Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caDC-15-01036/USCOURTS-caDC-15-01036-0/pdf.json

Parties Involved:
Delta Air Lines, Inc.
Intervenor for Respondent
Southwest Airlines Co.
Petitioner
United States Department of Transportation
Respondent

Document Text:

United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued February 12, 2016 Decided August 9, 2016

No. 15-1036

SOUTHWEST AIRLINES CO.,

PETITIONER

v.

UNITED STATES DEPARTMENT OF TRANSPORTATION,

RESPONDENT

DELTA AIR LINES, INC.,

INTERVENOR

On Petition for Review of an Order of the 

United States Department of Transportation

M. Roy Goldberg argued the cause for petitioner. With 

him on the briefs was Robert W. Kneisley.

Benjamin M. Shultz, Attorney, U.S. Department of 

Justice, argued the cause for respondent. With him on the 

brief were Benjamin C. Mizer, Principal Deputy Assistant 

Attorney General, Michael S. Raab, Attorney, Paul M. Geier, 

Assistant General Counsel for Litigation, U.S. Department of 

Transportation, Peter J. Plocki, Deputy Assistant General 

Counsel for Litigation, and Charles E. Enloe, Trial Attorney.

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Jeffrey M. Harris argued the cause for intervenor. With 

him on the brief were Paul D. Clement, Edmund G. LaCour, 

Jr., Kenneth P. Quinn, and Jennifer Trock.

Before: SRINIVASAN and WILKINS, Circuit Judges, and 

GINSBURG, Senior Circuit Judge.

Opinion for the Court filed by Circuit Judge SRINIVASAN.

SRINIVASAN, Circuit Judge: Southwest Airlines seeks 

our review of a letter from the Department of Transportation 

(DOT) to the City of Dallas addressing competition policies 

for airlines operating at Love Field airport. According to 

Southwest, the views expressed by DOT in the letter are 

substantively incorrect and procedurally improper. We 

dismiss Southwest’s petition for review because we find 

DOT’s letter does not constitute a final agency action, a 

prerequisite to our review. In particular, the letter does not 

reflect the consummation of DOT’s decisionmaking on the 

issues it discusses. DOT in fact has instituted an

administrative proceeding (which remains ongoing) that will

address and resolve, among other things, the precise issues 

and policies broached in the letter. Because we conclude that

the challenged letter is not a final agency action, we dismiss 

Southwest’s challenge.

I.

A.

Southwest Airlines, Love Field, and the City of Dallas 

have a long and somewhat complicated history. Love Field 

served as Dallas’s municipal airport starting in the 1920s. The 

City of Fort Worth (located about thirty miles away) operated 

its own municipal airports. 

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In 1964, federal regulators required the two cities to

designate a single airport to service the Dallas-Fort Worth 

metropolitan area, leading to the construction of the 

Dallas/Fort Worth International Airport (DFW). In order to 

ensure that all commercial air traffic would be routed through 

DFW instead of the municipal airports, all interstate 

commercial carriers agreed to transfer their service to DFW. 

Southwest refused to move. In 1973, a federal court ruled 

that Southwest must be allowed to operate from Love Field as 

an intrastate commuter airline. City of Dallas v. Southwest 

Airlines Co., 371 F. Supp. 1015 (N.D. Tex. 1973), aff’d, 494 

F.2d 773 (5th Cir. 1974).

A few years later, federal regulators allowed Southwest

to begin interstate service to New Orleans from Love Field. 

Some Members of Congress raised concerns “that if 

Southwest were to operate on an unrestricted basis from Love 

Field (closer to Dallas than DFW) many travelers to and from 

Dallas would choose that option rather than using DFW, thus 

undermining the economic viability of DFW.” Kansas v. 

United States, 16 F.3d 436, 438 (D.C. Cir. 1994). Congress

responded by enacting the Wright Amendment, named for 

then-Texas Representative and Speaker of the House Jim 

Wright. The Wright Amendment confined interstate 

commercial air traffic from Love Field to Texas’s four border

states: Louisiana, Arkansas, Oklahoma, and New Mexico. 

