UNITED STATES DEPARTMENT OF TRANSPORTATION FEDERAL AVIATION ADMINISTRATION WASHINGTON, D.C.

IN RE MATTER OF COMPLIANCE WITH FEDERAL OBLIGATIONS BY THE CITY OF DALLAS, TEXAS FAA Docket No. 16-15-10

RESPONSE OF THE CITY OF DALLAS TO THE NOTICE OF INVESTIGATION AND MOTION TO DISM ISS THE NOTICE OF INVESTIGATION

Designation of persons to receive serv ice for the City of Dallas, Texas:

CHARLES ESTEE Assistant City Attorney PETER B. HASKEL Executive Assistant City Attorney 7BN Dallas City Hall 1500 Marilla Street Dallas, Texas 75201 charles.estee@dallascityhall.com peter.haskel@dallascityhall.com Telephone: 214/670-3519 Facsimile: 214/670-0622 Peter J. Kirsch W. Eric Pilsk Kaplan Kirsch & Rockwell LLP 1001 Connecticut Avenue, N.W. Suite 800 Washington, DC 20036 pkirsch@kaplankirsch.com epilsk@kaplankirsch.com Telephone: (202) 955-5600 Facsimile: (202) 955-5616i TABLE OF CONTENTS Page

INTRODUCTION .................................................................................................................. ......1 I. LEGAL CONTEXT ..........................................................................................................4 A. The Wright Amendment And The Un ique History Of Love Field .......................4 B. The Five-Party Agreement ....................................................................................5 C. The Wright Amendment Reform Act ...................................................................6 D. Airline Use and Lease Agreement Terms ............................................................7 E. The Combined Effect Of WARA , Five-Party Agreement, And Lease On The City’s Federa l Obligations And The FAA’s Enforcement Authority .........................................................................................9 II. FACTUAL BACKGROUND .........................................................................................10 A. Love Field Since The Wright Amendment Re form Act .....................................10 B. Initial Efforts To Accommodate De lta (September – October 2014) .................13 C. The City Seeks The DOT’s Guidance (October 2014) .......................................17 D. The City’s Attempt To Establish Mandatory Accommodation Procedures Is Met With Airlin e Objections (November 2014) ..........................19 E. The City Seeks Additional Guidance From The DOT (November 2014) ...................................................................................................................23 F. The City Facilitates Further Accommodation In December 2014 ......................27 G. The DOT December 17, 2014 Letter To The City ..............................................33 H. The City’s Extension Of The Deadline For Accommodating Delta To February 28, 2015 And Additional Negotiations Between The Airlines ................................................................................................................36 I. DOJ’s HSR Act Review Of Th e Proposed United-SouthwestSublease, Consultation With DOJ On The Sublease, DOJ’s NonObjection, And The City’s Approv al Of The Sublease in January 2015.....................................................................................................................39 J. The City Seeks Further Guidan ce From DOT/FAA, But DOT/FAA Again Fails To Provide The Needed Legal Directive .........................................41 K. Southwest Announces Expanded Service, American Requests Accommodation, And Delta Make s A Second Accommodation Request In February 2015 ...................................................................................43 L. Southwest Sues The DOT In February 2015 Challenging The First DOT Letter ..........................................................................................................45ii M. The City Requests The DOT’s Guidance On Remaining Accommodation Questions In February 2015 ....................................................46 N. The City Proposes Revised Accommodation Procedures Based On The DOT’s Advice That Are Again Opposed By The Airlines (April 2015) ........................................................................................................47 O. The DOT’s Second Letter To The City On June 15, 2015 .................................49 P. Faced With Uncertainty and Impe nding Lawsuits, The City Seeks Guidance From The District Court ....................................................................51 Q. Further Temporary Accommodation ..................................................................52 R. Summary Of Litigation Status ............................................................................53 ARGUMENT ...................................................................................................................... ........55 I. THE NOTICE OF INVESTIGAT ION MUST BE DISMISSED BECAUSE THE FAA LACKS JURISDICTION .........................................................55 A. Resolving The Accommodation Controversy Requires Resolving Disputes Over The Meaning Of The Gate Accommodation Clause ...................56 B. The FAA Lacks Jurisdiction Over Disputes Regarding The Meaning Of Contracts Such As The Lease .........................................................59 C. The FAA Lacks Jurisdiction Because WARA Is Not One Of The Statutes Included Within The FAA’s Part 16 Jurisdiction ..................................62 D. WARA Further Narrows The FAA’s Jurisdiction With Respect To The Gate Accommodation Clause ......................................................................63 E. The FAA Lacks Jurisdiction Because The FAA Cannot Order Action Inconsistent With The Leas e As Construed By The District Court ...................................................................................................................65 II. EVEN IF THE FAA HAS JURISDICTION, THE NOI MUST BE DISMISSED AS PREMATURE AND UNRIPE ...........................................................66 III. ASSUMING THE FAA HAS JURISD ICTION AND THAT THE CASE IS RIPE, THE CITY IS IN COMPLIANCE WITH ITS GRANT OBLIGATIONS ..............................................................................................................72 A. The City Has Demonstrated That It Understands Its Accommodation Obligations ..............................................................................73 B. The City Has A Plan To Meet Its Accommodation Obligations ........................75 C. The City Is Carrying Out It s Plan To Comply With Its Accommodation Obligations ..............................................................................76 D. The City Has No Outstanding Compliance Violations .......................................77 E. Conclusion: The City Currently Complies With Its Grant Obligations ..........................................................................................................77iii IV. EVEN IF THE FAA HAS JURISD ICTION OVER THIS MATTER AND EVEN IF THE CASE IS RIPE, TH E CITY HAS NOT VIOLATED ANY OBLIGATIONS UNDER ASSURANCE 22 .................................................................78 A. Delta Has Been Continuously Accommodated And Has Not Been Denied Access To Love Field .............................................................................79 B. The City Is Not In Violation Of Assurance 22 Just Because It Has Not Yet Had To Make A Final Accommodation Decision .................................81 V. EVEN IF THE FAA HAS JURISDICTION OVER THIS MATTER AND EVEN IF THE CASE IS RIPE, TH E CITY HAS NOT VIOLATED ANY OBLIGATIONS UNDER ASSURANCE 23 .................................................................87 VI. EVEN IF THE FAA HAS JURISDICTION OVER THIS MATTER AND EVEN IF THE CASE IS RIPE, TH E CITY HAS NOT VIOLATED ANY OBLIGATIONS UNDER ASSURANCE 39 .................................................................90 VII. EVEN IF THE FAA HAS JURISDICTION OVER THIS MATTER AND EVEN IF THE CASE IS RIPE, TH E CITY HAS NOT VIOLATED ANY GRANT OBLIGATIONS BY CONSENTING TO UNITED’S SUBLEASE TO SOUTHWEST OR DUE TO SEAPORT’S DEPARTURE .................................................................................................................93 CONCLUSION .............................................................................................................100 CERTIFICATE OF SERVICE .....................................................................................1011 UNITED STATES DEPARTMENT OF TRANSPORTATION FEDERAL AVIATION ADMINISTRATION WASHINGTON, D.C.

IN RE MATTER OF COMPLIANCE WITH FEDERAL OBLIGATIONS BY THE CITY OF DALLAS, TEXAS FAA Docket No. 16-15-10

RESPONSE OF THE CITY OF DALLAS TO THE NOTICE OF INVESTIGATION AND MOTION TO DISM ISS THE NOTICE OF INVESTIGATION The City of Dallas submits this Response and Motion to Dismiss pursuant to 14 C.F.R. § 16.103 to the Federal Aviation Administration’ s (“FAA”) Notice of Investigation In The Matter Of Compliance With Federal Obligations By The City of Dallas FAA Docket No. 16-15- 10 (“NOI”).

INTRODUCTION For more than 13 months, the City of Dalla s (the “City”) has wo rked continuously and tirelessly to resolve a seemingl y intractable controversy between and among Southwest Airlines, Delta Airlines, and the Department of Transportation (“DOT”) and th e FAA. At the heart of this controversy is a dispute over the meaning of the scare resource provision of the Airport Use and Lease Agreement (the “Lease”), including Section 4.06(F) of th e Lease (the “Gate Accommodation Clause”), which de fines the City’s obligation to accommodate “new entrant” airlines at gate-constrained Dalla s Love Field (“Love Field”). Congress has approved the scare resource provision of the Lease as the means to accommodate new entrants in the Wright Amendment Reform Act of 2006, Pub. L. 109-352, 120 Stat. 2011 (2006) (“WARA”), and2 prohibited the FAA and any ot her federal agency from ch anging the Gate Accommodation Clause’s provisions or requiring the City to act inconsistently with that Clause. The FAA itself has approved the Gate Accommodation Clause as the means to assure competitive access to Love Field when the FAA approved the C ity’s Competition Plan for Love Field. Throughout this controversy, the City has b een committed to fulfilling its obligations under the Gate Accommodation Clause. In the face of legal disputes over the meaning of that Clause, including threats of litigation from both Delta and Southwest, the City first sought binding legal guidance from the DOT and the F AA (collectively, “DOT/FAA”) over the meaning of the Gate Accommodation Clause. For months, the City repeated its requests for that guidance, but DOT/FAA was unable to provide it. Next, the City turned to the courts and filed a declaratory judgment action in the U.S. District Court for the Nort hern District of Texas (the “District Court”) seek ing a ruling on the City ’s obligations under th e Gate Accommodation Clause. When the District Court rules, the City will be in a position to make a final decision regarding the accommodation of Delta. In the m eantime, the City has used its legal and moral authority to assure that Delta has been continuously accommodated at Love Field. This NOI is a belated effort by the FAA to r eassert the jurisdiction it failed to exercise previously in apparent retaliation for the City seeking judicial guidance to resolve a controversy the FAA previously refused to re solve. Worse, the NOI suggests that the City is somehow acting improperly by seeking to enforce the terms of the Gate Accommodation Clause even though both Congress and the FAA itself have embraced the Ga te Accommodation Clause as the sole means to accommodate new entrants given the unique lega l and physical constraint s at Love Field. Aside from being filed too late to be helpful, the NOI is prohibit ed, premature, and without legal merit, and must be dismissed.3 The NOI is prohibited and should be dismisse d because the FAA lacks jurisdiction to (1) adjudicate the contractual disputes over the meaning of the Gate Accommodation Clause, (2) adjudicate a dispute that is governed by WARA , which displaces the Grant Assurances with respect to accommodation obligatio ns under the Lease, (3) interfer e with the District Court’s jurisdiction and authority, or (4) formulate a remedy that would compel the City to either alter the terms of the Lease or act c ontrary to the terms of the Leas e, both of which are statutorily barred by WARA. The NOI is premature and should be dismi ssed because Delta has been continuously accommodated and the City has not denied Delta accommodation or adopted or applied a final accommodation policy. 1 Until the City does so, the controvers y will not be ripe for adjudication under Part 16, even if the FAA had jurisdiction, which it does not. The NOI is unnecessary and should be dismissed because the key legal issues were presented to the District Court before the NOI was filed and will be resolved by the District Court in the pending declaratory judgment acti on to which DOT/FAA is a party. Once the District Court rules, the City will be able to implement a legally binding accommodation policy and make decisions on pending accommodation reque sts. Conducting this investigation now is at best an unnecessary distraction because the c ontroversy will be resolved by the District Court and at worst a recipe for conflicting legal ru lings from the FAA and the District Court. Finally, even if there were some basis for th e FAA to conduct an investigation, the NOI is baseless because the City is in compliance with any federal obligations that might apply. The

1 Although not identified as an issue in the Notice of Investigation, American Airlines (“American”) has made a request for accommodation and Delta later made a second accommodation request, both as discussed below. These later requests are among the issues pending before the District Court and the Ci ty will act upon them following and based upon the District Court’s final decision.4 City is currently in compliance because it understands that the Le ase and WARA impose a certain obligation to accommodate new entrants, ha s a plan to resolve the current controversy by seeking a binding legal ruling from the District Court, and is ac tively pursuing that ruling, which will allow the City to act on Delta’s accommodation request, all while continuously accommodating Delta pending the District Court’s decision

. Moreover, the City has neither denied Delta access in violation of Grant Assurance 22 nor created an exclusive right under Grant Assu rance 23 because Delta has been continuously accommodated and any final accommodation deci sion will apply the Gate Accommodation Clause as provided in WARA, the City’s Competit ion Plan, and pursuant to the District Court’s legal rulings. The FAA cannot order the City to do more. The City has complied with its obligations under Grant Assurance 39 by provid ing the FAA with more information than required by Assurance 39, providing that information sooner th an required by Assurance 39, and seeking direct FAA assistance above and beyond wh at is required by Assurance 39. The City did not violate Grant Assurances 22 or 23 by c onsenting to Southwest’s sublease of United’s gates because the (1) City’s consent did not change , legally or practically, the ability of any new entrant to be accommodated at Love Field, (2) ne ither the DOT nor DOJ objected to, or claimed any adverse impact from, the sublease, and (3) the City had no lawful basis by which it could withhold its consent under the Leas e. Finally, the City did not fa il to accommodate SeaPort. SeaPort secured a voluntary accommodation itself and later left Love Field for independent business reasons and without asking th e City to force an accommodation.5 I. LEGAL CONTEXT A. The Wright Amendment And The Un ique History Of Love Field For the 35 years before October 13, 2014, L ove Field was subject to the unique restrictions on service imposed by the Wright Amendment in 1979. 2 The Wright Amendment was intended to protect the economic viability of the recently-constructed Dallas-Fort Worth Airport (“DFW”) by restricting airl ine nonstop flights by aircraft w ith more than 56 seats to and from Love Field to a service area comprising Texas and its four surrounding states. Over the years, the Wright Amendment was the subject of ongoing controversy and litigation. In 1998, Congress adopted the Shelby Amendment, which a dded three additional st ates that could be served directly from Love Field. By the early 2000s, changes in the avia tion industry and market forces made it clear that the Wright Amendmen t was outdated. In 2006, in response to litigation and various proposed Congressional actions, a number of member s of Congress instructed the Cities of Dallas and Fort Worth to work together to present a local solution to the problem of access to and routes from Love Field to replace the Wright Amendment.
B. The Five-Party Agreement In 2006, the City of Da llas, City of Fort Worth, the DFW Board, Southwest Airlines (“Southwest”) and American entered into a “F ive-Party Agreement” under which the parties agreed to seek a congressional repeal of the Wr ight Amendment and to ch ange to the manner in which service would be provided at Love Field. 3 The Five-Party Agreement was a compromise and agreement to end the flight restrictions at Love Field impo sed by the Wright Amendment.

2 Pub. L. 96-192 (the International Ai r Transportation Act of 1979) § 29. 3 See Exhibit 1, Contract Among the City of Da llas, the City of Fort Worth, Southwest Airlines Co., American Airlines, Inc., and DFW International Airport Board Incorporating the Substance of the Terms of the June 15, 2006 Joint Statement Between the Parties to Resolve the “Wright Amendment” Issues (June 11, 2006).6 Among its provisions, the Five-P arty Agreement reduced the ga tes from the then-existing 32 gates to 20 gates, restricted hours of operations, prohibited the use of hardstands, and prohibited international flights from originating at Love Field. Five-Party Agreement ¶¶ 2, 3. It also provided that Southwest would obtain pr eferential use of 16 gates and American and ExpressJet Airlines (later acquired by Unite d Airlines (“United”)), would each obtain preferential use of two gates at Love Field. Id . ¶ 3.b. Southwest also agreed not to operate at DFW unless it surrendered a gate at Love Field fo r each DFW gate it acquire d, up to eight gates. Id . ¶ 10. Recognizing that limiting gate capacity at Love Field and providing that all 20 gates would be leased by incumbent airlin es would limit the ability of new entrant airlines to operate at Love Field, the Five-Party Agreement addres sed how new entrants w ould be accommodated: “To the extent a new entrant carrier seeks to enter Love Field, [the City] will seek voluntary accommodation from existing carriers” but if an ag reement was not reached then the City agreed “to require the sharing of any pr eferential lease gates, pursuant to the terms of existing lease agreements.” Id . ¶ 3.b. As discussed below, the then-existing lease agreements included a specific process to accommodate new entrants. C. The Wright Amendment Reform Act Congress enacted WARA on October 13, 2006, which adopted many of the terms of the Five-Party Agreement as federa l law, although other provisions of the Five-Party Agreement remain in force as contractual obligations independent of WARA. 4 The statute repealed the Wright Amendment’s limitations on long-distan ce domestic flights, with the repeal becoming effective in October 2014. WARA § 2(b). WARA also implemented the Five-Party Agreement by requiring the City to reduce th e number of gates at Love Field from the then-existing 32 gates to 20 gates “as soon as practicable.” Id. § 5(a).

4 Pub. L. 109-352, 120 Stat. 2011 (October 13, 2006).7 WARA expressly limits the FAA’s enforcement and compliance authority at Love Field, including the gate accommodation issues in the FAA’s NOI. Specificall y, WARA prohibits the FAA from requiring the City to modify or eliminat e preferential gates leases unless the change is implemented nationally by the FAA. See id . § 5(e)(2)(B)(ii). Thus, WARA defines the scope of the City’s accommodation obligations under federal law, incl uding Grant Assurance obligations. WARA states, “[t]o accommodate new entrant air carriers, the city of Dallas shall honor the scarce resource provision of the existing Love Field leases.” WARA § 5(a). WARA then provides: Notwithstanding any other provisi on of law, the Secretary of Transportation and the Administrator of the Federal Aviation Administration may not make findi ngs or determinations, issue orders or rules, withhold airpor t improvement grants or approvals thereof, deny passenger facility ch arge applications, or take any other actions, either self-initiated or on behalf of third parties . . . that are inconsistent with [the Five-Party Agreement] . . . . Id . § 5(d)(1). Further, although Section 5(e )(1)(E) states that WARA does not “limit the authority of the [FAA] . . . to enforce requirements of law and gr ant assurances,” WARA “shall not be construed to require the city of Dallas, Texas . . . to modify or eliminate preferential gate leases with air carriers in order to allocate gate capacity to new entrants or to create common use gates, unless such modification or elimina tion is implemented on a nationwide basis.” Id

. § 5(e)(2)(B)(ii). Also, WARA pr ovides that “any actions taken by the parties to [the Five-Party Agreement] that are reasonably necessary to implement its provisions, shall be deemed to comply in all respects with th e parties’ obligations under tit le 49, United States Code.” Id

. § 5(d)(2). Therefore, WARA’s expressed la nguage makes clear the Grant Assurances do not require the City to modify or eliminate preferen tial gate leases at L ove Field in order to accommodate a requesting airline.8 In 2009, after the passage of WARA, and the ex ecution of the lease agreements with the airlines, the City submitted to the FAA an up dated Competition Plan pursuant to 49 U.S.C. § 40117(k). 5 The Competition Plan provides that the City will address requests by new entrant airlines for gate space at Love Field pursuant to the Gate Accommodation Clause in the Lease. 6 The FAA accepted the City’s Competiti on Plan, without comment or objection. 7
D. Airline Use and Lease Agreement Terms The City has Leases with Southwest, Am erican, and United under which the signatory airlines lease specific space at Love Fiel d. These Leases are virtually identical. 8 Lease Section 4.06(C) states that a leasing airlin e has preferential use of its leased gates and “in no event shall said use by others take precedence over Airline’s scheduled use.” Section 4.06(F) (the “Gate Accommodation Clause”) stat es that the parties to the Lease ag ree that the Love Field facilities may become a scarce resource if a new entrant airline (“Requesting Airline”) requests to provide serv ice at [Love Field]. In such circumstances, Airline agrees to accommodate such Requesting Airline at its Leased Premises at such times that will not unduly interfere with its operating sc hedule and upon such reasonable terms as may be agreed upon betw een Airline and the Requesting Airlines, taking into consideration all the circumstances of such an accommodation agreement. Id . § 4.06(F). This Gate Accommodation Clause, which is part of the “scarce resource provision” of the Five-Party Agreement, is stat utorily-enforceable thr ough WARA, which states,

5 Exhibit 2, Competition Plan (June 3, 2009). 6 Id . at 5. 7 See Exhibit 3, Letter from B. De Leon, FA A, to D. Weber, City (Oct. 15, 2009) (approving 2009 Competition Pl an update Love Field). 8 Because the leases are virtually identical, th e City has attached as an exhibit only one lease to this response. See Exhibit 4, Amended and Restated Lease of Terminal Building Premises by and between the City of Dallas and Southwest Airlines Co. (Feb. 13, 2009). Citations to the Lease refer to the Exhibit 4.9 “the city of Dallas shal l honor the scarce resource provision of the existing Love Field leases.” WARA § 5(a). If a voluntary accommodation cannot be reached, th e City may select a leasing airline to accommodate the requesting airline. Any accommoda tion is subject to the condition that: “In case of a conflict between schedules of the Sign atory Airline and the Re questing Airline, the Signatory Airline will have priori ty in use of its personnel and its Leased Premises.” Lease § 4.06(F)(4)(a). The Lease is subordinated to any requirement imposed on the City by the Grant Assurances and, to the extent rele vant, the Assurances are considered part of the lease, “but only to the extent, that the provisions of any such ag reements are required generally by the United States at other civil airports receiving federal funds.” Lease § 14.09. E. The Combined Effect of WARA, The Five-Party Agreement, And The Lease On The City’s Federal Obligations And The FAA’s Enforcement Authority WARA, the Five-Party Agreement, and the Leas e establish significant restrictions on the FAA’s Grant Assurance enforcemen t authority at Love Field, and the FAA has no other avenue for enforcement in this context. WARA provides th at if the City or any party to the Five-Party Agreement takes actions reasonably necessary to implement that agreemen t, those actions are deemed in compliance with Title 49. See WARA § 5(d)(1). Moreover, implementation of the Five-Party Agreement is dependent on implem entation of the Lease. “To accommodate new entrant air carriers, the city of Dallas shall honor the scar ce resource provision of the existing Love Field leases.” WARA § 5(a). Thus, WA RA limits the FAA’s authority under Title 49 to the extent that the exercise of such authority would be inconsistent with WARA, the Five-Party Agreement, and the Lease. Id . § 5(d)(1). This explicit restriction on FAA’s authority is reinforced by the legal decisions addressing this issue. In Love Terminal Partners, L.P. v. City of Dallas, Tex. , 527 F.Supp.2d10 538, 559 (N.D. Tex. 2007), the Northern District of Te xas held that the language in § 5(d)(1) of WARA was a “directive to the Federal Aviation Administrator not to frustrate performance of the [Five-Party Agreement].” Id . at 559. The Court held that WARA limits the FAA’s powers under Title 49, directing the FAA “not [to] make findings or determin ations, issue orders or rules

