right the record we're hearing argument in airline service providers association an air transport association of america versus los angeles world airports and the city of los angeles numbers fifteen dash five five five seven half i'm going to try to take eight minutes and talk about the labor issues including if i can get to it the expanded concept that the apple e has of the concept of his rights as a proprietor of los angeles international airport and my colleague will take ten minutes hopefully reserving two for me to reply labor peace agreement got a lovely ring to it sounds like a very nice thing to have but in this case we're not interested in the goal what's at issue here is the means by which the city of los angeles through  arm that operates l a international airport which we all refer to lovingly as law is trying to put that labor peace agreement concept into practice make no mistake about it this is a compulsory matter they talk about it being a labor peace agreement but what lala has done is to enact a regulation that applies to all of the members of my organization which is those people who are those organs those those people who provide the ground services for the airline companies the people that we all come in contact with when we're going to the airport the ticket takers the baggage handlers the folks to push the wheelchairs through the airport those are all people who work for independent companies that are members of my organization the airlines don't do those things they subcontract as i understand it they are licensed or certified to work at the airport and i do they pay a fee to the airport authority for the right to do business there is not in the ground stuff but they also have to have a license from the airport to be able to operate at the airport and matter which is of critical importance to my clients since that's that's what they're in business for and as the allow a brief indicates this airport is the sixth busiest airport in the world well if your business is servicing the airlines that were getting reports you don't want to be shut out of the six busiest in the world cup i didn't see this in the record but let's just take menzies aviation for one i'm familiar with that because they operate in seattle and handle big ramp services i'm assuming that they do business at other besides l a x so my question is if they were to enter into one of these labor peace agreements would that be binding on all of their employees all over the country or in an airport as set up here this is done soley for those operating at l a x and while they are operating at l a x one of the intriguing issues that that we have raised below which we really didn't get much play from the district judge is that under the railway labor act which does apply in these circumstances well there's an a requirement for doing it system wide that was really my question because that that is sort of a traditional function of the national mediation board in the you know or b and determining what the bargaining unit is going to be and what the geographical scope and it's it's one of the things that we have suggested is wrong with what law was trying to do is that they are interfering with that federal policy that you'd rather have them apply the rule to the entire country we would rather have the federal government make a federal policy that would apply cut nationwide instead of having to that at any time any labor organization whether they represent our people or not can come up to any of our members and demand the word of the order of the regulation a labor peace agreement and when they do that we have no alternative but to say ok let's sit down in the go she ate our labor peace agreement the only thing that has to be in that is that the labor union has to relinquish the right to strike the most powerful right that a labor union has so what else is going to happen when they negotiate with our people we don't know because all we do know is that in order for them to sign off on giving up the right to strike they're going to have to get something else pretty serious in return and i understand i think we probably all understand that argument but what is it that makes this  a regulator as opposed to a proprietor the you you just said that this only applies to l a x big airport but that's the arrow the market participant one would think x is competing with other airports around here i flew in the burbank but i'm going to fly out of l a x if i had to cross a picket line would i go to l a x when i go somewhere else why aren't those decisions that a market participant would be making as distinction between the two is laid out in cases like the supreme court's boston harbor case and the seven circuits decision but metro milwaukee in that case the rules that were applied applied beyond the business that the on the business in question is applied to the other businesses as well and you just told us that this only applies at l a x that's right but what they explained what the seventh circuit explained the metro of milwaukee and the supreme court explained in boston harbor was that if the entity is dealing with a third party like my clients that is providing service for the  proprietor of the business as the proprietor of the business that is an exception that will get you out from under the preemption provided by the federal labor laws but it's only when they're acting in the sense of contracting with my client they don't contract with my clients to have my clients provide a service to the airport part might as adding one more layer change though about whether they could be a proprietor where it changes the rule that the supreme court laid down that's that's really what we know we know that the supreme court has been clear in cases like garment and machinists that where there is a federal policy we keep local hands off it we don't let