[00:00:01] Speaker 04:
Case number 23-1155, Spokane Airport Board Petitioner versus Transportation Security Administration.

[00:00:08] Speaker 04:
Mr. McPhee for the petitioner, Mr. Lewis for the respondent.

[00:00:13] Speaker 02:
Good morning, counsel.

[00:00:14] Speaker 02:
Mr. McPhee, please proceed when you're ready.

[00:00:17] Speaker 00:
Thank you, may I please the court counsel and those in attendance.

[00:00:20] Speaker 00:
My name is Jim McPhee and I represent the Spokane Airport Board.

[00:00:23] Speaker 00:
Now this case involves a government agency that tried to amend a regulation not following the correct procedure.

[00:00:30] Speaker 00:
Now, airport operators aren't guaranteed an outcome, but they are guaranteed a procedure.

[00:00:36] Speaker 00:
And when TSA issued JEA 2301, it denied airport operators the statutorily guaranteed procedure of ratification by the Transportation Security Oversight Board, TSOB.

[00:00:51] Speaker 00:
Now, airport operators are required to have airport security programs by regulation.

[00:00:58] Speaker 00:
separate regulation.

[00:00:59] Speaker 03:
If I can just ask you a threshold question.

[00:01:01] Speaker 03:
Did the Spokane Airport Board raise this statutory question before the agency?

[00:01:08] Speaker 00:
Yes, it did.

[00:01:09] Speaker 00:
In terms of adding cybersecurity as an additional topic to 49 CFR 1542-103A?

[00:01:15] Speaker 00:
Is that the question?

[00:01:18] Speaker 03:
No, but the arguments that an emergency regulation had to be promulgated under 114L2, right?

[00:01:27] Speaker 03:
Yes.

[00:01:28] Speaker 03:
and so requires approval by the TSOB.

[00:01:31] Speaker 03:
Was that argument raised before?

[00:01:33] Speaker 03:
Was that particular issue raised before the agency?

[00:01:37] Speaker 00:
Yes, Your Honor, it was.

[00:01:38] Speaker 03:
Can you point me?

[00:01:40] Speaker 00:
Yes.

[00:01:40] Speaker 00:
In our petition for reconsideration, and that's at JA 144, in two different spots, at note one, it states, in 49 CFR 1542-103, entitled content,

[00:01:56] Speaker 00:
TSA has developed a regulation for what each airport operator regularly serving operations must include in its airport program.

[00:02:04] Speaker 00:
That's a reference to, obviously, 1542-103.

[00:02:06] Speaker 04:
I'm sorry, I'm on the page, but where are you reading from?

[00:02:09] Speaker 00:
JA-144.

[00:02:10] Speaker 04:
Yeah, I'm on the page, so which paragraph?

[00:02:12] Speaker 00:
Note one.

[00:02:17] Speaker 00:
Now, if we go to the same page, JA-144, and we go above in the first paragraph, there's a passage in which

[00:02:26] Speaker 00:
Spokane Airport Board says, there is no clear legal or factual basis for TSA to assume regulatory authority over information technology assets of airports.

[00:02:37] Speaker 00:
That's a reference to, first and note one, that cybersecurity is not a topic listed in 103A and that following that, TSA doesn't have the authority to regulate that absent rulemaking under 114L2.

[00:02:55] Speaker 02:
The question was about, although I don't mean to hijack the question from Judge Rabbitt, I thought the question was about the last strand of the analysis on whether the TSLB needs to be involved in the process.

[00:03:11] Speaker 02:
And as to that, I didn't read either the footnote that you identified or the textual sentence that you identified to speak to that question or to fairly raise before the agency

[00:03:25] Speaker 02:
whether they needed to go through the TSOB process as if it were an emergency under Section 114.

[00:03:33] Speaker 00:
And your honor, I think that goes towards the issue of raising the 103 issue and the fact that they can't regulate cybersecurity.

[00:03:42] Speaker 00:
I think inferred in that is the fact that it has to go through a rulemaking process in order to do it.

[00:03:47] Speaker 02:
the Spokane Airport board had identified is the fact that even if it has to go through a rulemaking process, it seems like that's several steps down the list.

[00:03:54] Speaker 02:
It's sort of like saying we raised one issue, and then if you follow that issue down the decision tree seven steps, you'll see that that also would have encompassed that it needed to go before the TSOB.

[00:04:04] Speaker 02:
And I'm just not sure that preservation operates in that way, because the reason to have a preservation requirement and exhaustion requirement is so that the agencies put on notice that they need to address an issue.

[00:04:15] Speaker 00:
And your honor, I would

[00:04:16] Speaker 00:
I would respectfully argue that when they issue JEA 2301 and the airport operators are given 15 days to draft their petitions for reconsideration, that it could be treated not unlike notice pleadings.

[00:04:31] Speaker 00:
I would also point the court to JA 162.

[00:04:36] Speaker 00:
Now there was a memo that was drafted and given to the administrator of TSA.

[00:04:44] Speaker 00:
And another operator argued that TSA must amend its regulations before proposing cybersecurity amendments to aircraft operator standard security programs at JA162.

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So it was something that was raised by, it was raised and it was identified by TSA to the point where it even went in a memo suggesting this is how we're going to respond to it.

[00:05:11] Speaker 00:
So I do think it was fairly raised.

[00:05:14] Speaker 03:
Yeah, I mean, another question.

[00:05:16] Speaker 03:
I mean, we have some cases that suggest that that issue exhaustion is jurisdictional.

[00:05:24] Speaker 03:
The issue, you know, exhaustion provision in the statute is jurisdictional.

[00:05:28] Speaker 03:
But the Supreme Court has in a number of recent cases said that an exhaustion provision is only jurisdictional if the provision is very explicit as to its jurisdictional nature.

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And the government doesn't challenge, doesn't suggest

[00:05:44] Speaker 03:
there was an exhaustion problem here.

[00:05:48] Speaker 00:
I would agree with that, Judge.

[00:05:49] Speaker 03:
I mean, they suggest there's an exhaustion problem with a number of other arguments, but not the statutory argument.

[00:05:56] Speaker 00:
Right, and they raise a number of different issues which we addressed in the brief as it relates to a potential waiver of different issues.

[00:06:02] Speaker 00:
But again, I think that note one, read in conjunction with the other provision, fairly preserved it in addition to the fact that

[00:06:10] Speaker 00:
TSA was aware of it.

[00:06:12] Speaker 00:
Is it recognized in its memo that I just referenced to the administrator of TSA?

[00:06:18] Speaker 02:
Can you just say again, I'm sorry, on J162, which particular part of that J162 you're pointing to that just show TSA's recognition?

[00:06:28] Speaker 00:
Yes, your honor.

[00:06:31] Speaker 00:
And actually, if I could grab my record.

[00:06:52] Speaker 00:
Your Honor, in JA 162, the lowest heading that's underlined says need to amend 49 CFR 144 103 C to address cybersecurity.

[00:07:05] Speaker 00:
This is the memo to the administrator of the TSA that identifies that cybersecurity must be added by rulemaking, not by ASP amendment.

[00:07:16] Speaker 02:
Right, so it goes to that question, and that I think footnote one,

[00:07:20] Speaker 02:
that you pointed to earlier, arguably goes to that question too, but then a follow on issue about whether the process needed to involve the TSOB in a particular way.

[00:07:32] Speaker 02:
I'm not sure that that's flagged.

[00:07:35] Speaker 02:
The question of whether that's jurisdictional, which is a related issue, but in terms of whether it was preserved, the need to get the TSOB's sign off,

[00:07:47] Speaker 02:
not in the way that was done, but in a way that's forecast by the section 114 provision, that particular part of it.

[00:07:59] Speaker 00:
I think it's a guaranteed procedure under statute that if TSA is going to invoke and state that there is an emergency, then what TSA has to do is go under 49 USC 114 L2,

[00:08:15] Speaker 00:
They can do it without notice of comment, but just by virtue of the required statutory procedure, it requires TSOB ratification.

[00:08:24] Speaker 00:
It's just a required part of the steps if you're gonna add cybersecurity to 103A.

[00:08:29] Speaker 04:
They could just do a regulation with notice of comment though.

[00:08:32] Speaker 00:
That's correct.

[00:08:33] Speaker 04:
If they did amend the- So you're just saying that they have to do a regulation doesn't necessarily encompass that they have to do an emergency procedure with TSOB, because you're just saying they have to go by regulation could mean they need to have notice

[00:08:46] Speaker 00:
Well, what they would be doing is they've stated that it's an emergency, and as a result, they can forego notice and comment in that emergency, yet it would still have to go through TSOB ratification.

[00:08:56] Speaker 04:
No, I understand that, but that's not what was preserved, is it?