. . . or take any other actions ” that are inconsistent with or chal lenge the legality of any provision of the Five-Party Agreement. Id. at 559 (emphasis added). Likewise, in Love Terminal Partners v. United States , 97 Fed. Cl. 355, 406 (2011), the Court of Fe deral Claims held that “Congress by incorporating [the Five-Party Agreement] into WARA, rendered the obligations set forth in the [Five-Party Agreement] matters of federal la w” and “Congress reinforced its intention to incorporate the [Five-Party Agreement] into federal law by ensuring that DOT and FAA policymaking does not affect any of th e provisions contained therein.” Id . at 415.
II. FACTUAL BACKGROUND A. Love Field Since The Wrig ht Amendment Reform Act The City owns and operates Love Field in Dall as, Texas. For decades, operations at Love Field were restricted by the so-called Wright Amendment. As stated above, in October 2014, under WARA, the most significan t restrictions under the Wright Amendment, such as the prohibition against longhaul domes tic flights from Love Field by full-size passenger aircraft, were repealed but a new limitation was imposed on th e number of gates at Love Field. The City was required to reduce the number of gates from 32 to 20 gates. The City has Lease agreements running through 2028 with Southwest, United, and American for the preferential use of the 20 gates at Love Field and for the use of other airport11 facilities. 9 Certain of the rights provided by the Leases have been transferred to other airlines, as explained below. American and Virgin. American originally leased two gates in the new Love Field terminal. 10 In 2013, US Air and American’s parent corporation, AMR Corp., announced plans to merge. DOJ and six state attorneys general and th e District of Columbia filed a civil antitrust lawsuit challenging the proposed merger. In November 2013, as part of a settlement of the pending action, DOJ required US Air and AMR to di vest slots and gates at various airports across the country. 11 The settlement agreement, which wa s embodied in a federal district court judgment, required divestment of Am erican’s two gates at Love Field. 12 Delta, Southwest, and Virgin America Inc. d/b/a Virg in America Airlines Inc. (“Vi rgin”) each made proposals for American’s lease rights to the two gates. DOJ recommended that American’s gates at Love Field be subleased to Virgin. 13 Accordingly, in 2014, the two American gates at Love Field were sublet to Virgin following the City’s consent. 14 On or about October 13, 2014, Virgin started commercial passenger operat ions at Love Field. 15 Representatives of DOJ have informed the City that Virgin is not subject to any accommodation requirement under the Lease for a

9 Exhibit 5, Joint Stipulations of Fact a nd Evidence between Southwest, Delta, and the City, at 4, No. 46, City of Dallas v. Delta Air Lines, Inc. , Case No. 3:15 cv-02069-K (N.D. Tex. Sept. 28, 2015) (“Joint Stipulations ”). When the preferential us e Lease expires at the end of 2028, the gates will convert to common use gates. 10 Id . at 4, No. 39, 43. 11 Id ., No. 49. 12 Id

. 13 Id ., No. 51. 14 Id ., No. 52. 15 Id . at 5, No. 54.12 reasonable period that shall be ap proximately one year from the st art of its operations at Love Field, in order to allow Virgin time to solidify its position at Love Field. 16
United. Continental Airlines, Inc. acquired rights to the two gates allocated to ExpressJet at Love Field. In 2010, the City amended and rest ated a pre-existing Leas e with Continental for ExpressJet’s two gates. 17 Continental later merged with United, and United is now the City’s lessee for the two gates at Love Fiel d initially allocated to ExpressJet. 18 In 2014, United elected to cease current flight operations at Love Field and initially entered into a gate use agreement with Southwest on September 18, 2014. 19 Subsequently, United subleased its gates to Southwest, to which the City consented on January 28, 2015. 20
Southwest. Southwest operates at Love Field from a total of 18 gates: the 16 gates that it leases directly plus the two gates it subleases from United. 21
Delta. In July 2009, Delta began operating at L ove Field by subleasing a gate on a month-to-month basis from American Airlines. 22 In mid-2014, American informed Delta that it would terminate the sublease effective October 12, 2014, with the effect that Delta would be

16 Affidavit of Peter B. Haskel (“Haskel Affidavit”), submitted concurrently with this Response, ¶ 21. Virgin and SeaPort Airlines, Inc. (“SeaPort”) entered into a voluntary gate use agreement in 2014 under which SeaPort had two daily flights operating from Virgin’s subleased gates. See Exhibit 6, Letter from T. Sieber, SeaPort, to W. Ernst, City at 1 (Nov. 19, 2014). In the summer of 2015, SeaPort elected to end its Love Field service and relocated its Texas operations to Houston. See infra at 98-99. 17 Exhibit 7, Amended and Restated Lease of Terminal Building Premises (Airport Use and Lease Agreement) by and between the City and Continental Airlines Inc. (Feb. 22, 2010). 18 Exhibit 5, Joint Stipulation at 5, No. 55. 19 Exhibit 8, Gate Use License Agreement be tween United Airlines, Inc. and Southwest Airlines Co. (September 18, 2014). 20 Exhibit 9, City’s Consent to Sublease between United and Southwest (Jan. 28, 2015). 21 Exhibit 5, Joint Stipulation at 5, No. 61. 22 Id . at 4, No. 44.13 without any gate rights at Love Field. 23 While the accommodation of Delta is the principal subject of this proceeding, it is critical to recognize that Delta has been operating continuously at Love Field since 2009 and at no time has it been denied access

. Current Gate Usage. As a result of leases, subleases, and gate use agreements, the following airlines currently operate at Love Field: Carrier Arrangement Gate Usage Southwest Lease 16 gates Southwest Sublease from United 2 gates

Virgin Sublease from American 2 gates Delta Gate use agreement fr om Southwest 5 flights/day

B. Initial Efforts To Accommodate Delta (September – October 2014) Delta began seeking accommodation from each signatory carrier in June 2014 when it learned that American would termin ate its sublease effective October 2014. 24 Despite indications from Southwest, Unite d, and Virgin that there might be gate space available for Delta after October 12, 2014, none of the airlines made firm commitments. 25 After contacting the signatory carriers, Delta’s Regional Director, Mi ke Anastas, contacted the City’s Director of Aviation, Mark Duebner, on July 16, 2014 requesti ng that the City notify each signatory carrier that “if Delta is not ac commodated within thirty (30) days from your notice, that you select one, or more, of the signatories to comply with the request for accommodation in a nondiscriminatory manner.” 26

23 Id . at 5, No. 62. 24 See e.g ., Exhibit 10, Letter from M. Anastas, De lta, to C. Czarnecki, Southwest (June 13, 2014). 25 See Exhibit 11, Letter from M. Anastas, Delta, to M. Duebner, City (July 16, 2014). 26 Id

.14 On September 3, 2014, the City sent a Notice of Failure to Accommodate Gate Use Request to Southwest and United notifyi ng them of requests for use of leased gates at Love Field from Delta and from SeaPort, wh ich was also seeking accommodation. 27 The City informed Southwest and United that, if Delta was not accommodated within 30 days of the notice, the City would select one of the Signa tory Airlines to comply w ith the requests for accommodation. 28 In response, Southwest informed the City on Septembe r 10, 2014 that it was en tering into a gate use agreement with United to operate from United’s gates on a “secondary basis” and could not accommodate Delta. 29
Southwest stated that the “rea lity of life at Love Field is that accommodation of new entrants at this time is impossi ble within the spirit, the intenti on, and practical application of the lease.” 30 Southwest argued to the City that the “l etter of the lease may allow for accommodation, but the language adopted by the city and signatory airlines, and memorialized in Federal Law, does not require accommodation.” 31 In addition to “hinder[ing] our ability to maximize our leasehold,” Southwest contended that “[a]ccommoda tion at this time will also present new legal challenges of the procedures and times for terminating that new service/accommodation.” 32

27 Exhibit 12, Letter from M. Duebner, City, to B. Mont gomery, Southwest, (September 3, 2014); see also Exhibit 13, Letter from M. Duebner, Ci ty, to J. Vlek, United (September 3, 2014). 28 See Exhibit 12 at 1; see also Exhibit 13 at 1. 29 See Exhibit 14, Letter from B. Mont gomery, Southwest, to M. Duebner, City (Sept. 10, 2014). 30 Id . at 2. 31 Id

. 32 Id

.15 United also responded to the City’s Notice , stating that it was “evaluating accommodating SeaPort Airlines on the United Gates, to the extent there was availability . . . .” 33 On September 18, 2014, Delta informed the C ity that its sublease with American was about to expire and again invoked the accommodation process under the Lease. 34 Delta sought to maintain its five daily fli ghts and asserted that, even afte r accounting for th e then-published schedules of the other airlines at Love Fiel d, there was space for its five daily flights. 35 According to Delta, under the Lease, the “City has the right to force signatory airlines to accommodate requesting airlines, and the signatory airlines are obligated under the agreement to do so.” 36 Also on September 18, 2014, Southwest and Unite d entered into a two-year Gate Use License Agreement under which United granted S outhwest use of its gates from September 16, 2014 to September 13, 2016, unless terminated earli er by either party under the terms of the agreement. 37 The next day, September 19, 2014, the City notif ied United that it had determined that United could accommodate Delta on one of United’s two gates. 38 The City noted that the Gate Use Agreement between United and Southwest did not “identify scheduled flights, but rather ability to utilize the vacant gates,” and therefor e, “it does not represent usage that will preclude Delta’s request for accommodation.” 39 The City informed United that it was required under the

33 Exhibit 15, Letter from J. Vlek, Unite d, to M. Duebner, City (Sept. 12, 2014). 34 See Exhibit 16, Letter from H. Shannon, Delta, to M. Duebner, City (Sept. 18, 2014). 35 See id

. 36 Id. 37 See Exhibit 8. 38 See Exhibit 17, Letter from M. Duebner, Cit y, to J. Vlek, United (Sept. 19, 2014). 39 Id

.16 Lease to accommodate Delta within 30 days and that that requirement would be in effect until January 6, 2015. 40 Southwest responded to the City ’s letter to United arguing that requi ring accommodation of Delta “directly interferes with an existing ag reement between Southwest and United . . . [and] Southwest believes that it has a right to, and must , dispute City’s decision.” 41 Southwest contended that “[b]y choosing to direct Un ited to accommodate a new entrant, you have effectively interfered with an agreement between two signatory carriers, have denied accommodation of a signatory airline in favor of a new entrant, and have summarily dismissed the needs of a longtime partne r of the City of Dallas.” 42 Southwest cited to the decision by “all signatory carriers to ‘ramp up’ se rvice” and stated that it hoped to “maximize use of its gates.” 43 Accordingly, Southwest asked th e City to reconsider its decision to direct United to accommodate Delta. 44 By letter on September 26, United also objected to the required accommodation of Delta, stating “United’s gates at [Love Field] will be fully utilized effective October 13, 2014 and United will be unable to accommodate Delta at its gates.” 45 Based on additional information provided by Southwest and United, the City reevaluated its accommodation decision and determined that Delta could not be accommodated. In a letter dated September 29, 2014, the City informed Delta that the City had reque sted the “gate usage from the signatory airlines to determine if Delta’s request to be accommodated without unduly

40 Id. 41 Exhibit 18, Letter from B. Montgomery, Southwest, to M. Duebner, City (Sept. 23, 2014). 42 Id

. 43 Id . at 2. 44 Id

. 45 Exhibit 19, Letter from J. Vlek, Unite d, to M. Duebner, City (Sept. 24, 2014).17 interfering with the Signatory Airlin es’ operating schedules can be met.” 46 As required by the Lease, the City conferred with the signatory airlines who provided the City with operating schedules. 47 Based on information provide d by the airlines (including, inter alia , the September 18 gate use agreement between United and Southwes t), the City advised Delta that it could not be accommodated at Love Field after the e xpiration of its sublease with American. 48 Delta’s legal counsel responde d to the City’s denial of accommodation on October 2, 2014, alleging, among other things, that the City’s decision violated the “City’s obligations under [Gate Accommodation Clause] of the [Lease] . . . , the Five-Party Agreement, the City’s recent promise to accommodate Delta, its commitment in its Airline Competition Plan . . . filed with the [FAA] to accommodate Delta and other new entran ts at DAL, its Airport Improvement Program (“AIP”) grant assurances, and Federal law.” 49 Delta’s counsel also suggested potential legal action against the City. 50
C. The City Seeks The DOT’s Guidance (October 2014) Faced with opposing arguments from the airlines and Delta’s threat of legal action, the City sought legal guidance from the DOT on October 6, 2014. 51 Peter Haskel, Executive Assistant City Attorney, emailed Kathryn Thom son, DOT General Counsel , requesting that, in the event the airlines could not resolve Delta ’s accommodation request themselves, the “City

46 See Exhibit 20, Letter from M. Duebner, Cit y, to H. Shannon, Delta (Sept. 29, 2014). 47 Id

. 48 Id

. 49 Exhibit 21, Letter from K. Quinn, Delta, to M. Duebner, City, at 1 (Oct. 2, 2014). 50 See id . at 8. 51 The City sought guidance from DOT as to the City’s legal obl igations. Haskel Affidavit ¶¶ 2-3. The City did not approach F AA separately because it understood that DOT was keeping the FAA informed of the City’s discussi ons with the DOT to the extent the FAA was not also participating in those discussions. Id . ¶ 3.18 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.” 52 The City’s concern then, as it remains, was to ensure the safe, efficient and reasonable operation of the airpor t and, to the extent possible, to avoid burdeni ng or confusing the traveling public due to uncertainty over wh ich airlines were opera ting from Love Field. 53 The City made it clear to DOT General Counsel th at it sought clear direction from the DOT so it could proceed without risk of offending any of its obligations under applicable federal law. 54 Notwithstanding Delta’s aggressive threat of litigation and the competing legal positions of the airlines, the airlines continued their ow n efforts, with informal assistance and guidance from the City as warranted, to accommodate Delta. The most immediate effect of these discussions was that, on October 10, 2014 (two days before Delta’s sublease from American was due to expire), Delta, Southwest, and United en tered into an agreement to accommodate Delta through January 6, 2015. 55 While that agreement provided relief from the immediate accommodation pressure, the parties recognized the need fo r a longer-term solution. Duri ng October 2015, with informal guidance and assistance from the City, Delta, S outhwest, and United con tinued to negotiate an agreement for accommodation past January 6, 2015. 56 The airlines also presented their

52 Exhibit 22, Email from P. Haskel, C ity, to K. Thomson, DOT (Oct. 6, 2014). 53 Haskel Affidavit ¶ 5. 54 Id

. 55 Exhibit 23, Gate Use License Agreemen t between Southwest and Delta (Oct. 10, 2014). 56 See Exhibit 24, Letter from B. Montgomery, So uthwest, to H. Shannon, Delta (Oct. 21, 2014); Exhibit 25, Email from H. Shannon, Delta, to B. Montgomery, Southwest (Oct. 22, 2014); Exhibit 26, Letter from B. Montgomery, Southw est, to H. Shannon, Delta (Oct. 24, 2014).19 respective accommodation positions more formally to the DOT and the FAA. 57 Throughout these discussions, the City made it clear that it preferred that the airlines 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, and WARA, and would mandate accommodation if necessary. 58 Also during this time, on October 7, 2014, Southwest submitted for the City’s review and approval a proposed subl ease covering all of Unite d’s facilities at Love Field. 59
Even while Delta and Southwest threatened lit igation, the airlines c ontinued to negotiate a longer term accommodation ag reement throughout October 2014. 60 On October 25, Southwest provided the City with a brief explanation of its accomm odation negotiations with Delta. Southwest stated that, notwithstanding De lta’s demand for accommodation, Southwest was planning to “average 9.6 flights per gate beginn ing in January 2015 on 16 gates and anticipates the same or greater level of utilization on 18 gates shortly thereafter.” 61 Based on its anticipated gate utilization, long-term accommodation of Delta would require Southwest “to forego [its] own flights.” 62

57 See Exhibit 27, Email from K. Quinn, Delta, to K. Thomson, DOT (Oct. 7, 2014); s ee also Exhibit 28, Dallas Love Field Issues – Presentation to: The United States Department of Transportation by Southwest, Washington, D.C. (Oct ober 2014); Exhibit 29, Email from R. Kneisley, Southwest, to K. Thomson et al., DOT, R. Fiertz, et al., FAA (Oct. 24, 2014). 58 Haskel Affidavit ¶ 6. 59 Haskel Affidavit ¶ 18. 60 See id. ¶ 6. 61 Exhibit 30, Email from M. Shaw, Southwes t, to W. Ernst, City (Oct. 25, 2014). 62 Id.20 D. The City’s Attempt To Establish Ma ndatory Accommodation Procedures Is Met With Airline Objections (November 2014) Because it was not a party to the inter-airlin e negotiations, the City did not know in late October whether the negotiations were making progress or whether a long-term negotiated resolution to the accommodation dispute would be possible. 63 Therefore, the City recognized that it might be appropriate for it to exer cise its authority under the Lease to mandate accommodation. 64 The City was also hopeful that the mere threat of mandated accommodation would help the airlines in their negotiations. 65 As a consequence, th e City began preparing a formal set of procedures for implementing th e forced accommodation requirements, should mandated accommodation become necessary. 66 On November 6, 2014, the City notified United, S outhwest, Virgin, and Delta of its intent to formulate “an accommodation plan/model that th e City would utilize, if necessary, in the current situation and that would also serve as a template to resolve any future accommodation requests from new entrants that car riers cannot resolve among themselves.” 67 The City stated that the primary objectives for the accommodati on plan were that it “be lawful, objective, reasonable, and transparent.” 68 Given the threats of litigation, the City retained outside aviation legal counsel and informed the airlines that it had retained Kaplan Kirsch & Rockwell LLP, as well as the consulting firm, LeighFisher Inc., to a ssist the City in the “design and implementation

63 Haskel Affidavit ¶ 7. 64 Id

. 65 Id

. 66 Id

. 67 Exhibit 31, Memorandum from W. Ernst, City , to Airlines re: Request for Space at Love Field and Protocol/Procedure to Address Same, at 1 (Nov. 6, 2014). 68 Id

.21 of the accommodation plan.” 69 The City also informed the airlines and DOT General Counsel Kathryn Thomson that it would be organizing and hosting a meeting to facilitate an effective accommodation plan: The City will further explain how it intends to proceed at a meeting or conference call to which all commercial aviation carriers operating at Love Field as well as DOT/FAA will be invited during the week of November 17, 2014. . . . The City will solicit input from all such carriers and from DOT/FAA regarding factors and methods that each stakeholder be lieves should be considered for incorporation in the accommoda tion plan as the City moves forward. In furtherance of its tran sparency objectives, the City will share any information that it obtain s from any carrier with all other carriers and with DOT/FAA. Based on all available information developed and received to that point, the City will propose a draft accommodation plan and invite further comment on the draft from the commercial aviation carriers using Love Field and from DOT/F AA. Based on the final round of inputs, the City will issue its permanent accommodation plan for Love Field commercial aviation. 70 On November 10, 2014, the City forwarded to the airlines and the DOT its proposed procedures for “a Dallas Love Field gate acco mmodation policy for use if necessary on Delta’s pending accommodation request and for any future requests that carri ers cannot resolve among themselves.” 71 In an attempt to reach a consensual resolution to Delta’s accommodation request, the City proposed a meeting on November 20 with the airlines, the DOT, and the FAA. 72 The City requested that the airlines submit re sponses to the follo wing questions on the accommodation procedures in advance of the November 20 meeting: 1. What is your view on what cons titutes a ‘new entrant’ carrier at Love Field for purposes of the s carce resource allocation procedure of the Five-Party Agreement and the Reform Act?

