Kerpen v. Metro. Wash. Airports Auth.

907 F.3d 152

Phil KERPEN, Individually and on Behalf of All Others Similarly Situated; Austin Ruse, Individually and on Behalf of All Others Similarly Situated; Cathy Ruse, Individually and on Behalf of All Others Similarly Situated; Charlotte Sellier, Individually and on Behalf of All Others Similarly Situated; Joel Sellier, Individually and on Behalf of All Others Similarly Situated; Michael Gingras, Individually and on Behalf of All Others Similarly Situated, Plaintiffs–Appellants,

v.METROPOLITAN WASHINGTON AIRPORTS AUTHORITY; Elaine L. Chao, in her Official Capacity as Secretary of Transportation; United States Department of Transportation, Defendants–Appellees,District of Columbia, Intervenor–Appellee,Karl Anthony Racine, Intervenor/Defendant–Appellee.

No. 17-1735

United States Court of Appeals, Fourth Circuit.

Argued: September 27, 2018

Decided: October 22, 2018

ARGUED: Gene C. Schaerr, SCHAERR | DUNCAN LLP, Washington, D.C., for Appellants. Stuart Alan Raphael, HUNTON & WILLIAMS LLP, Washington, D.C., for Appellee Metropolitan Washington Airports Authority. Lewis Yelin, UNITED STATES DEPARTMENT OF JUSTICE, Washington, D.C., for Appellees Elaine Chao and United States Department of Transportation. ON BRIEF: Robert J. Cynkar, Patrick M. McSweeney, Christopher I. Kachouroff, MCSWEENEY, CYNKAR & KACHOUROFF PLLC, Woodbridge, Virginia; S. Kyle Duncan, Stephen S. Schwartz, Michael T. Worley, SCHAERR | DUNCAN LLP, Washington, D.C., for Appellants. Philip G. Sunderland, Office of General Counsel, METROPOLITAN WASHINGTON AIRPORTS AUTHORITY, Washington, D.C.; Sona Rewari, HUNTON & WILLIAMS LLP, Washington, D.C., for Appellee Washington Metropolitan Airports Authority. Chad A. Readler, Acting Assistant Attorney General, Mark B. Stern, Civil Division, UNITED STATES DEPARTMENT OF JUSTICE, Washington, D.C.; Steven G. Bradbury, General Counsel, Paul M. Geier, Assistant General Counsel for Litigation and Enforcement, Joy K. Park, UNITED STATES DEPARTMENT OF TRANSPORTATION, Washington, D.C.; Tracy McCormick, Acting United States Attorney, OFFICE OF THE UNITED STATES ATTORNEY, Alexandria, Virginia, for Federal Appellees. Mark R. Herring, Attorney General, Stephen A. Cobb, Deputy Attorney General, Toby J. Heytens, Solicitor General, Matthew R. McGuire, Deputy Solicitor General, OFFICE OF THE ATTORNEY GENERAL OF VIRGINIA, Richmond, Virginia, for Amicus Curiae.

Before WILKINSON, DUNCAN, and KEENAN, Circuit Judges.

Affirmed by published opinion. Judge Wilkinson wrote the opinion, in which Judge Duncan and Judge Keenan joined.

WILKINSON, Circuit Judge:

Appellants here have raised a variety of constitutional and statutory challenges to Metropolitan Washington Airport Authority’s (MWAA) ability to use toll revenues to fund projects enhancing access to Dulles airport. The district court granted defendants’ motion to dismiss all of these claims, and we now affirm its judgment.

I.

In 1950, the federal government began to build Dulles Airport. Recognizing that access to the airport was as important as the airport itself, the government also acquired a right of way to begin building an access road, linking Dulles to two of the major highways serving the Washington, D.C. region. In 1962, the airport and the access road were opened under the management of the Federal Aviation Administration.

In 1983, the federal government gave Virginia an easement to build a toll road through the right of way previously acquired for the access road. The federal government determined that the new toll road would help mitigate increasing congestion in the vicinity of Dulles. The road was opened one year later and was operated by the Commonwealth of Virginia.

By 1984, the federal government was concerned that needed capital improvements at Dulles, and its sister airport National, could not be funded. The solution, devised by a Commission created at the behest of the Secretary of Transportation, was to transfer control of both airports to an authority with the ability to raise money by selling tax-exempt bonds. The next year, Virginia and the District of Columbia passed reciprocal laws to create an interstate compact for the management of Dulles and National. Congress had already consented to the compact in 1959, when it gave advance approval to interstate compacts for the management of airports. Act of Aug. 11, 1959, Pub. L. No. 86-154, 73 Stat. 333 (1959). The result of this compact was the Metropolitan Washington Airport Authority (MWAA).