[00:09:01] Speaker 00:
I believe that it was, because I believe that the statutory procedure is guaranteed, and once the issue is raised, then the guaranteed statutory procedure has to be followed.

[00:09:13] Speaker 00:
So we're required to have to our airport security programs are required by separate regulation to have 21 specific topics.

[00:09:22] Speaker 00:
But one of those topics is not cyber security.

[00:09:26] Speaker 04:
Now, looking at one on page 144.

[00:09:30] Speaker 04:
It says that the process followed without notice and comment, it's legally deficient, and it shows callous disregard for the value to be provided by comments from airport operators and aircraft operators, and review of the same by TSA.

[00:09:46] Speaker 04:
So it doesn't seem to be saying, if you're going to do an emergency, we get TSOB.

[00:09:51] Speaker 04:
It seems to be saying you needed to get comments, because you're disregarding the value of comments.

[00:09:57] Speaker 00:
Your Honor, I just

[00:09:58] Speaker 00:
Judge, I think that the combination of note one text above coupled with the memo to the administrator of TSA does properly preserve this.

[00:10:08] Speaker 00:
And what it does is it triggers a guaranteed statutory procedure, the end of which is TSOB ratification.

[00:10:15] Speaker 00:
Now, if TSA wants to amend 103A to add cybersecurity, it has to go through that procedure and it has to get TSOB ratification, but because it didn't,

[00:10:27] Speaker 00:
This agency action expired after 90 days.

[00:10:30] Speaker 00:
Now, TSA responds by cobbling together patchwork statutes and regulations, you know, for post-hoc support for an over-broadened and incorrect assertion that it inherited all of FAA's functions.

[00:10:46] Speaker 00:
Now, it's, but they pirouette around the statutes that actually control, and it's right in front of us in black and white.

[00:10:55] Speaker 00:
Now, Congress did give,

[00:10:57] Speaker 00:
FAA, emergency rulemaking ability without notice and comment.

[00:11:03] Speaker 00:
But when TSA claims that Congress then transferred that FAA function to TSA, it's incorrect.

[00:11:10] Speaker 00:
Because emergency notice, emergency rulemaking without notice and comment is at 49 USC 46105C.

[00:11:16] Speaker 00:
Now, when ATSA was enacted, we had 46105, it had subsection A, ordinary rulemaking, and subsection C, emergency rulemaking.

[00:11:28] Speaker 00:
Both listed FAA.

[00:11:30] Speaker 00:
But when ANSA was enacted, TSA was added to ordinary rulemaking in subsection A. It was not added.

[00:11:37] Speaker 00:
to emergency rulemaking.

[00:11:38] Speaker 00:
That was retained exclusively by FAA.

[00:11:41] Speaker 04:
My question is, does that matter?

[00:11:42] Speaker 04:
Because the grandfathering provision 141F says that the TSA will exercise all authorities under any other provision of law that were available with respect to the performance of the function for the performance immediately before the effective date.

[00:12:00] Speaker 00:
And that provision, that savings provision, and that any portion of the savings provision, but that specific portion of the savings provision doesn't help TSA at all.

[00:12:09] Speaker 00:
Because as you just stated, that savings provision allows TSA to perform functions that were available to FAA, both before and after ATSA.

[00:12:18] Speaker 00:
And to this day, 4610.

[00:12:22] Speaker 04:
This just says as of the date.

[00:12:23] Speaker 04:
So if FAA could do it before it was

[00:12:28] Speaker 04:
transition to TSA, why can't TSA still do it, even if things changed after?

[00:12:32] Speaker 00:
Well, Judge, my reading of that is they were transferred things that were available to FAA.

[00:12:39] Speaker 00:
But 46105, emergency rulemaking without notice in common, is available to FAA to this day.

[00:12:45] Speaker 00:
And in addition, the savings provision gave TSA functions that were transferred by ATSA.

[00:12:50] Speaker 00:
But as I just mentioned, when ATSA was enacted in 2001.

[00:12:54] Speaker 04:
I understand your argument.

[00:12:55] Speaker 04:
It's just not clear to me that

[00:12:58] Speaker 04:
that this provision doesn't allow TSA to exercise those functions anyway, because it says that if they were available immediately before the effective date, TSA can do it.

[00:13:10] Speaker 04:
So even if you change it after, it's not clear to me why they can't still perform those functions that existed before.

[00:13:17] Speaker 00:
But our reading of that statute is that if the functions were available, meaning that they were transferred to TSA and ATSA, then TSA can perform them.

[00:13:27] Speaker 00:
were not transferred in ATSA.

[00:13:29] Speaker 00:
The 46105C emergency rulemaking without notice and comment was before and after ATSA and to this day retained exclusively by FAA.

[00:13:39] Speaker 00:
And the savings provision also doesn't help because when TSA cited its authority for JEA 2301, it didn't cite the savings provision.

[00:13:48] Speaker 00:
It cited 49 CFR 1542 105D and 105D doesn't cite the savings provision.

[00:13:57] Speaker 02:
And where does that take you?

[00:13:59] Speaker 02:
So suppose the legacy FAA authority isn't what's at issue, and that let's just, I know the government will resist this, but just for purposes of understanding where your argument goes, if that wasn't or couldn't be what was exercised here, then what?

[00:14:19] Speaker 02:
If you could clarify, Chief, if the legacy FAA authority isn't what was being exercised, I think if I'm understanding all the numbers being banded about it, I confess that I'm not sure that I am, but if I'm understanding all the provisions that are being banded about, I thought what the exchange that you were having with Judge Pan was about whether the carryover FAA authority was what was being used to promulgate

[00:14:48] Speaker 02:
the 2301.

[00:14:51] Speaker 00:
No, the 46105C, which is FAA's emergency rulemaking without notice and comment wasn't referenced in JEA 2301.

[00:15:01] Speaker 00:
Again, that wasn't that wasn't that was retained at all times with the FAA.

[00:15:06] Speaker 00:
Now if you if you're talking about emergency.

[00:15:08] Speaker 02:
Yeah, so I guess I think that's I think I'm we're saying the same thing I believe, which is that.

[00:15:12] Speaker 02:
So the government relies on

[00:15:15] Speaker 02:
the FAA authority, but you're saying that wasn't relied on and it can't be relied on, right?

[00:15:19] Speaker 00:
Correct.

[00:15:20] Speaker 00:
If you're talking about emergency rulemaking, FAA gets to do it without notice in common under 46105C, but TSA needs to do it under 49 USC 114L2, and it requires TSOB ratification, which makes complete sense because FAA had been doing emergency

[00:15:39] Speaker 00:
emergency rulemaking without notice and comment since 1958.

[00:15:42] Speaker 02:
And in 2001... I guess what I'm asking is, is the consequence... If we were hypothetically to agree with you that the agency didn't or couldn't rely on the FAA provision, but had to go under the TSA provision, what's the upshot of that for you?

[00:16:00] Speaker 02:
Is it that then the joint EA couldn't be sustained because

[00:16:09] Speaker 02:
The TSOB ratification was not obtained.

[00:16:12] Speaker 02:
Is that the ultimate upshot?

[00:16:13] Speaker 00:
Yes.

[00:16:13] Speaker 00:
And what's interesting is important to note is the fact that had TSA done this correctly, that TSOB wouldn't necessarily be looking at JEA 2301, because to do this correctly, you'd have to add cybersecurity.

[00:16:29] Speaker 00:
to 49 CFR 1542-103A as a 20-second topic.

[00:16:35] Speaker 02:
Had this been done... Then on that, suppose we disagree with you on that.

[00:16:39] Speaker 02:
Suppose we think that for purposes of the regulations, and I'm just speaking for myself here just to play out the decision tree, for purposes of the regulations,

[00:16:48] Speaker 02:
Let's suppose we think that 23-01 didn't need to be an amendment to the regulation you just identified, which spells out what needs to be in the security program.

[00:17:01] Speaker 02:
And it could still be good.

[00:17:04] Speaker 02:
Then what?

[00:17:06] Speaker 02:
If we think it's consistent with the regulation, does that mean then that the TSOB ratification requirement that you otherwise think would be operative then drops out of the equation?

[00:17:18] Speaker 00:
So is the Chief Judge's your question that this JEA 2301 truly was only an ASP amendment and was not rulemaking in any way?

[00:17:30] Speaker 02:
It didn't change any other regulation?

[00:17:32] Speaker 02:
Exactly.

[00:17:32] Speaker 02:
It was a valid, let's just suppose we think it was a valid ASP amendment.

[00:17:37] Speaker 00:
Then TSOB ratification would not be required because under that hypothetical, then 103A, it wouldn't be

[00:17:47] Speaker 00:
rulemaking and changing the regulation under 103A.

[00:17:50] Speaker 00:
We'd have to ignore the fact that TSA is trying to add an additional regulation, an additional topic to that regulation.