the get in and muck around with what is supposed to be a clear federal policy of how you handle labor relations and when we allow the operator to come in here and put on its regulator hat as opposed to its operator hack it in the way it is not a regulator is because there's one layer of contracting in between because there is a different layer of contracting because if you look at those cases and we brief them all lock it differently that applies beyond what they said if you just have limited this to cases where the airport contracted with an individual for services to be rendered that would be different that would get you out from under the preemption that would be within the boston harbor rule and that's where we are here what happens what happens if an n s p a member is already unionized and the sci you comes and says we wan labor peace agreement with you and as i read that section twenty five it references negotiating terms and conditions of employment including hours and working conditions and so on which i suspect  conflict with the provisions of an existing collective bargaining agreement with the different union i suspect you could and you know that's part of the problem of not having allowed this case to go past the motion to dismiss stage we got we got what discovery we got no trial in fact we didn't even get the oral argument on the motion to dismiss the trial judge just looked at it and said leave but we do know from the face of the statute that if if the company refuses to enter into this process through to agree to a labor peace agreement then it is it will not be certified to do business at the airport that is correct that is the hammer but there is no provision that punishes the union for even for breaching labor peace agreements that either whatever strike none whatever this is a purely one sided regulation that puts a thumb on one side of the scale and upsets what the federal law has always been understood to be which is to say we want a level playing field and so you're down to ten minutes i think i'm impinging on my colleagues time i think i'll sit down  comfortable so i appreciate the question i think standings ok thank you and i'm i would like to address the airline deregulation issues in this case  in this case the district court found preempted a law or regulation that directly and exclusively targets the airline industry and that is without precedent in this circuit there have been many cases and the briefs are full of citations to many cases that deal with the issue of preemption under the airline deregulation act but all those cases beginning with  progeny deal with laws of general application in paris it was tort whether tort laws should be apply in the situation for example where some baggage falls out of the overhead compartment and hits a passenger or if a flight attendant spills hot coffee on a passenger whether tort law state tort law can be applied in the context of the provision of airline services  and other cases involving whether minimum wage laws or living wage ordinances should be applied but here in one of those cases was here a law directly targeted airline services as we have here and we believe that under  the clear precedent since fream court under morales roe ginsburg northwest riskin berg that that is preempted the district court not only found that it wasn't preempted but also didn't even give us an opportunity to make our case the court found that that the airlines had no standing to bring the airline deregulation act claim because the law in question rule in question targets service providers not airlines the the district court concluded that in one sentence without any citation to authority and that's just plain wrong the u s i think they have an ending to make the same argument why does it matter whether you also have standing well the actually the court found that they do not have standing we disagree that they would disagree then does it matter whether you have standing well it it it would lessen  if as long as someone can challenge it but but i think that it is appropriate for airlines to be able to challenge because the law doesn't say that the the a d a preemption clause doesn't say who can be the pla challenge all it says is that a law that refers or relates or has a connection with price root or service is preempted and the identity of the entity challenging the law doesn't matter and in acts but also the provisional law that affected and said what shippers not the carriers but the the parties shipping the tobacco products could do so i pretend you're passes issue and so now you're into the deregulation act no there is and this was mentioned in a footnote it has not been argued and it has not been briefed it was not relied upon by the district court there is what's known as a proprietor exception to the airline deregulation act but that is very limited and it feels it has as it's been construed so far has to do with the the ability of an airport for example to set landing fees they can charge landing fees that's that's within their stark proprietary powers there is no case law equivalent to the boston harbor line of cases that were that was discussed that would apply a similar market participate exception to the airline deregulation act and other cases on the other side not apply it i don't believe so i it's not something that i in my memory the only case that that has talked about the proprietors exception is a case that i argued against my colleague mr lewis in the district in the d c circuit that had to do with the the ability of of an airport to do congestion pricing on so in other words land the weather a landing fee could include a component of congestion our pricing so it was limited to the landing fees what about the american trucking association case in the court did recognize that there were that the that the city of all sense was acting as