Order: 2010
- 11
- 18 Served: November 17, 2010 UNITED STATES OF AMERICA DEPARTMENT OF TRANSPORTATION OFFICE OF THE SECRETARY WASHINGTON, D.C. Issued b y the Department of Transportation on the 17 th day

of November , 20 10

________________________________________________ : ALASKA AIRLINES, INC ., ET AL
. , : : DOCKET NO. v. : OST
- 20 0 7
- 27331 : LOS ANGELES WORLD AIRPORTS, ET AL
. : : SECOND ORDER GRANTING AN IN TERIM STAY OF PROCEE DI NGS AND EXTENDING DEADLINE TO FILE PROCEDURAL C OMMENTS By this Order, the United States Department of Transportation (Department) grants the Complainants’ and Respondents ’ September 24, 2010 Joint Motion to Change the Current Deadline in this Proceeding from October 18, 2010 to January 17, 2011 (Second Joint Motion) and to stay further proceedings in the case until January 17, 2011
. This Order requires the parties to cont inue to file status reports of settlement discussions with the Department. On November 24, 2009 , the Department issued its Initial Request for Status and Comments (Order 2009
- 11
- 24) to initiate further proceedings in this case following the issuance of th e mandate on September 25, 2009 , by the United States Court of Appeals for the District of Columbia Circuit in Alaska Airlines, Inc., et al. v. U.S. Department of Transportation , 575 F.3d 750 (D.C. Cir. 2009). That case arose out of our Final Decision2 (Order 2007
- 6
- 8, June 15, 2007) issued under 49 U.S.C. § 47129 on the reasonableness of new terminal fees and new fee methodologies imposed on the L os Angeles International Airport, following a complaint filed by certain air carriers in Terminals 1 and 3 1 (T1/T3 Carriers) against the airport operator, Los Angeles World Airports (LAWA). As explained in Order 2009
- 11
- 24, the D. C. Circuit remanded five issues for us to address. On December 22, 2009, we issued our Order Amending Time to File Procedural Comments (Order 2009
- 12
- 17) inviting the parties to file, no later than January 18, 2010, written submissions on the five remanded issues. W e also requested the parties to report periodicall y on the status of any settle ment discussions. On January

7, 2010, we held a status conference call with LAWA and the T1/T3 Carriers at which the parties advised us that they had reached agreement on one of the five remanded issues (that is, the timeliness of the T1 Carrier s’ obje ction to fair market valuation) and that the y i ntended to request an extension of the January 18 filing date of their submissions to October 18 in order to provide additional time to engage in further settlement discussions. On January 11, 2010, the parties filed their Joint Motion to Extend the Current Deadline in this Proceeding from January 18 to October 18 (First Joint Motion). On January

21, by Order 2010
- 01
- 14 (First Order Granting Interim Stay), we stayed the proceeding on remand until October 18 in order to encourage a local settlement of the remaining remanded issues
. We also removed the one remanded issue, described in Paragraph No. 3 of Order 2009
- 11
- 24 , upon which the parties had reached

1 Southwest Airlines and US Airways operate out of T erminal 1. Alaska Airlines, AirTran Airways, ATA Airlines, Frontier Airlines, and Midwest Express operate out of T erminal 3
.3

agreement from the scope of the proceeding on remand. Further, we required the parties to provide status reports of settlement discussions every 60 day s beginning March 18 through September 18 in order to keep the Department apprised of the progress of the settlement. The parties have filed J oint Reports on the Status of Settlement Discussions (Joint Reports) on March 18 and May 17 as well as their latest report on September 24, all in accordance with the terms of our January 21 Order. In addition to describing meetings between LAWA and the airlines at LAX, the September 24 Joint Report stated that the parties are interested in resolving the four remaining remanded issues, particularl y the T1 Carriers ’ desire to make meaningful progress with LAWA in addressing their terminal
- specific concerns. Additionally , LAWA maint ains that progress is being made regarding airport
- wide issues that may render moot the T1 Carriers ’ terminal
- specific concerns and that it was continuing one
on - one discussions with several T3 Carriers
. The parties further stated that they anticipate d th e need for additional time to continue negotiations and referenced the ir joint motion requesting extension of the current deadline to January 17, 2011 , filed concurrently

