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BEFORE THE
DEPARTMENT OF TRANSPORTATION
OFFICE OF THE SECRETARY
WASHINGTON, D.C.
__________________________________________
)
)
LOVE FIELD SERVICE )
) DOCKET OST-98-4363
INTERPRETATION PROCEEDING )
)
__________________________________________)
REPLY OF LEGEND AIRLINES, INC.
I. INTRODUCTION
In responding to this Procedural Order, American Airlines (“American”), Dallas/Fort
Worth Airport (“DFW”), and the City of Fort Worth (“the American parties”) have multiple
objectives. As they have shown from the day they began their 30-year odyssey to put Southwest
out of business, they understand that delaying any action that could allow new Love Field service
will add to the costs of their competitors and make it more difficult for anyone to initiate business.
As a multi-billion dollar company that has been provided valuable worldwide assets by the United
States government, American questions the authority and veracity of those government officials.1
American duplicitously argues that there is “no emergency” which warrants this proceeding, yet
1
American’s new television ads repeat the theme that American already is pushing through newspaper and radio
ads: that Washington lawmakers are wrongly interfering in a local issue, and that Fort Worth and Dallas officials
should decide the fate of Love Field. (“Crandall drops through-ticketing opposition at Love,” Dallas Morning
News, December 3, 1997.)
says the issues involved are of “nationwide significance” in the very next sentence.2 (Comments
of American, p. 2). American criticizes the expediency of the Department of Transportation’s
(“Department”) interpretative proceeding, but rebukes Legend and other parties for trying to slow
the state court proceeding so as to be able to have the benefit of the Department’s decision.
The conflicting arguments raised by American demonstrate that their only objective is to
manipulate the system and expand their control of the market. American is willing to expend
several million dollars a month to prevent Legend Airlines and Continental Express from
operating. They fully understand that Legend, as a start-up carrier, does not have the financing
to expend that amount of money and resources indefinitely and that, at some point, the predatory
scheduling action taken by American against Continental (LaGuardia-Houston flights) will
eventually impose a cost on Continental that will force that carrier to change its Love Field plans.
An editorial in the Fort Worth Star-Telegram, dated September 25, 1998, explains the
delay strategy of the parties and the need to keep the issue in front of a Fort Worth judge who is
elected by the residents of a community in which American and DFW are the largest employers.
The editorial, in a newspaper in which the largest advertiser is American, stated:
Here’s to the chess master who thought so many moves ahead in
framing the lawsuit that Fort Worth filed to challenge efforts to
expand interstate commercial air passenger service at Dallas Love
Field.
That’s why Fort Worth’s lawsuit, filed in state District Judge Bob
McCoy’s court in Fort Worth, sought only a declaratory judgment
that Dallas has the authority to regulate air passenger service at
Love Field and the obligation to protect Dallas/Fort Worth Airport
from injurious competition at Love Field.
Had an injunction been sought to prevent Love Field expansion --
allowed by changes made by Congress in the Wright Amendment
2
American also states that “the Department is obligated immediately to halt Continental’s regional jet operations
from Love Field” (page 76), although it claims that these issue are not within the Department’s authority.
2
last fall -- then Dallas, the defendant, might have found solid
grounds for demanding that the lawsuit be transferred to federal
court.
The editorial discusses how the Shelby Amendment allows expansion at Love Field and
that the effect of the court action is to enjoin services permitted by that federal law. Nevertheless,
in board rooms at DFW and Fort Worth, a celebration is in order because the state court has
already imposed new costs on Legend, Continental Express, and Dallas, has further delayed the
date of possible new competition, allowed discovery denied by the Department, and has allowed
American to expand its control over airline service in the entire area. Moreover, this state court
judge has effectively delegated to Fort Worth’s counsel the preparation of a summary judgment to
block scheduled airline service. Judge McCoy, who was recently asked who is the head of Civil
Aeronautics Board, has apparently decided that he is, along with other members being Dee Kelly,
Don Carty and Jeff Fegan.
The American parties are evidently more interested in delaying and setting up a basis to
appeal the Department’s order than they are in responding to it.
II. SUMMARY OF LEGEND’S POSITION
In its comments, Legend presented answers to five of the six questions posed by the
Department in its Orders implementing these proceedings:
1. Neither a four-state perimeter rule nor a flexible, ad hoc control over Love Field
are justifiable by the legitimate needs of a multi-airport proprietor. The local controls are,
therefore, completely preempted by 49 U.S.C. § 41713(b)(1). National Helicopter Corp. v. City
of New York, 137 F.3d 81 (2d Cir. 1998).
3
2. The Shelby and Wright Amendments obviously and similarly preempt any local
action, including the proposed Love Field perimeter rule, that seeks to nullify those Acts of
Congress. California Fed. Sav. & Loan Ass’n v. Guerra, 479 U.S. 272 (1987).
3. The Department’s prior decisions regarding the commuter airline exemption of the
Wright and Shelby Amendments are correct, and 56-seat aircraft may provide unlimited service
from Love Field. See Continental Air Lines v. Department of Transportation, 843 F.2d 1444,
1454 (D.C. Cir. 1988).
4. The Wright Amendment permits unlimited operations by 56-seat aircraft, with no
restrictions on through ticketing, interlining, or ticket sales.
5. The Department has the authority to apply its expertise to the issues in this
proceeding, and the Fort Worth parties’ race to the Tarrant County courthouse do not deprive the
Department of jurisdiction over federal aviation matters. See New England Legal Foundation v.
Mass. Port Auth., 883 F.2d 157 (1st Cir. 1989).
In addition, Legend has shown that:
1.) the controls over operations, routes, and services at Love Field are exclusively
federal;
2.) Dallas’ extremely limited proprietary powers over Love Field do not permit
local regulation except in extremely narrow circumstances and under strict
requirements of the Airline Deregulation Act and the Commerce Clause; if the
restrictions imposed by the Wright Amendment were locally imposed, they would
be unreasonable, arbitrary and discriminatory;
3.) Dallas’ proprietary powers certainly do not permit DFW to determine the
routes and types of planes that can be operated at Love Field;
4) The Department has clearly affirmed Legend’s authority to use any size
aircraft with 56 seats or less and that regional jets are permitted under the Wright
Amendment.3
3
In a “Joint and Agreed Motion of Petitioner and Respondent To Dismiss Petition for Review” (Astrea Aviation v.
Department of Transportation, No. 96-60802, November 5, 1997) the parties stated:
4
The American parties have opposed the City of Dallas, Southwest, and Legend on each of
these issues. Resorting principally to disingenuous arguments and misleading or untrue factual
statements, these three parties contend that the Department of Transportation has no authority,
special expertise, or jurisdiction over these matters and must defer to the Tarrant County court.4
In any event, they say, the pre-eminent power in the federal aviation system is the proprietary
power of the airport owner (even one such as the City of Dallas that does not claim to have
exercised such power), and its allies. The American parties contend that an airport owner can do
whatever it wants, whenever it wants, without government interference.5 The primary purpose of
the Deregulation Act, according to the American group, was to keep meddlesome federal
agencies off the backs of the entities that own and control the airports. Moreover, if there are
questions concerning rulings on such issues, the American parties should be decided by a local
state judge.
The filings submitted by the American parties to the Department are loaded with irrelevant
material. They reflect an unprincipled approach that is obviously designed merely to delay these
proceedings. While the Department considers the American parties’ warped legal analyses,
twisted techniques of statutory interpretation, and mountainous irrelevant exhibits, the American
Pursuant to the Act, the Petitioner, or any other air carrier, may pursuant to
29(a)(2) of the International Air Transportation Act of 1979, operate jet
aircraft reconfigured to accommodate 56 or fewer passengers, except for
aircraft exceeding 300,000 pounds gross weight, from Love Field to any
destination.
4
They claim that an elected state court judge with no experience in aviation or transportation should rule on issues
involving safety, congestion, the development of DFW, impact on international routes, and prohibit interstate
commerce. They are also asking the state court to review the procedures and validity of Department orders and
interpretation. They are asking this judge to decide whether the Department can fairly rule on these issues and on
issues he has already decided. If not, they have asked him to hold that these issues belong before him..
5
parties continue to run roughshod over the aviation system in Texas. These tactics should not be
countenanced or rewarded by the Department. For the reasons set forth below, and those in
Legend’s Comments, the Department should issue an Interpretive Order with all due haste and
take every additional measure available to re-establish federal controls and the rule of law over the
federal aviation system. Too much is at stake!
III. DISCUSSION
A. The supposed Love Field perimeter rule, which has never been
enacted by anyone with any proprietary interest in Love Field, is
preempted by federal law.
As noted in Legend’s Comments, there has never been a locally enacted perimeter rule in
Dallas or even an agreement to create one. The Joint Bond Ordinance only requires the “phase-
out” of Love Field. It contains no perimeter restriction on operations. Similarly, the DFW
construction contract (generally referred to by American) contains no provisions related to any
routes or services offered at Love Field. Dallas and Southwest agree. See Dallas Comments,
p. 28 (Fort Worth intends to force Dallas to impose and enforce a “perimeter rule demanded by
Fort Worth” but never agreed to by Dallas); Southwest Comments, p. 24 (it is unclear whether
the “local agreement” limits service to the State of Texas “or was somehow transmogrified
through a process we do not understand to include both Texas and its four contiguous states, as
Fort Worth now contends.”)
The American parties insist that there exist locally imposed enforceable restrictions on
Love Field. The Comment briefs are, however, comically inconsistent with each other, and they
barely even attempt to articulate the bounds of this vaporous perimeter rule. American seems to
5
If the American parties are correct in the ability of the local parties to overturn the Wright Amendment, their
next action could be to limit all flights to the state of Texas. But then again, if they can do that, why did they have
to litigate against Southwest?
6
argue that the Love Field perimeter is flexible, as long as the airport is limited to “short-haul
operations.” American Comments, p. 29. The DFW Board, on the other hand, asserts that Dallas
has implemented a hard-and-fast rule banning all interstate operations. See DFW Comments,
p. 16.
Fort Worth avoids the specifics asked in the question, and instead provides various
examples of proprietary powers, concluding that proprietary powers can be exercised to
“accomplish a limited state objective.” Fort Worth chooses not to address whether the scope of
proprietary powers (which have been upheld in a limited number of cases) is so broad as to permit
the type of restrictions they want at Love Field. The reason, very simply, is they cannot. In its
hometown court, Fort Worth has obtained a TRO and preliminary injunction against Continental
Express because Continental’s Cleveland service would violate “a perimeter rule at Love Field
which confines interstate traffic to Texas and the four contiguous states.”6, 7
This failure by the
American parties to honestly discuss the perimeter rule is not due to sloppiness or an inadvertent
admission. Rather, the American group is trying to “hide the ball.” The American parties have
repeatedly failed to produce any such agreement. By refusing to discuss the actual facts and
issues, and to stick to “one” position, they seek to inhibit the Department’s review of the issues.
The Department should not be deterred by the American parties’ sleight of hand regarding
the nature of the supposed perimeter rule. It does not matter whether Fort Worth seeks a five-
state perimeter rule or a broad right to shift traffic between DFW and Love Field. All
6
Fort Worth’s Brief in Support of its Temporary Injunction and Temporary Restraining Order, Fort Worth v.
Dallas, No. 48-171109-97, p. 8. Fort Worth has also persuaded the Texas Supreme Court that there exists an
agreement between Dallas and Fort Worth to “allow ‘turn around flights’ to states adjacent to Texas from Love
Field.” In re Continental Airlines, No. 98-0598 (Texas, Sept. 24, 1998).
