EMMET G. SULLIVAN, District Judge.
This case involves the decision of the United States Postal Service (the "Postal Service") to grant an equitable tender of
The State of Alaska is the largest state in the Union and has a very limited system of roads connecting its communities. See Congressional Findings, Pub.L. 107-206 § 3002(b)(1) (Aug. 2, 2002). The United States Government owns nearly 2/3 of Alaska's landmass, including large tracts of land separating isolated communities within the State. Id. § 3002(b)(5). This federal ownership has inhibited the ability of Alaskans to build roads connecting isolated communities. Id. § 3002(b)(6). Consequently, most communities and a large portion of the population in the State can only be reached by air. Id. § 3002(b)(7). As a result, the vast majority of food items and everyday necessities destined for these isolated communities and populations can only be transported through the air. Id. § 3002(b)(8). To tackle the unique challenge of connecting hundreds of rural and isolated communities within the State, Congress created the Intra-Alaska Bypass Mail system (the "bypass mail system"). Id. § 3002(b)(9).
The bypass mail system provides for the carriage of items-ranging from foodstuffs to building materials to livestock-as mail, which elsewhere would be transported as freight. It also provides a means of affordable and reliable passenger service for rural Alaskans. Indeed, Congress describes the bypass mail system as a "4-legged stool," designed to: (1) "provide the most affordable means of delivering food and everyday necessities to these rural and isolated communities"; (2) "establish a system whereby the Postal Service can meet its obligations to deliver mail to every house and business in the United States"; (3) "support affordable and reliable passenger service"; and (4) "support affordable and reliable nonmail freight service." Id.
In 2002, based upon its determination that some air carriers were abusing the bypass mail system, Congress enacted the Rural Service Improvement Act of 2002 (the "RSIA"). See Pls.' SMF ¶¶ 11-12; see also Congressional Findings, Pub.L.
To achieve these goals, the RSIA created basic tests and minimum eligibility requirements that carriers must satisfy in order to be eligible to carry bypass mail. Specifically, the RSIA divides eligible carriers into two groups: (i) mainline bypass mail carriers; and (ii) bush bypass mail carriers. Mainline bypass mail carriers operate large aircrafts (greater than 7500 pound payload capacity) and fly "mainline routes" between either Anchorage or Fairbanks and a regional Alaska hub.
At the time the RSIA was passed, only four carriers qualified as existing mainline carriers; those carriers are the three plaintiffs in this lawsuit—NAC, Everts, and Lynden—as well as Alaska Airlines.
As noted above, this case arises from the Postal Service's determination that PenAir was eligible for the equitable tender of nonpriority mainline bypass mail on five mainline routes: Anchorage-Dillingham, Anchorage-King Salmon, Anchorage-Aniak, Anchorage-McGrath, and Anchorage-Unalakleet. PenAir has historically provided daily service to those communities using its bush aircrafts. See PenAir's Opp'n & Cross-Mot. at 10.
Towards this end, by letters dated July 6, 2009 and July 22, 2009, PenAir applied to the Postal Service for an equitable tender of nonpriority mainline bypass mail in the Anchorage-Dillingham and Anchorage-King Salmon markets pursuant to 39 U.S.C. § 5402(g)(5)(C)—the statutory provision governing the entry of new mainline passenger carriers on routes in which there is no existing mainline passenger carrier.
Ex. A to Karp Decl. (letter dated August 7, 2009).
Thereafter, PenAir applied to the Postal Service for an equitable tender of nonpriority mainline bypass mail in the additional markets of Anchorage-Aniak, Anchorage-McGrath, and Anchorage-Unalakleet. Pls.' SMF ¶ 55; see also Postal Service's Ex. J to Declaration of Steve Deaton ("Deaton Decl.") (letter dated August 24, 2009). By letter dated September 2, 2009, the Postal Service approved PenAir's request for equitable tender in these additional markets, concluding that "[PenAir's] letters describe service which would make [it] eligible for the equitable tender [it has] requested in those markets." Ex. K to Deaton Decl. (letter dated Sept. 2, 2009).
On August 22, 2009, PenAir began operating as a mainline passenger carrier on the Anchorage-Dillingham, Anchorage-King Salmon, Anchorage-Aniak, Anchorage-McGrath, and Anchorage-Unalakleet routes. PenAir's SMF ¶ 23. Soon thereafter, on November 9, 2009, the Postal Service began tendering nonpriority mainline bypass mail to PenAir on all five routes. PenAir's SMF ¶ 23.
