UNITED STATES DEPARTMENTOFTRANSPORTATION FEDERALAVIATIONADMINISTRATION WASHINGTON, D.C.

IN RE MATTER OF COMPLIANCE WITH FEDERAL OBLIGATIONS BY THECITY OFDALLAS,TEXAS FAADocketNo.16-15-10

AFFIDAVIT OFPETERB. HASKELINSUPPORTOF CITY OFDALLAS' RESPONSE

OFTHE CITY OFDALLASTOTHENOTICE OFINVESTIGATIONAND MOTION TODISMISS THENOTICE OFINVESTIGATION I, PeterB. Haske!, ofmy personalknowledge andbeliefdeclare as follows: I. I am an Executive Assistant City Attorney for the City ofDallas and have served
as the City'sprimarycounselin litigatingthe accommodation issues atLoveField. 2. I am familiar with the documents attached as exhibits to the City's response, including those referenced in this affidavit. The documents are true and correct copies of documents that the City received, retrieved, or produced in the ordinary course ofbusiness or from public sources in connection with the accommodation ofthe Delta at Love Field, including documents submitted in the litigation before the Federal District Court for the Northern District ofTexas. We have also received documents from Southwest Airlines, Inc. and the Department ofTransportation ("DOT") submittedin the litigationbefore the Court ofAppeals for District of Columbia. 3. Following the City's September 29, 2014, determination that there would be no space to accommodate Delta after October 13, 2014 and Delta's strong negative reaction, I sought guidance from the DOT as to the City's legal obligations under WARA, the Five-Party Agreement and its Competition Plan in an effort to forestall threatened litigation bythe carriers. 1Iparticipatedin manytelephone and personal discussions with the DOTrespecting Delta'sLove Field accommodation requests and related issues, at which either Federal Aviation Administration ("FAA") personnel were present orfor which the DOT assured me that the DOT
was also speaking for FAA. Most ofmy email communications with the DOT also included FAA personnel. At all times I believed, and still believe, that FAA was fully informed by the DOT ofall communicationsbetweenthe City and the DOT and that the DOT consulted with the FAA as to all communications to the City on these issues. The City therefore saw no need for additional communicationwith theFAA onthese subjects. 4. On October 6, I emailed Kathryn Thomson, DOT General Counsel, requesting that, in the event the airlines could not resolve Delta's accommodation request themselves, the "City would appreciate DOT communicating a firm directive to Delta that Delta not sell any tickets for arrival at or departure from Love Field for dates and times for which Delta does not have confirmed gates." 1 On the afternoon of the same day, the City hosted a meeting and teleconference with airline representatives and Ms. Thomson participating to discuss Delta's accommodation request. 5. The City's concern then, as it remains, was to ensure safe, efficient and reasonable operation ofthe airport and, to the extent possible, to avoid burdening or confusing the traveling public due to uncertainty over which carriers were operating from Love Field. I made it clearto DOT General Counsel that we sought clear direction from the DOT so we could proceed withoutriskofoffending any ofthe City's obligationsunderapplicablefederal law.

1 Exhibit 22, Email from P. Haske!, City, to K. Thomson, DOT (Oct. 6, 2014). The exhibits citedherein are exhibitsto the City'sResponse andMotiontoDismiss and are identified byexhibitnumber as theyappearin that document. 26. Although an October 2014 agreement between airlines to accommodate Delta through January 6, 2015 provided relieffrom the immediate accommodation pressure, the City recognized the need for a longer-term solution. During October, with informal guidance and assistance from the City, Delta, Southwest, and United continued to negotiate an agreement for accommodation past January 6, 2015, and presented their respective accommodation positions
more formally to the DOT and the FAA. Throughout these discussions, the City made it clear that it preferred that the carriers reach an accommodation agreement but that, in the absence of
an agreement, the City would meet its obligations under the Lease, the Five-Party Agreement, andWARA, and wouldmandate accommodationifnecessary. 7. Because it was not aparty to the inter-airline negotiations, the City did not know in late Octoberwhetherthenegotiations were makingprogress orwhether along-termnegotiated resolution to the accommodation dispute would be possible. Therefore, the Cityrecognized that it might be appropriate for it to exercise its authority under the Lease to mandate accommodation. The City was also hopeful that the mere threat ofmandated accommodation would help the carriers in their negotiations. As a consequence, in November the City began preparing a formal set ofprocedures for implementing the forced accommodation requirements, shouldmandated accommodationbecomenecessary. 8. On November 19, 2014, City representatives met with approximately ten DOT and FAAofficials at the DOTheadquarters. In alengthy and wideranging discussion, the DOT and the FAA officials gave the City considerable guidance on the accommodation process, includingthe following keypoints:
• DOT counsel expressed the opinion that their review ofthe Lease led them to conclude that there is sufficient authority in the Lease to allow the Cityto accommodateDelta.