[00:17:58] Speaker 00:
And if we can suspend belief and say that that's true, then they could have proceeded without TSO being ratified.

[00:18:05] Speaker 02:
And 103A is what?

[00:18:07] Speaker 02:
What's the full site for that?

[00:18:08] Speaker 02:
Where are we at?

[00:18:09] Speaker 00:
49 USC.

[00:18:10] Speaker 00:
That's the way.

[00:18:11] Speaker 00:
I mean, sorry, 49 CFR.

[00:18:13] Speaker 00:
Got it.

[00:18:14] Speaker 00:
1542, 103C.

[00:18:16] Speaker 00:
Got it, got it.

[00:18:16] Speaker 00:
OK, thanks.

[00:18:17] Speaker 02:
Yeah.

[00:18:18] Speaker 02:
So in your view, if we think that, that, that J E a so many numbers, J E a 23 dash Oh one could be an amendment for purposes of the regulations.

[00:18:31] Speaker 02:
You resist that.

[00:18:32] Speaker 02:
But if we thought that then your objection as to T O T S O B ratification drops out.

[00:18:40] Speaker 02:
Yes.

[00:18:40] Speaker 00:
But our objections with regard to being able to show prejudice

[00:18:44] Speaker 00:
and being able to show that this agency action was arbitrary capricious stand, both of which are justified by the failure to follow the requisite procedure, as well as the additional points that we raised about, for example, aggregating all airport security programs in one spot, which is a risk to cybersecurity.

[00:19:05] Speaker 00:
I mean, if you're going to take all of these

[00:19:08] Speaker 00:
airport security programs or the sensitive cybersecurity information and put them in one spot.

[00:19:14] Speaker 00:
It's not only a risk, it's a challenge to cyber terrorists.

[00:19:18] Speaker 00:
put them in one safe so you have one lock to pick instead of dozens of saves.

[00:19:24] Speaker 03:
I'm interested in your response to the TSA's argument that they have been basically exercising this kind of legacy FAA emergency authority since since really the agency was created and they've never

[00:19:40] Speaker 03:
even convened the TSOB for the purpose of ratifying an emergency regulation.

[00:19:47] Speaker 03:
What should we make of that?

[00:19:48] Speaker 03:
I mean, how should we understand that argument?

[00:19:52] Speaker 03:
This is sort of a long-standing and contemporaneous understanding, the TSA.

[00:19:59] Speaker 00:
Whereas maybe the first example might date back a ways, it is not long-standing and it's not ongoing.

[00:20:06] Speaker 00:
It's not enough to excuse TSA

[00:20:09] Speaker 00:
of the requirement to follow the statutory procedure.

[00:20:12] Speaker 00:
I mean, were these instances emergencies?

[00:20:16] Speaker 00:
And in fact, were these instances circumstances where TSA just got it wrong and it wasn't challenged?

[00:20:26] Speaker 00:
I mean, I don't know that, but what I do know is that there is a statutory framework and a guaranteed procedure.

[00:20:31] Speaker 00:
Again, airport operators not being guaranteed an outcome.

[00:20:35] Speaker 00:
But being guaranteed a procedure that wasn't followed, perhaps it wasn't followed there.

[00:20:38] Speaker 04:
Has your client been subject to other emergency regulation type procedures that followed the procedure that was followed here?

[00:20:48] Speaker 00:
Subject to something separate and apart from JEA 2301?

[00:20:51] Speaker 00:
Yes.

[00:20:51] Speaker 04:
I'm just wondering how often this happens.

[00:20:54] Speaker 00:
I'm not aware of any off the top of my head in terms of a joint emergency amendment.

[00:20:59] Speaker 00:
There was a national amendment August 11, 2022,

[00:21:03] Speaker 00:
the TSA put out with regard to cyber security, but that went through a round of notice and comment.

[00:21:09] Speaker 00:
And when the second round of notice and comment was coming up, that's when JEA 2301 was issued.

[00:21:14] Speaker 04:
So this is the first instance that you're aware of where the TSA followed this procedure to implement what is essentially a regulation?

[00:21:23] Speaker 00:
I'm hesitantly answering yes.

[00:21:30] Speaker 02:
My colleagues have additional questions will give you a little time for rebuttal.

[00:21:33] Speaker 02:
Thank you very much.

[00:21:44] Speaker 01:
Ben Lewis for the government.

[00:21:46] Speaker 01:
As the case comes to this court, there is no dispute that there was an emergency in the aviation sector that the TSA needed to address.

[00:21:54] Speaker 01:
Foreign states, other proxies and cyber criminals had repeatedly conducted cyber attacks on the aviation sector and TSA had identified cybersecurity vulnerabilities in airports that called for an urgent response.

[00:22:08] Speaker 01:
And so accordingly, TSA issued an emergency amendment to airport security programs.

[00:22:13] Speaker 04:
So why did TSA do that instead of following the procedure in 114L2?

[00:22:18] Speaker 01:
So I think it would be useful to walk through exactly what the government relied on and what TSA understands itself to rely on.

[00:22:25] Speaker 01:
So the substantive authority that, and the reason why it went through the regulations is because for airport security programs in the aviation sector, it typically exercises this kind of emergency authority.

[00:22:39] Speaker 01:
The reason why, or sorry, emergency amendments for airport security programs.

[00:22:43] Speaker 04:
The reason- And have they done this before for regulation type?

[00:22:46] Speaker 04:
Amendment?

[00:22:48] Speaker 01:
Yes.

[00:22:48] Speaker 01:
So there are dozens of emergency amendments, both on airports and aircraft, that amend their security programs and go through the procedures of Section 105D.

[00:23:00] Speaker 01:
The reason why they did that.

[00:23:01] Speaker 04:
Can I just clarify?

[00:23:02] Speaker 04:
When you say there are dozens, it strikes me that this often would apply in an individual basis.

[00:23:09] Speaker 04:
Like, if TSA identifies a particular airport, you need to fix this.

[00:23:13] Speaker 04:
But you're saying there are dozens that were regulation type things that applied to a vast swath of airports.

[00:23:19] Speaker 01:
Dozens that are broad-based that are not within the existing categories of subject matter.

[00:23:24] Speaker 01:
And that's because TSA is at the front line of these emergencies that arise from time to time.

[00:23:29] Speaker 01:
If you refer to the 1972 advisory circular that accompanied the initial regulations, they're quite directive.

[00:23:36] Speaker 01:
And they're quite specific about the kind of substantive requirements that airports need to follow.

[00:23:43] Speaker 01:
If you follow that through to the other rep authorities we've referenced in 1985 when there are airport hijackings.

[00:23:51] Speaker 01:
TSA was at the front lines of those and required emergency amendments and response from both aircraft and airlines.

[00:23:58] Speaker 01:
You follow it through to the 9-11 itself when there was an emergency amendments that did things that we now take for granted but did not exist at the time.

[00:24:07] Speaker 01:
For example, no longer allowing curbside check-in, requiring passengers to go with a ticket through security screening, requiring that

[00:24:17] Speaker 01:
vehicles not be within 300 feet at the time of an airport.

[00:24:21] Speaker 01:
All of those things are substantive activities that they pursued through the mechanism of emergency amendments.

[00:24:30] Speaker 01:
And the same is true here.

[00:24:32] Speaker 01:
But I just I do think it would be clarified to

[00:24:35] Speaker 01:
but useful to clarify exactly what the government is relying on here because I don't think the other side gets this exactly right.

[00:24:42] Speaker 01:
And so in November 2001, much of the point of the Aviation and Transportation Security Act was to go very quickly from an agency in FAA that had responsibilities over all aspects of administration for the aviation sector

[00:24:57] Speaker 01:
to one that was dedicated to aviation security in particular.

[00:25:01] Speaker 01:
And the way that it did it is through primarily

[00:25:06] Speaker 01:
this savings provision.

[00:25:08] Speaker 01:
So FAA had long been responsible for airport security programs.

[00:25:12] Speaker 01:
And so section 114F11 of ATSA makes clear that it's going to be TSA's function to, quote, oversee the implementation and ensure the adequacy of security measures at airports.

[00:25:25] Speaker 01:
FAA had longstanding rules and regulations to carry out that function.

[00:25:29] Speaker 01:
And so the congressional judgment at section 141B and F

[00:25:33] Speaker 01:
of the public law was to say those rules and regulations carry on through according to their terms wholesale to the TSA.

[00:25:42] Speaker 01:
And so it's those authorities that TSA is relying upon.

[00:25:49] Speaker 01:
There's no Chenery problem here.

[00:25:53] Speaker 01:
When the TSA initially passed these regulations to itself, it cited a broad range of authorities, including 49 USC 44901.

[00:26:03] Speaker 01:
That's where this public law is codified at the note to that section.