a regulator not a market participant but well i recognize that there could be a market for to some it market participant exception i'm just wondering why if there's a market participant exception to lots of different doctrines and laws it wouldn't apply to this one all i can say is that that has never been applied it to the airline deregulation contacts as far as i'm aware is there any reason why the airline deregulation actually be different than other laws that regulate similar things and whether this there should be exceptions or preemption for market versus i think well i think the basic principle of the airline deregulation act is that you want to avoid what's been called a patchwork of local regulations each airport setting rate or each state or locality setting regulations on the activities of a national and international business like airlines if you're flying from one airport to another and one airport imposes requirements at another airport does not that's going to create real problems so the unit uniformity of regulation is very important and that's been something that's been cited throughout the second i think part of it is that the as this court in industry court recognized the airline deregulation act was the aimed at the rate the regulating the economic aspects and it had seen competition in the industry and to the extent that individual localities or airports can undermine that goal by and by presenting their own ideas of how services should be good morning richard mccracken for the defendants the city of los angeles and la la as he would be a counsel table is cutlass section twenty five is not unprecedented it is very much like business enterprise the less angeles international airport is one of the biggest business enterprises in the country let me let me cut to the chase here just this case that turn on whether or not the market participant exception applies would you concede that if we was not entitled to claim the market participant exemption then this regulation would be preempted by federal labor and airline regulations we don't think so your honor because they pla have failed to show that any right or immunity that they have under either the national labor relations act or the railway labor act has been in any way in french but what we do with the mandatory arbitration provisions section twenty five five point seven is important because twenty five point seven of jersey and any involvement by the government in any of the things that are regulated by those two labor laws and twenty five point  find twenty five point seven to be somewhat sufis stick in the sense that if there is an obligation in the earlier subsections of twenty five that requires the employers to engage in mandatory collective bargaining which i think is what this is even though it's called a labor peace agreement and that if the employer and the union can't agree then the matter is going to be resolved through mediation and then binding arbitration and that it may include terms and conditions of employment why doesn't that directly conflict with the provisions of federal labor law and recognition by the federal absolves any service provider from any obligation to deal with a union on those subjects it's to civically excludes from the scope of this section and they terms conditions of employment an remember that this is only something that would happen if the union agreed because arbitration is two way street so even though this requires a service provider to agree to arbitration that doesn't mean an arbitration will occur because the union would have to agree to it as well because arbitration is a consensual contractual matter if no labor peace agreement is reached and the service company loses certification to prove to work at the airport if it is it may be in breach but if the this is a contract this document is a contract it is not a orders and the purpose of the language in twenty five it talks about terms and conditions it was well the part to talk about terms conditions takes it out of the picture the part that that must be and the only part that must be in a an agreement is a promise by the  to strike picket boycott and it's not just strikes it's also these other things like boycotts unions are privileged to use secondary boycotts bring in other people into their disputes as has happened at l and this is what the airports concern is is to make sure that labor disputes don't occur that interrupt the operations and involve the much larger airport community in labor disputes and that's only concern i understand all that i think it's  it's a legitimate concern but the it sort of begs the question as to whether or not this regulation provision whatever you want to call it i don't mean to be use that term in a pejorative fashion somehow requires the parties to do something that the labor laws do not otherwise permit and i read that provision as essentially requiring the employer to recognize first of all the  you as the representative to bargain the labor peace agreement even though the f b i you has not gone through a contested election that's overseen with and certified by the mediation board so what do you do in a situation where the employees let's say the baggage handlers are already represented by a different union if not only does the section twenty five point seven specifically for dead union from assisting upon a being recognized and privileges the service provider to ignore that kind of request but it would also be illegal under federal law but nothing under the nothing in this provision prevents the cia you from approaching the employee and saying we invoke section twenty five and we want you to negotiate a labor peace agreement with us and then end of the world just a labor peace agreement that would be fine because there would not be any conflicting obligations because labor peace agreement is only about