69 Id . at 1–2. 70 See id . at 2. 71 Exhibit 32, Memorandum from W. Ernst, City, to Airlines, at 1 (Nov. 10, 2014). 72 Id.22 2. In ranked order, what consider ations do you be lieve the City should use in making a scarce re source allocation decision, should that become necessary? If it would be helpful, feel free to provide both a ranking and relative weight for each consideration. 3. Once the City makes a proposed allocation decision, should the City allow carriers to submit conf idential proprietary information (to the extent that Texas law permits the City to protect proprietary information) in response or comm ent on such a proposed decision or should the City only consider information that would be available to all carriers? 4. Federal law requires the City to prepare a Competition Plan and several of its Grant Assurance obl igations are designed to promote competition. Should the City consider both competition at Love Field and elsewhere within the Dall as Metroplex or should the City only consider competition at Love Field creating a Competition Plan? 5. Are there any factors that you co ntend it would be improper for the City to consider in considering a new entrant’s gate allocation request – and why? 6. What is your view on how far in to the future carriers have a right to claim that their proposed schedules must be considered by the City in gate allocation/ accommodation decisions? What factors should or should not be considered in choosing such duration? Reasons for your answers? 7. How would you calculate turn-a round times for gate allocation determinations at Love Field a nd do you think that the City should use each carrier’s unique turn time s or use a single standard? If a standard, how should that standard be determined? 73 On November 17, 2014, Southwest, Delta, and Virgin each submitted extensive comments, objections, and revisions. 74 Each airline presented conf licting legal interpretations of the City’s obligations, DOT policies, and the right s of the airlines unde r the Lease and related federal laws. For example, in response to th e City’s question regard ing considerations in addressing a “new entrant’s gate allocation request,” Southwest st ated “it would be improper for

73 See id . 1–2. 74 Exhibit 33, Letter from R. Kneisley, Southwest, to W. Ernst, City (Nov. 17, 2014); Exhibit 34, Letter from K. Quinn, Delta, to W. Ernst, City (Nov. 17, 204); Exhibit 35, Memorandum from J. Varley, Virgin , to W. Ernst, City (Nov. 17, 2014).23 the City to consider the Grant Assurances and other federal ai rport policies on accommodation in isolation, without reference to the Five Part y Agreement, the WARA, and the particular circumstances at Love Field at the time.” 75 In contrast, Delta argued We urge the City to take immediate action to invoke the gate sharing and accommodation obligations under the Use Agreement to maintain Delta’s existing service to DAL and achieve a permanent solution. . . . As a recipient of AIP funds, the City’s grant assurances require the City to make the airport available for public use without unjust discri mination or provision of any exclusive rights to the airport. This means that the City must provide reasonable access to air ca rriers seeking to serve DAL, and it cannot shirt these responsibilit ies by referring carriers to a separate submarket and airport sponsor at Dalla s-Fort Worth international Airport (“DFW”). To do so today would deny the manifest intent [WARA]. 76 Although DOT General Counsel Kathryn Thomson was copied on all of the communications both to and from the airlines, the DOT did not provide any written comments on the City’s proposed accommodation procedures and criteria.
E. The City Seeks Additional Guid ance From The DOT (November 2014) In a continuing effort to resolve the escalati ng controversy (and threat s of litigation) over accommodation in November 2014 the City sought additional DOT advice, requesting guidance from Kathryn Thompson on the “relationship between Delta’s pending accommodation request at Love Field and the City’s granting or withhol ding consent to Southwest’ s gate sublease from [United] at Love Field . . . .” 77 Ms. Thomson advised that it re mained DOT’s position that the City should not consent to the proposed sublea se between United and Southwest until and unless there was permanent accommodation for Delta. 78 The City scheduled a meeting for November

75 Exhibit 33 at 9. 76 Exhibit 34 at 2. 77 Exhibit 36, Emails between P. Haskel, C ity, and K. Thomson, DOT (Nov. 4, 2014). 78 Id

.24 20 among all the airlines, the DOT and the FAA to address the City’s proposed process should mandatory accommodation become necessary. 79 The City hoped that the DOT’s direct involvement would f acilitate a solution. 80 In an email from Peter Haskel to Kathryn Thomson on November 12, the City stated that it would be very useful for the DOT to partic ipate in the meeting as it “might encourage constructive dialogue.” 81 On November 13, Ms. Thomson requested a separate meeting with “the City, its outside counsel an d consultant in advance of the large group meeting to respond to some of the questions you have posed and make sure the City is clear on the information we seek.” 82 On November 19, 2014, City representatives met with ten DOT and FAA officials at the DOT headquarters. 83 In a lengthy and wide ranging di scussion, the DOT and FAA officials gave the City considerable guidance on the accommodation process, including the following key points: 84

• DOT counsel expressed the opinion that their review of the Lease led them to conclude that there is sufficient authority in the Lease to allow the City to accommodate Delta.

• The Office of the Secretary is charged with ensuring compliance with competition plan-related issues.

• The Lease meets DOT requirements with respect to competitive access.

• DOT interprets the term “new entr ant” in this context to be any carrier other than a signatory to the 2006 Lease, which would include Delta.

79 See Exhibit 32 at 1. 80 See Exhibit 37, Email from P. Haskel, C ity, to K. Thomson, DOT (Nov. 12, 2014). 81 Id

. 82 Exhibit 38, Email from K. Thomson, DOT, to P. Haskel, City (Nov. 13, 2014). 83 See Haskel Affidavit ¶ 8. 84 Id

.25 • In defining an accommodation pr ocess, the DOT will not be prescriptive but instead expect s 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 a nd 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-month look-fo rward period is reasonable.

• If the City approaches the date when voluntary accommodation expires, the City can impose a tem porary solution if it is reasonable in the circumstances ( e.g. , for another 30-90 days).

• The City should minimize the use of proprietary information in its accommodation decision, especia lly since future schedule information is generally public ly 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 info rmation that it has been given by the airlines.

• The City should not cons ider service at othe r airports; it should only consider servi ce at Love Field.

• An accommodation must allow the accommodated carrier access for as long as the carr ier maintains the same pattern of service.That may be permanent unless the request is for less-thanpermanent service.

• The City need not treat a requestfor accommodation as an all-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 ti mes even if those do not accord precisely with the request. But in no event is the City required to demand that an incumbent car rier change its schedule.

• The City cannot make a decision based upon the type of carrier ( e.g. , legacy, low-cost or ultra-low-cost). On November 20, 2014, represen tatives and counsel for the City, the DOT, the FAA, and all the affected airlines met at Dallas City Hall to discuss De lta’s request for accommodation and the City’s proposed accommodation procedures. 85 At the meeting, the City presented its

85 Id . ¶ 9.26 proposed Love Field Allocation Pr inciples and Allocation Process. 86 The City’s consultant, LeighFisher, presented a Baseline Gate Analysis that evaluated the existing gate usage at Love Field and the ability of Love Field to accommodate future demand scenarios. 87 LeighFisher addressed the critical constraints at Love Fiel d from their evaluation of flight schedules and peaking characteristics. 88 LeighFisher also explained the rationale for the City’s proposed snapshot date of November 5, 2015. 89 Under normal circumstan ces, the snapshot date would be Delta’s September 2014 accommodation request date. 90 However, because of the significant change in op erations at Love Field that occu rred in October 2014 when WARA’s elimination of the Wright Amendment flight re strictions became eff ective, the accommodation request date did not reflect t ypical operations at Love Field. 91 Thus, LeighFisher determined November 5, 2014 to be the earliest day following De lta’s request that refl ected a typical day of post-WARA operations at Love Field. 92 LeighFisher’s proposed next steps were to receive comments regarding the baseline modeling assumptions and incorporate them into a revised final baseline model, and to receive additional inform ation on the airlines’ ex pectations for proposed future schedules. 93 Following the November 20th meeting, acco mmodation negotiations continued among Delta, Southwest, and United, focusing on United’ s proposal to extend its temporary agreement

86 Id

. 87 Id .; Exhibit 39, LeighFisher DAL Ba seline Gate Analysis (Nov. 20, 2014). 88 Haskel Affidavit ¶ 10. 89 Id

. 90 Id

. 91 Id

. 92 Id

. 93 See Exhibit 39 at 11.27 with Delta and Southwest for another six months. 94 While the negotiations were ostensibly among Southwest, United, and Delta, the City rema ined intimately involved and participated in lengthy email exchanges with Delta, United, an d Southwest regarding United and Southwest’s proposal to extend the accommoda tion period. On November 28, 2014, Southwest emailed the City confirming its commitment to United’s propos al subject to the ne gotiation of documents between all parties. 95 The City stressed its view that it was important that Southwest and United involve Delta in the process as soon as possible. 96 One key sticking point in the discussions wa s that Southwest remained opposed to the permanent accommodation of Delta. According to Southwest, “[b]y January, our gates will be fully utilized under any reasonable measure” and it “intend[ed] to vigorously defend its right to fully utilize its gates at Love Field.” 97 Delta did not accept United’s offer for a short-term accommodation for six months through mid-2015.
F. The City Facilitates Further Accommodation In December 2014 November ended without an agreement among the airlines to extend Delta’s accommodation past January 6, 2015. 98 As a result, the City became increasingly concerned that a voluntary accommodation might not be reached in time to avoid serious uncertainty for the

94 Haskel Affidavit ¶ 11. 95 Exhibit 40, Emails between M. Shaw, S outhwest and P. Haskel, City (Nov. 28, 2014). 96 See id. ; see also Exhibit 41, Email from P. Haskel, City, to A. Bried, United (Nov. 28, 2014); see also Exhibit 42, Emails between P. Haskel, Ci ty, and B. Hirst, Delta (Nov. 28, 2014); see also Exhibit 43, Email between T. Bolling, United, and P. Haskel, City (Nov. 29, 2014). 97 Exhibit 44, Letter from B. Montgomery, Southwest Airlines, to H. Shannon, Delta Airlines, (Dec. 1, 2014). 98 Haskel Affidavit ¶ 11.28 traveling public about Delta’s operations after the beginning of the year and potential operational problems just as the busy holiday travel season was drawing to a close. 99 In an effort to increase pressure on the airlin es to reach a voluntary 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 “t hirty (30) day period allowed for voluntary accommodation described in [the Gate Acco mmodation Clause] of the Use and Lease Agreements with each signato ry carrier shall commence.” 100 The City explicitly urged the airlines to reach an accomm odation agreement, stating [a]s we explained in a meeting to which all Signatory Carriers were invited, on November 20, 2014, the City would prefer that the Signatory Carriers reach a volunt ary accommodation arrangement which is satisfactory to Delta. We believe that a negotiatedarrangement would be a far better outcome than a formal Citymandated accommodation. 101 The City provided each airline with 1) a letter memorandum from Mark Duebner, Director of Aviation, setting forth the revised accommodation procedures and schedule (based upon comments from the airlines), 2) proposed Dallas Love Field Allocation Principles and Accommodation Criteria and Allocation System, and 3) questions to the airlines to assist the City’s accommodation process. 102 The City stated [a]s we outlined at the Novemb er 20 meeting, we committed to seeking comment from any interested stakeholder on the criteria and bases that the City will use, sh ould it be necessary for the City to make a mandatory accommodation decision. We are attaching to this letter our proposed criteria and weighting of those criteria. We request comments immediately, and in no event later than December 8.

99 Id

. 100 Exhibit 45, Letter from W. Ernst, C ity, to Airlines, at 2 (Dec. 1, 2014). 101 Id ., Attached Duebner Letter at 2. 102 See id.29 Also attached to this letter is a list of information which we request that each Signatory Carrier provide in order to assist in the City’s assessment of a reasonable accomm odation of Delta. We request that you provide the information no later than December 8. If we do not receive information from a carrier, we will use the best information we have available from other sources. 103 The City’s proposed Accommodation Criteria st ated that the City would determine a “Snapshot Date” that would start the time period for assessing reasonable accommodation. 104 Among the questions it posed to the airlines, the City requested comments on the proposed snapshot date of November 5, 2014 that wa s discussed at the November 20 meeting. 105 The City set December 31 as a deadline for the air lines to reach a voluntary accommodation. 106 Even though the Lease does not contemplate any formal role for the City during the 30- day period preceding a mandatory accommodation deci sion, the City continued to play shuttle diplomacy, working assiduously to br ing about a voluntary agreement. 107 The City also continued to engage the DOT to ensure that it s proposed accommodation procedures satisfied the DOT’s concerns and to further seek the DOT’s guidance on open legal questions. On December 3, the City contacted the DOT requesting that the DOT provide the “DOT views on requesting carrier exhaustion, possible interi m accommodation, and related issues.” 108 City officials had telephone conversations with the DOT officials during the first week of December and provided information requested by Cindy Baraban at the DOT Chief Counsel ’s office regarding

103 Id ., Attached Duebner Letter at 3. 104 See id ., Accommodation Criteria at 1. 105 See id ., Questions for Carriers at 1. 106 Id ., Attached Duebner Letter at 2. 107 Haskel Affidavit ¶ 13. 108 Exhibit 46, Email from P. Haskel, City, to C. Baraban and N. Kessler, DOT (Dec. 3, 2014).30 accommodation periods at other airports. 109 On December 8, 2014, the DOT emailed the City referring to their earlier disc ussion and recommending a change to wording in the City’s Accommodation Principles. 110 While those negotiations were occurring, the City received multiple comments from the airlines in early December on the City’s Notice and on the revised accommodation procedures. The airlines reasserted their respective conflic ting positions on the le gal constraints upon the City’s proposed actions and repeated their criticisms of the City’s proposed accommodation procedures. In its response, Delta reasserted its request for permanent accommodation at Love Field for its five flights per day, stating that alt hough it “has had many discussions (including ones facilitated by the City) over the past several mont hs, the Signatory carriers either have failed to offer long-term accommodation on terms the City and [the DOT] have described as reasonable or have not offered any long-term accommodation.” 111 According to Delta, the “City is now dutybound under its commitment in the Five-Party Agr eement and Competition Plans, along with its statutory and grant assurance obligations, to ex ercise its authority to require accommodation.” 112 United responded with its own criticisms an d explaining that it had “offered to accommodate Delta . . . as a secondary user at United’s leased gates at [Love Field] for a period of 180 days commencing on January 7, 2015 [and] Un ited also offered to continue the current United-Delta [Love Field] facilities agreement w ith Delta through the term of the secondary use

109 See Exhibit 47, Email from P. Haskel, C ity, to C. Baraban, DOT (Dec. 4, 2014); see also Exhibit 48, Email from P. Haskel, Cit y, to C. Baraban, DOT (Dec. 9, 2014). 110 See Exhibit 49, Email from P. Irvine, DOT, to P. Kirsch, Counsel for City (Dec. 8, 2014). 111 Exhibit 50, Letter from K. Quinn, Delta, to W. Ernst, City, at 2 (Dec. 6, 2014). 112 Id

.31 gate agreement.” 113 According to United, “Delta notified United today that it has refused United’s voluntary offer of accommodation. Delta has thus failed to exhaust all reasonable efforts to secure accommodation from incumbent carriers, mooting any request by Delta for the City’s invocation of a mandatory accommodation process.” 114 For its part, Southwest argued that Delta provided “no le gal support for its claimed entitlement to a ‘long-term acco mmodation,’ and there is none.” 115 Southwest stated that “Delta is clearly not a ‘new entrant’ airline in any meaningf ul sense of the term, and therefore is not entitled to the benefit of eith er (1) the accommodation policies of the U.S. Department of Transportation that apply to real ‘new entrant ai rlines,’ or (2) the scar ce resources provision of the Love Field Lease that by its terms app lies only to requests for accommodation by ‘new entrant airlines.’” 116 Additionally, all of the airlin es criticized the City’s revised accommodation procedures. Delta submitted a redline version of its own changes to the pr ocedures attached. 117 Delta stated that it was “prepared to accept the City’s sn apshot date, but would oppose anything beyond this date.” 118 United contended that there were flaws in th e City’s procedures and that the “City must take into account and give prefer ence to a Signatory Airline’s . . . use of the gates and the use of

113 Exhibit 51, Letter from T. Bolling, United, to W. Ernst, City, at 1 (Dec. 2, 2014). 114 Id

. 115 Exhibit 52, Letter from R. Kneisley, Sout hwest, to W. Ernst, City, at 2 (Dec. 15, 2014). 116 Id . at 4–5. 117 Exhibit 53, Letter from K. Quinn, Delta , to W. Ernst, City (Dec. 11, 2014). 118 Id . at 8.32 the gates by any other carrier with whom such Signatory Airline has an agreement when determining accommodation of anot her carrier at [Love Field].” 119 Southwest provided an extensive list of objections to the accommodation criteria and proposed accommodation of Delta. Among them, Southwest stated that under the Lease, the City is not authorized to trigger a formal accommodation process unless the requesting airlin e has demonstrated that it ‘has exhausted all reasonable efforts to secure accommodations.’ Delta Airlines has not done this, and therefore the City’s Notice is contrary to the City’s ob ligations under the Lease. 120 Southwest criticized the City’s “Allocation Pr inciples” as “ambiguous, incomplete, or simply incorrect as a matter of law in material respects. Accordingly, the Principles must be modified before the City makes any accommoda tion decisions in reliance on them.” 121 Southwest also stated: The DOT has no authority to approve or disapprove the sublease, and likewise has no authority to interfere with the City’s approval of the sublease. . . . The DOT’s in terference with the City’s review of the sublease is an ultra vires act that is prejudicial to both Southwest and United. 122 Southwest also criticized the City’s propos ed “snapshot date” of November 5, 2014, as “imprudent and prejudicial to Southwest,” and urged the City to consider the “12-month lookahead” that was included in the City’s recently-executed lease with Virgin. 123 Despite the airlines’ objections, the City continued to engage all of them throughout December, 124 and continued to consult with, and seek guidance from, the DOT. 125 In

119 Exhibit 54, Letter from N. Lopp, United, to M. Duebner, City (Dec. 8, 2014). 120 Exhibit 55, Response of Southwest to Notice of Regarding Dallas Love Field Accommodation Issues, at 1 (Dec. 8, 2014). 121 Id . at 4. 122 Id. at 12. 123 Id. at 9.33 communications with Southwest, the City stated that it would delay its tentative decision on accommodation because of ongoing discussions with the DOT. 126 Delta, United, and Southwest continued to negotiate voluntary accommodation. 127 At one point, Delta emailed the DOT criticizing the terms of United’s offer and stating th at “the parties need to hear clear expectations from DOT before prospects for settlement have a chance of working.” 128
G. The DOT December 17, 2014 Letter To The City On December 17, 2014, DOT General Counsel Kathryn Thomson wrote the City summarizing the DOT’s views of the accommoda tion issue in response to earlier telephone conversations between th e DOT and the City and purporting to provide guidance as to the DOT’s position on the City’s legal obligatio ns (the “First DOT Letter”). 129 While the City hoped that the First DOT Letter would provide the kind of de finitive legal guidance that the City had been seeking so it would have clear and enforceable authority to proceed with an accommodation decision, the First DOT Letter proved to be far less definitive a nd far more ambiguous than the City had hoped. 130

124 See Haskel Affidavit ¶ 13. 125 See id. ; See Exhibit 60, Emails between C. Bara ban, DOT, and P. Haskel, City (Dec. 11, 2014). 126 Exhibit 56, Emails between M. Shaw, Sout hwest, and P. Haskel , City (Dec. 8 & 10, 2014) 127 See Exhibit 57, Letter from K. Quinn, Delta, to R. Kneisley, Southwest, and T. Bolling, United (Dec. 18, 2014); Exhibit 58, Email fr om T. Bolling, Southwest, to K. Quinn, Delta (Dec. 18, 2014); Exhibit 59, Letter from R. Knei sley, Southwest, to K. Quinn, Delta, at 1 (Dec. 23, 2015); Exhibit 61, Letter T. Bolling, United, to K. Quinn, Delta (Dec. 11, 2014). 128 Exhibit 62, Email from K. Quinn, Delta, to N. Kessler, C. Baraban, and K. Thomson, DOT (Dec. 12, 2014). 129 Exhibit 63, Letter from K. Thomson, DOT, to W. Ernst, City (Dec. 17, 2014). 130 See Haskel Affidavit ¶ 14.34 In the First DOT Letter, the DOT stated it wa s pleased that the City was taking an “active role” facilitating accommodation and summari zed the DOT’s understanding of its prior communications with the City. 131 The First DOT Letter then made a number of clarifying statements that memorialized advice that th e DOT had provided verba lly in the numerous November meetings and phone calls:

• The DOT stated that once an air carrier had been accommodated, it was entitled to maintain its ongoing pattern of serv ice even after the expiration of any agreemen t between the accommodated and accommodating air airlines as long as the pattern of operations remained unchanged. 132

• The DOT stated that it “expect[ed] that” the City would “accommodate the requesting carrier to the extent possible given the current gate usage, without impacting current or alreadyannounced, for-sale services ” by existing airlines. 133

• The DOT stated that it was the agen cy’s “position” that “for the accommodation to be meaningful,” the accommodated carrier was entitled to maintain an “ongoing sim ilar pattern of service” as long as it operated the accommodated flights. 134 Attached to and incorporated into the Fi rst DOT Letter was a compendium of airport competition plan requirements, “Airport Competi tion Plans: Highlights of Reported Actions to Reduce Barriers to Entry and Enha nce Competitive Access” (Nov. 2010): We are also enclosing a compendium of airport competition plan requirements and actions various air ports have taken to facilitate entry and enhance competitive access. The compendium table focuses on airports that have developed pro-competitive tools to accommodate requesting airlines in conformity with the competition plan requirements. 135

131 Exhibit 63 at 1. 132 Id . at 2. 133 Id

. 134 Id

. 135 Id . at 2.35 The attached compendium report did not pr ovide the DOT’s policy on accommodation or provide the City with any specific guidance or direction on addressing the accommodation of Delta. 136 None of the examples in the compendium included permanent accommodation mandates for preferential use gates or were similar to th e City’s circumstances at Love Field—where an airport is prohibited by law from adding gates. 137 While examples of how other airports have addressed competition issues may be interesting, neither the compendium nor the First DOT Letter addressed the unique legal limitations of WARA and the Five-Party Agreement, i.e., how to address accommodation at a space-constrained f acility with preferenti al gate rights that encompassed all gates when federal law explicitly prohibits any action that would interfere with those preferential gate rights. 138
The First DOT Letter did not mandate that the City take any particular action. Specifically, the letter did not require the Ci ty to grant Delta’s accommodation request. 139 Although the DOT provided some explanation of its policy and approach, it did not provide a legal basis for those views and did not explain how the DOT’s vi ews related to the particular legal constraints at Love Field under WARA and th e Five-Party Agreement. 140 The First DOT

136 See id ., Airport Competition Plans. 137 Haskel Affidavit ¶ 16. 138 Id . The First DOT Letter also referred to a 1999 study on airline competition at airports. See Airport Business Practices and Th eir Impact On Airline Competition , FAA Task Force Study, (October 1999) ̧ http://ntl.bts.gov/lib/17000/17100/17129/PB2000108301.pdf

. Contrary to the statements in the letter, that report notes that many leases provided that the primary tenant had “bumping” rights that allowed it to regain the use of facilities provided to an accommodated user if the primary te nant increased its operations. Id ., FAA Task Force Study at 37, n.8, 40-41. 139 Haskel Affidavit ¶ 17. 140 Id

.36 Letter did not provide the City with the definitive direction that the City had sought in the face the space-constrained faci lities at Love Field, WARA’s limitations, the opposing arguments from the airlines, and the threats of litigation. 141 In light of these omissions and uncertainties in the First DOT Letter, the City quickly responded to the DOT the next day with a request that the DOT pr ovide clarification of several points in that letter: (1) did the DOT’s reference in the letter to ‘current or already announced, for sale services”’ preclude the City’s use of the six-month look forward period afte r the ‘snapshot’ date to inform the City’s accommodation deci sion,” and (2) whether DOT intended to use the term “incumbent carrier” where the lette r used the term “signatory carrier.” 142 On December 22, the DOT provided a brief res ponse to the City’s questions, stating that: (1) the First DOT Letter “does not preclude the C ity’s use of the six-month look forward period after the snapshot date to inform its accommod ation decision,” and (2) the DOT’s reference to “signatory carrier should extend to any carrier with preferential rights to its existing schedule (whether signatory or non-signatory incumbent) – such a carrier coul d not be impacted by accommodation as long as it maintains its schedule.” 143
H. The City’s Extension Of The Deadline For Accommodating Delta To February 28, 2015 And Additional Ne gotiations Between The Airlines Although negotiations among the airlines cont inued through the December holidays, the January 6 expiration of the volun tary accommodation was fast approaching, presenting the City with a dilemma. While the First DOT Letter (a nd the follow-up email of December 22) provided some clarification, that guidance was not sufficient for the City to determine whether it could or

