ORDER 2011-1-13

UNITED STATES OF AMERICA

DEPARTMENT OF TRANSPORTATION

 OFFICE OF THE SECRETARY

 WASHINGTON, D.C.

Issued by the Department of Transportation

on the 14th day of January, 2011

________________________________________________

: 

ALASKA AIRLINES, INC., ET AL. , : 

: DOCKET NO. 

v. : OST-2007-27331

:

LOS ANGELES WORLD AIRPORTS, ET AL. :

:

THIRD ORDER GRANTING AN INTERIM STAY OF PROCEEDINGS AND 

EXTENDING DEADLINE

TO FILE PROCEDURAL COMMENTS

By this Order, the United States Department of Transportation (Department) 

grants the Complainants’ and Respondents’ December 15, 2010 request, in the 

Complainants’ and Respondents’ Joint Report on the Status of Settlement Discussions 

(Dec. 15, 2010 Joint Report), to stay further proceedings in the case until July 31, 2011.1 

This Order also requires the parties to continue to file with us status reports of their

settlement discussions. 

We initiated further proceedings in this case following the issuance of the 

mandate on September 25, 2009, by the United States Court of Appeals for the District of 

Columbia Circuit in Alaska Airlines, Inc., et al. v. U.S. Department of Transportation, 

575 F.3d 750 (D.C. Cir. 2009). See, Orders 2009-11-24 (Nov. 24, 2009) and 2009-12-17 

 

1 The Complainants in this case include certain carriers operating out of Terminals 1 and 3 at Los Angeles 

International Airport (LAX). Southwest Airlines and US Airways operate out of Terminal 1 (T/1 Carriers). 

Alaska Airlines, AirTran Airways, ATA Airlines, Frontier Airlines, and Midwest Express operate out of 

Terminal 3 (T/3 Carriers). The Respondents include the Los Angeles World Airports (LAWA), operator of 

Los Angeles International Airport (LAX), owned by the City of Los Angeles. The parties include the 

Complainants and Respondents. The stay will continue until Monday, August 1, 2011.
2

(Dec. 22, 2009). That case arose out of our Final Decision (Order 2007-6-8, June 15, 

2007) issued under 49 U.S.C. § 47129 on the reasonableness of new terminal fees and 

new fee methodologies imposed at the Los Angeles International Airport, following a 

complaint filed by certain air carriers in Terminals 1 and 3 (T1/T3 Carriers) against the 

airport operator, Los Angeles World Airports (LAWA). As explained in Order 2009-11-

24, the D.C. Circuit remanded five issues for us to address.

Since the commencement of the proceedings on remand, we have encouraged the 

parties to attempt resolution of the outstanding issues. To this end, we have issued 

Orders that required periodic filing of status reports of settlement discussions, extended 

the time to file procedural comments on the administrative process for our consideration 

of the remanded issues, and stayed the proceeding on remand to provide additional time 

for the parties to achieve a local resolution of the issues. See, Orders 2010-01-14 (Jan. 

21, 2010) and 2010-11-18 (Nov. 18, 2010). Pursuant to our Orders, the parties have filed 

Joint Reports on the Status of Settlement Discussions (Joint Reports) on March 18, May 

17, September 24, and December 15, 2010. 

In the Joint Reports, the parties have informed us of the progress made to date in 

reaching agreement on the outstanding issues and of the possibility of progress to be 

made in the near future. In January of last year, LAWA and the T1/T3 Carriers informed 

us that they had reached agreement on one of the five remanded issues (that is, the 

timeliness of the T1 Carriers’ objection to LAWA’s use of fair market valuation in setting 

the base rent in Terminal 1). More recently, as stated in the Dec. 15, 2010 Joint Report, 

they told us that the one-on-one discussions between LAWA and Alaska Airlines resulted 

in “significant progress” to “finally and completely” resolve all their outstanding disputes 

in the matter. Dec. 15, 2010 Joint Report, at 3.
3

Importantly, the Joint Reports also described the continued discussions between 

LAWA and the LAX Airlines, including the T1/T3 Carriers, on possible revisions to the 

Tariff imposing terminal charges at the airport. LAWA, according to the Dec. 15, 2010 

Joint Report, recently agreed to provide the financial information that has been requested 

by the T1/T3 Carriers, related to the proposed changes to the terminal charges Tariff. 

