The airline industry is challenging the federal government over how the Transportation Security Administration has calculated—and increased—fees that are imposed annually on airlines for screening passengers and property.
The federal agency since 2005 has collected $100 million more in fees on top of the $319 million collected annually for screening passengers and property. When TSA increased screening fees, it did not take into account what individual airlines spent in 2000, when the airlines were responsible for security, according to lawyers for the air carriers who have asked the U.S. Court of Appeals for the District of Columbia Circuit to review the agency’s final order.
The increase in fees was based on a purported overall industry-wide average—82 cents per passenger—and not on a per-carrier basis, Sheppard Mullin Richter & Hampton partner M. Roy Goldberg argued this week in the D.C. Circuit. Goldberg said the fee calculation violates federal law. The per-passenger screening cost varies from one airline to another.
Head of the firm’s aviation group in the D.C. office, Goldberg argued on behalf of airlines that include Southwest, American, Delta, United, Continental, and Northwest. Among the firms representing the airlines were: Crowell & Moring; Wilmer Cutler Pickering Hale and Dorr; Hogan & Hartson; Kirkland & Ellis; and Wiley Rein.
Circuit Judges Janice Rogers Brown, Merrick Garland, and Stephen Williams heard argument for more than an hour Thursday. A clear consensus from the panel was difficult to discern. A Justice Department lawyer in the Civil Division, Jeffrey Clair, argued the airlines had an opportunity to submit audits showing their screening costs. Clair urged the court to give deference to the federal agency.
The judges must assess whether the federal agency acted outside the scope of statute that, among other things, sets per-carrier limits on screening fees based on what individual airlines paid in 2000. Airlines are barred by law from paying more than the fees paid in 2000, when the airlines—and not the government—were responsible for screening passengers. Since Sept. 11, the federal government has taken over the screening role.
The fees jumped when the TSA deemed airlines had underreported the cost paid for passenger and property screening. As a group, the airlines in the litigation are paying $100 million more a year. For Southwest, that means an additional $24 million annually—a cost for which consumers are indirectly responsible, Southwest associate general counsel Robert Kneisley said.
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