JOHN P. MOORE, Circuit Judge.
This petition for review centers on whether the Federal Aviation Administration acted arbitrarily and capriciously in reversing a decision to approve and partially fund the construction of facilities for a major air cargo hub at the Front Range Airport, a general aviation facility in the Denver metropolitan area. Upon review, we conclude substantial evidence supports the agency's determination, and the FAA did not act as accused. We therefore affirm.
With the prospective closing of Denver's Stapleton International Airport, cargo carriers operating there needed a new location to continue their businesses. Many carriers found Denver's plans for Stapleton's replacement, Denver International Airport (DIA), undesirable because they located cargo operations at the airport's northern end. Carriers contended that site did not provide them ready access to interstate highways.
Seeing the need for an alternative to DIA, Adams County, the Front Range Airport Authority (Airport Authority), and Centerport International, Inc. submitted to the FAA, in 1991, a proposal to expand the existing general aviation facility, Front Range Airport (Front Range), into an air cargo hub. Adams County borders the City and County of Denver, and DIA and Front Range are relatively close.
In March 1992, in its Record of Decision (ROD), the FAA approved the Front Range expansion to accommodate sizable air cargo traffic anticipated in the Denver metropolitan area. The FAA assumed the absence of this expansion would leave unattended the needs of air cargo carriers because of Stapleton's closing and the carriers' rejection of DIA's northern air cargo site.
On the basis of these FAA documents, the Airport Authority expended funds to begin the expansion and to solicit cargo carriers. At least one carrier signed a long-term agreement with Centerport to lease property adjacent to Front Range; one company which provides support services paid the Airport Authority for a twelve-month lease option; and others expressed interest in Front Range Airport if the FAA provided funding. Through letters and meetings, the Airport Authority kept the FAA informed of its progress and submitted formal applications for funding.
In August 1992, Denver decided to change its plans and applied to the FAA for approval of cargo facilities on the southern end of DIA. In response, Federal Express, abandoning its earlier preference for Front Range, and Airborne Express entered long-term leases with DIA. In the meantime, "signed leases" between the Airport Authority and air freight carriers, upon which the FAA had predicated its original ROD, never materialized.
In November 1992, the regional administrator of the FAA issued an order withdrawing the March ROD and FAA approval of the Front Range project. The order stated, in part:
The order set forth other changed circumstances, the "willingness of cargo carriers to relocate to DIA" and Denver's willingness to accommodate the needs of the carriers. The regional administrator concluded the changed circumstances were significant and "supersede[d]" the previously perceived need for the Front Range expansion.
The following month, the FAA approved DIA's newly-situated cargo facilities. As a matter of judicial notice, we recognize DIA is poised to open with a southern air cargo facility in place.
The Board of County Commissioners for Adams County and other interested parties claim this court should void the reversal order and reinstitute funding because the reversal order is not supported by substantial evidence as required by 49 U.S.C. app. § 1486(e) and 5 U.S.C. § 706(2)(E), and because the FAA acted arbitrarily and capriciously in reversing its initial stance as condemned in 5 U.S.C. § 706(2)(A). Petitioners also raise a conflict claim to justify the reinstatement of the original ROD and contend the FAA should be estopped from denying the money it initially promised.
The Airport Authority, Adams County, Centerport, and United Parcel Service contend the FAA does not have substantial evidence to support its reversal order as required by 49 U.S.C. App. § 1486(e) and 5 U.S.C. § 706(2)(E). Petitioners argue the FAA did not consider all the evidence it found persuasive in reaching its original decision and failed to show a rational connection
Petitioners contend the failure to consider these commitments to Front Range and other factors demonstrate the FAA acted arbitrarily and capriciously in violation of 5 U.S.C. § 706(2)(A). The FAA failed to provide enough detail of the relevant factors underlying its reversal decision. Furthermore, they claim, the FAA based its reversal order on irrelevant factors: the willingness of two of the seven largest carriers to locate at DIA and DIA's decision to switch the site of cargo operations to accommodate carriers. Petitioners also argue the FAA chose between Front Range and DIA while earlier it recognized the two would compete for the air cargo business. Contending DIA's decision to move its cargo facilities to the south did not eliminate the need for Front Range, petitioners claim the agency should have chosen Front Range if the FAA believed it was compelled to fund only one cargo facility. Petitioners argue the FAA's asserted reason for choosing DIA over Front Range, DIA's closer proximity to interstate highways, did not overcome the reasons the FAA favored Front Range originally. Moreover, petitioners believe the FAA acted in response to passenger airlines and not cargo carriers, and many cargo operators hastily secured space at DIA because of the uncertainty of federal funding for Front Range after the FAA decided to support DIA's southern cargo facilities. Petitioners fault the FAA for crediting the tentative commitments of cargo carriers to DIA when it would not credit their earlier tentative commitments to Front Range. The FAA played favorites when it should have remained neutral. Therefore, the FAA's decision, according to petitioners, was irrational.