Due to confidentiality concerns, LAWA will provide the information directly to 

AvAirPros, the LAX Airlines’ outside consultant. AvAir Pros subsequently will analyze 

the information and advise the T1/T3 carriers on their negotiations over the revised 

Tariff. 

The parties note that, “[i]f an agreement can be reached relating to a revised 

Tariff, it may moot the four remaining remanded issues.” Dec. 15, 2010 Joint Report at 4. 

The parties further stated that it will take several months before the T1/T3 Carriers and 

LAWA will be in a position to reach agreement, if at all, on the revised Tariff. To 

facilitate this progress on a possible settlement agreement, the parties requested that we 

continue to stay the remanded case until July 31. Neither Airports Council InternationalNA (ACI-NA) nor Air Transport Association (ATA) filed objections or comments to the 

parties’ request. 

We are heartened that the parties have moved forward in their attempts to achieve 

a local resolution of the remaining issues and expect them to be in a position to make 

significant progress in the upcoming six and a half months. Accordingly, because we 

wish to encourage a local settlement of the remaining remanded issues, we are willing to 

grant the relief requested in the motion. We will continue to require the parties to 

provide periodic status reports of settlement discussions during this time period, in order 

to keep the Department apprised of the progress of the negotiations. The status reports 
4

will be due by February 15, April 15, and June 15, 2011, or such earlier times as we may 

deem appropriate.

Accordingly, 

1. We grant the Joint request;

2. We stay the proceeding on remand until August 1, 2011, during which the Los 

Angeles World Airport (LAWA), on the one hand, and any or all of the T1/T3 

Carriers, on the other hand, will attempt to resolve the remaining remanded issues 

described in Order 2009-11-24 at 2-3, namely Paragraphs No. 1 (Airfield vs. nonairfield space), 2 (Other aeronautical uses of terminal space), 4 (Burden of 

persuasion on rentable space) and 5 (Monopoly power);

3. We order the T1/T3 Carriers and the LAWA to file a written status report as to the 

progress of their settlement discussions by February 15, 2011, April 15, 2011, and 

June 15, 2011, or by such earlier time as the Department may order as 

appropriate;

4. We invite the T1/T3 Carriers, the Los Angeles World Airport, the Airports 

Council International – NA, and the Air Transport Association to file replies to 

the submissions described in Ordering paragraph 2, no later than August 11, 2011,

if a settlement agreement is not achieved by August 1, 2011. 

SO ORDERED 

 

By:

 

CHRISTA FORNAROTTO

 Deputy Assistant Secretary for Aviation

 and International Affairs

(SEAL)

Dated
5

An electronic version of this document is available on the World Wide Web at

http://dms.dot.gov//reports/reports_ aviation.asp

OST-2001-27331

We served a copy of Order on the persons listed in the Service List.

SERVICE LIST 

U.S. DOT Dockets 

U.S. Department of Transportation 

1200 New Jersey Avenue, S.E., 

Washington, DC 20590

Steve S. Rosenthal, Esq. 

Jeffrey A. Tomasevich, Esq. 

J.D. Taliaferro, Esq. 

KAYE SCHOLER LLP 

901 Fifteenth Street, N.W., Suite 1100

Washington, DC 20005-2327

srosenthal@kayescholer.com;jtomasevich@kayescholer.com;

jtaliaferro@kayscholer.com

TEL: (202) 682-3500 FAX: (202) 682-3580

Roy Goldberg

Sheppard, Mullin, Richter & Hampton 

1300 I Street, N.W., Suite 1100 East 

Washington, DC 20005-3314

rgoldberg@sheppardmullin.com

TEL: (202) 218-0007 FAX: (202) 218-0020

Robert S. Kneisley

 Associate Counsel

Leslie Abbott

 Attorney

Southwest Airlines Co.

1901 L Street, NW

Suite 640

Washington, DC 20036
6

Howard Kass

Vice President, Legal Affairs

US Airways Group, Inc.

1401 H Street, NW

Suite 1075

Washington, DC 20005

Thomas O’Grady

Deputy General Counsel

Alaska Airlines, Inc.

