In a split decision, the Ninth Circuit Court of Appeals rejected the FAA panel’s decision approving the construction of a new passenger terminal at Hollywood Burbank Airport based on a flawed Environmental Impact Statement (EIS). City of Los Angeles, California v. Fed. Aviation Admin., 63 F.4th 835 (9th Cir. 2023) [hereinafter City of Los Angeles]. The City of Los Angles had challenged the FAA’s decision approving the new terminal complex, parking structure, fire station, and maintenance and cargo buildings on two grounds. First, the City challenged the Environmental Impact Statement (EIS) based on fundamental flaws in the study. The second argument was that the FAA did not consider all reasonable alternatives such that the outcome was predetermined. The court rejected the second argument but found in favor of the City in the first argument. Accordingly, the court remanded the case back to the FAA panel since the plan failed to comply with the National Environmental Policy Act (NEPA).
The court determined that the FAA had a fundamental flaw in the EIS because it failed to consider the reasonable possibility that equipment running simultaneously would have increased noise levels beyond the acceptable thresholds. Courts generally give deference to the FAA’s fully informed and well-considered decision. City of Los Angeles, 63 F.4th at 849 citing Audubon Soc’y of Portland v. Haaland, 40 F.4th 967 (9th Cir. 2022). However, the court is permitted to take a hard look at the EIS when the FAA relies upon incorrect assumptions or data. City of Los Angeles, 63 F.4th at 849-50 citing Native Ecosystems Council v. U.S. Forest Serv., 418 F.3d 953 (9th Cir. 2005). Here, the court determined that the EIS failed to account for the cumulative effects of the simultaneous equipment operation. Simultaneous equipment operation was not a remote possibility but a certainty. The FAA should have foreseen that equipment could operate simultaneously since project phases overlapped. Had the FAA made such adjustments, it would have increased the noise level in neighboring communities to a level that would have resulted in the project not being approved. Thus, the court determined that the FAA failed to meet its burden and a second look was warranted.
At the same time, the court rejected the City’s argument that the FAA failed to consider all reasonable alternatives or that the project outcome was predetermined. The court unanimously reached its decision. As the petitioner, the City bore the burden of persuasion to prove that the FAA’s decision was arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with the law. City of Los Angeles, 63 F.4th at 842 citing Lands Council v. McNair, 537 F.3d 981, 987 (9th Cir. 2008). Arbitrary and capricious under the “rule of reason” requires that arbitrary and capricious be present only when the record plainly demonstrates that the agency made a clear error in judgment. City of Los Angeles, 63 F.4th at 843 citing Audubon Soc’y, 40 F.4th. Based on that standard, the court rejected the City’s appeal.
The City’s principal argument was that the FAA did not review enough alternatives. However, the FAA is not required to review a set number of alternatives or consider those that are speculative or not reasonable. City of Los Angeles, 63 F.4th at 844 citing Protect Our Cmtys. Found. v. Jewell, 825 F.3d 571 (9th Cir. 2016) and Audubon Soc’y, 40 F.4th. Here, the FAA had started with ten possible options with which it summarily dispensed based on the rationale that they did not meet the purpose and needs statement or were just not feasible based on economic or practical limitations. After this analysis, the FAA had one plan and the option to do nothing. The court stated that the City failed to identify any suitable alternatives that the FAA should have studied under the relevant technical and economic constraints. Thus, the court determined that the FAA had selected a reasonable range of alternatives.
The City also argued that the lack of alternatives made the outcome predetermined. City of Los Angeles, 63 F.4th at 848 citing Metcalf v. Daley, 214 F.3d 1135 (9th Cir. 2000) The FAA cannot go into an evaluation with predetermined results. Additionally, the FAA cannot use unreasonably narrow criteria such that the outcome is predetermined. City of Los Angeles, 63 F.4th at 843 citing Alaska Survival v. Surface Transp. Bd., 705 F.3d 1073 (9th Cir. 2013) The City argued that the single alternative was dispositive in proving the predetermined outcome. The standard that the City had to meet was to show that there was an irreversible commitment. The court provided the example of Metcalf v Daley, where the agency had entered into contracts before the final approval. However, the court was persuaded that the FAA had not predetermined the outcome because they had considered the do-nothing option until final selection. Therefore, the no-change option was sufficient to defeat the presumption of a predetermined outcome. This ruling reinforces that the EIS is not above reproach and communities have recourse against the infamous rubber stamp of deference through judicial oversight. Yet, simultaneously, the Ninth Circuit maintains the high bar plaintiffs must overcome to challenge the deference given to the FAA decision.