141 Id. 142 Exhibit 64, Email from P. Haskel, City, to K. Thomson, DOT (Dec. 18, 2014). 143 Exhibit 65, Email from C. Baraban, DOT, to P. Haskel, City (Dec. 22, 2014).37 should mandate continued accommodation of Delta. 144 That uncertainty was magnified by the explicit and implicit threats of litigatio n by Delta and Southwest if the City made any final decision regarding accommodation. 145 The problem needed an immediate solution, moreover, because of the imminent expiration of the voluntary ac commodation. To ensure that Delta’s accommodation would extend past January 6, 2015, the City notified the DOT and airlines on December 24, 2014 that it “direct[ed] all affected carriers to continue the temporary accommodati on arrangement, presently due to expire on January 6, through February 28.” 146 The City later clarified to the airlines and the DOT that it was the City’s intention that United, not Southwest, accommodate Delta through February 28, 2015. 147 The City stated that it was clear th e airlines are “unlikely to be able to reach another voluntary accommodation arrangement . . . before the January 6 deadline” and the City was “still seeking clarification from DOT a nd FAA of important issues relating to Delta’s accommodation request.” 148 The City noted that its “defer ence to the views of these federal agencies takes into account . . . their authority under gate lease section 14.02 to impose sanctions or lease modifications if they view the pa rties’ application of lease provisions as anticompetitive.” 149 The City explained that the extension was not in any manner intended to be a permanent accommodation but instead was merely an emerge ncy interim action designed to ensure that Delta could continue to operate until such ti me as the City could complete its mandatory

144 See Haskel Affidavit ¶ 17. 145 See id. 146 Exhibit 66, Letter from M. Duebner, City, to DOT and Airlines, at 2 (Dec. 24, 2014). 147 Exhibit 67, Email from P. Haskel to Airlines and DOT (Jan. 2, 2015). 148 Exhibit 66 at 1. 149 Id

.38 accommodation process (or the airlines could reach another voluntary accommodation). Specifically, the City stated that it was not a “final, permanent, or even a temporary accommodation decision . . . [but] is merely an interim rule under lease section 14.01, designed to preserve the status quo to insure the safe, efficient, and economically practicable operation of the airport for a short time so that the City can make a reasoned a nd thoughtful accommodation decision if the carriers fail to reac h a voluntary accommodation arrangement.” 150 The airlines objected to even this extension of the temporary accommodation arrangement. 151 On January 2, 2015, Delta proposed to Southwest and United a voluntary extension of the existing accommodation arrangements until February 28, 2015. 152 Just as it opposed the City’s emergency interim arrange ment, Southwest opposed Delta’s proposed temporary extension and argued that “Delta’s current Love Field flights c ould easily be accommodated if Delta simply accepts United’s offer of a six-month voluntary gate use agreement on terms substantially similar to those that Delta previously accepted . . . .” 153 Again, Southwest contended that the Fi rst DOT Letter did not “control th e City’s handling of Delta’s request for accommodation at Love Field” a nd the DOT’s position on forced accommodation “directly violated Southwest’s rights under its Love Field Lease to expand upon and fully utilize its leased gates . . . .” 154

150 Id . at 2. 151 See Exhibit 68, Letter from W. Ernst, City, to DOT and Airlines, at1 (Jan. 5, 2015); see also Exhibit 69, Letter from M. Shaw, Southwest, to W. Ernst, Cit y, at 1 (Dec. 31, 2014); see also Exhibit 70, Letter from T. Bolling, United, to W. Ernst, City, at 1 (Dec. 31, 2014). 152 Exhibit 71, Letter from K. Quinn, Delta, to R. Kneisle y, Southwest, and T. Bolling, United, at 2 (Jan. 2, 2015). 153 Exhibit 72, Letter from R. Kneisley, Sout hwest, K. Quinn, Delta, at 1 (Jan. 4, 2015). 154 Id . at 2.39 Notwithstanding this rhetoric, and perhaps becau se of the City’s unilateral declaration of an emergency interim preservation of the status quo, United and Delta agreed to an arrangement under which United would temporarily accommodate Delta from January 7, 2015 through July 6, 2015. 155 Southwest committed to suppor t that arrangement and agreed to continue to negotiate with Delta on a potential long-term accommodation. 156 The City informed the airlines that it “reserves its interpretations of its authority and duties, while continuing to seek additional clarification from the app licable federal agencies.” 157 The City stated it would “continue [its] mandatory accommodation process unless informed by carriers that it is no longer necessary.” 158 The City’s efforts to assure that Delta w ould be accommodated, at least on a temporary basis, had succeeded by leading to a seven- month accommodation agreement between United and Delta, with the support of Southwest. That temporary accommodation agreement alleviated the immediate crises, allowing the City to move forward deliberately and thoughtfully to reach a permanent solution without laboring under an imminent threat to the safe and efficient operation of the airport. Although the C ity still had a number of legal and technical issues to resolve before it could issue a final accommodation deci sion, the City was committed to moving forward transparently and collaboratively in an effo rt to resolve the accommodation controversy.

155 Exhibit 73, Gate Use License Agreement between United and Delta (Jan. 6, 2015); see also Exhibit 74, Letter from T. Bolling, United, to K. Quinn, Delta (Jan. 4, 2015); Exhibit 75, Letter from N. Lopp, United, to B. Montgomery, Southwest (Jan. 6, 2015). 156 See Exhibit 74 at 1. 157 Exhibit 68 at 1–2. 158 Id . at 2.40 I. DOJ’s HSR Act Review Of The Proposed United-Southwest Sublease, Consultation With DOJ On The Sublea se, DOJ’s Non-Objection, And The City’s Approval Of The Sublease in January 2015 One significant unresolved issue hanging ove r the entire accommodation debate was how to address the request by Southwest and United dating from October 2014 that the City consent to Southwest’s sublease of United’s gates. Th e City was not involved in, or informed of, negotiations between United and ot her airlines that apparently resulted in an agreement for Southwest to acquire United’s lease rights for $120 million. 159 Because of the dollar amount involved, the details of the proposed United- Southwest sublease, including the $120 million payment, were reviewed by DOJ pursuant to the Hart-Scott-Rodino Antitrust Improvement Act (“HSR Act”). 160 During the review, DOJ conferred with the DOT. 161 DOJ did not voice any objection or bring suit to prevent the transfer within the ti me frame stipulated by statute, including an extension of the original review period. 162 The United Lease requires City approval for the Sublease. The Lease provides that, the “Airline shall have the right to sublet the Leased Premises, or any portion thereof . . . ; provided, it shall first obtain the written approval of the City.” Leas e § 13.01(B). Section 14.08 of the Lease states that if the City’s consent is re quired, such consent “shall not be unreasonably withheld or delayed.” Southwest and Unite d requested City approval of the Sublease. 163 United, for instance, argued that its “voluntary offe r of accommodation [of De lta] demonstrates its

159 Exhibit 76, Email from R. Kneisley, Southwest, to J. Moss, DOT (Oct. 25, 2014) (attaching executed copy of the Asset Transfer Agreement between Southwest and United). The City did not learn of the amount or details of the sublease transaction until the details were disclosed in the District Court in September 2015. Haskel Affidavit ¶ 18. 160 Exhibit 5, Joint Stipulation at 5, No. 58. 161 See id ., No. 59. 162 See id

. 163 Haskel Affidavit ¶ 18.41 continuing good faith efforts to work with the City to find a comm ercial resolution of Delta’s accommodation request,” and that it “expects that the City will likewise act in good faith in approving United’s sublease of two gates . . . to Southwest.” 164 When the City learned that HSR Act review would be required, it consulted with DOJ and DOT and informed both agencies that it would wait for and rely on DOJ’s action before taking any action to approve the Sublease. 165 DOT concurred in this approach. 166 Upon learning on January 23 that the 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 consent under the Lease. 167 Before the City gave its consent, however, the City advised the DOT of its intent to grant consent, sent a copy of the draft consent to the DOT, and sought any final DOT comments or objections. 168 The City received no objections from DOT in
response. 169 The City consented to th e Sublease on January 28, 2015. 170 Since the entire accommodation dispute remained live, however, the C ity was especially careful to ensure that approval of the sublease would not in a ny manner prejudice its ability to mandate accommodation should that become necessary. 171 The City approved th e sublease explicitly

164 Exhibit 51 at 1. 165 Haskel Affidavit ¶ 19. 166 Id

. 167 See Exhibit 77, Email from M. Shaw, Southwest, P. Haskel, City (Jan. 23, 2015); see also Haskel Affidavit ¶ 20. 168 See Exhibit 78, Email from P. Haskel, C ity, to K. Thomson, DOT (Jan. 20, 2015). 169 Haskel Affidavit ¶ 20. 170 Exhibit 9. 171 Haskel Affidavit ¶ 20.42 subject to conditions that preserved the City’s authority to compel accommodation pursuant to the Gate Accommodation Clause. 172
J. The City Seeks Further Guidance From DOT/FAA, But DOT/FAA Again Fails To Provide The Needed Legal Directive On February 10, 2015, counsel for the City met again with the DOT and the FAA in Washington D.C. to seek further clarification of the First DOT Letter and to request clear written instructions on the City’s legal obligations to mandate accommodation un der applicable federal law. 173 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 complia nce with Grant Assuran ces (particularly Grant Assurance 23) and regulations concerning aut hority to levy Passenger Facility Charges, 14 C.F.R. Part 158. 174 DOT and FAA officials made severa l important observations and provided guidance on several points: 175

• The DOT stated that “general principles” required the City to accommodate airlines, but the DOT did not take a position on whether WARA modified those “general principles.”

• Forced accommodation is important fo r the City in order to satisfy its Grant Assurance obligations.

• The DOT and DOJ view competiti on differently; the DOT does not necessarily share the DOJ view concerning whether Virgin is protected from forced.

• FAA counsel emphasized that the FAA only provides guidance and will not substitute its judgmen t for that of the City in the operation of the airport.

• All airlines requesting gate accommod ation should be treated alike, regardless of whether the carrier is an incumbent or a new entrant or any other category.

172 See id .; see also Exhibit 9 at 1–2. 173 See Haskel Affidavit ¶ 22. 174 Id

. 175 Id

.43 • Leases with preferential use language are still subject to accommodation.

• The DOT knows that Delta could have been accommodated at the snapshot date because it was, in fact, accommodated. Delta should be allowed to continue its gate use not necessarily because an accommodation must be perman ent but because the actual temporary accommodation at the sn apshot date demonstrates the availability of space for accommodation. While this additional guidance clarified certa in issues, it still did not provide the definitive direction that the City sought in order to mandate accommodation consistent with the mandates of WARA incorporating the Lease a nd the Five-Party Agreement and with the DOT/FAA’s views on the City’s obligations und er federal law and the Grant Assurances. 176 In particular, DOT/FAA failed to expl ain how the City should reconc ile the (1) preferential gate rights with the accommodation requests or (2) the imposition of Grant Assurance violation sanctions with WARA’s limits on DOT/FAA aut hority. DOT/FAA also declined to provide guidance on the practicality of determining whether there was available space going forward from the selected snapshot date. 177
K. Southwest Announces Expanded Service, American Requests Accommodation, And Delta Makes A Second Accommodation Request In February 2015 Three separate, perhaps related, actions by the ai rlines occurred in February that further complicated the City’s efforts to resolve the accommodation issues. On February 6, 2015, American submitted a request to Southwest for accommodation of American’s proposed operations at Love Field. 178

176 Id . ¶ 23. 177 See id

. 178 Id . ¶ 24. In April 2015, American requested that the City as sist in American’s seeking accommodation of new operations at Love Field under the Gate Accommodation Clause of the Lease. See Exhibit 79, Letter from D. Anderson, American, to M. Duebner, City (April 9, 2015). In its request for accommodation, American did not attempt to reconcile the request with the44 The following week, on February 13, 2015, Sout hwest informed DOT staff that it was inaugurating 13 new daily flights from Love Field. 179 In a letter submitted to the City later in the month, Southwest informed the City, America n, Delta, and the DOT that because of the expansion of service at Love Field, “Southwest w ill be unable to provide gate space to any other carrier on [its] 18 Love Field gates.” 180 Southwest reassert ed its “right to fully utilize all space we lease at Love Field,” and it “intends to challenge any attemp t or directive—whether by the City or the DOT—that seeks to block or restra in that right.” 181 Days after Southwest announced its plan to ad d flights at Love Fi eld, on February 23, 2015, Delta both renewed its request that the City accommodate De lta’s request for its existing five daily flights 182 and, at the same time made a new, second accommodation request for an

court-mandated divestiture of its Love Field gates. Id . American did not specify the date on which it sought to commence operations. Id . Also, the City did not receive additional information from American on its accommodation re quest subsequent to th e April 9, 2015 letter. Haskel Affidavit ¶ 24. Although counsel for Ameri can appeared in the District Court litigation, it did not submit motions or briefs to the Court and did not actively participate in the hearing on the motions for preliminary injunction. Id

. 179 Exhibit 80, Email from R. Kneisley, Sout hwest, to K. Thomson, DOT (Feb. 13, 2015). 180 Exhibit 81, Letter from B. Montgomery, Sout hwest, to M. Duebner, City, at 1 (Feb. 27, 2015). 181 Id . Southwest’s expanded servi ce translated into a total of 180 flights per day on 18 gates, or 10 flights/gate/day. Haskel Affidavit ¶ 26. 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. Id. The evidence at the later preliminary injunction hearing esta blished that 10 flights daily pe r gate is the prudent maximum for aircraft of the sizes now us ed at Love Field, where hardst ands are prohibited by WARA and the number of gates and hours of operation are limited. Id. 182 Exhibit 82, Letter from K. Quinn, Delta, to W. Ernst, City, at 2 (Feb. 23, 2015); see also Exhibit 83, Letter from K. Quinn, Delta, to R. Kneisley, Southwest (Feb. 23, 2015) (requesting that Southwest, alon e, accommodate five Delta depa rtures and arrivals under the terms in First DOT Letter).45 additional eight flights to begin on August 15, 2015. 183 In its letter to the City, Delta requested, in the event that the other airlines did not volunt arily accommodate its needs, that “the City begin the forced accommodation process prescribed by [the Gate Accommodation Clause] of the [Lease].” 184 Southwest responded to Delta’s February 23 renewed and expanded accommodation request by stating that its expansion to 180 flights beginning August 9, 2015 “makes it impossible for Southwest to accommodate any other airline on its gates.” 185 According to Southwest, “the City has no lega l authority to mandate any accomm odation that interferes with Southwest’s contractual and othe r rights to use its own leased gates for its own operations.” 186 Southwest also renewed its opposition to the City ’s proposed snapshot date of November 5, 2014, stating that “the City has no authority to mandate accommoda tion based on the availability of space as of a prior ‘snapshot date.’” 187 According to Southwest, “the City cannot legitimately rely on the [First] DOT [L]etter to mandate a permanent accommodation on Southwest’s gates, and any attempt to do so would be unlawful.” 188
L. Southwest Sues The DOT In February 2015 Challenging The First DOT Letter Simultaneous with its announcement of plans for 180 flights per day, Southwest filed a petition for review in the U.S. C ourt of Appeals for the District of Columbia Circuit challenging the First DOT Letter. See Southwest Airlines Co. v. U.S. Dept. of Transp. , No. 15-1036 (D.C.

183 See Exhibit 84, Letter from K. Quinn, Delta, to Southwest, Virgi n, and SeaPort (Feb. 23, 2015). 184 Exhibit 85, Letter from K. Quinn, Delta, to M. Duebner, City (Feb. 23, 2015). 185 Exhibit 86, Letter from R. Kneisley, Sout hwest, to K. Quinn, Delta (Feb. 27, 2015). 186 Id

. 187 Id . at 2. 188 Id

.46 Cir. Feb. 13, 2015). Southwest asserted that th e First DOT Letter was a final agency action pursuant to 49 U.S.C. § 46110 and was issued in viol ation of the Administrative Procedures Act. Southwest contended that the First DOT Letter forces a permanent accommodation of Delta that deprives Southwest of its contracted-for right to fully use its leased gates at Love Field. 189 According to Southwest’s brief (filed June 22, 2015), the First DOT Letter “exceeds DOT’s statutory authority because no fe deral law authorizes DOT to re quire an airport operator to ignore the preferential lease rights of a signato ry airline by treating a forced accommodation as ‘permanent’” and “violates the [WARA] because it nullifies such preferential lease rights.” 190 Delta has participated as res pondent-intervenor in the D.C. Ci rcuit action. After the DOT issued a second letter to the City in June 2015, described be low, Southwest filed a second Petition for Review on August 13, 2015 challenging the letter in the D.C. Circuit in which it repeated essentially the same arguments it ma de with respect to the First DOT Letter. See Southwest Airlines Co. v. U.S. Dept. of Transp. , No. 15-1276 (D.C. Cir. Aug. 13, 2015).
M. The City Requests The DOT’s Guidance On Remaining Accommodation Questions In February 2015 Despite the apparent impasse, and the uncer tainty created by the litigation, the City continued to seek a resolution. The City sought additional guidance fr om the DOT and the FAA on the City’s legal obligations in accommodati ng Delta. In a February 26 email to Ms. Thomson, other DOT staff, as well as Frank San Ma rtin and Daphne Fuller at the FAA, the City

189 See Exhibit 87, Opening Brief for Petitioner at 2-3, Southwest Airlines Co. v. U.S. Dept. of Trans. (D.C. Cir. June 22, 2015). 190 Id . at 5.47 stated its intent to “share with DOT and FAA the City’s positions and questions on stillunresolved related issues, and to re quest further DOT guidance . . . .” 191 The City informed the DOT that it “concludes that each item of guidance contained in the [First] DOT letter was asserted because DOT a nd FAA believes that each item asserted standards that are necessary for the City to comply with the grant assura nce agreements between DOT and the City, and the City will act according . . . unless (and to the extent) that DOT or the FAA advises the City in writing that this was not a reason for one or more such items.” 192 The City also reminded DOT staff of the pending questions from the February 10, 2015 meeting to which the DOT said it would respond. 193 Among those questions, the City requested a follow-up on the “interplay between the DOT letter and the prov isions of § 5(e) of the Wright Amendment Reform Act of 2006” particularly § 5(e)(2)(B)(ii) that prohibits re quiring the City to “modify or eliminate preferential gate leases . . . .” 194 Feeling pressured by the need to have its pro cedures in place and make a decision before July 7 (the expiration of the voluntary accomm odation), the City reminded the DOT on March 12, 2015, of its need for a response on the ques tions and clarificati ons that it had sought. 195 Specifically, the City reminded DOT that it wa s “trying to finalize [its] standard for accommodation decisions and these points [raised by the City in February] remain outstanding.” 196 The City did not receive a response to its latest request for guidance until June

191 Exhibit 88, Email from P. Haskel, City, to K. Thomson and staff, DOT, and F. San Martin and D. Fuller, FAA (Feb. 26, 2015). 192 Id . (emphasis omitted). 193 Id. at 2. 194 Id

. 195 See Exhibit 89, Email from P. Haskel, Cit y, to C. Baraban, DOT (March 12, 2015). 196 Id

.48 15, nearly four months later, and only three weeks before the latest voluntary accommodation was due to expire.
N. The City Proposes Revised Accommo dation Procedures Based On The DOT’s Advice That Are Again Oppo sed By The Airlines (April 2015) By April 2015, it was apparent to the City that the impasse among the airlines on the permanent accommodation of Delta had still not been broken. 197 On April 16, 2015, in another attempt to establish a fair and transparent process of addressing accommodation, the City circulated a revised version of its draft accomm odation procedures and criteria to the DOT, the FAA, and airlines for comments. 198 The procedures and criteria had been revised based on the guidance from the DOT correspondence, meetings and phone conversations and from earlier input from the airlines. 199 The airlines responded with ex tensive comments on April 28, 2015 expressing objections and criticisms sim ilar to those they had earlier expressed: 200

• Delta: “Delta submits that the Accommodation Procedures can apply only prospectively to future requests for accommodation. Delta’s pending requests should be accommodated without further delay in accordance with the DOT Letter and [the Gate Accommodation Clause] of the [Lea se] to promote competition at DAL.” 201

• Southwest: “The City has no authority to restrict or interfere with Southwest’s rights to fully utilize its leased gates at Love Field and Southwest therefore objects to any provision of the proposed Accommodation Documents that, if implemented, would have the effect of doing so.” 202

197 Haskel Affidavit ¶ 27. 198 Id .; Exhibit 90, Email from L. Tuccelli sent on behalf of P. Haskel , City, to Airlines, the FAA, and the DOT (April 16, 2015). 199 Haskel Affidavit ¶ 27. 200 See Exhibit 91, Response of Southwest Airlines Co. to City of Dallas (April 28, 2015); see also Exhibit 92, Memorandum from J. Varley, Virg in, to P. Haskel, City (April 28, 2014); see also Exhibit 93, Letter from K. Quinn, Delt a, to W. Ernst, City (April 28, 2015). 201 Exhibit 93 at 2. 202 Exhibit 91 at 4.49 • Virgin: “The Accommodation Principles state that the mandatory accommodation process may proceed simultaneously with the requesting airline’s reasonable e fforts to secure accommodations through consensual commercial disc ussions with air lines operating at the airport. This is inconsiste nt with the language and intent of [the Gate Accommodation Clause] of the [Lease] which states that a requesting airline must demonstrate to the DOA 203 that it has contacted all airlines and has e xhausted all reasonable efforts to secure accommodations at Love Fiel d before the airport initiates a mandatory accommodation process.” 204
Neither the DOT nor the FAA commented on the proposed accommodation procedures. 205 Between approximately May 19 through 24, a nd again on June 11 and 12, 2015, the City attempted to negotiate an extended temporar y or a long-term gate accommodation agreement between Delta and Southwest. 206 Each airline informally sign aled what it might accept as a compromise, but rejected the proposals the othe r airline floated. No agreement was reached. 207
O. The DOT’s Second Letter To The City On June 15, 2015 Almost four months after the City requested further clarific ation and two months after the City had circulated proposed accommodation pr ocedures for comment and guidance, the DOT responded by letter to those requests on June 15, 2015 (“Second DOT Letter”). 208 The Second DOT Letter, dated June 15, 2015, explained that the DOT relied on the grant assurance statute and the competition plan statute as the basis for its conclusions in the First DOT Letter and stated