[00:26:07] Speaker 02:
Where did it cite that provision?

[00:26:10] Speaker 01:
So the other side references the regulations that carried out the administrative action of taking the regulations from FAA to TSA.

[00:26:22] Speaker 01:
The authority for part 107 of this section, or sorry, part 1542

[00:26:30] Speaker 01:
of this section.

[00:26:31] Speaker 01:
In that section, it cites essentially all of the provisions that were passed through, both in Chapter 449 and in the existing regulations.

[00:26:42] Speaker 01:
And in that section, I take the other side's argument to be that because TSA cited 114 at that time, that when it exercises that emergency authority, it's going through 114L2.

[00:26:57] Speaker 01:
not the case.

[00:26:58] Speaker 01:
It cited that position because it's carrying out the functions that it became responsible for to oversee the adequacy of security measures at airports.

[00:27:10] Speaker 03:
Mr. Lewis, why does the savings provision apply here though, right?

[00:27:14] Speaker 03:
Because the savings provision has to be for a function that's transferred to TSA.

[00:27:21] Speaker 03:
And 46105C, which is the emergency rulemaking,

[00:27:27] Speaker 03:
wasn't transferred.

[00:27:29] Speaker 01:
Yes.

[00:27:30] Speaker 01:
So the function that TSA is taking on is the function of ensuring the adequacy of security measures at airports.

[00:27:38] Speaker 01:
To be clear, the government is not saying that it needs any special emergency rulemaking authority to take an action immediately and is not relying on 49 USC 46105 to say that it can take this action because of that provision.

[00:27:56] Speaker 03:
Well, I understand that that's not what you're saying, but in order to take the FAA's emergency rulemaking,

[00:28:06] Speaker 03:
and use that by the TSA, you have to have some underlying statutory provision to support that emergency regulatory.

[00:28:13] Speaker 01:
Anytime an agency has substantive authority, it can decide to take an action in seven days and 14 days or immediately.

[00:28:20] Speaker 01:
The disputes in those cases are about procedures, whether typically it's a dispute about whether an agency follows the Administrative Procedure Act, including

[00:28:27] Speaker 01:
notice and comment provisions.

[00:28:30] Speaker 01:
The other side has been quite clear in page 15 of the reply brief that they are not making an argument anymore that TSA did not go through notice and comment that they're not relying on that or making an APA style argument.

[00:28:43] Speaker 01:
And so I really think the dispute here for the court is

[00:28:47] Speaker 01:
Did TSA act appropriately and just following the procedures in 105D, or did it need to take the additional measure of getting TSOB ratification?

[00:28:58] Speaker 03:
Congress specifically provided for a way for TSA to do emergency rules.

[00:29:07] Speaker 03:
And it does seem, or I guess my question is, why is it not an end run around that provision to make emergency rules in a different way, other than the way that was prescribed by Congress?

[00:29:17] Speaker 01:
Agencies all the time have many different mechanisms to take an action immediately.

[00:29:21] Speaker 01:
It can do, as the other side recognizes, an interpretive rule that takes effect immediately.

[00:29:25] Speaker 01:
It can do a rule that operates through the good cause exception of the APA, or it can act through.

[00:29:32] Speaker 03:
The TSA is not relying on those.

[00:29:34] Speaker 01:
I think TSA does understand what it is doing here as operating quite similarly to the good cause exception under the APA.

[00:29:41] Speaker 01:
But to answer your question, the reason why Congress would set up these two different mechanisms for TSA to operate is that

[00:29:51] Speaker 01:
They further different functions of the statutory design.

[00:29:55] Speaker 01:
So one half of the purpose of the Aviation and Transportation Security Act was to ensure that there was an agency that was dedicated to aviation security.

[00:30:04] Speaker 01:
And at a time of great uncertainty, in mere weeks and months, could take those regulations wholesale.

[00:30:10] Speaker 01:
The second half was to ensure that there was an agency that could regulate all aspects, modes of transportation.

[00:30:17] Speaker 03:
I mean, I understand how important the TSA is.

[00:30:21] Speaker 03:
But how does that relate to this rulemaking authority?

[00:30:25] Speaker 01:
It relates to this rulemaking.

[00:30:26] Speaker 03:
I don't see the connection.

[00:30:28] Speaker 01:
The connections, I think, it roughly corresponds to the two functions of these tools for TSA.

[00:30:36] Speaker 01:
The reason why Congress gave TSA the 114, this tool in 114, to go through notice and comment is because it wanted to give them a much, much stronger and much, much broader mechanism to effectuate change than had existed

[00:30:53] Speaker 01:
before.

[00:30:54] Speaker 04:
And so to give a concrete example, I thought you said it did exist before because you're relying on the FAA

[00:31:00] Speaker 04:
legacy, ability to do things with no notice in common.

[00:31:04] Speaker 01:
I'm trying to distinguish between two different tools that are available to TSA here.

[00:31:09] Speaker 01:
One is the 105D mechanism.

[00:31:13] Speaker 01:
The congressional judgment that TSA is relying upon there to exercise that tool is the public law in ATSA itself, section 141F and 141B.

[00:31:28] Speaker 01:
To answer the question of what procedures was TSA required to go through that congressional judgment that those rules and regulations be made available to TSA.

[00:31:37] Speaker 02:
Governors is that is that there's so many numbers being thrown around here.

[00:31:41] Speaker 02:
I'm getting confused.

[00:31:42] Speaker 02:
Is that the FAA legacy authority.

[00:31:46] Speaker 01:
Like I said, it is the savings provision.

[00:31:49] Speaker 02:
But the effective savings provision is to allow TSA to rely on what the FAA was relying on.

[00:31:55] Speaker 01:
Correct.

[00:31:56] Speaker 01:
I'm just going to call that the FAA.

[00:31:58] Speaker 01:
But I just want to distinguish that from the section 105 FAA authority that the other side has been referring to.

[00:32:09] Speaker 02:
What's 105?

[00:32:11] Speaker 01:
I'm sorry, 1,005.

[00:32:12] Speaker 01:
1,005.

[00:32:12] Speaker 01:
OK.

[00:32:12] Speaker 01:
49.

[00:32:15] Speaker 02:
49 USC 46105.

[00:32:18] Speaker 01:
Right.

[00:32:20] Speaker 01:
The government relied on that provision to make the very narrow point that when these rules and regulations were initially promulgated, Congress understood that the airport security programs would not have to go through notice and comment.

[00:32:34] Speaker 01:
It's not relying on that provision to say that anything I think about TSOB ratification

[00:32:40] Speaker 01:
One way or the other, we take that vision.

[00:32:42] Speaker 02:
We're not talking about 46105.

[00:32:43] Speaker 02:
49 USA 46105 correct that provision, but and then what 1005 is not 105.

[00:32:50] Speaker 01:
I was.

[00:32:52] Speaker 01:
Yes, there's the section 1005 of the FAA Act is the same thing was codified at 49 USC 49605.

[00:33:02] Speaker 01:
Sorry, but 105.

[00:33:04] Speaker 04:
OK, what is 1005 say?

[00:33:06] Speaker 01:
1005 is the existing tool that FAA had to take immediate action in response to an emergency.

[00:33:16] Speaker 04:
Without notice and confirmation?

[00:33:18] Speaker 01:
Correct.

[00:33:19] Speaker 01:
It is the statutory provision.

[00:33:20] Speaker 01:
Nobody else is referring to that as 1005.

[00:33:24] Speaker 01:
Yeah, I apologize for confusing and causing confusion.

[00:33:28] Speaker 02:
Let's call it 1005.

[00:33:29] Speaker 02:
I thought at one point there was a reference to 1005D.

[00:33:31] Speaker 02:
But when I look at 49 years... 105D.

[00:33:35] Speaker 02:
Sorry, 105 D. Yeah, sorry, sorry.

[00:33:38] Speaker 02:
Go go ahead.

[00:33:38] Speaker 02:
I don't see a 105 D. I see 49 USC 46105 has a B and C. Is there also a D?

[00:33:46] Speaker 01:
Yes, the.

[00:33:50] Speaker 01:
Yes, in the.

[00:33:51] Speaker 01:
I mean, maybe I have my.

[00:33:54] Speaker 01:
I'll get the.

[00:33:56] Speaker 04:
Yeah, D is emergency amendments.

[00:33:58] Speaker 02:
Yes, sorry, it's available at.

[00:34:01] Speaker 02:
Thanks under 49 USC 46105.

[00:34:05] Speaker 04:
1542.105D.

[00:34:06] Speaker 04:
1542.105.

[00:34:09] Speaker 02:
Yes.

[00:34:09] Speaker 02:
That's a regulation.

[00:34:11] Speaker 02:
That's the regulation.

[00:34:12] Speaker 02:
That's not a statute.

