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USCA Case #14-1168

Document #1541908

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[NOT YET SCHEDULED FOR ORAL ARGUMENT]

No. 14-1168

Page 1 of 86

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

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CERTIFICATE AS TO PARTIES, RULINGS, AND RELATED CASES

Pursuant to D.C. Circuit Rule 28(a)(1), the undersigned counsel certifies as

follows:

A. Parties and Amici

Petitioner is Flytenow, Inc., and the respondent is the Administrator of the

Federal Aviation Administration.

B. Rulings Under Review

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

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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. Statutory and Regulatory Background

3

B. Factual and Procedural Background

8

SUMMARY OF ARGUMENT

12

STANDARD OF REVIEW

15

ARGUMENT

15

I. THE FAA REASONABLY CONSTRUED ITS REGULATIONS

16

A. The agency reasonably concluded that Flytenow pilots are common carriers and thus require Part 119 certificates

16

B. Flytenow’s attacks on the FAA’s interpretation of its own regulations are meritless

21

II. FLYTENOW’S REMAINING CONTENTIONS ARE BARRED AND, IN ANY EVENT, LACK MERIT

31

A.

Review of Flytenow’s unexhausted statutory and constitutional claims is barred under 49 U.S.C. §

31

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B. The FAA’s decision is consistent with the Administrative Procedure Act and the Federal Aviation Act

32

C. The FAA’s decision is consistent with the Constitution

38

CONCLUSION

48

CERTIFICATE OF COMPLIANCE

CERTIFICATE OF SERVICE

ADDENDUM

ii

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TABLE OF AUTHORITIES

Cases:

Page

Aeronautical Repair Station Ass’n v. FAA,

494

F.3d 161 (D.C. Cir. 2007)

42

Air Line Pilots Ass’n, Int’l v. Quesada,

276

F.2d 892 (2d Cir. 1960)

40

Air Transp. Ass’n of Am., Inc. v. FAA,

291

F.3d 49 (D.C. Cir. 2002)

37

Alaska Prof’l Hunters Ass’n v. FAA,

177 F.3d 1030 (D.C. Cir. 1999), abrogated,

Perez v. Mortg. Bankers Ass’n, 2015 WL 998535 (S. Ct. 2015)

Alexander v. United States,

6, 20, 24, 25, 33

509

U.S. 544 (1993)

47

American Wildlands v. Kempthorne,

 

530

F.3d 991 (D.C. Cir. 2008)

12

Appalachian Power Co. v. EPA,

 

208

F.3d 1015 (D.C. Cir. 2000)

33

Association of Flight Attendants-CWA v. Chao,

493

F.3d 155 (D.C. Cir. 2007)

36

* Auer v. Robbins,

 

519

U.S. 452 (1997)

15,

21, 37

Board of Trs. of State Univ. of N.Y. v. Fox,

492

U.S. 469 (1989)

46

Central Hudson Gas & Electric Corp. v. Pub. Serv. Comm’n,

447

U.S. 557 (1980)

15, 46

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Chevron, U.S.A., Inc. v. Natural Res. Def. Council, Inc.,

467

U.S. 837 (1984)

36

Christensen v. Harris Cnty.,

 

529

U.S. 576 (2000)

37

City of Olmsted Falls v. FAA,

 

292

F.3d 261 (D.C. Cir. 2002)

32

City of Santa Monica v. FAA,

 

631

F.3d 550 (D.C. Cir. 2011)

15

Coeur Alaska, Inc. v. Southeast Alaska Conservation Council,

557

U.S. 261 (2009)

37

* Continental Air Lines, Inc. v. Dep’t of Transp.,

843

F.2d 1444 (D.C. Cir. 1988)

32

Cronin v. FAA, 73 F.3d 1126 (D.C. Cir. 1996)

 

16, 32

* CSI Aviation Servs., Inc. v. U.S. Dep’t of Transp.,

637

F.3d 408 (D.C. Cir. 2011)

4, 30, 35, 43

FAA v. Landy,

705

F.2d 624 (2d Cir. 1983)

6

* FCC v. Beach Commc’ns, Inc.,

 

508

U.S. 307 (1993)

38, 39

Ford Motor Co. v. Tex. Dep’t of Transp.,

 

264

F.3d 493 (5th Cir. 2001)

45

Go Leasing, Inc. v. NTSB,

 

800

F.2d 1514 (9th Cir. 1986)

42, 43

Gorman v. NTSB,

 

558

F.3d 580 (D.C. Cir. 2009)

5,

17, 35

Heller v. Doe ex rel. Doe,

 

509

U.S. 312 (1993)

38

iv

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* Holder v. Humanitarian Law Project,

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561

U.S. 1 (2010)

41

Jifry v. FAA,

370

F.3d 1174 (D.C. Cir. 2004)

36

Johnson v. Cal. State Bd. of Accountancy,

72

F.3d 1427 (9th Cir. 1995)

45

Kansas v. United States,

16

F.3d 436 (D.C. Cir. 1994)

46

Liberty Coins, LLC v. Goodman,

748

F.3d 682 (6th Cir. 2014)

45

Merrifield v. Lockyer,

547

F.3d 978 (9th Cir. 2008)

38

National Oilseed Processors Ass’n v. OSHA,

769

F.3d 1173 (D.C. Cir. 2014)

