Airlines Lose Challenge to TSA Screening Fees

(CN) - Southwest Airlines and 19 other passenger air carriers can not dispute how the Transportation Security Administration determines the amount of security fees it charges them for passenger and baggage screening, a federal appeals court has decided.

In the wake of the Sept. 11, 2001 terrorist attacks, the Bush administration placed the TSA in charge of a dramatically heightened airport screening process, but in doing so said that the fees for this new security must never exceed the amount that airlines paid for screening passengers and property during the year 2000.

But trying to determine the figure for that year has long been a point of contention.

In a petition for review of orders issued by the TSA, Southwest and the other airlines argued that the agency's methodology for determining the fees was "arbitrary and capricious" and also unconstitutional.

However two members of a three-judge panel of the U.S. Court of Appeals for the D.C. Circuit disagreed, finding that the TSA's data report inquiry process was chosen "with good reason, and certainly sufficient reason".

This is the second time this case has appeared in the appeals court. In 2009, the airlines protested that a fee increase implemented by the TSA was based on an inaccurate screening report from the Congress appointed Government Accountability Office

The agency was found guilty of miscalculating its fees and was required to recalculate and refund the airlines accordingly. The airlines insist that TSA's recalculations "fall short of the total amount due to the airlines", potentially hundreds of millions short.

But writing for a panel majority that included himself and Circuit Judge Karen L. Henderson, Circuit Judge Brett M. Kavanaugh said, "Determining the figure in response to this Court's remand thus involved a good deal of inquiry and ultimately required a dash of art as well as science".

Circuit Judge Janice R. Brown dissented on what she herself described as narrow but decisive grounds.

Brown was alarmed by the fact that when the TSA calculated passenger and baggage screening costs for the year 2000, it failed to consider another agency's estimate of the total number of people screened that year.

"Notwithstanding the Airlines' protestations, neither TSA nor the consultant whose analysis it relied on even mentioned that critical data," she wrote. "Although TSA's calculation of the security fee is entitled to broad deference, the agency's discretion is not unlimited."

In addition to Southwest Airlines, other airlines involved in the case included American Airlines, Delta Air Lines, United Air Lines and US Airways. Their case was argued by Roy Goldberg of Sheppard Mullin Richter & Hampton of Washington, D.C.

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