7
Or, as Dee Kelly explained the court’s action, “Continental is a marginal player at D/FW. They don’t care about
D/FW,” he said. “Their big concern is their hub at Houston Intercontinental. Their plan is obvious: They want to
weaken D/FW and strengthen Intercontinental at Houston. We have one of the best airports in the world, and they
7
articulations of the supposed locally imposed perimeter rule, particularly those in the Tarrant
County case, are arbitrary and discriminatory, and are the type of locally imposed restrictions that
have been vehemently opposed by these same American parties. If locally imposed, they would
violate the Deregulation Act, Commerce Clause, and the Airport & Airway Improvement Act.
The restrictions on scheduled operations at Love Field were imposed by the Wright
Amendment, as modified by the Shelby Amendment. The only reason why this rule has survived
is because it is imposed by federal law. In this connection, it is interesting that throughout the
history of the litigation brought against Southwest Airlines to stop it from operating at Love
Field, this local control over the airport was never raised by the American parties. Moreover, it is
difficult to ascertain exactly what the American parties define as the locally imposed rules
controlling Love Field operations. For example, although the American parties have argued that
through ticketing at Love Field is not permissible under the Wright Amendment (the Department
has also held that through ticketing is not permitted), and that the Shelby Amendment is not
applicable since it has not been agreed to by the local parties, they have decided not to challenge
or even question Southwest’s new through service to Jackson and Birmingham.8 If the Shelby
want to level the playing field.” (Fort Worth Star-Telegram, June 26, 1998.) Imagine the power of three flights a
day to Cleveland.
8
On November 7, 1997, Fort Worth’s counsel, Dee Kelly, served requests for admissions to the City of Dallas
seeking acknowledgment that the cities of Fort Worth and Dallas had, in connection with the sale of Dallas-Fort
Worth Regional Airport bonds, issued an official statement dated May 29, 1997, as attached as Exhibit 3 to their
request. That official statement contains the following definition of permissible Love Field services at p. 34:
A carrier providing service to Love Field to a point in one of the four
contiguous states is not forbidden from providing service from that point to
other points in other states beyond, but it could not do so in a continuation of
the same flight to or from Love Field, or on the same aircraft coming from or
going to Love Field, and it could not advertise or promote its service to points
in states beyond. While it could not sell through tickets, publish through
schedules or offer through fares between Love Field and points beyond the
contiguous states, its usual ticketing, scheduling and rate making practices
would not otherwise be effected.
8
Amendment does not control Love Field operations, then Southwest must stop its through
ticketing to Birmingham and Jackson.
Under this definition, Southwest could not operate its newly introduced connecting services to Jackson
and Birmingham.
A modified version of Love Field authority derives from the 1998 Appropriations Act (Shelby
Amendment) and the operations of Southwest Airlines to which American has never objected. As a result of the
Shelby Amendment, Southwest now offers continuation of flights to and from Love Field to points beyond the
contiguous states. Southwest advertises, promotes, and publishes schedules and fares for such service, noting that
“Service on these routes was not previously possible, because flights from Lubbock, Amarillo and Midland-Odessa
stopped at Love Field.” Since the American parties have not challenged Southwest’s service, its definition of local
Love Field restrictions appears to vary with the wind or its assessment of competitive impact.
In 1997, Congress adopted an amendment sponsored by Senator Richard Shelby of Alabama
(the “Shelby Amendment”), which expanded the permissible geographic scope of service from
Love Field to include the States of Alabama, Mississippi, and Kansas. The Shelby Amendment
also modified the Wright Amendment to define the term “passenger capacity 56 passengers or
less” as including any aircraft of 300,000 pounds or less gross weight, “if the total number of
passenger seats installed on the aircraft does not exceed 56.” Public Law 105-66, §337.)
Recognizing the Shelby Amendment to be the law of the land, on or about November 11, 1997,
Southwest began offering for sale through and connecting service between Love Field and both
Jackson, Mississippi and Birmingham, Alabama. In addition, the Shelby Amendment has
allowed Southwest, for the first time, to offer for sale service between Lubbock, Texas and
Birmingham; between Amarillo, Texas and both Jackson and Birmingham; and between
Midland-Odessa, Texas and Birmingham. This service was not previously available because the
flights serving Lubbock, Amarillo, and Midland-Odessa all stopped at Love Field, meaning
through and connecting service could not be offered beyond Texas and the contiguous states.
The relief requested by Fort Worth in the Fort Worth lawsuit would declare that this service
must stop.
Brief of Southwest Airlines, U.S. District Court for the Northern District of Texas, March 27, 1998.
The benefits of expanded Love Field service are clear. As Southwest noted in its press statement when it
launched service permitted by the Shelby Amendment:
Following enactment of the new law by the Congress, Southwest introduced connecting
service between Love Field and both Jackson, Mississippi and Birmingham, Alabama on
November 11, 1997. With Southwest’s new service, unrestricted fares in those markets
were more than cut in half, dropping from $324 to $149 in the Dallas-Jackson market, and
from $480 to $189 between Dallas and Birmingham.
“Our ability to serve markets from Love Field is not just an issue of local concern, it is a
matter of national concern,” Kelleher added. “For example, when Southwest added Jackson
and Birmingham as destinations from Love Field, it also allowed us to offer service for the
first time from Lubbock, Amarillo, and Midland-Odessa to Birmingham, and from Amarillo
to Jackson.” Service on those routes was not previously possible, because flights from
Lubbock, Amarillo and Midland-Odessa stopped at Love Field.
9
Some of the confusing and conflicting statements made by representatives of the American
parties in state court include:
“The contract between the two cities is what this lawsuit is all about
. . . this contract has not been preempted and cannot be preempted
by federal law.”
“The commuter exception to the Wright Amendment does not
preempt the covenants or the proprietary powers of Dallas to
maintain the four-state perimeter rule at Love Field.”
“Neither the Wright Amendment or the Shelby Amendment has
preempted the proprietary rights of the City of Dallas to manage its
own airport.”
Now, even if the Wright Amendment was deemed to modify the
covenants, and the covenants were never modified, its still would
not preempt the proprietary power of Dallas.”
There’s simply no legal impediment to Dallas exercising its
proprietary rights, proprietary powers to maintain the existing four-
state perimeter rule.”
(Dee Kelly, representing Fort Worth)
“There is nothing in the Wright Amendment or the Shelby
Amendment that states that the proprietors of an airport cannot
enact a more restrictive perimeter rule than that contained within
the amendments themselves. There is no language in the Wright or
Shelby Amendments forbidding more restrictive terms by
agreement of the parties.”
(R.H. Wallace, representing DFW Airport Board)
“Continental’s actions violate the covenants and the existing four-
state perimeter rule at Love Field.”
(Dee Kelly, representing Fort Worth)
“The question at the hearing on this temporary injunction for the
court to resolve is whether or not the DFW Airport Board is
entitled to preserve the status quo . . . And preserving the status
quo here means enjoining Continental Airlines, Inc. and Continental
Express, Inc. from conducting direct interstate flights between
Dallas and Cleveland.”
(R.H. Wallace, representing DFW Airport Board)
10
“The commuter exception to the Wright Amendment does not
authorize Continental flights to Cleveland. All the commuter
exception did was to authorize the CAB to certificate commuter
airlines with 56 seats or less. It did not, by any stretch, authorize
long-haul jet service from Love Field.”
(Dee Kelly, representing Fort Worth)
“What they (opposing counsel) try to argue is that because of the
Wright Amendment and Shelby Amendments, those have somehow
preempted the Use Agreement . . . The Wright Amendment doesn’t
grant any airline the right to do anything.”
(R.H. Wallace, representing DFW Airport Board of Directors)
Perhaps the best response to the contradictory and rapidly changing positions of the
American parties was stated by counsel for Continental:
“The question then has to be raised is why is it that it is all right for
us to fly under the Wright Amendment -- under portions of the
Wright Amendment but not all of it.”
(Randy Wilson, representing Continental Airlines)
Is it a contract? Where does the four-state perimeter rule come from if not Section (c) of
the Wright Amendment? Apparently the American parties believe they can even reduce the four-
state perimeter to impose a two-state or one-state perimeter rule that would force Southwest to
cancel existing operations.
To add confusion to the ever-changing position of the American parties, on December 3,
1997, American’s former chairman, Bob Crandall, stated:
. . . the airline no longer opposes ‘through ticketing’ from Dallas
Love Field.
Through ticketing would let Love Field travelers buy tickets to
airports throughout the United States, although the passengers
would still have to make at least one stop inside Texas or states
adjoining.
Asked about through ticketing, a practice American has previously
opposed from Love Field, Mr. Crandall said the airline doesn’t care
11
about passengers willing to make one or more stops in Little Rock,
Ark., Albuquerque, N.M., or other cities inside the restricted area.
Therefore, under this American “alternative,” through ticketing is okay under the Wright
Amendment (although not through the states added by the Shelby Amendment).9 So which is it?
Does the Wright Amendment apply with or without through ticketing, or does the Shelby
Amendment apply? According to the American parties, it depends who is asking and who
benefits. Apparently, Crandall, Carty and American believe that they will decide what limitations
exist on Love Field operations.
As noted in the Comments of Legend, Dallas, Southwest, and Continental Express, the
preemption provision of the Deregulation Act sweeps wide, while proprietary powers are tightly
circumscribed. See, e.g., National Helicopter Corp. v. City of New York, 137 F.3d 81 (2d Cir.
1998); Centennial Express Airlines v. Arapahoe County Public Airport Authority, FAA Docket
No. 16-98-05, Director’s Determination (1998). Any local restriction on routes or services is
invalid unless it is narrowly tailored to meet specific, demonstrated needs of the landlord, such as
addressing noise and groundside congestion problems. See, e.g., Western Air Lines v. Port Auth.
of N.Y. and N.J., 817 F.2d 952, 957 (S.D.N.Y. 1986) (expressly noting that a multi-airport
proprietor may “allocate air traffic” as a means of advancing its proprietary interest in addressing
noise or ground congestion problems.)
9
Contrast this Crandall position on through ticketing and the American parties’ acquiescence to Southwest’s
through ticketing to Birmingham and Jackson to their challenge of Continental’s through ticketing with 50-seat
regional jets:
Continental’s through ticketed, through service from Love Field to points
outside Texas in two aircraft -- one fewer than 56 seats and one with more --
clearly violates the Wright Amendment. If the Department is to comply with
its mandate in paragraph (a) of the Wright Amendment, the Department is
obligated immediately to halt Continental’s regional jet operations from Love
Field.
(Comments of American Airlines, Inc., Docket OST-98-4363, p. 76.)
12
The American parties argue that federal preemption is virtually nonexistent in aviation
matters. In violation of their ethical obligations to apprise the decision maker of all pertinent
authority, none of these parties cite, discuss, or distinguish the two most recent and persuasive
authorities on local regulation of air services: National Helicopter and Centennial Express.
These two cases present indistinguishable circumstances and indicate that the American parties’
attempts to exert local control over Love Field operations are contrary to federal law. As noted
by the Court of Appeals, “The proprietor exception, allowing reasonable regulations to fix noise
levels at and around an airport at an acceptable amount, gives no authority to local officials to
assign or restrict routes.” National Helicopter, 137 F.3d at 92.
Instead of discussing National Helicopter, the American parties rely on an odd collection
of miscellaneous legal principles to establish that the proprietary powers of an airport landlord
stand preeminent, without federal oversight or interference. American, for example, cites a
Solicitor General’s brief on a failed petition for certiorari (p. 24), the FAA’s 1981 perimeter rule
for Washington National (p.26), 1981 letters from the Secretary of Transportation to U.S.