41

Nordlinger v. Hahn,

505

U.S. 1 (1992)

39

Ohralik v. Ohio State Bar Ass’n,

436

U.S. 447 (1978)

44

Pearson v. Shalala,

164

F.3d 650 (D.C. Cir. 1999)

46, 47

* Perez v. Mortg. Bankers Ass’n, 2015 WL 998535 (S. Ct. 2015)

6, 20, 25, 33

Pittsburgh Press Co. v. Pittsburgh Comm’n on Human Relations,

413

U.S. 376 (1973)

45

Professional Pilots Fed’n v. FAA,

118

F.3d 758 (D.C. Cir. 1997)

40

Sorrell v. IMS Health Inc.,

131

S. Ct. 2653 (2011)

44

v

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Town of Barnstable v. FAA,

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740

F.3d 681 (D.C. Cir. 2014)

15, 37

Trans Union Corp. v. FTC,

 
 

245

F.3d 809 (D.C. Cir. 2001)

42

Trans Union LLC v. FTC,

 
 

295

F.3d 42 (D.C. Cir. 2002)

46

* United States v. Williams,

 
 

553

U.S. 285 (2008)

45,

46, 47

Virginia State Bd. of Pharmacy v. Va. Citizens Consumer Council, Inc.,

 

425

U.S. 748 (1976)

46

* Whitaker v. Thompson,

 
 

353

F.3d 947 (D.C. Cir. 2004)

44

Wisconsin v. Mitchell,

 
 

508

U.S. 476 (1993)

44

Woolsey v. NTSB,

 
 

993

F.2d 516 (5th Cir. 1993)

39, 40

Statutes:

 

* U.S.C. § 553(b)(A)

5

 

33

5

U.S.C. § 706(2)(A)

15

5

U.S.C. § 706(2)(B)

15

28

U.S.C. § 2112(b)

12

28

U.S.C. § 2412(d)(1)(B)

47

49

U.S.C. § 106(f)(3)(A)

3, 35

49

U.S.C. § 106(g)

35

vi

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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

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49

U.S.C. § 44711(a)(5)

6,

17, 44

49

U.S.C. § 46110

1, 31

49

U.S.C. § 46110(a)

1

49

U.S.C. § 46110(b)

12

* 49 U.S.C. § 46110(d)

2,

13, 16, 31, 32, 38

1986 Ohio Legis. Serv. Ann. 5-963

45

Ohio Rev. Code Ann. § 4728.01(A)

45

Regulatory Materials:

 

14

C.F.R. § 1.1

5, 27, 33, 35, 37

14

C.F.R. § 61.56(a)

6

14

C.F.R. § 61.56(c)

6

14

C.F.R. §§ 61.81-61.95

3

14

C.F.R. §§ 61.102-61.117

3

14

C.F.R. § 61.103(g)

4, 5

14

C.F.R. § 61.109(a)

4, 5

14

C.F.R. § 61.109(b)

4, 5

* 14 C.F.R. § 61.113

7,

10, 19, 27, 33, 37

14

C.F.R. §§ 61.113-61.117

4

14

C.F.R. § 61.113(a)

7, 19, 23, 25, 27

14

C.F.R. § 61.113(c)

7, 8, 9, 18, 19, 20, 22, 23, 25, 26, 27, 36

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14

C.F.R. § 61.113(c) (1998)

27

14

C.F.R. § 61.118(b) (1985)

20

14

C.F.R. § 61.118(b) (1997)

27

14

C.F.R. §§ 61.121-61.133

3

14

C.F.R. § 61.159(a)

40

14

C.F.R. § 91.155(a)

40

14

C.F.R. § 110.2

26, 40

14

C.F.R. pt. 119

5

14

C.F.R. § 119.1(a)(1)

5, 17, 29, 33, 35

* 14 C.F.R. § 119.1(a)(1)-(2)

 

8

14

C.F.R. § 119.1(a)(2)

29

14

C.F.R. § 119.1(e)

5

14

C.F.R. § 119.5(a)-(b)

5

14

C.F.R. §§ 119.5(g)

5, 44

14

C.F.R. § 119.5(k)

6, 14, 29, 37, 44, 46, 47

14

C.F.R. §§ 119.5(l)

44

14

C.F.R. § 119.21

5

14

C.F.R. §§ 119.21-119.25

5

* 14 C.F.R. § 119.21(a)

17,

33, 35

14

C.F.R. § 119.21(a)(1)-(3)

40

14

C.F.R. §§ 119.21(a)(4)-(5)

6, 40

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14

C.F.R. § 119.23

25, 26

14

C.F.R. § 119.25

5

14

C.F.R. §§ 119.33-119.36

47

14

C.F.R. § 119.33(a)(2)

5, 44

14

C.F.R. § 119.33(b)(2)

5, 44

14

C.F.R. § 119.39

47

14

C.F.R. pt. 121

5

14

C.F.R. pt. 121, SFAR 38-2, § 4 (1995)

20

14

C.F.R. § 121.1(a)

40

14

C.F.R. § 121.436(a)(1)-(2)

40

14

C.F.R. pt. 125

5

14

C.F.R. pt. 135

5

14

C.F.R. §§ 135.1(a)(1)

40

14

C.F.R. § 135.243(a)

5, 6

14

C.F.R. § 135.243(b)(1)-(2)

6, 41

14

C.F.R. § 135.243(c)(1)-(2)