[00:34:15] Speaker 02:
OK.

[00:34:15] Speaker 02:
The 105D you're talking about is a regulation.

[00:34:19] Speaker 01:
Correct.

[00:34:20] Speaker 01:
It's a regulation.

[00:34:20] Speaker 01:
And the congressional judgment that explains why TSA has this regulation available to exercise it is that the savings provision in ASSA.

[00:34:31] Speaker 03:
I think you haven't explained why the savings provision applies here.

[00:34:36] Speaker 03:
because those functions haven't, I mean, you're just relying on the general functions that are transferred to TSA, but the savings provision seems to be referring to specific authorities that are transferred to TSA.

[00:34:52] Speaker 01:
Yes, these specific authorities.

[00:34:54] Speaker 01:
I think it's important to recognize that the tools that we're talking about here are quite different in kind.

[00:35:00] Speaker 01:
The 105D, this emergency, is there another way I can be helpful to refer to it?

[00:35:07] Speaker 01:
105D is a regulation.

[00:35:08] Speaker 01:
Yeah, the regulation.

[00:35:11] Speaker 01:
It requires its amendments take effect only upon notice, and there's an administrative back and forth that happens with these petitions for reconsiderations.

[00:35:23] Speaker 01:
That is not the case when TSA exercises the tool in 114L2.

[00:35:29] Speaker 01:
In that circumstance, the rules take effect without notice, and there is no opportunity for an administrative back and forth.

[00:35:37] Speaker 01:
And so to give an example, on 9-11 itself, there were thousands of airplanes who were in the air.

[00:35:45] Speaker 01:
FAA issued an order that grounded them all immediately.

[00:35:49] Speaker 01:
That took effect without notice and was enforceable immediately.

[00:35:53] Speaker 01:
There was no opportunity for a back and forth.

[00:35:56] Speaker 01:
Then in the weeks that followed, the FAA issued an emergency amendment that directed the conditions that were required for airports to reopen.

[00:36:04] Speaker 01:
They were collaboratively with airports

[00:36:07] Speaker 01:
in order to get them to a place where airports could be made available.

[00:36:12] Speaker 03:
I understand that these two provisions operate in a different way, the regulatory authority and the 114L2 authority.

[00:36:19] Speaker 03:
They operate differently, but that doesn't answer my question about where the authority comes for TSA to exercise FAA's legacy regulatory authority.

[00:36:33] Speaker 01:
FAA, the regulatory authority, we understand that authority to come from the savings provision.

[00:36:38] Speaker 03:
Yes, but why?

[00:36:40] Speaker 01:
Because that is what Congress said.

[00:36:41] Speaker 01:
Congress directed that these quote rules and regulations would continue in effect.

[00:36:47] Speaker 03:
But for functions transferred to TSA.

[00:36:50] Speaker 01:
Correct.

[00:36:50] Speaker 01:
And the function that was transferred to TSA is this responsibility to oversee the adequacy of security measures at airports.

[00:36:57] Speaker 01:
Everyone had understood, Congress included, and was specifically aware of at the time.

[00:37:01] Speaker 03:
That's the substantive function.

[00:37:02] Speaker 03:
The function to make emergency rules was not transferred.

[00:37:06] Speaker 01:
And the government does not understand there to be required authority to take an action immediately.

[00:37:13] Speaker 01:
When it takes an action immediately, agencies take actions immediately all the time.

[00:37:17] Speaker 01:
There are disputes.

[00:37:18] Speaker 03:
But you're relying on the FAA legacy regulation as the authority for what you did here, what the agency did here.

[00:37:27] Speaker 01:
we're relying on the rules and regulations.

[00:37:30] Speaker 01:
And then there is a procedural dispute over whether TSA needed to do more than those procedures and the regulations.

[00:37:37] Speaker 04:
Let me ask in another way, because I think I have the same question as Judge Rao.

[00:37:43] Speaker 04:
You're relying on the savings provision.

[00:37:46] Speaker 04:
And you're saying that the power and authority of FAA

[00:37:51] Speaker 04:
to regulate safety and all these things were transferred to TSA.

[00:37:54] Speaker 01:
That's substantive authority.

[00:37:55] Speaker 04:
And I thought I heard your friend the other side say that since 1958 FAA was issuing emergency rules with no notice and comment that that's something that it's allowed to do.

[00:38:07] Speaker 04:
Is there a statutory provision that allows it to do that?

[00:38:10] Speaker 04:
That allows TSA to- FAA, the legacy provision from 1958.

[00:38:14] Speaker 04:
They've been doing this.

[00:38:16] Speaker 04:
What's the basis for FAA doing it?

[00:38:19] Speaker 01:
So in addition to their ordinary APA tools, I think that they have this specific statutory provision at 49 USC.

[00:38:31] Speaker 01:
I believe it's 49605.

[00:38:36] Speaker 03:
But there's no emergency rulemaking authority in 46105C.

[00:38:41] Speaker 05:
Yes, it is.

[00:38:42] Speaker 05:
Thank you.

[00:38:43] Speaker 03:
And that provision, this is what I'm asking, that statutory provision was not transferred to TSA.

[00:38:51] Speaker 03:
Correct.

[00:38:51] Speaker 03:
46105A was transferred, but not 46105C.

[00:38:57] Speaker 01:
Yes, we don't think TSA needs that authority to have been transferred.

[00:39:05] Speaker 03:
And I think it is true that if the other side... It needs that authority to be transferred if you're relying on the savings clause.

[00:39:13] Speaker 01:
I don't think that's true.

[00:39:14] Speaker 03:
Okay, why?

[00:39:15] Speaker 01:
Because the savings clause makes quite clear that TSA has the substantive authority to issue amendments to security programs.

[00:39:27] Speaker 01:
And there is no special authority that is required for it to take that action immediately.

[00:39:33] Speaker 01:
or to do so in the procedures that are outlined in 105D.

[00:39:36] Speaker 01:
There may be, in many cases, procedural disputes or issues or arguments that can be made.

[00:39:43] Speaker 01:
But I don't understand the other side to be making an argument that TSA, that this whole system of airport security programs, that they lacked the authority to issue amendments.

[00:39:55] Speaker 01:
And if they were making that argument, I think that is an argument that they would have to be presenting to the agency in the first instance, because that would be an argument that what TSA did here, the emergency amendment it took, was not authorized.

[00:40:09] Speaker 03:
Let me ask you about that, because the government here says that a number of issues were not exhausted.

[00:40:17] Speaker 03:
But it does not argue in its brief that this statutory argument was exhausted.

[00:40:21] Speaker 03:
In fact, it provides a lengthy rebuttal

[00:40:25] Speaker 01:
Yes, the reason why I did that is because that regulated entity is informed of whether or not it goes through TSOB ratification at the time that it receives the denial of the petition for reconsideration.

[00:40:37] Speaker 03:
Has the government waived any objection to issue exhaustion?

[00:40:42] Speaker 01:
We haven't taken a position and if this court

[00:40:45] Speaker 01:
you know, understands it to be jurisdictional, it would, you know, have to analyze it.

[00:40:49] Speaker 03:
If it's jurisdictional, of course, you can't waive it.

[00:40:50] Speaker 03:
But if it's not jurisdictional, then it does seem to be waived.

[00:40:54] Speaker 01:
I'm not trying to affirmatively waive it here at the podium, and we haven't taken a position on that question.

[00:41:00] Speaker 01:
I think there is a conceivable world where this court... Well, you haven't argued issue exhaustion on the statutory question at all.

[00:41:07] Speaker 03:
Correct.

[00:41:08] Speaker 03:
So you have

[00:41:09] Speaker 01:
We don't take a position on that question and the reason I think is because they received that notification about whether or not it goes to the TSOP ratification process at the time of the denial, but if I could give me understand that why would that be a reason not to raise?

[00:41:27] Speaker 01:
So the opportunity for them to raise an argument with the agency is through this post issuance administrative petition for reconsideration.

[00:41:37] Speaker 01:
And at that time, it's a 14 day period.

[00:41:40] Speaker 01:
There's a 30 day period for TSA to go through the TSOB.

[00:41:44] Speaker 01:
So at the time that they're filing their petition for reconsideration, they don't know yet whether the TSOB has ratified it or not.

[00:41:53] Speaker 01:
So it's true here that TSA, when it issued Joint EA 2301, that it noted the authority it was relying on was the regulations.

[00:42:06] Speaker 01:
So I think these sophisticated entities would know that it was not probably going to go through TSOB ratification, as that has been the longstanding practice for the agency not to do so.

[00:42:18] Speaker 01:
But we didn't formally take a position on that in our briefs.

[00:42:23] Speaker 01:
I'm not trying to spin out a new argument here at the podium.

[00:42:28] Speaker 02:
But suppose we take note of the fact that the regulated entity didn't object to the agency, that the agency failed to get TSOV ratification.