203 The City believes that the term “DOA” refe rs to the City’s Director of Aviation. 204 Exhibit 92 at 2. 205 Haskel Affidavit ¶ 27. 206 Id . ¶ 28. 207 Id

. 208 Id . ¶ 29; Exhibit 94, Letter from K. Thomso n, DOT, to P. Haskel, City, (June 15, 2015).50 that it viewed its positions in th e First DOT Letter as “‘necessary for the City to comply with the grant assurances.’” 209 The DOT reiterated that the City “is require d to accommodate a requesting carrier unless Love Field’s facilities are fully ut ilized at the time of the request , or the Signatory Airlines [sic] at the time of the request are selling tickets for future flights fully-utilizing the facilities.” 210 In determining gate utilization, the DOT stated that it did not “believe that it would be consistent with the grant assurances or with the City’s Co mpetition Plan” if the C ity considered “expanded, unscheduled service” that had not yet been offered for sale to the public.” 211 The DOT repeated that an accommodated carrier mu st be allowed to continue a similar pattern of service. 212 The letter concluded by stating that the decision on Delta’s request was the City’s responsibility but the City “must make this decision in compliance with the grant assurances and its other legal obligations.” 213
As with the First DOT Lette r, the Second DOT Letter expr essed the DOT’s position on what actions DOT would consider to be reasonable, but did not st ate what specific approach the City was legally required to take in order to be in compliance with all applicable law, including the Grant Assurances, WARA, the Five -Party Agreement, and the Lease. 214 Moreover, the

209 Id . at 1. 210 Id . at 2. The DOT’s reference to signatory airlines contradicted its earlier guidance that the City should treat all re questing airlines alike and treat all incumbent airlines alike, regardless of lease status. The DOT apparently changed its guidance in the Second DOT Letter to limit the City’s obligations to signatory airlines only. Al though Virgin, SeaPort and Delta operate at Love Field, none of them is a signatory airline. Southwest is the only signatory airline actually operating at Love Field. 211 Id

. 212 See id . at 3. 213 Id . at 4. 214 Haskel Affidavit ¶ 30.51 Second DOT Letter did not address how WARA affected the DOT’s view that the City’s had a general accommodation obligation, or ex plain the legal bases for DOT’s views. 215 Just as importantly, the DOT declined to provide any guidance, much less de finitive direction, on reconciling the City’s obligations under the Grant Assurances, the Lease, and WARA. 216 The need to reconcile the City’s obligations was not merely theoretical because the theories offered by Delta, Southwest, and the DOT all conflicted. 217 In other words, the City knew with virtual certainty that, if it chose one manner or another for reconciling these requirements, it would face litigation by the party or parties who di sagree with its legal interpretation. 218
P. Faced With Uncertainty and Impending Lawsuits, The City Seeks Guidance From The District Court The conflicting demands and legal interpretatio ns, the lack of viable guidance from the DOT, and the impending July 6, 2015, expiration of Delta’s accommodation agreement with United, left the City with no clear path forward. 219 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 th e scope of DOT/FAA’s authority over the accommodation process in light of WARA. 220 Accordingly, the City felt it had no realistic option but to seek legal direct ion and guidance from a federal district court. 221 Therefore, on June 17, 2015, the City filed a compla int in federal district court for the Northern

215 See id

. 216 See id. 217 Id. 218 Id. 219 Id. ¶ 31. 220 Id. 221 Id. ¶ 32.52 District of Texas, Dallas Division, challeng ing the First and Second DOT Letters and seeking declaratory relief against the DOT, Delta, Southwest, Virgin, United, and SeaPort. 222 See City of Dallas v. Delta Air Lines, Inc., et al. , No. 3:15 cv-02069-K (N.D. Tex. June 17, 2015). The City asserted in its complaint that by “d irecting the City to accommodate Delta on an indefinite and ongoing basis, DOT has violated WARA by effectively forcing the City to abrogate preferential gate leases protected by th e Five-Party Agreement” and that the First and Second DOT Letters are therefore “unlawful, ar bitrary and capricious, and in violation of WARA and the APA.” 223 The City made it clear in the complaint (as it has throughout the ensuing proceeding) it does not favor either Delta or Southwest and is not seeking to violate any validly-issued DOT directive or FAA order. 224 Rather, the City made clear that it needs to understand how to reconcile competing demands for scarce gate resources at Love Field with federal law. 225 Further, there clearly are conflicting (a nd perhaps contradictory) legal obligations placed on the City by federal law (WARA), by its contractual obligations to the federal government (Grant Assurances), by the Lease, and by its obligati ons under the Competition Plan statute. The City sought judicial direction to avoid (1) an untena ble legal conflict, (2) potential liability for interfering with preferential lease ri ghts, and (3) an unsafe and inefficient practical conflict among the airlines fo r use of Love Field gates. 226

222 Id. 223 Exhibit 95, City of Dallas’ Original Complaint at 40, City of Dallas v. Delta Air Lines, Inc., et al. , No. 3:15 cv-02069-K (N.D. Tex. June 17, 2015). 224 See id . at 39. 225 See id. At last count, Southwest Airlines has scheduled 180 flights, Delta has sought 13 flights, American has sought 4 f lights, and Virgin has 19 flights. Affidavit of Mark Duebner, (“Duebner Affidavit”), submitted concurrently w ith this Response, ¶ 3. With 20 gates, the maximum reasonable capacity of Love Field is between 190 and 200 flight s per day, leaving the City facing more requests for ga te space than it can accommodate. Id

. 226 Haskel Affidavit ¶ 32.53 Q. Further Temporary Accommodation One of the principal purposes of the City’s litigation was to ensure that Delta remain accommodated notwithstanding the impending e xpiration of the voluntary accommodation on July 7, 2015. 227 On June 23, 2015, U.S. District Judge Ed Kinkeade held a conference call with the parties as a result of whic h the District Court secured Sout hwest’s agreement to continue accommodating Delta’s five flights until Se ptember 30, 2015, the projected date for the conclusion of a hearing on cross mo tions for a preliminary injunction. 228 Subsequently, Southwest agreed that the original intent wa s to extend the accommodation until the District Court rules on the competing pr eliminary injunction motions. 229 Southwest and Delta entered into a temporary gate use agreement on July 2, 2015, accommodating Delta through September
30. 230 Delta has been continuously accommodated since then pe nding the District Court’s decision.
R. Summary Of Litigation Status The City’s Litigation in District Court. The FAA, as a party to the litigation in the District Court, is fully informed of that proceeding. By way of summary, on September 28 through September 30, 2015, Judge Ed Kinkeade held an evidentiary hearing on the motions for preliminary injunctions filed by th e City, Delta, and Southwest. Delta is currently accommodated under a temp orary gate use agreement with Southwest entered into on July 2, 2015 that was amended on October 7, 2015. 231 That agreement will be in

227 Id . ¶ 33. 228 Id

. 229 Id . n. 14. 230 Exhibit 96, Gate Use License Agreement Be tween Southwest and Delta, at 4 (July 2, 2015). 231 Id .; see also Exhibit 97, Letter from B. Stanton, Southwest, to W. Dawson, Delta and P. Haskel, City (Oct. 7, 2015) (ame nding language of Gate Use License).54 effect until Judge Kinkeade issues an orde r granting or denying th e requests by the City, Southwest, or Delta for a prelim inary injunction, or renders a fi nal judgment on the merits in the litigation. 232 The District Court has not, at this writing, issued its order so Delta remains accommodated at Love Field, as it has continuously since 2009. The City’s Motion to Stay this Investigation. On September 11, 2015, the City moved in the District Court for leave to file a supplementa l complaint to seek a stay or injunction of this investigation. DOT/FAA responded on Septembe r 17, 2015. The District Court has not yet ruled on the Motion for Leave to File. On November 13, 2015, the C ity filed a Moti on to Stay or Enjoin this Investigation. 233 Both City Motions were based primarily on the need for the District Court to protect its jurisdiction and re duce the risk of inconsistent rulings. 234 As reflected in the City’s November 13 motion, the FAA’s decision to invite the airlines to comment on the City’s response to the NOI, effectively replicating the partie s to the District Court case in the NOI proceeding, makes the risk of conf licting decisions particularly acute. 235 The District Court ordered DOT/FAA and the other parties to file any responses by November 18, which

232 See id. 233 Exhibit 98, City of Dallas’ Status Re port and Emergency Motion for an Immediate Stay of the Federal Aviation Administration’s Proceedings, City of Dallas v. Delta Air Lines, Inc., et al ., No. 3:15 cv-02069-K (N.D. Tex. Nov. 13, 2015). 234 Under the All Writs Act, a court may issue an injunction prohibiting conflicting litigation. See Hillman v. Webley , 115 F.3d 1461, 1468 (10th. Cir. 1997). Here, the FAA seeks to conduct a duplicative proceeding under its own auspices and involving the same material facts and legal issues as those in the District Cour t. The NOI unlawfully diminishes the District Court’s power to bring the litigation—which involves both the FAA and the DOT—to a natural conclusion. ITT Cmty. Dev. Corp. v. Barton , 569 F.2d 1351, 1359 (5th Cir. 1978). Furthermore, the NOI interferes with the City’s efforts to meet its obligations under WARA and with the District Court’s jurisdiction to determine those obligations. See Love Terminal Partners , 527 F.Supp.2d at 559. 235 See Exhibit 98.55 DOT/FAA, Southwest, and Delta did. The District Court had not ruled on the City’s Motion as of the time the City filed this Response. Southwest’s Challenge to the First DOT Letter. Briefing concluded in October 2015 in Southwest’s lawsuit challenging the First DOT Letter in the D.C. Circuit. The Court of Appeals has not, at this writing, set a date for oral argument. 236 Southwest’s Challenge to the Second DOT Letter. On October 26, 2015, the D.C. Circuit issued an order staying Southwest’s ch allenge to the Second DO T Letter until the Court of Appeals issues a decision on Southwes t’s challenge to the First DOT Letter.

ARGUMENT I. THE NOTICE OF INVESTIGATION MUST BE DISMISSED BECAUSE THE FAA LACKS JURISDICTION This matter arises under two legal regime s that are each beyond the FAA’s Part 16 jurisdiction. First, the f undamental issue in this matter is a contract interpretation dispute: What is the meaning of the Gate Accommodation Clause in the Lease and how should that clause be applied in the real-world circumstances as they exist today at Love Field? The only reason the City has not yet been able to take final action on Delta’s accommodation requests is that there is a dispute over how to interpret the Gate Acco mmodation Clause. That dispute also affects directly the issues related to the City’s cons ent to the United-Southwest sublease and the FAA’s concerns regarding SeaPort. The FAA has long recognized, however, that it lacks jurisdiction under Part 16 to adjudicate contract disputes. See Final Agency Decision and Order, In re Compliance with Federal Obligations by the City of Santa Monica, Cal. , FAA Dkt. No. 16-02- 08, at 54 (July 8, 2009).

236 The DOT has argued that its letters were not final or binding, lack legal effect, and the DOT admits they failed to fully address WARA. Exhibit 99, Initial Brief for Respondent DOT at 15-16, Southwest Airlines Co. v. U.S. Dept. of Trans . (D.C. Cir. August 21, 2015).56 Second, the City’s obligations under the Gate Accommodation Clause have been federalized by WARA and WARA is not one of the statutes identified in 14 C.F.R. § 16.1. Disputes arising under laws not set forth in Section 16.1 may not be addressed in a Part 16 proceeding. Id. at 29. The FAA has no jurisdiction in th is proceeding to interpret, enforce or apply WARA. Moreover, WARA itself severely limits the FAA’s jurisdiction and authority by prohibiting the FAA from interfer ing with the performance of th e Lease or from changing the terms of the Lease. WARA explicitly states that if the City is complying with the Lease, the FAA may not apply its authority under Grant Assurances 22, 23, and 39 to modify the terms of the Leases in order to accommodate a new entrant. The FAA seeks to avoid these clear jurisd ictional bars by relyi ng on Assurances 22, 23, and 39, as to which WARA § 5(e)(1)(E) preser ves some limited FAA authority. However, Section 5(e)(1)(E) does not create a jurisdictional toe-ho ld under the circumstances of this case. Fundamentally, the City is committed to addres sing all accommodation re quests pursuant to the terms of the Lease and the Ga te Accommodation Clause. The City has sought a judicial declaration of those obligations to resolv e a dispute over the meaning of the Gate Accommodation Clause. The City will act in accordance with that ruling. Thus, the only action that the FAA could take as a result of this pro ceeding would be to take the redundant step of ordering the City to comply with the District Co urt’s ruling that the City knows it must follow or ordering the City to alter the terms of the L ease to accommodate a new entrant, which WARA expressly bars and which may viol ate the District Court’s rulings. A. Resolving The Accommodation Contr oversy Requires Resolving Disputes Over The Meaning Of The Gate Accommodation Clause There is no independent federal obligation to accommodate a non-lessee airline in gates (or other premises) leased and used by another airline. E.g. , Edward Mainardi, Sr. v. Lincoln57 Park Airport, Inc. , FAA Docket No. 16-02-12, Final Deci sion and Order at 13 (Oct. 18, 2004) (“The Respondent is also not in a position, nor is FAA, to impose on a private business owner, such as Wagner Airways, to accept a new lease with a subtenant in the ordinary course of business.”); Compliance Manual ¶¶ 9.7(c) & 9.8. DOT/FAA has admitted that it is not aware of any airport where a mandatory accommodation ha s been ordered in the last twenty years. 237 Because all of the gates at Love Field are full y leased, the City’s a ccommodation obligation is defined only by the Gate Accommodation Clause and resolution of the accommodation controversy depends solely on interpreting the meaning of the accommodation provisions within the context of other provisions of the Lease. Moreover, WA RA and the Competition Plan establish the Gate Accommodation Clause as the sole means for the City to accommodate new entrants at Love Field. The contractual nature of the accommodation co ntroversy is apparent from the contractspecific issues raised by the airlines. The key is sues in the accommodation controversy relate to the meaning of “new entrant” (also referred to in the Lease as a “requesting airline”), the duration of any accommodation, the manner and tim e at which the City must determine the extent of gate usage, and the respective rights of incumbent pref erential leaseholders and the accommodated airline. Supra at 13-55. Those are quintessentia l contract issues arising under the specific language of the Lease. Although the parties to the cont roversy have at times resorted to the Grant Assurances and other FAA-administer ed federal law to support their interpretation of the Lease language, those laws were offered to aid the decisionmaker in determining the meaning of the Gate Accommodation Clause.

237 Exhibit 100, DOT/FAA Response to the City’s First Set of Inte rrogatories, Response No. 5 (Sept. 21, 2015).58 For example, the term “new entrant” is not defined in the Lease. The FAA and industry have used the term in inconsistent wa ys in various cont exts over the years. 238 The only way to determine the meaning of that term is to determine the intent of the parties to the Lease, which is a classic contract constr uction task arising under c ontract law and not any of the laws subject to the FAA’s Part 16 jurisdiction. The airlines dispute the meaning of other term s of the Lease, includ ing how to reconcile the Lease terms that allow the City to manda te an accommodation under Section 4.06(F)(3) with

238 The term is used in the L ease but there is no clear industr y standard for its meaning. The Gate Accommodation Clause refers to a “new entrant” airline as a “Requesting Airline,” but does not define either term furthe r. The Five-Party Agreement prov ides only that to “the extent to which a new entrant carrier s eeks to enter Love Field, the City of Dallas will seek voluntary accommodation from its existing carriers to accom modate the new entrant service.” Exhibit 1,¶ 3.b. However, the Five-Party Agreement does not further define “new entrant carrier” or “new entrant service.” The FAA’s guidance bookl et on air carrier incentives refers to a new entrant carrier as a carrier which has newly ente red a market (and is eligible for an incentive). http://www.faa.gov/airports/airport_comp liance/media/air-carrier-incentive-2010.pdf . The FAA’s summary of airport competition plans uses the term “new entrant” in many different contexts but most of the quotes from airport co mpetition plans appear to use the term generally to refer to carriers that are newly entering a market and nothing more ( i.e. , the term is used only to distinguish such operators from incumbents). http://www.faa.gov/airports/aip/guidance_le tters/media/pgl_04_08b_competition_highlights_201 0.pdf . A similar usage appears in the FAA’s Progr am Guidance Letter 03-01 which explains the requirement for the preparation of airport competition plans. http://www.faa.gov/airports/aip/ guidance_letters/media/pgl_04-08.pdf . The term has been used in other formal contexts such as the Wende ll Ford Aviation Investment and Reform Act (“AIR21”) where the term is defined for certain purposes as “an air carrier that has been providing air transportation according to a publish ed schedule for less than 5 years, including any person that has received authority from the S ecretary to provide air transportation but is not providing air transportation.” Th e FAA rule on congestion at Chi cago O'Hare Airport uses the term “new entrant” and the term “limited incumbents” in discussing the rights of air carriers to O'Hare slots. It noted that the term “new en trant/limited incumbent” is defined in AIR21. The term is defined in the regulation as “any U.S. or Canadian air carrier that does not hold or operate, and has never held or operated any Arrival Authorization at O'Hare, on its own behalf.” 14 C.F.R. § 93.22. The FAA regulation implementing the Airport Noise and Capacity Act refers to new entrants (entitled to notice of propos ed noise or access restrictions) as “any person intending to provide new air service to the ai rport within 180 days of the proposed date of implementation of the restriction.” 14 C.F.R. § 161.105; see also 49 U.S.C. § 40128(f) (3)(B) (defining the term “new entrant” for purposes of regulating helicopter tours over national parks and tribal lands).59 the “priority” given to the incumbent airline in the event of a schedule conflict with the accommodated airline in Section 4.06(F)(4)(a). The duration of any accommodation is one of the most contested issues in th is controversy. Again, resolvi ng the apparent tension between those provisions is a cl assic contract construction task that does not arise under the Grant Assurances or other laws identi fied in 14 C.F.R. § 16.1(a). Finally, the City’s duties rega rding approval of Southwest’s sublease of United’s gates is also a matter of contract interpretation. The City is cont ractually prohibited from unreasonably withholding or delaying consent to the s ublease. Lease §§ 13.01(B) & 14.08. Whether the City’s consent was improper is a matter of contract interpretation, not the Grant Assurances. The accommodation obligation arises solely under the L ease and Five-Party Agreement as a matter of contract. Any argument that the Gate Accommoda tion Clause required (or even permitted) the City to withhold consent to the S ublease is a matter of contract law, not a Grant Assurance issue.
B. The FAA Lacks Jurisdiction Over Di sputes Regarding The Meaning Of Contracts Such As The Lease The FAA recognizes that contract disput es are beyond its Part 16 jurisdiction. 239 As the Director ha s explained Whether or not an airport tenant has breached the terms of its lease agreement with the airport sponsor is a matter to be resolved in state court. The FAA is not a party to litigation proceedings between complainants and respondent s involving contract disputes;

239 The City recognizes that it had initially asked DOT/FAA to intercede to assist in resolving the accommodation controversy at Love Fi eld and issue rulings that would resolve it. In that sense, the City believed that DOT/FAA had the authority to address certain legal issues that arose under the Lease’s s ubordination clause (Section 14.02) th at may have helped resolve the controversy. It quickly became appare nt that Southwest an d Delta each disputed DOT/FAA’s authority even under that clause. Furthermore, the guidance from DOT/FAA failed to address the underlying contractual issues, desp ite the City’s requests th at it do so, indicating that DOT/FAA did not believe it had the authority to provide definitive direction on those issues. Moreover, even if DOT/FAA had authority to pr ovide interpretive guida nce outside litigation, it does not have jurisdiction to bring Part 16 proc eeding on a dispute over the meaning of the Lease at issue here.60 nor does the FAA have jurisdictio n over matters of contract law between airport tenants and sponsors. Asheville Jet, Inc. d/b/a Mi llion Air Asheville v. Ash eville Regional Airport Auth. , FAA Docket No. 16-08-02, Director’s Determination at 32 (Oct. 1, 2009). Similarly, in Platinum Aviation and Platinum Jet Center BMI v. Bloomington-Normal Airport Auth., Ill. , FAA Docket No. 16- 06-09, Final Decision and Order at 18 (Nov. 28, 2007) , the FAA noted that it had no jurisdiction over a contract dispute explaini ng that although a state court ma y not have jurisdiction over an airport sponsor’s federal obligations, “ the state court has otherwise broad authority to decide contractual disputes under state law.” Applying that principle, the Director has speci fically found that it lacks jurisdiction to resolve a dispute over the meaning of a contract term and how to apply that contract term in a particular situation, even when the outcome of th at dispute could implicate grant obligations. In Northwest Airlines Inc., et al . v. Indianapolis Airport Auth. , FAA Docket No. 16-07-04, Director’s Determination at 28-29 (Aug. 19, 2008), th e Director determined that the FAA lacked jurisdiction to resolve the i ssue because the dispute turned on whether the FedEx apron expansion was a “Special Purpose Facility” under a lease agreement and whether the treatment of the FedEx apron allowed for the application of a certain credit against landing fees. The Director concluded that that issue was “ a contract dispute” and therefore should “not be adjudicated
under Part 16.” Id. at 28. The Director further noted that there was no adverse impact on complainants because any adverse impact depended on resolution of the contract issue, which the Director described as “a potential future event” the outcome of which was “uncertain considering the differing analyses submitted by [the parties].” Id. The FAA’s lack of jurisd iction is made clear by In the Matter of the City of Santa
Monica , FAA Docket No. 16-02-08, Final Agency D ecision at 54 (July 8, 2009), where the FAA61 ultimately found that it had no jurisdiction to adjudi cate an alleged violation of contract cited in an FAA-initiated Notice of Investigation. In Santa Monica , the FAA issued an NOI and pursued a multi-year investigation into whether proposed measures to restrict access at Santa Monica Airport violated a number of Grant Assuranc es, other federal laws, and a 1984 settlement agreement between the FAA and Santa Monica. Id. at 22. After Santa Monica adopted the measures, the FAA issued a Director’s Determination finding, inter alia , that Santa Monica had violated the 1984 settlement agreement. Id. at 23. That decision was affirmed by an FAA Hearing Officer following an evidentiary hearing. Id. at 25. On appeal to the Acting Assistant Administ rator for Aviation Poli cy, Planning and the Environment, 240 the FAA held that the Hearing Officer’s decision that the FAA had jurisdiction to resolve the contract dispute was “in error.” Id. at 54. The FAA held that the 1984 settlement agreement had not been incorporated into subsequent grant agreements as Grant Assurances. Id. The FAA concluded that Part 16 provides authority to reso lve disputes arising specifically under AIP grant assurances. 14 C.F.R. § 16.1(a)(5). Consequently, resolution of issues arising under the 1984 Settlement Agreement is not properly addressed in this proceeding under Part 16. Id. That rule applies here. As in Santa Monica , the Lease has not been incorporated into any subsequent AIP grant as a sponsor assurance. Further, although the Lease’s obligations have, to an extent, been incorporated into federal law pursuant to WARA, Congre ss explicitly withheld from the FAA and the DOT any independent aut hority to enforce WARA . To the contrary, WARA makes clear that the FAA and DOT “may not interfere with the rights and obligations”