Pub. L. No. 96-192 § 29, 94 Stat. 35, 48-49 (1980). 

(Congress later added Kansas, Alabama, and Mississippi to 

that list. Pub. L. No. 105-66 § 337(b), 111 Stat. 1425, 1447 

(1997).)

In July 2006, the Cities of Dallas and Fort Worth, the 

DFW Airport Board, American Airlines, and Southwest 

agreed to seek the repeal of the Wright Amendment in order 

to allow interstate service from Love Field to the rest of the 

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country. The contract embodying their agreement became

known as the “Five-Party Agreement.” Later that year, 

Congress enacted the Wright Amendment Reform Act of 

2006 (WARA), codifying many provisions of the Five-Party 

Agreement. Pub. L. No. 109-352, 120 Stat. 2011 (2006). The 

WARA ended all geographic limitations on flights from Love 

Field as of October 13, 2014, and limited the number of gates 

at Love Field to twenty. Id. §§ 2, 5(a). Southwest leases

sixteen of those twenty gates and also subleases two of the 

remaining gates.

B.

In the petition before us, Southwest challenges a 

Department of Transportation guidance letter addressing

“accommodation” policies at Love Field. Accommodation is

a process by which an airline can gain access to operate 

flights from an airport at which it leases no gates. One of the 

airport’s tenant airlines “accommodates” the non-tenant 

airline’s flights by letting the non-tenant airline use one or 

more of the accommodating tenant’s gates. Accommodation

may be voluntary, in the form of an agreement between two 

airlines. Accommodation also may be forced, when the 

airport requires a tenant airline to make room for a non-tenant 

airline.

The accommodation procedures for Love Field are set 

out in the airport’s gate lease with tenant airlines. The lease 

contains provisions for both voluntary and forced 

accommodation, as well as a “scarce resource provision,”

which calls for the City to choose which airline will be forced 

to accommodate a new entrant (if necessary) and sets out the 

terms for an accommodation. The WARA also speaks to 

accommodation at Love Field, requiring the City to 

“determine the allocation of leased gates and manage Love 

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Field in accordance with contractual rights and obligations” as 

they existed on WARA’s effective date and to “honor the 

scarce resource provision of the existing Love Field leases” 

when “accommodat[ing] new entrant air carriers.” Pub. L. 

No. 109-352 § 5(a), 120 Stat. 2011, 2012 (2006). 

Two federal statutes addressing airport operations and 

competition—the Airport and Airway Improvement Act, 49 

U.S.C. §§ 47101, et seq., and the “Competition Plan” statute, 

id. § 40117(k)—also pertain to accommodation. In order to 

receive funds under either statute, most airports, including 

Love Field, must submit a “competition plan” to DOT, 

outlining “the availability of airport gates and related 

facilities, leasing and sub-leasing arrangements, gate-use 

requirements, gate-assignment policy, [and] financial 

constraints.” Id. §§ 47106(f), 40117(k). In 2009, the City of 

Dallas submitted its most recent plan for Love Field, which

DOT approved. 

Before receiving a grant through the Airport and Airway 

Improvement Act, an airport must also agree in writing to a 

number of grant assurances, including, for example, that it 

“will be available for public use on reasonable conditions and 

without unjust discrimination,” id. § 47107(a)(1), and will 

give no airline “an exclusive right to use the airport,” id. 

§ 47107(a)(4). If DOT believes an airport has breached one 

of the grant assurances, the agency, acting through the Federal 

Aviation Administration (FAA), may initiate an 

administrative process to investigate—and if necessary 

adjudicate—the alleged noncompliance. See 49 U.S.C. 

§ 47122; 14 C.F.R. §§ 16.1(a)(5), 16.101. That process is 

known as a “Part 16” proceeding.

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C.