The Administrative Procedure Act provides a reviewing court shall
5 U.S.C. § 706. The standards of review in 5 U.S.C. § 706 are each separate, Bowman Transp., Inc. v. Arkansas-Best Freight Sys., Inc., 419 U.S. 281, 284, 95 S.Ct. 438, 441, 42 L.Ed.2d 447 (1974) (citation omitted), and applicable to an agency's modification of an earlier action. Motor Vehicle Mfrs. Ass'n of the U.S. v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29, 41, 103 S.Ct. 2856, 2865-66, 77 L.Ed.2d 443 (1983). In addition, 49 U.S.C. App. § 1486(e) states the FAA's factual findings are conclusive if supported by "substantial evidence."
"Substantial evidence" in 5 U.S.C. § 706(2)(E) means more than a mere scintilla but less than the weight of the evidence and refers to relevant evidence which reasonably supports a conclusion. Foust v. Lujan, 942 F.2d 712, 714 (10th Cir.1991) (citations omitted), cert. denied, ___ U.S. ___, 112 S.Ct. 1668, 118 L.Ed.2d 388 (1992). In reviewing factual findings for substantial evidence, this court must consider the entire record including evidence opposing the agency's position. City of Pompano Beach v. FAA, 774 F.2d 1529, 1539 (11th Cir.1985) (citation omitted). The substantial evidence standard in 49 U.S.C. app. § 1486(e) requires an agency to have a rational basis for drawing its conclusions from the facts. Id. at 1540 (citations omitted). Thus, statutory interpretation and the application of law must withstand an arbitrary and capricious standard of review. Id. (citations omitted).
The arbitrary and capricious standard of 5 U.S.C. § 706(2)(A) is a narrow standard of review. Bowman, 419 U.S. at 285, 95 S.Ct. at 441-42. This court will determine whether the agency considered all the relevant factors and whether there was clear error of judgment, but may not substitute
Our review of the record indicates the keystone upon which the ROD was built is the assumption DIA was not a viable alternative to the expansion of Front Range because of the original northern location of the DIA air cargo facility. Indeed, the order stated: "A major uncertainty exists today concerning the implementation of adequate groundside and ground transportation connections at DIA." Other considerations, however, contributed to the ultimate decision. For example, the report referred to "long taxi distances" at DIA that might require "dual deicing for aircraft" adding to the costs of "time-sensitive operations." Additionally, the potential of higher landing fees and the lack of "competitively priced" land for private development were considered to disfavor DIA. Thus, the FAA concluded, "the DIA alternative is not as economical, efficient, and air cargo-oriented as Front Range Airport, and eliminated this alternative from further consideration and evaluation."
About two months after the entry of the ROD, the Denver Air Cargo Association and the major airlines serving Denver urged the city to relocate DIA's air cargo facility to the southern end of the site. A letter written by the president of the Denver Air Cargo Association stated:
These suggestions were later followed by letters from Emery Worldwide Airlines, Federal Express, and Airborne Express, stating their desire to locate operations at the southern end of the DIA site. Additionally, United Parcel Service expressed its interest in considering operations at DIA if DIA made a "firm commitment" to a southern cargo area.
Although, as petitioners assert, certain cargo carriers indicated various degrees of support for the Front Range project, it is equally evident they made a strong effort to convince Denver to relocate its cargo site. Denver's subsequent rearrangement of DIA in response to these activities provided the FAA with a significant and substantial factor to consider in determining the ultimate location of a metropolitan Denver air cargo hub.
Despite the advantages petitioners see in their site, the record demonstrates the substantial majority of cargo carriers galvanized around DIA's southern site and focused the FAA on the change in economic circumstances after the agency originally issued the ROD. The FAA had to consider how to weigh the overall economic viability of DIA's southern cargo site with the other factors mentioned in the ROD.
The FAA's decision to withdraw its tentative funding is not reviewable. The Administrative Procedure Act prohibits judicial review of an agency action committed to the agency's discretion by law. 5 U.S.C. § 701(a)(2). The Supreme Court has interpreted this exception to mean no judicial review where the statute provides no meaningful standard to judge the agency's action. Heckler v. Chaney, 470 U.S. 821, 830, 105 S.Ct. 1649, 1655, 84 L.Ed.2d 714 (1985). The allocation of funds from a lump-sum appropriation is traditionally regarded as committed to agency discretion. Lincoln v. Vigil, ___ U.S. ___, ___, 113 S.Ct. 2024, 2031, 124 L.Ed.2d 101 (1993). Congress may limit agency discretion to allocate resources by placing restrictions in the operative statutes. Id. ___ U.S. at ___, 113 S.Ct. at 2032. As long as an agency's allocation of a lump-sum appropriation meets permissible statutory objectives, a court has no jurisdiction to review that disbursement. Id.