19300 International Boulevard

Seattle, WA 98188-5303

Jacqueline Peter

Counsel

Frontier Airlines, Inc.

7001 Tower Road

Denver, CO 80249

Richard P. Magurno

Senior Vice President, General Counsel and Secretary

Air Tran Airways, Inc.

9955 AirTran Boulevard

Orlando FL 32827

Edward P. Faberman

Wiley Rein LLP

1776 K Street, NW

Washington, DC 20006

Carmen A. Trutanich

 Los Angeles City Attorney

Kelley Martin, Esq. 

 General Counsel of LAWA

Raymond S. Ilgunas, Esq. 

 Assistant General Counsel 

City of Los Angeles Attorney’s Office 

Los Angeles World Airports 

One World Way 

Los Angeles, CA 90045

Kellymartin@lawa.org;rilgunas@lawa.org;c.trutanich@lacity.org 

TEL: (424) 646-5010; FAX: (424) 646-9617
7

David A. Berg, Esq. 

Vice President & General Counsel 

Airport Transport Association of America

1301 Pennsylvania Avenue, NW 

Washington, DC 20004

dberg@airlines.org; kandrus@airlines.org

TEL: (202) 626-4234 FAX: (202) 626-4139

Robert P. Silverberg, Esq. 

Silverberg, Goldman & Bikoff, LLP

1101 30th Street, N.W. Suite 120

Washington, DC 20007

rsilverberg@sgbdc.com

TEL: (202) 944-3300 FAX: (202) 944-3306

Scott P. Lewis

Anderson & Kreiger LLP 

One Canal Park, Suite 200

Cambridge, MA 02141

slewis@andersonkreiger.com

TEL: (617) 621-6560 FAX: (617) 621-6501

Monica R. Hargrove, General Counsel 

Airports Council International – North America

1775 K Street, N.W. 

Washington, DC 20006

mhargrove@aci-na.org; 

TEL: (202) 293-8500 FAX: (202) 331-1362

Nancy Kessler, Esq. 

Office of General Counsel 

U.S. Department of Transportation 

1200 New Jersey Avenue, S.E. 

Washington, DC 20590

Nancy.kessler@dot.gov

TEL: (202) 366-9287 FAX: (202) 493-0154

The Honorable Richard C. Goodwin

Administrative Law Judge

Office of Hearings, M-20, Room 5411

U.S. Department of Transportation 

1200 New Jersey Avenue, S.E. 

Washington, DC 20590

Richard.goodwin@dot.gov;ira.leibowitz@dot.gov;patricia.matthews@dot.gov

TEL: (202) 366-2139; (202) 366-2139 Legal Assistant (202) 366-5121 FAX: (202) 

366-7536
8

Rosalind A. Knapp 

Deputy General Counsel 

U.S. Department of Transportation 

1200 New Jersey Avenue, S.E., W92-312

Washington, DC 20590

Lindy.knapp@dot.gov 

TEL: (202) 366-4713

Paul M. Geier

Assistant General Counsel for Litigation 

U.S. Department of Transportation 

1200 New Jersey Avenue, S.E., W94-310

Washington, DC 20590

Paul.geier@dot.gov

TEL: (202) 366-4731

Christa Fornarotto

Deputy Assistant Secretary for Aviation 

 And International Affairs

U.S. Department of Transportation 

1200 New Jersey Avenue, S.E., W88-324 

Washington, DC 20590

Christa.fornarotto@dot.gov

TEL: (202) 366-4551 

Dana Gresham 

Assistant Secretary for Governmental Affairs

U.S. Department of Transportation 

1200 New Jersey Avenue, S.E., W85-332

Washington, DC 20590

dana.gresham@dot.gov

TEL: (202) 366-4573

Jill Zuckman 

Assistant Secretary and Director of Public Affairs

U.S. Department of Transportation 

1200 New Jersey Avenue, S.E., W93-310

Washington, DC 20590

Jill.zuckman@dot.gov 

TEL: (202) 366-4570
9

Bill Mosley

Public Relations 

U.S. Department of Transportation 

1200 New Jersey Avenue, S.E., W93-501

Washington, DC 20590

Bill.mosley@dot.gov 

TEL: (202) 366-5582