After the Postal Service determined that PenAir was eligible for the equitable tender of nonpriority mainline bypass mail on the Anchorage-Dillingham and Anchorage-King Salmon routes, Alaska Airlines submitted a letter to the Postal Service expressing its "concern and differing viewpoint with the legal argumentation set forth in [PenAir's letter dated July 6, 2009]." See PenAir's Ex. 4 to Declaration of Daniel Seybert ("Seybert Decl.") (letter dated August 12, 2009). The letter then described, in detail, the airline's objections to PenAir's statutory analysis as well as its own interpretation of 39 U.S.C. § 5402. Ex. 4 to Seybert Decl.
By letter dated September 2, 2009—the same date that the Postal Service sent a letter approving the equitable tender of mainline bypass mail to PenAir on additional mainline routes—the Postal Service provided the following response to Alaska Airlines:
Ex. K. to Deaton Decl. (letter dated Sept. 2, 2009).
This action initially came before the Court on November 3, 2009, as a motion for preliminary injunction against the Postal Service. During a telephonic status hearing on November 4, 2009, however, plaintiffs informed the Court that they consented to having their motion for preliminary injunction consolidated with a determination
Summary judgment should be granted only if the moving party has shown that there are no genuine issues of material fact and that the moving party is entitled to judgment as a matter of law. See Fed. R.Civ.P. 56; Celotex Corp. v. Catrett, 477 U.S. 317, 325, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986); Waterhouse v. Dist. of Columbia, 298 F.3d 989, 991 (D.C.Cir.2002). "A fact is material if it `might affect the outcome of the suit under the governing law,' and a dispute about a material fact is genuine `if the evidence is such that a reasonable jury could return a verdict for the nonmoving party.'" Steele v. Schafer, 535 F.3d 689, 692 (D.C.Cir.2008) (quoting Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986)). The party seeking summary judgment bears the initial burden of demonstrating an absence of genuine issues of material fact. Celotex, 477 U.S. at 322, 106 S.Ct. 2548. In determining whether a genuine issue of material facts exists, the Court must view all facts in the light most favorable to the non-moving party. See Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 597, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986); Keyes v. Dist. of Columbia, 372 F.3d 434, 436 (D.C.Cir. 2004). Likewise, in ruling on cross-motions for summary judgment, the court shall grant summary judgment only if one of the moving parties is entitled to judgment as a matter of law upon material facts that are not genuinely disputed. St. Michael's Med. Ctr. v. Sebelius, 648 F.Supp.2d 18, 25 (D.D.C.2009) (citing Rhoads v. McFerran, 517 F.2d 66, 67 (2d Cir.1975)).
A challenge to an agency's construction of a statute that it administers is subject to the standard of review articulated in Chevron U.S.A., Inc. v. NRDC, Inc., 467 U.S. 837, 104 S.Ct. 2778, 81 L.Ed.2d 694 (1984). In assessing the validity of an agency's interpretation of a statute, the Court must first determine "whether Congress has directly spoken to the precise question at issue." Id. at 842-43, 104 S.Ct. 2778. Courts "use `traditional tools of statutory construction' to determine whether Congress has unambiguously expressed its intent," Serono Labs., Inc. v. Shalala, 158 F.3d 1313, 1319 (D.C.Cir.1998), including an examination of the statute's text, structure, purpose, and legislative history. See Shays v. FEC, 414 F.3d 76, 105 (D.C.Cir. 2005). "If the intent of Congress is clear, that is the end of the matter; for the court, as well as the agency, must give effect to the unambiguously expressed intent of Congress." Chevron, 467 U.S. at 842-43, 104 S.Ct. 2778. If, however, "the statute is silent or ambiguous with respect to the specific issue, the question for the court is whether the agency's answer is based on a permissible construction of the statute." Id. at 843, 104 S.Ct. 2778. In making such an assessment, "considerable weight" is generally accorded to "an executive department's construction of a statutory scheme it is entrusted to administer[.]" Id. Indeed, "under Chevron, courts are bound to uphold an agency interpretation as long as it is reasonable—regardless
As a threshold matter, the Postal Service argues that the Court lacks subject matter jurisdiction over this action. In support of its argument, the Postal Service points to 39 U.S.C. § 410(a), which provides for judicial review of a Postal Service action only when the Postal Service is alleged to have exceeded its statutory authority.