3• The Office ofthe Secretary is charged with ensuring compliance withcompetitionplan-relatedissues. • The Lease meets the DOT requirements with respect to competitive access. • The DOT interprets the term "new entrant" in this context to be any carrier other than a signatory to the 2006 Lease, which would include Delta. • In defining an accommodation process, the DOT will not be prescriptive but instead expects the City to use any and all flexibility available to it. • The City can use the date of a request for accommodation (or another reasonable "snapshot" date) for assessing the ability to meet an accommodation request and the City's decision can be informed by information on future plans that exist at the time of the request. Published schedules are a valid way to judge future plans. A six-monthlook-forwardperiodisreasonable. • If the City approaches the date when voluntary accommodation expires, the Citycan impose atemporary solutionifitis reasonable in thecircumstances (e.g., for another 30-90days). • The City should minimize the use ofproprietary information in its accommodation decision, especially since future schedule information is generally publicly available. Proprietary information should be used only to validate other information and to prevent gaming of the system. The City can, but need not, conduct due diligence to verify information that it has been given bythecarriers. • The City should not consider service at other airports; it should onlyconsiderservice atLoveField. • An accommodation must allow the accommodated carrier access for as long as the carrier maintains the same pattern of service. That may be permanent unless the request is for less-thanpermanent service. • The City need not treat arequest for accommodation as an ali-ornothing matter and may offer to a requesting carrier less than the requested amount of service if that is all that is available. The same principle applies to times of day: the City may inform the requesting carrier of available times even if those do not accord precisely with the request. But in no event is the City required to demand that an incumbentcarrierchangeits schedule. • The City cannot make a decision based upon the type of carrier (e.g., legacy, low-costorultra-low-cost). 49. On November 20, 2014, at Dallas City Hall, representatives and counsel for the City, the DOT, the FAA, and all the affected the airlines met together to discuss Delta'srequest for accommodation and the City's proposed accommodation procedures. At the meeting, the Citypresentedits proposedLoveField Allocation Principles and Allocation Process. The City's airport gate scheduling consultant, LeighFisher, presented a Baseline Gate Analysis that evaluated the existing gate usage at Love Field and the ability ofLove Field to accommodate future demand scenarios.2 10. LeighFisher addressed the critical constraints at Love Field from their evaluation offlight schedules and peaking characteristics. LeighFisher also explained the rationale for the City'sproposed snapshotdate ofNovember 5, 2015. Under normal circumstances, the snapshot date would be Delta's September 2014 accommodation request date. However, because ofthe significant expansion ofoperations at Love Field that occurred in October 2014 under WARA, the accommodation request date did not reflect typical operations at Love Field. Thus, LeighFisher determined November 5, 2014, to be the earliest day following Delta's request that reflected atypical dayofpost-WARAoperations atLove Field. 11. Following the November 20th meeting, accommodation negotiations continued among Delta, Southwest, and United with respect to United's proposal to extend its temporary agreement with Delta and Southwest for another six months. However, November 2014 ended without an agreement among the carriers to extend Delta's accommodation pastJanuary 6, 2015. As a result, the Citybecame increasingly concerned that a voluntary accommodation might not be reached in time to avoid serious uncertainty for the traveling public about Delta's operations

2Exhibit 39, LeighFisherDALBaselineGateAnalysis (Nov. 20, 2014). 