whether the union will exercise these weapons of economic warfare that's the only subject but one and i think that play out what happened in the timeline to the the request is made to invoke this section and you're saying the union could refuse to go to arbitration but if the union invokes the section but it won't go to arbitration are you in the exact situation they're saying is that the union can demand concessions at that point that would relate to conditions of employment if the union demanded those concessions and the service provider said no we won't because we're not obligated to do so and let's say that the union went to the airport and said they're not entering into a labor peace agreement and the service provider said this because they're asking for things they're not allowed ask for then they are part as the contract and party would be hard put to find the service provider in breach of the section how do we know that though it seems like if they don't have the labor peace agreement at that point they don't get their license they have a labor peace agreement but the section is carefully crafted that as the district court noted prevents the they and union from demanding to be recognized when that's not proper or even if that were proper because that's outside of the scope of this so this is this is your position basically there's no negotiation i mean it almost sounds then like what you're saying is all this does is say a union's going to have labor peace agreements if they want them or not i don't even understand why they have to be involved at that point they the airlines of course are not involved at all ok that you must bargain in good faith but it doesn't say that you have to actually reach agreement this is you've got to reach agreement and if you can't do it in face to face negotiations we're going to do mediation and then we're going to go to binding arbitration not even federal labor law goes that far requires more than the national labor relations act would require if this were recognised bargaining agent and they were negotiating over the terms of a collective bargaining agreement if they were negotiating over the terms of a collective bargaining agreement the question of arbitration would be non mandatory subject a bargaining unit couldn't even insist that that happen so that's absolutely if this is the regulation this is mandatory it must result in a labor peace agreement because in order to be licensed the companies shall have employees at all required times of labor peace agreement with any labor organization that requests the of course that is also provided that no one no service provider is required to stop providing services while this process takes place what do you think the things that would be negotiated would be i mean what are the what are the bargaining chips here it seems like you're reading this differently than i had read it so i'm curious what you think this negotiation would look like i think it would probably  from experience entail first of all a an agreement to not have either party use weapons of economic warfare because the employers have been to the employers have the power of lockout as well as other means of exercising pressure and labor disputes so there would be a mutual stand down and using those tools although there can't be a strike there can't be a reason for a lockout an employer can lockout it chooses to it doesn't have to lockout only in response to a strike the records held in the american shipbuilding case the mid sixty's that employers can use offensive lock outs and they do ok so any other bargaining chips yes the union might ask the employer and the reason why this section does not address that subject because that is a right that that is the under federal labor law that's one of the things that's key about this is that all those rights employers have under federal labor laws are not addressed here but you're saying that they might have to be given up because of the negotiation that would happen under the section they might have to be negotiated and the question is what happens if the parties fail to reach agreement one of the things that may happen is that they can continue to use these weapons the airport doesn't want them to because that's the whole purpose of this is to stop them from doing so but if the union as unable to get the agreement it wants it may strike picket boycott secondary find so bizarre about this some of them are oh yes because they don't have to be this applies to both the ones that are already unionized and ones are not and as the complaint shows there are ones that are already union but in that case isn't the national mediation board the final arbiter of which labor organization is entitled to represent the company's employees under the railway labor act yes if they if the parties don't agree but under the railway labor act as under the national labor lay propose i'm the teamsters union and the and i represent the employees of the refuelers and the f b i you comes to the employer and says we want to negotiate  some terms here under the labor peace agreement why would another union want to allow a competing union to enter into binding negotiations with its employer over things that will affect the terms and conditions of work that's that's what's in the collective bargaining agreement yes and that's not what's in a labor peace agreement as these as twenty five point seven makes clear they the union that is not the incumbent who wishes to to organize to raid the other one let's say can only get an agreement about the use of economic weapons it cannot get a collective bargain and even through arbitration that's forbidden in section twenty five point seven so this is designed to prevent an employer from being in the position of having contrasting obligations to different units the result some service providers at l a x will