Appellate Court Rules Agency Was "Arbitrary And Capricious"

CSI Aviation Services, Inc. won a significant victory against the U.S. DOT last week when the United States Court of Appeals ruled in favor of the air charter company to continue providing — and without exemption — air transportation services to the federal government under its GSA Schedule.

“This is a great accomplishment for CSI and the air charter industry,” said Deborah W. Maestas, Executive Vice President and Chief Operating Officer at CSI. “The DOT’s failed interpretation of aviation law has been a burden on our company for far too long. The Court’s decision protects the air charter industry and allows CSI to continue meeting the pressing needs of the U.S. Government.”

In October 2009, the DOT sent a letter to CSI claiming that it had “been acting as an unauthorized indirect air carrier” and was asked to refrain from contracts under its GSA Schedule. Six other companies received similar letters and they immediately ended all GSA operations. CSI refused to acquiesce and challenged the agency’s orders. CSI then filed its case in federal court in December 2009.

“CSI alone chose to challenge DOT’s determination, asking the agency to withdraw … on the grounds that the Act requires a certificate of authority only for companies that operate ‘as a common carrier,’” the Court’s opinion stated. The Court found that it is “impossible to conclude that the agency’s … order was anything other than arbitrary and capricious, and hence unlawful.”

Since 1983, CSI has been serving the federal government with air transportation services and has held a U.S. General Services Administration Schedule since 2003.

FMI: www.csiaviation.com