[00:42:42] Speaker 02:
Do you think that would be wrong to care about that?

[00:42:47] Speaker 01:
I think I guess it depends on the form that their argument is taking.

[00:42:52] Speaker 01:
I think it matters a great deal if they are kind of making the argument here that TSA lacks the authority to issue an emergency amendment immediately through the procedures of 105D.

[00:43:05] Speaker 01:
If that's the argument they're making, then they do need to present that to an agency.

[00:43:09] Speaker 01:
in the ordinary course because as soon as they know that they're issuing an emergency amendment under that regulated regulation, then they're on notice that they should be making an argument that the agency lacks authority.

[00:43:23] Speaker 01:
If they're making what I had understood their argument to be that

[00:43:25] Speaker 01:
In addition to the procedures and the issuance of the emergency amendment, TSA needed to then get it ratified by the TSOB.

[00:43:33] Speaker 01:
I think that type of argument, it's fair for them to raise in the first instance in a petition for review because they don't have that opportunity to know either way until the petition for reconsideration is denied.

[00:43:47] Speaker 01:
But if I could maybe give an off ramp to the TSOB issue, just I think that has come up here today.

[00:43:52] Speaker 01:
The other side does seem to clearly concede that if the regulations, sorry, if the emergency amendment was within the regulatory authority and does not require an actual published amendment to the regulations, then it would not need to go through the TSOB ratification.

[00:44:14] Speaker 01:
I think you can take the party's

[00:44:16] Speaker 02:
You know arguments on their terms and there are a couple of clear reasons why I think this is an amendment and not a Regulation one is can I just before you go there because I do I do want to hear that Yeah, but on the predicate to that which is that if it is an amendment then TSL be ratification drops out of the equation you agree with that I Agree what you're saying is that they've conceded that yes, and I'm wondering does the government agree that that was right to concede that

[00:44:47] Speaker 02:
Sorry, can you reframe the question so I have it right?

[00:44:50] Speaker 02:
And tell me if I'm asking the wrong question.

[00:44:52] Speaker 02:
But what I understood you to be saying is that the other side concedes, and we heard what the exchange earlier, that if JEA, whatever the number is, whatever the one we have, if that one was within the amendment power under the regulatory 105D, then

[00:45:17] Speaker 02:
there's no available objection that the process needed to include a TSOB ratification that wasn't gotten.

[00:45:26] Speaker 01:
I think, you know, there are a lot of premises baked into, I think, that concession, and I think it is appropriate to take their argument on its terms.

[00:45:40] Speaker 01:
I think the general concern or the gist of their argument here is that 114L2 was meant to displace this authority in 105D.

[00:45:51] Speaker 01:
And to the extent that it's an amendment and not something that they understand had to be

[00:46:04] Speaker 01:
where the agency had to change its published regulations, then I think you could take that argument to be that there's no potential conflict between those two provisions.

[00:46:15] Speaker 01:
The way we would understand that argument, I think, is that the savings provision says that the procedure should continue by their terms and nothing in 114L2 modifies those procedures.

[00:46:27] Speaker 01:
They are presenting an argument that

[00:46:30] Speaker 01:
It appears that it modifies those procedures only if it is not an amendment.

[00:46:36] Speaker 01:
And so I just think you can resolve the dispute on those terms.

[00:46:40] Speaker 01:
So turning to whether or not it is an amendment, I think clearly this is something that can be conceived as an amendment.

[00:46:48] Speaker 01:
If an ordinary contract negotiations, if one party may say, I have an amendment,

[00:46:55] Speaker 01:
I would like you to make this change and I won't approve it otherwise.

[00:47:00] Speaker 01:
That is precisely what the TSA is doing here.

[00:47:03] Speaker 01:
It's saying it's expressing the conditions for its approval through the emergency amendment that it needed to issue immediately and doing the same type of thing that

[00:47:17] Speaker 01:
you know, anyone would understand would not need to go through a formal kind of regulation.

[00:47:24] Speaker 01:
I would also say that it would make little sense for, I think, as the other side seems to suggest, for every kind of amendment that takes this form to have to go through, be published in the Federal Register, and kind of take its place next to the other applicable items.

[00:47:44] Speaker 01:
Again, this

[00:47:45] Speaker 01:
The tool is designed for circumstances in which the TSA is confronting yet unknown threats.

[00:47:55] Speaker 01:
The other side seems to suggest that the existing regulations bind TSA only to the kinds of threats that is already expressly considered by regulation.

[00:48:07] Speaker 01:
That doesn't seem to be a very sensible approach to me.

[00:48:10] Speaker 01:
And just as a matter of practice, I think, again, I would refer you to all of the materials that we've said in our brief to how TSA has understood its own regulations to have often very substantive

[00:48:23] Speaker 01:
expressions of the necessary approval requirements from the 1972 advisory circle all the way through to these emergency amendments in all of those circumstances.

[00:48:36] Speaker 01:
TSA has not understood it to be required to amend the regulations in order to issue an amendment to the airport.

[00:48:46] Speaker 02:
When you say approval, you mean approval of a security program?

[00:48:49] Speaker 02:
Correct, yes.

[00:48:49] Speaker 02:
So I guess the question on that is,

[00:48:52] Speaker 02:
The way the regulations are framed, I'm not saying this means that doing this as an amendment is off the table, but what specifically needs to be contemplated by amendments is amendments to a particular security program that a particular airport or particular aircraft might have.

[00:49:09] Speaker 02:
This one speaks more broadly.

[00:49:10] Speaker 02:
That's not to say it can't be done that way, but it does seem like that's the heartland of it.

[00:49:13] Speaker 01:
I agree that that's their position that TSA needs to individually redline airport security programs in order to effectuate policy in this area.

[00:49:22] Speaker 01:
The regulations do not require that.

[00:49:26] Speaker 01:
And I think it would make little sense for TSA to bind itself to not being able to say when there is an emergency that is equally applicable to all major airports to at one time issue an amendment to those airport security programs.

[00:49:43] Speaker 02:
That makes functional sense to me.

[00:49:44] Speaker 02:
So I mean, I take it the bottom line for the government is, look, I mean, in theory, you could do an amendment that applies.

[00:49:51] Speaker 02:
You could apply an amendment to every single individual security program.

[00:49:56] Speaker 01:
Yes, and TSA has done that.

[00:50:01] Speaker 01:
That's what this does.

[00:50:03] Speaker 01:
Correct.

[00:50:03] Speaker 01:
For this one, it only applies to certain categories of airports that are quite large.

[00:50:07] Speaker 02:
Sure, those categories.

[00:50:08] Speaker 02:
But as to those, the functional upshot, recognizing that it's a subcategory of all airports and aircraft, but as to those, it's the equivalent of adding requirements to

[00:50:22] Speaker 02:
what's otherwise already in 103 for what a security program needs to contain.

[00:50:26] Speaker 01:
Sure.

[00:50:27] Speaker 01:
I don't think there's any doubt that sometime TSA will encounter new subject matters that, and it needs to in the face of an emergency, take an immediate response.

[00:50:35] Speaker 01:
I mean, we've cited to the extent their argument is that the regulations itself constrain the agency.

[00:50:40] Speaker 01:
We've explained that those are not meant to be exclusive and that

[00:50:44] Speaker 01:
the kind of relevant definitional phrases indicate that they're not meant to be exclusive.

[00:50:49] Speaker 01:
And I just don't think there's a case to be made that TSA would, which traffics in ongoing and unknown emergencies would require itself to go through a burdensome kind of pre-planning a process rather than give itself the flexibility to issue an amendment when an emergency arises.

[00:51:11] Speaker 01:
If I could just try to take one more stab at, I think, clarifying why I think the text is pretty clear on the 114L2, that if you do reach that question, I do think that the statute speaks to this in quite clear terms.

[00:51:28] Speaker 01:
Which statute?

[00:51:29] Speaker 01:
So this is 114L2.

[00:51:33] Speaker 02:
But when you say the statute speaks clearly.

[00:51:35] Speaker 01:
49 USC 114L.

[00:51:37] Speaker 01:
Yes.

[00:51:38] Speaker 01:
That statute, the most straightforward reason why TSA did not exercise the tool in that statute, or sorry,

[00:51:48] Speaker 01:
why it doesn't apply here is that TSA did not understand itself to be exercising any mechanism in 114L2.

[00:51:55] Speaker 01:
114L2 is a tool that allows the agency to take a regulation and issue it without notice and without any further administrative back and forth.

[00:52:10] Speaker 01:
And the language of the provision, this is L2B, says that TSOB ratification will only apply to

[00:52:18] Speaker 01:
a regulation or security directive that is issued under that section.

[00:52:22] Speaker 03:
You're suggesting what the agency did here is more protective of public rights because there was notice.