Congressmen (p. 27), and a 1981 appellate brief in City of Houston v. FAA, 679 F.2d 1184 (5th
Cir. 1982). Fort Worth and DFW pin their arguments on Western Airlines (upholding the
LaGuardia perimeter rule), City of Houston (upholding the Washington National perimeter rule),
and Arapahoe Co. Pub. Airport Auth. v. Centennial Express Airlines, Inc., 956 P.2d 587 (Colo.
1998). They do not acknowledge that the Department has already decided that Arapahoe Co.
was wrongly decided. See Centennial Express.
The American parties also rely heavily on legislative history -- ranging from the statements
by Congressman Wright to committee reports -- to support the notion that Congress enacted the
Wright Amendment as a means of establishing Love Field as a short-haul airport. The Wright and
13
Shelby Amendments clearly articulate how Love Field operations are to be constrained, any
discussion of why the restrictions are in place can only be misleading. When statutes contain
particular, detailed instructions regarding conduct, there is little need to consult statements made
by legislators to divine Congress’ intent. See Davis County Solid Waste Management v. U.S.
E.P.A., 101 F.3d 1395, 1405 (D.C. Cir. 1996). Moreover, the Department addressed this
argument and subsequently dismissed it.
It follows, then, that Petitioners can derive no support from
Congressman Wright’s statements that the legislation was intended
to reexpress the right of local authorities under the Deregulation
Act to prohibit service inconsistent with regional airport plans. In
fact, the Love Field Amendment does nothing of the sort. Rather,
Congress authorized interstate service over the objections of the
local authorities.
(Brief of U.S. Department of Transportation, Continental v. U.S. Department of Transportation,
page 44, 1986.)
As discussed at length in Legend’s earlier filing (as well as in Southwest’s filing), the
original purpose of the Wright Amendment was to close Love Field and eliminate Southwest as a
competitor by forcing it to operate at DFW. After failing to achieve that primary objective, the
Wright Amendment compromise allowed Southwest to continue its existing service to the five-
state area. There was no discussion of it as a perimeter rule nor was there any debate about it
being a short-haul airport. Of course, Congress could have made sure that the only service
permitted was within the perimeter rule, with no service beyond those points, by excluding the 56-
seat provision; however, that provision was inserted. Nevertheless, by allowing any size jets to
operate within the five-state area and limiting beyond service to aircraft with no more than 56
seats, Congress’ action ensured that Love Field would remain as an airport with a primary focus
on short-haul traffic. First, limiting any air carrier to operate with no more than 56 passengers is
14
an enormous penalty for any air carrier to accept. No such limitation exists at any other airport in
the United States. Not until 1998, when Continental Express had regional jets with 50 seats and
Legend proposed operations under the Shelby Amendment, did any carrier attempt to operate
under this extremely limiting provision. Second, considering that Southwest and any carrier
wishing to operate jets within the seven-state Shelby Amendment area can operate any size jets,
the number of passengers boarded for those operations will always be significantly greater than
passengers boarded on Legend’s 56-seat aircraft or Continental’s 50-seat aircraft. Based upon
these seat restrictions, gate limitations at Love Field, and Legend’s projections, operations beyond
the seven-state area will not exceed 5% of total Love Field boardings nor will they exceed more
than 0.5% of the total DFW/Love Field boardings. As American adds to its fleet and
construction continues at DFW, that percentage will be even smaller.
Although the Shelby Amendment clarified the size of aircraft that can be utilized beyond
the seven-state area, it did not increase the number of seats permitted on those aircraft.
Therefore, Love Field will continue as an airport in which the primary number of operations and
passengers boarded will be destined for short-haul markets. However, since the American parties
(see Bob Crandall’s statement) are now claiming that through ticketing is permissible, the
implementation of through ticketing by Southwest will have a larger impact on changing the
short-haul nature of Love Field than will Legend’s limited operations.
In contrast to the approach of the American parties, the comments of Dallas and
Southwest properly integrate the holdings of the two perimeter rules that have been upheld, along
with the numerous attempts to impose local restrictions that have been overruled. See Dallas
Comments, pp. 20-28. As noted by Southwest (pp. 24-25), the proposed perimeter rule is invalid
because (a) it burdens interstate commerce, (b) it does not advance an appropriate proprietary
15
interest, (c) it is arbitrary and unreasonable, and (d) it is unjustly discriminatory. Remarkably, the
American-dominated parties do not even attempt to discuss why their proposed perimeter rule is
reasonable.
American’s arguments regarding Dallas’ proprietary rights are deficient also because
there is no factual basis for the contention that Dallas is a proprietor of DFW. Status as a
proprietor depends upon ownership and control of aviation activities at the facility. Centennial
Express, p. 30. Although Dallas may appoint 7/11 of the DFW Board members, it has no right to
control DFW’s operations.10
The American parties simply contend, without citation to authority, that a proprietor has a
right to do whatever it wants, as long as there is another airport nearby to receive all air traffic
without discrimination. See DFW Comments, p. 29. Imagine the impact on commerce if this
same principle applied throughout the country and airports were free to shift traffic at will to
other airports. This principle is fundamentally wrong because it ignores the strict requirement
that any “restrictions on rates, routes and services” must be “reasonable, non-arbitrary and non-
discriminatory.” Centennial Express, p. 28, citing British Airways BD v. Port Authority of New
York, 558 F.2d 75 (1977). Although the American parties claim that their rights flow naturally
from the perimeter rules at LaGuardia Airport and Washington National, those rules are markedly
different and a review of those rules show why the already imposed Wright Amendment would be
“unreasonable, arbitrary, and discriminatory.” For comparison:
Love Field National LaGuardia
Mileage not specific but 1250 miles 1500 miles
flights as short as (about to with exceptions
10
The DFW Board’s lawsuits against the City of Dallas make any notion that Dallas controls the DFW Board
implausible.
16
333 nonstop miles change again)
blocked -- Service
not permitted to:
Wichita - 333 miles
Jackson - 397 miles
Memphis - 423 miles
Kansas - 460 miles
Aircraft 56-seat limit for flights NONE NONE
Limitations outside of Texas and
border states
Amendments NONE Perimeter NONE
rule changed
from 650 to
1,000 to 1,250
and changes in
definitions of
commuter carrier
Proprietor City of Dallas Metropolitan Port Authority
Washington Airports of New York/
Authority - also New Jersey - also
controls Dulles controls Newark
Airport Airport and Kennedy
Airport
Operational NONE Maximum Maximum
Restrictions hourly limits hourly limits
set by FAA set by FAA
Runway None - used by Limited by FAA to Limited by FAA to
Limitations largest aircraft in Narrowbodies, 3-engine jets,
world including 757s DC-10s, 767s
Air Force One
17
Other Ban on through NONE NONE
Restrictions ticketing, advertising
of fares.
Basis for Protecting largest airport Protecting Airport limitations
Restriction in country and one of airport with and protecting
largest carriers significantly airport with
smaller number significantly
of operations smaller number
(Dulles) of operations
(JFK)
There is little question that a local proprietor, if it actually attempted to control operations with
rules similar to the restrictions imposed by the Wright Amendment, would be found to be
engaging in unreasonable, arbitrary and discriminatory activity.11
The American parties’ recent conversion to advocating “proprietary rights” for Dallas is
remarkable in light of American’s strenuous past efforts to defeat the (much more reasonable)
perimeter rule at Washington National. In a 1981 appellate brief, for example, American stated:
Does Love Field Have a Perimeter Rule?
No!
The perimeter rule [at National] is unique. No similar regulation
applies to any other airport in the United States.
11
Although the Wright Amendment has been modified by the Shelby Amendment, the American parties deny that
the Shelby Amendment applies to Love Field since they haven’t agreed to federal law. See Don Carty’s July 6 letter
to employees, in which he states:
Last fall, at the urging of a Senator from Alabama, Congress modified the
Wright Amendment to permit service from Love to three more states
(Alabama, Mississippi, and Kansas), and to allow commuter service from
Love using large jet aircraft reconfigured with 56 seats or less. But neither
Dallas nor Fort Worth has approved this modification, and they must do so
before it can take effect and modify the 1968 bond ordinance.
This was similar to the position taken in 1981 by Bob Crandall when he advised the FAA that American would not
comply with the National Airport perimeter rule.
This comparison assumes that the American parties are correct and that Love Field restrictions imposed by the
Wright Amendment were actually imposed locally, although a local “perimeter” restriction similar to the Wright
Amendment would be “unreasonable, arbitrary, and discriminatory.”
18
Should Proprietors Impose Perimeter Rules
No!
The perimeter rule is not required for operational or geographic
reasons. The airplanes that serve National are capable of providing
nonstop service to points well beyond the 1,000 mile limit.
(Brief for Petitioner American Airlines, American Airlines, Inc. v. FAA, United States Court of
Appeals for the Fifth Circuit (No. 80-2251), page 4, January 22, 1981.) In the same brief,
American noted:
The Port Preference Clause is the antecedent of the anti-
discrimination provisions of the Federal Aviation Act and the
Interstate Commerce Act. As such, the principles of the Port
Preference Clause are fundamental and of continuing importance.
The perimeter rule should therefore be declared unconstitutional. . .
By drawing a circle with a 1,000 mile radius around National the
perimeter rule clearly discriminates against the states outside the
perimeter in favor of the states within the perimeter.
Id., page 8-9, 14.
One of American’s chief allies in Congress, Senator John Tower, advised the FAA that
the National perimeter rule was irrational:
National Airport represents a unique national asset that should be
shared equitably and nondiscriminatorily by every state and every
city in this nation. National is the only airport providing “close-in”
service to the nation’s capital. Access to National Airport must be
available to all cities in this country on a fair, equal and non-
discriminatory basis. Rather than limiting the availability of non-
stop service to only a few cities which by mere geographic
happenstance are located within an arbitrarily-determined
perimeter. . .
* * *
The perimeter rule is anticompetitive, impedes air commerce,
inconveniences the travelling public, and artificially creates
economic inefficiencies. (emphasis added)
* * *
19
Moreover, the imposition of a prohibition by the federal
government against the operation by all air carriers of service is a
fundamental violation of Congress’ aviation policies as set forth
in the Airline Deregulation Act of 1978 which requires the
federal government to place “maximum reliance on competitive
market forces . . . to provide the needed air transportation
system.” (emphasis added)
* * *
There is simply no rational basis for permitting some cities, such as
Miami or Minneapolis/St. Paul, to receive nonstop service to
National while prohibiting other cities, such as Houston and
Dallas/Ft. Worth, from receiving nonstop service to National.
* * *
Moreover, there will be no significant deterioration of service at
Dulles Airport.
(Letter from Senator John Tower to FAA, May 19, 1981.)
Congressman Wright made a similar plea on behalf of American:
I surely have no objection to the FAA paying heed to the legitimate
concerns of its friends on the Hill. In fact, I would like to think that
I might qualify as such a friend.
* * *
But the point is that Dallas-Fort Worth, the hub for both American
and Braniff, is outside the magic circle. This leaves these two
airlines -- important constituents of mine, you know -- standing
forlornly on the outside looking in, like hungry kids gazing through
a candy store window.
* * *
American and Braniff are going to be subjected to grave
competitive disadvantage in providing one-stop service to the West
Coast, not to mention service to DFW and to Houston themselves.
* * *
I think you will recognize how seriously this would handicap these
companies and the many thousands of my constituents who work
for them.
(Letter from Congressman Jim Wright to the Secretary of Transportation, September 18, 1981.)
American, of course, took a more confrontational approach:
The FAA has no statutory authority to impose a 650-mile
perimeter rule at Washington National Airport, or indeed to impose
any perimeter rule that cannot be justified by operational or
20
geographic considerations. Moreover, the 650-mile rule is arbitrary
and capricious, in violation of the Administrative Procedure Act
and the due process clause of the Constitution. It unreasonably
discriminates among air carriers by arbitrarily favoring those whose
primary traffic-exchange points or hubs are within the perimeter;
the rule, with its seven exceptions, has no rational basis; and it is
inappropriate to achieve the FAA’s announced goal of promoting
National as a short-haul airport.