The Airport Improvement Program, 49 U.S.C. app. § 2204, pursuant to which the FAA tentatively agreed to fund Front Range's expansion, provides no guidelines relevant to this controversy. However, 49 U.S.C. app. § 1349 prohibits the expenditure of federal funds for an airport facility unless it "is reasonably necessary for use in air commerce." The statute does not define that phrase, and the parties have not pointed us toward any regulations providing an explanation. "Reasonably necessary for air commerce" does not provide the court with a justiciable standard of review. That kind of determination is better suited to an administrative agency.
Petitioners argue the FAA should be estopped from reversing its original funding decision because the elements of equitable estoppel have been satisfied. FAA employees acting within the scope of their authority outlined the conditions precedent to federal funding of the expansion project which petitioners satisfied. Also, the FAA has promoted private-public initiatives to fund transportation facilities like the Front Range project. The FAA intended petitioners to rely on the funding letter, and petitioners did not know the FAA would withdraw from the Front Range project if DIA moved its cargo facilities to the south. As proof of that, petitioners continued to work with the FAA after DIA decided to relocate the cargo area. Petitioners relied on the agency's representations to its detriment by expending time, money and resources to fulfill the requirements necessary to obtain federal funding.
Even though we are sensitive to petitioners' predicament, the government may not be estopped on the same terms as other litigants. Heckler v. Community Health Servs. of Crawford County, Inc., 467 U.S. 51, 60, 104 S.Ct. 2218, 2224, 81 L.Ed.2d 42 (1984). Estoppel may be appropriate where an individual's interest in honorable, reliable dealings with the government outweighs the government's interest in enforcing the law free from estoppel. Id. at 60-61, 104 S.Ct. at 2224. The Ninth Circuit has said estoppel may be applied against the government when it acts in its sovereign or proprietary capacity, though courts may be more reluctant to estop the government for its sovereign activities. United States v. Lazy FC Ranch, 481 F.2d 985, 989 (9th Cir.1973). However, the Supreme Court has alerted the judiciary that equitable estoppel against the government is an extraordinary remedy. See Office of Personnel Management v. Richmond, 496 U.S. 414, 421-22, 110 S.Ct. 2465, 2469-70, 110 L.Ed.2d 387 (1990) (though the Supreme
To assert equitable estoppel against the government, the party seeking relief must show the government exhibited affirmative misconduct. Penny v. Giuffrida, 897 F.2d 1543, 1546 (10th Cir.1990). Affirmative misconduct means an affirmative act of misrepresentation or concealment of a material fact. United States v. Ruby Co., 588 F.2d 697, 703-04 (9th Cir.1978) (citations omitted), cert. denied, 442 U.S. 917, 99 S.Ct. 2838, 61 L.Ed.2d 284 (1979). Mere negligence, delay, inaction, or failure to follow agency guidelines does not constitute affirmative misconduct. Fano v. O'Neill, 806 F.2d 1262, 1265 (5th Cir.1987).
We see no misrepresentation or concealment in this case. In its initial funding letter, the FAA indicated funding was conditioned upon factors ultimately left unsatisfied. We therefore conclude petitioners have failed to meet their burden of proof.
In late 1992, Leonard Griggs, FAA's Assistant Administrator for Airports, and Thomas Richards, the FAA Administrator, informed Denver Mayor Wellington Webb of their interest in heading the Denver Aviation Department. In November 1992, Mr. Griggs recused himself from all matters involving DIA. Petitioners now allege Mr. Griggs's and Mr. Richards's actions created conflicts of interest or the appearance of impropriety because of their integral involvement in the Front Range and DIA projects and their ability to influence which airport would receive the cargo business. Petitioners insinuate the FAA made its decision to withdraw from the Front Range expansion after the presidential election with the knowledge Mr. Griggs and Mr. Richards would be seeking employment. Petitioners claim even though the FAA recognized this conflict, the agency failed to resolve it. As a result of this alleged impropriety, petitioners urge us to nullify the reversal order and reinstate the ROD.
The government specifically denies any impropriety, but argues petitioners' failure to raise the conflict claim before the agency precludes this court from hearing it now. The Federal Aviation Act proscribes judicial review of an order where objections were not first presented to the "Board or Secretary of Transportation" unless "reasonable grounds" excuse the failure to appeal to the agency. 49 U.S.C. app. § 1486(e). The application of the exhaustion doctrine is a matter of the court's discretion. Park County Resource Council, Inc. v. United States Dep't of Agric., 817 F.2d 609, 619 (10th Cir. 1987) (citation omitted).
Even if we were inclined to exercise our discretion, the circumstances of this case militate against it. Meaningful review is not possible because we have no factual record before us. Moreover, we cannot presume the agency would not have provided petitioners with an adequate remedy had the issue been raised before it. Accordingly, we choose not to deal with this issue.