with their September 24 Joint Report
. T he T1/T3 Carriers and LAWA jointly moved to ex tend the deadline for filing written submissions on the remanded issues for an additional 90
- day period, i.e., from October 18, 2010 to January 17, 2011 and to stay

further proceedings in the case until January 17, 2011
. In support of their motion, the parties stated that they have engaged in multiple meetings over the last nine months, filed the periodic reports we have directed, and, although they

have not settled any

of the four remaining issues, they remain interested in trying to resolve them among th emselves, and anticipate the need for4

additional time to continue negotiations. The parties state that counsel for ACI
-NA and for ATA have represented that neither ACI
-NA nor ATA oppose s the motion. We are willing to grant the relief requested in the moti on and wish to encourage a local settlement of the remaining remanded issues. We will continue to require the parties to provide a status report of settlement discussions during this time period , in order to keep the Department apprised of the progress of the settlement negotiations . The status report will be due on December 15. Accordingl y, 1. We grant the Joint Motion; 2. We stay

the proceeding on remand until January 17 , 2011 , during which the L os Angeles World Airport (LAWA), on the one hand, and any or all of the T1/T3 Airlines, on the other hand, will attempt to resolve the remaining remanded issues described in Order 2009
- 11
- 24 at 2
- 3, namel y Paragraphs No. 1 (Airfield vs. non airfield space), 2 (Other aeronautical uses of terminal space) , 4 (Burden of persuasion on rentable space) and 5 (Monopol y power) ; 3. We order the T1/T3 Carriers and the LAWA to file a written status report as to the progress of their settlement discussi ons by December 15 , or by such earlier time as the Department may

order as appropriate ; 4. We he reb y amend Ordering paragraphs 2 and 3 of Order 2009
- 12
- 17 as follows:

2. We invite the T1/T3 Carriers, the Los Angeles World Airports, the Airports Council Inter

national

– NA, and the Air Transport Association, to file written submissions on the following: 1) whether the current record evidence on the remanded issues described in Paragraphs No. 1 (Airfield5 vs. non - airfield space ), 2 (Other aeronautical uses of t erminal space) , 4 (Burden of persuasion on rentable space) , and 5 (Monopoly power) of Order 2009
- 11
- 24 at 2
- 3 is sufficient or requires supplementation; 2) what, if any , additional fact finding or evidence is contemplated and for which of the remanded issu es described above; 3) the justification for such additional fact finding or evidence; 4) whether an oral evidentiary hearing is necessary

to hear the new evidence, if any ; and 5) any other procedural or evidentiary

issues the parties wish to note, no late r than January 17 , 2011, if a settlement agreement of all the issues is not achieved b y that date; and 3
. We invite the T1/T3 Carriers, the Los Angeles World Airport, the Airports Council International

– NA, and the Air Transport Association to file replie s to the submissions d escribed in Ordering paragraph 2 , no later than January

27, 2011, if a settlement agreement is not achieved by January 17, 2011
. SO ORDERED By : CHRI STA FORNAROTTO Deputy Assistant Secretary for Aviation and International Affairs (SEAL) Dated: November 17 , 2010 An electronic version of this document is available on the World Wide Web at