240 The appeal was assigned to the Acting Assistant Administrator for Aviation Policy, Planning and the Environment inst ead of the Associate Administra tor for Airports because of conflict of interest concerns.62 regarding accommodation set forth in the Five-Party Agreement and the Lease. Love Terminal
Partners , 97 Fed. Cl. at 411. The court went on to state that “WARA requires that Dallas allocate gates in accordance with the terms of the [Five-Party Agreement], which defined the rights and obligations existing for America n, Southwest, and ExpressJet . . . .” Id. The FiveParty Agreement in turn incorporates the Gate Accommodation Clause. See Five-Party Agreement ¶ 3(b). Because resolution of the accommodation controversy turns on resolution of the disputed meaning of the Lease, th e FAA lacks jurisdic tion under Part 16. C. The FAA Lacks Jurisdiction Becaus e WARA Is Not One Of The Statutes Included Within The FAA’s Part 16 Jurisdiction The FAA’s jurisdiction under Part 16 is limited to the statutes and la ws enumerated in 14 C.F.R. § 16.1(a). Final Ag ency Decision and Order, In re Compliance with Federal Obligations by the City of Santa Monica, Cal. , FAA Dkt. No. 16-02-08, at 29 (July 8, 2009). The City’s federal obligations w ith respect to the Ga te Accommodation Clause are governed by WARA, and not independently by any of th e laws listed in Section 16.1. WARA defines the limits of the City’s obligation to accommodate new entrants pu rsuant to the Gate Accommodation Clause: The city of Dallas, pursuant to its authority to operate and regulate the airport as granted under chap ter 22 of the Texas Transportation Code and this Act, shall determine the allocation of leased gates and manage Love Field in accordance with contractual rights and obligations existing as of the effective date of this Act for certificated air carriers providing scheduled passenger service at Love Field on July 11, 2006. To accommodate new entrant air carriers, the city of Dallas shal l honor the scarce resource provision of the existing Love Field leases. WARA § 5(a). The Five-Party Agreement, wh ich WARA generally incorporated into law, provides that if airlines do not accommodate a new entrant volun tarily, the City “agrees to require the sharing of preferenti al lease gates, pursuant to Dalla s’ existing lease agreements.” Five-Party Agreement ¶ 3(b). WARA also provide s that “any actions taken by the parties to [the Five-Party Agreement] that are reasonably n ecessary to implement its provisions shall be63 deemed to comply in all respects with the pa rties’ obligati ons under title 49, United States Code.” WARA, § 5(d)(2). Accordingly, the City ’s obligations to accommodate new entrants are defined by WARA. Because WARA is not identified in 14 C.F.R. § 16.1(a), the FAA lacks the jurisdiction to adjudicate any dispute regarding the City’s obl igations under the Gate Accommodation Clause. Nor does WARA fall within Section 16.1’s catch-al l provisions, which refer only to statutes codified in Title 49 of the U.S. Code, b ecause WARA is not codified in Title 49.
D. WARA Further Narrows The FAA’s Jurisd iction With Respect To The Gate Accommodation Clause Even if the FAA retained some jurisdicti on over the City’s oblig ations under the Gate Accommodation Clause notwithstan ding WARA’s general coverage , WARA further narrows the FAA’s authority and deprives the FAA of jurisdiction under the specific facts of this matter. WARA expressly limits the authority of the DO T and FAA to take any enforcement action or conduct an investigation regard ing the allocation of gates u nder the accommodation provisions of the Five-Party Agreement and the Lease: Notwithstanding any other provisi on of law, the Secretary of Transportation and the Administrator of the Federal Aviation Administration may not make findi ngs or determinations, issue orders or rules, withhold airpor t improvement grants or approvals thereof, deny passenger facility ch arge applications, or take any other actions, either self-initiated or on behalf of third parties . . . (A) that are inconsistent with [the Five-Party Agreement] or (B) that challenge the legality of any provision of [the Five-Party Agreement]. WARA § 5(d)(1). Although WARA § 5(e)(1)(E) states that WARA does not “limit the authority of the [FAA] or any other Federal agency to enforce [certain] requirements of law and grant assurances [including Assurance 22],” WARA § 5(e)(2)(B)(ii) limits the applicability of Subsection 5(e)(1)(E) with respect to acco mmodation requests by new entrants:64 [Subsection 5(e)(1)(E)] shall not be construed to require the city of Dallas, Texas . . . to modify or e liminate preferential gate leases with air carriers in order to allo cate gate capacity to new entrants or to create common use gates, unless such modification or elimination is implemented on a nationwide basis. Read together, these provisions of WARA limit the FAA’s author ity in precisely the scenario presented by this proceeding. The FAA cannot or der the City to take any action that is inconsistent with the terms of the Lease nor can the FAA order the City to change the terms of the Lease in order to accommodate a new entran t. Thus, WARA preser ves the FAA’s authority under the Grant Assurances only with respect to matters not covered by the Five-Party Agreement or matters that violat e the Five-Party Agreement. Mo reover, as demonstrated above, the FAA lacks the jurisdiction to interpret dis puted lease terms – a function reserved for the

courts. Courts construing WARA have confirmed th e narrow scope of FAA authority over the City’s actions under the Gate Accommodation Clause. In Love Terminal Partners, L.P. v. City of Dallas, Tex. , 527 F.Supp.2d 538 (N.D. Tex. 2007), the cour t confirmed that WARA bars the FAA from using its authority und er Title 49 in any way inconsistent with WARA or the FiveParty Agreement, stating that th e language in § 5(d)(1) of WARA was a “direc tive to the Federal Aviation Administrator not to frustrate performance of the [Five-Party Agreement].” Id . at 559. The Court of Federal Claims in Love Terminal Partners v. United States , 97 Fed. Cl. 355, 406 (2011), confirmed that principle stating that “Congr ess reinforced its intention to incorporate the [Five-Party Agreement] into federal law by en suring that DOT and FAA policymaking does not affect any of the provisions contained therein.” Id . at 415. The court held that “Congress simultaneously defined and limited the ability of DOT and the FAA to regulate those matters encompassed by the [Five-Party Agreement]” and “the DOT and the FAA are statutorily65 obligated to neither act in a manner that is inconsistent with [the Five-Party Agreement] nor challenge the legality of [the Five-Party Agreement]. Id

. The Court of Claims specifical ly addressed the scope of WARA § 5(e)(1)(E), finding that its applicability is narrow, particularly given the provisions of Section 5(e)(2)(B)(ii) which further limit the FAA’s authorit y. The net effect is that the WARA ensures that, while those portions of the [Five-Party Agreement] that pertain to gate a llocation at Love Field are matters of federal law, the federal government may not interfere with the rights and obligations set forth in paragraph 3 of article I of the [Five-Party Agreement]. 97 Fed. Ct. at 410-11. Paragraph 3, Article I of th e Five-Party Agreement incorporates the Gate Accommodation Clause of the Lease. In short, WARA statutorily directs the Ci ty to act in accordance with the Gate Accommodation Clause and deprives the FAA of any authority to interfere with those rights and obligations, to order the City to act in a manner inconsistent with th e Lease, or to require the City to change the terms of the Lease to accommodate a new entrant. The question of whether the City is complying with the Gate Accommodation Clause is a matter of statutory interpretation under WARA and contract interpre tation which are beyond the purv iew of Part 16 and outside the jurisdiction of the FAA to adjudicate.
E. The FAA Lacks Jurisdiction Becaus e The FAA Cannot Order Action Inconsistent With The Lease As Construed By The District Court In the ordinary case, once the meaning of a contract has been determined, the FAA would have jurisdiction to assess whethe r the terms of a contract are c onsistent with a sponsor’s Grant Assurance obligations and to re quire the sponsor to take corrective action if there were an inconsistency. Here, however, WARA deprives the FAA of that authority in the specific situation of the Gate Accommodation Clause. Unde r WARA, if the City acts consistent with the Lease, the FAA cannot use its authority to enforce grant obligations as a basis to require the City66 to act in a manner inconsistent with the Lease a nd cannot require the City to change the Lease in order to accommodate a new entrant. The City has committed, and reiterates is co mmitment, to act in accordance with the Lease. There is a dispute over th e meaning of the Lease. The C ity has sought direction from the District Court as to its obliga tions under the Lease. When the Di strict Court rule s (perhaps as soon as when the District Court rules on the pending motions for preliminary injunction), the City will then know definitively its obligations under the Lease. The City will act accordingly. The FAA has no authority to adjudicate the disp ute over the meaning of the Lease and once the meaning of the Lease has been determined, WARA prohibits the FAA directing the City to act except in accordance with its terms. That is consistent with the funda mental purpose of WARA to protect the agreements memorial ized in the Five-Party Agreemen t as a matter of federal law. Moreover, as a party to the District Court li tigation, the FAA will be bound by any decree in that proceeding. WARA Subsection 5(e)(1)(E) does not override those limitations. Read together with Subsections 5(d) and 5(e)(2)(B)(i i), the savings clause in Subs ection 5(e)(1)(E) is narrow and preserves the FAA’s enforcement authority under the Grant Assurances only with respect to matters not related to the Gate Accommodation Clause. With respect to the accommodation provisions, however, Congress has removed the FAA’s enforcement authority. Because this entire dispute turns on the meaning of th e Gate Accommodation Clause and the City’s obligations thereunder, the FAA ha s no jurisdiction under Part 16 and there is nothing left for the FAA to adjudicate in this proceeding.67 II. EVEN IF THE FAA HAS JURISDICTION , THE NOI MUST BE DISMISSED AS PREMATURE AND UNRIPE A sponsor’s action is not ripe for review under Part 16 if the po licy, decision, or other action identified for review “has ye t to be implemented or adversely affect the [c]omplainants.” Northwest Airlines, Inc., et al . v. Indianapolis Airport Auth. , FAA Docket No. 16-07-04, Director’s Determination at 37 (Aug. 19, 2008). This standard is closely related to the requirement that a complainant be “directly and substantially affected” before an issue is ripe. Ashton v. City of Concord , FAA Docket No. 16-02-01, Director’s Determination at 27 (Aug. 22, 2003). Accordingly, when a complainant presents speculative or hypothetic al harm related to a policy that has not yet been implemented or a pplied, the issue is no t ripe for review. Drake Aerial Enterprises, LLC v. City of Cleveland , FAA Docket No. 16-09-02, Director’s Determination at 20 (Feb. 22, 2010) (dismissing a challenge to a propos ed but not adopted banner towing fee as “speculative” and a “p remature” implication of a Grant Assurance violation); JetAway Aviation, Inc. v. Montrose Cty., Colo. , FAA Docket No. 16-08-01, Director’s Determination at 37 (July 2, 2009) (“This is not a matter ripe for FAA review, since the County has not exercised any review and has not rejected any FBO management for any reason.”); Maxim United, LLC v. Bd. of Cty. Commissioners of Jefferson Cty., Colo. , FAA Docket No. 16- 01-10, Director’s Determination at 21 (April 2, 2002) (“[S]ince the revised minimum standards at Jefferson County Airport have not yet been implemented, we cannot determine whether timing differences, if any, will result in unjust economic discrimination. As such, this issue is not ripe for review.”). As discussed above, supra at 60, the Director’s Determination in Northwest Airlines underscores the lack of ripeness to this invest igation because Delta is currently accommodated and any future change in Delta’s ability to be accommodated at Love Field depends on the68 uncertain outcome of a contract disput e. As the Director explained in Northwest Airlines in distinguishing an earlier decision The FAA notes that Martyn and the Complainant significantly differ. In Martyn, the complainant was in fact being denied access to the airport. In this Compla int, the Complainants are on the airport but arguing against a pote ntial future event, which is uncertain considering the differing analyses submitted by the Complainants and the Authority. Northwest Airlines , Director’s Determination at 28. The Director went on to find the claims were not ripe because the disputed contract provision had yet to adversely affect the complainant. These principles mandate dismissal of the NOI for lack of ripeness. First, the City has not taken any final action, has not adopted a final accommodation policy that the FAA can evaluate (even assuming it had Part 16 jurisdic tion), and Delta continue s to be accommodated. There are, in short, no facts for the FAA to eval uate regarding how the C ity intends to meet its accommodation obligations and there is no harm to Delta in the interim. Further, it is pure speculation as to what the City’s final accomm odation policy will be, what final accommodation decisions the City will make, and whether any of those actions implicate the Grant Assurances in any way. (The only certainty is the City’s re peated commitment that the final policy will be consistent with the Lease and the District Court’ s rulings.) Under the FAA’s determinations, any potential “harm” is speculative until a carrier requests accommodation, th e other airlines do not voluntarily accommodate the requesting carrier, and the City takes action which deprives that requesting carrier of accommodation in violation of the Gate Accommodation Clause. That has not happened. Accordingly, there is no ripe issue for the FAA to review. Second, the NOI is unripe given the particular procedural history of this dispute. As detailed above, the City made multiple atte mpts to implement an accommodation policy and69 make an accommodation decision based in large part on DOT/FAA guidance. Supra 13-55. Each attempt was met with objections from the airl ines and threats of liti gation. To resolve that dispute, the City filed the declaratory judgment action in the District Court to obtain a binding determination of the City’s ac commodation obligations under the Lease. The District Court’s decision in that case will be binding not only on the City and the airline parties, but on the
FAA. 241 Until the District Court rules, the para meters of the City’s accommodation obligations remain uncertain and there is simply no basis for the FAA to evaluate the City’s possible future actions at this time (even if the FAA were to have any jurisdiction at that time). The City understands from the FAA’s filings in the District Court that the FAA has its own view of how the City should have acted. Th e FAA appears to be taking the position in that litigation that the City failed to meet its obligations as a sponsor by failing to act in accordance with DOT/FAA guidance. Without disputing or ag reeing with the substance of the FAA’s view, the fact that the FAA has articul ated a position in the litigation does not make the controversy ripe for purposes of Part 16. Moreover, the City did attempt to implemen t DOT/FAA guidance. Those attempts were met with serious objections from Delta an d Southwest, including threats of litigation. 242
Southwest filed two Petitions for Review in th e United States Court of Appeals challenging DOT/FAA’s guidance as unlawful. Even if the City had moved forward and adopted the DOT/FAA recommendations, the decision would have been challenged in court, likely accompanied by requests for preliminary injunctive relief, and the parties would be in the same

241 Even if the FAA is correct that the Di strict Court lacks jurisdiction over it, any decision by the District C ourt will bind the City and the other pa rties. The City and the airlines will be required, as matter of law, to follow the District Court’s de cision. Unless the FAA intends to direct the C ity and the airlines to ignore the Di strict Court’s decision, the FAA cannot meaningfully affect the resolution of the accommodation controversy at this time. 242 See Exhibit 5, Joint Stipul ation at 6, Nos. 72, 73.70 position as they are today. The City for its part has done what any responsible government would do when faced with conflicting demands from other government agencies and from tenants of one of its most important facilities : it sought declaratory re lief from a court to adjudicate its rights and obligations. Furthermore, rather than applaud the City for seeking a quick resolution and continually pushing to make sure that Delta is not prejudi ced while seeking such a resolution, the FAA has directly prejudiced the City by instituting this proceeding and forcing the City to reply even before the District Court has ruled and provided precisely the definitive direction that all the parties so desperately seek. The FAA has placed the City in the impossible position of defending an action it has not taken, of rear guing the legal and factua l record that has been assembled in the federal court, and of mounting a defense before its legal obligations have been defined. By issuing the NOI, the FAA has placed the City’s grant and PFC funding at risk, but the City cannot fully defend itself because it has not ma de any final decisions and therefore cannot adequately explain its actions. The City offe red the FAA and the DOT multiple opportunities to take definitive action before the City filed the d eclaratory judgment action. They chose not to. By waiting until after the litigation was underw ay, the FAA has deliberately increased the complexity and uncertainty and raised the sp ecter of inconsistent rulings and conflicting decisions. Finally, the NOI suggests that the City’s failure to take final action merits investigation. But that does not make this dispute ripe for the simple reason that Delta continues to be accommodated and the City has not needed to take any final action that could be reviewed. Furthermore, because the extent of the City ’s accommodation obligation, and conversely the accommodation privileges of any new entrant, re mains undetermined, it is pure speculation that71 any aeronautical user has or may be harmed. For example, if Southwest is correct in its interpretation of the Lease that the Gate Accommodation Clause does not allow the City to force an accommodation that would limit Southwest’s abil ity to make full use of the gates it leases based on announced future schedules, then no ne w entrant could have been accommodated under the Lease and there has been no legal injury. On th e other hand, if Delta is correct that the Lease entitles it to a permanent accommodation, it ha s not yet been harmed because it has been accommodated in the interim and can continue to be accommodated. Only if the District Court affirms Delta’s theory and then the other airl ines do not voluntarily accommodate Delta, does the City have the authority to force an accomm odation under the Gate Accommodation Clause. Everything else is speculative: it is impossible now to determ ine if any other accommodation requests could or would have been granted wit hout analyzing gate utilization and applying the correct legal principles, which ar e currently the subject of the District Court litigation. Furthermore, the suggestion that the City s hould already have acted in compliance with the DOT/FAA guidance does not make this matter ripe because that guidance was not binding. In response to Southwest’s Petition for Re view DOT/FAA has take n the position that its guidance letters were not final ag ency decisions and did not have the effect of law. DOT/FAA took the same position in responding the City’s In terrogatories in the Di strict Court litigation. 243 If that is the FAA’s position, then there is no legally enforceable directive from the FAA that could have constituted a suffici ent legal basis upon which the C ity could have acted. The FAA cannot have it both ways: it cannot both asse rt that the DOT/FAA guidance is mere a preliminary, interlocutory sugges tion and that the City violated its grant obligations by not following those non-binding suggestions.

