Order 2010

- 6

- 12

Served: June 8 , 2010



### UNITED STATES OF AMERICA

DEPARTMENT OF TRANSPORTATION

OFFICE OF THE SECRETARY WASHINGTON, D.C.

Issued by the Department of Transportation

on the 8 th Day of June, 2010

U.S.

- Japan Alliance Case Docket DOT

- OST

- 2010

- 0059

ORDER ESTABLISHING P ROCEDURAL SCHEDULE A ND RULING ON REQUEST

FOR ACCESS TO CONFID ENTIAL INFORMATION

S UMMARY

By this order, we (1) strike certain confidentiality affidavits , (2) determine that the record in the

above

- captioned matter is substantially complete, and (3) establish a schedule for public

comments.

B ACKGROUND

On December 23, 2009, All Nippon Airways, Co., Ltd. (“NH”), Continental Airlines Inc. (“CO”), and United Air Lines, Inc. (“UA”) (together, “NH/CO/UA” or “Star Applicants”) filed

an a pplication for antitrust immunity which included a written application, copies of alliance agreements, and supporting documents. On February 12, 2010, American Airlines Inc. (“AA”) and Japan Airlines International Co., Ltd. (“JL”) ( togethe r, “AA/JL” or “o neworld Applicants”) filed a similar application requesting antitrust immunity which included a written application and copies of alliance agreements; supporting documents were submitted separately on March 5, March 8, and March 9, 2010. Both applications describe plans to launch joint ventures for the conveyance of transpacific air traffic, focused on the U.S.

- Japan market. These matters were consolidated into one proceeding under Docket DOT

- OST

- 2010

- 0059. 1

On December 24, 2009 and February 17, 2010, we issued notices granting interim access to confidential documents submitted with the applications, limited to interested parties who filed confidentiality affidavits with the Department.

1 See Order 2010

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- 10 (March 31, 2010).2

On February 16, 2010 , Mr. Hubert Horan filed an affidavit requesting access to confidential documents. On February 24, the Star Applicants filed a motion 2 to strike Mr. Horan’s confidentiality affidavit on the basis that he does not meet the requirements of the December 24 th
and February 17 th notices. On March 2, Mr. Horan filed a reply objecting to the Star Applicants’

motion. 3 Mr. Horan argues that he should be entitled to access the confidential record because he is a veteran of the airline industry with direct experienc e in alliance matters. He believes he needs access to confidential information to evaluate and comment on the issues, and that the Star Applicants have not identified any risks associated with granting him access.

On March 31, 2010, the Star Applicants renewed their request to strike Mr. Horan’s confidentiality affidavit 4 and requested that the Department strike three other affidavits fi led by employees of Dallas

- Fort Worth International Airport (“DFW”) on February 19 and 22, 2010, on the basis that the three employees in question were not licensed attorneys. Mr. Horan replied on April 2, requesting that the Department formally reject the Star Applicants’ motion to strike. 5
An answer was filed by DFW on April 9, requesting the DOT deny the Star Applican ts’ motion to strike the affidavits and offering to limit their request to confidential documents produced only by AA/JL. 6 DFW argues that its employees should not be denied any access to the AA/JL documents because DFW has a substantial interest in the p roceeding and that, as the affiants in question are not employees of rival airlines, there is no identifiable risk of harm.

On April 16, 2010, the Department issued Order 2010

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- 9, requesting additional evidence from the air carriers. In May 2010, 7 the S tar Applicants and the oneworld Applicants submitted documents and information supplementing their initial applications.

DECISION

We have reviewed the affidavits and the challenges to those affidavits. We have decided to grant the Star Applicants’ mot ions to strike all four affidavits.

As is our standard practice, the Notice set the requirements for access to the confidential

information : that affiants be attorneys, who could be in

- house or outside counsel for a party in the case, or an outside cons ultant to a party. These criteria reflect our policy that access to confidential information in a proceeding must balance, inter alia , the interest of commenting parties in the outcome of the proceeding and their need to have the information available to allow presentation of their views , on one hand, with the need of parties providing the information to protect business confidential data from unnecessary and unwarranted disclosure , on the other . In

2 See Motion of Star Applicants, Docket DOT

- OST

- 2009

- 0350 (February. 24, 2010).

3 See Reply of Hubert Horan, Docket DOT

- OST

- 2009

- 0350 (March 2, 2010).

4 See Motion of Star Applicants (March 31, 2010).

5 See Reply of Hubert Horan (April 2, 2010).

6 See DFW Answer (April 9, 2010).

7 The Star Applicants filed additional documents on May 14, 2010. The oneworld Applicants filed documents on May 10, May 11, and M ay 13, 2010.3

the case of Mr. Horan and the three DFW employees, we ag ree with the challengers that the affiants do not comply with the terms of the Notice.

We believe that, in the case of Mr. Horan, who is neither an attorney nor an outside consultant to a party, the balance of interests dictates denying him confidential access. The public record contains ample and detailed information about the competitive issues. Mr. Horan has full access to this information to assist him in providing meaningful comments. In balancing the interests at stake, there must be a presumpti on in favor of confidentiality. Mr. Horan has not overcome that presumption.

The three DFW employees present a different question. DFW has outside counsel who has

access to the confidential materials. N otwithstanding the three employees’ assertion that they are performing the function of in

- house counsel to DFW, they are not attorneys. The requirements

of the notice that limit in

- house participation with access to confidential materials to attorneys rely upon special professional obligations and practi ces to protect against the unauthorized disclosure of business secrets, including unintentional disclosures. Because these three affiants do not meet the terms of the Notice, they have not overcome the presumption of confidentiality and may not receive ac cess to the confidential information filed in the proceeding. 8

Additionally, i n order to de cide this matter, we must determine if the record is substantially complete and ready for public comment. 9

Upon review of documents provided , we determine that the record is now substantially complete and establish the following schedule for public comments:

Answers

– must be filed no later than 21 calendar days from the date of issuance of this Order;

Replies

– must be filed no later than 7 business days after the last day for filing an

answer.

A CCORDINGLY :

1. We grant the motion s of All Nippon Airways, Co., Ltd., Continental Airlines Inc., and United Air Lines, Inc., submitted on February 24, 2010 and Marc h 31, 2010, to strike confidentiality affidavits ;

8 We recognize that the three DFW affiants have, in fact, already had access to some of the confidential materials in this docket. Even though we are striking their affidavits, we consider them to continue to be bound by their undertakings t o maintain the confidentiality of any material that they have accessed. That access must now end and we expect them to turn over any copies of confidential materials in their possession to their attorney, and not to discuss them with anyone.

9 See 14 C.F.R § 303.04.4

2. We strike the affidavits of Hubert Horan, dated February 16, 2010 and submitted in

Docket DOT

- OST

- 2009

- 0350; Damian Brooke, dated February 18, 2010 and submitted

in Docket DOT

- OST

- 2010

- 0034; William F rainey, dated February 18, 2010 and

submitted in Docket DOT

- OST

- 2010

- 0034; and Mr. Joseph Lopano, dated February 19,

2010 and submitted in Docket DOT

- OST

- 2010

- 0034;

3. We establish the following procedural schedule: answers must be filed no later than 21 calendar days from the date of issuance of this Order, and replies must be filed no later than 7 business days after the last day for filing an answer; and

4. We will serve this order on all parties on the service list in this docket.

By:

SUSAN L. K URLAND Assistant Secretary

for Aviation and International Affairs

(SEAL)

An electronic version of this document is available at: http://www.regulations.gov