* * *
. . . the FAA itself, in opposing a 500-mile perimeter rule
proposed by the Orange County Airport in California, recently
advised that such a limit is in conflict with the Airline Deregulation
Act of 1978 “since that Act places the responsibility for decisions
concerning air carrier service, in terms of routes and markets to be
served, on air carriers and the pressures of competitive market
forces.” See FAA letter to Board of Supervisors of Orange
County, May 1, 1981.
* * *
. . . in imposing a perimeter rule at National Airport on the basis of
these provisions, the FAA has used the general regulatory authority
of the Federal Government to achieve an essentially local,
proprietary end in response to local political pressure to restrict the
use of National Airport. No other airport proprietor in the United
States is afforded such license; indeed, as shown in Attachment 5,
the FAA is vigorously opposing the imposition of perimeter rules
by another airport. If such rules are not proper strategies for non-
Federal airports, they hardly become proper merely because the
FAA can cite generalized provisions of Federal statutes to support
its claim.12
* * *
There is no basis for discriminating between states within the
perimeter and those outside it, and there is no ground for
distinguishing between the seven named cities exempted from the
perimeter rule and Dallas/Ft. Worth, which meets the same
standard of historic nonstop service to National Airport.
Supplemental Brief for Petitioner American Airlines, Inc., American Airlines, Inc. v. Federal
Aviation Administration, et al., U.S. Court of Appeals for the Fifth Circuit, (No. 80-2251),
August 26, 1981.
12
See British Airways Bd. v. Port Authority of New York, 558 F.2d 75, 84 (2d Cir. 1977), stating that an airport
proprietor has the power to issue reasonable, nonarbitrary and nondiscriminatory regulations with respect to noise
21
The American parties’ suggestion that routes and services at Love Field are under the
control of some local party -- the DFW Board, the City of Dallas, the two cities together and
individually -- without regard to federal interests, is a recent invention. Whatever scheme they
would advocate today has no legal basis. It is simply a blatantly anticompetitive tactic to delay
the legitimate operations of Legend and Continental Express.
Once again, American has contradicted its positions on Love Field service with its own
use of regional jets and with agreements it has made over the past decade as to use of commuter
aircraft at high density airports. In a September 8, 1998 press announcement, American’s wholly
owned commuter airline, American Eagle (“the world’s largest regional airline”), announced that
it placed an order for 75 ERJ-135 jets from Embraer Aircraft with an option for 75 additional
aircraft. Eagle President Dan Garton stated, “This will allow us to enhance customer service in a
big way. It will bolster our competitive position by helping us transition to a mostly jet fleet
within the next six years.”
The ERJ has 37 seats and, according to the data attached to the press release, it has a
standard range of 1,350 nautical miles. Therefore, when flown from DFW, this long-haul
commuter aircraft will be able to reach any city in the United States. Apparently, American
Eagle will provide commuter service to its passengers with 37, 50, and 70-seat regional jets from
every airport it serves, including DFW, although it claims that none of these aircraft can be
utilized at Love Field (just a few miles away from DFW) because “commuter airlines” never offer
“long-haul service to any city in the United States.” As noted by these announcements, and the
statement by Bob Crandall that turboprops will disappear from the market, American believes that
no commuter aircraft can operate under the commuter provision of the Wright Amendment.
levels, but “[a]ny other conduct by an airport proprietor [restricting airport access] would frustrate the statutory
22
In its comments to this docket, American states:
Whatever else might have been included in the meaning of
“commuter airline,” there can be no question that “commuter
airlines” never offered “longhaul service . . . to any city in the
United States.”
(Comments of American Airlines, Inc., Docket OST-98-4363, p. 45.)
That comment has been contradicted a number of times in comments submitted to the
FAA over a several-year period.
Under American’s Love Field position (shared by their partners, DFW and Fort Worth),
larger turboprops or any size regional jet cannot be utilized to cities as far away as 333 miles from
Love Field. They take this position although American now operates 110-seat jets at O’Hare
after convincing the Department that such jets are “commuter” operations, and can now operate
regional jets to the other high density airports to fulfill a Congressional mandate to increase
commuter service for small communities, at one airport in the country. Of course, what American
doesn’t acknowledge is that, according to Bob Crandall, turboprop aircraft “will essentially
vanish.” (Washington Post Weekly Edition, June 23, 1997, p. 19.)
American Airlines comments on 110-seat jets as commuter operations: (Petition of
American Airlines, Inc. for Rulemaking to Amend the High Density Traffic Airport Rule, FAA
Docket 26339, September 6, 1990):
• the size of an aircraft operating between O’Hare and another city is in large part dictated by a
rule first issued in 1968 and not by passenger demand or market forces.
• while carriers at hubs across the United States are expanding and introducing new equipment,
American’s O’Hare operation has been frozen in the past -- limited by economic regulations
issued approximately a decade ago.
• the average seating capacity of aircraft used by American throughout its system has increased
during the past several years and will continue to grow over the next decade. This is
scheme and unconstitutionally burden the commerce Congress sought to foster.”
23
consistent with industry-wide numbers. FAA’s 1990 Aviation Forecast (FAA APO-90-1,
March 1990) predicts that the average air carrier aircraft in the domestic fleet will exceed 180
seats by 2001. The FAA forecast further projects that the average seats per aircraft in the
commuter industry will grow at a rate more than twice that of the fleet, reflecting the
continued introduction of larger aircraft. To meet this demand, American has been replacing
aircraft in both its commuter and air carrier fleets with larger aircraft. (American’s commuter
fleet now includes 37-, 50- and 70-seat regional jets.
AMERICAN ORDERS 25 MORE BOEING 737s
(May 15, 1998).
American Airlines announced today that it has exercised rights
under its long-term agreement with Boeing to purchase 25 more
737-800 aircraft, bringing the total number of firm 737 orders to
100.13
AMERICAN EAGLE TO EXPAND REGIONAL JET
SERVICE
(April 4, 1998)
American Eagle ordered 67 regional jets last June -- 42 of the
50-passenger ERJ-145s and 25 of the 70-passenger Canadian CRJ-
700s.
AMERICAN CONFIRMS ADDITIONAL BOEING 777
ORDER
(April 1, 1998)
American Airlines announced today that following authorization
from its board of directors, it has reached agreement with Boeing
for the delivery of eight additional Boeing 777-2001 GW aircraft in
1999, 2000, 2001, increasing the number of firm 777-2001 GW
orders from 11 to 19.
• It is clear that commuter service cannot be defined in terms of the size of a city or the
type of aircraft flown to that city.
• Certainly, distance from Chicago cannot be a measurement of whether a city can be served
with a commuter-type aircraft rather than a jet.
• The use of jets certificated for 110 seats or less would be fully consistent with the rationale
contained in Amendment 93-56 for raising the commuter slot definition to 75 seats. These
aircraft (Fokker-100s) would have a positive impact on the regional airline industry and
service to small communities -- service would improve.
13
According to the May 28, 1998 USA Today, “Jet orders: Pie-in-the-sky hopes?”: “American Airlines will add a
new Boeing 737 a month between January 2000 and January 2002. That’s in addition to 103 Boeing planes
between this year and 2004.”
24
• In a deregulated environment, American is attempting to provide competitive services at the
one hub in the United States with slot and aircraft size limitations against a carrier which has
been guaranteed dominance at that same hub and against carriers at other hubs which are free
to add flights or increase the size of aircraft.
An airport’s EPS is set after an analysis of conditions likely to
occur at the airport based on the expected aircraft type mix, arrival
mix and runway usage. The aircraft type mix and runway usage
determinations are based on the following three categories of
aircraft: small (less than 12,500 pounds), large (between 12,500
and 300,000 pounds), and heavy (more than 300,000), and is not
related to the number of certificated seats on an aircraft or the slot
definitions included in the HDR.
* * *
In determining the number of aircraft that can be operated at
O’Hare under the EPS approved for the airport, all aircraft between
12,500 and 300,000 pounds are considered to be identical.
* * *
On February 7, 1989, American responded to these questions
(Docket 25758) and suggested that the distinction between air
carrier and commuter slots should be eliminated.
* * *
. . . when United Express submitted its petition for rulemaking to
allow utilization of larger aircraft in the commuter slot category,
American once again submitted comments urging that air carrier
and commuter slot pools be combined.
* * *
In issuing Amendment 93-46 in 1984, the Department stated that the
rule recognized “a change in character of commuter and air carrier
operations.” Time has not stood still over the past six years. Since
1984:
-- billions of dollars have been invested in new quiet, fuel efficient
aircraft, both for air carrier and commuter operations;
-- as part of hub and spoke systems, carriers have been able to
initiate service to small and medium-sized cities including some
markets which had not previously been able to justify jet service;
The question is not whether the industry will modernize and expand,
but whether the HDR will continue to prohibit the introduction of
new technology and other changes at Chicago’s O’Hare Airport --
the only hub airport that is subject to FAA’s high density
restrictions.
25
From Petition of American Airlines, Inc. to Suspend the Effectiveness of Certain Slot
Allocations and to Modify Subparts K and S of Part 93 of the Federal Aviation Regulations
(February 18, 1992):
Considering the horrendous times facing the aviation industry, it is
essential that the Department take every opportunity to lessen
restrictions which limit growth, new jobs and economic
opportunities for the carriers and the communities we serve. The
Department has such an opportunity at this time and can provide
immediate economic benefits by implementing the proposals in this
petition.
* * *
. . . (2) the distinction between commuter and air carrier slots
at O’Hare be eliminated. . .
* * *
The FAA has long objected to artificial operating restrictions --
such as airport curfews -- imposed by local governments, fearing
the undue compression of air carrier schedules within minutes of
the end of the curfew period. The O’Hare 30/60 minute slot quotas
produce the same result. (Footnote: The agency should initiate
proceedings to eliminate the entire high density rule. American
believes that the agency should consider that approach as it
completes action on this petition.)
* * *
The FAA Should Eliminate The Unnecessary Distinction
Between Air Carrier and Commuter Slots, Or In The
Alternative, Allow Additional Commuter Slots To Be Operated
With Small Jets
The FAA’s artificially created differentiation between air carrier and
commuter slots makes scheduling and marketing decisions
significantly more difficult, and reduces opportunities to serve small
communities.
To alleviate this problem, the FAA should eliminate the distinction
between the two classes of slots and recognize that for operational
and marketing reasons no justification for the distinction exists (for
all the reasons set forth in American’s Rulemaking Petition of
September 6, 1991, Docket 26339).
* * *
26
Allowing an increase in the number of small jets that can be
substituted for commuter aircraft operations will bring immediate
and substantial economic benefit to American and cities and states
throughout the country.
From Comments of American Airlines, Inc. to Docket 25758 (Notice of Proposed
Rulemaking 88-17 High Density Traffic Airport Slot Allocation and Transfer Methods) (February
7, 1989):
(1) Elimination of the differentiation between air carrier and
commuter slots.
Since its inception in 1969, the High Density Rule has created
separate slot categories for air carriers and commuters, or “air
taxis” as they were known at that time. This distinction was clearly
not established for air traffic control reasons. It simply reflected the
prevailing operations at the airports in question, and was
presumably designed to ensure that small and medium-sized
communities would not be deprived of service as a result of the
operation of the rule.