### 5after the beginning ofthe year and potential operational problemsjustas the busy holiday travel
season was drawingto aclose. 12. In an efforttoincreasepressure on thecarriers to reach avoluntary agreement, the City notified Southwest, Virgin, United, and Delta on December 1, that unless it received word that Delta was accommodated by the following day, the "thirty (30) day period allowed for voluntary accommodation described in [the Gate Accommodation Clause] ofthe Use and Lease Agreements with each signatory carriershall commence."3 13. Even though the Lease does not contemplate any formal role for the City during the 30-day period preceding a mandatory accommodation decision, the City continued to play shuttle diplomacy, working assiduously to bring about a voluntary agreement. The City also continuedto engagetheDOTto ensure thatits proposed accommodation procedures satisfiedthe DOT'sconcerns andto further seekthe DOT's guidance on open legal questions. 14. On December 17, 2014, the DOT General Counsel Kathryn Thomson wrote the City summarizingthe DOT's views ofthe accommodationissue in response to earliertelephone conversations between the DOT and the City purporting to provide guidance as to the DOT's position on the City'slegal obligations (the "FirstDOT Letter").4 While the Cityhoped that the First DOT Letter would have provided the kind ofdefinitive legal guidance that the City had been seeking so itwouldhave clear andenforceable authoritytoproceedwith an accommodation decision, the First DOT Letterproved to be far less definitive and far more ambiguous than the Cityhadhoped. 15. Attached to and incorporated into the First DOT Letter was a compendium of airport competition plan requirements. The attached compendium report did not provide the

3Exhibit45, Letter from W. Ernst, City, to Airlines, at 2 (Dec. 1, 2014). 4Exhibit 63, Letterfrom K. Thomson, DOT, toW.Ernst, City (Dec. 17, 2014). 6DOT'spolicyon accommodation or provide the City with any specific guidance or direction on addressing the accommodation ofDelta. 16. None of the examples in the compendium included permanent accommodation mandates for preferential use gates or were similar to the City's circumstances at Love Fieldwhere an airport is prohibited by law from adding gates. While examples ofhow other airports have addressed competition issues were interesting, none ofthe information in the compendium responded to the key, Love Field-unique problems, 

### i.e., how to address accommodation at a space-constrained facility with preferential gate rights that encompassed all gates when federal law explicitly prohibits any action that would interfere with those preferential gate rights. Neither the compendium nor the First DOT Letter addressed the unique legal limitations of WARA andtheFive-PartyAgreement. 17. The First DOT Letter did not mandate that the City take any particular action. Specifically, the letter did not require the City to grant Delta's accommodation request. Although the DOT provided some explanation ofits policy and approach, it did not provide a legal basis for those views and did not explain how the DOT's views related to the patticular legal constraints at Love Field under WARA and the Five-Patty Agreement. The First DOT Letter did not provide the City with the definitive direction that the City had sought in the face the space-constrained facilities at Love Field, the WARA limitations, the opposing arguments from thecarriers, andthe threats oflitigation. 18. One significant unresolved issue hanging over the entire accommodation debate
was how to address the request by Southwest and United dating from October 7, 2014, that the City consent to Southwest's sublease of United's gates. The City was not involved in, or informed of, negotiations between United and other carriers that apparently resulted in an

7agreement for Southwest to acquire United's lease rights for $120 million.5 The City was advised ofthe sublease deal onlywhen agreement was reached and the parties sought the City's approval of the sublease. The DOT/FAA knew more about that agreement than the City did beforethe Cityconsentedbecause the DOT/FAAhad knowledge ofthe business terms including the payment amount ofthe agreement in October 2014, while the City learned ofthose terms onlywhen revealed inJudge Kinkeade's courtroomin late September2015. 19. When the City learned that DOJ's review under the Hart-Scott-Rodino Antitrust Improvement Act would be required, it consulted with DOJ and the DOT and informed both agencies (and the two involved airlines) that it would wait for and rely on DOJ's action before taking any action to approvethe sublease. DOT concurredin this approach. 20. Upon learning on January 23 that the extended deadline for DOJ objections had passed without any DOJ antitrust objection, the City determined that it no longer had any valid legal basis to withhold its consentunder the lease.6 Beforethe City gave its consent, however, I emailed Kathryn Thomson at the DOT advising her ofthe City's intent to grant consent, and I attached a copy of the draft consent to the DOT and sought any final DOT comments or objections? The Cityreceived no objections from DOT in response. The City consented to the Sublease onJanuary 28, 2015.8 Since the entire accommodation disputeremained live, however, the City was especially careful to ensure that approval ofthe sublease would not in any manner prejudice its ability to mandate accommodation should that become necessary. The City approved the sublease explicitly subject to conditions that preserved City's authority to compel