6

14

C.F.R. § 135.293

6

28

Fed. Reg. 8157 (Aug. 8, 1963)

19, 26

29

Fed. Reg. 4717 (Apr. 2, 1964)

26

50

Fed. Reg. 23,941 (June 7, 1985)

20

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60 Fed. Reg. 65,832 (Dec. 20, 1995)

20

62 Fed. Reg. 16,220 (Apr. 4, 1997)

20,

26, 27

* FAA Advisory Circular No. 120-12A (JA 30-32)

* In re Transocean Air Lines, Inc., 11 C.A.B. 350 (1950) (JA 1-22)

4,

10, 17, 19, 20, 30, 35, 41, 43

11, 17, 30, 41, 43

Legal Interpretation to Mr. Atwood, 1993 WL 13581152 (FAA 1993)

28

Legal Interpretation to Don Bobertz (FAA 2009) (JA 38-40)

7,

22, 23

* Legal Interpretation to D. David Brown (FAA 1976) (JA 24-25)

Legal Interpretation to Peter Bunce (FAA 2008) (JA 33-34)

* Legal Interpretation to Thomas H. Chero (FAA 1985) (JA 28-29)

11, 20, 21, 23, 24

7,

8

8, 11, 20, 22, 23

Legal Interpretation to Wayne M. Del Rossi, 2010 WL 3070407(FAA 1987)

28

Legal Interpretation to Andy Dobis (FAA 2014) (JA45-46)

24

Legal Interpretation to Mark Haberkorn (FAA 2011) (JA 41-44)

7,

8, 21, 22, 23, 41, 42

Legal Interpretation to John W. Harrington, 1997 WL 34613525 (FAA 1997)

24

Legal Interpretation to Joseph A. Kirwan, 2005 WL 4994728 (FAA

24, 28

* Legal Interpretation to Hal Klee (FAA 1985) (JA 26-27)

11,

20, 23

Legal Interpretation to Ron Levy (FAA Office of Regional Counsel, Eastern Region 2005) (Pet. Addendum 10-11)

24

* Legal Interpretation to Rebecca B. MacPherson (FAA 2014) (JA 57-60)

10, 11, 18, 19, 20, 22, 27, 28

Legal Interpretation to Guy Mangiamele (FAA 2009) (JA 35-37)

7,

8, 22

Legal Interpretation to Taylor S. Perry, 2010 WL 3070407 (FAA 2010)

25

xi

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Legal Interpretation to Bob Shaw, 2008 WL 2204585 (FAA 2008)

28

Legal Interpretation to Mike Sommer, 2010 WL 4038518 (FAA 2010)

24

Legal Interpretation to Paul D. Ware (FAA 1976) (JA 23)

21,

24, 30

Legal Interpretation to John Yodice, 1978 WL 390805 (FAA 1978)

21

Rule:

Fed. R. App. P. 16(a)

12

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GLOSSARY

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FAA

Federal Aviation Administration

JA

Joint Appendix

Pet. Br.

Petitioner’s Brief

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IN THE UNITED STATES COURT OF APPEALS FOR THE DISTRICT OF COLUMBIA CIRCUIT

No. 14-1168

FLYTENOW, INC., Petitioner,

v.

FEDERAL AVIATION ADMINISTRATION, ADMINISTRATOR, Respondent.

ON PETITION FOR REVIEW FROM THE FEDERAL AVIATION ADMINISTRATION

BRIEF FOR THE RESPONDENT

STATEMENT OF JURISDICTION

Pursuant to its authority to regulate aviation safety, see 49 U.S.C. §§ 40113(a),

44701-44711, the Federal Aviation Administration (“FAA”) issued a letter interpreting

several FAA regulations on August 14, 2014. Joint Appendix (“JA”) 61-62. Petitioner

Flytenow, Inc. (“Flytenow”) filed a timely petition for review on September 5, 2014.

See 49 U.S.C. § 46110(a). This Court has jurisdiction under 49 U.S.C. § 46110.

STATEMENT OF THE ISSUES

Flytenow operates a website on which pilots may post information about

upcoming flights to attract passengers willing to pay a pro rata share of the pilots’

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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 regulations—known as a Part 119

certificate—to provide that flight service. The questions presented are:

1. Whether the agency’s decision is consistent with governing regulations.

2. Whether 49 U.S.C. § 46110(d) bars this Court from considering Flytenow’s

statutory and constitutional challenges because no such objections were raised before

the agency.

3. If not barred by § 46110(d), whether the agency’s 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

pilot’s operating expenses. Flytenow requested a legal interpretation from the FAA

regarding the company’s business model. The FAA concluded that pilots who

2

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participate in Flytenow’s website are “common carriers”—i.e., persons who hold

themselves out to the public (or a segment of the public) as available to provide

transportation for compensation. Because Flytenow pilots are “common carriers,” the

agency concluded that they must obtain a certificate under Part 119 of the FAA’s

regulations, which requires that they comply with certain stringent safety

requirements. Flytenow petitions for review.

A. Statutory and Regulatory Background

1. Congress assigned to the FAA Administrator (“Administrator”) the

responsibility to “promote safe flight of civil aircraft in air commerce.” 49 U.S.C.

§ 44701(a). The Administrator is required to carry out his duties “in a way that best

tends to reduce or eliminate the possibility or recurrence of accidents in air

transportation.” Id. § 44701(c).