MWAA was authorized by its organic state laws to acquire National and Dulles from the federal government. Additionally, MWAA was granted powers to operate, maintain, and improve National and Dulles airports, including the power to issue revenue bonds and collect various charges for the use of the airports. Va. Code § 5.1-156 ; D.C. Code § 9-905(a). MWAA was originally overseen by a Board of Review consisting of Members of Congress. But after two successful challenges the Board was dismantled, leaving the Board of Directors in control. Metro. Wash. Airports Auth. v. Citizens for the Abatement of Aircraft Noise, Inc. , 501 U.S. 252, 111 S.Ct. 2298, 115 L.Ed.2d 236 (1991) ; Hechinger v. Metro. Wash. Airports Auth. , 36 F.3d 97, 99, 101 (D.C. Cir. 1994). The Board of Directors, as currently constituted, has seven members appointed by the Governor of Virginia, four appointed by the Mayor of the District of Columbia, three appointed by the Governor of Maryland, and three appointed by the President of the United States. Va. Code § 5.1-155(A) ; D.C. Code § 9-904(a)(1).

In 1986, Congress passed the Transfer Act, which authorized the Secretary of Transportation to lease Dulles and National to MWAA. Pub. L. No. 99-591, 101 Stat. 3341 (1986), codified as amended at 49 U.S.C. §§ 49101 - 49112. The Act also authorized the transfer of the airports’ "access highways and other related facilities," 49 U.S.C. § 49102(a), specifically to include the right of way over which the access road and toll road were built. 49 U.S.C. § 49103 (4). The Transfer Act also specified the terms under which the Secretary could lease National and Dulles to MWAA, requiring that, as a condition of the transfer, MWAA must only use the property for "airport purposes." 49 U.S.C. § 49104(a)(2)(B). "[A]irport purposes" were in turn defined to include "activities necessary or appropriate to serve passengers or cargo in air commerce" and "a business or activity not inconsistent with the needs of aviation that has been approved by the Secretary." 49 U.S.C. § 49104(a)(2)(A)(ii), (iv).

The Transfer Act also required MWAA to "assume responsibility" for the Master Plan developed by the federal government for National and Dulles. 49 U.S.C. § 49104(a)(6)(A). The Plan was concerned with the management of the airports, and included provisions that were designed to ensure that passengers and cargo had access to them, in spite of increasing congestion. One of these provisions contemplated an eventual extension of metro service from Washington to Dulles.

In 2006, metro service to Dulles was becoming a reality. The long-planned Silver Line, which would connect Dulles to Washington, was coming to fruition. In service of this project, Virginia agreed to transfer operation of the toll road to MWAA, and MWAA agreed that it would use revenues from the road to finance construction of the Silver Line, as well as other transportation improvements near Dulles. In 2008, the Secretary of Transportation certified that this arrangement did not violate the terms of the Lease.

Virginia’s agreement with MWAA inspired three legal challenges before this one. First was a state law challenge that unsuccessfully tried to have a state court declare MWAA’s collection of tolls violated the Virginia Constitution. Gray v. Virginia Secretary of Transportation , 276 Va. 93, 662 S.E.2d 66, 100, 107 (2008). A second case advanced substantially the same argument and was dismissed by this court. Parkridge 6, LLC v. U.S. Dept. of Transp. , 420 F. Appx 265, 267 (4th Cir. 2011). The third case, Corr v. Metropolitan Washington Airports Authority , raised many of the claims presented here. 800 F.Supp.2d 743, 751 (E.D. Va. 2011). The district court rejected each one, finding that MWAA’s structure did not violate the non-delegation doctrine, the Appointments Clause, or the Guarantee Clause. Id. at 756-58. Plaintiffs appealed to the Federal Circuit, but that court held that MWAA is not a federal instrumentality and so jurisdiction was inappropriate. Corr v. Metro. Wash. Airports Auth. , 702 F.3d 1334, 1338 (Fed. Cir. 2012).

Appellants here (and plaintiffs below) bring a putative class action by users of the toll road and other airport facilities. Their lawsuit presented a bouquet of statutory and constitutional claims. Important for this appeal are the assertions that MWAA is a federal instrumentality, that MWAA violated Article I, Article II, and the Guarantee Clause of the Constitution, that MWAA violated the Administrative Procedures Act, and that MWAA violated the terms of the Transfer Act and the Lease by using toll revenues to build the Silver Line. The district court dismissed all claims. Kerpen v. Metro. Wash. Airports Auth. , 260 F.Supp.3d 567, 588 (E.D.Va 2017). Applying Lebron v. National Railroad Passenger Corporation , 513 U.S. 374, 115 S.Ct. 961, 130 L.Ed.2d 902 (1995), the court concluded that MWAA was not a federal instrumentality and it did not exercise federal power. Kerpen , 260 F.Supp.3d at 580. In the view of the district court, this was fatal to the non-delegation, Appointments Clause, and APA claims. Id. at 583-84, 586. The court also dismissed the claims based on the Lease and the Transfer Act, reasoning that metro from Washington to Dulles was a permissible airport-related expenditure. Id. at 586. Plaintiffs now appeal this dismissal.

II.

Appellants claim as a threshold matter that MWAA is a federal entity. Applying the standard from Lebron v. National Railroad Passenger Corporation we conclude that it is...