In 2014, Delta Airlines sought voluntary accommodation 

to fly five daily flights out of Love Field. Having no luck

with the tenant airlines, it sought assistance from the City, 

invoking the City’s obligations to accommodate non-tenant 

airlines under the grant assurances and the City’s competition 

plan for Love Field. Delta, the tenant airlines, and the City 

then exchanged a flurry of letters and emails debating 

whether, and on what terms, one of the tenant airlines should 

be forced to accommodate Delta. On December 1, 2014, the 

City notified the tenant airlines that it was invoking the 

process for forced accommodation set out in the airlines’ 

leases. 

Shortly thereafter, the City sought guidance from DOT 

about the City’s legal obligations under the grant assurances 

and competition plan. On December 17, 2014, DOT 

responded with a letter—the one at issue in this case—

providing “guidance” to the City. In the letter, DOT made the 

following statements discussing its understanding of the 

City’s obligations to force accommodation of a non-tenant

airline:

Our competition plan policy requires airport 

proprietors to assist requesting carriers seeking 

access, and we expect that, if a requesting 

carrier is unable to arrange a voluntary 

accommodation with a signatory carrier, the 

City will accommodate the requesting carrier to 

the extent possible given the current gate usage, 

without impacting current or alreadyannounced, for-sale services by the signatory 

carriers.

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With respect to the length of the 

accommodation, for the accommodation to be 

meaningful at [Love Field], it is our position 

that, once accommodated, the accommodated 

carrier is entitled to an ongoing similar pattern 

of service as long as the carrier continues to 

operate the accommodated flights. Importantly, 

the accommodated carrier should not be pushed 

out by incumbent carriers at a later date. It is 

the City’s responsibility to continue the 

accommodation and ensure that space is 

available so that the requesting carrier is able to 

maintain its pattern of service on an ongoing 

basis, based on the available space on the 

snapshot date of the original accommodation 

request, even after the expiration or termination 

of any agreement between the accommodated 

carrier and signatory carriers.

DOT’s December 17, 2014 Letter, at 2 (J.A. 002). 

On February 13, 2015, Southwest filed a petition for 

review of the letter, giving rise to this case. Southwest 

disputes the substance of DOT’s letter on two fronts: (i) 

DOT’s position that the City should determine a tenant 

airline’s “current gate usage” on a “snapshot date”; and (ii) 

DOT’s position that forced accommodation would continue at

least “as long as the [accommodated] carrier continues to 

operate the accommodated flights.” Id. Southwest’s concerns 

grow out of its plans to increase its service at some point after 

the “snapshot date” referenced in DOT’s letter. Southwest 

contends that forced accommodation of Delta based on the 

snapshot date, for as long as Delta operates accommodated 

flights, would impair its ability to increase its schedule as it 

desires. In Southwest’s view, its right to increase its service

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should supersede any accommodation claim Delta might 

have.

After receiving the December 17 letter, the City took no 

action to implement DOT’s guidance. Rather, the City asked

the agency for additional guidance. See Compl. at ¶ 76, City 

of Dallas v. Delta Air Lines, Inc., No. 15-cv-02069 (N.D. Tex. 

June 17, 2015). In response, DOT sent the City another 

guidance letter. On August 13, 2015, Southwest filed a 

petition for review of the second letter. That case has been

held in abeyance pending the outcome of this one.

Meanwhile, and significantly for our purposes, on August 

7, 2015, the FAA initiated a Part 16 proceeding to assess the 

City’s compliance with its grant obligations. See Notice of 

Investigation, In re Compliance with Federal Obligations by 

the City of Dallas, FAA Docket No. 16-15-10 (Aug. 7, 2015). 

In its notice initiating the proceeding, the FAA explicitly 

stated that the December 17 letter was not its final word on 

the accommodation issue. See id. at 10 n.12. And although 

the City is the only respondent in the proceeding, the FAA 

invited Southwest, Delta, and other interested airlines to 

participate in the proceeding by filing briefs “containing any 

information or argument that it believes the FAA should 

consider.” Notice of Opportunity, FAA Docket No. 16-15-10

(Nov. 6, 2015). 

II.

In its petition for review of DOT’s December 17 letter, 

Southwest argues that DOT’s guidance violates the 

accommodation terms of Southwest’s lease, and thus also 

infringes the WARA’s statutory command that the City honor 

the scarce resource provision of the Love Field gate leases. 