In 1981, slots were taken away from air carriers and given to
commuters at Washington National. A few years later, significant
increases were made in commuter slot allocations at O’Hare,
LaGuardia and Kennedy while air carrier allocations remained
constant. The basis for those changes was a recognition of the
changing demand for air carrier and commuter services.
From Motion by American Airlines, Inc. to Allow Immediate Use of Jet Authority
(Docket 26788, Petition of American Airlines, Inc. to Suspend the Effectiveness of Certain Slot
Allocations and to Modify Subparts K and S of Part 93 of the Federal Aviation Regulations)
(August 19, 1992):
(Footnote 5, p. 11): Delta, in its comments, suggests that the FAA
use the high density rule to force service to short-haul markets.
Therefore, Delta would force American to cancel flights to cities
such as Raleigh/Durham, Nashville, and Memphis. Delta fails to
27
mention that it operates eight roundtrips to Atlanta from Cincinnati
or that it does not serve Sioux Falls, Fargo, or Cedar Rapids and
serves Fort Wayne and Madison with turboprops. Apparently,
Delta believes that residents of these cities should not have jet
service.
* * *
While American is prevented from expanding at O’Hare by the high
density rule, there are no limitations on the size of aircraft or
number of frequencies used by our competitors at all other hubs.
From Additional Comments of American Airlines, Inc., Docket 26788 (Petition of
American Airlines, Inc. to Suspend the Effectiveness of Certain Slot Allocations and to Modify
Subparts K and S of Part 93 of the Federal Aviation Regulations) (June 1, 1992):
. . . There is no greater obstacle to growth than the 23-year-old
high density rule which has frozen air carrier operations at O’Hare
since 1969.
* * *
When the September 6, 1990 petition was filed, we stated that jobs
would be created if the rules were amended as proposed. The use
of larger aircraft and institution of new markets has had a positive
economic impact. The benefits have been greater than expected
and include:
-- Over 550 jobs have already been created as a result of new
service and use of F-100s.
* * *
There is simply no reason for distinctions to exist between
commuter and air carrier slots. Separate slot categories
amount to economic regulation; they are not needed for air
traffic management.
American has best made the argument why any size jet is appropriate for “commuter” and
that the distinction no longer exists. At the high density airports, carriers can fly any distance in
any size aircraft. At Love Field, according to the American parties, they can’t even fly 330 miles!
B. The Shelby and Wright Amendments preempt the proposed Love
Field perimeter rule.
28
Whenever a state action would stand as an obstacle to the accomplishment and execution
of the purposes and objectives of Congress, that action is preempted. See California Fed. Sav.
and Loan Ass’n v. Guerra, 479 U.S. 272, 281 (1987); National Helicopter, 137 F.3d at 88 (“The
Supremacy Clause of the United States Constitution invalidates state and local laws that ‘interfere
with or are contrary to the laws of Congress.’”) This principle is not just theoretical in this case.
The Wright Amendment placed restrictions on Love Field operations, and the Shelby Amendment
accomplished a partial relaxation of those restrictions. After the Shelby Amendment was enacted,
for example, an airline such as Southwest could fly non-stop from Love Field to any destination in
Alabama, Kansas, and Mississippi. Realizing that the Shelby Amendment opened doors that
American wanted closed, the American parties filed suit14 in Tarrant County court immediately
following the enactment of the Shelby Amendment. The goal of the lawsuits was to prevent
operations under the Shelby Amendment.15 A clearer and more obvious attempt to frustrate
Congressional purpose is difficult to imagine.
14
In their comments, the American parties suggest that the Department should stay out of this issue because it is in
state court. What they fail to mention is that this litigation was filed the day after the bill passed even before it was
signed by the President. Their purpose was to delay. Filing in such a manner does not create jurisdiction in a state
court judge.
15
American also paid for a number of ads claiming that dire consequences would result from the opening of Love
Field, using a number of third parties as fronts. The Love Field Citizens Action Committee (“Action Committee”),
for example, is supported by and under the direction of American. Many of the arguments made in its April 22,
1998 filing at DOT have also been made in radio, newspaper and bus ads paid for by American and under the
supposed name of the Action Committee. The following articles describe the American/Action Committee
relationship:
Russ Jewert, co-chairman of the Love Field Citizens Action Committee,
confirmed that “a substantial” portion of the week-long radio ad campaign was
covered by a contribution from American. [Star Telegram, October 15, 1997]
Even when it comes to the noise issue, there is reason to believe that American
Airlines is helping ferment neighborhood concern. Love Field Citizens Action
Committee is running ads on six radio stations at Love Field asking for
listeners to call their city council members to voice opposition to changes at
Love Field. And who paid for those costly ads? According to City Hall
documents, American Airlines picked up the $2,500 tab for the ads the
29
DFW and Fort Worth insist, however, that the proposed Love Field perimeter rule (and
their Texas lawsuits) is fully consistent with the Wright and Shelby Amendments because those
acts of Congress do not require the owner of Love Field to do anything. According to Fort
Worth, the amendments “set forth what services may be certificated by the DOT, rather than
mandating what services must be allowed by the Cities.” (Fort Worth Comments, p. 32.)
(emphasis in original).16 In fact, says DFW, “the full purposes and objectives of Congress in
passing the Wright Amendment was to protect the Cities’ agreements from further interference
from federal regulatory agencies and airlines to further preserve all the proprietary powers of the
airport proprietor.” (DFW Comments, p. 32.)
committee is running on city-owned WRR-FM. [Dallas Observer, October
16-22, 1997]
In radio commercials airing across town this week, a group opposed to lifting
restrictions at Love Field states that “hundreds of additional flights a day” (oh,
please) from Love will increase “pollution over our homes and schools.”
Strangely, the group gets financial support from American Airlines which, in
its unthinking zeal to protect its turf, perhaps has become the first airline in
history to pillory jet aircraft as dangerous health hazards to school children.
[Huntley Paton, Dallas Business Journal, October 17-23, 1997]
American also has donated an undisclosed amount of money to the Love Field
Citizens Action Committee, a neighborhood group that opposes new flights at
the local airport. The committee recently used an agency recommended by
American when it purchased radio ads promoting its views. [Dallas Morning
News, November 8, 1997]
16
American’s Comments take a slightly different approach. American cites a bit of legislative history from the
Wright Amendment and argues that Congress’ principal intent was to defer to Dallas’ proprietary powers.
American Comments, p. 35. This circular argument completely ignores the primary purposes of both the Wright
and Shelby Amendments. Neither was enacted as a means of protecting proprietary powers. Rather, they
represent Congress’ determination of the acceptable restrictions that could be imposed on Love Field. The Wright
and Shelby Amendments would have been meaningless and flaccid expressions of Congressional hope if they were
enacted subject to the right of Dallas and DFW to disregard them.
American’s argument depends upon the validity of the Love Field perimeter rule as a valid exercise of Dallas’
proprietary powers. If the proposed rule is not permissible as an exercise of proprietary authority, then American
loses its claimed safe harbor from Wright and Shelby Amendment preemption.
30
Noticeably absent from the American parties’ filings was how Southwest would be
impacted by the American parties’ statutory interpretation. They focus their offensive against
new and smaller carriers, hoping to achieve their goals without challenging Southwest, although
any ruling in state court will impact Southwest’s operations. They claim “three airlines” --
Legend, Astrea and Continental Express -- have unnamed plans to offer non-stop interstate jet
service from Love Field to destinations beyond the four contiguous states. (Fort Worth
Comments, p. 11.) Southwest is as much a target as these three airlines. If the Shelby
Amendment is construed to prohibit Legend, Astrea and Continental Express from proposed
operations, Southwest will also be prohibited from its through ticketing service and any additional
nonstop interstate service.
Of course, the Wright and Shelby Amendments say no such thing. Under the
Deregulation Act, Love Field operations were unrestricted.17 The Wright Amendment contained
the only limitation on Love Field operations, effectuated in the only permissible manner:
directions to the federal agencies. If the Wright Amendment were intended primarily to preserve
Dallas’ proprietary powers, it would certainly have contained language to that effect. It could
have, for example, simply stated, “Nothing in the Deregulation Act shall interfere with Dallas’
rights to dictate operations at Love Field;” or “Nothing in the Deregulation Act shall interfere
with the agreements and ordinances of the cities of Dallas and Fort Worth.” The Wright
Amendment does not, however, contain any language that can reasonably be construed as an
endorsement of local control. Rather, it represents a federally imposed restriction on the federal
authorities that have the sole responsibility for implementing federal aviation law.
17
The ADA specifically and fully preempted local efforts to regulate Love Field (as with all other airports), except
for limited proprietary rights. See National Helicopter, 137 F.3d at 88.
31
Fort Worth’s assignment of control to local authorities is even more ridiculous in light of
the Shelby Amendment. In that Act, Congress intended to increase the services provided at Love
Field in two ways. First, Congress redefined or clarified the 56-passenger limitation in direct
response to the Department’s prior interpretation of the Wright Amendment as applied to Legend.
The only reason for the change to § (a) of the Wright Amendment was to broaden the services by
56-seat aircraft at Love Field. In defining the size of jets that could be used under the 56-seat
authority of the Wright Amendment, the Shelby Amendment included the phrase “except aircraft
exceeding 300,000 pounds, reconfigured to accommodate 56 or fewer passengers if the total
number of passenger seats installed on the aircraft does not exceed 56.” This change clearly
overturned the Department’s interpretation of this provision, as acknowledged by the
Department. Moreover, the weight limits were placed in the bill at the insistence of the Texas
Members to put some limits on the size of aircraft that could operate under this expanded
authority. Even the American parties must recognize that regional jets, 737s, DC-9s, and even
DC-10s fit under the 300,000 limitation. Of course, this provision would not have been necessary
if the local parties had veto power over the bill. Second, Congress increased the service area to
include Alabama, Kansas, and Mississippi. Residents of Mississippi and Alabama, and
communities throughout the Southwest, have already seen improved air services as a result of the
Shelby Amendment because Southwest has initiated flights to Alabama.
If Fort Worth were now permitted to close down Southwest’s Birmingham and Jackson
service or to prevent nonstop service to those markets as an exercise of proprietary powers, they
would be directly interfering with Congress’ clear intent to increase Love Field services to those
and other markets. The American parties evidently agree that the Shelby Amendment undermines
32
their case, because they have refused to even acknowledge the existence of Southwest’s new
service in their discussions of this issue.
American does offer its typical doomsday presentation, suggesting that if the Department
rules that operations at Love Field are governed by the Wright and Shelby Amendments, then all
local agreements to address airport needs will be destroyed and that local governments will be
reluctant to work together to address regional needs. (See American’s Comments, p. 31.) The
comments cite the current situation in West Virginia. American asks how the local authorities are
to accomplish a local agreement. They then suggest that if the Department forbids agreements
among local airport owners to restrict airports, the FAA will have to reverse course immediately
in West Virginia. That argument has no merit.
The FAA letter to the Chairman of the Central West Virginia Regional Airport Authority
(American Exhibit No. 12) states that the assumption was that the “new airport would be the only
provider of scheduled passenger service, consolidating the current service at Charleston and
Huntington. The airport at Charleston and Huntington, in this scheme would continue to provide
general aviation and corporate services.” (emphasis added).
For a number of reasons, the Department’s ruling as to the issues in this Love Field
proceeding are unique and will not impact any other airport agreements. Surely even American
doesn’t believe that a Department ruling that federal law governs operations at Love Field will
impact rules applicable at LaGuardia or National Airport. Like the communities in West Virginia,
the Dallas/Fort Worth parties had various options to encourage the construction of a new airport.