243 Exhibit 100, Response No. 1.72 All of this is to underscore th at in the absence of final action by the City, there is simply nothing to investigate and no fi nal City action (or inaction) to evaluate. Any attempted adjudication would rest on multiple layers of specula tion and assumption, rather than facts. It is for that fundamental reason that Part 16 matters are not ripe until the s ponsor has taken a final action that can be reviewed. Even if this case were ripe, the City urge s the FAA prudentially to withdraw this NOI pending the District Court’s decisi on and pending the City’s respons e to that decision in order to prevent the unnecessary expense an d burden of litigating this inve stigation and to eliminate the risk of conflicting or inconsistent decisions between the District Court and the FAA.
III. ASSUMING THE FAA HAS JURISDICTI ON AND THAT THE CASE IS RIPE, THE CITY IS IN COMPLIANCE WITH ITS GRANT OBLIGATIONS As detailed above, the FAA lacks jurisdiction ov er the issues raised in the NOI, and even if the FAA had jurisdicti on, the issues are no t ripe for adjudication. In the event the FAA elects to proceed without jurisdiction and to treat th e accommodation issue as ripe, the City has not violated its grant obliga tions. To the contrary, the City ha s worked tireless ly, and at great expense, to meet its accommodation obligations. Although the controversy is not fully resolved, Delta has been continuously accommodated and ther e is a clear path forward to resolution. The City has acted reasonably and transparently to as sure it meets its accommodation obligations and has not done anything that is inconsistent with its obliga tions as an airport sponsor. 244

244 Ordinarily in a Part 16 proceeding, if the FAA finds a Grant Assurance violation, it will offer the sponsor an opportunity to develop a corrective action plan. 14 C.F.R. § 16.109. Even if the City were in violation of its grant obligations for some reas on that the City cannot understand, a corrective action plan in this instance is likely to look remarkably like what the City has already been doing: the City would seek legal certainty as to its obligations under the Lease and applicable federal law and would then, as appropriate, make an accommodation decision if the requesting carrier has not been vo luntarily accommodated. Th at is precisely what the City has been doing. Moreover, the NOI “inv ites” the City’s good faith efforts to resolve73 The FAA’s compliance program is focuse d on achieving voluntary compliance. Therefore, “in addressing allegations of noncom pliance, the FAA will make a determination as to whether an airport sponsor is currently in compliance with the appli cable Federal ob ligations.” Scott Meyer v. City of Cincinnati , FAA Docket No. 16-12-14, Dire ctor’s Determination at 10 (Sept. 12, 2014). In making an a ssessment of current compliance: FAA must make a judgment call in all cases as to whether a sponsor is reasonably meeting its federal commitments. A sponsor meets its commitments when: (1) The federal obligatio ns are fully understood; (2) A program ( e.g. , preventive maintenance, leasing policies, operating regulations, etc.) is in place that the FAA deems adequate to carry out th e sponsor’s commitments; (3) The sponsor satisfactorily demonstrates that such a program is being carried out; and, (4) Past compliance issues have been addressed. Airport Compliance Manual (FAA Order 5190.6B, he reinafter “Complian ce Manual”) ¶ 2.8(b) ; see also Keathly v. City of McKinney, TX , FAA Docket No. 16-03-14, Di rector’s Determination at 20-21 (Oct. 13, 2004) (finding no violation when respondent was aware of its wildlife mitigation obligation, had a plan to address that obligation, and wa s diligently carrying out that plan); see also Ricks v. Greenwood-Leflore Airport , FAA Docket No. 16-09-04, Director’s Determination at 17 (Jan. 24, 2011 ) (same, in the context of re moving aircraft equipment on airport property). The facts of the accommodation controversy demonstrate overwhelmingly that the City is currently in complia nce with its grant obligations.

informally the matters in the NOI. The City has offered to meet with the FAA for those very purposes but has not yet received a response.74 A. The City Has Demonstrated That It Understands Its Accommodation Obligations There is no genuine disagreement that the City understands that it has some obligation to make accommodations as provided in to the Leas e, the Five-Party Agreement, and WARA. From the time that Delta informed the City of its need for assistance in obtaining accommodation, the City has demonstrated a keen unde rstanding of its obligation to address that request. Without restating the lengthy history of the dispute set forth above, the City has repeatedly threatened to invoke the forced acc ommodation procedures and otherwise used its legal and moral authority to assure the contin ued accommodation of Delta. The City has spent considerable effort (not to me ntion City funds) to work with the airlines, with DOT/FAA, and even with DOJ to ensure Delta can be accommodated. For the last 13 months, the City has been successful. The FAA has no reason to believe that the City will not continue to be successful in skillfully navigating the dangerous shoals between the conflicting airline, DOT, and DOJ arguments. As a further demonstration of the City’s genuine effort to ensure continued Grant Assurance compliance, the City sought guidanc e and assistance from DOT/FAA as soon as it was apparent that the airlines intended to fight over the meaning of the Gate Accommodation Clause. In November, 2014, the City attempte d to implement DOT/FAA’s guidance, but was met by strong resistance from the airlines, incl uding threats of litigation. The City thereafter sought further guidance and clarification fromDOT/FAA, but that guidance, provided in December, 2014, was again met with objections from the airlines and more threats of litigation against the City. I ndeed, Southwest sued DOT/FAA cha llenging the legality of DOT/FAA’s guidance. In April 2015, the City deve loped a revised accommodation policy, again incorporating DOT/FAA guidance. That effort was also met again with objections and litigation75 threats. In June, 2014, DOT/FAA again offere d guidance, Southwest again challenged that guidance in the Court of Appeals, and DOT/FAA later claimed that that guidance lacked the effect of law. The DOT/FAA disclaimer underscores that the City acted prudently and reasonably in seeking judicial resolution of the controversy. Attempting to follow DOT/FAA’s admittedly non-binding suggestions would not have provided the City with the legal certainty it would have needed to defend its actions in the certain litigation that would have been filed by Southwest and/or Delta. The City has invested countless personnel hour s and hundreds of thousa nds of dollars in an effort to resolve the accommodation cont roversy. The City plainly understands its obligations. The fact that the City has not yet succeeded in resolving the controversy does not mean it does not understand its obligations.
B. The City Has A Plan To Meet Its Accommodation Obligations The City is acutely aware that it has not resolved the accommodati on controversy. As summarized above, the City has worked, and conti nues to work, ceaselessly to do so. It has invoked contractual power, it ha s invoked the regulatory and le gal power of DOT/FAA, it has used its moral authority as propr ietor, it has attemp ted negotiation and cons ultation, and it has attempted to force the issue. At every turn, those efforts have been met with determined resistance from the airlines, incl uding repeated threats of litigation. Although the City received guidance from DOT/FAA, that guidance was neve r backed up with the force of law and was never presented with sufficient deta il or authority to address the obj ections of the ai rlines and the concerns of the City, which has ultimately led S outhwest to challenge th e guidance in the Court of Appeals. Having been unable to resolve th e issue through those means, the City filed the District Court action seeking a declaratory judgment re garding the precise scope of its accommodation76 obligations under the Lease. The suit named DOT /FAA and all airlines currently operating at Love Field, as well as American, which has sought accommodation. The City has specifically requested the District Court to resolve the co ntroversy and declare th e City’s accommodation obligations under the Lease. Just to be sure that the FAA understands the City’s commitment s, they are repeated here. After the District Court rules, the City will implement the follo wing plan to ensure continued Grant Assurance compliance. (1) The City will promptly adopt an accomm odation policy based on the District Court’s ruling. (2) The City will address all pending accommod ation requests pursuant to that policy. If the City can require an airline to accomm odate any requesting airline, it will do so consistent with any further dir ection from the District Court. By basing its accommodation policy and decisions on a judicial declaration in a case in which all of the interested partie s were joined, the City has adopted a plan designed to resolve definitively the controversy and to allow th e City to meet its accommodation obligations in an undisputedly lawful manner. 245 Moreover, the outcome of this controversy woul d not have been substantially different if the City had implemented an accommodation po licy based on DOT/FAA guidance as the FAA apparently now desires, except that the City migh t be facing greater legal and financial exposure. As described above, the City’s prop osals to do so were met with th reats of litigation and there is no doubt that any final action by the City would have led to litigation raising the same core issues that are now before the District Court. Accordingly, the City’s plan represents a proactive

245 The District Court also heard extens ive testimony and argum ent regarding the propriety of United’s sublease to Southwest. That issue is expe cted to be resolved in the litigation as well.77 effort to resolve the controversy and obtain a binding determination of how the City may lawfully meet its accommodation obligation. 246
C. The City Is Carrying Out Its Plan To Comply With Its Accommodation Obligations The City is actively and expedi tiously carrying out its plan to remain in compliance with its grant obligations. As the FAA knows, the City initiated the litigation and, together with the airlines, moved very quickly to position the case for adjudication, including a massive amount of discovery and extensive motions pr actice, culminating in a three-day evidentiary hearing on the City’s motion and airlines’ cros s motions for preliminary injunc tion. Throughout that process, the City convinced the District Court to enter or ders and to use its pers uasive powers to assure that Delta continued to be accommodated. The C ity expects the District Court to rule on the several pending substantive motions very soon, wh ich rulings should lead to a resolution of the dispute. In the interim, Delta remains accomm odated. The City is committed to obtaining a ruling on the merits as expeditiously as possible. Once the District Court makes a final ruling, the City will finalize its accommodation policy and act on any pending accommodation requests.
D. The City Has No Outstanding Compliance Violations The City has an impeccable compliance record. The City is not aware of any unresolved compliance matters.

246 The City understands that there is a dis pute over the extent of the FAA’s authority over accommodation under th e Lease. The City’s position is that the FAA has no authority to mandate accommodation and that the Grant Assurances do not impose any obligations on the City above and beyond the accommoda tion obligations of the Lease. The City understands that the FAA disputes that position. The FAA has not asserted its position in this proceeding but has made its views clear in the District Court litigat ion. Naturally, the City has requested that the District Court resolve that dispute along with the other di sputed matters concerning accommodation. If the District Court rules in the City’s favor, this proceeding will become moot. If the District Court does not rule in the City’s favor, the City commits to work with the FAA to adopt an accommodation plan that is cons istent with WARA and the Lease as construed by the District Court and any a dditional grant obligations that may apply unless the District Court’s ruling is overturned on appeal.78 E. Conclusion: The City Currently Comp lies With Its Grant Obligations The City has clearly demonstrated that it is currently in compliance with its accommodation obligations. The City’s ceaseless and burdensome efforts over the past 13 or more months to address the accommodation controve rsy created by the reduced gate capacity at Love Field stand as a practical demonstration of the City’s commitment. The City clearly understands its obligations and has exhausted all means to meet t hose obligations. The City has a plan to resolve the outstanding legal controversy regarding its accommodation obligations and is diligently and aggressively pursuing that pl an by seeking a binding, legal ruling on the precise scope and nature of its accommoda tion obligations under the Lease. In the interim, the City has made every effort to assure that Delta has b een continuously accommodated at Love Field. By any reasonable application of the FAA’s curr ent compliance standard, the City currently complies with its accommodation obligations and the NOI should be dismissed.
IV. EVEN IF THE FAA HAS JURISDICTION OVER THIS MATTER AND EVEN IF THE CASE IS RIPE, THE CITY HAS NOT VIOLATED ANY OBLIGATIONS UNDER ASSURANCE 22 The NOI states that the FAA is investigating: Whether the City’s failure to grant or otherwise act on Delta’s request for accommodation of five daily flights at DAL is consistent with its grant obligation to make its airport available as an airport for public use on reasonable terms and without unjust discrimination to all types, kinds, and classes of aeronautical activities. (Grant Assurance 22) NOI at 11-12. Grant Assurance 22 requires airport sponsors to “make the airport available as an airport for public use on reasonable terms and without unjust discrimination to all types, kinds and classes of aeronautical activities, including commer cial aeronautical activities offering services to the public at the airport.” The FAA construe s this to have three distinct requirements:

• Making the airport and its facili ties available for public use,79 • Ensuring that the terms imposed on aerona utical users are reasonable for the services and facilities provided, and

• Applying those terms without unjust discrimination. Compliance Manual ¶ 9.1(a). Applying those principles to the facts of this case makes clear that the City is not in violation of any obligati on under Assurance 22 for tw o principal reasons. First, Delta is now being accommodated and has been continuously accommodated at the Airport , and the City has taken proactive steps to assure its continued accommodation pending the District Court’s determination of the City’s contractual obligation to accommodate Delta. Second, if at some time the City is no longer ab le to accommodate Delta, it would be because there is no available space, as defined by the L ease. Assurance 22 does not authorize the FAA to require an airport sponsor to lease property to a new entrant when there is no space available. WARA does not allow the FAA to use its Assura nce 22 authority to modify the terms of the
Lease. See WARA § 5(e)(2)(B)(ii). Becau se WARA artificially limits th e gate capacity at Love Field, if there is not space in the terminal , the FAA cannot mandate accommodation of Delta without modifying the Lease, which would be barred by WARA. If there is available gate capacity at Love Field, the Lease will allow the C ity to, and the City will, accommodate Delta. The ultimate disposition of Delta’s accommodati on request turns on the meaning of the Gate Accommodation Clause, which is being litigated in the District Court. Assurance 22 does not give the FAA any independent auth ority to compel an accommodation. A. Delta Has Been Continuously Acco mmodated And Has Not Been Denied Access To Love Field The FAA’s statement of the issue rests on an incorrect assumption: That Delta has been denied reasonable access to Love Field because of some action or inaction by the City. But the fact is that Delta has been granted access to Love Field and has been continuously accommodated. Although it is true that the City has not itself found it necessary to make a80 forced accommodation to assure Delta access, the C ity did not need to use that authority under the Lease because the City has been successful in convincing the incumbent airlines to accommodate Delta and because the District Court has further taken steps to assure continued accommodation. The City has repeatedly made cl ear its willingness to force an accommodation, but has not needed to exer cise that authority. As set forth in detail above, supra at 13-55, the City has worked tirelessly and ceaselessly to assure the continued accommodation of Delta even as Delta, Southwest, DOT/FAA, and the City disputed the scope of the City’s accommoda tion obligations. Specific actions by the City have in fact led, directly or indirectly, to the continued accommodation of Delta, as summarized in the following chart:

Date on which Delta’s Accommodation would have Terminated The City’s Action Accommodation Extension

October 12, 2014 September 19, 2014. The City orders United to accommodate Delta. Although that decisi on is rescinded on September 29, the City sought DOT guidance and encouraged the airlines to agree on a voluntary accommodation. October 10, 2014. Airlines agree to accommodate Delta through January 6, 2015

.

January 6, 2015 December 1, 2014. The City notifies airlines of 30-day voluntary accommodation period, then on December 24, 2014 , the City directs accommodation until February 28, 2015

. January 6, 2015. United and Delta agree to Delta’s accommodation through July 6, 2015

.

July 6, 2015 June 17, 2015 . The City seeks declaratory relief from the District Court. July 2, 2015. Southwest and Delta agree to Delta’s accommodation until decision from the District Court.81 Indeed, those “temporary” accommodations are greater than the accommodation term Delta enjoyed prior to October 2014. Between 2009 and October 2014, Delta ’s agreement with American afforded it accommodation only on a month-to-month basis. Supra at 12. Through the efforts of the City and others, Delta has been accommodated through several multi-month accommodation agreements. That Delta would like longer-term certainty does not support a violation of Assurance 22. Skydive Monroe, Inc. v. City of Monroe, Ga. , FAA Docket No. 16- 06-02, Director’s Determination at 9 (Mar. 30, 2007) (“[T]he gran t assurance obligations do not require an airport sponsor to accommodate the space demands of each aeronautical tenant at the airport.”); Edward Mainardi, Sr. v. Lincoln Park Airport, Inc. , FAA Docket No. 16-02-12, Final Decision and Order at 13 (Oct. 18, 2004) (“The Asso ciate Administrator also agrees that Grant Assurance 22, Economic Nondiscrimination, does not require the airport owner to provide any and all services its aerona utical users desire.”). The bottom line is that the City has assured, di rectly or indirectly, that Delta has been continuously accommodated. What the City has acco mplished to date is precisely what the DOT has repeatedly urged of the City: that it us e its persuasive power to facilitate voluntary accommodation, that it try to convince airlines th at voluntary accommodation is preferable to forced accommodation, but that it retain the author ity to mandate accommodati on as a last resort.
See NOI at 12 (“The FAA strongly recommends that the City ensure the maintenance of the status quo at DAL until this matter can be reso lved.”). Moreover, on ce the District Court determines the scope of the City’s accommoda tion obligations under the Lease, WARA, and the Five-Party Agreement, the City will make a final accommodation decision (assuming that the airlines do not reach a voluntar y accommodation agreement) in accordance with law. Those facts alone demonstrate that there is no Assu rance 22 issue that merits investigation.82 B. The City Is Not In Violation Of Assurance 22 Just Because It Has Not Yet Had To Make A Final Accommodation Decision As presented by the FAA, the Assurance 22 issu e assumes that there is an Assurance 22 compliance problem just because Delta has not been accommodated on a permanent basis. That assumption is false, however. The City’s a ccommodation obligations ar e defined solely by the Lease, as codified in the Five-Party Ag reement and WARA. The Lease only requires accommodation under particular conditions, and not under any circumstance. Moreover, under Assurance 22 precedents, the City has no oblig ation to accommodate Delta, as a non-lessee, when all of the gates at Love Fi eld have been leased, when incumb ent airlines assert that all of their leased gate capacit y is being used, and when the City is statutorily barred from building additional gates or providing additi onal gate capacity. As the City has stated repe atedly, it will address Delta’s accommodation request pursuant to the Lease once the District Court has adjudicated the City’s obligations under the Lease. Until then, however, Delta remains accommodated. Aside from the Lease, there is no Gran t Assurance 22 obligation that Delta be accommodated. The FAA has long held that Assura nce 22 does not require an airport sponsor to lease land or space to an aeronautical us er when there is no space available: The Director accurately portray s that the Respondent is not obligated to provide hangar space to the Complainant in a case where none is available. The Asso ciate Administrator also agrees that Grant Assurance 22, Econom ic Nondiscrimination, does not require the airport owner to provide any and all services its aeronautical users desire. Accepting for the sake of argument, the Complainant’s assertion that space, besides Wagner Airway s’ hangar, was not available, the Respondent is not required to pr ovide space where space is not available. The Respondent is also not in a position, nor is FAA, to impose on a private business ow ner, such as Wagner Airways, to accept a new lease with a subten ant in the ordinary course of business.83 Edward Mainardi, Sr. v. Lincoln Park Airport, Inc. , FAA Docket No. 16-02-12, Final Decision and Order at 13 (Oct. 18, 2004) (emphasis added). I ndeed, the City is not aware of any instance in which the FAA has ordered an airport sponsor to displace a tenant from space it was using (or had a reasonably foreseeable need for) in order to meet its Assurance 22 obligation to provide public access to the airport. This principle is confirmed in the Co mpliance Manual ¶ 9.7(c) (emphasis added): If adequate space is av ailable on the airport and the sponsor is not already providing identical aeronautical services, Grant Assurance 22, Economic Nondiscrimination , requires the spons or to negotiate in good faith and on reasonabl e terms with prospective aeronautical service providers. Paragraph 9.8 acknowledges that where an airport is operating at capacity new air carriers wishing to serve an airport often faced a lack of available facilities. In some instances, established air carriers made space available for the newcomers. However, in other cases, no space was made available, and sponsors subsequently denied the newcomers access to the airport. Paragraph 9.8(a) goes on to state that under A ssurance 23 an airport “sponsor may not deny an air carrier access solely based on the nonavailabil ity of existing facilities. The sponsor must make some arrangements for accommodations if reasonably possible .” (emphasis added) 247

247 Paragraph 9.8(a) refers to the FAA’s decisions in FAA Docket No. 16-98-05 for further guidance. That case, however, is inapplicable here. In Centennial Express Airlines , FAA Docket No. 16-98-05, the airport sponsor received a request from a carrier to start scheduled service at the airport. The air port sponsor refused the request and refused to make any attempt to accommodate the request, and further enacted legislation prohibiting scheduled service at the airport. Those facts bear no relationship to th e facts here, where scheduled service has been accommodated, supported, and encouraged at Love Fi eld for decades. The issue here is much narrower: What is the City’s obligation to acco mmodate a request for gate space when all gate space is leased or used by incumbent airlines, wh en the City is statutorily barred from adding additional capacity to accommodate more flight s, and where a congressionally mandated process is in place to allocate unused gate capacity to new entrants.84 Under those principles, it is clear that the City is in compliance with any obligations it may have under Assurance 22. 248 First, the Gate Accommodation Clause, as co dified in the Five-Party Agreement and WARA, provides a specific mechanism to allocate unused gate capacity to new entrants at Love Field. That mechanism is tailor-made to the uni que circumstances at Love Field where the City (and the FAA) are statutorily barred from enla rging gate capacity or modifying existing preferential leases. Congress has determined that compliance with the Gate Accommodation Clause complies with all of the City’s obligations under Title 49 and barred the FAA from interfering with the execution of that mechanism. Accordingly, unlike almost every other airport sponsor, the City has a contractual mechanism in place to accommodate new entrants that Congress has deemed to be compliant with a ll Title 49 obligations – including the Grant
Assurances. Pursuant to WARA , Congress has determined that the Gate Accommodation Clause is the sole requirement for the City to accommodate new entrants, as discussed above. Supra at 63-65. If the City complies with the Lease, it complies with the Gran t Assurances. Period. Further, the Gate Accommodation Clause ha s been incorporated into the City’s Competition Plan submitted in accordance with 49 U.S.C. § 40117(k). The Competition Plan

248 When the Compliance Manual refers to r easonable accommodation, it is referring to a factual situation far different from what exists today at Love Field. In many instances, “nonavailability of existing facilities” does not foreclose the requested activity because the sponsor can construct or make land available for the requested facilities. When the Compliance Manual states that “The sponsor must make some arrangements for accommodations,” it is referring to this scenario. See , e.g ., Exhibit 101, Letter from Carol A. Key, Manager Seattle Airports District Office to David A Waggoner, Airport Dir ector, Paine Field (June 4, 2008) (regarding the obligation of a sponsor to allow a carrier to build airline gates to accommodate proposed service). Of course, that situation does not apply here. When it comes to gate facilities at Love Field, the City is statutorily prohibite d from making additional facilities available ( e.g. , new gates or non-gate airline loading facilities). That situation is unusual if not unique in the United States.85 states that the City intends to use the Gate Accommodation Clause to address accommodation requests by new entrants: In the future, the City intends to accommodate requests for access by applying sharing provisions co ntained in the current leaseprovisions which have been in corporated in [the Gate Accommodation Clause] of the new Restated Lease . . . . As provided in the Five Party Agreement and Restated Lease, however, if the City recaptures a ny of the 20 leased gates, we will make them available on a common-use basis. Consistent with this approach, the City anticipates accommodating the Delta service commencing this summer through facilities currently used by American. As current facilities are demolished during the terminal redevelopment, the City will relocate both Continental and Delta to temporary facilities. Once the terminal redevelopment is completed, the City will accommodate Delta based on the gate sharing provisions of the preferential use lease. 249 The FAA has accepted the City’s Competition Plan, without comment or objection, and has never so much as suggested the need to modify it. 250 Accordingly, the City has a compliant mechanism to accommodate new entrants and, as detailed above, has exercised that authority to assure the continuous accommodation of Delta. Future accommodation of Delta will be addre ssed through the Gate Accommodation Clause once the contract dispute over the mean ing of those provisions is resolv ed in the District Court. Nothing in Paragraph 9.8 of the Complian ce Manual gives the FAA any authority to order the City to do anything more than the Lease or the Competition Plan requires. Paragraph 9.8(a) provides for mandatory access only “if re asonably possible.” Paragraph 9.8(c) provides for ACO-100 review of denials of accommodation so that ACO-100 can “coordinate the effort of the regional airports division with the FAA Office of Chief Counsel to achieve a viable solution to the problem.” Under WARA, the only “reas onably possible” solution to an accommodation