Southwest further contends that the letter amounts to a 

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legislative rule for which the Administrative Procedure Act 

(APA) required prior notice and opportunity for comment. 

See 5 U.S.C. § 553. 

Southwest’s petition for review invokes this court’s 

jurisdiction under 49 U.S.C. § 46110(a). That provision gives

us jurisdiction over DOT and FAA “order[s]” as defined in 

the APA: “the whole or a part of a final disposition, whether 

affirmative, negative, injunctive, or declaratory in form, of an 

agency in a matter other than rule making.” 5 U.S.C. 

§ 551(6); SecurityPoint Holdings, Inc. v. TSA, 769 F.3d 1184, 

1187 (D.C. Cir. 2014). To be subject to judicial review under 

the APA, an FAA order must be a final agency action. See id. 

In Bennett v. Spear, the Supreme Court established a twopart test for determining whether an agency action qualifies as 

final so as to be subject to judicial review:

First, the action must mark the consummation of 

the agency’s decisionmaking process—it must 

not be of a merely tentative or interlocutory 

nature. And second, the action must be one by 

which rights or obligations have been 

determined, or from which legal consequences 

will flow.

520 U.S. 154, 177-78 (1997) (internal quotation marks and 

citations omitted). An order must satisfy both prongs of the 

Bennett test to be considered final. See Ctr. for Auto Safety v. 

Nat’l Highway Traffic Safety Admin., 452 F.3d 798, 807 (D.C. 

Cir. 2006).

We conclude that the DOT’s December 17 letter fails at 

the first prong. In assessing whether a particular agency 

action qualifies as final for purposes of judicial review, this 

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court and the Supreme Court have looked to the way in which 

the agency subsequently treats the challenged action See, 

e.g., U.S. Army Corps of Eng’rs v. Hawkes Co., 136 S. Ct. 

1807, 1813-14 (2016); Whitman v. Am. Trucking Ass’ns, 531 

U.S. 457, 478-79 (2001); Nat’l Mining Ass’n v. McCarthy, 

758 F.3d 243, 253 (D.C. Cir. 2014); Amerijet Int’l, Inc. v. 

Pistole, 753 F.3d 1343, 1349 (D.C. Cir. 2014); Nat’l Envtl. 

Dev. Ass’n’s Clean Air Project v. EPA, 752 F.3d 999, 1007 

(D.C. Cir. 2014); Holistic Candlers & Consumers Ass’n v. 

FDA, 664 F.3d 940, 944 (D.C. Cir. 2012). In McCarthy, for 

instance, we found a guidance document was non-final in part 

because there was no indication that the agency had applied 

the guidance as if it bound regulated parties. 758 F.3d at 253. 

Here, we conclude that the agency’s initiation of a Part 

16 proceeding—to resolve, among other things, the very 

issues addressed in the challenged December 17 letter—

undermines Southwest’s claim that the letter marked the 

consummation of the agency’s decisionmaking process. 

When the FAA opens an investigation under Part 16, it sends 

a notice of investigation to “the person(s) subject to 

investigation” (in this case, the City), setting forth its 

concerns and rationale and requesting a response within 30 

days. 14 C.F.R. § 16.103. The FAA’s notice here makes 

clear that the agency did not consummate its decisionmaking 

process in the December 17 letter (or thereafter). The notice 

specifies that the “City will be afforded a full opportunity to 

raise arguments in this proceeding on . . . any . . . relevant 

topic including the guidance provided by the DOT letters of 

December 2014 and June 2015.” Notice of Investigation at 

12 (emphasis added). The notice further states that, 

“[b]ecause the [December 17] letter only offered guidance, it 

was not intended to constitute a definitive resolution of the 

dispute.” Id. at 10 n.12. 