To that end, Congress has directed the FAA to promulgate several categories

of regulations of particular relevance here. See generally 49 U.S.C. §§ 106(f)(3)(A),

40113(a). First, the FAA issues “airman certificates” authorizing individuals to serve

as pilots. Id. §§ 44702(a), 44711(a)(2)(A); see also id. § 40102(a)(8)(A) (defining

“airman”). The agency issues several types of “airman certificates,” such as “student

pilot certificates,” “private pilot certificates,” and “commercial pilot certificates.” See,

e.g., 14 C.F.R. §§ 61.81-61.95, 61.102-61.117, 61.121-61.133. The eligibility

requirements and operating rules associated with each type of certificate are distinct.

3

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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.

Dep’t of Transp., 637 F.3d 408, 415 (D.C. Cir. 2011).

As relevant here, Part 119 of the FAA’s regulations governs any person

“operating or intending to operate” civil aircraft as a common carrier, whether as an

4

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“air carrier” or as a “commercial operator,” a closely related category. 1 14 C.F.R.

§ 119.1(a)(1). See generally id. pt. 119. Any person proposing to offer common carrier

service must obtain a “Part 119 certificate” prior to commencing operations, unless an

exception to the certificate requirement applies. See id. §§ 119.21, 119.25; see also id.

§§ 119.5(a)-(b), (g), 119.33(a)(2), (b)(2); cf., e.g., id. § 119.1(e) (listing certain exceptions).

The operations of Part 119 air carriers and commercial operators are generally

subject to more stringent safety regulations than other air operations. See 14 C.F.R.

§§ 119.21-119.25 (citing id. pts. 121, 125, 135). For example, whereas a private pilot

can generally operate a plane with only 40 hours of prior flight experience, see id.

§§ 61.103(g), 61.109(a), (b), pilots operating under Part 119 must, at a minimum, hold

a commercial pilot certificate and have additional flight experience, with the amount

depending on the size of the aircraft and the type of operation. See, e.g., id.

1 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 carriers—i.e., persons who do not hold themselves out to the public or a segment of the public as available to provide transportation services—in 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

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§ 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 Prof’l Hunters Ass’n v. FAA, 177 F.3d 1030, 1033

(D.C. Cir. 1999), abrogated on other grounds, Perez v. Mortg. Bankers Ass’n, 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

2 As another example, Part 119 pilots in command of an aircraft must pass certain recurrent safety checks. For example, certain Part 119 pilots must annually

pass (1) a written or oral examination testing the pilot’s knowledge of enumerated safety requirements and procedures; and (2) a practical “competency check” to determine the pilot’s competence in various skills and techniques. 14 C.F.R. § 135.293. By contrast, pilots in command operating under the general operating rules in Part 91 of the FAA’s regulations are generally not subject to any such recurrent tests or checks. Instead, every other year, those pilots generally need only satisfactorily complete a “flight review” consisting of one hour of “flight training” and one hour of “ground training” that addresses a more limited set of topics. See id. § 61.56(a), (c).

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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

3 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).

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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. Factual and Procedural Background

1. Flytenow operates a website on which pilots can post information about

upcoming flights to attract passengers willing to pay a pro rata portion of the pilots’

operating expenses. Any member of the public may use Flytenow’s 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 Flytenow’s 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

4 Haberkorn Interpretation (JA 43); see also Mangiamele Interpretation (JA 36- 37); 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 FAA’s 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).

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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 passenger’s 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 Flytenow’s 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

FAA’s Office of the Chief Counsel provide a “legal interpretation” regarding its

website. JA 47-50. Flytenow’s letter described the website and requested that the FAA

address whether Flytenow—or a pilot or passenger using the website—would “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 FAA’s 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.

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b. In August 2014, the FAA responded to Flytenow’s request, explaining that

pilots posting flights on Flytenow’s website to offer flight services to paying strangers

are acting as common carriers and thus require a Part 119 certificate. JA 61-62.

The FAA explained that it had recently addressed Flytenow’s questions in a

legal interpretation issued to Rebecca MacPherson regarding a materially identical

web-based scheme operated by an entity called AirPooler. JA 61 (referencing Legal

Interpretation to Rebecca B. MacPherson (FAA 2014) (JA 57-60)). In the

MacPherson Interpretation, the FAA observed that FAA Advisory Circular No. 120-

12A describes common carriage as “(1) a holding out of a willingness to (2) transport

persons or property (3) from place to place (4) for compensation,” FAA Advisory

Circular No. 120-12A (JA 30). JA 58. The FAA concluded that pilots participating in

the AirPooler scheme satisfied all of the elements of common carriage, only the first

and fourth of which were in dispute. See JA 59-60.

The FAA reasoned in the MacPherson Interpretation that, because AirPooler

passengers paid AirPooler pilots a pro rata share of the pilots’ operating expenses in

exchange for transportation, the operations in question were “for compensation” for

purposes of the common carriage analysis. JA 59-60. The FAA explained that this

conclusion follows from the plain language of 14 C.F.R. § 61.113, which “established

a general prohibition against compensation and hire and listed

exceptions to that

general prohibition, which included expense-sharing with passengers.” JA 59

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(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

[Flytenow’s] 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

6 JA 60 (citing Chero Interpretation (JA 28-29); Legal Interpretation to Hal Klee (FAA 1985) (JA 26-27); Legal Interpretation to D. David Brown (FAA 1976) (JA

24-25)).