http://dms.dot.gov//reports/reports_ aviation.asp6 OST - 2001 - 27331 We served a cop y of Order 2010
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- 18 on the persons listed in this attachment. SERVICE LIST
U.S. DOT Dockets U.S. Department of Transportation 1200 New Jersey Avenue, S.E., Washington, DC 20590 James R. Weiss, Esq. Christopher S. Hunter, Esq. Thomas A. Reed, Esq. Megan H. Troy, Esq. Richard G. Price, Esq. Brian K. McCalmon, Esq. J. Timothy Hobbs, Esq. Kirkpatrick &Lockhart Preston Gates Ellis LLP 1735 New York Avenue, N.W. Suite 500 Washington, DC 20006 - 5221 Jim.weiss@klgates.com;chris.huther@klgates.com;br ian.mccalmon@klgates.com ; megan.troy@klgates.com;richard.price@klgates.com;thomas.reed@klgates.com TEL: (202) 628 - 1700; (202) 661 - 6225 FAX: (202) 331 - 1024; (240) 554 - 1487 Rana Aryan Kirkpatrick & Lockhart Preston Gates Ellis LLP 1900 Main Street, Suite 600 Irvine, CA 92614 TEL: (949) 253 0900 FAX (949) 253 - 0902 Rana.aryan@klgates.com Steve S. Rosenthal, Esq. Jeffrey A. Tomasevich, Esq. Douglas A. Tucker, Esq. Jason J. Jarvis, Esq. J.D. Taliaferro, Esq. KAYE SCHOLER LLP 901 Fifteenth Street, N.W., Suite 1100 Washington, DC 20005 - 2327 srosenthal@kayescholer.com;jtomasevich@kayescholer.com;dtucker@kayeschol er. com;jjarvis@kayescholer.com;jtaliaferro@kayscholer.com TEL: (202) 682 - 3553; (202) 682 - 3537 FAX: (202) 682 - 3580; (213) 612 - 1545(LA) (202) 414 - 04087

Roy Goldberg Courtney Sheehan Sheppard, Mullin, Richter & Hampton 1300 I Street, N.W., Suite 1100 East Washington, DC 20005 - 3314 rgoldberg@sheppardmullin.com;csheehan@sheppardmullin.com TEL: (202) 218 - 0007; (202) 772 - 5360 FAX: (202) 312 - 9425; (202) 312 - 9424 Kelly Martin, Esq. G eneral Counsel of LAWA Ray Ilgunas, Esq. Supervising Attorney, Airports Division Carmen A. Trutanich, City Attorney for the City of Los Angeles Lynn Mayo, Esq. Deputy City Attorney City of Los Angeles Attorney’s Office Los Angeles World Airports One World Way Los Angeles, CA 90045 Kellymartin@lawa.org ; rilgunas@lawa.org ;; lmayo@lawa.org ;c.trutanich@lacity.org TEL: (424) 646 - 5010; (213) 978 - 8100 FAX: (424) 646 - 9617 David A. Berg, Esq. Vice President & General Counsel Katherine Andrus, Esq. Assistant General Counsel Airport Transport Association of America 1301 Pennsylvania Avenue, NW Washington, DC 20004 dberg@airlines.org ; kandrus@airlines.org TEL: (202) 626 - 4234 FAX: (202) 626 - 4139 Robert P. Silverberg, Esq. Claire L. Shapiro L. Jeffrey Johnson Silverberg, Goldman & Bikoff, LLP 110 1 30 th Street, N.W. Suite 120 Washington, DC 20007 rsilverberg@sgbdc.com; cshapiro@sgbdc.com TEL: (202) 944 - 3300 FAX: (202) 944 - 3306 Robert Span Paul, Hastings, Janofsky & Walker LLP 25 th Floor 515 South Flower Street Los Angeles, CA 90071 robertspan@paulhastings.com TEL: (213) 683 - 6253 FAX: (213) 996 - 32538

