shall be issued only one certificate authorizing such common
carriage, regardless of the kind of operation or the class or size of aircraft to be
operated.
(e) A person authorized to engage in noncommon or private carriage under part 125
or part 135 of this chapter, or both, shall be issued only one certificate authorizing
such carriage, regardless of the kind of operation or the class or size of aircraft to be
operated.
(f) A person conducting operations under more than one paragraph of 119.21,
119.23, or 119.25 shall conduct those operations in compliance with-(1) The requirements specified in each paragraph of those sections for the kind
of operation conducted under that paragraph; and
(2) The appropriate authorizations, limitations, and procedures specified in the
operations specifications for each kind of operation.
(g) No person may operate as a direct air carrier or as a commercial operator without,
or in violation of, an appropriate certificate and appropriate operations specifications.
No person may operate as a direct air carrier or as a commercial operator in violation
of any deviation or exemption authority, if issued to that person or that person's
representative.
(h) A person holding an Operating Certificate authorizing noncommon or private
carriage operations shall not conduct any operations in common carriage. A person
holding an Air Carrier Certificate or Operating Certificate authorizing common
carriage operations shall not conduct any operations in noncommon carriage.
(i) No person may operate as a direct air carrier without holding appropriate
economic authority from the Department of Transportation.
(j) A certificate holder under this part may not operate aircraft under part 121 or part
135 of this chapter in a geographical area unless its operations specifications
specifically authorize the certificate holder to operate in that area.
Add. 17
Document #1541908
Filed: 03/11/2015
Page 85 of 86
Document #1541908
Filed: 03/11/2015
Page 86 of 86
Add. 19