Plaintiffs, relying principally on Aid Association for Lutherans v. United States Postal Service, 321 F.3d 1166 (D.C.Cir. 2003), contend that "judicial review is favored when an agency is charged with acting beyond its authority." Id. at 1172 (internal quotation marks omitted). Plaintiffs therefore assert that this Court has jurisdiction to determine whether the Postal Service exceeded its statutory authority by granting equitable tender of mainline bypass mail to an air carrier that does not satisfy the specific eligibility requirements established by Congress under § 5402(g)(5)(C). See Pls.' Combined Reply & Opp'n Br. at 5. This Court agrees.
"[T]he case law in this circuit is clear that judicial review is available when an agency acts ultra vires" because "[w]hen an executive acts ultra vires, courts are normally available to reestablish the limits on [its] authority." Aid Ass'n for Lutherans, 321 F.3d at 1173 (internal quotation marks omitted). Therefore, because plaintiffs assert that the Postal Service exceeded its statutory authority in purporting to apply § 5402(g)(5)(C), this Court has jurisdiction over the pending action. See, e.g., id. ("Appellees' claims here, that the Postal Service `exceeded its statutory authority' in purporting to apply the statute, clearly admit of judicial review.").
As discussed above, the Court's analysis of the validity of the Postal Service's interpretation of § 5402(g)(5)(C) is governed by Chevron, 467 U.S. 837, 104 S.Ct. 2778. Plaintiffs argue that this case should be decided under Chevron step one as the Postal Service's decision to tender nonpriority mainline bypass mail to PenAir was in direct contradiction with the "clear and unambiguous language" of § 5402(g)(5)(C) and is therefore ultra vires. In support of
Section 5402(g)(5)(C), the new mainline carrier entry provision that the Postal Service relied upon in granting equitable tender of nonpriority mainline bypass mail to PenAir, states:
39 U.S.C. § 5402(g)(5)(C).
As a threshold matter, there is no dispute that PenAir satisfies subparts (i) through (iii) of § 5402(g)(1)(A). Nor is there any dispute that PenAir satisfies § 5402(g)(1)(C) or § 5402(h)(2)(B).
Plaintiffs argue that the plain language of § 5402(g)(5)(C) requires PenAir to comply with § 5402(g)(1)(A)(iv)(II) in order to be eligible to receive an equitable tender of nonpriority mainline bypass mail. Pls.' Mot. at 13-14. Because it is undisputed that PenAir had not satisfied this requirement at the time the Postal Service rendered its decision,
In further support of their interpretation, defendants point to the term "immediately" in § 5402(g)(5)(C), and explain that "[i]t makes sense that a carrier seeking to `immediately' deliver mainline bypass mail and provide mainline passenger service on a route where no existing mainline passenger carrier is operating would not have to abide by the twelve month capacity requirement of § 5402(g)(1)(A)(iv)(II) or the sixth month passenger requirement of Section (g)(5)(A)(ii)." Postal Service's Opp'n & Cross-Mot. at 14. Likewise, PenAir asserts that "[t]he word `immediately' means `occurring without delay[.]'" PenAir's Opp'n & Cross-Mot. at 24 (quoting Black's Law Dictionary 751 (8th ed.2000)). PenAir explains that "Congress did not use that modifier in any of the other generally applicable RSIA provisions regarding the tender of nonpriority bypass mail," but instead chose to "reserve[ ] the word `immediately' to underscore its intention—expressed in no uncertain terms through the `Notwithstanding' clause—that new carriers need not satisfy the generally applicable [Prior Service and Capacity Requirement] under [§ 5402(g)(5)(C)]." PenAir's Opp'n & Cross-Mot. at 24.
Plaintiffs urge the Court to reject these arguments. With regards to the "not-withstanding"
In addition, with regards to defendants' interpretation of the word "immediately," plaintiffs assert that "[t]he word `immediately'—read in the context of Section (g)(5)(C) and the rest of the RSIA—does not exempt a carrier seeking to qualify under Section (g)(5)(C) from satisfying all of the eligibility requirements that Congress explicitly enumerated in that section[.]" Pls.' Combined Reply & Opp'n Br. at 18. To the contrary, plaintiffs argue that § 5402(g)(5)(C) clearly specifies, without qualification, that "`a new 121 mainline passenger carrier, otherwise qualified under this subsection, may immediately receive equitable tender . . . if the carrier meets the requirements of subparagraphs (A), (C), and (D) of paragraph (1) and subsection (h)(2)(B).'" Pls.' Combined Reply
Having closely considered the arguments of both plaintiffs and defendants, the Court finds that the Postal Service impermissibly disregarded the plain language of § 5402(g)(5)(C) in determining that PenAir was not required to satisfy the Prior Service and Capacity Requirement set forth in § 5402(g)(1)(A)(iv)(II). Congress clearly stated that a new mainline carrier must "meet[ ] the requirements of subparagraph[] (A) . . . of paragraph (1)," which includes § 5402(g)(1)(A)(iv)(II), in order to be eligible to "receive equitable tender of nonpriority mainline bypass mail." 39 U.S.C. § 5402(g)(5)(C). The Court, therefore, is unpersuaded by defendants' attempts to create an ambiguity where none exists.