In the Love Field case, the parties were unable to reach a local agreement that was not overturned
by the court system. The parties tried to close Love Field to interstate flights but lost. (See
discussion in Legend’s initial comments to this docket.) Therefore, the situation presented at
33
Love Field is not at all similar to the current situation in West Virginia. In years of Dallas
litigation, the courts clearly stated that federal law and authority prevailed. Having failed to reach
a local agreement, the parties turned to Congress which imposed rules for Love Field operations
although not the ones sought by the American parties.
The communities of West Virginia have similar choices. Parkersburg, Yeager, Charleston,
and Huntington can work together to:
1. create a single airport authority -- never done in Dallas/Fort Worth;
2. close existing airports -- not accomplished by American parties in
Dallas/Fort Worth;
3. or turn to Congress to regulate -- which is what occurred in Dallas/Fort
Worth.
The West Virginia parties understand their options. Of course, the American parties may
believe they will also have veto power over any agreement reached in that state.
1. Fifty-six-seat aircraft may provide unlimited service from Love
Field.
As noted in Legend’s Comments, the Department has already decided that 56-seat aircraft
may serve all destinations from Love Field. See Joint Agreed Motion of Petitioner and
Respondent to Dismiss Petition for Review, Astrea Aviation Services, Inc. v. Department of
Transportation, No 96-60806 (5th Cir., Nov. 5, 1997) (“Pursuant to the Act, the Petitioner, or
any other air carrier, may pursuant to 29(a)(2) of the International Air Transportation
Competition Act of 1979, operate jet aircraft reconfigured to accommodate 56 or fewer
passengers ... from Love Field to any destination.”) Continental Express agrees with this
interpretation, noting that the Shelby Amendment was enacted during a dispute between the
Department and Legend. As noted by Senator Shelby and the Department, the Shelby
Amendment overturned the Department’s interpretation limiting 56-seat jet service to regional jets
34
or other aircraft originally designed to hold no more than 56 seats. Congress refused to give
Dallas veto power over the provisions of the Shelby Amendment.18 As a result, Congress
intended to permit unlimited service with 56-passenger planes (with the 300,000-pound limit),
without interference or veto power by Dallas-area entities.
In opposition to literal interpretation of the Shelby Amendment, the American parties
claim that the Wright Amendment preserved Love Field as a short-haul airport. American’s
reliance on such legislative history cannot change the requirements of the Shelby Amendment for
two reasons. The language of the Wright Amendment’s “commuter exemption” places
restrictions on passenger capacity and not on the designation of a flight as “short-haul,” “long-
haul,” “medium-haul,” or any other “haul.” As noted in Continental Air Lines, the specific
statutory requirements are far more reliable indicators of Congress’ intent than any articulation of
an Act’s “broad purposes” in the legislative history. See Continental Air Lines, 843 F.2d at 1451.
In Continental Air Lines, the Department clarified its interpretation of the Wright
Amendment commuter exemption, stating:
Nor is there any basis for the argument that the Department’s
interpretation is inconsistent with Congressional intent that the
Love Field Amendment be a “compromise” between the DFW
parties, who sought to bar all interstate service at Love Field, and
Southwest and other carriers, who did not favor the imposition of
any barriers on Love Field service.
The Department further stated:
Prior to the passage of the Deregulation Act, the CAB frequently
granted exemptions to commuter carriers to conduct operations
with large aircraft . . . [H]ad Congress intended to limit the
18
In Fort Worth’s reply comments (p. 13), they cite language from the Senate bill referencing regional jets. That
language was later dropped in conference. As can be seen by a plain reading of the language, the regional jet
provision was only needed if the City of Dallas was given veto power over “Shelby Amendment authority.” Since
it was specifically decided not to include a veto provision, the reference to regional jets was moot and was dropped.
35
exemption to carriers operating small aircraft exclusively, it could
have done so explicitly, and it did not.
(Brief of the Department of Transportation, Continental Air Lines, at 47 and 65.)
The history of the commuter exemption demonstrates Congress’ intent to make
distinctions based upon an aircraft’s “passenger capacity,” not upon its characterization as a
short-haul aircraft. The initial restrictions on Love Field in the Wright Amendment refer to
capacity, not routes or destinations.
[E]ven if the intent of Congress had been to limit the size of aircraft
and number of flights serving Love Field by forbidding access to all
but short-haul, local traffic specialists, a class restriction on
interlining carriers would not have been an effective means of doing
so. It is a backward way of achieving Congress’ goal for Love Field
restrictions, and Congress could have directly limited the type of
aircraft, or the number of flights serving Love Field if that had been
its purpose. (Id. at 46.)
In the Shelby Amendment, Congress overturned a DOT interpretation (which was
supported, in part, by the Wright Amendment) and again referred only to passenger capacity. It
did not impose any route or distance restriction and did not make Love Field a “short-haul”
airport. The plain language of the Amendments thus defeats any contention that the commuter
exemption was intended to absolutely restrict Love Field to short-haul operations.
As noted by the Department in written responses to questions from Senators, 56-
passenger airplanes have always been permitted to provide unlimited service under the Wright
Amendment:
Question #6: Is there any aircraft with 56 seats that would meet
DOT’s interpretation as to the size of aircraft that can be utilized
under the Wright Amendment to serve the State of Kansas? Is it
true that the only jets that can operate under DOT’s interpretation
are foreign made and hold 50 or fewer seats?
36
Answer: We believe that the only jet aircraft currently meeting the
Wright Amendment’s 56-passenger capacity standard are the
recently developed regional jets manufactured in Canada and Brazil.
When Congress enacted the Wright Amendment, even the smallest
jet aircraft then available held over 70 seats. The Wright
Amendment also allows the use of turboprop aircraft. These,
coupled with the 50-seat regional jets, are the only aircraft that
could be used for flights between Love Field and Kansas under the
Wright Amendment.
Hearing Questions of Senator Brownback, Aviation Subcommittee Hearings on Barriers to
Entry, May 13, 1997.
A second, and perhaps even more compelling, reason to disregard the American parties’
argument is that the 56-seat limitation does effectively make Love Field a short-haul airport. The
American-dominated parties ignore the fact that the 56-seat limitation is extremely restrictive.
Airline economics prohibit 56-seat operations from competing effectively on long-haul routes. As
long as the 56-passenger limitation exists, Love Field will essentially be a short-haul airport, and
Dallas’ proprietary powers are irrelevant.
The American parties also argue that the proposed operations of Legend and Continental
Express are prohibited under the Wright and Shelby Amendments because their planes are too
large to be “commuter” flights. As they have questioned the validity of the General Counsel’s
letter to David Siegel, they apparently are ignoring all comments made in that letter. In particular,
the General Counsel stated, “the Shelby Amendment essentially overturned my opinion on the
issue of using reconfigured large aircraft and would seem to weaken arguments that Congress did
not intend to allow the use of jet aircraft for longhaul Love Field service.” The Department has
long held, however, that the term “commuter” does not connote any particular size restrictions.
In another written response to Senator Brownback, for example, the Department gave the
following testimony:
37
Question #5: At O’Hare Airport, I understand that you allow 110
seat aircraft to utilize commuter slots. I also understand that to
limit the size of the aircraft operating under this authority, you also
have a maximum weight limitation (126,000 pounds). Is there a
weight limitation in the Wright Amendment?
Answer: The Federal Aviation Administration’s slot rules allow
aircraft configured to hold no more than 100 seats to use commuter
slots at O’Hare.
See also Respondent (DOT), Continental Airlines, Inc., et al. v. U.S. DOT, filed
September 11, 1986.19
The American parties also contend that “commuter airline” was a term of art when the
Love Field Amendment was enacted and referred to “air taxi operators” providing scheduled
service. They argue that no carrier classified as a commuter operated large aircraft when the
Love Field Amendment became law. This argument is not correct. Prior to the passage of the
Deregulation Act, the CAB frequently granted exemptions to commuter carriers to conduct
operations with large aircraft. E.g. Provincetown Boston Airlines, Inc., Order 76-12-24 at 2, 4
(December 6, 1976); Rocky Mountain Airways, Inc., Order 78-8-102 at 3 (August 18, 1978). In
granting these exemptions, the Board consistently specified that the large aircraft operations did
not alter the carrier’s status as an air taxi operator (and hence, when scheduled, a commuter
19
The DOT stated:
Prior to the passage of the Deregulation Act, the CAB frequently granted exemptions to
commuter carriers to conduct operations with large aircraft. E.g., Provincetown Boston
Airlines, Inc. , Order 76-12-24 at 2,4 (December 6, 1976); Rocky Mountain Airways, Inc.,
Order 78-8-102 at 3 (August 18, 1978). In granting these exemptions, the Board
consistently specified that the large aircraft operations did not alter the carrier’s status as
an air taxi operator (and hence, when scheduled, a commuter airline). . . . “commuter
airline” included large aircraft operators. . . . had Congress intended to limit the
exemption to carriers operating small aircraft exclusively, it could have done so explicitly,
and it did not.
. . . aircraft operations by large or small carriers limited to 56 seat planes pose no threat to
enforcement of the Love Field restrictions.
38
airline). Thus, “commuter airline” has always included large aircraft operators. Had Congress
intended to limit the exemption to carriers operating small aircraft exclusively, it could have done
so explicitly, and it did not.
C. The Wright Amendment permits unlimited operations by 56-seat
aircraft, with no restrictions on through ticketing, interlining, or
ticket sales.
As demonstrated in Legend’s Comments, the answer to the Department’s question
regarding through ticketing on 56-passenger aircraft from Love Field is a straightforward matter
of statutory interpretation. Subsection (c) of the Wright Amendment “permits the authorization
of interstate passenger service between Love Field and points within Texas and the four
contiguous states subject to the prohibitions on interline service (subclause (c)(1)), and online
service (subclause (c)(2)) beyond that Service area.” Brief for Respondent (DOT), Continental
Airlines v. Department of Transportation, No. 86-1026 (D.C. Cir. 1986), p. 8 (emphasis added).
The prohibitions on subsection (c) operations apply to those operations only. They have no
application to services provided under subsection (a) of the Wright Amendment, which authorizes
unlimited operations with 56-passenger aircraft.
The American parties disagree, arguing that a prior ruling of the Department, Order 85-
12-81, prohibits any attempt to evade the seven-state perimeter established by the Wright and
Shelby Amendments. This argument blatantly misrepresents the Department’s rulings in Order
85-12-81. In a section labeled “INTRASTATE OPERATIONS,” the Department interpreted the
four-state perimeter rule for large aircraft20 and held that an air carrier could not evade the
requirements of subsection (c) operations merely by including an intrastate destination on a route.
39
Legend has no basis for challenging this holding because it is irrelevant to the issues presented
here. The previous section of Order 85-12-81, “SMALL AIRCRAFT OPERATIONS,” directly
contradicts the argument asserted by American in this case. According to the Order, 56-
passenger (small) operations are subject to no restrictions under subsection (a). See Order 85-12-
81, p. 13 (“we find that operations by either a certificated or non-certificated carrier using small
aircraft are exempt from the Amendment with respect to Love Field operations.”) Because 56-
passenger aircraft are exempt from Love Field restrictions, they can serve any destination, without
limitation.
Moreover, the Department has recognized that 56-passenger aircraft are exempt:
Southwest also argues that the Department’s interpretation will
permit carriers like Continental to evade the restrictions of the
Love Field Amendment by implementing small aircraft operations
at Love Field to connect with their services beyond the authorized
service area. Southwest suggests, as an example, that Continental
could implement small aircraft service between Love Field and
Continental’s Denver hub. Passengers using that service could
then transfer to Continental’s connecting flights to reach
destinations across the country. Br. at 47. However, Southwest’s
fears are highly speculative. To implement such a scheme,
Continental would have to pay a substantial penalty in the number
of seats it could operate on each flight. In addition, such flights
might be less attractive to travelers, since many segments of the
traveling public have a strong perception that jets are superior to
small aircraft. E.g., Guidelines for Individual Determinations for
Essential Air Services, 44 Fed. Reg. 5296, 52651 (September 7,
1979). See also, Spokane-Alberta Service Case, Order 85-1-21,
Recommended Decision at 14-16 (November 16, 1984).