Lorraine B. Halloway, Esq. Gerald F. Murphy, Esq. Crowell & Moring LLP 1001 P ennsylvania Avenue, N.W. Washington, DC 20004 - 2585 Lhalloway@crowell.com TEL: (202) 624 - 2538 FAX: (202) 628 - 5116 Robert E. Cohn, Esq. Patrick R. Rizzi, Esq. Hogan & Hartson, LLP 555 13 th Street, N.W. Washington, DC 20004 recohn@hhlaw.com ; prrizzi@hhlaw.com TEL: (202) 637 - 4999 FAX: (202) 637 - 5910 Joseph P. Zang, Director - Assistant General Counsel Susan L. Smith, General Attorney Delta Air Lines, Inc. Law Department #981 1030 Delta Boulevard Atlanta, GA 30320 joe.zang@delta.com ; sue.smith@delta.com TEL: (404) 715 - 2433 FAX: (404) 715 - 2233 Bruce Rabinovitz, Esq. Neil J. King, Esq. Wilmer Cutler Pickering Hale and Dorr LLP 1875 Pennsylvania Avenue, N.W. Washington, DC 20006 Bruce.rabinovitz@wilmerhale.com;neil.king@wilmerhale.com TEL: (202) 663 - 6960 FAX: 663 - 6363 Ricks Frazier Assistant General Counsel United Air Lines, Inc. P.O. Box 66100

–WHQLD Chicago, IL 60666 Ricks.frazi er@united.com TEL: (847) 700 - 4446 FAX: (847) 700 - 4683 Scott P. Lewis Anderson & Kreiger LLP One Canal Park, Suite 200 Cambridge, MA 02141 slewis@andersonkreiger.com TEL: (617) 621 - 6560 FAX: (617) 621 - 65019

Monica R. Hargrove, General Counsel James I. Briggs, Jr., Assistant General Counsel Airports Council International

– North America 1775 K Street, N.W. Washington, DC 20006 mhargrove@aci - na.org ; jbriggs@aci - na.org TEL: (202) 861 - 8088; (202) 293 - 8500 FAX: (202) 331 - 1362 Nancy Kessler, Esq. Office of General Counsel U.S. Department of Transportation 1200 New Jersey Avenue, S.E. Washington, DC 20590 Nancy.kessler@dot.gov TEL: (202) 366 - 9287 FAX: (202) 493 - 0154 The Honorable Richard C. Goodwin Administrative Law Judge Office of Hearings, M - 20, Room 5411 U.S. Department of Transportation 1200 New Jersey Avenue, S.E. Washington, DC 20590 Richard.goodwin@dot.gov;ira.leibowitz@dot.gov;patricia.matthews@dot.gov TEL: (202) 366 - 2139; (202) 366 - 2139 Legal Assistant (202) 366 - 5121 FAX: (202) 366 - 753610

The Honorable Rosalind A. Knapp Deputy General Counsel U.S. Department of Transportation 1200 New Jersey Avenue, S.E., W92 - 312 Washington, DC 20590 Lindy.knapp@dot.gov TEL: (202) 366 - 4713 Paul M. Geier Assistant General Counsel for Litigation U.S. Department of Transportation 1200 New Jersey Avenue, S.E., W94 - 310 Washington, DC 20590 Paul.geier@dot.gov TEL: (202) 366 - 4731 Christa Fo rnarotto Deputy Assistant Secretary for Aviation And International Affairs U.S. Department of Transportation 1200 New Jersey Avenue, S.E., W88 - 324 Washington, DC 20590 Christa.fornarotto@dot.gov TEL: (202) 366 - 4551 Dana Gresham Assistant Secretary for Governmental Affairs U.S. Department of Transportation 1200 New Jersey Avenue, S.E., W85 - 332 Washington, DC 20590 dana.gresham@dot.gov TEL: (202) 366 - 4573 Jill Zuckman Assistant Secretary and Director of Public Affairs U.S. Department of Transportation 1200 New Jersey Avenue, S.E., W93 - 310 Washington, DC 20590 Jill.zuckman@dot.gov TEL: (202) 366 - 4570 Bill Mosl ey Public Relations U.S. Department of Transportation 1200 New Jersey Avenue, S.E., W93 - 501 Washington, DC 20590 Bill.mosley@dot.gov TEL: (202) 366 - 5582