7 Flytenow’s addendum includes documents pertaining to Flytenow and a

screenshot of another company’s website that are not part of the administrative record in this case and that Flytenow has not relied upon in making its standing argument. See Pet. Addendum 7-9, 12-14. Although nothing turns on the issue in this case because of Flytenow’s limited reliance on these documents, they are not properly

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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 pilot’s 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 agency’s definition of “common carrier”—a person who holds himself out

to the public as available to provide transportation in return for compensation.

Instead, Flytenow contends that the agency’s 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

agency’s 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).

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conclusion consistent with the ordinary meaning of that term. Flytenow contends that

the agency misconstrued various regulations in reaching these conclusions, but the

agency’s interpretation of those provisions is both sensible and persuasive. At a

minimum, the agency’s 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

agency’s 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 Flytenow’s 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.

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Flytenow’s constitutional challenges are equally wide of the mark. First, the

FAA’s 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 pilot’s

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

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under the test articulated in Central Hudson Gas & Electric Corp. v. Public Service

Commission, 447 U.S. 557 (1980). The FAA’s 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 FAA’s substantial

interest in ensuring that those pilots who serve the public—i.e., those who hold out

the availability of transportation by air to the public—satisfy heightened safety

standards.

STANDARD OF REVIEW

The FAA’s 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 agency’s 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 Flytenow’s 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 money—the traditional hallmark of a common carrier. That

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the payment they receive is measured by the passenger’s 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

FAA’s regulations, which reflect the commonsense determination that defraying a

pilot’s fuel, oil, and other expenses in exchange for transportation is a form of

compensation. Flytenow’s 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 agency’s decision violates the notice-and-comment requirements of the

Administrative Procedure Act, exceeds the agency’s 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, Flytenow’s statutory and constitutional

challenges fail on their own terms.

I. THE FAA REASONABLY CONSTRUED ITS REGULATIONS.

A. The agency reasonably concluded that Flytenow pilots are common carriers and thus require Part 119 certificates.

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 agency’s regulations and thus require a Part 119 certificate. Flytenow does not

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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 adopted—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 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

agency’s 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

8 As explained above, under the FAA’s regulations, common carriers that operate in interstate, foreign, and overseas settings are “air carriers,” and common carriers that operate in intrastate settings are “commercial operators.” See supra pp. 4- 5 & note 1.

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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 Flytenow’s

website is to allow pilots to attract strangers who are interested in becoming

passengers. The FAA thus reasonably concluded that, because Flytenow’s “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.

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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 FAA’s commonsense judgment

that reimbursement of a pilot’s 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

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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

9 Prior to August 1997, a materially identical version of the expense-sharing rule was codified at 14 C.F.R. § 61.118(b). See, e.g., 62 Fed. Reg. 16,220, 16,266 (Apr. 4, 1997); 14 C.F.R. § 61.118(b)(1985). 10 Part 119 was added to the Code of Federal Regulations in January 1996 and

“consolidate[d] into one part the certification and operations specifications requirements for persons who operate under parts 121 and 135.” 60 Fed. Reg. 65,832, 65,832, 65,879 (Dec. 20, 1995). Prior to the promulgation of Part 119, the certification requirements for common carriers appeared in Special Federal Aviation Regulation 38-2 and Parts 121 and 135 of the FAA’s regulations. See id. at 65,879; see also, e.g., 14 C.F.R. Pt. 121, SFAR 38-2, § 4 (1995); 50 Fed. Reg. 23,941, 23,945, § 4 (June 7, 1985); Alaska Prof’l Hunters Ass’n v. FAA, 177 F.3d 1030, 1031 n.2 (D.C. Cir. 1999), abrogated on other grounds, Perez v. Mortg. Bankers Ass’n, 2015 WL 998535 (S. Ct. 2015).

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(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 Flytenow’s 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 agency’s 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. Flytenow’s attacks on the FAA’s interpretation of its own regulations are meritless.

1. Flytenow’s 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 FAA legal interpretations have also addressed the permissibility of posting expense-sharing flights on bulletin boards. In two legal interpretations, the FAA has emphasized that such postings “may be construed as holding out,” depending on the surrounding circumstances (which were apparently not presented to the agency in those cases). Legal Interpretation to Mark Haberkorn (FAA 2011) (JA 43); see also Legal Interpretation to John Yodice, 1978 WL 390805, at *1 (FAA 1978). In another legal interpretation, the FAA applied this principle to a posting on a community college bulletin board, concluding that such a posting was permissible. See Legal Interpretation to Paul D. Ware (FAA 1976) (JA 23). The number of prospective passengers reached by a community college bulletin board is plainly significantly smaller than in the examples above or in the case of the Flytenow website, which is accessible by any member of the public who applies for membership and is geared towards prospective passengers. JA 47.

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return for transportation. But Flytenow fails to explain why a passenger’s 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 agency’s 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 agency’s 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

12 See, e.g., MacPherson Interpretation (JA 59 & n.5); Haberkorn Interpretation (JA 43); Legal Interpretation to Don Bobertz (FAA 2009) (JA 39); Legal Interpretation to Guy Mangiamele (FAA 2009) (JA 36-37); Chero Interpretation (JA 28); supra pp. 7-8.