Perceptions aside, travelers would also have to pay a time penalty
to fly on Continental’s small aircraft, since small aircraft are slower
than jets. Moreover, small aircraft might by very costly for
Continental to operate, given its current wage scales based on
operation of larger jet equipment. In addition, if Continental were
really intent on using the commuter exemption to evade the Love
20
Large aircraft can service intrastate destinations from Love Field without any limitation by the Wright
Amendment. Interstate operations are limited to the perimeter area, and such flights are subject to the subsection
(c) prohibitions.
40
Field restrictions, Southwest’s approach would not prevent it.
Continental could establish a small aircraft commuter as a
subsidiary or purchase an existing one. (Footnote: Indeed,
Continental has recently announced its proposed acquisition of
Rocky Mountain Airways, a small aircraft operator that serves
Continental’s Denver hub. Aviation Daily, Vol. 254, No. 52 at
410 (June 12, 1986).) Despite Southwest’s speculative fears,
aircraft operations by large or small carriers limited to 56 seat
planes pose no threat to enforcement of the Love Field
restrictions.
(Brief of the Department of Transportation, Continental v. DOT, 1986, p. 65-66.)
Fort Worth’s contention that the rationale of the Department’s restrictions on intrastate
service supports similar restrictions on 56-passenger operations is incorrect. In Order 85-12-81,
the air carriers sought to evade subsection (c) restrictions merely by adding Texas destinations to
a prohibited route, served by large aircraft. The situation is quite different with 56-seat aircraft
because they are not otherwise restricted by the Wright Amendment. Continental Express’ Love
Field-Houston flight is not an attempt to evade the Wright Amendment; it merely serves as a
legitimate means of transporting passengers to Continental’s hub, in full compliance with the
statute. American’s protest that Continental Express’ Houston service undermines the “short
haul” nature of Love Field is patently ridiculous. Even if Love Field were generally a short-haul
airport, this status would have no effect on the Continental Express operations because Houston
is, by any definition, a short-haul destination.
E. The Department has the authority to apply its expertise to the
issues in this proceeding, and the Fort Worth parties’ race to the
Tarrant County courthouse do not deprive the Department of
jurisdiction over federal aviation matters.
The Department’s actions in considering these matters and issuing appropriate rulings are
correct, legitimate, and well within the agency’s authority. As discussed exhaustively in Dallas’
41
Comments, the Department is uniquely situated to interpret and implement all aspects of the
federal aviation statutes, including the Federal Aviation Act, the Deregulation Act, and the
Airport & Airway Improvement Act. See Dallas Comments, pp. 15, 16 and cases cited. The
Department is charged with the responsibility to “enforce the Love Field Amendment,” just as it
“has regulatory authority to enforce the federal aviation laws.” Cramer v. Skinner, 931 F.2d
1020, 1024 (5th Cir. 1991); Northwest Airlines, Inc. v. County of Kent, Michigan, 510 U.S. 355,
371 (1994).
Under the doctrine of primary jurisdiction, a court may leave an issue for agency
determination when it involves the special expertise of the agency and would impact the
uniformity of the regulated field. DeBruce Grain v. Union Pacific Railroad, 149 F.3d 787 (1998)
citing Access Telecommunications v. Southwestern Bell, 137 F.3d 605, 608 (8th Cir. 1998). In
DeBruce Grain, a shipper brought suit claiming the railroad’s distribution of rail cars violated
federal rail statutes and its tariff. Assessing the reasonableness of UPR’s response, in this case
to the car shortages, would involve issues related to national rail policy, and recognizing that a
“judicial ruling could affect rail transportation through the country, the appellate court held that
primary jurisdiction was properly invoked by the district court. (DeBruce at 790.) The shippers
claim should be “left to the STB . . . due to its greater expertise with rail policy and the need for a
uniform response to maintain regulatory uniformity.” (Id. at 790.)
In this case, at every opportunity the American parties claim that the Department lacks the
“special competence” needed to review these issues, and claim this proceeding is “unprecedented
and unsound.” (p. 9, p. 11.) However, it readily admits that the many Love Field issues “have
nationwide significance.” (p. 2.) While mistaken on the first two points, they are correct on the
latter. The issues decided at Love Field will affect the routes and schedules of all airports. Far
42
from “unprecedented,” the Department has the authority to review these issues and has done so
before.
Although American uses countless cases with completely dissimilar facts to extract a
seemingly supportive rule of law, it dismisses the rule of judicial deference to an administrative
agency espoused in Mass. Port Auth. because “the issues in this proceeding are of a very different
character from those in Mass. Port Auth. (American’s Comments, p. 10.) Perhaps American
should have been consistent in this argument, and saved us from all their worthless case research.
1. The Department Has Been Involved in Love Field Issues.
The American parties assert the Department lacks the expertise to provide a meaningful
interpretation to which deference might be owed in the future. This insulting argument is contrary
to the history of this issue. The Department’s expertise and familiarity with this matter at issue is
well demonstrated by its active involvement in Love Field and Wright Amendment issues for three
decades.
Legend’s September 22, 1998 comments detailed the long history of Love Field issues,
including those involving the Department. Some of the actions taken by the Department over the
past several years involving Love Field include:
• A 1992 study on the impact of changing the Wright Amendment which concluded
that “fare savings to travelers. . . resulting from a Wright Amendment repeal . . .
range from $183 million to more than $300 million in the first year following
repeal.”
• Department letters, dated November, 1994 and September, 1996, to Centennial
Express in response to requests for opinions concerning use of 56-seat aircraft at
Love Field.
• Review of request for interpretation, dated May 28, 1996, submitted by Dalfort
Aviation concerning use of 56-seat jets at Love Field. (During the course of that
review, a number of third parties, including American Airlines, provided
information to the Department on the request for interpretation.)
43
• Department response to Dalfort, dated September 19, 1996.
• Fifth Circuit Court of Appeals case brought by Dalfort in response to the
Department’s interpretation. (American, DFW and Fort Worth all filed briefs in
the Fifth Circuit proceeding.)
• Congressional appearances by a number of senior Department officials, including
Secretary Slater, at which questions concerning Love Field were raised.
• Testimony of senior Department officials before Senate Aviation Appropriations
Committee concerning barriers to entry, including the Wright Amendment.
• Introduction of the Shelby Amendment.
• Committee action concerning the Shelby Amendment.
• Passage of the Shelby Amendment, signed by President Clinton on October 27, 1997.
• Application of American and American Eagle for a change in 401 certificates based
upon the Shelby Amendment.
• Application of Legend Airlines for 401 certificate. (American, DFW and Fort
Worth all filed comments in DOT proceeding)
• Multiple Texas court actions, including a suit filed against the Department by the
City of Dallas in U.S. District Court in Dallas.
• Review of request submitted by Continental Express and response of General
Counsel Nancy McFadden to Continental Express, dated June 30, 1998.
• Visits to Departmental officials by officials of American, DFW and the City of Fort
Worth from the fall of 1997 through the summer of 1998 to discuss Love Field
issues.
(From American’s Answer and Objections to Legend Airlines, Inc.’s Second Set of
Interrogatories, Court of Tarrant County):
Interrogatory No. 2:
• In early December of 1997 American Senior Attorney Bruce
Wark, American’s outside counsel Mike Powell, and Fort
Worth’s outside counsel Glenn Johnson met with
[representatives of the Department’s General Counsel’s office]
to discuss the status of the litigation in Texas. The conversation
44
related primarily to Dallas’s federal court lawsuit, the inclusion
by Dallas of the DOT and FAA as defendants in that lawsuit,
the removal of the Fort Worth state court lawsuit to federal
court, and the legal issues raised by Fort Worth’s motion to
remand the case to state court. Either before or at that meeting,
a paper was given to the DOT. The paper included portions
relating to the history of DFW Airport and the Wright
Amendment, the status of the Texas litigation, a legal analysis
of preemption issues, and the potential effect of expanded
operations at Love Field on DFW Airport. Prior to that
meeting, Mr. Wark had one or more phone conversations with
[a representative of the Department’s General Counsel’s office]
in which they discussed the logistics of the meeting.
• In early January of 1998, American’s General Counsel Anne
McNamara, American’s Associate General Counsel Laura
Einspanier, and Mr. Wark met with [a representative of the
FAA’s Chief Counsel’s office] at American’s headquarters in
Fort Worth. . . . The conversation related to the general status
of the Texas litigation and then pending motion to remand Fort
Worth’s suit to state court. A paper was given to [FAA]; the
paper discussed the same topics as set out in the paragraph
immediately above.
• Shortly after reading Nancy McFadden’s June 30, 1998 letter,
Mrs. McNamara phoned Ms. McFadden, who was not in the
office. In Ms. McFadden’s absence, Mrs. McNamara spoke with
[a representative of the General Counsel’s office]. In the
conversation Mrs. McNamara expressed American’s concern
that the June 30 letter was issued during the pendency of the
injunction hearing in the state court action with no opportunity
for input from all of the parties to the litigation. Mrs.
McNamara also expressed American’s surprise that the
Department would want to opine on legal issues regarding the
scope of airport proprietor’s powers given the inherently legal
nature of such issues and the Department’s previous statements
that the courts were the proper forum for such issues to be
resolved. [Mrs. McNamara] also discussed . . . American’s
opinion that the 1992 DOT study was flawed when it was
prepared and that it was out of date at this time.
• On July 6, 1998 Mrs. McNamara wrote to Ms. McFadden
expressing to her the same thoughts described in the above
conversation.
45
• On July 29, 1998, Mrs. McNamara, Mrs. Einspanier, and Mr.
Wark met with Ms. McFadden [and other Department
representatives]. The conversation related primarily to the
DOT’s 1992 Love Field study, flaws therein, and the status of
the Texas litigation. The American representatives expressed
their disappointment that the June 30 letter was issued during the
pendency of the injunction hearing in the state court action with
no opportunity for all of the parties to the litigation to have
input. At the meeting, a paper summarizing the status of the
Texas litigation and the injunction hearing and setting out flaws
with the 1992 study was given to the DOT. Additionally, copies
of two exhibits from depositions taken in the case and maps with
demographic information related to Love Field were given to the
DOT at this meeting.
• On August 10, 1998, as a follow up to the earlier meeting, Mrs.
McNamara wrote Ms. McFadden. This letter discussed the
history of the founding of DFW Airport, some of the provisions
of the 1968 Bond Ordinance, and the unique nature of the Love
Field-related issues before the courts. Attached to the letter
were copies of two CAB orders.
• On August 26, 1998, Mrs. Einspanier returned a call . .
.informing American of the institution of the Love Field Service
Interpretation Proceeding. Mrs. Einspanier [said] that
American had received the Order instituting the proceeding and
expressed her view that the time given for comments to be filed
was inadequate. . . . Mrs. Einspanier also inquired as to
whether questions regarding the four topics of the Order should
be addressed with DOT prior to the filing of comments or as a
part of the comments.
• Near the end of August 1998 Will Ris, American’s Vice
President of Government Affairs, placed a phone call to Ms.
McFadden, which was returned by [another representative of
the General Counsel’s office]. Mr. Ris expressed American’s
disappointment at the DOT’s institution of the Love Field
Service Interpretation proceeding and American’s opinion that
the proceeding would not hasten a resolution of the disputes
and litigation related to Love Field. [The representative] stated
that the DOT had concluded that it had no choice but to
institute the proceeding.
