United Airlines, Inc. v. Transportation Security Administration, No. 20-1222 (D.C. Cir. 2021)
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United sought refunds, pursuant to 49 U.S.C. 44940(g), from the TSA for payments it made to the TSA related to fees charged to airline passengers, and collected by airlines, that fund aviation security measures and are to be remitted monthly to the TSA. United contends that it erroneously remitted the security fees in two circumstances: (1) tickets associated with passengers who purchased their tickets from other airlines but who were later involuntarily transferred to United flights and (2) tickets for which, because of currency exchange rate fluctuations, the recorded and remitted fee amount deviated from the fee amount statutorily required.
The DC Circuit upheld the TSA's decision denying United's refund request regarding the second set of tickets, but found that the TSA's denial of a refund for the first set arbitrary and capricious. The court concluded that the TSA's denial was arbitrary and capricious with respect to the involuntary transfer tickets where the court is confronted with a factual dispute with important implications for United's refund. On the one hand, United claims that it never transfers security fees—a practice that appears correct in view of the allocation of liability under 49 U.S.C. 44940—but failed to raise or support this assertion until oral argument. On the other hand, the TSA maintains that airlines might transfer security fees but does little to support this assertion in its denial letter, at least beyond bare conclusions and unsupported hypotheticals. The court vacated the TSA's decision with respect to the IT tickets and remanded to the TSA for reconsideration of the denial. The court otherwise affirmed the TSA's decision.
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