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reimbursement of a pilot’s operating expenses constitutes “compensation.” As already

explained, the conclusion that expense sharing is a form of compensation is the very

premise of § 61.113(c), which is an exception to the prohibition in § 61.113(a) against

transporting passengers for “compensation or hire.”

Flytenow notes (Pet. Br. 19) that some prior legal interpretations have stated

that, “[a]bsent a bona fide common purpose

, reimbursement for the pro rata

share of operating expenses constitutes compensation

for which a part 119

certificate is required.” 13 Although these general statements are imprecise, none of

them was made in the context of a decision addressing whether the presence of a

common purpose insulates a pilot who accepts payment of expenses from passengers

from being deemed a common carrier who requires a Part 119 certificate. And none

suggests that, when a common purpose is present, the payment of the pilot’s expenses

is somehow no longer “compensation.” As already discussed, the FAA has repeatedly

concluded that expense sharing is compensation for purposes of the common carriage

analysis. Moreover, each of those decisions arrived at that conclusion without

addressing the distinct “common purpose” requirement, see Brown Interpretation (JA

24-25); Klee Interpretation (JA 26), or assumed that the “common purpose”

requirement had been satisfied, see Chero Interpretation (JA 28-29). These decisions

are also supported by numerous FAA legal interpretations observing that the agency

13 Bobertz Interpretation (JA 39); see Haberkorn Interpretation (JA 41).

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construes “compensation” broadly to mean “the receipt of anything of value,” including

not only expense reimbursements but also meals, lodging, and other amenities. 14

Flytenow’s reliance (Pet. Br. 19-20, 25) on a legal interpretation issued by one

of the FAA’s regional counsel, Legal Interpretation to Ron Levy (FAA Office of

Regional Counsel, Eastern Region 2005) (Pet. Addendum 10-11), fares no better.

Although the regional counsel concluded that pilots who post flights on a website

similar to Flytenow’s may not require a Part 119 certificate as long as there is a

“genuine sharing of expenses,” Pet. Addendum 11, that interpretation does not

represent the views of the FAA’s Office of the Chief Counsel or the FAA

Administrator. It was issued by one of the FAA’s regional counsel without any

coordination with or approval by the FAA’s Office of the Chief Counsel, and the

interpretation is plainly inconsistent with the FAA decisions discussed above. 15 See

Alaska Prof’l Hunters Ass’n v. FAA, 177 F.3d 1030, 1035 (D.C. Cir. 1999) (“[W]hen a

14 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-20”—a reference to the Regulations and Enforcement Division of the Office of the Chief Counsel—“concur[red]” (capitalization omitted)); Brown Interpretation (JA 24-25) (same).

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local office gives an interpretation of a regulation or provides advice to a regulated

party, this will not necessarily constitute an authoritative administrative position,

particularly if the interpretation or advice contradicts the view of the agency as a

whole.”), abrogated on other grounds, Perez v. Mortg. Bankers Ass’n, 2015 WL 998535 (S. Ct.

2015). Accordingly, the Levy Interpretation does not control. See also Legal

Interpretation to Taylor S. Perry, 2010 WL 3070407, at *1 (FAA 2010) (concluding

that regional office’s interpretation does not control when it is inconsistent with an

interpretation issued by the Office of the Chief Counsel).

Flytenow further argues (Pet. Br. 21) that the agency’s interpretation of

§ 61.113(c) leads to the “nonsensical conclusion” that pilots must obtain Part 119

certificates whenever they share expenses with passengers, and it contends (Pet. Br. 32)

that the FAA “flipped its long-held position” that private pilots may engage in

expense sharing under § 61.113(c). But that is plainly not the case. Under the agency’s

interpretation of the governing regulations, private pilots may continue to share

enumerated operating expenses with their passengers on a pro rata basis consistent

with § 61.113(c) as long as they do not “hold out” to the public (or a segment of the

public) that they are willing to provide such transportation. 16 What a private pilot

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

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cannot do is publicly offer to provide point-to-point transportation to any stranger

willing to underwrite a portion of the flight expenses. When pilots hold out the

availability of transportation to the public in exchange for compensation of any kind,

the agency reasonably demands that they comply with the stricter requirements in Part

119 (and related parts of the FAA’s regulations), such as the requirements pertaining

to flight experience and pilot testing discussed earlier, see supra pp. 5-6 & note 2.

b. Flytenow also attacks (Pet. Br. 21-22, 33-34) the agency’s conclusion that

expense sharing is “compensation” under 14 C.F.R. § 61.113(c) by relying on the

preambles to three Federal Register notices concerning the promulgation or

amendment of § 61.113(c) (or its predecessors). These notices each include a

statement that § 61.113(c) and its predecessors reflect the view that expense sharing

“is not considered the carriage of persons for compensation or hire.” 29 Fed. Reg.

4717, 4718 (Apr. 2, 1964); see also 28 Fed. Reg. at 8158; 62 Fed. Reg. 16,220, 16,263

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.

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(Apr. 4, 1997). 17 But those statements reflect nothing more than the agency’s

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 exception—and the

Federal Register notices on which Flytenow relies—would have been unnecessary.

c. Flytenow also notes (Pet. Br. 22-23) that the agency’s 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 person’s 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.

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establishes that “expense-sharing [i]s compensation.” MacPherson Interpretation (JA

59).