• On or about September 11, 1998 Daniella Strother, an in house
lobbyist in American’s Government Affairs office in
46
Washington, D.C., received a phone call from [a representative
of the General Counsel’s office, who said] that he was calling to
inform American that its lawyers were accusing him and Ms.
McFadden of forging documents and that as a result of such
accusations the DOT was receiving media inquiries. Ms.
Strother inquired as to whether the purported accusations were
made by American’s attorneys or those of Fort Worth. [The
representative of the General Counsel’s office] stated that he
saw no difference between the two. Ms. Strother responded by
pointing out that in fact American and Fort Worth had separate
legal counsel in the Texas litigation.21
• On or around September 14, 1998, Mr. Ris phoned Ms.
McFadden to tell her that any allegations that were being made
in the Texas litigation related to the proprietary of her June 30
letter were not being made by American or its attorneys and that
American was not challenging Ms. McFadden’s personal or
professional integrity. Mr. Ris did state that American was
surprised that Ms. McFadden was able to respond to David
Siegel’s letter of June 29 in one day.22
• Public Statements made by American, Fort Worth, and DFW officials concerning
the air traffic control system, congestion, the future of DFW and American Airlines, at
the same time that those parties are seeking:
- new international route authority
- request for approval of American alliances
- PFC applications
- airport funding requests
• Statements made by American, Fort Worth, and DFW officials concerning
questionable conduct and bias by Department officials.
• Startup by Southwest Airlines of new through service to Jackson, Mississippi
and to Birmingham, Alabama from Love Field, bringing lower fares and new
21
Once again, American officials have a difficult time distinguishing fact from fiction. Although Mr. Kelly is
counsel for Fort Worth, he has been a member of American’s Board of Directors for over 15 years, and his firm
represents American on other issues, and that all tactics and positions involved in the state court litigation are
closely coordinated by all parties. There is little question that Mr. Kelly speaks for American. Moreover, where
has American repudiated those “bias” claims?
22
Apparently American did question Departmental behavior. It is ironic that Fort Worth, in its comments,
suggests that the Department may be biased because it discussed the issues in this proceeding with Continental
Express and Legend. Fort Worth states, “These actions raise serious concerns about agency bias,” while it is
asking the state court judge to review the bias. Does Fort Worth also believe that the Department may be biased
because of its numerous meetings with American officials? Legend rejects Fort Worth’s claim of bias.
47
service to dozens of markets. (In announcing the service, Southwest issued press
releases acknowledging that the new service was only permitted by the Shelby
Amendment.)
• Initiation of service by American between Houston and LaGuardia, bringing
complaints of anti-competitive behavior.
• Initiation of service by American at Love Field for the first time in 24 years.
• Reports concerning the millions of dollars allocated in the Dallas/Fort Worth area
by the American parties to litigate all issues involving airline service.
With all of these actions taking place, even the American parties must concede that the
Department had reason to believe that a major issue existed impacting competition, federal law,
the authority of the federal government and airline deregulation. Moreover, considering that
these same parties have filed voluminous documents in various court and administrative
proceedings on the very issues being considered by the Department, the question was not why the
Department became involved but why was it necessary to have such a lengthy comment period.
American’s Comments imply that the Department is engaged in some sinister plot to
destroy its hub. (Of course, the Department is good when it is helping American increase its
international presence or when considering its mammoth alliance with British Airways and the
new “OneWorld.”) Although it applauds the “good” Department, American objects to the “ad
hoc procedure” of the “bad” Department. The American parties claim that it “appears” that the
Department commenced this proceeding at the request of Legend or Continental, pretending that
the Department would have had no reason to review state court cases brought to overturn federal
law, Department rulings, the control of interstate commerce, attacks on the air traffic control
system and the safety of that system, and repeated statements made about bias of Department
officials. Once again, the American parties ignore fact.
48
2. Legitimate Principles of Federalism Do Not Affect the
Department’s Authority to Conduct these Proceedings.
The American parties attack the Department’s authority to conduct this proceeding
because it violates their understanding of “the basic principles of federalism.” American
Comments, p. 82.23 The federalism argument is, however, patently frivolous. American’s entire
legal support for deferring to Tarrant County Court on a matter of federal aviation law is a dissent
from a denial of certiorari in United Credit Bureau v. NLRB, 454 U.S. 994 (1981). By definition,
a dissent registered in a matter that the Court did not even consider cannot be considered to be
competent legal authority. Moreover, Justice Rehnquist only indicated that he did not believe that
a federal agency had the power to file a lawsuit enjoining an individual to dismiss a state lawsuit.
In this case, by contrast, the Department seeks only to consider the comments of persons with an
interest in the designated issues of federal law. The result will be a declaration. There is no basis
anywhere in law for the Department to refrain from its mission to administer the federal aviation
system as efficiently as possible.
As demonstrated in Centennial Express, the Department is uniquely qualified to balance
the critical interests of the national aviation system, the requirements of federal airport
development contracts, and the need for and extent of federal preemption over local regulation of
air carrier operations. See Centennial Express, p. 3. The present Proceeding, in which all
interested parties may participate and provide the factual and legal information necessary to an
informed decision, is ideal. American’s suggestion that the Department participate in the Texas
proceedings as an intervenor or amicus curiae is curious. American essentially asks the
Department to articulate a position on the issues without first considering the arguments and
49
comments raised by DFW, Fort Worth, Dallas, or other interested entities. There exists no legal
obligation to take such a precipitous approach, and the Department should issue its Order
expeditiously in this Proceeding only after considering the Comments submitted by all the parties.
IV. CONCLUSION
The American parties have been litigating issues concerning Love Field and competition
for thirty years. Unable to dispose of Southwest, they tried to close Love Field. Unable to close
Love Field, they asked Congressman Wright to place shackles around Southwest to limit the level
of competition that would be provided by Southwest. Now facing a much smaller level of
possible competition, the American parties are engaging in new forms of warfare.
First, they have learned that if the issues involved in this dispute are reviewed by the
federal government or by experienced and proper courts, they will have little chance of prevailing.
Therefore, they turned to an inexperienced state court judge, in a district with significant numbers
of plaintiff’s employees and in which the judge is up for re-election in two years, and have
presented aviation issues to him to decide. This judge is not only ruling on airline safety,
competition, airport growth, and differences between classes of operations, but he is also ruling
on the validity of the Department’s involvement and rulings on these issues. Moreover, his
decision will impact Southwest Airlines and the future of Alliance Airport, which has been
significantly funded by the federal government. These are issues that he has already decided with
little or no evidence. Such an approach is an abuse of the legal system and is inconsistent with
long-established case law.
23
Fort Worth has not discussed the bases for dismissal in its Comments and has stood on its Motion to Dismiss.
The DFW Board has not taken a position on the Motion to Dismiss. Thus only American has added additional
support to Fort Worth’s request for dismissal of this Proceeding.
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Second, the American parties have learned that their historical explanations for their
actions do not hold up in court. Therefore, they are now arguing that they either:
• have veto power over Congressional action, or
• federal laws don’t apply to Dallas/Ft. Worth, or
• regardless of federal law and Department rulings, there are no limitations on their
ability to prevent or restrict airline competition.
The American parties believe that to best serve their customers in certain markets, they
will use all sizes of jets in commuter markets but that no jet should be allowed to be utilized to
serve commuter markets from Love Field. American’s customers at O’Hare, New York, Miami,
and Dallas/Fort Worth can board those jets and larger turboprops but if one of those aircraft
operates at Love Field, the future of American, DFW, Northern Texas and the state will be placed
in jeopardy. It is hard to imagine a more outrageous position. As Abraham Lincoln remarked:
If you once forfeit the confidence of your fellow citizens, you can
never regain their respect and esteem. It is true that you may fool
all the people some of the time; you can even fool some of the
people all the time; but you can’t fool all of the people all the time.
[To a caller at the White House. From Alexander K. McClure,
Lincoln’s Yarns and Stories, 1904.]
All of these arguments are made of whole cloth and do not pass the laugh test.
Nevertheless, because there are few consequences to their fantasies about controlling the world’s
aviation system, they continue their odyssey because their costs are less than the cost of
competition. With no regard for public benefits, they press on in an attempt to raise the bar to
competition while at the same time begging for approval of proposals that will give them
unprecedented control of major domestic and international markets. As Senate Commerce
Committee Chairman John McCain recently stated:
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I am afraid, Mr. President, that concentration is increasing rather
than decreasing. That trend can only be reversed when we get new
entrants into the airline business. I am very disappointed at some of
the information - much of it anecdotal - that I hear of the major
airlines basically preventing that competition from beginning, or
even existing, for a long period of time.
Whether or not American, DFW, or Fort Worth is given the authority to approve or
disapprove federal law and make decisions concerning airline competition and federal law, is an
issue that is significant to competition in the Dallas/Fort Worth area and throughout the country.
At a time when concentration is reaching alarming levels, American and its partners are proposing
even broader agreements to control traffic.24 Somehow, this empire will crumble if three flights a
day are allowed to Cleveland, or 12 a day on reconfigured jets with 56 seats. At the same time,
there is no new entry.25 The Department’s ruling on these issues will impact the future of airline
24
On September 21, 1998, Don Carty, American’s chairman, Bob Ayling, British Air’s chief executive, and the
chief executive of Canadian, Cathay Pacific and Australia’s Qantas airlines introduced the “OneWorld” alliance.
Together, the OneWorld partners serve 632 cities worldwide, carry 174 million passengers and 2.6 billion tons of
cargo a year, and fly 1,524 planes. Air New Zealand, Anset Airlines of Australia and Japan’s All Nippon Airways
are expected to join the Star Alliance in the next few months, according to people in the industry. The OneWorld
executives said they expect several more major airlines to join them. They have already named Japan Airlines,
Iberia Spanish Airlines, FinnAir, Dragonair of Hong Kong, and perhaps several of American’s existing Latin
American partners as potential partners. Those include LanChile, Aerolineas Argentinas and the TACA Group of
national airlines in Central America. The OneWorld executives also would not rule out the eventual inclusion of
another U.S. airline. OneWorld represents one of the first big steps toward consolidation of the global airline
industry.
25
According to a report prepared by The Campbell-Hill Aviation Group, Inc. for the Air Transport Association,
“Debunking the Department of Transportation Myths About Domestic Airline Competition,” (September 21,
1998), one of the reasons why new entry has slowed includes: “The DOT frustrated the efforts of at least one new
entrant by its exclusionary interpretation of the ‘Wright Amendment.’” The report further stated:
Legend Airlines, a new carrier that has an application pending before the DOT
for a Part 401 certificate, was thwarted in 1996 by the DOT’s insistence that
the company’s proposal to operate at Dallas Love Field with 56 seats in large
aircraft was not permitted under the ‘Wright Amendment.’ It took Legend
approximately one year to have Congress deal with the Wright Amendment
issue and allow Legend to proceed with its service plan. Legend filed in court
to have the DOT General Counsel’s opinion overturned but the proceeding
dragged on so long that the company pursued Congress for relief from the
General Counsel’s order.
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deregulation. It is time for the Department to say “no more” and again assert itself into a clear
federal issue. The public interest must be put ahead of corporate greed.
For all the foregoing reasons, and for those articulated in Legend’s Comments, the
Department should promptly enter appropriate orders as articulated above.
Respectfully submitted,
_______________________________
Edward P. Faberman
Michelle M. Faust
Paul A. Olsen
UNGARETTI & HARRIS
1747 Pennsylvania Avenue, N.W.
Suite 900
Washington, D.C. 2006-4604
Tel: (202) 778-4460
Fax: (202) 331-1486
SUBMITTED: October 2, 1998
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