In 1940, Congress authorized the Executive Branch to acquire a tract of land a few miles from the Capitol and to construct Washington National Airport, which remained under federal ownership and operation until 1987, first managed by the Civil Aeronautics Agency and later by the Federal Aviation Administration within the Department of Transportation.
A few years after National opened, the Truman administration proposed that a federal corporation be formed to operate the airport. Instead, when Congress authorized construction of a second major airport to serve the Washington area, it again provided for federal ownership and operation. Dulles International Airport (Dulles) was opened in 1962 under the direct control of the FAA. National and Dulles are the only two major commercial airports owned by the Federal Government. National is by far the busiest and most profitable of the three airports due to its central location.
In 1984 the Secretary of Transportation appointed an advisory commission that recommended transferring control of National and Dulles to a regional authority created by compact between Virginia and the District of Columbia, with an eleven-member Board of Directors appointed by the governors of Virginia and Maryland, the Mayor of the District, and the President. Virginia and the District both passed legislation authorizing the establishment of the recommended regional authority. A bill embodying the advisory commission's recommendations passed the Senate. In the House of Representatives, however, the legislation encountered strong opposition from Members who expressed concern that the surrender of federal control of the airports might result in the transfer of a significant amount of traffic from National to Dulles. Substitute bills were therefore drafted to provide for the establishment of a review board with veto power over major actions of MWAA's Board of Directors. After Congress received an opinion from the Department of Justice that a veto of MWAA action by such a board of review would plainly be legislative action that must conform to the requirements of Article I, section 7 of the Constitution. The Senate adopted a version of the review board that required Members of Congress to serve in their individual capacities as representatives of users of the airports.
The Transfer Act specified that the Board of Review shall consist of nine Members of the Congress, eight of whom serve on committees with jurisdiction over transportation issues and none of whom may be a Member from Maryland, Virginia, or the District of Columbia, and detailed the actions that must be submitted to the Board of Review for approval, which include adoption of a budget, authorization of bonds, promulgation of regulations, endorsement of a master plan, and appointment of the chief executive officer of the Authority, with disapproval by the Board preventing submitted actions from taking effect. The Act also authorized the Board of Review to require Authority directors to consider any action relating to the airports. It required that any action changing the hours of operation at either National or Dulles be taken by regulation and therefore be subject to veto by the Board of Review. The Act contained a provision disabling MWAA's Board of Directors from performing any action subject to the veto power if a court should hold that the Board of Review provisions of the Act are invalid.
On March 2, 1987, the Secretary of Transportation and MWAA entered into a long-term lease complying with all of the conditions specified in the then recently enacted Transfer Act. The lease provided for a 50-year term and annual rental payments of $3 million in 1987 dollars. After the lease was executed, MWAA's Board of Directors adopted bylaws providing for the Board of Review, and Virginia and the District of Columbia amended their legislation to give MWAA power to establish the Board of Review. On September 2, 1987, the directors appointed the nine members of the Board of Review from lists that had been submitted by the Speaker of the House of Representatives and the President pro tempore of the Senate. On March 16, 1988, MWAA's Board of Directors adopted a master plan providing for the construction of a new terminal at National with gates capable of handling larger aircraft, an additional taxiway turnoff to reduce aircraft time on the runway and thereby improve airport capacity, a new dual-level roadway system, and new parking facilities. On April 13, the Board of Review met and voted not to disapprove the master plan.
In November 1988, Citizens for the Abatement of Aircraft Noise, Inc., and two individuals who reside under flight paths of aircraft departing from, and arriving at, National brought this action against MWAA and the Board of Review, seeking a declaration that the Board of Review's power to veto actions of MWAA's Board of Directors is unconstitutional and an injunction against any action by the Board of Review as well as any action by the Board of Directors that is subject to Board of Review approval. The District Court granted the defendants' motion for summary judgment. A divided panel of the Court of Appeals for the District of Columbia Circuit reversed. Because of the importance of the constitutional question, the Supreme Court granted MWAA's petition for certiorari.