5 Exhibit 76, Email from B. Kneisley, Southwest, to J. Moss, DOT (Oct. 25, 2014) (attachingexecuted copy ofthe AssetTransferAgreementbetween Southwest andUnited). 6

### See Exhibit77, Email fromM. Shaw, Southwest, P. Haske!, City (Jan. 23, 2015). 7

### See Exhibit78, Email from P. Haske!, City, to K. Thomson, DOT (Jan. 20, 2015). 8Exhibit 9, City's Consentto SubleasebetweenUnited and Southwest (Jan. 28, 2015). 

### 8accommodation pursuant to the Gate Accommodation Clause, and treated the First DOT Letter
as binding authorityunless overturned. 21. During this period, during one ofour telephone conferences with DOJ lawyers about the HSR review ofthe proposed sublease, DOJ also told me that DOJ's policy was that Virgin would have a reasonable time, in this instance approximately one year from date of Virgin's initial operations at Love Field, during which Virgin would be immune from being subject to gate accommodation requests at the airport. DOJ subsequently confirmed this policy in later conversations with me and other city lawyers. Virgin commenced Love Field operations in mid-October, 2014. In conversations with DOT and FAA, representatives ofthose agencies acknowledgedtheexistence ofthis DOJpolicyto me as well. 22. On February 10, 2015, I met again with the DOT and the FAA in Washington D.C. to seekfurther clarification ofthe FirstDOT Letter and to request clearwritten instructions
on the City's legal obligations to mandate accommodation under applicable federal law. At this meeting, attended by both DOT and FAA lawyers, the DOT raised for the first time the DOT's
concerns about the City's compliance with Grant Assurances (particularly Grant Assurance 23) and regulations concerning authority to levy Passenger Facility Charges. DOT and FAA officials made several important observations andprovided guidance on severalpoints:

• The DOT stated that "general principals" required the City to accommodate acarrier, theDOT didnottake aposition onwhether WARAmodifiedthose "generalprinciples." • Forced accommodation is importantfor the Cityin orderto satisfy its GrantAssurance obligations. • TheDOT andDOJ view competition differently; theDOTdoes not necessarily share the DOJ view concerning Virgin's protection from forced accommodation. • FAA counsel emphasized that the FAA only provides guidance and will not substitute its judgment for that of the City in the operation ofthe airport. 9• All carriers requesting gate accommodation should be treated alike, regardless ofwhether the carrier is an incumbent or a new entrantor anyothercategory. • Leases with preferential use language are still subject to accommodation. • The DOT knows that Delta could have been accommodated at the snapshot datebecauseitwas, in fact, accommodated. Delta should be allowed to continue its gate use not necessarily because an accommodation must be permanent but because the actual temporary accommodation at the snapshot date demonstrates the availabilityofspace for accommodation. 23. While this additional guidance clarified certain issues, it still did not provide the definitive direction that the City sought in order to mandate accommodation that is consistent with the mandates ofWARA, incorporating the Lease and the Five-Party Agreement, and with the DOT/FAA views of the City's obligations under federal law and Grant Assurances. Most especially, the DOT and the FAA failed to explain how the City should or could reconcile the lease preferential gate rights with the accommodation requests, or the imposition of Grant Assurance violation sanctions with WARA's limits on the DOT/FAA authority, and declined to provide guidance on the practicality of determining whether there was available space going forward from the selected snapshot date. 24. On February 6, 2015, American submitted a request to Southwest for accommodation of American's proposed operations at Love Field. In April 2015, American requested that the City assist in American's seeking accommodation ofnew operations at Love Field under the Gate Accommodation Clause ofthe Lease.9 American did not specify the date
on which it sought to commence operations. Also, the City did not receive additional information from American on its accommodationrequest subsequentto the April 9, 2015 letter. Although counsel for American appeared in the District Court litigation American it did not
9 See Exhibit 79, Letter from D. Anderson, American, to M. Duebner, City (April 9, 2015). 10submit motions or briefs to the Court and did not actively participate in the hearing on the motions for preliminary injunction. I believe that American has abandoned its accommodation request, atleastfor now. 25. I later learned that on February 13, 2015, Southwest informed DOT staffthat it
was launching 13 new daily flights from Love Field. 10 