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The agency, moreover, did more than simply issue a posthoc statement characterizing a prior action (the December 17

letter) as non-final. DOT put its money where its mouth is, so 

to speak. The agency invested its time and resources in 

undertaking exactly the type of action—a Part 16 

proceeding—that will lead to a final resolution of the matters 

addressed in the letter. And it went further: it specifically 

stated in the Notice of Investigation that it would entertain 

arguments about the guidance set forth in its prior letters, and 

it invited Southwest (and other interested parties) to 

participate and file a brief on those issues. 

We thus have no occasion in this case to consider

whether an agency’s mere characterization of a previously

issued guidance letter as open to reconsideration would 

suffice to render the letter non-final. Here, the agency did 

more than simply say it would give further consideration to 

issues addressed in its prior guidance: it instituted the process 

by which it could do so, confirming that the December 17 

letter is not the agency’s final word on the issues at hand.

The Part 16 process will afford an opportunity to address 

the issues Southwest raises in its petition here. In fact, the 

submissions in the Part 16 proceeding raise for the agency’s 

consideration the very issues Southwest claims were finally 

decided in the December 17 letter. See Response of 

Southwest Airlines Co. at 38-49, FAA Docket No. 16-15-10

(Dec. 23, 2015); Invited Brief of Delta Air Lines, Inc. at 15-

19, FAA Docket No. 16-15-10 (Dec. 23, 2015); Response of 

the City of Dallas at 71, 79-87, FAA Docket No. 16-15-10 

(Nov. 23, 2015). And the Part 16 process will result in a final 

decision subject to judicial review. If the FAA and the City

cannot resolve the FAA’s concerns through informal means, 

the agency may conduct a hearing to determine the City’s

compliance with its obligations under the grant assurances, 14 

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C.F.R. §§ 16.201, 16.202, or the Director may make a 

determination without a hearing, id. §§ 16.105, 16.31. In 

either case, the initial determination may be appealed to the 

Associate Administrator for Airports, who issues a final 

decision. Id. §§ 16.33(b), 16.241(b), (c). Such a decision 

constitutes a final agency action for purposes of the APA and 

is subject to judicial review in the courts of appeals. Id.

§ 16.247. 

The relevant regulations also make clear that any 

decisions or determinations at earlier stages of the Part 16 

process are not final agency actions (and, as such, are not 

subject to judicial review). See id. We would be hardpressed to find that a letter sent months before the initiation of 

the Part 16 proceeding, addressing issues to be vetted and 

resolved in that proceeding, is somehow more “final” than the 

proceeding’s non-final, early-stage decisions (which of course 

come after the letter). At the end of the Part 16 proceeding, 

the agency might ultimately adhere to the views expressed in 

the December 17 letter, or it might take a different approach.

At this point, though, we cannot be sure of the agency’s final 

stance on the issues addressed in the letter.

Southwest contends that the letter nonetheless was final

agency action because DOT has not rescinded or disavowed 

the letter. In making that argument, we note that Southwest 

necessarily agrees with our approach of examining 

subsequent agency actions in considering finality—they’ve 

explicitly asked us to do so. But Southwest provides no 

support for its argument, and has pointed us to no cases in 

which we have required an agency to rescind non-final advice 

or guidance in order to prove that its decisionmaking process 

has yet to be consummated. We find the argument 

unpersuasive.

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It is unclear whether Southwest, the City, or any other 

affected entities at one time may have viewed the December 

17 letter as a definitive mandate requiring the City to force 

accommodation on the terms outlined in the letter. The City, 

for its part, took no action to implement the guidance set out 

in the letter, instead seeking further guidance from DOT. In 

any event, now that the Part 16 process is underway, any such 

view of the December 17 letter which may have existed at one 

time would have no continuing force.

Because DOT’s December 17 letter did not mark the 

consummation of the agency’s decisionmaking process for 

purposes of the first prong of Bennett’s finality test, the letter 

was not a final agency action. In light of that conclusion, we

have no occasion to reach Southwest’s arguments under the 

second Bennett prong. For the same reason, we also do not 

consider Southwest’s contention that the letter amounted to a 

legislative rule as to which the agency was required to give 

prior notice and opportunity for comment.

* * * * *

For the foregoing reasons, we dismiss the petition for 

review. 

So ordered.

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