As prior FAA legal interpretations make clear, the “major enterprise for profit”

test is meant for circumstances in which a flight operator provides transportation for

goods or passengers in a manner that is not directly compensated but nonetheless

indirectly results in the payment of money. See, e.g., Legal Interpretation to Wayne M.

Del Rossi, 2010 WL 3070407, at *2-3 (FAA 1987) (pilot receives “compensation” for

a flight when he takes aerial photographs for aerial photography business); Legal

Interpretation to Mr. Atwood, 1993 WL 13581152, at *1 (FAA 1993) (company

receives “compensation” for flight when it transports seafood from one location to

another for sale and distribution); see also Legal Interpretation to Bob Shaw, 2008 WL

2204585, at *1 (FAA 2008). Here, however, compensation to the pilot could not be

more direct or clear—money is paid in exchange for transportation. That conclusion

is supported not only by prior FAA decisions concluding that public expense-sharing

schemes involve compensation, but also by agency decisions concluding more

generally that “compensation[,] under the FAA’s view, is the receipt of anything of

value.” Legal Interpretation to Joseph A. Kirwan, 2005 WL 4994728, at *1 (FAA

2005); see supra pp. 20-21, 23-24 & note 14.

2. Flytenow does not dispute that “holding out” is an element of the “common

carriage” analysis, Pet. Br. 6 n.6, 11 & n.14, 23-25 & n.21, and it offers no argument in

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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

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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. Dep’t 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 FAA’s 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 expense-

sharing flight plans on a bulletin board if the bulletin board’s 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

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“broad segment of the public,” which is what Flytenow pilots are doing. JA 62. The

agency’s conclusion that Flytenow pilots are “common carriers” who require a Part

119 certificate is entirely reasonable.

II. FLYTENOW’S REMAINING CONTENTIONS ARE BARRED AND, IN ANY EVENT, LACK MERIT.

Flytenow additionally contends (Pet. Br. 26-57) that the FAA’s decision violates

the notice-and-comment requirements of the Administrative Procedure Act; exceeds

the agency’s authority under the Federal Aviation Act; and violates the Constitution in

various respects. Because Flytenow did not raise these contentions before the agency,

they are not subject to review here. See 49 U.S.C. § 46110(d). In any event, as

explained below, Flytenow’s challenges are without merit.

A. Review of Flytenow’s unexhausted statutory and constitutional claims is barred under 49 U.S.C. § 46110(d).

Flytenow brings this petition for review of the FAA’s 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 agency’s

regulations to require Flytenow pilots to obtain Part 119 certificates would require

notice-and-comment rulemaking, nor did it raise any objection to the FAA’s statutory

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authority. See JA 47-50. Flytenow has not suggested in this Court—much less

established—that 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 FAA’s 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 Flytenow’s 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. Dep’t 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). Flytenow’s

constitutional arguments—all raised for the first time in this Court—are therefore

foreclosed under § 46110(d).

B. The FAA’s decision is consistent with the Administrative Procedure Act and the Federal Aviation Act.

Even assuming they are not barred, Flytenow’s statutory objections to the

FAA’s decision are without merit.

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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 Flytenow’s 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

FAA’s 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

agency’s decision here merely interpreted the term “common carrier” and the FAA’s

related regulations, such as 14 C.F.R. § 61.113.

Flytenow contends (Pet. Br. 26) that the agency’s decision “upended more than

40 years of agency precedent,” apparently invoking this Court’s 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 Prof’l Hunters Ass’n, 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 Ass’n, 2015 WL 998535, at *6-9 (S. Ct. 2015).

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Accordingly, notice-and-comment rulemaking was not required here. And in any

event, Flytenow is wrong that the FAA’s interpretation of its regulations “upended”

decades of the agency’s “precedent.” Pet. Br. 26. As explained above, the FAA’s

interpretation is amply supported by the FAA’s prior legal interpretations, with the

single exception of an interpretation issued by a regional counsel that departed from

the official views of the agency. See supra pp. 20-21, 23-25 & note 14.

2. Flytenow next attacks the FAA’s decision on the ground that the FAA lacks

statutory authority to “regulate Internet-based communications by pilots.” Pet. Br. 28;

see also Pet. Br. 26-29. In Flytenow’s view, the FAA exceeds its statutory authority by

taking into consideration the fact that pilots use Flytenow’s website to hold out the

availability of transportation by air to the public. That argument reflects a

fundamental misunderstanding of tasks that Congress assigned to the agency.

Congress expected the FAA to define and regulate common carriers in air

commerce. Congress specifically directed the FAA to issue “air carrier operating

certificate[s]” to qualified persons, 49 U.S.C. § 44705; id. § 44702(a), and it defined

“air carrier[s]” to include U.S. citizens 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). 18 Congress further authorized the FAA to prescribe

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

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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. Dep’t 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 FAA’s 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).

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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 way—whether 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 FAA’s 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 FAA’s

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

FAA’s regulations. JA 61-62. Flytenow attacks that conclusion on the grounds that the

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agency assertedly misinterpreted various regulations, including 14 C.F.R. §§ 1.1,

61.113, and 119.5(k). See Pet. Br. 19-25, 32-34. Under Auer v. Robbins, the FAA’s

conclusions regarding those regulations are “controlling unless plainly erroneous or

inconsistent with the regulation.” 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);

Air Transp. Ass’n of Am., Inc. v. FAA, 291 F.3d 49, 53 (D.C. Cir. 2002).