### In a letter submitted to the City later in the month, Southwest informed the City, American, Delta, and the DOT that because of the expansion ofservice at LoveField it wouldbe "unable to provide gate spaceto any other carrier
on [its]l8LoveFieldgates."ll 26. Southwest's expanded service translated into a total of 180 flights per day on 18 gates, or 10 flights/gate/day. In the City's initial gate utilization and allocation study, prepared by LeighFisher, the City's consultants determined that a reasonable maximum gate utilization capacity would be 10 flights/date/day. The evidence at the later preliminary injunction hearing established that 10 flights daily per gate is the prudent maximum for aircraft ofthe sizes now used at Love Field, where hardstands are prohibited by WARA and the number of gates and hours ofoperation arelimited, also byWARA, andbytheFive-PartyAgreement. 27. ByApril2015, it was apparent to the Citythat the impasse among the airlines on the permanent accommodation ofDeltahad still not beenbroken. On April16, 2015, in another attempt to establish a fair and transparent process of addressing accommodation, I circulated a revised version ofits draft accommodation procedures and criteria to the DOT, the FAA, and airlines for comments. 12 The procedures and criteria had been revised based on the guidance

2015). 10Exhibit 80, Emailfrom R. Kneisley, Southwest,to K. Thomson,DOT (Feb. 13, 2015). 11 Exhibit 81, Letter from B. Montgomery, Southwest, to M. Duebner, City (Feb. 27,
12 Exhibit 90, Email from L. Tuccelli sent on behalfofP. Haske!, City, to Airlines, the FAA, and theDOT (April 16, 2015). 

### 11from the DOT correspondence, meetings and phone conversations and from earlier input from the airlines. Neither the DOT nor the FAA commented on the proposed accommodation procedures, althoughtheywereon the distributionlist. 28. On or about May 19 through 24, and again on June 11 and 12, 2015, the City attempted to negotiate an extended temporary or a long-term gate accommodation agreement between Delta and Southwest. Each Airline informally signaled what it might accept as a compromise,butrejected the proposals the otherAirline floated. No agreementwas reached. 29. Almost four months after the City requested further clarification and two months after the City had circulated proposed accommodation procedures for comment and guidance, the DOT responded by letter to those requests on June 15, 2015 ("Second DOT Letter"). 13 As withtheFirstDOTLetter, the SecondDOT Letterexpressed the DOT'sposition on what actions the DOT would consider to be reasonable, but it did not provide the City with a clear direction
on what the City must do to comply with all applicable law, including the Grant Assurances, WARA, the Five-Party Agreement, and the Lease. Moreover, the Second DOT Letter did not analyzeWARA, orexplainthelegalbases fortheDOT'sviews. 30. Disappointingly, the Second DOT Letter did nothing to resolve the City's questions concerningits obligationsundertheLease andWARA. Indeed, theDOThadprovided considerable guidance andhadopined on what wouldbereasonable actionsbythe Citybutithad failed to direct what actions the City must, and what actions it must not, take to comply with its Grant Assurance obligations. Just as importantly, the DOT had declined to provide any guidance, much less definitive direction, on reconciling the City's obligations under the Grant Assurances, the Lease and WARA. The need to reconcile the City's obligations was not merely

