Steenholdt v. Federal Aviation Administration
314 F.3d 633, 2003 U.S. App. LEXIS 428, 354 U.S. App. D.C. 192 (2003)
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Rule of Law:
A court lacks jurisdiction to review an agency's substantive decision when a statute grants the agency complete discretion, creating no meaningful standard for a court to apply. An agency's failure to follow its own internal procedures is only reviewable if the aggrieved party can demonstrate substantial prejudice resulted from the procedural error.
Facts:
- In 1992, the FAA designated Randy Steenholdt as a Designated Engineering Representative (DER), authorizing him to perform certain aircraft safety inspections.
- In 1995, oversight of Steenholdt's consultant work was transferred to Manzoor Javed, with whom Steenholdt had numerous professional disputes.
- In 1997, FAA officials reported concerns that Steenholdt had approved a repair that exceeded the scope of his designated authority.
- In 1998, after continued poor performance reviews, Steenholdt attended a mandatory counseling meeting regarding the quality of his work.
- In 1999, due to ongoing concerns about his judgment and technical competence, the FAA renewed Steenholdt's designation but limited his authority to only approving repairs, not alterations.
- In 2000, Javed formally recommended that the FAA not renew Steenholdt's designation, citing a lack of improvement despite counseling and the need for excessive oversight.
- In September 2000, the FAA renewed Steenholdt's designation for only a three-month period.
- On October 26, 2000, FAA Manager Mary Ellen Schutt formally notified Steenholdt of the agency's intent not to renew his DER designation, citing years of performance deficiencies.
Procedural Posture:
- The Federal Aviation Administration (FAA) notified Randy Steenholdt of its decision not to renew his Designated Engineering Representative (DER) certificate.
- Steenholdt requested and was granted a first-level review by the Manager of the Chicago Aircraft Certification Office (ACO), who affirmed the nonrenewal.
- Steenholdt then sought a second-level review with the Manager of the Small Airplane Directorate.
- After reviewing submissions and holding a meeting, the Directorate Manager upheld the ACO's decision, making the nonrenewal final.
- Steenholdt filed a petition for review of the FAA's final order with the U.S. Court of Appeals for the D.C. Circuit.
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Issue:
Is the Federal Aviation Administration's (FAA) decision not to renew a Designated Engineering Representative (DER) certificate judicially reviewable where the governing statute allows the FAA to rescind a delegation 'at any time for any reason'?
Opinions:
Majority - Judge Sentelle
No. The FAA's decision not to renew a DER certificate is not judicially reviewable because the broad statutory language grants the agency unfettered discretion, meaning there is 'no law to apply' for a court to evaluate the decision's substance. The Federal Aviation Act explicitly states the FAA Administrator may rescind a delegation 'at any time for any reason,' which is a classic example of text that commits an action to agency discretion by law under 5 U.S.C. § 701(a)(2) and the standard set in Heckler v. Chaney. Although an agency's failure to follow its own procedures can be reviewed under the Accardi doctrine, relief is unavailable here because Steenholdt failed to show any substantial prejudice from the alleged procedural errors. The court found that Steenholdt received adequate notice and a meaningful opportunity to respond at every stage of the review process, and any minor deviations from internal FAA orders did not harm his ability to present his case.
Analysis:
This decision reinforces the high jurisdictional bar for challenging agency actions that are 'committed to agency discretion by law.' It clarifies that even where a statute provides a general mechanism for judicial review, courts cannot review the substance of a decision if the underlying law provides no manageable standards for evaluation, effectively giving the agency a blank check. The case also illustrates the limits of the Accardi doctrine, establishing that a petitioner cannot win relief for procedural errors alone; they must prove the errors caused them substantial prejudice, making it harder to challenge discretionary decisions on procedural grounds.