have labor peace agreements but others will not ye union it doesn't have any regulatory or proprietary authority or relationship to any of the unions it doesn't do business with them on like the service providers so it cannot make unions go seek representation of or labor peace agreements with any of the service providers all it can do is to tell the service provider that if it happens that a union comes to you and you don't have to go find one but if one comes to you then you need to try to get the labor peace agreement so can you speak to why we should consider your market participants yes because this is like boston harbor it's a huge business enterprise a proprietary department of the city of los angeles as alleged in of about the argument that there is an extra layer at l a x that takes it out of the direct relationship between the proprietor and its employee well among other things there is a direct relationship between the airport and the service providers they're under contract together and the contract looks like most other commercial contracts that has as many provisions besides the labor provisions and also it is in the record that the  service providers pay a fee it's a sliding scale fee based on revenues to the airport that's an exhibit c to the provider remit which we provided as an attachment to our brief and there's a reference in  scheme this contract provides for an employer to be audited to have all these books and records audited by the airport to make sure that the fee is being paid in full that is not something one finds in a regulatory environment and there are many other provisions throughout the fairly long agreement that really are just what you would find in any kind of landlord tenant lease or in any kind of commercial contract about be different for the airlines and they will have to deal with other localities is that a reason to analyze that statute differently than the others as mr berger s it's because they the agreement here can only be what the union would do at l a x with respect to those employees so would not have any spillover effect anyplace else again one of the things that this does is very consciously avoids the kind of problem that existed in the metropolitan the walky case where there was that kind of spillover it also avoids the other serious problem in that false milwaukee case which is that the labor peace promise only lasted through the point of union recognition and not there after which led the court to i think quite rightly conclude that this doesn't really have much to do with labor peace it actually creates the opposite effect creates greater risk of labor disputes after recognition what this one applies throughout the entire relationship what about the fact that the provision is essentially one way in the sense that if the employer doesn't enter into the agreement it doesn't get a license to operate if the union violates the provision of the labor peace agreement there is no there's no penalty there's no governmental remedy because there's no relationship between the government here well and the union so there's no nothing to that the law could do to them however if the union enters into a labor peace remarks and your honor i am sorry i shouldn't have said collective bargain granted because section three hundred one does not say that it says agreements between unions and employers in commerce and the supreme court held in the lion drygoods case that a non collective bargaining thank you your honors which you start with what would you learn from discovery that would help you expand the record to give the court more information about this or do we not have enough given the fact that we've got the agreement we've got the have the basic understanding of what this is case is about i think one of the things we could learn from discovery is what the heck is going on here i mean i gather from the questioning from the bench that the court is at least as confused as we are in some ways about why is l a doing this what's behind it now the initials sci you have come from both sides of the bench here and we've alleged in the of the folks who are running the airport ok not because they're there when that's one bit of discovery what other discovery would you be able to get that would alumina at the issues that we have to decide i suppose we could we could do discovery as to what kinds of  bargaining we're going to be up against that's something that we don't really all we can do is is conjure based on what other people in the past have done they've asked for things like council mentioned  you know banning lockouts but of course that would and would operate as two people that the union asking for the labor peace agreement doesn't represent at the moment they are represented by other people or by nobody other times unions have asked for contact information about the employees you know how do we get ahold of these people off the job site access we have on the job site i'm sorry right in organizing efforts yes your honor in front and and because we believe that part of this is to allow some stronger more influential unions to bump aside unions that are already representing some of the employees of our members is there any discovery that could be taken on whether the airport is a market which participant it's a fact question in what sense is it a fact question what are they doing and what are making the requirements under the case law that we've set up we know what what the what the boston harbor case as boston harbor and the cases that came after it has said that unless you are directly contracting or actually talks about contracts or sub contracts i'm not really sure the agreement in that case talked about  that's the best i can do for you at this point i think that those cases do say it and otherwise i see my light is coming i was tempted to simply say oh i'll submit on