[00:52:28] Speaker 01:
It's absolutely more protective of public rights.

[00:52:30] Speaker 01:
And it's absolutely true that I think the collaborative process here with the airports helped improve the emergency amendment in a way that would not have necessarily been the case otherwise.

[00:52:41] Speaker 01:
But I think the greater point is that

[00:52:45] Speaker 01:
Congress passed a belt and suspender statute that gave multiple mechanisms.

[00:52:50] Speaker 01:
One applies in the aviation sector.

[00:52:52] Speaker 01:
One applies across all modes of transportation.

[00:52:55] Speaker 01:
You're faced with it kind of the

[00:52:57] Speaker 01:
The dispute on this issue is essentially with respect to this bigger authority, whether the condition to the bigger authority also applies to the smaller one.

[00:53:05] Speaker 01:
And Congress can decide whether or not it cares about that overlap.

[00:53:09] Speaker 01:
It decided in this circumstance that I think that TSOB ratification is appropriate only for 114L2.

[00:53:16] Speaker 01:
That makes perfect sense because it is the type of broad and strong authority that would warrant TSOB oversight.

[00:53:24] Speaker 01:
We're talking about

[00:53:25] Speaker 01:
in order to transportation entities that would not just say all flights are grounded, but says all

[00:53:33] Speaker 01:
All trains, all pipelines, all transportation entities are grounded, a top-down directive, and there's going to be no administrative back and forth here.

[00:53:42] Speaker 01:
In that type of circumstance, it makes absolute sense for a seven-headed board of other agencies to be consulted on national security matters.

[00:53:52] Speaker 01:
But I take the other sides.

[00:53:54] Speaker 04:
I'm sorry.

[00:53:55] Speaker 04:
TSA could use L2 in the manner that

[00:54:01] Speaker 04:
With with a back and forth because, for example, it applies to security directives.

[00:54:05] Speaker 04:
So not just regulations.

[00:54:07] Speaker 04:
And why couldn't TSA say we're issuing a security directive, which is going to require all airports to submit an updated safety program that accounts for cyber terrorism.

[00:54:16] Speaker 04:
And that will be then approved by TSA.

[00:54:19] Speaker 01:
So the security directives, as I understand them, are temporary directives that don't work exactly through the same process and authorities.

[00:54:28] Speaker 01:
So I wouldn't treat them as one in the same.

[00:54:31] Speaker 04:
Oh, security direction is a term of art that doesn't apply to this?

[00:54:34] Speaker 01:
It is a term of art in this area.

[00:54:36] Speaker 01:
I don't want to make too much of that.

[00:54:39] Speaker 01:
I think our basic point is that there may be some overlap between what TSA is able to do through these provisions in the aviation sector, but the existence of that overlap is not surprising given how broad the 114 L2 authority is.

[00:54:56] Speaker 01:
And it's important to note that if there is some overlap in the Venn diagram that there's also

[00:55:01] Speaker 01:
extensive periods of non-overlap on both sides.

[00:55:04] Speaker 01:
On one side, there's the other modes of transportation through the 114L authority.

[00:55:08] Speaker 01:
And the other side, you have, I think, quite tailored and quite narrow emergency amendments that are only meant to apply to a subset of airports where it would be deeply surprising to expect that Congress wanted this super-governmental body to micromanage this collaborative and iterative back and forth between- Is the upshot of that that-

[00:55:28] Speaker 02:
Are you saying that 114L2 couldn't have been used to do this?

[00:55:33] Speaker 02:
Or are you saying Congress wouldn't have required it to be used to do this?

[00:55:41] Speaker 01:
Sorry, say the two options again.

[00:55:42] Speaker 02:
Well, are you saying that 114L2 is something that could not have been used to do the exact same thing that was done here?

[00:55:49] Speaker 02:
Or are you saying it could have been used, but Congress wouldn't have required that to be used?

[00:55:53] Speaker 02:
It would have allowed the method that was used to be used.

[00:55:57] Speaker 01:
If another way of doing if TSA had used that one 14 L 2 authorities, it would not have paid the prices in the regulation, namely that petitions for reconsideration that lead to say open to a pH challenges based upon.

[00:56:13] Speaker 01:
its agency explanation, the fact that it only takes effect upon notice.

[00:56:18] Speaker 01:
I'm not standing here to say that TSA could not do something through the 114L2 authority that would further its policy objectives in a similar way, but I don't think that's any different from TSA having or agencies having the option to go through adjudication versus

[00:56:36] Speaker 02:
Then it sounds like you're saying that 114L2 could have been relied on to do the exact same thing.

[00:56:43] Speaker 01:
If they did it, it wouldn't be the exact same thing.

[00:56:46] Speaker 01:
It would be, in that type of circumstance, there would be no administrative back and forth between the... Procedurally, but substantively.

[00:56:54] Speaker 02:
You could not do substantively the same thing?

[00:56:55] Speaker 01:
Yeah, because it's a procedural dispute here.

[00:56:58] Speaker 02:
The substantively they... What I'm asking is, substantively, could you do the same thing through

[00:57:04] Speaker 02:
Could you substantively do the exact same thing through 114L2 granting that that would be a different process?

[00:57:09] Speaker 01:
Meaning TSA could have issued a requirement that has access control segmentation policies and does show through a 114L mechanism.

[00:57:22] Speaker 01:
If it issued the requirement that way in that type of circumstance, there would be no administrative back and forth and that would take effect immediately.

[00:57:30] Speaker 01:
TSA has done that for

[00:57:33] Speaker 01:
other types of transportation.

[00:57:35] Speaker 01:
So there's references in the administrative record to pipeline.

[00:57:38] Speaker 01:
There's references to rail.

[00:57:40] Speaker 01:
In those circumstances, they don't have this legacy authority.

[00:57:43] Speaker 01:
And so they issue those regulations immediately.

[00:57:48] Speaker 01:
There is no back and forth with the regulated community.

[00:57:51] Speaker 04:
Why can't they provide for a back and forth under 114L2?

[00:57:57] Speaker 01:
They can.

[00:57:58] Speaker 01:
I mean, certainly they could.

[00:58:00] Speaker 01:
The agency, but I take the other side's argument to be actually that they could, that they either have to do 114L2 or it's not.

[00:58:11] Speaker 04:
My question is just, and I don't know that it's important, that can you replicate exactly what happened here, including the back and forth under 114L2 by saying in your L2 directive or regulation,

[00:58:26] Speaker 04:
that there will be back and forth.

[00:58:27] Speaker 01:
It wouldn't be exactly the same because again you would have this difference in when the regulation took its effect but again I'm not trying to stand here and say that there's not a quite similar thing that they could do or that what it did through an emergency regulation is

[00:58:45] Speaker 01:
ultimately, you know, so widely different from what you might expect the agency to do under 114 L2.

[00:58:53] Speaker 01:
The point here is that this was a belt and suspenders approach that was passed in November 2001.

[00:58:58] Speaker 01:
And the mere fact that there is some overlap between these provisions tells you nothing about whether Congress intended for

[00:59:06] Speaker 01:
these TSOB ratification procedures to apply in this narrow overlap that really only takes place in the aviation sector.

[00:59:16] Speaker 01:
I think Congress can decide whether or not it cares about those overlaps.

[00:59:21] Speaker 01:
The text is really a complete answer to this question because it says that TSA doesn't need to get TSV ratification when it doesn't exercise the tool in 114L2.

[00:59:34] Speaker 01:
TSA didn't understand itself to be exercising this authority and really it did something that is different.

[00:59:41] Speaker 01:
Now,

[00:59:42] Speaker 01:
You know, for better or for worse, that may raise other problems or other issues or other disputes that other petitioners can bring and present to the agency about the authority that TSA has.

[00:59:52] Speaker 01:
But it really says nothing about the scope of TSOB ratification.

[00:59:57] Speaker 01:
The text, I think, is a complete answer to that question.

[01:00:02] Speaker 01:
It would be quite strange to take a step back, to go from a circumstance in which the FAA had a litany of tools in both the APA and its FAA authorities to one in which I think the other side is quite clear.

[01:00:18] Speaker 01:
It thinks TSA had one option, its most powerful medicine at all times, and had to use it.

[01:00:26] Speaker 01:
It would be strange for Congress to single out TSA in that fashion.

[01:00:32] Speaker 02:
And the one that's the most powerful medicine is which one?

[01:00:35] Speaker 01:
114L2.

[01:00:37] Speaker 02:
Because it can do it immediately and it immediately takes effect and all that.

[01:00:42] Speaker 01:
And then it applies to all modes of transportation.

[01:00:46] Speaker 02:
Can I just ask this question just so I can keep track of where the government's making a non-preservation objection and where it's not?

