City of Los Angeles v. U.S. Federal Aviation Administration

Petitioners City of Los Angeles et al., who own and operate airports, challenge a Final Policy (“Policy”) issued by the Federal Aviation Administration (“FAA”). According to the Policy, the Federal Aviation Administration Reauthorization Act of 1996 subjects airport operators who accepted federal grants in the past (like the City) to indefinite revenue-use restrictions. When the City accepted the grants, however, it gave revenue-use assurances for only 20 years, as required by then-existing law. The Policy also stated a change in position by the FAA, which now considers revenue received from water and mineral rights to be subject to the use restrictions. Finally, the Policy continued the FAA’s position of including, as subject to the use restrictions, revenue received from agricultural products and revenue received from off-airport property used for airport-related purposes.

The principal issue is whether we have jurisdiction to hear this case as a direct appeal of the agency’s action or whether the case must first be instituted in the district court. We hold that we lack appellate jurisdiction and therefore transfer the case to the United States District Court for the Central…