Flyers Rights appealed the decision to the appeals court, which granted the petition for review in part and remanded it to the FAA.
The appeals court said the administration's denial of the petition "did not cite any studies or tests to corroborate its representations."
"As a matter of basic physics, at some point seat and passenger dimensions would become so squeezed as to impede the ability of passengers to extricate themselves from their seats and get over to an aisle. The question is not whether seat dimensions matter, but when," the opinion reads.
The court did not order the FAA to institute rulemaking, however. The FAA can deny the petition again but "must provide appropriate record support for its decision."
And the court also said the FAA was reasonable in declining to start a rulemaking process on the issue of deep vein thrombosis but saying it would monitor the effects of seat designs on safety and health.
Delta Air Lines and other carriers have been adding seats to planes to boost margins.
U.S. Rep. Steve Cohen, D-Tenn. has been pushing for legislation to set minimum seat sizes and distance between rows of seats to protect passengers' health and safety. He calls the legislation the "Seat Egress in Air Travel (SEAT) Act."
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"As many have no doubt noticed, aircraft seats and the spacing between them have been getting smaller and smaller, while American passengers have been growing in size," the opinion filed last week reads.