[01:00:54] Speaker 02:
So there's this question that you've just had a helpful back and forth on about the potential use of 114L2 versus the other route to go, which the agency under the government's perspective was what was adopted, which is going through the

[01:01:10] Speaker 02:
I'll call it FAA legacy route.

[01:01:12] Speaker 02:
But if that captures it, great.

[01:01:15] Speaker 02:
Through the savings clause.

[01:01:18] Speaker 02:
And has the government made the objection that the challenger's notion that this needed to go through 114L2 rather than through the savings clause route?

[01:01:34] Speaker 02:
Has the government objected that that challenge wasn't preserved?

[01:01:37] Speaker 01:
I didn't understand the other side to be making an argument in their brief that the amendment is invalid because it went through the procedures of 114D.

[01:01:48] Speaker 01:
They knew that TSA was going to go through the procedures of 114D.

[01:01:55] Speaker 01:
And if they are presenting that argument that TSA had to, that it was unlawful for them to exercise a tool that was not 114L2,

[01:02:07] Speaker 01:
then that argument is not preserved.

[01:02:09] Speaker 01:
It needs to be presented to the agency.

[01:02:13] Speaker 01:
To the extent they're making it for the first time at the podium, we would urge this court to reject it.

[01:02:18] Speaker 01:
What we think that the argument that TSA needed to take an additional procedure

[01:02:25] Speaker 01:
beyond what is in 105D, that it needed to, after it finished the administrative back and forth, it needed to get the amendment ratified by TSOB.

[01:02:38] Speaker 01:
We think that they are essentially put on notice of whether or not the agency goes through TSOB at the time that they get a denial of the petition for reconsideration.

[01:02:48] Speaker 01:
And so they can raise that on a petition for review in the first instance.

[01:02:53] Speaker 01:
If there are no further questions,

[01:02:55] Speaker 02:
Thank you.

[01:02:56] Speaker 01:
Thank you.

[01:02:56] Speaker 01:
Thanks.

[01:03:02] Speaker 02:
Be given the length of the back and forth.

[01:03:03] Speaker 02:
We'll give you three minutes for a rebuttal.

[01:03:06] Speaker 00:
Thank you.

[01:03:08] Speaker 00:
Now, your honor, with regard to Spokane Airport boards concession, you just referenced 49 CFR 1542.105 D in conjunction with the concession.

[01:03:23] Speaker 00:
I want to make sure that

[01:03:24] Speaker 00:
the airport's concession.

[01:03:25] Speaker 00:
We're on the same page and have the same understanding.

[01:03:28] Speaker 00:
So if this court finds that JEA 2301 was amending an ASP and it was not engaging in rulemaking, then I would agree that TSOB ratification wouldn't be necessary.

[01:03:44] Speaker 00:
But JEA 2301 does amend regulation.

[01:03:48] Speaker 00:
Now, the airport's not taking the position that TSA can't

[01:03:53] Speaker 00:
amend airport security programs, they can.

[01:03:58] Speaker 00:
And they can do that under the regulation at 105D.

[01:04:02] Speaker 00:
It allows them to amend airport security programs, but it does not allow them to amend regulations.

[01:04:09] Speaker 00:
And that's what they did here, because 103A, regulation 103A, doesn't list cybersecurity.

[01:04:17] Speaker 00:
And TSA is attempting to use an airport security program amendment

[01:04:23] Speaker 00:
to actually amend 103A to add cybersecurity.

[01:04:29] Speaker 00:
Now, it's true that the airport could do more in their airport security program, but TSA can't require more because the regulation at 1452.103A, that's a ceiling for them.

[01:04:46] Speaker 00:
They're telling us what is absolutely required to be in the program.

[01:04:50] Speaker 00:
And it doesn't make sense to say, this is what's absolutely required in the airport security program, but maybe there's more, and we'll tell you later.

[01:05:02] Speaker 00:
This is a list of what is absolutely mandatory to be included in the airport security program.

[01:05:09] Speaker 00:
So if they could just add topics, the question becomes, where do we draw the line?

[01:05:14] Speaker 00:
And could they add an additional topic of labor disputes?

[01:05:19] Speaker 00:
And then they're going to infringe upon the National Labor Relations Board, just like here where they're just adding a topic of cybersecurity.

[01:05:26] Speaker 00:
And then that's going to infringe on the Cybersecurity and Infrastructure Security Agency, which is America's cyber defense agency.

[01:05:34] Speaker 00:
It's responsible for cybersecurity across all levels of government.

[01:05:39] Speaker 00:
So the real concern is where the line would be drawn, if at all.

[01:05:43] Speaker 04:
I'm just trying to understand.

[01:05:44] Speaker 04:
what argument you're making so we can decide whether it was preserved or not.

[01:05:47] Speaker 04:
So are you arguing that TSA did not have authority under 105D to do what it did?

[01:05:52] Speaker 04:
Yes.

[01:05:54] Speaker 04:
And so that is what, in front of the other side, Mr. Lewis says that you didn't argue.

[01:05:59] Speaker 00:
But as I discussed earlier, we did preserve it in footnote one and in the body of it saying that there is no factual or legal support

[01:06:10] Speaker 00:
for TSA reaching in to try to control our information technology.

[01:06:14] Speaker 04:
And is it, are you arguing that the only route they could have taken was to go through 114L2 to do what they did?

[01:06:23] Speaker 00:
Add cybersecurity as an additional topic to a regulation to amend that regulation on an emergency basis.

[01:06:30] Speaker 00:
TSA was required to go through 49 USC 114L2.

[01:06:34] Speaker 04:
So those are your arguments.

[01:06:35] Speaker 00:
Yes.

[01:06:35] Speaker 04:
They had no authority under 105D and they had to go through 114L2.

[01:06:39] Speaker 02:
Yes.

[01:06:40] Speaker 02:
And then just to put a bow on the concession question, and thank you for clarifying this, if hypothetically we were to conclude that under 105D the agency could do this, you've presented a forceful argument as to why they couldn't, but if we conclude that they could do it under 105D, then the TSOB ratification question drops out in your

[01:07:07] Speaker 00:
Well, that's not a concession I would make, because that sounds to me like I would be conceding that under 105D that TSA can amend an ASP and effectively amend a rule and not concede that.

[01:07:24] Speaker 00:
My concession is simply that if JEA 2301 in this court's view is nothing but an ASP amendment, it's that and nothing more than

[01:07:37] Speaker 00:
on that hypothetical, then TSOB ratification wouldn't be required.

[01:07:41] Speaker 00:
But again, our position being that it did more than that.

[01:07:44] Speaker 00:
They're trying to use an ASP amendment to amend a regulation, which is going to require a different procedure.

[01:07:51] Speaker 00:
And again, a guaranteed procedure, because the procedural guarantees are more than courtesies that we hope will be afforded.

[01:07:57] Speaker 00:
I mean, they're guaranteed by statute.

[01:07:59] Speaker 00:
And because we weren't given that, they didn't follow the correct procedure, airports respectfully requesting that this court

[01:08:06] Speaker 00:
reverse the denial of the petition for reconsideration and vacate JEA 2301.

[01:08:12] Speaker 04:
And so just to follow up on the waiver issue that we've we've talked about, there's a line of argument that you didn't raise these arguments.

[01:08:23] Speaker 04:
before the agency, therefore they're not exhausted.

[01:08:27] Speaker 04:
The government didn't raise the fact that you didn't raise them.

[01:08:32] Speaker 04:
So they've kind of waived their waiver argument.

[01:08:34] Speaker 04:
But we have case law that says the government can't waive these types of arguments because it's jurisdictional.

[01:08:40] Speaker 04:
But you haven't argued that it's not jurisdictional.

[01:08:45] Speaker 04:
So you've waived the argument that it's not jurisdictional.

[01:08:51] Speaker 00:
I'm sorry, Judge, was that a question?

[01:08:55] Speaker 04:
I'm just, you agree with me that you've not raised that and therefore you've waived any argument that these waiver arguments are jurisdictional.

[01:09:03] Speaker 00:
I disagree with the proposition that we didn't raise those for the reasons that I've already stated, but I also would put forth that the statute requires that an objection be made.

[01:09:16] Speaker 00:
It doesn't require that the petitioner be the one that made the objection, just that an objection was made.

[01:09:23] Speaker 00:
And again, in the memo to the TSA administrator that I referenced before, it listed, you know, not even all, but it listed objections that were made.

[01:09:33] Speaker 00:
A statute doesn't require that it be spoken, an airport board make it, it just requires that an objection be made.

[01:09:39] Speaker 00:
An objection was made, it was acknowledged by TSA, and I believe it's preserved.

[01:09:47] Speaker 02:
Thank you, counsel.

[01:09:48] Speaker 00:
Thank you.

[01:09:49] Speaker 02:
We'll take this case under submission.