An agency’s interpretation of its own regulations is entitled to deference,

moreover, even when the agency acts through relatively informal procedures. See, e.g.,

Coeur Alaska, Inc. v. Southeast Alaska Conservation Council, 557 U.S. 261, 283-84 (2009)

(interpretive memo “not subject to sufficiently formal procedures to merit Chevron

deference” but still entitled to deference under Auer). Flytenow thus misunderstands

(Pet. Br. 30-31) the Supreme Court’s decision in Christensen v. Harris County, 529 U.S.

576 (2000), which held that the opinion letter at issue there was not entitled to Chevron

deference with respect to its interpretation of a statute but held that principles of Auer

deference nonetheless applied to the letter’s interpretation of a regulation. Id. at 586-88;

see also Auer, 519 U.S. at 461-62 (Auer deference may be granted to agency’s position

articulated in legal brief).

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C. The FAA’s decision is consistent with the Constitution.

Flytenow lastly raises several constitutional challenges to the FAA’s decision.

As already noted, each of these challenges is barred under 49 U.S.C. § 46110(d). Each

is also without merit.

1. Flytenow contends (Pet. Br. 46-51) that requiring Flytenow pilots to obtain

Part 119 certificates violates the equal protection component of the Due Process

Clause because (1) Flytenow pilots are assertedly similarly situated to other pilots

permitted to conduct expense-sharing flights without a Part 119 certificate (i.e., pilots

who do not hold themselves out to the public); and (2) Flytenow pilots are assertedly

differently situated from other common carriers that are required to obtain Part 119

certificates. This Court need not address whether the latter theory is cognizable under

equal protection law, see Merrifield v. Lockyer, 547 F.3d 978, 984-86 (9th Cir. 2008),

because all of the FAA’s classifications easily withstand equal protection scrutiny.

As Flytenow acknowledges (Pet. Br. 47-51), this Court must sustain the FAA’s

classifications “if there is a rational relationship between the disparity of treatment and

some legitimate governmental purpose.” Heller v. Doe ex rel. Doe, 509 U.S. 312, 320

(1993) (rational-basis review applies to classifications that are not inherently suspect

and do not implicate a fundamental right). “On rational-basis review,

those

attacking the rationality of the

classification have the burden to negative every

conceivable basis which might support it.” FCC v. Beach Commc’ns, Inc., 508 U.S. 307,

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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 FAA’s 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

carrier”—i.e., a common carrier in the interstate or foreign settings—“to 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

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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

Fed’n v. FAA, 118 F.3d 758, 767-68 (D.C. Cir. 1997); Air Line Pilots Ass’n, Int’l 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 FAA’s regulations—Parts 121 and 135—vary 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 Operations by commercial airlines of large aircraft like Boeing 747s are subject to the requirements set forth in Part 121 of the FAA’s regulations. See 14 C.F.R. §§ 119.21(a)(1)-(3), 121.1(a); see also id. § 110.2 (regulatory definitions). Under Part 121, for example, a pilot in command of an aircraft must, inter alia, have an “airline transport pilot certificate” (which generally requires 1,500 hours of flight experience, id. § 61.159(a)) and hold a “rating” for (i.e., be authorized to fly) the relevant type of aircraft. Id. § 121.436(a)(1)-(2). By contrast, common carrier operations of smaller aircraft—such as the aircraft Flytenow states its pilots use (Pet. Br. 9 n.10)—are generally subject to the

requirements set forth in Part 135 of the FAA’s regulations. See 14 C.F.R. §§ 119.21(a)(4)-(5), 135.1(a)(1); see also id. § 110.2 (regulatory definitions). Under Part 135, for example, pilots in command of an aircraft operating under “Visual Flight Rules” (which apply when flight visibility is sufficiently good, see id. § 91.155(a))

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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 Flytenow’s 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 Ass’n 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).

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In any event, Flytenow’s 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 Flytenow’s

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 Ass’n 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. Flytenow’s vagueness

challenge must fail. See also Go Leasing, Inc. v. NTSB, 800 F.2d 1514, 1524-26 (9th Cir.

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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 FAA’s 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

person’s 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 public—and thus that they should be

regulated under the strict safety regulations applicable to pilots who serve the

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public—does 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 Ass’n, 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 FAA’s 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 FAA’s 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.”

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United States v. Williams, 553 U.S. 285, 297 (2008); Pittsburgh Press Co. v. Pittsburgh

Comm’n on Human Relations, 413 U.S. 376, 388 (1973); see also, e.g., Ford Motor Co. v. Tex.

Dep’t of Transp., 264 F.3d 493, 505-07 (5th Cir. 2001).

These principles are well illustrated by the Sixth Circuit’s 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 transaction”—they offer

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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 carriers—i.e.,

those who hold themselves out to the public as available to provide transportation in

exchange for compensation—to the stringent safety requirements set forth in Part 119

(and related parts) of the agency’s 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).

Flytenow’s 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.

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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 person’s advertising on

the FAA’s 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.

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CONCLUSION

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For the foregoing reasons, the petition for review should be denied. 21

MARCH 2015

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

21 Although Flytenow requests (Pet. Br. 57) attorney’s 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).

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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

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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

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ADDENDUM

Filed: 03/11/2015