249 Exhibit 2, Competition Plan at 5. 250 See Exhibit 3.86 issue is compliance with the Gate Accommoda tion Clause. WARA§ 5(e)(2)(B)(ii) expressly prohibits the FAA from using it s authority under Grant Assurance 22 to “to modify or eliminate preferential gate leases with air carriers in order to allocate gate capacity to new entrants or to create common use gates, unless such modification or elimination is implemented on a nationwide basis.” WARA furthe r prohibits the FAA from interf ering with the performance of the Five-Party Agreement and the Lease. Inde ed, as discussed above, the FAA has long denied that it has jurisdiction over cont ract matters and cannot determin e the meaning of contracts. Supra at 59-61. WARA further limits the FAA or the City from expanding Love Field to accommodate new entrants. The only reasona bly possible accommodation mechanism is the Gate Accommodation Clause. Thus, even if Assurance 22 applies in this ma tter, the City is in compliance because Delta has been continuously accommodated, the City is committed to complying with the Gate Accommodation Clause, and it is not “reasonably possible” to accommodate a new entrant at Love Field in any other manner when incumbent airlines are using all gate capacity. Despite their guidance and suggestions, DOT/FAA have not suggested a wa y for the City to accommodate Delta in light of the constraints imposed by WARA and the legal obligations of the Lease and Five-Party Agreement. Indee d, it does not appear that ACO-100 undertook the review and coordination effort spelled out in Paragraph 9.8(c). Accordingly, for purposes of Assurance 22, there is no “reasonably possible” way to accommodate a new entrant if the Gate Accommodation Clause does not allow the accommodation. Moreover, under WARA, the only action the FAA can take is to order the City to comply with the Lease, which the City is doing and ha s already committed to continue doing. Indeed, the fundamental purpose of filing the District Cour t action was to assure th at the City acted in87 accordance with the Lease and that all controvers y over the meaning of the Lease in the specific context of Delta’s request for accommodation was resolved in a binding fashion. As the City has maintained from the beginning of this controversy, the Gate Accommodation Clause provides th e sole mechanism to accommodate new entrants and the City is committed to complying with those obligations . If applying the Gate Accommodation Clause as construed by the District Court shows that ther e is capacity in the 20 gates at Love Field to continue to accommodate Delta, the City will take the steps necessary to ensure such accommodation. Conversely, if the Gate Accommoda tion Clause as construed by the District Court does not allow for the continued accommoda tion of Delta, then Delta (and the FAA) will have to accept that decisi on. Assurance 22 requires nothi ng more, even if it applies.
V. EVEN IF THE FAA HAS JURISDICTION OVER THIS MATTER AND EVEN IF THE CASE IS RIPE, THE CITY HAS NOT VIOLATED ANY OBLIGATIONS UNDER ASSURANCE 23 The NOI states that the FAA is investigating: Whether the City’s failure to grant or otherwise act on Delta’s request accommodation of five daily flights at DAL is consistent with the statutory and grant a ssurance prohibition on granting or permitting any person, firm, or co rporation, either directly or indirectly, the exclusive right at the airport to conduct any aeronautical activities (Grant Assurance 23 and 49 U.S.C. § 40103(e)). Grant Assurance 23 states, in part, that: [The airport sponsor] will permit no exclusive right for the use of the airport by any person provi ding, or intending to provide, aeronautical services to the public . . . . [The airport sponsor] further agrees that it will not, eith er directly or i ndirectly, grant or permit any person, firm, or corpora tion, the exclusive right at the airport to conduct any aeronautical ac tivities . . . , and that it will terminate any exclusive right to conduct an aerona utical activity now existing at such an airport before the grant of any assistance under the Airport and Airway Improvement Act of 1982. The FAA defines an exclusive right as88 a power, privilege, or other right excluding or debarring another from enjoying or exercising a like power, privilege or right. An exclusive right may be conferred either by express agreement, by imposition of unreasonable standards or requirements or by another means. Such a right conferred on one or more parties, but excluding others from enjoying or exercising a similar right or right, would be an exclusive right. Compliance Manual ¶ 8.2. Although the prohibition against exclusive rights generally pr ohibits an airport sponsor from taking action, directly or indirectly, that would create a monopoly on a given aeronautical service, the mere presence of a single service provider is not ne cessarily a violation of Grant Assurance 23, because a violation requires that the airport sponsor’s action or inaction has somehow prevented other qualif ied service providers from operating at the airport. See FAA Compliance Manual ¶ 8.9(b). For example, when space at an ai rport is limited, a single entity can grow through natural market forces to be the exclusive service provider. As the FAA explains: A single enterprise may expand as needed, even if its growth ultimately results in the occupancy of all available space . However, an exclusive rights violation occurs when an airport sponsor unreasonably exclud es a qualified applicant from engaging in an on-airport aeronau tical activity without just cause or fails to provide an opportunity for qualified applicants to be an aeronautical service provider. An exclusive rights violation can occur through the use of leases where, for example, all the available airport land and/or faci lities suitable for aeronautical activities are leased to a single aeronautical service provider who cannot put it to productive use within a reasonable period of time, thereby denying other qualified pa rties the opportunity to compete to be an aeronautical servi ce provider at the airport. Id. 251

251 There is no claim that Southwest has not put its leased space to productive use within a reasonable time.89 Even when an entity has grown to occupy a ll available space “[t]he FAA’s policy makes clear that when all or most of the available la nd and improvements have been leased to a single enterprise, an arbitrary division or restriction to create an opportunity for a competitive enterprise is not required merely to comply with the exclusive rights policy.” Ricks v. Millington Mun. Airport Auth. , FAA Docket No. 16-98-19, Director’s Dete rmination at 20 (July 1, 1999) (finding no violation of Assurance 23 when the record did not show that there was any available leased space). Similarly, an airport sponsor does not violate Grant Assura nce 23 simply by failing to provide an aeronautical user with its preferre d accommodation or if the sponsor fails to lease space because it does not physically have space to lease. As the Director explained in Roadhouse Aviation v. City of Tulsa , FAA Docket No. 16-05-08, Director’s Determination at 28 (Dec. 14, 2006), “While Complainant may desire ‘fiscally acceptable’ leaseholds along the flightline, the grant assurances do not obligat e Respondent to provide such space at a price acceptable to the Complainant. Moreover, Responde nt cannot provide what it does not have.” Applying those standards, it is clear that the City has not crea ted an exclusive right in violation of Assurance 23 or 49 U.S.C. § 40103(3), ev en assuming those pr ovisions apply here. First, the City has not excluded or debarre d any aeronautical us er from Love Field. Southwest, Delta, and Virgin all operate today at Love Field. Two are signatory carriers and one is not. Delta has been continuously accommodated at Love Field. Southw est’s operations have grown naturally to occupy all of its available gate space. As pa rt of that growth, Southwest90 outbid Delta for the Sublease of United’s gates. 252 Southwest’s natural growth and economic decisions do not create an exclusive rights issue. Second, and related, Delta has not been denied any power, privilege, or right that any other new entrant has received. Delta has been accommodated on the same terms as all other new entrants, and will continue to be so accommodated to the extent required by the Gate Accommodation Clause as will any other new entr ant. Further, Delta chose not to outbid Southwest for the United Sublease. 253 Delta’s situation is the resu lt of historic business choices made by Delta and Southwest, and by the impact of WARA and the Five-Party Agreement, not any action by the City. Third, the Gate Accommodation Clause establis hes a mechanism for the City to allocate any unused gate capacity to new entrants in the event there is not a voluntary accommodation. Congress has approved the use of that mechanism a nd deemed it to comply w ith all of the City’s obligations under Title 49, including 49 U.S. C. § 40103(e) and § 47107(a)(4). The FAA approved that mechanism in the Competition Plan. Accordingly, as long as the City acts in accordance with the terms of the Lease – which it has done and will continue to do – the City remains in compliance with Grant Assurance 23. The Gate Accommodation Clause is explicitly designed to assure that all unused gate capacity at Love Field is used if there is dema nd. Assuring that unused space is made available for use by aeronautical users addresses any exclus ive rights concern; there is no exclusive rights violation if an aeronautical user is excluded beca use there is no available space. Simply stated, the City’s continuous and continued enfor cement of, and compliance with, the Gate

252 See Exhibit 104, Transcript of Pr eliminary Injunction Hearing, City of Dallas v. Delta Air Lines, Inc., et al. , No. 3:15 cv-02069-K, Vol. 2, at 68- 69, 247-248 (Sept. 29, 2015) (relevant excerpts only attached). 253 Id.91 Accommodation Clause complies with T itle 49 as a matter of law under WARA and with any separate obligations the City may have unde r Assurance 23 or 49 U.S.C. § 40103(e) under longstanding FAA law.
VI. EVEN IF THE FAA HAS JURISDICTION OVER THIS MATTER AND EVEN IF THE CASE IS RIPE, THE CITY HAS NOT VIOLATED ANY OBLIGATIONS UNDER ASSURANCE 39 The NOI states that the FAA is investiga ting “Whether the City has complied with the requirements of Grant Assurance 39, Competitive Access.” NOI at 12. Assurance 39 provides as follows: a. If the airport owner or operato r of a medium or large hub airport (as defined in section 47102 of title 49, U.S.C.) has b een unable to accommodate one or more requests by an air carrier for access to gates or other facilities at that airport in order to allow the air carrier to provide service to the ai rport or to expand service at the airport, the airport owner or operator shall transmit a report to the Secretary that- (1) Describes the requests; (2) Provides an explanation as to why the requests could not be accommodated; and (3) Provides a time frame within which, if any, the airport will be able to accommodate the requests. b. Such report shall be due on either February 1 or August 1 of each year if the airport has been unable to accommodate the request(s) in the six month period pr ior to the applicable due date. Assurance 39 simply sets forth a reporting requirement; it does not require an airport sponsor to do anything more than provide the describe d report if the sponsor has been unable to accommodate requests from airlines for acce ss to gates or other facilities. See also 49 U.S.C. § 47107(s) (same). It appears that the purpose of Assurance 39 is to help the FAA assess whether an airport is meeti ng its obligations under Assuran ces 22 and 23 when an airport sponsor does not provide an air carrier access to gates or other facilities. See Compliance Manual ¶ 9.8(b).92 First, the City has complied with the require ments of Assurance 39. The City has filed a Competition Plan and has made sure that Delta has been continuously accommodated. The City is waiting to act on Delta’s second request and Am erican’s request based on the District Court’s decision. Pending the outcome of th at litigation, the City has not made a determination that it cannot accommodate any air carri er that has request ed accommodation. A ccordingly, the City was not obligated to file any notice under Assurance 39. Second, if the FAA were to determine that the report was required, even though Delta has been accommodated, submission of a formal report under Assurance 39 would have been redundant and unnecessary. At all relevant times since October, 2014, the City has kept the FAA aware of all facts surrounding the accommodation controversy in almo st real time. (In fact, the documents produced during discovery in the Distri ct Court show that FAA has known more than the City in some instances regarding the stat us of accommodation and has known some key facts before the City.) The FAA was further aware in advance of any decision of the City’s reasons for not acting on the accommodation requests, and was also aware of the positions of Delta, Southwest, and other air airlines. Supra at 13-55. The City and the airlines each provided that information in countless phone calls, emails , meetings, and other communications, and repeatedly asked the FAA if it needed any additional information. Moreover, in June 2014, the City named the FAA as a defendant in the District Court Action, which once again, and more formally, laid before the FAA the relevant facts relating to the accommodation requests of Delta and American and the City’s explana tion for why it had not yet acted on those requests given the lega l uncertainty surround ing its accommodation obligations. The FAA has had access to thousands of documents relating to the accommodation issue, in addition to numerous depositions and ex tensive briefing by the City and the airlines on93 the myriad factual and legal issu es related to the accommodation i ssues. In short, the City has already provided the FAA with much more information than is required by Assurance 39, provided that information sooner than is required by Assurance 39, and invited the FAA to help resolve the accommodation issue. Under any reas onable construction of Assurance 39, the City more than fulfilled the notice requirements of Assurance 39. The bottom line is that the FAA has had, at all times since October 2014, virtually every detail about the controversy and th e efforts of the City, the airlin es, and the FAA itself to resolve that controversy. Indeed, despite its scrutiny of the City, the FAA never requested that the City submit the specific report called for in Assurance 39 or otherwise suggested that it lacked the information called for in such a report. Even if the City did not provide the FAA with a report dated February 1, 2015 or August 1, 2015, it is abunda ntly clear that the City provided the FAA with all of the information required by Assura nce 39 within the six-month window required by Assurance 39. To find the City in violation of Assurance 39 on these facts would elevate form over substance and punish an airp ort sponsor for reaching out to the FAA for help resolving a very difficult issue.
VII. EVEN IF THE FAA HAS JURISDICTION OVER THIS MATTER AND EVEN IF THE CASE IS RIPE, THE CITY HAS NOT VIOLATED ANY OBLIGATIONS UNDER ASSURANCES 22 AND 23 OR 49 U.S.C. § 40103(E) BY CONSENTING TO UNITED’S SUBLEASE TO SOUTHWEST The NOI states that the FAA is investigating: Whether the City’s consent to the sublease of United’s two gates to Southwest through the remainder of United’s lease term with the City, prior to the resolution of Delta’s request for an accommodation of five daily flights at DAL, and prior to the resolution of Seaport’s request for ticket counter space, is consistent with its obligations to make its airport available as an airport for public use on reason able terms and without unjust discrimination to all types, kinds, and classes of aeronautical activities, and to avoid granting or permitting any person, firm, or corporation, either directly or i ndirectly, the exclusive right at the94 airport to conduct any aer onautical activities. (Grant Assurances 22 & 23 and 49 U.S.C. § 40103(e)). NOI at 12. For all of the reasons discusse d above, as well as the specific terms and circumstances of the City’s consent to the Subl ease between United and Southwest, the City did not violate any obligation the City may have under Grant Assu rances 22 and 23 and 49 U.S.C. § 40103(e) by consenting to the Sublease. The FAA’s concern seems to be that the C ity’s consent to United’s Sublease to Southwest somehow impaired the City’s ability to accommodate new entrants, apparently by allowing Southwest to make use of all of United’s gate capacity on a preferential use basis. As explained below, however, the Sublease did not cha nge either the scope or applicability of the Gate Accommodation Clause at United’s gates and di d not change the ability of a new entrant to be accommodated at Love Field. Further, the City explicitly conditioned its consent to the Sublease on its ability to compel accommoda tion under the Gate Accommodation Clause in order to comply with federal law. The Sublease, and the City’s consent thereto, simply did not change any new entrant’s ability to be accomm odated. Moreover, SeaPort decided to end its Love Field operations for independent business reasons after it had been accommodated voluntarily. For those reasons, in addition to all of the reas ons discussed above regarding Assurances 22 and 23 and 49 U.S.C. § 40103(e), th e FAA has failed to identify an issue that merits investigation. First, the City’s consent to the Sublease did not change in any way the City’s ability or authority under the Gate Accommodation Clause to compel an accommodation, if necessary. The Sublease is subject to the Ga te Accommodation Clause just as is the Lease itself. Thus, the user of United’s gates, whether United, Southwes t, or any other airlin e, is subject to an obligation to accommodate new entrants, whether by agreement or compulsion, to the same95 extent. The identity of the leaseholder or s ublessee is immaterial to the Gate Accommodation Clause. Moreover, the City e xplicitly conditioned its approval of the Sublease on DOT/FAA’s position regarding accommodation as set forth in the DOT’s December 17, 2014 letter, and reserved the authority to compel accommodation pursuant to federal law, including that letter. 254 The City’s consent is furt her subordinated to the C ity’s federal obligations. 255 Accordingly, the Sublease, and the City’s consent to the Sublease, did not reduce or alter the ability of any new entrant to be accommodated in United’s gates. Not only did the Sublease have no legal e ffect on the City’s authority but it has no practical effect on the City’s ability to accommodate Delta (or any other carrier) in United’s gates. Even without the Sublease, United coul d have, and in fact did, enter into gate use agreements with another carri er to use its leased gates. 256 Alternatively, United could have decided to use those gates itself. Unde r the Gate Accommodation Clause, as DOT/FAA recognizes, 257 the ability to accommodate a new entrant depends on actual gate usage, not the form of legal right to use the gate. DOT/FAA has repeatedly instructed the City that, when considering accommodation, the City must consid er only actual gate usage (as informed by definite future plans). Thus, even without the Sublease, United could have used all gate capacity itself, or could have entered into agreements w ith Southwest and/or other airlines that would have used up some or all capacity at United’s gates. 258 Actual usage would affect

254 Exhibit 9, §§ 6(b) & (c). 255 Id. § 6(a). 256 See Exhibit 73. 257 See Exhibit 63 at 2. 258 In fact, the LeighFisher analysis shows ( See Exhibit 39) that the United leased gates were, in fact, being used on November 5, 2014 a nd there is no evidence that they have ceased being used in the time since that snapshot was taken.96 accommodation by a new entrant at those gates. Conversely, under the Gate Accommodation Clause, any unused capacity at United’s gates is subject to accommodation under the Gate Accommodation Clause, regardless of who leases or subleases those gates, or uses the gates by some other agreement among airlines. The vol ume and extent of usage depends on airline scheduling decisions, not on the le gal source of authority to use a gate at Love Field. Accordingly, the City’s consent to the Sublease di d not change the City’s ability to compel an accommodation if necessary. Second, that the FAA even raises this i ssue underscores the impropriety of this investigation. DOT/FAA were aware that United and Southwest had agreed to the Sublease as early as October 25, 2014. 259 Indeed, DOT/FAA knew more about that agreement than the City did before the City consented because DOT/F AA had knowledge of the business terms of the Sublease in October 2014 while the City learned of those terms only when revealed in Judge Kinkeade’s courtroom in late September 2015. 260 The City was aware that DOT/FAA had concerns about the Sublease (because DOT/FAA told the City so), and further that the Department of Justice was reviewing the Sublease pursuant to the HSR Act (because DOJ told the City so). Based upon informal guidance fr om both DOT and DOJ, the City refrained from granting its consent to the Sublease until it learne d that no antitrust objections had been raised during the Antitrust Division’s HSR Act review. 261 Once the HSR Act antitrust review period ha d expired (and DOT had informed the City that DOJ would not be raising objections), th e City informed DOT/FAA that it intended to

259 See Exhibit 76. 260 Haskel Affidavit ¶ 18. 261 Id . ¶ 19.97 consent to the Sublease and sent DOT/F AA a draft of the form of consent. 262 DOT/FAA did not raise any objections or concerns at that time. 263 DOT/FAA was fully aware of all of the circumstances surrounding the Subl ease and the City’s consent, and was further fully aware of the ongoing accommodation controversy. Despite al l that, DOT/FAA did not instruct or advise the City not to approve the Sublease when presented for final review. Compliance should not be a game of “got cha.” The City sought DOT/FAA guidance, and gave the DOT/FAA every opportunity to tell, advise, guide, or suggest that the City not consent. The DOT/F AA did not do so. 264 DOT/FAA had far more information than the City at the time and did nothing more than recommend th at the City not act on the Sublease in a manner that impaired its accommodation obligations and that the City not act until DOJ had completed its antitrust review. The City did precisely as DOT/FAA recommended, including assuring that Delta was accommodated at the time of the consent and preserving the City’s authority to force an accommodation in the future if permitted and necessary. There is simply no basis for the FAA to determine that the City acted improperly. Third, it has been suggested that City should ha ve withheld its consent in order to keep United’s gates available for new entrants in orde r to enhance competition. But that suggestion lacks practical merit and is legally suspect. As a practical matter, not consenting to the Sublease would not have prevented United from allowi ng Southwest to use United’s gates by simple contract, as it had already been doi ng. As a legal matter, the City lacks the legal authority to tell

262 Id. ¶ 20. 263 Id. 264 The City’s Airport Director, Mark Duebner, testified that if DOT had objected to the sublease, that would have been a basi s for withholding the City’s consent. See Exhibit 102, Transcript of Preliminary Injunction Hearing, City of Dallas v. Delta Air Lines, Inc., et al. , No. 3:15 cv-02069-K, Vol. 3, at 217 (Sept. 30, 2015) (relevant excerpt s only attached).98 United how to use its gates, at least in the ab sence of a legally binding directive from DOT/FAA under federal law. But, DOT/FAA never provided that specific directive (despite the City’s request for such a directive), and now takes the position that its general guidance did not have the effect of law. Moreover, the City could not “unreasonably withhold” its consent and would have risked lawsuits by both United and Southwes t had it not consented based on non-binding suggestions from DOT/FAA. Lease § 14.08. 265 Indeed, Delta apparently tried but failed to acquire the Sublease for itself. The City does not understand that it has the legal authority to withhold consent to a Sublease to the successful bi dder in order to assure that the unsuccessful bidder gets the Sublease. Further, the effect of not approving the Sublease in order to preserve gate capacity for new entrants w ould constitute an action to convert United’s preferential use gates into common use gates. WARA § 5(e)(2)(B)(ii) expressl y prohibits DOT/FAA from using its authority under Assurances 22 or 23 to do that. Accordingly, nothing in Assurances 22 or 23 or 49 U.S.C. § 40103(e) requires or allows the City to withhold consent to the Sublease in order to reserve gate capacity for new entrants. Finally, the NOI suggests that the City’s consent impaired the City’s ability to accommodate SeaPort, and that SeaPort left Lo ve Field because it was not accommodated in United’s gates. NOI at 12. That suggestion rests on incorrect fa ctual assumptions, however. It is true that SeaPort sought accommodation from the incumbent airlines in th e summer of 2014 and was initially unsuccessful in ob taining an accommodation agreement. 266 Accordingly, the City included SeaPort and Delta in its initial forced accommoda tion letters dated September 3,

265 As discussed above, the FAA has no jurisdic tion to interpret the te rms of the Lease as to what would or would not be a reasonable basi s for the City to with hold its consent to any sublease. 266 Duebner Affidavit ¶ 2.99 2014. 267 Subsequently, however, by November 2014, SeaPort had negotiated a voluntary accommodation agreement with Virgin America and United to provide it gate and counter
space. 268 Unlike Delta, SeaPort did not thereafter request that the City make any further accommodation. 269 And, to the City’s know ledge, SeaPort did not s eek further accommodation from Southwest or any other airline. 270 From the City’s point of view, SeaPort had been accommodated to its satisfaction and no longer sought to invoke the Gate Accommodation Clause for further accommodation. 271 Subsequently, SeaPort decided to relocate its Texas operation fr om Love Field to Houston. As the City understands it, that deci sion was based largely on business considerations, including SeaPort’s recogniti on that Houston was a better market for its operation. 272 It also appears that the structural and legal limit on ga te capacity at Love Fi eld created operational difficulties for SeaPort that are entirely independent of its ability to be accommodated. 273 SeaPort never advised the City of its problems and in particular did not request or otherwise seek the City’s assistance in securi ng counter space after reaching an agreement with Virgin and United. 274 Whatever SeaPort’s reasons for leavi ng, however, there is nothing but pure speculation to assert that had th e City not consented to the S ublease that SeaP ort would have

267 Id

. 268 Id. 269 Id

. 270 Id

. 271 Id

. 272 See Exhibit 103, Terry Maxon, Dallas Love Field to lo se service from one airline (the smallest one) , DALLAS MORNING NEWS (July 30, 2015, 6:08 PM), http://aviationblog.dallasnews.c om/2015/07/dallas-love-field-to-lose-service-from-one-airlinethe-smallest-one.html/. 273 See id

. 274 See Duebner Affidavit at ¶ 2.