13Exhibit94, Letterfrom K. Thomson, DOT, toP.Haske!, City, (June 15, 2015). 12theoretical because the theories offered by Delta, Southwest, and the DOT all conflicted. In other words, the City knew with virtual certainty that, if it chose one manner or another for reconciling these requirements, it would face litigationbythe party orparties who disagree with its legalinterpretation. 31. The conflicting demands and legal interpretations, the lack of viable guidance from the DOT, and the impendingJuly 6, 2015, expiration ofDelta's accommodation agreement with United, left the City with no clear path forward. The City felt it could not proceed in the face of the conflicting legal positions of the stakeholders regarding the meaning of the Gate Accommodation Clause, the relationship between the Lease, WARA, and the Five-Party Agreement and the City's obligations under its grant assurances, and the scope ofDOT/FAA's authority overthe accommodationprocess in light ofWARA. 32. Accordingly, there was norealistic optionbutto seeklegal direction and guidance from a federal district court. Therefore, on June 17, 2015, the City filed a complaint in federal district court for the Northern District of Texas, Dallas Division, challenging the First and Second DOT Letters and seeking declaratory relief against the DOT, Delta, Southwest, Virgin, United, and SeaPort. The City soughtjudicial direction to avoid an untenable legal conflict and
an unsafe and inefficient practical conflict among the carriers for use ofLoveField gates and to avoid liability from Southwest ifit was determined that the City interfered with its preferential leaserights without an adequateFAAorjudicial directive to do so. 33. One of the principal purposes of the City's litigation was to ensure that Delta remain accommodated notwithstanding the impending expiration of the voluntary accommodation efforts on July 7, 2015, at least until a court otherwise directed. On June 23, 2015, U.S. District Judge Ed Kinkeade held a conference call with the parties during which the

13court urged Southwest's to continue accommodating Delta's five flights until September 30, 2015, the projected date for the conclusion of a hearing on cross motions for a preliminary injunction. This resulted in Southwest extending accommodation until the Court rules on competing preliminary injunction motions. Southwest and Delta entered into a temporary gate
use agreementonJuly 2, 2015, accommodating Deltathrough September 30. 14 34. Delta has been continuously accommodated since then pending the Court's decision. 35. The DOT andFAA appeared in and attended through counsel the entirethree-day preliminary injunction hearing in the U.S. District Court, Northern District of Texas, held on Sept. 28-30, 2015. Although present they did not object to any documentary evidence, testimony, evidentiary stipulations, or fact stipulations, or to any court rulings. I was present throughoutthehearing. Under 28 U.SC. § 1746, I declare under penalty ofperjury under the laws ofthe United States ofAmericathat the foregoing is true and c



# ... PeterB. Haske!

14Exhibit 96, Gate Use License Agreement Between Southwest and Delta (July 2, 2015). Southwest later agreed that the parties intended this accommodation to last until the District Court decided the competingpreliminaryinjunctionmotions. 14UNITED STATES DEPARTMENT
OF TRANSPORTATION FEDERAL AVIATION ADMINISTRATION WASHINGTON, D.C. I N RE MATTE
R OF COMPL

I ANCE W I TH FEDERAL OBLIGATIONS

BY T H E CITY OF DALLAS, TEXAS

FAA Docket No. 16-15-10 AFFIDAVIT OF MARK DUEBNER IN SUPPORT OF CITY OF DALLAS' RESPONSE OF THE CITY OF DALLAS TO THE NOTICE OF INVESTIGATION AND MOTION TO DISMISS THE NOTICE OF INVESTIGATION I, Mark Duebner, of my personal knowledge and belief declare as follows: 1.

I am the Director of Aviation for the City of Dallas and am responsible for the management
of the City's airport system, including the management
of Love Field. As Director, I have been intimately involved with the accommodation issues at Love Field. 2. SeaPort Airlines ("SeaPort") sought accommodation

at Love Field from the incumbent airlines
in the Summer of 2014 and was initially unsuccessful

in obtaining an accommodation agreement. Accordingly, the City included SeaPort and Delta Air Lines, Inc. ("Delta")
in its initial forced accommodation letters dated September

3, 2014. By November 2014, SeaPort had negotiated

a voluntary accommodation agreement with Virgin America Inc

. ("Virgin") and United Airlines

, Inc

. ("United")

to provide

it gate and counter space. Unlike Delta, SeaPort did not thereafter request that the City make any further accommodation. And, to my knowledge, SeaPort did not seek further accommodation from Southwest
or any other airline. The City determined that SeaPort had been accommodated

to its satisfaction and no longer sought to invoke the Gate Accommodation Clause for further accommodation.3. At last count, Southwest Airlines has scheduled 180 flights, Delta has sought 13 flights, American Airlines, Inc. has sought

4 flights, and Virgin has 19 flights

. With 20 gates, the maximum reasonable capacity of Love Field is between 190 and 200 flights per day, leaving the City facing more requests for gate space than it can accommodate. Under 28 U.SC.

§ 1746,

I declare under penalty of perjury under the laws of the United States of America that the foregoing

is true and correct. Executed on November20, 2015

.

2