Accordingly, the Court concludes that the Postal Service exceeded its statutory authority by granting an equitable tender of nonpriority mainline bypass mail to PenAir pursuant to § 5402(g)(5)(C) despite the carrier's failure to satisfy § 5402(g)(1)(A)(iv)(II). The Court, therefore,
Next, plaintiffs argue that the Postal Service exceeded its authority in granting an equitable tender of nonpriority mainline bypass mail to PenAir because PenAir cannot qualify as a "new 121 mainline passenger carrier" as required by § 5402(g)(5)(C). In support of this argument, plaintiffs point to § 5402(a)(15), which states:
39 U.S.C. § 5402(a)(15); see Pls.' Mot. at 19-20. Plaintiffs argue that PenAir cannot satisfy subparagraph (B) of this provision because PenAir did not begin "providing nonpriority bypass mail service on a city pair route in the State of Alaska after January 1, 2001." 39 U.S.C. § 5402(a)(15)(B).
Defendants respond by arguing that it is "absurd and defies common sense" to interpret § 5402(a)(15)(B) as permanently barring PenAir from qualifying as a new mainline passenger carrier simply because it carried bush bypass mail before January 1, 2001. In support of their argument, defendants explain that the word "new" is an adjective that must be read to modify the noun to which it refers. See Postal Service's Opp'n & Cross-Mot. at 14; PenAir's Opp'n & Cross-Mot. at 30-31. Defendants assert that because § 5402 provides for separate definitions of "121 bush passenger carrier" and "121 mainline passenger carrier," see 39 U.S.C. § 5402(20)-(21), the "new" assessment should be conducted in reference to the particular noun that it is modifying.
Defendants also assert that the definition of "existing mainline carrier" supports their statutory interpretation. An "existing mainline carrier" is defined, in relevant part, as a carrier "that on January 1, 2001, was . . . qualified to provide mainline nonpriority bypass mail service." 39 U.S.C. § 5402(a)(12). Defendants argue that it makes sense, then, that a "new 121 mainline passenger carrier" would be a carrier that was qualified to provide mainline nonpriority bypass mail service after January 1, 2001. PenAir's Reply Br. at 21. This Court agrees.
When viewing the RSIA as a whole, the Court finds that defendants' proffered definition of a "new 121 mainline passenger carrier" as a carrier that began providing nonpriority mainline bypass mail service on a city pair route in the State of Alaska after January 1, 2001, harmonizes the definition of "new" with the overall structure of the statute. See, e.g., Bell Atl. Tel. Cos. v. FCC, 131 F.3d 1044, 1047 (D.C.Cir.1997) (recognizing that "`the meaning of statutory language, plain or not, depends on context'" (quoting Bailey v. U.S., 516 U.S. 137, 116 S.Ct. 501, 506, 133 L.Ed.2d 472 (1995))); see also Lanier v. District of Columbia, 871 F.Supp. 20, 22 (D.D.C.1994) ("In analyzing the meaning to be attached to particular phrases, it is necessary to view the statute as a whole, informed by the overall purpose and objective."). Specifically, because the word "new" must be read in context with the type of aircraft that applies—i.e., a mainline carrier or a bush carrier—it logically follows that the phrase "began providing nonpriority bypass mail" should be read in context to refer to the particular type of nonpriority bypass mail that the new carrier is seeking to carry—i.e., mainline bypass mail or bush bypass mail.
Accordingly, because PenAir did not transport nonpriority mainline bypass mail prior to January 1, 2001, the Court concludes that the Postal Service did not exceed its statutory authority in determining that PenAir could qualify as a "new 121 mainline passenger carrier" under § 5402(g)(5)(C). The Court, therefore,
For the foregoing reasons, the Court